Earnings Call: Q3 2025

Nov 10, 2025

Good morning. This is the Chorus Call operator. Welcome to the conference call presented by Generalfinance, its results as at end of September 2025. All participants are in listen-only mode, and the conference will be followed by a Q&A. The presentation can be downloaded from the site www.generalfinance.it. To be assisted by an operator during the conference call, press star and one on your phone handset. Let me now turn the conference over to Mr. Massimo Gianolli, CEO of Generalfinance. Mr. Gianolli, you have the floor. Thank you very much. Good morning to all of you. For those of you who are following the presentation, we start from page five, where you see an update on voting rights and of the shareholding structure with the reinforced multiple system. GGH, which is the holding under my MGH holding now, has voting rights for a share of 59.35%, and therefore we've updated all stakes and shareholding and voting rights for all other shareholders. On the next page, on page six of the presentation, you see how our turnover has been growing over time. We ended September with a turnover growth of 34%. We were up 34%, and we've almost achieved the full turnover we had last year. It was about EUR three at the end of December, and we're now around EUR 2.8 billion. We're very happy with the result because it's about twice as much as we had planned in our business plan. It's interesting to see that the growth we have recorded over this last period is higher than the CAGR between 2021 and 2024, which was about 29%. On the following page, you will see the number of sellers and debtors, number of debtors per seller. It's an interesting piece of information that gives you the idea how diversified our portfolio is and how many assigned debtors. On average, 61 debtors are assigned per seller, and it's 10 times the market average, and it's Assifact data. It's very interesting to see that the delta in turnover versus last year can be compared to an overall decline of our reference market. On the following page, on page eight, you can see the results we achieved. Our net income, which is up 55%, went from EUR 13.6 million in the first nine months of 2024 to EUR 21 million in the first nine months of 2025. That is combined with the turnover increase that makes it very meaningful because it really tells you how sound our growth model is, our business model is, and how much we can still grow, still retaining very high profitability. It's very interesting to see a comparison between the first nine months in 2024, 2025 to the CAGR we had between 2021 and 2024. CAGR was 30%, and now we're up 55%. It's three times higher, more than three times higher than we had assumed in our business plan between 2024 and 2027. Moving on in the presentation, we move to page 10, and you will see that despite the growth we achieved, cost at risk is very low, 0.15%, and our gross NPE ratio is 2.34% for the first nine months of 2025. All these values and factors are always under control. If you compare it to the market average, we are about 50% better. That is very interesting combined with the figures we saw before. If we look at page 11 in our presentation, we give you a breakdown of our parachutes, if I may say so, our financial assets. Net disbursed, EUR 599 million is financial assets end of September 2025. We have risk mitigators in place. We have the Allianz insurance policy, and then we have specific SACE policies for about EUR 95 million of overall insurance coverage. We have outstanding not advanced for recourse factoring. It's about EUR 143 million. We have personal guarantees that are released by shareholders or those who take part in the transactions that we roll out, is EUR 177 million. If we were to add up all these parachutes, we would reduce our real risk to about EUR 84, sorry, million. On page 12, you see a very interesting piece of information, our collection performance. In the two previous years, we had identified a stepwise decline of DSO versus the market that we have reverted starting from last year. DSOs currently, with a number of actions we've undertaken, and also we've made research into our portfolio, we've taken the current DSO of Generalfinance to be the same as the market DSO. You see on the left-hand side of the slide, you see that roughly we have the same payment conditions as the industry market average. What happened on the right-hand side of the slide, these are the payment delays. We normally give you data, updates that are very interesting. Despite the introduction of portfolios with longer DSOs and therefore, with a collection performance that has improved, we have 77% of Generalfinance's portfolio has no payment delays. Assigned sellers regularly pay on the expiration date, and we have 31% versus 31% of the market. That is to say it's about 2%. That is also very interesting because this DSO mix has an impact on the overall profitability of our portfolio. On page 13, you will see the DSO, our duration, as I said a few minutes ago, the performance of our DSO starting from 2023 until today. 