Allfunds Group plc (ALLFG) Earnings Call Transcript & Summary

Thank you for joining us. With me are Juan Alcaraz, Allfunds' Chief Executive Officer; and Alvaro Perera, Chief Financial Officer. Juan and Alvaro will take you through the presentation today. And after our prepared remarks, we will be happy to take your questions. Presentation is already available for download on this webcast page. The call is being broadcast live, and a replay will also be available on our website during the day. Let me now hand over to you, Juan.

Thank you very much, Silvia, and good morning to everyone. I'm excited to present these preliminary results for Allfunds. This has been a remarkable year for us, which marks a new era for Allfunds, and I'm proud to share our achievements and future plans with you. 2024 has been a transformative year for us. We have achieved growth, record breaking performance and laid the groundwork for even greater success. We are the world's leading B2B WealthTech platform, and our growth engines have driven exceptional performance across the business. Our assets under administration have increased by 13%, reaching EUR 1,558 billion. Platform Service AuA surged by 16%. And excluding discontinued operation, which means excluding the assets of Credit Suisse, the growth has been even higher at 22%. Net flows reached EUR 102 billion, an 11% increase since the beginning of the period. We achieved sustained EUR 21 billion (sic) [ EUR 29 billion ] from organic flows and EUR 73 billion from record migrations. Our financial performance has been outstanding. Our net revenues hit a record of EUR 632 million, up 16% year-on-year. We've seen solid subscription base growth and significant growth in our alternative solution platform. Adjusted EBITDA was EUR 422 million, up 18%, with a margin of 66.8%. We have executed on our capital allocation strategy, generating significant cash flow and maintaining excess capital. Our normalized free cash flow was EUR 238 million, up 17%. That is why we are proposing an increased dividend of EUR 80 million and a EUR 250 million share buyback to be executed over the next 2 years. We are also excited to announce our upcoming Capital Market Day, which will be held in early Q4 2025 in London. We look forward to sharing more details about our strategic initiatives and future growth plans with you. Let me start by spending a minute in our strong track record. Slide 5 highlights our historical profitable growth, excluding discontinued operations, and underscores a key point I have reiterated over the past 2 years. Allfunds is a significantly stronger and better company than it was 1, 2 or 3 years ago. The resilience of Allfunds during the challenging years of 2022 and 2023 is particularly noteworthy. Despite navigating the perfect storm of market conditions, we achieved remarkably solid results. The progress and strength of our company are clearly demonstrated by the results achieved last year. We have continued to gain market share in the European cross-border UCITS segments, reaching a new record of 27%, even when excluding discontinued operations. Our structural growth trend of open architecture penetration has been particularly strong, reaching 58% in Europe. However, there is still significant room for further growth, and we are well positioned to capitalize on this clear tailwinds. As you can see in Slide #7, our business model has consistently demonstrated long-term value creation with significant growth outperformance during the recovery. It is important to note that these figures exclude discontinued operations. Despite facing challenges such as the U.S.-China commercial crisis, financial turmoil in Ukraine, interest rates hike, we have never had a negative year in our total flows in the last 10 years. Our achievements in 2024 bring us back to the robust performance levels of 2019, 2020. However, our net flows have not yet reached the average of the last 5 or 10 years, which makes me truly optimistic about the potential for even greater growth in the future. Our core business continues to grow with improving investment cycle. UCITS, including ETFs, have experienced 4 consecutive quarters of inflows, signaling a rebound for the product, more than EUR 432 billion of flows in 2024 versus just EUR 57 billion in 2023 or minus EUR 164 billion in 2022. We have also seen a recovery on the active mutual funds in Europe with more than EUR 100 billion of positive flows compared to the minus EUR 165 billion in 2023, reflecting growing investor confidence and improving market conditions. We remain optimistic about the flow opportunity ahead. Firstly, throughout 2024, we observed a decreased appetite for conservative products. This shift presents a short-term opportunity of EUR 100 billion in 2025, particularly in our core markets of Italy and Spain. Additionally, we have seen cumulative inflows in the last 2, 3 years of EUR 500 billion into money market funds, which given the new interest rate environment, represent a significant opportunity pool. Given this strong structural growth, let's begin by discussing the expansion of our core business. Our plan continues to lead with multiple AuA growth engines. We have achieved AuAs of EUR 1.5 trillion, a key milestone for our company, driven by robust flows from existing clients. We have achieved strong positive flows of EUR 29 billion, record migrations of EUR 73 billion with significant contributions in the U.K., Italy and Asia. Excluding the business of Intesa, migrations exceeded expectations with EUR 61 billion, an exceptional market performance of EUR 93 billion, reflecting our alignment with the macroeconomic new cycle. More importantly, as of February 21, our platform's asset levels have already surpassed the end of 2024 figures even when including discontinued operations. Let's dig into the details of these positive net flows. You will see on Slide 11 that Allfunds has experienced continuous inflows from existing clients throughout 2024 for the first time since 2021. This growth has been supported by structural trends towards best-of-breed and open architecture and our flight network effect with flows directed towards funds as the leading European platform exceptionally negative micro environment in 2022 and 2023 with rapid rates increase led to exceptional years of outflows, which are now behind. We are