Evli had a solid third quarter of 2024. International sales has shown clear signs of improvement. The activity of international clients has increased since the summer, and net sales in the third quarter of the year were clearly positive.
Fund management fees increased compared to the comparison period. Both new sales and successful portfolio management contributed positively to the rise. In addition, institutional investors once again ranked Evli as Finland’s best asset manager in Kantar Prospera’s annual client survey. Evli was also placed first in sustainable investing expertise.
Financial performance January-September 2024 (comparison period 1–9/2023)
- Net revenue was EUR 96.7 million (EUR 78.0 million). Comparable net revenue after eliminating the effects of the corporate transaction was EUR 79.6 million (EUR 69.4 million).
- Operating profit was EUR 47.7 million (EUR 29.3 million). Comparable operating profit after eliminating the effects of the corporate transaction was EUR 32.7 million (EUR 26.9 million).
- Operating result of the Wealth Management and Investor Clients segment increased to EUR 29.5 million (EUR 26.3 million).
- Operating result of the Advisory and Corporate Clients segment increased to EUR 2.5 million (EUR 1.5 million).
- At the end of September, net assets under management amounted to EUR 18.7 billion (EUR 17.1 billion), including assets managed by associated companies. Assets under management excluding the associated companies amounted to EUR 16.3 billion (EUR 14.7 billion).
- Return on equity was 35.8 percent (22.2%).
- The ratio of recurring revenue to operating costs was 136 percent (133%).
- Earnings per share, fully diluted, were EUR 1.38 (EUR 0.80).
Financial performance July-September 2024 (comparison period 7-9/2023)
- The Group's net revenue was EUR 24.5 million (EUR 25.9 million). Comparable net revenue after eliminating the effects of the corporate transaction was EUR 24.5 million (EUR 23.7 million).
- The Group's operating profit was EUR 10.5 million (EUR 10.2 million). Comparable operating profit after eliminating the effects of the corporate transaction was EUR 10.6 million (EUR 10.0 million).
- Diluted earnings per share amounted to EUR 0.27 (EUR 0.28).
Commission income from traditional funds and advisory fees increased significantly
Economic growth in the United States continued to be strong in the third quarter, as in the early part of the year, but remained subdued in Europe. The Federal Reserve, the central bank of the United States, cut interest rates by half a percentage point in September. The European Central Bank, which started interest rate cuts already in June, lowered its key interest rate to 3.5 percent in September. Central banks both in the US and in Europe are expected to continue their interest rate cuts well into next year, possibly up to 2026. In addition to the economic and interest rate outlook, the market monitored closely the developments in geopolitical risks. The focus was on the upcoming presidential election and its potential impacts on the country’s economic, trade, and foreign policies.
In the third quarter, income from capital markets was positive in all main markets and in Finland. Returns on fixed income investments were strong across all interest rate asset classes, and equity returns were mostly reasonable or good, too.
“Evli Group’s net revenue in the third quarter decreased by six percent to EUR 24.5 million (EUR 25.9 million). Taking into account the corporate restructuring of the incentive business carried out in March, comparable revenue was slightly higher than in the previous year. Commission income from traditional funds as well as advisory fees performed best, both of which increased significantly,” Evli’s CEO Maunu Lehtimäki says.
The Group’s operating profit for the third quarter increased by three percent to EUR 10.5 million (EUR 10.2 million). Evli’s return on equity for the first nine months was 35.8 percent (22.8%). The ratio of recurring revenue to operating expenses was 136 percent (133%).
“As a result of positive market development and net subscriptions, managed client assets increased to EUR 18.7 billion (EUR 17.1 billion). The key areas of Evli’s strategy, international sales and alternative investment products, developed positively during the quarter,” Lehtimäki says.
In the area of responsibility, Evli continued as an active investor participant in the Nature Action 100 initiative, which encourages companies to take more ambitious action to reduce nature loss. Furthermore, Evli signed the 2024 Global Investor Statement to Governments on the Climate Crisis, that aims to accelerate the private capital flows needed for a transition to a climate-resilient, nature-positive economy.
Outlook unchanged for 2024
The business environment is expected to remain uncertain and difficult to predict in 2024. The expansion of geopolitical risks, 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 the one-off impact from the corporate arrangement, the strong position and growth prospects, we estimate that the operating profit will significantly exceed the level of the comparison period.
Read more: Evli Plc’s Interim Report 1–9/2024
