Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — Van Lanschot Kempen — H1 2021 Earnings Presentation
40 slides from Kempen European High Dividend Fund N.V. N's earnings presentation, Aug 26, 2021
Slide 1: Van Lanschot Kempen 2021 half-year results
Van Lanschot Kempen 2021 half-year results 26 August 2021
Slide 2: H1 2021 – key messages
H1 2021 – key messages • Strong net result of €58.3m • AuM growth to €104.2bn (+5%) • Private Clients NPS to 37 (2020: 26) • Partnership with Mercier Vanderlinden (€3.8bn AuM) fits perfectly into our strategy becoming a leading specialist wealth manager in Belgium • Strong capital position – CET 1 r
Slide 3: Our journey to a modern integrated and independent wealth manager
Our journey to a modern integrated and independent wealth manager 2013 2021 A small universal bank – Integrated wealth manager with clear focus on client doing everything for everyone groups, state-of-the-art IT and highly skilled people • Clear choices for specific client groups • €4bn Corporate Ba
Slide 4: How we connect with our clients – technology with a personal approach
How we connect with our clients – technology with a personal approach From our clients’ From our staff’s perspective perspective • Meetings at our offices and at Our workforce has the tools our clients’ homes needed to pursue opportunities: • Video calls • Data analytics support - • Secure WhatsApp
Slide 5: We are a leading independent wealth manager in our relevant markets and geographies
We are a leading independent wealth manager in our relevant markets and geographies A leading wealth manager in the Netherlands and Belgium that creates and preserves wealth in a sustainable way A prominent, European-oriented active investment manager that delivers sustainable alpha in less efficien
Slide 6: We deliver in our relevant markets and geographies
We deliver in our relevant markets and geographies • €3.7bn net inflow at Private Clients in the last 18 months A leading wealth manager in the • AuM growth Belgium 86% over the last 5 years to €4.8bn, combined with Netherlands and Belgium Mercier Vanderlinden €8.6bn • 233% growth in sustainable and
Slide 7: 2021 half-year results
2021 half-year results
Slide 8: Strong H1 2021 – reflecting our commercial success
Strong H1 2021 – reflecting our commercial success • Net profit at €58.3m • Strong growth in commission income – our core income – to €175.7m (+18%) • Stable interest income and small release from loan loss provisions • Net inflow Private Clients at €2.4bn at exceptionally high levels • Thanks to th
Slide 9: H1 2021: Very good overall performance
H1 2021: Very good overall performance Net result €58.3m (H1 2020: €9.5m) Commission income €175.7m (+18%) Underlying net result €59.2m Interest income €76.1m (-1%) (H1 2020: €9.5m) Operating expenses Efficiency ratio 73.1% €196.8m (+5%) (H1 2020: 93.2%) Client assets €121.0bn (+5%) Private Clients
Slide 10: Overview of net result
Overview of net result €m H1 2021 H1 2020 % chang e H2 2020 % chang e Commission 175.7 148.9 18% 147.5 19% Interest 76.1 77.0 -1% 75.1 1% Other income 17.5 -24.7 10.1 73% Income fr om op er ating activities 269.3 201.3 34% 232.7 16% Operating expenses -196.8 -187.5 5% -184.3 7% Gr oss r esult 72.5 1
Slide 11: Net result amounts to €58.3m
Net result amounts to €58.3m Key drivers of net result €m • Increase in commission income driven by higher management fees (H1 2021: €134.5m vs H1 2020: €110.3m) • Increase in other income is driven by the good results on own investment funds and the loss on structured products activities in H1 2020
Slide 12: Private Clients shows record net inflow of €2.4bn
Private Clients shows record net inflow of €2.4bn Private Clients: AuM Private Clients: Revenue composition € bn Total = €175.8m • Exceptionally high inflows reflect our unique wealth management position • Inflow split c. 50/50 between discretionary management and non-discretionary management • High
Slide 13: Private Clients: strong growth in our Belgian franchise in recent years
Private Clients: strong growth in our Belgian franchise in recent years Private Clients Belgium: AuM € bn Turnhout Antwerp Bruges Ghent Hasselt Waregem Leuven Mechelen Lanaken Kortrijk Brussels Liege Doornik • Net inflow AuM at €0.3bn in H1 2021 • Client assets grew to €5.5bn (2020: €5.1bn), includi
Slide 14: Result Evi passed break-even level with AuM at €1.3bn
