Generali Eyes Growth and Expansion With Fresh Three-Year Strategy - Update
Adds CEO comments, analyst comments, share price, detail on
By Pietro Lombardi
Assicurazioni Generali SpA (G.MI) on Wednesday unveiled a
three-year strategy aimed at improving earnings and expanding in
selected markets, fueled in part by acquisitions.
"Generali will continue to focus on generating and managing
capital to fund growth opportunities in key markets and drive
innovation and digital transformation wherever we operate," Chief
Executive Philippe Donnet said in a statement ahead of the
company's investor day.
Specifically, Mr. Donnet said Generali would "expand operations
in high-potential markets and develop a global asset management
platform." Separately, he told the Financial Times that the company
would set aside up to 4 billion euros ($4.57 billion) to fuel
growth, both organically and through M&A.
The market received the 2019-2021 plan positively, with Generali
shares gaining 2.3% at 0900 GMT, compared with the 1.3% rise on
Italy's benchmark FTSE MIB index.
Generali sees earnings per share growing at an annual rate
between 6% and 8% through 2021 and targets a dividend payout range
between 55% and 65%. As part of the three-year strategy, it targets
an average return on equity of more than 11.5%.
The company delivered a plan above expectations, U.S. bank
Jefferies says. The EPS target "exceeds our expectations and, with
a high payout target of 55%-65%, this supports higher dividend
growth," it said.
Generali also plans to cut its debt by up to EUR2 billion by
2021, while growing earnings and investing EUR1 billion in
innovation and digital transformation.
Analysts widely expected news on debt reduction, with Credit
Suisse analysts recently saying they expected the company "to
announce substantial deleveraging at its investor day."
The insurer plans to reinforce its business in Europe, a region
that remains attractive, and "deliver profitable growth in Asia and
Latin America," it said.
In Europe "high private-wealth accumulation will support the
sale of Life and Asset Management products, while demographic
trends and reduced public spending will drive the development of
pension, health and welfare services," the company said.
In asset management, it also said it plans to "accelerate
expansion with disciplined acquisitions."
Last year Generali launched a strategy for its asset-management
unit focused on creating a multiboutique platform, and recently
bought Polish asset-management company Union Investment TFI.
Write to Pietro Lombardi at email@example.com
(END) Dow Jones Newswires
November 21, 2018 04:27 ET (09:27 GMT)
Copyright (c) 2018 Dow Jones & Company, Inc.
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