Hello to everyone, and I'm very happy to be here together. And I'd also like to welcome everyone who is virtually with us today. It's a special meeting for us, and we decided to do it here in Turin, in Lingotto, which is celebrating its 100 years of life, so it's a century. And for who is here physically, I also would recommend you to visit the Pinacoteca and the exhibitions that we're having today. So this is a good background to tell you about Exor and what we have been up to, particularly in 2023.
We'll then want to deep dive into our company's investments, give you an update that Guido will give you on our financials, what we've been doing on ESG, and share with you what's next before hopefully answering as many questions as possible, and we hope you have many of them for who is here with us physically, but also who attends it virtually. 2023 was a very strong year in terms of results. We had our companies performing well despite the difficulties and the many uncertainties. The largest investment was in Philips, which is within the healthcare sector, which, as you know, is one of the sectors that we have been focusing on.
We also took the opportunity of investing in companies where we already were present, like Via or Juventus, and new companies with high growth potentials like TagEnergy. On the investment front, we strengthened our team, and we'll speak about this today in the venture side. So we've continued and strengthened our activity in venture. Despite 2022 was a difficult year, we felt that this was also a year of opportunity. And we started Lingotto, and Enrico will tell you more about that, which we founded in 2023. Investments today are concentrated in Ventures and Lingotto. On the finance side, it was a very active year.
We were able to execute most of the buyback plan of EUR 1 billion, which we announced with a clever transaction that Guido on the finance team engineered, and got an upgrade from a rating to A, which was a big achievement of the work done by everyone at Exor, both on the asset side and the liability side. And on the ESG front, as you'll hear from Suzanne, we have continued pushing forward and making our passions also very concrete in our commitments. What I'd like to share with you is that of the resources we had available, mainly driven by the disposal of PartnerRe and the free cash flow we generate, we have, in effect, spent or committed most of it.
If you look at where it has been invested, mainly in companies of which Philips is the largest part, in investments, where Lingotto is the largest part and largest commitment, and then in ourselves, for a combination of reduction of debt and buyback. That is the EUR 500 million we have executed and the EUR 750 million which we have executed of the EUR 1 billion committed. With this said, I'd like to pass it over to Suzanne to tell you more about what we have been doing on the companies front.
Thank you, John. So we're pleased to tell you that we've had very strong performance across our three largest companies, the three on this page. These, as you know, make up the majority of our GAV, and of course, we're very active in the governance of all of these companies as critical friends. All of them have revenues that are significantly up, and they've all had very strong margins and very strong cash flow. Alongside that, we've continued to look for new opportunities where a company can both become a great company with great people, and it sits within one of the three focus sectors that we've talked to you about before. Although I should note, and we've put this at the bottom of the slide, we do remain open to other sectors, and geographies if we see a good opportunity.
I'm not going to say very much about healthcare because I'm going to pass on to Benoît in a moment on healthcare, so I'll just take a moment on luxury and technology, the other two. We continue to be open to opportunities in luxury, and of course, luxury is the largest sector that we currently have in the portfolio. We're very happy about the luxury companies that we have. We're happy with the performance that they've been showing. However, in terms of looking for new opportunities, as you all know, those of you who follow the luxury sector, there are a limited number of opportunities, particularly at the top end of the luxury sector, and that's where we're determined to focus because we know that those companies are very resilient through the cycle.
So although we remain open to them, we're also conscious that many strategics are also very acquisitive in this space and are willing to pay very large prices that we may not be willing to pay. So we will continue to look in the sector, and it remains a sector of interest, but we're conscious of the opportunity flow being a little bit narrower. On the technology side, I wanted to underline the importance here of our Ventures business, which we will go on to talk about a little bit later in the presentation. Ventures is very important because it allows us to be present in the technology sector. Ventures also creates opportunities, such as our investment in Via, where we're now the largest shareholder.
Via uses technology to support public mobility, and we're very pleased with how they have been performing, and we will continue to look for opportunities within the technology sector and use, as I say, Ventures as a way into that sector. So with that as an introduction to two of our sectors, I'm going to pass over to Benoît to talk about healthcare.
Thank you, Suzanne. In the last 24 months, we have continued to explore the healthcare sector. We continue to. We remain convinced that this is a sector that is really well suited to a long-term investor like Exor. You know very well the strong supporting trends that benefits from, in particular, everybody knows that healthcare expenditure are increasing as the populations are aging, as the populations are becoming wealthier, and we believe it will continue at least in many countries. And we are also considering other trends, in particular, the shortage of doctors and nurses that is existing in most of the Western countries. The need for the better efficiency of the system, because the healthcare expenditure cannot continue to grow faster than GDP forever.
And therefore, we believe that for investors like us, investing in technology and investing in prevention is key for the long-term sustainability of the sector and for the long-term returns that obviously we are aiming for. In 2022, for our first year of investment in the healthcare sector, we invested alongside entrepreneurs and families. You remember that we invested in Lifenet, a chain of hospital in Italy, alongside Nicola Bedin, and we invested in Institut Mérieux, alongside the Mérieux family, which has been active in vaccine and infectious disease diagnostics for almost a century. Discussing with them and benefiting from their experience, we have started looking at other sectors and in particular, sectors that are key for the prevention and are at the crossroads of healthcare and technology, as I was mentioning.
And we particularly like the imaging and the monitoring and the image, image-guided surgery, and that is in this context that we decided to invest in Philips, and I will come back on it in a moment. We also looked at other sectors which are a little bit more difficult to explore, but that we like, like life science tools and life science ingredients, genomics, proteomics, that are at the core of the current biodrug revolution. So far, we have not made large investments, so it's more a domain where our venture team is investing and helps us exploring. They have made Series A and B investments in robotics and automation for biomanufacturing, in AI, AI-enabled medicine, and we are closely following what they do, maybe paving the way for our own investments in the company domain later on. So Philips.
Philips was, this year, obviously, I mean, and has been our largest healthcare investment. We started looking at them last year when they went through a kind of a perfect, perfect storm I will come back on. They changed their management. They are. They have been presenting a new plan, and we like this plan. We like this new management team. And we started being interested by them, discussing with them, engaging with them.
