Equity Capital Markets and IPO Case Study

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1 Equity Capital Markets and Case Study Daniele Moscato Global Equity Capital Markets Milan, 3 rd June 2014 AGENDA MARKET OUTLOOK ECM SETUP UNICREDIT EXAMPLE ITALIAN LISTING MARKETS AND REQUIREMENTS HOW TO GET A MANDATE: PITCH ECM PRODUCTS 2 1

2 I mercati finanziari anticipano l economia reale Performance degli Indici Azionari e del PIL dal Indici Equity Mondiali MSCI World Comit 100 STOXX Europe 600 S&P PIL Europa e Italia Eurostat GDP constant prices Europe Eurostat GDP constant prices Italy -8 3 Fonte: Bloomberg, Febbraio 2014, stime UniCredit Research Periodi di performance negativa dei mercati azionari e del PIL OUTLOOK MACRO Variabili Macro e Trend Equity Valore Corrente Stima 2014 Stima 2015 Trend rispetto al Valore Corrente Zona Euro -0.4% 1) +1.5% +1.7% Italia -1.8% +0.9% +1.4% Crescita del PIL (y-o-y) Germania 0.5% +2.5% +2.5% Cina +7.7% +7.1% +6.9% Stati Uniti +1.9% +2.4% +2.6% Materie Prime Rame ($/mt) 6,860 6,858 6,784 Petrolio (Brent USD/b) Tassi di cambio EUR=USD Tassi di riferimento Euribor 3M 0.32% 0.20% 0.55% Spreads BTP-Bund (bps) Indici Equity FTSEMIB 20,597 n.a. Euro Stoxx 50 3,187 n.a. VSTOXX 15.3% Raccomandazioni Settoriali Kepler Cheuvreux Su Euro Stoxx Overweight Neutral Underweight Banks, Construction & Mat., Food & Beverages, Financial Services, Healthcare, Telecoms, Travel & Leisure, Utilities Automobiles, Basic Resources, Oil & Gas, Insurance, Personal & HG, Real Estate Chemicals, Industrials, Goods & Services, Media, Retail, Technology 4 Fonte: Ricerca UniCredit, Raccomandazioni Kepler-Cheuvreux, Maggio 2014, Broker reports 1) Il valore corrente della crescita del PIL (y-o-y) si riferisce all anno 2013 per tutti i Paesi 2

3 Massive Inflows in European Equities and Volatility Close to Historical Lows as main Support for Primary Market in 2014 European Indexes Rally Volatility close to historical lows (2007) % EU Sovereign Debt 60 Crisis Escalation 50 Concerns over Europe and China s soft landing 40 Italian Political 30 deadlock Emerging Markets Currencies Instability Syria Turmoil 80.0 May-13 Jul-13 Sep-13 Nov-13 Jan-14 Mar-14 May-14 FTSE MIB STOXX Europe 600 S&P 500 MSCI World - May-11 Nov-11 May-12 Nov-12 May-13 Nov-13 May-14 VSTOXX VIX Net New Money from Italian Mutual Funds 1) Funds EZ equity exposure to highest level since ) EUR bn % Q11 2Q11 3Q11 4Q11 1Q12 2Q12 3Q12 4Q12 1Q13 2Q13 3Q13 4Q13 FMS Net% say OW EU Equities 5 Source: UniCredit analysis on Bloomberg data as of 18 th March Net Cash Overweight in Funds Portfolios source: ML Asset Management Survey 1) Assogestioni 2) BofAML Asset Management Survey, EPFR Global. EZ=Eurozone EMEA ECM 2013 Issuance Volume was up 55% vs 2012 volumes ABB High Level Record Driven by Stock Rebound & Investors Appetite EMEA ECM issuance volume in EUR bn 100% Split by deal type/ Split by industry 300, , ,000 75% 150, ,000 50,000 50% ABB Rights SPO CONV 100% 25% 37% 48% 40% 75% 50% 18% 27% 25% 0% Germany Austria Italy CEE UK Other 0% Financials TMT Utility & Energy Industrials Materials Other Core Markets 6 Source: Dealogic, 31 st December

4 Expected increase of ECM Volumes in Italy in 2014 Restart of Market, Bank Recapitalizations and opportunistic monetization / financing of equity stakes Equity Markets expected to benefit from further rotation out of Bonds as tapering materialises and interest rate expectations increase Italian markets expected to continue upward trend. The environment persists to get deals done: The massive privatisation plan announced by the Italian Government ECM Italy outlook 2014 Banking asset quality review could spark off a wave of banking recapitalisations on top of the ones already announced (Banco Popolare, MPS, Carige, BPM, BP Sondrio) Restart of market driven by FFS exit and relatively sizeable solid business Right Issue/ Capital Increase driven by M&A activity and capital strengthening Stake disposal following resolution of shareholders agreement expected to drive ABB activity EQL activity expected to be driven by refinancing as an opportunistic alternative funding source vs. loans and bonds (expected c. EUR 25bn of EQL redemptions in ) ECM s volumes expected to recover the pre-crisis level: backlog reached over 25 EUR bn 7 Oltre EUR 24 mld nella pipeline ECM in Italia Pipeline 2014/2015 Italia Value Exp. Launch Issuer Sector Status (EUR mn) 2Q 2014 Anima Holding Asset Mgmt 800 Completed 2Q 2014 Sisal Gaming 400 Rumoured 2Q 2014 Fincantieri Capital Goods 700 Rumoured 2Q 2014 Milano Serravalle Infrastructure 200 Announced 2Q 2014 Fineco FIG 700 Announced 2Q 2014 Cerved Services 450 Announced 4Q 2014 Poste Italiane Services 5,000 Rumoured 2014/15 SACE Insurance 2,000 Rumoured 2014/15 ENAV Transportation 500 Rumoured 2014/15 Savio Capital Goods 200 Announced 2014/15 Manutencoop Services 500 Rumoured 2014/15 Kedrion Pharma 500 Rumoured Volumi ECM in Italia ( and 2014/15E) /15E ABB EQL RI Composizione della pipeline ECM in Italia Per tipologia di transazione Per tipologia di emittente Per distribuzione temporale ABB 23% EQL 3% RI 26% 48% Privatisation 42% Financial Sponsor 7% Corporate 51% 4Q % 3Q % 2014/15 15% 1Q % 2Q % 8 Fonte: Bloomberg, Kepler Cheuvreux, UniCredit CIB analisi ad Aprile

