Azimut Holding — Interim / Quarterly Report 2017

Nov 9, 2017

Azimut Holding S.p.A. 9M 2017 Results

Short "termism" is institutionally banned

Milan, 9 November 2017

9M 2017 Results Table of contents

• Asset Management

• Distribution

  • 9M 2017 Financials
  • Summary & Outlook
    • About Azimut

• Asset Management

• Distribution
  • 9M 2017 Financials
  • Summary & Outlook
    • About Azimut

Short "termism" is institutionally banned

Source: Company data

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Strong revenue increase with stable margins and an effective cost discipline…

Short "termism" is institutionally banned

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… leading to a significant step up in Net Profit, including and excluding Variable Fees

Short "termism" is institutionally banned

Annual. Net Profit / AUM is calculated as annualized 9M Net Profit divided by average Managed AUM in the 9M

Evolution of Assets under Management

Close to our €50bn target set for 2019; international operations materially above Business Plan targets

• Total Assets very close to our business plan target of €50bn by 2019
• Net Inflows in the first 10 months remain at the highest levels (versus the record 2015 and 2016)
• Consistent and sustainable flows thanks to our geographic diversification and organic contribution of the overseas business (€2.3bn YtD)
• International operations now reached 24% of Total Assets at October 2017
• Solid performance at +2.9% in 2017 YtD
• Assets Under Management by portfolio:

Short "termism" is institutionally banned

-20%

-15%

-10%

-05%

00%

05%

Asset Management

• Distribution
• 9M 2017 Financials
  • Summary & Outlook
  • About Azimut

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Azimut Net Weighted Average Performance

Net performance YtD at almost +3%; good recovery since the summer sets us above the May 2017 peak

Azimut funds breakdown (1/2)

Despite improvements, Equity exposure still looking to be increased

Azimut funds breakdown (2/2)

Good geographical diversification across asset classes

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Global Team project and product review

Leverage on our global footprint to deliver a 24h service to customers

… refocus, rationalize and deliver

Focus on Performance fees

No change is envisaged in the short term, but in any case a new methodology would be fully manageable

• Azimut current performance fee mechanism in Luxembourg is fully compliant

• If and when a new regulation should be released, the following could be the key parameters that the Group might be considering:

• 9M 2017 Highlights

• Asset Management

Distribution

• 9M 2017 Financials
• Summary & Outlook
  • About Azimut

Distribution – Azimut Group vs. Avg. Italian Industry

Azimut Group total Net New Money as % of AuM: consistently above the average Italian industry levels

Note*: 2017 YtD numbers are annualised. Assogestioni are Jan-Sept, AZM is Jan-Oct. Source: Company out of Assogestioni monthly figures. Assogestioni excludes foreign operations.

Breakdown of 2017 YtD Net Inflows

Italy remains the core market but the business is well diversified with material contributions from abroad

Recruitment – Case study Italy

• 9M 2017 Highlights
• Asset Management
  • Distribution

9M 2017 Financials

• Summary & Outlook
• About Azimut

Consolidated reclassified Income Statement IAS/IFRS Compliant

Income Statement

€/000	9M 2017	9M 2016	3Q 2017	3Q 2016
commission income Entry	8 024	5 848	1 792	2 548
fees Recurring	448 510	378 849	149 442	138 326
Variable fees	93 687	80 381	12 069	34 064
Other income	6 320	513 5	842 1	1 545
Insurance revenues	35 252	28 315	11 246	9 935
Total Revenues	591 793	498 906	176 391	186 418
Distribution costs	(250 913)	(240 009)	(81 256)	(79 188)
Personnell and SG&A	(130 825)	(112 717)	(42 557)	(39 643)
/provisions Depreciation , amort	(11 672)	(9 285)	(4 037)	(3 461)
Operating costs	(393 410)	(362 011)	(127 850)	(122 292)
Operating Profits	198 383	136 895	48 541	64 126
Interest income	(14 895)	580	(5 455)	266
Net operating costs non	(3 900)	(3 859)	(1 644)	(1 964)
Interest expenses	(7 769)	(8 270)	(1 878)	(2 765)
Profit Before Tax	819 171	125 346	39 564	59 663
Income tax	(13 770)	(12 778)	(3 420)	(3 145)
Deferred tax	4 780	11 227	1 393	(1 082)
Profit Net	162 829	123 795	37 537	55 436
Minorities	6 633	2 497	2 500	1 904
Consolidated Profit Net	156 196	121 298	35 037	53 532
Consolidated Profit (excluding one-off*) Net	161 495	121 298	35 037	53 532

