Generali SpA

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Targets and achievement

Currently we are looking forward confidently to a future of organic growth, with strong cash generation and satisfactory levels of remuneration for our shareholders, after having completed the group restructuring and reorganisation plan presented in January 2013 one year ahead of schedule with the approval of the 2014 financial statements.

Financial and business targets

The strategy presented last May, covering the period 2015-2018, provides for:

  • The generation of accumulated net cash over four years of more than 7 billion euro (in 2014, the total was 1.2 billion euro).
  • The payment of dividends in the four years covered by the plan of more than 5 billion euro (the pay out for 2014 was 930 million euro).
  • The maintenance of a high level of profitability. In particular, over the course of the plan Generali is committed to maintaining a level of operating return on equity of over 13%, a level which represents the benchmark for the group.
  • The maintenance of a suitably high level of capitalisation.
  • The continuation of the cost reduction programme of 250 million euro per year. The overall savings, taking 2012 as the starting point of the efficiency improvement plan, will therefore amount to 1.5 billion euro by 2018. This is 500 million euro more in cuts than previously budgeted for the 2012-2016 period (i.e. cost efficiencies of 1 billion euro).
  • An investment of 1.25 billion euro in technology, data analytics tools and more flexible operating platforms.

Target achievements

The new strategy is underpinned by the targets achieved, a year ahead of schedule, with respect to the previous turnaround plan presented at the beginning of 2013. The main capital position and profitability results are shown below, and give us the confidence to face future challenges with equanimity.

The Leverage ratio at 38.5% and the Interest coverage ratio at 5.3x are shown net of the double counting linked to the pre-financing activity of the 2015 maturities. The improvement of 1.1 p.p. of the Leverage ratio compared to 2013 is a consequence of the stock debt reduction by 1,000 million euro, of which 500 million euro related to the senior bond already pre-financed.