Azimut Holding Spa Ord

Good afternoon. This is the call school conference operator. Welcome and thank you for joining the APSIMOD holding first quarter 2025 results conference call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and zero on the telephone. At this time, I would like to turn the conference over to Giorgio Medda, CEO of APSIMOD. Please go ahead, sir.

Good afternoon, everyone, and thank you for joining us today for AdMob's first quarter 2025 results presentation. I'm Giorgio Medes, CEO of the group, and I'm pleased to be here with Alessandro Zambotti, our CEO at Group CFO, and Alex Topera, Head of Investor Relations. We had a very strong start to the year, and today we will walk you through our key developments, financial performance, and the strategic progress we have made in positioning azimuths for long-term growth and value creation. So let's get it started and move to slide three, please. So let me begin, first of all, with the key highlights from the first quarter of 2025, which marked a strong start to the year from a strategic, financial, and operational perspective. We recorded the best first four months in our history in terms of managed NAV inflows, raising 5.5 billion euros. out of $5.7 billion in total, almost three times higher than the same period last year. This performance underlines the strength of our diversified business model and global platform. Secondly, recurring net income increased by 13%, confirming the resilience and the quality of our core business, even as overall profitability was affected by lower variable fees compared to last year. From a strategic standpoint, we have strengthened our senior leadership team through the appointment of a renewed board of directors, reinforcing our governance as we prepare for the next chapter of growth, which I will expand on shortly. As many of you will have seen in the news recently, it has been a particularly busy period for us, We made two strategic acquisitions in the U.S., entered the Moroccan market, and just a couple of days ago announced that we are preparing to launch operations in our 20th country, the Kingdom of Saudi Arabia. Lastly, we made progress on the TMB transaction, which remained a strategic priority for the group, and this will be discussed in more detail later by Alessandro. I'm also proud and pleased to share that in the first quarter, we surpassed 1 million clients globally, another important milestone in Ademo's journey as a leading multi-generational financial advisory platform. Turning to the numbers in more detail on page four, our diversified business model continues to deliver solid results. Total assets have reached 107 billion euros at the end of April, with 73.3 billion in managed assets, up 4.4% since the beginning of the year, supported by strong net inflows and positive asset dynamics across all geographies. It's worth noting, though, that at the group level, we have faced some effects headwinds, in particular from the U.S. dollar, as well as certain emerging market currencies that have softened our total assets growth. Revenues in the first quarter came in at 321 million euros, driven by an 8% increase in recurring fees across all core markets, with particularly strong contribution from Italy, Turkey, Brazil, Singapore, and the U.S. On the profitability side, our EBIT stood at 141 million euros, and if you look at the recurring component, excluding performance fee, we posted a 6% increase, driven by higher volumes and discipline in cost management. Net profit reached €115 million, and on a recurring basis, we recorded a 13% increase versus the same period last year. This is a clear indication of our view of the strength of our core earnings. Finally, we continue to generate robust cash flow. With a cash flow to market cap ratio in excess of 13%, it is an annualized yield. This underscores our capacity to fund both growth and shoulder returns, still maintaining the possibility and the capability to entertain investments into future opportunities. Yet, we believe that the strength is not fully reflected in our current market valuation, offering, in our view, a clear disconnect and an opportunity for long-term investors. Turning now to governance on page five, I'm pleased to present the composition of our new board of directors for the 2025 and 2027 term. This renewal reflects both continuity and evolution, providing a strength and foundation to guide Azimut through its next chapter of growth. I would like also to briefly introduce myself, as well as my colleague Alessandro Zambotti. I joined Azimut in 2007, following over a decade in sell-side roles. Within the group, I've served as a portfolio manager and later led business development initiatives for our international operations starting in Turkey and Dubai. I've also led our global asset management business from Luxembourg, and three years ago I moved to New York, U.S., to support our global strategic expansion around the world. As for the board structure, we have confirmed the composition that reflects the balance of experience and independence in line with the best practices. five independent directors 50 female representation and two representatives from our new italian commercial organization highlighting once again the central role of our distribution network alongside alessandro myself both reconfirmed as board members and under the continued leadership of our founder the pietro giuliani as chairman We are committed to driving Azimut forward with discipline, innovation, and a long-term strategic vision. And let me tell you that we are thankful for the trust of our shareholders and very excited for what Leisa has for us. Let me now walk you through an important evolution in the way we represent the Azimut business, starting on slide six. This new structure is not just about simplifying a presentation. It reflects the fundamental shift in how we operate and communicate. And together with Alessandro, we commit to disclose our financials and business proposition in a clear way going forward. Azimut is a global, multi-generational financial advisory platform that we will continue to scale across geographies, asset classes, and digital channels. Our asset management as a service proposition puts investment performance for the benefit