It comes there letter from John Elkann, CEO of Exor to the shareholders of the Agnelli-Elkann holding.
Several comments, ranging fromannouncement of the new Sgr Lingotto in the Juve casefrom the accounts of Ferrari and Stellantis to the numbers of CNH Industrial.
In the letter, John Elkann recalled that, “over the past four years, we have gone through many difficulties which, instead of being resolved, have continued to intensify, such as the conflict still underway in Ukraine, the geopolitical tension between America and China , global inflation rising to 9%, which collectively are driving unprecedented losses for both stocks and bonds.
But, in the letter that was written at the end of a trip to Asia, Elkann recalled the wisdom of Mahatma Gandhi, quoting what he said: “Peace is not the absence of conflict, but the ability to face it”.
Speaking of ExorElkann recalled that “the main driver of our performance this year has been cash, which as of July 2022 represented approximately 20% of our Gross Asset Value following the sale of PartnerRe to Covéa for a total cash consideration of 8.6 billion euro”.
“At the close of the deal, we received cash proceeds of $3.9 billion paid in dollars Americans (net of our investment in reinsurance vehicles managed by PartnerRe for 0.7 billion and net of the extraordinary dividend received equal to 0.2 billion dollars) and 3.8 billion paid in euros”, continued Elkann, who also highlighted the investment of Exor in the healthcare sector:
“In 2022 we deepened our knowledge of the health sector (healthcare) and invested almost 1 billion euros – reads the letter to the shareholders – It is a sector – continued Elkann – which will continue to grow over the next decades, for respond to the needs of an aging global population. For example, while health care spending in the United States for people ages 0-44 it is $3,000 to $5,000 a year, these costs rise eightfold for people ages 85 and older. In a world with a growing and longer-lived population, there is an increasing need to reduce costs and improve the quality of healthcare systems, thus creating attractive opportunities for the use of capital”.
Elkann announces Lingotto, asset management company
In the letter to shareholders, Elkann announced the birth, in this year 2023, of the alternative asset management company wholly owned by Exor, which took its name from the Lingotto, the Fiat gigafactory launched a century ago:
“This year we will meet at Lingotto, the Fiat gigafactory inaugurated a century ago, in 1923 – said Elkann, announcing that the Exor Investor Day is scheduled for November 30th at Lingotto, Turin – We are aware of the significance of Lingotto , and we hope that the choice of this historic name bodes well for our asset management company”.
“Under the leadership of Enrico Vellano, Lingotto will begin life this year as a wholly owned alternative asset management company, with approximately 2.5 billion euros of assets under management, thanks to the equal contribution of Covéa and Exor – Elkann pointed out – This will give a home to our colleagues Matteo, Nikhil and their teams who have already demonstrated a dedication that Adam Smith defined as rare when he said: ‘Managers of other people’s money seldom watch it with the same anxious vigilance with which they watch their own’”.
“We look forward to discussing all this with you in Turin on November 30th – continued Elkann – We are aware of the significance of Lingotto, and we hope that the choice of this historical name bodes well for our management company. patrimonial. The same magnificent building, praised by the world famous architect Le Corbusierhas become a symbol of renewal in recent decades: we therefore want to share its beautiful history and future with you as soon as possible”.
Great satisfaction for Ferrari and Stellantis
Wide satisfaction was expressed for Ferrari numbers and of Stellantis.
Elkann recalled that Ferrari “closed 2022 with record resultsincluding revenues of €5.1 billion (+19% year-over-year) and adjusted EBITDA of €1.8 billion (margin of 35%)”.
Reference to the “strategic plan presented by Benedetto Vigna”, which “provides that by 2026 internal combustion engines (ICE) will represent 40% of the offer, while the remaining 60% will be made up of hybrids and full electric. Thanks to the leap forward in the evolution of its range, Ferrari foresees an increase in turnover to €6.7 billion by 2026 and an adjusted EBITDA margin close to 40%, in line with the best luxury companies”.
“While profound changes are underway within the walls of Maranello, in particular in strengthening the sporting activity on the track and to develop the lifestyle collections on the catwalks, the drive towards progress that our founder Enzo Ferrari had in his heart continues to keep the people of Ferrari humble and ambitious in building the future of the Prancing Horse,” Elkann wrote.
