Q3’19 EBIT of SEK 74m, 18% below ABGSCe

Underlying estimates will come down for 20e and 21e

Expect share to be down with 3-5% today

Q3’19 EBIT of SEK 74m, down 18% y-o-y
Catella reported an EBIT of SEK 74m, -18% below ABGSC estimates, and down 18% y-o-y. The report was weaker that we expected, however one should remember that Catella is very lumpy in-between quarters, where Q2’19 for example, was very strong. The weaker report is driven by the performance of the Equity, Hedge and Fixed income fund segment, where Catella has seen net outflows from the important Systematic Macro fund on the back of weak performance of the fund during Q3. The AUM in Systematic Macro is down 10% q-o-q, net outflows of SEK ~5bn. Focus on the investor call at 09.00 will of course be on if the outflows has continued in Q4. The Property investment management segment however, continues to deliver and grow its AUM, up 6% q-o-q, now SEK ~100bn in total. One should remember that Q3 and Q1 are seasonally weaker quarters for Catella given its heavy exposure to the Real Estate sector, where the majority of transactions occurs during the Q2 and Q4.

Q3 details – Equity, Hedge disappointed
Catella reported sales of SEK 507m (-4% vs. ABG at SEK 529m). The EBITDA came in at SEK 111m (-9% vs. ABG at SEK 122m). EBIT came in at SEK 74m (-18% vs. ABG at SEK 91m), which is equivalent to an EBIT Margin: 14.6% (-2.5% vs. ABG at 17.1%). What stood out compared to our estimates, when we look at the different segments is primarily the weaker EBIT in Equity, Hedge and Fixed income funds, which came in 26% below our estimates. This was mostly due to the net outflows in that segment, AUM is down with SEK 23.5bn in Q3’19. However, most of that is due to the closing of Systematic Equity (~SEK 19bn). However, since the important Systematic Macro had bigger outflows than we expected, this will lead to negative estimate revisions on our part.

Expect share to trade down today by 3-5%
We expect the share will trade down today
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