Evli Oyj: Evli Plc's Half Year Financial Report 1-6/2025

EVLI PLC HALF YEAR FINANCIAL REPORT, JULY 14, 2025 AT 2:00 PM (EET/EEST)

Evli Plc's Half Year Financial Report 1-6/2025

COMPARABLE OPERATING PROFIT AT PREVIOUS YEAR'S LEVEL - ASSETS UNDER MANAGEMENT TO A NEW RECORD

Highlights of the period

• The growth of assets under management continued steadily.
• Demand for fixed income funds boosted the sales of traditional mutual funds.
• The popularity of alternative funds remained strong despite the market situation. New net subscriptions and commitments totaled approximately EUR 187 million, including EUR 47 million in capital returns.
• Evli received significant recognition for its expertise, as institutional investors once again ranked Evli as the best institutional asset manager in Finland in Kantar Prospera's annual client survey.

Financial performance January-June 2025 (comparison period 1-6/2024)

• Net revenue was EUR 55.2 million (1-6/2024 net revenue, after eliminating the impact from the corporate transaction, was EUR 55.0 million and unadjusted net revenue EUR 72.2 million).
• Operating profit was EUR 22.5 million (1-6/2024 operating profit, after eliminating the impact from the corporate transaction, was EUR 22.2 million and unadjusted operating profit EUR 37.2 million).
• Operating result of the Wealth Management and Investor Clients segment increased to EUR 20.0 million (EUR 18.2 million).
• Operating result of the Advisory and Corporate Clients segment decreased to EUR 1.3 million (EUR 2.2 million).
• At the end of June, net assets under management amounted to EUR 19.7 billion (EUR 18.7 billion), including assets managed by associated companies. Assets under management excluding the associated companies amounted to EUR 17.2 billion (EUR 16.4 billion).
• Return on equity was 24.2 percent (37.9%).
• The ratio of recurring revenue to operating costs was 132 percent (125%).
• Earnings per share, fully diluted, were EUR 0.60 (EUR 1.10).

Financial performance April-June 2025 (comparison period 4-6/2024)

• Net revenue was EUR 27.5 million (EUR 29,3 million).
• Operating profit was EUR 11.1 million (EUR 12.1 million).
• Diluted earnings per share amounted to EUR 0.33 (EUR 0.31).
  
  

OUTLOOK FOR 2025

The first half of the year was turbulent in the investment markets, and the operating environment is expected to remain uncertain and difficult to predict for the rest of the year as well. The expansion of geopolitical risks and concerns about the sustainability of economic growth are increasing uncertainty in the markets. If investor confidence deteriorates further and market values decline, this will have a negative impact on Evli's fee income and the return on its own investment portfolio.

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€	4-6/2025	4-6/2024	1-6/2025	1-6/2024	1-12/2024
Income statement key figures
Net revenue, M€	27.5	29.3	55.2	72.2	126.8
Net revenue excluding the impact of mergers and acquisitions, M€	27.5	29.3	55.2	55.0	109.7
Operating profit/loss, M€	11.1	12.1	22.5	37.2	58.2
Operating profit margin, %	40.3	41.4	40.7	51.5	45.9
Profit/loss excl. non-recurring items related to mergers and acquisitions, M€	11.1	12.2	22.5	22.2	43.3
Profit/loss for the financial year, M€	8.5	9.8	17.4	32.9	49.9
Profitability key figures
Return on equity (ROE), %	-	-	24.2	37.9	34.4
Return on assets (ROA), %	-	-	8.7	13.8	14.1
Balance sheet key figures
Equity-to-assets ratio, %	-	-	30.7	33.3	42.4
Key figures per share
Earnings per Share (EPS), fully diluted, €	0.33	0.31	0.60	1.10	1.63
Dividend per share, €		-		-	1.18*
Equity per share, €	-	-	5.01	5.08	5.64
Share price at the end of the period, €	-	-	18.2	19.5	17.5
Personnel figures
Number of permanent employees	-	-	279	273	273
Number of temporary employees	-	-	35	39	32
Share of personnel worked in Finland, %	-	-	91.7	92.3	91.8
Other key figures
Expense ratio (operating costs to net revenue)	0.6	0.58	0.6	0.49	0.53
Recurring revenue ratio, %	-	-	132	125	132
Market value, M€	-	-	482.0	516.5	463.5

* Dividend approved by the Annual General Meeting 2025. The dividend has been paid on March 27, 2025.

CEO MAUNU LEHTIMÄKI

The beginning of the second quarter of 2025 was marked by the so-called reciprocal tariffs announced by the United States and the resulting severe shock to the capital markets. On April 2, 2025, President Donald Trump declared a national emergency in the United States due to the long-standing imbalance in foreign trade. To restore balance in trade, Trump announced a wide range of reciprocal import tariffs. According to the announcement, a minimum level of 10 percent would be imposed on all U.S. imports, on top of which there would be an additional country-specific tariff.

The new announced tariffs were immediately met with a strong market reaction, as a result of which, only a few days later, the United States announced that it would suspend the implementation of the tariffs for 90 days. During this pause, the country-specific additional tariffs would be negotiated separately with each country. By the end of the deadline, new tariff agreements had been reached with only a few countries, mainly with the United Kingdom and China.

