Hello, and welcome to Eurazeo first nine months, 2023 results call. My name is Alicia, and I will be your coordinator for today's event. Please note this call is being recorded, and for the duration of the call, your lines will be on listen-only. However, you will have the opportunity to ask questions at the end of the call. This can be done by pressing star one on your telephone keypad to register your question. If you require assistance at any point, please press star zero, and you will be connected to an operator. I will now hand you over to William Kadouch-Chassaing, Co-CEO, to begin today's conference. Thank you. Thank you very much. Good morning. Thanks for joining this call. I am pleased to welcome you to our Q3 2023 trading update and first nine months results. Let me walk you through the performance and development we recorded for the period. Overall, I'd say the mantra is that we continue to post solid growth in a context which, as you know, is more uncertain than ever. Steady AUM growth is the first message we want to pass. We enjoy the steady increase in our assets under management. Fee paying AUM, as you can see on the page that has been provided to you and the press release, are up 19% for the period, our total AUM are up 11%. Just a technical comment. As a reminder, we have sold our stake in Rhône, so now our AUM exclude the contribution from Rhône, for Rhône, which has also been restated logically for in the 2022 figures. We have, for the period, a resilient fundraising, and this is, again, in spite of a more challenging environment. We raised EUR 1.7 billion from third parties in the first nine months of 2023. This is a tad lower than we had raised, the amount we had raised for the first nine months, 2022, excluding, Rhône, i.e., for our core asset management. Now, if you would just focus on Q3, we are at above EUR 400 million, to be compared with EUR 300 million for the same period of last year. Quarterly fundraising figures are a bit less relevant. Remember that last year we had some concentration on Q4 with EUR 1.1 billion. Overall, EUR 1.7, a tad lower than we had for the same period of last year. The main contributors, as we explained in the past quarters, are logically private debt, which continue to enjoy a very strong momentum with over EUR 900 million raised in the first nine months, which is up 31% compared to last year. We enjoy a very good start for our impact strategies. This is clearly a promising sector with strong interest from clients. Infrastructure funds that we've talked about in the past quarters continue to collect well. This is a fund dedicated to energy transition. We have new commitments, and we are now very close to the initial target of EUR 500 million. So we should cross that target and end up the year at the level above. Smart City II, which is a venture fund focused on mobility and technologies associated with green mobility and cities, yeah, has closed and exceeding its initial target. Another contributor, which you would find across different strategies, but in terms of clients beyond institutional, as you know, we have a very strong contribution from wealth management. That continues to be the case for the first nine months. Fundraising for in wealth management was about EUR 600 million for the first nine months, actually 566, which is very consistent with the number we had in 2022, which was a record year. That represents 33% of the inflows, and now wealth management represents 17% of our AUM, third party AUM, should we focus on inventories, which when you compare with competition, is obviously a good number. A very important thing, which we announced yesterday, post-closing, we completed a first closing of our mid-large buyout strategy at EUR 2.3 billion, of which EUR 600 million of third-party investors' money. This is a very important milestone for this strategy, which is historically supported by the balance sheet, has already proven that it could raise money through secondaries and dedicated side funds. But now, we're talking about primary money in this new Capital V program of EUR 600 million. So if you adjust the 1.7 I talked about before for this number of 600, you end up on a pro forma 2.3, which is to be put in conjunction with our guidance for the year. We now expect that we should reach around EUR 3 billion of fundraising for the whole of 2023. And, as you hear from me, we have already done the bulk of it as we speak. Logically, and that's the next slide, good momentum in AUM growth translates in increasing recurring revenues. They are, again, up double-digits year-over-year at 10%. The management fees, recurring management fees, stand at EUR 305 million for the first nine months of 2023. Again, 10% up relative to the same period of last year. Adjusted for last year, catch-up fees base effect. We don't have much catch-up fees in the first nine months of 2023, but we had catch-up fees in 2022. The management fee growth is up 12%. If you focus on me, as we put in the press release on third parties, adjusted from the base effect I was alluding to, management fees are up 7% for the first nine months. Let me turn now to the performance of portfolio companies. As you know, we are publishing our numbers under IFRS 10 exemption rule, which means that we no longer consolidate the revenues of the portfolio companies. Yet, as discussed with you in the previous, previous