Exor N.V. (AMS:EXO)

Investor Day 2019

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Nov 21, 2019

Thank you all for being here. I'm also very happy that we have joining with us some of our former colleagues, of which many are in the different companies of Exfor. And they've been a big part of what has been done and achieved in this last decade, which is the 1st decade of XOR in its current configuration, which was the result of work of simplification that we've been doing in getting to 1 sole holding company, which XOR is today. We wanted to start by giving you a view of what has happened in this decade, but mostly being very grateful to all of our shareholders for the trust that they've given us in what were very difficult circumstances back then. As you know, our focus in terms of measuring our performance is our NAV per share that we compare to the MSCI World Index. We've been able to succeed in meeting our objective over this past decade where we have been. If you look in aggregate, the average of our NAV per share has been of 18.9% versus the MSCI world of 10.8%. This has translated, which is more meaningful to you, into a strong performance of our share price. And if you look in terms of measuring a decade from March to March, our share appreciation plus dividend, we are close to 10 times what we were back in March 2009. So in effect, our shareholders like you who have trusted us have been rewarded and we are very grateful for your trust and really grateful to everyone here who has been able to achieve these results. If we try and look at how we got to these results, first of all, we had a big work done in terms of structure and scope of Exor. In fact, if we look back 10 years ago, 3 out of the 4 terms of value biggest companies that we had have been sold. We've also changed in terms of close to half of the capital then was concentrated in companies that we controlled of which we were the reference or the largest shareholder. We now have close to all our companies of which we are the largest reference or controlling shareholder. We have maintained a regular and growing dividend and have allocated additional resources through buybacks during this last decade, investing in ourselves in our companies and have, thanks to the great job that Enrico Villano and his team have done, managed always very carefully overall our gross debt. But our businesses to our companies have profoundly changed over the last decade. Fiat, who was a very, very large and troubled industrial conglomerate decade ago, thanks to the extraordinary leadership of Sergio Matcone, was transformed into the 3 leading companies in their own field FCA, Ferrari and CNHI and now CNHI and Suzanne who's chairing CNHI is in the midst of changing configuration transforming itself into 2 leaders in on road and off road. We changed the mix of business from a geographical standpoint. So if you looked at the aggregate revenue of our companies 10 years ago, 2 thirds of our revenues was generated here in Europe. Today, it's less than a third. And if you look at the key metrics of our companies both from the financial performances, but also the balance sheet, they've been able to achieve significant operational and financial improvement. But we're not really here to celebrate what we've done. We are proud of it, but we're all more interested in what's going to happen ahead. And it's been a very long exercise that we've done internally with all together to try and really distill and understand what our culture is about. Because as we look at the future and if we reflect on our results and if we reflect on the journey that we've had that this year, Fiat, where it all started, turns 120 years old, what really has been the main thread and the main reason of our performances is really our culture. So in order to do that, we've been very clear that our culture is a combination of entrepreneurial spirit and financial discipline, which really describes what we have achieved. And as we've been spending more time on these aspects and looking at what we've done, at what we what others have been doing, we really felt that it's very important to take this opportunity to strongly believe that as we become larger and as our companies develop, we need to be more clear about our purpose. And the purpose of XR is to build great companies. And what we've tried to be very clear about is that on one side to build is about making sure that the elements that make a company great, which is fundamentally how companies are run, what they believe in and how they're governed, but also what they aspire of becoming. And if you define and that's how we define that greatness, it's really about performing to the highest standards in what you do, making sure that you're distinctive, acting in a way in which you're responsible. And this is more and more important today, but it's always been part of how we've conducted business in the past and be always looking at how you renew and change, because one can get incredibly excited about new ventures. But reality is that we've been associated with companies who have more than 100 years old and within their journey have been able to renew, to change, to adapt. And there's a lot to be said about how important that is. We've also tried to define more clearly what we stand for as an organization and what we want people with whom we are associated and with whom we will work in X4 as partners and in our companies to stand for. And we felt that one of the big strengths going back to the combination of entrepreneurial spirit and financial discipline is being able to have a strength in dualities. And I won't go through all of these and we've tried to make them self explanatory sufficiently self explanatory. But if you take the first one, we are ambitious. We set ambitious goals for ourselves. So we want to as an organization for our companies and what we do, do really well, but we want to stay grounded. And we think it's an incredibly important prerequisite as you achieve success. And you can look at some of our companies, for example, Uventus, who has achieved success in its fields and that's a more it's a very shared among spend example of it. You maintain success if you continue to think about how you are successful in the future, which we believe is about staying humble. Or the last one, patience and drive. We think that you need to be patient and give time to time, but that doesn't mean that you should not take actions or you should not do what has to be done. So these values are very much a reflection of what believe is important for us, but also who we associate ourselves with. A clear example of how we actually make it work And if you recall the call we did last year, we said that our objective was to work on our culture, but also on our governance framework. And we've done a lot on our governance framework and it's being primarily led by Suzanne and she'll give you a life example of it. In ensuring that we have the right structure, we have the right people, we have the right process, because ultimately, the combination of that is what ends up to have and to generate outperformance. And this is something that we are in the midst of doing more work on. And as our companies have changed leaders in the last 12, 18 months and as we have our boards who are changing, we're going to give a much more consistent around making sure that our purposes and our values and that our companies themselves as they define more clearly their purpose and their values and the people who lead them and the governance structure that enable them and who works with them to be successful are consistent and aligned. This is also very important for as we are able in these years to generate more resources and we think how we will invest these resources and we can invest them as we have traditionally by buying companies, which is what we will continue to do. And as we think about buying companies, we want to make sure that we buy companies that are or potentially will become great. And the lenses in addition to making sure we do the right rigorous work on financial criteria, on business criteria are really linked to understanding. We want to make sure we understand where we invest. And this is not only for the companies we acquire. My colleagues Matteo, who runs our financial investments, Ornoam, who runs seeds, applied similar lenses. It's about people, as we discussed. Success is about the right people and value. We want to make sure that we fundamentally understand the value of the companies or the investments that we do. We are now going to give you examples of this. And before we do and Suzanne tells you she's been involved and contributed in doing at CNHI, I just wanted to give you a quick update on where we stood on our largest companies, our big four companies, which are in terms of value, Partnere, Ferrari, SCA and CNHI. So if we look at the results of the 1st 9 months, we are in aggregate all these companies are achieving or more than achieving what they were expecting to deliver in terms of financial results for the 1st 9 months and they are all deleveraging by being able to generate all additional free cash flow. All of them have interesting things they are involved in. And just to try and be granular, Partnery is very much focused in strengthening its organization and is developing the life and health part of the business. What it is very concentrated is on the January renewal and to make sure that it stays disciplined in pricing. So it has defined clearly that it will not grow unless the pricing is right. Ferrari is delivering on the plan that it presented last year and it has clarified what it wants to achieve outside cars, which was the main topic of the Q3 earnings in addition to its earnings where it has very clear where it has defined a very clear path of how it looks at developing new areas of revenues and in doing that making sure that it's consistent by actually letting go some licenses and some revenue opportunities to strengthen the resulting revenue that will come from additional products and services than cars. FCA is involved in the PSA discussions, which are progressing positively and the level at which these conversations are going are such that I'm very confident that by the end of the year, we will get to an MoU binding, whilst the company will still be delivering on its 2019 numbers and we feel that as it was announced at the Q3 earnings that 2019 will be a strong year on the back of a very strong performance in North America where we have record margins as you know from our on it. But it's in a good path both in terms of direction that it gave to itself, achieving the results for the year in terms of net income and on path for the big transformation of separating into companies. So with this said, I think it's I'd like Suzanne to walk you through for a practical example of how we tie culture to what we're actually doing in our companies. Thank you very much, John. So