Vontobel Holding Ag · SIX:VONN
Vontobel — FY2018 Earnings Presentation
50 slides from Vontobel's earnings presentation, Feb 12, 2019
Slide 1: Vontobel full-year 2018 results presentation
Vontobel full-year 2018 results presentation Zeno Staub Martin Sieg Castagnola CEO CFO February 12, 2019
Slide 2: Cautionary statement regarding forward-looking statements and disclaimer
Cautionary statement regarding forward-looking statements and disclaimer February 12, 2019 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 forwa
Slide 3: Overview
Overview February 12, 2019 Highlights Full-year 2018 results Strategy update Outlook Questions and answers
Slide 4: Vontobel on track: Higher profitability and continued organic growth
Vontobel on track: Higher profitability and continued organic growth February 12, 2019 Key figures1 as of December 31, 2018 Client assets Net new money CHF 247.3 bn including CHF 192.6 bn CHF 5.0 bn of advised client assets Operating income Group net profit Per share data CHF 1,157.8 mn CHF 232.2 mn
Slide 5: Good organic growth and NLR integration, on track for 2020 targets
With good organic growth and Notenstein La Roche integration progressing well, we are on track to achieve our 2020 targets February 12, 2019 Clients continue to endorse our products and services – Operating income grew by 9%, driven by Combined Wealth Management1 and Asset Management – NNM in Combin
Slide 6: Overview: Full-year 2018 results
Overview February 12, 2019 Highlights Full-year 2018 results Strategy update Outlook Questions and answers
Slide 7: Advised client assets reach CHF 193 billion despite the challenging environment
Advised client assets reach CHF 193 billion despite the challenging environment February 12, 2019 Advised client assets (CHF bn, end of period) Advised client assets by client domicile (end-2018) 193 Others 9% p.a. 187 8 Italy 7% 9 14 13 5% Switzerland 155 148 6 US 137 6 10 9% 6 7 7 43% UK 10% 165 1
Slide 8: Operating income up 9%, Group net profit up 11%
Vontobel grows operating income by 9% – Group net profit up 11% despite investment in growth (up 14% on comparable basis) February 12, 2019 Development of key figures Comments − Operating income rose 9% on increased 31-12-18 31-12-17 ∆ asset base. 68% of operating income Operating income (CHF mn) 1,
Slide 9: Vontobel delivers solid growth in Group net profit
Vontobel delivers solid growth in Group net profit February 12, 2019 Group net profit (CHF mn) Comments C/I Ratio C/I Ratio C/I Ratio C/I Ratio 75.3% 74.4% 74.7% 76.5% +11% – Group net profit increased by 11%, or 14% excluding one-off impacts +14% – Growth stems from Combined 31.3 249.2 17.0 Wealth
Slide 10: Smooth and rapid integration of Notenstein La Roche
Smooth and rapid integration of Notenstein La Roche We are now ready for our next growth phase February 12, 2019 Development of AuM (CHF bn) Price allocation at closing Integration costs before tax ∆ 658 in % 38 02.07.2018 15.0 2018 Goodwill 261 -18 -6.7 10 NNM WM 1.0 2019 Intangible 46 -0.7 assets
Slide 11: Combined Wealth Management with strong net inflows of new money
Combined Wealth Management1 with strong net inflows of new money from organic basis… February 12, 2019 Net new money2 (CHF bn) Development of AuM (CHF bn) AuM Development (CHF bn) 3.7% 4.4% 5.3% 4.7% 4.1% 6.1% ∆ in % 3.3 +14% p.a. 65.7 31.12.2017 54.0 54.0 NNM WM4 2.5 4.7 46.8 2.2 2.2 2.2 41.6 38.9
Slide 12: Increased profitability due to solid margin and lean business model
… and increased profitability due to protection of solid margin and focus on lean and scalable business model February 12, 2019 Gross margin on AuM1 (bps) Advised client asset split (%) Profit before tax (CHF mn) and CIR (%) 72 Other 69 67 682 121.6 66 +13% p.a. 13% 73 77 78 Fixed 83.5 74 income 20%
Slide 13: Asset Management with good net inflows in a challenging market
Asset Management with good net inflows in a challenging market environment … February 12, 2019 Net new money1 (CHF bn) Development of AuM2 (CHF bn) AuM development 6.9% 9.4% -14.3% 4.0% 3.0% 4.2% ∆ +6% p.a. in %2 7.9 110.3 104.2 31.12.2017 110.3 95.7 92.3 4.6 83.0 4.5 3.6 NNM 3.1 2.8 3.1 FX -1.2 1.1
