Consolidated interim financial report at 31 March 2017 Azimut Holding S.p.A.

Transcription

1 Consolidated interim financial report at 3 March 27 Azimut Holding S.p.A.

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3 Consolidated interim financial report at 3 March 27 Azimut Holding S.p.A. The consolidated financial statements have been translated from those issued, from the italian into the English language solely for the convenience of international readers.

4 4 G r u p p o A z i m u t

5 Contents COMPANY BODIES 3 AZIMUT GROUP'S HIGHLIGHTS AND INDICATORS 4 MANAGEMENT REPORT 6 CONSOLIDATED FINANCIAL STATEMENTS 22 BASIS OF PREPARATION 3 STATEMENT PURSUANT TO ARTICLE54BIS.2 OF THE CONSOLIDATED LAW ON FINANCE 4 Consolidated interim financial report at 3 March 27 5

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7 Company Bodies Board of Directors Pietro Giuliani Sergio Albarelli Paolo Martini Andrea Aliberti Alessandro Zambotti Marzio Zocca Gerardo Tribuzio Susanna Cerini Raffaella Pagani Antonio Andrea Monari Anna Maria Bortolotti Chairman Chief Executive Officer Director and CoManaging director Director Director Director Director Director Director Director Director Board of Statutory Auditors Vittorio Rocchetti Costanza Bonelli Daniele Carlo Trivi Maria Catalano Luca Giovanni Bonanno Chairman Permanent auditor Permanent auditor Alternate auditor Alternate auditor Consolidated interim financial report at 3 March 27 7

8 Azimut Group's highlights and indicators Azimut Group's structure The Azimut Group operates globally in 4 countries and is comprised of the parent company, Azimut Holding S.p.A., and 56 subsidiaries. Azimut Holding S.p.A. (Listed:AZM.IM) Azimut Partecipazioni (26) (%) Italy AZ International Holdings (2) Luxembourg AZ Fund (999) AZ CM (27) AN Zhong (AZ) IM (2) AZ Brasil Holdings (23) AZ Athenaeum (23) Katarsis CA (2) (5%) Luxembourg (%) Ireland (%) Hong Kong (%) Brazil (%) Singapore (%) Switzerland Augustum Opus Sim (3) (23) Azimut Capital Management (24) AZ IM HK (2) AZ IM (2) AZ Quest (25) Eskatos CM (2) (5%) Italy (%) Italy (%) Hong Kong (%) China (6%) Brazil (%) Luxembourg Azimut Financial Insurance (25) AZ Swiss (22) AZ Sestante (25) Sigma Fund Mgmt (26) (%) Italy (5%) Switzerland (76%) Australia (5%) Australia AZ Life Dac (23) Azimut Portföy (2) CGM (4) (2) CGM Sgr (2) (%) Ireland (%) Turkey (5%) Monaco (%) Italy Azimut Enterprises (24) Azimut Global Counseling (24) AZ Sinopro FP (2) (23) AZ Mèxico Holdings Sa de CV (24) (%) Italy Futurimpresa Sgr (24) (%) Italy (5%) Taiwan AZ Sinopro SICE (2) (23) (94%) Mexico Màs Fondos Sa (24) AZ Brasil Holdings (23) AZ US Holdings (25) Note (): Controls distribution companies M&O Consultoria, FuturaInvest and Azimut Brasil Wealth Management. (55%) Italy (%) Taiwan AZ Andes Spa (25) (9%) Chile (%) Mexico AZ NGA (24) (52%) Australia (%) Brazil Azimut Brasil WM Holding () (25) (%) Brazil (%) USA AZ Apice LLC (26) (7%) USA Note (2): controls AZ Sinopro Insurance Planning. Note (3): Azimut acquired the remaining 49% and is in the process of being merged into Azimut Capital Management SGR. Note (4): Azimut reached an agreement to acquire the remaining 49% at 3/2/27. 8 G r u p p o A z i m u t

9 Azimut Group Highlights at 3 March million 24 4 countries, million Year of incorporation Total assets Employees Revenues for the first quarter of 27 Year of IPO Geographical presence Financial advisors Net profit for the first quarter of 27 Consolidated interim financial report at 3 March 27 9

10 Azimut Group Indicators Change Financial indicators (millions of euro) First quarter of 27 First quarter of 26 Absolute % 26 Total income: % 76 of which fixed management fees % 59 EBIT % 25 Net profit for the period % 73 Net inflows (billions of euros) 2,2,7,5 29% 6,5 Operating indicators 3/3/26 3/2/26 3/3/26 Financial advisors,636,637,64 AUM, net (billions of euros) Breakdown of AuM at 3 March 27 7% 5% 68% Mutual funds and advisory Discretionary portfolio management AZ Life Insurance G r u p p o A z i m u t

11 Management report This consolidated interim financial report at 3 March 27 has been prepared pursuant to Article 54ter (Interim Reports) of Italian Legislative Decree no. 58/998 (Consolidated Law on Finance), introduced by Italian Legislative Decree no. 95/27, implementing EU Directive 24/9/EC (known as the Transparency Directive) as amended. Azimut Holding S.p.A.'s consolidated interim financial report specifically focuses on the highlights of the quarter, simplifying market disclosure. This consolidated interim financial report provides: a) a general description of the financial position and results of operations of Azimut Holding S.p.A. and its subsidiaries for the quarter; b) a description of the main events and transactions of the period and their impact on the financial position of Azimut Holding S.p.A. and its subsidiaries Introduction Despite the considerable uncertainties and the high volatility on the markets, the advisory activities provided to customers by Azimut Group's financial partners continued to develop positively. The Group continued to attract professionals of the banking and the Private Banking sectors in Italy, increasing the number of financial advisors by an additional 8 resources compared to 3 December 26. Azimut Group's performance for the first quarter of 27 Consolidated interim financial report at 3 March 27