of our clients and product solutions across public and private markets at the center, enabled by technology and our global distribution networks. This new structure helps address market complexity, improves transparency, and allows us to better highlight the strengths of our long-term fundamentals. We believe our model is particularly well positioned to respond to the structural industry shifts thanks to our scale, geographic diversification, and alignment between performance and distribution. With this new presentation format, we aim to reposition investor perception and demonstrate that AdSense is not a collection of silos that is reliant on a single market, but a single high-performing platform with multiple levels of growth. Let's turn now to page seven. So how does this all translate in practice? What you see here is the blueprints of how we intend to represent the group going forward, an organizational matrix that mirrors how we actually run the business. On this slide, we present the total assets as of the end of April, structured by product lines across the top, from investment funds to digital asset management, and by key distribution channels along the left. This is more than a new reporting layout. It's a transparent and a light view of how our platform creates value, and over the coming quarters, we will also reflect the structure in our financial disclosure, giving investors greater clarity on growth, scale, and profitability across our core pillars. Moving on to slide eight, this slide gives you the geographic breakdown of our total assets as of April 2025. What's new is that alongside our traditional regional reporting, we are now showing separately the perimeter of our strategic affiliates, namely Sanctuary in the U.S. and AZNGA in Australia. These are businesses where we are no longer exercising diet control. but where we remain a strategic shoulder. By separating them, we reflect their distinct business models and highlight the long-term value potential. As you have seen, by the way, with the recent partial sale of ZNGA, these platforms offer a very meaningful room to scale and create upside over time together with our local partners. Turning to page nine, let me walk you through an important change in how we will report our assets and inflows going forward. We have introduced a simplified structure that better reflects how we actually run the business, cleaner, more intuitive, and free of double counting, giving investors a clear view of where growth is being generated. Going forward, our reporting will focus on five product categories, mutual funds, alternative funds, discretionary and advisory, life and pension, and strategic affiliates. As mentioned on the previous slide, we have carved out our strategic affiliates, Sanctuary and ZNGA, to reflect the distinct business dynamics and fundamentals. And at the same time, assets previously reported under custody and advice are now consolidated into the discretionary and advisory lines. Lastly, pension funds assets previously included in funds will now be reported under life of pension to ensure a clear attribution also consistent with our financial planning product offering. Let me be clear and repeat this once again. This is more than a technical update. It's part of a broader push to enhance transparency and ensure our disclosures are fully aligned with how we manage capital, allocate risk across our business platform, and deliver long-term value. Let's now move to page 10 to dive quickly into the year-to-date performance in terms of assets and inflows. On this page, you will see how our total assets have evolved since the start of the year under the new reporting methods. I won't go too much into the detail here, as we already published and commented these figures in our press releases, but I want just to highlight the strong demand for mutual fund solutions since the start of the year, supported by our networks and partners in Italy and Turkey. We recorded €5.7 billion of net inflows in the first four months, of which €3.4 billion were organic. This is the best performance in the group's history for this period. This underscores the strength and appeal of our offering across both mature and growth markets. And on the asset side, also, I'd like to mention that we closed April just shy of €107 billion. This certainly represents a marginal decline since year end, but is entirely and mostly due, in fact, to FX headwinds, particularly due to the U.S. dollar and some emerging market currency developments. These results, in our view, confirm the resilience of our core business and the effectiveness of our diversified model, delivering growth across channels, geographies, and client segments. Turning now on to page 11, here we introduce a new visual representation of what is driving our profitability in a more intuitive and transparent way. While Alessandro will go into the details shortly, I'd like to highlight a few points. First, our recurring operating business, after all costs, grew by a solid 6%, a strong signal of the health of our platform. Secondly, we received a solid contribution from our strategic participation, including dividends from our GP stake in business that I will also elaborate more into details shortly with the transaction that we have announced just yesterday with IPOS Capital. Finally, while the headline net profit shows a modest year-on-year decline, this is entirely due to lower performance fees. When we look at recurring net profit, so after stripping out the variable components and all the non-recurring items, we actually saw an increase of 13% to $112 million. Let's move now onto slide 12. This slide, along with the next one, marks another important evolution in how we present the business. What you see here is the current P&L breakdown by business verticals, a structure that we introduced with our full year results in 2022. While this representation helps illustrate the underlying dynamics of our platform at that time, We continue to scale across geographies and solutions. We have now recognized the need for a clearer, more actionable format, one that speaks to both our internal performance drivers and external investor expectations. Therefore, starting from this quarter, we are transitioning to a new