Result Evi passed break-even level with AuM at €1.3bn Evi: AuM Evi: AuM €m €m 106 89 -42 1,313 1,160 31/12/2020 Net inflow Integration in Market 30/06/2021 Van Lanschot performance Belgium • AuM grew by 13% to €1.3bn (2020: €1.2bn), client assets decreased to €1.5bn (2020: €1.6bn) • Result slightly
Slide 15: Wholesale & Institutional Clients net outflow of €2.0bn
Wholesale & Institutional Clients net outflow of €2.0bn Wholesale & Institutional Clients: AuM € bn • Outflow of low-fee fiduciary management mandates • Investment strategies saw inflow in global small-cap strategies and real assets strategies, outflow of a government bond strategy mandate and in cr
Slide 16: Wholesale & Institutional Clients: AuM growth in the UK
Wholesale & Institutional Clients: AuM growth in the UK Wholesale & Institutional Clients UK: AuM € bn • Offering fiduciary management services in the UK • €0.3bn AuM growth in H1 2021 • Several new mandates won in H1 2021, including Clara-Pensions. Clara-Pensions is a member-first consolidator for
Slide 17: Sharp increase in annualised recurring management fees
Sharp increase in annualised recurring management fees Annualised recurring fees +43% +14% +8% +16% 306.9 270.3 249.6 215.3 YE2018 YE2019 YE2020 HY2021 • Annualised recurring management fees represent the annualised portfolio revenues at the reporting date, assuming that the portfolio remains unchan
Slide 18: Stable AuM margins
Stable AuM margins AuM margin – Private Banking AuM margin – Asset Management bps bps • For comparative purposes, we used the old segmentation for the figures above. As of full-year 2021, we only show figures for the new segmentation • AuM margin Private Clients: 60 bps in H1 2021 • AuM margin Whole
Slide 19: Good deal flow at Merchant Banking Clients
Good deal flow at Merchant Banking Clients Commission €m • Strong H1 2021: 34 completed transactions in 9 countries with a total value of over €4bn • Focus on our selected niches: real estate, life sciences & healthcare, tech & fintech, renewables and infrastructure • Net result at €7.7m and commiss
Slide 20: Interest income stabilises in H1 2021
Interest income stabilises in H1 2021 Interest income and margin (12-mth moving average)* Average volume charged negative interest rates €m € bn 2.5 2.6 1.5 1.0 1.0 0.2 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 • Stabilisation of interest income is driven by growth of the loan portfolio and ne
Slide 21: Increased level of income from securities and associates
Increased level of income from securities and associates Income from securities and associates €m €m Book value Book value Income Income YE2020 HY2021 H1-2020 H1-2021 VLP (minority interests) 47.4 51.1 10.2 5.2 Bolster Investments Coöperatief UA 37.0 39.0 1.6 2.7 Own investment funds 146.3 221.9 -11
Slide 22: Result on financial transactions
Result on financial transactions Total result on financial transactions Outstanding volume structured products macro €m hedge portfolio €m • Result on financial transactions improved to -€4.8m • Total result on structured products activities was neutral • Significant progress has been made on the ru
Slide 23: Increase operating expenses mainly driven by acquisition of Hof Hoorneman Bankiers
Increase operating expenses mainly driven by acquisition of Hof Hoorneman Bankiers Operating expenses €m 190.4 193.7 187.5 196.8 184.3 H1 2019 H2 2019 H1 2020 H2 2020 H1 2021 • Operating expenses increased by €9.3m to €196.8m • Increase due to – as previously indicated – the completion of the acquis
Slide 24: Growth in Private Clients loans +4%, decrease in impaired loans
Growth in Private Clients loans +4%, decrease in impaired loans €m Lo an Lo an % c hange Impaired P ro vis io n Impaired Co verage po rtfo lio po rtfo lio lo ans ratio ratio 30/06/2021 31/12/2020 Mortgages 6,149 6,032 2% 44 2 0.7% 5% Other loans 1,978 1,809 9% 71 33 3.6% 46% P rivate Clients lo ans
Slide 25: Strong capital position, CET 1 ratio to 21.9%
Strong capital position, CET 1 ratio to 21.9% Common Equity Tier 1 ratio % • Higher market risk RWA because of more prudent interpretations of regulation • Increased exposures – growth in the loan portfolio – and increase in own investment funds caused RWA increase • Implementation of new Internal R
Slide 26: Dividend pay out of €1.95 per share in Q4
