Antin Infrastructure Partners S.A. (ANTIN) Earnings Call Transcript & Summary

Good morning. This is the conference operator. Welcome, and thank you for joining the Antin Half-Year 2026 Results Conference Call. As a reminder, all participants are in listen-only mode. After the presentation, there will be an opportunity to ask questions. Should anyone need assistance during the conference call, they may signal an operator by pressing star and 0 on their telephone. [Operator Instructions] At this time, I would like to turn the conference over to Ms. Ludmila Binet, Head of Shareholder Relations of Antin. Please go ahead, madam. Thank you, madam.

Good morning, everyone, and thank you for joining the call today. Earlier this morning, we issued a press release announcing our results for the first half of 2026. A copy of this release, the presentation, and the half-year report are available in the shareholder section of our website. For today's presentation, I am joined by Alain Rauscher, Chairman and CEO, and Walid Damou, Partner and CFO. Mélanie Biessy, Managing Partner and COO, is also with us today and will join the Q&A session. Let me now hand over to Alain.

Thank you, Ludmila, and good morning, everyone. I am pleased to welcome you on today's call to present our half-year results and activity update. Our commercial dynamics are clearly positive, with good momentum across exits, deployment, and fundraising preparation. Let me run you quickly through the main highlights. First, exits have resumed, which is an important milestone for Antin and for our clients. We made good progress on several exit processes in the first half of the year. Indeed, over the summer, two of the largest European exits made to date in Europe. This will allow us to distribute significant amounts of capital to our clients in the coming quarters. Second, we have continued to deploy capital in a disciplined manner while maintaining the differentiated exposure that is central to our strategy. Third, our asset management platform continues to deliver a solid performance. Over the last 12 months, our three main funds delivered performance around or above 15%. That good progress on deployment enables us to launch fundraising for a Mid-Cap 2, with Mid-Cap 1 now fully committed. Regarding our own financial performance, the transition between fundraising cycles is visible in our numbers. In this context, we delivered an EBITDA margin of 50%, entirely fee-related, which reflects the strength and quality of our business. Finally, we remain committed to our dividend policy with attractive distributions to shareholders and an implied dividend yield around 8%. Over the past quarters, we have launched several exit processes, and these are now coming to fruition. The transactions we signed over the summer mark an important step forward for Antin. First, we signed the sale of 30% of SOLTRANS. Second, we signed the full sale of IDEX. These two exits with multi-billion valuation mark some of the largest realizations made in Europe so far this year. They are expected to return around €2.1 billion to our fund investors. This is a very substantial level of distribution in a short period of time. In terms of DPI, we will have returned over 90% of the invested capital to our Fund 3 investors, with more than a third of the portfolio of Fund 3 yet to be realized. And importantly, this is not the end of the exit cycle, but the start of a new phase for distributions for several of our funds. We have other exit processes already underway or close to launch, or close to close across multiple funds. This gives us strong confidence in our ability to continue increasing distributions to fund investors. The two exits we have signed, SOLTRANS and IDEX, are in both cases, textbook examples of what we typically do as an investor: support growth, drive transformation, and realize value through active ownership. In both cases, the starting point was to put in place the right team and capacities to execute an ambitious value creation plan. From there, we worked on the same core levers that are central to our approach more broadly: strengthening the platform, winning market share in core markets, expanding the offering, entering new geographies, and delivering inorganic growth where relevant. This is very much in line with the Antin model of investing in essential infrastructure businesses with resilience and clear value creation potential. IDEX is a leading European independent energy infrastructure platform. This exit at a multi-billion euro enterprise value is the largest in Antin's history and one of the largest PE transactions in France this year. This is a clear demonstration of our ability to build and realize value at scale. Under our ownership, IDEX's EBITDA roughly tripled, supported by significant strengthening of the organization and the development of the platform. This led to a realized growth multiple of 2.0x. Turning to SOLTRANS, this is the world's leading provider of mission-critical wellboats serving the growing aquaculture industry. Under our ownership, SOLTRANS has more than doubled its total fleet and increased its shipping capacity by significantly more than that, resulting in a gross multiple for the investment of 2.4x in Norwegian Krona. More broadly, SOLTRANS illustrates how certain high-quality infrastructure assets can be particularly well-suited to minority transactions. Partial exit allows us to crystallize value today through the sale of a minority stake to a new shareholder that recognizes the attractive characteristics of this type of business, while full realization is underway and expected to take place over time. Taken together, these two exits show how our model can create value across very different infrastructure subsectors. Let's turn now to deployment. Following a very strong second half of 2022, we maintained that momentum in 2023 across all three of our strategies. Most notably, we finalized the deployment of Mid-Cap 1 in a very selective manner. It is now fully committed, which