EQT AB (publ) Year-end Report 2024

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STOCKHOLM, Jan. 23, 2025 /PRNewswire/ -- Gearing up for long-term growth

"Private markets are returning to their long-term growth trajectory. The global economy is growing, paced by Asia and the US, central banks have cut interest rates, and capital markets are robust albeit volatile. We live in times of rapid technological and societal shifts. At EQT we continuously adapt, while remaining focused on building resilient companies, infrastructure, and real estate. In 2024, we returned to record levels of investments, increased exit activity, drove significant value in our portfolios, and closed the largest private equity fund globally(1). In recent years, we launched a number of new strategies and are now primed to hit the ground running as we embark on a new EUR 100 billion fundraising cycle."

Christian Sinding,
CEO and Managing Partner

1) PEI

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

Strategic

    --  EQT introduced two new strategies: EQT Healthcare Growth, a dedicated
        healthcare buyout strategy, and EQT Transition Infrastructure, investing
        in energy transition-related infrastructure
    --  EQT enhanced its focus on private wealth through senior team hires,
        branding efforts, the addition of further distribution banks, and the
        launch of new products. In 2025, EQT expects to launch three additional
        evergreen vehicles, and thereby have five active vehicles available for
        private wealth, including three dedicated to the US, and two dedicated
        to Europe and Asia
    --  EQT strengthened its central platform to enable continued scalable
        growth, as EQT expands its offering of vehicles for private wealth,
        enhances its capital raising efforts to attract new clients and increase
        cross-selling, launches new investment strategies, and expands its
        investment advisory teams and investment activities across North America
        and Asia
    --  In recent years, EQT has launched ten strategies which are at an early
        stage of scalability and profitability, and is currently incurring costs
        associated with its recently launched and upcoming private wealth
        products, which had an impact on EQT's margins
    --  EQT continues to assess strategic opportunities, organically or through
        acquisitions to strengthen its platform

Adjusted Financials - reflecting EQT's underlying performance(1)

    --  Management fees increased primarily due to closed out commitments.
        Carried interest and investment income increased driven by value
        creation and higher realization activity, and the EBITDA margin was
        flat, reflecting the impact of long-term growth initiatives. EQT
        continues to expect to be at the upper end of its stated 55-65% EBITDA
        margin target range in years when substantial carried interest is
        recognized. As outlined at EQT's capital markets day in March 2024, EQT
        furthermore expects to reach the 55-65% EBITDA margin target range also
        excluding carried interest and investment income during the next
        fundraising cycle
    --  The US Multifamily fund initiative has been discontinued. The associated
        costs such as redundancies and the revaluations of certain investments
        made with the support of EQT's balance sheet - totaling approximately
        EUR 80m net of tax - are treated as an item affecting comparability and
        are therefore excluded from EQT's adjusted financials (see Note 1)
    --  Total Revenue amounted to EUR 2,355m (EUR 2,131m), an increase of 11%.
        Management fees increased by 7%. Carried Interest and Investment Income
        amounted to EUR 251m (EUR 165m), an increase of 52%
    --  EBITDA amounted to EUR 1,359m (EUR 1,226m), corresponding to an EBITDA
        margin of 58% (58%). Fee-related EBITDA amounted to EUR 1,108m (EUR
        1,062m), corresponding to a Fee-related EBITDA margin of 53% (54%)
    --  Net Income from continuing operations amounted to EUR 1,115m (EUR
        1,019m)
    --  Earnings Per Share for continuing operations before and after dilution
        amounted to EUR 0.942 (EUR 0.860) and EUR 0.942 (EUR 0.859),
        respectively

1) Adjusted Financials, which are alternative performance metrics for the EQT AB Group. For a full reconciliation, please refer to section "Alternative performance measures"

Reported Financials - IFRS(1)

    --  Total Revenue amounted to EUR 2,653m (EUR 2,122m). Carried Interest and
        Investment Income amounted to EUR 549m (EUR 156m)
    --  EBITDA amounted to EUR 1,324m (EUR 731m), corresponding to an EBITDA
        margin of 50% (34%)
    --  Net Income from continuing operations amounted to EUR 776m (EUR 177m)
    --  Earnings Per Share for continuing operations before and after dilution
        amounted to EUR 0.656 (EUR 0.149) and EUR 0.656 (EUR 0.149),
        respectively

