AuA and AuM reach new record - taulaentitatssarria.cat

Netfonds announced new record levels of €26.2 billion in assets under management (AuA) and €3.3 billion in assets under management (AuM), well above our estimates. BUY

Subject: With €26.2 billion assets under administration (AuA) and €3.3 billion assets under management (AuM), Netfonds reached new record levels, well above our estimates. In detail:

Strong growth will continue. With absolute growth of €2.6bn in AuA YTD (+10%; 15% yoy) to €26.2bn in Q2, Netfonds is well ahead of our estimates of €25.7bn and should easily meet our FY24 estimates of €27bn. Even better, high margin AuM rose to €3.3bn at end-Q2 (20% YTD; 18% yoy), in line with our Q2 estimates of €3.2bn and on track for the expected €4.0bn in FY24.

Strong H1 numbers ahead: After Q1’s record figures of €25.1bn AuA and €56m Gross Revenue, Netfonds reached new record highs in Q2 and should have continued its revenue growth as well, fueled by 1) value-enhancing smaller deals (i.e. MFK and Comfort Finance) at very reasonable prices (eNuW: 4-8x EBITDA) for its VB-Select advisor network, 2) the launch of a proprietary money market fund with already over €75m end-Q2 and 3) the acquisition of an umbrella in Luxembourg. We cautiously expect €56m in gross revenue (20% yoy), €10.5m in net revenue (10% qoq, 9% yoy) and €1.6m in EBITDA (78% qoq; 10% yoy). Q2 figures are expected end-August.

Consolidation of the insurance brokerage market in full swing. In addition to the strong operational performance, the Group’s proprietary 360° finfire platform is seen as a driver for market consolidation, particularly in the insurance brokerage market which, unlike the investment advisor market, is still highly fragmented. finfire makes selling and managing insurance products much easier, unlocking huge cross-selling opportunities as the already on-board investment advisor can additionally offer a wide range of insurance products to its clients. finfire therefore remains the company’s key growth driver in the medium to long term and scalability. The expected strong organic growth momentum is expected to be accompanied by further value-accretive M&A deals which should come at very reasonable prices.

Overall, we believe that Netfonds is well on track to achieve its medium-term target of €59 million in net sales (vs. eNuW: €59 million) and €23 million in EBITDA (vs. eNuW: €20 million) in financial year 2026.

BUY with an unchanged PT from€74.00based on DCF.