Financial Results and Shareholders Meeting (IR)

EQUITA ends the first quarter of 2023 with growth in Net Revenues, high Return on Tangible Equity and strong Capital Ratios. Ascertainment of independence


  • Consolidated Net Revenues at €19.3 million (+5% vs Q1’22)
  • Consolidated Net Profits at €3.9 million, with net profitability to 20%
  • Return on Tangible Equity (ROTE) at 26% and IFR Ratio 5.5 times above the minimum requirements
  • Management confirms targets for business growth and diversification, discipline on costs, and shareholder remuneration as outlined in the EQUITA 2024 business plan
  • The Board of Directors ascertains the independence of Directors and Statutory Auditors of the Company

Milano, 11 May 2023

Andrea Vismara, Chief Executive Officer at EQUITA, commented: “These results represent our second best Q1 in terms of Net Revenues and one of the best Q1 in terms of Net Profits since our IPO, demonstrating our resilience to volatility in the market. We continue to strengthen our business model and market position as the leading independent investment bank in Italy, with the same commitment and enthusiasm that has distinguished EQUITA over the last 50 years”.

“The results of the first quarter 2023 are in line with our growth objectives and the targets set in the EQUITA 2024 business plan. Long-term remuneration of shareholders remains a top priority and a key aspect of our investment case”.

The Board of Directors of EQUITA Group S.p.A. (the “Company” and, together with its subsidiaries, “EQUITA” or the “Group”) approved the first quarter results of the Group as of 31 March 2023.


Consolidated Net Revenues (divisional breakdown)

Consolidated Net Revenues grew 5% year-on-year, from €18.4 million in Q1’22 to €19.3 million in Q1’23. Net Revenues linked to clients[1] reached €17.7 million (€18.4 in Q1’22, -4%).

The Global Markets division – which includes Sales & Trading, Client Driven Trading & Market Making and Directional Trading – recorded Net Revenues of €11.2 million in Q1’23 (€9.9 million in Q1’22, +13%). Net Revenues linked to business with clients[2] reached €10.0 million, in line with the previous year (€10.0 million in Q1’22, -1%).

Brokerage activities on behalf of clients confirmed the EQUITA’s strong position in the domestic market, recording significant market shares across all relevant segments (8% on the Italian Stock Exchange – Euronext Milan, 13% on Euronext Growth Milan, 9% on bonds and 14% on equity options) [3]. In the same period, overall Italian market volumes on cash equities were down 14% on Euronext Milan and 39% on Euronext Growth Milan, while volumes on fixed income instruments were up 125% year on year [4].

Sales & Trading revenues, net of commissions and interest expenses, reached €5.8 million in Q1’23 (€6.4 million in Q1’22, -9%) while Client Driven Trading & Market Making [5] net revenues rose to €4.1 million (€3.7 million in Q1’22, +13%), thanks to higher levels of client trading activities in fixed income financial instruments, certificates and derivatives. Directional Trading recorded €1.3 million in Net Revenues in Q1’23 (€-0.1 million in Q1’22), in line with the historical average of previous first quarters. In Q1’23, the Directional Trading performance included €0.4 million income from a €38 million fixed income portfolio built mainly between July and September 2022, to be held to maturity, to profit from the market opportunity offered by corporate bonds.

The Investment Banking division recorded €6.2 million in Net Revenues (€6.7 million in Q1’22, -7%), notwithstanding the challenging market circumstances at global level, especially in M&A advisory. M&A in Italy experienced a significant drop in the number of deals and volumes, with 258 transactions and €7 billion in value, compared with 327 transactions in Q1’22 (-21%) and €17 billion in value in Q1’22 (-57%). Equity Capital Markets in Italy were almost in line with the previous year, both in terms of number of deals (11 in Q1’23, 10 in Q1’22) and volumes (€0.8 billion in Q1’23, €0.9 billion in Q1’22). Debt Capital Markets recorded a positive performance, with overall corporate issues increasing from 12 in Q1’22 to 15 in Q1’23 and volumes growing from €7.9 billion in Q1’22 to €10.1 billion in Q1’23.[6]

With reference to the different teams of the Investment Banking division, capital markets activities were up year-on-year thanks to the positive contribution of several Equity Capital Markets and Debt Capital Markets & Debt Advisory transactions, as well as Corporate Broking, which positively contributed to the net revenues of the division. M&A Advisory instead was impacted by the difficult underlying market in Italy, although EQUITA outperformed the overall market in Q1’23 with a more resilient performance.