5 s and ABBs are expected to drive 2014 ECM activity s Decreasing volatility opening the market again for s Strong pipeline of (sponsor driven and privatisations) s lined up for 2014 Increased anchor-marketing for s with early look meetings, pilot fishing, etc. Macro trends, solutions on sovereign debt and stable market crucial for market restart Market Appetite +++ ABBs Pricing in 2014 expected to be sharper with more deal opportunities for equity investors to choose from Quick to market deals continue to be pursued opportunistically Headline-driven market conditions ( risk on vs. risk off mode); timing is key ++ Rights Issues FIG - balance sheet enhancement driven by: already announced s (MPS, BPM, Carige) asset quality review for other regional banks (expected by 2H2014) Corporates - capital increase also driven by increase of M&A activity + EQL Strong pipeline on the back of supportive market parameters (interest rates, credit spreads, equity share prices) Sustained investor demand for new issues driven by inflows into the asset class, strong performance in the secondary market and overall market risk appetite AGENDA MARKET OUTLOOK ECM SETUP UNICREDIT EXAMPLE ITALIAN LISTING MARKETS AND REQUIREMENTS HOW TO GET A MANDATE: PITCH ECM PRODUCTS 10 5

6 Seamless Integration with Kepler Cheuvreux for Equity Research and Distribution UniCredit Clients Structuring and Execution s Capital increases Equity Capital Markets ABBs Share buybacks Equity Capital Markets Syndicate Equity-linked Convertible bonds Exchangeable bonds Pre- financing Research, Sales and Trading Equity Research Equity Sales Equity Trading Equity-Linked Sales (1) Institutional investors 11 (1) Including UniCredit Credit Research and Fixed Income trading UniCredit + Kepler Cheuvreux best of both worlds Multi-local ECM team supported by 150 professionals in 17 locations across Western and Eastern Europe Strategic alliance with Kepler Cheuvreux significantly expanded our equity distribution platform London 10 Milan Equity & Equity-linked capital markets 6 Equity capital markets 24 Corporate finance Munich 6 Equity capital markets 24 Corporate finance Warsaw 7 Equity capital markets 12 Corporate finance Vienna 3 Equity capital markets 3 Corporate finance Other CEE 4 Equity capital markets 50 Corporate finance Sales / trading: 45 Research: 50 Stocks: 450 Investors: ca Sales / trading: 75 Research: 55 Stocks: 580 Investors: ca. 900 Sales / trading: 100+ Research: 80+ Stocks: 800+ Investors: 1, Source: UniCredit, Kepler Cheuvreux 6

7 Extensive Coverage Through the Largest European Research Platform Kepler-Cheuvreux Equity Research Platform Most extensive company research coverage in Europe: 800+ stocks covered by Kepler Cheuvreux 90+ research analysts Top Ranked European Research %+ market cap covered in most countries Pan-European Small & Mid Cap research Germany Country Research Austria Country Research UniCredit has expanded its equity research footprint Germany Country Research # of companies covered Western Europe Country research # research analysts # of sales & sales trading # of inst. investors covered Largest multi-local distribution platform provides broadest access We service 1,200 institutional investors and not only the top 100 funds typically covered by bulge brackets We are Top 5 broker for ca. 40% of Tier 1 institutional funds and Top 3 broker for ca. 20% of Tier 2 real money funds Differentiated equity distribution platform Typical investment banks Tier 1 (100 investors) 76 equity sales from 9 locations in EU and 3 in US US 9 Sales Amsterdam Stockholm New York 4 Sales 4 Sales Boston San Francisco Tier 2 (500 investors) Covered by via London 10 Sales Frankfurt 12 Sales Tier 3 (600 investors) Paris 18 Sales Top ranked European broker (2013) Milan 7 Sales Pan-European Small & Mid Cap Sales Vienna 1 Sales German Equity Sales Austria Leading Country Broker Madrid 3 Sales Zurich 8 Sales 14 Source: UniCredit, Kepler Cheuvreux, Extel Survey

8 #1 in 2013 Italian ECM League Table and #1 in Italian Cash Equity Transactions in the Last 3 Years Italian ECM League Table UniCredit s ECM transactions in Italy Pos. GloCo / Bookrunner Value (Euro mn) No. %share Mediolanum Gemina Fondiaria- SAI EI Towers 1 UniCredit 1, % 2 JPMorgan 1, % 3 BNP Paribas 1, % EUR 253,000,000 EUR 204,000,000 EUR 106,337,288 EUR 61,951,000 4 Mediobanca % Sole Bookrunner Italia, 2013 Sole Bookrunner Sole Bookrunner 5 Morgan Stanley % 6 Intesa Sanpaolo % Hera Buzzi Unicem Snam Terna 7 UBS % 8 Barclays % 9 Deutsche Bank % EUR 98,083,000 EUR 220,000,000 Convertible Bond EUR 1,458,000,000 EUR 361,000, BAML % Placing Agent Sole GC & Sole Bookrunner Italian Cash ECM League Table ) Selected 2014 Italian Cash ECM Pipeline Pos. GloCo / Bookrunner Value (Euro mn) No. %share Anima Holding Fineco Fincantieri Cerved 1 UniCredit 4, % 2 Goldman Sachs 3, % EUR 796,430,000 Announced Roumored Announced 3 Intesa Sanpaolo SpA 3, % 4 Credit Suisse 3, % Joint Global Coordinator Italy, 2014 Joint Global Coordinator Italy, 2014 Italy, 2014 Joint Global Coordinator Italy, Mediobanca 2, % 6 Deutsche Bank 2, % Sisal Gruppo Banca Carige Italcementi Banco Popolare 7 JPMorgan 2, % 8 BAML 2, % Rumoured Announced Announced EUR 1,500,000,000 9 UBS 1, % 10 BNP Paribas 1, % Italy, 2014 Co-Global Coordinator Italy, 2014 Joint Global Coordinator Italy, 2014 Italy, Source: Dealogic, as of 31 st December Global Coordinator or Bookrunner role (rank eligible only) 1) Including cash equity transaction only (s, ABBs, s) AGENDA MARKET OUTLOOK ECM SETUP UNICREDIT EXAMPLE ITALIAN LISTING MARKETS AND REQUIREMENTS HOW TO GET A MANDATE: PITCH ECM PRODUCTS 16 8

