Vontobel Holding Ag · SIX:VONN
Vontobel — H1 2023 Earnings Presentation
30 slides from Vontobel's earnings presentation, Jul 27, 2023
Slide 1: Half-year 2023 results
Zeno Staub CEO Thomas Heinzl CFO Half-year 2023 results July 27, 2023
Slide 2: Cautionary statement regarding forward-looking statements and disclaimer
Cautionary statement regarding forward-looking statements and disclaimer This document may contain projections or other forward-looking statements related to Vontobel that are subject to known and unknown risks, uncertainties, and other important factors. These projections and forward-looking statem
Slide 3: Highlights and strategy
Highlights and strategy
Slide 4: Highlights
Highlights 1. Recovering markets, with persistent uncertainty – Gains follow 2022 historical declines – Continued macro uncertainty, geopolitical and industry shifts 2. Robust financial results after two exceptional years – WM continued strong, DI normalized and improving trends in AM – Results supp
Slide 5: Key figures
Key figures Robust financial results after two exceptional years Assets under management Net new money CHF −0.9 B CHF 212 B (−0.9% growth) (+4%) CHF 0.9 B (+0.9% growth) excl. impact of market focus1 Operating income Pre-tax profit Group net profit CHF 696 M CHF 150 M CHF 128 M (+1%) (−17%) (−16%) R
Slide 6: Markets and sentiment partly recovered
Markets and sentiment partly recovered Higher markets and rates Mixed volatility; Lower industry outflows Themes 1H 2023 Global Equities and Global Bond markets Volatility MSCI World, Barclays Global Aggregate, Indexed VIX, MOVE, Indexed Impact of sharp rate hikes 130 500 on inflation and growth 120
Slide 7: Investment performance: more constructive, in particular in Fixed Income
Investment performance: more constructive, in particular in Fixed Income Track record in Vontobel mutual funds % of fund assets with % of fund assets in – Fixed Income: solid performance despite a 4-/5-star ratings1 1st and 2nd quartiles2 challenging environment, in particular for Additional Tier 1
Slide 8: ESG: We are partnering with our clients to manage the risks and seize the opportunities
ESG: We are partnering with our clients to manage the risks and seize the opportunities Showcase from Vontobel Conviction Equities AuM in investment solutions incorporating Boutique: “Global Environmental Change Fund” ESG-criteria – SFDR framework (CHF B)1 700 600 500 2 400 +497% 300 since SFDR disc
Slide 9: Disciplined strategic execution
Disciplined strategic execution Strategic priorities Achievements 1H 2023 2023 – 2024 Delivering future New regimes: More constructive one-year investment performance, in particular in Fixed Income 1 proof investment solutions Private Markets: Contract signed enabling 3Q launch of private offering t
Slide 10: Global development validates our strategic priorities
Global development validates our strategic priorities WM RMs: accelerating our organic growth Market focus − High demand for stable, client-centric, and investment-led advice − Well-positioned with low exposure to geopolitical escalation − Hired 50 WM relationship managers, with more expected − Acce
Slide 11: Financial results
Financial results
Slide 12: H1 2023 financial results summary
H1 2023 financial results summary Key figures (CHF M) H1 2023 H2 2022 H1 2022 ∆ (%)1 ∆ CC2 Assets under Management (B) 211.9 204.4 208.6 +4% − Operating income up despite normalization of trading activity, mainly due to higher Net Interest Net New Money (B) −0.9 −4.2 −1.0 n.m. Income and higher AuM
Slide 13: Assets under management
Assets under management Assets under management Assets under management development CHF B CHF B +4% p.a. 243.7 Including CHF 1.8 B net outflow impact of 211.9 219.6 market focus 208.6 204.4 211.9 198.9 204.4 10.6 165.3 171.1 0.9 2.2 AuM +4% 2017 2018 2019 2020 2021 1H22 2H22 1H23 2022 NNM FX Per- 1H
Slide 14: AuM and NNM by Client Unit
AuM and NNM by Client Unit AuM NNM and NNM growth rate CHF B CHF B, annualized growth % +4% −0.8% −4.0% −0.9% – WM NNM of CHF 2.1 B, or CHF 3.9 B (8.4% annualized growth) when adjusted for CHF 208.6 204.4 211.9 1.8 B outflows (market focus) 1.8 WM NNM CHF 3.9 B 3.0 2.4 2.1 adj. for market – WM inflo
Slide 15: Operating income
