INVESTOR AND ANALYST CONFERENCE CALL MAY 29, 2018

Transcription

1 INVESTOR AND ANALYST CONFERENCE CALL

2 C e r t a i n s t a t e m e n t s a n d i n f o r m a t i o n c o n t a i n e d in t h i s p r e s e n t a t i o n t h a t a r e not s t a t e m e n t s or i n f o r m a t i o n of h i s t o r i c a l f a c t c o n s t i t u t e f o r w a r d - l o o k i n g s t a t e m e n t s, n o t w i t h s t a n d i n g t h a t s u c h s t a t e m e n t s a r e not s p e c i f i c a l l y i d e n t i f i e d. T h e s e f o r w a r d - l o o k i n g s t a t e m e n t s m a y i n c l u d e s t a t e m e n t s r e g a r d i n g our ( o r our p o r t f o l i o c o m p a n i e s ) p l a n s, o b j e c t i v e s, g o a l s, s t r a t e g i e s, f u t u r e e v e n t s, f u t u r e r e v e n u e or p e r f o r m a n c e, f i n a n c i n g n e e d s, p l a n s or i n t e n t i o n s r e l a t i n g to a c q u i s i t i o n s, i n v e s t m e n t s or c a p i t a l e x p e n d i t u r e s, b u s i n e s s t r e n d s or o t h e r i n f o r m a t i o n t h a t is not h i s t o r i c a l i n f o r m a t i o n. T h e s e s t a t e m e n t s m a y i n c l u d e t e r m i n o l o g y s u c h as m a y, w i l l, e x p e c t, c o u l d, s h o u l d, i n t e n d, e s t i m a t e, a n t i c i p a t e, b e l i e v e, r e m a i n, o n t r a c k, d e s i g n, t a r g e t, o b j e c t i v e, g o a l, f o r e c a s t, p r o j e c t i o n, o u t l o o k, p r o s p e c t s, p l a n, i n t e n d, or s i m i l a r t e r m i n o l o g y. F o r w a r d - l o o k i n g s t a t e m e n t s a r e r e l a t e d to f u t u r e, not p a s t, e v e n t s a n d a r e not g u a r a n t e e s of f u t u r e p e r f o r m a n c e. T h e s e s t a t e m e n t s a r e b a s e d on c u r r e n t e x p e c t a t i o n s a n d p r o j e c t i o n s a b o u t f u t u r e e v e n t s a n d, by t h e i r n a t u r e, a d d r e s s m a t t e r s t h a t a r e, to d i f f e r e n t d e g r e e s, u n c e r t a i n a n d a r e s u b j e c t to i n h e r e n t r i s k s a n d u n c e r t a i n t i e s. T h e y r e l a t e to e v e n t s a n d d e p e n d on c i r c u m s t a n c e s t h a t m a y or m a y n o t o c c u r or e x i s t in t h e f u t u r e, a n d, as s u c h, u n d u e r e l i a n c e s h o u l d n o t be p l a c e d on t h e m. A c t u a l r e s u l t s m a y d i f f e r m a t e r i a l l y f r o m t h o s e e x p r e s s e d in s u c h s t a t e m e n t s as a r e s u l t of a v a r i e t y of f a c t o r s, i n c l u d i n g a m o n g o t h e r s : c h a n g e s i n g e n e r a l e c o n o m i c, f i n a n c i a l a n d m a r k e t c o n d i t i o n s a n d o t h e r c h a n g e s i n b u s i n e s s c o n d i t i o n s ; c h a n g e s i n c o m m o d i t y p r i c e s, t h e l e v e l o f d e m a n d a n d f i n a n c i a l p e r f o r m a n c e o f t h e m