Slide 14: Strong pre-tax profit due to balanced book of business
… and strong pre-tax profit due to our balanced book of business February 12, 2019 Gross margin on AuM1 (bps) Advised client asset split (%) Pre-tax profit (CHF mn) and CIR (%) +14% 52 51 180.3 46 163.5 162.8 44 42 138.5 Multi Asset 71 69 32% Equity 108.2 61 63 37% 61 31% Fixed Income 2014 2015 2016
Slide 15: Financial Products is gaining market share in Europe and Asia
Financial Products is gaining market share in Europe and Asia – increased turnover of own products and on deritrade® MIP February 12, 2019 Turnover of listed and non-listed Market share of listed products in Notional volume issued Vontobel products in Europe1 Europe and Asia on deritrade® MIP (CHF b
Slide 16: Financial Products continues to invest in future growth
Financial Products continues to invest in future growth Difficult markets in Q4 had a strong adverse impact on business February 12, 2019 Operating income1 (CHF mn) November and December Pre-tax profit1 (CHF mn) and CIR (%) Volume Switzerland2 Volume Europe ex CH (CHF bn) (EUR bn) -29% +7% +22% 276
Slide 17: Acceleration in Asset Management and Combined Wealth Management
Acceleration in Asset Management and Combined Wealth Management – now jointly accounting for 83% of pre-tax profit1 February 12, 2019 Pre-tax profit of core activities (IFRS, CHF mn) Combined Wealth Management2 Asset Management Financial Products +11% 180.3 162.8 +46% 121.6 -29% 89.1 83.5 63.1 2017
Slide 18: Higher capital ratios – improved capital structure with AT1 bond
Higher capital ratios – capital structure improved by issuing additional Tier 1 bond February 12, 2019 Capital ratios − Total capital ratio improved to 18.9% from 18.4% at end-2017 − CET 1 ratio at 12.3%; slightly above the ratio 18.4% 18.9% expected for end-2018 after announcement of acquisition of
Slide 19: Overview: Strategy update
Overview February 12, 2019 Highlights Full-year 2018 results Strategy update Outlook Questions and answers
Slide 20: Strategy 2020: Progress on strategic priorities
Strategy 2020: Progress on strategic priorities February 12, 2019 Deliver the unique Vontobel experience Empower people Create brand excitement among our clients Boost growth and market share Drive efficiency 20
Slide 21: Vontobel Wealth Management is disrupting the capped growth model
Vontobel Wealth Management is disrupting the capped growth model of the traditional private banking industry… February 12, 2019 – Tradition, relationships, discretion are typical – Relationship manager as sole contact for clients, Value characteristics of the offering; there is very Service with res
Slide 22: Ready for next growth phase
…ready for next growth phase February 12, 2019 Implementation Progress – Vontobel brand relaunched Value proposition – Build-out of investment capabilities and introduction of proprietary 3α-Investment approach – Holistic client advisory process introduced, feeding into a modular product offering li
Slide 23: Asset Management is well positioned with its high-conviction boutique approach
Asset Management is well positioned to benefit from challenging markets with its high-conviction boutique approach February 12, 2019 Diversified book of business Long-term achievement of growth Total advised client assets: CHF 117.5 bn (end-2018) – In the top 400 asset managers 2018 list published b
Slide 24: Product quality and distribution reach are key in Asset Management
Product quality and distribution reach are key in Asset Management February 12, 2019 High-quality products Strengthening our distribution platform – Expansion of teams for Latin America, US and Iberia – 50% of our funds have received a 4 or 5 star Morningstar rating, compared to only 35% in the – Ex
Slide 25: Financial Products: focus on profitable market share growth
Financial Products: Continue on our path and focus on profitable market share growth and leadership in our platform businesses February 12, 2019 Products Platforms Europe – In target segment, – Entered Denmark turnover on 13.1% in January 2019 +30% deritrade MIP 6.0 Platform volume 10.4% – Consolida