quarters, we continue to think this is a very important indicator for you to gauge the quality of the portfolio we have on balance sheet, as well as the quality of the investments. As you know, what we invest from the balance sheet is usually through the funds. And, what the numbers we give you here relates to assets which represent 95% of the total net value of Eurazeo balance sheet. So we consider it's a very relevant indicator. Overall, as you can see, very decent and even solid growth across the board. Revenues in mid-large buyout. Mid-large buyout represent 43%, as you know, of our balance sheet value, on balance sheet value. Mid-large buyout companies posted revenue growth of 15% year-on-year for the first nine months, distributed, broad-based, and that reflects the quality of choices, particularly in terms of sectors, companies, geographies. Small buyout post somewhat slower growth, a bit more heterogeneous for this first nine months, with 3%. Business services and healthcare-related companies continue to have very strong growth. Companies more exposed to the consumer sector are experiencing some slowdown. The growth strategy shows again that the underlying growth of the companies continues to be strong and consistent with expectations. Overall, the weighted average growth is 17%. There are some companies, particularly related to consumer marketplaces or fintech, which experience a slower growth. But overall, the bulk of the portfolio companies post growth in between 20% and 45%. The Brands strategy, i.e., consumer growth unit, recorded again a pretty broad-based, robust growth of 11% year-on-year. And Real Assets, which in this case relates particularly to real estate, in terms of exposure of the balance sheet, posted also very strong growth at the portfolio level of about 10%. That reflects the type of exposure we have. Type of exposure is very concentrated on hospitality that represent more than 40% of the portfolio, and that's obviously very good in the context. Offices are less, represent less than 30% of the portfolio, but one has to say that even in this area, we benefit from high occupancy rates. Let me turn to the deployments and realizations. In terms of deployment, we continue to be selective with EUR 3 billion of deployment in the first nine months, compared to EUR 3.8 billion for the same period of last year. Now, we are selective, but we benefit from the fact that we have a diversified sources of funding with institutional money, third party, retail money, third party, and some balance sheet, which allows us to be somewhat active in this context. We are starting to see some interesting opportunities, thanks to some repricing, particularly in secondaries and somewhat in buyout, which debt continue to enjoy a good momentum. Realizations, which I know is a key area of focus for everyone in the industry, we were logically more limited in the period, and the overall market is down 50%, according to PitchBook, in terms of realization. There is a bit of proactivity in this number. Let me explain. We decided in the market context, where rates had not stabilized yet, and there were some uncertainties, the so-called bid-ask spread not stabilized, to delay some of our exits, which explains the lower number for 2023 year to date. Now, having said that, we are confident about the outlook. We launched a number of processes which, you know, are ongoing, and that would result in a pickup in realizations in the first half of 2024. Let me finish now with the balance sheet and dry powder. Still, a very comfortable headroom. We have a 12% gearing for the company, which, you know, is a bit higher than what we had in the past quarters. But as you know, we run the company with a conservative credit policy. Yet, you know, it can vary from one quarter to another, depending upon the pace at which we deploy versus the pace at which we realize. That remains a very reasonable gearing. It compares to own funds of EUR 1.4 billion, and we have important liquidity with a credit facility. In terms of dry powder, we stand at EUR 6.2 billion. So the number for third party has been adjusted for Rhône. Rhône was accounting for EUR 600 million, so the number is EUR 4 billion ex Rhône, plus EUR 2.2 commitment from the balance sheet, which gives teams flexibility for future deployments. To wrap up, yes, we continue to operate in a difficult environment on asset rotation and fundraising, although we concur with some comments that have been made by peers, that there are some green shoots. In this context, we've been able to grow our asset management activity, and the underlying portfolio company's growth remains dynamic. During the full year results of 2022, we guided you towards strong growth in FRE, FREs for the year. We are on track to meet this target. On the fundraising side, we anticipate reaching EUR 3 billion of inflows for the year, which would be somewhat above the level of fundraising we achieved in 2022 for the whole year. As you know, we have an important milestone in terms of financial communication with you, as we will be presenting our midterm roadmap during a Capital Markets Day on November 30, 2023. I now thank you for your attention, and we are available for questions. As a reminder, if you would like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. We'll take now our first question from Alexandre Tissier, from