68 days are now 81 days, and therefore, this is an interesting piece of information, but also it's very interesting to see the growing trend. It's a consistent stepwise growth. We move on to page 14. Here again, you see an update on our business model. This gives you a breakdown of the credit score of our sellers on the bottom part of the slide. There you can see the quality of our sellers. What is always interesting to see is that the central part of the slide, on the top part, you see a pie that is giving you a breakdown of the green score of the score on assigned debtors, and then how we manage collections. It's interesting to see that assigned debtors, well, 50% of them are between yellow, red, and black. There, it's interesting to see how we manage our credits, our receivables, and we produce excellent results. We are outsourcers for our clients. Our speed of collection, of course, has an impact on the treasuries of our sellers. This is very interesting as a piece of information. On the right-hand side of the slide, you see the growth experienced by our portfolio. Our clients are performing clients, still high risk, but well distressed companies, but they are performing customers. They went up a lot, these customers, and we have noticed a growth and a pressure made by the market that enabled us to acquire quite a large number of performing clients that went on to complete our distressed company portfolio that for many years has been our main activity. On page 15, again, a few more numbers to crunch. These are data that are updated for the last 12 months. 700,000 transactions were managed with our high-tech digital platform, and we also managed 344 sellers, so the number of seller has increased sizably, and 21,000 assigned debtors. If you combine that with the resources, our HR resources, head count is 84 within Generalfinance today. This is definitely proving how efficient we are in absolute terms, our team is, in absolute terms in our ability through our digital platform, ability to manage a huge number of transactions at a very high speed. Let me now turn the conference over to our CFO, Mr. Ugo Colombo, who will give you an overview of our financial highlights. Good morning to all of you. We are on page 17 of the presentation, 17. The table you see, top part shows you the main lines of our income statements. Banking income is much higher than the volume effect, is up 34%, as we could see in the industrial part of the presentation. Interest margin is growing sizably and speeding up versus the previous quarter, up 65%, with commissions up 44%, net commissions. The overall banking income is nearly 50%, and year-on-year, the cost of risk is growing year-on-year, and I will tell you about quarter-on-quarter dynamics. As to the central part of the table, with the main indicators, the cost-income and ROE, which are sizably again improving on a yearly basis and a quarterly basis as well. The cost-income ratio goes down below 30%, well in advance of the effect we had assumed in our business plan. Profitability with a 50% increase in our net income, the return on invested capital is in excess of 40 percentage points. As to the balance sheet, we have no major deltas or differences on a quarter-to-quarter basis. Year-on-year, as you can see, assets are growing in line with a turnover growth. They are up 34%, the assets, such as our liabilities, EUR 117 million, is in line with the volume effect. Retained earnings in 2024, and then profits for 2025 is a 25% growth in excess of EUR 90 million. On page 18, we see quarter-on-quarter performance. Let me tell you about the income statement on the top part of the slide. Breakdown of the net banking income. Interest margin quarter-on-quarter went up 50%, more than 50%, 50, thanks to the contribution made by tax credits, VAT credits, and the Superbonus, so to say. Over the quarter, they gave a very positive contribution, which explains most of this 50% increase. Net profit for the quarter, also thanks to the interest margin and commission performance and costs that are in line or slightly better than the previous quarter, you see net profit is up 23% and EUR 8.7 million. If we look at the two main indicators, the cost income indicator for the quarter, cost income for the quarter is 25%, and therefore maximizing efficiency of our operating machine, so to say, in the third quarter of this year. Page 19, the lower part of the slide, you see the capital ratios that are basically flat quarter-on-quarter, thanks to our RWA flat at EUR 560 million versus the previous quarter of 2024. Assets and liabilities reflect the weighing of assets. For instance, assets that reflect the weighing of assets that we use for the computation of risk-weighted assets and of risk ratios. Capital ratios, of course, are in line with the European regulations that require no additional buffer. CET1 ratio is nine percentage points. End of September, total capital was 14.6%, with more than six percentage points of buffer. Total Capital Ratio, if you look at the performance at the end of the quarter, we issued EUR 30 million subordinated bond for the amount of EUR 30 million, against a very favorable market backdrop that gave an additional positive contribution to our TCR of more than 500 basis points. Pro forma Total Capital Ratio end of September, including the new subordinated bond issuance, would be about 20%. Therefore, more than refinancing what we had assumed in our Business Plan, considering what was already stated in the first part. On page 21, let's have a look at funding. At bottom, you see the different facilities, funding facilities, EUR 1.1 billion, approaching EUR 1.9 billion. We have unused liquidity of about EUR 500 million counterbalancing capacity. The liquidity position, EUR 114 million. The funding structure is almost entirely at floating or variable rate, exception made for some senior bond