Slide 26: Our results show we are on track to reach our 2020 targets
Our results show we are on track to reach our 2020 targets February 12, 2019 Growth Profitability Capital and payout Top-line growth (in %) Return on equity (in %) Total capital ratio (in %, end of period) 9 18.9 13.0 > 14 > 162 4-6 2018 Target 20201 2018 Target 2020 2018 Target 2020 Net new money g
Slide 27: Overview: Outlook
Overview February 12, 2019 Highlights Full-year 2018 results Strategy update Outlook Questions and answers
Slide 28: Brand, talent and technology are key
Brand, talent and technology are key - We will continue to invest in future growth February 12, 2019 Worst investment year In this world and markets … since 1931 – After a strong 2017, 2018 was a far Long-term governance backed by a more challenging year, with trade solid balance sheet and tensions,
Slide 29: Outlook
Outlook February 12, 2019 A growing industry in a Strong asset base Vontobel to focus on organic challenging environment growth and client journeys – Expansion of asset pools driven by – Strong brand to foster organic generation of new wealth and long- growth term asset appreciation 3.6% – Combined
Slide 30: Overview: Questions and answers
Overview February 12, 2019 Highlights Full-year 2018 results Strategy update Outlook Questions and answers
Slide 31: Appendix
Appendix 31
Slide 32: Focused on solidly growing markets with a distinctive offering
Vontobel is focused on solidly growing markets and is delivering value through a distinctive first-class offering February 12, 2019 Wealth management Active asset management Financial products – Strong growth of HNWI population – Industry AuM is growing by an – Long-term increase in demand for and H
Slide 33: Advised client assets have more than doubled since 2008
Advised client assets have more than doubled since 2008 – demonstrating Vontobel’s successful focus on its core capabilities February 12, 2019 Advised client assets (CHF bn, end of period) Vontobel’s business model – Vontobel’s core capabilities are to protect and build wealth, to actively manage as
Slide 34: All core activities with ambitious targets for 2020
All core activities with ambitious targets for 2020 WM with new ones since June 2018 February 12, 2019 Combined Wealth Management1 Asset Management Financial products NNM growth2 (in %) NNM growth3/4 (in %) Operating income 6.1 4-6 4-6 4.2 270.3 > 300 2018 Target 20201 2018 Target 2020 2018 Target 2
Slide 35: 93% of advised client assets stem from home and focus markets
93% of advised client assets stem from home and focus markets February 12, 2019 Advised client assets by client domicile as of end-2018 (CHF bn) Home Focus markets Other markets market EMERGING SWITZERLAND GERMANY ITALY UK US Total MARKETS1 Advised client assets 82.4 23.2 10.4 18.8 16.4 27.7 13.7 19
Slide 36: Offering based on client-specific needs
Vontobel sets itself apart by providing an offering based on client-specific needs – an important driver of organic growth February 12, 2019 Clients are traditionally segmented by the … but Vontobel’s offering is industry according to their wealth … based on client-specific needs Ultra-high-net-wort
Slide 37: Clients and third parties reward us for our offerings
Clients and third parties reward us for our offerings February 12, 2019 Our clients recommend us Vontobel gains external recognition – Vontobel Wealth Management has the highest Net Promoter Score1 among Swiss competitors – a strong sign of client satisfaction – More than half of our clients are pro
Slide 38: Swiss market is fragmented and undergoing structural change
Swiss market is fragmented and undergoing structural change – creating opportunities for Vontobel to accelerate growth February 12, 2019 Private banks in Switzerland Comments – Number of Swiss private banks has -32% decreased by more than 30% since 158 2011 147 138 – Structural change is expected 13
Slide 39: Wealth Management distinguishes itself and attracts top-tier talent