Bank of America. Your line is open now. Thank you. Good morning. Thank you for taking my question. Relating to private equity, could you please talk a bit more about what you currently see in the market? I mean, it's a strategy where you have the most exposure, and also the one which is a bit slower this year due to wider bid-ask spreads and slower fundraising. Overall, do you see - are you starting to see signs of improvement? And is it fair to say that 2024 will be a bit better than this year, but still relatively slow compared to a very strong year and exceptional year, like 2021? That's a very broad question. Thank you for your question. But that's a very broad question, because as you know, for us, private equity encompasses various strategies. It is buyout, mid-market and small buyout. It is growth and venture, and it is secondaries. So in that sense, you know, the logic, the dynamics behind the strategies can differ a little. So I guess your question is more focusing on buyout, but correct me if I'm wrong, happy to talk about the rest. As you know, secondaries is pretty dynamic as a segment these days. Now, it's also a wide question because, talking about fundraising, we're talking about underlying value of the portfolios and, and the underlying, growth of, what's in the portfolios, and you, and you're referring to realizations. On fundraising and focusing on buyout, yes, this is slower to raise buyout funds in the market than it is to raise private debt funds, secondary funds, or focused infrastructure funds. I mentioned impact being a, a, segment that, you know, clearly enjoys some, tailwinds. Having said that, we managed in 2022, to raise and close above its, initial target, our small buyout funds. Remember, this was EUR 1.1 billion, compared to an initial target of EUR 1 billion.... For mid-large buyouts, now we enjoy, we are happy to see, you know, we have been able to raise that EUR 600 million. And then, you know, we obviously work to make more than the EUR 600 million in the next quarter. So I would concur that, you know, it's more difficult, it takes more time. We are a bit of a newcomer in terms of raising primary money for mid-large buyout, which is also a function of us being also in transformation towards third-party asset management. But when you have good quality teams, a focused value proposition, and good track record that you can show to a potential client, I mean, you can get it, which you know is obviously where we are now. In terms of the underlying performance, I've mentioned it. It reflects what I've just said in terms of the value of investments. It's pretty good, if not strong. In terms of realizations, as I said, slower in 2023, but we expect to pick up, including for buyout in 2024. Thank you. We'll take now our next question from Nicolas, from BNP Paribas. Your line is open now. Thank you. Hi, good morning. Thank you for taking my questions. I'd have three questions, please. The first one, coming back on your comments on deal pipeline for H1. So I understand that we should expect Q3 to be Q4, sorry, to be pretty quiet. But for going into next year, could you give us a bit more color on what kind of investments are in the pipeline, and how large could it be? Here thinking about the potential cash flow going to the balance sheet. In terms of the fundraising as well, I wanted to come back on your announcement yesterday. Have you set some sort of a target size for the buyout fund? I wanted as well to know if what's the likelihood for first close to happen in the growth fund as well in Q4. And if you could provide as well more color on the fundraising for your private equity secondary fund, how is the traction? What's been raised so far? And finally, just a quick one on the net debt. So I've seen that it's risen, it has risen due to as you say, the timing issue between deployment and realizations. But I wonder, what are the terms exactly of this RCF, the maturity and the cost mainly? And how do you see it in your overall balance sheet structure? Would you think, for instance, that paying it down could be a priority over using cash for buybacks or, or M&A? Thank you very much. Okay. Well, thank you for your questions. So, I think your first question was about divestments, not, not investments, no? Uh, yes. I mean, it is clear that, 2023, we most logically will end up the year with a percentage of realization relative to, the, the previous year NAV, which would be lower than our average. You know, the average... In fact, if you look at the past, ten years, you know, base of realization is about 20, 24, 25% per annum. Now, we like to be a tad conservative, so we usually say we are able to realize between 15% and 20%. Now, this is not linear. If you look at 2021, for example, where there was a bit of catch up after a very slow 2020, it was 51%. You look at 2020, it was close to, closer to 10%. So overall, you know, through the noise, you can retain that, you know, 20-25% is what we can achieve, i.e., you know, we recycle the portfolio on a 4-5 years basis. But you know, it is not linear. So 2023, we decided that it was not worth launching some of the processes that we had in mind to launch too soon, before we would see the famous green shoots that you've been talked about by others, i.e., some stabilization in the interest rate environment, and some relaxing of the financing conditions for