9 Milan Stock Exchange Regulated Markets Market Segments, Indices and Characteristics SEGMENT REFERENCE INDEX CHARACTERISTICS FTSE MIB 40 most liquid and capitalised shares of the Borsa Italiana Official list Representing 80% of total Italian market cap MTA (MERCATO TELEMATICO AZIONARIO) STANDARD STAR FTSE ITALIA MID CAP FTSE ITALIA SMALL CAP FTSE ITALIA MICRO CAP FTSE ITALIA STAR First 60 shares by capitalisation and liquidity following the companies which belong to the FTSE MIB Shares not belonging either to FTSE MIB or FTSE Italia Mid Cap, but respecting certain free float and liquidity thresholds Shares with market capitalisation lower than FTSE MIB constituents and not in the FTSE Italia All Share Dedicated to mid-sized companies (capitalization lower than EUR 1 bn) Highest level of requirements among all Borsa Italiana s segments: High transparency and disclosure requirements High liquidity (minimum 35% of free float) Corporate Governance in line with international standards 17 Milan Stock Exchange Regulated Markets Requirements for Listing MTA - STANDARD MTA - STAR Minimum Floating Capital 25% 35% Certified Financial Statements Last 3 years (IFRS) Last 3 years (IFRS) Offering Major Documents Market Cap BoD - Non Executive and Independent Directors Internal Control Committee Top Management Incentive Schemes Investor Relator Institutional / Retail Prospectus / MIS Memorandum 1) / Business Plan / QMAT 2) Min EUR 40 mn Recommended Recommended Recommended Recommended Institutional / Retail Prospectus / MIS Memorandum 1) / Business Plan / QMAT 2) Min EUR 40 mn - Max EUR 1 bn Mandatory Mandatory Mandatory Mandatory Specialist Broker Quarterly and Yearly Financial Statements Main Advisor No Yes Sponsor / Global Coordinator Mandatory Yes Sponsor / Global Coordinator Web Site Recommended Mandatory 18 1) Management Information System ( Sistema di Controllo di Gestione ) 2) Quotation Management Admission Test 9

10 Key preparatory steps for an A CORPORATE GOVERNANCE Start moving towards suitable board structure including the appointment of independent directors as appropriate B SYSTEMS AND CONTROLS Evaluate systems and controls to ensure they are appropriate and implemented as necessary, most crucially clear financial reporting procedures along with other controls to ensure that the Company will comply with regulatory requirements MANAGEMENT Ensure all key management positions are in place and established for the coming years Consider a management incentivisation package including equity based plans FINANCIAL INFORMATION Prepare 3 year consolidated audited IFRS financial statements Discuss with auditors to identify any issues early on Review segment reporting to evaluate if any changes are needed Develop a detailed 3 year business plan CAPITAL STRUCTURE Review capital structure and possible pre- measures to be taken Ensure credit facilities appropriate for a public company are in place Review path to monetisation for major shareholders INVESTMENT CASE Develop investment case and identify what the key strengths of the strategy of the business are Possible testing of the investment case/valuation with selected investors at an early stage COMMUNICATION The Company should consider increasing its financial communication ahead of the Setting up targeted investor meetings before the execution phase of the would be beneficial IR FUNCTION Set up IR function Ensure standard IR tools are available online (reports, company background, management team etc.) 19 A Corporate governance will have to be tackled early The Italian Corporate Governance Code sets recommendations for what is considered good corporate governance in Italy Corporate Governance requirements are not mandatory for the Italian Stock Exchange, but Borsa Italiana pushes for voluntary acceptance by candidates A listing company adopting this Code shall yearly disclose information to the relevant market, specifying which recommendations have actually been implemented by the issuer and how CORPORATE GOVERNANCE REQUIREMENTS BOARD OF DIRECTORS INDEPENDENT DIRECTORS INTERNAL CONTROL COMMITTEE REMUNERATION COMMITTEE NOMINATION COMMITTEE Constituents shall include executive directors (i.e. the top management and those who perform management functionswithin the company) and non-executive directors An adequate number of non-executive directors shall be independent (cannot entertain business relationships with the company of a significance nature, able to influencetheir autonomous judgment) The Italian Corporate Governance Code does not specify the number of independent directors which should be included in the Company s BoD. According to market practice, normally there are 1, 2 or 3 non-executive and independent directors, depending on the total number of members of the BoD fewer than 5, between 6 and 11, and more than 11 respectively Committee established by the BoD and reporting to the BoD Monitors the efficiency of the company s operating and administrative procedures, the reliability of financial information, the compliancewith laws and regulations in order to safeguard the company s assets The committee should be made-up of non-executive directors, the majority of which are independent Committee established by the BoD and made up of non-executivedirectors, the majority of which are independent Submits proposals to the BoD for the remuneration of the top management and of those directors who are appointed to particular positions The appointment of Directors shall occur according to a transparent procedure which shall ensure, inter alia, timely adequate informationon the personal and professional qualifications of the candidate The BoD shall evaluate whether to establish among its members a nomination committee made up, for the majority, of independent directors 20 10

