Catella: Strong AUM growth despite tough market - ABG

Q2 EBIT of SEK 90m, 10% below ABGSC forecast
AUM up 6% q-o-q, 2% above with our expectation
Tough comps and a miss on EBIT - stock slightly down today

Q2 EBIT of SEK 90m, 10% below ABGSC forecast
Catella reported an EBIT of SEK 90m (386m) in Q2’23, which was 10% below ABGSC estimate of SEK 100m. Looking at the largest segment the operating profit within Investment management came in at SEK 111m in Q2, 2% above our forecast of SEK 109m. Within Corporate Finance, the operating profit came in somewhat below ABGSC's expectation, at SEK -22m (26m), ABGSC expected SEK -16m, where the weak result was driven by the muted transaction market. The company highlight that they expect the transaction market to improve some in H2'23. Principal investment contributed with SEK 5m to the group operating profit in the second quarter, while ABGSC expected SEK 12m.

Q2 showed strong AUM growth, up 6% q-o-q
Catella reported net sales of SEK 483m (641m), which was 1% above ABGSC. EBITDA came in at SEK 108m, 9% below ABGSC. The AUM came in at SEK 149.3bn, up 6% q-o-q (SEK 8.8bn), which was 2% above ABGSC forecast, which expected an AUM of SEK 146.1bn. The increase in AUM is driven by completed development projects as well as FX tailwind.

Tough comps and a miss on EBIT - stock slightly down today
We expect consensus to raise their underlying 2024-‘25e EBIT ~1-3% driven by the strong AUM growth. However, given the Q2 earnings miss on EBIT (-10%) combined with the tough comps, we expect the share to come down a few percentage points today, despite the stronger-than-expected AUM expansion in the quarter. Conf. Call at 10.00 CET.

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Länk till analysen i sin helhet: https://cr.abgsc.com/foretag/catella/Equity-research/2023/8/catella---strong-aum-growth-despite-tough-market/