Release Date: November 07, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Azimut Holding SpA (AZIHF, Financial) reported adjusted net income of EUR447 million, marking a 28% increase compared to the same period last year.
- The company achieved significant inflows, reaching EUR14.3 billion by the end of October, surpassing revised guidelines.
- Azimut Holding SpA (AZIHF) completed a successful exit from its GP staking business, generating EUR165 million gross from an initial investment of EUR60 million.
- The strategic partnership with Oaktree in Australia is set to invest EUR124 million in AZ NGA, valuing the business at an EV of AUD 690 million.
- The company is reorganizing its Italian FA network to create a digital bank, aiming to capture net interest income and consolidate client relationships.
Negative Points
- Distribution costs increased by EUR25 million, with Italy accounting for EUR20 million of this rise.
- Personnel and SG&A costs rose by EUR30 million, with a significant portion attributed to foreign operations.
- The company faces challenges in maintaining a stable recurring margin, which has seen a downward trend in previous quarters.
- There is uncertainty regarding the completion of the Oaktree transaction, which is subject to Foreign Investment Review Board approval in Australia.
- The New Bank Project faces potential delays and complexities, with multiple strategic options still under consideration.
Q & A Highlights
Q: Can you clarify the Fintech project and whether listing is an alternative to partnering with a financial or banking partner?
A: The listing remains a goal, but partnering with a banking or financial partner might delay it. The plan is to double AUM and net profit over five years. The stake Azimut will retain is now considered to be just below 20% to avoid CRD IV regulation implications.
Q: What are your views on the BAMI offer on Anima and its implications for the asset gatherers sector?
A: Banks are interested in building commission revenue lines and investing in asset management to avoid heavy capital consumption. The transaction was done at a multiple of 9.5x earnings, while Azimut is trading at 6x to 7x earnings, highlighting a potential undervaluation.
Q: Can you provide more details on the net inflows progression and its sustainability?
A: The strong inflows are driven by robust client activity and a positive market environment. While the trend is expected to continue, it may not sustain the current pace indefinitely. The performance is strong across various regions and products.
Q: Could you explain the fulcrum mechanism, given the positive performance year-to-date but a negative fulcrum?
A: The fulcrum mechanism compares fund performance with ESMA-compliant benchmarks. Positive overperformance results in performance fees, while negative underperformance results in a rebate of management fees, up to 20%.
Q: What is the expected contribution from the Australia transaction within the finance income line for 2025?
A: It's too early to provide specific numbers, but the transaction with Oaktree is expected to accelerate growth. More clarity will be available in the coming quarters.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
