Julius Baer Gruppe Ag · SIX:BAER
Julius Baer Gruppe — FY2000 Earnings Presentation
24 slides from Julius Baer Gruppe's earnings presentation, March 2001
Slide 1: Year 2000 result highlights
Year 2000 result highlights Assets under management CHF 142 bn (+11%) Net new money CHF 19 bn (+56%) Strongly increased margins Net profit CHF 433 mn (+63%) Cost/income ratio 61% (67%) ROE 30% (19%) Comparison 2000 vs.1999 USA.3.2001
Slide 2: Business lines of Julius Baer
Business lines of Julius Baer Private Institutional Mutual Brokerage Trading Banking Asset Mgmt Funds Securities Institutional Marketing to Private trading clients distributors clients Forex trading Mgmt. of Administr. Institutional External mutual funds of Brokerage asset Swiss capital Julius Baer
Slide 3: Assets under management
Assets under management CHF bn 160 142 +11% Expected 140 128 long-term 31 CAGR: 120 +11% 28 15% 100 95 33 81 +10% 30 80 64 75 +14% 60 66 40 Mutual Funds 20 Inst. Asset Mgmt. Private Banking 0 96 97 98* 99 00 * first year with divisional figures 3
Slide 4: Analysis of asset growth in 2000
Analysis of asset growth in 2000 150 CHF bn 3.5 0.0 7.0 IAM -0.5 PRB 145 MUT other IAM other PB 142 -4.0 -0.5 MUT -0.5 140 9.0 135 PRB 130 128 125 Dec 99 Net New money: 19.0 Market performance: -5.0 Dec 00 PRB: Private Banking MUT: Mutual Funds IAM: Institutional Asset Management 4
Slide 5: Asset mix and fee margin
Asset mix and fee margin Asset mix Gross fee margin 100% 80 9 11 10 9 10 bps 67 15 12 12 10 12 75% 60 51 52 48 40 37 42 46 43 50% 50 40 25% 20 35 41 41 26 31 0% 0 96 97 98 99 00 96 97 98 99 00 Third-party products Asset management fees in % of Money market Bonds average assets under management Equit
Slide 6: Net operating income
Net operating income 2000 CHF mn 1729 +43% 191 +33% 1500 196 +6% 1207 1040 144 1000 846 185 886 843 -5% 91 598 110 100 1308 +54% 86 500 852 675 633 0 96 97 98 99 00 00H1 00H2 Fees/Commissions (net) Trading Interest Other 6
Slide 7: Asset mgmt. fees & transaction commissions (gross)
Asset mgmt. fees & transaction commissions (gross) 1600 CHF mn 1482 +57% 1400 1200 533 +53% 1000 943 800 758 759 723 -5% 348 600 550 305 228 355 906 +57% 400 576 472 200 434 0 96 97 98 99 00 00H1 00H2 Fees Transaction comm. Other 7
Slide 8: Operating expenses
Operating expenses 1200 1009 +29% 1000 781 317 +12% 800 631 284 535 +13% 600 521 473 401 692 +39% 137 180 400 497 200 336 355 Bonus 32% 40% 41% 38% 0 96 97 98 99 00 00H1 00H2 Personnel expenses General expenses incl. bonuses 8
Slide 9: Improved cost/income ratio
Improved cost/income ratio* 75% 70% 65% 60% 55% 50% 91 92 93 94 95 96 97 98 99 00 01 02 03 * Incl. depreciation and write-offs 9
Slide 10: Net profit: 35% p.a. (5 years)
Net profit: 35% p.a. (5 years) 500 CHF mn 433 +63% 400 302 300 265 249 257 202 183 -27% 200 131 100 0 96 97 98* 99 00 00H1 00H2 * Positive tax effect of CHF 45 mn 10
Slide 11: Private Banking (1)
Private Banking (1) l Enhanced client acquisition through new market units without disrupting existing relationships l Products: new style mandates: value, growth and sector rotation (higher margin products should contribute to improving profitability) l Confidence that quantitative and qualitative
Slide 12: Private Banking (2)
Private Banking (2) Assets under m gm t. l Net operating income: +14% + 36% to CHF 607 mn (CHF bn) l Operating expenses: 80 73 76 + 30% to CHF 398 mn 67 70 61 l Segment result: 60 55 + 46% to CHF 156 mn 50 l Staff up 14% to 554 40 30 20 Improvement of margins: 10 • Gross margin up 16% 0 from 74 to 8
