madrid, 2 of march 2010 - grupocatalanaoccidente.com/media/files/g/grupo-cat... · madrid, 2 of...

Madrid, 2 of March 2010

2009 RESULTS PRESENTATIONMr. Francisco Arregui, General Manager and Mr. Juan Casanovas, CFO

2

CONTENTS

1. Introduction

2. 2009 in figures

3. Grupo Catalana Occidente’s share

4. A Group prepared for the future

3

INTRODUCTIONMr. Francisco Arregui, General Manager1 .

3

4

Our strategy

Main magnitudes of 2009

Principal facts

INTRODUCTION

5

INTRODUCTIONOur strategy

ProfitabilityGrowth

Solvency

6

2009 better than 2008?

High competitive environment in traditional business

Atypical cyclonic storm

Increase of credit insurance demand and restrictive

supply

INTRODUCTIONPrincipal facts

6

EXTERNAL

INTERNAL

Atradius’ Special Action Plan

Measures on business

Measures on expenses

Synergies achievement – set up of Corporate IT

7

2008 2009

Premiums 3,231.4 3,034.6

Traditional business ordinary profit 162.6 138.1

Credit insurance ordinary profit -172.7 -80.8

(figures in million euros)

Sound and recurrent traditional business

INTRODUCTIONMain magnitudes of 2009

Technical result 144.1 137.2Financial result 73.5 50.4

Traditional business 1,690.4 1,716.8Credit insurance business 1,540.7 1,317.8

-6.1%1.6%

-14.5%

8

2008 2009

First quarter

Second quarter

Third quarter

Fourth quarter

25.2

10.2

- 65.5

-142.6

-71.9

-33.0

10.0

14.1

(figures in million euros))

Gradual improvement


Credit insurance ordinary profit

Attributable profit 104.4 101.2

Consolidated profit 2.8 37.9

9

2008 2009

Long term capital (*) 1,604.8

Technical provisions 7,251.4

Excess of solvency 1,488.4

Funds under management 7,793.3

Rating

(*) Includes Equity and subordinated debt (**) Excluding Atradius’ minority interests acquired by the transaction

+2.9%Excluding transaction

426.2%Of minimum required

Robust balance sheet

A-


1,422.1 (**)

6,920.8

1,447.8 (**)

7,767.9

A-


377.1%Of minimum required

10

2009 better than 2008?

High competitive environment in traditional business

Atypical cyclonic storm

Increase of credit insurance demand and restrictive

supply

INTRODUCTIONPrincipal facts

10

EXTERNAL

INTERNAL

Atradius’ Special Action Plan

Measures on business

Measures on expenses

Synergies achievement – set up of Corporate IT

Atradius’ minorities acquisition

11

INTRODUCTIONPrincipal facts – Atradius’ minority interests acquisition

11

Purchase agreement with Atradius’ minority interests

GCO acquires directly 26.66%

INOC,SA acquires the 9.11% of Atradius NV capital

GCO has the right to acquire the 9.11% to INOC,SA in 2 years

Atradius’ valuation: 1,500 M€ (18.87 euros per share)

* Pending of regulatory approval

PURCHASE AGREEMENT*

12


2009 Structure 2010 Structure

GCO

INOC, SA

Grupo Crédito y Caución, SL

ATRADIUS, NV

Crédito y Caución

100%

56,71%

73,84%

CCS ESA

9,88% 11,28% 5,00%

GCO

INOC, SA


ATRADIUS, NV

Crédito y Caución

100%

56.71%

64.23%

73.84%

CCS GES+ NAC

ESA

9.88% 11.28% 5.00%

S Re DB SO

25.0% 9.1% 1.7%

GCO

INOC, SA


ATRADIUS, NV

Crédito y Caución

100%

56,71%

9,11%26,66%64,23%

73,84%

CCS ESA

9,88% 11,28% 5,00%

GCO

INOC, SA


ATRADIUS, NV

Crédito y Caución

100%

56.71%

9.11%26.66%64.23%

73.84%

CCS GES+ NAC

ESA

9.88% 11.28% 5.00%

Economic stake of 47.43% Economic stake of 74.09%

Total investment

535 + 400

13


Profit and Loss

In 2010% Attributable profit: 74.09%

Balance Sheet in 2009 figures

Equity - 228.7 M€ (minority interests)Goodwill + 168.8 M€Debt + 397.4 M€

Solvency

Available capital - 228.7 M€ (426.2% vs. 477.3%)S&P confirmed A - rating with negative outlook

IMPACT ON RESULTS, BALANCE SHEET AND SOLVENCY

14

2009 IN FIGURESMr. Juan Casanovas, CFO2 .

14

15

Premiums and Results

Traditional business performance

Credit insurance business performance

Capital and Solvency

Investments

2009 IN FIGURES

16

1.2%

2008 2009% CHG.