At the end of the day, as we were convinced by the agenda of change that was supported by the board, we invested a significant amount of money, obviously, EUR 2.8 billion, to reach a 15% ownership, to get the right to participate to the board, because this is clearly an investment that is intended to support and accelerate the strategy that has been proposed by the new management. We will therefore be part of the board and make sure that the shareholding, the governance, and the management are well aligned behind the management plan and make sure that we can contribute to the acceleration of that plan. If you come back on Philips, but most of you know well the situation of the company. I mean, indeed, in 2023, Philips has been emerging from a decade of significant changes.
For the last 10 years, the focus for the company was to basically precisely refocus from a conglomerate that was a technological conglomerate, but that was a conglomerate into a pure healthcare company. So, they have been disposing traditional businesses like lighting, entertainment, domestic appliances. And in parallel, they have made significant acquisition, a very sizable acquisition, especially Volcano and Spectranetics, which are strong players in this new emerging domain that we like, which is image-guided surgery. And they have also invested in BioTelemetry, which focuses on cardiology remote monitoring. Just had they became, or just had they had achieved this transformation into a pure healthcare player, they had to face a kind of perfect storm at the end of 2021.
After COVID, Philips had numerous supply chain issues and misses in its financial communication and also, as you well know, their Respironics division had to manage a significant recall of their sleep apnea devices, and they are currently negotiating a consent decree with the U.S. FDA. As a result, the share price declined sharply. There was a new management, as I was mentioning, but he presented a new plan. He presented a comprehensive plan that I will come back on, and that's in this context that we looked at the company and decided to invest to support the transformational plan they had presented in January. Why did we invest despite the current difficulties? Because we believe that Philips has very attractive competitive position and leadership positions in segments that are growing very fast. Not just traditional segments, but also segments that are growing very fast.
As you well know, growth is a key valuation driver in the med tech industry, and Philips is number one in this new sector called image-guided therapy, the new technology that progressively replaces the traditional surgery with less invasive techniques. It is number one in cardiac ultrasound. It is number three in MRI and CT scan that continue to grow. It has a leadership position in monitoring all the devices that monitor your constants, especially when you are in ICU, but also outside of the hospitals. This is a domain that is likely to be further automated due to the shortage of nurses and doctors I was mentioning, and that will allow for significant efficiency gains if you, if you can discharge patients safely by organizing a remote telemonitoring, which is precisely where Philips is investing on.
They have also EUR 1 billion revenue in informatics, which was initially a business that was somehow, if I could say, simply storing images of the patients, but now they will build on it to make a better use of the collected data and build integrated solutions and automated solutions. Despite the current difficulties, they also remain number two globally in the world behind ResMed in sleep and respiratory care, and they are currently negotiating with the FDA the conditions under which they can resume their activity in and outside the U.S., and this is a business that was growing fast in the past. And lastly, they have this very strong position in personal healthcare, let's say healthcare at home, with number one positions in shavers, electrical toothbrushes, mother and childcare.
These are businesses that are growing and profitable, and for the company, this is also an opportunity to bring at home with a strong consumer brand, the technologies that they have developed at the hospital. So as a conclusion, we really believe that this investment in Philips is fitting well with our strategy. First, it is at the crossroad of healthcare and technology, and it enables us to expand our presence in healthcare significantly. We like to be the largest shareholder of large-scale listed company. We believe it brings us an adequate level of influence to accelerate the plan that has been presented by the management. We certainly do not underestimate the current difficulties and the uncertainties of the negotiation with the FDA.
However, we believe that the plan presented by Philips, on which we are happy to say that this year they have upgraded their guidance, so they are executing well on their plan. They are executing a plan that will eventually allow them to emerge stronger from the current crisis, both on the cultural side and on the organizational side, and also paving the way for future growth in most of their businesses. We like the fact that their plan is really down to earth, focusing on execution, and also allows, I mean, to envisage that after the current difficulties are being solved, there are a number of exciting strategic challenges, which makes that Philips has the potential to be great, we believe, in a great sector. I hand over to you with this.
Thank you, Benoît. So this is the representation of Exor today, and Philips is now, with Ferrari, Stellantis, CNH and CNHI, in terms of value, one of our largest companies, and as Benoît mentioned, very consistent with what we have done, being the largest shareholder of public listed companies and working through our ownership with their governance and their leadership in what are the ambition of building great companies, which is the purpose of Exor, with great people. We have 11% of our GAV, which is allocated in larger number of companies, and in aggregate, these companies have performed well in 2023.
Some very well, like Welltec, some other, some others less well, as, as Juventus, as you all know, which has had a difficult 2023, but was able to resolve the external problems, both with the sports authorities in Italy, in Europe, and the non-sports authorities, leading to it announcing a capital increase, which we have committed to, which will combine sports ambitions with economical and financial sustainability, as the leadership of Juventus mentioned when they had their AGM last week. And investments, which has been a growing part of where we have been allocating our capital, really, in two legs, the venture side and the Lingotto side.
What I'd like to do now is jump into investments and start with the venture part, which is run by our colleague, Noam, who is not able to be with us as he is now in Israel and committed to his country in this difficult moment. The venture team is continuing to develop under his leadership and is now we have invested approximately $600 million and have reached 94 companies, so we're getting to 100 companies soon. These companies are very much in line with what Exor is interested in. Healthcare has been taking a larger part of what we are looking at, with a good mix between early and late, and also a similar distribution in terms of geographies where we are present, between the U.S., Europe, but also the rest of the world.
Similar to what we do at Exor, relatively concentrated. If you look at our 10 largest positions within the venture portfolio, 10 weigh 41%. What I'd like to highlight within the venture activity is Vento, a program that we launched last year, which is run by Diyala, which has become the most, both in terms of quantity and quality, investor in early stage in technology in Italy and of Italian founders and entrepreneurs. We operate both as an early stage in the early stage investing activity, where we have seeds of EUR 150,000 of investments. We've had 2,000 and close to 2,200 applications, and we've backed 55 companies as of now.
