Q1 2024 Eurazeo SE Corporate Sales Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Nicolas Vaysselier - BNP Paribas Exane - Analyst : Hi, good morning. Thank you for taking my questions. I have three questions, please. The first one starting on fundraising. As you seem to imply that the soft number into Q1 is more a timing issue. So I guess you are still seeing some demand for your different strategies, but I'm interested knowing a bit more about the progress you're making on the different flagships in buyout growth and also in secondaries. And also you have mentioned in the slide impact buyout strategy. I think this is more new strategy. What could be the size of such a first-time fund? Then on your exit pipeline, you keep mentioning of a positive outlook. I'd like to know if among the exit processes you have in the pipeline that includes some of the big tickets in your MLBO funds and if this is more skewed towards the back end of the year or if it could happen in the coming months. And then lastly, on the performance of portfolio companies, so I've seen the numbers you gave on revenue growth. I very little -- the disclosure is a bit different this last time, but I'm interested in knowing what's the derivative here. Are you seeing sequentially some slowdown in growth across portfolio companies or some reacceleration versus the H2 last year? Thank you very much. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2024 / 6:50AM, EURA.PA - Q1 2024 Eurazeo SE Corporate Sales Call William Kadouch-Chassaing - Eurazao SE - co-CEO Well, thank you, Nicolas. From just the very relevant and important questions, let's start with fundraising. Yes, this is largely a timing issue. And then we we did the -- we're just a stronger because in Q4 2024, we closed first and early this year. So we expect that we have a closing through the year. It's not a demand issue. As I said, we have constructive discussions with LPs. We continue to register good inflows on the wealth side and are able to strike new partnerships that I mentioned. We've been able to raise already some money in Belgium, this is by progressive wealth management. But it's a good sign that we are able to strike. We've also done some agreement with familiar faces and I facing country such as Switzerland and Germany. That would be very progressive. On the main funds and key related. If you go back to the page where we have the program. It starts with direct lending. I mean we are on the same pattern, same type of momentum that we enjoyed for our fund six still pretty strong. I mean our buyout, we continue to have constructive discussions. So we should be able to have further tickets through the year. Certainly [thing] gross, I mean there are different as and when we just started its fundraising this year, that was a good result is a half dependent on the wells of dependent on institutional. I think the West collection has been stronger in Q1 for some countries than the LP [maneb], but we have a constructive discussions here second risk generally a pretty attractive. Growth, we said it's more to what they're skewed towards the end of the year, and we want to see some improvement in the market and also with the strong team we've put in place, it was important for us that we're able to announce some exits and some investments which will materialize in the next two weeks. We have -- we are quite positive about the prospects here, but it is more skewed towards the end of the year, maybe early 2025. This for that the main [natural]. Symmetry France, I mean sustainable infrastructure, we had said we would to a final close ahead of the initial target of [500]. This will be the case and it should materialize in the next months use. We have good momentum on biotech, particularly the [SaaS] base and article 9. This has some positive tailwinds from this us reasonably small funds. Impact buyout, which is that one you mentioned also speak to us the end of the year, it's a fund that is complementing our offering, the impact in that we offer that impact and ventures with smart cities in a debt to asset base that we are, it would be biotech with -- it's also an article 9 [fund]. Now we are willing to announce and infrastructure, of course, obviously, we only have two months to launch a buyout fund around the concept of planetary boundaries. And we have very good traction in the dialogue with LPs bit too early to say what we can target, but it's going to be above the [500 mark]. And then you will have already committed. Exit pipeline what we said is that we see an improvement or relative to last year. Last year, we did perform [tad] better than the market in terms of exits. And clearly in Q1, we did much better than the market with a plus 20% and it was EUR538 million pertaining to the balance sheet. It is encouraging. So we're not operating it totally normalized on one. We are operating in an improving environment where we can show that we deliver. So you're right, there will be some bigger tickets, which are essentially for us associated with maintenance buyout, as you pointed out, the [amenities] given the configuration for portfolio that with normal. But this is a pretty well balanced pipeline of things exist that we have. You've seen what we had in most in Q1. And we have also smaller things in small buyout, we have seeks in venture growth in biotech, we may have a bit of real estate. So this is a pretty diverse portfolio of assets that we have. No, I won't comment more because there is an intrinsic execution risk in everything we do. But let me just reiterate that we confirm that we should do better in 2024 relative to 2023. Net underperformance for frozen portfolio, it varies fundament for [any]. So it's not easy to answer to your question. So generally speaking, I'd say that for some sectors and for some companies, it clearly basically rebounds. We also though there's still a bit of the extremities effect of some slowing down towards the end of 2023. So overall, the 9% for buyout for example, that you have to take -- it is really not certain of the companies continue to grow double digit. And so again, see some acceleration. And you have some cases for which is clearly more difficult than maybe the minority of the portfolio. REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2024 / 6:50AM, EURA.PA - Q1 2024 Eurazeo SE Corporate Sales Call But overall, I don't see we -- I don't think we can give a very consistent picture across the board anything I mean ticks up or maybe improving. Something which we don't comment in the first quarter trading update because we all know [cannot limit] the drop through in terms of EBITDA is gradually improving. So that [too 2023], [2023] was a year where you had really had some impact on the cost side of inflationary pressure and value chain disruptions. I mean that's been a (inaudible) bit.