framework, simpler in structure, yet more granular. And I'll show you this objective view on the next slide. On slide 13, you see a simplified overview of our Q125 performance versus the same period last year, applying our new reporting structure. As mentioned earlier, we now present a more detailed geographic breakdown of the international business, while also separating out our strategic affiliate perimeter. Let me briefly analyze a couple of takeaways without going into the numbers. In Italy, we saw a 15% increase in total assets, which translated into higher recurring revenues. However, the bottom line was affected by lower performance fees compared to a very strong Q1 in 2024. Internationally, we have achieved a meaningful uplift in profitability thanks to asset growth, strong recurring revenues, and a contribution from dividends received on our GP stakes. The results underscore the strength and the scalability of our diversified business model. And let me now turn to the next slide where I will highlight the product pipeline that is expected to support further growth in the coming quarters. So on slide 14, you see how we are scaling innovation across asset classes, geographies, and digital channels. On the public side, we are launching seven new use strategies, rolling out a refreshed suite of private insurance solutions under the name of Ademot Life Collection. And we are accelerating onboarding with all set distributors across key hubs like Dubai, Hong Kong, and Singapore. Notably, we are also launching the China UAE ETF link with China Universal Asset Management, one of the largest independent managers in China. It is a very bold move that reinforces our capability to leverage cross-border partnerships. On the alternative side, we continue to deepen our capabilities with new vintages for our flagship private equity infrastructure portfolios and strategies. The debut of our capital solution suite, the launch of a corporate venture capital initiative, and the revamped offering in Turkey and Brazil, where we are already managing over 550 million euros in niche private market strategies. This pipeline reflects the breadth of our platform and certainly our ability to innovate and deliver value across all client segments along the market cycle. And on the following slide, we also showcase the different initiatives that we have undertaken across digital business developments. Last month, we launched in Italy MetAdvisor, a new tool allowing clients to engage with the Gen-TK AI and have a relationship with their financial advisors for everything being related to their portfolio. Last month, we also launched Azimuth Next Generation Advisory, an AI-driven portfolio construction that will constitute a very significant part of our offering in the coming months. In February, we launched Azify, a digital wallet in Brazil that also includes a stable coin offering. And we have also continued since the beginning of the year to expand the product offering of the AZ Invest. a digital fund distribution platform in Egypt that now captures almost 20% of all the new clients in the country. And also, following the end of the summer, we'll be expanding the offering of BYs in Belgium and Luxembourg after the success that we had in Italy. Let me now move on to our international expansion on slide 16. And I'd like to start with Morocco, the transaction of that at the end of March saw us acquiring 25% in RedMed Capital, one of the largest independent managers in the country, and 1.7 billion euros of assets under management, a 3% market share. Let me remind you that Morocco today is one of the most developed asset management industries across all emerging markets, with a 33% growth annually over the last 30 years. Morocco is also the African country with the highest millionaire growth rate over the last 10 years. This is a strategic investment, a plug-and-play for the group. Consider that Morocco and Europe, they have a very well-established relationship. This transaction will allow Azimut to expand its distribution capabilities into Morocco, leveraging its European product factories. Two days ago, also, we have announced the attainment of the principal approval to operate as a fully-fledged onshore asset management company in Saudi Arabia. Operations will start in Q3 2025, unlocking significant new growth opportunities in the kingdom. But let me tell you, Azimut has been already operating in the country since 2020 with the management of institutional mandates today in excess of $400 million. But we are looking really to expand to benefit from the very sizable retail opportunity with the local asset management industry in excess of $260 billion expected to grow by 50% over the next 50 years. And obviously, needless to say, the possibility of raising from within the country to address and penetrate the very significant pool of institutional assets. Also, yesterday we have announced a very exciting strategic development in the U.S. On slide 17, we highlight the details of our increased investments in high-cost capital. As announced, we raised our stake from 15% to 56%, taking a controlling interest in a business that we know well, and we have seen growing six-fold in AUM since our initial entry. With close to 650 million euros in AUM and a contract record in private equity and venture capital, Hypost is not only a growth story, but a very powerful platform for us to further scale our presence in the US alternative space. This transaction also deepens the alignment between our two firms. More importantly, Mark, a very important step in our partnership with David Moroz and Mark Bezos, we will both increase their ownership in Azimut, further reinforcing our partnership. David, in addition to his role as a high-post CEO, will also serve as a senior advisor to ACP, supporting our broader GP stakes business. Meanwhile, Mark will become head of strategic partnerships and a board member of Azimut U.S. Holdings. Looking ahead, IPOS is planning to launch two new funds by year end, further expanding its product offering and opening new opportunities for value creation across our ecosystem. This concludes my part for now, and I now hand over to Alessandro, who will give you some insights into the progress of the new bank transaction. Thank you.