They are Stellarthe auto giant “closed 2022 with a net turnover of €179.6 billion (up 18% pro forma compared to the previous year) and excellent profitability with an adjusted operating profit of €23.3 billion (margin of 13%). Stellantis has already consolidated its position in the automotive world as the third largest operator by revenue and margin and, taking into account the reporting differences between global manufacturers, as the market leader in absolute operating profit”.
With these numbers, “Stellantis intends to continue achieving excellent financial results, with the ambition of double net revenues to €300 billion by 2030 (vs. 2021), delivering double-digit adjusted operating profit margins throughout the decade.”
Still, underlined John Elkann, “since the strategic plan was presented Dare Forward 2030 Stellantis has deepened its expertise in technologies that will shape the future of mobility, both through investments and through joint ventures”.
Elkann’s comment on CNH Industrial
On CNH Industrial, John Elkann talked about a company that “boasts a rich lineup of historic brands – Case, New Holland, Fiat e Ford – whose origins date back to four entrepreneurs of the 19th and 20th centuries: the ‘founding fathers’ of today’s CNH Industrial are Jerome Increase Case (1842, Racine – Wisconsin, USA); Abe Zimmerman (1895, New Holland – Pennsylvania, USA); my great-grandfather Giovanni Agnelli (1899, Turin, Italy), who created his first tractor, the 702 model, in 1918; Henry Ford created the Ford Motor Company and then produced his first tractor, the Model F, in 1917 – the world‘s first mass-produced tractor.”
“Today, the Company is continuing to develop its precision and digital technologies, explore alternative energy sources, and create more specialized approaches to construction. In support of this, in 2021 CNH Industrial has acquired Ravena leader in precision agriculture, for $2.1 billion: Precision technologies helped generate $0.9 billion in revenue for the company in 2022, with annual growth forecast of 10-15% in the years to come” .
Juventus: the words of John Elkann
On the Juventus case, Elkann pointed out that the club “now has a new president, Gianluca Ferreroand a new Ad, Maurizio Scanavino, who is also at the helm of our media company Gedi, where he is successfully carrying out a recovery plan. At Juventus, Gianluca and Maurizio will be aided by a new board, and they have started well, ensuring that Juventus can meet the many current challenges, while protecting its reputation so that it can come back stronger both on and off the pitch.”
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Again, “to a greater extent than many of our clubs, in 2022 Juventus found itself facing growing internal and external difficulties, which put the Club to the test. Juventus recorded one significant loss of €239 million in the year and, for the first time since 2011, the men’s team has not won any titles”.
“Ma were the lawsuits against the club who ended up occupying the company’s Board of Directors, which met 18 times during the year”. And “the level of pressure has grown so much that the Board of Directors has decided to resign to allow the company to protect itself in the most effective way against allegations ranging from alleged accounting irregularities to inaccurate communications to the financial markets mainly relating to the sale of players and their salary agreements. Juventus denies any wrongdoing“.
“The Club – recalled Elkann – has collected extraordinary successes, winning everything in Italy and internationally, and have counted 27 world champions among their players, more than any other club in history. This level of sporting success, which brings great joy to our supporters, however also creates considerable animosity, which can emerge when the Club is faced with challenges. I would like to thank the Juventus Board of Directors for having acted responsibly and in particular the President Andrea Agnelliwho led Juventus through a phase full of changes and victories”.
Still:
“In general, continental European football can’t keep up with the growing financial power of the Premier League, whose revenues are expected to triple those of Serie A by the end of the current season. The effects of this dominance can be seen in the transfer market, which in turn is able to play a key role in the success of the clubs: in the 2022 summer window, the gross transfer spend in the Premier League was equal to the total spend of Serie A, LaLiga, Bundesliga and Ligue 1 combined, and this situation continued into the winter window, with Chelsea alone spending more than all the clubs in these four leagues combined. Football is still in transition towards a fully professional industry: it still lacks clarity as a whole, and this is creating financial and regulatory tensions”.