Then we have our venture building activity, which is really enabling and supporting new companies and their formation, of which 20 were started and of which we've invested in 10. I'd like really to thank Alberta and Francesco, who are here today, and both from different cohorts have been part of the venture building program, and we're very pleased of being invested alongside them. So welcome. I would like now to pass it over to Enrico. We're very proud to have started a new activity, so founded Lingotto in 2023. It is very much driven by the very talented colleagues that we have that were working on the investing side of PartnerRe, and I see Matteo here. And they've been very successful and very much part of the success that PartnerRe has become.
When we sold PartnerRe to Covéa, PartnerRe and Covéa wanted to continue to invest alongside. So together, we decided to create, found Lingotto, which is an investment management company, and Enrico Vellano, who was our CFO, was very interested in changing jobs and doing something more entrepreneurial, and so we're very happy that he decided to lead this opportunity and that Guido joined us on the back of it. Enrico, here you are.
Thank you, John. Thank you very much. Good afternoon, everybody. It's a pleasure for me to be here today and to give you a quick update on Lingotto, what we have done in the last few months. As you know, we launched Lingotto in May this year, so not just few months ago, actually, with the objective to continue to deliver important return to our investors. We are now managing around $4.5 billion. We have a team of 40 people based in London and in New York, and we are managing the three core strategies I'm going to talk about in a second. We are building a new company, a unique company, based on talent and performance. We are managing the company in a different way compared to other companies.
First of all, we are fully aligned with our investors, and we share with them the approach, in the long-term approach in investing. John mentioned talent. We have talented people with a lot of experience, and we've a proven track record. Our managing partners are managing different strategies and that we talk about in a second. But we are managing differently also in terms of risk, meaning that a lot of companies, a lot of people try to minimize concentration in liquidity volatility, while we think that managing those aspects, we can have a better return. Having all these elements, we think, we do think that we can build up a home for talented people to join us and to achieve a good and interesting return. We are a young company, so we spend time on values and culture.
Our culture is based on entrepreneurial spirit and collaboration. Values like courage, curiosity, ambition, passion, guide us every day in our activity. As I mentioned before, we have currently three strategies. All the strategies are managed by talented people, talented managing partners with a lot of experience and track record. Matteo is managing a long-short equity, investing in public markets with a concentrated strategy and a long-short strategy. Nikhil is a different approach, he's more opportunistic. He's managing $1.6 billion, investing in different asset class. James just joined us in May. His approach is, again, investing in public and private equity with a specific focus on companies with a focus on innovation. Before to close, I'd like just to give you a quick update on what we have done in 2023 and future priorities.
First of all, we launched two new strategy: opportunity and innovation. In the future, we'll continue to add other strategy, but with a very selective approach. We strengthen the organization, both, on the investment teams and on the business team, and we will continue to do it in the future, hiring new talent. I'm particularly pleased to have George Osborne as new chair of the company. Finally, we started with two large and strong investor, Covéa and Exor, and we'll be very selective in adding other partners to our strategy in the future.
Thank you, Enrico. I'm very pleased to start with showing you what our performance has been. And as investment holding, we measure our performance against two market ratios. One is our NAV per share compared to the MSCI World Index, and the other one is an absolute performance in the TSR/ CAGR. And you'll see in this table, that we've both outperformed the MSCI World Index in the last five years as well as in the current year, and that we've also exceeded our targets on TSR performance. So all in all, a very good performance, both on absolute and relative basis, and both on the long term and the short term. Next to these objectives, we are managing three KPIs very closely.
The first one is free cash flow over dividend paid, which is a measurement of our cash flow generation ability. And you've seen that it has been strong in the past years and even stronger in 2023, evidencing the strength of our companies and the dividends that they're paying out. The second one is holding cost over GAV, which is an important measure for us in how efficiently do we manage our capital. And at seven basis points, we're a very lean holding, and in the top quartile of efficiency compared to other investment holdings. And the final one is loan to value, which is an indicator of our leverage, where we choose to have some leverage because it contributes to results, but in a conservative way.
Now that we are fully invested again, we're at a ratio of 10%. As an investment holding, our key role is to allocate capital efficiently, and we have a very disciplined approach with doing that. Our portfolio review approach, which we formalized recently. With that, we monitor the performance of our investments in companies as well as in the investment range, and we reassess how they're doing. So for companies, we consider whether we should increase our investment, hold, or reduce our investments if that's the best opportunity, or acquire new companies.
Similarly, for the investment side, we evaluate whether we should invest more, the same level or, or less in, in Ventures or in the different funds of Lingotto. So that's something we, we manage very actively in this process of monitoring, reassess and, and rebalance. And one critical and explicit component of our asset allocation is buybacks. And to go a bit deeper into that, buybacks for us is a very good way to invest in something that we know at a significant discount. So in principle, that's a very attractive asset class for us to, to invest in, and we've shown that in, in the past years.
We've announced plans to invest EUR 1.5 billion of capital behind buybacks, of which EUR 1.225 billion has already been executed, which is significant if you look at it in terms of percentage of our free float. In September, we announced and executed a tender offer, which we thought is a very efficient way to buy back shares, rather than taking over two years to buy back on the market. And in those two years, as we've seen in the past, share price tend to increase quite significantly. We were able, in two weeks, to buy a zero premium EUR 750 million of shares back, which represents 3.8% of our share capital so still EUR 250 million to continue to execute, which we'll do in 2024.
And we've started the cancellation of the shares, which should be done also in first half of 2024. So then we move on to our debt position, where we try to be lean and simple in the way the way we do that. So we're only financed through bonds, except for a small portion of bank debt, which is very well spread out, an average duration of six years, and financed at low cost, at 2.5%. We're very pleased that the strong performance of our companies, but also the diversification that we've done with reinvesting the PartnerRe proceeds across different industries and substantially into listed companies, has been recognized by Standard & Poor's, and been translated into a rating to A-. So with that, I conclude the finance section, and would like to hand over to Suzanne to address ESG.
Thank you, Guido. So I really want to tell you what we're doing on the ESG front, and we have talked about this before. When we talked about it with you, we talked about the three legs or our three passions in ESG, and we have one of these around each of the three pillars, E, S, and G. So on the environmental side, we told you that we were focusing on achieving carbon neutrality and moving towards net zero emissions. On the social side, our focus is on education. I'm gonna tell you a little bit more about that on the next page. And on the governance side, our focus has been particularly around the gender balance.