Thank you, Giorgio, and good afternoon to everyone. So from my side, let's move to slide 18. Again, here we just simply re-propose the same slide that we already proposed in the last two calls. The aim is just to underline again that the purpose of this transaction is not driven by a specific element or driven by a specific condition, but we have three options on the table and we are still running the project in this way. Therefore, the aim is still focused on Real one of the objectives that is to create more value for clients, shareholders, financial advisors, and employees, and also capitalizing on assets that are currently outside the admin perimeter. This is important to help me also on the following slide where we just give you an update on the exclusivity agreement that we still have with FSI. As you probably remember, there was a deadline within the end of April. This exclusivity has been extended to the 20th of May. On one side, the part of the due diligence is completed, but on the other side, we are still negotiating and finalizing the transaction. Therefore, at the moment, for the information that we can share, following also the sensibility of the information, We just, you know, it's able to give you a better view, but just related to the fact that we extended the exclusivity period. Then the other information are still the same. Therefore, we expect, you know, to obtain the banking license within the end of the year, and the aim of the project is what I mentioned before. So moving to numbers, so moving to slide 20, Here we just try to give you the big picture of the consolidated results of the group for the first quarter of 2025. Then we will go in detail. Therefore, I will not spend additional time through the single line of the numbers here. But I just want to give you an update on the fact that relation to the first quarter 24, we created a new column that is following the adjustment related to the consolidation of ZNGA. That means that to have a better comparison of the numbers, we take out the line-by-line contribution of AZNGA through the first quarter 24. And also here you will see at the end the recurring net profit that we introduced, I mean it has been introduced by Giorgio at the beginning, is a new way to look to the numbers of the group of focusing on the recurring business. So the other way, taking out the effect of the variable fees or no recurring effect like fair value option, non-operating cost, and as we always do also taking out the effect of the IFRS 17. So in this way probably we expect that in the future you will have a better understanding of the evolution of the recurring business. So moving again to more details, here you have the slide related to the revenues. Total revenues, I mean, comparing the two quarters, the first quarter of 25 with the first quarter of 24, overall you have a decrease of 2 million. But then if you consider, let's say, the single variation, you can see that there is a solid growth in recurring fees, plus 8 percent, that in absolute value, 20 million more. This is thanks to the Italian, let's say, perimeter. So across to all the business lines, we benefit to a positive increase in terms of mutual fund recurring fees, plus 6 million, and alternative funds, plus 4 million plus additional positive effect from the portfolio management or the advisory fee. And also we have a positive contribution thanks to our international business led by Turkey, Brazil, Singapore, US that provides and contributes for the growth of the recurring fees by 8 million. In terms of performance fees, you can see that the fulcrum was negative, €1.4 million in the first quarter of 2025 compared to the €1 million positive of the first quarter of 2024. And also, if we look to the insurance revenue, it's true that we see a decrease of 80 million, but again, last quarter, so the first quarter of 2024, was benefiting by 28 million of performance fees. That is not contributing at the same level this year, this quarter, because it's just 5 million euros. Therefore, the real positive message here is, again, that despite the volatility of the market that we are facing, we are increasing our recurring revenue by 17%. That is almost 4 million euros compared to the first quarter, 24. And then, just to conclude, the other revenue, we are almost stable thanks to the contribution of our company investment banking business. Moving to the next slide, we have details in relation to the cost. You can see an increase of $6 million overall. We have $9 million more in terms of distribution costs due to an increase of the recurring revenue, again, as I mentioned before, in Italy and abroad. of almost 3 million euro, and a target provision from variable incentive to Italian FTA of almost 4 million euro. On personal and the CNA, we have an increase of 6 million. Again, a link to the evolution, as you remember, as you always say, the international business is also impacting this line of the P&L. to the evolution of the business, we have an increase of 4 million around this line. And then we are flat on the amortization. So then moving to the next slide, here we have EBIT and the net profit. You see, again, a positive variation of 6% of the EBIT and 13% on the recurring net profit. And it's also thanks to the fact that at the level of the finance income, we have a positive contribution of almost 14.5 million, and it's mainly explained by 4 million dividends from GP stakes and affiliates, 3 million Euro realized and unrealized gain and losses on our own investment, 3 million Euro net interest earned, 3 million fair value option, But again, I would like to underline once again the important result, the important increase of the recurring net profit by 13% year-on-year. Following slide, net financial position. We have a positive and almost €1 billion of net financial position. As you can see, we have an increase compared to December 24 of €232 million. As we always do, we try to reconcile the variation starting from the net profit before tax, so €145 million. plus the $68 million that is cash that we received during the first quarter at 25 related to the transaction of the ZNGA, so are linked to the proceeds that we cashed in during the quarter. We proceed, I mean, we continue our investment activity. Therefore, we have less than $80 million through M&A, and then a positive reimbursement of STEM duties by $40 million. Therefore, these three amounts should reconcile the variation that I mentioned. Okay, I mean, I'm going to give back to Giorgio for the conclusions.

