Azimut Holding Spa Ord

Good afternoon. This is the Cardo School Conference Operator. Welcome and thank you for joining the Aptimot First Half 2026 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 Mr. Giorgio Medda, Chief Executive Officer of Azimut Holding. Please, go ahead, sir.

Thank you and good afternoon, everyone. Thank you for joining us for the Azimut First Off 2026 conference. Financial Results, a business update call. I'm Giorgio Medda, Group CEO, and I'm delighted to welcome you to today's webcast. Here with me, we have in our headquarters in Milan, Alessandro Zambotti, CEO and Group CFO, and our Head of Investor Relations, Alex Sopera. So let me tell you that the first half of 2026 has been another milestone period for Azimut. We have delivered a very strong operational performance, continuing our history of strong cash generative growth. At the same time, we have taken a massive, transformative leap forward in executing our Elevate 2030 strategic plan. Today, we are not just presenting a robust set of financial results, we will also be explaining to you the transaction in Turkey with YAPI Credit that we announced yesterday and that establishes Azimut as the undisputed Italian champion of financial services worldwide. So let's turn to slide three, where we have the key highlights of this first half of 2026. So if there is one key message I would like to leave you with today is this, Azimut's multi-generational global platform keeps growing, keeps on firing on all cylinders. So we have generated 8.1 billion euros in head inflows for the first six months of the year. This is not just another strong figure, this represents 81% of our original full year target achieved in just six months. These commercial strengths coupled with our strategic M&A allows us to significantly upgrade our full year net inflows guidance to more than €35 billion and while confirming our net profit target of €450 million for the year. Speaking of M&A, you might feel that from my voice, I'm very excited to give you more insights later on how we have catapulted Azimut as the number two asset manager in Turkey through the acquisition of the Apicredi portfolio. and, furthermore, in line with the strategic capital allocation framework under our Elevate 2030 plan, the Board has just approved the launch of the first tranche of our share-by-back program for €250 million starting as early as next Monday morning. This program, which follows the 284 million euros of dividends that we distributed at the end of May, underscores our disciplined approach to capital allocation and our commitment to returning substantial capital to our shareholders. So now let's move to slide four for the details behind these numbers in H1. So here really the KPIs of our financial performance started with total revenues 781 million euros driven by a powerful 16% increase in recurring revenues. This demonstrates the exceptional quality and stability of our business mix resulting also in operating profit growing to 354 million euros with recurring EBIT up 10% year-on-year to 310 million euros. On the bottom line, our reported group net profits stood at 242 million euros, while our recurring net profit, which represents the true core earnings power of our business, increased by 6% to 249 million euros. Importantly, our global operations generated 37 million euros in net profit, representing 15% of our total group net profit. This international growth is also evident in our assets, with total client assets reaching a record 158 billion euros after a percent here today fueled by more than 8 billion euros in net inflows out of which 53 percent came from our global For those who have been historically being skeptical about the scale of our international expansion, this is the definitive answer to why we invested and focused so much over the last 10 years on investing outside Italy, and this is today a visible result of our growth. Our global business has become the primary engine of our growth, and we expect this contribution to accelerate significantly towards our elevated 2030 goals. So moving swiftly to slide 5 where we have our net profit bridge for the first half of 26 versus 2025 and we look really under the hood of our net profit development starting with our reporting net profit of 240 million euros in the first half of last year, where you can see how our core operational engine drove a €29 million increase in recurring EBIT. That was also complemented by a €33 million increase in performance fees driven by strong market performance both on funds and insurance products. The strong performance was offset by let's say 63 million euros in other non-operating items below EBIT which included several non-recurring or accounting driven items such as conservative extraordinary write-offs on proprietary investments in the second quarter, but Alessandro will detail on those later in the presentation. Despite these non-recurring headwinds, the underlying power of the business shines through a recurring net profit rising by 6% to 249 million euros, highlighting the steady predictable compounding of our core franchise. And now let's look at the performance breakdown by business line in slides 6 and 7. In slide 6 we have our reclassified P&L by business line and reclassification that we have been now using for more than a year where we have integrated solutions which represents the DNA of the firm combining our proprietary product factories with our exceptional financial advisor networks in Italy and beyond. I continue to act as our core powerhouse and command the superior stable recurring net profit margins of 69 basis point. Global wealth solution is showing strong commercial traction across all the jurisdictions we'll be operating and we see here how operating leverage is driven by excellent productivity and high network clients acquisition, our hubs in Singapore and Monaco in particular. Our institutional and wholesale division has also expanded massively, certainly this is thanks to NSI and NOVA and we expect the full profitability to unfold progressively as these platforms mature. and finally also let me highlight how our strategic affiliates continue to ramp up representing a solid foundation of diversified global assets in the most attractive markets and for the first year this vertical showing a break-even as opposed to what we have seen over the last few years. This is starting to pay back years of focus and investments. So focusing on slide seven, we have our geographical verticals where we really prove the success of our global diversification strategy. Italy remains exceptionally strong, delivering €290 million in recurring net profit, driven by stable domestic inflows, robust recurring fees, and strict cost control. Globally, our international operations are accelerating, generating €974 million in revenues, EUR net profit, which accounts for 15% of our total group net profit. If you compare this figure to 2019 when the international share represented less than 6%, I consider that once the YAPI credit transaction is closed, this share is set to expand