May 26-27, 2020
VIRTUAL STAR CONFERENCE
INVESTOR PRESENTATION - FIRST QUARTER 2020 RESULTS
Index
UPDATE ON RECENT DEVELOPMENTS
EQUITA TODAY (CURRENT TRADING Q1'20)
CLOSING REMARKS
APPENDIX (DETAILS ON Q1'20 AND OTHER ADDITIONAL INFORMATION)
SNAPSHOT ON Q1'20 CONSOLIDATED RESULTS
VERY POSITIVE FIRST QUARTER 2020 IN TERMS OF NET REVENUES FOR CLIENT-RELATED BUSINESSES BUT OVERALL RESULT IMPACTED BY FINANCIAL MARKETS DOWNTURN. PROFITABILITY ALMOST IN LINE WITH 2019.
KEY CONSOLIDATED HIGHLIGHTS
€12.9m | €1.9m | 22% | 14% | €0.9bn |
(+2% vs Q1'19) | (-7% vs Q1'19) | (as of 31 March 2020) | (as of 31 March 2020) (+1% vs Q1'19/-16% vs FY'19) | |
Net | Net | Total | Return on | Assets under |
Revenues | Profit | Capital Ratio | Tangible Equity(1) | Management |
DIVISIONAL PERFORMANCE
€0.19
(-14% vs FY'18) (2) Mid-point
of the
Dividend guidance
per Share
Revenues
Breakdown FY'19
15%
FY'19 54%
31%
Global Markets
Investment Banking
Alt. Asset Management
Q1'20 vs Q1'19 (growth %)
Global | 9,1 | (0%) | |||||
Markets | 9,1 | ||||||
Investment | +93% | ||||||
4,0 | |||||||
Banking | 2,1 | ||||||
Alt. Asset | (0,1) | n.m. | |||||
Management | 1,4 | ||||||
Q1'20 | |||||||
c. €1.2m negative market impact on | |||||||
Q1'19 | fair-value of AM investments in Q1'20 |
Client-related Net Revenues
€10.4m
(vs €7.7m)
€4.0m
(vs €2.1m)
€1.0m
(vs €1.1m)
€15.4m
(vs €10.8m)
Portfolio
Net Revenues
-€1.3m
(vs €1.5m)
n.a.
-€1.2m
(vs €0.3m)
-€2.5m
(vs €1.8m)
(1) Calculated excluding Net Profit from Tangible Equity. (2) Dividend per share approved by the Shareholders' Meeting on May 7, 2020. | FIRST QUARTER 2020 RESULTS | 3 |
KEY MESSAGES FROM Q1'20 FINANCIAL RESULTS
POSITIVE QUARTER WITH STRONG GROWTH IN CLIENT-RELATED BUSINESS, OFFSET BY IMPACTS OF MARKET TURMOILS ON DIRECT INVESTMENTS
Business continuity guaranteed
Strong growth in client-related revenues
Negative impact on directional business and long-term AAM investments
Profitability substantially in line with Q1 2019
Strong liquidity and solid capital structure
…during the
Covid-19 pandemic
…confirming the
importance of
business
diversification
…due to the
plunge of financial markets following Covid-19 pandemic
…thanks to a
disciplined and
flexible cost
structure
…supporting
operations and
business initiatives,
as well as returns
for investors
Operations keep going smoothly thanks to IT investments made during the last few years which guaranteed business continuity and top-qualityservice to clients, as well as health and safety of Equita professionals
Double digit growth in client-related revenues (Q1'20 vs Q1'19)
Sales & Trading (+24%) | Alt. Asset Management (-3%) |
Investment Banking (+93%) | (management fees) |
Client-Driven & Market Making (+66%)
Sharp correction of financial markets impacting directional trading as well as direct investments (mark-to-market valuation)
Impacts on Directional trading (-€1.3mvs €1.5m in Q1'19) and direct long term investments related to AAM activities like the Blueglen alternative-credit fund (-€1.2mimpact in Q1'20)
€1.9m Net Profits (-7% vs Q1'19) thanks to broadly stable general costs and despite the impacts of on direct investments
Compensation/Revenues ratio at 46%
Cost / Income ratio at 79%
Strong liquidity and capital structure, with the strategic option to increase cash if needed
TCR of 22% in Q1'20, well above capital requirements, and more than €40m of reserves available for potential distribution
More than €200m mixed-credit facilities guaranteeing operations
FIRST QUARTER 2020 RESULTS | 4 |
KEY MESSAGES FROM THE SHAREHOLDERS' MEETING
ALL ITEMS ON THE AGENDA PASSED WITH LARGE CONSENSUS, CONFIRMING THE INVESTORS' FRIENDLY PROPOSALS AND THE BEST PRACTICES ADOPTED BY EQUITA
ITEMS ON THE AGENDA
Approval of 2019 Financial Statements and €0.19 per share dividend distribution
Dividend yield > 8% (1)
Approval of 2020 Remuneration Policies and 2019 Remuneration Report
Approval of 2020-2022 Stock Options Plan for the Senior
• 13 managers as beneficiaries
Management • TCR, ROTE, TSR as gates (2)
• ≈2.5% maximum dilution
Appointment of the new Board of Directors and Board of Statutory Auditors (2020-2022)
Board of Directors | Board of Stat. Auditors | |
Perilli (Chairman) | Demartini (Indep.) | Fondi (Chairman) |
Vismara (CEO) | Ferrari (Indep.) | Acquadro (Standing A.) |
Biglieri (Non Exe.) | Zeme (Indep.) | Redaelli (Standing A.) |
Colonna (Indep.) |
PURPOSE
Remunerate shareholders
adequately, with an
interesting dividend yield
Pursue fair and meritocratic remuneration policy to attract talents and enhance retention
Incentivise senior
management, further
aligning interests
to investors
Renew
Board of Directors
with majority of
independents (4/7)
and fair gender balance
(3/7 of the board is
represented by women)
SUMMARY VOTES
100%
FOR
100%
FOR
98%
FOR
77% Slate #1
(major shareholders)
18% Slate #2
(institutional investors)
3% Slate #3
(institutional investors)
2% Abstained
(1) Calculated on the average share price of May 2020; (2) Total Capital Ratio (TCR) > 15% in each year of the 3-year plan (20% weight), Average | FIRST QUARTER 2020 RESULTS | 5 |
2020-2022 Return on Tangible Equity (ROTE) > 15% (40% weight), Average 2020-2022 Total Shareholders' Return (TSR) > 10% (40% weight) |
A DIFFICULT ENVIRONMENT WITH STRATEGIC OPPORTUNITIES
AN OVERALL DIFFICULT FRAMEWORK PRESENTING INTERESTING STRATEGIC OPPORTUNITIES FOR EQUITA IN THE COMING YEARS
AREA | OPPORTUNITY | ENABLING FACTORS AND KEY DRIVERS |
Global
Markets
Investment
Banking
Alternative Asset Management
Cost
Structure
External Growth Opportunities
Increase brokered volumes and
further consolidation of leadership
Increase in number of ECM, DCM and M&A
and Advisory deals expected from 2021
New initiatives, leveraging on our
unique expertise on
alternative assets management
Potential savings from additional
cost-optimisation initiatives, following recent developments
Business partnerships and
bolt-on acquisitions
High market shares (#1 independent broker)
Fixed Income desk (significant upside potential with cross- selling and up-selling initiatives)
Alternative PIRs and Government initiatives (increase liquidity on markets, especially for Mid-Smallcaps)
Government initiatives to support capital markets and SMEs (easier access to capital markets, simpler regulation, tax reliefs,…)
Increasing M&A activities in the market (consolidation of several sectors and industries to cope with the crisis)
Launch of Alternative PIRs (focus on Mid and Small caps and SMEs, strong need of competences on illiquid investment strategies like private equity and private debt)
Introduction of smart working (lower general expenses like electricity and rental spaces, increased productivity,…)
Broad acceptance of virtual meetings (lower marketing expenses for roadshows, conferences,…)
Strong reputation among professionals who appreciate Equita's entrepreneurial DNA
Increasing appeal of the Equita brand (perceived as trusted partner to co-developproducts and set-uppartnerships)
FIRST QUARTER 2020 RESULTS | 6 |
Index
UPDATE ON RECENT DEVELOPMENTS
EQUITA TODAY (CURRENT TRADING Q1'20)
CLOSING REMARKS
APPENDIX (DETAILS ON Q1'20 AND OTHER ADDITIONAL INFORMATION)
CLEAR GROUP STRUCTURE AND STRONG MANAGEMENT COMMITMENT
GROUP STRUCTURE | SHAREHOLDING STRUCTURE | SHAREHOLDERS' AGREEMENTS |
EQUITA
GROUP
100% | 100% | ||
EQUITA | EQUITA CAPITAL | ||
SIM | SGR | ||
Global Markets | Alternative Asset | ||
Investment Banking | Management | ||
Research Team |
Fully separated governance to avoid conflicts of interest and maximize business potential
AGM
73%
27%Voting rights
37% | |
54% | |
9% | Share |
Capital | |
Management | Treasury Shares |
Free Float |
Partnership
"opened"
to the market
First Shareholders' Agreement-Bis
28 shareholders with 47% of share capital (≈64%(1) of votes following the kick-inof increased voting rights)
Voting and lock-up commitments
expiring in July 2022
Other Shareholders' Agreement(2)
71 shareholders with 54% of share capital (≈73%(1) of votes following the kick-inof increased voting rights)
Preemption rights on shares disposed
by adherents to the agreement
Strong management
commitment and
entrepreneurial spirit
(1) Excluding treasury shares. (2) Referred to the Fourth Shareholders' Agreement, entered into force in November 2019 and expiring in November 2022.
