EQT AB (publ) Half-year Report 2024

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STOCKHOLM, July 18, 2024 /PRNewswire/ -- Well positioned as markets improve

"In the first half of 2024, EQT successfully closed several fundraisings, despite a challenging environment. We launched new strategies and further strengthened our private wealth platform. Investment activity continued at a good pace across strategies, and we are actively pursuing realizations, building on our strong track record of providing liquidity for our clients," Christian Sinding, CEO and Managing Partner.

Highlights for the period Jan-Jun 2024 (Jan-Jun 2023)

Financial

    --  During the period, management fees increased due to closed out
        fundraising commitments, while carried interest was lower due to lower
        volumes of closed realizations. Adjusted margins increased due to higher
        FAUM, operational efficiency and scaling effects
    --  Adjusted Total Revenue amounted to EUR  1,088 m (EUR   1,019 m), an
        increase of  7% . Reported Total Revenue* amounted to EUR    1,232 m
        (EUR   1,115 m). Management fees increased by   13%
    --  Adjusted Carried Interest and Investment Income amounted to EUR  41 m
        (EUR     89 m). Reported Carried Interest and Investment Income*
        amounted to EUR    184 m (EUR    185 m)
    --  Adjusted EBITDA amounted to EUR   609 m (EUR    555 m), corresponding to
        an Adjusted EBITDA margin of   56%  (  54% ). Reported EBITDA* amounted
        to EUR  562 m (EUR      405 m), corresponding to a Reported EBITDA
        margin* of     46%  (    36% )
    --  Adjusted Fee-related EBITDA amounted to EUR    568 m (EUR     466 m),
        corresponding to an Adjusted Fee-related EBITDA margin of    54%  (  
        50% )
    --  Adjusted Net Income from continuing operations amounted to EUR   500 m
        (EUR     450 m). Reported Net Income from continuing operations*
        amounted to EUR    282 m (EUR    120 m)
    --  Adjusted Earnings Per Share for continuing operations before and after
        dilution amounted to EUR   0.422  (EUR    0.379 ) and EUR   0.422  (EUR 
        0.379 ), respectively. Earnings Per Share for continuing operations*
        before and after dilution amounted to EUR  0.238  (EUR       0.101 ) and
        EUR      0.238  (EUR      0.101 ), respectively

(*) (As of January 1, 2024, EQT has, in accordance with IAS 8, changed accounting principles relating to carried interest, see Note 6. Adjusted Revenue is unchanged compared to prior periods)
(Note: The adjusted metrics are alternative performance metrics for the EQT AB Group. For a full reconciliation, please refer to section "Alternative performance measures)"

Strategic

    --  EQT X closed at EUR 22bn in total commitments, of which EUR 21.7bn are
        fee-generating assets under management, hitting the hard cap. EQT's
        Private Capital strategies across the world have completed fundraises in
        2024 that combine to more than EUR 26bn in total commitments
    --  EQT hosted a Capital Markets Day, re-confirming its revenue growth and
        Adjusted EBITDA margin targets, providing further color on its Adjusted
        Fee-related EBITDA margin ambition, and refining its dividend growth
        target to be on a per share basis
    --  Preparations progressed for BPEA IX and for a transition infrastructure
        strategy
    --  EQT continued to enhance its focus on the Private Wealth area through
        senior team hires, branding efforts, the addition of further EQT Nexus
        distribution banks, and preparations for new products in different
        geographies
    --  EQT continued to elevate its Capital Markets team across debt and
        equity, adding further focus on exit and IPO excellence

Fundraising

    --  FAUM increased to EUR  133 bn (EUR   126 bn). Total AUM was EUR  246 bn
        (EUR    224 bn). Gross inflows amounted to EUR   7 bn and were primarily
        driven by closed out commitments from EQT X and EQT Infrastructure VI
    --  Fundraisings are generally taking longer in the current fundraising
        environment, and we expect the fundraising market to meaningfully
        improve only once realizations pick up materially across private markets
    --  EQT Infrastructure VI had fee-generating commitments of EUR 16.2bn.
        Active fundraising efforts are expected to materially conclude in 2024.
        The fund is expected to reach its target size upon final close
    --  EQT Future(1) closed at EUR 3bn in total fund commitments, with total
        fee-generating commitments to the strategy, which includes
        co-investments, totaling EUR 3.6bn
    --  BPEA EQT Mid Market Growth(1) held its final close at more than double
        the fund's target size, with USD 1.6bn in total fund commitments, of
        which USD 1.4bn is fee-generating
    --  EQT launched EQT Healthcare Growth, a dedicated healthcare buyout fund,
        which has announced two investments to date
    --  EQT Nexus' NAV amounted to approximately EUR 700m, and EQRT, EQT's
        semi-liquid strategy focusing on direct investments in commercial real
        estate, announced its first acquisition and initiated marketing in a
        slow real estate fundraising market

