Exor N.V. (EXO) Earnings Call Transcript & Summary

Ladies and gentlemen, good afternoon. Welcome, and thank you for joining the Exor Investor and Analyst Call. Please note that the presentation is available to download on Exor website, www.exor.com under the Investors and Media Events and Presentations section. And any forward-looking statements Exor management makes are covered by the safe harbor statement included in the presentation material. Please note that this conference is being recorded. [Operator Instructions] I would like to turn the conference over to your host, CEO, John Elkann. Please go ahead.

Thank you very much. I would like to apologize to all of you for being delayed and for the difficulty in hearing us. We are in Amsterdam with our COO, Suzanne Heywood; with our CFO, Enrico Vellano, for another day; our CFO from tomorrow, Guido, and Noam who runs our venture activity, and we really hope you can hear us clearly from Amsterdam. What we would like to talk to you about is what we have been doing at Exor and more importantly, what we want to do in the future. Starting by what we have been doing, '22 has been a very active year, and we are on track in meeting the objectives that we had described to all of you in terms of priority over this decade when we met for our first decade of life in 2019. First of all, we have been evolving as an organization. Our governance has adapted to the one our companies have, splitting the role between the Chair and CEO. And we are very honored of having Ajay Banga as our Chairman, who has been a Director of Exor and has had a relationship with Exor over many years. And we really value his contribution and not only his professionalism but also his wisdom for the years ahead. We have also changed our organization and evolved it and I'll touch upon that later on. On the company's front, we have sold PartnerRe, and PartnerRe now belongs to Covéa who has paid us, in July, $9.3 billion or EUR 8.6 billion then. CNHI and Iveco Group have separated with a very successful spin of Iveco Group. Now both are independent companies, 1 operating in the agriculture and construction equipment space, the other 1 in the commercial vehicle space. We have started investing in health care, which is a sector we want to do more in with EUR 1 billion of investments and commitment in Institut Mérieux and Lifenet. On the investment front, we have continued to invest in early and later stage and have evolved our seeds activity into ventures with a broader mandate and have reorganized our investment activity, which we carried forward for PartnerRe in a company called Lingotto. We have worked on reducing our debt and now we have a debt under EUR 4 billion at EUR 3.7 billion. We have been buying back our shares and we have committed to EUR 0.5 billion of buybacks, and we are continuing to buy Exor shares. We have completed a migration to the Netherlands and, over the summer, have transferred our listing from the Milan Stock Exchange to the Amsterdam Stock Exchange in order to be aligned with our listing and where our company sits and where it's governed. And have made a lot of progress on ESG since we spoke, offsetting our emissions at holding level, GHG and working on an important project linked to education, which is really where ourselves, as Exor, but also our companies want to contribute to our societies. Our organization has evolved. We have Suzanne who has been promoted as Chief Operating Officer, taking a more active role with our companies and our future companies. We have Guido who joined this month and is preparing himself to succeed Enrico, who will become CEO of our new company called Lingotto. Benoit joined early this year to help us in new sector, particularly driving the health care sector and has really been the architect in our investment in Institut Mérieux; and Noam whom you know, who has taken a broader responsibility from seeds to ventures. We wanted here to give you a visual illustration of how the EUR 9 billion which we had discussed are composed of and the investments that we have been carrying forward since our last meeting together last year and how today we currently have EUR 6.5 billion of firepower or available cash. What is Exor today? Exor today, if you look at our gross asset value, is primarily a company which owns companies, and our companies represent 75% of our gross asset value, of which 3 companies, Ferrari, Stellantis, CNHI, 65%. Our investments are divided in 2 buckets, the venture bucket and our other investments that will be held by Lingotto who will carry forward those investments through funds, 1 in the public market and 1 in the private market. And 20% of our GAV is available resources, which are the proceeds net of the investments we've done in companies and in investments that are to be deployed. In '21, we shared with you our area of interest where we wanted to spend more time and where we wanted to be deliberate in looking at incremental capital deployment in 3 sectors: health care, luxury and technology. Health care and luxury are sectors that have structural tailwind but are also sectors in which the capital Exor has, the permanency of our capital, but also the culture of Exor in building great companies, are very much in sync with these 2 sectors and what is done in these 2 sectors and for who it's done. So we feel there's a lot of affinity in what we do and what we can do in these 2 sectors. Technology for us takes us back to our origins and it's very much linked to the future. We have been increasingly more interested in also participating in formation of new companies and building great companies from the beginning. And being involved in technology for us is not only about a sector, but it's also a way of understanding how all our companies and all the sectors in which we are involved are changing, are morphing, are transforming. So we are committed in spending time in these 3 sectors, and we will be looking at doing more in the future. I would like now to pass it over to Suzanne for her to give you a better view of what we have been doing in our companies.

