Conference call with Filippo Taddei Economy Spokesman of the Democratic Party

Transcription

1 Conference call with Filippo Taddei Economy Spokesman of the Democratic Party Italy Renzinomics Thursday 17 April April 2014

2 Renzinomics a la carte : From 2014 realistic target to 2015 optimal goals, bn 22.0 From 2014 realistic targets to 2015 optimal goals Renzinomics: From 2014 realistic target to 2015 optimal goals*, bn 12.0, * red bar signals controversial step Tax on financial assets (8 months) Bilateral agreement with Switzerland on assets repatriation (one off) Spending review Extra VAT from 2013 PA arrears (FY impact) IRAP tax cut (8 months) 10% SME energy price cut (8 months) IRPEF cut (8 months) Tax on financial assets (full year) Spending review Lower interest on spread Exploiting Total VAT on PA % deficit arrears treshold ESA 95 higher deficit IRAP tax cut (Full year) 10% SME energy price cut (full year) IRPEF cut (full year) investment in Hydro geological Youth education and schools disasters unemployment Buffer left , * red bar signals controversial step 2

3 L'Espresso Finmeccanica UBI Banca BPER Banca Generali Mondadori ISP Credem UCG Autogrill Astaldi Cairo Mediaset Atlantia Azimut Saras Marr ERG Piaggio GTECH Impact on EPS 2014 e Renzinomics Potential EPS impact on our coverage universe from various measures, 2014e assuming annualised impact Renzinomics Potential EPS impact on our coverage universe from various measures, 2014e assuming annualised impact* Bilateral agreement with Switzerland (2016 EPS impact) Arrears impact IRPEF boost IRAP boost 14.0% 12.0% 10.0% 8.0% 6.0% 4.0% 2.0% 0.0%, * the impact on asset gatherers from assets disclosure agreement is estimated on 2016 FY numbers due to our probability scenario. Only stocks with 2014 profits showing up 3

4 MB Italian Coverage Estimated Breakdown of IRAP Taxation, 2014E estimates 4

5 L'Espresso Mondadori BP Emilia Romagna UBI Banca Finmeccanica Autogrill Saras Intesa Sanpaolo Credem Hera Mediaset Cairo Safilo Trevi Fin. Amplifon Unipol-SAI ERG Piaggio Telecom Italia Cattolica Assi.ni EI Towers Emak Atlantia Terna Marr GTECH Enel Banca Generali Snam Maire Tecnimont Astaldi Sorin Unicredit Fiat Brembo Generali Italcementi Eurotech Ansaldo STS Azimut Holding Saipem Enel Green Power Brunello Cucinelli Indesit Company Delclima Danieli Yoox Recordati Campari Eni Tod's Moncler Interpump Group De' Longhi Nice Sogefi CNH Industrial Ferragamo Tesmec Moleskine Diasorin Pirelli & C. Prysmian Buzzi Unicem Tenaris Mediolanum Cementir Luxottica Impact on EPS Estimated Impact on 2014 EPS from 10% IRAP tax reduction (% on current MBe) 7.0% 6.0% 5.0% 4.0% Estimated Impact on 2014 EPS from 10% IRAP tax reduction (% on current MBe) 3.0% 2.0% 1.0% MB Coverage 0.92% 0.0% 5

6 32% 32% 32% 33% 34% 33% 34% 34% 34% 35% 35% 34% 35% 37% 37% 39% 33% 32% 4% 5% 7% 6% 7% 6% 6% 10% 9% 19% 22% 21% 22% 21% 21% 21% 21% 19% 21% 22% 7% 7% 9% 9% 7% 7% 7% Tax collection breakdown Tax stream breakdown Others IMU IRAP VAT IRES IRPEF 100% % 80% 70% 60% 50% 40% 30% 10% 0% on Eurostat data Tax revenue breakdown, bn Tax revenue breakdown, bn bn CAGR VAT % IRAP % IRPEF % IRES % IMU % Others % Total % GDP 947 1,004 1,049 1,091 1,127 1,191 1,249 1,295 1,335 1,392 1,429 1,485 1,546 1,568 1,520 1,549 1,559 1, %, MEF, Istat, MEF, Istat 6