unsecured in the first three quarters that account for 14% end of September. These issuances were the object of an interest rate swap. All of our liabilities is fully at floating rate in line with assets that are fully with floating rates linked to EURIBOR. The senior unsecured bond issuance, which has a spread which is higher than the secured ones. We retained funding spreads quite flat, maximized from 190 basis points-180 basis points, end of September 2025. On page 24, you see a few things on cost before I turn it over to our CEO. In the top part, you see our FTE, that headcount that was reinforced in all areas. End of September, we had 84 people employed, and with a growth of almost 30%. Personnel costs are up 19%, 19%, because of the strengthening and enhancing of incentives, both short and long-term incentives. Net of which it would only be 7% instead of 19%, in line with the average headcount growth year-on-year. Other expenses, up 30%, are driven by a number of items, EUR 1.8 million, some of them non-recurring ones, such as costs that are tied in with projects that are envisaged in our business plan and that an impact on the yearly performance. Net of those items, if we were to take on a like-for-like basis, the increase year-on-year would be 13%, which is in line with what we had for other admin expenses. Let me hand it over to our CEO for the closing remarks. Thank you, Ugo. We are back, and we're now on page 26, where we have our closing remarks. We have summarized the main items that our growth is relying on. We can say that the profitability level is very appealing indeed, and the good quality of our assets is reconfirmed, and that's also very important for our job. The further reduction of the cost-income ratio, that was another good piece of information, but the most meaningful part is the market backdrop, which is the most reassuring part. It's indeed a very good year, this one, but also thinking of the future, it will help us grow and then subsequently revise our business plan. We have a high number of sellers. We have acquired new performing sellers that are starting to give a contribution. We have very many other sellers, a sizable number of sellers we are now assessing. We are talking about another 100 companies that could be introduced in our portfolio in the following months. The funding structure is very important. Capital ratios and the funding transaction we have rolled out were necessary to support our growing trend. The Tier 2 issuance, our CFO has just mentioned, and the bond issuance, that is really making our funding more stable and stronger, and also the availability of CDP, Cassa Depositi e Prestiti, for an initial amount of EUR 7.5 million, now EUR 20 million, using their help and support. All of these elements are matched by an excellent activity in the Spanish market. If you remember, we opened a branch there this year in Madrid, and the operations are giving good results. Over these first few months, we took advantage of the spring to fine-tune our business model there. We have some very interesting outcomes also from the opening of the Rome-based branch. There, too, we are happy and satisfied. Also, thanks to this sizable growth trend, we have hired new colleagues in the different areas, not just sales, but also communication and other departments, risk and control departments, for instance. A very positive performance so far that led us to revising our guidance, the net income guidance. We went from EUR 24 million, which is what we had disclosed to the market at the beginning of this year, and we revised it upward to EUR 27 million. I have nothing else to add. Let me now hand it over to you for any questions you may want to ask or clearing doubts. Thank you very much. Thank you very much. This is the Chorus Call operator. We're now starting the Q&A session. If you want to ask a question, press star and one on your phone keypad. To be removed from the Q&A queue, press star and two on your phone. Please use your phone handset to ask your questions. Press star and one if you want to ask a question now. The first question comes from the line of Irene Rossetto with Banca Akros. Please, madam. Thank you very much. Good morning to all of you. I have a couple of questions. The first one is on the guidance. You expect a net income higher than EUR 27 million, so you revised it upward. If my calculations are correct, we are at the beginning of Q4. In Q4, you expect a shrinking of profitability versus this third quarter of the year. Is this a conservative buffer on your side, or do you expect a decline in growth over the last quarter of this year? Also, guidance-wise, as we are close to the closing of the fiscal year, I would like to know if you could give us your outlook for 2026 when it comes to both volumes and profitability. A specific question for this quarter, we've seen provisions increase. Could you give us more color on that, the growth drivers, and if you expect a normalization over the following quarters? Thank you very much. Thank you for this question. We need to be cautious, of course, always. We need to be conservative. Your remark is spot on, definitely. It's likely we may even achieve a better result, but we know that December may, in our business, could lead us to EUR 100 million more or EUR 100 million less because of what we do with certain companies that use December to run transactions that may give them advantages in balance sheet terms. What you said is correct. The fact