Azimut Holding Spa Ord

Good afternoon. This is the Chorus Call Conference Operator. Welcome and thank you for joining the Azimut Holdings first half 2025 results presentation. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions by pressing star and 1 at any time. Should anyone need assistance during the conference call, they may signal an operator by pressing star and 0. At this time, I would like to turn the conference over to Mr. Giorgio Meda, Chief Executive Officer. Please go ahead, sir.

Thank you very much, and good afternoon, everyone, and thank you for taking the time and joining us today for AdMob H1 2025 results presentation. I'm Giorgio Meda, CEO of the group, and I'm pleased to be here with Alessandro Zambotti, our CEO, a group CFO, and Alex Popera, our Head of Investor Relations. General comment before we dive into the slides, this has been a defining semester for Azimut. We have exceeded expectations across the board and have to say navigated very volatile market conditions, and this has been possible only courtesy of our resilience and discipline. At the same time, we have laid the groundwork for the group's next phase of growth, and I think what we have seen in the last six months both very well for what lies ahead for us. So let's move to slide three, please. So let me begin with the key highlights of the first six months of 2025, which marked a very strong start to the year from a strategic, financial, and operational perspective. We delivered a record 8.2 billion euros in managed net inflows, the highest first-half figure we have ever achieved. Alongside this, our recurring income has grown by 18% year-on-year, and that is a testament to the resilience and scalability of our platform, even in very challenging market and macro conditions. But our progress goes far beyond financials. During the semester, we successfully introduced a new organizational matrix that has allowed for greater transparency, improved accountability, and a streamlined reporting structure, as we will discuss in detail later in the presentation. We also made tangible progress on simplifying our business verticals, particularly in the U.S. with the transaction of North Square Investments that we have announced last week, around SHIELD that we announced just yesterday. Throughout this period, we have remained focused on executing several strategic business development initiatives, such as the key strategic partnership with DNI Next to promote Italian access globally, particularly in the energy sector. And we have forged several distribution agreements with leading financial institutions throughout our global hubs, or the release of our exciting digital strategy. Lastly, but not very important for For our progress, we have moved forward on the TMB transactions since our key announcement at the beginning of May. This remains a strategic priority for the group and obviously will be discussed in more detail later by Alessandro. And finally, given the strong underlying performance in the first half, our confidence in our product pipeline for the second half and obviously our execution capabilities we have upgraded our target for both net profits and net inflows. So, moving to the next slide, and before we dive into the strategic and operational updates, let me take a moment to highlight our group's strong financial performance in the first half of 2025, which clearly reflects how we are firing on all cylinders across all metrics. At the end of June, total assets reached 113 billion euros, up 11.1 percent year-to-date. The inflows for the period were 9 billion euros, of which 43% came from our international operations. That is a clear demonstration of our global scale and distribution capabilities, and despite effects headwinds, as we will elaborate later on. Total revenues have stood at 646 million euros, which require revenues growing by 7.1% year-on-year. That has been supported by our strong fee-based model and growth across all core markets, with particularly strong contributions from Italy, Turkey, Brazil, Singapore, and the U.S. As far as operating profits is concerned, EBIT came at 291 million euros, with recurring EBIT increasing by 8.6% versus the first half of last year, driven by higher revenues and an overall disciplined approach to cost management. Importantly, 18% of net profits were generated outside Italy, and that is a very meaningful step from the 15% in the same period last year. That, if you want, further confirms our international expansion strategy is now bearing fruit. These figures put us in a very strong position to continue executing our long-term growth agenda at the same time creating value for shareholders. Now, moving on to the two following slides, we show you what was the recently introduced visual representation of what is driving our profitability in a more intuitive and transparent way. So as we focus on a quarter-on-quarter view, Q2 showed a very balanced picture with broad-based growth across recurring revenues, selective performance key contribution, and disciplined cost management. And that, as I said earlier, confirms the resilience of our diversified platform. Instead, as we look at the year-on-year bridge for net profit, as we show in slide six, we set out to highlight two things. In the first half of this year, we delivered a reported net profit of 240 million euros, compared to 321 in the same period of the last year. That needs to be explained. Obviously, this comparison is significantly affected by non-recurring items, most notably the capital gain from the sale of our stake in Kennedy Lewis, And as such, it's important that throughout this call and for the broader analysis in general, we will focus solely on recurring growth, which fostered a strong 18% year-on-year performance as a result of our continued expansion across the globe. Moving