FIRST QUARTER 2020 RESULTS | 8 |
THE LEADING INDEPENDENT BROKERAGE FIRM IN ITALY…
COMPLETE AND DIVERSIFIED PRODUCT OFFERING (EQUITIES, BONDS, DERIVATIVES, ETFS) BUILT ON CLIENTS' NEEDS. THE HIGH MARKET SHARES ACHIEVED OVER TIME CONFIRMED EQUITA'S COMPETITIVE ADVANTAGE POST MIFID II. CONSTANTLY RANKED AT THE TOP OF INVESTORS' SURVEYS AND #1 AMONG INDEPENDENT BROKERS
COMPLETE PRODUCT OFFERING | MARKET SHARES (1) |
CLIENT-RELATEDBUSINESS | NON-CLIENTRELATED | ||
INSTITUTIONAL | RETAIL | CLIENT DRIVEN TRADING & | DIRECTIONAL |
SALES | HUB SALES | MARKET MAKING | TRADING |
SALES | TRADING/ | SALES | TRADING/ | MARKET | SPECIALIST | BROKERAGE | RISK | ||
DIRECTIONAL | ARBITRAGE & | ||||||||
(PRIMARY, | (PRIMARY, | / LIQUIDITY | (ON BEHALF | VOLATILITY | |||||
EXECUTION | EXECUTION | MAKING | TRADING | SPECIAL | |||||
SECONDARY) | SECONDARY) | PROVIDER | OF CLIENTS) | ||||||
SITUATIONS | |||||||||
ITALIAN RANKINGS (2)
TradingEquity
ExecutionSales
2° | 1 | 2 | 2 | 2° | 2 | 3 | 2 |
2016 | 2017 | 2018 | 2016 | 2017 | 2018 | ||
1 | 1 | 1 | 1 | 1 | 2 | ||
2019 | 2013 | 2014 | 2015 | 2019 | 2013 | 2014 | 2015 |
Equities | Bonds | Equity | |
Options | |||
Q1'19 | 8.8% | 5.8% | 9.9% |
Q2'19 | 10.2% | 6.0% | 7.3% |
Q3'19 | 9.4% | 6.8% | 6.6% |
Q4'19 | 8.4% | 5.6% | 6.2% |
Q1'20 | 8.2% | 6.3% | 6.0% |
LTM | 8.9% | 6.3% | 6.3% |
APR'20 | |||
Corporate Access
(Company & Expert Meetings)
1° | 2 | 3 | 2 |
2016 | 2017 | 2018 | |
1 | 1 | 2 |
2019 2013 2014 2015
(1) Source: ASSOSIM, market share on third parties brokered volumes; column "Equities" refers to the MTA segment, "Bonds" refers to | FIRST QUARTER 2020 RESULTS | 9 |
DomesticMOT, EuroMOT and ExtraMOT, "Equity Options" refers to IDEM. (2) Rankings (incl. Small & Mid Caps) based on commissions paid. |
- SUPPORTED BY BEST-IN-CLASS QUALITY RESERCH FOR INVESTORS
EQUITA CONFIRMED ITS EXTENSIVE COVERAGE OF LISTED SECURITIES, BOTH EQUITIES AND BONDS. CONSISTENTLY RANKED AT THE TOP OF INTERNATIONAL RANKINGS THANKS TO THE BREADTH AND QUALITY OF ITS RESEARCH
EQUITA COVERAGE | ITALIAN RANKINGS (2) |
ITALIAN
ABROAD
# of companies covered | Market size | |||||||||
covered (1) | ||||||||||
The Equita Research Team | ||||||||||
covers approx. 96% of the | ||||||||||
Italian market capitalization | ||||||||||
21% | ||||||||||
117 | 117 | 120 | 129 | 120 | 44% | |||||
108 | 107 | 112 | ||||||||
35% | ||||||||||
LARGE CAP | ||||||||||
MID CAP | ||||||||||
SMALL CAP | ||||||||||
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 Q1'20 | ||||
Coverage of |
+ | Equities and |
40 foreign | Bonds |
stocks covered | |
(as of March 31, 2020) |
- Small cap (market cap < €0.5bn), Mid Cap (market cap > €0.5bn and < €2.5bn), Large Cap (market cap > €2.5). (2) Rankings (incl. Small & Mid Caps) based on commissions paid. (3) Distribution of votes received by the Equita Research Team on the «Italy: Country Research (incl. Small & Mid Caps)» ranking
Italian 2°
Research
Team 2019
111211
2013 | 2014 | 2015 | 2016 | 2017 | 2018 |
Country 3°
Research
2019
112222
2013 | 2014 | 2015 | 2016 | 2017 | 2018 |
Votes received in 2019 by the Equita Research Team (3)
92% of votes in the 4-5 | 90 | |||||
range (Excellent) | ||||||
7 | 29 | |||||
3 | 1 | |||||
1 | 2 | 3 | 4 | 5 | ||
(Average) | (Excellent) | |||||
FIRST QUARTER 2020 RESULTS | 10 |
LEADER AMONG INDEPENDENTS IN INVESTMENT BANKING IN ITALY
THE LEADING INDEPENDENT PLAYER ON CAPITAL MARKETS IN ITALY AND CONSTANTLY RANKED AMONG TOP M&A ADVISORS BY NUMBER OF DEALS. SIGNIFICANT BENEFITS AND SYNERGIES FROM COVERING THE WHOLE SPECTRUM OF IB SERVICES.
