Half Year 2025 Exor NV Earnings Call
Guido De Boer: Welcome everyone to the half-year 2025.
Operator: Welcome and thank you for joining EXOR's half-year 2025 results conference call. Please note that the presentation materials and the related press release are available for download on EXOR's website, www.exor.com, under the Investor and Media Financial Results section, and any forward-looking statements made during this call are covered by the Safe Harbor statement included in the presentation material. As a reminder, all participants are in a listen-only mode. Later, there will be a brief question and answer session. Please note that this conference is being recorded. At this time, I would like to turn the conference over to EXOR's Chief Financial Officer, Guido De Boer. Sir, you may now begin.
Guido De Boer: Fantastic, and thank you for this introduction, and happy to have this half-year results call. As you'll see in the new format of our half-year reports, I hope that that gave good insights, and I want to take you through the highlights in this presentation. Our NAV per share outperformed the MSCI World Index by about 5%, largely aided by the $1 billion buyback. Companies did well, but a mixed bag of performance across the different companies, which we'll address a bit later. We're particularly pleased with the performance of Lingotto, performing with an 11% increase, mainly from the public investments part in the backdrop of a declining market. This half-year saw us monetizing a $3 billion Ferrari stake, as well as some other items, leaving us with good firepower to monetize, to invest in the future.
Welcome everyone to the half year 2025. Okay welcome and thank you for joining xor half year 2025 results conference call. Please note that the presentation materials and the related press release are available for download on xor website www.xo.com and the investor and media Financial results section and any forward-looking statements made during this call are covered by the Safe Harbor statement included in the presentation material. As a reminder, all participants are in a listen-only mode. Later there will be a brief question and answer session, please note that this conference is being recorded at this time. I would like to turn the conference over to xor type. Chief Financial Officer, Keo, deur sir. You may now begin.
And then take, and, uh, thank you for this introduction. And, uh, happy to have this, uh, half year results call.
Uh, and as you'll see in the, in the new format uh, of our of our half year report, I hope that that gave good insight and I want to take you through the through the highlights in this presentation.
Um, so our NAV per share outperformed the MCI World Index by about 5%, largely aided by the buyback.
Companies did well, uh, but a mixed bag of performance across the different companies, which we will address a bit later.
Uh, we're particularly pleased with the performance of Lingotto.
Uh, performing um, with an 11% increase, mainly from the public.
Um, investments part in the backdrop of a declining market.
Guido De Boer: It leaves us with a very healthy debt ratio at 5.5% of our GAAP. Moving to the key figures at the half-year, our gross asset value went down by $2.5 billion, partly from value changes, partly from the buyback, and our NAV moved in line with that, while our NAV per share saw an increase, and our loan-to-value, as mentioned, is more or less half than what it was at the end of 2024. Our NAV per share growth went up by 0.9%. 3.2% of that growth is attributed to our buyback, given that we buy back our own shares at a discount. The positive impact on NAV compared to the number of shares that we reduce is delivering this growth. Even ex-buyback, our portfolio has done better than the MSCI World Index. This is an important measure because we want to outperform relative to the index.
Um and this half year saw us monetizing 3 billion of Ferrari steak as well as some other items leaving us with good Firepower to uh, to monetize, uh, to to invest in the future.
And it leaves us with a very healthy, uh, debt ratio, um, at uh, 5.5% of our of our Gap.
So moving to the key figures at the half year,
our gross asset value went down by 2 and a half billion. Um, partly from value changes partly, from from the buyback, um, and our, and that moved in in line with that. Well, our Nest per share. Uh, so an increase, um, in our loan to value. As, as mentioned, um, uh, is more or less half than what it was at the, at the end of, uh, 2024
So, our NAV per share growth went up by 0.9%.
Uh, 3.2% of, uh, dead growth is, um, attributed to our buyback. Given that we buy back our own, um, uh, shares at the discount, um, the positive impact on, um, on NEF, uh, compared to the number of shares that we reduce is, uh, is delivering this growth.
So even with the buyback, our portfolio has done better than the MCI Index.
Guido De Boer: We also want to show absolute returns, and in that sense, obviously, we're disappointed that our TSR, even though better than the market, is negative, and we aim to improve that side in the coming period. If we move to the overview, I first would like to present to you a new classification, and rest assured, I don't want to make a habit of this so that you need to change your models all the time. This was actually intended to provide you further insight and probably also ease for building your models. Given that EXOR Ventures is now managed by an external investor, we moved that to the other funds moved by third parties into others, and you really see separately the performance of Lingotto, which are the funds operating under our own management.
And this is an important measure because we want to outperform relative to the index.
We also want to show absolute returns, and in that sense, obviously, we're disappointed that our TSR...
Even though better than the market, it is negative, and we aim to improve that, sir.
In the coming period.
So, if we move to, um,
Uh, to the overview. Um, I first would like to present to you a new classification, and rest assured, I don't want to make a habit of this.
And so that you need to change your models all the time. This was actually intended to provide you further, uh, insight and and probably also ease for for building, uh, building your models.
um,
given that X or Ventures.
Guido De Boer: We thought it's useful not to group cash and cash equivalents under others, but show separately also if you want to look at a net debt basis to facilitate your analysis. I hope this is helpful, and if you have any comments or suggestions or requests for historical data, please feel free to reach out to the Investor Relations team. If we then move to the drivers of change in gross asset value in this new format, and maybe starting on the right-hand side, you see the change that I mentioned previously of a GAAP of $42.5 billion to $40 billion, which splits in $1.1 billion of shareholder distributions, around $100 million of dividends, and $1 billion of buybacks. It's a decrease of GAAP, but not necessarily reflective of performance, just the capital distribution.
Uh, is now managed by, uh, an external investor. We, we move that to the other funds, uh, moved by third parties into others. And you really see, uh, uh, separately the performance of lingo, which are the funds operating under our own management.