Operating income Operating income by category Operating income by Client Unit CHF M CHF M +1% – Operating income increased by 16% 686 696 686 696 versus 2H 2022, y-o-y by 1% 33 95 599 599 203 – FX headwinds of CHF ~15 M 69 247 210 440 – Net interest income (NII) tripled y-o-y, 415 Net interest AM pr
Slide 16: Return on Assets
Return on Assets Asset Management Wealth Management2 bps bps +12 bps – AM margin stable at 37 bps on continued pricing discipline 82 70 72 – WM margin strongly improved 22 on higher net interest income ~ bps 8 17 24 23 Performance 17 Performance fees 37.5 37.2 37.2 fees1 Interest income Commission C
Slide 17: Operating expenses
Operating expenses Realized CHF 15 M gross savings Operating expenses, CHF M 546 − Realized CHF 15 M P&L cost savings, 21 through reduction of temporary staff 15 and strict market and strategy focus 506 10 15 9 − Cost savings offset by accelerated WM hiring and cost-to-achieve Cost reduction WM orga
Slide 18: Operating expenses (cont’d)
Operating expenses (cont’d) Operating expenses by category1 Cost/income ratio3 CHF M % +8% +5.4 pp – Operating expenses increase driven mainly by one off items and integration of 546 84.7% SFA 506 512 78.2% – Cost / income ratio above 72% mid-term 72.8% < 72% target target 330 363 326 Personnel – St
Slide 19: Capital – Strong capital levels and a conservative risk profile
Capital – Strong capital levels and a conservative risk profile Capital ratios % of RWA − Further strengthened balance sheet: capital, 25.5% 23.8% 24.0% deposits, bond portfolio and liquidity AT1 6.8% 7.1% 6.7% − CET1 capital ratio 1H 2023 up 60 bps to 17.3%, with CET1 capital CHF 1.2 billion; compa
Slide 20: Dividend – Highly capital accretive business model enables attractive returns
Dividend – Highly capital accretive business model enables attractive returns 19% 13% 14% 13% 12% 13% 13% Return on equity (%) ~11% 12%1 11% ~10% 9% ~10% 1H 2023 ROTE: 17.8% ~9% ~8% ~8% ~9% ~9% ~9% ~7% ~8% ~7% ~8% 1H 2023 ROCET1: 22.8% 8% 8% 8% Cost of equity2 (%) 3.00 3.00 2.25 2.25 2.00 2.10 2.10
Slide 21: Targets
Targets 1H 2023 1H 2022 Targets Net new money growth −0.9% −0.8% 4% – 6% Operating income growth 1% −12% 4% – 6% Cost / income ratio 78.2% 72.8% < 72% Return on equity 12.5% 14.6% > 14% CET1 ratio 17.3% 18.5% > 12% Total capital ratio 24.0% 25.5% > 16% Refer to the Strategy section of the Full-Year
Slide 22: Recap and outlook
Recap and outlook
Slide 23: Recap and outlook
Recap and outlook 1H 2023: We will in 2H 2023: – Implement the communicated measures We achieved a robust set of We believe that global to contain costs financial results following an developments have validated exceptionally strong 2021, our strategic priorities and – Continue the expanded and acce
Slide 24: Q&A
Q&A
Slide 25: Appendix
Appendix
Slide 26: Upcoming events
Upcoming events 9M trading update 2023 October 31, 2023 Refer to the Vontobel Investor Relations website for details: www.vontobel.com/calendar 26
Slide 27: Summary of FX impacts and one-offs
Summary of FX impacts and one-offs Profit before tax CHF M −17% − FX impact on Profit before tax of reported negative CHF 10 M due Swiss Franc strengthening across all −6% major currencies including USD, underlying EUR and GBP 180.4 0.0 180.4 11.6 168.8 10.0 8.5 150.3 − Refer to the Business Review
Slide 28: AuM by asset class and ESG criteria per SFDR framework
AuM by asset class and ESG criteria per SFDR framework AuM by asset class AuM in investment solutions incorporating CHF B ESG-criteria – SFDR framework3,4 Other1 CHF B 2% Equity 212 18% 212 2 4 23 Other 109 15 103 assets Multi 18 52 Asset 98 CHF 109 B 62% Fixed 55 19 Income SFDR 98 21 19% 109 12 cat
Slide 29: AuM by client domicile and mandate type
AuM by client domicile and mandate type AuM by client domicile AuM by mandate type 1H 2023, % of total AuM 1H 2023, % of total AuM Execution/ Other Custody Collective Focus APAC1 investments / Funds LATAM and MEA 10% 16% 23% 11% Advisory Switzerland 45% mandates North 9% 18% America 6% Italy 9% 43%
Slide 30: Shareholder structure
Shareholder structure Vontobel families hold more than 50% of the share capital and are strongly committed to Vontobel Advontes AG 10.6% Vontrust AG 14.3% Shares in the Free float1 pooling agreement 49.1% 50.9% Vontobel Foundation 14.9% Pellegrinus Holding AG 4.7% Further shares of a family member 6