Multirisk 366.6 5.1%273.9 -7.4%Other Non -Life439.9 -5.1%Auto610.0 8.3%

Traditional Business 1,690.4 1.6%Credit insurance business 1,540.7 -14.5%TOTAL PREMIUMS 3.231.1 -6.1%Service revenues 225.4 -12.2%TOTAL VOLUME 3,456.5 -6.5%Return on investments 398.4 -13.6%TOTAL REVENUES 3,854.9 -7.2%

Contributions to Pension Funds 76.7 -26.7%Contributions to Mutual Funds - 18.7

% CHG. market*

(*) According to ICEA for the Spanish insurance market. 2009 year-end

Ranking

115 4

14

9

3.51%4.76%

3.73%

2.35%

6.34%

Total

Life

Total Non - LifeMultiriskAuto

160.5%Credit Insurance

Spanish market share (*)Ranking


2009 IN FIGURESPremiums

Life

385.2253.5417.6660.5

1,716.81,317.83,034.6

197.83.,232.4

344.43,576.8

56.2- 8.6

5.8%-5.4%

3.1%

17

Diversification and complementarity of our business mix

CONSOLIDATES BUSINESS DIVERSIFICATION


lIFE

21.4%

Other Non-Life8.2%

Multirisk

12.5%

Auto

13.6%Credit

Insurance42.8%

PF +MF1.5%

ATTRIBUTABLE BUSINESS DIVERSIFICATION

Life

27.6%

Other Non-Life

10.6%

Multirisk

16.1%

Auto

17.5%

CreditInsurance

26.2%

PF +MF2.0%

18


Presence in more than 40 countries

1,179 offices

More than 20,000 agents

More international potential growth

GEOGRAPHICAL DIVERSIFICATION

Spain71.8%

Italy2.2%

France3.9%

Rest of E.E.C.6.6%

Rest of countries4.7%

United Kingdom3.3%

Germany

4.4%Netherlands

3.3%

19

2008 2009% CHG.

Multirisk 31.2 32.9 5.4%Other Non-Life 53.3 46.7 -12.5%Auto 40.4 36.8 -9.0%Life 19.1 20.8 8.8%

ORDINARY NET TECHNICAL RESULT 144.1 137.2 -4.8%Financial Result 73.5 50.4 -31.4%ORDINARY TECHNICAL AND FINANCIAL RESULT 217.6 187.6 -13.8%Taxes 55.0 49.5 -10.0%

ORDINARY PROFIT FROM TRADITIONAL BUSINESS 162.6 138.1 -15.0%

ORDINARY PROFIT FROM ATRADIUS NV -172.7 -80.8

NON RECURRING RESULT 12.9 -19.4

CONSOLIDATED PROFIT 2.8 37.9 1,252.4%Attributable to minority interests -101.6 -63.2Attributable to the parent company 104.4 101.2 -3.1%


2009 IN FIGURESResults

20

Written premiums (M€)Technical ordinary result (M€)Combined ratioOrdinary profit (M€)

1,690.4144.1

88.4%162.6

1,716.8137.2

89.1%138.1

2008 2009

Business based in Spain – slightly above of the market growth (1.6% vs. 1.2%)

Customers loyalty through our professional agent network

Technical cost and combined ratio containment

Permanent cost control and programs to exploit synergies

% chg.

p. – points

Income and results containment as a result of the Spanish economic situation

2009 IN FIGURESTraditional business performance

1.6%- 4.8%0.7 p.

