Evli Oyj: Financial Statements Bulletin January-December 2024

EVLI PLC STOCK EXCHANGE RELEASE ON JANUARY 29, 2025, AT 12:00 AM (EET/EEST)

Evli Plc: Financial Statements Bulletin January-December 2024

RECORD YEAR

Highlights of the period

• Result and assets under management rose to a new high.
• International sales turned clearly positive towards the end of the year. Fund sales to foreign customers exceeded EUR 240 million during the review period.
• Despite the challenging market environment, sales of alternative investment funds also performed well. For example, the Evli Private Equity IV fund raised a record amount of more than EUR 75 million in investment commitments during the first closing.
• Evli received significant recognition for its expertise. Institutional investors once again ranked Evli as Finland's best asset manager in both SFR Research's and Kantar Prospera's annual customer surveys.

Financial performance January-December 2024 (comparison period 1-12/2023)

• Net revenue was EUR 126.8 million (EUR 108.7 million). Comparable net revenue after eliminating the effects of the corporate transaction was EUR 109.7 million (EUR 96.6 million).
• Operating profit was EUR 58.2 million (EUR 40.2 million). Comparable operating profit after eliminating the effects of the corporate transaction was EUR 43.3 million (EUR 36.4 million).
• Operating result of the Wealth Management and Investor Clients segment increased to EUR 39.8 million (EUR 33.0 million).
• Operating result of the Advisory and Corporate Clients segment increased to EUR 3.3 million (EUR 2.7 million).
• At the end of December, net assets under management amounted to EUR 18.9 billion (EUR 18.0 billion), including assets managed by associated companies. Assets under management excluding the associated companies amounted to EUR 16.6 billion (EUR 15.6 billion).
• Return on equity was 34.4 percent (22.8%).
• The ratio of recurring revenue to operating costs was 132 percent (130%).
• Earnings per share, fully diluted, were EUR 1.63 (EUR 1.05).
• The Board of Directors proposes that a dividend of EUR 1.18/share (EUR 1.16/share) be distributed for the financial year 2024.

Financial performance October-December 2024 (comparison period 10-12/2023)

• The Group's net revenue was EUR 30.1 million (EUR 30.7 million). Comparable net revenue after eliminating the effects of the corporate transaction was EUR 30.1 million (EUR 27.1 million).
• The Group's operating profit was EUR 10.5 million (EUR 10.9 million). Comparable operating profit after eliminating the effects of the corporate transaction was EUR 10.6 million (EUR 9.5 million).
• Diluted earnings per share amounted to EUR 0.25 (EUR 0.26).

OUTLOOK FOR 2025

The operating environment is expected to remain uncertain and difficult to predict in 2025. The expansion of geopolitical risks and concerns about the sustainability of economic growth increase uncertainty in the markets.

Despite the challenging operating environment, Evli has succeeded in strengthening its position in the market. Growth has been supported by a wide product range and customer base. With a strong market position and growth outlook, we estimate the operating result to be clearly positive.


KEY FIGURES DESCRIBING THE GROUP'S FINANCIAL PERFORMANCE

M€	10-12/2024	10-12/2023	1-12/2024	1-12/2023
Income statement key figures
Net revenue, M€	30.1	30.7	126.8	108.7
Operating profit/loss, M€	10.5	10.9	58.2	40.2
Operating profit margin, %	34.9	35.4	45.9	37.0
Profit/loss excl. non-recurring items related to mergers and acquisitions, M€	10.6		43.3	-
Profit/loss for the financial year, M€	8.6	8.5	49.9	32.0
Profitability key figures
Return on equity (ROE), %	-	-	34.4	22.8
Return on assets (ROA), %	-	-	14.1	9.0
Balance sheet key figures
Equity-to-assets ratio, %	-	-	42.4	39.8
Key figures per share
Earnings per Share (EPS), fully diluted, €	0.25	0.26	1.63	1.05
Dividend per share, €	-	-	1.18**	1.16*
Equity per share, €	-	-	5.64	5.02
Share price at the end of the period, €	-	-	17.5	19.70
Personnel figures
Number of permanent employees	-	-	273***	316
Number of temporary employees	-	-	32***	38
Share of personnel worked in Finland, %	-	-	91.8***	93.8
Other key figures
Expense ratio (operating costs to net revenue)	0.62	0.63	0.53	0.63
Recurring revenue ratio, %	-	-	132	130
Market value, M€	-	-	463.5	521.8

