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Alessandro Profumo - CEO

UCI Portfolio Strategy: Focus on New Europe. Alessandro Profumo - CEO. 2 nd UCI INVESTOR DAY. Focus on New Europe. London, December 5 th , 2002. UCI Portfolio Strategy: Focus on New Europe. A. Profumo – UCI CEO. Strategy and Organisation of NE Division.

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Alessandro Profumo - CEO

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  1. UCI Portfolio Strategy: Focus on New Europe Alessandro Profumo - CEO 2nd UCI INVESTOR DAY Focus on New Europe London, December 5th, 2002

  2. UCI Portfolio Strategy: Focus on New Europe A. Profumo – UCI CEO • Strategy and Organisation of NE Division R. Nicastro – UCI Head of New Europe Division • EU Enlargement: Implications for existing and future EU member countries F. Pissarides – EBRD, Senior Economist • New Europe Banks: Rising Leaders J. Kunert – Unibanka CEO B. Karacam – KFS CEO • New Europe Banks: Clear Leaders F. Lukovic – ZABA CEO L. Hampartzoumian – Bulbank CEO M. Wisniewska – Pekao CEO 2nd UCI INVESTOR DAY – FOCUS ON NEW EUROPE: TODAY’S AGENDA

  3. UCI has diversified in many different businesses and geographies according to a defined portfolio strategy in order to exploit all the opportunities deriving from high potential segments/areas. UCI’s organisational structure has been developed accordingly • UCI has found a “second home market” in New Europe, with high growth perspectives and declining risks also thanks to EU convergence • In 3 years we have acquired a leading position in the region, being present in 8 countries, serving more than 7 million clients and becoming soon leaders as for profitability and efficiency • New Europe has increasingly contributed to UCI Group’s revenue (and risk) diversification, showing very good results in terms of value creation, RARORAC and ROI • Today all the banks are managed according to the Group’s standards, leveraging on cross-fertilisation. The management team is our Key Success Factor KEY HIGHLIGHTS

  4. UCI DIVERSIFIED IN THE RIGHT BUSINESSES AND GEOGRAPHIES AND THERE IS STILL A SIGNIFICANT POTENTIAL TO BE EXPLOITED Leverage on synergies and or acquire capabilities of best owner = Euro 250 mln revenues COMPARISON CRITERIA Push growth limits/ allocate additional resources • Value creation of current operations • Value creation of new investments/options + Consumer Finance Retail UBM Private Banking New Europe Asset Management VALUE CREATION POTENTIAL Asset Gathering Do not invest further and/or free up capital allocated Corporate UNDERSTAND CURRENT AND POTENTIAL VALUE CREATION FROM EACH BU Cannot add value Can add value - Non natural owner Natural owner + - RELATIVE CAPACITY TO EXTRACT VALUE • Relative/absolute market share • Historical track record of returns • Synergies among businesses IDENTIFY DEGREE OF NATURAL OWNERSHIP OF EACH BU IN ITS RELEVANT MARKET COMPARISON CRITERIA

  5. THE NEW ORGANIZATIONAL STRUCTURE HAS BEEN DESIGNED TO EXPLOIT ALL THE EXISTING BUSINESS POTENTIAL AND TO DRIVE FUTURE GROWTH Consumer Finance Retail UBM Private Banking Asset Management New Europe Asset Gathering Corporate UCI Corporate division Retail division Private & AM division New Europe division Retail Bank Corporate bank Private bank New Europe Banks TradingLab UBM Pioneer Clarima(1) BMC(3) Xelion Adalya(2) Locat(4) (1) Consumer Finance (2) Retail mortgages (3) M/l term corporate financing (4) Leasing