to nearly 30% of expected profits. So it's very clear how the recent transaction is a truly remarkable milestone in our global expansion. Our global operations are no longer just a long-term option. They are a highly profitable reality that generates stable, diversifying cash flows across Europe. to any countries. Very often when I'm talking to you, I always keep hearing this argument that, you know, because of this diversification, Azimut deserves a discount. We believe that these results would improve. Actually, Azimut deserves a premium to its valuation considering the substantial reality of these figures. So now let's turn to the most exciting chapter of today's presentation and move into slide 8 where we really go through the rationale behind the transaction that we announced yesterday. In Turkey, as I mentioned, this is a transformative milestone for the Ademo Group. Yesterday we signed a binding agreement to acquire 100%. of IAPI Credit Portfolio Unetimi, the asset measurement subsidiary of IAPI Credit Bank, that is the fourth largest private bank in the country. And this acquisition, by the way, represents the largest deal that the group has made so far, and there are very good reasons why this is the case. Certainly, you know, we need to look at this transaction in combination with our Existing business in Turkey, Azimut Portfoy. Combining Yapi Credit Portfoy and Azimut Portfoy, we are creating a 29 billion euros national champion, establishing what will become the second largest asset manager in the country and elevating, you know, certainly Turkey to our third largest market globally by assets under management. I would like to make a point here. Yes, we'll be the second, you know, in terms of assets under management, we'll be the first Private asset management in the country considered number one is an entity controlled by the state banks with everything that results in this respect when it comes to the product and marketing proposition of that institution. So, at the core, at the center of this important financial transaction, there is a 15-year exclusive distribution agreement that is essentially a long-term strategic alliance providing Azimut Global Investment Platform with exclusive access to IAPI Credit's, you know, Tier 1 network of over 18 million clients, one-eighth, so this is pretty, pretty massive. More importantly, we have also implemented street safeguard mechanisms and we have aligned incentives. And when it comes to the protection, Aurora mentioned that we have a comprehensive fee protection system and an explicit AUM targets that structurally lock in our operating margins and secure our total asset base from day one. So combining this protection with a growth-linked earn-out structure We have ensured a perfect alignment of interest with our partners, giving us highly visible recurring cash flows that are set to deliver 65 to 75 million euros in pro forma net income in 2026, as well as an average 10% earnings per share accretion between 27 and 29, and that is before we take into account any synergies. So from a financial standpoint, as I said, this is the largest acquisition of the group to date. But apart from being very accretive, it's also an incredibly disciplined use of our capital. The 305 million euros consideration implies a very attractive seven times P multiple on 2026 estimated net income. And certainly it's very important to mention that we have already secured a financing structure and certainly we will provide specific details on that at the later stage, once the closing of the transaction approach, but it's very important for me to stress that now our pro forma gross debt remains well below a one-time EBITDA preserving our pristine credit profile and financial flexibility. So moving to slide nine, I would like really to explore, to highlight for you why Turkey, why we believe Turkey is a large and attractive market For some of you, Turkey might seem like an unconventional choice. Obviously, that goes beyond the fact that you have been operating in the country since 2011. And what I'm about to describe now is something that we lived and we have experienced, has contributed significantly to our earnings growth over the years. So this is not simply A representation of things observed or looked from thousands of miles away. This is something that we lived. And certainly let me tell you that Turkey is one of the most compelling and dynamic growth stories in Europe today. First, demographics. Turkey represents the largest population in Europe with 86 million people, the youngest and fastest growing population in the continent. That, as you know, is a pretty strong demographic fundamental. Thank you very much. a key enabler of growth and stability even despite adverse market conditions. The combination of demographic, energy, economic growth and fiscal discipline makes Turkey a uniquely compelling market for assets and wealth management and we see that better represented in slide 10 where we look at the economic KPIs Thank you very much. without doubts a U-turn in terms of implementing a disciplined policy shift anchoring the currency to a managed depreciation path and bringing inflation progressively under control. This stabilization has led to a significant re-rating of Turkish credits, any Turkish asset classes, in particular the five-year CDS spread has tightened dramatically, dropping from their 2023 peaks to the current level, so 235 basis points, that in history is one of the lowest levels ever recorded. And certainly reflecting this structural improvement, all the rating agencies have recognized that you know the situation had changed and all of them have upgraded the credit rating of the country maintaining a positive outlook. So certainly this economic re-rating provides a highly supportive backdrop for our combined operations and for what has been essentially what you can see in slide 11 a pretty major change in the asset management Thank you very much. Thank you. in ad currency over the last six years or so. So we are talking about here ad currency figures. I'm not talking about Turkish lira inflation driven figures. I'm talking about ad currency real value growth for an industry that has also reflected in a pretty major growth and expansion also in terms of commission revenues rising to more than $1.1 billion with a very similar growth rate in the same period of time. The market is currently dominated by banks, captive managers with the top five commanding a combined 50% market share of which Yappie Credit portfolio, the company, We are anticipating a real structural shift in investor demand away from money market funds. toward domestic and foreign equities and alternative products. It is exactly where our combined entity will excel and is best positioned to capture the highest margin flows. So let me go in slide 12 on describing what the Epicredit portfolio is. As I said, the fifth largest asset measure in the country, managing approximately $26 billion in assets and 8% market share that represents approximately the same market share the IAPI Trading Bank