Equita Group Spa · MIL:EQUI
Equita Group Spa — H1 2020 Earnings Presentation
43 slides from Equita Group Spa's earnings presentation, Oct 7, 2020
Slide 1: STAR Conference – Investor Presentation First Half 2020 Results
October 7th, 2020 STAR CONFERENCE INVESTOR PRESENTATION – FIRST HALF 2020 RESULTS
Slide 2: Index
Index EXECUTIVE SUMMARY Page 3 H1’20 RESULTS (KEY FINANCIALS) Page 5 RECENT DEVELOPMENTS & INITIATIVES Page 10 OUTLOOK 2020 AND CLOSING REMARKS Page 19 ANNEX INTRODUCTION (EQUITA AT A GLANCE) Page 25 GLOBAL MARKETS Page 30 RESEARCH TEAM Page 31 INVESTMENT BANKING Page 32 ALTERNATIVE ASSET MANAGEMENT
Slide 3: Executive Summary
EXECUTIVE SUMMARY H1’20 FINANCIAL RESULTS Growth confirmed Double digit growth in client-related revenues, consolidated net revenues and net profits RECENT DEVELOPMENTS & INITIATIVES Covid-19 Strategic initiatives Business continuity guaranteed New advisory board Social initiatives to support local
Slide 4: H1'20 Results (Key Financials)
Index H1’20 RESULTS (KEY FINANCIALS)
Slide 5: Snapshot on H1'20 Consolidated Results
SNAPSHOT ON H1’20 CONSOLIDATED RESULTS KEY CONSOLIDATED HIGHLIGHTS €29.1m €5.1m 25% 19% €0.9bn (+14% vs H1’19) (+27% vs H1’19) (as of 30 June 2020) (as of 30 June 2020) (+5% vs Q1’20/ -12% vs FY’19) Net Net Total Return on Assets under Revenues Profits Capital Ratio Tangible Equity (1) Management DI
Slide 6: Divisional Performance
DIVISIONAL PERFORMANCE GLOBAL MARKETS NET REVENUES (€M) MARKET SHARES (%)(1) Client Sales & Trading Equity 37,1 Business Client Driven & Market Making Equities Bonds Options 31,6 Directional Trading 30,6 30,5 29,9 Q2’19 10.2% 6.0% 7.3% +7% Q3’19 9.4% 6.8% 6.6% 25,8 18,2 24,4 20,8 21,4 21,7 +15% 17,1
Slide 7: Profit & Loss and Focus on Costs
PROFIT & LOSS AND FOCUS ON COSTS DISCIPLINED APPROACH ON COSTS AND STRONG PROFITABILITY CONFIRMED SUMMARY OF CONSOLIDATED FIGURES Profit & Loss H1 H1 Var FY €m Net Revenues 2020 29,1 2019 25,5 % 14% 2019 58,3 Focus on Costs Personnel costs (1) (13,3) (11,6) 15% (27,1) (46%) (46%) (46%) Personnel cos
Slide 8: Summary H1'20 Financial Results
SUMMARY H1’20 FINANCIAL RESULTS POSITIVE FIRST HALF 2020 WITH STRONG GROWTH IN CLIENT-RELATED BUSINESS Operations guaranteed Business continuity …during the Back to a “new” normal (mix of professionals working on-site and remotely; guaranteed Covid-19 pandemic meetings and roadshows hosted virtually
Slide 9: Recent Developments & Initiatives
Index RECENT DEVELOPMENTS & INITIATIVES
Slide 10: Covid-19 Response: Key Messages from the Outbreak of Pandemic
COVID-19 RESPONSE: KEY MESSAGES FROM THE OUTBREAK OF PANDEMIC OPERATIONS KEEP GOING SMOOTHLY THANKS TO INFORMATION TECHNOLOGY INVESTMENTS MADE DURING THE LAST FEW YEARS WHICH GUARANTEE CONTINUITY TO THE BUSINESS, AS WELL AS HEALTH AND SAFETY OF EQUITA PROFESSIONALS BUSINESS PROFESSIONALS SOCIAL INIT
