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 at www.exor.com under the Investors and Media Events and Presentation section. Any forward-looking statements Exor management makes are covered by the safe harbor statement included in the presentation materials. Please note that this conference is being recorded. As a reminder, all participants are in a listen-only mode. Later, there will be a brief question and answer session. To ask a question on the phone, please press star one and one and wait for your name to be announced. To withdraw your question, please press star one and one again. Alternatively, you may also send your written questions on the webcast at any time by typing them in the question box and click submit.
At this time, I would like to turn the conference over to your host, CEO John Elkann. Please go ahead.
Good morning, good afternoon, and good evening to all of you. Thank you for being here today with us. 2025 was a difficult year in many different ways for Exor and for our companies. It also has been a year that has helped us be more focused and be more resilient, which enables us as a company to be better prepared for another difficult year, which will be 2026. Today, we want to talk to you about our companies. We have less of them, and we have more in healthcare. We want to speak to you about Lingotto, who has reached a very important milestone in 2025, reaching $10 billion of assets under management driven by performance, which is exactly in line with our intentions of building an investment organization interested in performance, not in gathering assets.
Finally, our financials that on the back of disposals have provided us with a strong balance sheet and also the opportunity in 2025 of doing a large buyback of EUR 1 billion, which if you add to the ones that we've done in prior years, taking into account our large discount, has allowed us to buy up to close to 15% of our shares. Our portfolio today reflects the latest disposal, which is JD, which we were able to conclude and the money got wired yesterday. It reflects Exor as we move towards 2026, which would be one of less companies, where we'll be able to focus particularly on our larger ones. That's where I'd like to proceed. I'd like to start with Stellantis, who has been the one that has encountered both external difficulties and internal difficulties in the course of 2025.
It is resetting itself, and under the leadership of Antonio Filosa, it is addressing the many challenges that it's confronted with, both externally but also internally. We are getting to an important year in 2026 with the Capital Markets Day, where Stellantis, end of May, will present its future, where it intends to be very clear about how it will improve as a company and make sure that it is and will remain one of the leaders in what is a defining industry. Ferrari, on the other hand, has already spoke about its future in 2025 in the Capital Markets Day, where it is committed to growing, but growing in a way in which the uniqueness of what it does continues to be unique.
2026 is a defining year with the launch of the Ferrari Luce, the first-ever electric car, which will also happen end of May with the third act of the launch that started at the Capital Markets Day, presenting the technologies of the Ferrari Luce, which then had beginning of this year with the interiors and finally the final car end of May in Rome. I would like now to pass to my colleague, Benoît, to speak to you about Philips, which is a company in which we continued to invest in 2025 and today is, in terms of value, the second largest company for Exor.
Thank you, John. 2025 was the last year of the 2023-2025 plan that we underwrote in 2023 when we invested in Philips for the first time. It was good to see at the end of this plan the company delivering a strong performance, a solid performance with in particular a strong margin expansion, which is the result of the ambitious reorganization and productivity plans that have been launched by CEO Roy Jakobs. Second, we saw also in 2025, and it was long awaited, a peak in the order intake after years of moderate growth, and it is paving the way for a new momentum of the company. The stock price so far has not been following the performance, so we have decided to increase our stake last year.
To reach 19% economic growth. We were glad to see the company announcing earlier this year the new plan, the new three-year plan for 2026, 2028. After a phase where the focus was on execution and on exiting the quality crisis of the sleep and Respironics business. This is a renewed ambition for the company, which is now targeting mid-single digit sales growth and mid-teens profit margin. Of course, continuing the efforts that they launched on quality and productivity enhancement, but also accelerating in the delivery of new products fueled by AI and fueled by the high level of R&D that this company has always been part of. We are a happy shareholder of Philips, and we are looking forward to seeing their next progresses. Suzanne on CNH.
