The year 2023 was a good year to Evli. Net revenue and operating profit increased, driven by the acquisition of EAB Group Plc, positive market development, and successful new sales. At the same time, demand for traditional investment funds increased, and Evli attracted the second most fund subscriptions in Finland. Also, the recurring revenue’s share of revenue increased further, improving the quality of the result.
- Net revenue was EUR 108.7 million (EUR 96.1 million).
- Operating profit was EUR 40.2 million (EUR 30.9 million).
- Operating result of the Wealth Management and Investor Clients segment increased to EUR 33.0 million (EUR 27.4 million).
- Operating result of the Advisory and Corporate Clients segment decreased to EUR 2.7 million (EUR 4.2 million).
- At the end of December, net assets under management amounted to EUR 18.0 billion (EUR 16.0 billion).
- Return on equity was 22.8 percent (20.4%).
- The ratio of recurring revenue to operating costs was 130 percent (123%).
- Earnings per share, fully diluted, were EUR 1.05 (EUR 0.81).
- The Board of Directors proposes that a dividend of EUR 1.16 per share be paid for the financial year 2023 (EUR 1.15 per share consisting of EUR 0.80 per share dividend and EUR 0.35 per share from the reserve for unrestricted equity).
Financial performance October-December 2022 (comparison period 10–12/2022)
- Net revenue was EUR 30.7 million (EUR 29.4 million).
- Operating profit was EUR 10.9 million (EUR 5.0 million).
- Fully diluted earnings per share amounted to EUR 0.26 (EUR 0.12).
Despite the uncertainty in the operating environment, Evli's revenue developed strongly
During the last quarter of 2023, the US economy continued to grow strongly, as in the early part of the year, but in Europe growth remained sluggish. However, the slow-down in consumer prices, the growing challenges facing the global economy and more dovish guidance from central banks led to increased expectations for a reduction in market rates. As concerns about recession are piling up, investors anticipate cuts in key interest rates already in the first half of 2024. Increased risks for the economy were posed by increased geopolitical tensions, including the more tense situation in the Middle East, the signs of wobbling in the Western countries’ support for Ukraine and the protracted war in Ukraine.
The prices of equities and bonds rose during the last quarter, stimulated by interest rate optimism. The rise in share prices was fastest in the US and emerging markets, with share prices up by over ten percent. In Europe, too, share prices rose by over six percent. Overall, the year 2023 was profitable for equity and fixed income investors.
“Despite the continued uncertainty in the operating environment, Evli's revenue developed strongly during 2023. Net revenue increased by 13 percent from the corresponding period of the previous year and was EUR 108.7 million. Operating profit rose over 30 percent and was EUR 40.2 million. Revenue increased due to increased fund fees in traditional and alternative funds as well as increased commission income in the incentive business,” Evli’s CEO Maunu Lehtimäki says.
In the fourth quarter, the Group’s net revenue increased by 4.5 percent from the comparison period and was EUR 30.7 million (EUR 29.4 million). Operating profit, in turn, doubled to EUR 10.9 million (EUR 5.0 million).
“The positive development was due to the increase of commission income from traditional funds. By contrast, commission income from the Corporate Finance unit and brokerage activities remained lower during the quarter than in the previous year because of the slowdown in M&A activity and lower trading volumes,” Lehtimäki says.
In January–December, Evli’s return on equity was 22.8 percent (20.4%). The ratio of recurring revenue to operational costs was 130 percent (123%). The Group’s solvency and liquidity were at an excellent level.
The key drivers of Evli's strategy, international sales, and alternative investment products, developed favorably during the quarter. Net subscriptions by international clients amounted to EUR 30 million. International clients accounted for 19 percent (20%) of Evli’s total fund capital, including alternative investment products. Sales of alternative investment products continued to increase, and subscriptions and investment commitments totaled EUR 32 million (EUR 120 million).
Outlook for 2024
The business environment is expected to remain uncertain and difficult to predict in 2024. The expansion of geopolitical risks, fears of inflation and interest rates, and concerns about the sustainability of economic growth increase uncertainty in the markets.
Despite the challenging market environment, Evli has succeeded in strengthening its position in the market. Growth has been supported by a wide product range and customer base. Due to our strong position and growth prospects, we estimate that the operating result will be at or above the comparison period.
Read more: Evli Plc’s Financial Statements Bulletin 1–12/2023
* Includes carve-out figures for 1–3/2022