- 15.0%

21

Premiums have risen 5.1% (market 3.1%)

Combined ratio at 91.2% (+ 0.1 points)

Increase of the technical result by 5.4%

MULTIRISK

Premiums decreased by 5.1% (market – 5.4%)


Technical result drop by 9.0%

AUTO


2010 -

2010 -

Good performance

Difficulties of growth

2009 - Good perspectives in both, premiums and results

2009 - Difficulties of growth.Target to maintain business Technical cost increase – Cost reduction

22

OTHER NON - LIFE

LIFE


Premiums decreased by 7.4%


Technical result drop by 12.4%

Increase of 8.3% in premiums (market 5.8%)

Lower contribution to Pension and Mutual Funds

Technical result improved by 8.9%

2010 -

2010 -

Difficulties of growth

Good performance

2009 - More competition in saving products

2009 - Difficulties of growth.Target to maintain business Technical cost increase – Cost reduction

23

2009 IN FIGURESTraditional business performance - Combined ratio

Combined ratio evolution of Traditional business

23

AUTO

MULTIRISK

OTHER NON - LIFE

TRADITIONAL BUSINESS

83.0%

91.0%89.1% 91.2%

93.2%

91.3%90.2%

92.5%

87.7%89.3%

80.5% 80.5%

91.4%90.9%

89.6%

94.5%

90.4%91.4%

88.4% 89.1%

2005 2006 2007 2008 2009

24

Written premiums (M€)Ordinary profit (M€)Combined ratio

Technical expensesCommissions Expenses

Attributable profit (M€)

1,540.7- 172.7118.1%88.9%10.3%18.9%- 78.0

1,317.8- 80.8

111.2%81.6%10.0%19.6%- 54.8

2008 2009 % chg.

Credit insurance results should be analysed quarter by quarter

2009 IN FIGURESCredit insurance business performance

-14.5%-

- 6.9 p.- 7.3 p.-0.3 p.0.7 p.

-

p. – points

25


Performance of the combined ratio of credit insurance quarter by quarter

25

217.5%

101.5% 96.1%115.7%

126.6%

99.9%93.0%

154.2%127.3%

98.2%109.3%

118.0%134.6%

90.3% 98.3%

123.5%101.4%

77.2% 91.3%109.8%

103.5%97.3%

111.3%

184.2%

1Q08 2Q08 3Q08 4Q08 1Q09 2Q09 3Q09 4Q09

Total Atradius Crédito y Caución

26


26

Spain European Economic Community and United States of America

Accumulated inter - annual variation rate / Source: Crédito y Caución Expected Default Frequency rate / Source: Atradius y KMV

27


Results evolution quarter by quarter


Net technical resultMultirisk 4.0 8.2 9.8 9.2 4.6 11.5 9.0 7.8

Other Non - Life 9.3 19.7 15.9 8.4 11.6 19.2 14.8 1.1Auto 6.8 12.4 6.1 15.1 7.9 12.9 2.9 13.1Life 5.5 2.4 3.9 7.3 6.9 4.3 1.3 8.3

Ordinary net technical result 25.6 42.7 35.7 40.1 31.0 47.9 28.0 30.3Financial result 15.7 20.3 13.4 24.1 14.2 16.9 8.3 11.0Ordinary technical and financial result 41.3 63.0 49.1 64.2 45.2 64.8 36.3 41.3Taxes 10.7 13.6 13.4 17.3 12.2 14.7 9.3 13.3Ordinary profit from Traditional business 30.6 49.4 35.7 46.9 33.0 50.1 27.0 28.0

Ordinary profit from Atradius NV 25.2 10.2 -65.5 -142.6 -71.9 -33.0 10.0 14.1

Non recurring results 6.2 31.0 -7.8 -16.5 17.9 -0.4 -0.9 -36.0

Consolidates profit 62.0 90.6 -37.6 -112.2 -21.1 16.8 36.0 6.2Attributable to minority interests 13.3 9.5 -39.7 -84.7 -39.3 -18.2 5.1 -10.8Attributable to parent company 48.6 81.2 2.1 -27.5 18.3 34.9 30.9 17.1

3Q09 4Q091Q08 1Q09Earnings by business line

2Q08 3Q08 4Q08 2Q09

2008 result: -172.1 2009 Result: -80.8

28

Focussed on margins and technical result versus premiums growth

Policy of price increase in renewals and new business

Strict underwriting policy

Reduction / Cancellation of levels of risk to companies with a greater risk risk of insolvency