Thank you, John. So if I continue on from where John was describing, John described the 3 areas that we've prioritized as potential sectors for us to find new companies. The first 1 is health care, as John mentioned. We've already started, as you can see in this slide, to deploy some capital into the space. We've made 2 acquisitions this year. One was an investment in a company called Institut Mérieux and the other was a company called Lifenet Healthcare. Institut Mérieux, I'm going to come on and describe in a little bit more detail on the next slide. Lifenet Healthcare, what it does is it manages both hospitals and outpatient clinics in Italy. We think it's an interesting company. And both of them together, not only do we think that they're interesting investments, but they're enabling us to build our knowledge of the health care space as we continue to look at other interesting opportunities in this space. In total, at the moment, we have about EUR 1 billion committed into health care. If I move into the middle of the slide, these are our luxury investments, obviously, in addition to Ferrari, which is a long-standing luxury investment for us. We made 2 further acquisitions here. One is Louboutin, which we invested in, in 2021; and the other is SHANG XIA, which is a more Chinese-focused luxury goods player. In total, we're approaching EUR 1 billion in this space as well. And again, through the acquisitions that we've already made as well as obviously through our relationship with Ferrari, we're building a very good network of practitioners and experts in the luxury space, and we're continuing to look for more opportunities that might come forward in this space. Thirdly, on the right-hand side, in the tech space, we have 2 investments. One is Via and the other is Casavo. As John mentioned, we are investing, through our ventures arm, which Noam is going to come on to talk to us about in quite a wide range of early-stage companies. And that has 2 benefits. One is it brings us much closer to some of these tech disrupting companies, which are very interesting, both for us at Exor and also for our companies. But also, it gives us the opportunity to look for potential graduates from that fund that can come into our company's portfolio. And both VIA and Casavo are graduates from the Ventures fund that have come into the Exor portfolio. We will also look at other opportunities that don't come out of Ventures, but I think Ventures is a very good way for us to build our knowledge of this space. And as I say selectively, we will bring companies from there into the company's portfolio. On the tech side, we now also have about EUR 1 billion invested. So I said I would say a few -- a little bit more about Institut Mérieux, which was one of the investments that we made this year. This is a company which shares a lot of the elements of our own culture. It's also backed by a family. They have a very entrepreneurial culture. They're very global. So although it's a French-based company, they have a very global presence. As you can see on the left-hand side at the bottom, over 90% of their sales are generated outside of France. Institut Mérieux is itself invested in 5 different branches, which you can see on the right-hand side. BioMérieux is the biggest one of those, which is also listed. And it is very heavily involved in in-vitro diagnostics, test for micropathogens and tests which look for multiple different types of pathogens at once. It's a very interesting space and we're learning a lot in that area. But Institut Mérieux also is invested in 4 different other areas, 3 of which are not listed, the middle 3. Transgene at the bottom is also listed. And across their portfolio, working in partnership with the Mérieux family, we feel that we are, first of all, partnering with a family that we're delighted to be working with, but also that we have the opportunity to learn a huge amount about the health care space, which we continue to see as an area where we would like to make further investments. On this page, you can see a little bit of the background here. So we invested in Institut Mérieux back in July. It was an EUR 833 million investment, which we're actually paying in tranches. You can see on the right-hand side some of our shared ambitions. And we do believe that this is a strong partnership and a very important step forward for us as we develop our interest in health care. So Institut Mérieux is an example of one of our new companies that has come into our portfolio, illustrating 1 of the 3 sectors that we're interested in. But on this page, we want to take a moment to talk about our 3 largest companies, which as John mentioned, still make up the bulk of our company's portfolio. We're very excited about the plans that all 3 of these companies have put forward for the future. These are old companies but they are all companies that have a lot of plans to take themselves forward and to address some of the challenges that they're now facing. You can see in the middle that they're performing very well. Two of the companies have just confirmed their 2022 guidance. Well, one's confirmed the guidance. Two of them have actually revised upwards the guidance. You can see that they have strong balance sheets, strong free cash flow. And importantly, on the right-hand side, all 3 of the companies are making very significant investments into new technologies or new opportunities. So you can see that Ferrari has launched its Purosangue, which is its first 4-door, 4-seater vehicle, which I think has been very well welcomed by the market. It's also now put on its third fashion show, which has been well received. Stellantis is investing very heavily in Gigafactories, battery factories. And also Free2move is an interesting venture which they're doing, which is looking at a whole series of ways in which people can get access to mobility, everything from car sharing to rental to parking, fleet management. And then on the CNHI side, we've got a couple of illustrations here. One is the methane tractor, which is a very important part of a future circular economy on the farm because you can capture the methane on a farm and then use that to power your tractor. And they have the industry's first methane tractor as well as also, of course, doing a lot in electric technologies. And they also made an acquisition of Raven Technology, which is enabling them to leap forward in terms of what they're able to do around precision farming. So we feel that all 3 of these companies, although they're old companies they are reinventing themselves, and we're very encouraged by the plans that they have in place. And we're looking forward to continuing to support them as they take those forward.

Thank you, Suzanne. We will now jump into the future with Noam.