Slide 11: An Advisory Board to Assist the Group in its Strategic Decisions
AN ADVISORY BOARD TO ASSIST THE GROUP IN ITS STRATEGIC DECISIONS EQUITA APPOINTED LEADING INDEPENDENT EXPERTS TO ADVISE THE BOARD OF DIRECTORS AND MANAGEMENT THE LEADING INDEPENDENT EXPERTS OF THE ADVISORY BOARD OF EQUITA PAOLO BASILICO STEFANO MAINETTI ROBERTA NERI Italian entrepreneur, founder of
Slide 12: New Medium-Term Financing to Support Our Growth Strategy
NEW MEDIUM-TERM FINANCING TO SUPPORT OUR GROWTH STRATEGY UP TO EURO 30 MILLION TO FINANCE GROWTH PLANS THROUGH THE EXECUTION OF POTENTIAL M&A TRANSACTIONS AND INVESTMENTS IN NEW ALTERNATIVE ASSET MANAGEMENT PRODUCTS FINANCING FACILITIES – KEY TERMS TLA (TERM LOAN AMORTISING) RCF (REVOLVING CREDIT FA
Slide 13: Leading Position in Investors' Surveys Confirmed
LEADING POSITION IN INVESTORS’ SURVEYS CONFIRMED… EQUITA CONFIRMED ITS COMPETITIVE ADVANTAGE POST MIFID II BY RANKING AT THE TOP OF INTERNATIONAL INVESTORS’ SURVEYS AND #1 PLAYER AMONG INDEPENDENT BROKERS ALSO IN 2020 SALES & TRADING CORPORATE ACCESS Quality of Trading Execution (2) 1 Service Compan
Slide 14: Investment Banking League Tables
…AS WELL AS IN THE INVESTMENT BANKING LEAGUE TABLES ITALIAN RANKINGS KEY TRANSACTIONS (2018 - YTD 2020) (3) # IPO / Listing (1) # deals (2018 – YTD Sep’20) 1. Banca IMI 8 2. 7 3. Integrae SIM 7 ECM 4. Mediobanca 6 IPO IPO IPO IPO 5. Intermonte 4 RIGHT ISSUE 6. Unicredit 4 SOLE GLOBAL COORDINATOR GLO
Slide 15: M&A: Equita K Finance
M&A: EQUITA K FINANCE EQUITA ACQUIRED A 70% STAKE IN K FINANCE (NOW EQUITA K FINANCE), AN ITALIAN INDEPENDENT M&A ADVISORY BOUTIQUE WITH MORE THAN 20 YEARS EXPERIENCE AND SIMILAR VALUES AND FOUNDING PRINCIPLES TO EQUITA’S EQUITA K FINANCE AT A GLANCE Independence > €6m c. 10 Net Revenues Deals compl
Slide 16: M&A: Deal Structure and Key Impacts for Equita
M&A: DEAL STRUCTURE AND KEY IMPACTS FOR EQUITA ACCRETIVE TRANSACTION IN TERMS OF EPS AND ROTE, WITH LIMITED IMPACT ON SOLVENCY RATIOS. IMPACTS EXCLUDE POTENTIAL COMMERCIAL SYNERGIES DEAL STRUCTURE AND KEY TERMS Acquisition of majority stake in the target (2020) Acquisition of remaining minorities (2
Slide 17: Equita Private Debt Fund II
EQUITA PRIVATE DEBT FUND II THE PRIVATE DEBT TEAM CLOSED THE FIRST FUNDRAISING PHASE OF «EQUITA PRIVATE DEBT FUND II» (EPD II) AT €100M KEY INFORMATION – EPD II FUND SIZE AND INVESTORS Hard cap €250m Target size €200m (hard cap €250m), of which €100 already committed Investing in senior unitranche a
Slide 18: Outlook 2020 and Closing Remarks
Index OUTLOOK 2020 AND CLOSING REMARKS
Slide 19: Outlook 2020