what we thought we would do is take some of the things that John has just talked to you about and just show you how we've been applying them within CNHI because we thought that would be a very good example for you of how we operate as XOR. So what is the role of XOR that we have in relation to our companies? In describing this, I'm not going to get into the operational details of CNHI. We're actually very clear as XOR that our role is as a holding entity. The companies and the CEOs and the boards of our companies deal with the operational performance of the companies. But I would like to show you what we do at XOR level in terms of providing governance and direction for our companies and giving them the space in which they can do incredible things and turn themselves into great companies. Companies? And one thing that we've been thinking about is trying to define that a little bit more. And I think there's three reasons why if you're a company like CNHI being part of the portfolio of Exor is an interesting place to be. One thing is that we are as you know, we're very long term stable capital going back over 100 years. And in fact, CNHI started the roots of CNHI go right back to the roots of FCA. We also come with a very strong network, which we use very actively to create opportunities for our companies. And we provide support and challenge for our company's plans. The second thing is the way in which we empower our leaders to build great companies. So first of all, we put a huge priority, and John mentioned this before, on the people that we appoint to the key positions in our companies. So appointing Hubertus Muhlhauser as the new CEO of CNHI, which we did last year, was a very important decision for us and one that we took very, very carefully. Having found those leaders and having decided that we have confidence in those leaders, what we then want to do is to give them the space to do great things. And we do that by operating, as we call it, as a critical friend to those leaders. So we encourage them. We are critical. We will come in and look at the plans that they're putting in place. We will look at the organizations that they're putting in place. But they are leading their organizations, and we want to give them the space to do that. The other thing that we do is we make sure that our companies have a very strong culture in place and I'll take you through some of the work that's been done on that within CNHI. It needs the link to the XO culture, but it's not a duplication of the XO culture. That wouldn't be appropriate. We can't apply the XO culture wholesale to a reinsurance company, a football club and a tractor manufacturer. But it should echo our culture, the important elements of our culture. And diversity and inclusiveness, we think, is very, very important at the Board level and within the company. I was very pleased actually yesterday, CNHI was named by the Feet as one of the global companies for diversity and inclusiveness. On the right hand side, that's all very well. But the way in which we operate day to day or week to week, if you like, to make these companies or help these companies to become great is by building very effective boards, again, being very, very thoughtful about who we put on the boards, making sure we have the right diversity and skills and talent on those boards, making sure that we have the right management succession plans in place and then very actively playing a role as XOR within these companies. And we are active owners within these companies. So that's what we bring or how we operate within our companies. So let me then take you a little bit through the recent CNHI story. So what happened with CNHI? As you know, Hubertus Mulhauser was appointed as CEO last September. And one of the first things that we as a Board did and that I did as Chair of CNHI once he was in place is to initiate a strategy program for CNHI. And as a Board, we challenged Hubertus and his team to deliver 4 things from the plan that he was putting in place. We wanted superior stakeholder value. We wanted him to think about future opportunities, where all of his different industries are going to develop over the coming years. So in precision farming, all of the different changes around engine technology, all of that has to be built into a plan to create a sustainable company over time. It had to be something that would be executable across the cycle. And finally, we did want him to think about the portfolio. CNHI is a complicated company that operates in multiple different markets. And we wanted him to think about whether or not that made sense. The current portfolio footprint, did that make sense? Were the synergies sufficient to justify the complexity that we had? And that was the mandate that we as a board, and if you like, us as XOR, gave to the company when Hubertus came in as CEO. The other thing that we worked with Hubertus and with the company on was the set of values that sit within CNHI. And I referred to this before, and you can see these on the page here. And they're not identical to Exor's, but I think you will see some quite significant echoes of the XOR values within those of CNHI. So CNHI talks about entrepreneurship. We talk about being bold. They talk about having passion and being highly committed to delivering ambitious goals. We talk about getting things done. They talk about a team spirit and diverse teams. I've talked about diversity. It's very important for us. And they talk about excellence and acting responsibly. And we talk about acting responsibly as well. And as you probably know, CNHI has recently been named as the industry leader in the Dow Jones Industrial Index for Sustainability for the 9th consecutive year. It's something they take very, very seriously. So we helped and challenged the set of values that they were putting in place, but we don't insist that they mirror ours. We insist that they mesh with ours, but not that they mirror ours. They have to be suitable for the company. But we do believe that it's very important to have a set of values within each of our companies that we believe and they believe in and will be effective within their industry. So having done that, the team within CNHI, Hubertus and his leadership team, put together their 5 year plan, which we went through in some detail at the Capital Markets Day that CNHI had in September. And you can see in line with the challenge to be kind of bold, to deliver superior stakeholder value, to think about opportunities and execute across the cycle, this is a bold plan. And you can see some of the objectives here. So growing net sales over the next 5 years, that's 2019 to 2020 24 by 5%, some significant movement in the EBIT margin and really thinking about how well we are using the capital within the company. Those were all very important elements. It's important to say again, coming back to the XOR role in preparing this plan, we set the top down objectives, which I showed you before. The company developed their plan in a very bottom up way. Every bit of the company worked on what the correct plan was for their part of the company, whether that's construction vehicles or whether it's buses or whether it's trucks. That all came together. And then at a board level, we spent a lot of time challenging that plan and going through that plan and making sure we were comfortable with the plan. The plan is owned by the leadership team, but very much kind of challenged by us in our role within Exor and by the board more generally. And the plan is underpinned by a lot of operational detail. I mean, effectively, there are 3 different buckets of things that the company is doing. The company is doing a lot of things around growing, so new technologies, new products. It's doing a lot of things around simplification, taking out a lot of the SKUs that currently exist within the company, which had become quite diverse, thinking about things like operational footprint, optimizing the inventory, sourcing out the dealer network. And all of these pieces add up to the overall plan, which we challenged and then announced at the Capital Markets Day. So that is the result, if you like, of the challenge. But the other thing you'll remember that we asked Hubertus and the team to do was to think about the overall portfolio of CNHI. And this is a question which I know many investors have been asking about CNHI for quite a while. And at one level, the answer seems straightforward, which was, does it actually make sense to have all of the parts of the business that we have within the current portfolio? Does that make sense in the long term? We actually wanted to make sure we answered this question very thoroughly. It's not quite as simple a question as it might first appear. And we took 3 different lenses to it. So first of all, we looked at some of the strategic implications of organizing the company in different ways. And there are multiple different configurations of where different parts could go. So what are the competitive dynamics? What are other people in the industry doing? How are the industries evolving? What are the synergies not just today but in the future in terms of technologies and some of the innovative pressures that are facing the company. Secondly, we took an investor perspective. So what do investors like to see and what do they find helpful within these companies? And there is, as you know, a preference many investors have for clearer, purer play companies. And this is a company that sits across the ag sector and the truck sector and other sectors as well. And then thirdly, we looked at the obvious question of synergies and dissynergies. So if you start to pull this company apart, what are the synergies and dissynergies that you create? And the result of that thinking, which was a very detailed piece, was to say this company will make a lot of sense if we split it into 2 parts. 