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1UNEDIC – Investor Presentation – April 2015
FRENCH
UNEMPLOYMENT
INSURANCE
2UNEDIC – Investor Presentation – April 2015
CONTENTS
Compensation by unemployment insurance
Management of the insurance e...
3UNEDIC – Investor Presentation – April 2015
Compensation by unemployment insurance
A compulsory insurance
covering the
ri...
4UNEDIC – Investor Presentation – April 2015
Compensation by unemployment insurance in 2013
COMPULSORY INSURANCE REPLACEME...
5UNEDIC – Investor Presentation – April 2015
Management of the insurance entrusted to the social partners
Responsibility o...
6UNEDIC – Investor Presentation – April 2015
Unédic mandates two public agencies for carrying out operations of
contributi...
7UNEDIC – Investor Presentation – April 2015
An unemployment insurance scheme with guaranteed continuity and
sustainabilit...
8UNEDIC – Investor Presentation – April 2015
CONTENTS
Unédic’s economic model is closely correlated to the macroeconomic s...
9UNEDIC – Investor Presentation – April 2015
Unédic’s economic model is closely correlated to the macroeconomic
situation ...
10UNEDIC – Investor Presentation – April 2015
Expenditures closely tied to the economic situation
(Annual percentage chang...
11UNEDIC – Investor Presentation – April 2015
Expenditures closely tied to the economic situation
Contributions and expend...
12UNEDIC – Investor Presentation – April 2015
With the current parameters of unemployment insurance
(contribution rate and...
13UNEDIC – Investor Presentation – April 2015
Balance and net indebtedness of unemployment insurance
Source : Unédic, Unéd...
14UNEDIC – Investor Presentation – April 2015
Reliable financial forecasts
 Projections updated three to four times a yea...
15UNEDIC – Investor Presentation – April 2015
CONTENTS
Investment-grade rating reflects Unédic’s rigorous management
Finan...
16UNEDIC – Investor Presentation – April 2015
AA (Stable watch)
Aa1(Negative watch)
Investment-grade rating reflects Unédi...
17UNEDIC – Investor Presentation – April 2015
Financing programme for 2015
 Commercial paper
• Duration target of 3 month...
18UNEDIC – Investor Presentation – April 2015
Unedic aiming for longer average maturity on outstanding debt structure
 Un...
19UNEDIC – Investor Presentation – April 2015
Unedic new BMTN Programme
 Unedic new BMTN Programme allows for
flexible fi...
20UNEDIC – Investor Presentation – April 2015
Unédic’s EMTN signature strengthened internationally
A growing interest amon...
21UNEDIC – Investor Presentation – April 2015
Bond issuance welcomed by institutional investors
Ever-increasing demand
 2...
22UNEDIC – Investor Presentation – April 2015
Unédic is rated AA by Standard & Poor’s, Aa1 by Moody’s
and AA by Fitch Rati...
23UNEDIC – Investor Presentation – April 2015
Unédic
4, rue Traversière
75012 PARIS
+33 1 44 87 64 00
INVESTOR RELATIONS
P...
24UNEDIC – Investor Presentation – April 2015
This document is a draft for discussion purposes only, it is highly confiden...
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Unédic Investor Presentation

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Unédic is the public related entity in charge of managing the compulsory French unemployment insurance system: Strategic role within the French Welfare system, the law has mandated the main trade unions and employers’ organizations (social partners) to manage the compulsory unemployment insurance system, the system is managed by Unédic, established in 1958 by the social partners as a non-profit organization

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  • “Millions of euros”
    ---Expenditure ---% of growth in GDP --- Expenditure trend
    NB: les chiffres à gauche (inaccessibles) devraient être séparés par un (,) et non pas par un espace. N-d-T.
    les chiffres à droite (inaccessibles) devraient être séparés par un (.) et non pas par un (,).
  • “Millions of euros”
    ---Expenditure ---% of growth in GDP --- Expenditure trend
    NB: les chiffres à gauche (inaccessibles) devraient être séparés par un (,) et non pas par un espace. N-d-T.
    les chiffres à droite (inaccessibles) devraient être séparés par un (.) et non pas par un (,).
