Catella - Weaker than expected Q4 report
Q4’20 EBIT of SEK 23m vs. ABG est. at SEK 65m AUM was 8% below ABGSC estimate Expect share will come down today Q4 EBIT came in at SEK 23m, vs ABGSC at SEK 65m Catella reported a Q4’20 EBIT of SEK 23m (122m), 65% below ABGSC, which expected SEK 65m. The reported EBIT is down 81% y-o-y, driven by the Corporate Finance and the Equity, Hedge and Fixed Income Funds segments, which are the two segment that has been most impacted by COVID-19, where the operating profit has decreased y-o-y.
The main deviation compared to ABG expectations in Q4 was the Property Investment Management, which came in below our forecast. In Q4’20, the group’s AUM decreased by 4% q-o-q (SEK 6bn) to SEK 130bn, primarily driven by outflows in Systematic Macro. The company proposes a DPS of SEK 0.9 per share, which was in-line with ABGSC expectation SEK 0.9 per share.
Q4 details – AUM came in at SEK 130bn, 8% below ABGSC Catella reported sales of SEK 534m (-1% vs. ABGSC at SEK 541m), EBIT came in at SEK 23m vs. ABGSC at SEK 65m.
The AUM came in at SEK 130bn, down 4% q-o-q and 8% below ABGSCe. The AUM in Equity, Hedge and Fixed Income Funds saw outflows during the fourth quarter and came in 26% below ABGSCe at SEK 14bn. The AUM was also lower in the PIM segment and decreased by 1% q-o-q in Q4, and came in 5% below ABGSCe, at SEK 116bn.
The company highlights that the segment saw net flows of SEK 5.1bn in Q4 and that the AUM decrease is driven by FX. AUM below our expectations, leads to negative revisions We expect the estimates for 2021e and 2022e will come down, driven by the lower reported AUM. The Catella stock remains cheap on multiples compared to our peer group, however given that the stock was strong into the numbers the last few days, and up ~43% the last 3M, while the reported EBIT is down 81% y-o-y, we expect the share will come down today..