1H24 RESULTS
COLLECTIONS AT €721M AND NET INCOME UP TO €23.2M (+5%) ASSETS UNDER MANAGEMENT AT €33.5BN
- Assets under Management (AuM) at €33.5bn (-7% y/y) in line with the strategy defined in the 2024-2028 Plan. 70% are NPLs and 30% are UTPs
- New financing to support businesses: €12m issued in 1H24
- Collection rate stable at 4.2%; collections at €721m, compared to €760m in 1H23, due to the reduction of assets under management
- Revenues at €218.7m (-10% y/y) due to lower volumes
- EBITDA at €121.0m. Ebitda margin at 55.3%
- Net income at €23.2m, +5% y/y
- Capital ratios further improving: CET1 at 35%
- Ratings confirmed: Fitch (BBB/F2) and S&P (BBB/A-2) with stable outlook
- In February, €250m of the maturing bond was repaid with available liquidity
- Sustainability Report 2023 published on a voluntary basis and new 2024 Sustainability targets defined within the 4 pillars of the GSSE Strategy1
Milan, 30 July 2024 – The Board of Directors of AMCO – Asset Management Company S.p.A. met today and approved the 1H24 results.
“In these first months we have been working on the transformation of AMCO’s operating model by focusing on reorganising the business, strengthening the organisational structure and reinforcing the control system, -explains Andrea Munari, CEO of AMCO. – The company closed the first half of the year with a profit, confirming the generation of liquidity and a solid capital structure. In line with the 2024-2028 Plan, in the next months we will continue the transformation of the operating model, with a data-driven approach and strengthening the IT infrastructure. The new structure and the actions taken will allow us to optimise recoveries and produce value in the long term.”
2024-2028 STRATEGIC PLAN UPDATE
The 2024-2028 Strategic Plan ”We Produce Value” was presented to the market on 12 March 2024. In the first few months of the implementation of this Plan, a number of changes were made to the governance and organisational chart (some of which will be effective as of the third quarter of 2024) in order to adopt the organisational structure deemed most suitable to pursue the objectives outlined in the Plan. These changes, which also constitute “Significant events after the period”, have already been illustrated in the Press Release of 12/6/2024.
Among the most significant changes is the appointment of a Co-General Manager, reporting to the CEO, who supervises and coordinates:
- business areas and business support functions
- the management of the operational infrastructure
- the (newly established) 1st level Centralised Control Function
- the (newly established) Transformation Office Function to oversee the implementation and monitoring of all transformation initiatives envisaged in the Strategic Plan.
Within this framework, and as already announced on 12/6/2024, the business activity was strengthened with the evolution into two Departments: the NPE & Outsourcing Department (files below €2m and management of outsourced servicers) and the Turnaround & Strategic Finance Department (files above €2m).
In addition, AMCO has precisely defined new important Sustainability goals for 2024 within the guidelines already announced in the 2024-2028 Strategic Plan, following the 4 pillars of the GSSE Strategy.
In particular, on Diversity and Inclusion, the defined objectives are: the annual promotion to roles of greater responsibility of 10% of the female population, the calculation of the gender pay gap with reduction targets and the definition of a D&I Manifesto.
1H24 RESULTS
Business performance
As of 30 June 2024, Assets under Management (AuM) reached €33.5bn (-7% y/y), in line with the strategy set out in the 2024-2028 Strategic Plan, due to the natural dynamics of the portfolio, in the absence of new purchases. AuM consisted of 70% NPLs and 30% UTPs. In terms of operational mix, 70% of volumes are managed in-houseand 30% in outsourcing.
With a view to management simplification, in the second quarter AMCO sold over 60,000 non-core small tickets -approximately 30% of total managed positions- with negligible impact in terms of assets. At the end of June, there were approximately 167 thousand positions under management.
New financing issued to companies amounted to €12m in the first half-year.
Operations Management – Collections
Collections in the first half of the year reached €721m, down 5% from €760m in the same period of the previous year due to the decrease in assets under management.