7 IRPEF simulation Employees by income bracket Gross income bracket Number employees as % below 7.5k 3,942,147 19% 7.5k-15k 3,931,818 19% 15k-26k 7,510,064 36% 26k-35k 3,004,064 14% 35k-55k 1,594,420 above 55k 967,928 5% Total 20,950, % Simulation of IRPEF cut aimed at releasing 1,000 net income IRPEF today IRPEF tomorrow Gross annual income Irpef paid Deduction Net tax Net income Deduction Net tax Net income Renzi net Difference 1, , , ,000 1, ,000 1, , ,000 1, ,000 1, , ,000 2, ,490 1, , ,000 3, ,886 13,114 2, ,114 1,000 20,000 4, ,461 16,539 2,339 2,461 17,539 1,000 25,000 6, ,037 19,963 2,113 4,037 20,963 1,000 30,000 7, ,814 23, ,814 23,

8 Estimated Impact on 2014 EPS from 7% IRPEF tax reduction (% impact on MBe) 8

9 Financial assets of Italian families from to 26% tax rate, bn 2012 assumed yield taxation tax income new taxation New tax income Delta Cash nm Banking deposits % 20.0% % Postal deposits % 20.0% % Securities of which Italian Government bonds % 12.5% % of which Italian bonds % 20.0% % of which foreign bonds % 20.0% % Equities % 20.0% % Mutual funds % 20.0% % Life reserves of which pension funds nm 11.0% nm 11.0% nm - of which Life reserves % 20.0% % TOTAL 3,

10 Spending review key items, bn Costs optimisation real estate management advisory costs and cars top mgmt salaries goods and services expenditure Reorganisation provinces police synergies digitalization Political costs towns, regions constitutional bodies Transfer cuts central transfers regional transfers local participations railway transfers Sector expenditures defense pensions war pensions Total

11 Macro and sentiment turning up Mediobanca Italian Pulse index and Italian real GDP QoQ Mediobanca Italian Pulse Index with Manufacturing and Services PMI surveys % % % % % Real GDP Growth q/q (lhs) Mediobanca Italian Pulse Index (rhs) Italy Manufacturing PMI Survey (lhs) Italy Services PMI Survey (lhs) Mediobanca Italian Pulse Index (rhs) 11

12 Italy s debt / GDP trajectory under different scenarios Avg GDP growth of 2. and primary surplus 5 % Avg GDP growth of 1% and primary surplus 5 % Avg GDP growth of 2. and primary surplus 3 % Avg GDP growth of 1% and primary surplus 3 % Source: European Commission Alert Mechanism Report 12

13 Italy debt exceeding 60% GDP brought to zero in 25 years, bn Residual capital Interest payment Capital payment Total annuity Gvt revenue (3% CAGR) as % of government revenues , % , % % % % % % % % % % % % % % % % % % % % % % % % 13