entering a brighter period similar to what we experienced in 2020. We have witnessed in the first 2 months of 2025 already a significant recovery exceeding Q4 2024 figures. Moving into our key engine, migrations. Our client wins this year have reinforced our position as a market leader in Europe and globally. We have successfully onboarded 74 new distributors, a 40% increase from 2023, with many coming from competitors or shifting from in-house operations to our platform. Our growth has been driven by expansion in 2 key markets like Central and Northern Europe, Asia and the Americas, focusing on midsized clients and a few exceptional big wins coming from the U.K. Additionally, we have welcomed 98 new fund houses, a 21% increase year-on-year with over 20% being alternative asset managers, highlighting the growing importance of diversification in asset management portfolios. But more importantly, we have a strong new distributor pipeline activity supported by EUR 250 billion for the next 24 months. 2024 has been an extraordinary year for Allfunds, marked not only by recovering the brake in performance but also by significant strategic advancements. We are at the forefront of innovation, transforming into a comprehensive 3-in-1 platform that put together under the same platform, long-only funds, alternative investments and soon exchange-traded products, ETPs. Our journey for growth and innovation continues, and the best is yet to come. I would like to provide an update on our enhanced offerings. We will begin by discussing our alternative solutions and then move on to the progress of our new ETP platform. The demand for private market funds is growing amongst distributors. We are also seeing top entities launching new products for the wealth segment. This is creating a perfect market dynamic for distribution of these products through platforms. We are proud to have a strong network of around 500 private banks and wealth managers. However, it's worth noting that only 11% of them has invested in alternative assets over the past 12 months. This represents a significant opportunity for growth in this segment. Additionally, each quarter, we see new names from our distributors starting to invest in alternatives, further expanding our reach and solidifying our position in the market. Our alternative solution platform is well positioned to capitalize on this trend, and I'm particularly enthusiastic about this initiative. Our Alts business is growing exponentially. We have reached EUR 19.4 billion by the end of 2024 with strong demand from Swiss, Asian and Italian clients. We are also seeing good progress in our Allfunds Private Partners problem. And I'm happy to share with you that we are welcoming JPMorgan and Ares to this selected group for the distribution of the products in our network of clients. Our new initiative of ETPs is gaining traction, and we are building an innovative solution for our clients. Demand and supply dynamics support a significant addressable market in the ETF market with record net flows of EUR 250 billion in 2024 and active and thematic products growing 11x year-on-year. As investors increasingly seek diversified and cost-effective investment options, the demand for high-value ETFs continues to rise. On the supply side, financial institutions are responding by introducing innovative ETF products tailored to meet the specific market needs and investor preferences. This synergy between demand and supply creates are robust and expanding market of around EUR 1 trillion by 2030, offering substantial growth opportunities for both investors and issuers in the high-value ETF segments. Our improved Allfunds proposition includes the launch of a cutting-edge ET platform, designed to revolutionize the distribution of ETFs with an open architecture model. We want to become the one-stop shop for ETFs, too. This platform will be the first cross-border end-to-end solution, providing seamless access and optimized distribution strategies for both new and existing asset managers, empowering the wealth space with advanced institutional trading and distribution capabilities. The ETP road map outlines the strategic steps and key milestones necessary for the successful implementation of our ETP products platform. In this quarter, we will launch a new ETP ecosystem partnership, and we have started to test and validate our proposition with over 100 clients during Q4 and the beginning of 2025. This milestone includes the phased rollout of new features with the development of the new trading platform during Q2 and a pilot phase during Q3. The purpose is to achieve full operational capacity by the end of this year. Let's a quick look at our high-quality growth accretive subscription-based business. The subscription business is instrumental for our enhanced value proposition. We have implemented a new business strategy focused on our all-in-one service, embodying a holistic sales approach where every team member contributes to cross-selling and upselling our entire suite of tools. This initiative is shaping our platform into the ultimate one-stop shop for fund distribution. In just 6 months, we have made significant progress. Our subscription-based business has performed really well, delivering double-digit growth and keeping on improving our commercial metrics. We added over 200 new clients, which means a 37 increase year-on-year. As you can see in the top right-hand side chart, we have achieved significant growth and diversification globally, all of this while maintaining a high retention rate. In 2024, Allfunds introduced several innovative products and services to enhance our offering. To name a few, this includes: Allfunds Navigator, which leverage advanced AI and machine learning to deliver comprehensive market insights; Sustainability Navigator, which simplifies the construction of sustainable investment portfolios; and our more recent white labeling platform, empowering fund managers to launch new funds, leveraging Allfunds extensive distribution network and technology. In conclusion, 2024 has been a year of exceptional growth and performance for our company. We are well positioned for continued success and I look forward to sharing more updates with you in the future. With that, let me now turn the call over to Alvaro, who will take you through our financial results. Thank you.