So I'm pleased to tell you that at the holding level, so at the Exor kind of holding level, we've produced our first TCFD report, and we are now carbon neutral and have been since full year 2021. On the governance side, we have maintained our gender balance. We've also been doing unconscious bias training for all of our colleagues. I should add that in addition to thinking about what we do at a holding level, we also run networks of excellence across our companies, which means that we can encourage our companies as well to think about the passions that we have. Many of our companies are pursuing targets in these three areas, and you will have seen that in their own reports.
So just to tell you a little bit more about the education side, something that we're particularly passionate about, we have been working on an initiative called Matabì, with Fondazione Agnelli. What this does is to try and address the gap in STEM subjects, particularly between girls and boys, in schools. And this is particularly acute, actually, in Italy, although you find it in many places across the world.
What we've done is we have developed, led by Fondazione Agnelli, a technique which uses a set of LEGO bricks and then a whole series of exercises that children do in the classroom, which teaches them about spatial awareness and also some of the math basics that are so important as part of the STEM subjects, which of course kind of plays back to our industrial heritage and something that we feel very passionate about. This technique has now been used in 130 schools, 130 classes in 25 schools across six different regions. I wanted to underline the fact that we are working very, very hard to do an impact initiative around this program, because it's very important when you do an education initiative, to work out exactly what the impact is of this.
The first results from those are very positive, and we'll continue to keep you updated on it. We will continue with this program because it's beginning to have very clear results, and we're hoping that we will make a difference within this. With that, I'm going to pass back to John to talk about what comes next.
Thank you, Suzanne. And of course, very happy to share more about what we do on the three passions on ES G, and particularly the initiatives like Matabì. What's next? So now that we've invested most of the resources, what we want to make sure is that we stay, very focused on, on our companies and are very clear in the alignment, between the ownership we have, the governance in which we have a role, and the interactions with the leadership of the companies that we own, which ultimately are the drivers of results and following our purpose of building great companies with great people. We want to make sure that as we add on more capital to Ventures and Lingotto, the capabilities are there, and they're strengthened, and that is an area of focus, as you've heard, by through what Enrico mentioned.
We will continue to explore opportunities, and that is both for companies we own for our investments, but also new opportunities. And finally, as Guido mentioned, we will continue to maintain very clear discipline on our capital allocation and strengthening our overall balance sheet. What I'd like to share with you today is Sergio, whom some of you have known, left us five years ago. And a lot of things have happened since, and he would be very proud about the results that were obtained in these five years. And I have a lot of gratitude to my colleagues at Exor and also in our companies and in Lingotto and Fondazione. Great work that they all have been doing, and particularly 2023, as we shared with you, is a strong year of which we feel very, very proud.
But that is also important, and the words of Sergio on this page, which resonate very strongly to us, are a reminder that we need to continue to focus and to make sure that we excel in what we do, and that the biggest risk is to drift into mediocrity. So what I want to share with you is that we are committed in not doing that, and we wholeheartedly share the indication that Sergio has been very clear, and that's how he lived. I would like now to hand it over to you, and we're very happy with my colleagues to answer any questions you might have. Thank you all. Might you -
I can go n ow? Yes. Good afternoon. Martino De Ambroggi, Equita. The first question is inevitable on the discount. So 40% is lasting more than two years in a row. I don't know if you have any justification about it, because the buyback, you promised the buyback, you did it. The discount is always 40%. So my question is: What are the reasons explaining such a huge discount today, and what do you think to do in order to reduce it? The second is on the healthcare. Following Philips, the weight of healthcare in the net asset value is roughly 10%. So are you happy with this? And so the focus will be probably on luxury and tech going forward.
Still on the healthcare, Institut Mérieux was acquired, the 10% stake was acquired more than one year ago. Can you share with us any successful milestone or some achievement you got it? And last, specifically on Iveco. Sorry, this is a question we already discussed in the past, but being standalone is performing well, so it's okay, but it's too small in size compared to competitors. So last year, we talked about possible partnerships. Okay, but the size will remain for sure, much lower than others. So my question is: Are you willing to discuss, or you are looking for something more than a partnership, meaning a merger Stellantis like? Because the size will remain, in any case, much smaller, although performing well. Thank you.
Thank you. Thank you for the good questions. On Iveco, Suzanne will answer. On Institut Mérieux and healthcare, Benoît, and I'll give a go on the discount, and then I'll pass it to Guido. The discount is an opportunity for two reasons, because it is at around 40% and because of the quality of the companies we have. So we don't feel in any way that that is a reflection of results. We feel that it is an opportunity actually to invest in ourselves, and that's what we have done in a much more sizable way than what we did in the past.
We executed EUR 500 million, we committed to EUR 1 billion, we executed EUR 750 million, and we have EUR 250 million remainder. What I feel is really important for us is to remain focused on making sure that we deliver the returns and also bearing in mind what are the right also mixes that we have on the actual liquidity to the point Guido was mentioning. And I'll let him also elaborate on it. Then you had another question.
Healthcare?
No, before healthcare.
The explanation for the 40% discount?
No. No, no, not on discount.
Was that-
Yeah.
Was it Iveco?
Yeah, sorry, that. So in terms of concentration, which is a parameter that we look very carefully, luxury is actually our largest sector. So if you take Ferrari plus our other luxury investments, of which the most relevant after Ferrari is Louboutin. So we feel that luxury is already a sector where we have a large concentration. We are keen in looking at opportunities within the sectors that we have determined as being the ones we're focused on: healthcare, luxury, and technology. We like when you have a crossroads of the two, like healthcare and technology, which is the case of Philips. But as Suzanne mentioned, we're also open at looking at other sectors, and we continue to believe that public markets are very interesting in terms of opportunity setting, not only for companies like Exor, but also other companies. Guido?
Yeah, so maybe to, to comment a bit further on the, on the discount. So having a discount is obviously part and parcel of, of being a holding company. I think that that's obvious for, for everybody. It has indeed been elevated over the past few years, and then there's the question, why? First, it was uncertainty about how the, proceeds of PartnerRe were going to be allocated. Very clear and logical. Now, we've fully invested the PartnerRe proceeds, the discount is still there. And why? Because we now need to show that from the investments that we've made in the past, year, as well as the existing portfolio, we'll deliver - we need to deliver the returns.
