Last close As at 05/08/2026
74.60
▲ 1.20 (1.63%)
Market capitalisation
228m
Research: Financials
ÖKOWORLD (ÖWAG) posted solid H120 results, which we believe may reflect, among other things, improving interest in its insurance brokerage business focused on pension products. Entering 2020, assets under management (AUM) of its fund managing subsidiary ÖKOWORLD LUX amounted to c €1.7bn then expanded to almost €2.0bn at end July 2020. While this has driven growth in its management fees, we assume the subsidiary earned limited (if any) performance fees in H120, as funds exceeded previous high-water marks for a short time only before the pandemic outbreak. However, we note that on the back of the strong rebound in broad equity markets in Q220, the fund performance recovered from the initial downturn in late Q120.
ÖKOWORLD |
Growing interest in its offering
Diversified financials |
Scale research report - Update
16 September 2020 |
*Based on 7.06m total shares issued (after deducting treasury shares). Only 3.05m non-voting preference shares are listed on the stock market. Share price graph
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ÖKOWORLD (ÖWAG) posted solid H120 results, which we believe may reflect, among other things, improving interest in its insurance brokerage business focused on pension products. Entering 2020, assets under management (AUM) of its fund managing subsidiary ÖKOWORLD LUX amounted to c €1.7bn then expanded to almost €2.0bn at end July 2020. While this has driven growth in its management fees, we assume the subsidiary earned limited (if any) performance fees in H120, as funds exceeded previous high-water marks for a short time only before the pandemic outbreak. However, we note that on the back of the strong rebound in broad equity markets in Q220, the fund performance recovered from the initial downturn in late Q120.
Significant improvement in net profit
In H120, ÖWAG reported net profit of €7.4m against €2.5m in H119. The increase was likely driven by strong insurance brokerage business and the dividend of €4.9m (vs €2.4m in H119) from ÖKOWORLD LUX. Furthermore, personnel expenses in the period decreased by 47.3% y-o-y to €1.5m, which is largely attributable to the high comparative base in H119 (€2.8m), inflated by reorganisation costs and performance bonuses.
Funds reporting positive returns in 2020
Healthy returns over the three-month period ending 31 July 2020, reported by all funds managed by ÖKOWORLD LUX, helped offset Q120 losses. The largest fund in the portfolio, ÖKOWORLD ÖKOVISION CLASSIC (c 72% of overall AUM), has already reported a positive year to date performance, reaching 3.4% at end July 2020. Meanwhile, the best performing fund, ÖKOWORLD KLIMA, recorded a c 18.5% ytd return and increased its AUM from €150.6m at the beginning of the year to €258.4m at 31 July 2020.
Valuation: Setting new record-high share price
Although ÖWAG’s share price is currently at a record-high level, the valuation against its peers, based on the last 12-month P/E multiple, indicates a c 20% discount. Based on the market cap to last reported funds AUM ratio, ÖWAG is trading 4.1pp above the peer group median, which may reflect its solid insurance brokerage business. ÖWAG currently offers a dividend yield of 2.5%.
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Historical financials
Source: ÖKOWORLD accounts |
Edison Investment Research provides qualitative research coverage on companies in the Deutsche Börse Scale segment in accordance with section 36 subsection 3 of the General Terms and Conditions of Deutsche Börse AG for the Regulated Unofficial Market (Freiverkehr) on Frankfurter Wertpapierbörse (as of 1 March 2017). Two to three research reports will be produced per year. Research reports do not contain Edison analyst financial forecasts.
Financials: Further expansion of AUM
With interest rates remaining stable at a record-low level over H120, investment funds have gained in significance as an investment opportunity for individuals looking for a reasonable risk-return tradeoff. ÖKOWORLD LUX is clearly benefiting from this trend, further assisted by strong sentiment towards sustainable investments. Its AUM has made steady progress through the year to date, with July volume of nearly €2bn (vs €1.7bn at 31 December 2019 and more than €1.3bn at 30 June 2019), likely driving improved management fees. The company has not disclosed detailed information regarding the performance fee. We note, however, all five funds managed by ÖKOWORLD LUX (the fund management subsidiary) reached new records in terms of unit price over the analysed period and the previous high-water marks were exceeded for a short time only before the pandemic. We also note that performance fee (if any) earned in H119 was limited.
We believe that the 29.4% y-o-y improvement in revenues, which reached €9.5m in H120 (vs €7.3m in H119), may be mainly attributable to improved fund fee income and strong insurance brokerage business (focused on pension products). However, we note that management fees earned by ÖWAG (which are charged by ÖKOWORLD LUX as a percentage of AUM and partially transferred to the parent company) are largely passed on to distributors, with the higher fees paid in H120 resulting in costs of services growing from €2.5m in H119 to €3.3m in H120. Over the first six months of 2020, ÖWAG recognised €4.86m in income from related companies in the form of dividends from ÖKOWORLD LUX against €2.43m in H119. However, management indicates this dividend was partly paid from previous period retained earnings.
