Good morning, ladies and gentlemen, and welcome to Allfunds 1Q 2024 Trading Update Conference Call. Joining us on today's call are Allfunds CEO Juan Alcaraz, and the CFO Álvaro Perera, and the Global Head of Investor Relations Silvia Rios. Mr. Alcaraz will make a brief introduction, and there will be a question-and-answer session that will follow. This conference call is being recorded, and an audio replay will be available at allfunds.com during the day. At this time, I would like to hand the call over to Mr. Juan Alcaraz. Sir, you may begin. Thank you very much. Good morning to everyone, and thank you for joining us today in this Q1 2024 Trading Update. As we generally do, I will make some general brief remarks on the highlights for this quarter, and then we will open for Q&A. Let me first start with the announcement we have made this morning: a landmark partnership with Google to enhance our capabilities through generative artificial intelligence, advanced data analytics, and cloud computing. I'm very excited about this partnership. It will help us progress further in our Allfunds 3.0 journey and achieve higher efficiencies to better serve our clients. We believe, together with Google, we will bring transformational solutions that will make our offering unbeatable. In this first quarter of 2024, it is worth highlighting our strong AUA growth and our strong revenues in the quarter that we report for the first time on a quarterly basis. Assets under administration for Allfunds Group increased by 4% since December 2023, or almost EUR 50 billion, as a result of the positive evolution of both portfolio assets. Our platform service AUA increased by 4.4% since December, and our dealing and execution AUA grew by 1.4% since last quarter. For the first time since December 2021, our assets increased a double-digit growth year-on-year, and this is very important as we are seeing a change in the trend experienced in the last two years. Our platform business is entering a normalization phase after the perfect storm that we experienced during 2022 and 2023. We also reached historical record revenues of EUR 153 million with a growth rate of almost 18% year-on-year. When moving into more detail, the increase in platform service AUA, which reached EUR 1 trillion last time we saw this level in the platform business was December of 2021, came as a result of the positive evolution of global equity markets in this quarter, but also due to almost flat net flows. We saw a market performance contribution of EUR 44 billion despite the volatility seen in the fixed income market. Net flows amounted to -EUR 3.4 billion. These outflows were concentrated in a very limited number of clients, mainly coming from Central Europe and Italy. However, when excluding Central Europe, quarterly flows from existing clients were positive for the first time in the last year, amounting to EUR 2.7 billion, a strong sign of recovery. Indeed, some of our core markets, such as Southern Europe, the UK, Northern Europe, Middle East, and Asia, have all experienced inflows in the quarter. In terms of flows from new clients, you might have seen that migrations came a bit lighter this time, but this was expected given the strong commercial push we did to end 2023. We have managed to onboard almost EUR 3 billion of assets. Finally, year-on-year, AUA have increased by 7.3%. This compares with an increase of 4.1% for the European cross-border mutual fund industry, according to Morningstar. Therefore, we continue to consistently outgrow the market. I would also like to give you a brief update on our alternative solution platform. We continue making good progress, and as of March 2024, we have already reached EUR 6 billion of AUA under distribution. We think this area of the business will experience significant growth in the coming years, and we are looking forward to capturing that growth. On the revenue side, we have seen an outstanding performance in this quarter with growth across all revenue lines. Platform revenues were up 17% year-on-year. Our revenue margin increased to 3.9 basis points, driven by the resilience of Allfunds' operating model, which resulted in a strong treasury income of EUR 26 million in these first three months. More important is the increase of transaction revenues, almost 30% year-on-year, which reflects the higher level of transactional activity we have experienced following two years of subdued activity. Subscription revenues grew more than 23% year-on-year thanks to the recent acquisitions. As you might have seen in the statement today, we continue to attract new clients to our WealthTech platform, and we are very excited with the progress of our strategy around the subscription-based business. As closing remarks, I would like you to retain very clear messages from today's update. First, we are entering a new phase for Allfunds that will accelerate growth. Second, we have continued to see strong new client activity demonstrating our ability to continue to win market share and deliver excellent client outcomes. Third, we are making good progress in the digitalization trend as highlighted by our new partnership with Google. And