to the next slide, you will see how our total assets have evolved since the start of the year under the new reporting method. I won't go too much into the details here as we have already published and commented these figures in our press release, but let me highlight if you think essentially the strong demand for mutual fund solutions since the start of the year. supported by our networks and partners in Italy and Turkey, and a very sustained momentum in our wealth management operations in Dubai, Monaco, and Singapore, as well as there is a very strong momentum across our institutional franchise. At the end of June, our total assets have reached 113 billion euros, up nearly 5% since the beginning of the year, despite significant FX headwinds. So, this is something that we need to mention. Obviously, we have all commented about the depreciation of the U.S. dollars since the beginning of the year, the steepest decline since 1973, a 14% depreciation, coupled, you know, also with some local currencies performance, such as for the Turkish lira, minus 27% year-to-date. That has obviously impacted, you know, the value of our assets during the year. And when you look at our business, obviously we lost 5.5 billion euros on the total assets in euro terms. Nonetheless, the message that we want to send across is very clear. Despite material effect pressure, we have still grown by 5% year-to-date, and that is thanks to the strength of our net inflows and performance. And what is even more remarkable to highlight is that this growth has been driven almost entirely by organic flows, which have amounted to 6.3 billion euros in the first half alone. Just to put that in perspective, that is approximately 68% of what we had achieved organically in all of 2024. And this is the first of inflow results for the azimuth history in terms of performance, the strongest inflow results in our history. So these results confirm the resilience of our core business, and certainly the fact that our diversified model is delivering growth across all channels, geographies, and client segments. Turning now onto page eight, as you might recall, what you see here is the blueprint of how we intend to represent the group going forward. This is an organizational matrix that mirrors how we actually run the business. And on this slide, we present the total assets as of the end of June, structured by product lines across the top, from investment funds to digital asset management, by key distribution channels along the left. As we already said during our Q1 earnings call, this is more than a new reporting layout. This is a very transparent and aligned view of how our platform creates value, and as promised on the next slide, we are giving greater clarity to the financial community on growth, scale, and profitability across our core pillars. As you can see in slide 9, increased transparency into the earnings potential of our platform is realized by showing you the economics behind our different distribution cohorts. Let me walk you through a few key highlights here. Integrated solutions, that is our core vertical, which includes Italy, Brazil, Mexico, and And Turkey continues to be our powerhouse and commands superior margins that are driven by the vertically integrated business model and market leading positions that we have in these geographies. Global wealth that comprises our hubs in Monaco, Dubai, Singapore, Switzerland, and the U.S. is becoming an increasingly important growth engine. These are very high potential markets, while margins are slightly below last year. due essentially to business mix and the impact of effects across different geographies. We are building the foundations for long-term value with our unique proposition, scalable operations, and what is very sophisticated client demand. Then we have institutional and wholesale that is gaining traction. This segment brings together our institutional initiatives across Latin America, Asia, Italy, and EMEA. And while its margin is aligned with the industry average, the strategic importance of this business is rising. And this is a source of innovation, distribution diversity, a partnership such as the contribution from NOVA. And taking a step back, what is important is the overall picture. We are building a multi-engine platform where each business line has clear accountability, strategic intent, and a pathway to scalable profitability. And all of this while maintaining and improving a very healthy group level recurring net profit margin of 43 basis points. In short, our platform is now more transparent, more balanced, and certainly better positioned than ever to capture global opportunities. On the following slide, slide 10, you see the simplified overview of our H1-25 performance versus the same period last year, applying our new reporting structure that we had already introduced with our Q1 results. With these two new representations, we strongly believe that it should be easier for investors and analysts alike to understand the key business drivers of our business and how we are creating value every day. I won't go into the details too much as these numbers and if he knows to speak for themselves, but what I want to emphasize here is the following. The overall picture is one of a truly global platform where each region is progressing along its growth path, supported by strong governance, scalable systems, and local leadership. We don't want to longer be just an Italian asset manager with international ambitions. We are a global group with local excellence and financial architecture to compete and win across all markets. So let's now move on to our exciting corporate business development. I want to start with the slide 11, you know, the partnership with NSI that we announced mid last week. This partnership marks a very pivotal moment in our U.S. strategy where