I think that's what we need to do, show that we continue to deliver the outstanding returns that we've done in the past years, and that, that should address the discount. But in the end, the discount is determined by the market, so more by you than, than by us. Our job is to deliver outstanding returns. So that, that would be my remarks, maybe to pass on to Benoît for the, the healthcare and Institut Mérieux questions.
Yeah. Regarding healthcare, I mean, clearly, now that we have made these three large investments, our focus is clearly on supporting the plans of the companies that we have invested in, more than looking for new investments. Even if I told you that we continue to look at other sectors, first and foremost, for our venture company, but also to continue to deepen our knowledge of some of the sectors that... Well, we are explorers for the time being. We do not feel confident enough to invest, but we want to continue to stay tuned with what's going on in the biodrug evolution.
For what regards our companies and for what regards Institut Mérieux, I mean, Institut Mérieux, as, as you well know, is, is a private company, but 85% of the value of Institut Mérieux is made of a listed company, bioMérieux, that, that is the strong diagnostic player in the-- in-- for infectious disease. As it's a listed company, I will not... I mean, I, I will defer to, to their own communication.
I can just say that, in the last year, I mean, the diagnostic sector has been suffering a little bit from the post-COVID normalization, and we have enjoyed the, I mean, kind of resilience from bioMérieux, in particular, because, contrary to other players, they have continued to grow, thanks to the very strong positions that they have in niche, in infectious disease. They have suffered less than their peers in terms of top line, and they are working also to continue to improve the bottom line. The rest of the activities of Institut Mérieux are smaller. They are. Some of them are private. The biggest one is Mérieux NutriSciences, acting in the TIC domain, for food safety.
Here as well, the sector has been suffering because the food industry has spent less, but they are posting good results, and they are on a good track for performance.
And then finally, on Iveco. So as you indicated, and you won't be surprised that we're happy with the performance of Iveco since it spun out from CNHI. No, we're not looking to do anything else. And I actually wanted to take the opportunity to thank, in particular, Gerrit and the leadership team at Iveco, who I think have done a very good job since the spin at establishing that company. For those who are interested in Iveco, they do have an Investor Day next year, so there'll be an opportunity to ask many more questions about the future plans that they are putting together now.
Good afternoon, everyone. Monica Bosio from Intesa Sanpaolo. I have two questions. The first one is in the healthcare. You are going to keep going in supporting the healthcare segment. I'm just wondering, do you plan to increase your investment in Philips up to 20% in a very short term, or is this an opportunity that you will take, you'll keep in the medium, long-term run? And as for the technology segment, which is, in your view, the most interesting area in the technology segment? How do you see an investment in the AI? Thank you very much.
So on technology, and then I'll pass it to Benoît on Philips. We think that we become stronger if we reinforce the areas in which we want to focus, and we create more understanding, knowledge, and capabilities, which is why healthcare has been a particular area of focus, as mobility has been. On the other hand, artificial intelligence is transforming technology, and it will have a big impact on many companies, and by itself as a technology, will be valuable, and the application of that technology will be valuable. And just to be on topic, Francesco, who's here, is the founder of Nebuly with, and they are really building something very extraordinary in really trying to solve one of the roadblocks around AI, with AI, which is really energy consumption.
If you have interest and time, he's here, and I'm sure he'll be delighted to tell you more about what, what he's building. AI direct companies who are directly involved in them, like Mistral, where we've invested, or companies that use AI are of interest.
Regarding our shareholding in Philips, I mean, as per our agreements with Philips, we have exactly the same rights in between 15%-20%. So we have increased our shareholding up to 15%. We have no obligation, no timeline, and for the time being, no intention to increase further the stake. We will be opportunistic in that regard. It doesn't change our position with the governance of the company. It was just part of the agreements that we negotiated with them to create trust, 'cause they obviously didn't. They wanted to know what was our intention and up to which level we wanted to buy to build our stake in Philips. As John often said, I mean, we are very comfortable with this kind of influence, being a board member, having a significant shareholding. There is no, I mean, intention in the short term to increase that position.
Okay. Good afternoon, and thanks for the presentation. Alberto Villa from Intermonte. I have a few questions. The first one is on the Ventures. I take the opportunity today to ask you some more info or color about the $600 million you have invested into Ventures. More than 50% is now late stage, so I was wondering, in your view, what is the opportunity here to create value in the midterm out of these investments you already have in your portfolio? And when you look at an opportunity into Ventures, how do you measure the, let's say, opportunity to invest or not in terms of other rates or investment opportunity metrics you use when you decide to make an investment? The second question is on CNH i s now in the process of moving the listing only to New York.
The stock suffered probably also by this decision to leave the listing in Milan. I was wondering, in your view as a main shareholder, what is the real value of this decision? The third question probably is a little bit trickier, but I take the opportunity to ask you about the change in bylaws that has happened this year in the Giovanni, Giovanni Agnelli B.V.
To ask you if there is any change in, let's say, the view of the different branches of the family on the long-term tenure in Exor investment, and if this change in bylaw will facilitate in any way a potential exit or, let's say, a partial divestment of some of the member of the family. And finally, please let me put on the hat of a little bit disappointed Juventus supporter, to ask you about your commitment on Juventus. You are now committed to take part to the capital increase. There has been some press rumors about the intention of the family to keep on being the reference shareholder of Juventus. I was wondering if you can share with us some views on that as well? Thank you.
What I'll do is I'll ask more questions, so we'll try and group them, because some seem to converge. So maybe let's have two other questions.
Hi, good afternoon. My name is Robert Karas from Vienna, Austria. First of all, I want a bigger discount, and if you keep on exercising tender offers, I'll be as happy as Henry Singleton, just to say that. This question is in honor of Charlie Munger, who we will all, or at least I will dearly miss. And he said, "Three investments are enough," and I saw some of this ethos also within Exor. I remember Matteo Scolari, when you put out the investments, sometimes there were only three big investments. And I still see, see it. I think you're still invested in Ocado. I think the Philips investment points in the direction. But I still would be interested, now everything gets more institutionalized with Lingotto, how you're thinking about concentrated investments in public equities?