Thank you, Benoît. CNH had a challenging year in 2025 because of the downturn in the agricultural market, exacerbated of course, by some of the geopolitical events that have been going on, as well as some of the changes in tariffs. That is expected to continue into 2026, as already communicated by the company. At its Investor Day in May 2025, CNH presented its path to 2030, and we think this is very important because it includes a number of different measures that will strengthen the company and enable it to come out of this downturn in a strong way. One is expanding the margins of the company through the cycle, and an important part of that is addressing some of the quality issues that it needs to address within the company.
It is also looking to launch a series of new products, new technologies, in particular those around precision farming, which of course are very, very important for our customers, and also a focus on costs, in particular supply costs for the organization. The company has a lot to do, but it also has a lot to look forward to as it comes out of this cycle, given its tremendous lineup of products, both on the agriculture side and on the construction side. We look forward to continuing to be a shareholder in the company. I also want to take this moment to do an update on Iveco. This is an important moment for Iveco. Last year, we celebrated with Iveco the first 50 years of its history.
Last year we also agreed and are participating in two extraordinary transactions in relation to Iveco. The first of these is the sale of Iveco Defence to Leonardo. This is the Iveco Defence business, and this transaction closed on March 18th, with the expectation that the dividends will be distributed at the end of April. This transaction for Iveco Defence secures a future for the defense business within Iveco. Secures a future for it now with Leonardo, which will give it increased scale. The remainder of the business, which is the trucks, buses and engines business, will be combined with Tata Motors through a tender offer, which we're expecting to close at the end of the second quarter. The total valuation of both of these transactions will be EUR 5.3 billion.
I want to take this moment to thank the two CEOs that have led Iveco through the period since it was spun out of CNH back in 2022, Gerrit Marx and Olof Persson, and of course their management teams as well. We wish all parts of the Iveco business a very successful next 50 years within their new ownership. I now pass back to John.
Thank you, Suzanne, and it's also the opportunity for me to thank the leadership team and all their colleagues at Iveco and wish Iveco an important journey ahead as it opens for the new future with Leonardo and Tata. Coming back to Exor, if we look at our unlisted companies, they delivered mixed results. The good news is that our bigger companies in terms of value have performed better than our smaller ones. Welltec had an extraordinary year, while Shang Xia continued to have a difficult year. We expect the overall companies that we have as unlisted to present themselves in 2026 with strong plans ahead and continuing to do in aggregate well. I would like now to speak about Lingotto, which had a very important year in 2025.
Lingotto was founded in 2023 to really converge all the different investment activities that we were doing in PartnerRe and directly in Exor. We now no longer have any investments outside of our companies, which are the ones in which we are involved in their governance, and everything we do outside will be carried forward within the investment strategies of Lingotto, who today are four. Of these four, the one that has performed the best is the Intersection Fund, led by Matteo Scolari, and the overall aggregate returns of the four strategies have allowed Lingotto to reach $10 billion under management. What is encouraging is this has been driven by performance and it was really what we expected when we founded Lingotto. An organization, an investment management organization, where the principle is what the organization cares about.
Investing is what they do in order to grow through performance rather than gathering assets. The good news is on the interest of specific parties, which we've been very selective in allowing to invest alongside us, the quality of the investors and also the quality of what their mandate is, of which most are linked to societal causes, are encouraging to see how we have alongside us very capable investors which invest for important causes. I would like now to pass it to Guido to walk you through our financials.
Thank you, John. On this slide, we recap what John, Suzanne, and Benoît mentioned previously. Our NAV per share started the year at 178, the biggest movers in a negative sense were three of our largest companies, Ferrari, Stellantis, and CNH, contributing in total for a EUR 25 per share decline in our NAV per share. This was partly offset by decent performance of our other companies, as John just highlighted. An outstanding performance at Lingotto, going up 40% in the year. In addition, we invested EUR 1 billion in buybacks at over 50% discount, which contributed for 0.7 EUR per share to our NAV per share. Overall, we ended at 164.4, so down for the year.
