The ‘Awaking the lion’ program of the Caltagirone group’s list of candidates for Generali aims for profits of approximately 4.2 billion in 2024, cumulative cash generation of approximately 9.5-10.5 billion in the period 2022-2024, approximately 1.5-1.6 billion investments in digital and technological transformation, with an annual cost reduction target of up to 0, 6 billion, to the maximization of cash availability for M&A activities up to approximately 7 billion. Confirms the dividends foreseen by the Investor Day of December 15 of the plan presented by the ceo Philippe Donnet for the three-year period and the share repurchase.
On the sidelines of the presentation of the plan for Generali, Francesco Caltagirone said he had “more than 9%”. He had just over 8%.
“The plan has two columns. The first is the strategic repositioning of the company. The plan presented in December is an inertial plan with a low level of ambitious. We want to make the company more profitable.” This was stated by Claudio Costamagna at the presentation of the Caltagirone list plan. “We want to be better positioned for future growth. It means more cash for development,” he resumed, adding that “Generali can use some leverage to increase the firepower to 7 billion for M&A.” The second column “is governance. We represent a list presented by a shareholder. The other list concentrates the list on the chief executive officer”. “We want to have a board with balanced powers, review the procedure for the related party committee.” “The idea – he concluded – is to introduce a general manager and introduce an executive committee.”
“Awakening the Lion”, the strategic program for Generali presented today by Claudio Costamagna to Luciano Cirinà, candidates on the Caltagirone list, intends to effectively relaunch the Lion through 5 strategic intervention lines (plus one). The interventions are described in a press release:
First. Rationalization of the geographical presence. Focus on markets that ensure medium and long-term growth and profitability. In-depth review of the geographical presence aimed at freeing up resources to be reinvested in organic (and non-organic) growth in high-potential markets characterized by strong financial attractiveness. Consolidation of leadership in Italy, France and Germany, growth in Eastern Europe, China and India and development of the presence in the USA, especially in the asset management sector.
Second. Efficiency of central and administrative costs. Immediate activation of a crash program based on the simplification of the holding structure, on the simplification of the organizational structure, on the efficiency of “non-business” functions, on the consolidation of IT processes and on the loyalty of talents. The goal is to bring the Cost / Income ratio from the current 64% to around 55%, making Generali a benchmark in cost management.
Third. Improvement of operational performance in individual countries. Renewed ambition to grow the operating result mainly in the mature markets in which Generali operates, also through a plan of strong management incentives on results. Concentration of managerial efforts mainly on three specific business lines in order to reduce dependence on the Life business: (i) to become the first choice for Small & MidCo, a sector in rapid growth and strong margins, (ii) to launch a development program of a “Single Integrated Ecosystem for Health” that strengthens and unifies the Company’s strategy on Health and finally (iii) strong acceleration on asset management through the overcoming of the multi-boutique strategy and the development of a Central Factory and through a program of talent insourcing. The plan on this point is completed by a program for the digitization of agents’ activities to be developed in concert with the sales force.
Fourth. Tech and Data Analytics. Total investment in the three-year period of 1.5 – 1.6 billion euros in technological investments to create new opportunities for growth and cost savings, preparing the Company to face the needs and habits of the new generations (of customers, employees and agents) . Generali must free itself from concentrating on a few large suppliers, grow a generation of developers and data scientists in-house and catch up on the delay accumulated in the field of Insurtech.
Fifth. BUT. Focus on M&A transactions capable of accompanying corporate transformation and growth also through the efficient use of financial leverage and avoiding the multiplication of dossiers. The new strategy will be based on a limited number of larger transactions in the Non-Life sector and in geographic areas of interest, in asset and wealth management, in Fintech and Insurtech. The new strategy will benefit from the desire to maximize the cash availability potentially available for M&A activities up to 7 billion euros which will derive from: increase in revenues compared to Lifetime Partner 24, use of the potential proceeds of the geographical rationalization and recourse, if necessary, leverage. The further line of action is a differentiating approach on ESG. Generali cannot simply align itself with ESG standards but must aspire to be the protagonist of the processes that aim to build a more sustainable society.
Source: Ansa
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