Cassa Depositi e Prestiti Company Presentation Milan, 13 November 2019 Cassa Depositi e Prestiti Investing in tomorrow
Agenda CDP at a glance #CDP2021: Promoting Sustainable Development Assets and Funding Structure Appendix
The Italian Promotional Bank and Sovereign Fund CDP’s Mission is to foster the development of the Country, using national savings responsibly in order to support growth and boost employment, leveraging on innovation, business competitiveness, infrastructure and local development State and private shareholders 4 Total assets 1 Loans 2 Postal funding 2 Net Income 3 438 EUR Bn 100 EUR Bn 260 EUR Bn 1H 2019 83 % 2.2 Ministry of Equity 1 Equity portfolio 2 Non-Postal funding 2 Economy and 36 EUR Bn 34 EUR Bn 93 EUR Bn EUR Bn Finance 16 % Bank foundations 1. CDP consolidated balance sheet as of 30 June 2019 1 2. CDP S.p.A. balance sheet as of 30 June 2019 3. CDP consolidated P&L as of 30 June 2019. Net Income 1H19 attributable to CDP S.p.A. equal to 1.4 EUR Bn 4. Remaining 1% treasury shares
Business Model Funding Tools Business Areas + Direct and Indirect Lending Banks CORPORATES Guarantees Liquidity Instruments POSTAL FUNDING Direct and Indirect Equity/Debt Promotion, Advisory & Lending INFRASTRUCTURE MARKET FUNDING ACTIVATED PUBLIC SECTOR & Lending THIRD-PARTY LOCAL AUTHORITIES RESOURCES Management of public resources and DEVELOPING Direct Lending COUNTRIES SURVEILLANCE REGULATION BY-LAWS 2
CDP Group Equity Portfolio Snapshot Selected Direct Investments Indirect Investments SGR and funds / investments vehicles 59.10% 100% 100% CDP Industria 25.76% 68.00% 5 70.00% 29.85% 71.64% 9.89% 21.49% 31.04% 12.55% 50.00% 83.11% 1 18.65% 14.01% 39.00% 40.00% 35.00% CDP Investimenti Sgr 28.40% 2 26.04% 70.00% FOOD / HOSPITALITY / HEALTHCARE / #18 AGRITECH Corporates 59.94% 45.95% funds STRATEGIC INFRASTRUCTURE INDUSTRIAL #8 NATIONAL ASSETS NETWORKS ASSETS Infrastructures funds 23.00% 4 49.50% 3 #7 Real Estate funds 25.06% 4 16.86% Listed companies 3 1. Through FSIA (held by FSI Investimenti with 70% stake) for 57.42% and for 25.69% through CDP Equity; 2. Through IQMIIC. of which FSI Investimenti is shareholder with 50% stake; 3. Stake after pro-forma conversion of convertible bond. Stake held at 0.5%; 4. Through FSI Investimenti. controlled by CDP Equity with 77% stake; 5. Closing of the increase from 43% to 68% to be finalized
Agenda CDP at a glance #CDP2021: Promoting Sustainable Development Assets and Funding Structure Appendix
2019-2021 Business Plan - From Italy to Italy Main 2021 targets 60,000 83 EUR Bn Corporates reached Corporates Tailor made Proactive role as integrated infrastructure- 25 EUR Bn offering (physical development and digital) accelerator Infra, PS and Local Dev. 3 EUR Bn Cooperation +23% vs. 2016-2018 plan 111 EUR Bn Mobilized Resources Third-party resources Disciplined Renewed approach focus on +32% towards equity International vs. 2016-2018 plan strategy Cooperation 203 EUR Bn Activated Resources 4
CDP 2021 - High coverage of UN SDGs towards sustainable development «Contribute to the economic, social and environmental development of the Country, facilitating investments with a positive measurable impact on territory and community» Infrastructure and Education Green, Social and development of cities Sustainability Bond Energy and SME’s financing Framework Environmental Sustainability Innovation and Energetic transition and Digitalization climate change Megatrends Developing countries Social change and international trade 2019-21 Business Plan for the first time aims at explicitly integrating sustainability into strategic choices 5
CDP Green, Social and Sustainability Bond Framework CDP Green, Social and Sustainability Bond Framework (“ CDP Framework ”) is in line with the Green Bond Principles 2018 , the Social Bond Principles 2018 and the Sustainability Bond Guidelines 2018 issued by the International Capital Market Association (ICMA). CDP has appointed Vigeo Eiris as Second Party Opinion (SPO) provider to verify the sustainability credentials of CDP Framework and assess its alignment with the ICMA 2018. Social Bond Green, Social and Framework Sustainability Bond Framework ESG Framework subject ESG ESG 2017 Social Bond Performance on Performance on Performance on to potential Environment Pillar Social Pillar Governance Pillar evolutions in order Sustainability to widen the scope 2018 “Hydro” Bond “Good” “Advanced” “Good” of intervention Social Bond 2019 An overall “Good” ESG performance CDP was the first Italian Social Bond issuer and is one of the main issuer in the Social Bond Market 6 Source: https://www.icmagroup.org/green-social-and-sustainability-bonds