a j o r i n d u s t r i e s o u r p o r t f o l i o c o m p a n i e s s e r v e ; a n d c h a n g e s i n r e g u l a t i o n s a n d i n s t i t u t i o n a l f r a m e w o r k ( i n e a c h c a s e, i n I t a l y o r a b r o a d ) ; and m a n y o t h e r f a c t o r s, m o s t o f w h i c h a r e o u t s i d e o f t h e c o n t r o l o f E X O R. T h e s e f a c t o r s s h o u l d n o t be c o n s t r u e d as e x h a u s t i v e a n d s h o u l d be r e a d in c o n j u n c t i o n w i t h t h e o t h e r c a u t i o n a r y s t a t e m e n t s i n c l u d e d in E X O R s A n n u a l R e p o r t , i n c l u d i n g t h o s e s e t f o r t h u n d e r t h e h e a d i n g R i s k F a c t o r s. T h e s e r i s k s a n d u n c e r t a i n t i e s, as w e l l as o t h e r r i s k s of w h i c h we a r e not a w a r e or w h i c h we c u r r e n t l y do not b e l i e v e to be m a t e r i a l, m a y c a u s e o u r a c t u a l f u t u r e r e s u l t s to be m a t e r i a l l y d i f f e r e n t t h a n t h o s e e xp r e s s e d in our f o r w a r d - l o o k i n g s t a t e m e n t s. I n v e s t o r s a n d s h a r e h o l d e r s a r e c a u t i o n e d n o t to p l a c e u n d u e r e l i a n c e on t h e f o r w a r d - l o o k i n g s t a t e m e n t s. F o r w a r d - l o o k i n g s t a t e m e n t s s p e a k o n l y as of t h e d a t e t h e y a r e m a d e. A l l f o r w a r d l o o k i n g s t a t e m e n t s a t t r i b u t a b l e to us or p e r s o n s a c t i n g on o u r b e h a l f a r e e x p r e s s l y q u a l i f i e d in t h e i r e n t i r e t y by t h e f o r e g o i n g c a u t i o n a r y s t a t e m e n t s. E X O R u n d e r t a k e s no o b l i g a t i o n to u p d a t e or r e v i s e i t s o u t l o o k or f o r w a r d - l o o k i n g s t a t e m e n t s, w h e t h e r as a r e s u l t of new d e v e l o p m e n t s or o t h e r w i s e. E X O R e x p r e s s l y d i s c l a i m s and d o e s n o t a s s u m e a n y l i a b i l i t y in c o n n e c t i o n w i t h a n y i n a c c u r a c i e s in a n y of t h e s e f o r w a r d - l o o k i n g s t a t e m e n t s or in c o n n e c t i o n w i t h a n y u s e by a n y p a r t y of s u c h f o r w a r d - l o o k i n g s t a t e m e n t s. N a m e s, o r g a n i z a t i o n s and c o m p a n y n a m e s r e f e r r e d to m a y be t h e t r a d e m a r k s of t h e i r r e s p e c t i v e o w n e r s. T h i s p r e s e n t a t i o n d o e s n o t r e p r e s e n t i n v e s t m e n t a d v i c e n e i t h e r a s o l i c i t a t i o n, n o r a r e c o m m e n d a t i o n n o r an i n v i t a t i o n, nor an o f f e r f o r t h e p u r c h a s e or s a l e of f i n a n c i a l p r o d u c t s a n d / o r of any k i n d of f i n a n c i a l s e r v i c e s as c o n t e m p l a t e d by t h e l a w s in any c o u n t r y or s t a t e. 2