1 is the off highway business, which is the ag business, the construction vehicles business, the specialty vehicles business. And as you can see, that's about €15,600,000,000 and then an on highway business, which is the commercial vehicles and the powertrain, the engines business. Now there are some dis synergies of doing that. Perhaps the most complicated part of doing that is the engines business, the powertrain business, which will still supply engines for the off highway as well as the on highway. It's worth bearing in mind though that Fiat Powertrain, which is an extremely high performing business, at the moment sells a lot of its engines outside of CNHI, which it will continue to do. So we feel that we can manage that process very successfully over time. There will be some other dis synergies as well, particularly around things like back office, a little bit around plants, but those all feel kind of manageable. And I think, again, at the XOR level, our perspective is that we are very excited about these 2 companies that will be created, the on highway and the off highway. And I think already, we're beginning to see some of the parts of the future stories of these two companies. So you may have seen that on the off highway side, on the agriculture side, we have created something called AgXtend, which is starting to bring some very, very innovative new agricultural companies into the remit of CNHI. We have bought a company called AgDNA, which brings in a lot of new technology into the which we can put within the tractors. And very, very recently, we just announced that we bought K Line Implement, which is an implement company in Australia. We're starting to build I think is a very exciting off highway business. And I think you'll continue to see that grow and develop and shape itself. And then on the on highway side, we have a very exciting story around getting new technologies into trucks. We already have a very exciting gas story, LPG story around trucks where Iveco is already a leader. And as part of the announcement that we made at the Capital Markets Day, we announced an investment in Nikola Trucks, which is electric trucks, which we're very excited about. And we will be producing those trucks within Europe. So that the story for that part of the business is beginning to shape itself as well. So we believe that these will be 2 world leading companies. And again, coming back to the XOR level, we were very clear and we made this very clear at the point of the announcement that we are excited about remaining as the anchor shareholder of both of these companies going forward. So the timing, as you probably know, is that the spin will happen at the start of 2021. Being able to make all of that happen has depended very critically on a couple of things which John talked about earlier. I mean, first of all, making sure that we get the right management in place. So when unfortunately, we lost Sergio Marchioni in CNHI as well as in some of our other companies, we had to manage a relatively quick transition, and I was appointed as Chairperson. And I think that's one of the advantages of these companies being within a group is that we can act quite quickly to make management changes when that sort of thing happens. And let's hope it doesn't happen very often. We also led again relatively quickly to appoint a CEO for this business because unfortunately, that also happened at a point where we didn't have a CEO of the company. And I'm very excited about the CEO that we've put in place Hubertus Mulhauser, who comes with both strategy expertise from Arthur Delittle. He comes with agricultural expertise from the time that he spent at AGCO. And he comes with proven CEO expertise from the time that he spent at Welbilt. And I think all of those pieces of background are coming together. And then the other thing here is thinking about the overall organizational structure within our companies. And that's something else that we do focus on at Board level and at XOR level. We need to make sure that each of our companies is set up in a way that can deliver. And in the case of CNHI, that has meant streamlining the management team. We did have 23 senior leaders at the top level. We've taken that down to 13. We've clarified the accountability, so we have much, much clearer P and L accountability. We have also changed the delegation rights from chair to board, from board to organization. Those are the sorts of things that we worry about at Exor level. We worry we have the right plan, the right leadership and the right organizational structure within our company so that we can make sure that they deliver. And then finally, on governance. And governance is very important. It's probably the lever it's the lever that we use day to day to make sure that our companies are in the right on the right track. As John says, we've been doing a lot of thinking in the last year about best practice governance. We've gone out. We've talked to a lot of companies similar to ourselves about what they've learned about governance, what's most effective. We've read all the available literature as you might expect. And we have come up with a set of governance principles. I think you saw some of them on the earlier slide. In the case of CNHI, I just wanted to explain to you some of the things that we've actually done. So we have been making the board smaller, which is one of our beliefs. We believe smaller boards are more effective. You have a more open and honest and challenging discussion. So the CNHI Board has gone from 11 down to 9. And we have also added in some new functional expertise. Most recently, I'm delighted that we were able to add not only Alessandro, who's here today, but also Lorenzo Simonelli, the CEO of Baker Hughes, has joined the Board of CNHI. So we have a current acting CEO within the Board, which is very, very valuable. As you can imagine, we are currently in a process of recruiting new board members now because we're going to have 2 boards because we need a board of on road and off road. And as we do that, we're going to be doing that very mindful of diversity. And by diversity, I don't just mean men and women. I mean diversity in terms of educational backgrounds, sectoral backgrounds, nationality. There are multiple different dimensions of diversity. And the important thing, as John and I have discussed many times, is that within the boardroom, we want to see willing to challenge the status quo. And you do that by bringing people who don't all come from the same place. And we will make sure that we do that as we form these 2 new boards. And then the other thing that we've done is we've streamlined the committee structure. We've got a much more systematic set of board discussions and agendas. And all of that has been incredibly helpful, particularly given the weight of decision making that CNHI has gone through over the last 12 months. So to get that through the board, not only in an efficient way, but in a way that really allowed the board to challenge those decisions, has been very much helped by all of that. So I hope this has given you a little bit of an example within CNXI about how we operate at XOR level. So creating an environment where you can have a company that sets an ambitious plan that we will then hold them accountable to, appointing strong leaders and then giving them the space to act whilst acting as a critical friend to them, and making sure that we have the right governance in place so that we really oversee those companies both as they put those plans in place and then as they deliver them. So thank you, John. That was the bit of a summary of CNHI. Thank you. Thank you, Suzanne. Now, Enrico is going to walk you through a financial update. And as we said, one of the important achievements, managed our balance sheet, but also how rigorously he has been as within this decade we really transformed XOR from XOR SPA to XOR BV and how 3 years ago we had to go to being a startup. So restarting everything where we're now based in the Netherlands and the way Rico has been doing this and how he's made sure that as we transition from Italy to the Netherlands, everything in the company company functioned, worked and that we always made sure that we kept control of all the processes and our expenses. Thank you, John. Good afternoon. In the next few slides, I will illustrate, first of all, our approach to the debt management, our main financial objective and KPIs and finally, what we expect in terms of cash flow and available firepower in the next 3 years. Our approach to debt has been and will continue to be proactive, meaning that in normal condition, we keep our gross debt level relative to the value of our assets in a comfortable range between 20% 10%. While when a good opportunity presents itself, we are able to go above with a clear roadmap to reduce the LTV in a relatively short period of time. When we acquired Pernari, our ratio increased to around 28% and went back below 20% in the following few months. Thank you to the deleveraging action for disposal and thanks to the good performance of our companies. Today, we are below 10%. We think that a moderate and proactive use of the debt is consistent with our approach of managing capital efficiently. The characteristic of current debt markets provide the opportunity to further optimize our debt and we have taken advantage of those. We diversify source of financing, private public bonds, commercial paper, bank debt. We increased the average maturity of our debt, issuing 10, 15 and also 20 years notes. And finally, we have reduced our average weight cost of debt to 2.6 percent. As we continue to focus on managing our debts efficiently, having a strong rating remains 1 of our top priorities. Our main financial target remain unchanged. We stick to our performance in the MSCI World Index through the growth of our net asset value per share. We also measure ourselves through additional KPIs, which allow us to remain efficient in how we manage the company. We want to make sure that we generate a sufficient ordinary cash flow compared to the dividends that we pay to shareholders. We want to keep our costs compared to the value of our assets under control. And we want to monitor our debt compared to the value of our assets. We have been consistent in managing these KPIs and our objective. And in the last 3 years, we took 3 years average as a reference, we have been able to match and over perform actually our assets, our targets. And our peers. And if we compare ourselves with our peers, we have done the same. Our firepower in the next 3 years. Next 3 years, we expect to generate close to €2,000,000,000 of Firepower. We expect that our cash results will come from the cash that we expect to have at the year end in our books. The ordinary dividends that we expect to receive from our operating companies, net of financial and general expenses between 2020, 2022. We will use the cash available to continue to pay a stable dividend to our shareholder, has been always one of our key objectives. Reduce the amount of gross debt to €3,000,000,000 from the current €3,400,000,000 The remaining amount of around €2,000,000,000 represents the 5 power capacity that we expect in the next 3 years. Just in terms of being clear, what Enrico mentioned is excluding whatever proceeds we have from the FCA PSA transaction. So as the FCA PSA transaction were to complete of the 1.9, you would add 1.6, which means that by 2022, the adding to the €1,900,000,000 the total would be a €3,500,000,000 of capital to be deployed. If we look at what we'd like to do in the next 10 years and as we've discussed today with you, we will remain focused on building great companies. We think the companies we own have a lot of potential and there's a lot of work to be done. This is why both the culture the governance framework, which was one of the topics that we told you last year we were going to work on, remains key and key over this decade, especially as we acquire new companies. So our aim is to continue