Okay. Good morning, all, and a warm welcome to ABG Sundal Collier's Q2 results presentation. I am, as always, joined by my co-presenter, Peter Straume, our Chief Executive Officer and Head of our Norwegian Operations, and we're also joined by our Chief Financial Officer, Geir B. Olsen. I'd also like to mention that you may ask questions during or after the presentation using the team's Q&A function as instructed on this first slide. Could we please flip over to the next slide, please? Yeah, we have obviously been reminded the last few months that markets are unpredictable. That is nothing new for us, and we are also used to the fact we cannot influence how the market is behaving.
What we can impact is how we adapt to the conditions served by the market, how we cater to our clients' changing needs, and our relative share of our addressable market. From that point of view, I am pleased we have delivered revenues of NOK 893 million for the first half of the year, representing the second highest level in the last 15 years, despite what you could mildly describe as challenging market conditions with the war in Ukraine, rising interest rates, and recession fears. One of the main reasons we've done well in relative terms is our broad industry competence, enabling us to shift focus to the sectors of most relevance for our clients and markets at any point in time.
Furthermore, we are in market leading positions in all key investment banking products, making us highly relevant for our corporate clients across products, also when market condition changes. I would also like to take the opportunity to highlight the strength and contribution from our research and brokerage operations. That has contributed significantly to our earnings this year. Our long-term commitment to employ some of the most experienced and talented analysts and brokers in the Nordics continues to pay off. While we continued to steadily grow our operations over the last six, 12, 18, 24 months, and thus, as a consequence, fixed cost base, we keep tabs on all cost items, and we are benefiting from our dynamic remuneration model reflecting the pace and profitability of our business.
Next slide, please, looking a bit more into the numbers. We once again delivered revenues of close to NOK 900 million first half and NOK 406 million specifically in the second quarter. This is looking at the first half down by 42% against what was by far the toughest comparison year on year for us ever. As previously mentioned, once again, this was actually the second best first half year in 15 years, and also well above the kind of historical average the years leading into the super strong 2021. Looking at operating margins, as you'd expect with our business model with operational leverage, it works both ways to some extent.
Margin was mainly negatively affected by lower revenues and to a lesser degree cost increases, which we will come back to later. This resulted in the operating margin ending up at 27%, still above our historical average. Fully diluted earnings per share of 29 øre compared to 80 øre the same period last year. Next slide please. Markets. Well, I mean, during the first quarter of this year, we talked about the long-term interest rates increasing as well as signs of inflation on the rise. To say the least, those concerns intensified during the second quarter on the back of higher inflation than expected and more firm action from central banks in terms of interest rate hikes and also quantitative tightening.
Now the market seems slightly concerned that central banks might have been acting a bit too late and, once acting, doing a bit too much even leading to further sell-offs as of late in equity markets, with resulting in indices being down by some 15% in the quarter. Nordic indices have held up slightly better compared to many other markets, mainly due to the fact that energy and oil obviously is such an important sector in Oslo. With markets clearly in risk-off mode, IPO activity has gone from record high to almost record low in a very short period of time. Markets would obviously benefit now looking forward from some indications we are nearing the peak in interest hikes.
In the absence of any such conviction in markets, we'd expect volatility to short-term continue to be on the high side. Until then, until we get some conviction on interest rate hikes nearing the peak, we will continue to serve our clients with all their needs, regardless of type of transaction. Many cases in other forms than anticipated going into this year. Once again, it highlights the importance of having leading positions in all relevant product areas for our corporate clients. With that, I leave the word over to Peter, who will talk more about our markets and our performance in investment banking.
Yeah Thank you Jonas. Have some challenge with the video feed today, so without the picture. Anyway, on page five we see that the picture continues from last quarter for the equity capital market in the Nordics with very limited IPO activity. Some private placements and right issues took place. All in all stable from last quarter but significantly down from last year and a 42% reduction last 12 months in Nordics. Debt capital markets also stable from last quarter, still down 30% last 12 months and with modest activity. We also see that M&A volumes remain stable at levels seen last three, four quarters and through the cycle. Down 5% last four quarters, but less affected than in the capital markets.
