Allfunds Group Plc · EURONEXT:ALLFG
Allfunds — H1 2023 Earnings Presentation
39 slides from Allfunds's earnings presentation, 2023
Slide 1: 1H 2023 Interim results
1H 2023 Interim results World’s leading B2B WealthTech platform
Slide 2: Agenda
1 Business review Juan Alcaraz - CEO Financial update Agenda 2 Alvaro Perera - CFO 3 Q&A 4 Appendix
Slide 3: Business review
Business review Juan Alcaraz CEO
Slide 4: Solid 1H23 with record performance against several operating and profitability indicators
Solid 1H23 with record performance against several operating and profitability indicators Strong business outlook confirming Committed to delivering value Growing AuA and record revenue growth our FY2023 guidance to our shareholders Growing AuA volumes by 4% YTD driven by Flywheel effect growing
Slide 5: Return to AuA volume growth during 1H 2023
Return to AuA volume growth during 1H 2023 Allfunds AuA bridge Growth since Dec 22 % Over BoP AuA (1) 4.5% (2.7)% 2.2% 4.2% Allfunds Assets under Administration have 4.1% increased 4.1% since December For the first time in more than a year, markets have contributed positively Outflows concentr
Slide 6: 10+ years of annual market share gains, with still extensive room to increase market penetration
10+ years of annual market share gains, with still extensive room to increase market penetration Allfunds market share evolution (1H 2012 - 1H 2023) Long-term secular penetration trend to open- US/UK architecture with significant remaining runway Open Architecture Penetration (Market share of Cros
Slide 7: Allfunds continues to outperform the market
Allfunds continues to outperform the market Organic AuA Evolution (1H 2012 - 1H 2023)(1) MSCI World Stoxx Europe 600 Bloomberg Global S&P 500 Why we outperform the market Aggregate Index (2) % CAGR 1H 12-1H 23 23.9% 8.3% 5.7% 0.2% 11.4% 1. Outsourcing penetration by banks / wealth managers % CAGR 1H
Slide 8: Deep dive on flows from existing clients
A Deep dive on flows from existing clients Flows from existing clients breakdown (Q1 and Q2 2023) Resilient flows from the vast majority of By Quarter By Region existing clients outside a handful of retail banks: 7% — Excluding 3 countries (Switzerland, Italy 3% and Spain), flows from existing cli
Slide 9: Migrations, a stable engine of growth, on track to deliver guidance for 2023
B Migrations, a stable engine of growth, on track to deliver guidance for 2023 New Fund houses New clients Mid-sized clients, our Capturing market share onboarded from core diversification sweet spot from competitors markets by Region by Size by Origin % based on number % based on total AuA of % bas
Slide 10: Flywheel effect remains strong with a strong pipeline for the 2H
B Flywheel effect remains strong with a strong pipeline for the 2H Solid new client migrations (AuA) Constant onboarding of fund houses to the platform Number Number of new fund houses of new 34 38 35 47 34 31 distributors 107 99 FY23 guidance Figures in €bn of €40bn - €60bn 35 32 70 70 74 68 64 26
Slide 11: A unique enhanced value proposition
A unique enhanced value proposition Tech Regulatory Solutions Solutions Allfunds´compelling one-stop shop NEW Unique ESG approach for top ESG tier financial groups, providing a one stop shop for Data MainStreet(1) their sustainability requirements Analytics NEW Privat e New proprietary Investment Ma
Slide 12: We continuously make our proposition to our clients more compelling
We continuously make our proposition to our clients more compelling Key milestones in 1H 2023 Contribution to Allfunds 1 • Launch in March: integrated solution that will streamline the operational aspects of private asset investments, making alternative more accessible to distributors • Asset class
Slide 13: Allfunds is ideally positioned to lead the Alternatives Funds opportunity
1 Allfunds is ideally positioned to lead the Alternatives Funds opportunity Large growth and margin accretion potential Medium Term market opportunity (€tn) Significant untapped market opportunity Highest growth asset management segment/product Global Retail Wealth TAM(1) €181-208tn Low AuM vola