14 14 Disclaimer THISRESEARCHREPORTISPREPAREDBYMEDIOBANCABANCADICREDITOFINANZIARIOS.P.A.(MEDIOBANCAS.P.A.)AUTHORIZEDBYTHEBANKOFITALYTOPROVIDEFINANCIALSERVICES.THISRESEARCHREPORTISPROVIDEDFO RINFORMATIONPURPOSESONLYANDDOESNOTCONSTITUTEORSHOULDNOTBECONSTRUEDASANOFFERTOBUYORSELL,ORASOLICITATIONOFANOFFERTOBUYORSELL,ANYFINANCIALINSTRUMENTS.ITISNOTINTENDEDTORE PRESENTTHECONCLUSIVETERMSANDCONDITIONSOFANYSECURITYORTRANSACTION,NORTONOTIFYYOUOFANYPOSSIBLERISKS,DIRECTORINDIRECT,INUNDERTAKINGSUCHATRANSACTION.THEINFORMATIONCONTAINED HEREIN,INCLUDINGANYEXPRESSIONOFOPINION,HASBEENOBTAINEDFROMORISBASEDUPONSOURCESBELIEVEDTOBERELIABLEBUTISNOTGUARANTEEDASTOACCURACYORCOMPLETENESSALTHOUGHMEDIOBANCAS.P.A. CONSIDERSITTOBEFAIRANDNOTMISLEADING.NEITHERMEDIOBANCAS.P.A.NORANYOFITSDIRECTORS,OFFICERS,EMPLOYEESORAGENTSSHALLHAVEANYLIABILITY,HOWSOEVERARISING,FORANYERROR,INACCURACYORIN COMPLETENESSOFFACTOROPINIONINITORLACKOFCAREINITSPREPARATIONORPUBLICATION.SAVEASOTHERWISEPROVIDEDINTHERESEARCHREPORT,MEDIOBANCAS.P.A.HASNOOBLIGATIONTOUPDATE,MODIFYORAMEN DTHISREPORTANDINFORMTHEREADERACCORDINGLY.THISDOCUMENTDOESNOTCONSTITUTEAPERSONALRECOMMENDATIONANDRECIPIENTSMUSTSATISFYTHEMSELVESTHATANYDEALINGISAPPROPRIATEINTHELIGHT OFTHROWNUNDERSTANDING,APPRAISALOFRISKANDREWARD,OBJECTIVES,EXPERIENCE,ANDFINANCIALANDOPERATIONALRESOURCES.ALLSTATEMENTSANDOPINIONSAREMADEASOFTHEDATEONTHEFACEOFTHISDOC UMENTANDARENOTHELDOUTASAPPLICABLETHEREAFTER. MEDIOBANCAS.P.A.ORONEORMOREOFTHECOMPANIESBELONGINGTOITSGROUPMAY,FROMTIMETOTIME,DEALIN,HOLDORACTASMARKETMAKERSORADVISERS,BROKERSORBANKERSINRELATIONTOTHEFINANCIALINSTR UMENTS,ORDERIVATIVESTHEREOF,OFPERSONS,FIRMSORENTITIESMENTIONEDINTHISDOCUMENT,ORBEREPRESENTEDONTHEGOVERNINGBODIESOFSUCHFIRMSORENTITIES.EMPLOYEESOFMEDIOBANCAS.P.A.ORONEOR MOREOFTHECOMPANIESBELONGINGTOITSGROUP,ORINDIVIDUALSCONNECTEDTOTHEM,MAYFROMTIMETOTIMEHAVEAPOSITIONINORBEHOLDINGANYOFTHEINVESTMENTSORRELATEDINVESTMENTSMENTIONEDINTHI SREPORT.BARCLAYSINITIALCOVERAGEASOF30/06/2010.BNPPARIBASINITIALCOVERAGEASOF30/06/2010.CREDITAGRICOLESAINITIALCOVERAGEASOF30/06/2010.CREDITSUISSEINITIALCOVERAGEASOF30/06/2010.DEUTSC HEBANKINITIALCOVERAGEASOF30/06/2010.INTHEPAST12MONTHS,THERATINGONDEUTSCHEBANKHASBEENCHANGED.THEPREVIOUSRATING,ISSUEDON10/09/2010,WASUNDERPERFORM.GOLDMANSACHSINITIALCOVER AGEASOF30/06/2010.INTHEPAST12MONTHS,THERATINGONGOLDMANSACHSHASBEENCHANGED.THEPREVIOUSRATING,ISSUEDON07/02/2011,WASNEUTRAL.HSBCINITIALCOVERAGEASOF30/06/2010.INTHEPAST12MONTH S,THERATINGONHSBCHASBEENCHANGED.THEPREVIOUSRATING,ISSUEDON08/11/2010,WASNEUTRAL.JPMORGANCHASEINITIALCOVERAGEASOF30/06/2010.MORGANSTANLEYINITIALCOVERAGEASOF30/06/2010.INTHEPA