12 Net Inflows The Group's inflows for the first quarter of 27 is positive at 2.2 billion euro. Figures in millions of euro Mutual funds Discretionary portfolio management and other AZ Life insurance Advisory Double counting Total net inflows Assets under management Securities, third party funds and A/C Total net inflows Change 3/3/27 3/3/26 Absolute % %, %, , , , % 28 % 54 99% % % 28% ,5 3,9 6,529 Assets At 3 March 27, total assets, including assets under custody, reached 46.5 billion euro, of which 37.7 billion euro relates to assets under management. Figures in millions of euro Mutual funds Discretionary portfolio management and other AZ Life insurance Advisory Double counting AUM, net Securities, third party funds and A/C Total asset Change 3/3/27 3/2/26 Absolute % 3/3/26 3,223 7,965 6,668 28,756 7,7 6,434, % 3% 4% 26,276 6,25 5, ,85 37,669 8,832 46, ,96 35,8 7,85 43, ,869,27 2,896 5% 3% 5.2% 3% 7% 59 7,445 3,583 5,83 37,396 2 G r u p p o A z i m u t

13 In order to provide a more effective representation of the results, the income statement has been reclassified and thus better reflects the content of the items according to operating criteria. Reclassified consolidated income statement The main reclassifications involved the following: cost recoveries on portfolio management reported under Fee and commission income have been reclassified as Other income in the reclassified income statement; net premiums and the corresponding change in the technical reserves, commissions and recovered expenses relating to insurance and investment products issued by AZ Life dac, reported under Net premiums, Change in technical reserves and Fee and commission income, have been reclassified as Insurance income ; commission expenses paid to the distribution network, reported under Fee and commission expenses have been reclassified as Acquisition costs ; the Enasarco/ Firr contributions related to these commission expenses and the other trade payables associated with the distribution network, booked under Administrative costs, are now classified as Acquisition costs ; the amount allocated to the supplementary indemnity provision for agents (ISC) reported under Provisions for risks and charges has been reclassified as Acquisition costs ; administrative cost recoveries, reported under Other operating income and costs were recognised as a reduction of Overheads/administrative costs ; interest expense on loans was reported under Interest expense in the reclassified income statement. Consolidated interim financial report at 3 March 27 3

14 Euro/ Acquisition fees Fixed management fees Variable management fees Other income Insurance income Total income Acquisition costs Overheads/administrative costs Amortisation/provisions Total costs EBIT Net financial income Net nonrecurring costs Interest expense Pretax profit Income tax Deferred tax assets/liabilities Net profit Profit attributable to minority interest Group net profit Q27 2,93 48,27 49,57 2,293,775 24,723 (84,363) (42,863) (3,979) (3,25) 83,58 (427) (975) (2,825) 79,29 (4,248) (479) 74,564,623 72,94 Q26,572 2,666 5,724 3,98 9,366 33,236 (74,975) (3,454) (2,745) (9,74) 24,62 (243) (276) (2,727) 2,86 (3,724) 3,62 2, ,344 Consolidated EBIT and consolidated Group net profit at 3 March 27 came to 84 million euro (24 million euro at 3 March 26) and 73 million euro (2 million euro at 3 March 26), respectively. At 3 March 27, assets managed amounted to 37.7 billion euro, up by 6 billion euro on 3 March 26 (+9%), generating fixed management fees of 48 million euro, in addition to variable management fees of 5 million euro. The trend of acquisition costs (up by 9 million euro or +3% on 3 March 26) also reflects the recruitment of financial advisors during the period. Overheads and amortisation/depreciation in the first quarter of 27 increased on the same period of the previous year due to the consolidation of foreign equity investments and charges directly related to investments in software to keep up with the growth of the Group. 4 G r u p p o A z i m u t

15 MAIN BALANCE SHEET FIGURES Euro/ Financial assets measured at fair value Availableforsale financial assets Receivables and equity investments Tangible and intangible assets Other assets Total assets Payables and outstanding securities Technical reserves Financial liabilities measured at fair value Other liabilities and provisions Shareholders equity Total liabilities and shareholders equity 3/3/27 6,689, , ,5 525, ,576 8,368,63 66, ,77 6,545, ,856 69,292 8,368,63 3/2/26 3/3/26 6,447,427 5,958,45 276,963 45,445 9,24 22,67 52,562 47,22 29,84 252,96 7,727,276 7,299, ,86 37,44 25, ,57 6,299,36 5,764, ,44 24, ,66 74,728 7,727,276 7,299,685 Financial assets and liabilities measured at fair value rose by approximately 4% on 3 December 26. These items mainly refer to the insurance activities carried out by AZ Life dac: assets mainly relate to investments in unitlinked policies where the investment risk is borne by policyholders, while liabilities mainly relate to commitments from unitlinked policies classified as investment contracts. Similarly, "availableforsale" financial assets, which reflect the investment of the excess liquidity of operations in UCITS units, rose by 3% from 277 million euro to 286 million euro. The increase in cash and cash equivalents with bank current accounts held by Group companies from 9 million euro to 584 million euro is due to the issue of the % nonconvertible Bond of 35 million euro on 27 March 27. Tangible and intangible assets increased slightly as a consequence of the rise in intangible assets with a finite life due to the investments of the period. Consolidated interim financial report at 3 March 27 5