Yes, thank you Alessandro. So we said we had a solid start into the year that obviously makes us very comfortable in reconfirming our targets for the full year. We had a net profit target between 400 million euros and 1.25 billion euros depending on the completion of the TNB transaction. Obviously, we have achieved €150 million as for Q1 2025. That is approximately 30% of the overall target if measured at the bottom of our guidance. In terms of net inflows, €10 billion was the target. As we said, we had the strongest start in the history of the group. 5.7 achieved as of the end of April 2025. That makes a 57% achievement on the overall target. Let me tell you that the group will present its new strategic targets and dividend policy by Q3 2025 results. This is to mark the next phase of value creation for our group. Now, let me open the floor to questions. Thank you.

This is the College School Conference Operator. We will now begin the question and answer session. Anyone who wishes to ask a question, press star and 1 on the touch-tone telephone. To remove yourself from the question queue, please press star and two. Please pick up the receiver when asking questions. Anyone who has a question, please press star and one at this time. The first question is from Hubert Yam from Bank of America. Please go ahead, sir.

Hi. Good afternoon. Thanks for taking my questions. I've got three. Firstly, on the new bank, thank you for the update. I'm just wondering if you can maybe talk a little bit more in terms of operationally how things are progressing just in terms of maybe deposit growth, customer interest, advisor hires, et cetera, and, like, any changes, you know, in your expectations around the development. Second question is on your high post stake now. You now have a majority stake. Just wanted to double-check. Is this more like a financial investment in the high post, or do you see opportunities for a possible cross-sell opportunities of their products into your client base. And lastly, a question on NOVA. You continue to highlight it as a contributor to your inflows. Can you talk about how significant it's been to your inflows and maybe how the operating margin is doing compared to your target around it previously? Thank you.

Okay. So, relation to TMB project, as I mentioned before. In general, the transaction is still going on. That means that we are positive in terms of the evolution. This is the reason why we decided to extend the exclusivity. So, at the end of the day, again, we are not still able to anticipate any elements. but we see the possibility, you know, to conclude positively. But again, as I mentioned during the call, again, the message is that we are now, you know, close to only this option, but we still have other possibility for us to generate value for the group, but also, you know, generate value for our stakeholders. That means that also we are still, you know, working to create the value that we are going to transfer to the spin-off. So the activity through the deposit, obviously, is still going on. This is an activity that we already started. but with a normal evolution of the activity itself. Probably I'm going to take also related to NOVA. I mean, NOVA, again, is producing positive effect and positive impact on our P&L. We are close to the net profit margin that we were expecting because, obviously, We were missing at the beginning the economic scale coming from the cost of the structure, and thanks to the evolution of the AUM, we are covering this part positively. Therefore, we are close to the 40-45 basis points net that we announced at the beginning when we announced the partnership.