acquiring additional companies. We have added investments on the back of having the opportunity of investing part of the resources of Partner Re and Mateo manages between Partner Re, XOR and our resources now 1 point 5,000,000,000 in financial investments and equity concentrated equity portfolio. And and NOAM has invested up to now a $100,000,000 again of partner E exor and R resources in early stage. We've discussed with you last year how we were going to continue to work around family business and a lot of work has been put in family businesses being businesses controlled by families, but also expanding into And our colleague of ours here, Elion, has done a lot of work on a subset of those, which are owner operators companies. We believe some of our learnings here not only will enable us to be better owners of the companies we have, but potentially could also lead to some other investment ideas along what Matteo and Noam are doing. And we will remain financially disciplined as we venture in this decade and we will measure our performance by the metrics Henrico mentioned. Our objective stays and remains to outperform NAV per share versus the MSCI World Index. And we want to have a very clear control on our debt, on our free cash flow and on our cost. One area where we are doing more work in terms of being systematic is the area that is defined as ESG, environmental, social and governance. We have always been a responsible actor since our whole history. Suzanne is now leading across our companies a way of how we have a common threat and to make sure that each company will have their own priorities. But at Lexor, we have a good grasp of the subject matter and we are systematic about it. We are here today in what is the offices of the Agnelli Foundation, which now exists for more than 50 years and it's the leading foundation in Italy on the subject of education and a lot of what our companies are involved in partially also with the Agnelli Foundation, which is an independent body and independently supported by its own resources around the topic of education, which we believe to be in terms of our responsibility very important. But we just think that as it's becoming and as it should be a central point of attentions of investors and of companies, we want to make sure that we have a clear definition at Exor's level and that definition is shared and is consistent with our companies. And making sure that we do that is definitely an element as you've seen in our definition of great. We are launching today our new website. We've decided that we could gift ourselves for 10th anniversary a proper website. So you can be able to access all the information. It's been interesting to work on this website. What we wanted to say, how we wanted to say. Any feedback from all of you on how we can make it better will be very welcome. But the idea is really to be able to give to our investors, but also to our partners I'm really very happy that you are so many today and also happy for who is assisting the webcast in different places of the world because as our scope of activities has developed in the world, Our investor base has also developed in the world. We're very grateful for your support and are very happy to take any questions. And it's really fun to see X4 developing not in exactly the same way as Berkshire Hathaway. And I was hoping that you could share with us. It's also interesting to note that all of the companies that you own are based in Europe. They might be global businesses, but they're based in Europe. Maybe you can share with us what you've learned from Berkshire Hathaway, what you've sought to apply, but maybe also what you've sought not to apply perhaps because this is a European business, not an American business? Thank you. I think that we continuously seek to learn and we have learned a lot from Berkshire Hathaway and are very grateful also to them as we entered the reinsurance sector and being able to have better knowledge. And we always benefited going to practitioners as we try and learn about a subject matter. I think that our evolution from a European and an Italian base has in the world has been through the United States. And today in aggregate, the largest market for us is the United States. And so if you look also at how we are organized and how our organizations have evolved, it's been a very interesting way of working with different cultures. And if you were to look the scope of businesses that Berkshire Hathaway has, it's today still primarily a U. S. Mix of businesses. And the last since it was founded, the U. S. Has provided very interesting opportunities. And for us, the United States is being a market, which we have developed in all our companies and also directly in the last since probably mostly in the 60s, we've invested directly and in the last decade have had a substantial part of our business coming there. So I wouldn't want to stress any differences. I think that Berkshire Hathaway and other organizations have been organizations from which we learned a lot. I think that we have because of the opportunities that were presented to us to be able to enter new geographies, doubt going back to one of the points that Suzanne mentioned that we believe that diversity is a strength and it needs to be managed and that cultures which are homogeneous are easier. But we believe that cultures that can integrate differences are stronger. Thank you. Baloney, Mediobanca. Two questions. The first one is about your dividend policy. If I have understood correctly, you had mentioned about unexpected free cash flow of around EUR 1,900,000,000 over the next 3 years. And at the same time, you have also you also gave us a target of free cash flow above dividend paid by the holding. But if I calculate the current dividend distributed by XOR is around €100,000,000 So it looks to be pretty below the level of €1,900,000,000 free cash flow expected to be generated in 3 years. So I would like to have some more color about your dividend policy. Should we expect any potential extra dividend also in light of the extra dividend that you have cashed in from FCA and you could cash in next year after before the merger with Peugeot. My second question is about Patreri. In the past, some French press has rumored about potential interest in M and A for Parthener E? Is this something that you are really considering or is not in the agenda at all? And my very last question is about the truck business. We saw the intention to spin off truck from CNH. I would like to understand what do you expect about market consolidation in this industry? We are talking about very cyclical business, pretty crowded in my opinion, mainly Europe with TRATON just listed in the market and other market player which could come. So are you open to any potential M and A for truck? Thank you. Thank you. So if you read my shareholders' letter of this year, we are clear that we want to maintain a regular and growing dividend policy. And we've anticipated that we keep the dividend level from now to 22 at €100,000,000 So the 1.9 number is net of dividends. And we believe that it's important for us to pay a regular and growing dividend over time. But the opportunity set to invest and I think our shareholders would agree that we were better off continuing to invest at the returns we were able to achieve over this decade rather than distributing dividends. I've also written that if we were to have extraordinary distributions, we would prefer buybacks than extraordinary dividends, which we would do based on our assessment of the value of our companies, the value of XOR and the relative discount. But as we have a discount which can defer, we're basically by buying back our shares, buying depending on where the discount is, ourselves have what we think is interesting prices. We have completed a SEK300 1,000,000 buyback, as you know, which we completed this year. We're not today there isn't there aren't in our plans an additional buybacks today and we would rather focus our attentions in looking at acquisitions or investment opportunities. But again, we have proven that if it made sense for us to consider buying back our shares, we would definitely have that conversation with our Board. And as they have approved in the past and our shareholders have approved, we would look at that as a way of distributing more capital to our shareholders. Partner E, as I said, is very much focused on developing a life and health business, which is doing both by acquisitions. The largest acquisitions it did since we acquired it was Origin, which was a life and health business in Canada and organically. And we are now in the process of having the most important moment in time for the reinsurance industry, which is the January renewal. So the attention and focus is very much concentrated on what we can do there. In terms of what are the possible scenarios for CNHI on the back of the spin? I'd like maybe Susanne if you want to answer that. Yes. Sure. So I think we made clear at the Capital Markets Day that we were taking a very clear decision that we wanted to spin on road rather than to sell on road. And that's because we are very excited about the potential for that company and the equity story that is going to be built around that company. And indeed, the plan that the management team, as I described, has built up for both engines and for trucks, which will be part of that business. Once that business has spun, if we do receive interesting offers, we will, of course, as a board, look at those very, very seriously. It's an industry which is moving, so we certainly wouldn't ignore offers that came in, but nor are we looking particularly to sell. We're excited about the company and excited about its future potential within the portfolio. Thank you. Mani Cabazio from Intesa Sanpaolo. I don't know if I'm in the right place for the queue. Taking apart the current business, as for your acquisition strategy, can you comment a little bit on the areas where do you see more value and where do you plan to invest, both at a country level but especially on the diversification sectors, which are the sectors that you look that you see more interesting? So we think that around the industries in which we are and the adjacencies in the industries in which we are. So if you think about entertainment and media, if you look at capital goods, if you look at luxury, if you look at industrials, if you look at financial services, we would definitely have a knowledge base and a network, which is more conducive for us to understand. And as one of the lenses was around knowledge is where our attention will most likely go. We haven't devoted specific attention to trying to determine what would we look at as our next acquisition also because as Henrico mentioned, we were very much focused on deleveraging. And a lot of the effort has been to go from our gross debt level to where we want to end in 2022. So we are now in a situation where