16 Consolidated net financial position At 3 March 27, the net financial position is at 236 million euro, up on the balance at 3 December 26 (+44 million euro). Euro/ Cash Cash equivalents: Due from banks Due from managed funds Availableforsale financial assets Liquidity Shortterm financial receivables Shortterm bank loans Current portion of longterm debt: Bonds (Azimut '3'2 Convertible) Bonds (Azimut '7'22 Nonconvertible) Due to banks (Banco BPM loan) Other shortterm financial payables Shortterm financial debt Short term financial debt (net) Longterm bank loans: Due to banks (BPN loan) Bonds Azimut '3'2 Convertible Bond Azimut '7'22 Nonconvertible Bond Other longterm debt Longterm financial debt Net financial position 3/3/ ,433 49,332 76, 266,85 834,274 (,929) (,852) (77) (,) (,929) 822,345 (,) (,) (576,44) (227,369) (348,775) (586,44) 236,2 3/2/26 3/3/ ,8 8,759 9,63 9,29 5,5 266,832 43,98 438, ,27 (,575) (,97) (524) (,832) (,5) (,85) (,575) (,97) 428, ,353 (,) (2,) (,) (2,) (225,998) (22,848) (225,998) (22,848) (235,998) (24,848) 92,259 32,55 With regard to the methods used to assess net financial position, reference was made to the recommendation issued by CESR (Committee of European Securities Regulators) dated February 25, and more specifically to the paragraph on Capitalisation and indebtedness in chapter II. 6 G r u p p o A z i m u t

17 Receivables and payables include those of a financial nature only, whereas trade receivables and payables have been excluded. Receivables in the form of fees and commissions for managed funds and discretionary portfolios are also included and are considered as cash equivalents given that they are collected by the Group during the first few working days after the reference date. At 3 March 27, consolidated shareholders' equity, including the profit for the period, amounted to 675 million euro (627 million euro at 3 December 25). This figure does not reflect the effects of the dividend distribution approved by the shareholders in their ordinary meeting called to approve the 26 financial statements on 27 April 27. The shareholders resolved to pay a dividend of euro per ordinary share, pretax, to be paid as of 24 May 27, 22 May 27 exdividend payment date and 23 May 27 as the record date. They also approved the payment to Fondazione Azimut Onlus of.8 million euro, equal to % of pretax consolidated profit and the payment of 7.27 euro for each profitparticipating financial instrument held by Top Key People at the time of approval of payment of the dividend. Shareholders' equity At 3 March 27, Azimut Holding S.p.A.'s subsidiaries did not hold, nor did they hold during the period, any treasury shares or shares of the parent company, either directly or via trust companies or third parties. Treasury shares During the first quarter of the year,,492,55 treasury shares were purchased, for a total of 25 million euro. At 3 March 27, Azimut Holding S.p.A. s treasury share portfolio therefore stood at,879,739 shares, or 8.293% of share capital. Consolidated interim financial report at 3 March 27 7

18 2 Main events of the first quarter of Capitalisation transactions carried out by Azimut Holding S.p.A. In the first quarter of 27, following the Board of Directors' resolutions of March 26, Azimut Holding S.p.A. made a capital injection of 3 million euro to increase the share capital of the subsidiary AZ International Holdings SA and finance the Group's international development. The capital injection in favour of Azimut Enterprises Holding S.r.l. totalling 22 thousand euro was made on 4 January Purchases of own shares by Azimut Holding S.p.A. As of 7 February 27, as resolved by the Shareholders in their Ordinary meeting of 28 April 26, Azimut Holding S.p.A. launched a share buyback programme in order to subsequently resell treasury shares or use them to acquire or exchange equity investments, accumulate the capital stock for the execution of stock options programmes, service the financial instruments convertible into the Company's shares or any other useful purpose which increases the value of the Company in compliance with the legislation from time to time in force. The maximum number of shares that may be repurchased as of today is 8,263,7, representing approximately 3% of share capital. Buybacks will be executed in tranches, for a total amount of 25,, euro at the maximum price of 5 euro (only for the first tranche the maximum acquisition price will be equal to 3 euro). The purchase of the first tranche was completed on 27 February 27 and involved a total of,492,55 treasury shares against a consideration of 25 million euro. 2.3 Issue of a fixedrate nonconvertible bond On 2 March 27, the Board of Directors of Azimut Holding S.p.A. approved the issue of a fixedrate nonconvertible bond (the Bond Issue ). The company closed the Bond placement at 35 million euro on 22 March 27, with a fixed rate coupon of 2.% and a fiveyear duration, maturing on 28 March 222. The bonds were offered to qualified investors, excluding those in the United States and other selected countries, and are listed on the Luxembourg Stock Exchange. The Company may use the proceeds from the Bond for its own operations and to finance potential extraordinary transactions, including the possible repurchase of the company's equity instruments currently outstanding and/or repay part of the debt or to finance the rescheduling and settlement of the company's longterm debt, including a possible purchase offer (25.. 2,25%). Subordinated Convertible Bonds due in 22 (reference should be made to the paragraph Events after the reporting date ). 2.4 Other significant events of the period Over its 25 years of activities, in line with market practices and given its size and business, the Azimut Group was subject to ordinary inspections by the Supervisory Authorities. In March 27, as part of an ordinary inspection carried out by the Bank of Italy, to the extent of its duties, Consob fined some profiles of Azimut Consulenza SIM (now Azimut Capital Management SGR). 8 G r u p p o A z i m u t

19 The main risks and uncertainties to which Azimut Holding S.p.A. and the Group are exposed are as follows: 3 Main risks and uncertainties Strategic risk; Sales network risks Operational risk; Outsourcing risk; Reputational risk; Compliance risk; Financial risk; Liquidity risk. For further information on the key risks and uncertainties for the Group, reference should be made to the consolidated financial statements at 3 December 26. Pursuant to Consob Regulation on Related Parties (Resolution No. 722 of March 2, as amended), on 22 November 2, the Board of Directors of Azimut Holding S.p.A. approved the procedures that ensure transparency and fairness of relatedparty transactions ( RelatedParty Transaction Procedure available on Azimut s website at With reference to paragraph 8 of Article 5 of the Consob Regulation on periodic disclosure of relatedparty transactions, the Group did not engage in any significant transactions during the first quarter of Related party transactions No other atypical or unusual transactions were performed. Information on key management fees Directors' fees amounted to 4,49 thousand euro in the first quarter of 27. The fees for the Board of Statutory Auditors members stood at 6 thousand euro. Information on related party transactions Related party transactions referring to commercial transactions carried out by Azimut Holding S.p.A. with its subsidiaries and associates, and among its subsidiaries and/or associates in the first quarter of 27 are part of the Group's ordinary business and were conducted on an arm s length basis. Consolidated interim financial report at 3 March 27 9