Despite the difficult market circumstances, in the first quarter of 2023 EQUITA completed several high-profile mandates. EQUITA assisted, inter alia, Racing Force Group as Joint Bookrunner with its rights issue through a primary accelerated book-building procedure; Gentili Mosconi as Sole Global Coordinator, Joint Bookrunner and Euronext Growth Advisor with its admission to Euronext Growth Milan; ENI as dealer in the issue of €2 billion of notes; AMCO – Asset Management Company as Joint Lead Manager and Joint Bookrunner in the issue of €500 million of senior unsecured notes;  DeA Capital and Prima Industrie as Financial Advisor with the fairness assessment of the consideration offered in the respective takeovers, and Atlantia as Financial Advisor in a transaction to improve the group’s financial capital structure.

The Alternative Asset Management division recorded €1.8 million in Net Revenues in Q1’23 (€1.8 million in Q1’22, +1%). Assets under management reached €935 million as of 31 March 2023 (€921 million as of 31 December 2022, +2%), with an increasing mix toward proprietary, illiquid, and more profitable assets. Revenues linked to asset management fees – Portfolio Management, Private Debt and Private Equity - were at €1.6 million in Q1’23, down 7% year-on-year, driven by the lower amount of assets under management in Q1’23 compared to Q1’22 in the Portfolio Management funds, especially the closed-end UCITS which are subject to drawdowns in volatile market environments and not allowed to receive inflows after closing. This was partially offset by new assets and commitments from illiquid funds such as the EQUITA Private Debt Fund II and the private equity fund EQUITA Smart Capital - ELTIF. The Investment Portfolio[7], equal to approximately €9.7 million as of 31 March 2023 contributed to the results of the Alternative Asset Management division with €0.3 million Net Revenues in Q1’23 (€0.1 million in Q1’22).

The EQUITA Private Debt Fund II is expected to complete its first investment abroad this year, in Germany, alongside a leading pan-European private debt investor. The team is expected to complete the deployment of capital by the end of the first semester of 2023 and is starting the marketing activities to launch its third fund.

The Research Team continues to support all business areas of the Group, assisting institutional investors with research reports and insights on more than 120 Italian companies and 40 foreign listed companies. The team has also added several debt instruments to its coverage, building a significant presence in the fixed income domain and expanding to more fixed income issuers.


Consolidated Profit & Loss (Reclassified)

Personnel costs[8],[9] increased from €8.5 million in Q1’22 to €8.9 million in Q1’23 (+5%), following the increase in Net Revenues. The Compensation/Revenue ratio was 46.0% (45.9% in Q1’22) and the number of professionals reached 190 as of 31 March 2023 (188 as of 31 December 2022 and 176 as of 31 March 2022). Other operating costs increased from €4.5 million in Q1’22 to €5.0 million in Q1’23 (+12%). Information Technology expenses were up 8% year-on-year, mainly driven by the migration to the Euronext platform and some inflation-linked adjustments on info-providing supply contracts. Trading fees were up 7%, mainly due to by the increase in Client-Driven Trading activities on fixed income instruments. Other costs were up 16%, from €2.1 million in Q1’22 to €2.5 million in Q1’23, due to the gradual return to in-presence client marketing activities such as roadshows and conferences, and some inflation-linked supply contracts. The Cost/Income ratio[10] was 71.8% in Q1’23 (70.1% in Q1’22).

Consolidated Profit Before Taxes10 was €5.4 million in Q1’23 (€5.5 million in Q1’22, -1%). Consolidated Net Profit 9 was €3.9 million (€3.8 million in Q1’22, +1%). Including the impacts of the long-term incentive plan to Top Management (“LTIP”), Consolidated Net Profit was €3.8 million, in line with the previous year (€3.8 million in Q1’22, -1%).

The awarding of the stock options follows the achievement of all the targets set in the plan: i) IFR Ratio 2020-2022 above 200% in every year (533% IFR Ratio, above minimum threshold every year)[11], ii) Average Return on Tangible Equity 2020-2022 above 15% (33% per year on average), and iii) Total Shareholder Return above 10% per year in the period 30 April 2020 – 30 April 2023 (27% per year on average). It is worth noting that the impact of the LTIP is aimed at reducing the dilution of the plan which will award 1,300,000 stock options to beneficiaries in May 2023. These incentives are not considered as additional remuneration, but an award already vested.