finally, overall, we are optimistic about the remainder of the year and remain very confident in achieving the guidance provided last February. Thank you very much. Let's now open for Q&A. Thank you. Thank you. If you would like to ask a question, please press star followed by one on your telephone keypad. If for any reason you would like to remove that question, please press star followed by two. Again, to ask a question, please press star followed by one on your telephone keypad. Our first question today comes from the line of Gregory Simpson from BNP Paribas. Please go ahead. Your line is now open. Hi. Morning. Could I just ask about the number of new distributors onboarded? It was 27, which was one of the highest quarters in history. But then the volume of new migrations was EUR 3 billion, and that was one of the lowest quarters. So can you just talk a bit about this dynamic? Are you winning smaller-sized clients this year, or do you typically see clients onboard and then you see migrations later? Just wanted to kind of square that dynamic and how you're thinking about the range of the 40-60 for the full year. And then just second question would just be on the net treasury income continue to move up. Can you just talk about the latest level of cash balances, and is this level a kind of sustainable level if there are no rate cuts? Thank you. Thank you very much. Well, just in a quarter, it's very difficult to extract any real conclusion, no? So I think for me, the important message is that the platform continues to be attractive all around the world, and the best proof is that we keep on signing new agreements. But as you said, one thing is to sign an agreement, and a different thing is to migrate the assets, no? As it can take, no? three to six even to nine months, no? And regarding the point of whether we still not be positive on the guidance that we gave at the beginning of the year, no? This EUR 50 billion well, from EUR 40 billion-EUR 60 billion in migrations for the full year, yeah, absolutely, yes, we believe that we will achieve those assets. Absolutely. Regarding net interest, yeah, Álvaro Perera. Yeah. Thank you, Greg. So we've seen a combination of higher average balances from existing clients and incremental cash balances coming from new clients that were onboarded last year and this year. So on average, cash balances have been around EUR 1.8 billion-1.9 billion. Additionally, and as a result of higher transactional activity and more portfolio rotation or rebalancing carried out by some of our clients, we have seen some extra or some additional increase in average balances, which has driven our NTI revenues to record quarterly levels. Leaving aside any rate cuts, which again, you might have your own view around those, we do think that these balances, these average balances, seem to be sustainable going forward. Perfect. Thank you. You're welcome. The next question today comes from the line of Alexander Medhurst from Barclays. Please go ahead. Your line is now open. Yeah. Morning, everyone. Thanks for taking my questions through, if I may. Just firstly, on this Google Cloud agreement, can you give any color on any impact this might have on guidance or targets? Notably, is there any sort of cost in the short term, or does it have an impact on operating leverage in the medium term? Second question on transactional revenues. I don't know if you can give any commentary about the sustainability of this sort of higher transactional margin in Q1. And equally, can you remind us whether there is any seasonality quarter by quarter in this line? And then finally, subscription revenues in Q1 were below the H2 run rate. Can you give some color as to what drove that dynamic and, again, whether there's any seasonality in these lines? Thank you. Okay. Thank you very much. Well, we just signed the agreement with Google a couple of weeks ago. I think it's too early to disclose any short-term potential impact, as you can imagine. But without any doubt, in the long term, it should drive efficiencies regarding costs, without any doubt. It's going to help us to do many more things with less people, obvious, but more important than cost synergies. I think that this agreement has to help us, Allfunds, to deliver better products, better services, and therefore to drive our subscription revenues to higher multiples. So in both sides, I mean, revenue synergies and cost synergies. So we have already opened different workshops and workstreams with them, and I hope that in three to six months, we will start seeing the real impact of this agreement. But I mean, I cannot say in this moment that this is going to change any number regarding the guidance that we gave you in, I mean, last February, not at this point, no? Álvaro Perera, yes. Go on, Alex. So on transaction revenue, as you saw, we delivered EUR 27 million revenues for the quarter, which represents 29% versus Q1 2023. If we exclude the Iccrea contribution, so looking at this on a like-for-like basis, the increase is still very meaningful. We're talking about 21%, which indicates a return to normalized transactional activity after two years of subdued levels, as Juan