Not to group cash and cash, equivalents under others, but, uh, show separately. Also, if you, if you want to look at the and net debt basis to to facilitate your analysis. So hope this helpful and um and if you have any comments or suggestions or requests for historical data, please feel free to reach out to the investor relations team.
So if we then move to the drivers of change in gross asset value in this, uh, in this new format.
And maybe starting on on the right hand side. You see the the change that. I I mentioned previously of
a gap of 4 points: $42.5 billion to $40 billion.
Which split in $1.1 billion of shareholder distributions.
Guido De Boer: You see a $1.4 billion decrease in value, which is the real metric of our performance on GAAP. If we then move one column to the left, cash and cash equivalents, here you can see the movement in our cash flow, where we've invested $1 billion in new investments. We realized $3.5 billion of disposals, and obviously, the $1.1 billion in distributions. If we take the $1 billion in investments, you'll see, and we'll go into more detail later, $438 million went into listed companies, principally Philips and a minor part in Juventus Football Club, and then a bit in commitments on Lingotto, and $428 million in others, which we invested in the deal mid-year. Disposals line for $3.5 billion breaks up quite simply in $3 billion for Ferrari and almost $0.5 million of proceeds from the reinsurance vehicles that we invested in as part of the sale of Partnery.
Around 100 million of of, um, of dividends and and the billion of, of BuyBacks. So, it's a decrease of Gap, but not necessarily, uh, reflective of, uh, performance but but just a capital distribution.
And you see a $1.4 billion decrease in value, which is the real metric of our performance on gas.
if we then move 1 uh column to the left cache and cache equivalents here, you can see well, uh, the the movement in, in our cash flow, where we've invested 1 billion in, uh, in, in in new Investments, we realized 3.5 billion of of disposals
Uh, and obviously the $1.1 billion in distributions.
So, if we take the 1 there and, um,
In in Investments, uh, you'll, you'll see them will go into into more detail later. Uh, 438 million, uh, went into listed companies, uh, principally Philips and in a minor part in, in Juventus,
Um, and then, uh, a bit in commitments on lingo and $428 million in others, which we invested in the deal media.
Guido De Boer: We have the line change in value, which I propose we address in a bit more detail in the following slides. Performance of listed companies, I mentioned already the investments behind Philips, Juventus Football Club, and the disposal of Ferrari. If you then look in the change in value, you basically see that the change in value of Ferrari is marginal, where it started on January 1 and where it landed on June 30. We were quite lucky in our timing that we did the trade at the all-time high in that period, but a very flat movement in between the start and the end of the period. CNH Industrial, a similar story, and we measure our returns in euros, and in euros, it was flat, notwithstanding a strong movement between the dollar and the euro.
Disposals line, uh, for 3.5 billion, uh, breaks up quite simply in 3 billion for Ferrari and uh, uh, almost half a million of proceeds from the reinsurance vehicles that we invested in as part of the sale of, uh, of partnering.
Then we have the line change in, in value, which I propose. We, uh, we address in in a bit more detail in, in the following slides,
So performance of of listed companies, um, uh, I mentioned, uh, already the Investments between behind Philips, Juventus and the the disposal of of Ferrari.
If you then look at the change in value.
Um, you basically see that the change in value of Ferrari is marginal, where it started on the 1st of January and where it landed on the 30th of June.
We were quite lucky in uh, in our timing that that we did the trade at uh, at at the all-time high, uh, in in that period. Um, but um, a very flat movement in in between the start and the end of the period.
Guido De Boer: The big driver of the decrease in value was the disappointing share price movement of Stellantis, as well as that of Philips, which started the year a bit above $24, was at the half-year at $20, and now ranges around $24 again. The good thing is this $700 million of loss has rebounded in the year to date, largely. Obviously, the positive news in the half-year was also the strategic transaction on Iveco Group, which in the run-up to that transaction led to a significant increase in the share price. That is a monetization for EXOR at a very attractive price, as well as a good home for Iveco Group for the future, if that pending transaction will complete in 2026. Those are the key moves in listed companies.
CNH, a similar story. Um, and we measure our returns in euros, and in euros was flat notwithstanding, um, a strong, uh, movement between the dollar and the euro.
The Big Driver of the decrease in uh, in value. Uh, was the, the disappointing, uh, share price movement of uh, of stellantis, um, as well as that of uh, of Phillips.
Uh, which started the year a bit above $24, was at the half year at $20, and uh, is now um, around $24 again. So.
The good thing is this; the $700 million of losses has rebounded in the year to date, largely.
And then, obviously, the positive news in the half year was also the...
Strategic transaction on Evo.
Uh, that pending transaction will complete in 2026.
Guido De Boer: If we then move to unlisted companies, we had some smaller investments behind VIA Transportation, where there were some shares available ahead of the IPO. I'm happy to say that following the successful IPO on NYSE last week, we'll move VIA Transportation to the listed companies in the following reporting, and some existing commitments we have on TagEnergy and SHANG XIA. You'll see the movements in value, where the largest one is Institut Mérieux, on the back of the increase in share price of bioMérieux. VIA Transportation, based on its strong performance. Welltec and The Economist, actually, largely FX movements, and the other amounts are relatively smaller. If we then move to Lingotto and others, you see we invested in private strategies around $166 million, and you see a very strong performance of the public investments, notwithstanding the equity capital markets, in general, declining.
So, those are the key moves in listed companies. If we then move to unlisted companies.
Uh, we had some smaller investments, uh, behind, um, via, uh, transportation, uh, where, um, there were some shares available ahead of the IPO. And I'm happy to say that, um, following the successful IPO on NYSE last week, we will move, um, via to, um, the list of companies in the, in the following reporting, and some existing, uh, commitments we had on tech energy, and and share.