has, looking at the total banking assets The platform features a highly institutionalized product suite spanning 136 funds, including 17 pension funds. The company has been benefiting in the past from exclusive distribution access to YAPI Credit Bank's Tier 1 network of 730 branches across the country and over 18 million customers and this massive retail and institutional distribution power has generated an exceptional financial track record between 2023 and 2025. Let me tell you that the assets have grown over the same period by 74% annually, revenues by 40%. and Net Profit has delivered an outstanding 57% annualized growth rate in the same period. The IAPICRE Profile is a pretty well-run company, highly efficient, high growth and immensely profitable machine with approximately 70 professionals and you know I've always made a remark created always a remarkable track record of operational excellence and now let me actually I'll give you more details in slide 13 regarding Azimut own Turkish business is the first time and you know certainly we feel proud and immensely delighted in providing some look through on the performance of our Turkish business we are never provided access to single countries financial performance but here we feel compelled to do it and I want to show you how Azimut Portfoy since 2018 has been an incredible story of growth certainly you know driven by a highly successful independent and high margin platform operating in a country with its own logics with its own dynamics but with a strong backing of our global group. Through disciplined organic growth and successful acquisitions, AdMob Profoi has become the profitability leader within the group. Our assets and the management have grown over 16 fold since 2019, reaching now more than 6 billion euros while net profit in the same period has grown 22 times to 24 million euros last year and expected to be very this year. Adun Portfolio operates as a high-value independent platform with 44 financial advisors serving nearly 1,700 retail and institutional clients supported by a physical footprint of regional liaison offices in Ankara, Izmir, Bursa, Bodrum and having certainly a distribution reach with the retail market in the country with approximately 46,000 investors in its funds. Unlike the bank captive players, our asset mix is highly sophisticated with discretion portfolio management representing 53% of our assets delivering what is an incredibly competitive and profitable margin profile. So let's look now in slide 14 what will be the combined let's say Proforma representation of both businesses, IAPI Credi and Adimum Profoi coming together. The combined platform I mentioned earlier will manage 29 billion euros or $33 billion in assets. From a profitability perspective, the combined business is expected to generate 65 to 75 million euros or 75 to $85 million. in a thinkum for 2026 and that is essentially representing a figure that takes into account let's say financing for the transaction and is excluding any synergies that I will detail later that can be pretty meaningful and material. IAPI credit portfolio will immediately benefit from Azimut's world-class sophisticated manufacturing capabilities and we will inject our proven expertise in the discretion portfolio management business and strategies to transition retail clients into higher margin solutions. We will certainly have a specific focus on real estate and private equity alternative funds Allowing us to capitalize on Turkey's rapidly growing demand for alternative assets. Again, here a number that we have never commented before, but when you look at our assets on the measurement today, 5% is actually accounting for alternative investments. I mean, Turkey has taken the same path of our Italian Business in this respect and certainly we will be bringing our global equity funds expertise to Turkish investors providing them seamless offshore access through our Luxembourg product hub. This is a clear blueprint for transforming massive scale into high margins profitability. So in slide 15 I want to just mention briefly touch upon what are and the potential synergies that could improve the financial impacts that I mentioned earlier. First of all, as I said, there will be an amazing cross-selling opportunity through YAPI Credit Captive Distribution Network. Second of all, and that is very important, we will expand our product suite We will be able to achieve a better price mix and, you know, certainly to transition what is an existing business for Yappie Clever 4 into a higher margin product suite. And third, there is certainly a material opportunity to rationalize both personal and non-personal costs. I mean, Yapi Porfoi, as I said, is a pretty well-run company, a cost-income ratio of 25%, but combining two asset management businesses, Businesses will allow here really to duplicate, to eliminate any duplication and have certainly a pretty major impact on what is already a low cost-income ratio by bringing that even further down. So slide 16, some sort of qualitative and last remarks on this transaction. Asimov becomes the second asset manager in Turkey, the first if you take out from the peers panel, you know, the largest that is controlled by the state banks. This is a transaction that transforms Azimut's global network, certainly makes us grow in Turkey, but it gives also another, let's say, proof of how Azimut is positioning itself as a trusted asset measurement platform for and other leading financial institutions operating across its global footprint. It's very important to say that this transaction comes with an exclusive 15-year distribution agreement that will allow us to certainly offer Thank you very much. multiple earnings that is an absolutely attractive level for a transaction of this type even for an high growth market like Turkey and the transaction brings an average 10% EPS accretion over the next three years but started with year one immediately at this level that I want to reiterate includes any financing cost for the transaction and it excludes any potential synergies that are very likely to be extracted. Just to wrap it up, I want to just mention that this transaction proves that the power Our global vision is in the making, is not longer a free or a dream, a free option, a dream is something that is happening today. Our international assets after the consolidation of IAPI Portfoy will stand above 50% of our total group assets. and when you look at our earnings, we have accelerated our path towards generating 30% of our expected earnings from global operations under our elevated 2030 road map. I want to say that this is the definitive proof that Azimut is the true Italian champion of financial services worldwide. We are a global multi-generation advisory platform present in 20 countries, chosen by more than 2.5 million private clients globally, where networks are some of the largest institutional investors globally to manage their services. With this, I'm going to hand over to Alessandro that will walk you through our financial results. Alessandro, the floor is yours.

