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01/09 22:53
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Access earnings results, analyst expectations, report, slides, earnings call, and transcript.
The earnings call reveals strong financial performance with record profits, increased dividends, and successful share buybacks. Despite some challenges in supply chain and competitive pressures, the stable cost of risk and strong NII growth, especially in Europe, along with optimistic guidance for the second half, suggest a positive outlook. The Q&A session reinforces this with expectations of continued revenue growth and stable credit quality. Overall, the financial results and strategic initiatives are likely to drive a positive stock price movement.
Profit €3.2 billion, up 20% year-over-year, despite €450 million of one-time charges.
Recurring Profit €3.7 billion in Q2, reflecting strong cost of revenue growth across all regions.
First Half Profit €6.1 billion, a record high, up 16% year-over-year, supported by strong revenue growth.
Efficiency Ratio Improved by 261 basis points to 41.6%, the best in 15 years, due to transformation efforts.
Return on Tangible Equity (RoTE) Increased by 137 basis points to 15.9%, or 16.3% when excluding the temporary levy in Spain.
Total Net Asset Value (TNAV) plus Dividend per Share Increased by 12% year-over-year, reflecting strong profitable growth and shareholder value creation.
Cost of Risk Stable at around 1.2%, with year-to-date cost of risk at 1.17%, despite additional provisions.
CET1 Ratio Ended June at 12.5%, with strong organic capital generation.
Net Interest Income (NII) Rose 11% year-over-year, driven by active price management and higher volumes.
Fee Income Reached €6.5 billion, with solid growth across all businesses.
Operating Income Increased by 14% year-over-year, supported by revenue growth and lower costs.
Earnings Per Share (EPS) Rose to nearly €0.37, around 20% year-over-year.
Return on Risk-Weighted Assets New book return at 2.9%, equivalent to a RoTE of 23%, well above the back book at 16%.
New Digital Onboarding: Launched a new digital onboarding process for auto finance, allowing customers to complete their auto finance online quickly.
Installment Loans with Apple: Launched installment loans with Apple in Germany through Zinia, with plans to expand to other European countries.
Market Share in Payments: Gained market share in most markets, strengthening Getnet's customer value proposition with new global solutions.
CIB Revenue Growth in the U.S.: CIB revenue in the U.S. rose 33% year-on-year, reflecting the benefits of the U.S. banking build-out initiative.
Efficiency Ratio Improvement: Efficiency ratio improved by 261 basis points to 41.6%, the best in 15 years.
Cost Control: Costs fell 1% in real terms year-on-year, with significant cost control in retail, consumer, and payments.
Transformation Strategy: Accelerating transformation to become simpler, more automated, and more integrated, leading to higher operational leverage.
Focus on Core Markets: Discontinued the merchant platform in Germany to focus on core markets where competitive advantages exist.
Regulatory Issues: The company has adopted a new inflation-adjusted exchange rate for the Argentine peso due to significant divergence between inflation and the official exchange rate, which may cause distortions in financial reporting.
Supply Chain Challenges: The discontinuation of the merchant platform in Germany and the write-down of Superdigital in Latin America indicate challenges in managing investments and operational efficiency.
Economic Factors: The company is facing pressures from higher inflation on salaries and other costs, which may impact profitability despite a stable economic environment.
Competitive Pressures: The need to maintain a competitive business in core markets, as indicated by the write-down of investments in non-core areas, suggests ongoing competitive pressures.
Credit Quality: While credit quality remains under control, the company has increased provisions for Swiss franc mortgages, indicating potential risks in specific loan portfolios.
Revenue Growth Target: Increased to high single-digit for 2024.
Efficiency Ratio Target: Improved to around 42%.
Return on Tangible Equity (RoTE) Target: Raised to above 16%.
Cost of Risk: Expected to remain stable at around 1.2%.
CET1 Ratio: Ended June at 12.5%, targeting to remain above 12%.
Shareholder Value Creation: 12% growth in shareholder value creation.
Profit Growth: Expected to end 2024 with profit growth of around double-digit.
EPS Growth: EPS rose to nearly €0.37, around 20% year-on-year.
CapEx Optimization: Consistent execution of strategy and CapEx optimization expected to drive profitability.
Credit Quality: Cost of risk was 1.21%, on target to reach 1.2% for the year.
Organic Capital Generation: Strong organic capital generation supporting capital allocation plans.
Dividend per share increase: TNAV plus dividend per share increased by 12%.
Payout ratio: The payout ratio for shareholder remuneration was 50%.
Share buyback program: Banco Santander has repurchased around 11% of its outstanding shares in the last three years, returning approximately $6.5 billion through buybacks.
Return on investment from buybacks: The share buybacks provided a return on investment of 19% to shareholders.
The earnings call summary indicates strong financial performance across multiple segments, including a 60% increase in Payments profit and a 21% rise in Wealth profit. The Q&A session reveals positive sentiment towards cost management, risk stability, and regulatory improvements. The company's strategic initiatives and optimistic guidance, especially regarding RoTE and cost efficiencies, suggest a positive outlook. Despite some uncertainties in litigation provisions, the overall sentiment remains positive, likely resulting in a stock price increase of 2% to 8% over the next two weeks.
Sanofi's earnings call summary shows strong financial performance with record revenue, positive R&D progress, and a robust shareholder return plan. The Q&A section reveals confidence in NII growth and operational leverage, despite some competitive pressures and economic risks. The company's strategic focus and potential asset sales further enhance its growth prospects. While challenges exist, the overall sentiment is positive, driven by solid earnings, optimistic guidance, and shareholder-friendly actions like share buybacks and dividend increases.
The earnings call presents a strong financial performance with a 19% profit increase, robust RoTE, and efficient cost management. The €10 billion share buyback plan and 14.5% dividend growth are positive signals for shareholder returns. Despite competitive pressures and regulatory challenges, the overall sentiment is optimistic with reiterated guidance and confidence in achieving targets. The Q&A reveals some uncertainties, but they are not significant enough to overshadow the positive financial outlook and strategic initiatives. The market is likely to react positively, with a stock price increase of 2% to 8%.
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