3 INVESTOR AND ANALYST CONFERENCE CALL AGENDA OVERVIEW BUSINESSES GROSS DEBT BOARD OF DIRECTORS PARTNERS COUNCIL FAMILY BUSINESSES CLOSING REMARKS 3

4 INVESTOR AND ANALYST CONFERENCE CALL OVERVIEW 4

5 EXOR FIGURES $29.4bn GROSS ASSET VALUE $25.6bn NET ASSET VALUE $17.9bn MARKET CAPITALIZATION ~30% DISCOUNT ~13% LOAN-TO-VALUE RATIO <10 bps HOLDING COSTS $162bn GROUP NET REVENUES , GROUP EMPLOYEES COUNTRIES 2 EXOR is ranked 20th on the Fortune Global 500 list Note: Figures as of December 31, 2017 (with listed prices updated as of May 24, 2018) 1) Group Net Revenues converted to an average EURUSD = for the year ) Number of countries in which EXOR s businesses have commercial relationships with customers 5

6 2017 HIGHLIGHTS PERFORMANCE Best performing year since 2009 with a +57% NAV per share increase, beating our benchmark by 37% BUSINESSES All businesses achieved or exceeded their financial targets DEBT 25% Gross debt reduction 1. Rating outlook upgraded by S&P 1) Since closing the PartnerRe acquisition in March

7 NET ASSET VALUE NAV BREAKDOWN NAV PER SHARE PERFORMANCE Annual percentage change $mn Value % GAV EXOR Businesses 29, % Others % Gross Asset Value (GAV) 29,450 Gross Debt (3,834) Net Asset Value (NAV) 25,616 Year NAV/Share ($) MSCI World Index ($) Delta (26.2) (7.6) (18.6) (3.1) (2.1) (2.7) YTD Note: Figures as of December 31, 2017 (with listed prices updated as of May 24, 2018) 1) Financial investments, Cash and equivalents and Treasury stock Compounded Annual Rate Total percentage change YTD Note: Data in 2009 starts from March 1st, the date before EXOR s listing on Borsa Italiana. 1) Data in 2018 based on Net Financial Position as of December 31, 2017 with listed prices updated up to May 24th 7

8 TOTAL SHAREHOLDER RETURN (TSR) EXOR Share price ( ) TSR ( YTD 1 ) : 1,071% (~30% CAGR) SHARE PRICE APPRECIATION 994% DIVIDENDS DISTRIBUTED 2 700mn 5.79 Mar-09 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-16 Mar-17 Mar-18 EXOR s share price performance has been driven both by NAV increase and a holding discount reduced by half from ~60% (March 2009) to ~30% (May 2018) 1) Corresponds to dividend adjusted share price (assumes reinvestment of distributed dividends in the stock) from March 2, 2009 up to May 24, ) Cumulative amount of dividends distributed since Includes up to dividend paid in

9 INVESTOR AND ANALYST CONFERENCE CALL BUSINESSES 9

10 EXOR S MAIN BUSINESSES (1/2) COMPANY 2017 HIGHLIGHTS FUTURE DEVELOPMENTS DOUBLED MARKET CAP FROM CASH BURNER TO CASH PRODUCER PLAN CEO SUCCESSION MAGNETI MARELLI 34% of GAV 26% of GAV GOOD UNDERWRITING RESULTS EVEN IN THE THIRD HIGHEST INSURED LOSS YEAR ON RECORD TOP-QUARTILE INVESTMENT RETURNS (4.2%) VS. PEER AVERAGE (3.6%) OPERATING COSTS REDUCED BY MORE THAN 25%, WITH $124M IN SAVINGS CONTINUE TO STRENGTHEN THE ORGANIZATION FOCUS ON RISK SELECTION: NO REVENUE GROWTH WITHOUT BOOK VALUE GROWTH BEST PERFORMER AMONG LUXURY PEERS ACHIEVED 1BN+ EBITDA - TWO YEARS AHEAD OF IPO PLAN PLAN F1 PERFORMANCE 20% of GAV 10

11 EXOR S MAIN BUSINESSES (2/2) COMPANY 2017 HIGHLIGHTS FUTURE DEVELOPMENTS ALL BUSINESS LINES PROFITABLE (~20% INCREASE IN OPERATING PROFIT AND ~40% IN NET INCOME) CEO SUCCESSION 45% NET DEBT REDUCTION AND ACHIEVEMENT OF INVESTMENT GRADE RATING 15% of GAV 10TH LARGEST FOOTBALL CLUB GLOBALLY BY REVENUE ACHIEVED A RECORD OF 7 CONSECUTIVE LEAGUE TITLES AND 4 TH CONSECUTIVE ITALIAN CUP TITLE STRENGTHEN AND DIVERSIFY REVENUE MIX MAINTAIN WINNING SPIRIT 2% of GAV MOST TRUSTED NEWS SOURCE AMONG US READERS (MOST IMPORTANT MARKET) PAUL DEIGHTON NEW CHAIRMAN 2% of GAV INCREASED SUBSCRIBERS AND PRICING FROM ADVERTISING TO A SUBSCRIPTION-BASED BUSINESS 11