Thank you, Juan, and good morning, everyone. I will now run you through the key financial figures and explain the main underlying drivers of another year of outstanding performance. Let me start with a few key performance indicators on Slide 26. We have delivered very strong financial performance in 2024, combining growth, high profitability and cash generation, three pillars of our financial profile. The company posted record revenues of EUR 632 million, a 16% growth versus 2023, and adjusted EBITDA of EUR 422 million, an 18% growth in adjusted earnings per share, and finally, a 17% free cash flow growth. As you can see on the right-hand side of the slide, once we adjust for discontinued operations, the performance is even stronger. The coming slides will be focused on clean figures, i.e., excluding discontinued operations, in order to reflect the comparable view going forward. So let's pause on Slide 27 to take a quick look at our revenues. The company has been able to grow across all segments of revenue at double digit, reflecting our exceptional growth and market momentum. Platform revenue increased by 18%, benefiting from the sustainable contribution of net treasury income, thanks to higher average cash balances, as well as to the higher transaction revenues following a recovery to normalized levels of activity. Commission revenues increased by 10%, reducing at the same time its relative weight from 58% to 54% of total revenues. At the same time, subscription revenues increased year-on-year by 13% to EUR 67 million. And I think also worth highlighting that total revenues, excluding net treasury income, grew by 50% year-on-year. So shifting our attention to margins. I would like to highlight that our businesses once again demonstrated margin resilience, increasing our total net platform revenue margin from 3.7 basis points to 3.9 basis points despite the continued shift to nonrebate earnings. Platform service margin increased 0.1 basis point from 5.4 bps in 2023 to 5.5 bps, while dealing and execution margin remains stable, as usual. Before we jump into cost, let's pause on Slide 29 so I can provide you with an update on our client base. So as you can see on the left-hand side, we have progressively diversified the sources of our revenue. Today, our key strategic partners, now only 3, contribute only with 22% of our revenues, which is half of what they represented at the time of our IPO. I would like to take the opportunity to inform you that we have reached agreements with Santander and Intesa to strengthen and expand our relationship with them. As part of these agreements, that also include further collaborations in digital tools and technologies and other businesses, both groups will remain as platform service clients of Allfunds for no less than 5 years following the expiration of the current exclusivity term ending in November 2025. Moving on to cost. And as you probably have noticed in previous slides, revenue growth materially outpaced costs, generating positive jaws and demonstrating our operational leverage. Adjusted personnel expenses and SG&A expenses stood at EUR 131 million and EUR 86 million, respectively. The main drivers behind 2024 ordinary cost growth were the full year impact of the cost base attached to previous year's acquisitions, namely Iccrea and MainStreet Partners. Secondly, higher inflation and currency impact. Third, higher variable costs driven by the incremental transactional activity and growth in our subscription business. And finally, increased investments in line with our strategic ambition to develop our digital capabilities and our IT infrastructure. In addition to ordinary or business-as-usual cost growth personnel expenses experienced an exceptional increase in the second half of 2024, reflecting the incremental variable compensation, which was linked to the over delivery of company targets for 2024. This should, of course, return to a normalized level in 2025. So despite this growth, our cost-to-income ratio improved from 37.4% to 35.6%. Thanks to this operating leverage, we were able to deliver record adjusted EBITDA of EUR 401 million in 2024 and reported EBITDA of EUR 380 million, representing a 21% and 30% growth versus 2023, respectively. As a result, we were able to increase our cash flow generation by 24% to EUR 217 million. Allfunds has a strong cash flow and capital generation capacity. In addition, we have been able to reduce our risk-weighted assets by almost 20% despite our strong top line growth. The reduction in credit risk RWAs has been a result of the revised accounting treatment of our revenues in accordance with IFRS 15, which is neutral from a P&L perspective, but simplifies our balance sheet and enables us to generate a meaningful amount of additional capital buffer above regulatory minimum. As of December 2024, Allfunds had over EUR 280 million in excess capital, reducing our net leverage even further. Let me remind you of our capital allocation framework and what we plan to do with such excess liquidity. We continue to invest in the future of the company. And in parallel, we do monitor the market to assess the best risk-adjusted returns for shareholders to deploy this excess cash that we generate. Our substantial existing cash balances and material current and expected cash generation growth create the opportunity to continue returning capital to shareholders. We believe that the share buyback offers the most effective value-creating opportunity for our shareholders to deploy our excess cash. Therefore, we will seek approval at our next AGM to distribute EUR 80 million of dividend, implying a payout ratio of 32% as well as to launch a EUR 250 million share buyback program to be executed up to 2 years. Let me now share our views on the potential outlook for 2025. Thank you. In line with previous slides, we have rebased the metrics to exclude discontinued operation. We have started the year with positive momentum with supporting markets already contributing 3% growth to AuAs and carrying over the improved flows picture that we saw towards the end of 2024 with encouraging dynamics. We see 2025 revenues, excluding net treasury income, growing at double digit to low teens, supported by high single to low double-digit net flows, including both organic flows and migrations. Total revenue is expected to grow at mid-single digit as we see net treasury income share of revenue reducing from 17% to roughly 11%. Finally, we continue to focus on our operational leverage with an intention to improve our adjusted EBITDA margin by another 50 basis points. Thank you very much for your attention. And before we open the Q&A, we wanted to invite you to our first Capital Markets Day to be hosted in early Q4 2025 for financial analysts and institutional investors. We believe that this event will be an opportunity to outline the pillars of our value-creating strategic model and announce our ambitions for the future.

