Annual Accounts and Report as at 30 June 2011 Draft - Mediobanca

comparing total assets with tangible net equity (excluding the instrumentsknown as “Tremonti bonds”) remained unchanged at around 23 times(compared to an average of approx. 28 times for the leading Europeanbanking groups).Insurance companies were boosted by a major increase in net profit,which reached €1.8bn, compared with €0.7bn in 2009, the return onequity climbing from 3% to 8.1%. Growth in underwriting profits (€9.9bn)was only partly swallowed up by higher net claims (€7.5bn) and operatingcosts (€1.1bn); while higher tax charges (€0.8bn) were in turn largelyoffset by the reduction in minority interest (€0.5bn).Industrial groups showed a major improvement in their operatingprofit, which increased from €14.6bn to €19bn, with the return on equityup from 8.2% to 10%. The growth in value added (€9.4bn) was absorbedby higher depreciation and amortization (€1.4bn), interest (€0.4bn) andtax charges (€2bn). Net of minority interests (€1.5bn), and taking intoaccount positive residual items, net profit improved by €4.4bn. Profitsrecorded by companies listed on the STAR segment also improvedappreciably, from €0.5bn to €0.8bn (ROE up from 6.7% to 9.3%).Aggregate net equity for industrial companies grew by 12% as a result ofundistributed profits being capitalized, with borrowings virtuallyunchanged (up just 1%); as a result, the debt/equity ratio reduced from113% to 102%.In the twelve months ended 30 June 2011, the Mediobanca shareprice index showed a 5% increase, rising to almost 10% in the total returnversion. The simple share price index confirms the trends witnessed in2009/10: industrial companies were up 18%, while insurances and banksboth showed reductions, of 3% and 21% respectively, while share priceson the STAR segment continued to rise, up 13%. The average daily valueof stocks traded on the MTA for the twelve months ended 30 June 2011was down 7% on the previous year (from €3.1bn to €2.9bn per session).The reduction in the free float (from 59% to 56%, the lowest level seen forthe past six years) was met with stability in the turnover ratio, which wasunchanged at 22%; while volatility again fell (1.7% in the year ended 30June 2011, as against 2.0% the previous year and 3.4% in 2008/2009).Since the reporting date share prices have declined sharply, down 27% inthe period ended 6 September 2011, chiefly due to the banking index,which declined 36% to reach its lowest level for the past 16 years.– 15