allows us to launch Mid-Cap 2. Looking at our investments in the first half of 2026, Sapphire Gas is a buy-and-build play focused on the transportation of liquefied renewable gas in the U.S., positioned in a market where energy demand is growing rapidly and where traditional pipeline infrastructure is not expanding fast enough to meet those needs. Belambra is an opportunity to support a further upgrade and expansion of a unique portfolio of holiday destinations in France with potential to expand internationally. NextGen signed its eighth investment, which we will disclose the name of at closing, and that should be imminent. More broadly, what this transaction demonstrates is that we continue to see attractive opportunities, but we remain selective. We're not chasing volume. We are deploying where we see strong infrastructure characteristics, clear value creation plans, and the right level of downside protection. Overall, the investments that we have made over the last 12 months reflect a consistent objective: provide our fund investors with differentiated exposure, avoiding concentration around any single theme, sector, or geography. As you can see on Slide 8, the portfolio mix across our main funds remains well diversified by both sector and region. We offer privileged access to the European market where we continue to deploy the majority of our funds. Let me give you a few examples of how this approach translates into portfolio construction. The rapid development of AI is driving very significant capital needs, creating attractive opportunities for infrastructure investors. Our approach, however, remains selective and disciplined. We are focused on areas where we see durable demand and compelling risk-adjusted returns, not energy and connectivity. In data centers, we believe the co-location segment is a better way to gain exposure, a better way, a safer way to get exposure to AI-related demand, as it offers more defensive characteristics, particularly because of the diversity of its customer base. That was part of the rationale behind our acquisition of North Sea last December. In medical equipment leasing, our investment in MCRA allows us to capture exposure to the long-term structural trends of aging populations, but in a way that avoids the development, product, and distribution risks. And in Vigo Marine, we identified a business supported by end markets that have historically shown strong resilience over time. This brings an additional layer of diversification to the portfolio, further strengthening the differentiated exposure we aim to provide to our core investors. This disciplined diversification is fully consistent with the approach we have maintained over the years, building portfolios that combine resilience and long-term structural growth. Regarding fund performance, our main funds in value creation mode all delivered strong progress over the last 12 months, around or above 15% on a like-for-like basis. As you can see on Slide 9, Flagship 4 is at 14.4%, 14.5% IRR over the last year. Mid-Cap 1 at 19.6%, and Flagship 5 at 16.3%. This reflects the healthy performance of the portfolios. We are particularly encouraged by the consistency of performance across the Flagship 5 portfolio and by the strong start from the more recent Mid-Cap 1 investment. Overall, this gives us confidence that the health of the portfolios remains solid as we start raising our next steps. Let me now take a step back and look more broadly at where each of our funds stands today. Starting with our earlier vintages, Flagship 1 and Flagship 2 both delivered outstanding outcomes and clearly demonstrate our ability to create value across different market environments. Flagship 3 and 4 have both faced some micro headwinds, but both funds are now showing improving momentum. Exits are accelerating again in Flagship 3, which is now 63% realized, and where we remain confident in our ability to deliver strong outcomes for fund investors. Regarding Flagship 4, we will start to crystallize value very soon. Turning to our more recent vintages, we are well encouraged by the performance of Mid-Cap 1 and Flagship 5 today. Both funds have performed well, with a good level of consistency across their respective portfolios. Mid-Cap 1 is now fully committed, while Flagship 5 remains in deployment with strong asset quality. As for NextGen, which is a growth-oriented strategy, as it is precisely here with growth, the value creation journey is typically longer. So, what we are seeing so far is very encouraging. This gives us a balanced picture across vintages. Some mature funds are in harvesting mode. Some are recovering momentum, and our more recent funds are building what we believe will be the next growth drivers for the platform. Finally, a word about our platform before handing over to Walid. Over the years, we have invested significantly to build a strong footprint on both sides of the Atlantic. Today, we have scaled investment capabilities across Europe and North America, supported by enhanced global investor coverage, best-in-class operation. We believe this will serve us well in the coming fundraising cycle. In the first half of 2026, we extended our presence to Australia with the opening of our Melbourne office, strengthening our access to capital markets in Australia and more broadly in the Asia-Pacific region. At the same time, we continued to enhance our platform and asset management capacities, including through the expansion of our performance improvement team with senior hires. This is important because it helps us drive greater value creation across the portfolio. Antin now has 254 professionals across its global platform, with teams in Paris, London, New York, and Luxembourg, as well as representation offices in Seoul and Melbourne. This continued investment in the platform reflects our conviction that the next phase of growth is underpinned by the quality and breadth of the platform. With that, I will now hand over to Walid to walk you through the financial results.