Thank you, Juan. Thank you, Alvaro. Let's move on to questions next. [Operator Instructions] For any questions that may be remain unanswered, the IR team will be at your disposal after the event. Operator, can you please proceed with the first question, including the name and company of the caller?

[Operator Instructions] We now have a question from Haley Tam from UBS.

Congratulations on your results this morning. If I can ask a question, please, on fund flows, and I guess there will be a follow-up as well. But firstly, on the fund flows, if I'm focusing more on your new client wins, given we're in a pretty uncertain market environment at the moment, the EUR 250 billion pipeline you mentioned over the next 2 years, how do we square that with the EUR 40 billion to EUR 60 billion migrations guidance, which I think you've repeated again just now? Is it something to do with the conversion ratio? Or just help me understand that would be great. And then the sort of follow-up on that would just be on the small and midsized clients being your sweet spot. I just wanted to understand if that means we should expect most of that pipeline to come from those sized clients? Any color really on the mix by distributor type and region, et cetera, would be great.

Okay. Well, thank you very much. Let me take the first question regarding the pipeline. Our main goal is to convert from 50% to 60% at least of the pipeline into real migrations. Okay. So that's the numbers that we have been achieving in the last, let's say, 10 years of track record.

Haley, of course, we always reference to the EUR 40 billion to EUR 60 billion range when we provide the guidance for the year. As I think you're used to now -- by now, we like to be prudent in our approach to the guidance. And hence, we maintain that range. Although as you heard from Juan, aspiration is to convert a higher amount than what would translate into those EUR 40 billion to EUR 60 billion. In terms of mix, the EUR 250 billion pipeline is pretty diversified. It includes, I would say, a meaningful amount of medium-sized clients, which, as you -- potential clients, which is, as you mentioned, is our sweet spot. But we do also have some smaller clients and also a few, let me call them, larger whales within that EUR 250 billion figure.