We move to page six. Talking a bit more about ABG performance within corporate financing. In the last quarter we have experienced much of the same as seen in the overall Nordic markets. Significant reduction first six months compared to last year, but above comparable period in 2020 and earlier years as well. One IPO in Sweden took place last quarter with 4C Strategies. We had several private placements and secondary placements across several sectors during the quarter. Continued stable and solid performance by debt capital market with several bonds placed within energy and financials. Both ECM and DCM pipelines remained strong.
Moving to page seven, we see that, M&A advisory, M&A and advisory ABG has picked up last six months in contrast to the overall market fall. M&A up 60% compared to first half last year and also well above previous four years in the same period. Important transaction took place as the sale of, for instance, Kappa Bioscience and Visma Custom Solutions, to mention a few. Also several public to private transactions took place such as Ørn Software and the ongoing Mercell. Furthermore, the TGS bid for Magseis and the Frontline/Euronav combination. Also here we see that, the M&A pipeline is still strong and is building up. With that back to you, Jonas.
Okay Thank you, Peter. Let's continue with the third leg of our operations, brokerage and research that has continued to deliver a very solid performance with revenues in line or even slightly up compared to last year. This must be considered respectable, I think. Not least given the falling asset prices during the period and the kind of risk-off mode among investors, reducing activity on an overall level. I think that is a very respectable performance. We also continue to notice a very strong interest for Nordic equities among international investors, which is a good thing benefiting a firm such as ours with strong local presence on the ground, with best-in-class brokers and analysts.
We believe we are gaining ground relative to international peers from that point of view. Since we are relentlessly focused on providing the best advice and best execution to our clients, we have continued to selectively make senior hires to further strengthen our team as of late. Over to next slide, please. When it comes to costs, I mentioned our dynamic revenue and profitability driven compensation model previously, which is obviously something that mitigates some of the negative operational leverage. Keeping fixed salaries at a more modest level than many of our peers, but sharing the profitability between shareholders and employees, enabling excellence to be well rewarded is a model we strongly believe in and we will stay committed to.
This model contributes to our total cost base being down by some 32% to be specific in the first half of this year, in spite of higher headcount and some general cost inflation. Looking at headcount, which is a driver for costs of course, but mainly for revenues longer term, we have continued to execute on our long-term strategic plan of further expanding, especially within our investment banking division. Headcount is up by 7% year-on-year, enabling us to continue to broaden our service offering to our clients. Other cost increases I would say are a reflection of ABG not being immune to general cost inflation elsewhere and also to some degree more normalized traveling activity and some infrastructure costs increasing.
Having said all this we are obsessed by keeping tabs on all cost items and are working on a daily basis to trim non-compensation costs and always making sure we are as efficient as possible. Okay, next slide please. Let me summarize what we think are the key takeaways here today. We delivered what we think is a solid performance in what was more or less closed or very limited activity, at least in capital markets with the revenues the first six-month period at the second highest level in 15 years. We continue to be focused on improving our relative position irrespective of market conditions.
One example being our debt capital markets, where we have reinforced our leading position in Norway and strongly progressed in Sweden, debt capital markets with revenues actually being up slightly year-over-year, even this year. We have stayed loyal to our long-term commitment of investing in a strong brokerage and research operation, and that commitment is clearly paying off. Our continued work with broadening our industry and product capabilities also make us better positioned to be the most agile advisor and cater to our client needs as those changes with markets changing. The current sentiment provides limited visibility, but our ability to win mandates is stronger than ever. The activity in the secondary market is holding up well.
Furthermore, our pipeline remains robust and is better adapted to current market conditions. All in all, making us cautiously optimistic about the prospects for the second half of this year. With that I'll open up the floor for any questions out there.