OUTLOOK 2020 POSITIVE EXPECTATIONS ON FY’20 RESULTS LED THE BOARD OF DIRECTORS TO CONSIDER A POTENTIAL DIVIDEND DISTRIBUTION OF €0.18-€0.20 PER SHARE EVIDENCES EXPECTATIONS 1 Positive H1’20 results Positive view on Net Revenues +14% YoY 2020 full year results Net Profits +27% YoY 2 Solid investment
Slide 20: A Difficult Environment Presenting Strategic Opportunities
A DIFFICULT ENVIRONMENT PRESENTING STRATEGIC OPPORTUNITIES AN OVERALL DIFFICULT FRAMEWORK OFFERING INTERESTING STRATEGIC OPPORTUNITIES FOR EQUITA IN THE COMING YEARS AREA OPPORTUNITY ENABLING FACTORS AND KEY DRIVERS High market shares (#1 independent broker) Increase in brokered volumes Fixed Income
Slide 21: Next Steps
NEXT STEPS MANY INITIATIVES TO SUPPORT FURTHER FUTURE GROWTH IN ALL AREAS AREA INITIATIVES Further coordination of Global Markets area as a whole, with clear strategy and allocation of resources Global Further diversification of product offering as well as client base, increasing resiliency Markets
Slide 22: Road to 2022: Top Priorities and Targets
ROAD TO 2022: TOP PRIORITIES AND TARGETS (PLAN APPROVED IN NOVEMBER 2019) TOP 5 PRIORITIES KEY TARGETS FROM 2020-2022 STRATEGIC PLAN (@2022) GM €30m-34m Revenue Generation and Net Revenues 1 IB €30m-34m Diversification €75m AAM €8m-12m Cost Discipline and -500 bps in Cost/income 2 Focus on Profitabi
Slide 23: Resilient and Profitable Performance Thanks to Diversification
RESILIENT AND PROFITABLE PERFORMANCE THANKS TO DIVERSIFICATION NET REVENUES (€M) +5% CAGR ‘09-’19 in Net Revenues over the last 11 years 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Global Markets Investment Banking Alt. Asset Management NET PROFITS (€M) Always profitable, with significant
Slide 24: Appendix
Index APPENDIX
Slide 25: The Leading Independent Investment Bank in Italy
THE LEADING INDEPENDENT INVESTMENT BANK IN ITALY THE LARGEST INDEPENDENT TRADING FLOOR IN ITALY COMMITTED MANAGEMENT, UNPARALLELED ACCESS TO WITH INTERESTS FULLY CAPITAL MARKETS ALIGNED TO INVESTORS Independence as differentiating factor Clear and diversified business model STRONG PROFITABILITY & TO
Slide 26: Story and Milestones
STORY AND MILESTONES The management team Incorporation of Equita Group Incorporation of of Equita SIM (which (HoldCo which owns 100% of Equita Capital SGR, Launch of already owns 49.5%) and Equita SIM). The management the management Listing of discretionary Alessandro Profumo buy acquires the majori
Slide 27: Clear Group Structure and Strong Management Commitment
CLEAR GROUP STRUCTURE AND STRONG MANAGEMENT COMMITMENT GROUP STRUCTURE (1) SHAREHOLDING STRUCTURE SHAREHOLDERS’ AGREEMENTS First Shareholders’ Agreement-Bis EQUITA AGM 30 shareholders with 48% of share GROUP 73% 27% Voting capital (≈65%(2) of votes following the kick-in of increased voting rights) r