20 Moreover: for use of the trademark, the subsidiary Azimut Capital Management Sgr S.p.A. pays Azimut Holding S.p.A. annual royalties totalling 2, thousand euro, established by contract; Azimut Holding S.p.A., as the parent company, Azimut Capital Management Sgr S.p.A. Azimut Financial Insurance S.p.A., Azimut Enterprises Holding S.r.l. and Azimut Partecipazioni S.r.l., as subsidiaries, have adopted the tax consolidation regime; a contractually established annual fee (totalling, euro/thousand) is payable for the coordination activities carried out by the Parent Company on behalf of the subsidiary Azimut Capital Management Sgr S.p.A.; an annual fee calculated based on contractually established percentages is payable for the Risk Management, Internal Audit, Compliance and Antimoney Laundering control activities carried out by the Company in favour of the subsidiaries Azimut Capital Management S.p.A., Futurimpresa Sgr S.p.A. and Augustum Opus Sim S.p.A.. Azimut Holding S.p.A. has issued sureties to the subsidiary Azimut Capital Management Sgr S.p.A. Azimut Capital Management sgr S.p.A. has disbursed loans to several financial advisors, identified as related parties, to develop their business. The terms and conditions of these loans are at arm s length. At 3 March 27, they amounted to,69 thousand euro. Moreover, the directors of the Group who also act as managers of mutual funds are exempt from paying fees and commissions on any personal investments made in the funds they manage. With respect to profitparticipating financial instruments, in accordance with Shareholders' resolutions, 3 key directors subscribed 23, instruments (paying the corresponding amount), including the Chairman Pietro Giuliani (78,65), the CoChief Executive Officers Marco Malcontenti (33,) e Antonella Mungo (33,), the directors Andrea Aliberti (5,), Paolo Martini (25,), Marzio Zocca (5,), Gianpiero Gallizioli (3,93) and Silvia Scandurra (,548). As per the Shareholders' agreement related to Azimut Holding S.p.A., 944 related parties subscribed a total of,476,96 profitparticipating instruments. Following the call option exercised by Azimut Holding S.p.A. in May 26, at the reporting date, the company held 23,94 profitparticipating financial instruments. 2 G r u p p o A z i m u t

21 Position Managers Middle managers Office staff Total 3/3/27 3/2/26 3/3/26 5 Human resources Invitation to the holders of the euro 25,, 2.25 per cent Subordinated Convertible Bonds due 22 to tender their bonds for purchase by the Company. On 4 April 27, the Board of Directors of Azimut Holding S.p.A. approved the invitation to the holders of its euro 25,, 2.25 per cent Subordinated Convertible Bonds due 22 issued in November 23 (the Convertible Bond or the Bonds ) to tender their Bonds for purchase by the Company (the Repurchase ) through a reverse bookbuilding process. On 5 April 27, at the Expiry of the Offer, at 7:45 (CET) on 5 April 27, Bonds with an aggregate nominal amount of over 248,, euro were validly tendered, equal to more than 99% of the total nominal amount of the Bonds issued. The Early Purchase Price was set at,783 euro every, euro of Bonds (principal), while the Late Purchase Price was set at 9,783 euro every, Bonds (principal). 6 Events after the reporting date 6.2 Azimut Holding S.p.A. General Shareholders Meeting of 27 April 27 The shareholders meeting (both ordinary and extraordinary) of 27 April 27 approved the following: Approval of 26 financial statements The shareholders meeting approved the 26 financial statements, which included a parent company net profit of 6.9 million euro. The shareholders concurrently resolved to pay a dividend of euro per ordinary share, pretax, to be paid as of 24 May 27, 22 May 27 exdividend payment date and 23 May 27 as the record date. They also approved the payment to Fondazione Azimut Onlus of.8 million euro, equal to % of pretax consolidated profit and the payment of 7,27 euro for each profitparticipating financial instrument held by Top Key People at the time of approval of payment of the dividend. Appointment of Directors. The Shareholders were in favour of the appointment of Sergio Albarelli and Alessandro Zambotti as Directors. In their meeting of 27 April 27, the Board of Directors of Azimut Holding S.p.A. confirmed Sergio Albarelli as Chief Executive Officer and Alessandro Zambotti as the Chief Financial Officer of the Group. Consolidated interim financial report at 3 March 27 2

22 Proposal for purchase and allocation of treasury shares and consequent resolutions. Furthermore, the shareholders approved the purchase of up to 28,, Azimut Holding S.p.A. ordinary shares, or 9.55% of the current share capital, including in one or more instalments, considering the shares already in portfolio upon purchase at a minimum unit price equal to at least the carrying amount of Azimut Holding S.p.A. ordinary shares and a maximum unit price of 5 euro. Remuneration Report The Shareholders Meeting approved the Company policy concerning remuneration of members of the management boards, general managers and key managers, as well as the procedures used to adopt and implement said policy. Furthermore, the Shareholders were in favour of the proposal to increase the ratio between the fixed and variable components of remuneration up to 2:. 6.3 Publication of the consolidated interim financial report at 3 March 27 On 4 May 27, the Board of Directors granted authorisation to publish the interim financial report at 3 March Business outlook Given the positive results of the subsidiaries in the first quarter of 27, consolidated net profit is expected to be positive this year. Nonetheless, this year s financial position and results of operations will also be affected by financial market trends. 22 G r u p p o A z i m u t