  • -Bonds -Commercial Paper
  • - Americas -Asia -France -Europe, others -Others
  • Transcript of "Unédic Investor Presentation"

    1. 1. 1UNEDIC – Investor Presentation – April 2015 FRENCH UNEMPLOYMENT INSURANCE
    2. 2. 2UNEDIC – Investor Presentation – April 2015 CONTENTS Compensation by unemployment insurance Management of the insurance entrusted to the social partners Two public operators are in charge of collection and payment of benefits Continuity and sustainability of the scheme are guaranteed Summary of the modifications made to the Unemployment Insurance Agreement
    3. 3. 3UNEDIC – Investor Presentation – April 2015 Compensation by unemployment insurance A compulsory insurance covering the risk of job loss Jointly Managed (Social Partners) Providing replacement income Employers’ organisations Medef, CGPME, UPA Trade unions CFDT, CFE-CGC, CFTC, CGT, CGT-FO
    4. 4. 4UNEDIC – Investor Presentation – April 2015 Compensation by unemployment insurance in 2013 COMPULSORY INSURANCE REPLACEMENT REVENUE Annual budgeted expenditure: 38 billion Euros 16.4 million employees covered out of 26 million employed in France (uncovered population consists of civil servants & entrepreneurs) 1.6 million companies covered 3,2 million workers are recipients of unemployment insurance* Contribution rate: 6.40% of base salary Benefit rate : 61% of previous base salary *at 12/31/2014
    5. 5. 5UNEDIC – Investor Presentation – April 2015 Management of the insurance entrusted to the social partners Responsibility of unemployment insurance COMPULSORY UNEMPLOYMENT INSURANCE SCHEME EVALUATES Produces the studies and analyses supporting the strategic decision making for the insurance scheme SOCIAL PARTNERS LAW MANAGES Ensures the financial management of unemployment insurance scheme while guaranteeing its independence PRESCRIBES AND CONTROLS Prescribes, guarantees and controls the conditions for implementing unemployment insurance scheme Labour Code Art. L 5422-13 Note: The unemployment insurance agreement is subject to government approval (Labour Code Art. 5422-21) Labour Code Art. L 5422-10 Labour Code Art. L 5427-1Implementation Non profit organisation managed by the social partners
    6. 6. 6UNEDIC – Investor Presentation – April 2015 Unédic mandates two public agencies for carrying out operations of contribution collection and benefit payment EMPLOYERS EMPLOYEES JOBSEEKERS Payment of benefits and help jobseekers reintegrate labour market Recovery of contributions
    7. 7. 7UNEDIC – Investor Presentation – April 2015 An unemployment insurance scheme with guaranteed continuity and sustainability  Collective negotiation every 2 to 3 years to ensure financial balance “over the cycle” • A legal obligation for a balanced budget (Labour Code Art. L 5422-12) • Definition of the mechanisms for a 2 to 3 years term, depending upon the financial situation of the unemployment insurance, the job market and unemployment figures • Adjustable variables in order to reach equilibrium:  Contribution rate  Compensation rights  Amount and duration of benefits • Specific measures: The last collective negotiation of May 2014 witnessed the decision to implement and provide more incentives for unemployed workers to reintegrate the labour market. The new set of measures are expected to generate savings worth €210M and €640M for 2014 and 2015 respectively  A scheme with a tacit guarantee from the French government • Compulsory nature of the unemployment insurance (Labour Code Art. L 5422-13) • Ministerial approval of the insurance agreements (Labour Code Art. L 5422-21) • Unédic is substituted by the government take-over should the social partners and employers’ organisations fail and reach an agreement or obtain its governmental approval  Bonds issuance supported by an explicit State guarantee, renewed since 2011  Amending Finance Law of 29 December 2014 (article 111): authorisation to provide guarantee  Ministerial Order granting the guarantee (January 28th 2015)
    8. 8. 8UNEDIC – Investor Presentation – April 2015 CONTENTS Unédic’s economic model is closely correlated to the macroeconomic situation Expenditures closely tied to the economic situation A “leverage effect” upon the balance of unemployment insurance scheme Balance and net banking indebtedness of unemployment insurance scheme Reliable financial forecasts for anticipating financial needs FINANCIAL SITUATION