Dividend pay out of €1.95 per share in Q4 Expected CET 1 ratio developments • We expect to be able to offset a part of the RWA increase by further optimising our balance sheet in the second half of 2021 • The acquisition of Mercier Vanderlinden will have a negative impact on the CET 1 ratio of appro
Slide 27: Events after reporting period
Events after reporting period Legal merger • On 1 July 2021, the legal merger between Van Lanschot Kempen and Van Lanschot Kempen Wealth Management became effective. This has a positive impact on the Tier 1 capital ratio of approximately 1%-point and a positive impact on the total capital ratio of a
Slide 28: Overview of our financial targets
Overview of our financial targets Common Equity Tier 1 ratio Dividend pay-out ratio* % % 50-70% 15-17% 23.8% 24.3% 21.9% 56% 61% 57% 65% 20.3% 21.1% N/A 2017 2018 2019 2020 H1 2021 2025 2017 2018 2019 2020 H1 2021 2025 Efficiency ratio Return on Common Equity Tier 1* % % 10-12% 70-72% 79.4% 85.7% 76
Slide 29: H1 2021: Very good overall performance
H1 2021: Very good overall performance Net result €58.3m (H1 2020: €9.5m) Commission income €175.7m (+18%) Underlying net result €59.2m Interest income €76.1m (-1%) (H1 2020: €9.5m) Operating expenses Efficiency ratio 73.1% €196.8m (+5%) (H1 2020: 93.2%) Client assets €121.0bn (+5%) Private Clients
Slide 30: Van Lanschot Kempen is an integrated, independent wealth manager
Van Lanschot Kempen is an integrated, independent wealth manager
Slide 31: Further leveraging current momentum
Further leveraging current momentum Deepening relationships with our current clients and prospects • Increase strategic advisory mandates with existing and new private and semi-institutional clients • Co-creation and product development with fiduciary clients • Continuing our focus on entrepreneurs
Slide 32: Strengthening our geographical footprint
Strengthening our geographical footprint The Netherlands • Continuing to explore opportunities for M&A Rest of Europe • Investing in expansion of our distribution efforts via placing agents in Germany, Italy and Nordics • Continuing our pan-European UK approach for Merchant Banking • Benefiting from
Slide 33: Van Lanschot Kempen – key messages
Van Lanschot Kempen – key messages • Our independence is key to our proposition to clients and employees. We have an entrepreneurial culture for which our independence is a decisive element • Our size means that every client counts and every employee can make real impact. Clients value our tailored,
Slide 34: Appendix
Appendix
Slide 35: Key figures H1 2021 by segment
Key figures H1 2021 by segment €m Private Wholesale & Merchant Other Total Clients Institutional Banking Clients Clients Commission income 106.8 37.7 29.0 2.1 175.7 Interest income 67.3 - 0.0 8.9 76.1 Other income 1.7 - 1.3 14.5 17.5 Income from operating activities 175.8 37.7 30.3 25.4 269.3 Operat
Slide 36: Progress on our non-financial KPIs
Progress on our non-financial KPIs • To monitor whether we're on track to deliver on our ambitions, we define KPIs and targets • The KPIs are focused on value creation, both financial and non-financialr Financial KPI’s, refer to slide 34 Theme KPI Target H1 2021 Score H1 2021 Score 2020 2020 Clients
Slide 37: High scores on external ESG ratings
High scores on external ESG ratings 1st in our peer group of AA rating medium-sized banks on resilience to ESG risks 10th 4th place in league table of in group of 97 peers rated on 500 entrants sustainability C+ rating A+ score top 5 out of 80 financials for Kempen’s responsible and asset managers i
Slide 38: Asset Management
Moving from a business line-driven organisation to a function-based structure Former business line-driven organisation New function-based structure Investment Strategies & Asset Management Merchant Banking Corporate Centre Solutions Private Banking IT & Operations Corporate Staff Finance & Risk Oper
Slide 39: Our new reporting structure
Our new reporting structure Simplified view Asset Merchant Old structure Private Banking Evi Other Management Banking Income and New structure Income and expenses related to expenses funds and fiduciary related to funds management for for Private Wholesale & Clients Institutional Clients Wholesale &
Slide 40: Disclaimer
Disclaimer Disclaimer and cautionary note on forward-looking statements This document may contain forward-looking statements on future events and developments. These forward-looking statements are based on the current insights, information and assumptions of Van Lanschot Kempen’s management about kn