Thank you. So talking about Ventures. Five years ago, we launched Exor Seeds, now Ventures. And the strategy was to follow top-tier funds and maybe have a focus on mobility and fintech at the seed and really the earliest stages of investing. Today, we generate a proprietary deal flow, mostly through existing founders, co-investors and the relationship we've built. We invest across stages and we selectively lead deals and serve as a funnel for larger Exor opportunities. We built a team to support that effort. And we are confident today that we can bring these opportunities to Exor like Via and Casavo Via, which is the global leader in TransitTech; and Casavo, which is the leading prop-tech platform in Europe. So looking at the portfolio, we've invested $500 million in 71 companies. Our top 9 position, our core position make up 50% of our portfolio, and our position split evenly between U.S. and Europe. The majority of our portfolio is invested in mobility, in fintech and health care and we'll talk about that, that's a focus. Healthcare and climate tech today is something that we are doing more of. So we all know the environment is volatile, especially in the tech ecosystem, tech complex. We are adapting to that environment. We're doing less but higher conviction and larger deals. We work closely with management teams to provide input, guidance. It's something we're -- certainly, the Exor toolbox comes in handy. We've expanded the scope of what we do as discussed with this renewed focus on healthcare, brought in some new team members to -- we push through and have more even science background to analyze these deals. On the deep tech side and the healthcare side, we partner with specialist investors that we've established relationships with over many years. And we've launched a pre-seed and seed program in Italy, which should make us the most active investor in Italy if we -- if it's not already the case. We are quite excited about it. We think Italy has a chance to catch up with the rest of Europe. There is the technical talent and some of the corporate activity and government programs that are important components. And so with Vento, our Italian program, we are hopeful that we can contribute to that change. With that, I will pass it on to Enrico to talk to us about Lingotto.

Thank you, Noam. Good morning, good afternoon, everyone. First of all, I would like to thank John for giving me the opportunity to lead this new project. As you know, I spent a large part of my career at Exor. And now I'm moving from the role of CFO to a new adventure, and I'm very excited about that. To give you some background to our activity, when we and Exor both partnered in 2016, decided to manage directly the exposure of the company in the equity capital market. At the time, our investor was PartnerRe. We started with a $500 million assets under management, 1 strategy public and with an investment team of less than 5 people. When we decided to sell PartnerRe in 2022 and we closed the deal in July this year, we decided to reorganize our captive investment asset management to a new scheme under the name of Lingotto. We decided to continue to deliver and to continue to deliver good performance to our investors, at the same time, to increase and scale the business. Today, Lingotto has 2 investors, Covéa and Exor, $2.4 billion of assets under management, 2 strategy, public and private, and we are going to talk about that in a second. And we have around 20 people, investment professional and back-office to manage the company. Many of you know Matteo and Nikhil, but for those who don't, I'd just like to highlight the impressive credential of the Lingotto 2 senior partners. Matteo joined Exor in 2016. He has more than 20 years investing experience. He was, before joining Exor, senior member of equity partner in Eton Park. He was managing more than $2 billion assets under management, and he has a very impressive return of around 20% per year. His approach is fundamental-driven approach, is investing in a few number of high conviction stocks. Currently manage $1.7 billion NAV and had a very impressive return in the last years from when he joined Exor, 16% since injection. Nikhil has a lot of experience as well. More than 22 years investing experience. Joined Exor in 2016 and full time from 2018. He has been Chief Investment Officer of PartnerRe, Generali and also Allianz, with asset under management for an amount higher than $500 billion in each company, outperforming all the time the targets. His approach is more flexible. He's investing in different sectors with a team-driven approach, innovation, consolidation, localization dislocation. He's innovative about how to invest in the single asset -- in the single sector using different asset class. He's exposures to Europe and also to Asia. Currently, Nikhil is managing $750 million of assets under management with a return of 11% since injection. I'm very happy to start this new project with Matteo and Nikhil. We know that it is a challenging project, but at the same time, we know that this is an opportunity for all of us and hopefully for Exor.

Thank you very much, Enrico. We thought that it would be good with Enrico and our colleagues at Lingotto to give you context of the name, which is related to our history, our entrepreneurial history with a Gigafactory of the 19th century that was started in 1916 by a very talented architect engineer, Giacomo Matte-Trucco, which over a century, transformed itself and was able to renew and is and has become a symbol of Turin, the city, and its past and future prosperity under, again, an important architect, Renzo Piano. And Le Corbusier, who's among the most important architect, said that Lingotto was one of the most impressive shows that the industry has ever offered. So we felt that, that was a very inspiring name for the enterprise that Enrico will be leading. But also Lingotto means in Italian, ingot or bullion, which gives the sense of solidity that will be applied by Enrico and our colleagues from Lingotto, which are Matteo, Nikhil and who is working with them. I would like to take this opportunity to thank Enrico for all what he has done for us and, more importantly, encourage him what I know he will be doing for us as he takes a new leadership role on an exciting project that Lingotto is. Grazie, Enrico. And with this said, I think you want to tell us how the financials look like, which I'm very happy that they do look well. So thank you for everything, Enrico, and it's a very good way also of transitioning to Guido, who will assume Enrico's responsibility tomorrow. So welcome, Guido.