1) As of Jan 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

Fundraising

    --  In 2024, the global fundraising market saw lower volumes of completed
        fundraisings compared to 2023, extended fundraising timelines, and
        marginal improvements in liquidity dynamics as realization volumes
        across global private markets remained subdued
    --  Larger managers with an established track-record attracted an outsized
        share of client commitments as clients consolidated their relationships
        with fewer managers, a trend which EQT benefited from. EQT strategies
        across the world completed fundraises in 2024 that combine to around EUR
        30bn in total commitments(1), including EQT X, the largest private
        equity fundraise to be completed globally in 2024(2)
    --  Gross inflows amounted to EUR 11bn (EUR 24bn), primarily driven by
        closed out commitments from EQT X and Infrastructure VI
    --  FAUM increased to EUR 136bn (EUR 130bn). Total AUM was EUR 269bn (EUR
        232bn)
    --  EQT Infrastructure VI had fee-generating commitments of EUR 18.1bn. The
        fund is expected to reach its target size upon its final close in the
        first quarter of 2025
    --  EQT set the hard cap for investor commitments of USD 14.5bn for EQT
        Private Capital Asia's BPEA Private Equity Fund IX. The target fund size
        for BPEA IX is USD 12.5bn, and EQT expects commitments to approach the
        target fund size upon first close during the first half of 2025. BPEA IX
        is expected to be activated in the first half of 2025
    --  EQT Nexus' NAV amounted to approximately EUR 1bn, with inflows
        accelerating during the fourth quarter. EQRT, EQT's semi-liquid strategy
        focusing on direct investments in commercial real estate, announced its
        first investments and is expected to gradually increase marketing and
        fund raising efforts when the real estate fund raising market improves

1) EQT X (EUR 22bn), EQT Future (EUR 3.6bn), BPEA Mid-Market Growth (EUR l.5bn), and EQT Active Core Infrastructure (EUR 2.9bn)
2) PEI

Investment and exit activity(1)

    --  EQT had one of its most active investment years ever, with total
        investments by the EQT funds amounting to EUR 22bn, an increase of 27%
        compared to 2023. In addition, EQT provided co-investment opportunities
        of EUR 12bn for its clients
    --  EQT announced new investments across focus themes including
        digitalisation, energy transition, cyber security, education, waste
        management, transportation, and logistics
    --  EQT Exeter more than doubled investment volumes to almost EUR 4bn, to
        mark its most active investment year since the combination with EQT in
        2021
    --  EQT accelerated exit activity and announced total gross fund exits of
        EUR 11bn, a 72% increase on 2023
    --  Exit events included complete sales, Initial Public Offerings (IPOs),
        monetizations of listed holdings, and minority stake sales making 2024 a
        record year in terms of the number of exit events for the EQT funds
    --  EQT was the most active private markets firm globally in 2024 as it
        relates to IPOs and follow-on volumes(2)

1) Signed transactions, if not otherwise mentioned
2) Dealogic and Goldman Sachs

Investment performance

    --  All Key funds continued to perform On or Above plan. At the end of the
        period, EQT increased its expectation for BPEA VIII to perform Above
        plan, based on the fund's strong value creation outlook
    --  Value creation in key funds amounted to 18% during 2024, underpinned by
        strong underlying Sales and EBITDA developments, supportive valuation
        references, realizations and exit processes. In particular, the fourth
        quarter of 2024 marked a meaningful improvement, being the strongest
        quarter in three years in terms of value creation
    --  Key funds in EQT Infrastructure, and more recent vintages in Private
        Capital EU & North America and Private Capital Asia saw the strongest
        performance. EQT IX performed particularly well towards the end of the
        year on the back of strong operational performance and supportive pies,
        including for companies being readied for exits