we will be starting to think about this as we enter 2020. So the process within XOR of reflecting and being able to answer to your question is something where time will be spent starting from next year. But we are in no hurry also because as we said, 2022 is really 2 years, 3 years from now. So we have time to be prepared and ready for the right opportunities. Martino Gernborgski, Equita. Still on the previous question for new investments. Should we expect larger deals like Partner Re? Or maybe you also did something like Weltec, so several smaller? This is the first question. The second is on Partner Re, just to check if the long term target that you mentioned in the previous Investor Day and was repeated in the calls is still there, if I remember correctly, 8%, 10% return on year over the cycle? And maybe it's not I understand it's not an easy question today. Go. Yes. But and I accept also no comment because it's possible. But looking at what happened yesterday with the GM issue, it would be strange if someone inside this room wouldn't ask anything about it. If it's possible to comment, but I understand if you don't want to comment it. Thank you. So let's start with the last. It came as a surprise to us, the filling that Jim did. Having worked on it over the night, there is nothing new that has appeared. As we stated in our press release, we believe that this will be treated in court that there's no grounds to what we are being accused of and we will defend ourselves vigorously. On a personal note, what I find very saddening is the accusations that are being made to Sergio Marchionne, which have no substance and to someone who's not here to defend himself. Now on Partner Re, when we met, you had Emmanuel and Mario present. We were discussing with Mario and Enrico the other day. One of the reasons why we've been able to deleverage is really the contribution of Partner E. And one of the reasons that we'll be able to build the firepower that we're looking at is Partner E. So we paid that close to 6.5 percent. We've at today, so without considering Q4, we have collected CAD 650,000,000 from partner. So basically 10% has already come back from a company that we effectively owned since 2017. In terms of what we were expecting in doing, we actually have achieved it in advance. The cost structure is from where we started, it is now 25% of costs out done. And in terms of the reorganizations of the investments, we are in the top quartile within the 2017 and 'eighteen were very difficult years within the industries, we performed at market. So Partner Re have been met within the circumstances and our targets of 8%, 10% within the cycle seem to us achievable. And we are very proud collectively of what PartnerRe has become and what it could become in the near term. It's a very important company for us. The fact that it's a private company means that there's less information on it compared to our other companies. And the fact that it operates in an industry which requires very specific knowledge and not particularly interesting compared to the other companies we have is one of the reasons why it's less known, but it's economic reality. If you look where we started to where it is now, it's substantially different. In terms of where do we look at deploying capital, I think that we want to make sure that most of the capital will be in companies that we are the largest reference or controlling shareholder. So that's going to be very important and especially because that's the way in which what our purpose is of building great companies can be applied through our involvement in governance and how we work with the leadership teams. What size will it be? I think that it's too early. We wouldn't want to ideally bigger than smaller, but we wouldn't want not to do a smaller company if we thought it had potential in terms of growth or if it operated in a very interesting niche. We are also going to deploy to investments. So what Matteo and Noam are doing and potentially other ideas. Welltec, we view it more as a minority investment. So more in line with investing alongside owner operators like is. So that could be an area that we would add to the investment areas as I mentioned before. Question from my side, Gabriela Gambarova with Banca Akros. The first one is on Comau. Comau was mentioned in June when you tried you made the attempt with Renault. And now again with PSA something that will come out from the ERCA perimeter and you will become if the deal is done, a direct shareholder of Comau. So I was wondering what are your thoughts about it? Do you see it as a possible strategic asset, something to nurture? Or you have a more, let's say, short term outlook on this? And the second question regards luxury. Clearly, your experience with Ferrari is very good, I guess. You announced Ferrari announced new initiatives also together with our money and so on. So I was wondering how strong is your appetite for luxury? And if you consider to act through Ferrari or directly possibly directly as Exor? Thank you. So great questions. Rafael Apapa, former colleague of ours is now CFO of Comau. I think she's more qualified to give you a real assessment of Comau, which has been a company within Fiat and FCA for many decades. We have worked in the last decade to be able to give a strong future for the companies who are not within the specific scope related to FCA of cars. And Comau is a company which we believe has an independent future, which is the reason why FCA has worked on the opportunity of spinning it. And that is something that we have discussed with PSA in order to make sure that Comau has the independent future that we think it can have and that the shareholders of FCA can benefit of that future. And we as Exor are going to ensure that going back to our purpose, we can make Comau a greater company than what it is. And no doubt that the automation sector at large, there is some confusion, especially around the analyst community of Comau being a robotics company, which is more of an automation company, has some robotics capabilities, but it's actually not the robotics companies. But if you look at the leading companies within the automation sector And if you look at the opportunity set of it, we believe that Comau in a different configuration that a spin could provide could develop in that area. Luxury is a sector that we have done a lot of work through Ferrari, especially as we've tried to think around the adjacencies within Ferrari. We've concluded that we wouldn't add to Ferrari. So Ferrari needs to develop Ferrari and it's a very strong brand as for example Hermes is versus building or buying companies within Ferrari. As I mentioned before, adjacencies are probably where we would be looking at if we were to make new acquisitions. Suzanne is on the Board of Chanel, which is another unique company like in terms of brand. So our knowledge base in the area is something that exists and the network exists. The valuations are very high. James Anderson from Beta Gifford. That was all fascinating. And firstly, I'd say congratulations on what you've achieved. You'll all be too modest, but some of the international comparisons you've mentioned, you've actually done way better than. So real congratulations on what you've achieved. I think many mentions and rightly of Sergio Marcioli, but linking it to your attention on culture, what are the cultural rather than strategic lessons that he taught you and that have endured? And secondly, could I just sort of link that to a question for Suzanne? How do you prevent your very rational and thoughtful principles from getting in a way from of the uniqueness of the companies in which you're investing? Thank you. Can you get just on the second one, which is a very good question. Can you give an example of what would worry you? This might apply in Noam's area, I guess, as well. And I think you've alluded to in some of your writings. I think founder driven companies are profoundly different in the way you have to handle them. And I'm not sure that any of us have got great answers structurally how you go about that, but it would be an example of what I worry about. I think so going back to a question asked to me and I think it's very pertinent. Sergio definitely had characteristics of similar characteristics of owner operators. And in my letter, I mentioned some of them as I spoke about him. And I think the duality concept which you've seen apply to some of our values, which we've described before, something we spent a lot of time, The difficulty and that's what I learned with Sergio and if I look at other situations is the equilibrium. So I think and there's this quote from Fitzgerald where first rate which I use where the way you measure first rate intelligence is having 2 opposite ideas in your head and still maintaining the ability of functioning. So I think James, the real difficulty is how you make sure that you get the right equilibrium of functioning. And when you look at strong business leaders, that's what they really do well that they can be in very strong tensions between many different subject can be very tough, but they can be incredibly kind too. The secret is not being able to do both is the ability of how you do both and when you're able to have the right attitude at the right moment. So that's the difference. So I think the difficult part and what I learned and what we need to make sure that as we go forward is that the values are just not and we've discussed this a lot internally. We have been working with these values and this is how we operate, but they need to be living. And the difficult thing is to avoid being too mechanical. And I think the real strength of people with whom we want to associate ourselves is ultimately how they're able of managing the duality. On the other hand, I think that the lens of people, which is one of the approaches that we will put in companies that will acquire investments that we will do is very important. So as we reflect on this with Matteo in terms of his own portfolio, if we reflect with Noam, there will be extraordinary people that we might not be compatible with. And that's where you need to be very clear around that compatibility. Did it answer the question? I found it really interesting to reflect on. I mean, there are no hard and fast rules in dealing with these brilliant people. Good afternoon. Maybe you want Suzanne to So I think it's a very good question because it actually gets back to the heart of how we operate at Exel. And when Enrico spoke, he spoke about the that we have a very small organization in terms of cost at Exor level. And that's not just a cost point. That is actually quite fundamental to the culture of how we operate. And I hope what came across when I described how we operate with CNHI is we are very active as owners within the governance, but we don't attempt to try and make the organizations in some way a kind of carbon copy of each other and nor would