Welcome and thank you for joining Exor's Full Year 2023 Results Conference Call. Please note that the presentation materials and the related press release are available for download on Exor's website, www.exor.com, under the Investors and Media Financial Results section. Any forward-looking statements made during this call are covered by the Safe Harbor statement included in the presentation material. As a reminder, all participants are in listen-only mode. Later there will be a brief question-and-answer session. Please note that this conference is being recorded. At this time, I would like to turn the conference over to Exor's Chief Financial Officer, Guido de Boer. Sir, you may now begin.
Thank you, Nadia, and happy to present the 2023 results to you, especially because it was a busy but also a very successful year for Exor. Our NAV increased from EUR 28 billion- EUR 35 billion, one of the strongest performances we've seen in years, on the back in particular of Ferrari and Stellantis doing extremely well. Our debt position increased from a cash position of EUR 800 million- EUR 3.9 billion of net debt, delivering on the reinvestment plans that we had from the partner proceeds, in particular behind Philips, Clarivate, and the Lingotto funds. We also announced this morning an important change in our external reporting as we determined that Exor will be, as of 1st January, an investment entity under IFRS 10 and will change prospectively our reporting. A bit later I'll provide more details on what the exact impacts of that are.
We confirm the dividend of around EUR 100 million, and we will recommence shortly the remaining part of the EUR 1 billion buyback program that we announced in the middle of 2023. Moving to the next slide where we show EXO's performance on NAV per share compared to the MSCI, as well as our share price performance. It has been a very strong year indeed, both NAV per share up 33% as well as our share price, and that being almost double of the MSCI World Index. So we're obviously very pleased with this result in 2023, but more importantly, our strategy is to have long-term holdings and be a long-term compounder of results. So that's why we showed here also the performance both on share price and NAV per share relative to the MSCI since our inception as Exor in this form in 2009.
To illustrate also the value of compounding, if we would have invested in 2009 EUR 100 in the MSCI World Index, that would have delivered an investor 492 EUR. A good result, but having invested that in Exor would have delivered an investor 1,620 EUR, so three times the result. So even though the delta between the MSCI of 11.2 over that full period and the NAV per share of Exor of 18.6 is only 7.3, our continued outperformance over a long period really drives significant outperformance for our shareholders, which is in the end our driver of existence. Moving to slide 5 where we show these objectives again, also compared to the last 5 years, but we also show our KPIs, which are important for us as short-term more high-end factors or guardrails within which we operate.
One is that we always want to make sure that our cash flow generation is strong, giving us opportunities to reallocate funds where they deliver the best returns. Given the strong dividends that we receive, in particular from Stellantis and CNHI, that ratio is now 8.1 times. Another key holding ratio for us is our cash holding cost, where we aim to be in the top quartile of most efficient holding companies, and we set that target around 10 basis points, and we have been consistently well below that. The third one that we measure closely is our loan-to-value ratio. We believe in the value of having a certain level of debt to deliver increased returns, but moderately so. We're probably a bit above the peers in the holding industry, but well below what Standard & Poor's deems applicable for our rating.
This is a level where we're comfortable with going forward. Moving then to the main performance drivers to break down the composition of our gross asset value, both between where we've invested or monetized, as you can see in the line of cash in, and to illustrate where we've increased the value of our investment in the appreciation and depreciation line. As you see, the increase of around EUR 7 billion in GAV has principally come from the listed entities area, EUR 2.9 billion coming from the reinvestment of the partner proceeds behind Philips, and EUR 7.1 billion is the performance of our listed companies, with compliments to the strong delivery of both Ferrari and Stellantis.
Ferrari up EUR 4.7 billion in 2023 and Stellantis EUR 3.6 billion, and they've both continued that strong performance also in 2024. CNH retreated a bit with a EUR 1.4 billion decrease in value of our share.
Private companies have been fairly stable, and Lingotto is the other area where you've seen significant shifts. We indicated already earlier in our investment days our commitment to invest behind the Lingotto funds, and we did that for an amount of EUR 600 billion in 2023. And there you see the funds are starting to invest, so the majority of the funds are still in the ramping-up phase, having still cash positions, so just starting to deliver returns. But the more mature part of the portfolio has been doing very strongly, in particular the hedge funds that we have under the lead of Matteo, which delivered the bulk of the appreciation in Lingotto. So far for our performance drivers, and obviously can clarify further if you have any questions later on in the Q&A.