UNIQUE AND COMPLETE PRODUCT OFFERING
KEY TRANSACTIONS (2019)
ITALIAN RANKINGS (2019)
Equity Capital Markets
M&A Advisory & Corporate Broking
Financial
Institutions
Debt Advisory
Debt Capital
Markets
Financial
Sponsors
Small Caps
Utilities / Infrastructures
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
2019
3
5
7
10
11
13
16
17
20
22
23
29
33
IPO |
(€ 20 mln) |
JOINT GLOBAL COORDINATOR |
AND BOOKRUNNER |
JUNE 2019 |
Senior Unsecured Bond |
3.0% 2019-2026 |
(€ 300 mln) |
PLACEMENT AGENT AND |
SOLE BOOKRUNNER |
OCTOBER 2019 |
ACQUISITION
FINANCIAL ADVISOR TO
CEDACRI IN THE
ACQUISITION OF OASI
FEBRUARY 2019
INTEGRATION
FINANCIAL ADVISOR IN THE
CONTEXT OF THE INTEGRATION
OF INWIT AND VODAFONE 22,000 TELECOM TOWERS IN ITALY INTO A SINGLE ENTITY
IPO |
(€ 81 mln) |
JOINT GLOBAL COORDINATOR |
AND JOINT BOOKRUNNER |
OCTOBER 2019 |
BOND 3.125% 2019-2025 |
ISSUE ON MOT |
(€ 200 mln) |
PLACEMENT AGENT AND |
SOLE BROKER |
NOVEMBER 2019 |
MERGER |
FINANCIAL ADVISOR TO THE |
GIMA TT BOARD OF DIRECTORS |
IN THE CONTEXT OF THE |
MERGER WITH IMA |
JUNE 2019 |
Project Italy |
Private Placement |
(€ 600 mln) |
FINANCIAL ADVISOR AND |
CO-LEAD MANAGER |
# | IPO / Listing (1) | # dealS | ||
1. | Banca IMI | 3 | ||
2. | Bank of America - ML | 2 | ||
ECM | 3. | 2 | ||
4. | Intermonte | 2 | ||
5. | Banca Akros | 1 | ||
6. | BPER | 1 | ||
7. | Credit Suisse | 1 | ||
8. | EnVent | 1 | ||
9. | Fidentiis | 1 | ||
10. | GS | 1 | ||
# | HY and NR Bonds (2) | # dealS | ||
1. | GS | 5 | ||
2. | BNP Paribas | 5 | ||
DCM | 3. | Banca IMI | 4 | |
4. | UniCredit Group | 3 | ||
5. | Credit Agricole | 3 | ||
6. | JP Morgan | 2 | +1 | |
7. | 2 | Financial | ||
8. | UBI Banca | 2 | Deal | |
9. | Citigroup | 2 | ||
10. | Mediobanca | 1 | ||
# | M&A deals (3) | €bn volumes | #16 by | |
1. | Mediobanca | 17 | ||
2. | KPMG | 12 | number | |
3. | GS | 11 | of deals | |
M&A | 4. | Banca IMI | 9 | |
(10) | ||||
5. | Bank of America - ML | 8 | ||
6. | UBS | 8 | ||
7. | 7 | |||
8. | PwC | 6 | ||
9. | Rothschild & Co | 5 |
New product team | New sector team |
JULY 2019
NOVEMBER 2019 |
10. | JP Morgan | 5 |
(1) Rankings made considering # of IPOs and listings in the Italian market (Global Coordinator, Sponsor, Advisor to Issuer or Selling shareholders, | ||
NOMAD), excluding deals <€10m and market cap <€10m (in case of listing). Source: Equita analysis on Borsa Italiana and Dealogic data. (2) | FIRST QUARTER 2020 RESULTS | 11 |
Rankings considering High Yiled and Not Rated bond issues. Source: Bondradar. (3) Rankings made on Mergermarekts figures. | ||
A COMPLETELY ''DIFFERENT'' ASSET MANAGER…
EQUITA CAPITAL SGR, THE MANAGEMENT COMPANY OF EQUITA, LEVERAGES ON THE GROUP'S DIFFERENT AREAS OF EXPERTISE AND COMBINES SEVERAL DISTINCTIVE FEATURES THAT MAKE IT UNIQUE IN THE ITALIAN COMPETITIVE LANDSCAPE
KEY DIFFERENCES BETWEEN EQUITA CAPITAL SGR AND COMPETITORS
Fully | Multi-asset | Co-investing | Opened to |
independent | manager | approach | partnerships |
GROWTH OPPORTUNITIES IN THE COMING FUTURE
Launch of new products | Performance | Other asset classes |
and investment structures | fees generation | and strategies |
Fundraising of EPD II started in October 2019 (€200m target) and currently underway
ELTIF structure (tax-advantaged) to be implemented in new products
Launch of new products in partnership
Material potential upside from | Assessment of new opportunities |
performance fees generated from | to capitalize on team competences |
current and future products | and expand product offering |
(private equity, real estate, venture | |
€3.7m Performance Fees | capital, etc) and investment |
in FY'19 | strategies |
FIRST QUARTER 2020 RESULTS | 12 |
…WITH A CLEAR AND DIVERSIFIED GROWTH STRATEGY
A CLEAR STRATEGY, FOCUSSED ON DIFFERENT PRODUCTS AND SERVICES OFFERED TO BOTH FINANCIAL INSTITUTIONS AND PROFESSIONAL INVESTORS. NOT INTERESTED IN TRADITIONAL ASSET MANAGEMENT AND WEALTH MANAGEMENT
PARTNERSHIPS TO CO-DEVELOP PRODUCTS WITH BANKS, FINANCIAL INSTITUTIONS AND PRIVATE BANKING NETWORKS
Discretionary accounts
Flexible funds
Other funds
≈€190m | 3 discretionary equity portfolios managed on behalf of Credem |
(≈€250m pre-Covid) | since 2003 |
≈€530m | 2 flexible funds managed on behalf of Euromobiliare Asset |
(≈€630m pre-Covid) | Management SGR |
ALTERNATIVE ASSETS DEVELOPED BOTH IN-HOUSE AND WITH PARTNERS
Private Debt
Alternative Credit (Blueglen)
€100m
≈€30m
(≈€40m pre-Covid)
Among the leading teams in Italy, with 1 private debt fund fully invested and 1 fundraising underway (€200m target)
1 alternative credit fund distributed ("G10 Blueglen Equita Total Return Credit UCITS Fund") + framework agreement with Blueglen to distribute other alternative products
FAMILY OFFICE
Potential new business to be considered at some point in the future (organic growth or M&A): highly synergistic with the Investment
Banking and Alternative Asset Management divisions
TRADITIONAL ASSET MANAGEMENT | WEALTH MANAGEMENT |
Requires large-scale business | Requires private banking networks |
Requires private banking networks for distribution
FIRST QUARTER 2020 RESULTS | 13 |
SEVERAL INITIATIVES TO STRENGTHEN THE BRAND AND SUSTAINABILITY
EQUITA HAS ALWAYS BEEN A STRONG «NAME» IN ITALY BUT IN RECENT YEARS IT HAS SIGNIFICANTLY STRENGTHENED ITS BRAND, ALSO THANKS TO ITS ESG INITIATIVES
LIST OF MOST RECENT EQUITA INITIATIVES, ALL AIMED AT SUPPORTING BUSINESS GROWTH
Partnership with Bocconi University on Capital Markets
Encourage the debate on structural elements, development factors and possible solutions for the
growth of capital markets
for Italian companies
Partnership with
Cattolica University on
ESG & Sustainability
Research on relevant ESG factors
for Italian SMEs to support
investors to better evaluate those
companies from an ESG
perspective
New Advertising | ||
Listing on the | Campaign | |
To improve | ||
AIM and | brand | |
MTA - STAR | awareness | |
Increased visibility | ||
in Italy and abroad | Ad-hoc | |
Commitment to high | ESG initiatives | |
standards in | ||
corporate governance, | Welfare plan for employees | |
transparency and | ESG factors embedded in the | |
communication | remuneration policy |
Partnership with | |
Corporate | Accademia di Brera |
to promote | |
Identity | |
Culture and Art | |
New corporate website | |
(Equita.eu) and improved | Reward young talented |
presence on social networks | students, research and |
Pro-active management | didactics in artistic |
of contents on the web | disciplines |
Ongoing education for all professionals
New policies to protect environment
Strong Brand and ESG/sustainable
approach improve positioning
for future growth
FIRST QUARTER 2020 RESULTS | 14 |
THE INFLUENTIAL ROLE OF EQUITA ON FINANCIAL MARKETS
EQUITA IS AN OPINION MAKER ON CAPITAL MARKETS AND HAS POSITIONED ITSELF AS THE LEADING EXPERT OF FINANCIAL MARKETS IN ITALY
EQUITA ROLES AND INITIATIVES THAT PROMOTE THE DEVELOPMENT OF FINANCIAL MARKETS