* Dividend approved by the Annual General Meeting 2024. The dividend has been paid on 25.3.2024.
** The Board of Directors proposal to the Annual General Meeting
*** The number of employees of Allshares Oy is not included in the 1-12/2024 personnel figures.


CEO MAUNU LEHTIMÄKI

In the later part of 2024, economic growth continued as in the early part of the year. In the United States, growth remained strong, supported by private consumption and a high employment rate, while growth in Europe was subdued. At its December meeting, the Federal Reserve (Fed) cut its key interest rate by a quarter of a percent, bringing it into a new target range of 4.25-4.50 percent. This was the third consecutive rate cut, and now the policy rate has fallen by a full percentage point from its peak. In Europe, too, interest rate cuts continued; The European Central Bank's interest rate on deposits stood at 3.0 percent at the end of the year. The US dollar strengthened markedly during the year and was close to parity against the euro by the end of the year.

In addition to the economic and interest rate outlook, the US presidential election in November and the subsequent change of direction in US domestic and foreign policy as well as the development of geopolitical risks were prominent towards the end of the year. Divisions within the US, growing nationalism, and possible trade policy measures increased investors' concerns. If enacted, possible import tariffs would raise prices in the United States, increase inflationary pressures, and weaken growth in other parts of the world.

In the fourth quarter, capital market returns were mixed. The returns on fixed income investments were almost without exception positive in all fixed income asset classes, but in equities, strong returns focused particularly on the United States and, there, especially on shares of technology companies. In Europe, including Finland, stock price performance was weak in the fourth quarter, reflecting the continent's dependence on exports and traditional industries, which could be subject to possible U.S. import tariffs. There were no significant changes in valuations of other asset classes in the fourth quarter.

At the end of the year, open real estate funds became a topic of discussion in Finland. The property market, which has remained weak for two years, with falling prices and vacancy rates, and slowed transaction activity led to an increase in redemption requests and, consequently, to delays or temporary closures of redemption requests in several real estate funds. Of Evli's three open real estate funds, only Evli Rental Yield II had to delay redemptions. In the Evli Rental Yield and Evli Logistics Properties funds, redemptions have been carried out normally from the cash resources of the funds. Delaying redemptions or temporarily closing the fund is understandably unfortunate for the investor who requested redemption. However, doing so ensures equal treatment of all investors in the fund in a situation where the forced liquidation of the assets could lead to a particularly unfavorable outcome for the fund as a whole and all its unitholders.

In the fourth quarter, Evli Group's net revenue was almost at the same level as in the previous year, EUR 30.1 million (EUR 30.7 million). Net revenue for the full year increased by 17 percent from the previous year to EUR 126.8 million (EUR 108.7 million). Taking into account the incentive business transaction carried out in March 2024, comparable pro forma net revenue was 14 percent higher than in the previous year, rising to EUR 109.7 million (EUR 96.6 million). Commission income from traditional funds and advisory fees developed best, both of which grew clearly. Commission income from private equity funds and asset management was at the previous year's level. As a result of the slowdown in trading activity, brokerage returns fell. Income from the company's own balance sheet was lower than in the previous year.

The Group's operating profit for the fourth quarter decreased by four percent to EUR 10.5 million (EUR 10.9 million). Operating profit for the full year increased by 45 percent from the previous year to EUR 58.2 million (EUR 40.2 million). Correspondingly, comparable pro forma operating profit increased by 19 percent to EUR 43.3 million (EUR 36.4 million).

Evli's return on equity in 2024 was 34.4 percent (22.8%). The ratio of recurring revenue to operating costs was 132 percent (130%). The Group's solvency and liquidity were at an excellent level.