It's extraordinary well diversified. By size, of future distributors and also by geographical, let's say, split.

We now have a question from Christiane Holstein from Bank of America.

And my first one is just on the Intesa and Santander relationship. So you already have an incredibly strong partnership. Given you're paying EUR 60 million to now extend the relationship and have said that the relationship will be strengthened, has Santander now increased the revenue contribution and from a larger portion of overall revenue? And then I just also had a follow-up to Haley's question on the EUR 250 billion pipeline. Does this also include flows into the newer alternatives and ETP platform? And what proportion would that include?

Okay. So probably, let's -- yes, let me jump into the last part of your question, okay, and I will let Alvaro to talk about the Intesa and Santander strategic deals. Yes, I mean, definitely, I mean, this pipeline includes the alternative numbers that we have definitely in mind. But it does not include the potential ETP migrations, okay? Because as you can imagine, it's too early really to calculate and to include in a 1 to 2 years pipeline, our estimations of the assets that we are -- that we want to gather on the -- with the new platform. I mean we will have to wait at least 6 to 9 months until we are able to deliver you with, well, a projection, of the future growth of our ETP platform. So yes, it includes long-only, our traditional long-only platform, and yes, it includes the potential growth of our alternatives platform, but not the ETP. Santander and Intesa, Alvaro, do you want to?

Christiane, so obviously, we have disclosed on this slides the amount of information that we agreed to with both parties. You must understand that this is -- these are 2 independent and confidential agreements. What I could add to that is that while we might see incremental revenues from both entities, it doesn't necessarily mean that the relative weight will increase in the overall revenue picture given what we saw in previous slides. We've been diversifying out of these strategic partners for a long time. We keep adding new entities, we keep adding new clients, so diversifying further. And in a nutshell, that is why we believe that this relative weight should not necessarily increase. Quite the opposite, probably.

We now have a question from Andrew Lowe from Citi.

First one is just on the net treasury income guidance. It looks like you're budgeting for a 30% year-on-year decline. So I just wanted to hear what your assumptions are in terms of cash balances and interest rates in that number? And then the follow-up is, again, just on this pipeline, how do you define the sort of definition of that pipeline, who's included and who's not included? And the reason why I asked this is at H1 results, you gave for the first time, a pipeline figure for the migrations in the second half of the year, and that to do with clients that you've signed an agreement with. And then you over-delivered on that number. So it sounds a bit like these are different definitions of pipeline. So if any sort of explanation there would be really helpful.

Okay. Probably, yes, let me cover the definition of pipeline. I mean, for us, it's very simple. So clients know potential clients that we have signed, okay? And what we are basically doing is just to negotiate the timing, the calendar of the migration. This can take 3, 6 or 9 months and plus potential new clients that are not yet signed, but that we have started already to discuss the distribution agreement with them basically. Okay. So well, does not include our prospects, as you can imagine, okay.

Okay. Let me take -- Andrew, let me take a question on NTI. So you're right, we are assuming a decline in NTI revenues for 2025 basically driven by the rates environment. And we are looking at the current rate situation and the forward curves. We're combining it with the available or average cash balances that we have on our books. And assuming that we will see a further increase in those average cash balances coming from new business, from a growing business plus healthy and normalized transaction activity, we come up with this guidance. Just as a reminder, around 70% of our average cash balances are placed overnight in central banks and roughly 75% of that is denominated in euros. We have included, I believe, Silvia, a slide in the appendix, where you can see the details of the average cash balances and the currency in which we hold those cash balances as well as where we invest those amounts. So hopefully, that will give you more color and help you estimate the impact for 2025.

We now have a question from Panos Ellinas from Morgan Stanley.

I have two, if I may. First one on the revenue, excluding NTI growth and taken together with the platform service AuA growth, I think this implies higher platform service margin in '25 than what you have reported in '24, so -- and broadly similar to Q4, right? So can you comment on the margin progression considering the product and asset class mix from here? And then another one is on the EBITDA margin expansion. It looks like it assumes around 3% cost growth in '25. So how shall we think of the cost growth or cost growth drivers from here and the margin expansion on EBITDA? I think that's all for me.