And you'll see the movements in value.
Um, where the largest ones in M, on the back of the increase in share price of boiler.
Via Transportation, based on its strong performance.
Um, well, Tech and The Economist actually largely, uh, ethics movements. Um, and the other amounts are relatively small.
So, if we then move to Lingo and others.
Uh, you see, we invested in private strategies around $10,066.
Um, and you see a very strong performance of, um,
Guido De Boer: We're very happy with how the Lingotto funds deliver returns, which are less correlated to the rest of the portfolio and outperforming the market. We then move to others. There you see funds managed by third parties, so that also now includes EXOR Ventures, and it was also including the reinsurance vehicles, where you see the half billion of disposals, so we're quite positive. The funds are doing quite well. The minus $72 million is actually $427 million negative FX, and both EXOR Ventures, as well as the reinsurance vehicles in local currency, have been performing well. In listed securities, you see, again, the investment of $317 million in bioMérieux, and the change in value is largely due to the decline in share price of Nomura, a smaller investment that we've done in the past. I think those are the main items to highlight in others.
Uh, of the public investments notwithstanding, um, the XT capital markets, um, in general, uh, declining. So we're very happy with how the lingo.
Uh, funds deliver returns, uh, which are.
Uh, less correlated to the rest of the portfolio, and outperforming, uh, outperforming the market.
We then move to others. Uh, there you see, um, funds managed by third parties. Um, so that also now includes, uh, Xor Ventures.
Uh, and it was also, uh, including the reinsurance vehicles where you see the half bearing of, uh, disposals. Uh, so we're quite positive.
The funds are doing quite well. The minus 72 is actually $427 million in negative ethics.
uh and uh both extra Ventures as well as the reinsurance vehicles in um in local currency have been uh performing performing well
In listed securities, uh, you see again the investment of $317 million in the BM area.
And the change in value is largely due to the decline in share price of Noora, a smaller investment that we've made in the past.
And I think those are the main items to highlight in others.
Guido De Boer: Cash and cash equivalents, I largely mentioned this previously. We had strong dividend inflows of €624 million, of which we distributed, again, €1.1 billion to our shareholders. We raised disposals of €3.5 billion, which we reinvested for €1 billion, and we repaid bank debt for €547 million and a bit of a bond, which leads us to a cash position now of €1.5 billion, which is obviously very, very healthy. That is in line with a gross debt that, as I mentioned, with the reduction in bank debt and the bonds, now stands at €3.5 billion rather than the €4.1 billion at year-end. As you know of us, we try to have a very stable maturity profile, so we have no cliff payments, and all the short-term obligations that we have here can easily be filled out of our cash positions.
So cash and cash equivalents. Um I largely mentioned this uh this previously, we had strong dividend inflows of um of of 60024 million.
um,
Of which we distributed again then. Um,
Um, $1.1 billion to our shareholders.
Uh, we raised um disposals of 3 and a half billion which we reinvested for for 1 billion.
Um, we repaid, um, uh, bank debt for $547 million and, and, and a bit of a bond.
Which leads us, uh, to a cash position now of $1.5 billion, which is obviously very, very healthy.
Uh, and that is in line with a growth that, uh, as I mentioned, with the reduction in bank debt and the bonds, now stands at $3.5 billion rather than the $4.1 billion net at the year end.
And as, uh, as you know, we try to have a very stable maturity profile. Um, so we have...
Um you know, no Cliff payments and all the short uh short-term obligations that we have here, can easily be filled out of our out of our cash positions.
Guido De Boer: With that brief summary, I would like to open the floor to a Q&A. Over to you at the operator.
Operator: Thank you. We will now begin the question and answer session. If you have a question, please press star, then 1 and 1 on your touch-tone phone. Once again, if you have a question, please press star, 1 and 1. We will now take the first question. One moment, please. We will now take the first question from the line of Monica Bosio from Intesa Sanpaolo. Please go ahead.
So with that uh, brief summary. Uh, I would like to open the floor to uh, to a Q&A. So over to uh, to you at the operator.
Touch from phone. Once again, if you have a question, please press star 1 and 1.
We will now take the first question.
1 moment, please.
We will now take the first question.
[Analyst]: Good afternoon, everyone, and thanks for taking my questions. I hope you can hear me well. I have three. First of all, on the future investments, my perception is that maybe the group priorities are more on the healthcare side. Do you see real true opportunities in the luxury segments? I'm just wondering because in the last conference, the company didn't see real opportunities in the luxury segments. The second question is on the size of the potential acquisitions. The press speculated a lot on this. Any comment from you on this side? Do you have any time or horizon for the completion of the new investments? The very last is not on investments, but maybe on disposal. Should we expect in the coming future some other disposal on top of LifeNet? Thank you very much.
From the line of Monica Bozzio from Inessa, São Paulo. Please go ahead.
Hey, good afternoon everyone, and thanks for taking my questions. I hope you can hear me. Well, I have a 3. Um, first of all, on the future investments, um, my perception is that maybe the group priorities are more on the health care.
Side, or do you see real true opportunities in the luxury segments? I'm just wondering because in the last conference uh the company didn't see real opportunities on in the luxury segments. And the second question is on the side of the potential Acquisitions of the press speculated a lot on this. Any comment from you on this side and do you have any time or other on for the completion of the new Investments and the very last as uh is, uh, not only Investments but maybe on disposal. Should we expect in the coming future? Some other disposal on
Guido De Boer: Fantastic. Thank you, Monica. Good questions, as usual. In terms of priorities, for us, when evaluating a potential acquisition, we look at fundamentals. You know, does it have the right strategic fit? How are the financial fundamentals, cultural alignment with us as an owner? What are the leadership strengths? What are their governance proposals? We base this on analysis of each individual company. It can be healthcare. It can be luxury. These are, in particular, industries where we have domain knowledge within the team, but it could even be outside that if the investment opportunity is sufficiently attractive for us. There is no a priori preference of healthcare over luxury. In terms of size, we basically have said that we are considering to do transactions which are meaningful in the perspective of our total GAAP, and 5% is a percentage where this becomes meaningful.