Pro-market regulatory contributions
Equita has actively contributed to several initiatives aimed at improving financial markets and ease access and liquidity of SMEs to capital markets (PIR funds, listing tax breaks,…)
Standing roles of some Equita representatives
Some representatives of Equita are currently covering important offices to promote the development of financial markets (Assosim, Borsa Italiana, Consob) 1)
Long-Standing
Partnership with
Bocconi University
Long-standing relationship with Bocconi to encourage the debate on Italian capital markets. Six position papers published and dedicated research lab
Opinion maker on
relevant financial topics
Several contributions on national and international media to raise awareness on key financial topics (MiFID II, promotion of capital markets, …)
THE EXPERTS OF
FINANCIAL MARKETS
Strong brand, feeding new business opportunities
High reputation, reinforcing the Equita's appeal as strategic partner
1) Mr. Perilli is member of the Board of Directors of Borsa Italiana. Mr Vismara is member of the ASSOSIM executive committee and member of | FIRST QUARTER 2020 RESULTS | 15 |
the stakeholder group of Consob. |
PROFIT & LOSS AND BALANCE SHEET
STILL PROFITABLE QUARTER, DESPITE THE MARKET IMPACT ON DIRECT INVESTMENTS. SOLID CAPITAL STRUCTURE CONFIRMED
SUMMARY PROFIT & LOSS AND BALANCE SHEET
Summary P&L | Q1 | Q1 | FY | |
€ m | 2020 | 2019 | Var. % | 2019 |
Net Revenues | 12,9 | 12,6 | 2% | 58,3 |
Personnel costs (1) | (5,9) | (5,8) | 2% | (27,1) |
Compensation/Revenues ratio | (46%) | (46%) | (46%) | |
Operating costs | (4,3) | (4,0) | 8% | (17,5) |
Total Costs | (10,2) | (9,8) | 5% | (44,7) |
Cost/Income ratio | (79%) | (77%) | (77%) | |
Profit before taxes | 2,7 | 2,8 | (5%) | 13,7 |
Income taxes | (0,8) | (0,8) | (1%) | (4,2) |
Net Profit | 1,9 | 2,0 | (7%) | 9,5 |
Margin % | 15% | 16% | 16% | |
Dividend Payout % | 91% | |||
Summary Balance Sheet | Q1 | FY | ||
€ m | 2020 | 2019 | ||
Total assets | 347,9 | 288,3 | ||
Total liabilities | 265,7 | 208,2 | ||
Total shareholders' equity | 82,2 | 80,1 | ||
Total equity and liabilities | 347,9 | 288,3 | ||
Total Capital Ratio | 22% | 26% |
Simple but disciplined cost structure,
confirming strong profitability
Compensation / Revenues ratio consistently
below 50%
Discipline on operating costs confirmed
Operating leverage in Investment Banking and Alternative Asset Management businesses
Profitability almost in line with Q1'19
- 90% dividend payout in the last 3 years
Solid capital structure,
investing in capital light initiatives
Capital light business
Sizeable reserves available for distribution (more than €40m, of which €4m set aside during the last 3 years) (2)
Strong ratios, well above minimum requirements
(1) Net of compensation to directors and statutory auditors. (2) Net Profits of €1m per year not distributed in 2017, 2018 and 2019, in addition to | FIRST QUARTER 2020 RESULTS | 16 |
€1m of Adjusted Net Profits coming from non-recurring IPO expenses recorded in 2018 |
FOCUS ON COST STRUCTURE
Q1'20 CONFIRMED THE COST-DISCIPLINED APPROACH OF THE GROUP, WITH DECREASING FIXED COMPENSATION, STABLE INFORMATION TECHNOLOGY EXPENSES AND LESS GROWING TRADING FEES COMPARED TO SALES & TRADING REVENUES
PERSONNEL COSTS | ||||
Q1 | Q1 | Personnel costs at €5.9m (+2%, in line with revenues) | ||
€ m | 2020 | 2019 | Var. % | Fixed component at €4.2m (-3% compared to Q1'19), benefiting |
Personnel costs (1) | 5,9 | 5,8 | 2% | |
from junior hirings which replaced some senior professionals | ||||
o/w Fixed component | 4,2 | 4,4 | (3%) | Increase in Variable component, setting up additional incentives |
o/w Variable component | 1,7 | 1,4 | 18% | |
and further strengthening retention | ||||
FTEs (2) | 145 | 146 | (1%) | |
Comps / Revenues | 46% | 46% | 0% | Compensation / Revenues ratio at 46%, in line with most recent |
Fixed Comp / Total Comp | 72% | 76% | (5%) | quarters |
OPERATING COSTS
Q1 | Q1 | ||
€ m | 2020 | 2019 | Var. % |
Operating Costs | 4,3 | 4,0 | 8% |
o/w Information Technologies (IT) | 1,4 | 1,4 | 0% |
o/w Trading Fees | 0,9 | 0,9 | 9% |
o/w Non-Recurring | - | - | n.a. |
o/w Other (D&A, marketing, governance,…) | 1,9 | 1,7 | 13% |
Includes additional costs related to the governance of the newly established Equita Capital SGR
Operating Costs were €4.3m, up by +8% compared to Q1'19
Stable Information Technology expenses at €1.4m, thanks to a constant cost-disciplinedapproach
Trading Fees were up by only 9% in Q1'20 (despite Sales & Trading revenues being up 24%), thanks to some initiatives that optimised the trading execution of orders
Increase in Other costs mainly driven by expenses related to Equita Capital SGR, offsetting minor savings in marketing expenses (roadshow, events, …)
(1) Net of compensation to directors and statutory auditors. (2) Number of FTEs at year-end. (3) Excluding Retail Hub operating cost, non- | FIRST QUARTER 2020 RESULTS | 17 |
recurring items and non like-for-like expenses (eg. Equita Capital SGR's costs due to company setup, new governance, advertising campaign, etc.) |
Index
UPDATE ON RECENT DEVELOPMENTS
EQUITA TODAY (CURRENT TRADING Q1'20)
CLOSING REMARKS
APPENDIX (DETAILS ON Q1'20 AND OTHER ADDITIONAL INFORMATION)
RESILIENT AND PROFITABLE PERFORMANCE THANKS TO DIVERSIFICATION
NET REVENUES (€M)
+5% | |||||||||||||||||||||||||||||||
CAGR '09-'19 | |||||||||||||||||||||||||||||||
in Net Revenues | |||||||||||||||||||||||||||||||
over the last | |||||||||||||||||||||||||||||||
11 years | |||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||||||
Global Markets | Investment Banking | Alt. Asset Management | |||||||||||||||||||||||||||||
NET PROFITS (€M) | |||||||||||||||||||||||||||||||
Always | |||||||||||||||||||||||||||||||
profitable, | |||||||||||||||||||||||||||||||
with significant | |||||||||||||||||||||||||||||||
dividend distribution | |||||||||||||||||||||||||||||||
over the last | |||||||||||||||||||||||||||||||
11 years | |||||||||||||||||||||||||||||||
2009 | 2010 | 2011 | 2012 | 2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | |||||||||||||||||||||
Dividend Payout (%) | |||||||||||||||||||||||||||||||
100% | 100% | 100% | 100% | 100% | 100% | 100% | 100% | 90% | 91% | 91% | |||||||||||||||||||||
FIRST QUARTER 2020 RESULTS | 19 |
STRONG TRACK-RECORD IN THE EXECUTION OF NEW INITIATIVES
LEGACY BUSINESS VS NEW INITIATIVES (NET REVENUES FY'09 VS FY'19)
€58m | €58m | ||||||
9 | New | ||||||
€36m | 18 | €36m | 30 | ||||
Initiatives | |||||||
4 | |||||||
7 | Global Markets | ||||||
36 Legacy | Legacy | ||||||
25 | 32 | Investment Banking | 28 | ||||
Alt. Asset Management | Business | Business | |||||
2009 | 2019 | 2009 | 2019 |
CONTRIBUTION OF FIXED INCOME ON FY'19 RESULTS
Retail Hub
Market Making
Fixed Income sales
M&A & Advisory
Debt Capital Markets
Debt Advisory
Private Debt
Flexible funds' management
…and many others!