we are building a highly integrated scalable B2B2C platform rather than a traditional B2C model. which we believe is the best suited to the dynamics of the U.S. market. And SI is an exceptional fit for our group. Like Hadley, it operates as an integrated asset management distribution firm and carries an outstanding reach and execution capability set. Its unique positioning enables NSI to capture what is the ongoing structural growth of all U.S. and wealth asset management industries, managing a broader range of products and penetrating even deeper into its distribution networks. More importantly, in slide 12, we want to show what is the strategic ambition and the strength of our positioning in the U.S. and how this is turning into a very critical pillar of our global strategy. Our U.S. platform has reached now a performance total of $50 billion in assets and positions us among the few international players with a fully integrated asset management and distribution model across the country. Certainly, this is the result. of a long-term vision and discipline execution is also the result of work done over the years where we have built piece-by-piece diversified synergistic and scalable architecture. On the asset management side, we operate across both public and private markets, while on the distribution side, we have created a powerful multi-channel approach. Our RIA service platform, led by Sanctuary Wealth, is today one of the most respected in the U.S. It continues to grow at an incredible pace. And also, I want to mention our diet presence in the RIA space, with Azimut Apis and Azimut Genesis, so advisory-led businesses that speak to our heritage and long-term alignment with clients. We believe that this integrated approach allows us to cover the entire value chain, from investment strategy and product manufacturing to advisory services and direct client engagement. The U.S. obviously has an immense potential, is also a very complex market, and we believe that scale will come over time, but we also believe we are uniquely positioned to compete, not as a niche operator, but as a credible long-term player in one of the world's most dynamic markets. So, in short, we are just getting started in the U.S., but the foundations that we have built built are strong and the opportunity ahead is very significant. Another exciting news, fresh off the press from yesterday, is where we announced that Azimut sold its stake in Round Shield Partners to Horizon Streets. With the sale of our stake in Round Shield, Azimut completes its second GP stake exit in just 16 months. confirming our ability to generate real liquidity and value from the lower middle market segments. After exiting Kennedy Lewis to Goldman Sachs in 2024, this latest deal, that is a strategic sale to Harrison Street, shows we can monetize our GP stakes across different buyer profiles, and this is just in a few years. Together, the two exits have delivered a DPI of 2.9 times, an IRR of 60%, placing Azimuth among the top performing players in this space. Azimut remains fully committed to the GPE State Strategy, an area that has been a focus for our business since 2019 through our experienced New York-based team, and it will remain strongly committed to our emerging manager partners, Hypost and Broadlight, both of which operate with high growth potential and a clear focus on attractive long-term secular industries. Also, let me touch briefly upon slide 14 on the very exciting partnership that we have recently announced with ENI, one of the largest energy companies globally. The partnership with ENI has a very clear target, you know, raising 100 million euros starting in September, to be deployed in the clean tech and energy transition industries. This is a partnership that sees Azimut, who is an Italian excellence in the world, to invest in the most exciting and promising investments in key sectors and industries for the global economies. This is also testament to the ability of Azimut of signing partnerships with Italian players who have a very strong reputation in the world markets where they operate. I want to mention here our partnership with Ferrari. It resulted starting in 2023 with the launch of Automobile Heritage Enhancement Fund that is the world's first and only evergreen investment fund for historic super and hypercars, a fund that has raised commitments to date of almost €200 million and delivered a performance to investors to date of approximately So our growth journey as a global investment partner continues partnering with the country's leading innovators in their respective sectors. And the last point I'd like to mention is the publication of our digital strategy white paper that I'm assuming most of you have received via email at the beginning of this week. This is an 80-page report where Azimuth is elaborating and discussing and providing an outlook on how digital developments are essential to redefine the engagement with clients and to draw the lines of our business in the years to come. It is an opportunity to see what Azimuth has been building over the last few years in the digital space, certainly with focus on AI, blockchain, and the development of cloud services or tools working even on the metaverse. I'd like to mention here in slide 16 something that is not very known to the public apart from the clients who have decided to entrust us through digital channels. I'd like to mention here, as I mentioned, digital solutions that are already live in the market. real apps that I've seen over the last three years gathering more than 50,000 clients that have been empowered by Azimut platforms around the globe to access asset management investment solution as well as a broader scope of financial services. I will pause here for a second and I will hand over to Alessandro for a detailed review of our H1 results.

