1
2006 FY RESULTS2006 FY RESULTS
15 MARCH 2007
2
Summary 2006 HighlightsAsset management
Distribution
2006 Financials
2007 Outlook
3
2006 Highlights
4
2006 total net inflows (mutual funds, hedge funds, life insurance)
2006 Net profit vs. 2005
2006 EPS: €0.58 vs. €0.34 in 2005
2006 Dividend €0.20 (€0.10 ordinary plus € 0.10 extraordinary)
PF - Azimut Consulenza SIM
300400500600700
800900
10001100
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
2006 HighlightsSignificant growth for both asset management and distribution
€ 1,628.2
+72.4%
Data in € m
Data in €m
Last 10 years of Azimut’s growth
Assets under management
0
2000
4000
6000
8000
10000
12000
14000
1997 1998 1999 2000 2001 2002 2003 2004 2005 2006
CAGR +8CAGR +8.5%.5%
CAGR +16CAGR +16.9%.9%
5
2006 FinancialsFinal figures in the upper part of the range announced on January 07
Data in € m
Data in €m for Total revenues and Net profit – Data in € for EPS
Total revenues Net profit EPS (basic) €
100
150
200
250
300
350
2004 2005 200610
20
30
40
50
60
70
80
90
2004 2005 20060,100,150,20
0,250,300,350,400,45
0,500,550,60
2004 2005 2006
Preliminary results announced in January 2007:Total revenues: €322-328m Net profit: €77-84m EPS: €0.53-0.58
32884
0.58
6
Asset management
7
% of LUX-domiciled funds on total AuM in mutual funds
Leading role of AZFund productsNew product launches and repricing accelerated the existing trend
0%
10%
20%
30%
40%
50%
60%
2003 1H04 2004 1H05 2005 1H06 2006 FEB-07
8.6% 9.4% 11.6%15.9% 18.0% 17.8%
41.1%
52.3%
Source: Azimut
8
0%
20%
40%
60%
80%
100%
Industry Azimut
Cash Bond Balanced Flexible Equity Hedge
AuMAuM 31.12.06 (%)31.12.06 (%)
0%
20%
40%
60%
80%
100%
Industry Azimut
Cash Bond Balanced Flexible Equity Hedge
Funds breakdown by category
AuMAuM 31.12.05 (%)31.12.05 (%)
Source: Company / Assogestioni
3.4
24.2
3.67.9
45.8
15.1
1.0
22.1
33.2
21.7
18.4
3.6
4.6
25.9
8.56.9
40.4
13.7
4.2
18.6
44.9
15.0
15.02.2
9
2006 net inflows 2006 net inflows
Funds breakdown by category
2005 net inflows2005 net inflows
Source: Company / Assogestioni reclassified figures - data in €m
Italian Fund Industry Azimut
-200
0
200
400
600
800
1000
Italian Fund Industry Azimut
-30000
-25000
-20000
-15000
-10000
-5000
0
5000
10000
15000
20000
25000
-400
0
400
800
1200
1600
2000
-12000
-9000
-6000
-3000
0
3000
6000
9000
12000
15000
18000
10
Other5.4%
Italian eq.11.5%
Foreign Eq.41.1%
Gov.t Bonds41.0%
Ital./For. Bonds0.9%
Mutual fund breakdown by underlying assets
IndustryIndustry AzimutAzimutTotal Equity 28.0% Total Equity 52.6%
Source: Company / Assogestioni / Il Sole 24 ore - data as at the end of 2006
For. Bonds 12.4%
Ital. Bonds3.3%
Gov.t Bonds50.5%
Foreign Eq.22.0%
Italian eq.6.0%
Other5.8%
11
Distribution
12
Funds – net inflowsNet inflows as a % of the AuM
Source: Assogestioni monthly press release on mutual funds – dotted line: quarterly reclassified Assogestioni data for the Industry
Azimut Italian industry
-2%
-1%
0%
1%
2%
3%
4%
5%
jan-
03fe
b-03
mar
-03
apr-
03m
ay-0
3ju
n-03
jul-0
3au
g-03
sep-
03oc
t-03
nov-
03de
c-03
jan-
04fe
b-04
mar
-04
apr-
04m
ay-0
4ju
n-04
jul-0
4au
g-04
sep-
04oc
t-04
nov-
04de
c-04
jan-
05fe
b-05
mar
-05
apr-
05m
ay-0
5ju
n-05
jul-0
5au
g-05
sep-
05oc
t-05
nov-
05de
c-05
jan-
06fe
b-06
mar
-06
apr-
06m
ay-0
6ju
n-06
jul-0
6au
g-06
sep-
06oc
t-06
nov-
06de
c-06
jan-
07fe
b-07
-2%
-1%
0%
1%
2%
3%
4%
5%
13
0
2000
4000
6000
8000
10000
12000
14000
16000
18000
-500 -300 -100 100 300 500 700 900 1100 1300 1500
Still improving the efficiency of the network2x the avg. AuM per PF and 5.4x the avg. Net inflows per PF
Source: Assoreti out of a sample of the largest PF networks. Data in €/000 as at 31.12.2006
Avg. AuM per PF: €6.5mA
vg. N
I per
PF:
€0.
