EVLI BANK PLC STOCK EXCHANGE RELEASE APRIL 26, 2019, AT 1.00 PM
CAUTIOUS MARKET SENTIMENT REFLECTED IN THE FIRST QUARTER RESULT
* The Wealth Management and Investor Clients segment's operating profit
declined and was EUR 2.8 million (1-3/2018: EUR 4.3 million)
* The Advisory and Corporate Clients segment's operating profit of EUR 0.5
million remained at same level as in the comparison period (EUR 0.5 million)
* The return from own balance sheet items developed favourably and totaled EUR
1.1 million (EUR -0.1 million), which improved the operating profit in the
Group Operations segment
* According to our strategy, Evli's assets under management in alternative
investment products increased during the review period and exceeded EUR 400
million (about EUR 100 million).
January-March 2019
* Net revenue was EUR 16.8 million (EUR 17.0 million)
* Operating profit was EUR 4.3 million (EUR 5.2 million)
* Profit for the financial year was EUR 3.5 million (EUR 5.9 million)
* Evli's diluted earnings per share were EUR 0.13 (EUR 0.24) and return on
equity was 19.2 percent (34.1%)
* Net assets under management grew and totaled EUR 11.9 billion (EUR 11.4
billion) at the end of March
* Proportion of recurring revenue to operating costs was 110 percent (120%).
Outlook for 2019
The risks associated with the general trend in the equity and fixed income
markets are high due to the prevailing uncertainty on the markets. A possible
continued decline in equity prices or a reduction in investors' risk appetite
would have a negative impact on the company's profit performance. Evli Group's
assets under management have grown substantially in recent years, which softens
the result-impact of any reversal of the market. Sales of alternative investment
products, in particular, have brought new, stable revenue. Evli has initiated a
series of internal, strategy-based actions and cost savings, leading to
improvements in the company's cost effectiveness.
There has been positive development in the demand for advisory services, and its
outlook for 2019 is stable. Own balance sheet investments share of Evli's
business decreased during 2018. Nevertheless, it may have a significant impact
on the company's result performance. In the advisory business and in own
investment activities, fluctuations in quarterly and annual returns are
possible. Customer's demand for Evli's products and services has continued to be
good, which has also led to a systematic increase in lending.
Because of profitable and stable development, we estimate that the result for
the 2019 financial year, will be clearly positive.
Key Figures
1-3/2019 1-3/2018 1-12/2018
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Income statement key figures
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Operating income, M€ 16.8 17.0 68.5
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Operating profit/loss, M€ 4.3 5.2 18.9
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Operating profit margin, % 25.7 30.8 27.6
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Profit/loss for the financial year, M€ 3.5 5.9 17.3
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Profitability key figures
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Return on equity (ROE), % 19.2 34.1 23.0
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Return on assets (ROA), % 1.4 2.3 1.9
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Balance sheet key figures
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Equity-to-assets ratio, % 5.7 6.1 9.5
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Group capital adequacy ratio, % 15.8 15.4 16.2
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Key figures per share
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Earnings per Share (EPS), fully diluted, € 0.13 0.24 0.68
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Comprehensive Earnings per Share (EPS), fully
diluted, € 0.13 0.23 0.67
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Dividend per share, €* - - 0.61
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Equity per share, € 2.79 2.80 3.27
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Share price at the end of the period, € 7.70 9.48 7.28
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Other key figures
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Expense ratio (operating costs to net revenue) 0.74 0.69 0.72
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Recurring revenue ratio, % 110 120 113
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Personnel at the end of the period 256 259 254
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Market value, M€ 184.0 224.6 172.5
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*Dividend for 2018 approved by the Annual General Meeting. The dividend was paid
on March 21, 2019.
Maunu Lehtimäki, CEO
After the steep decline in share prices at the end of last year the market
environment calmed down and equity and corporate bond prices recovered. Despite
this, investor activity and sentiment were cautious at the beginning of the year
and this was reflected in Evli's first quarter financial performance. During the
review period, our net revenue declined 1 percent, net commission income by 8
percent and operating profit by 18 percent year on year. A decline in fund and
brokerage fees, in particular, had a negative effect on performance. However,
the balance sheet returns developed exceptionally well and was EUR 1.1 million
in the first quarter.