The annualised2 collection rate in 1H24 remained stable at 4.2% (4.2% in 1H23). Management effectiveness is confirmed by the sound performance of all Business Divisions: the Workout Division achieves a collection rateof 3.4% (3.4% in 1H23) while the UTP collection rateis 6.0% (6.1% in 1H23). The SP&S Division’s collection rate increases to 4.1% (3.6% in 1H23) due to the start of the process of better alignment with servicers.
The solid collections performance is accompanied by a proactive approach to credit management: 94% of collections from UTP credits come from extrajudicial activities, as well as 29% of collections from NPL credits, inline with the GSSE Sustainability Strategy.
Results as of 30.06.2024
Net income as of 30 June 2024 amounted to €23.2m, up 5% vs €22.1m in 1H23, due to lower credit provisions and debt reduction.
EBITDA amounted to €121.0m (compared to €160.5m in 1H23). The trend reflects the decline in revenues due to lower on-balance sheet volumes. Ebitda margin is at 55.3%.
Income statement – Main items
Revenues amounted to €218.7m, down 10.4% y/y (€244.2m in 1H23) due to lower interest income originated from on-balance-sheet loans, in line with the Plan’s Strategy. Servicing fees increased 20.7% to €23.2m due to the management of the off-balance sheet portfolio relating to the former Veneto banks and the Cuvèe fund.
Interest from customers amounted to €150.2m, -13.5% y/y due to the reduction of on-balance sheet AuMs.
Other income/expenses from operating activities – which refer to cash recoveries (all cash-based) – decreased (-11.7% y/y), they are related to collections exceeding expected recovery plans.
Total costs amounted to€97.8m, up 16.8% y/y due to the strengthening of the company’s structure, both in terms of infrastructure and staffing, and the acceleration of recoveries. In detail, net operating costs stood at €70.8m, up 19.0% y/y, due to the increase in legal and recovery expenses, IT costs including the replacement of the core banking system, and higher outsourcing fees related to recoveries on the portfolio managed by external servicers.
Personnel expenses amounted to €26.9m (+11.4% compared to 1H23) due to the increase in staff to support the company’s development, especially for control and business support functions.
As of 30 June 2024, AMCO’s employees were 429, 16 more than in the first half of 2023. 66% of staff is employed in business roles and the remaining 34% in central functions. Females account for 41% of total staff.
| €/m | 1H23 | 1H24 | % change |
| Servicing fees | 19.3 | 23.2 | 20.7% |
| Interest income | 173.6 | 150.2 | -13.5% |
| Other income/expenses from operating activities | 51.3 | 45.3 | -11.7% |
| Total Revenues | 244.2 | 218.7 | -10.4% |
| Personnel expenses | (24.2) | (26.9) | 11.4% |
| Net operating costs | (59.5) | (70.8) | 19.0% |
| Total costs | (83.7) | (97.8) | 16.8% |
| EBITDA | 160.5 | 121.0 | -24.6% |
| EBITDA margin | 65.7% | 55.3% | n.m |
| Net impairment gains/losses | (80.0) | (54.4) | -32.0% |
| Depreciation and amortisation | (2.7) | (2.5) | -8.9% |
| Provisions | (0.1) | (2.1) | n.m |
| Other operating income/expenses | (0.5) | 0.1 | n.m |
| Net result from financial activities | 1.5 | 6.0 | n.m |
| EBIT | 78.7 | 68.1 | -13.4% |
| Interests and fees from financial activities | (45.5) | (37.1) | -18.5% |
| Pre-tax income | 33.2 | 31.1 | -6.5% |
| Income taxes | (11.1) | (7.9) | n.m |
| Net income | 22.1 | 23.2 | 4.9% |
EBIT amounted to €68.1m. Net impairment gains/losses were -€54.4m and reflect provisions to cover the portfolio’s credit risk. Interest from financial activities, at €37.1m, decreased by 18.5% compared to the first half of 2023 due to the decrease in outstanding debt for the repayment of maturing bonds3 .
Income taxes stood at €7.9m.