Moving to the net financial position, like I mentioned earlier, we started the year with a cash position of around EUR 800 million. Dividends came in for EUR 835 million from CNH and Stellantis principally. We invested for a total of EUR 4.4 billion, with Philips, Lingotto, and Clarivate being the most significant ones. We also returned significant capital to our shareholders, both the dividend at the level that we always do, but on top of that another EUR 1 billion in buybacks during the year. We're very pleased with returning capital in an efficient way because we think the discount is a good opportunity to increase our investment in our own portfolio and deliver NAV per share growth for the shareholders who want to stay, and people who want extra distributions can benefit in that way.
I think the mechanism that we chose of doing that through the tender offer has proven to be very efficient because on-market purchases would take around 2 years, we did in 2 weeks at basically no discount, and at the share price, which was at the time EUR 84, and we've seen the share price appreciate with 20% since, so delivering strong accretion for our shareholders and buying back 5.8% of our total market cap. Moving to our debt, we're very pleased that at the end of the year Standard & Poor's recognized both the strong financial position of Exor as well as the strong business performance of our portfolio and increased our rating to A-.
We took the opportunity of both the improved rating and the strong market conditions at the start of the year to do an early capital raise of initially EUR 500 million, but on the back of strong demand we upsized that to EUR 650 million for a rate of 3.75 and at very low spreads and a NIP close to zero, which gives us basically the cash in the bank with a positive carry so that we can refinance the bonds that will mature later in the year. With that, we continue to have a very well spread out maturity of bonds with a duration of approximately six years and very low financing cost trending around 2.5%.
So then moving to the change in external reporting that I mentioned earlier, given that Exor evolved over the past year significantly in terms of investment portfolio and also investment approach, we deemed that as of the 1st of January 2024 we fulfill all the criteria of an investment entity under IFRS 10, and we will prospectively change our external reporting. What does that effectively mean? On the accounting side it would mean that we will deconsolidate all our portfolio companies, so the companies that we currently account for as subsidiary or associate, and all those companies will be accounted for at fair value and the movement will flow through the P&L on a continued basis. And the only companies that will continue to consolidate are the subsidiaries that provide services to the investment entity. So that's principally what we define in our annual report as the holdings system.
So you'll see much clearer what is the operating cost of the holding system in our financial statements rather than that being mixed up with the cost or the balance sheet of our portfolio companies. We expect that that would lead to one-off positive P&L gain, which is obviously non-cash, of around EUR 12 billion, which accounts for the difference of the book value of the companies we currently consolidate and the fair market value, for which we'll disclose more detailed information in the half-year result of 2024. So for us, the key benefit is that our key metrics that we drive, like our gross and net asset value, will be audited rather than being alternative performance measures, and that our financial reports will also be much more concise, clear, and better aligned with how our stakeholders and, principally, you as well perceive, analyze, and evaluate Exor.
So in a nutshell, that new reporting will increase the consistency of what we provide externally and how we internally measure our performance, take decisions on capital allocations, and the KPIs that we also use in management incentives. So with that, that closes the formal part of the presentation, and happy to take any questions.
Thank you. We will now begin the question and answer session. If you have a question, please press star one one on your touch-tone phone. To withdraw a question, please press star one one again. Once again, if you have a question, please press star, then one one on your touch-tone phone. Now we're going to take our first question. The question comes from Martino De Ambroggi from Equita. Your line is open. Please ask your question.
Good morning, everybody, and thank you. My first question is on the firepower, just if you could update, considering the dividend inflows and the commitments, an update compared to your investor day's presentation. The second is on Lingotto in particular, just to understand what were the drivers leading from EUR 1.2 billion- EUR 2.1 billion, the fair value of Lingotto, separating what was the contribution in cash and what was the performance. You mentioned hedge funds, just if you may provide any additional color on the performance of the different product lines. A similar question on the venture lines, a ventures line, which grew from roughly grew by EUR 140 million, roughly, just to understand if it's because you added new investments or the performance of some of the assets in the portfolio.
The last one is on the holding costs, which were 46, if I remember correctly, EUR 46 million, if you provide a normalized level of holding costs going forward. Thank you.