The first question reads, "Do you see that acquisition is an attractive use of capital or difficult value add given ABG's strong position? What would be attractive? Good growth opportunities in general or more selectively within segments, geographies, and if so, what areas could be of interest?
We are not in the game or the business of growing for the sake of growing. In general is not of interest for us. We are always looking for opportunities to strengthen our product offering to existing and new clients. That could be within the core. That could be also within products very near the core where we have clear synergies. We are actively looking to expand our product offering, but I cannot comment upon exactly what that would be. It would be cautious additions to our existing product offering, making us more relevant to existing and new clients.
Next question reads, "Buybacks in excess of partner program. Is that something that could be on the table at all, or how do you reason around that?
We always think that we should not be overcapitalized. We have proved that historically. The distribution to shareholders could be in the form of dividends, which has been a key priority for us looking back, and also buybacks. What we've communicated and what we're sticking to is keeping the diluted share count stable. That is our current strategy, i.e., buying back in line with the partner offering.
We have a third question. Could you give some color on the Norwegian and Swedish market and ABG's position in these?
Maybe Peter could comment on the Norwegian market, but let me start with the Swedish market. It's the market in general very, very similar, even though the Oslo Stock Exchange has done better this year on the back of strong interest for oil and energy related companies. It's kind of a global phenomenon what's happening with risk appetite and tightness of access to capital. Both markets are obviously affected by that when it comes to primary capital markets activity. In Sweden, our relative position, we have reinforced a stronghold within equity capital markets even though obviously activity has been limited.
We did one of very few IPOs, as Peter mentioned, in the second quarter of this year. We have progressed strongly within that capital markets as of late in Sweden. I mentioned revenue's actually being up in absolute terms year-on-year in Sweden. What we are looking as a next step when it comes to doing what we can do impact better, i.e., gaining ground is M&A. We have a very competent team, and we have a lot of experienced M&A bankers. We are well positioned to gain market shares within M&A in Sweden. Peter, I don't know if you wanna say something on our second to none position in Norway.
Well, I think we at least experienced that we have taken steps forward within the debt capital markets recently. I think also the many public transactions and also large private transactions we have taken part in, worked within M&A proves our standing here. I think we have if anything, improved over the last couple quarters.
Okay.
Next question. Maybe you answered some of this already, but the question reads, do you see that there is M&A opportunities or difficult to find?
We see plenty of M&A opportunities especially when equity capital markets are a bit tougher or more volatile. No, it's a matter of having the capacity and right people on board. We are already there in Norway, as Peter Straume alluded to, and we are now positioned to take a bigger share of that in Sweden.
We have a new question. Would you comment on the level of revenues from commission research?
We do not break out that specifically, but it's what I can say. It's steadily growing. We have a very strong interest amongst companies to be part of the commission research platform. We are actually hiring on the research side, especially then in Stockholm in order to meet that demand. It's not huge numbers, but as I said it's steadily growing and it's also definitely more sticky revenues and less volatile. It's an area we are focusing quite a lot on and expect it to continue to grow.
Next question reads acquisition targets for ABG, do good options exist or are they difficult to find?
Well, as I think I alluded to that previously, we are not a sort of an M&A compounder, and we will never be. We're not actively looking at acquisition targets in the traditional sense. We are actively looking at adding new products or potentially new teams to our existing platform.
The last question, did you book revenues from Lunar Instabank in Q2?
I cannot comment upon specific transactions unfortunately.
That was the last question.
Okay. Great to have so many questions. I think that was a record. I'm very grateful for the interest all of you have shown in ABG. Stay tuned for what's gonna happen post-summer. We are, as I mentioned, cautiously optimistic looking at what we can impact, and that is how we adapt to changing market conditions. I feel strongly we are better positioned to capitalize on the changing market conditions now compared to a few months ago. Stay tuned and thanks all for listening to this. bye now.