Thank you very much for your trust.

Thank you, John. Thank you very much. In the next couple of slides, we would like to give you an update on our objective and KPIs on the debt and on the cash. In terms of objectives, our -- we have 2 objectives at Exor: one is the performance of our NAV and the other one is total shareholder return. Both are very relevant for us. The total -- the first one is something that we always follow in the past is our objective. And our target, as you know, is outperforming MSCI World Index. The second 1 is more related to the market price, and as I said, TSR, total shareholder return. We have a target, and as you see in the slide, we have achieved largely those targets both in 2022 and also in the last 5 years. We have also KPIs that are very important for us that we use and we monitor constantly in order to be in line with them. First of all, the free cash flow on dividend paid. This KPI is important, in particular, on the amount of free cash flow that we are able to generate every year. The free cash flow for us is basically the dividend that we cash in, the ordinary dividend from our operating company, net of the cost of funding, net of cost of the company and net of a dividend that we pay to our shareholders. As you can see in the slide, the free cash flow on dividend paid is above -- and at this moment is above our target. The second 1 is the cash holding cost. This is another KPI, very important. We think that it's important for a holding company to keep -- to maintain and control the cost of the structure. Our target is to stay below 10 basis points. And this is something that we have achieved over time -- in the past this year but also in the previous year. Finally, loan to value. As you know, our approach to debt has been very conservative. We have as a threshold 20%, is a threshold that in certain case it can go also above is threshold but it's a threshold that is relevant in order to keep under control the debt. As John said, this year, we reduced actually our gross debt, paying back one of the bond that matured in 2022 using the cash -- a portion of the cash that we received from the disposal of PartnerRe. Today, this KPI is not -- technically speaking, is not applicable because we are in a net position -- in a net cash position in this moment. In the last 5 years, the average has been around 8%. Moving now to the debt. As I said, this year, we reduced the amount of gross debt to EUR 3.7 billion. We have a different maturity in the future. The debt is financed through bonds, public and private bonds. And as you can see, we don't have any peak in terms of debt. We have debt with an average maturity of 7 years and the cost is 2.5% fixed cost. Our rating is BBB+. This has been very consistent and stable in the last more than 20 years now and has been very important for us and also for our operating company in order to give stability to the structure of the group. Finally, cash. After the disposal of PartnerRe, we received cash from the disposal of PartnerRe. And this cash is available, has to be available for new investment, new deployment. John will talk about this in a second. For us, cash means to have an approach very conservative in terms of principle, to have liquidity and to have a return on the cash. We allocate this cash in different pockets. We have banked in deposits. We have a high diversification in order to reduce the counterparty risk and with a maturity between 1 and 6 months. A second portion has been allocated in short-term funds with a duration that is below 12 months. And also in this case, we diversify in order to have a good return, at the same time, to reduce the counterparty risk. And finally, we have also allocated a portion of this cash in a bond portfolio with a mandate that with a target of preservation of capital and with maturity that is below 24 months.