23 Consolidated financial statements Consolidated interim financial report at 3 March 27 23

24 Consolidated balance sheet Assets 3/3/27 3/2/26 3/3/26 Cash and cash equivalents Heldfortrading financial assets Financial assets measured at fair value 6,689,224 6,447,427 5,958,45 Availableforsale financial assets 286, ,963 45,445 Heldtomaturity financial assets Receivables a) for portfolio management b) other receivables 583,8 76, 56,979 89,35 9,29 99,86 86,865 5,5 35,354 Equity investments ,84 Tangible assets 8,288 7,29 6,893 Intangible assets 57,595 54, ,39 Tax assets a) current b) deferred 82,47 33,778 48,269 8,949 35,878 46,7 85,624 52,682 32,942 Other assets 2,52 29,4 84,279 Total assets 8,368,63 7,727,276 7,299,685 Liabilities and Shareholders Equity 3/3/27 3/2/26 3/3/26 Payables 28,873 28,283 34,372 Outstanding securities 578,73 226, ,68 Technical reserves where the investment risk is borne by policyholders 246,827 25, ,77 Other technical reserves Financial liabilities measured at fair value 6,545,792 6,299,36 5,764,228 Tax liabilities: a) current b) deferred 66,293 5,89 6,42 59,4,443 57,958 74,46 4,9 59,955 Other liabilities 75,524 82,975 69,357 Staff severance pay (TFR) 3,397 3,43 3,364 Provisions for risks and charges b) other provisions 3,642 3,642 3,265 3,265 26,852 26,852 Share capital 32,324 32,324 32,324 Treasury shares () 6, 8,288 8,864 Equity instruments 7,95 7,95 7,435 Share premium reserve 73,987 73,987 73,987 Reserves 433, ,7 522,363 Valuation reserves 2,967 4,674,552 Profit for the period/year 72,94 72,685 2,343 Minority interest 6,63 7,975 2,692 Total liabilities and shareholders equity 8,368,63 7,727,276 7,299, G r u p p o A z i m u t

25 Consolidated income statement Items First quarter of 27 First quarter of 26 Fee and commission income Fee and commission expense Net fee and commission income Dividends and similar income Interest income and similar income Interest expense and similar charges Profits on disposal or repurchase of: a) financial assets b) financial liabilities Net result of financial assets and financial liabilities measured at fair value Net premiums Net profits (losses) on financial instruments at fair value through profit or loss Change in technical reserves where the investment risk is borne by policyholders Redemptions and claims Total income Administrative costs: a) personnel costs b) other administrative costs Net impairment/writeups of tangible assets Net impairment/writeups of intangible assets Net accruals to the provisions for risks and charges Other operating income / costs Operating profit Pretax profit (loss) from continuing operations Income tax on profit from continuing operations Net profit (loss) from continuing operations Profit (loss) for the period/year attributable to minority interest Profit (loss) for the year 25,63 (75,975) 29, (3,73) ,426 58,479 4,47 54,458 36,243 (52,8) (9,586) (32,495) (578) (3,284) (937) (72) 79,29 79,29 (4,727) 74,564,623 72,94 25,57 (68,58) 57, (2,86) (6) ,86 8,52 43,5 62,323 (38,398) (4,35) (24,47) (464) (2,274) (43) 58 2,85 2,85 (22) 2, ,343 Consolidated interim financial report at 3 March 27 25

26 Statement of comprehensive income Items First quarter of 27 First quarter of 26 Profit for the period/year Other comprehensive income, net of taxes, not transferred to profit or loss Tangible assets Intangible assets Defined benefit plans Noncurrent assets held for sale Share of valuation reserves of investments measured at equity Other comprehensive income, net of taxes, transferred to profit or loss Foreign investment hedge Exchange rate differences Cash flow hedge Availableforsale financial assets Noncurrent assets held for sale Share of valuation reserves of investments measured at equity Total other comprehensive income/(expense), net of taxes Comprehensive income Consolidated comprehensive income attributable to minority interest Consolidated comprehensive income attributable to parent company 72,94 (22) (),829,77 74,648,623 73,25 2,693 (9) (,957) (,8) (3,776) 6, , G r u p p o A z i m u t

27 Consolidatd cash flow statement Indirect method A. OPERATING ACTIVITIES. Operations profit (loss) for the period/year (+/) gains/losses on heldfortrading financial assets and financial assets/ liabilities measured at fair value (/+) profits/losses on hedging activities (/+) net impairment losses (+/) net impairment losses on tangible and intangible assets (+/) net allowance to provisions for risks and charges and other expenses/income (+/) tax and duties still to be paid (+) net impairment losses on assets held for sale, net of tax (+/) other changes (+/) 2. Cash generated from or used by financial assets heldfortrading financial assets financial assets measured at fair value availableforsale financial assets due from banks due from financial institutions due from clients other assets 3. Cash generated from or used by financial liabilities due to banks due to financial institutions due to clients outstanding securities heldfortrading financial liabilities financial liabilities measured at fair value technical reserves other liabilities Net cash generated from or used by operating activities First quarter of ,258 34,755 72,94 72,685 (5,856) (58,942) 3,862 6, ,844 4,727 (,72) (,353) 77 (223,626) (787,765) (225,94) (73,63) (9,42) (3,52) 873 (,225) (335),56,42 (3,76),55 (5,665) 588,7 839,55 (4,249) (6,625) (367) (8) 5,55 (27) 352,955 4, , ,73 (4,47) (29,885) (7,393),748 43,342 86,45 Consolidated interim financial report at 3 March 27 27