Thank you, Giorgio. So we go back to numbers. So we can move to slide 17. It is a pleasure to present the financial results of a truly outstanding first half for the Azimut Group. As usual, we will begin with the evolution of our top-line performance. During the first half, the group recorded total revenues exceeding €780 million, representing an outstanding 21% year-on-year growth compared to the first half of 2025. This is a fantastic top-line expansion, driven by a solid 16% increase in our recurring fees which rose by €92 million to reach €653 million driven by solid EUM growth and our ongoing platform expansion. And looking at the main drivers, first of all our global business has continued to expand and can grow by €58 million year-on-year and this was driven by changes in our consolidation perimeter and specifically adding 25 million from NSI, 2 million from NOX, and 11 million combined from the consolidation of Kennedy Capital, Chenai Post, alongside robust organic growth in the US, Singapore, Brazil and Turkey. Secondly, Italy delivered a very robust domestic contribution, adding 34 million euro a year. This solid organic performance was based across all of our core business lines, Funding Open-ended Mutual Funds through the Alternative Chartsets and the Next Generation Advisory Services and also we would like to mention also NOVA. Moving to the performance fees from our fund solution increased by 5 million euro here and here to reach nearly 80 million euros driven by strong investment results in Turkey and Monaco which effectively offset the negative impact of the full confirm mechanism. And turning to the insurance revenues, we achieved an year-on-year increase of €31 million to reach €91 million. This outstanding performance was driven by an exceptionally strong second quarter, which generated €28 million in variable insurance fees, complemented by nearly €3 million in recurring insurance revenue. Finally, the entry commission and the other income rose by €80 million to reach €30 million, and this is primarily supported by higher entry fees inflows from our international hubs and in particular Singapore, the Switzerland and Monaco business. So in general what I would like also to mention is the evolution quarter on quarter basis to highlight our underlying operating momentum On a sequential basis, we achieved overall revenue growth of approximately 40 million euro. This incorporates a 15 million euro increase in recurring fees, a 20 million euro expansion in the insurance revenue, and 6 million euro in higher performance fee. In terms of domestic recurring fees, our Italian operation grew by 7.3 million euro quarter-on-quarter, led by open-ended funds, which contributed 4.5 million euro supplemented by a 1.8 million euro increase in private market management fee and approximately 1 million euro from NOVA. It is also our international operation also delivers strong sequential growth by 8 million euro quarter on quarter. The main contributors were the US with an increase of 4 million euro reflecting the successful ramp up of NSI, Monaco with 1.6 million euro, Singapore with 1.2 million euro and Turkey with 1 million euro. So now moving to the next slide, let us analyze the evolution of our operating expenses compared to the first half of 2025. Total cost increased by approximately 74 million euro, an evolution directly correlated with the expansion of our business scale and the revenue growth we have just outlined. Let's examine the individual components. So first we start with the distribution cost increased by 21 million euro year on year to reach 244 million euro reflecting the direct growth of our recurring revenues both in Italy and abroad and including a 6 million euro perimeter effect from MSI. In Italy accounted for a 6 million euro of increase while the international business contributed the 15 million euros. Second, looking to the personal and the SG&A expenses, we have an increase by €44 million to reach €165 million. This reflects the combined effect of consolidation perimeter changes totaling €25 million, primarily again in the US for €21 million, including on one side 15 million euro from NSI, 6.5 million euro from IPOS and Kennedy Capital as well as we mentioned for the revenue, Brazil for 1.5 million euro and in general we have an organic cost growth of 19 million. The organic costs in Italy remain virtually flat, reflecting our disciplined cost management in domestic operation, while the international organic growth was mainly driven by Turkey, Brazil and the UAE. It is critical to highlight that organic costs in Italy remain virtually flat. Again, as I mentioned before, it's important to remark this point. Third, depreciation and amortization increased by €8 million year-on-year to reach €18 million. which includes a 2 million euro perimetre effect from NSI. The remaining increase is primarily a baseline comparison effect as the second quarter of 2025 benefits from a provision release following a favourable legal resolution. So if we take out the effect of this positive one-off DNA evolution, it's broadly chain-lined. Chen again trying to give you also an overview of the evolution of the group quarter on quarter. Distribution cost rose by 8 million euro in line with the recurring revenues. Chess G&A and administrative expenses remaining linear with a low growth of 2 million euro. And this again to remark as well the point related to the cost discipline. Moving on to slide 19, so moving below the operating line, the net impact of financial items and the non-operating costs for the first half of the year was negative by €18 million, which represents a market improvement compared to the negative €38 million recorded in the first half of 2025. This net performance was driven by three primary components. First, a non-cash IFRS 17 adjustment of approximately €10 million. Second, add a non-operating cost of €5 million. And third, €8 million related to the fair value option, equity participation, and portfolio performance, which was impacted by €25 million in no recurring write-off on property reinvestment in the second quarter. To provide some strategic context, These write-offs relate to two specific venture capital holdings, one in technology and the other one in MedTech sector. As a global platform, we manage our property portfolio with the highest level of financial discipline, while investment activities naturally carry risks Our track record demonstrates our ability to capture extraordinary upside, as we did with our investment in Kennedy Lewis, which returned third times our initial capital and generated a capital gain of over $160 million. So, to equally discipline capital allocation means taking a conservative and proactive approach to valuation when necessary. By electing to write down these assets now, we clean our slate, protect the quality of our balance sheet, and ensure our financial reports remain a pressing reflection of our core recurring profitability. And then our adjusted tax rate stood at 21.7% for the first half of 26, and we are guiding to a full year tax rate approximately 24-25%. Putting it all together, the group achieved a reported net profit of 242 million euro and we are reflecting the true structural earnings power to our business. Our recurring net profit grew by a remarkable 6% year-on-year reaching 249 million euro. Moving to slide 20, we present our net financial position which remains highly robust and positive of 750 million euro. While this is lower compared to both the previous quarter and the end of last quarter, it is a direct result of active capital allocation and shareholder return initiatives. Specifically, during the period we deployed €89 million in M&A and strategic investments, €58 million in tax advances, €352 million in ordnance and preferred dividend distribution, and then €60 million in shares by bank. Probably the news is that in line with our commitment to maximizing shareholder value, the Board of Directors has today approved, as mentioned before, George, the launch of the first tranche of our new share buyback program for up to 250 million, scheduled to start at the beginning of August and to be completed within the next six months and represent exactly a half of our total 500 million authorized buyback capacity. This launch marks another milestone in executing our strategic capital allocation framework. More importantly, it directly delivers on our H-Elevate 2030 plan, reinforcing our former commitment to return approximately 25% of the group market capitalization to shareholders through a combination of dividend share buyback with subsequent share cancellation over the 26th and 27th period. This program is a powerful concrete testament to our exceptional cash generation, our robust balance sheet, our absolute focus on driving long-term capital appreciation. And now we can move to slide 21. So before ending the call back to Giorgio, let me provide a brief strategic update on the TMB transaction. We have extended our framework agreement with FSI until December 20 of the 2026. The customary follow-up assessment by the Bank of Italy regarding the previously agreed remediation plan was completed in early July, and we are currently awaiting the official report from the Regulatory to formally conclude this stage, which represents a key prerequisite for obtaining regulatory approvals for the overall transaction for the component authorities. Based on our current progress and the highly collaborative and positive nature of our ongoing regulatory engagement, we remain fully confident that the transaction will be completed within the end of the year. So with that, I will end the call back to Giorgio. Etienne, thank you.