mentioned earlier. We do maintain our guidance for the full year. Remember that we're talking around EUR 100 million. As it already assumed, this return to normalized activity in 2024. And with regards to your question around seasonality, as you know well, Q3 tends to be much weaker given the summer break, but the rest of the quarters don't necessarily need to be very different, no? In a nutshell, we remain positive and confident that we can deliver on guidance based on what we've seen so far. Yeah. And to your final question regarding subscription revenues, again, one quarter, three months is still a short period to take any conclusion. I think we are getting traction in all the different business lines, so digital, ESG, blockchain, so data and analytics. I think that all the business lines are performing as expected. And without any doubt, I'm very, very confident that we will achieve the guidance that we gave you in February without any doubt in subscription revenues. Yeah. I'm not concerned at all. As I said, in fact, I see that every day, we increase the pipeline, and every day, we bring to the platform new clients regarding these new initiatives, no? Great. Thank you very much. Thank you. Our next question today comes from the line of Iulian Dobrovolschi from ABN AMRO and ODDO BHF. Please go ahead. Your line is now open. Hello, gentlemen, and thanks for taking my questions. Well, first of all, congrats on the results. I have two questions. Maybe the first one as a follow-up to net client migrations of basically, if you focus only on the new migrations, EUR 2.8 billion indeed is quite low. I understand you're feeling still comfortable with the guidance and hoping for kind of, let's say, a rebound in the next couple of quarters. But can you please give us a bit of an indication of the phasing effect of the new migrations in Q2, Q3, and Q4 in 2024? And then the second one would be on the alternative solutions, EUR 6 billion. Can you please remind us how much you distributed/onboarded in Q1, 2024, and basically, how does that compare with the end of Q4 last year? Then, of course, I understand this is just a small figure into the whole EUR 1.4 trillion of AUA. But can you still maybe talk a bit about the pipeline and impact on the group fundamentals such as growth, margin development from the distribution of private capital in 2024 again? Thank you. Hi, Julian. Let me take the first one. So on migrations, as you know, Q4 last year was a strong month or strong quarter, sorry, with a huge push from all the teams. And we sort of anticipated a weaker Q1, which is what happened. But as Juan mentioned earlier, we're not concerned at all. We have a very healthy pipeline and very healthy diversification of customers. In terms of timing, we do expect, as it typically happens, most of the migrations to take place in the second half of the year. We will, of course, push for Q2, but based on historical trends and dynamics, the second half of the year tends to be much stronger than the first half. And then your other questions, and I'll turn it. Yeah. On the alternative space, I mean, these EUR 6 billion are all the assets that we currently have in the alternative space under distribution agreement, okay? So we have a global distribution agreement with these managers, and this accounts for EUR 6 billion, okay? What I think that we have not disclosed today, and it's something that we can provide you, is how does it compare this exact and precise figure with 12 months ago? I don't have this number in this moment, no? But well, I think the good news is that what we are seeing is that this asset class is growing, not booming, I mean, it's not that don't get me wrong. I'm not saying that we are seeing this asset class now growing strongly, okay? But it's growing. And well, as you know, it's a very profitable business line that we have. And yeah, I think we are positive that with the current solution that we have, that was our 2023 strategic project, the launch of this platform, our goal is to capture the highest possible market share of this, in some way, new asset class in Europe, no? No, sure. Yeah. Yeah. Thanks for the answers. Maybe just to drill a bit deeper into the last one. So obviously, from the, let's say, private industry perspective, let's say, private capital managers as a broad, I think this is a high, let's say, focus area, and everybody's looking at, let's say, distribution of private capital towards the wealth segment as being one of the future growth engines in terms of inflows to them. And that applies, I think, across the board, let's say, European but also US peers, maybe also Asian ones. Did you see a bit of a, let's say, pickup in interest for your solution that it provides? Because if I understand, this is probably one of the unique things that people can find on the market, and you already have the pipeline in place for distribution of this, let's say, private funds towards the wealth channel. You already work with KKR, I believe, Apollo as well, so some of the top-notch firms. But again, did you see a bit of a pickup in interest, these guys kind of intending to commit a higher portion of their