PATRIZIA SE (PAT) Earnings Call Transcript

Hi, and welcome to our financial results presentation for the first half of 2021. My name is Karim Bohn, and I'm the CFO of PATRIZIA. For those of you watching us for the first time, PATRIZIA is a leading partner for global real assets and currently manages more than EUR 48 billion of assets under management for our diverse international client base, ranging from international pension funds and insurance companies to domestic retail investors. We are active in the long-term structural growth market, driven by lower-for-longer interest rates, increased allocation to real assets and ongoing industry consolidation. I'm very pleased to guide you through our financial results for the first half of 2021. My 3 messages for you today are as follows: First, we are well on track to deliver on our financial year 2021 guidance. With an operating income of EUR 57 million in the first half of 2021, we are on our way to deliver on our full year guidance range of EUR 100 million to EUR 145 million for this year. What makes us optimistic is a well-filled transaction pipeline for our global clients for the remaining 6 months of 2021. At the same time, we see growing vaccination rates around the globe. We see momentum of real asset transaction markets coming back, and the structural demand for investments in real assets is stronger than ever. We are confident to reach our goal to sign a transaction volume of between EUR 6 billion and EUR 9 billion in 2021. This should lead to an organic increase in assets under management to between EUR 50 billion and EUR 53 billion until year-end. Second, the quality of our earnings continues to increase, and we show strong organic growth. At first glance, our operating income is down 22% compared to last year. However, this can be explained by timing differences in the realization of performance fees between the first and the second half of the business year but especially much higher net sales revenues and co-investment income in the comparable period last year. The driver for this year's financial results was organic growth in recurring management and transaction fees. Management fees grew over 8%, and transaction fees grew almost 4%, even in an adverse economic environment. During the first half year of the year 2021, we signed transactions with EUR 2.1 billion for our global client base, an increase of 30% to last year. Through our pan-European network of real estate experts, we were able to source attractive deals for our clients. This is a remarkable team success in times of temporary lockdowns throughout Europe. At the same time, we raised EUR 800 million of fresh equity from our clients for investments in European and global real assets. Assets under management continues to grow to over EUR 48 billion, which confirms the high quality of the assets we manage for our clients and the successful investment strategies we run in a constantly changing market environment. Third message, we have a rock-solid balance sheet. Both the net equity ratio of above 78% and our available liquidity of over EUR 500 million are testimony to our strong positioning. This gives us great flexibility to continue our growth path. On the one hand, it allows us further organic growth through investments in technology and sustainability. On the other hand, we are a strong player in a consolidating industry. We keep screening attractive M&A opportunities fully in line with our midterm strategy. We are also continuing our share buyback program to build further M&A currency and to align the interest of future partners with a long-term strategy of PATRIZIA. Last but not least, you might have seen that our annual report and quarterly financial publications are labeled with PATRIZIA as a forward-thinking partner. What does this mean? We believe it is the power to create a better tomorrow, ranging from responsible investments, performance-driven investment strategies, to making a positive impact on society through a combination of local knowledge, people and data intelligence. Let me invite you to our investment strategy and research team's new website. Just click on the link for further background and market insights. Thank you so much for your attention. We hope to speak to you on one of our next virtual investor road shows or conferences. Stay healthy.