The Wealth Management and Investor Clients segment's net revenue increased by 24 percent in the fourth quarter to EUR 26.6 million (EUR 21.4 million). Due to positive market development and net subscriptions, customer assets under management increased to EUR 18.9 billion (EUR 18.0 billion). Evli Fund Management Company's mutual fund capital, including alternative investment products, totaled approximately EUR 13.4 billion (EUR 12.6 billion). Net subscriptions of traditional investment funds were in the fourth quarter approximately EUR -117 million and EUR 30 million for the full year. The largest net subscriptions during the quarter were directed at Evli's long-term fixed income funds, while subscriptions to equity funds and the Evli Euro Liquidity money market fund were negative. For the full year, the largest net subscriptions were raised by the funds Evli Europe Growth (EUR 170 million), Evli Nordic Corporate Bond (EUR 125 million) and Evli European High Yield (EUR 109 million).

The Advisory and Corporate Clients segment's net revenue decreased by 59 percent in the fourth quarter to EUR 2.0 million (EUR 4.9 million). The decrease in net revenue is a consequence of the corporate arrangement in which the incentive business became an associated company of the Group and is therefore no longer part of segment reporting. Advisory fees received from M&A activities increased compared to the corresponding period of the previous year. The unit's mandate base is good, and the M&A market is clearly livelier than in the previous year.

The key areas of Evli's strategy, international sales and alternative investment products, developed positively during the quarter. The net subscriptions of international clients amounted to around EUR 240 million and international clients accounted for 21 percent (19%) of Evli's total fund capital, including alternative investment products. Sales of alternative investment products totaled approximately EUR 115 million (EUR 33 million) during the quarter and about EUR 265 million (EUR 225 million) for the full year. During the quarter, the first closing of the new Evli Private Equity IV fund was made with a record amount of investment commitments of EUR 77 million.

In the area of responsibility, Evli prepared reporting according to the EU's standardized sustainability reporting (CSRD), the nature reporting according to the Taskforce on Nature-related Financial Disclosures framework, and the emissions evaluation of its own operations. Evli also worked as an active investor participant in the Nature Action 100 initiative, which engages with 100 systemically important companies regarding nature and biodiversity loss and encourages companies to take more ambitious action to reduce nature loss. Furthermore, Evli talked about its research on promoting children's rights and about utilizing AI in children's rights assessments in the Building Bridges conference in Switzerland.


EVLI PLC


Additional information:
Maunu Lehtimäki, CEO, Evli Plc, tel. [phone], [e-mail]
Juho Mikola, CFO, Evli Plc, tel. [phone], [e-mail]


Evli Plc

We see wealth as an engine to drive sustainable progress. We draw on our heritage, broad expertise, and Nordic values to grow and manage wealth for institutions, corporations and private persons in a responsible way.

We are the best fund house in the Nordics¹ and the leading asset manager in Finland² offering a broad range of services including mutual funds, asset management and capital markets services, alternative investment products, equity research as well as Corporate Finance services. Responsible investing is integrated in every investment decision and our expertise is widely acknowledged by our clients. Evli has Finland's best expertise in responsible investment³.

Evli Group employs around 270 professionals and Evli has approximately EUR 18.9 billion in client assets under management (net 12/2024). Evli Plc's B shares are listed on Nasdaq Helsinki Ltd. More information at www.evli.com.

¹ Morningstar Awards 2024 (c). Morningstar, Inc. All Rights Reserved. Awarded to Evli for the Best Fund House in Finland and Sweden. Lipper Fund Awards 2023, 2024, the category Small Fund Companies.
² Kantar Prospera External Asset Management Finland 2015, 2016, 2017, 2018, 2019, 2021, 2022, 2023, 2024. Kantar Prospera Private Banking 2019, 2020 Finland.
³ SFR Scandinavian Financial Research Institutional Investment Services Finland 2021, 2022. Kantar Prospera External Asset Management 2017, 2018, 2019, 2020, 2023, 2024 Finland.


Distribution: Nasdaq Helsinki, main media, www.evli.com