Abc Arbitrage Sa · EURONEXT:ABCA
Abc Arbitrage Sa — Investor Presentation (March 2025)
45 slides from Abc Arbitrage Sa's investor presentation, March 2025
Slide 1: Investor Presentation - March 2025
Investor Presentation - March 2025 2025 Markets - Return of Donald Trump at the Helm - Gladiator(2), the Return of Economic and Financial "Bread and Circuses" ? ABC arbitrage FY 2024 - Investor Presentation 1
Slide 2: Key topics of the presentation
ABC arbitrage Key topics of the presentation 1. What we do. 2. 2024 Market Parameters. 3. 2024 Financial Result. 4. How we do it. 5. Outlook for the 2025 markets. 6. Springboard 2025 plan - Decisions for 2025. 7. ABC Shares & distributions. 8. The 5 key takeaways! ABC arbitrage FY 2024 - Investor Pr
Slide 3: Who we are
ABC arbitrage Who we are Who we are ❏ One Business: Quantitative Asset Management. ❏ One Team: Enthusiastic technologists, building innovative trading systems and asset management strategies. ❏ One Trading Principle: Quantitative arbitrage. ❏ One Methodology: Risk mitigation & Risk Management. ❏ One
Slide 4: 1. What we do
ABC arbitrage 1. What we do ABC arbitrage FY 2024 - Investor Presentation 4
Slide 5: Our business: Trading Arbitrage
What we do Our business: Trading Arbitrage Arbitrage: Providing liquidity to the market with systematic mechanical or statistical hedging position. ❑ Sophisticated trading techniques using scientific & data driven approach to generate alpha. ❑ Statistical and Event Driven strategies - focus on niche
Slide 6: 2. 2024 Market Parameters
ABC arbitrage 2. 2024 Market Parameters ABC arbitrage FY 2024 - Investor Presentation 6
Slide 7: Volatility - an overall volatility close to that of 2023
Markets parameters Volatility - 2 years - An overall volatility close to that of 2023 ➔ 2024 HY1 - The first HY is very calm, well below (~ 30%) average. ➔ 2024 HY2 - The second HY presents some very local peaks of volatility 2023 2024 ➔ Average VIX over 30 years is around 20% ➔ “No life zone” is a
Slide 8: M&A and Corporate Action activity
Markets parameters M&A and Corporate Action activity Monthly existing M&A announced offers Corporate actions opportunities (Numbers given for listed targets) +15% vs 2023 & +10% vs 10y average Divided by 3 since 2014 - Divided by 1.5 since 2018 2024 - Rate cut expectations following a 2023 activity
Slide 9: Traded markets Volume
Markets parameters Traded markets Volume ➔ 2024 vs 2023 - Stable (+2%) average volume (Europe). ➔ 2024 vs 10y average + 14%. ➔ Reminder - Long-term attrition in equity volumes. (7500 listed companies 20y ago - 4000 today) Data source: Euronext ABC arbitrage FY 2024 - Investor Presentation 9
Slide 10: Strong SP500 back to back performance
Markets parameters Specific market situation - 2024 - Strong SP500 back to back perf.! Rare back to back high returns on SP500 & NASDAQ 100 index - ( 54% and 93% over two years, respectively) SP500 ➔ 2020–2021: Amid the post-COVID recovery, the SP500 gained approximately +47% over two years (nearly
Slide 11: July/August 2024 - Drawdown Topix & Tech US
Markets parameters Specific market situation - July/August 2024 - Drawdown Topix & Tech US ➔ Monday 8/5: End of the carry trade in Japan - The Topix dropped as much as -13% intraday (not seen since 1987). ➔ Big Tech sell-off started on 8/1 and continued into the following week. ➔ September: Same pat
Slide 12: Nov/Dec 2024 - Bitcoin rally
Markets parameters Specific market situation - Nov/Dec 2024 - Bitcoin rally! ➔ Strong rally following trump election and launch of options on Bitcoin ETFs. ➔ Optimism was tempered on December 18, when the Fed announced hawkish guidances. ➔ Trading volumes (more than x2) & Volatility peaked in Nov an
Slide 13: 3. 2024 Financial Results
ABC arbitrage 3. 2024 Financial Results ABC arbitrage FY 2024 - Investor Presentation 13
Slide 14: Profit & Loss Breakdown
ABC Financial Results Profit & Loss Breakdown Change In millions of euros - IFRS 2020 2021 2022 2023 2024 2024/2023 Useful comment Investment Services Fees* 22.5 59.9 27.4 18.3 21.4 17.2% ~9% from external third party Net gains at fair value through profit or loss** 46.3 4.3 33.8 21.0 29.8 41.8% Tax
Slide 15: The moral contract has been fulfilled!