Net Financial Position IAS/IFRS Compliant

Net Financial Position

€/000	30/09/2017	31/12/2016	30/09/2016
due banks: Amounts to	(10 000) ,	(20 051) ,	(20 000) ,
Senior Loan	(10 000) ,	(20 051) ,	(20 000) ,
issued: Securities	(351 964) ,	(226 522) ,	(226 437) ,
Bond Azimut 17-22 Senior 2 0%	(351 964) ,	-	-
convertible bond Azimut 13 20 2 125% -	-	(226 522) ,	(223 723) ,
TOTAL DEBT	(361 964) ,	(246 573) ,	(246 437) ,
CASH AND CASH EQUIVALENTS	465 678 ,	438 832 ,	495 714 ,
NET FINANCIAL POSITION	103 714 ,	192 259 ,	249 277 ,

• Treasury shares (not booked within the NFP) stand at 8.4% as of 30/09/2017
• The NFP at the end of September includes mainly the following variations :
• €133mln ordinary dividends paid in May 2017
• €50mln share buyback purchases
• €10mln Senior loan partial repayment (June 30, 2017)

• Repayment of the "Azimut 13-20 convertible bond 2.125%" fully tendered on 05/04/2017 @ ca. 110

• 9M 2017 Highlights

• Asset Management
  • Distribution
  • 9M 2017 Financials

Summary & Outlook

About Azimut

Summary & Outlook

Priorities set straight: growth in Italy and overseas, cost discipline and focus on long term value creation

• 9M results were strong, despite a weaker 3Q with limited upside from Variable fees
• 3 rd consecutive quarter of cost discipline (below the peak of 4Q16). More efficiencies still to come
• Leveraging on global talent both on asset management side (Global Team, Global Trading Desk) as well as on distribution (organic Net Inflows from abroad have been consistent YtD)

Regulatory risk on variable fees is under control

• When asked, the Group will move quickly to adapt to any new methodology making sure the bottom line is as little impacted as possible (we are all long term shareholders too)
• More compact than ever: €12mln already invested by Azimut Group employees on Azimut stock in the last 16 months, of which €1.8mln from the Chairman alone

2018 will focus on:

• Additional delivery on cost exercises and Operating Leverage
• More granularity on international operations (any European slowdown can be mitigated with solid presence worldwide)
• Effectiveness of Global Team and Global trading desk
• Key initiatives on a more equity oriented asset mix, leading to potential increase in average margins

One step ahead: Azimut initiatives in context

Undisputed leader in corporate and product innovation thanks to an effective and unique business model

Update on 2015-2019 business plan: on track

A notch below our 2019 AuM Target, Net Profit figures YtD are encouraging, well on track on the rest

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• 9M 2017 Highlights
• Asset Management
  • Distribution
  • 9M 2017 Financials
    • Summary & Outlook
    • About Azimut

Azimut Group Structure

remaining 49% as of 31/12/2017. Controls 100% of CGM Italia SGR. Note (5): 49% owned through Azimut Partecipazioni, fully owned by Azimut Holding. Note (6): controls SDB

Financial Solutions; the acquisition is subject to regulatory approval by FINMA and closing is expected in Jan. 2018. Note (7): still to be completed

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Azimut Group business overview

Azimut international presence

Azimut overseas business reached 24% of Total Assets at Oct-2017

International expansion – Turkey

2011: Start of a building block leading us to become the largest independent player in Turkey

• In 2011 Azimut entered the Turkish market through AZ International Holdings S.A. ("AIH") with the aim of growing on both the production and distribution sides of the business
• In October 2014 Azimut acquired 70% of Notus, a Turkish independent asset management company. Notus manages discretionary portfolio mandates for individual and corporate clients ensuring diversified and efficient asset allocation plans across local and international markets.
• In December 2014 Azimut acquired 100% of AZ Global (renamed Azimut Portfoy) to continue its growth plans in Turkey
• In January 2015 Azimut reached an agreement to acquire 70% of Bosphorus Capital (later merged into Azimut Portfoy).
• In September/October 2015 Azimut announced the reorganization of it's Turkish platform to extract stronger commercial synergies and operational efficiencies, concentrating it's business in Azimut Portfoy
• The commercial and industrial integration within Azimut Portföy creates the Turkish largest independent player with a 5% market share