If we look at our objectives, which are twofold, the first one is a relative performance metric where we look at NAV per share versus the MSCI World Index, and the second one is an absolute performance measure, total shareholder return. To first go to the relative one. In 2024, we actually had a pretty good year at 9% NAV per share growth at a very challenging benchmark, where the Magnificent Seven did great and the MSCI went up by 25%. In 2025, we actually had a much easier comparable because those similar seven companies did not perform as well. We actually declined in NAV per share as I just showed you. On the back of an increase in the discount, our total shareholder return is below our NAV per share growth.
Moving to the measures that we track every year to make sure we operate in an efficient and disciplined way. The first one we track is free cash flow over dividend as a measure of the financial health that we have in terms of cash flows. That is still at a very healthy level at almost 6x , notwithstanding a decline in the dividend of Stellantis. Management cost over GAV, so an indication of how efficiently we manage our overhead is world-class. It went up largely driven by the decrease in GAV, increasing it as a percentage. Loan to value, which measures how aggressively we are levered, is down to 6.9%.
Notwithstanding the reduction in GAV, and that's primarily because we realized EUR 3 billion of proceeds from the sale of Ferrari shares. We reinvested that partially, but we also increased our cash position. We're in a healthy place there. If we look at our balance sheet, which is critical in these turbulent times, we are very strong. Our loan to value ratio is at 6.9%. Our bond maturities are very well spread out. We refinanced EUR 600 million in 2025, and now that has a maturity in 2035. We have a payment coming up of $170 million of a private placement which we can finance out of our cash position.
On top of this low repayment requirement in the coming years, we have a EUR 1.1 billion credit facility which we extended and doubled in the year. We have a EUR 1.4 billion cash position as of December 2025. In a very healthy position indeed. These are the financial slides that I would like to present, and I want to hand over to John for the concluding slides.
Thank you, Guido. We enter 2026 with momentum. We have to complete the transactions that we have announced. On the back of those, as Guido mentioned, we will have been strengthening our balance sheet with close to EUR 3 billion additional resources, and if we look at the returns of what we have been divesting, we're speaking about 1.4x on cost. Now, in moments like the ones we are living, which are uncertain times, what is key is to have liquidity and preserve capital. We feel that having close to EUR 4 billion as we conduct and conclude the transactions that I described, puts Exor in a very strong position in an uncertain moment of time. I would like to conclude by giving you which are the priorities that we have as a company.
We want to focus particularly on our larger companies because that's where we believe the greatest value is. We want to continue to simplify our portfolio by conducting to closure the transactions that we have announced and continue to divest from our other assets. We are committed to a strong balance sheet, which is even more valuable in moments like the ones we are living, and be ready to deploy capital with discipline when the time is right. I would like to thank you all for your commitment. I would like to thank you all for believing in Exor. We realize that 2025 was a difficult year on the back of a difficult year that 2024 was. We are also very aware that the environment in which we find ourselves is uncertain in 2026.
We do feel that the last two years have strengthened us, and we enter this difficult year stronger than we were in the last two years. This is why I wanted to conclude with the quote that I have at the end of our letter, which I deeply believe is one of the strength that we have as an organization. Thank you, and we look forward to answering your many questions.
Thank you. We are now going to proceed with our first question. The questions come from the line of Monica Bosio from Intesa Sanpaolo. Please ask your question.
Good morning, everyone. Good afternoon, everyone. I have basically two, three questions. The first one is obviously, cash is king in this tough environment. But maybe should we assume that no deal will be announced across the entire 2026 and that the timeframe will be longer? The last conference call, the company clearly stated its interest for three main sectors, the healthcare, the luxury, and the technology. With no clear priority, are still these the sector where the company wants to invest or maybe something has changed in the selection list? Another question is on deployment of the cash. Following the EUR 1 billion buyback in 2025, I was wondering if the company is willing to execute another buyback program in the future.
If yes, could the buyback be taken into consideration jointly with the new investments or could it be considered only in case no significant investment opportunities arise? Thank you.