Thank you. Any...
Okay. Can I just, ask a question about your hedge fund strategies?
Who is-
It's Simon Waxley from Whitebox. Could I just ask some questions around your hedge fund strategies in particular? I think I saw that you have EUR 4 billion, I think, invested. I just wanted some clarity around: Is that capital or is that exposure? That's the first thing. The second thing, which is sort of linked to that, is: Do you have a tolerance for risk around those strategies, i.e., is there a limit to the amount of losses that you might be prepared to accept on any of those individual strategies? And I don't know if you could provide a bit more clarity as far as what the performance of each of those individual strategies has been like for this year. Thank you.
Thank you. So on, on concentration, we, we remain, we remain convinced that if you do have, a high conviction, it is important that you're able to be concentrated. On the other hand, there is a limit to concentration, and, and that is, and, and, and that is really what, what we, we need to gauge. Historically, we've been comfortable between 25% and 30% in, in one single. Above that, it becomes, it becomes probably too concentrated. That is common to what we do. So if you look at our venture portfolio, it is a concentrated, portfolio, 10 positions, 40%. If you look at our investment strategies in Lingotto, they are concentrated.
Now, we believe that concentration, if you have a very strong conviction, if your conviction is right, will give you outsized returns versus the, the medium of the market. Lingotto takes some of those attributes and the strategies that they have, which is what Enrico mentioned. If you look at concentration, if you look at volatility, if you look at liquidity, those are all levers where institutional investing is trying to avoid them. But if you actually embrace them for what they are, which is opportunity of making outside returns, they are an opportunity. That is very much the culture that Lingotto has, which is linked to the culture that Exor has. We are satisfied about the returns which are in the top quartile in which they operate, and the numbers are not disclosable.
But as Lingotto develops its activity, and Enrico was mentioning that selectively it will look at third-party capital, it will make sure that the return figures are ones that will be publicly available, in addition to what we make publicly available as Exor. The capital, which is EUR 4.5 billion, is capital which is equally split between Exor and Covéa PartnerRe. So Covéa PartnerRe have further invested in the Lingotto funds, and alongside Exor has invested in an equal way, so that's effective capital invested. In terms of Ventures, we believe that the opportunity set is on today, probably in some situations on later stage, because the funding environment, as I mentioned, on the back of what happened in 2022, is more difficult.
So we're seeing very attractive valuations relative to what we saw in 2021. We also believe that early stage is interesting, and we're very encouraged by the Vento program, which I mentioned, which really is giving a sense of a very high dynamism that, that we are seeing on the earlier stage. As you well know, the, the venture asset class in aggregate is not a very good asset class, but if you are in the top performers, it is a very good asset class, and that's what the ambition of the venture team is, and that is the solidity of the team that we are building in, in Exor Ventures, which is also why we have evolved from seeds to, to now Ventures. That gives us a broader scope of, of activities.
In terms of the bylaws, I didn't really understand the question, and it doesn't really, it's not that relevant to Exor, because the bylaws were really changes that we had in terms of Giovanni Agnelli being the private company that is owned by my family, which is committed to its ownership of Exor, and no changes in terms of the commitment of Giovanni Agnelli and of my family to Giovanni Agnelli are never being put into question. So I'd like to try and make that very clear and avoid any kind of speculations that are not really relevant. For Juventus, I would say that the changes that were made have proven to be very successful.
What were the very difficult situation in which Juventus found itself have been solved, and they all have been solved and have been put behind. Today, the company is focused on what it should be doing, and the results in the sports side are there. Juventus is competing within the Italian Championship and the Italian Cup. The plan to which we are committed, which the management team has worked, as I mentioned before, is one that really wants to have going hand to hand the sports success of Juventus of Juventus as the financial success, which is really finding a sustainable model. We have hired a very successful sporting director who has shown that that is possible, which is what he has done in Napoli.
That, as you know, was the team that won the championship of last year and has been also very virtuous on the financial front. On CNHI, I'll hand it over to Suzanne.
Thank you, John. Well, on CNHI, we spoke earlier about Iveco Group. In the last few years, our focus here has been creating the remaining company, CNHI, allowing it to focus on agriculture and construction. Significantly simplifying that company by taking out Iveco and establishing a separate company, which, as we said, is performing well. Within CNHI, under the leadership of Scott and his team, the focus is very much on putting in place all of the building blocks that they need around precision agriculture. On the listing, very much kind of connected to that, we want to simplify the way in which this company operates. All of its peers are listed in the U.S., so it will be a significant simplification to move to a single listing, and the obvious place for that listing to be is in New York.
Thank you very much for having us. I'm Steven Wood. Nice to see you all. Just a couple of follow-ups. On the core portfolio, would love to know how you think about. Are these sort of, never sell, always hold, or are they sort of more partner-y-ish in terms of, evaluating opportunities? And I'm sort of anchoring on your comments, Lady Heywood, on the luxury multiples. Wonder if you sort of flip that in the other direction and maybe access that market, valuation with, with Ferrari. Let's see. John, I'm curious, you've been very assertive on buyback, which has been, wonderful to see. I'm curious how you think about if this persistence discount persists, if you get even more assertive on, on that or you really focus on growing the portfolio.
As a shareholder, on Stellantis, do you feel if you see incremental capital returns, which is, I mean, the balance sheet is exceptionally strong, free cash flow, as well. Curious if you, if you have a view on dividends versus repurchase there as they sort of, I don't want to front run January, but as they sort of head into their 20/30 plan, how do you, how would you prefer to see your capital returns there? And then one for Benoît, if you don't mind. I'm curious, Philips is going to be pretty unique in that core portfolio because it'll be one board seat. It'll be a little bit different from the other, portfolio companies. So I'm curious, how do you feel like Exor will exercise the same level of influence?
I'm curious if you could maybe unpack a bit where you see the opportunities for Exor to add value to accelerating that plan. Thank you.
Other, other questions?
