Abg Sundal Collier Asa

Good morning, all, and a warm welcome to our Q3 results presentation. Before we kick off the presentation, I would like to mention that we will, as usually, have a Q&A session after the presentation. And should you want to raise a question, please use the Q&A function in Teams, and we will answer all questions in turn. We delivered a strong set of numbers in the quarter. And in fact, our second highest third quarter revenues ever with healthy operational leverage and strong growth of EPS. This is important since it proves our ability to deliver strong results today while investing in profitable long-term growth. We're also happy to observe continued strength in our debt capital markets and M&A operations. And we also observe higher activity in equity capital markets overall, especially in Sweden. In fact, when it comes to IPOs, Stockholm is the leading listing venue in Europe year to date. And looking at our pipeline of Swedish IPOs, we have reasons to be optimistic when it comes to our own performance in this area. regard the next couple of quarters furthermore we continue to improve work to improve our firm to become the nordic investment bank of choice the investment bank of choice for clients, talents and investors. We continue to focus on strengthening our positions in our core operations as well as developing our business by broadening our offering to new client groups such as our recently launched private bank and alternative investments operations. We are pleased with the reception of our private bank from clients Not least looking at the most important metric, i.e. the conversion from initial dialogues to actual onboarding of clients. While it will take some time before these new business initiatives make some meaningful contribution to our revenues, they will further diversify our revenue base and contribute to improved profitability over time. meanwhile we will continue to work relentlessly to gain market shares in our core areas and we will add resources in terms of number of employees and partners by using our key assets people and technology and by communicating more clearly what we do and building our brand awareness we have a clear path for gaining ground and increase revenues further By doing this, we are committed to our long-term targets of increasing our revenue per head by at least 20% versus 2024 over the cycle and to deliver a mid-cycle operating margin of at least 25%. So in the third quarter, that just ended. This resulted in us, if we flip to the next slide and look at the numbers, please. It ended in us delivering revenue growth of 21% to knock 476 million. This growth is a result of our diversified platform delivering as designed. with a broad contribution from products geographies and sectors the growth in sweden in this particular particular quarter stands out with continued solid contribution elsewhere looking at our operating margin in the first nine months of the year ended uh that ended at just north of 20 if we look at our core business Excluding our new growth initiatives, our operating margin went from just south of 20% to just north of 21%, an improvement of some 1.5 basis points year-to-date 2025 versus same period last year. And looking at our underlying margin, excluding new business ventures, year-to-date is around 23%. Our ambition is, of course, that our new ventures shall contribute to improving our operating margin and profitability, even though it will, as alluded to earlier, take some time before we can see that in the actual numbers. We delivered earnings per share at 14 EUR, up from 9 EUR in the quarter, an increase of 56%, highlighting the operational leverage once again in our business. Year-to-date earnings per share ended up at 41 EUR versus 35 EUR last year. And should we exclude investments in new ventures, the same numbers would have been 46 EUR and 38 EUR respectively. So let's continue with the next slide please and look at the macro and market backdrop. After what was a bit of a roller coaster the second quarter with the tariff war that shocked the market at the beginning and then a very sharp recovery, the third quarter was more stable. uh with u.s equity markets regaining uh the lead in terms of outperforming uh outperforming the global indices as well as the nordic englishes especially driven by nasdaq and the tech sector volatility was continued to be low and stable and both u.s interest rates and credit spreads continued to tighten highlighting the increase in risk appetite amongst investors all in all this is a good foundation for our core markets to perform so if we continue with the next slide please and look at our main markets within investment backing performed in the nordics during the quarter and over the last couple of years and starting off with the equity capital markets It is clear that volumes overall have continued to be rather muted in a Nordic perspective. Having said that, as alluded to earlier, the IPO activity in Sweden specifically, also continuing into the fourth quarter, is encouraging. All in all, volumes were up in equity capital markets by some 30% in the quarter, close to 24% in the quarter. But that was in all fairness versus a very weak Comp Q3 last year. And looking at a rolling 12-month basis, you can see volumes are still muted at 178 billion in the Nordics, actually a slight decline versus 2024, even though we expect activity to pick up, led by not least activity in Sweden. Continuing with debt capital markets, the path to recovery has been very clear and convincing with rolling 12 months, as you can see at the bottom hand side of this slide, with last 12 month volumes actually reaching above the previous peak in 2021. This is, to some extent, a cyclical recovery, but it also highlights the structural growth that we have talked about a lot previously of the very vibrant Nordic DCM market with many non-Nordic issuers looking to tap into the opportunities offered here. And finally, looking at M&A, that continues to be stable, continues to be the least dramatic area in our investment banking portfolio in terms of stability. But in the absence of the expected pickup that we and other of our colleagues in the industry have talked about over the last quarters, M&A in the