Grazie, Monica. Those were all incredible questions. The timing is really linked to making sure that we find the opportune investment. I think that in times like the ones we're living, on one side, one needs to be prudent, on the other side, one needs to be patient. We want to make sure that we are sufficiently patient to capture the best possible opportunity. In terms of interest in sectors, we remain convinced that the sectors that you mentioned are interesting sectors, technology, luxury, and healthcare, with interesting valuations. We also think that we should be open to other sectors and not preclude ourselves better opportunities if we were to find them.
We also think that the companies that we own within the sectors in which we're present remain interesting, which is the reason why we have deployed money in 2025 in Philips and bioMérieux. If you add our investment in Institut Mérieux plus bioMérieux, it is de facto our fifth largest investment today, the fifth most largest company, if you combine Institut Mérieux with bioMérieux. In terms of buyback, as I mentioned, we have been aggressively buying back shares, EUR 2.5 billion in the last years, which is approximately close to 15% of our capital. With wider discounts, which we look at very favorably because they are the opportunity to do buybacks, which is a way to invest in ourselves, are opportunities that, of course, we will continue to look and look with discipline.
As of now, we believe that, as you said, cash is king, and it is a moment where making sure that we do have a fortress balance sheet is important. That is also the case for our companies. We believe that our companies are all with very strong balance sheets, which is the most important thing when you do enter in uncertain times of, as we have learned in the past. As much as I feel bad about 2024 and 2025, I also realize that they have helped us both at Exor in our companies to enter these uncertain times much stronger.
Thank you very much, John. Very clear.
Grazie, Monica.
Thank you. We are now going to proceed with our next question. The question comes from the line Martino De Ambroggi from Equita SIM. Please ask your question.
Thank you.
You must be happy about Iveco.
No, not anymore. Thank you. The first question is on Lingotto. Could you elaborate on what is the strategy going ahead? I don't know if it's possible just to have a fair value, current and fair value considering what happened in the past few weeks in the market turmoil. I don't know if you have an indication you can provide. The second is on the additional divestitures, because if I understood correctly, you were talking about more divestitures. Is there any clue on what could be a moving part going ahead?
Third, I know I repeat basically every year the same question, but now it's quite a long time with the discount to net asset value well in excess of 50%, and this morning even much higher. What are the three main reasons justifying such a high discount in your view? Your personal impression. Last, the environment is getting worse and worse. Could you provide us an update on your view on the Stellantis environment and risks considering what is going to happen? Thank you.
There's a lot of questions with you. Lingotto, the strategy is very much the one that was stated in the letter that I wrote as the founder of Lingotto in 2023. This is an organization that wants to attract exceptional investors and make sure that they can do what they love, which is investing. We have four distinct strategies, as we have described in the past, and those remain consistent with what the strategies are. Which allows us to have a diversified sets of strategies which are different from what we do directly as Exor, and it allows the right discipline also being able to have selectively third-party capital from, as I mentioned before, very solid investors. In terms of the recent events, we don't comment on where we stand on mark to market.
If you look at the opportunity of the discount, we actually have viewed that in a positive way because it has allowed us to buy back shares as we've done in the past. I think that it is important to stress that in moments of uncertainty, you're better off being patient than rushing. Which is why for any capital allocation, is it in buying our own companies, investing more in Lingotto strategies, investing in a new company or doing buybacks, we remain prudent but studious of what would be the different alternatives. Stellantis was able to raise through a hybrid issuance which increased already a strong balance sheet, and the overall execution that is being carried forward is on the right track.
Giving today any further information on Stellantis is not desirable because we are, as you know, at the end of May, we will be attending the Capital Markets Day of Stellantis. Thank you, Ambroggi.
We are now going to proceed with our next question. The questions come from the line of Luuk van Beek from Degroof Petercam. Please ask your question.
Yes. I have two questions. First of all, have you reviewed your portfolio for the potential impact of higher energy prices and any other things that are happening in the world, to see the exposure and the risk level? The second question is on the discount to NAV. Do you consider to take any measures other than just executing your strategy and delivering and trusting on that reducing the discount?
