Gruppo Banca Leonardo

Industrials

Discounted cash flow According to the DCF (discounted cash flow) valuation method the value of the capital of a company is given by the current value of the cash flow it will be able to generate in the future discounted at an actualization rate defined as the weighted average capital cost (WACC). The calculation of the DCF determines the current value of the operating cash flow expected for an explicit forecast period and a Terminal Value. The value of net debt must be subtracted from the sum of the current value of the cash flow to obtain the capital valie and the additional value of the non operating businesses. Sum of the Parts The SOP is a methodology that envisages a different valuation model for each company area (DCF, multiples, book value, market value, NAV, Embedded value/Goodwill, EVA) and then a sum of these models).

Insurance and Asset Gathering

Appraisal value The Appraisal value method brings to the valuation of an entity as a sum of three components: Adjusted net equity + value of in-force business + value of future business. The net equity is adjusted to reflect the market value of assets and liabilities, net of goodwill and other intagibles. The valore of in-force business (Life and e Asset Gathering sectors), reflecting the present value of future profits expected from in-force business at the valuation date, is estimated based on information on margins and underlying growth and flow actualization assumptions.The value of future business is estimated as the present value of future profits coming from future new business (Life and Asset Gathering sectors) and from in-force and future business (P&C).

Banks

EVA The valuation method based on the EVA values banks on the base of the normalized capital invested in their core business, the value creation based on expected returns on the invested capital in the next 10 years (net present value of the EVA) and the sustainable forward return in the long term. The value of the non-core businesses and the excess capital are then added to the value of the core business.

Real Estate

Net asset value The Net Asset Value (NAV) valuation method determines the value of an entity's assets less the value of its liabilities. Assets and liabilities can be valued thanks to different methods (DCF, multiples, book value, market value, embedded Value / Goodwill, EVA). NAV may be calculated at present time or when the company is being liquidated.