(1.)(EQT Future and BPEA EQT Mid Market Growth charge management fees on invested capital)

Investment and exit activity(2)

    --  Total investments by the EQT funds during the period amounted to EUR  12
        bn (EUR   9 bn) driven by strong deal flow across regions and strategies
    --  Investments include the partnership with EdgeConneX to develop
        hyperscale data centers in APAC; the public to private tender of OX2;
        fiber-to-the-home platform Lumos (EQT Infrastructure VI); the public to
        private tender of Believe, the largest independent digital-native music
        label globally; Avetta, a leading cloud-based supply chain risk
        management software platform (EQT X); and the public to private tender
        of Perficient, a leading global digital consultancy (BPEA VIII)
    --  Total gross fund exits announced during the period amounted to EUR  4 bn
        (EUR    4 bn)
    --  Exits include the sale of idealista, a leading real estate platform in
        Southern Europe (EQT IX), Ottobock, the global leader in wearable human
        bionics (EQT VII); fiber-to-the-home platform Lumos (EQT Infrastructure
        III); CMS Info Systems, India's largest cash management company (BPEA
        VI); and Shinhan Financial Group, the largest financial group in Korea
        (BPEA VII)
    --  Galderma (EQT VIII), a leader in dermatology, priced its IPO on the SIX
        Swiss Exchange, and Waystar (EQT VIII), a cloud-based provider of
        software for simplifying healthcare payments, began trading on the
        Nasdaq stock exchange; both IPOs saw the company raise primary capital,
        while EQT VIII retained its ownership with the liquidity benefit of
        having publicly traded shares, paving the way for realizations over time

((2).Signed transactions, if not otherwise mentioned)

Investment performance

    --  All key funds continued to perform On plan or Above plan
    --  Value creation across the Key EQT funds amounted to 5% during the
        period, driven by earnings growth
    --  The key funds in EQT Infrastructure, and more recent vintages across
        both Private Capital EU & North America and Private Capital Asia saw the
        strongest performance
    --  In certain earlier Private Capital vintages, which have a significant
        share of already realized investments, fund valuations were modestly
        lower due to specific pockets of underperformance
    --  EQT's Capital Markets team took advantage of strong financing markets to
        optimize portfolio company debt by further extending maturities,
        improving covenants, and reducing interest expenses. The EQT key fund
        portfolio companies have no material maturities before 2027

Balance sheet, realization of carried interest and liquidity

    --  At 30 June 2024, interest bearing liabilities amounted to EUR  1,994 m.
        Cash and cash equivalents amounted to EUR   806 m. EQT's EUR 1.5bn
        sustainability-linked revolving credit facility was undrawn and the
        facility was extended in July 2024 with a tenor of5 years with two
        1-year extension options. Net Debt (ND) amounted to EUR  1,194 m.
        ND/Adjusted EBITDA was    0.9x  and ND/Adjusted Fee-related EBITDA  
        1.0x , both on a last twelve-month basis**
    --  Reported Carried Interest* amounted to EUR   164 m (EUR  168 m).
        Adjusted Carried Interest amounted to EUR     21 m (EUR    72 m).
        Realized (cash) carried interest amounted to EUR    19 m (EUR   84 m)
    --  As previously communicated, EQT expects to execute share buyback
        programs twice a year to offset the dilution impact from EQT's equity
        incentive programs. EQT repurchased 2.2m shares during the period and a
        second buyback program will be carried out between 19 July 2024 and 23
        August 2024 and comprises 2.0m shares

((* )As of January 1, 2024, EQT has, in accordance with IAS 8, changed accounting principles relating to carried interest, see Note 6. Adjusted Revenue is unchanged compared to prior periods)
((**) Net debt end of period divided by Adjusted EBITDA during the last twelve months)
(Note: The adjusted metrics are alternative performance metrics for the EQT AB Group. For a full reconciliation, please refer to section 'Alternative performance measures')