Yes. Thank you. David Vagman from ING. One question on, to start—two questions actually in total. One question on Philips. Thanks for having explained the rationale and the upside from Philips. Now more on the, let's say, the downside risk potential. Could you take us through the due diligence process that you had and all you see, let's say, the downside risk from the legal point of view? So the legal risk, we could have some, quite some volatility on the outcome. And second question on your KPI, the free cash flow on dividends, which is a very interesting KPI. You've basically have got this KPI of being above one, which is a floor. How should we think about you having kind of a ceiling?
So at some point, considering, okay, we've got enough free cash flow, we should give some back, so, something a bit structural, let's say, in terms of capital allocation. Thank you.
Thank you.
Thank you so much, and thank you for the meeting, and it's a great opportunity to learn, and many of us really appreciate it. I've been watching Bernard Arnault's company, and I feel like the... I'll be nice to Exor. The only other company in Europe that has a kind of a luxury trump card is Ferrari. But LVMH seems to be collecting up a lot of assets. I keep seeing them buy things at high prices, but then they do extraordinary things with them, for example, Tiffany's. And I'm just wondering if you can here share how you see, perhaps, Exor being able to play its trump card of Ferrari and maybe creating something else in Europe other than this juggernaut that's based in Paris.
So, on capital allocation, which has been a lot of the questions that you've all been asking, they very much relate to what Guido shared with you in terms of our internal process. And, what we generally tend to do when we look at opportunities in our companies is really to try and look at the quantitative side and then the qualitative side, which is what was applied to Philips. So we focused on healthcare. Within healthcare, as Benoît mentioned, subsectors of healthcare. Within those subsectors, we felt that public markets were offering more opportunities, which led us to look at Philips, and Philips had definitely specific areas, while also it had the price that it has. It had, and it has.
Then it's a question of qualitative, and these are public companies, so there's a lot of information which is publicly disclosed, and there are conversations with the companies in which they will be able to share what they can disclose, and then there's work you do in terms of your assessment. As Benoît mentioned, on one side, we feel that the problems and issues are known, and we have our assessment on them. Fundamentally, the assessment is that they will be fixed.
And then on the other, on the other hand, we do have a plan that Philips have put together, and we think that that plan is very convincing and that there is alignment between the leadership of Philips, its CEO, Roy, the governance of Philips, its board with its chair, Feike, and the shareholder base, of which we are now the largest shareholder. And that is very much aligned with what we have done, Stephen, and so it's not very dissimilar than from our other companies. In terms of looking at how much free cash flow we have and how we prioritize between companies, investments, and distribution, dividends or buybacks, these are, again, pretty standard analysis that all of you know, and we actually apply the same ones as you all apply.
Then the question is how you make judgments between what is the opportunity set and the parameters of risk between what you actually see of the level of risk you want to take for the return you want to take, the concentration you want to have, and the overall so leverage situation. Teledyne was used as an example, and Teledyne definitely was a very good example of a company that was very good in capital allocation. On the other hand, if you're able to compound capital at high rates, that is also a very good place to be. Where is Teledyne today versus Berkshire Hathaway, thinking about Charlie Munger? If Berkshire Hathaway had been more aggressive, probably on the buyback front, maybe the overall results would be different.
So we are students of Charlie Munger and others, and with Suzanne, we were actually commenting this today. One of the things that we feel is one very valuable lesson from him, and we were discussing it, is not to confuse action with outcome. And sometimes we're taken by velocity and trying to achieve many things, but at the end of the day, the reality of success is achieving relatively small things, but that are ultimately meaningful and impactful, and that remains what we want to achieve, and it goes back to also what I mentioned about Sergio. In terms of luxury, first of all, luxury is really a very small sector in terms of companies that exist in that industry.
And we are fortunate to have very good companies within that industry, and what is interesting for us is to be in the highest possible end of that sector. When we look at conglomerates within the luxury sector, there isn't real clarity if they actually are that additive towards the different companies in terms of that aggregation, how much that aggregation is additive, and you could go both ways. It can be detrimental, and there are examples of that, or incremental, and examples of that. On the other hand, if you look at pure valuation, the market seems to say that what they like are companies that are very focused on what they do and how excellent they are at that, which is the case, for example, Hermès, and the case of Ferrari.
So I feel that if you start thinking about trying to mingle what's really good with what is probably not that good, but could be better, it is a risk that you're taking. So what we want to continue doing is to make sure that if there are opportunities within a very defined part of that market, they know that we could be a good partner, and Louis Vuitton is a perfect example of that. We're not that interested in going after, within the luxury sector, going around companies that ultimately are not that easy to really fix, and there is a real strength in the quality of what the companies do, and there are not that many of them.
But the ones that exist, if they're interested in doing something with us, they know that they can call us, and as I mentioned, Louis Vuitton is a good example of a company that did not want to end up in one of the big companies, but was very interested in accelerating its growth, accelerating its potential, and strengthening that company, and saw in Exor a good partner in doing that.
Hi, Stefano Bonzano from SG. Although it weighs very little in your portfolio, you still play a quite big role in the press and media sector, at least in Italy and then also in Europe. It's a complex sector that is going through a lot of changes, and where it's hard to get profitability. What is your strategy in that respect?
Other questions?
Alexander Pichler. Hi, nice to meet you. Running a holding company seems to be quite a dilemma because if you have a large shareholding, you have been very successful, and the market gives a discount to this shareholding. Furthermore, if I sell this shareholding to this and I have the cash on my balance sheet, again, the market gives a discount on it. Have you ever considered distributing the shareholdings, the large blocks that you have, simply to shareholders? So even you, as a large shareholder, would be 30% richer in a minute.
Other question? So on the question of how you would organize spin-offs and how those will ultimately play out for shareholders, by experience on what we've done, that's definitely an effective way of reducing discount. What I think is the real question is: Do you think that Exor's ability to compound at higher rate is there or not? And that is ultimately what we, as an organization, are interested and excited in doing. If you think that that's not the case, and then you end up concluding that there's a better opportunity of having those assets being distributed in other ways, that is a liquidating conclusion. And so I feel that we're not definitely thinking about that, and we believe, as I mentioned, that there's incredible opportunities ahead, and that's what we're interested in capturing.