Q1’23 results are in line with the strategic objectives announced on 17 March 2022 with the EQUITA 2024 business plan, including the shareholders’ remuneration targets (“[…] average dividend of at least €0.30 per share […]”).[12]


Consolidated Shareholders’ Equity

Consolidated Shareholders’ Equity was €108.5 million as of 31 March 2023 and the Average Return on Tangible Equity (ROTE) was 26%. The capital strength of the Group was confirmed among the highest in the market, with the IFR ratio approximately 5.5 times the minimum requirements, pursuant to the EU 2033/19 Regulation (IFR).


Outlook on H1’23

As of today, the Global Markets division is growing year-on-year, led by the performance of proprietary trading activities on behalf of clients (Client Driven Trading & Market Making) and Directional Trading; these areas are more than compensating for the lower levels in brokerage activities from investors in the Italian stock market (YTD April 2023 vs. YTD April 2022: -22% on Euronext Milan, -33% on Euronext Growth Milan; source: Assosim). With respect to the Investment Banking division, since 31 March 2023 the team has acted with senior roles in the IPOs of Ecomembrane and Lottomatica. Looking to the coming months, the pipeline of capital markets transactions and M&A deals is interesting. Despite this, it is worth remembering that the performance recorded in H1’22 by the Investment Banking team was the best H1 since IPO (€24 million Net Revenues compared to an average of €11 million Net Revenues). H1’22 results were positively impacted by the contribution of EQUITA K Finance, which benefitted from some very large and remunerative mandates. On the Alternative Asset Management side, fundraising of illiquid assets will continue with EQUITA Smart Capital – ELTIF expected to final close its fundraising by 30 June 2023. The team will also start to market its third private debt fund and, in parallel, it is also expected to announce a new asset class by the end of the first semester of 2023.


Ascertainment of independence requirements of Directors and Statutory Auditors of the Company

The Board of Directors of the Company ascertained, based on the declarations submitted by Directors and Statutory Auditors of the Company, that the requirements set forth by Article 13 of the Legislative Decree No. 58/98 (“TUF”) are met.

More in detail, the Board of Directors verified, pursuant to Article 148, paragraph 3, of the TUF (as recalled by Article 147-ter, paragraph 1, of the TUF itself), the independence of Paolo Colonna, Silvia Demartini and Michela Zeme, members of the Board of Directors of the Company. The Board of Directors also ascertained that any of the abovementioned Directors are included in any of the provision set forth in Recommendation no. 7 of the Corporate Governance Code approved by the Corporate Governance Committee last January 2020, including the cases where the quantitative and qualitative criteria approved by the Board of Directors of the Company during the meeting of 20 April 2023 apply.

During the meeting, the Board of Directors was also notified that the Board of Statutory Auditors ascertained the independence of Franco Fondi, Laura Acquadro and Andrea Conso, Standing Auditors of the Board of Statutory Auditors of the Company.

The correct application of criteria and procedures adopted by the Board of Directors of the Company to assess and ascertain the independence of its members was verified by the Board of Statutory Auditors during the meeting.


1 Excludes the impacts for the cash-settlement of the incentive plan EQUITA Group 2020-2022 based on stock options and addressed to Top Management

[1] Excluding Directional Trading activities, the impacts of the Investment Portfolio linked to Alternative Asset Management activities as of 31 December 2022, and performance fees from asset management activities

[2] Sales & Trading and Client Driven Trading & Market Making, and excluding Directional Trading

[3] Source: ASSOSIM

[4] Source: ASSOSIM. Figure on equities refers to the Italian Stock Exchange – Euronext Milan. Figure on bonds refers to DomesticMOT, EuroMOT and ExtraMOT Italian markets in total

[5] “Client Driven Trading & Market Making” and “Directional Trading” are an internal reporting representation of Proprietary Trading

[6] Source: EQUITA on Dealogic (Equity Capital Markets), Bondradar (Debt Capital Markets) and KPMG (M&A) data.

[7] The Investment Portfolio includes the investments made by the Group in the Alternative Asset Management products that have been already launched, such as private debt funds for instance, with the purpose of further aligning EQUITA’s and investors’ interests

[8] Excludes compensation of Board of Directors and Statutory Auditors. Those items are included in Other operating costs.

[9] Excludes the provisions for the cash-settlement of the incentive plan EQUITA Group 2020-2022 based on stock options and addressed to Top Management

[10] Ratio between Total Costs and Consolidated Net Revenues

[11]   Following the change in regulation and the subsequent resolution of the Shareholders’ Meeting, Total Capital Ratio was substituted with IFR ratio

[12] See the Equita 2024 three-year business plan targets announced on 17 March 2022: “€50+ million in dividends to be distributed in the three-year period 2022-2024, with an average yearly dividend above €0.30 per share”