that you underline that we have been cautious, that we were cautious, but we can assume that the turnover should be EUR 3.7 billion-EUR 4 billion, and this delta could determine whether or not we have been cautious enough today. The turnover, if you consider, as we could see before, that commissions and interests match the turnover, so it could be meaningful to think of a possible better guidance than the EUR 27 million, but we'll see. The revising, thinking of 2025 and going into 2026. Indeed, the outlook is good for 2026 and 2027, with again, a sizable increase in performance. Today, I would have no reasons to tell you that we cannot go on and growing even more than we had assumed. It's likely for us to be able to revise that 15% and be closer to 20%-30%. It's reasonable to think about that. Starting from the numbers I gave you as impact on this year's business plan, but that will mean we'll have to revise 2026 and 2027 as percentage growth, but also bottom line and turnover. As to the second question, I'll leave it up to our CFO to answer. Well, as far as the cost of risk is concerned, which is about EUR 1.2 million higher than the previous quarter, if we go into details, there are two drivers. The first one is stage one positions, so the performing items that were up EUR 700,000-EUR 800,000 versus the previous quarter, where in accounting and through IFRS 9 policies, this is how we computed it or reported it versus the previous quarter. I'm particularly referring to future receivables, even positions items that were quite high in size, so they increased our exposure. Because of the accounting policy, which is more stringent and determines a higher expected loss for this position, then we have a BA for the following quarters. As to the contribution they give to the P&L, these higher line items will have a strong impact on interest margin and commission on the P&L. EUR 700,000-EUR 800,000 is three-four items with future receivables that have no specific significant impact of expected losses. It's simply compliance with the expected loss model according to the accounting principles. UTPs, for instance, there's one item that went from expired or overdue to UTP for about EUR 600,000. The necessary initiatives for collections were put underway, but that meant that contributed for half of the cost of risk performance. These were the two main items that had an impact. Thank you very much. Next question. Thanks to you. Davide Rimini with Intesa Sanpaolo is the next question. Congratulations on your results, and thanks for the presentation. A couple of questions. One is about the outlook and the guidance you gave us, is, of course, refers to the business plan disclosure you gave us or guidance you gave us, but it was mainly focused on cost performance and the cost-income ratio you have highlighted for this quarter as being particularly low. With reference to costs, is there an opportunity to have something more to say? It's your first year going through your business plan, and you had given us a guidance to be below 30% of cost-income ratio during the business plan time horizon. Could you give us more color on your assessment as to cost performance and versus the business plan horizon? Another question about Q3, the quarter you presented. The turnover performance was much stronger than volumes, thanks to tax credit, VAT tax credits and Superbonus. Could you elaborate on those activities and the contribution they may give in the following quarters? Thank you. Well, Davide, as to the costs, cost-income has improved versus our target for 2025, mainly due to revenues having improved so much rather than because of costs that are very much in line with the performance we had identified or planned, or doing even slightly worse in relative terms, because we had non-recurring costs in the first part of the year that we thought would be diluted over three-year, spread over a three-year time span. I'm talking about non-recurring items, especially to do with our international business. We had initiatives and actions that we had planned, sales actions, leveraging marketing opportunities that had an impact in this year. If we were to look at the break, costs are in line with our 2025 targets, and revenues instead are much better than we expected. The turnover is much better than we expected. Going back to what our CEO was saying a few minutes ago, indeed, we will give you an update of our forecasts, mainly as far as turnover and revenues are concerned, because we were much more conservative in our disclosure, especially as far as the top line is concerned, and turnover, assets under management, and therefore P&L. The cost level in absolute terms versus the targets we gave you at the beginning of the year, or we gave the market at the beginning of the year, are hardly to compress more, so to say. If we put everything together, we can give you accurate updates, but putting all factors together, the factors we mentioned before, the cost income could be slightly better than the target, slightly below 30%, I mean, as we had disclosed at the beginning of the year. As to tax credits, let me say that indeed there was a number of transactions during 2025 that was higher than 2024, where our operating volumes were much lower in 2024. Services that had a marginal role in 2024, whilst in 2025 we managed to increase by seizing very interesting business opportunities for cross-selling among our customers. I'm always talking about special situations, with