Thank you, Alain, and good morning, everyone. Let me start with a highlight from our financial results for the first half of 2026 on Slide 13. As expected, the beginning of the year reflected a transition between two fundraising cycles, with a 2.9% reduction in fee-paying AUM following the step-down in Mid-Cap 1 in April. Underlying revenue decreased by 4.5% to €138.5 million, reflecting the same dynamic. This flowed through to EBITDA, which was down 12.3% year-on-year to €69.9 million. EBITDA margin remained healthy at 50%, demonstrating the resilience of our model. Finally, we continue to expect the full-year shareholder distribution for 2026 to remain stable at €0.71 per share, subject, as usual, to shareholder approval at the next AGM. Let me now go into a bit more detail, starting with fee-paying AUM and revenues on Slide 14. In the first half, our fee-paying AUM benefited from some modest capital calls in Flagship 4, which were more than offset by the step-down of Mid-Cap 1. On Mid-Cap 2, as we have said before, activation is expected to coincide with the fund's first investment. We are making good progress with LPs, having already started to gather commitments, and on the investment side, we're advancing on several opportunities. That said, the timing of new deals remains difficult to predict, and we now expect the activation of the fund in the fourth quarter of this year. On revenues, the 4.5% year-on-year decrease was driven by three main factors. H1 2025 included €0.9 million of catch-up fees, which did not occur this year. Second, the Mid-Cap 1 step-down reduced management fees by €3.8 million. This is the mechanical effect of moving to a lower FPUM base and a lower fee rate. Third, investment income was negative in the period. Positive performance across the portfolio for the period was offset mainly by lower valuations in Funds 3 and 3B. The change in valuations in these relatively concentrated funds reflects a mix of broader market conditions and asset-specific factors. These funds are not yet fully realized, and it is therefore still early to draw firm conclusions on final outcomes. Briefly on headcount and cost on Slide 15. Operating expenses increased by 4.9% year-on-year, in line with last year and confirming the slower cost growth trajectory relative to prior years. This reflects both the operating leverage we are now starting to see in the platform and our disciplined approach to costs. As I mentioned earlier, we have invested consistently in recent years to build a strong and scalable platform with enhanced capabilities across investment teams, specialist functions, fundraising, and operations. We believe this gives us a very solid foundation from which to support the next growth phase for Antin. In March, we indicated that cost growth for the year was expected to be in the high single digits. We are now aiming for a slightly lower growth rate for cost in 2026. With that in mind, and based on the assumption that Mid-Cap 2 is activated in the fourth quarter rather than in the second quarter, we now expect underlying EBITDA for full-year 2026 to be slightly below the 2025 level. It reflects a timing effect only and does not change our confidence in the medium-term growth prospects for the business. Moving on to balance sheet on Slide 16. Our cash balance decreased to €326 million as of June 30, 2026, from €361 million one year ago. This mainly reflects the deployment of capital into our funds and our continued shareholder distributions. At the same time, our financial assets increased as a result of this capital deployment. Importantly, we continue to have zero financial debt. More broadly, we remain committed to a capital-light model. Our balance sheet is primarily used to support the business through co-investment in our funds and carried interest commitments, creating a strong alignment of interest with our clients. Today, around one-third of our cash balance is earmarked for deployment in our existing funds, mainly Flagship 5, Mid-Cap 1, and NextGen 1. As we raise our next vintages, these commitments will increase over time, but we will also expect to receive distributions in parallel as our funds continue to realize assets. The cash balance also provides us with capacity to pursue potential strategic initiatives that can strengthen our capabilities and support long-term value creation. Finally, on shareholder distributions, we remain committed to our policy of a stable or growing dividend per share. For 2026, we intend to maintain an annual dividend of €0.71 per share in line with last year and including €0.28 per share expected to be paid in late October. Over time, as Mid-Cap 2 ramps up and we launch the next flagship fund, we do expect dividend growth to resume alongside earnings growth. A few words on our shareholding structure on Slide 17. It is important to flag that the lock-up mechanism in place since IPO will expire in a few weeks on September 27. The agreement between the partner shareholders, who are acting in concert and collectively own 84% of the company, will remain in force after the lockup expires. This agreement includes several mechanisms allowing to support an orderly increase in the free float. In particular, subject to customary exceptions, the concert members have agreed to coordinate with Antin for any transfer of shares above a certain threshold. Therefore, going forward, we continue to expect our free floats to increase gradually, mainly through placements that can be absorbed by the market. Any such transaction would of course be considered in light of market conditions. We now hand back to Alain for some concluding remarks.