% Other | % Fixed | ||
Revenues | ≈80% | ≈20% | Income |
(Equity, etc) | Revenues |
Equita Private | |
AAM | Debt fund I |
IB | DCM & |
Debt Advisory | |
Market Making | |
GM | |
Fixed Income sales | |
≈20%
Net Revenues
related to
Fixed Income
business
in 2019
FIRST QUARTER 2020 RESULTS | 20 |
HOW HAS THE BUSINESS CHANGED SINCE IPO?
RESILIENT GLOBAL MARKETS THANKS TO M&A AND DIVERSIFICATION (DESPITE MIFID II REGULATION). STRONG GROWTH IN INVESTMENT BANKING, IMPACTED BY TOUGH MARKETS IN 2019 BUT STILL WITH A LOT OF POTENTIAL. ALTERNATIVE ASSET MANAGEMENT CONFIRMED AS SIZEABLE GROWTH ENGINE, WITH FASTER DEVELOPMENT THAN EXPECTED AT IPO.
KEY FINANCIAL INDICATOR
FY'16 (YESTERDAY)
EQUITA
ACTUAL
FY'19 (TODAY) | FY'22 (TOMORROW) | |||||
MB ESTIMATES | UBI ESTIMATES | EQUITA | EQUITA | |||
(@IPO, NOV-2017) | (NOV-2019) | ACTUAL | STRATEGIC PLAN | |||
Business Mix
31 | ||
16 | 2 | |
GM | IB | AAM |
28 | 25 |
4 |
GM IB AAM
32 | ||
15 | 5 | |
GM | IB | AAM |
M&A | ||
32 | ||
18 | 9 | |
GM | IB | AAM |
30 30
- -
34 34 8-
12
GM IB AAM
Net Revenues
AuM
Net Profits
(Margin %)
Total Capital Ratio
Dividend / Payout
€49m | €57m | €53m | €58m | €75m | |
€0.4bn | €0.5bn | n.d. | €1.0bn | €2.0bn | |
€8.8m | €11.1m | €8.1m | €9.5m | ≈20% | |
(18%) | (19%) | (15%) | (16%) | Net Revenues | |
16% | Share | 17% | 17% | 26% | ≥15% |
Price €2.9 | |||||
@IPO | |||||
n.d. | €0.19 (80%) | €0.20 (>100%) | €0.19 (91%) | 90%+ |
FIRST QUARTER 2020 RESULTS | 21 |
RESILIENT PERFORMANCE IN TERMS OF TOTAL SHAREHOLDERS' RETURN
MORE RESILIENT STOCK BEHAVIOUR COMPARED TO PEERS AND MAIN ITALIAN INDICES SINCE IPO(1)
TOTAL SHAREHOLDERS RETURN SINCE THE EQUITA IPO (23 NOVEMBER 2017)
IPO 23-Nov-17
(€2.90)
€277m Median €121m
Market Cap (2)
€4.6bn | Peer | |
€160m | Peer | |
Peers | €417m | Peer |
€83m | Peer | |
€31m | Peer | |
€359m | Peer | |
€198m | Peer | |
€918m | Peer | |
All-shares | ||
Italy | MIB | |
STAR | ||
FTSE | ||
Small Caps
All-Financials
All-Fin. services
@31-Dec-19
13%
13%
(11%)
36%
(43%)
(27%)
11%
25%
12%
11%
12%
10%
(1%)
2%
23%
@14-Feb-20 | @23-Mar-20 | ||
(pre-Coronavirus) | (post-Coronavirus) | ||
(13%) | |||
14% | |||
11% | (44%) | ||
(11%) | (30%) | ||
38% | 17% | ||
(37%) | (47%) | ||
(25%) | (53%) | ||
7% | (29%) | ||
42% | (5%) | ||
20% | (42%) | ||
17% | (24%) | ||
19% | (23%) | ||
13% | (21%) | ||
(1%) | (33%) | ||
7% | (36%) | ||
30% | (30%) | ||
@22-May-20
(today)
(1%)
(36%)
(12%)
(7%)
(9%)
(40%)
15%
8%
(11%)
(15%)
(14%)
(4%)
(25%)
(32%)
(11%)
(1) Total Shareholder Return calculated including dividends. (2) Market Cap in Euro (€) currency as of May 22, 2020 | FIRST QUARTER 2020 RESULTS | 22 |
NEXT STEPS
MANY INITIATIVES IN ALL AREAS, SUPPORTING FURTHER FUTURE GROWTH
SUMMARY PROFIT & LOSS AND BALANCE SHEET
Global
Markets &
Research
Investment
Banking
Alternative Asset
Management
M&A &
Partnerships
P&L
Balance Sheet
Further coordination of Global Markets area as a whole, with clear strategy and allocation of resources
Further diversification of product offering as well as client base, increasing resiliency
Cross-sellinginitiatives supporting growth in market shares
Discipline on costs / technology. Review of profitability by area and client
Strengthening of our market position in the fixed income domain
Close gap with larger international independent players
Additional focus on advisory (M&A and debt advisory/restructuring)
Cross-selling with Asset Management
First Closing of Equita Private Debt Fund II by year-end (fundraising underway with €200m hard cap)
Other private capital initiatives with specific focus on private equity and exploiting investment structures
like ELTIFs
Bolt-onM&A on selected opportunities in areas of potential growth
Potential high-levelpartnerships contributing synergies to Equita's businesses
Compensation / Revenues ratio < 50%
Cost-disciplinedapproach keeping general costs stable and looking for potential savings
Highly selective approach on hirings (only necessary replacements and/or revenue-generating new hires) Implementation of a new state-of-the-art customer relationship management tool (CRM)
FIRST QUARTER 2020 RESULTS | 23 |
ROAD TO 2022: TOP PRIORITIES AND TARGETS
TOP 5 PRIORITIES | KEY TARGETS FROM THE 2020-2022STRATEGIC PLAN | |
1
2
3
4
5
Revenue Generation and Diversification
Cost Discipline and Focus on Profitability
Growth in AuM
Low Capital Absorption and
Consistent Shareholders'
Remuneration
Strong Commitment on Sustainability
Net Revenues €75m
-500 bps in Cost/income
≈20% Net Profitability
AuM €2 billion
TCR ≥ 15% / ROTE ≥ 20%
Dividend Payout % ≈90%
Promote employees wellbeing
Increase customer and financial community's satisfaction
Social and economic development of local communities
Improve health and safety Mitigate impacts on environment
Opened to
strategic
partnerships
that could accelerate the growth of the business
FIRST QUARTER 2020 RESULTS | 24 |
, THE LEADING INDEPENDENT INVESTMENT BANK IN ITALY
THE LARGEST | |
INDEPENDENT TRADING | |
FLOOR IN ITALY | |
COMMITTED | |
MANAGEMENT & FULLY | UNPARALLELED ACCESS |
ALIGNED INTERESTS | TO CAPITAL MARKETS |
WITH INVESTORS |
STRONG PROFITABILITY | WIDE RANGE OF |
& LOW CAPITAL | INVESTMENT BANKING |
ABSORPTION | SERVICES |
TOP-QUALITY | INNOVATIVE |
ALTERNATIVE ASSET | |
RESEARCH TEAM | MANAGEMENT |
PLATFORM |
FIRST QUARTER 2020 RESULTS | 25 |
Index
UPDATE ON RECENT DEVELOPMENTS
EQUITA TODAY (CURRENT TRADING Q1'20)
CLOSING REMARKS
APPENDIX (DETAILS ON Q1'20 AND OTHER ADDITIONAL INFORMATION)
KEY MESSAGES FROM THE OUTBREAK OF COVID-19