potential buyers, be they LBO funds or corporates. And this is where we are. So we expect that 2023 will probably be below, most likely be below, you know, this average. In 2024, we will be logically above in a normalized environment. And you know, I expressed some confidence earlier. Fundraising. Your question is quite wide. So let's start with the first part of your question, which relates to mid-large buyout. Previous program was EUR 2.5, so we expect to be at least at this level. And we'll see. I mean, we are again reasonably cautious in the environment, but we are also reassured by the capacity of the new management team to market the fund, the choice they've made in terms of investment approach, value proposition, the quality of the dialogue they are able to initiate with clients. And so, you know, I think we should be in a good position to reach at least this number. Growth, we said, it's a difficult market for tech fundraising overall. And we have some management change. Now, we are going into the phase where clearly the team is stabilized. In fact, we are onboarding very senior international profile at senior advisors. We will announce some recruitments of senior people to befit the team, and so that the dialogue is fairly productive with clients. So, but, you know, if I am plain, for me, it's more a 2024 event. Secondaries, good dynamic in the dialogue. Both on the deployment side, we see now that we're able to access some good opportunities in terms of value creation. Clearly, there is good dynamics on the institutional side for the fundraising of our Fund V. Some, you know, will logically be done 2023, and then we have the whole year of 2024 to complete. Let me remember you that in fundraising, particularly for debt and for secondaries, but also in growth and venture, we benefit strongly from having wealth collection. Remember that secondaries and debt have a significant portion of the programs deployed, associated with wealth. In fact, let's look at debt, for example. We're close to EUR 2 billion, which on the institutional side, if you add up what we've done so far, which was, you know, the target. We may be able to go above that. You know, we leave that for future disclosures. But on top of it, we have EUR 600 million-EUR 700 million of debt for the program that can be deployed. So in fact, these strategies strongly benefit from the fact that we don't have only one source of funding, and we believe we'll come back to that when we do our capital market day. This is a real strength in the context for Eurazeo to be able to have two sources of third-party money and one source of own funds. More and more you see that having these three prong approach to resources is a competitive advantage. Net debt. Let's be clear. Our intention is not to have permanent net debt on the balance sheet. We consider, you know, that, you know, the policies that have been set forth in this company for years is valid, is a valid one, so net debt should be, you know, low. I would say that, you know, 12% gearing is pretty low, in fact, but, you know, overall, it should be logically even lower than this number through the noise. You know, in aggregate, you are a tad higher than zero, a tad lower. So this is what we will continue to do. If you bear in mind that, you know, we will have some realizations, you know, that is not too difficult to imagine that we should come back to a much lower number. Remember, in 2022, we ended up the year with very low indebtedness, close to zero. In fact, at some point we were at EUR 800 million net debt, midyear. That was also due to the sequencing of deployments versus realization. Does this debt cost much? No. In fact, this is a low margin over EURIBOR, so it's reasonably a cheap debt in the context. Maturity of a credit line is 2026, so there is no refinancing issue with that regard. I will not comment on the last part of your question, which is the balance between reimbursing net debt and returning capital to shareholders via share buyback. We'll have a capital market day on the thirtieth of November, and we will be clarifying what is the policy in terms of capital allocation. Just have in mind that it's not because you have some debt at a point in time, that you're not able to increase your distribution going forward. Very clear. Thank you very much. We'll take now our next question from Patrick Jousseaume from Société Générale. Your line is open now. Thank you. Hello, good morning. Can you hear me? Well. Can you hear me? Yes, Patrick, we hear you very well. Okay. Perfect. Thank you. Okay, so, regarding the company in the portfolio, the figures to the end of September, some of them reflect a deceleration in growth in Q3 for portfolio company in the mid large buyout segment, and probably a decrease in the small mid segment. So they both represent around 51% of the portfolio. So can you give us some granularity on these trends, and tell us maybe what the impact of the portfolio's value might have been if you have carried out a September 30 evaluation? So I, I'll start with the first part. The second part, as you know, we don't adjust valuations on a quarterly basis, only every at least to the market. Accounting wise, we do that only half year and full year. Listen, yes, there is a case that the second derivative in terms of growth is a bit less favorable, but this is a nuance. I mean, we had for mid-large buyouts, top of my mind-head, 17% growth for the weighted average of our portfolio companies. In first half, we are at 15%. I'd say that in the context that, you know, we all see with clearly decelerating growth across Europe and globally, some disruptions, you know, which have not totally been solved, particularly in trade between Asia and Europe, and, you know, still some high inflation. I would say 15% is a very good number. 