12 INVESTOR AND ANALYST CONFERENCE CALL GROSS DEBT 12

13 GROSS DEBT EVOLUTION Bn CREDIT LINES BOND 5.375% 2017 TERM LOAN BONDS Mar-16 Disposal of Almacantar Financial investment proceeds and free cash 31-Dec-17 LTV ratio 1 : 28% flow 14% In 2017 we continued to focus on deleveraging, reducing total debt by ~25% since the closing of PRE in March 2016 Managing our liabilities in a disciplined way combined with the performance of our assets allowed us to reduce our Loan-To-Value (LTV) ratio to ~14% by the end of ) LTV ratio calculated according to S&P s rating methodology: Gross debt adjusted for cash & equivalents and commitments divided by Gross Asset Value adjusted for cash & equivalents and commitments 13

14 GROSS DEBT BREAKDOWN DEBT COMPOSITION 1 DEBT MATURITY PROFILE 2 Public bonds 58% Private placements 41% Bank debt 1% $170 10, Gross debt = 3,269mn All figures are expressed in millions and in the original currency of issuance Bank debt Public bonds Private placements New 10yr and 20yr bond issuances completed in 1Q18: 500mn 1.75% and 200mn 3.125% Most of debt currently made up of bonds, with avg. maturity >7yrs and avg. cost ~2.8% No material refinancing needs, with 2019 and 2020 maturities covered by Net Free Cash Flow 4 1) Gross debt as of December 31, Debt composition post-issuance of 500mn 10-yr public bond in January 18, 2018 (for the repayment of term loan facilities) and 200mn 20-yr private placement in February 15, 2018 (to refinance short-term debt), as announced, with no impact on the Gross debt amount 2) Excluding short-term bank debt 3) EXOR put in place a cross-currency swap on the bond issue 4) Net Free Cash Flow calculated as: Free Cash Flow (Dividend inflows Net financial expenses Recurring net general expenses) minus Dividend outflow 14

15 DEBT MANAGEMENT KEY METRICS APPROACH LOAN-TO-VALUE (LTV) RATIO Keep LTV below 20% Demonstrated ability to restore the ratio when it went above 20% after acquiring PartnerRe through an all-cash deal AMOUNT OF DEBT Monitor our debt levels relative to the value of our assets, but also in absolute terms 15

16 INVESTOR AND ANALYST CONFERENCE CALL BOARD OF DIRECTORS 16

17 BOARD OF DIRECTORS Members 23% Independent 0% Female 60 Years old on average 2 Nationalities 11 Members 54% Independent 36% Female 50 Years old on average 7 Nationalities INDEPENDENT DIRECTORS JOSEPH Y. BAE MELISSA BETHELL MARC BOLLAND LAURENCE DEBROUX CO-PRESIDENT & CO-COO KKR SENIOR ADVISOR AT BAIN CAPITAL FORMER MARKS&SPENCER CEO AND MORRISONS CEO; NOW AT BLACKSTONE GROUP CFO HEINEKEN N.V. ANNEMIEK FENTENER VAN VLISSINGEN CHAIRMAN SHV HOLDINGS ANTONIO HORTA-OSORIO GROUP CEO LLOYDS BANKING GROUP 17