28 Consolidatd cash flow statement B. INVESTMENT ACTIVITIES First quarter of 27. Cash generated from: disposal of equity investments dividends disposal of heldtomaturity financial assets disposal of tangible assets disposal of intangible assets disposal of subsidiaries and business units 2. Cash used by: (8,84) purchase of equity investments purchase of heldtomaturity financial assets purchase of tangible assets (,647) purchase of intangible assets (2,78) purchase of subsidiaries and business units (3,756) Net cash generated from or used by investment activities (8,84) 26 (8,593) (82) (3,528) (6,69) (6,75) (8,593) C. FINANCING ACTIVITIES issue/purchase of treasury shares change in other reserves change in capital and reserves attributable to minority interest issue/purchase of equity instruments dividends and other distributions Net cash generated from or used by financing activities (24,82) (559) (,345) (26,76) (,79) (2,564) 7,627 (58) (238,599) (254,835) Net cash generated or used for the period/year 395,442 (49,383) RECONCILIATION Opening cash and cash equivalents Total net cash generated/used for the period/year Closing cash and cash equivalents First quarter of , , , ,25 (49,383) 438, G r u p p o A z i m u t

29 Consolidated interim financial report at 3 March 27 29

30 Statement of changes in shareholders' equity for 3 March 27 Allocation of prior year profit Items Balance at Changes in opening balance Balance at..27 Reserves Dividends and other distributions Changes in reserves Share capital 32,324 32,324 Share premium reserve 73,987 73,987 Other reserves: a) incomerelated 369,76 369,76 72,685 b) other (6,69) (6,69) Valuation reserves (4,674) (4,674) Equity instruments 7,95 7,95 Treasury shares (8,288) (8,288) Profit (loss) for the period/year 72,685 72,685 (72,685) Group shareholders equity 627,92 627,92 Shareholders equity attributable to minority interest 7,975 7,975 3 G r u p p o A z i m u t

31 Changes during the year Shareholders equity transactions Issue of new shares Treasury share purchases Extraordinary dividend distribution Changes in equity instruments Other changes Consolidated comprehensive income for the first six months of 27 Group shareholders equity at 3/3/27 Shareholders equity attributable to minority interest at 3/3/27 32,324 4,827 73,987 (2,266) 539,595 (28,554) (6,69),77 (2,967) 2,734 7,95 (24,82) (6,) 72,94 72,94,623 (24,82) (2,266) 74, ,662 (2,968),623 6,63 Consolidated interim financial report at 3 March 27 3

32 Statement of changes in shareholders' equity for 3 March 26 Allocation of prior year profit Items Balance at Changes in opening balance Balance at..26 Reserves Dividends and other distributions Changes in reserves Share capital 32,324 32,324 Share premium reserve 73,987 73,987 Other reserves: a) incomerelated 36,354 36, ,42 b) other (8,73) (8,73) Valuation reserves (7,776) (7,776) Equity instruments 7,459 7,459 Treasury shares (8,727) (8,727) Profit (loss) for the period/year 247,42 247,42 (247,42) Group shareholders equity 76,869 76,869 Shareholders equity attributable to minority interest,348, G r u p p o A z i m u t

33 Changes during the year Shareholders equity transactions Issue of new shares Treasury share purchases Extraordinary dividend distribution Changes in equity instruments Other changes Consolidated comprehensive income for the first six months of 26 Group shareholders equity at 3/3/26 Shareholders equity attributable to minority interest at 3/3/26 32,324 3,393 73,987 (5,263) 62,52 (7,743) 24 (8,49) (3,776) (,552) (38) (24) 7,435 (37) (8,864) 2,343 2, (37) (5,263) 6, ,28, ,692 Consolidated interim financial report at 3 March 27 33

34 Statement of changes in shareholders' equity for 3 December 26 Allocation of prior year profit Items Balance at Changes in opening balance Balance at..26 Reserves Dividends and other distributions Changes in reserves Share capital 32,324 32,324 Share premium reserve 73,987 73,987 Other reserves: a) incomerelated 36,354 36,354 4,689 (32,867) b) other (8,73) (8,73) Valuation reserves (7,776) (7,776) Equity instruments 7,459 7,459 Treasury shares (8,727) (8,727) Profit (loss) for the period/year 247,42 247,42 (4,689) (5,732) Group shareholders equity 76,869 76,869 (238,599) Shareholders equity attributable to minority interest,348, G r u p p o A z i m u t

35 Changes during the year Shareholders equity transactions Issue of new shares Treasury share purchases Extraordinary dividend distribution Changes in equity instruments Other changes Consolidated comprehensive income for the first six months of 26 Group shareholders equity at 3/2/26 Shareholders equity attributable to minority interest at 3/2/26 32,324 39,29 73, ,76 (27,337) 58 (26,44) (6,69) 3,2 (4,674),484 (58) 7,95 (,79),23 (8,288) 72,685 72,685 4,69 (,79) (25,74) 75, ,92 3,8 4,69 7,975 Consolidated interim financial report at 3 March 27 35

36 36 G r u p p o A z i m u t

37 Basis of preparation Consolidated interim financial report at 3 March 27 37

38 Basis of preparation Accounting policies Statement of compliance with IFRS Pursuant to article 54ter of Italian Legislative Decree no. 58 of 24 February 998 and subsequent amendments, the consolidated interim financial report of the Azimut Group at 3 March 27 has been prepared in accordance with the IAS/IFRS (International Accounting Standards/International Financial Reporting Standards) promulgated by the International Accounting Standards Board (IASB) and the related interpretations of the IFRS Interpretations Committee (formerly IFRIC) and the Standing Interpretations Committee (SIC) endorsed by the European Commission until the date of this report, as required by Regulation (EC) No. 66 of 9 July 22, implemented in Italy by Legislative Decree no. 38 of 28 February 25. General reporting criteria The consolidated interim financial report has been prepared in accordance with the IAS/IFRS endorsed and in force on 3 March 27. Other documents prepared by the IASB or the IFRS Interpretation Committee to supplement the reporting standards issued were considered for interpretation purposes and to support application, although they were not endorsed. These documents include: the Framework for the Preparation and Presentation of Financial Statements, the Implementation Guidance, the Basis for Conclusions, the IASB Update and the IFRIC Update. The consolidated interim financial report has also been drawn up based on the interpretative documents on the application of IAS/IFRS in Italy prepared by the Italian Accounting Standard Setter (OIC) and the ESMA (European Securities and Markets Authority) and Consob (the Italian Commission for Listed Companies and the Stock Exchange) documents which refer to specific IAS/IFRS. 38 G r u p p o A z i m u t