11% for the non-growth portfolio is still a very good number. Now, specifically, as we said, you know, the more company is exposed to consumer, and so the consumption growth patterns, the less growth it has these days. Because there's a limit to the number of time you can pass price increase to consumers. I mean, clearly, there is some impact on the macro, there. But this is small part of the portfolio. And as you can see, looking at Brands, when you invest in consumer in very focused, innovative growth companies, you know, you can find very high growth profile. You know, for example, Waterloo in the U.S., which operates—which does a flavored water and has increased its distribution capacity through partnership, or a UPD, which does upper end market pet food. You know, they all have growth patterns which are in excess of 30%, three zero. And then on growth, as I said before, we have a bit the same pattern for some of the companies which are operating in marketplaces, consumer-focused marketplaces, growth will be slowing strongly. At some point, there will be a rebound, we think. But, you know, clearly, there is a slowing down for the reasons we've mentioned, on top of the fact that, you know, the post-COVID adjustment is still ongoing. But for the rest of the portfolio, the more B2B services you are, the more healthcare you are, obviously, you continue to have a very strong growth. And now, on valuations, we've been very cautious, you know, in the first half. Some people, you know, wondered why we had been so cautious. What I can say is, we continue to have this double-digit growth pattern of the underlying figures. Multiples hold reasonably well. So that's, you know, the context of, our valuation framework. Very clear. Thank you. As a reminder, if you'd like to ask a question or make a contribution on today's call, please press star one on your telephone keypad. To withdraw your question, please press star two. We'll take now our next question from Alexandre Gérard from CIC. Your line is open now. Thank you. Yes. Good morning, William, and thank you for taking my questions. My first question is related to fundraising. What can we go for in 2024? I mean, if we add up all the funds that will be marketed in 2024, what's your target? Can we have in mind at least EUR 3 billion, like in 2023? More or less correlated to that, related to that question, in terms of your target to internationalize your LP base, is this the case in 2023? What part of that 1.7 billion euros that you've raised are coming from international investors? And this morning, in the press release, you don't reiterate your medium-term target to double your LP... your AUM basis in 5-6 years' time. Is this still the case? So that's my first question, overall, I mean, related to fund fundraising. Second question, regarding your OpEx base. This morning in the press release, you mentioned a certain number of new hires, and at the same time, you mentioned that you want to control your OpEx base. What can we go for in terms of FRE margin in 2023? And my last question is related to corporate development. Can you comment a bit on the M&A opportunities? The environment is consolidating very fast. And also regarding MCH, have you made up your mind on what to do with your 25% stake in that Spanish private equity firm? Thank you, William. Well, thank you. I hope I won't be too frustrating, but I have to say that, you know, a lot of your questions are looking forward questions, sometimes even midterm, or strategy questions, which we intend to address more in the context of the capital market day than in this third quarter results. So, you know, pardon me, if sometimes I would say, you know, that we will communicate. And let's start with your question on fundraising 2024. We usually give an indication on fundraising in the Q3. Obviously, we will tell you what is the strategy in terms of fundraising, the type of funds that will be on the road for 2024. I mean, have in mind that, you know, the core of the strategy is to accelerate on the asset management and our ability to increase our inflows. So we are a bit cautious because of the context, but, you know, we're quite confident that with this combination of institutional money, more internationalized, I will give you the number for the first nine months, don't worry. Wealth money, and this positioning of private debt impact, mid-market buyouts, secondaries, you know, we have some appeal in the context or some differentiating element of differentiation. So that ties a bit to your question on AUM, EUR 60 billion. You know, I will put it on the side, and we'll come back to you to tell you what is the sort of midterm perspective we see in terms of our ability to grow our AUM revenues for going forward. You know, we'll be as specific as we can be to help you build your models. Internationalization is going on quite nicely. For the first nine months of the year, sort of the non-French resources