International expansion – Switzerland

2011: Start of a building block to create an independent asset management player

• AZ Swiss & Partners was established in 2012 and, on January 2016 following the acquisition of Augustum Opus, has received the authorization from the FINMA, the Swiss Financial Market Supervisory Authority, to operate under a LICol license.
• In June 2016 AZ Swiss acquired the business of Sogenel Capital Holding S.A., which will form a new division within AZ Swiss to be headed by Sogenel's current founder and CEO.
• In June 2017, AZ Swiss acquired the entire equity capital of SDB Financial Solutions S.A. ("SDB"), which will operate as a subsidiary of AZ Swiss and will continue to be headed by SDB's current management team. With this second acquisition and its organic growth strategy AZ Swiss has achieved total AuM of CHF 2bn (€ 1.9bn) as of June 2017.
• With these acquisitions AZ Swiss is starting to deploy its strategy based on: (i) the management of mutual funds (both UCITS and FIA) and discretionary portfolios; (ii) the distribution of funds to qualified investors (HNW and institutional clients); (iii) the consolidation of independent asset managers and private bankers in Switzerland to grow an independent wealth management platform.

International expansion – Brazil

2013: Azimut enters LATAM with a JV in the Brazilian asset management market

• On 10 October 2013 Azimut acquired 50% of Legan (later merged into AZ Quest), an asset management company with excellent track record.
• Subsequently, on 13 February 2014, Azimut completed the acquisition of 50% of AZ FI Holding (later increased to 100% and renamed Azimut Brasil Wealth Management Holding).
• Azimut WM Holding controls M&O (financial services through advisory on asset allocation, funds selection and financial education) and FuturaInvest (dedicated to asset management services through funds of funds and managed accounts).
• In February 2015 Azimut completed the acquisition of a 50% stake in LFI (later renamed Azimut Brasil WM), focused on Wealth Management
• In April 2015 Azimut announced the acquisition of a 60% stake in award-winning Quest Investimentos, managing mostly equity products and employs one of Brazil's best-performing fund managers.

International expansion – Mexico

2014: Azimut expands LATAM with a JV in the Mexican market

• On 17th June 2014 Azimut through its subsidiary AZ International Holdings S.A. ("AIH") acquired 82.14% of Profie S.A. (renamed AZ Mèxico) a Mexican holding company controlling the entire equity capital of Más Fondos S.A. ("Más Fondos"), Mexico's largest pure independent asset management distribution company.
• Through this partnership, Azimut and Más Fondos will cooperate to develop an integrated platform centred on a proprietary financial advisors network working in an openarchitecture environment to exploit the growth potential of the Mexican market.
• In 2015 Azimut increased its stake in Màs Fondos (to 94%), reaffirming commitment to build a fully integrated platform
• On the 2 nd January 2017 Mas Fondos started fund management operations in Mexico with the launch of two local products and an additional one being launched in the 2H 2017. The launch of the first two funds is allowing us to continue building an integrated platform and increase overall profitability. At the 30th of June about 25% of Mas Fondos asset are managed on the two funds.

International expansion – Iran

2017: first global financial institution acquiring a stake in a company providing financial services in Iran

• Azimut signed an agreement to acquire 20% of Mofid Entekhab ("Entekhab"), the largest independent asset management company of Iran, which is part of the Mofid Group, the largest brokerage firm and financial advisory in the Country.
• Entekhab is the carve out of the asset management business of Mofid Securities with AUM of USD 89 million at the end of September 2017 distributed between 6 mutual funds and managed accounts. It has an 8% market share for equity funds and is the largest independent asset management company in Iran.
• Iran is one of a kind opportunity for global asset management companies being underpinned by strong demographics, high GDP-PPP adjusted per capita, low capitalization of the economy, structural limitations for local banks to raise capital through local deposits and high entry barrier for foreign investors.
• Azimut and Mofid will also participate pro rata to a capital increase to finance the business plan to develop a range of investment strategies in local asset classes, to build a local trained sales force providing financial advisory and wealth management services and launch offshore funds for foreign investors.
• The parties have ensured that the partnership will be compliant with economic sanctions requirements.