Perfect. Thank you, Martino. And as always, good questions, which set the stage well. So in terms of firepower, basically nothing changed from the investor update that we did in November. That we still have around EUR 1.7 billion of cash, not spent yet but already allocated, principally towards Institut Mérieux for a bit below EUR 600 million, EUR 350 million towards Lingotto, and approximately EUR 400 million towards ventures and the remaining part of the buyback. So in that sense, we have fully allocated our cash proceeds that we have coming in, unless we sell something or if we would use increased debt, which we don't intend for now, that basically is the committed firepower.
Then next year we expect dividends to continue to be strong, so every year we'll have around EUR 900 million of cash inflows, and you can deduct from that the dividend and holding costs, and that provides you the amount we can on an ongoing basis without divestments reinvest annually. I hope that gives some clarity on firepower. If we look at the investment part in returns, basically on ventures, the EUR 140 million breaks down in approximately EUR 85 million coming from increased amounts that we invested in ventures, and the remainder for changes in the fair value of the portfolio. On the Lingotto side, I mentioned the numbers previously, and the grand majority of the EUR 300 million of fair value increase is coming from the long-only and the long-short funds that are managed by Matteo Scolari.
On holding costs, in the holding costs in this year, there is a one-off special award granted to the current chairman. If you would adjust for that, basically the 2023 net recurring general expenses are broadly in line with the previous year. Trending around that EUR 30 million is the long-term run rate that we expect to have. I hope that answered your questions, Martino.
Yep. Thank you, Guido.
Thank you. Now we're going to take our next question. Just give us a moment. And the next question comes from Alberto Villa from Intermonte. Your line is open. Please ask your question.
Good morning, and thanks for taking my questions. It's rather a question about the bridge of the net financial position as of today, starting from the end of 2023, to understand if there were additional investments in the first months of 2024, so Clarivate and others that can move significantly the net financial position. That's it. Thank you.
Yep. Perfect. Thanks, Alberto. No, so the key movements in net financial position, which are also publicly disclosed, are obviously the dividends that have come in, which you can all see, which have been even stronger than the ones we received in 2023. And the other significant move, I would say, is the bond issue that we've done. So I would say those are the key amounts. Clarivate is marginal, the stake that we bought in 2024. The key buildup had been done in 2023 already.
Thank you.
Thank you, Alberto.
Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone. Now we're going to take over next question. The next question comes online of Monica Bosia from Intesa Sanpaolo. Your line is open. Please ask your question.
Good morning, everyone, and thanks for taking my question. I have a follow-up on Martino's question on the firepower. So basically, Exor is keen to invest in healthcare, technology, and luxury. As things are, just your feeling, would you consider Exor exposure to the luxury sector as fair or maybe a bit overexposed? Just your feeling about this to understand which could be the next move of the company. And as for the luxury, still on the luxury, you have a stake in SHANG XIA . How do you see the outlook for luxury in China? And would you reconsider the strategy on SHANG XIA? Thank you very much.
Perfect. Thank you, Monica. Very good questions. So in terms of looking for further opportunities, we always are very diligent in making our investment selection. So that's a long process where we don't do anything rushed. So we're already now looking for where we're going to put the next significant amounts to use in 2024, but could also be in 2025. And we continue to do that across our stated focus sectors, so luxury, healthcare, and technology, and obviously remaining open for other opportunities. So it can be across those industries. We indicated these industries because that's areas where we have affinity with and we believe a strong knowledge where we can drive good returns, and also to focus our efforts. But in the end, it's about the individual investment opportunity and the returns that it can give us.
So whether the next investment will be in luxury or technology or healthcare or somewhere else, I would not be able to say. We continue to find luxury attractive, but it all depends on the opportunities that come into our way. So luxury in China, we continue to believe in the fundamental thesis behind SHANG XIA is that with the increasing wealth in China, the luxury market will continue to grow strongly, and consumers also will increasingly want to buy luxury products that originate from China rather than just from the Western world. And SHANG XIA provides there, I think, a unique proposition. But it's an investment that does take time. So we're closely following how that will do, and we monitor the situation closely.
Thank you. Thank you.
Thank you, Monica.
Thank you. Dear participants, as a reminder, if you wish to ask a question, please press star one one on your telephone keypad. Now we're going to take over next question. The question comes online of Martino De Ambroggi from Equita. Your line is open. Please ask your question.
Thank you. On the portfolio rotation, because the empirical evidence is that portfolio rotation may be beneficial for the discount to NAV. And in your case, buyback was not enough, even if it was quite large in size, but the discount is always, well, in excess of 40%. So my question is simply if there is anything that you could divest partially, totally, in order to crystallize some value over the next 12 months, obviously referring more to the unlisted assets rather than the listed ones. But I don't know if obviously, you cannot provide the name, but just to understand if there is something that is enough mature to start some portfolio rotation among the new investments.