pertaining to institutional money is 64%. Now, on the retail side, it's still, you know, vastly French, but we're starting now to have some inflows through partnerships that will get, you know, slow first and then, you know, increase over time. So we have, as you know, a partnership with Allianz to distribute in Belgium, and we have partnerships with two platforms, one focused on Germany, Moonfare, and one, iCapital, for distribution in Italy, Germany, Belgium, as well as Switzerland, and Luxembourg, on top of my head. But you know, on the institutional side, and we'll talk about that more in details during the capital market day, we'll show you some examples, strategies for which the combination of scaling and internationalization of the client base is clearly functioning well. OPEX, you know, this is revenues in the US. So let me remind you that for the H1, the margin was 33.5%. At the end of 2021, it was 29%. So the journey of increasing the margin has started. You know, we ended 2022 with 31.6. The intention that, you know, is stated by the company is 35%-40% midterm. We'll come back to that during the capital market day. Obviously, our intention remains to continue the journey of increasing the margin over time. Which means that we'll be very focused on growing our OPEX at a pace slower than our revenues. So what the clear intention is to continue to steer the company so that we generate positive yields. Having positive yields doesn't mean that you don't invest. I remember a call with you guys. Well, legitimately so, you had some questions pertaining to some departures. And I remember having told you, in fact, overall, our headcounts are pretty stable. Some people go, some people are recruited. So this is what we do. We continue to have a very focused approach to adding expertise, where it is relevant, where we have growth potential. And if you look at the press release, we effectively mention that we've added some expertise in private debt. We recruited someone to senior to deploy in the Scandis and Nordics because that's an area of development for us. We do that in fundraising, so we recruited someone who will come early 2024, that will focus on Middle East sovereign funds, very high profile. We onboard some good senior profile of senior advisors. So senior advisors are not necessarily a huge cost, because you know the way to incentivize them you know don't weigh too much on your OPEX. But you know they are very important to help companies and strategies either on fundraising or operations. So we did some very good hire on for impact funds, very good hires for growth funds. And that's you know and when I say we we will do some focused recruitments either for senior salesperson in dedicated geographies or to replace one or two senior person in the growth strategy. That is in light of being capable to increase our fundraising and ultimately our management fees. But overall, expect that we will be very, very, very, disciplined, and you know, the headcount will not grow significantly in the next quarter. It may not grow at all. M&A. You know, I think, you know, we will have plenty of time, I think, to discuss where we see the industry is going on, whether M&A should be part of a growth strategy of companies such as Eurazeo. Base consolidation is pretty clear. I think we had already the opportunity in the past quarters to say that we consider that, there's no reason why the alternative asset management would not go the pace that, banking, insurance, more traditional asset management have gone. So clearly, you know, this industry will consolidate. There are many reasons for that. And Eurazeo has the capacity to be a consolidator rather than the reverse. That's what I would say at this stage. Now, you know, we have a strategy that is focused on ability to grow organically. A capital allocation, we will come back to that, that prioritize return to shareholders. It happens that we also consider that, you know, we have some strategic flexibility for organic, inorganic moves, and external growth should there be a valid partnership to make. MCH, yes, you're right to remind me that of the fact that, you know, we've said that by the end of the year, we will clarify what we do with minority stakes. So I'd say the thirtieth of November is probably a good date to clarify that. So we confirm that, you know, by the end of the year, we'll have taken a decision. Thank you, William. We currently have no more questions coming through on the phone, so I will hand you back to William to take the webcast questions. Thank you. Hi. Yes, I have a question from the webcast from Geoffroy Michalet from Oddo. A few of these questions have been answered already, but one was about the share buyback program of EUR 100 million, and how much is for the long-term incentive, and how much will be canceled? I think I can take this question. The EUR 100 million of share buyback is fully for the cancellation plan, so it's going to be relative. The LTIP is on top of this EUR 100 million, and that's, I guess, the only question that has not been answered. Thank you, Pierre. So we would like to thank you very much again for joining this call, and we're looking forward to having you joining the next call on the thirtieth of November. And we wish you a very good day. Thank you all, and good day. Thank you for joining today's call. You may now disconnect. Thank you.