Thank you, Alessandro. And the last slide, slide 22, just a look through of our Guidance upgrade in terms of net inflows for 2026. We are upgrading the original €10 billion target to €35 billion target, at least €35 billion target, resulting from the impact of the acquisition of YAPI credit that we expect to be closed following regulatory approvals by October, November this year, and an organic Thank you very much.

This is the call square conference operator. We will now begin the question and answer section. Anyone who wishes to ask a question may press star and 1 on the touch-tone telephone. To remove yourself from the question queue, please press star and 2. Please pick up the receiver when asking questions. Anyone who has a question may press star and 1 at this time. The first question is from Gianluca Ferrari of Mediobanca. Please go ahead, sir.

Yes, thank you very much. Ciao, Giorgio. Four questions for me, please. The first one is page seven, when you give the verticals by region. I was wondering what happened in the global business, looking at the dynamic of assets, the dynamic of revenues, and the dynamic of EBITDA net profit. It seems that something on the cost base has changed this year, and I was wondering what was that, and if it is a one-off item or something more structural. The second is on the deal you made and announced yesterday. I was curious to hear some thoughts on the hyperinflation. What are the currency risks there? How you are isolating forex risk and how are you edging this kind of risk? The third question is if you can help us in modeling In a bit more predictable way, the net interest income for 2026 with all the moving parts, the derivatives and stuff like that. And if in the extraordinary items, we should expect only, let's say, the level of first half as a run rate for full year. And the final one is you are reiterating the 550 million net income guidance. X extraordinary items. What are you considering extraordinary in the first half? Is the write-offs in the technology and medtech is the only component we have to isolate in the 450 million? And the link to these, can you remind us how much you invested from your prop investments as seed money in venture capital overall? Thank you.

Okay Gianluca, I'll take some of your questions and leave Alessandro for the others. So, page 7, you rightly pointed out, you know, we have increased assets and Operating margins or operating earnings have not increased linearly. This, obviously, we already commented before Q1. I mean, the increase in assets reflects the consolidation of NSI. We said at the very beginning that the first quarters of this transaction following the consolidation of the assets would have implied a dilution in margins as the platform gets integrated into the group as you know a number of let's say one-off non-recurring items are absorbed over time and you know obviously we are not going into the details now of NSI financials but we have already seen a material improvement in the second quarter versus the first quarter and we see that continuing unfolding Over the next few months we're expecting NSI to be contributing positively to the NetInca. We provided at the time of the acquisition some guidance in terms of EPS accretion, all those are standing. We were mentioning back then that we're expecting a 5% EPS accretion over the first two years. All that is standing. It's a pretty large firm, more than 22 billion dollars of assets, a lot of products, a lot of counterparties are linked to the launch of new products. We launched at the end of June two of the first five activity apps built for the American market. Let me tell you that we had a very strong sales response, more than 150 million dollars invested in these two products in the first month. All this is resulting in some, let's say, headwinds that, as I said, will be absorbed as the business keeps integrating and keeps growing. And there's no change whatsoever in our view on how this will contribute to our earnings. In terms of the deal in Turkey, Look, the numbers that we are showing here are all accounting for hyperinflation accounting. Sorry for the double repetition, but one thing I want to tell you that hyperinflation accounting is expected to be discontinued in 2027 as inflation has normalized. There is one key aspect when it comes to the asset management business. Hyperinflation accounting had a very limited impact in general. The numbers that we have shown are already post those adjustments. But the beauty of this business is that we invest in assets, we invest in locally denominated asset classes. that obviously start with the base return that is the local interest rate yield and that is reflected inflation. So whatever you might see in terms of inflation essentially provides, they say, naturally hedged at the fund performance level, as funds always start with the risk-free rate, if you look at this now, in excess of 40%. So even if the currency depreciates, as has been depreciated by the interest rate differential, we have, through the organic development as much as the ability to beat the markets, These incredible growths delivered on top of any currency devaluation. That is very, very important to remember. Turkey has not experienced any major currency volatility for the last five years, almost six, and that is the result of the normalization in the macroeconomic policies implemented by the central bank. And we think that that will continue and there are no reasons Thank you very much. Even if that is bad, we have been able to turn that into an opportunity for our business. And certainly the fact that we are a global manager helps investors to look at diversified portfolios and basically provide them a way to hedge any local risk through our portfolio management capabilities. Now, you were asking about the net interest income for 2026. We didn't catch whether you were referring to IAPI portfolio or you were looking at the group level. And depending on which one of the two, either me or Alessandro will reply to that question. Hello? Gianluca, we didn't hear you. Gianluca? Hello? Hello, can you hear us?