In terms of media, media is definitely a very challenging industry. We are today exposed with The Economist and GEDI. GEDI has been working in the last three years on a very strong combination of portfolio and an operational improvement, which is really trying to see how we can digitize mostly its offering. And a lot of the disposals that have been made were in regional press, where the opportunity set around digitization is different. And we believe that also looking at where The Economist has been successful, that the historical drivers of revenue, which were physical subscriptions and advertisement, have been and are and will be challenged. On the other hand, if you are able to actually provide something that is unique, there is value which is being paid through subscriptions.
How much are those subscriptions really going to be paid, and what's that famous ARPU, the average revenue per user, is the big indicator. And we are seeing encouraging signs of it with The Economist, where we're seeing subscription and pricing going up on the back of also The Economist providing always more and better journalistic information, which is actually being considered valuable and an additive. And to some extent, AI is going to make that even more stimulating because a lot of things will actually be free and will be able to have a very clever journalist through any of the AI bots that you'll want to use that will provide you a lot of information.
And so as that becomes more and more commoditized, it pushes any news organization in making sure that what they do is distinct. Which again is very much part of our definition of great companies. The ones that are great are ones that can renew themselves and are one that can keep their distinctiveness. So if there's no more questions in the room, we do have some questions outside the room through our many participants, and we reached a record participation of 225 people, so.
Yes. Yes, one last question. On the discount, is it something that you think you can reduce through communication, so through transparency? Or is it something that actually you don't really want to influence and you repeat when you have a high discount, you repeat to buy back shares, as you highlighted? And related to that, for instance, on Lingotto and more the unlisted participation? Would you consider disclosing more information, like indeed return, alpha generation, et cetera? Thank you.
What did you just say? Alpha generation?
Yes, so, value creation above the, let's say, the stock market return. So alpha from the fund or, let's say, IRR, internal rate of return of the fund.
So the level of disclosure we provide is very high, and we've been trying to always get better in terms of increasing our transparency and making sure that any information that we can provide is there. I'd say not always everyone looks at it, so I'd encourage to really do good homework in looking actually at everything we provide and how we provide it. And I think that is very important, and it's definitely something that for us is very important to make sure that our investors, as well as our stakeholders, have all the information. I feel that what is really key, as we shared with you today, is really to be able to continue to consistently perform.
And I think the biggest risk is not the discount, is actually our NAV going down. So if you end up having a discount that closes because your NAV goes down, that would be really bad, and that's why we need to be focused, keep our heads down, and fight against mediocrity. On the other hand, if there are any suggestions that you believe that we can improve in terms of how we communicate, we will be very, we'll be very grateful for any of that. And I don't know if, Guido, you want to add anything on this point?
No, I think you've covered it all.
I think go ahead now. Reference each other, but go ahead.
So the questions we have coming from our other investors, who are with us on webcast, and it goes back to what you were asking on our private companies, would be an update on Welltec. So I'd like to hand it over to Benoît.
Welltec is benefiting strongly from, I mean, the good oil and gas services market. So, they are at the same time developing fast and enjoying a very strong profitability on their traditional business, which is intervention, when you intervene on the well. But they have also reached a great success in developing a new product that they launched a few years ago, and that I mean, really, made its way to the market in the last 18 months. The completion business, which is a good business, especially and in the context of COP28, because it helps securing and sealing much better than the traditional concrete technology. I mean, it helps sealing the wells in a much better and more efficient way.
So this is also a second product line of Welltec that has expanded very fast. It's a very successful company. Very nichey, but going now quite fast. We are fully leveraged. After three years ago, I mean, the company had a significant debt. We dedicated a big chunk of the cash generation to deleverage the company. So we are enjoying a much better situation in terms of balance sheet, and again, a much better situation in terms of competitive positioning.
Thank you, Benoît. One question for Guido. Could you please give us disaggregation of how you arrive at your objective target, TSR/ CAGR of 8%, and what your assumptions are for international stock markets as you also want to outperform the MSCI? It's a good technical question.
Indeed. And I'll take it with pleasure. So like I mentioned in the presentation, we chose to have an absolute and a relative measure against the stock market. So the relative one is how our net per share develops versus the MSCI World Index. The absolute one is TSR exceeding 8%. And the 8% we established by looking at the long-term average of the MSCI World Index. So it has the same reference, but we always try, you know, to beat the market in up and down years, but it also needs to be a relative outperformance. So that's basically where they come from. Yeah, and there's obviously many other index you can look at, but for us, with our investment horizon, we think or investment scope, we think MSCI World Index is the most relevant one, and also that's used by most of our peers.
Thank you, Guido. So more detail being asked if we can explain the product due diligence done at Philips prior to the investment, and how did we get comfortable with the product issues? Benoît?
Yeah. Obviously, I mean, we made significant and comprehensive due diligences before investing in Philips, and we have had more than six months engagement with the management, only dealing with the public information, as obviously was the rule. We hired, especially on the, I guess, your question, it was also a question from someone in the room. The question certainly focuses a lot on the product issues and the consequences of the current discussion with the FDA. We had our own lawyers, and we run many, I mean, possible scenario, from the most optimistic to the least optimistic.
Running these different scenarios, we checked that the plan was resilient in basically all possible scenarios. What eventually reassured us and what I believe is the lens that we are using vis-a-vis these investments, that we are looking at these investments with a very long-term lens. For sure, I mean, we are certainly not underestimating the impact and the consequences of the current negotiation of the consent decree.
But frankly speaking, if you look with the 2030 horizon, the long-term growth of businesses like Ultrasound or IGT are as much important as the amount of the fine that Philips is going to pay or the level of disgorgement of profit that they are going to have on their sleep apnea devices. So this is, of course, extra important, and we have done a lot of due diligence on that. But I want to insist that in the long run, the growth and the success of that plan is even more important.
Thank you, Benoît. We have a question, Guido, for you on: other than buybacks, what steps are you considering to reduce the NAV discount?
I, I wouldn't say that we've discussed it by now ad nauseam, but, I, I think the, the key points have been mentioned, mentioned here. Communication, indeed, is, is a key, key topic, but what we really need to do is, to deliver outsized, returns, and that's what we, we aim to do. So I think there's, there's not much more to, to add to that.
Thank you all very, very much. It's wonderful to be here with all of you, and I also want to thank everyone who has joined us through webcast, and we look forward continuing to deserve your trust. Thank you.