11 B Systems and controls perfectly working will be critical to speed up the approval process by Borsa Italiana and Consob 1) The Company has to establish an internal control system which is the set of rules, procedures and organisational structures aimed at making possible a sound and correct management of the company, consistent with the established goals, through adequate identification, measurement, management and monitoring of the main risks INTERNAL CONTROL SYSTEM An effective internal control system contributes to safeguard the company s assets, the efficiency and effectiveness of business transactions, the reliability of financial information, the compliance with laws and regulations The internal control system should guarantee Monitoring of the main risk factors related to the company Performance valuation, where valuation means achievement of the company s targets Operating procedures and instruments related to the management and the control of the company activity Data and information production, especially financial information The Internal control system is also needed to comply with the recurrent financial obligations required once listed For quarterly results, publication within 45 days For 6 months results, publication within 60 days For full year results, publication within 120 days 21 1) Borsa Italiana is the Italian Stock Exchange and Consob ( Commissione Nazionale per le Società e la Borsa ) is the Italian regulatory watchdog Key documents to be filed with Borsa Italiana and Consob TASK / DOCUMENTS FILING WITH PRIMARY RESP. OFFER DOCUMENTATION (ITALIAN PROSPECTUS / IOC) Marketing and disclosure document that describes the terms and conditions of the securities and the plan of distribution and contains a description of the Company, its business, risks, management and financial statements and certain information about the shareholders The minimum required information is governed by Italian and EU legislation and best practice Company Counsel will be principally responsible to write the first draft of the Italian Prospectus and of the IOC The GC and the underwriter s legal counsel will contribute through drafting sessions Consob Borsa Italiana CC, C, UC, GC, A FINANCIAL DATA Audited financials for the last three years Preparation of pro-forma numbers in case of extraordinary transactions executed during the last fiscal year preceding the admission procedure Consob Borsa Italiana C, A BUSINESS PLAN 1) 3 years business plan including assumptions, key drivers, forecasts, sensitivity analysis, achieved and future strategy, action plan (model and descriptive document) Borsa Italiana C, GC, A QMAT 1) Self-assessment document presented by the Company on strategy, business model, stakeholders, industry and markets Borsa Italiana C, GC MIS MEMORANDUM 1) Description of company s internal auditing and reporting system, including description of KPI ( key performance indicators ) and highlighting, as appropriate, potential weaknesses and actions planned to address them Borsa Italiana C, A, GC OTHER PRESENTATIONS Other presentations, prepared by the GC, with the assistance of the Company, include: Analyst presentation Roadshow presentation Copy of analyst presentation may be required to be filed with Consob GC, C 22 Legend: C=company, GC=Global Co-ordinator, UC=Underwriters Legal Counsel, CC=Company s Legal Counsel, A=Auditors 1) Only to Borsa Italiana, not made public 11

12 Preliminary timetable Execution phase Analyst Education Investor Education Marketing phase Road Show Pricing / Allocation 1 Offer Structure and Documentation Due diligence 2 Analyses 3 4 Preparation of Prospectus, IOC and other offer documentation Prospectus approval process Review of business plan Corporate finance valuation Preparing the investment case / equity story / review company positioning Offering structure Managing relations with Preparing equity analyst presentation Research notes preparation Flagship investors identified IOC drafting and regulatory approval process continues Investor Education Publication of research report Analyst to visit key investors Investor education to assess demand and price sensitivities Set offer price range for Bookbuilding and Road Show Publication of Prospectus Institutional sales briefing Roadshow Investor meetings (oneon-ones, group meetings), press conference 5 Pricing and Allocation Books are closed Price set Allocation of shares Underwriting agreement regulators and Stock Exchanges bookbuilding exercise International bookbuilding Subscription for Listing criteria/ regulatory Publication of IOC opening institutions considerations Press briefing Retail subscription Retail subscription closed Investor Sounding (early premarketing) meetings Settlement / closing Stabilisation / aftermarket 12 weeks 4 weeks 2 weeks 2 weeks 1 week Consob review Borsa Italiana review Typically around 2 months 23 Note: Duration of stages may vary depending on company s readiness including legal structure and availability of audited IFRS accounts, length of regulatory approval process and other factors UniCredit Lounge in Get Ready Get Fit Get Value Formazione Assistenza nell implementazione dei cambiamenti necessari a sviluppare il proprio progetto di crescita Ottenimento Certificato Elite e accesso selettivo a set strutturato di benefici e opportunità ELITE Strategie di crescita e internazionalizzazione Modelli organizzativi e di governance nelle aziende leader Sistemi manageriali evoluti Accesso ai capitali internazionali Supporto nella definizione di strategia e business plan Check up su sistemi di controllo di gestione Check up Corporate Governance Strumenti di trasparenza informativa e preparazione alla comunicazione finanziaria Business matching con altre società ELITE o quotate su mercati LSEG Accesso strutturato,via piattaforma web al network di Borsa Italiana (advisor, professionisti, istituzioni) Funding (fast track per quotazione; accesso al debt capital market; piattaforma dedicata a Private equity) Capital Structure Advisory LOUNGE Gestione dei rischi finanziari di impresa Debt Capital Markets Il passaggio ai bilanci IFRS: temi cruciali da considerare Assetti proprietari: passaggio generazionale e fiscalità Tutorship su temi altamente specifici e personalizzati sulla singola società Workshop con la comunità finanziaria Incontri con investitori in occasione delle UniCredit / Kepler conference «simulation» a cura di Borsa Italiana Assessment Equity Research Kepler Sponsor in caso di Ricerca di partner finanziari in caso di trade sale 24 12