28m
14
2006 Survey by Eurisko – External image vs. Internal satisfaction
Quality below the figuresSatisfaction of the network
Source: Eurisko based on the largest Italian PF networks in 2006 - Eurisko is an independent operator in the social and marketing research sector
POOR IMAGEPOOR IMAGEPOOR SATISFACTIONPOOR SATISFACTION
HIGH IMAGEHIGH IMAGELOW SATISFACTIONLOW SATISFACTION
BR
AN
D E
QU
ITY
IN
DEX
BR
AN
D E
QU
ITY
IN
DEX
BR
AN
D E
QU
ITY
IN
DEX
OVERALL SATISFACTIONOVERALL SATISFACTIONOVERALL SATISFACTION
HIGH IMAGEHIGH IMAGEHIGH SATISFACTIONHIGH SATISFACTION
POOR IMAGEPOOR IMAGEHIGH SATISFACTIONHIGH SATISFACTION
++
––++
15
2006 Financials
16
% 2005200632.439.525.843.732.1
35.117.630.635.646.4
22.2
61.1
10,088199,893
89,72315,45212,701
327,858-139,259-14,984-41,218-2,662
-198,123
129,735
Consolidated Reclassified Income StatementIAS/IFRS Compliant
Data in € 000
Entry commission incomeFixed management feesVariable management feesOther incomeIns. premiums net of reserves
Total RevenuesDistribution CostsCommissions on no load productsPersonnel and SG&ADepreciation, amort./provisions
Operating Costs
Operating Profit
7,620143,284
71,33110,7509,612
242,597-118,399-11,469-30,391-1,818
-162,077
80,521
17
% 20052006
Consolidated Reclassified Income StatementIAS/IFRS Compliant
Data in € 000
Operating ProfitIncome from financial operationsNon operating costsInterest expensesProfit Before TaxIncome taxDeferred taxesConsolidated Net ProfitMinoritiesNet Profit
129,7354,971
-0,900-6,219
127,587-38,147-4,21485,227-0,85984,367
80,5211,129
-1,636-6,51073,504
-19,977-4,43949,088-0,04349,045
61.1340.3-45.0-4.573.690.1-5.974.0
72.4
Effective tax rate
Adjusted Net Profit29.9%
88,581
27.2%
18
20052006Data in € 000
“CORE” PERSONNELL AND SG&A COSTS Variable remunerations New initiatives (AZ Investimenti, Azimut CM)*REPORTED PERSONNELL AND SG&A COSTS
-28,528-7,888-4,877
-41,293
+27 new employees in 2006+26 planned new hiring for 2007 (⅓ in Fund management, ⅓in Risk management and internal audit and ⅓in IT, Back Office and Sales)
Variable compensations linked to good results achieved2007E costs increase will be less than 10% yoy
Investments finalised for fostering the expansion of foreign Investments finalised for fostering the expansion of foreign -- based activitiesbased activities
Azimut Capital Management contribution in 06: €12.0m revenues €3.5m net profitAZ Investimenti contribution in 06: €19.8m revenues €2.4m net profit
In addition to the two new initiatives launched during 2005, AZ Life, launched in 2004, posted a € 9.3m net profit in 06 vs. €4.6m in 05.
-26,149-2,181-2,061
-30,391
Cost control - Profitability of new initiativesEffective cost increase lower than 10%
* Azimut CM: consolidated in 2005, operating since beginning of July 2005AZ Investimenti: operating and consolidated since July 2005.