Restructuring / Non renewal of loss policies

Revision of policies with high exposure

Inclusion of franchises

Rigorous cost management and operational improvement

Workforce restructuring

2009 IN FIGURESCredit insurance business performance – Special Action Plan

28

29

Risk exposure by sector – change and total weight

49,679

39,469

32,13937,168 37,101

26,793 28,807

42,105

22,522 21,497

13,982 11,567 13,7599,085

(-31.9%)

12.9%

(-40.9%)

(-37.2%)(-42.1%) (-27.6%)

(-32.9%) (-29.1%)

(-20.2%)

(-37.9%) (-23.5%)

(-40.5%) (-22.9%) (-22.6%)(-35.5%)

10.2% 8.3% 9.7% 9.6% 7.0% 7.5% 10.9% 5.8% 5.6% 3.6% 3.0% 3.6% 2.3%

2009 IN FIGURESCredit insurance business performance – Special Action Plan

100%

Cons

.st

aple

Met

als

Elec

troni

cs

Cons

truct

ion

Chem

ical

pr

oduc

ts

Tran

spor

t

Mac

hine

ry

Food

Build

ing

Mat

eria

ls

Serv

ices

Text

ile

Fina

nces

Agric

ultu

re

Pape

r

30

2009

Traditional businessInsurance activitiesHeadquartersInsurance Agency

Credit insurance business

2009 IN FIGURESCredit insurance business performance – Special Action Plan - Workforce

3,627

Total employees 6,114

2008

4,083

6,512

30

Chg.

+58-10+12+56

-456*

-398

2,4292,123

104202

2,4872,113

116258

Known leavers (including temporal workers) - 282 (1Q09 – 4Q09)Workforce restructuring (500 estimate) - 242 (4Q09)Obliged entries – Maternity + 68 (1Q09 – 4Q09)

*

Workforce evolution

Estimate workforce restructuring: 500 employeesCost saving estimate: 35 M€ annually

31

Premiums and Results

Traditional business performance

Credit insurance business performance

Capital and Solvency

Investments

2009 IN FIGURES

32

1,305.4116.6587.3

2,009.4

Long term capital at market value

EquitySubordinated debtUnrealised capital gains Long term capital

Properties’ unrealized capital gains 587.3 M€ (564.7 M€ at Dec. 2008)Strong balance situation

2008 Equity 1,488.9

Consolidated profit 37.9Dividends paid -72.9Change in valuation 114.8Change in valuation adjustments in minority interest

Changes in equity method valuation -9.3

Changes in treasury shares -1.6Total movements -183.5

2009 Equity 1,305.4

Subordinate debt 116.6

2009 Long term capital 1,422.1

2009 IN FIGURESCapital and Solvency – Long term capital

2008Lon term capital 1,604.8


Atradius NV minority interests -228.7

Other minority interests -23.7

33

2008

Minimum requiredAvailable capitalExcess of solvency

2009

537.2

1,488.4

2,025.6 (*)

443.8

1,447.8

1,891.5 (**)

Rating S&P A-

2009 IN FIGURESCapital and Solvency – Solvency I

Spanish average

275% s/ Minimum required

426.2% of minimum required

377.1% of minimum required


(*) – Corrected(**) – Without considering Atradius’ minority interests acquired by the transactionAverage Spanish excess of Solvency I according to ICEA data