Over the same period, personnel expenses fell from €2.8m to €1.5m. However, we note that in FY19 company incurred some reorganisation costs and paid performance bonuses to its staff. H120 personnel costs are on a par with the H118 total of €1.4m.
Exhibit 1: Financial highlights
€000s |
H120 |
H119 |
y-o-y |
Revenues |
9,497 |
7,340 |
29.4% |
Other operating income |
43 |
43 |
0.9% |
Costs of services |
(3,345) |
(2,470) |
35.4% |
Personnel expenses |
(1,453) |
(2,756) |
-47.3% |
Other operating expenses |
(943) |
(969) |
-2.7% |
D&A |
(56) |
(88) |
-36.3% |
Income from related companies |
4,860 |
2,430 |
100.0% |
EBIT |
8,603 |
3,529 |
143.7% |
EBIT margin |
90.6% |
48.1% |
42.5pp |
Other interest and similar income |
0 |
1 |
-66.2% |
Interest and similar expenses |
(45) |
(11) |
307.8% |
EBT |
8,558 |
3,519 |
143.2% |
EBT margin |
90.1% |
47.9% |
42.2pp |
Income tax |
(1,118) |
(1,064) |
5.0% |
Effective tax rate |
13.1% |
30.2% |
-17.2pp |
Net profit for the period |
7,440 |
2,455 |
203.0% |
Net income margin |
78.3% |
33.5% |
44.9pp |
Source: ÖKOWORLD accounts, Edison Investment Research
As the company has a net cash position (€24.5m at end June 2020), both interest income and expenses have an insignificant impact on its results. EBT is on a par with EBIT at c €8.6m in H120 (€3.5m in H119), translating into an EBT margin of more than 90%. Assisted by an effective tax rate reduction from 30.2% to 13.1%, ÖWAG reported a threefold improvement in net profit, which reached €7.4m in H120 vs €2.5m in H119.
Valuation
We continue to compare ÖWAG with a group of European asset managers in the equities space for valuation purposes. As Refinitiv consensus is not available for the company, we have used reported earnings calculated for the last 12-month period, which implies a c 20% discount to median of peers’ figures. We note, however, that company’s earnings also reflect significant dividend income booked in H120. Looking at the market capitalisation to total funds’ assets under management ratio, ÖWAG is trading at premium to its peers. However, this ratio does not capture ÖWAG’s insurance and investment funds brokerage business. The company’s share price is reaching record-high levels, which results in a dividend yield of 2.5%, trailing the peer group median by 3.6pp.
Exhibit 4: Peer group valuation
Market |
Market cap/AUM (%) |
P/E (x) |
Dividend yield (%) |
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H120 LTM |
2020e |
2021e |
2019 |
2020e |
2021e |
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Ashmore Group |
£2,692 |
4.3 |
14.8 |
14.7 |
15.4 |
4.4 |
4.5 |
4.5 |
Azimut Holding |
€2,354 |
5.7 |
13.5 |
9.9 |
10.2 |
6.1 |
6.3 |
6.7 |
Jupiter Fund Management |
£1,141 |
2.9 |
9.0 |
10.0 |
9.1 |
8.3 |
8.2 |
8.3 |
Man Group |
$1,728 |
1.6 |
9.9 |
12.4 |
9.3 |
6.5 |
5.9 |
5.9 |
Impax Environmental Markets |
£649 |
3.4 |
37.3 |
41.7 |
32.1 |
1.1 |
1.3 |
1.7 |
Peer group median |
- |
3.4 |
13.5 |
12.4 |
10.2 |
6.1 |
5.9 |
5.9 |
ÖKOWORLD |
€172 |
8.7 |
10.8 |
N/A |
N/A |
2.5 |
N/A |
N/A |
Discount/premium to peers |
- |
5.3pp |
(20%) |
N/A |
N/A |
(3.6pp) |
N/A |
N/A |
Source: ÖKOWORLD accounts, Refinitiv data at 15 September 2020.
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Research: Consumer
OPAP’s Q220 results were heavily affected by the COVID-19 closures, with a revenue (GGR) decline of 53.2%. As expected, costs were well managed so that EBITDA profitability was restored by the end of the period and free cash flow generation improved on a relative basis. Post lockdown, the overall recovery was described as ‘encouraging’, but management reiterates a cautious outlook for the rest of the year given the macroeconomic uncertainties and re-emergence of COVID-19 in parts of the country. We make small changes to our assumptions, which result in similar EBITDA for FY20 to before and a modest downgrade of 3% in FY21. Our DCF continues to suggest a value of at least €9.5/share.