Yes, on high post capital, let me say that this is an industrial investment, a strategic investment. The idea is certainly to leverage our majority stake to use high post capital to launch new funds, new strategies. Obviously, what we can do with David and Mark is to tap onto an incredible network relationships, a great origination pipeline. a very solid LP base, and that obviously poses very well for the future of IPOs, as well as for azimuth-penetrating distribution opportunities across the country.

Great. Thank you.

The next question is from Alberto Villa from Intramontesim. Please go ahead, sir.

Thanks for taking my questions, and congratulations for the appointment. I have a few questions mostly around the new organization. I'm sure it's going to simplify the understanding of the operating performance of the company, of the group, and this is certainly positive. I was wondering if it's possible eventually to have a DACA with also 2024 numbers under the new organization and the quarters for the past year so we can try to start to model our own estimates based on this new organization. Going to the reorganization, just to make clear a few points that I'm not sure I got completely. If we go to slide seven to your new matrix, I was wondering if you can help me understanding what does integrated solutions and global wealth means in practical terms. My simple question is, if we look at your, let's say, traditional Italian financial advisor distribution business. How is that fitting into this new matrix? What is within integrated solution? What is within global wealth? That could be helpful for me to understand how it works. And then, again, on slide 12, you You gave us a few details about the single regions. It actually took my attention the fact that international business has got an increase in AUM of around 30% and a decrease of revenues of mostly 30% than EBIT is up. There has been some moving parts for sure, but I wanted to check with you what was the reason beneath this different behaviors of AUM trends and revenues and margins. And finally, if I may, just another question to better understand how you calculated the recurring income. You are now communicating the various items, part of the financial income, are that considered, stripped out, what is in the recurring and what is not? Thank you very much.

Alberto, let me pick your first question on the reorganization and the figures that we have shown in slide seven. Indeed, Italy is part of the integrated solution distribution cohort. With integrated solutions, we identify businesses where we have a clear competitive advantage built upon the integration of product factories with distribution teams. Obviously, Italy represents the benchmark for this business proposition. But the figures that you see shown here also includes countries such as Mexico, Turkey, and Taiwan. These are countries where we operate exactly on the same basis and also for similarities that are pretty obvious in the way we approach and cater to clients. Global Wealth, on the other hand, represents the global wealth management business that we conduct out of what are global marketplaces for wealth management, offshore wealth management, such as Singapore, Hong Kong, Dubai, Switzerland, Monte Carlo, and Miami. Obviously, you see these integrated solutions and global wealth distribution cohorts What is important for me to stress here is that both distribution efforts rely upon the ability of Azimut to deliver investment management solutions in different forms and product cohorts, that being investment funds, discretionary advisory mandates, or life or welfare solutions.

So back to, I mean, taking the other point, if I'm not wrong, first of all, looking to slide 12, you mentioned the fact that you were seeing 66 million in revenues compared to the 48 million of the first quarter 25. Here, as we didn't have mentioned already, the fact that we created the first quarter 24 adjusted, we just keep the The same level of revenues, so also considering the full contribution of ZNGA in the first quarter of 2024. That's what we did after in the presentation. We took out and we make the comparison more, you know, friendly and comparable itself. That means that the contribution is related in terms of revenue by ZNGA, first quarter 24, that is missing in 25. But as you can see through the evolution of the positive total assets, you have a positive net profit impact and also at the level of the EBIT, we have a positive increase.

Sorry, I'm not sure I understood. In the first quarter 2025, in the international segment, There is not, obviously, Australia, no?

But it has been deconsolidated.

Okay.

But it provides a positive contribution in terms of revenue. It's in the first quarter, 24.

Okay. And the trend in assets that grew from 41 to 53, what is the driver beneath that, if I may?

I mean, it's linked to the evolution of the business. That means the sanctuary, for example. So we are still, you know, representing the real value of total assets coming from the international business. But as I was trying to say, it's also linked to the fact that if you consider the impact of the Australian business in the first quarter, 24, in terms of net profit, you can see in the slide of the P&L, I mean, the 20, that there was no significant contribution in terms of net profit. That in the other way around, you see that the positive increase in terms of U.M. provide positive increase in net profit in the first quarter of 2025. Okay, okay.

Thank you.