Top of life, Net. Thank you very much.
Fantastic. Uh, thank you, Monica. Good questions, as usual.
Um,
So, in terms of priorities for us, when evaluating a potential acquisition.
We look at fundamentals. Uh, you know, does it have the right strategic fit? Are our financial fundamentals aligned? What about cultural alignment with us as owners? What are the leadership strengths? What do their governance proposals look like? We base this on analysis of each individual company. So it can be healthcare, it can be luxury; these are in particular industries where we have domain knowledge within the team. But it could even be outside that if the investment opportunities are sufficiently attractive for us. So there's no a priori preference of healthcare over luxury.
In terms of, uh, size,
Um, we basically have said that that we are considering to do uh transactions which are meaningful in the in in the perspective of of our total gaff.
Guido De Boer: Again, we look at every individual opportunity to decide if it's attractive or not. On disposals, we continuously evaluate our portfolio to decide whether we should increase our stake, like we've done on Philips in the period, or whether it's a good time to dispose. If there's anything to update, obviously, you will be the first one to know. For now, there's nothing further to mention.
Um, and you know, 5% is a percentage where this becomes meaningful. But again, we look at every individual opportunity.
Um, to decide if it's attractive or not.
And on disposals, we continuously evaluate, uh, our, our portfolio, um, to decide, whether we should increase our stake, uh, like we've we've done on on Philips in the period.
[Analyst]: Thank you very much.
Guido De Boer: I hope this answers your questions.
Or, uh, whether it's a, it's a good time to, to dispose. Uh, if there's anything to update, uh, obviously you will be the first 1 to know. But for now there's, there's nothing further to to mention.
[Analyst]: Yes. Yes, thank you. I came back to the queue.
Thank you very much. I hope this answers your questions. Yes, yes, yes. Thank you.
Operator: Thank you. We will now take the next question from the line of Martino De Ambrogi from Equita. Please go ahead.
I came back to the queue.
Thank you.
We will now take the next question.
[Analyst]: Thank you. Good afternoon, everybody. Good afternoon, Guido. The first question is on the financial flexibility because once you divest Iveco Group's stake, you will have another €1.3 billion cash in. Would you prefer to look for one more big ticket, as you mentioned, 5% of GAAP, or buyback could be another priority? Specifically on the buyback, you don't need any divestiture to continue to buy back shares. You already finalized the €1 billion buyback in one shot. Why are you not starting additional buyback, considering the high discount to net asset value? The third question is, sorry to be more specific on the name, but Armani is, I don't know, up for sale, probably not shortly and so on.
From the line of Martino. The embro from Equita. Please go ahead.
Thank you. Good afternoon, everybody. Good afternoon. Go.
Um, the first question is on the financial flexibility because once you divest a vehicle stake.
You will have another $1.3 billion, uh, cash in.
So, would you prefer to look for one more big ticket? As you mentioned, five times, five percent of our GAV.
Or, uh, buyback could be another priority, uh, and specifically on the buyback, you don't need any diversity to continue to buy back shares. You already finalized a $1 billion buyback in one shot, but, uh,
Uh, why are you not, uh, starting an additional buyback? Considering the high discount to net asset value.
Is.
[Analyst]: Just from a theoretical point of view, just theoretically, could it be an interesting asset for you, or are you absolutely out of the game, even if today is too early to talk about it? Very last, on Ferrari, when you sold a stake, you mentioned there was an excessive concentration in terms of asset value. Today, Ferrari is roughly 90% of the net asset value. The issue of too high concentration could come back. What's your way of thinking about it for future in case the concentration further increases?
Uh, I don't know at for sale, probably not shortly and so on, but, uh, just from a theoretical point of view. So just theoretically, could it be an interesting asset for you or you are absolutely out of the game uh even if uh, today is too early to to talk about it.
And, uh, very last, on Ferrari, uh,
When you sold a stick, you mentioned there was an excessive concentration in terms of asset value.
Uh, today Ferrari is roughly 90% of the net asset value.
So the issue of $2, high concentration could come back. But, uh, what's your way of thinking about it, uh, for, uh, future in case the concentration?
Guido De Boer: Thank you, Martino. Good to have you on the call again. On buybacks, they are part of our resource allocation process. In a sense, the buyback, the discount is also an opportunity for EXOR to reinvest capital and for investors that want to remain on to benefit from a NAV per share increase from that, which you've seen in this half-year. We've just done $1 billion of capital returns. In terms of our market cap, that is something that's very, very sizable. As I mentioned, every time we do our portfolio review, we consider to increase or reduce the holdings in existing companies. We consider new investment opportunities that we have, and we consider buybacks, and we decide on what we feel is the most attractive choice or multiple choices between those. We will continue to do that and consider buybacks as part of that process.
Further increases.
Yeah. Thank you, Martina. It's good to have you on the call again.
Um,
So on buybacks, um, they are part of our, uh, resource allocation process. Um.
And in this sense, you know, the buyback discount is also an opportunity.
for uh, for xor to to reinvest capital and for investors that want to remain on to benefit from uh an an F for share increase from that, so which you've seen in in this half year,
We've just done a billion of capital return. So, in terms of our market cap, that is something that’s very, very sizable.
Um, but as I mentioned, every time we do our portfolio review, we consider, uh, increasing or reducing the holdings. In existing companies, we consider new investment opportunities that we have, and we consider buybacks, and we decide on what we feel.
Is the most attractive.