margins that are consistent with the historical margins we have for this kind of business, by leveraging a better knowledge of this specific industry or sector we have accrued over the years. We've slightly revised our accounting policies over the quarter, so by better defining the still outstanding transactions. That led to EUR 1.5 million of interest margin on VAT credits that had a fully positive contribution in the third quarter. In the following quarters, we won't have this very same contribution, this very same effect, because accounting criteria will be updated, and so it will follow the volume of underlying transactions. We won't have this EUR 1.5 million effect, but it will follow volume performance. Also just to give you an overview, also going forward, it's an ancillary and opportunistic type of business and activity in our product portfolio. It is used by some performing clients. We've seen that there's an interest for those services, and we, as Ugo said, we've come up with a simpler and leaner and faster model for the acquisition of clients also going forward. We will do it this year too, but it won't replace our core business, which, as you know, is the world of special situations. Understood. Thank you very much. If I may, couple more additional questions. One was on your international business. I'm particularly referring to Spain, and then in the future to Switzerland. When faced with very strong results, as you told us, over the last quarters, could you maybe give us a flavor, an update of what is going to happen going forward? And then one last question with reference to capital. Tier two issuance that you referred to after the closing of the quarter. Could you or are you going to... This 30 million issuance, which is bigger issuance than you had, mm, disclosed or talked about. As to the still existing, still outstanding Tier two, are you going to do early redemption, call it back early? Well, tier two, as to our international business, I'm answering the first question. We are really focusing on our international business, and we are focusing on Spain. We think that the growth we achieved in Spain could achieve the numbers we had mentioned in our business plan. Starting from 2026, it will be or could be also because we will increase the headcount. Our human resources will be increased in Madrid. In 2026, we will run more or less the same type of activities we are running in Italy. We're going to meet stakeholders, we're going to meet the market, we're going to organize meetings and conferences on factoring. We'll do a lot on the marketing and communication side. We will focus on the growth in Spain. Of course, also considering the growth we are experiencing in Italy, we don't need to push too much towards achieving one-of-a-kind results. If not an ordinary growth, and the fine-tuning, the constant fine-tuning of our business model. Because, you know, you need to be cautious when you go outside your own borders, your own country, where we have 40 years of experience. Being cautious is of paramount importance. As to Switzerland, a few days ago, the regulator gave clearance to start looking into the actual opening of the offices. We've talked to the Swiss colleagues. For the time being, it's not a priority indeed. We will look into the details based on the positive reply we got from the regulator on the possibility to applying a model that's similar to the Spanish one. By year-end, we will probably have a clear picture on when to really get going with that business. There are other opportunities indeed, but we'll look into them from now to year-end. It might be, for instance, meaningful to switch from one country to another and to change the order of our openings, maybe focusing on giving priority to other countries where the market is bigger, so to say. We'll give you an update, between now and year-end and the beginning of next year. As we're not in a hurry, and we want to focus on closing this year and managing our growth, which requires absolute focus on our side. As to the Tier 2 bond, I'll give the floor to our CFO to comment on it. Well, this is Ugo Colombo speaking. As to the outstanding bonds, the space of maneuvering is quite limited because of the regulations. If you remember, we have two loans. One is a six-year loan, September 2027, EUR 5 million, and the other one expiring October 2026, EUR 7.5 million. Basically, the second EUR 7.52 million bond cannot be early redeemed because it's a five-year bond, and there's a regulation for five bonds, so you cannot exercise the right of early redemption. We cannot do any ALM transaction on that. As to the EUR 5 million bond, that could be redeemed early or repaid early, one year earlier, therefore saving about EUR 500,000 worth of interest. We need the clearance from the regulator in order to do that. We thought about it also when we were focusing on the issuance of the new bond. We assumed during 2026, making contacts with the regulator, and in the light of the strong increase of Tier 2 capital, we might get the clearance from the regulator. It's still a transaction that is subject to getting clearance from the regulator. That's the scope of the potential savings we could achieve. Thank you. Mr. Gennari, there are no more questions in the queue. Very well. I take this opportunity to thank all of you for logging in, for your attention, and for your questions. We'll see you in three months' time. See you soon. Have a good day, and thank you very much.