And then, if I'm not wrong, you mentioned also the calculation, I mean, the The way we fix the amount related to the recurring net profit, that is 112 million euro, so we do the result of the group. We take out the effect of the performance being coming from the insurance, so 5.3 million. We take out the effect of the fulcrum, so 1.4 million euro, in this case negative. And as well, the contribution of the option, fair value option, so 2.6 million. And in the opposite, let's say, the opposite way, the IFRS 17 that was impacting 1.6 million, more or less. So those are the four elements that we are considering here.

Okay, so all the other elements in financial income are included in the current netting. Thank you. Grazie.

The next question is from Elena Perini from Intesa San Paolo. Please go ahead.

Yes, good afternoon and thank you for taking my questions. First question is about an update on the new bank in terms of assets and financial advisors. You started, you had the spin-off one year ago with approximately 24 billion of assets and 1,000 financial advisors. So I was wondering... where you are at the moment in terms of both those items, if you have started recruiting and how it is going. My second question is about private markets. I see that in your new breakdown by Vertical, you did not mention anymore the private markets. I was wondering whether this is no more a strategic driver for you or if there is any other reason behind this. Thank you.

Elena, thank you very much. I'll actually start picking up your second question. So let me say private markets remain a strategic priority for our product development. We are strong believers that diversification across illiquid alternative investments is of paramount importance for our ability to generate performance for clients. We do actually see this as positive and necessary for value and performance for our clients' portfolios. Obviously, we have shown today a breakdown of earnings using a geographic breakdown. We have heard in the past, but that was something that was missing, particularly for those trying to analyze how we create value out of a very material investment base over the years. We said that over the coming quarters, we will be able to provide a breakdown, also following the matrix in slide seven. Within that breakdown, by product line or distribution cohort, we will break down also the contribution of private markets. For your reference today, when you look at slide 12, you see what has been the contribution of private markets within that table where we wanted for transparency to outline reporting of earnings according to the breakdown method that was used up until the end of last year.

In relation to your question of the TNB, In terms of FA, let's say that we are broadly stable. On one way, someone left, but on the other way, the activity of the recruiting give us, let's say, the effect of people that are joining the project. For sure, in the future, someone is coming. Therefore, we are almost stable. In terms of assets, excluding the market effect, which I have in mind a number close to 25.5, 26 billion, so we are growing compared to the level of the AUM where we start. Obviously, again, I underline the market effect that obviously is impacting during those days.

Okay. Thank you very much.

The next question is from Jan White from Autonomous Research. Please go ahead.

Hi there. Thanks for taking my questions. Two from my side, please. Firstly, just coming back to the new bank transaction, can you just clarify for us what are the main talking points there that remain with respect to the terms? You said the due diligence is done. Financial terms seem to be within... a definable range so what's still left to be agreed there please what's the sticking point if you like and just secondly any comment please on the outlook for exits in the private market business some more downbeat comments maybe from some of the private market specialist names but has anything really changed there for your business with respect to the increased market uncertainty we've had in the last month or so thank you

Yeah, actually, I'll start with your second question. Yeah, obviously, we see what's happening in the market. Indeed, you know, the slowdown in exits is very obvious. Although I have to say that we are still operating with funds with relatively recent vintages. And so we are not really today focusing on exits, although on a very opportunistic basis we have been able to exit in a few instances. An example I would like to bring to your attention is the recent exit from an Italian leader in the tiles industry, tiles manufacturing. That was the first investment of our Demos One Fund, launched in 2020. And well within the investment period, we were able to exit this investment with a 3x multiple. That has been done in a difficult market, has been done obviously with all the headwinds that we know very well. And I think, you know, on an opportunity basis, we will consider, you know, where and when, you know, we are able to maximize our investors. But, you know, in general, we are not really that concerned for what the market will be in the future. We see all this as very cyclical.

And in relation to the first question, I mean, I'm going to answer in a simple way because at this stage, after the conclusion, in the completion of the due diligence, We are obviously now working on the contract, and as you know, probably expect in terms of answer, you know, you never know what is going to happen, even if, you know, you fix the main elements or the main KPI that you would expect to obtain. Therefore, we are working on it, but again, waiting to finalize everything. We cannot anticipate any further information. Got it.

Thanks very much.

For any further questions, please press star and one on your telephone. Gentlemen, there are no more questions for registers at this time.

So thank you, everyone, for attending this call, and obviously we look forward to meeting with you in person or to hearing from you at the next earnings call at the end of July. Thank you very much.