Anima Holding SpA (ANIM) Earnings Call Transcript & Summary

I now have pleasure handing over to Luca Mirabelli, Head of Investor Relations. Please go ahead, Luca, the floor to you.

Thank you, Rebecca. Many thanks to everyone for attending. I hope you're having a nice afternoon. We certainly have -- we certainly are given the quality of these results. So let me start right off giving the floor to Alessandro Melzi D'Eril, CEO of Anima Holding for his commentary. Please, Alessandro.

Thank you, Luca. Hi, everybody. As usual, I would bring you through to our presentation. So I will start from Page 2, some highlight. We reached at the end of 2024, EUR 204 billion of assets between assets under management and assets under administration. Almost EUR 1 billion of net inflows in the year, 8.6% in terms of weighted average performance of our assets. EUR 530 million of total revenues, plus 44% compared to last year, EUR 390 million of adjusted EBITDA, plus 47% compared to last year and almost EUR 228 million of net profit, plus 53%. As a reminder, in the year in 2024, we bought, we acquired a stake in Monte dei Paschi, increasing our stake from 1% to 4%. We've been object of a voluntary public tender offer from Banco BPM Vita launched on the 6th of November. And always, as a reminder, because of this offer, the LTI plan for the management is fully vested. We'll get back to it. Page 3, the structure of the group. Well, the group today has a shape with Anima SGR, our historical asset management company with approximately over EUR 190 billion of assets. Anima is managing more than 100 retail distribution agreements and several institutional mandates. Kairos is our -- one of the most renewed Italian asset management brands. The company is focusing on high-end retail and institutional clients. The company also has a selected team of bankers with over EUR 2 billion of assets. The company overall manages EUR 6 billion of assets approximately in terms of assets under management and EUR 1 billion of assets under administration. Finally, our, let's say, business -- illiquid business Anima Alternative and Castello SGR with almost EUR 5 billion of assets. This part of our group focus on real estate and other illiquid or nontraditional asset classes, mainly focused -- mainly aiming at the institutional business and high net worth individuals. Page 4, the split of our assets. I don't have particular things to outline. The only thing is that the retail component increased a little bit its weight, 52% of the total, almost EUR 107 billion of assets over the total. Page 5, our performance in line with the Italian industry, notwithstanding, if you look at the right side of the page, a more conservative asset mix as always. So I would say that the performance of the group overall has been absolutely positive and very good, I would say. Page 6, the flows. Well, the decreasing trend of interest rates, even though there's no clear consensus on timing of cuts, and we know also that there are many geopolitical uncertainties. In any case, this brought the Q4 figure reflecting a client appetite to shift from bond to our flexible solutions. As you can see, the flexible solution that includes also our targeted funds, and we'll get back to it, decreased the outflows, while the bond decreased the inflows. So we are changing a little bit the mix of the product we are selling, and this could be absolutely beneficial for our profitability and for the business. If we go to Page 7, and we look at the -- where the profitability and where the inflows comes from, we registered EUR 3.7 billion of inflows in the most juicy asset classes, fund users, retail and pension funds and institutional mandates, while the outflows were concentrated on asset classes where the profitability is very close to 0 or negligible or very close to 0, meaning the funds of underlying funds. This -- we already talked about many times about this part of our business. This is a wrapping component of our funds investing in our funds. As you know, according to the Italian regulation, we cannot duplicate fees. So this part of the business has a profitability -- a profitability, if not 0. And Class 1 insurance mandates, again, these are mainly almost entirely linked to the Poste mandate to the large Poste mandate we manage since 7 years. This part of the business, the profitability, again, is below -- in the region of 2 basis points, 2.5%. Page 8. Instead, if you look at the retail inflows, this year are very strong. This is the strongest year since 9 years actually. We are very happy about that because the retail inflows is a significant qualitative indicator of the health of our business. The inflows comes from -- mainly from our commercial and strategic partner, banking partner. And this demonstrates also the interest from clients of our solutions and our product managed. I think that if you look a little bit ahead, the trend of decreasing interest rates will continue to provide a beneficial underlying ground for the development of our business in 2025. And actually, this is what is happening already in the first month of the year. If you look at our income statement, Page 9, our P&L. So we already said something at the beginning, total revenues plus 44% year-on-year, 33% if you look at the like-for-like as a like-for-like, reaching EUR 530 million, of course, with an important component of performance fees, EUR 125 million approximately if compared to less relevant numbers of last year. Adjusted EBITDA, plus 47% compared to 2023, reaching EUR 390 million. Net income, plus 53%, as I said at the beginning, EUR 228 million approximately. Looking at the profitability on the right side of the page, we have been able -- as we said -- we already said during the year, we have been able constantly to increase our profitability. This is mainly due to our -- the asset mix improvement, the pricing of new products that is higher on average compared to the past, thanks to the bond component there is -- we are able to price in a better way compared to a few years ago. And of course, the average profitability is boosted by the consolidation of Castello and Kairos. Castello full year, Kairos since the 2nd of May 2024. The cost income remained at the top, also excluding performance fees at the top of the sector. We registered a little bit of increase compared to previous year because of the consolidation again of Kairos and Castello that has a structural cost income