ST12MONTHS,THERATINGONMORGANSTANLEYHASBEENCHANGED.THEPREVIOUSRATING,ISSUEDON07/02/2011,WASNEUTRAL.SOCIETEGENERALEINITIALCOVERAGEASOF30/06/2010.UBSINITIALCOVERAGEASOF30/06/20 10.INTHEPAST12MONTHS,THERATINGONUBSHASBEENCHANGED.THEPREVIOUSRATING,ISSUEDON09/02/2011,WASNEUTRAL.CERTAINMEMBERSOFTHEGOVERNINGBODIESOFBARCLAYSORONEORMOREOFTHECOMPANIES BELONGINGTOITSGROUPAREALSOMEMBERSOFTHEGOVERNINGBODIESOFMEDBANCAS.P.A.ORONEORMOREOFTHECOMPANIESBELONGINGTOITSGROUP.SOCIETEGENERALEHASAREPRESENTATIVEONONEOFTHEGOVERN INGBODIESOFMEDIOBANCAS.P.A.ORONEORMOREOFTHECOMPANIESBELONGINGTOITSGROUP.MEDIOBANCAS.P.A.ORONEORMOREOFTHECOMPANIESBELONGINGTOITSGROUPEXPECTORWILLSEEKTORECEIVE,INTHENEX TSIXMONTHS,FEESDUEFORDELIVERYOFCORPORATEFINANCESERVICESTOBNPPARIBASORONEORMOREOFTHECOMPANIESBELONGINGTOITSGROUP,ORHAVEENTEREDINTOAGREEMENTSTOPROVIDECORPORATEFINANCE SERVICESTOBNPPARIBASORONEORMOREOFTHECOMPANIESBELONGINGTOITSGROUP. MEDIOBANCAS.P.A.ANDTHECOMPANIESBELONGINGTOITSGROUP,ORINDIVIDUALSCONNECTEDTOTHEM,AREUNDERNOOBLIGATIONTODISCLOSEORTAKEACCOUNTOFTHISDOCUMENTWHENADVISINGORDEALINGWITHOR FORTHEIRCUSTOMERS.FORFURTHERINFORMATIONREGARDINGQUARTERLYRATINGSTATISTICSANDDESCRIPTIONS,CHINESEWALLMECHANISMSPUTINPLACEBYMEDIOBANCAS.P.A.,EVALUATIONMETHODS,THEMEANING OFANYOUTPERFORM,NEUTRAL,UNDERPERFORMORSIMILARRECOMMENDATIONS(ANDANINDICATIONOFTHERISKSANDASENSITIVITYANALYSISOFTHERELEVANTASSUMPTIONS)ANDANYOTHERRELEVANTMATTERS,PLEA SEREFERTOTHEMBSECURITIESSECTIONOFTHEMEDIOBANCAS.P.A.WEBSITEATWWW.MEDIOBANCA.IT.TOACCESSPREVIOUSRESEARCHREPORTSANDESTABLISHTRENDSINRATINGSISSUED,PLEASESEETHERESTRICTEDACCE SSPARTOFTHEMBSECURITIESSECTIONOFTHEMEDIOBANCAS.P.A.WEBSITEATWWW.MEDIOBANCA.IT.ANYREFERENCESTOSTATUES,LAWS,DECREES,REGULATIONSORLISTINGREQUIREMENTSARETOSTATUES,LAWS,DECREE S,REGULATIONSORLISTINGREQUIREMENTSASINFORCEONTHEDATEOFTHISRESEARCHREPORT.THISMATERIALISNOTDIRECTEDATYOUIFMEDIOBANCAS.P.A.ISPROHIBITEDORRESTRICTEDBYANYLEGISLATIONORREGULATI ONINANYJURISDICTIONFROMMAKINGITAVAILABLETOYOU.YOUSHOULDSATISFYYOURSELFBEFOREREADINGITTHATMEDIOBANCAS.P.A.ISPERMITTEDTOPROVIDERESEARCHMATERIALCONCERNINGINVESTMENTSTOYOU UNDERRELEVANTLEGISLATIONANDREGULATIONS.MEDIOBANCAS.P.A.ACCEPTSNORESPONSIBILITYWHATEVERFORANYFAILUREBYAPERSONRESIDENTOUTSIDEITALY,THEUNITEDSTATESORTHEUNITEDKINGDOMTOOBSE RVETHEFOREGOING.NOPARTOFTHECONTENTOFANYRESEARCHMATERIALMAYBECOPIED,FORWARDEDORDUPLICATEDINANYFORMORBYANYMEANSWITHOUTTHEPRIORCONSENTOFMEDIOBANCAS.P.A.,ANDMEDIOBANC AS.P.A.ACCEPTSNOLIABILITYWHATSOEVERFORTHEACTIONSOFTHIRDPARTIESINTHISRESPECT. ADDITIONALNOTESTOU.K.INVESTORS:MEDIOBANCAS.P.A.PROVIDESINVESTMENTSERVICESINTHEUKTHROUGHABRANCHESTABLISHEDINTHEUK(ASWELLASDIRECTLYFROMITSESTABLISHMENT(S)INITALY)PURSUANTTOI