capital through your channel? Yeah. I mean, I think you have described it extraordinarily well. Yeah. We also launched, as you know, not only the platform last year but also the program and the partnership with the top seven largest and best private equity firms in the world, no? So you mentioned some of the names, no? Well, we have the solution on the operational side. We have the agreements under distribution or under distribution agreements, okay, which is also pretty unique. And the combination of both should make, in front of our clients, of our distributors, an extraordinary appealing proposal with our Buy3 model, by the way, no? So are we seeing more interest or interest in this asset class? Absolutely, yes. So I mean, I don't think of any discussion meeting with the top management of any bank in Europe and in Asia and in the Middle East, okay, and in Latin America where we do not discuss about this topic. Having said this, the funds are pretty new, okay? The new funds that all these names are launching in Europe are new, okay? And the assets are still small, which means that the tickets cannot be, for the moment, big tickets, okay? Because there are no—I mean, any distributor wants to own 30%-40% of any fund. So what we are seeing is that, yes, a lot of interest, but small tickets for the moment, okay? So it's going to take some time until we see significant volumes in this asset class, no? Our ambitions, as you can imagine, our ambition, excuse me, is very high regarding the market share that we want to acquire or to have of this asset class, no? We currently have around 25% of the long-only, let's say, cross-border, no? UCITS cross-border market in Europe, 25%. We, minimum, minimum, expect to capture the same market share of all this new business, no? That should be the minimum, no? Because, as you said, we have the platform, we have the agreements and the partnerships, and we have the clients already connected to Allfunds, no? So it's a fantastic advantage for Allfunds, no? But again, it's too early because the funds are being launched and incorporated in Luxembourg as we speak. There was another question, no? No. That was everything from me. Thank you. Yeah. Thanks a lot, gentlemen. I think we covered everything. Thank you. Thanks. Okay. Thank you. Thank you. The next question today comes from the line of Tom Mills from Jefferies. Please go ahead. Your line is now open. Hi. Good morning, guys. Thanks for the update and the revenue disclosure as well. I heard what you said on the transaction revenue component before. I'm just wondering. I'm not going to pencil this into my numbers, but I'm just kind of wondering. I see the transaction revenues are about 20% of the total platform revenues at the moment, perhaps in 2021, in a much more risk-on environment. We saw transaction revenues get up to 24% of the platform revenues in a sort of even more constructive risk environment. Could you see it getting back up to those levels again? Would be the first question. Then just in terms of net flows from clients, I'm just wondering, are you guys seeing a drag from sort of government-sponsored savings products like the BTP Valore and Livret A in France, as I guess some other people are calling out in net flows? Just wondering if, as that gradually fades, whether that could be a bit of a kicker as well. Thanks very much. Yeah. Hi, Tom. So on the first question, is there potential for transaction revenues to go above the guidance or the levels that I described? Yes. Of course, there is potential if we see the environment that you described, right? The environment where there's an increased appetite, especially on the retail front, in particular, in the Italian market, in the foreign, in the US. So there is potential. But as I said earlier, we want to be cautious. And for this year, the expectation is a level which is, as I said, not a normalized level of transaction revenues, as I described. I think I mentioned earlier around EUR 100 million. But of course, there is potential, no? With regards to your second question, yes, we've seen some drag, in particular, in the Italian market. In fact, when you look at or you look through these regions that we present into the underlying or the different countries that make up these regions, I think Italy's probably one of the if not one of the exceptions, no? In terms of trends, so we've seen a recovery. So we've seen a positive trend across all countries. Some of our most meaningful countries have turned from net negative into net positive, with Italy being one of the very few that hasn't. And it's precisely because of what you described, no? On the other hand, on a more positive note, it is true that the level of outflows is significantly lower than what we experienced in previous quarters. So back to Juan's comment, we do think we're getting to this normalization phase. So hopefully, we start seeing that country also improving flow-wise. Very clear, Álvaro. Thank you. Our next question today comes from the line of Hayley Tam from UBS. Please go ahead. Your line is now open. Hi, there. Sorry. I took a while to unmute myself. Thank you very much for taking my