ABC Financial Results The moral contract has been fulfilled! Still a significant correlation between ABC gross profit & Realized volatility ABC arbitrage FY 2024 - Investor Presentation 15
Slide 16: Specific situations in 2024 for the constitution of ABCA revenues
ABC Financial Results Specific situations in 2024 for the constitution of ABCA revenues In millions of euros - IFRS Useful comment CRY situation ➔ QTYS has suspended its “digital assets business” on March Digital assets business 0,2 1,6 Relaunch mid-Q1 2024 2023 after FTX/SVB crisis - ABAM has obtai
Slide 17: Split of revenues between equity and third party AuM
ABC Financial Results Split of revenues between equity and third party AuM ➔ Revenues from External Third Party (ETP) = 1.9M€ / 3.7% of Net Revenue. ➔ At this level of results, activity slightly exceeds the breakeven point. ➔ Revenue from third party capital is historically in the 5%-15% range. ABC
Slide 18: External Third Party AuM under pressure
ABC Financial Results External Third Party (ETP) - Assets under Management under pressure. ❑ Pre-2010: (mainly) generated through trading of our own equity. ABCA’s AuM ❑ Post-2010: opened to third party funds. Geographical breakdown ❑ External Third Party Asset under Management - via Managed Account
Slide 19: ABCA Funds - AIF & Professional Investors only
ABC Financial Results ABCA Funds - AIF & Professional Investors only! 2024 - New flagship strategy built around a modified ABCA Opportunities Fund. ➔ A multi-asset, multi-strategy approach aimed at delivering 'all-weather' returns. ➔ Adjusting expected performance volatility to compensate for a low-
Slide 20: ABCA Funds - 2024 Returns
ABC Financial Results ABCA Funds - 2024 Returns ABCA Opportunities 2024 Perf.Class USD Net => +9% (31/12) ABCA Reversion 2024 Perf. Class USD Net => +1.9% (31/12) 2021 Eurohedge Awards Nominee - 2022 Top Performer Investor Choice Awards 2020 - BarclayHedge Recognition award for excellence - EMN Winn
Slide 21: HR Costs Breakdown
ABC Financial Results HR Costs Breakdown ABC Team = ABC Top priority = ABC largest expense ! 2024 Total of 21.2M€ Staff = 111 (31/12) ❑ Base cost increase = partial adaptation to HR market + new R&D people. ❑ Strong correlation between Bonuses and ABC arbitrage performances. ❑ Targeted Equity Incent
Slide 22: Other expenses: mainly IT expenses
ABC Financial Results Other expenses : mainly IT expenses ABC arbitrage is a “French Tech” Company ! IT Costs ~ 70% of the “other costs”. Springboard 2025 ➔ +28% vs ABC 2022 ➔ 2025 ~ 6.5M€-7M€ (vs 2024 = 5.4M€) ABC arbitrage FY 2024 - Investor Presentation 22
Slide 23: Historical Results & ROE
ABC Financial Results ABC arbitrage Historical Results & ROE - a success! Since ABC creation (1995) ➔ 30 consecutive years of strong positive results. ➔ Average ROE above 15% & minimum of 10% over 30y. ➔ ROE 2024 = 16.4% - EBIT = 21M€ (~41%). ABC arbitrage FY 2024 - Investor Presentation 23
Slide 24: 4. How we do it
ABC arbitrage 4. How we do it ABC arbitrage FY 2024 - Investor Presentation 24
Slide 25: ABC equity as a powerful driver of growth
How we do it ABC Equity Situation ABC equity as a powerful driver of growth! ❏ "High responsiveness in seed capital decisions and market allocations ❏ Fully independent from external client constraints. ❏ Pure capital accumulation from ABC’s financial results, starting from ~€10K in 1995. ABC arbitr
Slide 26: Dedicated team for our core business
How we do it Dedicated Team for our core business 110+ specialists dedicated to ABC arbitrage business! ~70% - R&D + Front ~15% - Risk Management ~10% - Sales ❏ Quant Traders & Research ❏ Risk Control ❏ IT developers & IS ❏ Marketing ❏ Process Control ❏ Data analysis ❏ Investor Relations ❏ Risk Comm
Slide 27: Proven expertise, technological know how
How we do it Proven expertise, technological know how Tech company! Robust & internally developed trading systems operating 24/7 ❏ Hundred of Billions of data elements processed each year*. ❏ Active in almost 100 markets across the world - 24/7*. ❏ Not a High Frequency Trading player but Top Tier 2.