International expansion – China / HK

2010: Definition of a frame agreement with local entrepreneurs/partners

• Azimut's partnership philosophy has been implemented also in China by involving local partners with an expertise in the local asset management industry.
• An Zhong (AZ) Investment Management in Hong Kong is the Holding company controlling two operating subsidiaries. Azimut, through the Holding company, oversees them and has relocated three Senior PMs from Luxembourg. Today Azimut manages one of the largest RMB fund in the world
• Through the operating subsidiaries Azimut aims at creating a regional hub and developing local production and distribution of asset management products and investment advisory services with a focus on qualified investors.

International expansion – Taiwan

2013: Azimut widens its Asian presence with a JV in the distribution business in Taiwan

• On 27th June 2013 AZ International Holdings S.A. ("AIH") and An Ping Investment (later renamed AZ Sinopro Financial Planning), a Taiwanese holding controlling the entire capital of Sinopro Financial Planning Taiwan Limited ("Sinopro"), signed an investment and shareholders agreement to start a partnership in the distribution of asset management products in Taiwan.
• In particular, Azimut purchased 51% of An Ping Investment's capital from its existing shareholders for an investment of ca. € 3mn to finance the business development activities, and has also call/put option rights.
• The partnership increases Azimut presence in the Asian market together with a strong and dedicated financial planning and distribution partner, which will contribute in developing the financial knowledge and will respond to planning and financial consulting needs of Taiwanese investors

International expansion – Singapore

2013: Azimut signs a JV with a Singapore based asset management company

• On 2 nd October 2013 Azimut and Athenaeum Ltd, a Singapore independent asset management company, have signed an investment and shareholders agreement to start a partnership in the local market.
• Azimut initially purchased 55% of Athenaeum's corporate capital through a capital increase, which was employed to finance the business plan.
• Through this partnership, Azimut and Athenaeum will aim at maximising the potential of Athenaeum's existing funds and develop an internal sales structure to service institutional and HNWI investors in South East Asia. In addition, the partners will work to leverage these asset management competences via Azimut international presence and clients.
• In January 2016 Azimut acquired the remaining 45% to extract stronger commercial synergies and operational efficiencies abroad.
• The local partners agreed to continue working together over the long term to grow the business in Singapore and focus on managing the local products as well as cultivating relationships with family offices and HNWI in the region.

International expansion – Australia

2014: Azimut signs an agreement to enter the Australian asset management market

• On November 3 rd , 2014, Azimut acquired a 93% stake in Next Generation Advisory ("NGA"), an Australian based newco established with the purpose of consolidating financial planning businesses providing asset allocation and advisory services to local retail, HNW and institutional clients.
• The business plan targets to reach AUD 7.6bn of consolidated AuM (ca. €5.3bn) in the next 12 years
• In the first year of operations the plan is well ahead of schedule
• The Australian wealth management industry is the largest market in the Asia Pacific region and the 4th largest in the world. Australia has one of the world's leading pension system (Superannuation), which has underpinned the growth of the Australian asset management industry.
• In August 2015, a majority stake (76%, later increased to 100%) was acquired in Ironbark Funds Management (RE) Ltd (renamed AZ Sestante), a company operating as trustee and manager of Australian mutual funds, necessary to launch and offer funds locally.

International expansion – Monaco

51% CGM (Asset management) CGM Italia SIM 100% AZ International Holdings (2010)

2011: Agreement for a 51% stake acquisition

• On 10th May 2011 Azimut through its subsidiary AZ International Holdings S.A. ("AIH") signed a binding frame agreement with CGM (Compagnie de Gestion privée Monegasque); the acquisition of a 51% stake has been completed on 30th December 2011.
• The partnership added new competences to Azimut Group targeting UHNWI also thanks to CGM's operating subsidiary in Italy.
• Current CGM management entered Azimut's shareholders' agreement.
• In 2016, Azimut reached an agreement to acquire the remaining 49% as of 31/12/2017

Azimut pre-IPO history

20+ years of growth and evolution

Azimut post-IPO development

A dynamic Group at the verge of product and corporate innovation

Azimut's shareholder base

Timone Fiduciaria represents the shares of around 1,400 individual shareholders (Consulenti, employees, managers working for Azimut), tied up in a strong shareholders' agreement.