that be appropriate. So we do worry about some elements. So we worry about making sure we get the right people and making sure we have cultures within the companies that we feel comfortable with, which reflect our own but are not carbon copies of our own. We do pick up some themes like governance or like and this is going to be one now going forward ESG, where the companies, I should say, are already doing a lot, but they're doing a lot independently. And we want to see whether or not we can make more by bringing them together. But in most areas, we let the companies do what's right for the company. So we don't have any common approach to organizational structures. We don't put common functions across the companies. We don't try really to rotate people across the companies. These are independent companies that aspire to be great. And our job is to give them the space to do that without forcing commonality on to them. And I think that's very important and reflects very much the XOR culture, and that's why XOR is deliberately very small so that we don't start to go down that route. Good afternoon. My name is Robert Keras. Thank you for building the culture. I think we need more of that. Pertaining to Partnere, you mentioned a few things that what partner e can become. You talked about the €1,500,000,000 concentrated equity portfolio. I would be interested where do you see partnering 10 years? What could be the float? What could be the part that is invested in equities? And maybe can you give us a little bit of color what you mean by concentrated equity portfolio, just in general, how did this build and your time frame on that one? That would be more properly answered by Matteo. Well, in terms of concentration levels and the type of investments that we make, Roughly, I would say, 3 or 4 investments will constitute 80 close to 80% of the portfolio to date. I would say the top 3 represent 75% of the portfolio in the past. It was even higher than that. And we believe that's a real advantage because it really it ultimately pushes you to invest where you really have the best risk reward and when you have that fat pitch and not get too distracted by too many by too much of a long tail. And if you look in retrospect, our returns have been delivered precisely by those 3 big investments and the tail has actually detracted. In terms of where we might invest, I mean, in any we don't invest in the stock market. We invest in a market of stocks. And valuations look very high, but underneath the surface, there's always sectors that are out of favor, companies that are out of favor, it's misunderstood. And we and always there's always some debate. And we'll try to isolate the ones where the risk reward is the most compelling obviously, but really with a real focus on, I would say, minimizing the downside in case things don't work out the way you expect, which happens from time to time. I mean that's just the nature. I mean at the moment we invested as John mentioned 1,500,000,000. We could run substantially more than that without finding constraints either in terms of liquidity or bandwidth in terms of team. Good afternoon. It's Andrew Hollingworth from Holland Advisors. Am I? Okay. Hi there. Andrew Hollingworth from Holland Advisors. Just a couple of questions. The first is just in terms of the sort of acquisition criteria. Sorry, I'm over here. I hope I don't defend in saying that the sort of businesses that obviously you controlled in the past could be typified as being maybe asset heavy in need of significant restructuring and in need of a sort of a cultural change. And it feels like the businesses that you want to buy in the future are asset light, already a good culture, already maybe come with an owner manager and maybe has a sort of already a good runway of growth. Is that a fair certification? And if you are possibly likely to go back to the former list, under what circumstances might you might do that? And I have one more, if I may, and that's just on Partner Re. You've obviously achieved some fantastic things at Partner Re on all three drivers of OpEx, underwriting and return. It does feel a lot like that 8% to 10% target is just too prudent. Maybe look at it another way. You tell us in the NAV that it's independently valued, but is it independently valued with a look through to that 8% to 10% return? It feels like it is. On partner E, maybe Enrico can give you the process of how we of our valuation. Sure. I mean, in terms of valuation, as you mentioned, we use a third party in order to have a third valuation and this makes sense to us for different reasons, I think. From this point of view, I mean, we take care of the market. I mean, we start they start from the market and the multiple of the market. They take in account also the plan of the company. So is that I mean, we use a different method. We got a classic method in order to evaluate a company. You're mentioning is the return could be a little bit too conservative. This is your point. I mean this the 8%, 10% that we mentioned is longer cycle. So this is a little bit an average from this point of view. So we think that mean, we think that to be conservative is not a negative in this case. On the characteristics of the companies you mentioned are that they are expensive. And so I think that we will ultimately try and gauge value and try and get value at a good price. And generally in the companies that we will own seek to improve and be able to have levers that could make them more valuable. I don't think that necessarily we should exclude the ones that have similar characteristics as you described. It's just going to be harder, A, to find them at the right price, unless we have growth trajectories, which we're very confident that we're underwrite. And so what you enter at because of the growth that it has and because of our long term horizon would be different, but also what actual levers utilized and make them in making them even greater. So I would say that we will definitely look at many type of companies, but we'll still want to make sure that we're finding companies where we can pay a price where we're comfortable versus the value that the companies have, but that we also believe that that value can be enhanced through specific actions. Alberto Villa Termont, a couple of questions. Well, we are celebrating 10 years of XOR. So I wanted to ask you something that obviously is not so much discussed, which is the main shareholder of XOR. What has happened, the dynamics in the last 10 years in the Giovanni and Nelli and what we can expect to happen. So just to get more feeling and color from yourself, we don't have a lot of insights on that about what are the, let's say, the discussions, the request, the expectations at the parent company of Exor level. And if we can assume that the stability we have seen in the last years is going to continue also in the future, this may be helpful. That's a very good question. Giovanni Agnelli is the just for who doesn't know, is the company which is owned by my family and who owns 53% of Exor. I think that it is likely that as we go through this next decade and we will have different successions that we will have likely some of the family members that will want some liquidity events and we will be prepared for those liquidity events if they were needed and we will make sure that that's well explained to the market if those liquidity events were to entail that we should or need to sell some of our ownership of Exor. I would say that being Giovanna Nelis, the largest shareholder of Vexor, they've been happy that we have been able to buy within the last decade 10% of Giovanni Aniali's capital. So there is an ongoing system where we do provide liquidity for the shareholders, which is why I'm very confident and my family is in making sure that the ownership stability that XOR benefits will continue to benefit XOR. But I wouldn't exclude that we will have liquidity demands, which is a normal consequences of generations transitioning and of a larger shareholder base. If we're able to deliver as we have in terms of leadership team, they will be happy in 10 years as they are today, which is what we really are aiming for, for all of our shareholders, of which Giovanni and Henley is the largest one. Thank you. I have a second question that is on investments. We have had a lot of questions today. And from what I get from the presentation, you're telling us that you're not increasing the return to shareholders, keeping it stable or growing with dividends, no buybacks. You're building up a lot of firepower. So I'm assuming you believe there are opportunities for investments. We are in a strange world in which in many jurisdictions, interest rates are negative, in which there is a lot of liquidity and competition on us and private assets now, private equities, any kind of investors. So and you mentioned also ESG, and that sounds a little bit of an abused term nowadays. So I wanted to ask you, if you say in the next 2 or 3 years, I really believe that you can deploy all the firepower that you are going to build in the coming years also thanks to extraordinary dividends and so on? And if what is your approach to this ESG investment? So these are 2 very relevant questions. And by the way, we have one of our shareholders who's listening who asked similar question about how we feel about the opportunity set of deploying capital. I would answer in 2 ways. 1, we're seeing thanks to Matteo, to Noam, opportunities that exist. We feel that in terms of making a new acquisition of a company, we don't need to do it tomorrow. So we have time. A lot of time went by before we bought PartnerRe and many of you who have followed us remember that we were patient and we build up resources. So I'm not worried about the opportunity set for two reasons. 