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

Hi, and thanks for taking my questions. Hi, Giorgio Alessandro. I have a few. Thanks for the deep dive on IAPI credit portfolio. Very helpful. I was wondering if you can give us some more color about the expected growth of the I've seen a tremendous growth in the last three years of the UM, but a slowdown in growth in the first half of this year. I don't know, maybe there are specific reasons for that. But going forward, in your expectations, what we should bake in in terms of growth? Expected AUM progression going forward and well any additional color you can provide us on the agreement distribution agreement with the bank would be particularly helpful because it's one of the most relevant point of the deal I guess and secondly still on Yapicredi. I understand that there are also earnouts and other considerations. Maybe you can detail a little bit better how they could work if they kick in. and the seven time PE multiple is based on the initial consideration. So just to understand the final amount that could be paid in case everything goes in the right direction. And the second question is on the fact that you are operating now in 20 countries and some of them are now contributing significantly to your results, others are a little bit less relevant. So I was wondering if you are considering some sort of rationalization in terms of the portfolio of countries in which you operate or you believe there are opportunities in all the 20 countries you are currently operating. The third question is more related to the updated target on net inflows which is obviously impacted by M&A but stripping out the M&A component it seems Quite conservative, this is aligned with what you have been doing in terms of guidance on net inflows but I was wondering if you can provide us on how to look on what was the trend in July and if you expect organic or same perimeter net inflows to continue to be solid going forward. And the final question is a more generic one on Margin evolution going forward. We've been hearing about potential pressure, but at the end of the day, probably also market contributed positively on mix and so on. In general, in your view, are you experiencing any pressure on margins in any of your jurisdictions? Thank you very much.

Alberto, can you confirm that you can hear us?

Yes, I can.

Okay, cool, okay, because we lost Gianluca Learia, but we will come back to him offline. So, going through a very long list of questions, but hopefully We have an answer for all of them. So in terms of growth assumptions for IAPI Cary Portfoy, I mean, it happens that, you know, businesses can grow at different rates over, you know, the medium and long term. You know, what happened over the last first month, it was actually the first two months of 2026 has been as a matter of fact compensated by very robust growth over the last couple of months. at the end of the first half. So our basic assumption that through the distribution agreements we can achieve between 7% and 10% organic growth for IAPI credit portfolio assets. This is significantly below what the company has delivered over the last few years and reflects what is our underlying view of organic growth. Thank you very much. Put under the label of safeguard mechanisms. Essentially, we have very clear rules, if I can define them so, in terms of margins. We have a baseline margins defined below which the bank will have to essentially compensates in terms of lower retrocessions from our part. You know, to say that on the other hand, we provided them an incentive to shift the product mix towards different solutions so they have, if you want, in this respect, an element of interest in improving the underlying Let's say the profitability of the business. When it comes to the assets, similarly, we have set some thresholds below which there will be initially a compensation calculated and representing the basis for and lower retrocessions over the short term. There are even thresholds below which we might be entitled to some compensation as opposed to the original consideration. I have to say that all this has been negotiated with the bank, but we generally believe that none of these thresholds will actually kick in. You know, we have really sort of felt that during the negotiations that is a genuine focus from the bank's management to use asset management in this partnership with Azimut to increase the market share both for the banking business and the asset management business. So we really believe, you know, it's good, you know, for sleeping at night to know that there are things that will protect us but I have to say that this transaction represents even for the bank and I feel they've been very open yesterday commenting as they want to start really anew as far as the asset management business is concerned following this transaction. The earnouts will be relatively limited. We are expecting for the first five years an overall amount of 20 million euros The way the Arnaut's work is based on Thank you very much. The existing assets under management. So we are talking about obviously an earn out that is important financially, but there is a very compelling case in terms of growth as far as the different milestones have been set for that to be paid. We also have for the longer term, we really want to leave Thank you very much. will not impair or affect the overall profitability of the business. So the seven times P multiple is calculated on the 305 million euros consideration. I told you 20 million is the maximum earn out to be paid over the first five years based on these growth targets. We will acquire a business that will have some cash in it, and certainly that cash is also part of the consideration on top of what I mentioned, but it's cash against cash, so it doesn't really account for the multiple calculation. And then you asked a very fair question, you are now in 20 countries. So is there any plan to exit some or to rationalize? I have to tell you that it's very hard for me right now, not because I'm an optimist by nature, but it's very hard for me to think that Asmodee will ever leave any of these countries for the simple reason that the business is operating as a truly integrated platform. It doesn't matter whether In Taiwan, we have relatively small business as opposed to Singapore. We have a lot of cross-border relationships. We have a lot of interactions between different teams within, you know, closer countries within, you know, Same regions. We have a lot of things happening between the US and Brazil, between Europe and the Middle East. So we have passed that sort of position where we're looking at the world as a globe with flags planted on the ground. We are really operating the business as a global platform Today, the geographic breakdown represents very little in terms of What we are doing every day and as a matter of fact the business lines are more representative of the approach of 3DG focus than we have on the day-to-day business. Now, you also were asking in terms of the trends for the net new money, I mean for the upgraded guidance. Look, I think we have seen over the last couple of months market conditions being a little bit jittery. I think there is a bit of reckoning across a number of sectors. I mean, valuation reckoning. This volatility cannot be overlooked. We are not concerned. We are not scared. We don't think that we are in in face of any major systemic correction, yet risk propensity, portfolio construction, and commercial activity might be affected. So I think it's pretty reasonable, actually very sensible for us to take the conservative path in terms of upgrading our guidance. We don't want to hide, we don't want sort of low ball to impress you later. We did the same thing last year. We ended up very much close to what we told you at the end of July and we are doing the same this year and market conditions are the main reason why we are taking this stance. And that's it.