Guido De Boer: I don't really have anything to comment on the individual transaction as we obviously never do that. Ferrari, the concentration has nicely reduced. It was 43% when we did the transaction. We're now at 39% of our gross asset value, which is the way we look at it. Indeed, if you look at it as our market cap, you probably meant 90% of market cap rather than net asset value. That is high, but then you could almost see EXOR as buying Ferrari and getting the rest for free. In that sense, we see this as a great opportunity for investors to buy into the EXOR stock. Concentration, maybe to have that as a general point, we like concentration because our belief is that if we buy one share of every stock in the index, we perform like the index, and we want to outperform.
Choice or multiple choices between those. So we'll continue to to to do that. Um and and consider BuyBacks as part of that as part of the process.
Armani, I don't really have anything to comment on, um, on individual transactions. As we obviously never do that.
Um, and Ferrari. Um,
The concentration has nicely reduced. It was 43% when we did the transaction; we're now at 39%.
Of our gross asset value, which is the way we look at it. Indeed, if you look at it as our market cap, you probably meant 90% of market cap rather than net asset value.
That is high, but then you could almost see EXOR as buying Ferrari and getting the rest for free.
So, in that sense, I would see this as a great opportunity for investors to.
to buy into the X or XR stock.
And concentration maybe to have that as a general point.
Guido De Boer: We invest in companies where we have conviction, and Ferrari is absolutely one where that holds true. I hope this addresses the points you raised, Martino.
We like concentration because our belief is that if we buy one share of every stock in the index, we perform like the index, and we want to outperform. So, we invest in companies where we have conviction, and Ferrari is absolutely one where that holds true.
[Analyst]: Thank you, Guido. You are right. I mentioned as a % of NAV, but it was on market cap. One more follow-up on Lingotto, which made a great job because the performance was very strong. Could you remind us what were the main drivers for this performance? In terms of strategy, are you planning to open the doors or to accelerate on third party's assets, or is this something that is not on your table?
So, I hope this addresses the points you raised, Martina.
Yeah, thank you. And you are, right? I mentioned it as a percentage of Neva, but it was on market cap. Um, one more follow-up on Lingotto, which made a great job, because, uh,
The performance was very strong. Could you remind us what the main drivers were for this performance, and in terms of strategy?
Are you planning to open the doors or to accelerate on third parties? Uh, uh, asset? Uh, or, um, this is, uh, something that is not, uh, um,
Guido De Boer: For us to invest more or less behind Lingotto strategies is part of the portfolio review process, as I mentioned. If we would invest more behind existing strategies or if there's new ones, we will obviously announce that to the markets. Our strategy is not to grow assets under management and gain management fees. Lingotto was created to deliver performance to us. I think that is critical. We want to grow our assets under management through performance rather than capital inflows. As you see, we are delighted by the performance that it showed in this half-year, which it has been showing over a longer period now. The quality of investors that we've been able to attract makes us obviously very pleased with having put the funds behind Lingotto.
On your table.
So, for us to invest more or less in Behind Lingo, strategies is part of the portfolio review process. As I mentioned.
And if we would invest more, uh, behind existing strategies or if there are new ones, we will obviously announce that to the markets.
For us, our strategy is not to grow assets under management and gain management fees.
Performance to us.
So, I think that is critical. We want to grow our assets under management through performance rather than capital inflows.
Um, and as you see, uh, we, we are delighted by by the performance that it showed in this half year, uh, but which it has been showing over a long longer period. Now, so, the quality of investors that we've been able to attract, um, makes us, uh, makes us obviously very pleased with having, put the funds behind lingo.
[Analyst]: Regarding the first-half performance, is there any specific driver leading to such a good performance?
Guido De Boer: I think they're great investors that know how to find the stocks that perform well.
And, uh, about the first alter performance, is there any specific driver leading to such a?
Good performance.
I think there are great investors that know how to find.
The stock that performed well.
[Analyst]: Yeah, you're right.
Guido De Boer: Thank you.
[Analyst]: Thank you.
Operator: Thank you. We will now take the next question from the line of Joran van Aken from Degroof Petercam. Please go ahead.
Yep. You're right. Thank you. Thank you.
Thank you.
We will now take the next question.
[Analyst]: Yeah. Hi. Good afternoon. A lot of great questions have already been asked, but just one from my side. I remember Mr. Elkann saying a while ago that private valuations were higher than listed assets, and not long after that, you bought the Philips stake. Today, I'm hearing that high-quality assets in the private market still have very high valuations. Do you think that the bid-ask spread has narrowed sufficiently on the private side, or do you think that listed is still more attractive today? Thanks.
From the line of Jordan that I can from the group Pizza Camp. Please go ahead.
Yeah, hi, good afternoon. Um, a lot of great questions have already been asked, but just one from my side. I remember Mr. Elcan saying a while ago that private valuations were higher than listed assets, and not long after that, you bought the Philips stake. Um, today I'm hearing that high-quality assets in the private market still have very high valuations. Do you think that the bid-ask spread has narrowed sufficiently on the private side, or do you think that listed is still more attractive today? Thanks.
Guido De Boer: I'm not sure if I've seen too much of a reduction in price expectations from private assets. I don't think that much has changed on private asset valuations and public market valuations. I think that's your day job, so you know much better than me. I would say there's a big disparity between certain types of companies, like the large tech companies, versus some slower-growing companies or companies that have a one-quarter earnings miss, which have then a disappointing share price performance. If you look in public markets, there's definitely opportunities to be found. Private assets can have their individual situations that the valuations are attractive. Apologies for not trying to evade your question with a clearer answer, but I think there's not a one-size-fits-all response to your question. Joran, I hope that's clear how we look at this.
I'm not sure if I've seen too much reduction in in price expectations from, uh, from from private assets. So I don't think that much has changed on, on, on private asset valuations.