Thank you. So now what I'd like to do is just share with you our thinking on ESG because like for many companies, pretty much all companies, ESG has become a very important issue, both for us and for our company. So we spent a lot of time thinking about how we're going to address this, and I want to update you on our progress. I want to start by talking about what we're doing at Exor level. What we have put in place is a series of targets that we've shared with you in the past around each of the pillars of E, S and G. So on the environment side, we made a commitment that we would achieve carbon neutrality by 2022 and net zero emissions by 2025. You'll be pleased to know that we're making progress against that. We've now measured, we've done our first comprehensive measurement of Scope 1, 2 and 3 emissions. And we will be carbon-neutral at the holding level for the full year 2021. And we will continue to make progress on this, and we believe it's very important. On the social side, we said when we last spoke to you that we were going to focus on education. It's something that's a very important part of Exor's history, in the family's history and something, as you will see that many of our companies are passionate, that many of our companies share. We said that we would set 2 commitments here. One is that we would launch a project to help reduce the gender gap in STEM subjects in schools. And we also said that we would help high-potential young entrepreneurs, particularly in Italy. You'll see that, again, we've made progress on both of those. We've designed and launched an initiative around STEM abilities with Fondazione Agnelli. That is now being tested, and if it's successful and the initial results are very good, then we will be rolling that out through a series of schools, hopefully being able to demonstrate that we are able to make some difference in closing that gender gap in terms of special awareness. On the second side, on the high-potential entrepreneurs, we've been working with young entrepreneurs through an initiative called Innovation 4 Change. And we're hoping that we're going to be able to see some very interesting projects and businesses coming out of that currently focused in Italy. On the governance side, we said that at holding level, we would maintain our gender balance and we would consider diverse candidates for all of our new appointments. You'll be pleased to know that we currently have a 50-50 gender balance in Exor, and this is something that we continue to monitor very carefully. And we have been including diverse candidates on all of our appointment shortlist and we will continue to do so. All of these topics are ones that we have been encouraging all of our companies to also think about. So we've asked all of our companies to think about emissions reduction, education and diversity and inclusion. And across our companies, we have a network now of people who are developing the programs at company level. What you will see on the second page, therefore, are illustrations of some of the initiatives that our companies are undertaking. So on the left-hand side, on the emissions reduction side, you can see that in our 3 big companies, both Ferrari and CNH, both have committed Science-based Targets, and Stellantis has committed to being carbon net zero by 2038. In terms of education, what we have said to our companies is we would like to see all of our companies doing something meaningful on education. But obviously, they should do something which is relevant to them and to the expertise that they bring and obviously to the stakeholders that they work with. So just to give you a couple of illustrations here, The Economist has an education foundation that uses a lot of the materials that the newspaper generates around current affairs to educate -- to give those to teachers so that they can use that material within their classrooms. And that's a very powerful program that they continue to run. GEDI, which is our collection of Italian-based newspapers and media organizations, they are working with more elderly people to help them to get online and become very comfortable with using online on the Internet, which is very important as the world, of course, as we all know, becomes much more based on the Internet. So each of our companies is doing something in terms of education, and we are -- we have a network which is helping to teach those, particularly the smaller companies, some of the things that they might consider doing so that they can also have an impact here. On the governance side, we've asked all of our companies to include in their program something on diversity and inclusion. And again, you can see some of the initiatives that our companies are doing. Ferrari has its Equal Salary certification. And both Iveco Group and Stellantis have put forward targets to get a certain percentage of women in their management teams. I should say these are just examples across our companies. What we feel is very important is that at holding group level, we have our targets and commitments, which we will meet. And then across our companies, we are working with them to make sure that they have comprehensive ESG plans in place and that within those plans, they include these passions which we have at Exor level so that as a group, we can have even more impact.

Thank you, Suzanne. And as you see, we have been evolving in our ESG thinking, which not only applies to how we operate but also where we want to operate in the future. And that's a good segue for what's next. We have the responsibility of deploying EUR 6.5 billion. And the way we're thinking about it is really to concentrate that amount of capital in 2 companies. And EUR 5 billion is what today we have allocated in our discussions with our Boards. Ideally, we would want to allocate a bigger part of those EUR 5 billion into 1 company. And the way we think about it is our area of focus, healthcare, luxury, technology. Looking at the public markets where we think there is more value than private markets today on 1 side because public markets valuations have adjusted more than private markets and also because there isn't financing conditions today where public companies could be taken private. When we discussed the sectors we wanted to spend time on and where we wanted to participate more in '21, they were interesting sectors but they had high valuations as we discussed then. Today, those valuations have come down, and the first assessment that we are doing in the universe of companies in Europe and in North America, between EUR 5 billion to EUR 15 billion market caps is understanding the value and the price. We then want to understand what is the potential of these companies going forward and how Exor as an owner can be an accelerant of that potential, in aligning that path with what we believe to be our purpose, which is building great companies. It is a stage of study that we are now at. And we are encouraged by the many companies that exist, and we believe that this thorough analysis that we are doing will then help us really assess a smaller number of companies with whom we can engage. And as you well know, we are of the belief that results come with people, and the first assessment that we always do are around people, and the first filter of that is linked to our values. So this is very much where our focus is. We look at that investment, ideally to be one where we are the largest shareholder, the controlling shareholder, the reference shareholder, but one where our ownership can be aligned with the governance that can be aligned with the leadership because that is very much the way in which we have operated in the past. And when we have been able to achieve successful outcomes was when we had clarity of purpose and alignment between ownership, governance and leadership. We also will be looking at deploying EUR 1.5 billion in investments. The way we think about that is to fund Lingotto, not only the existing funds of Lingotto but also future funds that Enrico will be working on. Lingotto has a vocation to be able to access third-party capital beyond its original investors that are Covéa and Exor. And we also, based on the opportunity set that Noam sees, continue to invest into Ventures with a cadence that has historically been between EUR 100 million that could go up to EUR 150 million per year. Ventures is creating opportunities not only in its existing companies, which, as Noam mentioned, are now up to 70 companies but also in new companies. We believe that it's time of patience. We don't think that the opportunities have already gone by, but we do think that it's very important for us, both in companies and investments to be prepared. And that's really where most of the time of my colleagues here is spent in addition to making sure that what we own, starting with our companies, but also our investments is properly taken care of. What I'd like to finish with before opening up to questions, and I'm really looking forward as my colleagues to your questions, is to give you a summary of where directionally we're heading. We are in the second decade in more than a century of professional life of Exor in its current state, which is a holding company that, at the core, wants to build great companies. We feel very strongly about the companies we have and their future. We feel that they've become stronger on the back of this very difficult period of time we've lived through COVID, and that they're very eager despite the difficult circumstances in which we find ourselves, both political, geopolitical and economical, in being able to compete in the markets in which they operate. And all of them have strong leaders, strong Boards in order to enable the ambitions of these companies to succeed. And the experience of our leadership but also the entrepreneurial spirit, which is in line with our culture that is based on entrepreneurial spirit and financial discipline is at the core of the way we want to continue conducting our business. We also think that opportunities are always there, particularly in moments like today, and we want to be ready. We want to stay patient and that's part of our values, but we also believe that it's important to be ready and to be ready, one needs to prepare, which is what we are doing. We have a track record, as Enrico described it, and this is a track record over -- a long track record over now 3 centuries when we started to the 21st century where we are today. And we are committed to being consistent with what is our past in how we build our present and more importantly, where we want to go in the future, where we take great comfort of the people that we have in Exor, in our companies and who work in our investments. So it's really to them that I'm very grateful and to all of you that I can speak with confidence that thanks to all of them, we have a very interesting future ahead. Thank you very much. We have a record level of attendance today, so we'll try and be very succinct in answering to your many questions but as precise and transparent as we always want to be and will be. Thank you very much.