Through a voluntary Employee Purchase Plan, almost 1,200 participants of the shareholders agreement are buying Azimut shares on a monthly basis up until 2021, including the Chairman with €100k per month.

Total shares issued: 143.3m Timone: a strong agreement for l/t commitment

Participants	Advisors, employees and management organised in separate areas
Duration	3 years automatically renewed unless the absolute majority of the voting rights refuses. Already renewed in 2013 and 2016
	Part of each participant's following a table based Agreement. The residual but subject to pre-emption participants. The price for rolling average.	shares are locked on the tenure within the can be sold at any time right amongst other this transfer is a 30 days
Share lock-up	Years matured*	% of locked shares
	< 3	75%
	3 - 6	66%
	6 - 9	33%
	> 9	25%

Governance

A committee is responsible for managing and monitoring the participants' obligations and rights under the agreement

Product innovation: Azimut success story

Innovation has and will be one of Azimuts' key success factors

• Despite volatile market environments, product innovation helped to defend the client base and attract net new money from existing and new customers
• Products include both strategic and tactical solutions launched in different cycles

% of AuM divided by vintage year

Azimut and Entrepreneurs

While remaining focused on the core business of asset management, Azimut is enlarging its scope of activities by supporting entrepreneurs and fostering the "Sistema Italia"

Main growth trend - Clients, FAs and AuM

Continuous growth throughout the decade, notwithstanding turbolent years

Net Inflows (€bn)

2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

109 120 135 ^{148 145 149 154 156 160 163}

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016

Financial Advisors

101

1576

1637

2009-2017 A beta stock with a strong P&L

Solid financial performance (€mln)

Source: Company data as of 30/09/2017 45 Note: 4Q14 and 2Q17 Net Profit excludes one-offs

Contacts & Corporate calendar

IR & Corporate Communications Contacts Upcoming events

Vittorio Pracca

Head of Investor Relations & Corporate Communications Tel. +39.02.8898.5853 Email: investor.relations@azimut.it Website: www.azimut-group.com

• No more scheduled events for 2017
• Next year's corporate calendar will be announced in January 2018

Disclaimer – Safe harbour statement

This document has been issued by Azimut Holding just for information purposes. No reliance may be placed for any purposes whatsoever on the information contained in this document, or on its completeness, accuracy or fairness. Although care has been taken to ensure that the facts stated in this presentation are accurate, and that the opinions expressed are fair and reasonable, the contents of this presentation have not been verified by independent auditors, or other third parties.

Accordingly, no representation or warranty, express or implied, is made or given by or on behalf of the Company, or any of its members, directors, officers or employees or any other person. The Company and its subsidiaries, or any of their respective members, directors, officers or employees nor any other person acting on behalf of the Company accepts any liability whatsoever for any loss howsoever arising from any use of this presentation or its contents or otherwise arising in connection therewith.

The information in this document might include forward-looking statements which are based on current expectations and projections about future events. These forward-looking statements are subject to risks, uncertainties and assumptions about the Company and its subsidiaries and investments, including, among other things, the development of its business, trends in its operating industry, and future capital expenditures and acquisitions. In light of these risks, uncertainties and assumptions, the events in the forward-looking statements may not occur. No one undertakes to publicly update or revise any such forward-looking statement.

The information and opinions contained in this presentation are provided as at the date of this presentation and are subject to change without notice.

Any forward-looking information contained herein has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, actual results may vary. This document does not constitute an offer or invitation to purchase or subscribe for any shares and/or investment products mentioned and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever.

The information herein may not be reproduced or published in whole or in part, for any purpose, or distributed to any other party. By accepting this document you agree to be bound by the foregoing limitations.

The Officer in charge of the preparation of Azimut Holding SpA accounting documents, Alessandro Zambotti (CFO), declares according to art.154bis co.2 D.lgs. 58/98 of the Consolidated Law of Finance, that the financial information herein included, corresponds to the records in the company's books.

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