1, we're seeing opportunities in the investments and we have all the patience to make sure that we deploy the resources when we believe that the opportunity is right. In terms of ESG, it is something that has always been really part of what we have done. It is today and is having a big emphasis. And I agree with you that one has to be careful of what it implies and what it means, which is exactly the reason why we're trying to work on it being very thoughtful. And 1, just expressing Environmental, social and governance are all aspects with whom we have always been dealing and are part on the way we conduct business and we build great companies. We do not want to be in any boxes and view this as a compliance exercise. We want to just make sure that as we always operated in this fashion, it is clear and to be able to express that as Exfor and as our companies in order for it to be very, very clear rather than just an additional compliance burden that some could imagine or be perceived as such. Stephen Wood from Greenwood Investors. Thank you for having us. And what you've highlighted with the dualities, I think is incredibly enlightening and actually is the answer to ESG in and of itself actually. So thank you for this and sharing this to the world. I guess I just have you partially just answered the question. But if we think about I love Suzanne's comment about building these companies integrate and the whole team actually building each company into its own great business. But one, you own 100% of and you can actually use it to be a little bit selfish if you want. And that's partner of course. Mario outlined, I think it was in July, he is lowering the duration of the bond portfolio. And I think that if I love XOR, particularly this year, you've seen the benefit of a leverage bond portfolio working when cyclical investments don't work very well. So should you be actually increasing duration and using that as more of a portfolio hedge, because there's no minorities here? And then secondly, somewhat related to the cycle, how we're talking about when you're going to buy, if you're waiting for a cycle. Matteo, would you mind talking about how you apply the lens how you when you look at investments, how you also look at them as a potential buy and build for XOR and for Suzanne and the team to come in and how that how you interplay on utilizing your expertise with Suzanne's and cross paralleling that, if you don't mind? Answering the last point first. I would just say 2 comments. Maybe how we can potentially help Suzanne's team, but also how I can helped, which Yuri didn't ask, but I'm going to answer anyway by being part of this group. And which is, for instance, in particular, this whole work around governance and importance of leadership has actually been very has really taught me a lesson. And if I look back to what has worked and what has worked less well within our investment portfolio, some of it is really you can conduct back to good and bad leadership. And being part of this group, you get much, much more sensitive to that topic. I mean, we're all taught that you have to invest in good leaders. But I think it's being part of this group and having been exposed to this work that has happened has really increased my sensitivity to this particularly important point. And hopefully going forward, I'm going to avoid some missteps. No, on the other hand, the way we look at the market is quite different because I think we don't start from trying to look for great companies. We try we start the other way and we try to look for great investments and they don't necessarily always overlap. Obviously, the beauty is when you can find a great company, which is also a great investment, then you can at that point, you can sleep better at night and typically that great investment turns out to be a spectacular investment and plays out for a longer period still. At this point in the market, it's a peculiar market where the type of businesses that Susan's team looks at is most interested in and XOR looks most for are very, very expensive. So we're unlikely to be spending a lot of time in those particular areas. On the other hand, we're developing expertise in other parts of the market and maybe one day things will line up and some of these other sectors that we're studying will surface some opportunity which is compelling which is fits also Suzanna's portfolio. There has been some marginal situations we looked at together. Ultimately, they didn't tick all the boxes, so we didn't decide to act. But I think I'm quite I'm convinced that those opportunities will arise. And just to just be wait and be patient, which we can afford to be. So the so Partner Re has a chief investment officer. So it was a very accomplished leader who used to be the Chief Investment Officer of Generali and Alliance and a Board member of Partnere. And he is of the view that it's important to in today's environment, because the biggest chunk of the resources partner he has are in fixed income to lower the duration of it. And he has been able to find as he's done that an increased capital that can be deployed in other areas to find private opportunities, which relative shorter durations who are actually providing very interesting returns. And we believe that a lot of opportunities that also come directly to XOR, but not necessarily fit XOR are now being shared directly with Nikhil, where there are co investments opportunities both on the equity or the debt side. And in fact, Nikhil shares his office in London with Suzanne and Matteo. So that type of dialogue is very open and he is also in dialogue with Noam. So I do believe that we have a serendipitous opportunity as we look at what presents itself. And the really difficult part as we all know is ultimately making the right judgment. I think that we have been fortunate to create more opportunity set for us in this decade than what we had a decade ago. The real test will be to make sure we make ultimately the right decisions. Bart from Fixed Asset Management. Thank you for taking my question. Have you considered taking Partner A more towards Berkshire model investing significant part of float into the equity or private market? Are there any regulatory or capital constraints that prevent you due to that or simply not the way you want to develop and grow this business? Thank you. It's a good question. And you gave the answer. The insurance and reinsurance industry are very well regulated. So the way we've organized ourselves was to make sure that everything that we used to have in our balance sheet, which was more suited to Partner E is now being directly invested through Partnere and Partnere's capital is invested alongside our own resources with Matteo and with NOAM. So we believe that this is a more efficient way of doing it, which is very much within the regulatory constraints, but also very clear in terms of accountability of who makes the decisions. Real estate, which we used to do directly at extra level, which was under the responsibility of Verico has been shifted for example to Partner E because the balance sheet of Partner E or of a reinsurance company is very is better for those type of investments. So the way of thinking about it is we try and make sure that within the constraints we have, we can invest that capital for the best type of opportunity based also on capital charges that different asset classes have. Good afternoon. Massimo Vecchio from Weebanck. I have a question on Ferrari. The company clearly grew strongly after the IPO as you remove the self imposed limit on volumes. It will grow also in the current business plan by selling new products to new customers in new geographies. The question is, are there any talks within the board or at XO level as a major shareholder to how close you are to reach the limit of this growth and to saturate your niches? And what you would suggest to management when this and if this will happen? From your previous comment, it seems that you don't like growing Ferrari through acquisitions by Ferrari itself. Would you consider to use the knowledge that the company has in managing such exclusive brands to grow through XOR in acquisitions? Thanks. So that's very well put. We believe the adjacencies within Ferrari are the ones that were clearly communicated on the back of the Q3 earning calls that the company Ferrari is taking forward. We believe that the product Roma, which was launched last week, is a good example of how you can increase your available market. So that is a product which factors in not only the performance, but also the elegance and it opens up to a different customer base. So within the realm in which Cevade develops, there are many things that it has and it will do. In terms of knowledge based network access that could help us find opportunities, as I mentioned before, definitely we have it and we will more likely look at adjacencies within the industries we operate, but outside of the companies we own. I'm Alexander Bichler from Bolzano. I have huge respect for XOR, what it has built and how it has performed. I want to come back on the duality concept. I see a tension in holding companies that have such a huge history between the heritage and what probabilistically compounds best. And so maybe a duality exercise could be taking out a white sheet of paper and rebuilding a portfolio. So how would you tackle that? I guess there's no answer today, but I'm curious about it. Yes. I think that it's always interesting to look at how what are the value drivers. And arguably, it's a question of ultimately price relative to intrinsic value. So if you're able to buy at a price which is just lower than the intrinsic value and then it's a question of how that intrinsic value develops, right? And so we are pretty confident that we have today opportunities within our business set that achieve that. If we look at growth where it is in terms of multi baggers and where you can have a lot of impact, reality is that it is generally for an opportunity set which requires less capital and the level of risk is also in a probabilistic distribution of the casualty level. And so that's a good segue for Noah maybe to share what he's been seeing and also why XOR or has more likelihood to win as it deploys capital in early stage and growth opportunities than other organizations. So what we've been focused on at SEED is really trying to take advantage of our ability through the XOR network and the access to talent and other great early stage investors that we're in touch with identify this talent. So on the question on the type of founders that we have at the earlier stage, obviously, they're more like pirates. Some of them would not qualify for to run public companies and we've seen how sometimes this encounter leads to misunderstandings and friction, but we try syndicates with in syndicates with other top tiers, often Silicon Valley Venture Capital Firms and bring something to the table that's not readily available. So we've found that there is a lot of appetite for the DNA that Exor has that access to the knowledge of industrial companies, access to other global companies, ability to make introductions, bringing expertise and experts from other sectors and not feel from other venture capital firms that we're coming to eat their lunch, if you will, and compete, but really to be a good partner. And trying to do that at the earlier stage seed Series A, but also in later stage growth rounds where we can put on our value hat more of a fundamental analysis that ultimately we come from that world and look at these businesses and underwrite them and say, okay, can they even though they are somewhat more mature, can they be very large businesses in the future? And there is even more possibilities to really exchange with the rest of the team and with Suzanne and Matteo and see how we can use frameworks to make better decisions, right? And I think that's something that even for us on the early stage, clearly, we've benefited from that on the governance side and on the fundamental analysis side. So I'm not sure if that answers the question. Hi, Philippe