Slovenian Weekly Report 21.5.2018-25.5.2018
- Generali CEE Holding bought 100% stake in Adriatic Slovenica for EUR 245m. Adriatic Slovenica is the 3rd biggest insurance group in Slovenia, behind Triglav and Sava RE, having 14.0% market share. It also has EUR 531.6m of AuM (mutual funds) or 20% of AuM industry in Slovenia.
- Detailed comparison on page 2.
- On one hand this could stir the market and key competitors, Sava RE and Triglav, as Generali will become more important player on insurance and asset management market in Slovenia. Generali should be a stronger competitor as well, in addition is was logical that AS was influenced by transaction process … namely market share slipped in 2017.
- On the other hand it could be argued that Generali had to be more price aggressive to gain footing in Slovenia, increasing its market share. Now market share was gained with the transaction (together with current Generali market share of 4.7% they will surpass Sava RE 16.1% share). In addition possibly more can be gained by seeking cost synergies and subordinated debt repayment and possibly they could be less focused on price competition.
- Time will tell.
- One thing is clear, multiples are hefty and imply Generali has a beneficial view regarding Slovenian insurance and asset management potential. Transaction multiples are P/E 22.9x, P/B 2.5x and P/GWP 0.81x. This is significantly above what Triglav and Sava RE is currently trading at.
Attached special topic: Slovenian elections commentary.
Mercator dd is a Slovenia-based company primarily involved in the wholesale and retail sale of consumer goods. Its operations are structured into two segments, namely Trade and Non-trade. The Trade segment consists of retail and wholesale of consumer goods such as food and beverages as well as appliances and electronics under the brand M Tehnika, construction materials under the brand M Grandja and furniture under the brand M Pohistvo. The Non-trade segment consists of food processing, such as the production of bread and pastry, fruit, vegetables, coffee and cocoa products, as well as hospitality and other services. Mercator Real Estate business unit provides management of real estate and development of retail network. On September 4, 2014, Agrokor dd raised its interest in the Company to 80.73% from 53.12%.
Pozavarovalnica Sava dd (or Sava Reinsurance Plc), also known as Sava Re dd, is a Slovenia-based reinsurance undertaking. It operates as a parent company of Sava Re Group, which comprises direct insurance and pension undertakings. The Company's activities are divided into four segments: Reinsurance operations, Non-life insurance operations, Life insurance operations and Other business segment. The Reinsurance operations segment comprises treaty and facultative arrangements for intra-group clients and insurance and reinsurance partners worldwide. The Non-life insurance operations segment supports local markets with non-life insurance products and customer oriented services. The Life insurance operations segment is focused on life protection and saving products, including pension schemes. The Other business segment comprises operations of the Company's non-insurance subsidiaries. Sava Re Group operates through subsidiaries in Slovenia, Croatia, Serbia, Macedonia, Montenegro and Kosovo.
Salus Ljubljana dd is a Slovenia-based company engaged in the wholesale and distribution of medical products. The Company's portfolio includes pharmaceuticals, medical devices, medical supplies, food supplements, cosmetic products and other health products. The Company's core clients are pharmacies, hospitals and health centers from both Slovenia and abroad. Moreover, Salus Ljubljana dd offers the products to its business partners through the Internet store. The Company also provides additional services related to the registration of medicines and the distribution and storage of pharmaceuticals and other medical products.
Zavarovalnica Triglav DD. Zavarovalnica Triglav dd is Slovenian-based company principally engaged in the insurance and financial services. Zavarovalnica Triglav dd is the controlling company of the Triglav Group which offers insurance, asset management and banking services. Zavarovalnica Triglav dd, Zdrastvena zavarovalnica dd and Pozavarovalnica Triglav Re dd provide wealth, life, voluntary additional pension and health insurances. The insurance sector of the Company also operates in the Czech Republic, Croatia, Bosnia and Hercegovina, Montenegro, Serbia and Macedonia. Through Triglav DZU ddo, Triglav Nalozbe financna druzba dd and Triglav nepremicnine dd the Company provides investment fund management, real estate and banking services. As of June 22, 2012, the Company acquired a 100% stake in Investicijsko podjetje, Trgovanje z lastnimi nepremicninami doo from Sava dd.
ALTA Invest, investicijske storitve, d.d., (ALTA Invest, investment services, Inc.) is a part of ALTA Group, the biggest financial non-banking group in Slovenia. ALTA Invest has around 28% market share on the domestic Ljubljana Stock Exchange and has more than EUR 95m of assets under management.
Our trading advantage is our execution of large trading blocks with low impact on the market. We offer trading on several platforms on numerous markets, with a wide variety of financial instruments. Our advantage is also a research department, which is both sell side and buy side and has the far most extensive and regular coverage of domestic companies. We cover 9 companies on Ljubljana Stock Exchange, which is around 90% of Mcap on LJSE – and here we are practically the only local broker providing this kind of extensive and regular coverage for Slovenian companies.
A part of ALTA Group are ALTA Skladi, a mutual fund asset management company with roughly EUR 260m of asset under management. ALTA Group is also extensively involved in corporate finance projects and raised considerable assets (fixed income and equity) in the last two years for several companies.
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