Excluding transaction477.3% of

minimum required

34

2009 IN FIGURESCapital and Solvency – Technical provisions coverage

Excess of coverage1,688.0

120.4%Eligible assets of

Provisions

Eligible assets8,498.7

Eligible assets8,493.,8

Excess of coverage1,43.,0


124.8%Eligible assets of

Provisions

2008 2009

35

2009 IN FIGURESInvestments

1,061.9

3,600.7

562.7

351.3

1,263.8

109.9

1,029.3

3,916.0

533.2

296.1

1,073.5

141.3

Client risk 803.9 817.7

Subsidiaries

Properties

Other investments

Short term

Fixed income

Equity

Client risk

Subsidiaries

Properties

Other investments

Short term

Fixed income

Equity

2.0%

56.1%

15.4%

4.2%

7.6%

14.7%

1.6%

51.8%

18.2%

5.0%

8.1%

15.3%

2008 – 6,989.4 M€ Co. risk 2009 – 6,950.3 M€ Co. risk

(figures in million euros)Investment policy maintenance

Short term increase

36

Average portfolio rating of AA-

Large investment in short term

Government

1,387.7

Corporate2,272.0

36.9%

63.1%

Average portfolio rating of AA-Large investment in short term

BBB and no rating 2.6%

A 33.7%

AA 46.6%

AAA 17.1%

2009 IN FIGURESInvestments – Fixed income


1,061.9

3,600.7

562.7

351.3

1,263.8

109.9

817.7Client risk

Subsidiaries

Properties

Other investments

Short term

Fixed income

Equity

1.6%

51.8%

18.2%

5.0%

8.1%

15.3%

37

Prime *

955.7

Other106.2

* Prime: singular buildings placed at the main Spanish cities

Own use

On rent

485.3

576.6

43.5% of properties valuated during 2009 (42% in 2008)Last valuations in line to previous (no capital loss)

Unrealized cap.gains On rent

390.7

Book valueOwn use

288.7

Unrealized cap.gains Own use

196.690.0%

10.0%

45.7%

54.3%

2009 IN FIGURESInvestments - Properties

Book valueOn rent

185.9


1,061.9

3,600.7

562.7

351.3

1,263.8

109.9

817.7Client risk

Subsidiaries

Properties

Other investments

Short term

Fixed income

Equity

1.6%

51.8%

18.2%

5.0%

8.1%

15.3%

38

GRUPO CATALANA OCCIDENTE SHAREMr. Francisco Arregui, General Manager3 .

38

39

GRUPO CATALANA OCCIDENTE SHAREShare price performance

12/30/2002 12/30/2003 12/30/2004 12/30/2005 12/30/2006 12/30/2007 12/30/2008 12/30/2009

GCO IBEX 35 Dow Jones EUROPE STOXX Insurance

8.8 €

4.9 €

14.7 €

27.5 €

22.9 €

14.5 €15.7 €

3.9 €

40

(figures in million euros)(euros per share)

200 400 600 800 1,000

1,043.7

551.4

795

Book value

Properties’ unrealized capital gains

VIF Life (12/31/08)*

8.70 €/s

13.30 €/s

19.93 €/s

VALUE OF GRUPO CATALANA OCCIDENTE PER SHARE

* Certified by Watson Wyatt VIF – Value In ForceAV – Appraisal Value

Goodwill?

AV Non Life

GRUPO CATALANA OCCIDENTE SHAREDrivers of value – strong fundamental value

41

EPS – Earning Per ShareDPS – Dividend per sharePay - out

Dividend maintenance

GRUPO CATALANA OCCIDENTE SHAREShareholders’ remuneration

0.340.42

1.96

0.25 0.400.48

0.290.220.200.190.19

2001 2002 2003 2004 2005 2006 2007

0.51

2008

0.86

1.15

1.59

0.87

25.9%25.4%

25.2%24.5%

60.2%

47.9%76.0%54.3%

0.51

2009

0.84

42

A GROUP PREPARED FOR THE FUTUREMr. Francisco Arregui, General Manager 4 .

42

43

Solid and profitable business

Credit insurance: long term investment

Important excess capital

Robust balance with insignificant financial debt

Conservative and prudent investment policy

2010 PRIORITIES

Keep portfolio and results

Return to profits

Maintain

Maintain

QIS V and work on Solvency II

A GROUP PREPARED FOR THE FUTURE

44

This presentation includes oral and written “forward-looking statements” with respect to certain plans and its current goals and expectations relating to its future financial condition, performance and results. These forward-looking statements represents a simple forecast whose formulation does not represent a guarantee with respect to the future performance of the Company. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which may be beyond the Company’s control such as general economic conditions, performance of financial markets, the frequency and severity of insured loss events, mortality and morbidity levels and trends, persistency levels, interest rate levels, currency exchange rates, general competitive factors, changes in laws and regulations, changes in the policies of governments or regulatory authorities.

The Company undertakes no obligation to update the forward-looking statements made in this presentation or any otherforward-looking statements.

DISCLAIMER

45

THANK YOUPara mayor For further information please contact to:

TLF. 0034 93 582 05 18 // [email protected] // www.grupocatalanaoccidente.com

madrid, 2 of march 2010 - grupocatalanaoccidente.com/media/files/g/grupo-cat... · madrid, 2 of...

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