In an environment that has been complex and unpredictable for some years, and that looks to remain that way for the foreseeable future, we continue to be confident in our ability to adapt and perform. Opportunities remain numerous in the infrastructure space underpinned by powerful long-term tailwinds. We remain disciplined in how we capture those opportunities. We are not concentrating the portfolio around a single theme, sector, or geography. We are in the process of building our most diversified funds to date to provide our clients with truly differentiated underlying exposure. We recognize that DPI is especially important to fund investors today. And as our mature funds move into harvesting mode and exit activity accelerates, we expect distributions to become more meaningful whilst staying firmly focused on maximizing returns and value creation across the platform. To conclude, nothing we see today changes our confidence in the medium-term growth prospects for Antin. Our model remains resilient, our platform is stronger than ever, and we are entering the next fundraising cycle with strong, solid momentum. To conclude this presentation, Walid, Mélanie, and I are now happy to take your questions.

Thank you, sir. We will now begin the question and answer session. [Operator Instructions] The first question comes from Nicholas Herman of Citi.

Yes, good morning. Thank you for the update and for taking my questions. A couple from my side, please. Firstly, just a bigger picture question. Is it fair to assume that you are adjusting down the valuations you are assigning to prospective investments as a result of the higher rates that we increase in interest rates that we've seen, for rates? And then secondly, I think there's a couple of here, um, I guess, presumably, you would not disagree with my conclusion that lower marks for the assets in Funds 3 and 3B means that the pace of realizations of these funds will be slower than we previously anticipated. So I guess the kind of, the derivative questions from that are, does that mean that future distributions will be lower than we would have otherwise expected? Presumably that would then impact, I mean, why should that not impact the Fund 6 fundraise whenever that happens? And then finally, on performance earnings or carry, do you expect us to be able to hit your hurdle rate and generate carry from Fund 3B? Thank you.

Walid, did you want to answer those questions?

Maybe I'll start with the last ones, and I'll let you comment on the bigger picture one. So on the pace of exits, I think it's fair to remind everyone on the call that Fund 3 and 3B, so Fund 3 is a '26, '27 vintage, went through quite exceptional series of events with macro volatility and a few crises globally, as you know. So to answer your question regarding the pace of exits, yes, the pace of exit is slower than initially anticipated. That being said, we do see an acceleration at the moment. And we're very happy with what we saw so far, as Alain said, with SOLTRANS and with IDEX, among other situations that we're working on. In terms of implications of this slower exit pace, I think there are two parts in what you're asking, Nicholas. So first, on the crystallization of carried interest, you're pointing to the right impact. So as you know, the more we go, the higher the hurdle rate gets. This could have implications on the final outcome in terms of carried interest for the fund. That being said, from where we stand today, we think that it's worthwhile to conclude, the teams remain very much focused on maximizing value in the remaining assets and maximizing value in the funds. So we need to wait for the final outcome of the last exit in that fund to reach a conclusion on carried interest. And then the second part of your question regarding exits and the impact on fundraising for Fund 6. As we said consistently, fundraising is the result of many different aspects. DPI is one of them. Broader and of the fund is also very important. And I think we're making very good progress across all those parameters. And if you look at the momentum that we're seeing in the more recent funds, I think that's also very, very important because we're having very engaged discussions with the clients, going very deep in the portfolios, looking at the build-up of the portfolios, and all of that has an influence on fundraising. So I wouldn't draw any conclusions from the pace of exit to mechanical impacts on a Fund 6. Maybe Alain, I'll let you comment on the valuation.