[Operator Instructions] Now we're going to take our first question. And the first question comes from the line of Martino De Ambroggi from Equita.

Martino De Ambroggi from Equita. My first question is on the largest investment you recently made, Institut Mérieux. Three things. The first is could you provide just a rough indication of the entry prices close to net asset value at premium, something, just to give a rough idea? Second, have you any additional commitments in Institut Mérieux? And I suppose this is just the first step together with the Mérieux family. But should we expect further common deals through Mérieux Holding or independent deals for Exor going forward? I have 2 more questions later.

Why don't you go with all the other 2 questions, Massimo, so we can?

Okay, okay. I go with the other 2. So the second is on the 3 sectors that you are targeting. Is there any priority nowadays following what you already did? And still in the luxury sector, I know we already discussed it in the past, Armani. I'm referring to Armani. I'm not asking you if you had negotiations, if you have ongoing negotiations today. But would it fit with your idea of a target for the luxury sector? Or is probably Armani has features that do not fit with your strategy? And the last question is on -- specifically on Iveco because I believe the spin-off is not just an arrival point because Iveco needs to be larger, more geographically diversified and so on. So it may go ahead alone, but an aggregation would, for sure, accelerate its recovery and would make it much more visible. So just your view on this specific issue.

Thank you. So Institut Mérieux is an investment we have done at valuations of NAV. We are definitely committed to Institut Mérieux and to work alongside the Mérieux family and supporting the companies Institut Mérieux owns. So if these companies or new companies will require more capital is it will definitely be something that we will be evaluating with the Mérieux family. And the health care sector is a broad sector where we believe that, for example, in the Ventures side, as Noam said, there will be many interesting opportunities, and in the company side also, which will be done alongside the investment we have in Institut Mérieux. The 3 sectors, as Suzanne mentioned to you, are now real. We have EUR 1 billion in health care, we have EUR 1 billion in technology, and we're getting close to EUR 1 billion in luxury. We think that these are interesting sectors, but I also want to be clear that our history has also been one of being able to capture opportunities. So we are committed in terms of timing to the 3 sectors but they won't be the only ones. So if there could be interesting opportunities in sectors where we are already present or in other sectors, we will be open to that eventuality. We believe that in the luxury sector, there are not that many opportunities relative to the other 2 or to the bigger universe out there. As I mentioned before in the past, Giorgio Armani is a company which we have huge respect. Giorgio Armani is an entrepreneur and a creator, which we have and I have personally a lot of admiration for. And the important thing is for us to be able always to be open for any conversations that any company will want to have. But as I said publicly, there is no conversation with the company, Giorgio Armani and with Giorgio Armani himself. On Iveco, I would like Suzanne, who is the Chair of Iveco to answer to you. Thank you.

Thank you very much. Well, on Iveco, obviously, I won't go into too much detail because it will be more appropriate to do that at Iveco level. But as you know, at the point of the spin or shortly before the spin, the Iveco management team did a full presentation on their plans for -- a big part of their plan is for them to work in partnership with others. And I think that's very important, very important for the sector itself. The company has a number of very interesting parts to it. It's got some very interesting businesses within it, including, for example, the bus business and the engines business, in addition, of course, to the truck business. It also has some very interesting technologies within it. So it's developed the e-axle. It's bringing out both electric trucks, heavy-duty trucks and fuel cell heavy-duty trucks. So I think the partnership plan that they've put in place is a good one to address the fact, as you say, that they are a relatively small player in the industry. And we will continue to support them as they put that plan in place and look forward to seeing how that goes forward.

Now we're going to take our next question. And the next question comes from the line of Alberto Villa from Intermonte.