  6. EU 27 MAY 2004 / 2007: HOW EUROPE WILL LOOK LIKE New Europe(1) Total EU Year 2001 data Population, mln 174 551 377 GDP, Euro bn 627 9,633 9,006 23,885 Per Capita GDP, Euro 3,472 17,482 8,559 Loans, Euro bn 167 8,726 9,773 Deposits, Euro bn 288 10,061 203% 72.6 Loans + Dep. /GDP % 195% (1) Including Croatia and Turkey and excluding Malta and Cyprus

  7. NEW EUROPE IS OUR SECOND HOME MARKET… VALUE CREATION OPPORTUNITY NEW EUROPE: 2001 RARORAC: 6.3% 01-05 REVENUE GROWTH: 9.4% • Attractive but volatile (especially in the short term) growth, strong increasing RARORAC • Second wave of consolidation likely to happen also due to marginal presence of some foreign players • EU Convergence can improve value further High potential BEST OWNERSHIP/SYNERGIES New Europe Value creation potential • UCI has the largest position in the region ... • ... and the best performance in terms of efficiency and profitability • Cross fertilization of business models and product offering already effective • New Europe platform can be leveraged for specialized businesses and product factory integration • Long term option for cross-country integration (e.g. IT/OPS) Low potential Cannot add value Can add value Non-natural owner Natural owner

  8. … WITH HIGH GROWTH PERSPECTIVES AND DECLINING RISK • Abundant growth expected: • GDP and banking sector growth • Plenty of economies of scope/know-how transfer opportunities • Favourable tax environments • Italian driven corporate business Higher growth perspectives • Reasonable and further declining economic & political risk • Already different from other Emerging Markets areas • Perspective entry into EU and EMU guarantees a predetermined convergence path Cost of equity

  9. WE HAVE ACQUIRED AN IMPORTANT PRESENCE IN NEW EUROPE … Pekao - Poland UniBanka - Slovakia 72.4% acquired in October 2000 53.2% acquired in May 1999 Warsaw Prague Bratislava UniCredit – Romania Zagreb 82.5% acquired inMay 2002 Bucarest Zagrebacka Group -Croatia & Bosnia Herzegovina Sofia 82.0% acquired in March 2002 Istanbul Bulbank - Bulgaria 85.2% acquired in October 2000 Zivnostenka - Czech Rep. KFS - Turkey 50% acquired in October 2002 85.2% to be acquired in Dec 2002 Minor presences: Pekao Ukraine, Pekao Tel Aviv, Koc Azerbaijan, Koc Netherlands

  10. … BECOMING THE LEADING BANK IN THE REGION FOR NET PROFIT, TOTAL ASSETS AND COST/INCOME RATIO 7 millions clients in 8 countries Data as at Dec. 2001 Total Net Profit (mn Euro) Total Assetsbn Euro Cost / Income Pro quota Controlled (1) UCI 53% 268 22.3 33.7 456 (2) HVB 225 20 24.0 (3) 192 KBC 26 223 149 32.5 INTESABCI 11.1 117 146 9.4 Peers’ Average 71% 137 10.5 RZB 10,1 (3) 126 ERSTE(4) 60 97 13 21.9 SG 13 69 11.1 17.4 (1) Considering 100% of total assets / profit for controlled Companies (stake  50%) and share owned for non controlled companies (2) Including Koç FS and Zivnostenka(3) Our preliminary estimate(4) Excluding Rijecka Banka Source: Bankscope

  11. DIVERSIFICATION OF REVENUES BY BUSINESS AND BY GEOGRAPHY IS A KEY SUCCESS FACTOR TO ENSURE UCI’S GROWTH AND MANAGE THE RISK PROFILE … UCI REVENUE COMPOSITION BY BUSINESS AREA (Net of infra-Group dividends and of Corporate Centre & Elisions negative contribution) 9,317 mln 10,633 mln 7,679 mln New Europe Banking 15.4% 13.7% 16.3% Asset Management 2.7% 4.6% 4.9% 4.8% Investment Banking 5.7% 7.9% New Initiatives 0.2% 0.2% 78.8% Italian Banking 73.2% 71.6% 2000 2001 9M02