And public market valuations. I think that's, that's your day job so you know, much better than me. Uh, but also their I would say there's a big disparity between, um, certain type of companies. Like the large large stack companies versus, uh, some slower growing companies or or companies that have a, a 1 quarter earnings myth which uh, which have then, uh, disappointing share price performance. So I think if you look in public markets, there's there's definitely
Uh, opportunities to be found.
Uh, but also private assets can have their individual situations, and the valuations are attractive. So,
[Analyst]: Thank you so much. I could try, at least.
Apologies for not trying to evade your, your answer with your question, with a clear answer. Uh but I think there's another 1 size fits all um, response to uh, to your question. So you all I hope that uh, that that uh that's clear how we how we look at this.
Guido De Boer: Thank you.
So much. I could try at least.
Operator: Thank you. We will now take the next question from the line of Hans Hess from ING. Please go ahead.
Thank you.
Thank you. We will now take the next question.
[Analyst]: Afternoon. Thank you for taking the questions. I wanted to state first, Guido, that really happy with the new tables layout and increased even better transparency. Already was really happy with the IFRS 10 change, and now this really helps also with the valuation drivers for listed companies and so on. Very good job. Regarding portfolio, we've seen that you've been very explicit in what sectors EXOR would like to increase its exposure and for what amounts. Thank you for that. In the meantime, we only saw a considerable increase of Philips, so we're waiting for other stuff. If now opportunities rise for acquiring minority stakes in other companies, in companies, for instance, that you already are an important shareholder, like for instance, The Economist, would you consider to increase your stake?
From the line of hands has Froemming. Please go ahead.
Thank you for taking questions. Um, and I I wanted to stay first to go that really happy with the new uh tables layouts uh and and increased.
Even better. Uh, transparency already was ready. Happy with the ifs 10 uh, change. And now this uh, really helps also with the valuation drivers for illicit companies. And so, and and so on very, uh,
A very good job. Um, then, uh, regarding, uh, portfolio, um,
We've seen that you've been very explicit in what sectors you would like to increase your exposure and for what amount. So, thank you for that. In the meantime, we...
[Analyst]: Is this something that would fit in the portfolio, or are you sticking to, "No, it should be healthcare and luxury"? That's one question. The second one, in light of market expectations of further U.S. dollar weakness, and considering that your stakes in CNH, in Clarivate, in Lingotto are dollar-sensitive, what is your hedging strategy? Are you considering, are you doing something, or is this something that is not part of the strategy of EXOR? Third and last question, what are your considerations about investing in Bitcoin, cryptocurrencies? Do you see them as an alternative for your cash position, or do you see them as a different asset class? Do you want to share your thoughts about this? Thank you for that.
Only saw a considerable increase for Philips. So we're waiting for other stuff. Um, if now opportunities arise for acquiring minority stakes in other companies, in companies, for instance, that you already are an important shareholder in, like, for instance, The Economist.
Would you consider increasing your stake? Is this something that would fit in the portfolio? Are you sticking to no? It should be Healthcare and luxury.
What is your hedging, uh, strategy? Uh, are you considering are you doing something or is this something that is not, uh, part of the strategy of XR?
And then the third and last question. Uh, what are your considerations about, uh, uh, investing in Bitcoin and cryptocurrencies?
Do you see them as an alternative for your cash position?
Guido De Boer: Yeah. My pleasure. Thanks, Hans. First, for the compliments, much appreciated because we've been working hard on providing information to you and all our other stakeholders, which is as clear as possible so that we can talk more about fundamental activities like you now ask about. Much appreciated. On portfolio, whether we would consider investing in existing companies versus, like for example, an Economist or in only healthcare, technology, and luxury, we are, in a sense, agnostic. Why have we said healthcare, technology, and luxury? These are sectors where we think there are structural tailwinds and where we've built up a domain knowledge. We know all the good players in the industry. We know subsectors of those industries which we like. In that way, we feel we can uncover opportunities that maybe others don't see. That's why our focus is there.
Uh, do you see them as a different asset class? Is this, uh, well, just you want to share your thoughts about, uh, about this? Thank you for that. Yeah, it's a pleasure. Thanks, uh, HS.
Uh, first, for the compliments—much appreciated, because...
We've been working hard on providing information to you and all our other stakeholders that is as clear as possible so that we can talk more about, uh, fundamental activities. Like, you know, now ask about some much appreciated.
On portfolio, or whether we would consider investing in existing companies versus, for example, an economist, or in only healthcare technology and luxury.
we are, uh,
In a sense agnostic. What have we said? Healthcare technology and luxury.
Because these are sectors where we think there are structural tailwinds.
And where we've built up a domain, uh, knowledge. Um, so we know uh all the good players in the industry uh we know sub sectors of those Industries which we like and
Guido De Boer: If we see another opportunity, either in our portfolio already, which obviously has many advantages because we know that asset, or outside, we're very open to consider those as well. We're not married to investing in healthcare, luxury, or technology. On the U.S. dollar, we don't do any hedging. Hedging, I think, is a useful measure for covering short-term exposures, which you cannot offset for a production company. Hedging your fixed cost if you import into a country when your sales and you cannot change your prices. For us, as a long-term investor, we don't see hedging as a valuable tool. There might be actually a short-term opportunity to say maybe with the devaluation of the U.S., on a relative basis, U.S. companies have become more attractive than six months ago. We look at it more from that perspective.
In that way, we feel we can uncover opportunities that maybe others don't see. So that's why our focus is there.
But if we see another opportunity, either in our portfolio already, which obviously has many advantages because we know that asset, uh, or, uh, outside, uh, we're very open to, to consider those, uh, those as well. So, we're not married to investing in healthcare luxury, or, or technology.