The U.S. economy performed better than expected during the first half of the year, which led the U.S. stock markets to once again reach record levels. Investors appeared to be anticipating an easing of the trade war and that the final import tariffs would settle at a level tolerable for global trade and corporate earnings prospects. However, based on the import tariffs collected by the government as calculated from the June import statistics, this may turn out to be an overly optimistic assessment, as their annualized impact on corporate profits would be significant. The risk with Trump's tariff policy is therefore a weakening of corporate profitability or, if companies pass the tariffs directly onto end-product prices, an increase in consumer prices. Both are negative outcomes from the perspective of the economy and capital markets.

Due to tariff uncertainty and President Trump's "big, beautiful bill" legislative package, the United States Federal Reserve (Fed) has so far refrained from further interest rate cuts. The Fed announced that it wants to first see how the tariffs and the legislative package affect the behavior of businesses and consumers. In the longer term, the new legislative package is expected to increase U.S. government indebtedness, which has accelerated the decline of the dollar against other currencies.

Geopolitical as well as economic and trade policy uncertainty weakened economic growth in the euro area and slowed the recovery. According to forecasts, annual GDP growth this year would be 0.9 percent and would strengthen only slightly in the coming years. Inflation in the euro area is expected to continue slowing and to be close to the European Central Bank's two percent inflation target next year. This allowed for eight consecutive interest rate cuts to continue up until the June meeting, where the policy rate was set at two percent.

Stock prices rose in the second quarter across all major markets. In the United States, however, stock prices fell by 6.6 percent as measured by the S&P 500 index. In Europe, prices increased by 9.1 percent according to the STOXX 600 index. Emerging markets also saw price increases. In the fixed income markets, high-yield bonds with higher credit risk delivered the best returns, with a year-to-date return of 2.3 percent, while government bonds and investment grade bonds returned between 0.6 and 1.8 percent. The difficulties in the Finnish real estate market continued in the second quarter, characterized by subdued price development and low transaction volumes. However, with lower interest rates, expectations for a recovery in the real estate market were once again revived.

Evli Group's net revenue decreased by six percent year-on-year in the second quarter and amounted to EUR 27.5 million (EUR 29.3 million). The best-performing areas were traditional and private equity fund fee income, asset management income, and brokerage income, all of which increased compared to the previous year. In contrast, performance-based fees and advisory fees declined. Returns from the Group's own balance sheet were also lower than in the previous year.

The Group's operating profit for the second quarter decreased by eight percent and was EUR 11.1 million (EUR 12.1 million). The decline in operating profit was influenced by performance-based fees recognized in the comparison period, which were significantly higher than during the review period. Evli's return on equity for the first half of the year was 24.2 percent (37.9%), and the ratio of recurring revenue to operating expenses was 132 percent (125%). The Group's capital adequacy and liquidity were at an excellent level.

The Wealth Management and Investor Clients segment's net revenue decreased by one percent in the second quarter and was EUR 23.8 million (EUR 24.1 million). Assets under management increased to EUR 19.7 billion (EUR 18.7 billion) as a result of positive market development and net subscriptions. Evli Fund Management Company's mutual fund capital, including alternative investment products, was approximately EUR 14.3 billion (EUR 13.4 billion). Net subscriptions for traditional mutual funds in the second quarter were around EUR 145 million. The largest net subscriptions were directed to Evli's short- and long-term fixed income funds, while equity funds saw negative net subscriptions.

The Advisory and Corporate Clients segment's net revenue decreased by 16 percent in the second quarter and was EUR 1.6 million (EUR 1.9 million). In the first half of the year, advisory fees grew by one third and amounted to EUR 4.4 million (EUR 3.3 million). Revenue fluctuations can be significant from quarter to quarter and from year to year. The unit's order backlog is good, and the M&A market has been reasonably active in the early part of the year.

The key areas of Evli's strategy, international sales and alternative investment products, developed positively during the quarter. Net subscriptions from international clients were approximately EUR 70 million, and the share of international clients of Evli's total fund capital, including alternative investment products, was 21 percent (18%). Net subscriptions and investment commitments to alternative investment products during the quarter totaled approximately EUR 98 million, including EUR 31 million in capital returns (around EUR 82 million).

During the second quarter, Evli strengthened the responsibility of its investment activities by participating in 70 general meetings and directly engaging with two companies. The Evli Private Capital fund made a significant investment in the heat pump technology company Calefa, and Evli issued a green Autocall certificate. In addition, Evli started a collaboration with the Global Child Forum, an international children's rights organization. Global Child Forum will start utilizing an AI platform developed by Evli.

In 2025, we celebrate Evli's 40-year journey. Over the years, we have grown into a leading Nordic wealth manager and fund house, supporting our clients in building long-term success and directing capital where it creates lasting value. We are committed to building a prosperous tomorrow in the future as well.

EVLI PLC

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

Evli in brief

Evli is a Nordic wealth manager that helps institutions, companies, and individuals build a prosperous tomorrow. With 40 years of experience, we offer award-winning and result-driven wealth management, along with a broad range of investment solutions. Evli employs 300 professionals and manages EUR 19.7 billion in client assets (net as of 6/2025). Evli's B shares are listed on Nasdaq Helsinki.

For more information, visit evli.com.

Distribution: Nasdaq Helsinki, main media, evli.com