CDP Framework - focus on Reporting One year after each Green, Social and Sustainability Bond issuance, CDP produces a detailed report illustrating the eligible loans financed through the raised proceeds and their social and environmental impacts 1 Use of proceeds 2 Process for project evaluation & selection 3 Management of proceeds March 2020 Social Bond Report Overview of the Allocation September 2019 projects financed Sustainability Bond Report 4 November 2018 Reporting Social Bond Report Quantitative and Impact ▪ qualitative indicators Full allocation reached ▪ Impact measured on ▪ Full allocation reached Employment and ▪ Reduction of water Impact measured on dispersion Employment Reporting is aimed at providing maximum transparency on the portfolio of assets to be addressed and at underlining the quality and positive impact of the projects financed 7
Agenda CDP at a glance #CDP2021: Promoting Sustainable Development Assets and Funding Structure Appendix
CDP Assets EUR Bn Assets LIQUIDITY BUFFER Cash & Cash Equivalents 167 157 EUR Bn of cash on the Treasury Current Account with the Ministry of the (-1% vs. YE2018) Economy and Finance (MEF) provide outstanding financial flexibility ASSET QUALITY Loans 100 Mainly fixed rate exposures with local & regional governments, assisted by favorable (-1% vs. YE2018) laws. Net NPLs/Net Loans to customers and banks 0.1% 1,2 NATURAL BUYER OF ITALIAN BTPs Debt Securities 68 Debt Securities Portfolio mainly consisting of government bonds, used as ALM to (+13% vs. YE2018) manage interest rate risk and optimize banking book profitability STRONG EQUITY PORTFOLIO Equity Portfolio 34 Stakes in some of the most important Italian listed companies (Eni, Italgas, Terna, (+2% vs. YE2018) Snam, Poste Italiane, Fincantieri, TIM) Strong capital base to protect savings and support country growth 8 1. Exposure includes loans to banks and customers, Disbursement commitments, cash & Cash equivalents and Bonds 2. Net Exposure is calculated net of he provision for non-performing loans
CDP Funding EUR Bn Postal Funding 1 Non-Postal Funding 1 157.3 103.0 20.2 41.3 4.0 27.5 Money Multilateral Postal Bonds Passbooks Bonds Other market Banks ▪ Postal savings, including postal ▪ 10 EUR Bn Debt Issuance Programme bonds pertaining to Ministry of ▪ Oustanding bonds 2 for 18 EUR Bn , o/w : Finance , represent ~ 8% of Italian 260.3 93.0 − 3 ESG Bonds (1.75 EUR Bn) households’ total financial assets − 2 Retail Bonds (3.0 EUR Bn) ▪ Stable and anticyclical source of ▪ 6 EUR Bn Short-Term Commercial funding Papers programme ▪ Positive trend since 2018 thanks to ▪ Short-term funding on the money market continuing effort towards innovation through deposits and repurchase and digitalization of products agreements ▪ Credit facilities granted by Multilateral ▪ Main source of liquidity on the Banks (EIB-CEB) Treasury Current Account Mix of resilient Postal Funding and diversified Market Funding to support Business Plan challenges 9 1. As of 30 June 2019 2. Including EMTN-DIP (~ 10.5 EUR Bn), Guaranteed Bonds (4.5 EUR Bn) and Retail Bond (3 EUR Bn). Net of 2.4 EUR Bn Commercial Paper
Focus on Postal Funding Products Issuer Distributor Customers Postal Passbooks Bonds ~ 27mn customers (total customer base) ▪ Net flows strongly rebounded since 2016, with stock reaching record-high levels in ▪ Entirely guaranteed by ▪ Exclusive service agreement with Poste 1H 2019 , supported by digital offering the Republic of Italy Italiane renewed in Dec. 2017 for the period ▪ Not subject to bail-in 2018 - 2020 ▪ Redeemable at par at any time ▪ # of digital customers steadily increasing with a growing contribution from the App ▪ Unparalleled physical and digital ▪ No fees or commission distribution network: ▪ Bonds benefit from a ▪ ~13k post offices tax break ▪ Brand-new App and website Historically common products among Italian households, being innovated in terms of offering and going more digital 10
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