higher than the business managed by Anima historically. In terms of taxation, 29.5%. The tax rate is influenced by the badwill income from Kairos, dividends, we have a 4% tax rate and step-up of goodwill related to Castello acquisition. This has brought EUR 6.1 million of benefit in the year. Page 10, a little bit of bridge if you look for our net income. Well, I would say that the major items are performance fees compared to last year. The EBITDA, other EBITDA component, this is relevant because apart from performance fees, that are, of course, more volatile and more difficult to be estimated. But the other EBITDA components are -- these are the current component driven by a better work that we did on our capability to generate revenues and of course, the increase of assets. Again, as a reminder, we -- in the year, we are charging entirely the LTI for the management that, of course, vested because of the launch of the tender offer of BAMI and the company. So this is the full cost of the LTI and is all on 2024. Page 11. A little bit of analysis on the total revenues ex performance fees. Net recurring fees are growing faster than AUM, thanks to the change in asset mix, as we already commented before. The other income, 2 main elements. There is a structural increase for the entire 2024 following the internalization of some service rendered by -- on our mutual funds. And this is a very important element. In Q4, we also reflected the seasonality of the Castello business that typically has, in the last part of the year, an increase of structuring fees. Page 12, personnel expenses, a few comments. First of all, the Q4 fixed component include a 1-year change related to the personal welfare. This means that the increase in the fixed component is not an increase structure for all the quarter, but is a one-off of the year. So basically, the increase of EUR 1 million should be applied -- should be considered for the entire year. Castello fixed component is impacted by the inclusion of Vita Srl. Vita is a new company that bought Halldis, is an instrumental company for the business of Castello. And the variable component, of course, is impacted by the very high level of performance fees. Page 13, net financial position. The net financial position, of course, includes the almost EUR 80 million of dividend paid in May. Last May, EUR 40 million of shares buyback and the increase of the put options after Castello acquisition of the Halldis business that I just mentioned. This is a business of managing of short-term rentals. Within the net financial position is also included the -- our stake -- the stake we bought in BMPS, including incorporating a significant capital gain. Page 14, liquidity. A couple of comments. Return on liquidity is driven by deposits and the investments in our own funds. In Q4, the liquidity decreased, of course, because we invested almost EUR 220 million to acquire 3% stake in Monte dei Paschi. This is likely depressing the return on liquidity in the short term, but will secure significant dividend from 2025 onwards. Page 15, dividend proposal. The dividend proposed to the -- that we will propose to the AGM is EUR 0.45, plus 80% compared to last year. This dividend -- well, it's very important, I think that confirm the capability of the company to generate cash and to provide return to shareholders. Just to remind you that this year, we will -- the share buyback actually, the share that we have in hand will not be canceled, but will be used to -- for the LTI for the vesting of the LTI. On top of that, we also have to issue 5.9 million of new shares in order to serve the LTI. So the shares to serve LTI are 5.9 million plus 9.4 million of treasury shares. Banco BPM Vita offer on Page 16. As we said before, Banco BPM Vita launched a voluntary public tender offer on Anima on the 6th of November. We expect regulatory authorizations, regulators authorizations by the end of February. Antitrust and Golden Power were already cleared. And always in terms of process, the Board of Anima will express itself right after the authorization and right after the new of expected by the beginning of March, of course, if the authorities will provide the clearance within the expected timing. Important elements of the offer, the offer is subject to some element. The reach -- the possibility to reach by Banco BPM Vita of 66.7% of the share capital of Anima, the application of the Danish compromise to the acquisition by the ECB and of course, the price. On top of the Anima, just as a reminder, after the launch of this tender offer, an offer was launched by UniCredit on BAMI. So BAMI today is subject itself to the passivity rule due to the pending of this public tender offer. As a consequence, in the absence of a waiver of UniCredit, only BAMI AGM can make amendment to the price or the conditions to the offer of Anima Holding. To conclude, I just would like to outline a few elements of Anima in these years. I think this is a very important period, a very important moment in the history of the company. We are under a tender offer. I think that we are in the center of several potential development. And I think that Anima is here because it did very well in the last 10 years, in the last 15 years, I would say. This is a project that started when the Bank of Italy encouraged the banks to externalize product factories. Anima has been able to offer solutions and to create long-lasting and successful partnership. We demonstrate strength and resilience throughout different economic cycle, different market periods. And I mean, we went through 2011, 2018, COVID and so on and so forth. We have been able to raise money consistently during these years and always to provide and to generate profitability to increase our profitability, the profitability of the company in a period where profitability for the sector was shrinking continuously. So I think that we demonstrated that we know how to stay on the market and we know how to do this business. We have also been able to diversify the business in the last years. We bought Castello, we bought Kairos. Overall, I think that Anima provided significant value to the -- to all the financial institutions that have been working with us, several and created shareholder relationship with strategic partners that, as I said at the beginning, position Anima today as a value for all the company that are looking at the sector and that want to develop. So thank you very much.