Slide 14: Boosting our subscription-based revenues
2 Boosting our subscription-based revenues Subscription business continues growing at a fast pace Increasing and diversifying our pipeline Expanding through all growth levers Revenue in €m Deal value pipeline (1) By Region Deal value(2) breakdown by sale type >82% >71% CNE & Nordics 25% 26.6 43% 28%
Slide 15: A strong investment case
A strong investment case A leading global Unique and attractive A one-stop-shop revenue model Superior financial profile scaled WealthTech Global reach and local presence Compelling value proposition “Buy-free” model for Distributors Best-in-class growth (+13% CAGR 20-23E in net revenues)
Slide 16: Financial update
Financial update Alvaro Perera CFO
Slide 17: Record half year revenues
Record half year revenues Strong Revenues High margin High profitability Highly-cash generative €266m c.65% €172m €101m (1) Net revenues Adjusted EBITDA margin Adjusted EBITDA Free Cash Flow 1H 2023 Net revenues 1H 2023 1H 2023 1H 2023 normalized Free Cash flow Record half of revenues in the Record
Slide 18: 1H 2023 – Income Statement
1H 2023 – Income Statement % y-o-y Figures in €m 1H 2023 2H 2022 % H-o-H 1H 2022 change Net platform revenues 239.4 210.2 14% 244.4 (2%) Net subscription and other revenues 26.6 25.5 4% 14.6 82% Net revenues 266.0 235.6 13% 259.0 3% Revenues have grown 13% vs 2H 2022 and a 3% vs 1H 2022 Adj. Perso
Slide 19: Record 1H Total Revenues
Record 1H Total Revenues Total revenues Platform revenues Figures in €m Growth Figures in €m 90% Strongest 1H of revenues, with the best 1.5x performance in the history of Allfunds 266 258 259 4.1x 247 11 15 27 239 9 236 1.4x Platform revenues 25 32 Resilient revenues despite drop in volume 210
Slide 20: Significant increase in Platform Revenue margin
Significant increase in Platform Revenue margin 2H 2022 1H 2023 AuA Dec 2022 AuA June 2023 Platform Platform (€bn) (1) (€bn) (1) Margin Margin Platform service 908 c. 4.4 bps(2) 945 c. 5.1 bps(2) Dealing & Execution 388 c. 0.2 bps(3) 405 c. 0.2 bps(4) Aggregate 1,296 c. 3.2 bps(5) 1,350 c. 3.6 bps(6
Slide 21: Allfunds with higher cost due to investment in growth
Allfunds with higher cost due to investment in growth Personnel expenses Bridge SG&A Bridge Figures in €m Figures in €m Higher adjusted expenses due to investment in future growth of the company Increase in personnel expenses mainly due to: 57.2 55.5 — Moderate impact of inflation in wages and 5
Slide 22: Adj. EBITDA margin in line with guidance
Adj. EBITDA margin in line with guidance Adjusted EBITDA margin at 65% in line with mid-60s Adj. EBITDA 69% 65% guidance: Margin (1) — Acquired businesses onboarded at a lower EBITDA margin, other factors such as Figures in €m rebasement of one-off costs and incremental 171.8 costs from BNPP TSA d
Slide 23: Allfunds has delivered its capital allocation policy since IPO
Allfunds has delivered its capital allocation policy since IPO Allfunds confirms disciplined approach to capital allocation via ordinary dividends (20-40% pay-out), strategic M&A (e.g. Mainstreet in 2023) and additional distributions to shareholders based on its excess capital: launch of a share buy
Slide 24: Allfunds has currently a low leverage ratio
Allfunds has currently a low leverage ratio Additional leverage capacity Net financial debt (1H 2022 - 1H 2023) Net financial debt / Adj. EBITDA ratio(3) Figures in €m Jun 2022 Dec 2022 Jun 2023 < 0.5x Gross financial debt 196.0 196.0 240.0 Cash at Allfunds Group Plc (3.3) (4.0) (2.9) CET1 capital 4
Slide 25: MoU to acquire the Local Paying Agent business of Iccrea Banca
MoU to acquire the Local Paying Agent business of Iccrea Banca High-level transaction overview 1 • MoU signed with Gruppo BCC Iccrea and exclusive negotiations to acquire the Banca Corrispondente or local paying agent business of Iccrea Banca Transaction status and perimeter — Gruppo BCC Iccrea is t
Slide 26: Confirming FY 2023 Outlook