Thanks for the presentation. I have a few quick questions. The first 1 is on Lingotto. I was wondering if you can share with us some of your, let's say, midterm targets on how big the company could become over the years, thanks to your investments in the opening, to potentially third-party capital in terms of the assets under management. We currently incidentally have 2/3 of the investments into public markets and 1/3 in private markets, if that is the split you think is going to work for Lingotto in the future. And if you have any target in terms of annualized returns you are expecting from the Lingotto invested asset. The second 1 is on the Ventures, the $0.5 billion investments you have currently having in Ventures. There has been a lot of reassessment in value in the sector this year. I was wondering if for the annual reports, you're going to make any assumption on the valuation based on market prices or anything like this, or you are going to keep kind of the historical valuation for this item. The third 1 is on a couple of smaller investments you have in your portfolio, which are not so material but maybe a little bit disturbing for some of your investors. I'm referring to Juventus and GEDI. On Juventus, I was wondering if you can confirm in case the company needs further cash injections Exor is willing to keep on maintaining its stake and so participate to any future capital increase if needed. And on GEDI, if you have any, let's say, midterm thoughts about your ownership in the company, the prospects of the publishing sector and of your investment for the future. Final one, very quick one is on the current discount on NAV. If you can update us with your internal calculation of the current discount at which the company is trading and any thoughts on the still very high discount since last time we spoke.

Thank you, Alberto. And I will try and give you a couple of answers and then let my colleagues, Enrico and Noam answer more specifically. So you had so many questions that I'm really trying to answer them in a systematic way. I'll start by the last ones and then address the first one, so then it's easier in terms of having Enrico and Noam. GEDI is going through a very strong transformation. So it has been doing 2 things in the last 2 years since we've been owning it and it's been private. One is a change of scope. So GEDI has been selling activities that were mainly print activities and slower growing or decreasing activities and has been acquiring digital activities that are growing and profitable. So there's been a significant change of -- in its scope of activities. Secondly, it has really accelerated in 2 ways: one, it's a much more efficient and digitally-run company today, and it has also accelerated the revenue that derives through the digital interfaces in which it's present. So we are satisfied by how GEDI is evolving. And despite the headwinds, particularly this year with the increase of energy prices particularly in Italy, that has been impacting GEDI also on the cost of paper, the company has been performing in its transformation at a much higher velocity than what we would have been expecting 2 years ago. Juventus has no requirement of capital. It is in a situation today where there is very clear directions ahead. As we announced yesterday, there will be a Board being formed in January, and it will be chaired by a professional, Gianluca Ferrero, that is able to address the different issues it has. It has a general manager who will lead the company and has very good capabilities in the areas in which Juventus is present, which is [ Mauritius Cannavino ], who has done a very good job in GEDI, as I described before. And we have a very experienced and strong coach, [ Massimo Negre ], who is able to win and has delivered in the past, and his more recent past has shown how Juventus is back in winning. Football is a very valuable sector, as all of you know. And we think that the ingredients that Juventus has and the leadership ahead are going to make those ingredients, make Juventus a more valuable company than what Juventus has been. So we're very encouraged by its future. Lingotto. Lingotto is an important project that is now a reality. It's on the back of very good results that our colleagues, Matteo and Nikhil have had, investing PartnerRe's capital. We believe that it's an important opportunity as Covéa committed and has decided that it wanted to continue to invest not only as PartnerRe but also directly as Covéa into the funds managed by Lingotto. And this enabled us to think with Enrico that we wanted to develop it and we wanted to develop it with additional investors. But we want to be selective because we have a lot of them that want to come since we announced it a couple months ago. And we are very -- going to be very selective on who is going to invest, and we are going to be very selective on what other funds we will start, and I'll leave Enrico elaborate that. On the Ventures side, the Ventures side is only investing Exor's capital. It's an activity that we feel is very intertwined with our purpose of building great companies. It's just starting early. So the -- for us, starting early gives us the opportunity of being able to follow a company for a life cycle. And the 2 examples Noam's mentioned are very important ones, both Via and Casavo, and I'll let him elaborate that. In terms of valuations and, in general, valuations of our private companies or our investments, I will have Enrico give a clear description and a transparent one on how a process works and how it's implemented. Thank you, Enrico.