    9. 9. 9UNEDIC – Investor Presentation – April 2015 Unédic’s economic model is closely correlated to the macroeconomic situation (Annual percentage changes) Correlation between growth in revenues and GDP 2009 2010 2011 2012 2013 2014 (Prev.) 2015 (Prev.) Annual revenues (€M) 30 310 31 188 31 855 32 466 33 274 33 789 34 070
    10. 10. 10UNEDIC – Investor Presentation – April 2015 Expenditures closely tied to the economic situation (Annual percentage changes) Expenditure developments amplify the economic cycle
    11. 11. 11UNEDIC – Investor Presentation – April 2015 Expenditures closely tied to the economic situation Contributions and expenditures relative to GDP
    12. 12. 12UNEDIC – Investor Presentation – April 2015 With the current parameters of unemployment insurance (contribution rate and compensation rate), the contributions of roughly 9 affiliated employees are necessary to compensate 1 jobseeker A “leverage effect” upon the balance of unemployment insurance 1 employee losing his job has a compounded negative effect upon the finances of unemployment insurance: - 1 contributor + 9 contributions consumed 1 jobseeker finding a job has an enhanced positive effect upon unemployment insurance finances: + 1 contributor + 9 contributions available There usually is a delay of 6 months to a year before this levered effect can be noticed
    13. 13. 13UNEDIC – Investor Presentation – April 2015 Balance and net indebtedness of unemployment insurance Source : Unédic, Unédic calculations (€M) Change in cash balance of unemployment insurance, € million Prévision 4 years 5 years 7 years ?
    14. 14. 14UNEDIC – Investor Presentation – April 2015 Reliable financial forecasts  Projections updated three to four times a year • Based on macro-economic fundamentals from the Consensus of Economists:  Forecast in change of GDP rate  CPI • Monitoring of the working population, wage rate change, unemployment benefits paid, etc.  A steering tool for social partners. • Forecasts reviewed by unemployment insurance managers. • A reference for the social partners negotiating the agreements:  The contribution rate can be adjusted  Conditions of access to compensation  The level of benefits and duration of compensation
    15. 15. 15UNEDIC – Investor Presentation – April 2015 CONTENTS Investment-grade rating reflects Unédic’s rigorous management Financing Program for 2015 Unedic new BMTN programme Unédic’s signature strengthened internationally Bond issues welcomed by institutional investors Unédic‘s rating FINANCIAL MANAGEMENT
    16. 16. 16UNEDIC – Investor Presentation – April 2015 AA (Stable watch) Aa1(Negative watch) Investment-grade rating reflects Unédic’s rigorous management  Capital market financing • EMTN Program (26 billion) - Fixed rate, explicitly guaranteed by the French State • BMTN Program (5 billion) - Fixed rate • French Commercial Paper Program (12 billion)  Active management of the French CP Program • Setting of a duration target and active maturity management • Setup of a liquidity buffer  Risk management • No foreign exchange risk • Interest rate risk managed through issuance along the yield curve of the rates representing the economic outlook for Unédic AA (Stable watch)
    17. 17. 17UNEDIC – Investor Presentation – April 2015 Financing programme for 2015  Commercial paper • Duration target of 3 months and active maturity management  BMTN • €5 billion BMTN program, first issuances starting October 2014 • Fixed rate, in Euros, maturity up to 5 years  Debt issuance program of €6 billion • Fixed rate, in Euros, maturity up to 10 years • First demand guaranty from the French State • ECB-eligible (Tier-1)
    18. 18. 18UNEDIC – Investor Presentation – April 2015 Unedic aiming for longer average maturity on outstanding debt structure  Unedic objective is to structure its debt by the economic cycle and extend the average maturity of its outstanding debt • 7 months average maturity for the outstanding Commercial Papers • 3 years 4 months average maturity for the outstanding BMTN • 6 years 6 months average maturity for the outstanding EMTN • 5 years average maturity for the overall outstanding debt of Unédic • The maximum maturity for new EMTN and BMTN issuance is 10 years and 5 years respectively