39 It comprises the consolidated financial statements (balance sheet, income statement, statement of comprehensive income, statement of changes in shareholders equity and cash flow statement) and the basis of preparation, and is accompanied by information on the performance of consolidated companies and the statement required by article 54bis.2 of the Consolidated Law on Finance. The consolidated financial statements have been drawn up in accordance with the instructions issued by the Bank of Italy for the preparation of financial statements of IFRS financial intermediaries, other than banking intermediaries on 9 December 26. The Instructions lay down the mandatory financial statements schedules formats and how they must be filled in and the content of the notes thereto for asset management companies that were adequately adjusted to better represent the Group's financial position and business activities, which include the Irish insurance company Az Life Dac. In particular, the balance sheet and income statement include the items which are typical of the insurance business, taking as a reference ISVAP (now IVASS) Regulation No. 7 dated 3 July 27 concerning the provisions governing the consolidated financial statements of insurance companies drawn up on the basis of IAS/IFRS. The consolidated interim financial report has been drawn up using the euro as the reporting currency. Specifically, in line with the instructions issued by the Bank of Italy, consolidated financial statements figures are presented in thousands of euros, unless otherwise specified. Figures were rounded considering the above instructions issued by the Bank of Italy. The consolidated interim financial report has been published within 45 days of the end of the first quarter of the year and has not been audited by the independent auditors. Consolidated interim financial report at 3 March 27 39

40 Accounting policies The IAS/IFRS applied to prepare the Azimut Group's consolidated financial statements, governing the classification, recognition, measurement and derecognition criteria of asset and liability items and the recognition of income and expense are those in force at the drafting date of this report, as endorsed by the European Union. For information on the classification, recognition, measurement and derecognition criteria of the main items, reference should be made to that set out in Part A.2. of the Notes to the Azimut Group's consolidated financial statements at 3 December 26. In addition to that set out in Part A.2, following the completion of the endorsement procedure, the following amendments to IAS/IFRS became effective on January 27. Standards IFRS 4 Regulatory deferral accounts IASB publication date 3 January 24 Endorsement date n.a.* Date of coming into force n.a. * IFRS 9 Financial instruments 24 July November 26 January 28** IFRS 6 Leases 3 January 26 January 29** IFRS 5 Revenue from contracts with customers and amendments 28 May 24 and September September 26 January 28** Amendments Amendments to IAS 2: Recognition of deferred tax IASB publication date January 26 Endorsement date Date of coming into force January 27** assets for unrealised losses Amendments to IAS 7: Disclosure initiative 29 January 26 January 27** Amendments to IFRS 2: Classification and 2 June 26 January 28** measurement of sharebased payment transactions Amendments to IFRS 4: Applying IFRS 9 Financial 2 September 26 January 28** instruments Amendments to IAS 4: Transfers of investment 8 December 26 January 28** property Annual improvements to IFRS 2426 cycle 6 February 27 January 28** IFRIC 22 Foreign currency transactions and advance 7 February 27 January 28** consideration Clarifications IASB publication date Endorsement date Date of coming into force Clarifications to IFRS 5: Revenue from contracts with customers 2 April 26 January 28** 4 G r u p p o A z i m u t

41 The consolidated interim financial report of the Azimut Group includes the balance sheet and income statement figures of Azimut Holding S.p.A. and the direct and indirect subsidiaries. Consolidation scope Subsidiaries The Azimut Group consolidation scope has been established in accordance with IFRS. Specifically, subsidiaries are those companies in respect of which the Azimut Group is exposed, or has rights, to variable returns from its involvement with the investees and has the ability to affect those returns through its power over the investees. Control exists only when the following elements simultaneously exist: (i) the power to direct the relevant activities; (ii) exposure, or rights, to variable returns from involvement with the investee; (iii) the ability to use its power over the investee to affect the amount of its returns. Associates Associates are those companies subject to significant influence, i.e. companies in which the Azimut Group, either directly or indirectly, holds at least 2% of the voting rights (including potential voting rights) or in which despite holding a smaller percentage of voting rights has the power to participate in the financial and operating policy decisions, such as the participation in shareholders' agreements, due to specific legal relationships. These companies are consolidated using the equity method whereby on initial recognition the investment is recognised at cost, and the carrying amount is increased or decreased to recognise the investor s share of the equity of the investee after the date of acquisition, using the most recently approved financial statements of the companies. The difference between the carrying amount of the equity investment and the investee's share of equity is included in the carrying amount of the investee. Changes to the consolidation scope There were no changes in the consolidation scope compared to 3 December 26. Consolidated interim financial report at 3 March 27 4