Slide 28: Experienced Management Supported by Well-Integrated Teams
EXPERIENCED MANAGEMENT SUPPORTED BY WELL-INTEGRATED TEAMS Equita Board members Board renewed in May 2020 Perilli (Chairman) Independent Board members EQUITA Vismara (CEO) Colonna (Indep.) Ferrari (Indep.) Key managers GROUP Biglieri (Non Exe.) Demartini (Indep.) Zeme (Indep.) Control functions L. Ro
Slide 29: Business Areas
BUSINESS AREAS Global Investment Alternative Asset Research Markets Banking Management Team We are the leading independent We offer high-profile advisory in We manage - via Equita Capital SGR - Our expert analysts support all other broker in Italy. We offer to extraordinary financial transactions, l
Slide 30: The Leading Independent Brokerage Firm in Italy
THE LEADING INDEPENDENT BROKERAGE FIRM IN ITALY COMPLETE AND DIVERSIFIED PRODUCT OFFERING (EQUITIES, BONDS, DERIVATIVES, ETFS) BUILT ON CLIENTS’ NEEDS. THE HIGH MARKET SHARES ACHIEVED OVER TIME CONFIRMED EQUITA’S COMPETITIVE ADVANTAGE POST MIFID II. CONSTANTLY RANKED AT THE TOP OF INVESTORS’ SURVEYS
Slide 31: Best-in-Class Quality Research for Investors
BEST-IN-CLASS QUALITY RESEARCH FOR INVESTORS EQUITA CONFIRMED ITS EXTENSIVE COVERAGE OF LISTED SECURITIES, BOTH EQUITIES AND BONDS. CONSISTENTLY RANKED AT THE TOP OF INTERNATIONAL RANKINGS THANKS TO THE BREADTH AND QUALITY OF ITS RESEARCH EQUITA COVERAGE ITALIAN RANKINGS (2) Italy Research # of comp
Slide 32: Leader Among Independents in Investment Banking in Italy
LEADER AMONG INDEPENDENTS IN INVESTMENT BANKING IN ITALY THE LEADING INDEPENDENT PLAYER ON CAPITAL MARKETS IN ITALY AND CONSTANTLY RANKED AMONG TOP M&A ADVISORS BY NUMBER OF DEALS. SIGNIFICANT BENEFITS AND SYNERGIES FROM COVERING THE WHOLE SPECTRUM OF IB SERVICES UNIQUE AND COMPLETE PRODUCT OFFERING
Slide 33: A 'Different' Asset Manager
A ‘‘DIFFERENT’’ ASSET MANAGER… EQUITA CAPITAL SGR, THE MANAGEMENT COMPANY OF EQUITA, LEVERAGES ON THE GROUP’S DIFFERENT AREAS OF EXPERTISE AND COMBINES SEVERAL DISTINCTIVE FEATURES THAT MAKE IT UNIQUE IN THE ITALIAN COMPETITIVE LANDSCAPE KEY DIFFERENCES BETWEEN EQUITA CAPITAL SGR AND COMPETITORS Ful
Slide 34: A Clear and Diversified Growth Strategy
…WITH A CLEAR AND DIVERSIFIED GROWTH STRATEGY A CLEAR STRATEGY, FOCUSSED ON DIFFERENT PRODUCTS AND SERVICES OFFERED TO BOTH FINANCIAL INSTITUTIONS AND PROFESSIONAL INVESTORS. NOT INTERESTED IN TRADITIONAL ASSET MANAGEMENT AND WEALTH MANAGEMENT PARTNERSHIPS TO CO-DEVELOP PRODUCTS WITH BANKS, FINANCIA
Slide 35: Alternative Asset Management: Sound Performance
ALTERNATIVE ASSET MANAGEMENT: SOUND PERFORMANCE POSITIVE TRACK RECORD IN ALMOST ALL PRODUCTS THANKS TO STRONG EXPERTISE AND TOP-QUALITY IN-HOUSE RESEARCH. RESILIENT PERFORMANCE ALSO DURING THE MARKET TURMOILS OF 2020 A DIVERSIFIED SET OF PRODUCTS PORTFOLIO MANAGEMENT 1 2013 2014 2015 2016 2017 2018