    19. 19. 19UNEDIC – Investor Presentation – April 2015 Unedic new BMTN Programme  Unedic new BMTN Programme allows for flexible financing • The BMTN is a flexible programme for OTC fixed rate debt issuance • The maximum outstanding amount of the programme was increased to €5bn in 2015 from €3bn • The maximum maturity of the programme was extended to 5 years (previously limited to 3 years)
    20. 20. 20UNEDIC – Investor Presentation – April 2015 Unédic’s EMTN signature strengthened internationally A growing interest among international investors for the Unédic’s EMTN program A total of €18,8bn outstanding, more than 60% of which is held by foreign investors Germany and the United Kingdom are the primary European investors after France. Investors present over 5 continents and in more than 30 countries Data derived from primary issue books  Unedic EMTN Programme increased popularity • Every year, the increasing interest for Unedic EMTN programme allows for bigger issuance and more diverse investor distribution • Unedic bonds’ spread vs. OAT benchmark are tightening every year on both primary issuance and secondary markets
    21. 21. 21UNEDIC – Investor Presentation – April 2015 Bond issuance welcomed by institutional investors Ever-increasing demand  25% increased Chinese demand for 2015  15% increased European demand (excluding France) for 2015  due to the quality of Unédic signature and trustworthy relationships built with investors KEY FIGURES  More than 30% increase in the share held by Insurance companies in the portfolio, due to the stability of Unédic signature  A portfolio diversified among different types of investors Data from primary issue books 0% 10% 20% 30% 40% 50% Middle East & Africa Germany & Austria France Other Europe Asia Evolution Ask 2015/Benchmark 2015 Total
    22. 22. 22UNEDIC – Investor Presentation – April 2015 Unédic is rated AA by Standard & Poor’s, Aa1 by Moody’s and AA by Fitch Ratings AA AA As the cornerstone of the unemployment insurance scheme, Unédic has historically benefited from strong state support […] […] Unédic has implemented conservative and prudent liquidity policies. […] […] Unédic benefits from a significant tax levy to pay down its debt, with compulsory subscription to the unemployment insurance system that provides it with a wide fiscal base of around 16.5 million employees […] we expect Unédic to continue to cover its expected deficits comfortably. “ “ “ “ “ “ Aa1
    23. 23. 23UNEDIC – Investor Presentation – April 2015 Unédic 4, rue Traversière 75012 PARIS +33 1 44 87 64 00 INVESTOR RELATIONS Philippe Eberschweiler Chief Financial Officer investors@unedic.fr +33 1 44 87 64 47 www.unedic.fr/investors
    24. 24. 24UNEDIC – Investor Presentation – April 2015 This document is a draft for discussion purposes only, it is highly confidential and proprietary and should not be transmitted to any person other than its original addressee(s) without the prior written consent of Unédic. Prices and margin are meant to be indicative only and are subject to change at any time depending on market conditions. Unédic cannot be held responsible for any financial loss or other consequences of the implementation of the transactions described in this document. The French Autorité des Marchés financiers granted its visa under number 15-048 dated 6 February 2015 with respect to a base prospectus (hereinafter referred to as the “Base Prospectus”) which details this operation. The Base Prospectus is available at no cost at Unédic registered office, 4, rue de Traversière, 75012 Paris, France and on its website www.unedic.org. You are invited to report to the section “risks” of the Base Prospectus before taking a decision with respect to the implementation of the transactions described in this document or in the Base Prospectus. Should you so require, you should contact your financial, legal or tax advisor, or any other specialist, in order to confirm that any decision taken is consistent with your personal financial situation. Disclaimer
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