42 Wholly and jointlyowned subsidiaries Name Registered office Type of ownership (*) Stake Voting rights % Shareholder % stake Fully consolidated, whollyowned companies. Azimut Capital Management Sgr S.p.A. Milan Azimut Holding S.p.A. 2. AZ Fund Management SA Luxembourg Azimut Holding S.p.A. Azimut Partecipazioni S.r.l AZ Life dac Dublin Azimut Holding S.p.A. 4. Azimut Global Counseling S.r.l. Milan Azimut Holding S.p.A. 5. Azimut Enterprises Holding S.r.l. Milan Azimut Holding S.p.A. 6. Augustum Opus Sim S.p.A. Milan Azimut Holding S.p.A Futurimpresa Sgr S.p.A. Italy Azimut Holding S.p.A Azimut Financial Insurance S.p.A. Italy Azimut Holding S.p.A. 9. Azimut Partecipazioni S.r.l. Italy Azimut Holding S.p.A.. AZ International Holdings S.A. Luxembourg Azimut Holding S.p.A.. AN Zhong (AZ) IM Hong Kong AZ International Holdings SA 2. AN Zhong (AZ) IM HK Hong Kong An Zhong (AZ) IM 3. AZ Investment Management Shanghai An Zhong (AZ) IM 4. Compagnie de Gestion priveè Monegasque Monaco AZ International Holdings SA CGM Italia SGR S.p.A. (formerly CGM Italia SIM S.p.A) Italy Compagnie de Gestion priveè Monegasque 6. Katarsis Capital Advisors SA 7. Eskatos Capital Management Sarl 8. AZ Swiss & Partners SA (formerly AZ Swiss SA) Lugano Luxembourg Lugano AZ International Holdings SA Katarsis Capital Advisors SA AZ International Holdings SA AZ Sinopro Investment Planning Ltd Taiwan AZ International Holdings SA AZ Sinopro Investment Planning Ltd Taiwan AZ Sinopro Investment Planning Ltd AZ Sinopro Insurance Planning Ltd Taiwan AZ Sinopro Investment Planning Ltd Atheneaum Ltd Singapore AZ International Holdings SA 23. AZ Brasil Holdings Ltda Brazil AZ International Holdings SA 24. Quest Partecipacoes S.A. Brazil AZ Brasil Holdings Ltda Quest Investimentos Ltda Brazil Quest Participações Ltda Azimut Brasil Wealth Management Holding S.A. (formerly AZ FI Holdings) Brazil AZ Brasil Holdings Ltda 27. M&O Consultoria Ltda Brazil Azimut Brasil WM Holding SA 28. Futurainvest Gestão de Recursos Ltda Brazil Azimut Brasil WM Holding SA 42 G r u p p o A z i m u t

43 Name Registered office Type of ownership (*) Stake Votin rights % Shareholder % stake Fully consolidated, whollyowned companies 29. AZ & Partners Gestão de Recursos Ltda (formerly BRZ Gestáo de Patrimônio) Brazil Azimut Brasil WM Holding SA. 3. Azimut Brasil Wealth Management Ltda Brazil Azimut Brasil WM Holding SA Azimut Portfoy AS Turkey AZ International Holdings SA. 32. AZ Mexico Holdings S.A. de CV (formerly AZ Profie SA) Mexico AZ International Holdings SA Mas Fondos S.A. Mexico AZ Mexico Holdings S.A. de CV (formerly AZ Profie SA) Next Generation Advisory PTY Ltd Australia AZ International Holdings SA Eureka Whittaker Macnaught PTY Ltd Australia Next Generation Advisory PTY Ltd Pride Advice PTY Ltd Australia Next Generation Advisory PTY Ltd Lifestyle Financial Planning Services (LFPS) PTY Ltd Australia Next Generation Advisory PTY Ltd Eureka Financial Group PTY Ltd Australia Next Generation Advisory PTY Ltd Pride Financial PTY Ltd Australia Next Generation Advisory PTY Ltd Wise Planners PTY Ltd Australia Next Generation Advisory PTY Ltd 53,8 53,8 4. Domane Financial Advisers PTY LTD Australia Wise Planners PTY Ltd Financial Lifestyle Partners PTY Ltd Australia Next Generation Advisory PTY Ltd Harvest Wealth PTY Ltd Australia Next Generation Advisory PTY Ltd RI Toowoomba PTY Ltd Australia Next Generation Advisory PTY Ltd Empowered Financial Partners PTY Ltd Australia Next Generation Advisory PTY Ltd Wealthwise PTY Ltd Australia Next Generation Advisory PTY Ltd Priority Advisory Group PTY Ltd Australia Next Generation Advisory PTY Ltd Sterling Planners PTY Ltd Australia Next Generation Advisory PTY Ltd Logiro Unchartered PTY Ltd Australia Next Generation Advisory PTY Ltd Aspire Pty Ltd Australia Logiro Unchartered PTY Ltd OnTrack Financial Solutions Pty Ltd Australia Next Generation Advisory PTY Ltd AZ Sestante Ltd (formerly Ironbark Funds Management (RE) Ltd) Australia AZ International Holdings SA AZ Andes S.p.A. Chile AZ International Holdings SA Sigma Funds Management PTY Ltd Australia AZ International Holdings SA AZ US Holding Inc. United States AZ International Holdings SA 56. AZ Apice Capital Management LLC United States AZ US Holding Inc. 7 7 (*) Type of ownership: () majority of voting rights at ordinary shareholders meetings Consolidated interim financial report at 3 March 27 43

44 Investments measured at equity Name Registered ed office Stake Voting rights % Shareholder % stake Associates measured at equity. Cofircont Compagnia Fiduciaria S.r.l. Italy Azimut Enterprises Holding S.r.l SiamoSoci S.r.l. Italy Azimut Enterprises Holding S.r.l G r u p p o A z i m u t

45 Statement pursuant to article 54bis.2 of the Consolidated Law on Finance Consolidated interim financial report at 3 March 27 45

46 46 G r u p p o A z i m u t

47 Statement pursuant to article 54bis.2 of the Consolidated Law on Finance The Manager in charge of financial reporting, Alessandro Zambotti, represents pursuant to Article 54bis, par. 2 of the Consolidated Law on Finance, that the accounting information presented in this Interim financial report at 3 March 27 is consistent with the accounting documents, books and records. Milan, 4 May 27 The Manger in charge of financial reporting (Alessandro Zambotti) Consolidated interim financial report at 3 March 27 47

48