13 AGENDA MARKET OUTLOOK ECM SETUP UNICREDIT EXAMPLE ITALIAN LISTING MARKETS AND REQUIREMENTS HOW TO GET A MANDATE: PITCH ECM PRODUCTS 25 Anima Holding Largest Asset Manager in the last 10 years and Third largest FIG 1) in the last 7 years in Continental Europe The Company The Highlights The UniCredit difference Anima Holding ( Anima or the "Company") is the largest independent asset manager in Italy, with 48.6bn 2) of Assets under Management, and more than 1 million customers The Company is active through an unique retail distribution network based on 3 long-term (15+ years) strategic agreements with large Italian banks/shareholders (around 8mn customers), enhanced by 130 distribution agreements with other banking partners and FAs Superior manufacturing capabilities, strong brand, positive investment performance and top notch and long standing management team allowed Anima to reach a sound financial performance and strong cash flow generation Clessidra Capital Partners (through L42), Banca Popolare di Milano, Banca Monte dei Paschi di Siena and some managers of the Company have sold through the 55% of the Company (pre-gs) UniCredit acted as Joint Global Coordinator,and alongside Goldman Sachs and Banca IMI Pricing date: 10 April 2014 Anima Holding Listing: Milan, Italy Size: 759,205,272 Number of shares: mn Issue price: EUR 4.20 Initial Price range: EUR 759,205,272 EUR Revised Price range: Joint Global EUR Coordinator Free float: 55% Italy, 2014 Market offer: EUR 1,259mn The was executed in a busy period for European Equity Capital Markets, with more than 15 s pricing in the first three weeks of April and several quick to market transactions occurring during bookbuilding of the The crucial decision on when to time the Company's market debut allowed Anima to be the first Italian Company to float in 2014 benefiting from a strong liquidity in the market With a transaction value of EUR 759mn, Anima Holding is the largest of an Asset Management Company in continental Europe in the last 10 years was strongly received by investors since opening the book with a coverage message across the price range already on the 4 th day of bookbuilding which helped achieving a 5x coverage level at issue price Pricing came in the upper end of the range, at EUR 4.20 per share (vs. EUR original range), despite heightened volatility in the last 3 days of bookbuilding achieving a market cap of over 1.2bn Germany 6.4% France 4.5% UK 44.6% Investors' Demand by Region RoE 7.5% RoW 0.7% US 25.1% Italy 11.2% Demand by Investor Retail 8.4% LO 37.3% Together with the other s, UniCredit Kepler Cheuvreux ran a comprehensive international marketing activity, including 11 Early look meetings, 56 PDIE feedbacks, 51 One-on-Ones 3) and 10 group meetings reaching over 250 investors during a 9- day roadshow in Milan, London, Paris, New York, Boston and Frankfurt Impressive conversion rate of roadshow one to one meetings: 85% hit ratio UniCredit generated 27.5% of the overall demand for the, in line with the other two international Bookrunners Book was represented by an impressive 280 lines with nearly 45% of the book derived by UK investors, 25% US and c. 11% in Italian accounts Controlled allocation of the book targeting a stable trading in the aftermarket, whilst also achieving a pricing level in the upper end of the range for the sellers HF 54.3% Allocation by Investor Retail 8.7% LO 57.9% HF 33.4% Investors allocation by 4) UniCredit 27.5% GS 29.4% Banca IMI 14.7% UBS 28.4% 26 1) Excluding Insurance deals 2) As of ) Two of which are Two-on-Ones 4) Based also on duplications 13

14 AGENDA MARKET OUTLOOK ECM SETUP UNICREDIT EXAMPLE ITALIAN LISTING MARKETS AND REQUIREMENTS HOW TO GET A MANDATE: PITCH ECM PRODUCTS 27 Initial Public Offering (1/2) WHAT THE BANKER SHOULD KNOW What is this Product? In an initial public offering () a private company gets listed on the stock exchange for the first time (i.e. Milan Stock Exchange). Shares can be offered to institutional and private investors. Two types of shares can be offered in an : Primary shares are new shares offered by the issuer to raise new capital and secondary shares offered by existing shareholders to monetise part or all of their stake in the company. is a fully documented offering: an approved prospectus is required by the Italian Securities and Exchange Commission (Consob). Banks support the issuer during and after the process conducting business due diligence, structuring the offering, providing research, supporting the Consob approval process, marketing the transaction and selling the shares to the market. Banks also provide post services like acting as a specialist on the stock, research coverage, market making etc. An process usually takes about 4 to 5 months starting from the kick off meeting. What is it for? Financing future growth, development plans or M&A. The represents also a first step for further multiple financing opportunities: convertible debt, access to bond markets, possibility to use listed shares for paper M&A. An gives the issuer a wider access to investors, transforms a company into a liquid asset and improves the Company s visibility. Selling shareholders use an to monetise part of its investment enlarging the investors base. A parent company can also structure an as a spin-off of certain business operations. The transaction gives the possibility to develop management incentive schemes and to solve generational turnover issues. Who is it for? A successful candidate usually operates in an attractive industry with good future earnings and growth potential. The company should have a convincing Equity Story: market leading position, a sustainable competitive advantage, an established customer base and high product and service quality. The management is expected to be capable and experienced and should have a comprehensible business strategy. Ideally the company has a sustainable earnings perspective and stable positive cashflows with high margins and good payout potential. AT A GLANCE Profitability Risk Induced cross selling Recurrence Resources required / Example for an Process: I. Preparation II. Documentation III. Marketing IV. Placement V. Post Services IFRS / Corporate Governance Research & publicity Pilot Fishing Sales force briefing Specialist Mandating of advisers guidelines Analyst presentation Determination of pricing range Ongoing research coverage Development of equity story Underwriting agreement Research report Bookbuilding Non-deal related research Business Plan / Valuation Preparation of prospectus Investor education Pricing/allocation Capital markets advisory Data room and due diligence Consob approval process Roadshow presentation Settlement Execution of follow-on Transaction timetable Management roadshow transactions 28 14