Bouchot, Jefferies. Thank you very much for this event. A couple of comments on my part. First, thank you for the comments on GM and Sergio much appreciated. Also wanted to congratulate you on the team behind you on how well you sell your businesses. It's been quite remarkable and you're really to discussion with PSA. And that's quite impressive. It's always easier to buy into sell a funding investment and the dominant market be well. The 2 questions I have one is and you've addressed that you should to some extent, but if you look at a lot of your NAV as part of businesses, mega businesses which have a significant CO2 challenge, they're addressing those challenges. When you think about governance in the next 10 years, is there a point where you need to dilute that because of this will still be legacy businesses for a number of years. Do you need to find a way of diluting that exposure to avoid some form of derating of your stock? And if you look at where you're going to reinvest, you're going to come into some capital in the next couple of years. I appreciate what Matteo said about buying stocks not the market. And but you think that there is more opportunities around the private equity side of the market. And if that's the case, is there an issue of how far you can take the share of any fee that comes from non listed entities as it supposedly, I mean, theoretically should increase the discount in your share price? So have any thoughts on this that will be interesting to me? And last point maybe a question is, if you look at the past 10 years and you're running XOR, I think we can all agree on which has been your best investment. Would you care to share with us which has been your worst investment, not just from a financial standpoint, but the stress related to owning that investment? I can think of Cushman and Weixin possibly, which has some dark days during your holding period. And so if you could share that element with us, that would be appreciated. Thanks. Just sorry, the second question before the last one, which is a great question. What would what was that? Well, I'm trying to understand as you I mean a chunk of your energy is CO2 challenge. Yes, that I understood. But then you asked something else around private equity. Yes. I'm in the years when I used to follow Exor directly, there seemed to be a correlation at the time when the higher your share of NAV was driven by non listed equities, the bigger discount to NAV was, which is logical. And I'm just wondering if you think about potentially in the next years, are there sufficiently attractive differential in returns from listed equities versus private equity? And is there a cap to how much of your NAV you're willing to have in non listed equities and how you balance that different parameters? Okay. So that's a good that's a very interesting question. So as you know, our objective is NAV per share growth versus the MSCI. So we will not make an arbitrage around making a less good of an investment because it could reduce our discount versus maximizing our NAV. Okay. I think that answers the last question. We are focused as an organization in trying to deliver the highest NAV per share growth that we can. We look at the reflection of our stock with the discount as an opportunity to buy back shares as we've done and we will act on it. And we've seen that reality is that it just trends our objective. So if we are able to achieve NAV per share growth and if that growth exceeds the MSCI and if that growth makes us generate superior returns, there is an alignment ultimately with our stock price. So we don't want to compromise on that decision. CO2 emission is a great topic in general, where you could argue that some of the new business models which are very capital light because they have a lot of interactions with larger chunks of ecosystems would have much bigger CO2 liabilities than the ones that are capital intensive, but have a controlled way of looking at their CO2 footprint. So I'm not worried about that. I just think we need to be aware, cognizant of what it means And it somehow ties to the conversation around the SG and not being trendy, but understanding the trend. I think that distinction is very important. And as long as you make that distinction and you make the right decisions, I actually think that it's more of an opportunity than isn't. And you could find companies that will end up because of some of these fears of some of these potential liabilities actually at very interesting prices versus their value, which could provide Matteo or ourselves interesting opportunities as long as you are knowledgeable and aware of that set of issues and the subject matter. So for me, from a mindset standpoint, it's actually not threatening, but it is an opportunity in terms of its perception, but it needs to be taken very seriously and one has to be considerate on how you respond. The last question, which was the best the worst investments that we've done. I think the worst investment that we've done and Cushman and Wakefield was actually a good investment. We more than doubled our money taking into account that we invested pre financial crisis. So we were incredibly lucky and the company was able to develop by being acquired by a company double, which was similar size and the name remained and Cushman and Wayfield is one of the global leaders in commercial real estate services. So if that was our worst investment, I'd be incredibly happy, but it would not be true for me to say so. The vision was The Vision was an asset management company, was a fund of funds. We had done very well with a company called Permal, which was one of the leading funds of hedge funds in the 90s. And we felt that vision could provide us with an opportunity of building a asset management company in a growing region, which was Asia in an interesting business model, which is very, as you all know, who are in the investment management business, very low capital intensity and potentially very lucrative. It was difficult and it taught us also a lot about aligning yourself with owner operators. And you need just to make sure that if you invest with an owner operator, he is running the business. And so you need to be clear that you are minority investments that you can try and protect yourself. But he is ultimately running the show. And the opportunities that changed with the financial crisis for the hedge fund industry and it became very difficult operationally. We learned a lot because ultimately Mario, who is now the CFO of Exor sorry of Partnere, went to run Vision. So he actually moved to Hong Kong for 18 months and turned it around and we find someone who acquired it. So that was the worst investment we did. But ultimately, we learned a lot. Mario learned a lot. He became the CFO of Partnere and now he's going to build his own company, which we will be backing as X4 and it will be in Financial Services. So maybe out of that wrong investment collectively, we learned the lucky part of it was we sized it in a way where it didn't impact that much. Having said that, it was a $100,000,000 investment, which back then was a relatively large investment for us. Last question. Well, if we create the asset value investors, you obviously have thought about and researched other family controlled holding companies a lot over the years. And I was wondering what you saw as kind of the key characteristics and attributes of the best run family controlled holding companies? Can you sorry rephrase it? What are? From studying other family controlled holding companies, kind of what have you learned? What's inspired you? And what are the kind of best attributes? I think holding what isn't what our similarities among successful holding companies are a good control of their balance sheet. So one of the key areas is really to make sure that you control your leverage, because what happens when you have your assets to go down and your debt who stays fixed, that mismatch is fundamentally what ends up where you end up getting into real trouble, existential trouble. So they generally tend to be very good and conservative with their capital structure, very tight in the way they are run. So they generally have a good control on the overall costs. So they're not huge bureaucracies. And ultimately, their success depends on 2 things, their judgment on which companies they own, so what they acquire, what they divest and the way those companies are run and so their capacity of being a good owner of those companies. Then you would find circles of competences. So some within a geography or within a specific set of industries would have those expertises and I think that that's what makes them a better and more informed owner also of those companies. But one of the questions that we've had from who's listening to us on the website is what have we learned more on this topic around family control businesses and Erian Husier has done a lot of work in the owner operator businesses. And we've seen that they generally tend to it's interesting to see the difference between OpEx and CapEx, very, very low OpEx, but relatively high CapEx. So there's clear attention of where the money is spent. They are generally good acquirers. So what you end up seeing is that they acquire well similar companies or adjacent companies. That's something that is quite consistent. And they start young. So you're better off trying to detect them in their early stage when they are at the beginning of that trajectory in their 30, 40s then later on because when you actually see what they've been able to do consistently, which some start later on. So that's another thing that we they are as capable, but they just end up starting the company, buying a company just in a later phase. So your runway is by definition more limited. So we are doing a lot of work on this topic and learning a lot from it. And it continues to be for us a big theme of interest. One of the questions we had is, if you like so much the companies you have, why wouldn't you invest in them rather than get distracted in investing or finding a new company to buy. This is something that we of course would prioritize versus other acquisitions. We've done it in 2 ways in the past. 1 is buying back shares, which in effect is investing in our own companies. 2nd is by supporting our companies because they wanted to do a transaction or they had opportunities or they were in a difficult moment in time with allocating to them through capital increases. So as they grow, as they have opportunities, we would look at making sure that we invest in them or buying more of them. And if we believe that there will be dislocations or that we feel strongly about one of our companies, We will always prioritize on our companies versus new companies. Thank you very much. It's great for all of you to be here. And I'm looking forward spending some time now as we have drinks. Thank you.

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