OPERATIONS KEEP GOING SMOOTHLY THANKS TO INFORMATION TECHNOLOGY INVESTMENTS MADE DURING THE LAST FEW YEARS WHICH GUARANTEE CONTINUITY TO THE BUSINESS AS WELL AS HEALTH AND SAFETY OF EQUITA PROFESSIONALS
2018 - 2019
Information Technology
Implementation of a faster and safer network infrastructure with ultrabroadband guaranteed connection
Investments in cybersecurity (new firewall,…) to ensure safe
and secure access to company data
Increase from 10 to 200 simultaneous remote connections
Setup for the migration to a cloud-basedapplicative
(Microsoft Office 365)
Enablers for
Business Continuity
February - May 2020
Business & Operations
Business continuity granted in all areas, from Global Markets to Investment Banking, with a mix of professionals on-site (approximately 20%) and remote operations
Relocation of some activities to reduce risks of contagion and guarantee business continuity in case of emergency (eg. sales and traders repositioned in areas of the building and remotely)
Information Technology
Safe and secure remote access guaranteed to all employees
New collaboration tools to facilitate remote co-working (videoconferences,…)
Setup of a new VPN as backup as well as to avoid congestion in peak-timeswhen traders
work from remote (guaranteeing the broadband connection they need)
Procurement of additional laptops
Compliance and HR
Adoption of formal internal policies to limit contacts and rule the presence on-site, setup a task-force to investigate any potential issue and act promptly
Frequent updates to keep employees posted on what is going on
FIRST QUARTER 2020 RESULTS | 27 |
MILESTONES
LONG TRADITION AS ITALIAN INDEPENDENT INVESTMENT BANK
The management team of Equita SIM (which already owns 49.5%) and Alessandro Profumo buy 50.5% from J.C. Flowers & Co.
J.C. Flowers & Co., in partnership with the management team, acquires a controlling stake in Euromobiliare SIM
Euromobiliare SIM changes its name in Equita SIM
2019- | |
2020 | |
2018 | |
2017 | Launch of the Asset |
Launch of discretionary portfolio management business
Midland Bank acquires control of Euromobiliare (1988)
Incorporation of Euromobiliare SIM (1991)
Credito Emiliano acquires Euromobiliare and completes a reverse merger and listing process (1994)
Listing of Euromobiliare on the Italian Stock Exchange
2015
2007-
2008
Management Company |
Equita Capital SGR |
2016 |
Acquisition of Nexi's Brokerage & |
Primary Market and Market Making |
business units |
Partnership with Blueglen for |
exclusive distribution in Italy of a fund |
focused on high yield credit |
Equita Group moves to the |
STAR segment of Borsa Italiana |
2003
Incorporation of | |
Euromobiliare, one of | 1988- |
the first merchant | 1994 |
banks in Italy | |
1981
1973
Incorporation of Equita Group (HoldCo which |
owns 100% of Equita SIM). The management |
acquires the majority of Profumo's stake |
Equita Group listed on AIM Italia |
Launch of EPS Equita PEP SPAC (€150m), Italy's |
first institutional SPAC, and listing on AIM Italia |
Launch of a €100m closed-endPrivate Debt fund |
FIRST QUARTER 2020 RESULTS | 28 |
FOCUSED AND SYNERGISTIC BUSINESS MODEL
DIVERSIFIED BUSINESS MODEL WITH THREE DIVISIONS - ALL SUPPORTED BY A TOP-QUALITY RESEARCH TEAM
GLOBAL MARKETS
Largest independent trading floor in Italy, focused on Equities, Bonds and
Derivatives
Over 400 active Italian and international
-
institutional clients
Retail Hub with over 80 interconnected
Italian banks
#2 "Best Broker in Italy Trading Execution" and "in Italy Equity Sales"
Wide range of services, particularly Market Making in Derivatives and
Bonds
Around 300 active specialist contracts
Experts in reducing the impact of market volatility with a balanced portfolio management strategy
GMAAM
ALTERNATIVE ASSET MANAGEMENT
€1.0bn+ of Asset under Management, including discretionary portfolios, flexible funds and private capital funds
€100m closed-end private debt fund entirely invested and a second fund with fund-raisingcurrently underway (€200m target)
IB
INVESTMENT BANKING
Consistently ranked among the top M&A Advisors by number of deals in the last 5 years
Leading independent operator on capital markets (ECM, DCM, Debt Advisory), raising €4.4bn for its clients in the last 5 years with more than 30 transactions
RT
RESEARCH TEAM
Equity and Bond market coverage | #2 "Best Italian Research Team" (Institutional Investor) |
120+ Italian companies covered (96% of the total market cap) | |
#3 "Best Country Analysis" (Extel) | |
40+ European companies covered | |
FIRST QUARTER 2020 RESULTS | 29 |
EXPERIENCED MANAGEMENT SUPPORTED BY WELL-INTEGRATED TEAMS
Equita Board members | Perilli (Chairman) | Board renewed in May 2020 | ||||||||||||
Independent Board members | EQUITA | Vismara (CEO) | Colonna (Indep.) | Ferrari (Indep.) | ||||||||||
Key managers | GROUP | Biglieri (Non Exe.) | ||||||||||||
Demartini (Indep.) | Zeme (Indep.) | |||||||||||||
Control functions | ||||||||||||||
L. Roth (Chairman) | L. Roth (Chairman) | |||||||||||||
M. Ghilotti (CEO) | ||||||||||||||
F. Deotto (Vice-Chairman) | ||||||||||||||
EQUITA | EQUITA CAPITAL | S. Milanesi (Member & Group CFO) | ||||||||||||
A. Vismara (CEO) | ||||||||||||||
SIM | SGR | S. Lustig (Member) | ||||||||||||
S. Milanesi (Member) | ||||||||||||||
P. Pendenza (Member) | ||||||||||||||
F. Perilli (Member) | ||||||||||||||
M. Zeme (Member) | ||||||||||||||
GLOBAL MARKETS | 40+ | INVESTMENT BANKING | 30+ | ALTERNATIVE ASSET MANAGEMENT | 10 | |||||||||
V. Abbagnano (Co-Head of Global Markets) | M. Clerici (Co-Head of Investment Banking | M. Ghilotti (CEO Equita Capital SGR & Head of Portfolio Management) | ||||||||||||