No. No. Good question. And we evaluate our portfolio continuously on past performance, but also on the future returns that we expect from our companies. And on the basis of that, we decide whether we want to invest more in the company or maintain our position or divest. So for us, it's a continued process that we go through to assess portfolio rotation opportunities, both in increasing or decreasing our stakes. Obviously, we cannot say anything upfront. So if there is a transaction, we will announce that to the market immediately if material. So that's more from a conceptual perspective. And we look at what's best to drive NAV per share growth, either to hold an investment or to find a new opportunity that delivers better returns. So apologies for giving you a bit more generic answer, but can't go into any specific opportunities.
Yeah. I clearly understand. And so the discount in excess of 40%, apart from managing the net asset value upwards, buyback is the only action you are foreseeing.
Yeah. And for us also, good communication to shareholders is critical in that I think also the change in investment entity will give more clear insight in our financial performance. So I think all these things should help towards that. And in the end, it's also the market that needs to decide and has significant upside, I would say, in the Exor share price with this discount if it would return to more historical levels.
Okay. Thank you.
Thank you. Just give us a moment. Now we're going to take over next question. The next question comes online of Alberto Villa from Intermonte. Your line is open. Please ask your question.
Hi. I take the advantage for a follow-up. Coming to the change in the accounting, becoming an investment entity, surely will help us having a reporting that is more useful. I was wondering if there is any change towards the, let's say, the way you update the fair value of non-listed assets or anything that would change compared to what you are doing now when you present the NAV, or if it's just something that will be reflected more, let's say, fairly into the balance sheet but doesn't change anything from what you are already reporting today.
No. Good question. We found it always, also in the past, extremely important that we present a fair value that is the fair value. So also rather than only doing these kind of assessments internally of what is the fair value of our assets, we use for all our material non-public investments an external party that performs the valuation. So in that sense, I would not expect any significant changes in the methodology on how we value those companies. It does provide an extra layer of comfort that the auditors will also review, the gross asset value and net asset value, going forward.
Okay. Thank you.
Thank you. Dear participants, just a last reminder. If you wish to ask a question or just give us some kind of feedback, please press star one one on your telephone keypad. Now we're going to take over next question. The next question comes online of Stephan Simmross from Simmross Capital. Your line is open. Please ask your question.
Yes. Thank you very much for the opportunity to ask a question. My question is regarding Ferrari. We saw impressive company development, especially in the last 10, 8 years. So the share price is, I think, like tenfold. And of course, the earnings increased a lot, and now it's by far your biggest holding. But of course, we also saw that the multiples on Ferrari have, I think, doubled to around a P/E ratio of 50, where there's 25, I think, at the start of the listing. So in the future, would it be possible if this multiple expansion even increases, also that maybe you would distribute shares of Ferrari to Exor owners, or is the holding unrelated to the valuation of the company in the market?
Of course, I'm a great admirer, as everyone, of Ferrari, but of course, the valuation is not as cheap as it used to be. Thanks.
No. Good point. And not doing anything with the company, the same holds true more for a general statement that we have a portfolio review process where we look to each investment and whether to add shareholdings, maintain, or sell. So that is true for any of our companies. And we must say that, Ferrari, we don't get the mistake nowadays anymore that Ferrari is seen as a car company, but everybody recognizes it now for the luxury company that it is, and with that, in the premium segment of luxury. And I think the multiples now start reflecting that. And you've seen not only the multiples expand, but also the earnings to show continued strength. And we believe that the unique business dynamics of the company position Ferrari very well. So like you, we're obviously very pleased with how the company is doing.
Excuse me, Stefan. Any further questions?
No. Thanks. So thank you very much.
Thank you. There are no further questions for today. I would now like to hand the conference over to your speaker, Guido de Boer, for any closing remarks.
So, perfect. Thanks, Nadia. Thanks for hosting the call, and thanks for everybody who has joined for your time and your good questions. Look forward to joining you again at the half-year results, where we'll go more into our financial statements as per an investment entity, which hopefully will make your life easier and provide you more insightful financial statements. Thanks for your time, and wishing you all a good day. Thank you.
Thank you, ladies and gentlemen. This concludes today's conference. Thank you for participating. You may now all disconnect.