Slide 28: Focus on risk mitigation
How we do it Focus on risk mitigation Risk Mitigation Process Strict Quality Control ❑ A compound of all possible risk types — including opposite or offsetting risks ❑ No significant increase in the risk budget over time (+15% over the last 10y). ❑ External incident* in Dec 2020 concerning 2016 to 2
Slide 29: 5. Outlook for the 2025 markets
ABC arbitrage 5. Outlook for the 2025 markets Bread and Circuses under Trump’s administration ? ABC arbitrage FY 2024 - Investor Presentation 29
Slide 30: Equity markets and others
2025 Outlook Equity markets …and others… Incredible investor optimism over the last 24 months! Back-to-back gains of over 20% mark the strongest two-year performance since the start of the century. ABC arbitrage FY 2024 - Investor Presentation 30
Slide 31: A new economic and geopolitical paradigm
2025 Outlook A new economic and geopolitical paradigm! The wall of debt in the face of estimates of inflation with “Trump Policy” incompatible with a return to negative interest rates! New tariff policy = Rising price pressures! Source = S&P Global - Research and Insights ABC arbitrage FY 2024 - Inv
Slide 32: Global Debt situation in a new rates & inflation paradigm
2025 Outlook Global Debt situation in a new rates & Inflation paradigm An economic world with contradictory pressures! ➔ Global debt increased by approximately 5% in 2024 (again…) ➔ Refinancing remains expensive amid persistently high rates. ➔ Even if Credit Market Resurgence Helps Ease Upcoming Mat
Slide 33: All the conditions are set for persistent volatility
2025 Outlook All the conditions are set for persistent volatility! PE ratio ~28 Among the highest! Historical average = 16 Stronger probability of a new paradigm of normalized volatility! Shiller ratio ~35 Among the highest! Historical average = 15 ABC arbitrage FY 2024 - Investor Presentation 33
Slide 34: Central Banks Balance Sheets
2025 Outlook Central banks Balance sheets Central Banks Balance Sheets ➔ FED = almost -25% (15/04/2022 - 14/03/2025) ➔ ECB = almost -30% (24/06/2022 - 14/03/2025) Far away from the end of Central Banks support! Source = Bloomberg ABC arbitrage FY 2024 - Investor Presentation 34
Slide 35: 6. Springboard 2025 plan
ABC arbitrage 6. Springboard 2025 plan. Decisions for 2025 ABC arbitrage FY 2024 - Investor Presentation 35
Slide 36: Springboard 2025 - Status update on the March 2024 matrix
Decisions for 2025 Springboard 2025 - Status update on the March 2024 matrix ✅ 31/12/2024 - DONE (80/20-based assessment) 31/12/2024 - WiP 31/12/2024 - Not completed so far #The ABCA Reversion fund strategies were not able to #ABC2022 & SB2025 strong contributions to the ABC #Ongoing validation for
Slide 37: 2025 matrix - Work already in Progress
Decisions for 2025 2025 matrix - Work already in Progress! +3 months H1 2025 +6 months HY2025 Publications +12 months FY2025 Publications #Structural gains need to be confirmed with stable #Milestones and decisions on selected ABC2022 & #Structural and cyclical gains observed in 2024 still to Core B
Slide 38: 7. Shares & Distributions
ABC arbitrage 7. Shares & Distributions ABC arbitrage FY 2024 - Investor Presentation 38
Slide 39: Shareholders breakdown
Shares & distributions Shareholders breakdown Over 20% ownership by executive leadership - Ensuring alignment between shareholders and management. * Holding company 50,01% held by Dominique Ceolin ** Management and independent non-executive directors excluding Dominique Ceolin and David Hoey Number
Slide 40: Historical share prices
Shares & distributions Historical share prices ➔ Significant stock price increase following the exit of replication-based ETFs (Feb. 2024). ➔ 1Y strong outperformance of ABCA (+42%) vs CAC MidSmall index (+3%) & CAC 40 index (-1,5%). ABC arbitrage FY 2024 - Investor Presentation 40
Slide 41: Distribution & Share Buyback Program
Shares & distributions Distribution & Share Buyback Program ➔ 2024 - A yield of ~7%* based on a distribution of 0.34€. FY2024 distribution = €0.34 ➔ ABCA acts as a remunerated hedge against market volatility! ❏ €0.10 – Ex date October 9, 2024. ❏ €0.10 – Ex date December 3, 2024. ❏ €0.10 – Ex date Ap
Slide 42: 8. The 5 key takeaways
ABC arbitrage 8. The 5 key takeaways ! ABC arbitrage FY 2024 - Investor Presentation 42
Slide 43: The 5 key takeaways: Cornerstones for FY 2024 & 2025
The 5 key takeaways ! Cornerstones for FY 2024 & 2025 1. Cornerstone 1 - ABCA Revenues - 30 consecutive years of average ROE > 15%. ROE 2024 = 16.4% et EBIT = 21M€ ✅ 2. Cornerstone 2 - Distribution Policy - Distribution return between 6%-8% for SB2025. 34 cts for FY2024 (~7%). ✅ 3. Cornerstone 3 - C
Slide 44: Disclaimer
ABC arbitrage Disclaimer This slideshow is a communication support for the investor presentation on FY2024. This document includes some forward-looking statements as statements regarding ABC arbitrage business operations. Although ABC arbitrage believes its expectations are based on reasonable assum
Slide 45: Q&A
ABC arbitrage Q&A ABC arbitrage FY 2024 - Investor Presentation 45