  12. … AND IT WILL SOON INCREASE – AT GROUP & NE DIVISION LEVEL - THANKS TO NEW ACQUISITIONS (KFS, UCROMANIA, ZIVNOSTENKA) NEW EUROPE BANKING TOT. REVENUES Sept.02 – UCI’s PORTION: EURO 897(1) mln KFS 16% (Euro 144 mln) ZIVNOSTENKA 3% (Euro 31 mln) UCROMANIA1% (Euro 7 mln) UNIBANKA 2% (Euro 22 mln) BULBANK 6% (Euro 49 mln) GROUP PEKAO 51% (Euro 457 mln) ZAGREBACKA 21% (Euro 187 mln) (1) Pro-forma calculation. Pekao, Zaba, Bulbank, Unibanka, UCRomania – ItAS; KFS and Zivno IAS Sept. 2002

  13. 9M02 RESULTS CONFIRMED ONCE AGAIN THE GROUP’S ABILITY TO CREATE VALUE, WITH A GOOD CONTRIBUTION FROM NEW EUROPE … NOPAT (a) Risk taken(1) (b) Shareholder’s value added (c) =(a)-COE(2) Value added per unit of risk taken (c)/(b) MARGINAL RARORAC% RARORAC % Adj NET INCOME VALUE CREATION CAPITAL ABSORPTION (Euro mln) 1,367 Group total(3) 8,874 695 10.5 13.2 1,326 6,189 907 19.5 19.7 Italian banking 253 804 121 20.1 49.6 Wholesale banking 131 913 60 17.5 8.8 New Europe banking -59 New Initiatives 12 -62 n.s. n.s. (1) Minimum regulatory capital, market risks, credit risks and operational risks (2) The Cost of Equity is related to the capital employed (Net equity for the Group and allocated capital for the business units) (3) Balance due to Corporate Center and Other companies, respectively -284 for Adjusted Net Income, 956 for Capital absorption and -331 for Value Creation

  14. …. WHERE ACQUISITIONS ARE QUICKLY REWARDING THE INVESTMENT Years of full UCI management Sept. 2002 MARGINAL RARORAC (Euro mln) UCI’S Total Investment(1) 2002 ROI Banks NE Division (2) 2,148 17.5% 11.3% 2 Pekao 1,205 9.9% 10% 3 Bulbank 242 43.6% 14% 2 Unibanka 65 34.1% 6.2% 2 Zaba(4) 614 23.2% 14% 1 Splitska Banka 59 N.a. 19%(3)2 • Calculated including acquisition price and further capital increase and deducting capital gains from sales of minority stakes and extraordinary dividends. Total NE Division excluding Splitska Banka • Sept. 2002 data for Marginal Rarorac; Weighted Average for 2002 ROI (excluding Splitska); simple average for years of full UCI management (including Splitska) • Excluding gross impact of Euro 34 mln from capital gain on Splitska sale (realised in 2002) • Figures based on current 82.47% stake finalised in 2002

  15. THE TEAM IS OUR KEY SUCCESS FACTOR M. Wisniewska (CEO) P. Fiorentino (Dep. CEO) PEKAO UCI – NE DIVISION R. Nicastro (Head of Division) F. Lukovic (CEO) A. Decio (Dep. CEO) ZABA • PLANNING & DEVELOPMENT M. Moi Hampartzoumian (CEO) L. Lovaglio (Dep. CEO) BULBANK • RETAIL BANKING C. Burberi J. Kunert (CEO) A. Casini (Dep. CEO) UNIBANKA • CORPORATE BANKING A. Steinbichler S. Saldirak (CEO) UCI ROMANIA • CREDIT RISK PROCESSES G. Vovk B. Karacam (CEO) F. Ghizzoni K. Kaya (Dep. CEOs) KFS • IT & ORGANISATION F. Pusateri M. Minolfi (Dep. CEO) ZIVNO

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