FY 2010 Results
Assets under administration: 45,849 million euro, +14%
Adjusted net income: 224 million euro, +3%
Dividend proposal: 15.5 eurocents per share
Dividend balance to be paid: 7 eurocents per share
The Board of Directors of Mediolanum S.p.A. met today in Basiglio (MI) and approved the Consolidated and the Separate Financial Statements as at December 31, 2010.
The Board of Directors resolved to propose to the shareholders a payment of a dividend of 15.5 eurocents per share relative to the net income for 2010. Considering the interim dividend of 8.5 eurocents per share already paid out in November 2010, the Board of Directors will propose the distribution of a final dividend of 7 eurocents per share, gross of any applicable taxes, at the General Shareholders’ Meeting, payable as of May 26, 2011 (coupon #22, ex-dividend date May 23, 2011).
The General Shareholders’ Meeting for the approval of the financial statements will take place on April 21, 2011 at 2:30 p.m., first call, and, if needed, on April 22, 2011 at the same time on second call, in Basiglio Milano 3, Palazzo Meucci.
The CONSOLIDATED GROUP RESULTS,
registered a Statutory Net Income of 247 million euro, gross of the capital gains from the sales of the Lehman Brothers bonds relating to the commercial operation in 2008 supporting the customers impacted by the Lehman Brothers default. In fact, in 2010 the operation was completed, resulting in a positive impact on the Group’s economic results amounting to 22.9 million euro (net of related taxes) which compares to a net loss of 107.6 million euro recorded in 2008. Therefore, the final cost of the operation came to 84.7 million euro, completely covered by the two majority shareholders - the Doris Group and Fininvest S.p.A.
In light of the extraordinary nature of the operation by the two shareholders, that through the creation of an equity reserve brought the shareholders’ equity to the exact same value that it would have been if the ‘Lehman Brothers’ operation had not taken place, an adjusted version of the 2010 Income Statement will be presented and commented on without considering the effect of the sales of the Lehman Brothers bonds, thus allowing a more appropriate comparison with the previous year.
Adjusted Net Income came to 224 million euro, an increase of 3% with respect to the previous year.
Profit before Tax was at 275 million euro, an increase of 7%.
This is an extremely positive result and higher than expected, despite the negative influence coming from the lower Euribor rate and the confidence crisis that impacted government securities of the peripheral European governments, Italy included (European bank bonds indirectly). This impact, however, was more than compensated by a significant strengthening of the business - expressed by an increase in assets thanks to the equity market performance, but even more so by strong net inflows - and a consequent increase in recurring revenues in managed assets.
Moreover, the favourable trend in the financial markets positively influenced performance fees. In fact, the fourth quarter registered a net income of 70 million euro.
As proof the aforementioned:
- Assets under Administration reached a record, totalling 45,849 million euro, an increase of 14% compared to the previous year.
- Net Inflows, after the historic record in 2009 (6,928 million euro following the introduction of the ‘Freedom Account’) were positive at 4,048 million euro.
The same considerations made for the Group apply to the DOMESTIC MARKET as well, where the following results were achieved (Net Income and Assets include Banca Esperia for the 50% share pertaining to the Group):
- Net Income was at 234 million euro, with an increase of 5% with respect to the previous year;;
- Assets under Administration grew 14% with respect to December 31, 2009, totalling 43,886 million euro.
In greater detail, with reference to Banca Mediolanum:
- Net Inflows were positive at 3,285 million euro. Net Inflows into Managed Assets were positive and increased 5%, totalling 2,131 million euro (note that third party structured bonds and certificates sold to customers are included in this figure).
- The success of the ‘Freedom Account’ launched in March 2009 continued, as inflows registered a total of 6.5 billion euro in just under 2 years.
- There were 4,772 Financial Advisors as at December 31, 2010.
- As at December 31, 2010, there was a total of 1,077,000 customers, of which 897,000 Primary Account Holders.
- There was a total of 568,000 bank accounts as at December 31, 2010.
Highlights in particular with respect to Banca Esperia:
- Assets under Administration increased 14% with respect to December 31, 2009, reaching 12,745 million euro (6,372 million euro for Mediolanum’s share).
- An Operating Income of 9.9 million euro, growing 115% with respect to the previous year..
- Net Income of 1.4 million euro (0.7 million euro for Mediolanum’s share), an improvement with respect to the result in 2009 of 0.4 million euro, despite the presence of extraordinary costs of 7.3 million euro.
With reference to the FOREIGN MARKETS:
- The business in Spain closed the year in profit (0.6 million euro), after a loss of 0.1 million euro in 2009..
- The business in Germany closed the year with a loss of 11.4 million euro, which includes the impairment that was taken on this business totalling 7.4 million euro. Excluding this effect, the operating loss came to 4 million euro, an improvement compared to 6.8 million euro in the previous year.
- Total Assets under Administration for the Foreign banking subsidiaries totalled 1,963 million euro, a growth of 5% with respect to December 31, 2009.
Embedded Value, which includes all the Domestic Market businesses excluding Banca Esperia, and the business in Spain excluding the banking business, hit a historic record of 3,233 million euro at December 31, 2010 (+5% with respect to 2009).
Embedded Value Earnings came in at 267 million euro. In particular, the Value added by New Business was 215 million euro.
In an effort to provide more complete disclosure about the economic results as at December 31, 2010, we have attached the segment report detailing economic data, reclassified to reflect the criteria used by the Mediolanum Group. This reclassified segment report is not subject to audit by the independent auditors, who moreover, haven’t yet completed the audit of the consolidated and separate financial statements as at December 31, 2010.
The Officer responsible for preparing Mediolanum S.p.A accounting documents, Luigi Del Fabbro, declares that, in compliance with the requirements of the second paragraph of section 154 bis of the Consolidated Finance Act, the financial information contained herein reflects the accounting entries, records and books.
A presentation in English of the information contained herein will be available at Borsa Italiana.
The Financial Statements as at December 31, 2010 will be made available at the company’s Registered Office in Basiglio - Milano 3, Palazzo Meucci - Via F. Sforza, on the website http://www.mediolanum.com
and at Borsa Italiana S.p.A. within the deadlines specified in the Shareholders’ Meeting convocation notice.
The Board of Directors also approved the fifth edition of the Social Report of the Mediolanum Group. For the past four years, this document has been published alongside the Annual Report. The Social Report expands upon the intangible aspects of corporate activities and their ethical, social, environmental and safety impacts with the aim of providing better, deeper insight into the work, commitment and values of the Group. The Social Report also serves the purpose of highlighting Mediolanum’s contribution to sustainable development through concrete practices in the relationships with the main internal and external stakeholders.
Basiglio - Milano 3 City, March 29, 2011