People and future-proofing

    --  Richa Goswami joined the EQT AB Board, bringing experience and expert
        knowledge in building consumer facing financial brands
    --  The number of full-time equivalent employees and on-site consultants
        (FTE+) amounted to  1,861  (  1,814 ), of which  1,796  (   1,716 ) FTEs
    --  Masoud Homayoun, Partner and Head of EQT Value-Add Infrastructure,
        joined EQT's Executive Committee
    --  Since committing to the Science Based Targets initiative in 2021, EQT
        has supported 44 portfolio companies in setting science-based targets,
        of which 12 completed the validation during the period. In terms of
        invested capital, this represents a portfolio coverage of 57% as of Q1
        (surpassing EQT's interim target of 40% in 2025). With a continuously
        evolving portfolio, a further 21 companies are in the process of setting
        targets

Other

    --  EQT won six awards in the 2023 PEI Group Awards, including
        Infrastructure Investor's 'Global Sustainable Investor of the Year' for
        the second consecutive year, and New Private Markets' 'Multi-Strategy
        Firm of the Year (ESG)'. EQT was also recognized in the 2024 Prequin
        League Tables as one of the 'Most Consistent Top Performing
        Infrastructure Fund Managers', and for the third year in a row, EQT was
        ranked in the top 3 in the PEI300 list(3)
    --  The acquisition of HDFC Credila (BPEA VII) was awarded the 2024 Private
        Equity Deal of the Year in the Mint India Investment Summit Awards
    --  EQT established offices in Warsaw, Poland and Bengaluru, India. The
        Warsaw office is expected to become a significant tech development hub
        for EQT, host global operations functions, and other teams over time.
        The Bengaluru office will host junior investment advisory professionals,
        working alongside EQT's global investment advisory teams

(3.)(The PEI 300 measures the amount of private equity capital raised between 1 January 2019 and 31 December 2023)

Events after the reporting period

    --  BPEA VIII announced the public-to-private of Keywords Studios, a leader
        in gaming technology services
    --  EQT Future announced its investment in Flix, a global travel company
        focused on long-distance ground transportation
    --  In addition to EQT's current A- (Stable) rating from Fitch, EQT obtained
        an A- (Stable) rating from S&P, underscoring EQT's operational strength
        and robust financial position
    --  Investment levels in EQT Key funds as of 18 July 2024, were 35-40% in
        EQT X, 40-45% in EQT Infrastructure VI and 65-70% in BPEA VIII

Presentation of EQT AB's Half-year Report 2024

Financial analysts and media are invited to participate in a conference call, including a presentation at 08:30 CEST.

The presentation and a link to follow the webcast and conference call live can be found here [https://c212.net/c/link/?t=0&l=en&o=4214493-1&h=2098624898&u=https%3A%2F%2Fedge.media-server.com%2Fmmc%2Fp%2Fs9yapw37%2F&a=here] and a recording will be available afterwards.

To participate by phone, please register here [https://c212.net/c/link/?t=0&l=en&o=4214493-1&h=1006675725&u=https%3A%2F%2Fregister.vevent.com%2Fregister%2FBIf2ea2bd42ece41e48a9ae6f9d197c6bb&a=here]. You will then receive your personal dial-in details, to be able to ask questions during the Q&A.

Information on EQT AB's financial reporting

The EQT AB Group has a long-term business model founded on a promise to its fund investors to invest capital, drive value creation and create consistent attractive returns over a 5 to 10-year horizon. The Group's financial model is primarily affected by the size of its fee-generating assets under management, the performance of the EQT funds and its ability to recruit and retain top talent.

The Group operates in a market driven by long-term trends and thus believes quarterly financial statements are less relevant for investors. However, in order to provide the market with relevant and suitable information about the Group's development, EQT publishes quarterly announcements with key operating numbers that are relevant for the business performance (taking Nasdaq's guidance note for preparing interim management statements into consideration). In addition, a half-year report and a year-end report including financial statements and further information relevant for investors is published. Finally, EQT also publishes an annual report including sustainability reporting.

Contact
Olof Svensson, Head of Shareholder Relations, +46 72 989 09 15
EQT Shareholder Relations, shareholderrelations@eqtpartners.com [mailto:shareholderrelations@eqtpartners.com]


Rickard Buch, Head of Corporate Communications, +46 72 989 09 11
EQT Press Office, press@eqtpartners.com [mailto:press@eqtpartners.com], +46 8 506 55 334

This is information that EQT AB (publ) is obliged to make public pursuant to the EU Market Abuse Regulation. The information was submitted for publication, through the agency of the contact persons set out above, at 07:00 CEST on 18 July 2024.

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The following files are available for download:

https://mb.cision.com/Main/87/4016251/2920111.pdf EQT AB Half-year report 2024 (20240717) https://news.cision.com/eqt/i/eqt-ab-group,c3320640 EQT AB Group

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