TSPASSPORTINGRIGHTSUNDERAPPLICABLEEEABANKINGANDFINANCIALSERVICESDIRECTIVESANDINACCORDANCEWITHAPPLICABLEFINANCIALSERVESAUTHORITYREQUIREMENTS.THISDOCUMENTISDIRECTEDONLYAT PERSONSWHO(I)HAVEPROFESSIONALEXPERIENCEINMATTERSRELATINGTOINVESTMENTSFALLINGWITHINARTICLE19(5)OFTHEFINANCIALSERVICESANDMARKETSACT2000(FINANCIALPROMOTION)ORDER2005(ASAMEN DED,THEFINANCIALPROMOTIONORDER),(II)AREPERSONSFALLINGWITHINARTICLE49(2)(A)TO(D)(HIGHNETWORTHCOMPANIES,UNINCORPORATEDASSOCIATIONS,ETC.)OFTHEFINANCIALPROMOTIONORDER,OR(III)AREP ERSONSTOWHOMANINVITATIONORINDUCEMENTTOENGAGEININVESTMENTACTIVITY(WITHINTHEMEANINGOFSECTION21OFTHEFINANCIALSERVICESANDMARKETSACT2000)MAYOTHERWISELAWFULLYBECOMMUNICAT ED(ALLSUCHPERSONSTOGETHERBEINGREFERREDTOASRELEVANTPERSONS).THISDOCUMENTISDIRECTEDONLYATRELEVANTPERSONSANDMUSTNOTBEACTEDONORRELIEDONBYPERSONSWHOARENOTRELEVANTPERSO NS.ANYINVESTMENTORINVESTMENTACTIVITYTOWHICHTHISDOCUMENTRELATESISAVAILABLEONLYTORELEVANTPERSONSANDWILLBEENGAGEDINONLYWITHRELEVANTPEONS.MEDIOBANCAS.P.A.DOESNOTPROVIDEIN VESTMENTADVISORYSERVICESTORETAILCLIENTS(ASDEFINEDBYTHERULESOFTHEFINANCIALSERVICESAUTHORITY). ADDITIONALNOTESTOU.S.INVESTORS:THISRESEARCHREPORTISPREPAREDBYMEDIOBANCAS.P.A.ANDDISTRIBUTEDINTHEUNITEDSTATESANDCANADABYMEDIOBANCASECURITIESUSALLC,AFINRAMEMBERFIRM.THISINFO RMATIONPROVIDEDINTHISCOMMUNICATIONISFORDISCUSSIONANDISNOTBINDINGONMEDIOBANCASECURITIESUSALLCORANYOFITSAFFILIATES.MEDIOBANCASECURITIESUSALLCISANAFFILIATEOFMEDIOBANCAS.P.A.M EDIOBANCAS.P.A.HASNOOBLIGATIONTOUPDATE,MODIFYORAMENDTHISREPORTANDINFORMTHEREADERACCORDINGLY,EXCEPTWHENTERMINATINGCOVERAGEOFTHEISSUEROFTHESECURITIESDISCUSSEDINTHISREPO RT.THISDOCUMENTISNOTINTENDEDTOREPRESENTTHECONCLUSIVETERMSANDCONDITIONSOFANYSECURITYORTRANSACTION,NORTONOTIFYYOUOFANYPOSSIBLERISKS,DIRECTORINDIRECT,INUNDERTAKINGSUCHATR ANSACTION.THEATTACHEDTERMSAREINDICATIVEANDCONSTITUTENEITHERANOFFERTOSELLNORTHESOLICITATIONOFANOFFERTOBUYANYSECURITY.WEWILLASSUME,UNLESSYOUNOTIFYUSOTHERWISE,THATYOUHAV ESUFFICIENTKNOWLEDGE,EXPERIENCEAND/ORPROFESSIONALADVICETOUNDERTAKEYOUROWNASSESSMENT.ALLOFTHEVIEWSEXPRESSEDINTHISRESEARCHREPORTACCURATELYREFLECTTHERESEARCHANALYST'SPER SONALVIEWSREGARDINGTHESUBJECTCOMPANY.NOPARTOFANALYSTCOMPENSATIONWAS,ISORWILLBE,DIRECTLYORINDIRECTLYRELATEDTOTHESPECIFICRECOMMENDATIONSORVIEWSEXPRESSEDINTHISRESEARCHRE PORT.MEDIOBANCASECURITIESUSALLCACCEPTSRESPONSIBILITYFORTHECONTENTOFTHISREPORT.ANYUSORCANADIANPERSONRECEIVINGTHISREPORTANDWISHINGTOEFFECTANYTRANSACTIONINANYSECURITYDISCUS SEDINTHISREPORTSHOULDCONTACTMEDIOBANSECURITIESUSALLCAT001(212) PLEASEREFERTOTHECONTACTPAGEFORADDITIONALCONTACTINFORMATION.