Yes, I think, as Walid rightly said, yes, I think, what is very important for our LPs is first the performance of our previous vintages, that's the first one. And even though there might be some tougher vintages, and we all have tougher vintages, everybody's got some tougher vintages than others. Right. And certainly Fund 3 and Fund 3B are such more challenging vintages. We do everything we can to preserve value, maximize value for our shareholders. And as you know, our model is such that, the bulk of the return evidently goes to our investors, to our clients, and that's actually our brief to work for their interest, and we do that very, very much. And then, of course, they might be more or less carried according to hurdle rates being met or not, and sooner rather than later, and value, of course, being higher. But clearly our brief is to continue delivering maximum value for our investors, and I can assure you they are completely aware of all the efforts we do, and in particular the fact that when we are faced with some difficult situations, we don't walk away. We deal with the issues. Second thing is DPI. DPI, as you know, is a major theme in our industry, and because in a way with higher interest rates, more uncertainty, we are faced in an industry at large, I would say the private market industry, where returns, I would say, we return of capital has been lesser. Clearly, the only thing we control as a GP is how much money we give back to our LPs. And this is very important in allowing our LPs, our clients, to commit new capital for new funds. So on this one, as we have explained to you, we have made big progress. And I think, frankly, we are now in an extremely strong position compared to most of our peers because we returned in nearly all cases and more money than you know we LPs would have done recently. And so I think this is a very, very important feature. So I don't think you can derive from today's environment the fact that we may face particular difficulties to raise, say, Fund 6, because frankly Fund 6 is not there today, we first are committing to raise Mid-Cap 2. And we do things one at a time, and to be frank, we are pretty optimistic that you think things will go well. But first, performance, secondly, DPI, return capital, so people are busy, they are happy, can put more capital at work. And to be frank, if you look at the performance of Fund 5, uh the quality of the earning is also the quality of Mid-Cap 1, frankly, everybody has got some very stronger, I would say incentives, to to to to to to to keep the investment going on because clearly we are demonstrating that we use good and differentiated investments.

That's very helpful. Can I quickly circle back to the first question? I apologize, I appreciate these were a big topic we just discussed. But just in terms of how you are kind of reacting to higher rates, are you adjusting the valuations you are assigning to prospective investments?

Thank you. Well, the straight question is, I mean, it's hard to pretend the different things that are happening in the world are not there. So we're taking into account obviously all the different factors that are impacting the economy and the companies we're investing on. So in a way, uh yes. Valuations are being impacted by rates, whether it's directly through financing conditions or indirectly in the way we look at risk-adjusted returns, we do adapt to the ongoing environment. As you can appreciate, Nicholas, when we look at a given company, you have typically several, not one, but several instruments, debt instruments, which are in place, with different schedules of repayment. And evidently, we have to integrate what is going to be the new, I would say, market conditions when they apply. But it's exactly like a company, like a state, which has to think about, you know, it's a refinancing cost going forward over 30 years. Evidently, you're not going to mark, for instance, the U.S. public debt by, say, 5.5% because today you have 10-year debt at 5.5%. It's not correct because, in fact, this new debt you raise is going to be only a fraction of the total debt. But clearly we are completely updating whatever cost of debt we need to to to to to adjust.

Very helpful. Thanks so much.

We are, and I know it's quite boring, but we are very prudent, maybe too prudent, and some papers this morning when I was actually taking my coffee. And clearly, for instance, we don't rush to make distributions, to make some disposals. If we believe that you, we have to wait a little bit. And clearly, it's a gap in, I would say, in financial results for the time. And we think that our first brief is to be sure that we do the best investments and exits for the benefit of our shareholders. This is how we believe, essentially. But we are very prudent people.

The next question is from Sharath Kumar Ramanathan of Deutsche Bank.