I don't know whether we have left any questions unanswered. Now maybe on margins, if you have any comment on... Ah, margins, margins.

Look, I mean, this has been, you know, very often we talk about evergreen funds, and this has been an evergreen question, you know, what's happening to our margins and what's happening to fees. It would be silly for me to tell you that we don't feel any pressure. Let me tell you that you are able to cope with the pressure very well. It's always a mixed match of, you know, top line being... Sometimes exposed to the competitive forces of the market and our ability through cost management to overcompensate for that. The margin mix of azimuth will remain always within this 35 to 45 basis point range. These are the baseline of our Elevate 2030 plan. There might be seasonality, there might be acquisition, there might be things that might affect this temporarily, but I think that we do not see anything major to shake the house. and even expected changes in regulation in Europe with the Retail Investment Strategy. Although we only read about these changes, so we have not really seen any actual directive or law enforcement, but we know that we will be able to adjust and to accommodate with our operating performance for any pressure on fees.

Thank you Giorgio for the detailed answers. Thank you.

The next question is from Davide Giuliano of Equita. Please go ahead, sir.

Hi, good afternoon and thank you for taking my question. I have just two as many of them were already answered. The first one is on Turkey. How much room do you see for margin improvement over the coming years from the upselling initiatives you may have? And the second one on net inflows during second quarter. We have seen a progressive slowdown in mutual fund inflows in May and June. Can you provide some indication on the underlying dynamics, in particular qualitative split of the dynamics of the various moving parts, including Nova, if possible? Thank you.

Okay, I'll take the first question as we work for the second. So, in terms of upselling or pricing mix, let me be very factual here. Average management fees in the market are below 1%, clearly affected by money market funds. I have to say that IAPI Credit Portfolio has been always, compared to its peers, a good performer. Average management fees between 1.1% and 1.2%. But then I look at what we have been able to achieve with Azimut Portfolio, above 1.4% historically. So if I look at a translation of the business and ability to We have been able to work with the same mix that we have been able to implement with our clients. I think, you know, the top line can, you know, certainly 10 to 20% upside that we can deliver over the short and the medium term. Nothing will be automatic, but, you know, certainly The distribution agreement has been built in a way where the bank is opening the doors of the branches to our teams and certainly there will be a lot of education with their personnel, with the clients as well. One thing I didn't mention, or I mentioned that briefly only when we were talking about alternatives, Turkey right now is experiencing what is a very fast growing stage when it comes to alternatives. I have to say investors' preferences, particularly among iNetwork individuals, resemble significantly what we see in other more mature markets. There is, maybe because of the country, the history of the country, an entrepreneurial spirit, there is an entrepreneurial culture, and iNetwork individuals are very ready to put their money at work in liquid investments, private equity, venture capital, private debt. and the bank itself is looking to add these products to the mix offered to their clients. And these are products like, you know, elsewhere that have significantly higher fees. We start always with 2% and something that Azimut Porfoi, our affiliate, has been able, ready to seize as an opportunity over the last 15 months. You know, we have now approximately $300 million of alternative investments for our clients and the way we have been able to engage with them, certainly what we have learned in Italy, in the US, today is very conducive of effective marketing, of an effective marketing proposition with clients and we will translate that, we will bring that to Yappie Credit Network, obviously. We are talking about a very significant asset base there, so I'm not expecting to get to 5% of Yappie Credit portfolio investing into alternative assets, but in the business plan that they presented to us, there was more than a double-digit exposure to alternative investments, so I think we can work towards that.

Yeah, taking the second question, I mean, looking to the last quarter evolution of the net inflows, but in particular, as you were mentioning, on the mutual funds, To be honest, we don't really see a particular, let's say, problem or issues. To be honest, probably we're more, you know, frequent having particular and positive results over the last 12 or 15 months. So probably the fact that in the last quarter we were a bit lower make you a bit, you know, afraid of the evolution is not probably the case. Obviously, mutual funds, I mean, we in general suffer a bit in Brazil. You know that credit funds, there's a bit of volatility. The market sometimes happens. And as well, also, we should consider that, like in May, we had this fantastic growth in alternative funds. In two days, we had net new money in... One Club Deal, 175 million euros. So, all in all, I think that the evolution we see back in the second quarter remains positive. As well, we should consider looking forward for the next quarter. We will probably end up with the seasonability of, I mean, like August and July, people are Thank you.