C. Rho (Co-Head of Global Markets) | & Head of Global Financing) | S. Lustig (Head of Alternative Asset Management) | ||||||||||||
F. Arcari (Head of Sales & Trading) | G. Mazzalveri (Co-Head of Investment | P. Pendenza (Head of Private Debt) | ||||||||||||
Banking & Head of Financial Institution) | ||||||||||||||
C. Belotti (Co-Head of Retail Hub) | R. Rufini (Head of Private Equity) | |||||||||||||
C. Volpe (Co-Head of Investment Banking & | ||||||||||||||
S. Pozzi (Co-Head of Retail Hub) | ||||||||||||||
Head of Corporate Advisory) | ||||||||||||||
S. Martucci (Head of Proprietary Trading) | ||||||||||||||
RESEARCH TEAM | 14 | |||||||||||||
L. De Bellis (Co-Head of Research Team) | D. Ghilotti (Co-Head of Research Team) | |||||||||||||
GROUP OPERATIONS, STAFF AND CONTROL FUNCTIONS | 50+ | |||||||||||||
S. Milanesi (Group CFO & COO) | P. Pedrazzini (Head of Compliance, Risk & AML) | E. D'Ardes (Internal Audit) |
# | Number of professionals by business line or area | FIRST QUARTER 2020 RESULTS | 30 |
GLOBAL MARKETS
SOLID GROWTH IN THE CLIENT-RELATED BUSINESS (+36% VS Q1'19), THANKS TO INCREASED VOLATILITY, HIGHER MARKET VOLUMES AND STRONG DIVERSIFICATION. OVERALL PERFORMANCE OFFSET BY THE RESULTS OF DIRECTIONAL TRADING ACTIVITIES, WHICH WERE IMPACTED BY THE TOUGH MARKET CONDITIONS AND REPEATED SHARP DOWNTURNS
NET REVENUES (€M) | ||||||||||||||||||||
37,1 | Client-related | Sales & Trading | ||||||||||||||||||
31,6 | ||||||||||||||||||||
30,6 | 30,5 | |||||||||||||||||||
30,0 | ||||||||||||||||||||
Business | Client Driven & Market Making | |||||||||||||||||||
25,8 | ||||||||||||||||||||
25,8 | 20,8 | 21,7 | (0%) | Directional Proprietary Trading | ||||||||||||||||
24,4 | 21,4 | |||||||||||||||||||
20,9 | 9,1 | |||||||||||||||||||
9,1 | Client-related | |||||||||||||||||||
4,3 | 4,4 | 6,8 | ||||||||||||||||||
3,1 | 5,5 | 8,0 | 5,5 | |||||||||||||||||
Business +36% | ||||||||||||||||||||
7,0 | ||||||||||||||||||||
2,1 | 3,0 | 1,9 | 3,6 | |||||||||||||||||
3,1 | ||||||||||||||||||||
2,8 | 5,3 | 2,1 | ||||||||||||||||||
1,5 | (1,3) | |||||||||||||||||||
FY'14 | FY'15 | FY'16 | FY'17 | FY'18 | FY'19 | Q1'19 | Q1'20 | (Growth % Q1'20 vs Q1'19) | ||||||||||||
Performance drivers
In the first months of 2020 financial markets experienced a significant increase in volatility and third parties brokered volumes (+47% on equities and +49% on fixed income in Q1'20 vs Q1'19) (1)
Sales & Trading revenues up 24%, from €5.5m to €6.8m in Q1'20, benefiting from increase in volatility and higher market volumes
Client-Driven & Market Making revenues grew by 66%, from €2.1m to €3.6m in Q1'20, driven by higher levels of clients' activities and thanks to some particularly performing trading strategies
Directional trading impacted by the tough conditions and sharp downturns of financial markets, which driven the Q1'20 result to €1.3m
losses (€1.5m gain in Q1'19). This more than offset the growth achieved by the client-related business activities
(1) Source: ASSOSIM. Note: 2014 and 2015 figures referred to Equita SIM; 2016 and onward figures referred to Equita Group; roundings in Client | FIRST QUARTER 2020 RESULTS | 31 |
Driven & Market Making and Directional Trading net revenues could occur due to minor reclassifications | ||
INVESTMENT BANKING
Q1'20 REVENUES IN LINE WITH THE AVERAGE OF LAST 5 YEARS, WITH SIGNIFICANT IMPROVEMENT VERSUS THE WEAK Q1'19 AND DESPITE THE DIFFICULT ENVIRONMENT DUE TO COVID-19
NET REVENUES (€M) | MARKET FIGURES (Q1'20 VS Q1'19) | |
26,1 | |||||||
19,6 | 20,2 | ||||||
18,3 | |||||||
17,6 | +93% | ||||||
15,9 | |||||||
2,1 | 4,0 | ||||||
FY'14 | FY'15 | FY'16 | FY'17 | FY'18 | FY'19 | Q1'19 | Q1'20 |
ECM (1) | €0.9bn (+30%) |
7 Deals (-42%) | |
€3.2bn (-32%) | |
DCM (2) | |
6 deals (-14%) | |
€9.2bn (+40%) | |
M&A (3) | |
231 deals (+8%) | |
Performance drivers
Only 7 ECM deals executed in Italy in Q1'20 (12 in Q1'19), for a total volume of only €0.9bn (€0.7bn in Q1'19). DCM transactions decreased too, with 6 deals completed in Q1'20 (7 in Q1'19) which raised €3.2bn (€4.7bn in Q1'19)
Several high-profileM&A mandates completed by Equita in the first months of 2020. Interesting opportunities in the coming months due to the consolidation of several sectors and industries
Corporate Broking and Specialist activities continued to deliver good results. Number of mandates with listed companies increased to 50, enabling cross-sellingand cross-fertilisation opportunities for the other investment banking teams
(1) ECM figures include IPOs, Convertibles and Follow-on deals. Source: Equita analysis on Borsa Italiana and Dealogic data. (2) DCM figures excluding | FIRST QUARTER 2020 RESULTS | 32 |
banks/insurances. Source: Bondradar. (3) Source: M&A in Italy, KPMG report. (4) (32%) excludes three large balance sheet driven deals above €1 billion | ||
(Nexi's IPO, Creval's aucap and Fineco's ABB). Page note: 2014 and 2015 figures referred to Equita SIM; 2016 and onward figures referred to Equita Group | ||
ALTERNATIVE ASSET MANAGEMENT
RESULTS IMPACTED BY THE LOWER MARKET VALUE OF PROPRIETARY INVESTMENTS IN ASSET MANAGEMENT INITIATIVES. AM FEES SLIGHTLY DOWN YEAR-ON-YEAR DUE TO THE DECLINE IN AUM WHICH WERE IMPACTED BY MARKETS' DOWNTURN
NET REVENUES (€M) | ||||||||||||||||||||||||
Recurring initiatives | ||||||||||||||||||||||||
Management fees PM | 8,6 | €1.0m AM Fees in Q1'20 | ||||||||||||||||||||||
(€1.1m in Q1'19) | ||||||||||||||||||||||||
Performance fees PM | (€1.2m) | |||||||||||||||||||||||