15 Initial Public Offering (2/2) What are the risks for UniCredit? Market Risk: Usually none, unless the deal is guaranteed Credit Risk: None Operational Risk: Prospectus liability and reputational risk mitigated by due diligence Others: None WHAT THE CLIENT WILL WANT TO KNOW Why this Product? Why this product for this client? What is the profitability for UniCredit? 2.5% to 3.5% based on the issuance volume Customer loyalty Recurrence: Follow-on transactions like share placements or capital increases which occur quite regularly with specific clusters of clients (i.e. Financial Sponsors) Induced cross selling: Structured finance, buy side M&A advisory, wealth management for core shareholders How strong is UniCredit on this product? No. 2 in Italian league table 2011 and no. 7 in European s league tables by deal volume UCG led several benchmark s, including the Global of the Year 2011 and first of an Italian Company in Hong Kong (Prada in 2011), the largest European in 2010 (Enel Green Power) and 2009 (PGE) An grants broader investor access and is an additional financing source. The company becomes a more liquid asset and valuation of the company can be conducted more easily and on a daily basis. Equity that is raised during the offering does not have to be repaid. Also, an increases the public awareness towards a company which might lead to new business opportunities. Why this product and not another one? An is the only possible way to become a publicly listed company and to get an additional source of financing from equity capital markets. Why UniCredit? Energa SA ZE PAK PRADA SpA Jastrzębska Spółka Enel Green Power Il Sole 24 Ore SpA Damiani SpA Poltrona Frau SpA Węglowa SA EUR 700,000,000 EUR 166,000,000 EUR 1,734,300,000 EUR 1,343,700,000 EUR 2,466,000,000 EUR 209,600,000 EUR 105,400,000 EUR 113,700,000 Poland, 2013 Poland, 2012 Italy, 2011 Poland, 2011 Italy, 2010 Italy, 2007 Italy, 2007 Italy, Capital Increase (1/2) WHAT THE BANKER SHOULD KNOW AT A GLANCE What is this Product? In a capital increase a company increases its subscribed capital and offers new shares to investors in order to raise new equity. The new shares can be offered to either existing shareholders or new investors. Usually existing shareholders are being granted a subscription right to subscribe for the new shares in order to avoid dilution. However, in Italy, subscription rights can be excluded also through a capital increase of up to 10% of the subscribed capital. 10% capital increases without subscription rights usually do not require a prospectus and can be executed in an accelerated bookbuild (ABB) in a short time frame if BoD has been mandated by EGM. Banks might guarantee a capital increase in return for additional fees and/or upside participation. What is it for? A company usually raises new equity in order to improve its balance sheet structure and deleverage, finance growth (capex and acquisitions), restructure its debt profile, strengthen its capital ratios (e.g. Net Debt/EBITDA, Financial Leverage), avoid to face an increase in cost of debt due to potential rating downgrades or exceeding debt covenants. Who is it for? Listed companies Timing Profitability Risk Induced cross selling Recurrence Resources required 3 to 4 month for rights issue with prospectus Max 1 week for capital increase via ABB after EGM/OGM approval 30 15

16 Capital Increase (2/2) What are the risks for UniCredit? Market Risk: Yes, if the deal is underwritten/guaranteed Credit Risk: None Operational Risk: Prospectus liability (if applicable) and reputational risk mitigated by due diligence Others: None What is the profitability for UniCredit? 1% - 2% of the issuance volume for ABB 3% - 5% of the issuance volume for Customer loyalty Recurrence: Follow-on transactions possible Induced cross selling: Acquisition financing, M&A advisory, structured finance, debt restructuring How strong is UniCredit on this product? #1 by no. of deals within our core markets #2 by no. of deals in Italy #1 by no. of deals and #7 by deal volume in our core markets in 2011 WHAT THE CLIENT WILL WANT TO KNOW Why this Product? Why this product for this client? A capital increase provides equity for listed companies to finance acquisitions/capex and to improve the capital structure of the issuer. Why this product and not another one? The issuer can decrease its leverage and strengthen its balance sheet structure or finance acquisitions and growth. In contrast to debt financing, no interest payments or repayments needed. Debt lenders might require additional equity for further debt financing. Why UniCredit? Fondiaria-SAI Unipol UniCredit Group IVG Immobilien AG Fondiaria-Sai Porsche Automobil Industria Macchine Holding SE Automatiche S.p.A. Falck Renewables SpA Amplifon SpA EUR 1,100,000,000 EUR 1,100,000,000 EUR 7,499,000,000 EUR 145,496,159 EUR 449,000,000 EUR 4,987,500,000 EUR 36,800,000 ABB Primary EUR 129,900,000 EUR 72,400,000 ABB Primary Italy, Sept 2012 Italy, Sept 2012 Italy, 2012 Germany, 2011 Italy, 2011 Germany, 2011 Sole Bookrunner Italy, 2011 Italy, 2011 Italy, Share placement - ABBs / Block Trades (1/2) WHAT THE BANKER SHOULD KNOW AT A GLANCE What is this Product? In an accelerated bookbuild (ABB) larger stakes of a listed company are placed in the market in a short time period (usually within one day). Sellers can either be existing shareholders (secondary shares) or the company (primary shares, max 10% of o/s shares). Due to the absence of a prospectus and the short execution period buyers are usually exclusively qualified institutional investors. Banks might guarantee a certain minimum price for the shares in return for additional fees or upside participation. In a block trade a bank acquires a stake from a shareholder and either places it in the market via an ABB or sells it in a second block trade to other investors. What is it for? An Accelerated Bookbuild is conducted to exit a stock or to sell larger stakes of a company if an open market sale is not possible due to the large relative size of the stake. Also, a capital increase via ABB (max 10% of o/s shares) will lead to cash proceeds in a short time period in order to finance growth, acquisitions or reduce debt. Who is it for? Shareholders with significant holdings in a company. Companies who wish to raise equity in a short period of time without a prospectus (max. up to 10% of the subscribed capital in Italy). Timing Up to 1 week Profitability Risk Induced cross selling Recurrence Resources required 32 16

17 Share placement - ABBs / Block Trades (2/2) What are the risks for UniCredit? Market Risk: None, only if the transaction is guaranteed at a certain share price Credit Risk: None Operational Risk: Limited Others: None What is the profitability for UniCredit? Depending on deal structure between 1% and 2% Customer loyalty Recurrence: Follow-on transactions Induced cross selling: Follow-on transactions, M&A How strong is UniCredit on this product? #1 by deal volumes in Italy in UniCredit has executed some of the largest ABBs in Europe in recent years and ranks top 10 in European league tables WHAT THE CLIENT WILL WANT TO KNOW Why this Product? Why this product for this client? Monetisation of large stakes in a company. Short execution period. Capital raising of up to 10%. Why this product and not another one? Short execution period. Monetization might not be possible in the open market as it would lead to negative share price performance and extended time period due to relative size of the stake. Allocation to preferred investors possible. Why UniCredit Mediolanum Gemina El Towers Fondiaria- SAI Snam Terna Luxottica Polska Grupa Energetyczna SA Enel / Terna EUR 253,000,000 EUR 204,000,000 EUR 62,000,000 EUR 106,337,288 EUR 1,458,000,000 EUR 361,000,000 EUR 486,000,000 EUR 604,100,000 EUR 280,500,000 Sole Bookrunner Italia, 2013 Sole Bookrunner Sole Bookrunner Sole Bookrunner Co-Bookrunner Italy, 2012 Poland, 2012 Italy, Share Buy Back (1/2) WHAT THE BANKER SHOULD KNOW AT A GLANCE What is this Product? In a share buyback a Company purchases its own shares typically over an extended period of time. The company either retires the repurchased shares or keeps them as treasury shares. Share buybacks can be carried out either in an open-market purchase or via a tender offer. As the number of shares is being reduced, the share price should increase and share ratios like EPS would improve. What is it for? A Company might choose a share buyback to distribute excess cash to its shareholders. Compared to a dividend payment a share price increase would not have immediate tax effects. Also a company would send a positive signal to the market as it can effort to spend its cash reserves on its own stock and signalling that it thinks that current share price levels are below their fair value. If shares are being held as treasury shares a company could reissue the shares in order to raise new equity. Companies also acquire their own shares for their employee stock option plans. Who is it for? Buy backs might be attractive for listed companies who have excess cash and want to send a positive signal to the market and its investors. A company can increase its share price, improve its share ratios (e.g. EPS) and distribute profits to shareholders. In contrast to dividend payments, shareholders can benefit from the share price increase without immediate taxation. Profitability Risk Induced cross selling Recurrence Resources required Best Effort / 34 17

