Generali Group: Net profit at € 2 bln(+ 21.6 %) in 2015
The Board of Directors of Generali, which met under the chairmanship of Gabriele Galateri di Genola, approved the consolidated financial statements and the draft financial statements of the Parent Company for 2015.
Generali Group ended the year 2015 with excellent results: operating performance exceeded pre-financial crisis levels, whilst net profit and the dividend are the best in the past 8 years. In spite of a challenging macroeconomic environment and low interest rates, the strategic initiatives undertaken by the Group have created strong growth in production, excellent operating profitability and a further improvement in capital strength. The Group’ s operating result reached € 4,785 million(€ 4,508 mln FY14), up by 6.1 %, driven in particular by the P & C segment(+ 8.5 %) and thanks to a solid result of the Life segment, in spite of the current situation of the financial markets. The operating RoE, the main profitability target, consequently reached 14 %, a significant increase compared to 2014( 13.2 % FY14), amply exceeding the goal of remaining above 13 %. Net profit grew significantly to € 2,030 million(+ 21.6 %; € 1,670 mln FY14), thanks to the improvement in operating and non operating performance, thus returning to pre-financial crisis levels. On the production front, the launch of new products and business initiatives boosted total premiums to € 74,165 million, up by 4.6 %(€ 70,430 mln FY14): the increase was driven by the Life segment and by the recovery of the P & C segment. Life premium income grew to € 53.297 million(+ 6.2 %; € 49,813 mln FY14), thanks to the improvement of all business lines and the excellent performance of the main Countries where the Group operates( Italy, France, Germany and CEE countries). New production is stable in terms of APE at € 5,210 million(-0.2%), where the positive performance of the unit linked and protection policy products is offset by a decline in savings production, with business mix consequently shifting in line with group’ s strategic ambitions. Profitability( NBM) held firm at 21 %( 24 % FY14) and, due to the decisive
1 Italy, Germany, French P & C business, and the Czech Republic
actions taken to improve the business mix and to the recalibration of guarantees, it was able to counteract the unfavourable scenario of low interest rates and increase in volatility recorded in the second quarter. The value of new production( NBV) reached € 1,097 million(-13 %). In the P & C segment, premiums grew by 0.8 % to € 20,868 million(€ 20,617 mln FY14), through the growth of both the Non Motor line and the steady performance of the Motor line, which however experienced varied performance in the different countries where the Group operates because of the strong competitive pressures. The P & C business confirmed its very strong technical profitability, with a combined ratio which improved further to 93.1 %(-0.6 p. p.) thanks to the decline of the loss ratio, in spite of the greater impact of catastrophic claims by € 75 million(+ 0.4 p. p.). The reserving ratio remained stable at 154 %. These results are accompanied by a strengthened capital position which the Group continues to hold in a sharp focus. Shareholders’ equity grew 1.5 % to € 23.6 bln. The Solvency I ratio is 164 %(+ 8 p. p.; 156 % FY14). The Group’ s high level of organic capital generation drove an increase in the Economic Solvency Ratio to 202 %(+ 16 p. p.; 186 % FY14), as calculated under Solvency II principles, using the Group’ s internal model for the whole Group’ s perimeter and after accruing the proposed dividend. From a regulatory perspective, on 8 March 2016, the Group has received the regulatory approval for the use of a partial internal model, starting from January 1, 2016, covering all the entities included in the application 1 while the remaining businesses will be treated under the Standard Formula initially. This calculation gives the Regulatory Solvency Ratio, which stands at 175 %. The Group is working with the regulators to widen the scope of internal model approval over time, aiming to have substantially all relevant business units in scope by the end of the process. The regulatory solvency ratio is therefore expected converge to the full internal model view, as the process of achieving the planned expansion of the application’ s scope progresses. Furthermore, Generali have made a strong first step towards the financial target of more than € 7 billion of cumulative Net Free Cash Flow generation by 2018. Thanks to higher dividends from subsidiaries and slightly lower interests expenses, the net free cash flow increased by 30 % to € 1.6bn(€ 1.2 bln FY14). The dividend per share to be proposed at the next Shareholders’ Meeting is € 0.72, up by € 0.12 cents per share(+ 20 %) relative to the previous year(€ 0.60 FY14). The payout ratio is equal to 55.3 % from 55.9 % in 2014. The total dividend relating to shares outstanding amounts to € 1,123 million. The dividend payment date shall be from May 25, 2016 with record date on May 24, 2016 and ex-dividend date from May 23, 2016.“ The positive result for 2015 shows the quality of the turnaround plan accomplished by the company over the last few years and of the new strategy launched last year. These results allow us to propose at the Shareholders’ Meeting a dividend per share of 0.72 up by 20 % compared to 2015. This is an excellent start to a new phase beginning with the appointment of Philippe Donnet as new Group CEO. It is an important acknowledgment of Generali’ s internal resources, also affirmed by the appointment of the Group CFO Alberto Minali as General Manager. Both of them are leaders of the highest international quality, with a deep understanding of the insurance business and well appreciated by the markets; they show the capability of Generali Group to enhance its own talents”, said the Chairman of Generali, Gabriele Galateri di Genola.
( ΑΠΡΙΛΙΟΣ 2016) 89