Balance sheet, realizations of carried interest and liquidity

    --  At 31 December 2024, interest bearing liabilities amounted to EUR
        2,000m(1). Cash and cash equivalents amounted to EUR 1,024m. EQT's EUR
        1.5bn sustainability-linked revolving credit facility was undrawn and
        the facility was extended in July 2024 with a tenor of 5 years with two
        1-year extension options. Net Debt (ND) amounted to EUR 976m. ND/
        Adjusted EBITDA was 0.7x and ND/Adjusted Fee-related EBITDA 0.9x
    --  Reported Carried Interest amounted to EUR 587m (EUR 134m)(2). Adjusted
        Carried Interest amounted to EUR 176m (EUR 142m). Realized (cash)
        carried interest amounted to EUR 59m (EUR 115m)
    --  EQT repurchased a total of 4.2 million shares (EUR 118m) to offset the
        potential dilution from EQT's equity incentive programs
    --  In addition to EQT's A- (Stable) rating from Fitch, EQT obtained an A-
        (Stable) rating from S&P, underscoring EQT's operational strength and
        robust financial position

Note: The adjusted metrics are alternative performance metrics for the EQT AB Group. For a full reconciliation, please refer to section "Alternative performance measures'
1) Nominal amount
2) As of Jan 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

People and future-proofing

    --  The number of full-time equivalent employees and on-site consultants
        (FTE+) amounted to 1,941 (1,838), of which 1,886 (1,777) were FTEs. New
        hires in 2024 were made to strengthen the capital raising platform as
        well as the investment teams to enable scalable future growth
    --  Masoud Homayoun was appointed Head of EQT Infrastructure
    --  Henry Steinberg was named Global Head of EQT Exeter, after Ward
        Fitzgerald decided to step down
    --  During 2024, the number of portfolio companies with validated
        science-based targets increased by 28, taking the total number of
        portfolio companies with validated targets to 52, or more than 60% of
        invested capital, at the end of the period. This is about three times
        higher than the median alternative asset manager(1). In addition, 14
        companies are in the process of setting targets

1) BCG, May 2024

Other

    --  EQT Exeter, which will operate under the EQT Real Estate brand going
        forward, will continue to focus primarily on industrial (logistics) real
        estate. The US Multifamily fund initiative has been discontinued, and
        the associated costs such as redundancies and the revaluations of
        certain investments made with the support of EQTs balance sheet -
        totaling approximately EUR 80m net of tax - are reported in the period
        as an item affecting comparability (see Note 1). EQT Real Estate has
        also decided not to pursue further investments in the office and life
        sciences property sector for the time being
    --  EQT established offices in Warsaw, Poland and Bengaluru, India. The
        Warsaw office is expected to become a significant tech development hub
        for EQT, and the Bengaluru office will host junior investment advisory
        professionals working with our global teams
    --  During 2023 and 2024, lock-ups related to 20% of EQT's share capital
        expired (including 12% in September 2024). Current and former employees
        subject to lock-up expiries during 2023 and 2024 continue to own a
        majority of those shares. Liquidity in the EQT share increased by
        approximately 33% following the 2024 lock-up expiry in September,
        compared to the 12 month period prior (source: Bloomberg), and EQT's
        weight in certain indexes increased during the fourth quarter
    --  In December, EQT was included in the Dow Jones Sustainability Index
        (DJSI) for the third consecutive year, and is the only private market
        firm globally to be part of DJSI World

Events after the reporting period

    --  The Board proposes a dividend per share of SEK 4.30 (3.60), to be paid
        in two installments, SEK 2.15 (1.80) in June 2025 and SEK 2.15 (1.80) in
        December 2025
    --  Investment levels in EQT Key funds as of 23 January 2025 were 45-50% in
        EQT X, 45-50% in EQT Infrastructure VI and 80-90% in BPEA VIII
    --  Anna Wahlstrom, Leadership Strategy and Culture Enabler, stepped down
        from EQT's Executive Committee. Anna's role and scope remains unchanged
    --  Alex Lowen was appointed Global Head of Human Resources

Presentation of EQT AB's Year-end Report 2024

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

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=4346787-1&h=3058809864&u=https%3A%2F%2Fedge.media-server.com%2Fmmc%2Fp%2Ffzdmv928%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=4346787-1&h=3858859262&u=https%3A%2F%2Fregister-conf.media-server.com%2Fregister%2FBIb25db79935cb4eacb7a02b450fb85e82&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 CET on 23 January 2025.

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The following files are available for download:

https://mb.cision.com/Main/87/4094903/3219232.pdf EQT AB Year-end Report 2024 https://news.cision.com/eqt/i/eqt-ab-group,c3370532 EQT AB Group

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