Eurazeo Paris Ord

Ladies and gentlemen, welcome to the Eurazeo first quarter 2022 conference call. I now hand over to Mr. William Kadouchiassin, General Manager of Finance and Strategy and member of the Eurazeo Executive Board. Sir, please go ahead.

Thank you very much. Good morning to all. Thanks for taking the time to connect to this call. It's a pleasure to present to you Eurazeo results and particularly for me, as it is for the first time, I would present Eurazeo's Rezons. I joined the company and a great team of entrepreneurs two months and a half ago already in order to participate to the exciting ambition of growth and transformation of the company under the stewardship of Virginie Morvan. The Rezons we publish today are, in a sense, a very good illustration of the dynamic in place with Eurazeo. We published this morning very good figures for Q1 on all fronts. Fundraising, AUM, management fees, asset rotation, and the performance of the portfolio company. Let me take you through all these points, starting with the dynamic of growth of the company. Eurazeo continues to grow at a high pace, as you have seen in the press release, both as an asset manager and as an investment company. The asset management activities, as I mentioned, continue its development at a robust pace. AUM are up 41% year on year at 32.2 billion euros end of March. Fundraising is strong in the first quarter. Over the last 12 months, it's been in total amounting to 5.3 billion euros. For the quarter solely, we raised 876 million euros, which is up 12% relative to the first quarter of last year. We continue to see strong demand for our funds across the board. with good flows in venture, growth, buyout, and private debt in particular for this quarter. On top, and as you know, this is one of the key strengths of the company, we continue to collect money on the retail side very dynamically, which further strengthens our leadership in wealth management. We raise 100 million in the quarter of retail money and we are about to launch new innovative funds very shortly. Management fees are up 34% adjusted for change and perimeter effects, with fees from third parties up 45%, which obviously echoes what I said about the dynamics in terms of money collection, but also the strong fundraising that we had in the past quarters. That's for the asset manager, which continues again to grow at a high pace. Let me turn to the investment company, or the balance sheet, which is also supported by a solid momentum of growth. The economic revenue of the consolidated portfolio is up 31%, in the first quarter 2022 compared to the same period of last year at constant currency and Eurazeo perimeter. The growth, and this is a very important point, is very broad-based in the portfolio across sectors, across sides of companies, across strategies, which echoes or underpins the strengths of Eurazeo positioning on segments with structural growth outlook. Obviously, the travel and leisure companies continue to rebound strongly in the quarter, but outside of travel and leisure, the revenue growth amounts to 17%. And again, as I mentioned, this is very broad-based across companies and strategies. In addition to the consolidated portfolio, Looking at the gross portfolio, the digital assets we own, which are not consolidated, we continue to enjoy very strong momentum, benefiting from a digital native positioning. Revenue are up another 50%, 5-0, in Q1 2022 relative to the same period of last year. The good performance of the portfolio companies in the first quarter reflects, obviously, the relevance of Eurasio's sector choice. We all have seen the volatile economic environment and uncertain environments we've been going through in the first quarter. The group, however, benefits, including in such a context, from a diversified, high-quality portfolio positioned in structurally growing segments such as healthcare, business services, digital with strong consumer brands, and the energy transition. Second point I'd like to stress is the fact that the asset rotation is satisfactory and goes according to plan. deployed 1.7 billion euros in the first quarter of this year, of which 600 million from our balance sheet. This means 1.2 billion in private equity, focusing again on companies where we think there is structural growth in healthcare, case in point, Cranial, for example, in the U.S., Business services, digital enabled business services, such as Dili Trust, which is a legal tech leader in France and Europe. And energy transition, we just completed an investment in Icaros in the photovoltaic space. We also invested 500 million in private debt, which continues to be very well sustained, and is a sector where we benefit from being in an environment of floating rate, meaning we have a natural hedge against what's happening in the interest rate environment these days. We continue to benefit from a very strong balance sheet and position for further investment with 4.7 billion dry powder, a net pro forma position, treasury position in excess of 200 million, And we obviously continue to have 1.5 billion of committed line by our partnership banks, which is a mid-term commitment. Very importantly, our exit program is executed as planned. We completed or signed roughly 1.2 billion equivalent in Euro terms of deals year-to-date, which is 400 million realizations in the first quarter, on top of the deals we had announced already, which you know, Aurelia and Reden Solar, for a total amount, again, of 1.2 billion. I'd like to stress that all these exits are performed in good terms, and sometimes, as we already mentioned in the first quarter, very good terms. Third point, we continue to progress in our non-financial ambitions, our ESG commitment. As you know, Eurazeo aims for leadership in ESG with two major commitments, two key pillars, environment and inclusion. This quarter, we made particularly progress, further progress on the environment front. with two key elements I'd like to underline. Our carbon footprint target for the group, core Eurasia group, is validated or has been validated by the science-based target initiative. We aim for a decline in carbon impact of 55% through 2033, and 30 versus 2017. And this is what this trajectory represented and submitted to the science-based target is about. Beyond Eurazeo as a company, including the portfolio companies, we aim for carbon neutrality through 2040. That's also why, and this is the second point, we have deployed further the decarbonization plan at portfolio level on top of what I just mentioned for Eurazeo Group. Fourth point, we aim for an attractive return to shareholders. You know that we have already decided to pay a 3 euro per share dividend with the coupon DPH on the fourth of May, after the General Assembly had validated it, today we announce on top the share buyback program of 100 million. The acquired shares are to be consoled. We believe this is a relevant step towards improving the return to shareholders, particularly in the context of the discount to our next asset value. But further beyond that, we want to show the confidence we have in both the quality of our portfolio and the fundamental valuation of our assets and the strength of our balance sheet. To sum up, in the first quarter, I'd say that in an uncertain environment, we've shown the capacity of Eurazeo to grow on all cylinders and execute on the strategy, both financial and non-financial. Going forward, which being obviously vigilant and on the potential impact of the environment on the future performance, we remain confident with the outlook. As you have seen in the press release, we confirm our ambition to reach 60% billion AUM in the mid-term, combined with an improving operating leverage. I'll stop there and open the floor to questions. Thank you for your attention.

Ladies and gentlemen, if you wish to ask a question, you may press 01 on your telephone keypad. So it's 01 on your telephone keypad. So first question is from Mr. Geoffroy Michelet from O2BHF. Please go ahead.