Wealth Management clearly distinguishes itself from its competitors and attracts top-tier talent February 12, 2019 Our need-based segmentation, 3α-Investment Vontobel attracts top-tier talent Philosophy® and value-based pricing set us apart – Vontobel attracts and retains top talent – Vontobel is a
Slide 40: Compelling asset management offering to financial institutions
Vontobel provides compelling asset management offering to financial institutions February 12, 2019 Vontobel’s offering for Partners across the globe rely on Vontobel’s offering asset management partners – Distinctive offering for financial institutions focusing on core competencies such as client Lu
Slide 41: Financial Products competitive lead
Leading offering and technology, well-balanced business model and cost leadership give Financial Products a competitive lead February 12, 2019 Leading offering / technology Well-balanced business model Cost leadership Vontobel products issued – Vontobel sells volatility through leverage – Industry-l
Slide 42: deritrade MIP – decision-making tool for structured products
deritrade® MIP – the world’s 1st decision-making tool for designing and buying structured products using smart and crowd data February 12, 2019 Innovation cycles Benefits of Vontobel’s multi-issuer platform – deritrade® MIP provides full customization capabilities at best prices – bringing the Inter
Slide 43: Financial Products market share across all markets (1/2)
Financial Products with stable or growing market share across all markets (1/2) February 12, 2019 Switzerland (CHF bn) 8 60% 6 Rank #11 40% 4 MARKET SHARE 20% 2 Turnover 28.4%1 # of trades 44.2%1 0 0% Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dez Jun Dez 07 08 0
Slide 44: Financial Products market share across all markets (2/2)
Financial Products with stable or growing market share across all markets (2/2) February 12, 2019 Italy2 (EUR bn) 4 20% 3 15% Rank #41 MARKET SHARE 2 10% Turnover 9.6%1 1 5% # of trades 12.9%1 0 0% Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dez Jun Dez 07 08 08 0
Slide 45: High quality of bond portfolio maintained
High quality of bond portfolio maintained February 12, 2019 Counterparty exposure by rating (end-2018) Counterparty exposure by sector (end-2018) 6% 1% 18% 23% 31% 37% 33% 51% Government /public sector bodies AAA A Other Financials AA BBB Corporate (non-financials) Note: Total issuer risk from debt
Slide 46: Financial Products accounts for less than one-third of capital usage
Financial Products accounts for less than one-third of capital usage February 12, 2019 Capital consumption as of 2018 (CHF mn) 537.4 1,128.0 584.0 391.5 266.1 193.7 179.3 4.6 187.9 40.6 130.8 3.8 221.0 69.1 0.0 132.4 88.6 76.8 65.8 143.7 12.4 0.0 16.1 38.4 Capital Combined Wealth Asset Management Fi
Slide 47: Amortization of intangibles from former acquisitions
Amortization of intangibles from former acquisitions February 12, 2019 Amortization of intangibles from former acquisitions1 (CHF mn) Comments – Amortization of intangibles includes these acquisitions: 16.4 – Commerzbank Schweiz until 14.8 September 2019 – TwentyFour Asset Management until April 202
Slide 48: Strategy has delivered attractive returns to shareholders
Successful implementation of Vontobel’s strategy has delivered attractive returns to shareholders for more than a decade February 12, 2019 Return on equity and dividends Comments – Attractive business with average 21.6% return on equity of 12.1% since 19.2% 2003 – clearly above Vontobel’s 18.0% cost
Slide 49: Additional transparency on wealth management activities
Vontobel provides additional transparency on its wealth management activities February 12, 2019 Financial disclosure Comments Organizational set-up/ – Vontobel’s Combined Wealth Management activities Core activities consist of Wealth Management (WM) and the business IFRS reporting with External Asse
Slide 50: Vontobel families hold more than 50% of share capital
Vontobel families hold more than 50% of share capital and are strongly committed to Vontobel February 12, 2019 Shareholder structure1 Vontobel Foundation and Pellegrinus Holding 19.6% Free float 49.3% Pooled shares total Vontrust AG 14.3% Shares in the core pooling 50.7% agreement 43.9% Advontes AG