On the US dollar. Um, we don't do uh, any hedging um you know, hedging I think is a useful measure for covering short-term exposures.
Uh, which you cannot offset for, for production company.
Adding your fixed cost. Um if you import into a country, when your sales and you cannot change your prices,
but for us as a long-term investor,
Uh we don't see hedging as a as a valuable tool. Um there might be actually a short-term opportunity to to say maybe uh with the devaluation of the US.
On a relative basis us, uh, uh, companies have become more attractive than 6 months ago. So we we look at it more from, uh, from
Guido De Boer: Utilizing the dry firepower that we have now, we're quite conservative on that and put it in cash spread over euros and dollars across multiple banks, including many of you who are in this call. Stable banks across currencies at a decent return because this is not where we want to make our money. That's why crypto or Bitcoin would not be places where we would park our money. Where we want to take risk is in the long-term investments that we do and not in the short-term liquidity storage that we hold. That's how we look at it today. Not voicing an opinion on Bitcoin or crypto because there's many people who are much better positioned than I to speak about this.
from that perspective.
And then of, um, utilizing the the um, the the the fire dry fire, power power, that that we have now.
We're quite conservative on on that and and put it um in cash spread over uh euros and dollars across multiple Banks, including uh, many of um, of of you who are in this, uh, this call. So a stable Banks across currencies, uh, at a decent return because this is not not where we want to make our money, so that's why.
Uh, crypto Bitcoin would not be.
Um, places where we would park our money. Um where we want to take risk is in the long term investments that we do and not in the short term uh liquidity storage that uh that we hold. So
That's how we how we look at it, uh, today. And not not voicing an opinion on, on bitcoin or crypto, because there's many people who are much better positioned than I to, uh, to speak about this.
[Analyst]: Thank you, Guido.
Operator: Thank you. We will now take the next question from the line of Alberto Villa from Intermonte SIM. Please go ahead.
Yeah, thank you.
We will now take the next question.
[Analyst]: Good afternoon, and thanks for taking my questions. A couple from my side. Many of you already asked it. Again, on Lingotto, congratulations to the team, a very great performance. Now it's 8% of the GAAP. Is there any internal limitation you put yourself in terms of size of the investment of your funds in Lingotto, or it could go farther in the future? The second question is a more general question about, let's say, when you consider investing in a company with the current geopolitical uncertainty and turmoils, if you're now looking more specifically to some regions rather than others, if there is any, let's say, change in the approach on a geographical standpoint compared to the past due to what has been happening in the recent past, and presumably, we continue to be a very volatile environment on that side. Thank you very much.
From the line of Alberto Villa from Inter Monty Sin. Please go ahead.
Guido De Boer: Thank you, Alberto. On Lingotto, I think the limitation breaks down maybe in two parts, one on individual funds and two on allocation to Lingotto as a whole. As I mentioned earlier, on Lingotto as a whole, we always take Lingotto as part of our portfolio review strategy, and we see do we want to allocate more or more to existing strategies or new funds, and we decide what kind of returns, risk, reward do we get against this, and we make an investment decision based on that. In terms of limitation, and I think it's a very important question which goes to the core of Lingotto, for us, it's key that the investors behind the Lingotto funds focus on performance and outperformance. The limitation is the size where adding further assets under management would go at the detriment of performance, and that would be the limitation.
Uh, or it could go, uh, farther in the, in the future. Uh, the second question is, uh, more general question is about, uh, the uh, let's say when you consider investing, uh, in in, in a company, uh, with the current geopolitical uncertainty and, and turmoils. If you now looking more specifically to some regions rather than others, if there is any, let's say change uh, in the in the approach uh on a geographical standpoint compared to the past, due to what has been happening in in the recent past and presumably, we continue to be a very volatile environment on that side. Thank you very much.
Thank you, Alberta. Um,
So on lingo, I think the limitation breaks down maybe into two parts.
Uh, 1 on individual funds, uh, and 2 on allocation, um, to lingo in a hole.
Uh, so as I mentioned earlier, on lingo as a whole, um, we always uh, take lingo as part of our uh, portfolio review strategy and we see do we want to allocate more or, uh, more to, um,
2 existing strategies or a new funds. And we, we decide what kind of returns, uh, risk, uh, reward. Um, do do we get against this and and we make an investment decision based on on that.
in terms of limitation,
And I think it's a very important question, which goes to the core of lingo.
For us, it's key that the investors behind the lingo of funds.
Focus on uh, on performance and outperformance.
um, so the limitation is the size where
Guido De Boer: That's obviously different for different types of strategies, whether it's public or listed, and which markets they are. That's where the key limitation probably is for individual Lingotto strategies. Geopolitical is an important investment consideration, obviously. It is also a potential opportunity if those have led to significant price movements because we are a long-term investor. We do take that into account, but I cannot say that that has led to exclusion of certain regions or countries where we would say we're absolutely not looking there now.
Adding further assets on the management, would go at the detriment of uh of performance. And that would be the the limitation. And that's obviously different for different types of strategies uh where there's public or listed and where and which markets they are.
But that's where, where the key uh key limitation probably is for individual lingo to strategies.
And then geopolitical.
It is an important investment consideration. Obviously, um,
It is also a potential opportunity if you know those uh have led to significant price movement because we are a long-term investor. Um so we do take that into account.
Uh, but I cannot say that that has led to the exclusion of certain regions, or countries where we would say we're absolutely not looking there now.
[Analyst]: Thank you.
Thank you.
Operator: Thank you. As a reminder, to ask a question, please press star, 1, and 1 on your telephone. We will now take the next question from the line of Andrea Baloni from Mediobanca. Please go ahead.
Thank you. As a reminder, to ask a question, please press star 1 and 1 on your telephone.