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

Yes, good afternoon and thank you for taking my questions. First of all, consideration about your transaction in Turkey that in terms of dimensions of size both regarding AUM and net profit seems to be very similar to what you can lose through TMD. So also optically it is a good result even considering that the margins are different and can improve. Talking about TMB, my first question is about an update on the results. I don't know if you have already provided them because I was disconnected for a while due to technical issues. Then regarding Turkey, I understand that your target in terms of net profit is already net of the cost of the financing. is it also net of the cost of the edges because I imagine that you have some and then if you can provide us an AUM breakdown in terms of currencies so are them in local currency or I imagine that there will be also an exposure to Euro to Dollar or something like that. Then on banking distribution, it seems that it is going to be a key driver for you. I'm referring to NOVA and also to this agreement in Turkey. Are financial advisors Are you going to remain prominent for your distribution model or are you thinking about something different? And finally on your private markets, you had 25 million write-offs on two specific investments. Would you expect to be in the need to take other provisions or it seems that your investments are going quite well? Thank you very much.

Okay, we'll answer to some of your questions, starting with Turkey. Yes, so when we talk about net income and the expectation that we have disclosed, that is post-financing, so that is taking into account What we see following conversations with a lender, you know, the cost of this debt. So that is certainly already reflected. That assumption does not include for any hedging. As I mentioned earlier asset management businesses have a natural edge in terms of what the revenues do as opposed to where inflation is and interest rates are. and, as you know, currency depreciation is a function of interest rates, so everything basically gets fixed naturally at the top-line level. Having said that, and you asked a fair question, today approximately 45% of the assets of YAPI Porfoi are invested in our currency assets. Turkey has a very vibrant and dynamic euro bonds market. These are bonds issued in dollars or euros by local issuers. and are a staple of any portfolio for local investors. So in a way, if you want, it's also a hedge in that respect because of the underlying assets invested by the portfolios. When it comes to the strategic question regarding is Azimut walking away from the financial advisors business, the answer is absolutely not. We have four business lines. what we call integrated solutions is essentially the typical onshore business integrated platforms product factories with the proprietary network of advisors catering to and other affluent individuals. This is a business that obviously made Axiom very successful in Italy and we are replicating with equal success in Turkey, in Brazil, in Mexico, in Egypt, in Taiwan and we will keep focusing on these segments because we believe there is so much value in the integrated asset management platform as opposed to resorting to a pure wholesale business. You know, asset management is are all serving supermarkets away from where the clients are with everything that entails, particularly when market conditions worsen. What you will see is certainly Azimut being very keen to seek strategic partnerships. Nova obviously is very known to all of you. YAPI, Credit Portfolio is what we have. commented extensively today. But let me tell you that in Brazil we have a strategic partnership with XP, that is the second largest financial products digital distribution platform. This is a true partnership. They are a key driver in our performance, operating performance in the country. In the Middle East we have now almost a 10-year long partnership with Abu Dhabi Islamic Bank. for everything being Sharia compliant, asset management solutions, and we do that only with them. In Asia as well, we have a partnership with the Maybank, that is a larger financial institution in the southeast of the continent. These are partnerships that we never comment on because they are certainly smaller as opposed to what Nova, Yapi, Credit could be, but they're already part of our business. So we are developing this partnership Thank you very much. all these strategic agreements. And then Alessandro...

Referring to TMB, we have not mentioned before the evolution in terms of P&L, but we can share the fact that the net profit is around 30 million euro at the end of June 26, so with a positive trend compared to last year. This thanks to positive evolution of the AUM in terms of net new money and as well market effects. So in general the division is running positively compared to last year. Also referring to the private markets, we decided to be very conservative. This first half, as I mentioned before, I mean, looking also to the way, I mean, the accounting principle, we do not move the value of the assets, but on the other way around, I mean, we keep a conservative approach when you talk about cost, costless impairment. So we don't see future, I mean, additional negative adjustment, hopefully positive. So that's the results of what has been, I mean, the approach of the group for this first half.

The next question is from Ubert Lam of Bank of America. Please go ahead.

Hi, good afternoon. I've got three questions. Firstly, on the deal in Turkey, can you talk about the funding costs for the acquisition in Turkey or what would you expect it to be around? The second question is, in terms of leverage, how much more leverage are you willing to take for Azimut Group? And lastly, I saw that for the write-down you've taken on your balance sheet, Were there also client funds that were invested in these assets and hence need to be written down as well? Just checking where it really came from. Thank you.

So I'm going to take the first two.

What we see today is around 2.53% cost of the debt. Referring of the leverage, normally what we have seen in the past is 2.5x the ABDDA. So we have, you know, big margin if we see, I mean, we look to our ABDDA today to leverage the company, but, you know, at the same time we keep as well our conservative approach. So that's for the first two.

and as far as the exposure of our funds to some of the positions that you have been conservatively marking down, let me tell you, very negligible. As a matter of fact, these were warehousing investments. In some cases, Azimut has been involved in helping startups and businesses to take off, really bringing these businesses to Eventually, our clients only want certain profitability and certain assumptions of their underlying business cases were proven. This, I think, is a legitimate position and always in protection of clients' interests. By the way, I think for accounting purposes, we are really subject to very strict rules and very rarely If never, you will see, you know, such an approach applied to private equity and private debt. And let me tell you, this position has been written down now, but, you know, can be written back at some point. And we've already proven in several instances how we've been able to extract meaningful value from this proper book.

Okay, so clients will have no real impact?

No, no, absolutely. You can say virtually nil.

Okay, thank you.

The next question is from Giovanni Razzoli of Deutsche Bank. Please go ahead.

Thank you. In the interest of time, I'll skip my questions and then we can take them offline. Thank you.

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