Confirming FY 2023 Outlook FY 2023 Outlook FY 2023 Outlook Comments February Today Flat market performance Underlying market performance Flat market performance February since end of June Up mid-single digit YTD assumptions for the remainder of the year for the remainder of 2023 New Client Migration
Slide 27: Q&A
Q&A
Slide 28: Appendix
Appendix
Slide 29: Allfunds AuA breakdown
Allfunds AuA breakdown by Type of Client by Asset Class by Geography 4% 3% 7% 7% 7% 7% 15% 15% 5% 7% 21% 6% 4% 3% 11% 13% 13% 3% 3% 4% 2% 16% 15% 6% 14% 6% 7% 20% 21% 14% 20% 13% 14% 29% 31% 31% 20% 15% 26% 26% 25% 21% 19% 17% 11% 40% 43% 39% 37% 35% 34% 24% 24% 26% June 21 June 22 June 23 June 21 J
Slide 30: Allfunds client base: highly diversified, thanks to the continuous onboarding of new clients
Allfunds client base: highly diversified, thanks to the continuous onboarding of new clients Net revenues by type of distributor Increasingly fragmented distributor base Concentration has reduced significantly thanks to Cumulative flows from new clients(1) €130bn new client onboarding and incremen
Slide 31: Update on new Retail Investment Strategy
Update on new Retail Investment Strategy Negligible impact from RIS, impacting <1% of AuA Shift to non rebate-earnings AuA evolution (2017-2023) New Retail Investment Strategy New proposed draft regulation bans inducements only for execution-only services. The impact is thus rather limited: Neglig
Slide 32: Sustained investment in Capex
Sustained investment in Capex Maintenance Capex(1) as a % of net revenue Figures in €m Underlying capital expenditure of €20.4m (2) for 1H 23 due to IT development projects to 1.9% 6.7% 4.0% 4.1% 5.3% 4.8% support the future growth of the Group and new initiatives, especially the Allfunds 20.4 Alt
Slide 33: Solid cash flow generation
Solid cash flow generation In the last 4 years, we had an average pre-tax cash flow conversion of 86% 1H 2023 cash flow generation Figures in €m 171.8 (20.4) (3.5) (6.2) 101.2 (40.6) Adj. EBITDA 1H 2023 Capex excl. IFRS 16 Rental expense Net interest expense (1) Normalised cash Normalised tax expens
Slide 34: Bridge to reported figures
Bridge to reported figures % H-o-H % Y-o-Y Figures in €m 1H 2023 2H 2022 change 1H 2022 change Adjusted EBITDA 171.8 162.0 6% 188.4 (9%) Increase of EBITDA due to growth in revenues Transitional Service Agreements (TSAs) (2.5) (25.5) (90%) (23.1) (89%) Significant decrease in TSA costs, in line
Slide 35: Significant alignment of Adjusted and Reported figures
Significant alignment of Adjusted and Reported figures Separately disclosed items - Items Affecting Adj. % H-o-H % Y-o-Y EBITDA 1H 2023 2H 2022 change 1H 2022 change Meaningful decrease in TSA (Transitional Transitional Service Agreements (TSAs) (2.5) (25.5) (90%) (23.1) (89%) Service Agreement) c
Slide 36: Regulatory supervision and solvency position
Regulatory supervision and solvency position Allfunds Banking Group - Solvency position ALLFUNDS GROUP Change vs Dec-22 1 RWAs for Pillar I requirements have PLC decreased in H1 2023, thanks to a strong (United Kingdom) control of risk exposures Figures in €m Jun-23 Dec-22 Jun-22 Amount % Credit R
Slide 37: MoU to acquire the Local Paying Agent business of Iccrea Banca
MoU to acquire the Local Paying Agent business of Iccrea Banca Gruppo BCC Iccrea Largest Cooperative Banking Group in Italy… Full Service Financial Institution… • Gruppo BCC Iccrea is the first cooperative banking group in Italy, as well as the Group Management, Coordination and Control largest, com
Slide 38: This presentation is delivered solely as reference material and is merely for information purposes.
This presentation is delivered solely as reference material and is merely for information purposes. It does not constitute an offer to sell or a solicitation of an offer to buy any holdings and shares in any of the Allfunds group companies nor in any of the funds which may be available through Allfu
Slide 39: Investor Relations
Investor Relations investors@allfunds.com +34 91 274 64 00