18 Share Buy Back (2/2) What are the risks for UniCredit? Market Risk: No, only if the transaction is guaranteed at a certain share price Credit Risk: None Operational Risk: None Others: None WHAT THE CLIENT WILL WANT TO KNOW Why this Product? Why this product for this client? What is the profitability for UniCredit? Brokerage Fees ( %) for plain vanilla execution, up to % for structured execution Customer loyalty Recurrence: Daily transaction, typically with a medium /long term horizon Induced cross selling: Financing, equity products How strong is UniCredit on this product? UniCredit ECM Italy has executed share buy backs for many well known clients including large FTSE-MIB companies Buy backs may support the share price in high volatility market phases. They are often used to build-up a treasury share position for employee stock option plans, strategic operations (mergers, acquisitions, etc.), distributing profits to shareholders and equity-linked instruments issuance. They have a positive effect on share ratios like EPS and can lead to an increase in share price. Additionally, the repurchase of a company's own stock sends a positive signal to the capital markets. Why this product and not another one? Tax advantages for shareholders compared to dividend payments. Possible improvement of the share price and improved ratios. Why UniCredit? Telefonica Czech Republic Daimler AG DAX Company CDC SpA Replay SpA Finmeccanica SpA IMA SpA Fiat SpA Prysmian SpA CR Undisclosed CZK 3,804,000,000 Share Buyback EUR 1,500,000,000 Share Buyback EUR 14,000,000 Share Buyback EUR 1,200,000 Share Buyback EUR 5,200,000 Share Buyback EUR 34,400,000 Share Buyback EUR 2,100,000 Share Buyback EUR 126,100,000 Share Buyback EUR 20,200,000 Share Buyback Open Market Agent Czech Republic, 2012 Open Market Agent Germany, 2011/2010 Open Market Agent Germany, 2011/2010 Open Market Agent Italy, 2010 Open Market Agent Italy, 2010/2008 Open Market Agent Italy, 2009/2008 Open Market Agent Italy, 2009/2008 Open Market Agent Italy, 2008 Open Market Agent Italy, Tender Offers Advisor / Technical Listing Sponsor (1/2) WHAT THE BANKER SHOULD KNOW AT A GLANCE What is this Product? Tender Offers: Voluntary Tender Offers are market-regulated operations allowing a take-over of control over a listed company or increasing the stake in a listed company by offering to acquire its shares from existing shareholders; Mandatory Tender Offers are triggered by gaining control, i.e. acquiring 30% of the voting rights in the target company. Price offered is usually at a premium to the market price. Cash or liquid securities may be offered to the target company's shareholders. Technical Listing Sponsor (listing on MTA): the Bank supports the Issuer during and after the listing process which follows extraordinary transactions (i.e. Mergers, Spin-Offs, etc.), conducting business due diligence and supporting Consob / Borsa Italiana review process. What is it for? Tender Offers typically occur when a party wishes to take over a company or at least take a large stake in a company or when the threshold for a Mandatory Tender Offer is triggered. Shareholders are offered an option to tender a part or all of their stake within a certain time frame, typically at a premium to the current market price in order to compensate investors for selling their shares rather than holding them. Technical Listing Sponsor: requested by regulation related to the listing of new shares arising from extraordinary transactions Who is it for? Tender Offers are attractive for companies who are aiming at taking over a company or a large stake in a company. Tender Offers are also interesting for shareholders contemplating a squeeze-out and / or a delisting Technical Listing Sponsor: for Companies involved in extraordinary transactions Timing Tender Offers: It takes typically 3 months to complete a Tender Offer assuming that there is no competing bid Sponsor: up to 2/3 months Profitability Risk Induced cross selling Recurrence Resources required / 36 18