[Analyst]: Yes. Thank you. Good afternoon, everybody, and good afternoon, Guido. A few questions for myself. My first one is a follow-up to the one of Martino, and sorry for asking again. This is about Ferrari. I was wondering, if you find some very good opportunities to invest in, would you even consider another partial disposal of Ferrari to finance the investment, or on the opposite, current stake you have in Ferrari is a level you are not willing to lower? My second question is about current holding discount that we see at 50%, despite the material share buyback you have recently done. What could be, in your view, a way to shrink this holding discount as of today? My very last question is on Philips.
We will now take the next question from the line of Andrea baloney from media Banker. Please go ahead.
Yes, thank you. Good afternoon everybody and good afternoon. Go uh, few questions for myself. My first 1 is a follow up to 1 of Martino and sorry for asking again, which is about Ferrari.
Uh, I was wondering if you find some very good opportunities to invest in, uh, would you even consider another partial disposal of Ferrari to finance the investment, uh, or on the opposite? Current take you have inferred. Our is a level. You are not willing to lower.
[Analyst]: I remember when you have announced the acquisition of this stake, you mentioned that you were convinced to be able to extrapolate some value from a company that was clearly undervalued by the market. Just to understand, what time horizon you had in mind for this asset? Thank you.
And my second question is about the current holding discount that we see at a 50% discount, despite the material shared by Back. You have recently done, uh, what could be your view on a way to shrink this count as of today?
Guido De Boer: Thank you, Andrea. Good. On Ferrari, our view remains. In
And my very last question is on Philips. I remember when you announced the acquisition of Philips, you mentioned that you were convinced you could extrapolate some value from a company that was clearly undervalued by the market. But just to understand what time horizon you had in mind for this asset.
Thank you.
Thank you, Andrea.
Guido De Boer: What we said earlier in the year, that our commitment to Ferrari is as strong as ever. We didn't do this disposal about reducing our interest of the company. It was really a strategic decision to reduce our portfolio concentration, as well as creating room for the next back-to-back opportunity. We're actually extremely happy that Ferrari is still a significant part of our portfolio. As I said, we do like concentration and are confident that Ferrari will be a strong contributor to future results. On the holding discount, what are we doing about it? I think calls like now, based on clear and transparent communication, are one important part of it. Even more important is we need to continue to show sustained outperformance both on the absolute and on the relative basis.
Good. So on Ferrari, our view remains as what we said earlier in the year.
We didn't do this. Um,
Disposal about reducing our interests of the of the company. It was really uh a strategic decision to reduce our portfolio concentration um as well as creating room for the for the next back opportunity. So we're actually extremely happy that Ferrari is still uh significant part of our portfolio and and as said we do like concentration and uh and our confident that Ferrari will be
Strong contributor to future results.
So, on the holding, uh, discount.
What are we uh doing about it? I think.
Calls like now, based on clear and transparent communication, are...
Guido De Boer: I think it's interesting also to have a look at the long-term performance of EXOR versus the MSCI World Index because that's really why we want people to invest in our stock, because we are long-term investors. By compounding better returns than the index over a long time, we will create significant value for our shareholders. That's something we'll just continue to do. If you have other views of actions that we could take, I'm always happy to hear them from you, either reading it in your report or to have a call on that, if you like. Philips, we continue to believe that the company has a huge potential and that it's delivering on its potential. We're quite excited by its operational performance and our conviction also remains strong, and happy with the progress that they're making. Our time horizon is long. We're there for the long term.
1 important part of it. Uh, but even more important is we need to continue to show, um, uh, sustained outperformance, both on the absolute and on relative basis, and
I think it's, uh, interesting also to have a look at the long-term performance of, uh, EXOR versus the MSCI World Index because that's really why we want people to invest in, um, in our stock.
Because we are long-term investors and by compounding,
um,
Better returns and uh, than the index over a long time, we, we will create significant value for, for our shareholders.
So that's something we'll we'll just continue to do. Um, but if you have other views of actions that we could take um always happy to
Uh, to hear them from you.
and either reading it in your report or, or to have a go on that if you like.
So Phillips, uh we continue to believe that uh that the company has um has a huge potential and that it's delivering on its on its potential. So we're quite excited by by it's it's it's operational performance and and our conviction also remains strong
Guido De Boer: We don't have any specific horizons where we say at this moment, we exit. There is not a year that I can mention to you of our planned horizon for an investment like this.
Um, um, and and and happy with the progress that they're making. So our time horizon is long. We're there for the long term. We don't have any specific horizons where we say at this moment, we exit.
um,
Guido De Boer: Thank you.
So there there's not a year that that I can mention you, uh, of of our plans Horizon for an investment like this.
Guido De Boer: That clarifies. Thanks, Andrea.
Operator: Thank you. This concludes the Q&A session. I would like to hand back over to Guido De Boer for closing remarks.
Thank you. Let's clarify. Thanks Andrea.
Thank you. This concludes the Q&A session. I would like to hand back over to Guido Boer for closing remarks.
Guido De Boer: I would love to thank all of you for your very thoughtful questions. I think this was all valuable and also gives us some good inputs to sharpen our strategy. I am very happy you all joined this call. Please reach out via the usual channels if you have any further information requests or would like to speak to us in any other way. Thank you, everyone, and have a nice day.
Operator: Thank you. Ladies and gentlemen, this concludes today's conference call. Thank you for participating. You may now disconnect.
I would love to thank all of you for, for your very thoughtful questions. Uh, I think this, uh, this was all valuable and also gives us, um, some good inputs to, to sharpen our strategy. Um, so very happy you all joined this call and please reach out, um, via the usual channels if you have any further information, requests, or, or would like to speak to us in, in any other way. So thank you, everyone and have a nice day.
Thank you, ladies and gentlemen. This concludes today's conference call. Thank you for participating. You may now disconnect.