Thank you, Alessandro. And just before we move to the Q&A session, I would like to add a preliminary note, as Alessandro mentioned and you are all well aware about, we are under a tender offer. We are currently restricted from making any comment on the contents or the outcome or the possible changes in the offer. So we -- on that topic, we will have to limit ourselves to factual information so we can maybe help you clarify any doubts about the sequence of events that are prescribed by law about what we can or we cannot do right now. But please be aware and we hope in your comprehension, we cannot comment any forward-looking or qualitative comments on the offer because this will belong to the Board after the final prospectus is published. So with this in mind, I would ask the operator to please give the floor to your questions, and we are here to answer.

[Operator Instructions] The first question we have today comes from Luigi De Bellis. His question is, what is the trend of flows in January and expectations for Q1 2025, both institutional and retail? His second question is, could we see some performance fees in Q1 2025 to help with the top line?

Okay. Here I am. Well, Q1 performance fees, let's say, we didn't start particularly well. Actually, well, the market did not too bad, but I would say that we expect -- I expect the level of performance fees to be lower than 2024 and 2025. As of today, of course, this is a very volatile item. Of course, you know it and let's see. Flows 2025, I have to confirm what I said before. The trend is positive. It's absolutely positive because we are seeing that the flows on the retail are doing well. So the retail is -- the trend on the retail is absolutely positive. People want to invest. The networks are pushing on commissions. So they like to sell the product. So I think that the -- all the environment is absolutely benign and favorable.

Thank you for the questions. Currently, we do not have any questions in queue, so we will wait just a few moments.

Thank you, Rebecca. And while we wait, of course, we will not leave you without the January net inflows. They will be probably out reasonably one of the next days. And we will do some tweaking to the presentation format to make it clearer for the joy of many investors. Please go ahead with the Q&A.

We now have a question from Alberto Villa.

Okay. Can you hear me now?

Yes, we can.

I wanted to ask you about the fact that you have the stake in Monte dei Paschi in the net financial position. Can you give us an idea what was the impact on the year-end net financial position of the stake? And if you plan to keep it in the net financial position in the future or maybe move it to assets? Then the second question is maybe some color on the trends in retail. If there is any, I know that you refrain from commenting about the single net partners, et cetera, but maybe any color you can add on the flows you're getting from the retail could be helpful to understand also maybe and to try to model for the future.

Okay. Alberto, well, what concerns BMPS, the value within the NFP, the year-end NFP is EUR 340 million approximately. We have a capital gain of EUR 8 million. Well, the strategy on the stake comes from the fact that this is a strategic investment for us as it was the first EUR 25 million invested in the capital increase at the time. So Monte dei Paschi for us is a key strategic partner, is one of the founder of this company, of this project. So it's very important for us to keep the strongest relationship as possible. And the stake today, we bought the stake in this respect and with this idea. So as of today, the stake remains as a strategic stake that we keep. Actually, we also hope and we expect the stake to generate important returns given the performance of the bank that -- so we are happy about that. And as of today, the stake is strategic. On flows, more color, I mean, all the networks are performing very well. Of course, Monte dei Paschi and BAMI are performing far better in absolute terms because they are the largest. They are doing very well. But when we see -- typically, when we look at our range of -- huge range of partners, and we see that all the partners, larger and smaller are performing very well, this is a trend like last year. So I believe that there is a positive trend in the market, a favorable trend for the sector and for our -- for the asset management products. So I think that we are going in the right direction. I can't give you a number yet, but I think that Luca will be probably out with the numbers --

Within the week.

Yes. Within the week.

Currently, we do not have any questions queued. So we will wait just a few moments. As there are no further questions, I will now hand the word back to the speakers for any final comments before bringing this presentation to a close. Thank you.

We would like to take the chance to thank everyone once more for attending. There's been, I would say, a record attendance despite the low number of questions. Of course, IR remains available for any follow-ups for those who attended the call and for those who will listen to a recording. And except for that, our next appointment is for the first quarter results due May 6, 2025. What an exciting year. Goodbye, everyone. Thank you very much, and goodbye, everybody.