Release Date: August 14, 2024
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Patrizia AG (WBO:P1Z, Financial) has set an ambitious vision for 2030, aiming to become a EUR100 billion AUM manager, focusing on smart real asset solutions.
- The company has identified key growth areas, including living, value-add real estate, European infrastructure, and smart cities, which are expected to drive future growth.
- Patrizia AG (WBO:P1Z) plans to raise EUR30 billion of equity across its five key investment strategies over the next five years.
- The company is focusing on enhancing earnings quality by transitioning to a sustainable recurring fee-earning business model.
- Patrizia AG (WBO:P1Z) has a strong balance sheet and plans to leverage its existing expertise and capabilities without relying on M&A for growth.
Negative Points
- AUM decreased by 2% year-to-date and 3% compared to the previous year, driven by valuation pressures.
- Management fees are down 4.2% year-on-year, primarily due to lower AUM valuation and reduced development service fees.
- Performance fees have decreased by almost 40% year-on-year, contributing to a drop in EBITDA.
- The company is currently experiencing revenue pressure, with overall revenues down 10% compared to last year.
- Patrizia AG (WBO:P1Z) is facing challenges in achieving profitability, with a reliance on one-off items and consolidation effects impacting EBITDA.
Q & A Highlights
Q: What would be the adjusted EBITDA for the first half without one-off effects?
A: Martin Praum, CFO, explained that the first half EBITDA of EUR19.2 million includes a EUR4 million one-off item. Without this, the adjusted EBITDA would be in the EUR20 million-plus range.
Q: Are there any expected tax effects or further one-off impacts for the second half?
A: Martin Praum noted that tax effects depend on the profitability of various subsidiaries, with some being profitable and others not. The company expects a high tax rate for the year, and no significant reduction is anticipated.
Q: Will Patrizia continue using its balance sheet for warehousing and seeding investments?
A: Martin Praum confirmed that Patrizia will continue using its balance sheet to enable products. Some consolidated assets are in a start-up phase, creating losses that impact the balance sheet and P&L. These losses are expected to turn into profits once the funds are deconsolidated.
Q: Why is the North American market excluded from the strategic growth targets?
A: Asoka Woehrmann, CEO, stated that Patrizia has not been active in the US real estate market and does not plan to enter it organically. Instead, the company will tap the market through external client channels and placing agents for its infrastructure strategy.
Q: Why is M&A explicitly excluded from the growth strategy?
A: Asoka Woehrmann explained that Patrizia aims to consolidate its platform and focus on organic growth in expertise-based areas. While M&A is not ruled out entirely, the current strategy emphasizes organic growth to improve profitability and shareholder value.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
