The new Generali industrial plan for the three-year period 2022-2024
A plan in continuity with the strategies of the last three years on which Piazza Affari does not heat up (+ 0.27% to € 18.50 at closing). Less cash forBUT (4 billion in the old plan against i 2.5-3 billion of the three-year period 2022-2024) to allocate greater resources for investments in digital and technological transformation and get your hands on start-up successful ininsurtech, thus facing the criticisms of pact members Francesco Caltagirone (who voted against in the Board of Directors yesterday) e Leonardo Del Vecchio (absent the representative Romolo Bardin) on the delays of Lion on innovation in the company.
But higher profits and, above all, growth of the dividend payout for at least 700 million euros (from 4.5 billion in the three-year period 2019-2021 to 5.2-5.6 billion from 2022 to 2024) promised to shareholders. The only strategic move of Philippe Donnet which surprised analysts and concocted to push that approximately 50% of shareholders, between institutional investors e retail, which will be thetip of the scales in April on the governance to reconfirm him in the assembly.
This is the main feature of the new business plan of Generali “Lifetime Partner 24: Driving Growth“, business plan highly anticipated for the ongoing battle between Mediobanca And De Agostini (outgoing) on the one hand and the two great old men of Italian capitalism that with the Crt Foundation they want a discontinuity in governance And an acceleration in the size and capitalization growth of Generali in order to rebalance the gaps with the big Allianz And Axa who have detached the Lion.
The average annual growth in earnings per share in 2022-2024
A plan in which Donnet, thanks to the credibility it enjoys on the market for the target of two strategy since 2016 always centered (the last even in the difficult phase of Covid), decided to push hard on new profitability targets, promising a annual growth in earnings per share in the next three years of 6-8% (Equita estimates + 5%) and, at the same time, a organic cash generation overall at the end of the plan over 8 and a half billion.
An advance to the Donnet members, with i 500 million euros (about 600 at home after closing in early 2022 on the French The Medical) unspent of treasure intended forBUT of the plan that will expire in a few days, has decided to give it by starting a buyback (buyback of own shares) within the next 12 months, the first in 15 years in Trieste. “The buyback at the assembly of 29 April, then we will proceed immediately after“, explained the top-manager that so played another jolly to push the members to reaffirm him.
The main industrial levers of the new plan
The main industrial levers that the French insurer with dual (Italian) citizenship based in Venice will act to succeed distribute at least 5.2 billion coupons to shareholders, in the event that the list of the outgoing council is victorious in the next meeting, I am the annual growth of over 4% in Non-Life premiums (not Rc Auto) bringing to 2.3-2.5 billion the value of new production at the end of the plan (against 1.9 billion in 2020). Sector in which the acquisitions of the company in the same areas where the Lion did shopping in the last three years (area Central East Europe and Asia), the M&A to which to allocate 2.5-3 billion in the policy market and in managed (focus, as anticipated by Affaritaliani.it, on United States And United Kingdom), 100 million extra commission income in the management of masses of third parties in‘asset management they investments in digital andinsurtech.
To the chapter tech, on which he was heavily criticized by Delfin and by the vice president Caltagirone, Donnet decided to allocate to which to allocate 1.1 billion euros over the three-year period (+ 60% compared to the previous plan), plus the creation of a bottom ad hoc from 250 million euros “To seize – reads the note from Generali – opportunities with high potential ininsurtech“. At the same time, Donnet will also operate the leverage of cost reduction, reducing the relationship cost / income by 2.5-3 basis points.
Donnet: “A plan based only onBUT it’s not a plan “
“The most important part of the plan is not theBUT, also because this cannot be planned and if a plan is based only onBUT it is not a plan “, the manager justified himself, questioned on the fact that the budget for external growth, between 2.5 and 3 billion, was less than the 4 billion of the previous plan. The group CEO pointed out that if other operations such as the run off from Generals Leben the budget it could however increase.
That said, the 3 billion is one “good amount” to “achieve a good balance between the cash returned to shareholders and the capital invested in growth”. “We will allocate 5.6 billion to dividends, between 500 million and 700 million for internal growth and therefore 3 billion will remain for mergers and acquisitions”, added Donnet starting from the target of more than 8.5 billion in cash generated at the end of the plan.
There strategy ofBUT? “Always the same: selecting opportunities that create value for all stakeholders and shareholders, strengthen ourselves in business insurance in the markets in which we are already present, for example in Asia, as we did in Malaysia, aiming at selected markets “, he pulled straight the head of the Lion, according to which “as regards theasset management, where we want to be a global leader, the target it is broader and includes above all Great Britain And United States“.
Second Equity, Donnet’s plan focuses onincrease in collection It is on maintenance of technical margins, improving the market share in segments with high growth potential. It also aims to continue the development of low capital absorption products in the Life And optimization of existing portfolios to reduce capital absorption and the development ofasset management in order to increase the size of the division and generate an additional 100 million in revenues from third parties.
The counter-plain of Caltagirone and Del Vecchio
The eyes are now on countertop and on names that the pactists will deploy to convince the market to support their list at the next renewal of the corporate bodies. A more aggressive plan that will be presented between January and February and which, unlike what has been done by the group CEO, will push more on the lever ofBUT, ofasset management and dimensional growth.
@andreadeugeni
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