It's premature to actually see the impact of energy prices on the inflationary pressures. That is definitely something that our companies are working actively on understanding the inflationary pressures that are happening and what type of impact that will have on some of their cost structure. We believe that the discount is actually an opportunity, and that's something that we have been able to capture in the past.
Okay. Thank you.
We are now going to proceed with our next question. The questions come from the line of Alberto Villa from Intermonte SIM. Please ask your question.
Hi. Good afternoon, and thanks for taking my questions. Actually, first of all, congratulations for the annual report. It's very clear and very nice also to read. Congratulations to the team. Secondly, going back to Lingotto, it's now more than 11% of your GAV, thanks to the performance. Looking at the composition of the investments, the vast majority, 70% is the Intersection Strategy. The public investment that had a great 2025. I was wondering if in the future you expect to maybe take advantage of the performance to reduce a little bit the exposure to Lingotto or maybe to shift a little bit more into the other strategies.
How do you feel about private markets. There have been a lot of rumors about the outlook for these asset classes, especially in the U.S. Wondering if you want to share with us your thoughts on that. Thank you very much.
Thank you. I will, with Guido, convey your message on our annual report. There was a lot of work in doing it, so our colleagues will be very happy that you appreciated it. Lingotto is made of different strategies. We committed in 2022 on the back of the disposal of PartnerRe, EUR 6.5 billion, which had been divided EUR 5 billion into one large investment and into three to five smaller investments. We executed that with Philips being the large investment and Lifenet, TagEnergy, Clarivate, and Institut Mérieux being four smaller investments. While EUR 1.5 billion would have been deployed in investments which back then were Lingotto strategies and ventures. That has been done.
We've also said that as we would be realizing the investment in what used to be Exor Ventures, now managed by O ra, we would be recycling it within the strategies of Lingotto. The actual exercise that we do internally, the portfolio review, is exactly meant on one side to try and see how we think about what we own and the opportunity ahead. As of now, we're not considering allocating more capital to Lingotto strategies, but equally we're not considering reducing our exposure to Lingotto strategy.
Thank you. Any thoughts about the private markets situation?
In credit?
Yeah.
Luckily, we were not exposed to the credit market, and we are increasing our net cash position. The actual environment, as you know, is very tight.
Okay, thanks.
We are now going to proceed with our next question. The question comes from the line of Nicolas Gaudet from Alex.Co Capital. Please ask your question.
Yeah, hi. Sorry to come back to the discount theme. I mean, the discount today is such that the shares are at $0.44 on the dollar, which means if you invest $100 in your share, it's $125 of value and actually probably much more because the shares are depressed in the portfolio too. Obviously compared to that, it's a high bar for the acquisition of a new company here. I guess, is there room to do both?
In the sense you're mentioning a firepower of $3.5 billion for an acquisition, but why not return, say, $1 billion here and now and then do a $2.5 billion acquisition or something along those lines? Why is there any, you know, why can't both be done at the same time, I guess? 'Cause that would certainly go a long way to create NAV per share, which is the objective at the end for shareholders.
As I mentioned, we haven't committed to no allocation as we speak. What we have committed to is to make sure that we have a strong balance sheet and we have liquidity. As it pertains to how we will invest it, everything is open and we will make sure that we will be disciplined in how we proceed.
Thank you.
Thank you.
As a reminder to ask a question on the phone, please press star one and one and wait for your name to be announced. To withdraw your question, please press star one and one again. If you wish to ask questions via the webcast, please type them in the question box and click submit. Please stand by while we compile the Q&A roster. We are now going to proceed with our next question. The question comes from the line of Andrea Balloni from Mediobanca. Please ask your question.
Hi, yes, good afternoon, and thanks for taking my question. I have a couple. My first one is on the potential share buyback. I understand the reason why this year we are pretty cautious. What could trigger a different decision from a macro standpoint over the rest of the year? What would you consider to be a potential positive catalyst or trigger to restart eventually a share buyback program? My second question is on the potential investment that you are considering. You have mentioned a relevant size and also a material stake that may be taken by Exor. Yet, are you scouting among the listed companies, such as in the case of Philips, or should we expect an investment in private companies? Thank you.