Thank you, John. Thank you for your question. About Lingotto. As John will say, meaning that we start as a captive asset management company, managing the equity exposure of PartnerRe and now we are moving to something different. We are reorganizing ourselves. We want to strengthen the organization. Before in the past, Exor has a very important role also in terms from an organizational point of view, supporting the asset management company, the captive asset management company, and now we are organizing ourselves having a specific management. And this is something that we are doing right now, hiring new people and in order to have a stronger organization. In terms of strategy, we have currently 2 strategies, 1 called public with Matteo and 1 called private with Nikhil. The idea here is to, over time, to add other strategy, but would be a process, meaning that we are not under pressure from this point of view. It's something that we want to do it but step by step. In terms of size, as John was saying also in the presentation, today, we have $2.4 billion under management. There is a commitment by Exor. John will say, EUR 1.5 billion for Seeds and for Lingotto. So I will compete with Noam on the capital. And Covéa will follow for an amount that will be close to a portion of EUR 1.5 billion, around EUR 1 billion. So this is what we want to do. We want to scale the business, to have a stronger organization in order to continue to deliver the performance that Matteo and Nikhil have been able to deliver in the last 5 years for Matteo and a little bit recently for Nikhil. In terms of valuation, this is a very important topic, in particular now that we have also other companies that are not listed in our portfolio. This is a process that we have put in place a long, long, long time ago. I go back more than 20 years now. And so in the past, every year, on yearly basis, we have a third party that would evaluate our portfolio, our private assets, going through a process that is based on multiple discount cash flow and so on, so the typical approach, a financial approach. We decided from this year, for 2022, to have twice a year of this valuation by a third party in order to have a valuation that is done not just on a yearly basis but 2 times a year. And we will continue from this point of view, so we use third party in order to be -- to have a very clear valuation and transparent valuation.

I think specifically to the question on valuation for Ventures, we're aware that some keep the portfolio at the last NAV until a new round. We agree with you, I guess, was what's behind the question that it's not a reasonable approach, given the environment. And so we look at cash runway. We look at the underlying company performance. We look at the security type we own. We look at public comps. And so as Enrico said, even coming to these third parties, we have already done the work to have a more accurate reflection of where the portfolio stands.

Thank you, Enrico. Thank you, Noam. On the holding discount that we have, we view, as you know, our main objective is our NAV per share. So that's what we want to keep focus on, which is a function of our NAV growth and the number of shares we have. We have accelerated our buyback. As you all know, we have communicated that we were going to buy for EUR 0.5 billion of shares. We are today at EUR 210 million of shares bought and we are continuing the process. So the way we think about discount is always as an opportunity for us to reassess if we buy back our own shares, which we believe to be a very efficient way, A, of distributing capital to our shareholders; and B, of meeting the objectives we have of growing our NAV per share at a higher velocity than the MSCI World Index in euros. Any more questions?

That's fine.

[Operator Instructions] Now we're going to take our next question. And the next question comes from the line of Andrea Balloni from Mediobanca.

Just a couple of questions left. The first 1 is on the catalyst to trigger a re-rating for exhaust. 2022 was a pretty busy year for your main shareholdings with Stellantis, Ferrari, CNH and Iveco presenting their business plan. What's next for 2023 in terms of catalyst? How far is next acquisition? Is this something you would expect in the very short term? And my second question is on a potential delisting of CNH. What has been discussed also by Scott Wine in the last conference call. I'm pretty curious what's your view on this potential decision.

So I will -- on the last question, I will hand it over to Suzanne.

Thank you, John. So as Scott said on the last call, that is an issue which CNH is considering and that the Board has been considering as well. However, no decision has been made on that at the moment, and we continue to keep it under review at CNH. So no decision or kind of changes on that at the moment.

And just to be clear, what we're speaking about is an effect going from a double listing in Milan and New York to a single listing, not a delisting in terms of taking CNHI private, just for this to be clear to everyone because the question could have been misleading. In terms of objective that we have in 2023, we want to be ready. We want to work, as I said, on being prepared to deploy the capital we have, but we want to be patient and we want to be prudent because the environment out there is very uncertain and the uncertainties are increasing. So we want to be prepared but also be mindful that we don't need to be in any hurry. There's a lot of things that need to be done in our existing companies. And we believe that the best way for us to be able to capture opportunities ahead in additional incremental capital investments is for us to be ready but be patient. We've had a couple of questions which are important that are based on how is the capital allocation process at Exor? We have a Board of Directors. We have a chair who's Ajay Banga, so all the investment decisions above EUR 250 million are decided by our Board. This is a very disciplined process that we have at Exor and is even more so important now that Exor has more capital to deploy. There's also a question about what are the adjacent areas between Lingotto and the funds that Lingotto manages and Exor. We have, in Lingotto, investment activities carried forward by the funds which are in no way competing or adjacent to what Exor does. Matteo Scolari, in effect, runs a hedge fund. He has a concentrated portfolio and has no governance involvement in any of the companies in which he is investing. Nikhil runs an opportunity fund, as Enrico said, which has a broad mandate. And again, there is no governance in the investments that Nikhil will carry forward. Real estate has been a sector that we have invested in historically and Enrico has carried very successfully also as one of his responsibility in Exor and then in PartnerRe. So that would be, for example, an asset class that we could consider. And again, Exor will not invest directly in real estate. Those were the questions that have emerged. While we have answered to all of the ones also that we have been notified with, and if there aren't any additional questions, I really want to thank you all for the trust you have in what we are doing at Exor and we look forward to seeing you in presence in a year from now. Oh, there's one more question, so happy to take it. Andrew?

Now we will take our next question. It seems Andrew's line has been disconnected.

Thank you very, very much. See you all next year.

This does conclude the conference for today. Thank you for participating. You may now all disconnect. Have a nice day.