Question: Alexander GTrard - CIC Market Solutions - Analyst : Yes, good morning, William, and thank you for taking my questions. Going back again on the same questions regarding fund raising what you mean by positive outlook for the year or more precisely, please. I mean, do you expect to be above what you recorded last year in terms of gross fundraising? And also in terms of redemptions or what do you expect is going to be a normal year, i.e., more or less 12% of the purchase your AUMs? So that's my first question. Second question, I mean, do you hit rate in terms of operating performance, the fee-related earnings margin in 2024, which is going to be it is slightly up compared to next year [to ensure]. So that's my second question on the trend on your [Italian] margin. And the third and fourth questions are related to your completed development strategy. Can you update us on your GP acquisitions pipeline in the acquisitions in the pipe and MCH? Also last question, of course, I mean, you had in mind to maybe dispose of that stake. Can you update us on that situation also? Thank you, William. William Kadouch-Chassaing - Eurazao SE - co-CEO Thank you for your questions and you smartly tend to need to do to provide guidance with your question and the number one, we don't provide guidance pertaining to fundraising so early in the year because in this. So is -- if you putting aside given quarters of [Paulo Stephen], it sinks can be back-ended. So I will not do that. But when we say positive attributes because we consider we are on track and to fund raise for across the diversified and rich portfolio of funds that I mentioned. And we see positive vibes, as I mentioned, no capacity to being distributed outside of France. But really, again, that mimic not translating big flows for 2024. But it's very encouraging to see that we are able to strike off the shelves and get some early flows. It's very encouraging to see that our direct lending franchise continues to perform well. Not every direct lending franchises, we'll trying to what is being said very often isn't necessarily able to fund raise isn't easy these days. I mean, the positioning strategy [we set last here] for quite an astute. In partnership with diamonds that's what we mean by a positive outlook? Positive outlook as we have good commercial dynamics in the context of this, progressively it getting better, but is not back to the vein BioDuro of 2021, '22. We see for the industry as a whole how it develops. Then may be some positives when and if the ECB, as I noted, first cut, because that will certainly help relaxing the so-called denominator effect for some of our bigger peers. But obviously, we're not counting on purely a market accounting on our performance as an asset manager system [and so much]. And that's what we mean by positive outlook. Operating performance, yes, we expect some growth in FRE for 2024. Corporate Development, let me remember what we said during our capital markets that we present the inorganic [road map] of follow units and everything comes here, organic and for use, you don't transform the company REFINITIV STREETEVENTS | www.refinitiv.com | Contact Us consent of Refinitiv. 'Refinitiv' and the Refinitiv logo are registered trademarks of Refinitiv and its affiliated companies. MAY 16, 2024 / 6:50AM, EURA.PA - Q1 2024 Eurazeo SE Corporate Sales Call that has an average duration of its portfolio of 4.5 years and officially as the ambitious for reference of winning market share in very competitive landscape. We don't do that in a quarter and so organically being broadly speaking. Now we also have said you're right to point out, that we see key reason for the industry to consolidate. We observe consolidation moves, and this is our duty as management to look at potential opportunities that may help us accelerating the pace at which we meet our end target, which is to become this reference leader in the [mean] market. Those impacts to you. So we've never comment on specific situations unless we have something to announce that, yes, we do the job of identifying what could make sense if it makes sense. MCH, you heard it well, we will dispose of our stake in MCH, and we will announce it in due course, most of the year in H1, at the latest in Q3.