So thank you, Giorgio. Good afternoon to everyone. So moving to slide 70, let me now walk you through the key financial developments for the first half of 2025. So starting with revenues, we recorded an overall increase of approximately 9 million euro compared to the first half of last year. This growth was primarily driven by a 7 percent or 36 million euro increase in recurring fees. So, a solid performance that reflects the continuous expansion of our asset under management and administration despite what volatile market that we see in the market during the first half of the year. So, in particular, we note that our Luxembourg tab, so the open-ended funds and the private market funds, contributed 8.6 million euros and 6.3 million euros So, a reflection, again, of our continuous platform build-out and the NAS products offering. So, the level of discretionary portfolio management and the advisory increased by 3 million euros compared to last year. And as well, the international operations added 18 million euros to the top line. Here, the U.S. stands out with 8.54 million euros from Kennedy Capital and as well 0.7 million euros from IPOS, following the perimeter changes that characterized the first half of the year. But as well also behind on that, Brazil, Singapore, and Turkey, which all recorded positive organic growth. Quarter-by-quarter revenues were up by 1 million euro, a balanced result considering the effect impact and also the perimeter changes in the U.S. and softer market conditions in Q2. That shows again our resilience, our revenues, even in uncertain conditions. So the level of the variable fees contributed less in the half-year period, 6 million euro less compared. to the previous period. Despite this, Brazil, Turkey, and Monaco made a solid contribution during the semester, more than offsetting the negative impact of the Fulcrum fees. Then looking to the insurance revenue, the headline decline of 23 million here and here, and this is entirely due to the lower performance fee. From the positive side, we can see that there is a positive recurring insurance revenue, that increased by over €5 million, and this is reflecting again the after-growth and the product mix. And furthermore, with current market conditions and looking to our performance achieved during July for our clients, we see a robust 3Q25 outlook for performance in this segment. And then to conclude the revenue section, the adult revenue remains broadly flat year-on-year. So to sum up, again, our revenue performance in the first half shows the power of our diversified global platform and our ability to grow even more in a challenging environment. So then on the following page, we show the evolution of cost. The overall, we note an increase of around €20 million plus 6%. Starting with distribution costs, we recorded an increase of about 18 million euros. This variation was mainly driven by tiger distribution expenses in line with the growth in recurring revenue both in Italy and across our international business. We see an increase in provisions for valuable incentives to the Italian financial advisor and additional costs related to the T&V project. Personal costs increased by approximately 3 million euro, and this reflects the continued cost discipline and the stable evolution of our Italian operation. And as well, ongoing investment to support international expansion, including the perimeter effect from the integration of Kennedy Capital, was netted by a positive foreign exchange . Finally, depreciation and amortization together with provision remain broadly unchanged compared to the previous year. And it is worth noting that Q2 2025 benefited from the release of a provision related to a legal case, which had offset part of the normal increase of the cost during the quarter. Moving then to the next slide, we conclude the income statement analysis with recurring EBIT and recurring profit, which increased by 9%. or 22 million euro, and 18 percent, so 36 million euro. This trend, as I like to say, the strong of the robustness of the business, not only in terms of the current impact, but also through contribution below the EBIT. And we have 21 million from asset and portfolio performance, including these evaluations in accounting elements through the revaluation of the majority stake in IPOS and Kennedy Capital. €12 million from fair value option and equity participation, that includes also sanctuary and Australia. €6 million from dividends from GP stakes and affiliates, €6 million from the net interest earned, and then a negative impact of €2 million from the IFRS 17. So now let me turn to the net financial position on slide 20. At the end of June 25, our balance sheet remained strong and debt-free, even after significant investments and shareholder distribution made during the period. We closed the first half with cash and cash equivalent of $643 million. compared to almost $1 billion at the end of March and $750 million at the end of the year 2024. The variation reflects the seasonability of our cash flow and deployment of capital across strategic areas. Overall, we have a net financial position of approximately $642 million with a negative variation of around $110 million compared to December 24. This change is due to the positive pre-tax results contribution of 329 million, but we need also to consider the deployment resources across the four key areas. So, first of all, we received 68 million euro in proceeds from the partial disinvestment of our stake in ZNGA. We invested 50 million euros primarily into M&A and platform development, including the expansion of Kennedy Capital, Thai Postal Trust US, but also Italy and Brazil. Third, we paid out 170 million euros for tax advances, stamp duties, and contributions to the actual reserves. And then lastly, we returned a total of 354 million to shareholders. And these 323 million through the ordinary dividends and payments on participating financial instruments, and 31 million for share buyback, repurchasing 1.4 million shares at an average price of 23 euro. To conclude, our balance sheet remains well capitalized and positioned to support continued growth and shareholder recovery. Finally, on slide 21, So a quick update on the TMB project. We are simply confirming that we are actively working with Bank of Italy on the contractual documentation, the future structure of TMB, with the goal of moving quickly into the final and more detailed phase. So now in this phase we are dealing with the pre-filing with Bank of Italy. And we remain obviously focused and the expectation is completing the transaction at the end of the year. To conclude, we would like also to remark again the expected outcome of the disposal, so around 1.2 billion potential total consideration for the disposal of an 80% stake to FSI and the co-investors. 2.4 billion revenue guarantee in the next commission for the time with a minimum of 12 years, and then almost 20% retained stake in TNBs offering potential for the value of . And with this, I hand over to Giorgio for the final part of the presentation.