questions too, please, from me. One further on the existing client flows and one on fee margins. In terms of those flows, just so I can understand, please, what are the countries that you include in Central Europe? And what is the difference in these countries versus elsewhere in terms of that continued net outflow in Q1? Is there something in particular we should be looking for? Is it simply timing, risk appetite? Any thoughts you have there would be helpful. And then secondly, in terms of fee margins, obviously, 3.9 basis points was a good outcome for Q1. I wonder if you could just clarify for us, how much is the margin on alternative solutions if we're to think about that in the future? What proportion of the funds in your platform now is passive? Thank you. Okay. So the first one is very easy, Hayley. Central Europe predominantly represents the Swiss market. And with regards to your second question around margins, I don't think we've disclosed specifically the margins. We've always mentioned high. I've been told we haven't. But on average, you should see significant difference versus the average high single-digit to low double-digit. And the question around passives in ETFs, no meaningful changes. It represents around 8%-9% of our total book, so still not a very meaningful asset class or type of product on our platform today. Well, and it has been below 10% since ever, no? So it grows, it's true, but not significantly, really. Thank you. So I can clarify then. The Southern European positive flows include any drag you had from the Italian market. So even though there's another BTP issue coming up, we shouldn't be massively concerned. And then on Central Europe being mostly Swiss, is there any signs of change there? Thank you. I think we've seen an improvement. Looking at just the facts, when you look at Q4 2023, or sorry, previous quarters, we see a slight improvement. No additional yeah, still red. Yeah. Yeah. Yeah. Just perhaps looking at the bigger picture, probably, well, as expected, as we guided towards back in February, hopefully, very soon, it will be the only region where we see red. And as we see other regions moving positively, as Juan described, this impact will be diluted into the overall flow picture. Thank you very much. Welcome. As a reminder, if you would like to ask a question on today's call, please press star followed by one on your telephone keypad. Our next question today comes from the line of Ian White from Autonomous. Please go ahead. Your line is now open. Hi. Good morning. Thanks for taking my questions. Just a few from my side, please. First up, I just wondered if I could press you for some more details around the Google partnership. What expenditure, for example, have you committed to Google over the life of the partnership? And could you say a bit more about specific product opportunities and your monetization strategy that arises from this? That would be interesting, please. That's question one. Secondly, just on migrations, I recall you mentioned last year some double-digit billion sort of single opportunities, basically, within the pipeline. As far as I know, those haven't come through, obviously, in the first quarter. It sounds like you're saying don't expect them in the second quarter either. And I wondered if you could provide some color around progress with those sales processes specifically, please. I think you referred to them as whales in the pipeline last year. So just wondering if you could help me understand where those are. And just lastly, just a clarification, really, can you describe maybe a bit around the geographical exposure of the transaction revenue, having in mind it's driven disproportionately by Italian distributors that would be grateful if you could share some more detail there, please? Thank you. Okay. Well, I think regarding the first question, which is the investment with Google, I mean, unfortunately, I cannot disclose that figure in this moment because it's an agreement that we have signed with them, and we have not disclosed it. But we will talk to them and see whether we can come up with that number in the future. But it's something that I have to, as you can imagine, to discuss with our colleagues from Google, no? And the impact, I already mentioned before, no? I think that it's going to have a significant impact in the mid and long term. But of course, I cannot commit to bring to the table now any short-term impact. I want to say short-term. I'm talking about 2024. So I think we should not really expect any change in the guidance that we gave three months ago because of this agreement. But again, without any doubt, this partnership has to help us, okay, in the mid-term and in the long-term goals of Allfunds. And as I said, in both sides, no? In cost-cutting and being much more efficient on the cost side. And without any doubt, boosting and enhancing many of the, well, current and I hope future, no? Services, tools, and products that we launch or we will launch in our digital units, no? But again, we have to wait. As I said, we have already launched several workstreams with our colleagues from Google, and we need to let them work together