Equita Group — Interim / Quarterly Report 2021

May 17, 2021

FIRST QUARTER 2021 RESULTS

May 2021

THE EXPERTS OF FINANCIAL MARKETS

Q1'21 RESULTS (KEY FINANCIALS)

Index

SNAPSHOT ON FIRST QUARTER 2021 CONSOLIDATED RESULTS

GLOBAL MARKETS

NET REVENUES (€M)

• Global Markets results were up 38% thanks to the positive contribution of Directional Trading that generated €2.8m income in Q1'21 (compared to the €1.2m loss generated in Q1'20 due to the mark-to-market of Directional trading portfolio as of 31 March 2020)
• Sales & Trading net revenues declined by 10% (€6.1m in Q1'21 vs €6.7m in Q1'20) due to lower market volumes compared to the ones brokered on behalf of clients last year. If compared to Q1'19 results (€5.5m), Q1'21 net revenues were up 11%, benefitting from the successful diversification strategy of the product offering
• Client-Driven Trading & Market Making performed positively (+2% vs Q1'20) despite the lower brokered volumes of fixed income instruments on markets. If compared to Q1'19 results (€2.1m), Q1'21 net revenues were up 70%

Performance drivers Market data - ASSOSIM (1)

(third parties brokered volumes)

	Equities			Bonds	Equity Options
	% market share	Overall rank (2) (indep. rank)	% market share	Overall rank (2) (indep. rank)	% market share	Overall rank (2) (indep. rank)
FY'18	6.6%	#5 (#1)	4.2%	#9 (#1)	5.3%	#4 (#3)
FY'19	9.2%	#5 (#1)	6.2%	#6 (#1)	7.6%	#7 (#1)
FY'20	7.8%	#5 (#1)	6.8%	#6 (#1)	5.0%	#3 (#3)
Q1'21	7.2%	n.d.	8.4%	n.d.	8.7%	n.d.

(1) Source: ASSOSIM; market volumes and market shares' figures based on brokerage activities on behalf of third parties; "Equities" referred to MTA segment, "Bonds" referred to DomesticMOT, EuroMOT and ExtraMOT segments; "Equity Options" referred to IDEM segment. (2) Overall rank vs Independent brokers' rank (excluding intermediaries controlled by commercial banks or dealing with flows deriving from proprietary retail clients(captive). 2015 figuresreferred to Equita SIM; 2016 and onward figuresreferred to Equita Group; roundings in Client Driven & Market Making and Directional Trading could occur due to minor reclassifications

Q1'21 RESULTS 4

INVESTMENT BANKING

Performance drivers

• In Q1'21, Italian capital markets experienced interesting levels of activity: number of ECM transactions doubled (from 7 in Q1'20 to 14 in Q1'21, mainly convertible bonds) while DCM issues more than tripled (from 6 in Q1'20 to 21 in Q1'21)
• M&A activities increased in terms of deal size (€26bn in Q1'21 vs €10bn in Q1'20) due to some large deals completed – including the merger between FCA and PSA Peugeot (€19.6bn) – but declined in terms of number of transactions (232 in Q1'21 vs 239 in Q1'20)
• The investment banking team executed a relevant number of transactions in all areas and confirmed its strong positioning in assisting corporates and financial institutions
• Minor impacts from the consolidation of Equita K Finance due to seasonality effects that concentrates revenues contribution in Q2 and Q4

ALTERNATIVE ASSET MANAGEMENT

Performance drivers

• AM fees increased by 30% in Q1'21 vs Q1'20 thanks to the increase in private debt AuMs that more than offset the lower average value of AuMs in portfolio management
• Private Debt continued the fundraising of EPD II its second fund, PIR compliant. To date, the team has raised €131.5m of total commitments (1) and has already completed 4 investments(€42m, 32% of EPD II current commitments). Final target confirmed to €200m by 2021.
• Private Equity is working jointly with a tier 1 partner on the launch of its ELTIF focused on private equity ("Equita Smart Capital ELTIF"). Final target expected to reach €140m in 2022.
• Equita recently closed its first club deal and given the success of the initiative the team is now actively working to offer access to its interesting deal flow to families and institutional investors

PROFIT & LOSS AND FOCUS ON COSTS

DISCIPLINED APPROACH ON COSTS AND STRONG PROFITABILITY CONFIRMED

SUMMARY OF CONSOLIDATED FIGURES

Profit & Loss	Q1	Q1	Var	FY
€ m	2021	2020	%	2020
Net Revenues	20,3	12,9	57%	68,2
costs(1) Personnel	(9,7)	(5,9)	64%	(32,3)
Comps/Revenues ratio	(47%)	(46%)		(47%)
Operating costs	(4,4)	(4,3)	1%	(18,2)
Total Costs	(14,0)	(10,2)	38%	(50,6)
Cost/Income ratio	(69%)	(79%)		(74%)
Profit before taxes	6,2	2,7	130%	17,6
Income taxes	(1,9)	(0,8)	127%	(4,7)
Net Profit	4,4	1,9	131%	12,9
Net Profit (post-minorities)	4,5	1,9	137%	12,3
Margin %	22%	15%		18%
Dividend Payout %				75%