19 Tender Offers Advisor / Technical Listing Sponsor (2/2) What are the risks for UniCredit? Market Risk: None Credit Risk: To the extent provided: Cash confirmation letter, Financing in Tender Offers. For the technical execution no credit risk is incurred Operational Risk: None in Tender Offers. Others: Potential liability risk in connection with a fairness opinion for Tender Offers. Reputational mitigated by due diligence in Sponsor transactions WHAT THE CLIENT WILL WANT TO KNOW Why this Product? Why this product for this client? What is the profitability for UniCredit? Up to 1% for advisory + flat fee for Agent bank activity Additional fees could be generated from financing / cash confirmation letter for Tender Offers Sponsor: flat advisory fee Customer loyalty Recurrence: None in Tender Offers, follow-on possible after Sponsor transactions Induced cross selling: Cash confirmation letter (Tender Offers), Financing, M&A (fairness opinions) In case it is mandated by the controlling shareholder could be aimed at the delisting in order to restructure the Company in a more flexible way (cost cutting, efficiency implementing, etc.). In case it is launched by a third party it may be an alternative to negotiations between the boards of the two Companies. Technical Listing Sponsor: requested by regulation after certain extraordinary transactions such as material M&A, Spin-off transactions. Why UniCredit: Camfin Marcolin Hera Acegas NTT DoCoMo / Buongiorno Edizione Srl/ Benetton SpA AS Roma Global Games SpA/ SNAI SpA ERG SpA/ ERG Renew SpA Alliance Healthcare/ ANZAG EUR 237 m Tender Offer Joint Agent 2013 EUR 57 m Tender Offer Joint Agent 2013 EUR 110 m Tender Offer Joint Agent 2013 EUR 224,000,000 Tender Offer Sole Agent Italy, 2012 EUR 276,440,000 Tender Offer Joint Agent Italy, 2012 EUR 30 m Tender Offer Sole Agent Italy, 2011 EUR 141,164,000 Tender Offer Joint Agent Italy, 2011 EUR 23,000,000 Tender Offer Sole Agent Italy, 2011 EUR 143,398,000 Tender Offer Transaction Bank Germany, 2011 Fiat Industrial DMT EI Towers EUR 11,000,000,000 Spin-off EUR 793,500,000 Reverse Merger Joint Listing Sponsor Italy, 2011 Listing Sponsor Italy, Convertible / Exchangeable Bond (1/3) WHAT THE BANKER SHOULD KNOW AT A GLANCE What is this Product? The Convertible Bond is a senior unsecured bond which offers bondholders the option to convert into new or existing shares of the issuer during the life of the bond at a pre-determined conversion price (fixed at a premium to the reference price at issuance). If conversion does not occur, the bond is redeemed at maturity. The embedded option subsidies funding cost making the product an attractive source of financing. Similarly, the Exchangeable Bond is a senior unsecured bond granting bondholders the option to exchange the bond for existing shares of a listed company other than the issuer. What is it for? Opportunistic: mid-to-long-term (re)financing at competitive terms, cheapest source of capital markets financing available, diversification of funding instruments. Acquisition / growth financing: conversion price at a premium justifies potential dilution taking into account growth potential. Stake monetisation (exchangeable bond only): allows issuers with stakes in listed entities to potentially dispose or monetise value of their holdings at a premium to current share price. Who is it for? Issuer: satisfactory stand alone credit quality (visibility on source of funding for repayment required). Underlying: listed entity, market cap EUR 500mn+, daily trading liquidity EUR 1mn+. Any sector, geography or currency. Rating: not required unrated issuers accounted for more than 50% of EMEA transactions in Timing Execution in 2 to 3 weeks Profitability Risk Induced cross selling Recurrence Resources required Best Effort / 38 19

20 Convertible / Exchangeable Bond (2/3) What are the risks for UniCredit? Market Risk: None most deals are on best efforts Credit Risk: None Operational Risk: None Others: Limited, mis-pricing and reputational risks What is the revenue for UniCredit? Approx 1-2% depending on structure and size Customer loyalty Recurrence: Repeat issuers are common, but long interval between deals (average 4 years) Induced cross selling: Limited, as the product is commonly used as a complement to debt financing. Potential for Liability Management transactions on outstanding instruments How strong is UniCredit on this product? #5 Equity-linked bookrunner in Core Markets WHAT THE CLIENT WILL WANT TO KNOW Why this Product? Why this product for the client? Equity-linked financing allows issuers to achieve mid-to-long-term funding at a substantially lower cash cost vs comparable straight bond. The possibility to issue shares at a premium to market price justifies the potential dilution. Issuers can access a new global investor base, with minimal overlap with bond or equity investors and gain visibility in the capital markets. Why this product and not another one? Unsecured nature and absence of covenants allow full flexibility for future debt raising. Rating and roadshow are not required and allow for quick issue process, ca. 2-3 weeks preparation with lean documentation. Highly flexible instrument with a wide range of structures across debt to equity spectrum to meet issuer s objectives. Why UniCredit? Telecom Italia Hungary / G. Richter Kuka AG Buzzi Unicem Alcatel Lucent Alstria AG Kuka AG Camfin / Pirelli Adidas AG EUR 1,300,000,000 Mandatory Convertible Bond EUR 903,800,000 Exchangeable Bond EUR 150,000,000 Convertible Bond (after EUR 91.2mn tap) EUR 220,000,000 Convertible Bond EUR 628,946,424 OCEANE EUR 79,400,000 Convertible Bond EUR 58,800,000 Convertible Bond EUR 150,000,000 Exchangeable Bond EUR 500,000,000 Convertible Bond Co-Bookrunner Hungary, 2013 Germany, 2013 Sole Global Coordinator Co-Bookrunner France, 2013 Co-Bookrunner Germany, 2013 Germany, 2013 Italy, 2012 Sole Global Coordinator Germany, Convertible / Exchangeable Bond (3/3) TECHNICAL TERMS Maturity Date upon which the issuer will have to redeem the bond in cash to investors. Typically if the share price is above the Conversion Price, investors will convert their bonds before maturity Coupon Interest which must be paid to investors at regular intervals until maturity Status, Rank CB may be secured or unsecured and unsubordinated (senior) or subordinated (junior) debt of issuer Conversion Price Price above which investors will convert their bonds into shares, usually set as Reference Price * (1 + Conversion Premium) Reference Price Typically the volume weighted average share price during the bookbuilding Conversion Premium Percentage premium at which the Conversion Price is set over the Reference Price at issue Conversion Ratio Number of shares into which each bond will convert, calculated as Denomination / Conversion Price Denomination Par Value or Principal amount of one bond (e.g. EUR 100,000) Convertible Bond Price Convertible bond trading price quoted as a percentage of the par value of the bond Parity Current market value of underlying shares according to the Conversion Ratio, expressed as a percentage of denomination Prevailing Premium Percentage difference of the convertible price over parity Issue Price It is the convertible price at issue, expressed as a percentage of the denomination (typically 100%) Redemption Price Price at which a convertible bond will redeem if conversion does not occur Bond Floor Net present value of convertible fixed income cash flows Theoretically if CB loses all equity sensitivity, it will trade on its "bond floor" Yield to Maturity Discount rate or internal rate of return (IRR) that equates redemption price to current convertible market price Call Option The right for the issuer to call the convertible for cash redemption during a pre-determined period of time. Usually subject to a trigger level above the conversion price, thus effectively forcing investors to convert their bonds Put Option The right for the investor to request early redemption of the bond by the issuer on a pre-determined date at then applicable redemption value (par or accreted value); European style option 40 20