3,7 | Port. Management (-7%) | impact | ||||||||||||||||||||||
Private Debt (+17%) | from FV on | |||||||||||||||||||||||
3,7 | ||||||||||||||||||||||||
3,2 | investments | |||||||||||||||||||||||
2,1 | ||||||||||||||||||||||||
2,1 | ||||||||||||||||||||||||
1,5 | 4,9 | 1,4 | ||||||||||||||||||||||
0,8 | ||||||||||||||||||||||||
0,5 | (0,1) | |||||||||||||||||||||||
FY'14 | FY'15 | FY'16 | FY'17 | FY'18 | FY'19 | Q1'19 | Q1'20 |
Performance drivers
Q1'20 results impacted by lower market value of Equita investments (e.g. Blueglen fund down 26% YTD as of March 31, 2020)
Portfolio management recorded lower management fees (-7%) following the decline in its AuMs (from €919m in FY'19 to €752m in Q1'20), mainly due to performance (2/3 market, 1/3 drawdowns)
Private Debt continued to focus on EPD II fundraising (hard cap €200m) and deal- sourcing activities to speed-up the investment phase when EPD II will be ready (First closing expected by the end of H1'20)
Assets under | Decline in AuM (16%) | ||||||||||||
Management | mainly due to market | ||||||||||||
performance | |||||||||||||
(€m) | |||||||||||||
1.019 | |||||||||||||
980 | |||||||||||||
39 | 852 | ||||||||||||
49 | |||||||||||||
100 | |||||||||||||
654 | 150 | 29 | |||||||||||
100 | 100 | ||||||||||||
150 | |||||||||||||
358 | |||||||||||||
100 | 880 | ||||||||||||
251 | 681 | 723 | |||||||||||
66 | |||||||||||||
404 | |||||||||||||
251 | 292 | ||||||||||||
2015 | 2016 | 2017 | 2018 | 2019 | Q1'20 |
Private Equity working on a new initiative leveraging on investment structures like ELTIFs
Portfolio Management Private Debt SPAC Blueglen
2014 and 2015 figures referred to Equita SIM; 2016 and onward figures referred to Equita Group | FIRST QUARTER 2020 RESULTS | 33 |
ALTERNATIVE ASSET MANAGEMENT: SOUND PERFORMANCE
POSITIVE TRACK RECORD IN ALMOST ALL PRODUCTS THANKS TO STRONG EXPERTISE AND TOP-QUALITYIN-HOUSE RESEARCH. RESILIENT PERFORMANCE ALSO DURING THE MARKET TURMOILS OF 2020
A DIVERSIFIED SET OF PRODUCTS
Broad market recognition
of senior professionals, leveraging on
top quality in-house research
Different products
performing
with a strong track record
1
ITALY TOP
SELECTION
(BLUE CHIPS)
2
TOP SELECTION
MID SMALL
(MID-SMALL CAPS)
3
TOP SELECTION OPPORTUNITY
(BALANCED)
PORTFOLIO MANAGEMENT
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | YTD | (1) | |
Line | 30,8% | 10,0% | 26,6% | (1,8%) | 16,9% | (8,5%) | 23,9% | (19,8%) | |
Benchmark | 16,1% | 0,0% | 14,1% | (8,6%) | 14,0% | (15,1%) | 24,3% | (22,4%) | |
Rel. Perf. | 14,7% | 10,1% | 12,6% | 6,9% | 2,9% | 6,6% | (0,4%) | 2,6% | |
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | YTD | (1) | |
Line | 66,6% | 8,6% | 37,1% | (5,5%) | 28,7% | (14,4%) | 23,2% | (21,1%) | |
Benchmark | 39,8% | (0,3%) | 30,7% | (4,1%) | 25,7% | (16,1%) | 17,9% | (18,1%) | |
Rel. Perf. | 26,8% | 8,9% | 6,4% | (1,4%) | 3,0% | 1,7% | 5,3% | (3,0%) | |
2013 | 2014 | 2015 | 2016 | 2017 | 2018 | 2019 | YTD | (1) | |
Line | 30,2% | 7,4% | 14,8% | (1,1%) | 4,6% | (3,6%) | 13,5% | (11,8%) | |
Benchmark | 9,3% | 2,9% | 7,4% | (3,7%) | 6,8% | (8,0%) | 14,8% | (12,8%) | |
Rel. Perf. | 20,9% | 4,5% | 7,4% | 2,6% | (2,2%) | 4,4% | (1,3%) | 1,0% |
4 | EQUITY MID | Net Performance (2) | 5 | EQUITY SELECTED | Net Performance (2) |
SMALL CAP | YTD (4%) | DIVIDEND | YTD (10%) |
FUND | Inception +3% | FUND | Inception (6%) |
THIRD PARTIES
6 | Net Performance (2) | 7 |
BLUEGLEN | ||
EQUITA | ||
EQUITA TOTAL | YTD (26%) | |
RETURN FUND | PRIVATE | |
Inception (21%) | ||
(BETR) | DEBT I |
PRIVATE DEBT | PRIVATE EQUITY | |||||
Fund type | Closed-end | 8 | EPD II | 9 | Equita | |
Commitment (€, time) | €100m/10 yrs | + | Smart Capital | |||
(Fundraising | ||||||
Leverage (avg) | ≈3x EBITDA | started in | (ELTIF) | |||
Gross Exp. Ret. (%) | ≈9.5% YTD(1)(3) | Oct'2019) | (Launch expected | |||
in Q3 2020) |
(1) Performance as of May 15, 2020; (2) Performance as of March 31, 2020; (3) Assuming no early reimbursement | FIRST QUARTER 2020 RESULTS | 34 |
BALANCE SHEET AND TOTAL CAPITAL RATIO
LIGHT BALANCE SHEET AND HEALTHY CAPITAL STRUCTURE, WITH TOTAL CAPITAL RATIO WELL ABOVE REQUIREMENTS
€ m | Q1'20 | FY'19 | FY'18 | |
Cash & cash equivalents | 0,0 | 0,0 | 0,0 | |
Assets at FV to P&L & Equity investments | 80,9 | 75,3 | 62,0 | |
Receivables | 237,6 | 184,2 | 215,1 | |
Tangibles assets | 7,2 | 7,3 | 0,6 | |
Intangible assets | 15,1 | 15,1 | 15,0 | |
Tax assets | 4,2 | 5,0 | 3,9 | |
Other assets | 2,9 | 1,5 | 1,7 | |
Total assets | 347,9 | 288,3 | 298,3 | |
Debt | Approximately | 227,2 | 172,9 | 184,8 |
Financial liabilities held for trading | 13,4 | 12,3 | 8,3 | |
€40m of reserves | ||||
Tax liabilities | 2,7 | 2,3 | 2,0 | |
available for | ||||
Other liabilities | 16,5 | 14,2 | 14,5 | |
distribution | ||||
Employee termination indemnities | 1,9 | 2,5 | 2,4 | |
Provisions for risks and charges | 3,9 | 3,9 | 6,2 | |
Total liabilities | 265,7 | 208,2 | 218,3 | |
Share capital | 11,4 | 11,4 | 11,4 | |
Treasury shares | Total | (4,5) | (4,5) | (4,5) |
Share premium reserve | Capital Ratio | 18,2 | 18,2 | 18,2 |
Reserves | 22% | 55,3 | 45,6 | 44,0 |
Valuation reserves | (0,0) | (0,0) | 0,0 | |
Profit /(Loss) for the financial year | 1,9 | 9,5 | 11,0 | |
Total shareholders' equity | 82,2 | 80,1 | 80,1 | |
Total shareholders' equity and liabilities | 347,9 | 288,3 | 298,3 |
FIRST QUARTER 2020 RESULTS | 35 |
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Equita Group S.p.A. published this content on 25 May 2020 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 25 May 2020 17:37:06 UTC