Those are very good questions. On the first one, today we have compounding uncertainties. We have uncertainties around the overall commerce that has been triggered by changes between tariffs and regulations. We have uncertainties linked to conflicts that are happening in different parts of the world. We have uncertainties linked to markets that are moving in different directions. And finally, we have uncertainties on the deployment of a substantial new technology, which is AI, which has the power of fire or electricity, hence going to impact in many ways the way in which companies operate, both in what they do and how they do it. This is an environment in which we believe that it's important to be prudent and patient in order to really make sure that we can take the best out of it. I remain optimistic about the future of Exor and our companies.
In some ways, having had to go through very difficult internal and external situations in the course of 2024 and 2025 equipped us well to what is ahead. In terms of what are we looking for, we believe that Philips is a good example of the type of companies that Exor would be a good owner of. That is a function of three things. One, size. We have said last year that we'd like to deploy more than 5% in one company. Second, we think that public markets offer interesting opportunities. We believe that companies that have a large shareholder or a reference shareholder empirically have proven to perform better within their industry or within an index.
Third, we think that the opportunity of sectors where some of these changes that we were describing before can lead to improvement in these companies are all factors that we think describe Philips as a good example. As of now, we have been, as Benoît mentioned, very happily involved and the outcomes so far have been good for the company and for Exor.
Thank you. A follow-up, please. Would you consider to invest a part of this amount of firepower in some of the investment you already have in portfolio? I'm thinking about Stellantis, Ferrari, and other companies which had a very bad trend recently. I was wondering if you might consider to increase your stake.
As I mentioned before, that's a very good question. That's why today, making firm commitments of capital, is where I'd like to be prudent and patient because where would we invest? We'd invest in our companies. We know them well. That's what we did last year in Philips and bioMérieux. We would invest in Lingotto strategies. As of now, I said there's no intention of doing that. We would invest in new opportunities, a new Philips, or we would be investing in ourselves through a buyback, which as most of you have told us, is definitely very attractive, and we would agree with that. We think that the bigger the discount is, the more attractive it is. We have been quite deliberate and decisive in doing that over the last years.
Today, we want to make sure about two things. One, are we equipping Exor and our companies to go through turbulent times? We believe so. Secondly, are we sufficiently patient to try and understand what is happening in order to be able to underwrite within those four possible allocations of capital what is the one where we as an organization and a board feel that that's the best usage of capital, which we want to be disciplined in doing in the best interest of our shareholders.
Thank you.
Thank you. This concludes the question and answer session on the phone. I will now hand over for the written questions.
We have a question from ING, which is about the economics of our investment in Lingotto and how Exor benefits. I will pass it to Guido.
Thank you, John. We are an investor in Lingotto's funds. Through that funds, we receive, you know, the returns after performance fees. What helps us is that we also own the asset manager. We have co-investors in Covéa and many others that help share the cost of the infrastructure. In that way, it makes for us a very efficient way to invest behind some of the most talented investors in the world. I hope that answers your question. There were some follow-up questions from another person on the assets under management for Lingotto. Would you like to take that or shall I? I wouldn't say that there is a maximum in terms of assets under management for Lingotto as a whole.
For individual strategies there are, and they're depending on the type of strategy. For us, what is key is that like John mentioned earlier, the objective for Lingotto not to be an asset gatherer, but an investment manager that delivers outstanding performance. We will be very cautious that we don't grow the capital too much that it goes at the expense of performance. That is maybe a bit more philosophical answer, but I think that is critical behind our thinking on assets under management for Lingotto. Those were the questions that we had on the webcast. If there's nothing else, or I don't know if you want to make any further remarks, John.
Thank you, Guido. Thank you all. We'll make sure to make 2026 the best possible year out of very uncertain and difficult circumstances. Thank you.
Thank you all for participating in our disconnect line. Thank you.