Balance Sheet
The balance sheet remained solid. Loans to customers amounted to €3,952m, down from €4,981m in June 2023 due to collections and provisions.
Cash and cash equivalents, including cash and Italian Government bonds reached €749m, down €318m compared to 1H23, and were sufficient to repay the next bond maturing in January 2025 (€600m). The cash surplus is invested in Italian Government bonds, accounted at Fair Value.
Financial assets stood at €420m and mainly consisted of the stake in the Italian Recovery Fund(IRF).
Financial liabilities as of 30 June 2024 amounted to €3,137m and consisted of unsecured bonds. The company has a Commercial Paper program with a maximum total amount of €1bn, currently unutilised.
The Net Financial Position (NFP)4 is -€2,351m, improved by €360m compared to December 2023 and by more than €800m y/y, thanks to the solid cash generation from the business.
Shareholders’ equity as of 30 June 2024 amounted to €2,045m.
Capital ratios are further increasing: the CET1 capital ratio is 35%5; with Total Capital ratio also standing at 35%, as there are no subordinated bonds on the balance sheet.
The Net Debt (NFP)/Equity ratio is at 1.1x, down from 1.3x in June and December 2023.
| €/m | 1H23 | FY23 | 1H24 |
| Loans to customers | 4,981 | 4,235 | 3,952 |
| Cash and cash equivalents (loans to banks, Government bonds) | 1,067 | 679 | 749 |
| Financial assets | 500 | 441 | 420 |
| Other Activities | 250 | 232 | 212 |
| Total assets | 6,798 | 5,587 | 5,333 |
| Financial liabilities | 4,275 | 3,412 | 3,137 |
| Tax liabilities | 4 | 0 | 0 |
| Provisions for specific purposes | 14 | 25 | 25 |
| Other liability items | 93 | 128 | 125 |
| Net equity (of which) | 2,413 | 2,022 | 2,045 |
| Share capital | 655 | 655 | 655 |
| Share premiums | 605 | 605 | 605 |
| Reserves | 1,184 | 1,184 | 796 |
| Valuation Reserves | (53) | (34) | (34) |
| Net income | 22 | (388) | 23 |
| Total liabilities and net equity | 6,798 | 5,587 | 5,333 |
SIGNIFICANT EVENTS DURING THE PERIOD
Repayment of a bond maturing in February 2024
In February 2024, a €250m maturing bond was repaid by using part of the available liquidity.
Fitch and S&P confirm AMCO’s ‘BBB’ rating with stable outlook
On 16 April 2024, Fitch Ratings confirmed AMCO’s long-term rating at ‘BBB’ with a Stable outlook and short-term rating at ‘F2’.
On 21 May 2024, S&P Global confirmed the long-term rating at ‘BBB’ with a stable outlook and the short-term rating remaining at ‘A-2’.
SIGNIFICANT EVENTS AFTER THE PERIOD
Organisational evolution
On 30 July, AMCO’s Board of Directors approved a series of organisational changes that, in line with the Strategic Plan, integrate the structure revisions already announced on 12/6/2024. In particular: the role of Co-General Manager was introduced to oversee the business and support areas, the management of the operational infrastructure, and the new 1st Level Centralised Controls and Transformation Office functions.
DECLARATION BY THE EXECUTIVE RESPONSIBLE FOR THE PREPARATION OF CORPORATE ACCOUNTING DOCUMENTS
I, the undersigned, Luca Lampugnani, in my capacity as executive responsible for the preparation of corporate accounting documents, hereby declare, in accordance with paragraph 2, Article 154-bis of the Testo Unico della Finanza (Italian Consolidated Law on Financial Intermediation) that the accounting information disclosed in this press release reflects documentary evidence, accounting entries and other records of the company.
1 Sustainable Governance, Sustainable Credit Management, Sustainable Development of Human Capital, Environmental Protection.
2 Annualised recovery rate calculated as the ratio of collections to average (monthly) GBV for the period.
3 €850m in July 2023 and €250m in February 2024.
4 Calculated as: debt securities in issue at nominal value less cash and cash equivalents.
5 Managerial data.