The core areas in Evli's strategy performed according to expectations during the
first quarter. In line with the strategy we focused on developing alternative
investment products, on international fund sales and on projects to improve
client experience and digitalization.
In the area of alternative investment products, we launched the new Evli Private
Equity II Ky fund that invests in private equity funds in the first quarter and
raised around EUR 60 million for our real estate equity funds. The Evli
Healthcare I fund, which invests in care facilities, reached its target size of
EUR 200 million and was closed to new subscriptions. The total capital in the
alternative investment products, including investment commitments, was around
EUR 400 million at the end of the review period compared with around EUR 100
million a year earlier.
International fund sales grew by around EUR 100 million during the first
quarter, the majority of the growth came from corporate bond funds. As was the
case in the previous year, foreign investors were interested in the Nordic
Corporate Bond fund and the fund's capital increased to almost EUR 700 million.
Overall, our international fund capital grew to EUR 2.1 billion compared with
EUR 1.7 billion a year earlier. Evli's major markets outside Finland are Sweden
and the other Nordic countries and large countries in Central Europe,
particularly Germany, France and Spain.
In Finland, the sales performance of fund products and discretionary asset
management services was varied. The sale of asset management services to private
and institutional clients increased according to plan. However, fund sales were
negative during the first quarter on account of a couple of large redemptions.
Evli Fund Management Company's net subscriptions to traditional mutual funds
were around EUR 100 million negative, but as a result of the recovery of share
prices our fund capital increased and exceeded that of the end of last year at
EUR 8.1 billion. Evli is the fourth largest fund management company in Finland
and its market share was 7.1 percent at the end of March. Our client assets
under management grew to EUR 11.9 billion.
In the Advisory and Corporate Clients segment the Corporate Finance business
area performed in line with expectations and invoicing was at the level of the
previous year. The company's mandate base is stable so the outlook for the
coming quarters is also positive. The incentive system management business grew
as it has in previous years due to new clients and existing clients extending
their current incentive systems.
We will continue our resolute work to develop our strategic focus areas in order
to reach our target of achieving an even broader selection of funds and more
international clientele. By developing new alternative investment products, we
want to meet client demand even better and strengthen the average margin of our
fund products. We will also continue our work to create a unique client
experience and to boost the efficiency of our investment processes. We have
invested in the development of our information systems for a long time now.
During 2019 our target is to launch new digital services and update our back-
office systems. We believe this work will have a positive impact on client
satisfaction and our profitability.
EVLI BANK PLC
For additional information, please contact:
Maunu Lehtimäki, CEO, Evli Bank Plc, tel. +358 50 553 3000,
maunu.lehtimaki@evli.com
Juho Mikola, CFO, Evli Bank Plc, tel. +358 40 717 8888, juho.mikola@evli.com
Evli Bank Plc
Evli is a bank specialized in investments that helps institutions, corporations
and private persons increase their wealth. The product and service offering
includes mutual funds, asset management and capital markets services,
alternative investment products, equity research, administration of incentive
programs and Corporate Finance services. The company also offers banking
services that support clients' investment operations. Evli is the highest ranked
and most used institutional asset manager in Finland*.
Evli has a total of EUR 11.9 billion in client assets under management (net
3/2019). The Evli Group's equity capital totals EUR 66.6 million and its BIS
capital adequacy ratio is 15.8 percent (March 31, 2019). The company has more
than 250 employees. Evli Bank Plc's B shares are listed on Nasdaq Helsinki Ltd.
*KANTAR SIFO Prospera External Asset Management Finland 2015, 2016, 2017, 2018,
SFR Scandinavian Financial Research Institutional Investment Services, Finland
2015, 2016 ,2017, 2018.
Distribution:
Nasdaq Helsinki Ltd, main media, www.evli.com
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