Okay. So let me take that. So, Panos, I think 2024 has been the year of recovery of our three growth engines, migrations, organic flows and end market, leading to a 22% growth in our platform service. The biggest factor in margin has been the growth -- in this growth is that it has not been equal in all or across all regions. So assets in regions like Spain or Italy have grown close to 20% while the U.K. has delivered growth levels close to 50%, among other things, led by large client migrations. So the relative weight of the U.K. has increased from around 11% to 14%, 15% in total AuA. As you know well, the average margin in this country is, I would say, meaningfully lower than the average. Another factor that has impacted the margin has been the asset mix, particularly on the organic flows front. So we've seen a continuous improvement in the asset mix throughout 2024, but we still have some negative effect from the equity outflows and money market inflows that took place last year. For 2025, what we do expect is the continuation of an asset mix improvement with inflows in higher value-added or higher margin underlying, as you've heard from Juan earlier. In terms of EBITDA margin expansion, it is true that for 2025, we will see some rebasement on the variable compensation front. So we will have a lower amount of staff cost given we will -- we've reset the targets for the year. And the rest, I would say, in line with previous year's contribution, so fixed cost growing in line with inflation and the variable ones probably more linked to the transactional activity, which we expect now to continue on a normalized level, as we mentioned earlier. And probably the only incremental cost could come from strategic initiatives like the ones that Juan walked you through earlier this morning, in particular, on the ETPs front. But all in all, this -- the contribution from this initiative should not be meaningful. So cost-wise, we expect a moderate increase for 2025 on a like-for-like basis.

We now have a question from Ian White from Autonomous.

Just on the subscription-based revenues. Can you just talk us through what exactly drove the softer year-over-year growth relative to your initial guidance? And is that something we should expect to see unwind or catch up in 2025, please? And just as a simple follow-up, just regarding the extension of the agreement with Santander and Intesa, are those agreements exclusive for the 5-year extension, please? Sorry, if you did say that in your prepared remarks, I just didn't quite catch that. Then that would be great.

Yes. I will take the subscription, okay, subscription-based question. Well, we have made some changes during 2024 where we have boosted our sales teams with new targets, okay, to deliver the revenues that we are expecting to have in subscription revenue. So today, we have the whole sales force of Allfunds promoting all the services tools and products that the company today we have now. So I think that, that should definitely have an impact in 2025. We have also enhanced some of our more strategic digital products during second half of last year. And I definitely also hope that, that will also have a positive effect, okay, in 2025. We are about to launch a Nextportfolio 4.0 powered by AI. We have launched in January, last January, so 2 months ago, our new Navigator tool that should also help us to grow much more in our data and analytic services, for instance. So yes, I'm positive with the 2025 subscription revenues number, I think are going to be better than last year. And yes, I'm pretty optimistic. Regarding Santander and Intesa, yes.

Yes, just to clarify, I would like to call them strategic agreements that include fund distribution exclusivity. I think that's the best way to look at these.

If I could just come back on the subscriptions point, just very simplistically, I'm just conscious that the growth is a little bit lower than you guided at the earlier part of the year. And is there anything that you could call out that would just help us understand sort of maybe what didn't come through versus your prior expectations there? That's just the point I'm keen to get my head around, if possible.

No. Well, I mean, as I said, I think, if I remember well, we said mid-teens, and I think we have delivered 13%. So I think we are -- we met with the targets, internal targets that we had. But again, I think, as I said, that we have two main levers that I have just mentioned. One is we have restructured the complete sales force of the company and with training and education to be able to promote all these new services and tools and not just platform business. So that should have an impact. But it's true that we started as I think I already explained in summer of last year. So all this training has taken time -- I mean it takes time to change the way our sales force that have been for decades selling the platform concept now to start also selling digital services or data and analytics services. So that has taken time. Now the sales force is ready. And what I said before, I think we are -- we have improved and enhanced some of our flagship products like Nextportfolio and Navigator that we have the new versions are available now or will be available in March now like Nextportfolio 4.0. And that's why I am very excited with the 2025 numbers. So that's all I can comment really.

We now have a question from Tom Mills from Jefferies.

Congrats on good numbers. I just had a question on the guidance side, [Audio Gap] you guys have seen [Audio Gap] around 3% through the middle of February.

We don't hear you very well.

Not very good. Is that better?

Yes, much better. Thank you.