18 INVESTOR AND ANALYST CONFERENCE CALL PARTNERS COUNCIL 18

19 PARTNERS COUNCIL GEORGE OSBORNE (CHAIR) MICHAEL LARSON JORGE PAULO LEMANN NASSEF SAWIRIS Former British Chancellor of the Exchequer. Editor London Evening Standard Chief Investment Officer BMGI USA Co-Founder 3G Capital BR CEO OCI EGY ROB SPEYER JOSEPH C. TSAI MIKE VOLPI RUTHI WERTHEIMER President & CEO Tishman Speyer USA Executive Vice Chairman Alibaba Group CHN Co-Founder Index Ventures ITA Founder, Owner & Chairwoman 7-Main ISR A group of highly successful business leaders that will bring additional experience and opportunities to EXOR and its companies 19

20 INVESTOR AND ANALYST CONFERENCE CALL FAMILY BUSINESSES 20

21 FAMILY BUSINESSES (FB) HAVE OUT-PERFORMED THE MARKET OVER THE LONG TERM Last 20Y Total Shareholder Return 1,794% 1,130% Family Businesses 1 Diversified Holdings 2 217% MSCI World Index ($) 1) Family business defined as a company where (i) a family has a relevant voting power (20%+) or (ii) the CEO or Chairman holds relevant economic interest (5%+). The subset of Family Businesses was obtained from an analysis of the shareholding structure of the constituents of the broader MSCI Index (1600+ companies as of Dec 2017). It includes 300+ companies and it remains broadly diversified in terms of geography and industry, thus limiting sector or geography bias. Equally weighted index 2) A global group of diversified holdings equally weighted index including: Bollore, CK Hutchinson, GBL, HAL, Investor AB, Industrivarden, Jardine Matheson, JG Summit, Koç Holding, Loews, Mahindra, Power Corp, SM Investments, Swire Source: CIQ as of May 24, Data in USD 21

22 FB HAVE RECOVERED FASTER AFTER 2008 MARKET DOWNTURN TSR Performance through 2008 market downturn (in $) 80.0% 60.0% +53% 40.0% 20.0% 0.0% +3% -20.0% -40.0% -60.0% Jun 2008 Dec 2008 Jun 2009 Dec 2009 Jun 2010 Dec 2010 Jun 2011 Family Businesses MSCI World Index Source: CIQ 22

23 SUPPORTED BY STRONG GROWTH IN THEIR UNDERLYING EARNINGS TSR components break-down ( ) FAMILY BUSINESSES MSCI WORLD ($) +53% +3% Initial Value Fwd EPS Growth Fwd P/E Re-rating Dividends Final Value Initial Value Fwd EPS Growth Fwd P/E Re-Rating Dividends Final Value Earnings capability and a more conservative capital structure (~30% lower Net Debt/EBITDA 1 ) have allowed FB to deliver superior returns during the crisis Note: The representation of the TSR components is illustrative given their non-linear relationship; 1) Based on historical comparison between FB and other businesses within the current constituents of the MSCI World Index Source: CIQ, Bloomberg and EXOR estimates; data in USD referring to the period from June 2008 to June

24 FB BRING REAL VALUE 1 A WINNING INVESTMENT STRATEGY The evidence suggests FB deliver strong results over the long term and are well positioned to withstand market downturns We are studying ways of creating a liquid financial instrument of high quality FB where EXOR and PartnerRe could invest in the event of a market correction 2 A STRONG CULTURE LEADS TO STRONG PERFORMANCE EXOR will continue to learn from and apply to its activity and businesses the strong culture and the competitive advantage that characterize FB 24

25 INVESTOR AND ANALYST CONFERENCE CALL CLOSING REMARKS 25

26 2018 OBJECTIVES QUANTITATIVE QUALITATIVE NAV per share in USD to outperform the MSCI World index in USD Free Cash Flow 1 > Dividend outflow Reassess our corporate culture as we reach EXOR s first decade Strengthen the governance framework for EXOR companies Loan-To-Value ratio below 20% Continue to study family businesses 1) Free Cash Flow calculated as (Dividend inflows Net financial expenses Recurring net general expenses) 26

27 INVESTOR AND ANALYST CONFERENCE CALL Q&A SESSION 27

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