19
31.12.0530.06.06
Consolidated Net financial positionIAS/IFRS Compliant
Data in € 000
Amounts due to banks:Senior Loan
Vendor Loan (AZ Investimenti SIM)
Trademark lease-back
Securities issued:Convertible bond
TOTAL DEBTCash and cash equivalents
NET FINANCIAL POSITION
(102,434)(90,085)
(12,349)
-
(97,170)(97,170)
(165,207)112,387
(52,820)
(107,335)(95,104)
(12,231)
-
(96,371)(96,371)
(203,706)126,327
(77,379)
31.12.06
(37,308)-
(12,231)
(25,077)
(96,510)(96,510)
(133,818)157,171
23,353
•Senior Loan paid off during 2006 in advance of its 2009 expiry date•€0.10 dividend confirmed; extraordinary dividend of €0.10 (both subject to AGM approval)•NFP is not reflecting 2006 taxes and dividend payment which will be made by 1H07 (€38m and €29m respectively)
20
20052006
Consolidated Cash Flow StatementIAS/IFRS Compliant
Data in € 000
Net income (loss)Amortisation, depreciation and other provisionsInterest expenseCommissions on no-load productsTax provisions (tax asset uses)Net change in credits and debts and technical reservesNet change in tax assets/debts
Cash flow from operating activities(Increase)/decrease in other assets(Increase) in investment subsidiariesCash flow from investment activitiesDebt and interest repaymentCapital increase (incl. IPO fees and stock options)Dividends paidConsolidation of AZ Investimenti
Cash flow from financial activities
TOTAL CASH FLOW GENERATED (ABSORBED)Cash and cash equivalents at beginning of periodCash and cash equivalents at the end of period
84,3677,7826,369
14,98442,360(8,952)
(24,646)
122,264(1,446)
0,048(1,398)
(76,110)0,525
(14,438)-
(90,023)
30,844126,327157,171
49,0458,3136,615
11,46924,417(8,172)(5,238)
86,449(6,312)(0,550)(6,862)
0,495(1,290)(7,214)
4,923
(3,086)
76,50149,826
126,327
21
2007 Outlook
22
0%10%20%30%40%50%60%70%80%90%
100%
31.12.04 31.12.05 31.12.06 28.02.07 28.02.07*
Cash Bond Balanced Flexible Equity Hedge
2007 Outlook – Product range ongoing transformation
Total Total AuMAuM split by funds category split by funds category –– Main changes effective April/July, 2007Main changes effective April/July, 2007
29.6%€2,392m
33.2%€3,609m 44.9%
€5,843m49.8%€6,677m
67.0%€8,986m
Equity funds: only FoF investing in 3rd parties’ products
* Simulation based on February-end AuM
Bond funds: institutional clients and limited component of retail clients’ allocation
Almost 80% of AuM in long-only mutual funds will be in products which can switch from equities to other asset classes, including cash (with no limit for flexible funds)
23
February 2007 – New product launches
4 new funds offered by 4 new funds offered by AZFundAZFund
2 bond fund: AZFund Bond Trend – AZFund Income
1 balanced fund: AZFund European balanced
1 quant fund: AZFund QProtection
Focus on Focus on AZFundAZFund QProtectionQProtection
Flexible fund domiciled in LuxembourgReference benchmark: 35% Eurostoxx50, 65% MTS Bot (risk free)Equity exposure: 0-70%
Protection: 90% of the highest NAV, regardless of the subscription date
Return: 60% Eurostoxx50 during a market cycle
Risk: 50% of Eurostoxx50 volatility
Already reached € 158m AuM in the first month of activity
Targets:Targets:
24
2007 Outlook
Ongoing focus on organic growthOngoing focus on organic growth……Recruiting: Usual 100-120 new PF in Azimut Consulenza sim
Additional recruiting from AZ Investimenti sim
Hedge fund: Ireland-domiciled hedge fund under authorisation
Further expansion in the product offering
……but actively searching for additional opportunities not only in but actively searching for additional opportunities not only in domestic marketdomestic marketExternal growth: Opportunistic M&A
Foreign expansion: Extreme flexibility in opening new markets
0% AZIMUT SHAREHOLDIN0% AZIMUT SHAREHOLDING 100%G 100%
Distribution agreementInstitutional salesWhite label
AcquisitionsPartnerships
Joint VenturesNewco (spinoffs)
Spinoff : Newcos can be created with PMs who whould like to spinoff and set up a company avoiding to cope with all other aspects but fund managementJoint Ventures: interest in partnerships with banks for which Azimut is the ideal technical partner, not competing in the banking services Product development possible for long only products in LUX, hedge funds and life insurance in IRL
25
Contacts
Disclaimer
This document has been issued by Azimut Holding just for information purposes. No reliance may be placed for any purposes whatsoever on the information contained in this document, or on its completeness, accuracy or fairness. Although care has been taken to ensure that the facts stated in this presentation are accurate, and that the opinions expressed are fair and reasonable, the contents of this presentation have not been verified by independent auditors, third parties and the Company.
Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company, or any of its members, directors, officers or employees or any other person. The Company and its subsidiaries, or any of their respective members, directors, officers or employees nor any other person acting on behalf of the Company accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith.
The information in this document might include forward-looking statements which are based on current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Company and its subsidiaries and investments, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur. No one undertakes to publicly update or revise any such forward-looking statement.
The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice.
Any forward-looking information contained herein has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, actual results may vary. This document does not constitute an offer or invitation to purchase or subscribe for any shares and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.
The information herein may not be reproduced or published in whole or in part, for any purpose, or distributed to any other party. By accepting this document you agree to be bound by the foregoing limitations.
Fabrizio Armone Investor Relations Manager tel. [email protected] www.azimut.it