and see what they can with what they come back to us, no? But yeah, very, very excited with the opportunity. And regarding the migrations that you mentioned, yes, it's true. We have signed two pretty big clients, and we are expecting to migrate them, of course, this year. I don't know if it's going to be in Q2 or in Q3 because, as you know, it doesn't depend 100% on us, no? In the end, we need to find a slot, and the final decision always comes from the client, no? So yes, we should expect them, as I said, end of Q2 or if not in Q3. But yes, they are signed, and we are waiting for the migrations, absolutely, no? And I think the last one was regarding the. Yeah, the exposure to. Yeah, to Italy, no? Exactly. So Ian, hi, the significant portion of the transaction revenues are linked to the Italian market, as most of that revenue comes from the local paying agent business, both the historical that we had plus the new contribution from Iccrea and, to a lesser extent, from foreign exchange services, which we also offer in other regions and countries. Yeah. Yeah. In the moment that we see a change between distributors investing rather than redeeming, so that activity - and I say on the positive side, not so investing - you should expect the transaction revenues to grow, okay, because we make more money, especially in Italy, in the Banca Corrispondente business, when clients invest, so buy, rather than when clients redeem or sell, even though we also make money when they redeem. But the amount is much less, no? And the same with the forex, no? In the end, the more appetite for a U.S. dollar-denominated funds, as an example, and therefore, the more appetite for investing in U.S.-denominated funds, the better for this specific revenue stream, no? So the more activity, yeah, the higher transaction revenues. So that's why we believe that at least the way that 2024 has started with this normalization, we all should expect these revenues to grow. That is exactly what has happened in Q1, no? That's great. Thanks for your help there. Can I just press you slightly on the migrations? It sounds like there are some agreements that have already been signed, but it's just a question of timing. And I'm assuming that's kind of a subset, basically, of the overall pipeline that you publish with the FY results. Would you share that number with us at all in terms of how much, in terms of migrations, is sort of already it sounds like almost certain to come in. It's just a question of timing versus the much bigger pipeline number, which I think is sort of everything under discussion, basically. Is that a figure you'd be prepared to share? Yeah. Ian, we're not prepared to share that today. I think you're referring to what we here internally call the secured migrations. But let us think about it, and we'll see if we want to disclose. But I think, Álvaro, no, it's basically because I don't have that number at this moment. So probably, if you agree, Ian, what we can do is in H1, no? Because I mean, again, this is just Q1, no? So it's just the beginning of the year. So why don't we wait for H1 so that we should be able to have that number much more clear? And we can, again, talk about this secure migrations concept, no? That, as you saw, in the last three years and I say three years because it's since we were listed, no? And we have been publishing these migration numbers, no? We have always achieved our, let's say, commitments, no? So let us talk about secure migrations in H1, okay? I think it makes much more sense than now, really, okay? Thanks very much. Appreciate that. Thank you. Our final question today comes from the line of Andrew Lowe from Citigroup. Please go ahead. Your line is now open. Hi. Thanks for taking the question. Just a quick one. Last year, previously disclosed that 3.5% of your revenues came from Switzerland. I wondered if you were willing to share an update on that number. Thanks. Hi, Andrew. It's below 3%. Great. Thanks so much. You're welcome. Thank you. We have another question coming from Panos Ellinas from Morgan Stanley. Please go ahead. Your line is open. Yeah. Hi. Thanks for taking my question. It's on the revenue growth as we go towards the end of the year. So if I assume the 17%-18% revenue growth you had in Q1 and some improvement in the margins following the mix of impacts, equities, fixed income, and also the clients, are you now more comfortable on the low end so on the low double-digit growth on revenues for the full year? Hi, Panos. Yes. So we're not changing our guidance for the year, as you heard earlier, but we expect to be more likely on the high end of the range if the circumstances don't change, no? And with circumstances, I'm referring to the market as a whole. Thank you. You're welcome. This concludes today's question and answer session. I'd like to turn it back over to Mr. Juan Alcaraz for any closing remarks. Oh, thank you very much. Thanks a lot for spending this last half an hour with us. Thank you very much again for listening to us and follow our company. Thank you very much. This concludes today's conference call. Thank you all for your participation. You may now disconnect your lines.