Nordics is still rather muted with volumes in terms of number of transactions actually down in the quarter year-on-year and flat. on a rolling 12 month basis. So if we continue with the next slide, please, and look how we have performed in these markets and looking at starting off with our combined corporate financing operations. We are on a year-to-date basis slightly down after the general weakness in the second quarter with revenues just north of half a billion versus 531 million NOC last year in the same period. However, looking at our performance in the third quarter specifically, our revenues were up by 20%, reflecting stronger markets and not least our debt capital markets performing well. And as you can see on the right-hand side of this slide, there is good contribution from the entire range of products and sectors in our combined capital markets operations. Three IPOs, two out of Sweden and one in Norway this quarter, coupled with a number of placings. And as you can see on the lower right-hand side of this slide, lots of DCM activity. where I would specifically like to highlight the European Entertainment Group issue of 585 million euro bonds, setting a new all-time high in terms of size for a non-rated Nordic bond issuer. Moving on to the next slide, please, looking at our M&A business. We yet again delivered a rock-solid performance with several large deals closed during the quarter, also with good contribution from all geographies. Revenues in the quarter specifically ended up at 156 million, an increase by more than 40% versus last year, and at 496 million the first nine months, up by 37% versus the same period last year in a market that has been fairly flat. On the right-hand side of this slide, we have some selected transactions where I'd like to highlight the renewable energy company transaction in Denmark. Silex in Sweden and also our stronghold in the Norwegian TMT sector. Let's continue with the next slide, please, and look at our brokerage and research operations. where we can conclude that we continue to deliver solid revenues at 127 million in the quarter, a slight increase, versus a rather tough third quarter last year. Revenues ended up at 453 million in the first nine months of this year, which is up by some 10%. That means we are now on a level of 609 million NOC on a rolling 12 months basis. And our brokerage and research operations thus continues to deliver rock solid contribution to our revenue base. Finally, before touching on some concluding remarks, let's look at headcount and cost. So if we flip to the next slide, please, where we can see a very undramatic chart in terms of number of full-time employees. As you can see, it's been very stable over the last couple of years in spite of our focus on growth on upfront staff, including private banking. the average year-to-date of 335 full-time employees is basically flat versus the same period last year, meaning we have continued to focus on efficiency and focus on our support and operations division. The ratio of Front staff to total staff is now at a record high of 82%. And while we continue to focus on keeping a high efficiency level, there is obviously a level where this ratio to some extent can become a bit too high, where we start to become inefficient on our front operations. So I would not expect this ratio to change dramatically over time as we grow the number of full-time employees going forward let's continue with the next slide looking at our operating cost level that increased in the first nine months of the year by 11 to 1 billion 161 million notch while we have kept the compensation to revenue ratio steady around as you can see 56 57 the increase in revenues and profitability obviously is the main driver for the increased in costs due to our variable uh remuneration model also our reinvestments in our new ventures explain some of the cost increase but looking at our underlying fixed cost base in q3 it's very much in line with last year and recent quarters. So, let's continue with the next slide and let me summarize what I think the key takeaways are here. We had a strong quarter with revenues up by plus 20% and EPS by 56%, demonstrating our strong operational leverage. We are both short- and long-term focused in our approach. Short-term profitability paves the way for investing in long-term profitable growth. We had solid contribution from all business areas to our revenue growth with our M&A and debt capital markets operations as the main contributors to the growth in the quarter year-on-year. We're also happy to observe that IPO activity has picked up in Sweden, with Stockholm being the leading listing venue in Europe year-to-date. and we are furthermore encouraged by our own pipeline in this regard in sweden we are pleased with the early success in our private banking operations as illustrated by the strong conversion from initial dialogues to client onboarding and we will continue to strengthen our core business by targeted senior hires coupled with junior hires to support growth further. So with that, I'd like to open the floor for any questions.

Yes. What trends are emerging in Sweden's equity capital markets that make Stockholm such a strong listing venue?

Yeah, that is a great question, but the answer is both simple and difficult. But the main reason is that we have an incredible depth in the Swedish market as proven by the recent large successful IPOs. And that is due to the unique ecosystem in Sweden of investors with an unusual large number of institutional investors, not only large ones, but also in an international context, many smaller ones, providing the opportunity also for smaller IPOs that would have been more difficult to pursue outside the Nordics at least. On top of that, investing in equities is somewhat of a national sport with an extreme interest and depth from retail as well. And since we are a true Nordic investment bank, we are completely agnostic about listing venues for our clients. This is, of course, an opportunity also for non-Swedish issuers to exploit, we think. any thank you i think that's it from the floor okay okay many thanks for tuning in and should you have any follow-up questions do not hesitate to contact either yours truly or gayer olsen thank you