Good morning. Thank you for taking my questions. I have three, please. Firstly, a follow-up on Fund 3. I wanted to understand at what point does this fund cease to generate management fees, given this is a 2016 vintage and it is currently about 65% realized. So is there a scenario where we can expect to see a step-down from management fees without the fund being fully realized? That's the first one. Second, on Flagship Fund 6, just wanted to understand, is there a scenario where the activation flips to 2028? Or another way of asking this is what progress do we need to see for the fund to be on track for a 2027 activation? And finally, on the evergreen's opportunity, recently, infrastructure has seen strong interest from private wealth investors, so how do you view this opportunity? Is it a no-go zone for you given that it is fundamentally inconsistent with your investment approach, or do you remain open-minded? Thank you.

Let me start with the first question on me, and then I'll let Mélanie comment on the fundraising more specifically. So you're right to point out that the fund is a '26 vintage. Um, indeed there is a possibility to extend the life of the fund. And as the fund continues in its life, what is going to impact the fees coming from Fund 3 is indeed the reduction in fee-paying AUM as we exit the remaining assets. So you should assume that the fund will continue being extended as per the agreements with the clients, and then the fee rate, I think we've communicated in the past around the fee levels. So we can discuss in more details at a later stage what are the precise fees that will be implemented during the extension period. But you could indeed assume a small decrease in the fee rates as we extend the life of the fund. And then I think just to be clear on the carried interest and what would come from that, as I mentioned, we've been working hard to maximize value in these funds. And what we would expect is for the carry, if any, to be towards the end of the life of the fund as we finalize the realizations in that fund.

Also, Flagship Fund 6. Our base case today is still an activation in 2027. And what needs to happen by the time we activate this Fund 6 is finishing the deployment of Fund 5. And as you've seen, and as it's been presented by Alain, the deployment is way ahead. And we anticipate that we would need two to three investments to be able to be in a position to start launching Flagship Fund 6. Of course, it's difficult to predict. As we said, we are very disciplined on the quality of assets and investments that we have. We make, and therefore, we anticipate that it should happen in 2027, meaning that we are full speed, investment team is full speed on continuing deploying a very high-quality pipeline, and we feel that the base case should be that at some stage in 2027 we'll be able to activate Fund 6. We cannot mention much more on size, on timing, because it would be too mechanical. It's binary, and we need to uh to still do those investments and make sure that these are the right investment complements Fund 5 portfolio.

Maybe, Sharath, I'll take the last question on the evergreen opportunity. And there, um, I'll cover two points. So first, evergreen with uh retail or wealth investors, and then second, evergreen on the institutional side. So on the wealth and retail side, I think we've been quite consistent on that topic. We definitely see the substantial potential that we see with increased participation of wealth and retail investors into private markets, and there is a strong appetite in the infrastructure in particular. However, we have been extremely prudent, as Alain said. And we also see the potential risks, as getting into that area clearly creates some potential reputational and regulatory risk as we've seen in recent months. So we have done a lot of work. We see different avenues to tackle the retail and wealth opportunity. It can be done through evergreen products, but it can also be done through feeder funds, as we've been doing consistently and as we continue doing. And it can also be done through partnership and different ways. We're active in that front, uh we're getting into that area gradually, uh we're not rushing into it, uh because we're very much aware of the risks that come with that. So that's on the retail side. Looking at the institutional side, I mean, you're right. Uh, this is an area where we see a lot of potential in the value-add space where we are active, but also on the core side of the investment spectrum. I think we can spend time on SOLTRANS, but that's a good example of assets that fit very well the opportunity that we could see with evergreen products. So we are doing a lot of work. We're having very interesting discussions with clients on that topic. And so we will keep you posted as we evolve and we progress there.

Thank you. We would also like to add one complement, especially on enterprise, which applies to flagship strategies. As you know well, we focus on Europe and North America with the majority of investment capital deployed in Europe. And in fact, this applies to mid-cap investment, mid-size investments, or large-size investments. And if you compare what our peers, and in particular our U.S. peers, would do, do actually in Europe, you will find that few of the very large U.S. investors make big investments, transactions in Europe, focusing more of the capitals for larger deals in the United States. Reasons, not the only one, but one of the reasons which, in my view, underpins the appeal of our flagship strategy.