Okay. Great. Sorry, it's going to be a boring question after all that. So I basically -- I've seen your guide of 3% market performance through the middle of February. Is that -- are you maybe sort of keeping something in your back pocket there? Because it feels like based on what we've seen from European markets year-to-date that it could be a bit stronger than that. So just curious as to whether you're trying to be somewhat conservative in how you're seeing the guide from here? And just if -- I guess, if markets come through stronger, should we expect you to hold the EBITDA margin kind of flattish around the 66% guide, and you probably just invest a little bit more in the platform, if that does come through a bit better? That would be helpful.

Tom, so you've known us for quite a bit. You know that we like to be prudent when putting out our guidance. And hence, we only included the growth or contribution from the market up until mid-February, as you can see here, and assumed a flat contribution for the remainder. So yes, if -- answering your question, if markets perform better than expected, we should see a translation of that into our numbers. Margin-wise, we -- while we always say that we like to triangulate, right, growth, diversification and then profitability, it is also true that this business is about scale and hence, positive market contribution would lead to improved margins as a rule of thumb, I would say.

[Operator Instructions] We now have a question from Haley Tam from UBS.

Sorry. Just a couple of quick follow-ups, if I can. Firstly, just on the strategic partnerships and the acquisition of the Fideuram associated local paying agent business, I think it was. Could you tell us what your market share of the paying agent business is now? I think that's mostly in Italy, just to understand that. And secondly, I don't think anyone else has mentioned that the EUR 250 million buyback, but should I consider that as reducing the likelihood of you needing further M&A? And in particular, therefore, this target you previously gave a 30% revenue share from subscriptions and other revenue is something you think you can do organically? And then just a follow-up on Ian's question on that. I seem to remember there were some talk of some disruption in Q4 with the software engineers being based in Valencia and the floods there. So I just wondered if that was a dynamic for last year.

Probably -- well, there were like 5, 4 questions probably. Let me talk about probably the Valencia issue, which did not affect Allfunds. Thanks to god. The second one was the guidance -- well, guidance, the objective of achieving 30% of our revenues coming from subscription in the mid- to long term, so 3 to 5 years. And I said that 2 years ago. So yes, that remains an objective, 30% coming from subscription revenues. Today is 11%. So the quick answer is no, we cannot do that organically, as you can imagine, especially, or also because the platform business is being extraordinary well. So yes, we expect some M&A in the coming years, absolutely, okay? I think the good news, as you have seen, is that we generate a lot of excess cash. And I think we can do -- I mean, the three things. So we can definitely return capital to our shareholders through dividends, through share buyback and definitely also be able to acquire the right companies that could help us to increase our revenues, be correlated from the market, so what we call non-asset driven revenues, okay? But definitely, to date, beginning of 2025, the priority is more on the share buyback, okay, the opportunity rather than M&A. But this is not changing, okay, our midterm view or strategy at all, no.

I think the first question, Haley, was around Fideuram and the acquisition of this business, FAMI, which is contributing revenues and some cost to the P&L. I don't think we have disclosed market share in the Banca Corrispondente business, but we definitely hold a leadership position, I would say, in the Italian Banca Corrispondente business. And this addition definitely reinforces that position and more importantly, makes us an even stronger and better partner of Intesa and Fideuram, which was one of the aims of this transaction.

We currently have no further questions. I'll hand over to you for any questions from the webcast.

Two quick questions from the webcast. One is cash tax rate. What's the guidance on tax for 2025 onwards?

No meaningful changes versus the number that we disclosed in the appendix. If I don't recall if it's correct, it was around 28%, 29%, excluding discontinued operations. That's the, I would say, the right postcode to look at.

And second question is what are Allfunds' plans for Germany as Germany is one of the largest markets for alternatives?

Yes. Well, it's a good point. We have appointed very recently, like a month ago, a new person, a new Senior Advisor, former CEO of FNZ, in Germany to help us to work on Allfunds' Germany plans, okay? So I think 2025 should be the year where Allfunds should start doing -- or putting even more focus on this country, okay? So we will -- I hope you know that we will be able to announce in the coming months more details and a much more detailed plan, okay, of our plans in Germany. But there's a lot of focus on Germany for 2025, a lot of focus.

All right. This was the final question for today. Thank you very much for your participation. It has been a pleasure to host you on these preliminary results presentation. See you soon, and goodbye.