Focus on Costs

Equita Group (Consolidated)	Q1	Q1
€ m	2021	2020	Var. %
costs (1) Personnel	(9,7)	(5,9)	64%
o/w Fixed component	(5,1)	(4,2)	20%
o/w Variable component	(4,6)	(1,7)	178%
(2) FTEs	162	145	12%
Comps / Revenues	47% (3)	46%	3%
Fix Comp / Total Comp	53%	72%	(27%)
12 FTEs from Equita K Finance

Equita Group (Consolidated)	Q1	Q1
€ m	2021	2020	Var. %
Operating Costs	(4,4)	(4,3)	1%
o/w Information Technologies	(1,4)	(1,4)	(1%)
o/w Trading Fees	(0,9)	(0,9)	(5%)
o/w Non-Recurring	-	-	n.a.
o/w Other (marketing, SGR, EKF)	(2,0)	(1,9)	5%

Year-on-year increase in Other expenses mainly driven by the enlarged perimeter (Equita K Finance)

DIVIDEND APPROVAL AND GUIDELINES FOR THE FUTURE

Q1'21 RESULTS 8

ROAD TO 2022: TOP PRIORITIES AND TARGETS (PLAN APPROVED IN NOVEMBER 2019)

RESILIENT AND PROFITABLE PERFORMANCE THANKS TO DIVERSIFICATION

NET REVENUES (€M)

NET PROFITS (€M)

BALANCE SHEET AND TOTAL CAPITAL RATIO

LIGHT BALANCE SHEET AND HEALTHY CAPITAL STRUCTURE, WITH TOTAL CAPITAL RATIO WELL ABOVE REQUIREMENTS

Equita Group (Consolidated) € m		Q1'21	FY'20	H1'20	Q1'20	FY'19	9M'19
Cash & cash equivalents		0,0	0,0	0,0	0,0	0,0	0,0
Assets at FV to P&L & Equity investments		74,9	43,9	84,2	80,9	75,3	81,5
Receivables		221,6	203,3	196,4	237,6	184,2	174,4
Tangibles assets		6,0	6,2	6,7	7,2	7,3	7,6
Intangible assets		27,5	27,5	15,1	15,1	15,1	15,0
Tax assets		3,0	3,1	2,2	4,2	5,0	2,6
Other assets		2,8	1,6	2,7	2,9	1,5	1,6
Total assets		335,8	285,8	307,3	347,9	288,3	282,7
Debt		185,0	157,0	205,7	227,2	172,9	173,7
Financial liabilities held for trading		28,3	14,2	8,3	13,4	12,3	17,5
Tax liabilities		4,0	2,2	1,9	2,7	2,3	0,9
Other liabilities		23,3	21,7	10,8	16,5	14,2	8,9
Employee termination indemnities		2,3	2,3	1,9	1,9	2,5	2,6
Provisions for risks and charges		2,7	2,7	1,8	3,9	3,9	3,4
Total liabilities		245,6	200,1	230,4	265,7	208,2	207,1
Share capital	Tangible Equity €63m	11,4	11,4	11,4	11,4	11,4	11,4
Treasury shares		(4,1)	(4,1)	(4,5)	(4,5)	(4,5)	(4,5)
Share premium reserve		18,7	18,2	18,2	18,2	18,2	18,2
Reserves	TCR 18% in Q1'21 (vs 20% in FY'20)	59,7	47,2	46,7	55,3	45,6	44,9
Valuation reserves		(0,0)	(0,0)	(0,0)	(0,0)	(0,0)	(0,0)
Profit /(Loss) for the financial year		4,4	12,9	5,1	1,9	9,5	5,6
Third parties' equity & Profit /(Loss)		0,1	0,1	0,1	-	-	-
Total shareholders' equity		90,2	85,7	76,9	82,2	80,1	75,6
Total shareholders' equity and liabilities		335,8	285,8	307,3	347,9	288,3	282,7

EQUITA GROUP

Via Turati, No. 9 | Milan | 20121 Tel. +39 02 6204.1 | Fax +39 02 29001208/1202 info@equita.eu | www.equita.eu

GLOBAL MARKETS | INVESTMENT BANKING | ALTERNATIVE ASSET MANAGEMENT | RICERCA