Slide 36: Shortlist of Equita Initiatives with Social Impact
INVESTING IN A SOCIALLY RESPONSIBLE BUSINESS INVESTING IN EQUITA MEANS SUPPORTING INITIATIVES THAT BENEFIT THE SOCIETY Training & Corporate Remuneration on Employees Diversity … Education Welfare Meritocracy 6.600+ hours of Medical check-up, Quali-quantitative performance indicators, training in 201
Slide 37: Several Initiatives to Strengthen the Equita Brand
SEVERAL INITIATIVES TO STRENGTHEN THE EQUITA BRAND EQUITA HAS ALWAYS BEEN A STRONG «NAME» IN ITALY BUT IN RECENT YEARS IT HAS SIGNIFICANTLY STRENGTHENED ITS BRAND, ALSO THANKS TO ITS ESG INITIATIVES LIST OF MOST RECENT EQUITA INITIATIVES, ALL AIMED AT SUPPORTING BUSINESS GROWTH New Advertising Campa
Slide 38: The Influential Role of Equita on Financial Markets
THE INFLUENTIAL ROLE OF EQUITA ON FINANCIAL MARKETS EQUITA IS AN OPINION MAKER ON CAPITAL MARKETS AND HAS POSITIONED ITSELF AS THE LEADING EXPERT OF FINANCIAL MARKETS IN ITALY EQUITA ROLES AND INITIATIVES THAT PROMOTE THE DEVELOPMENT OF FINANCIAL MARKETS Pro-market regulatory Long-Standing Partnersh
Slide 39: Strong Track-Record in the Execution of New Initiatives
STRONG TRACK-RECORD IN THE EXECUTION OF NEW INITIATIVES LEGACY BUSINESS VS NEW INITIATIVES (NET REVENUES FY’09 VS FY’19) Retail Hub €58m €58m Market Making Fixed Income sales 9 New M&A & Advisory €36m 18 €36m 30 Debt Capital Markets 4 Initiatives 7 Debt Advisory Global Markets Private Debt 32 Invest
Slide 40: How Has the Business Changed Since IPO?
HOW HAS THE BUSINESS CHANGED SINCE IPO? KEY FINANCIAL INDICATOR FY’16 (PAST) FY’19 (CURRENT) FY’22 (FUTURE) EQUITA MB ESTIMATES EQUITA EQUITA ACTUAL (@IPO, NOV-2017) ACTUAL STRATEGIC PLAN M&A 30 30 Business 31 28 32 - - 25 34 34 Mix 16 2 4 18 8- 9 12 GM IB AAM GM IB AAM GM IB AAM GM IB AAM Net Reven
Slide 41: Resilient Performance in Terms of Total Shareholders' Return
RESILIENT PERFORMANCE IN TERMS OF TOTAL SHAREHOLDERS’ RETURN MORE RESILIENT STOCK BEHAVIOUR COMPARED TO PEERS AND MAIN ITALIAN INDICES SINCE IPO(1) TOTAL SHAREHOLDERS RETURN SINCE THE EQUITA IPO (23 NOVEMBER 2017) IPO 23-Nov-17 @31-Dec-19 @14-Feb-20 @23-Mar-20 @30-Sep-20 (€2.90) (pre-Coronavirus) (p
Slide 42: Balance Sheet and Total Capital Ratio
BALANCE SHEET AND TOTAL CAPITAL RATIO LIGHT BALANCE SHEET AND HEALTHY CAPITAL STRUCTURE, WITH TOTAL CAPITAL RATIO WELL ABOVE REQUIREMENTS €m H1’20 Q1’20 FY'19 9M'19 Cash & cash equivalents 0,0 0,0 0,0 0,0 Assets at FV to P&L & Equity investments 84,2 80,9 75,3 81,5 Receivables 196,4 237,6 184,2 174,
Slide 43: Contact details
Via Filippo Turati, 9 – Milano +39 02 6204 1 | info@equita.eu | www.equita.eu | Global Markets | Investment Banking | Alternative Asset Management | Ricerca |