Slide 13: Institutional Asset Management (1)
Institutional Asset Management (1) l Confederation concept: Diversified investment styles through asset management centers in Zurich, London, Frankfurt and New York l Continued launch of attractive products (e.g. various new investment funds, non-traditional fund of funds) l Further expected sustain
Slide 14: Institutional Asset Management (2)
Institutional Asset Management (2) l Net operating income: Assets under m gm t. + 50% to CHF 228 mn +11% (CHF bn) l Operating expenses: + 13% to CHF 94 mn 59 60 55 l Segment result: 49 Institutional J. Baer + 100% to CHF 84 mn assets (33) funds 40 37 l Staff up 1% to 151 32 20 Improvement of margins
Slide 15: Mutual Funds (1)
Mutual Funds (1) l Opening of Julius Baer Italia Investment Funds Services in Milan l Further promotion of private label funds business l Increase of third-party products range for our clients l Leverage European expertise into the U.S. l Strengthening of market position in partner distribution in S
Slide 16: Mutual Funds (2)
Mutual Funds (2) l Net operating income: Mutual Funds +11% (CHF bn) + 103% to CHF 199 mn Operating expenses: 35 33 l + 65% to CHF 66 mn 31 28 clients (22) clients 30 l Segment result: JB 25 + 120% to CHF 83 mn 20 19 l Staff up 50% to 154 16 Partners’ 15 10 Improvement of margins: 5 • Gross margin up
Slide 17: Brokerage / Trading
Brokerage / Trading Brokerage l Opening of Julius Baer España, Madrid l Expansion of startup organizations in Amsterdam/Milan l Internet access to pan-European sector-research database (>700 companies) l Strong and 'independent' equity research Trading l Increase of quality of earnings through expan
Slide 18: Pan-European brokerage network completed
Pan-European brokerage network completed Research/Sales Total staff 294 in 2000 (1999) Stockholm*: Sales only 30 in 2001 Amsterdam*: 25 (12) London: 9 (6) New York: 14 (14) Frankfurt: 52 (37) Paris*: 81 (56) Zurich: 42 (47) Madrid 2000 *: 35 Milan*: 36 (23) * outsourced Back Office 18
Slide 19: E-initiatives
E-initiatives Achievements l eBaer (information tool for private banking clients) l JBfundnet (B2B application for mututal funds partners) and brokerage database l Swiss banking licence for new online bank (juliusbaer.net) l New investment funds B2C partnerships planned in selected European markets
Slide 20: Private client e-business expansion
Private client e-business expansion Self-directed Participating Delegating investors investors investors Online Offline Online Offline worth ind. Traditional Traditional High net private private banking - banking - New advisory discretionary online clients clients bank New Affluent clients investmen
Slide 21: Share information
Share information 12 Market capitalization* Avg. daily turnover (CHF mn) (CHF bn) 9.6 10 00 30 8.0 8 99 17 6 5.2 5.3 98 19 97 9 4 3.2 96 5 1.7 2 0 5 10 15 20 25 30 35 0 Free float: 81.1% Share ownership (votes): 96 97 98 99 00 01 Baer Family (incl. staff) hold 53.8% . .3 12 * incl. registered shares
Slide 22: Efficient capital management
Efficient capital management Reduction in par value and stock split (August 2001) l Reduction in par value (CHF 51 mn) - Bearer shares: from CHF 50 to CHF 5 - Registered shares: from CHF 10 to CHF 1 l Subsequent stock split 1:10 Share buy-back l Program 2000/2001 completed (12,439 shares for CHF 100
Slide 23: Consolidated income statement 2000
Consolidated income statement 2000 CHF mn 1999 2000 Change Net interest income 144 191 33% Net commissions/service fees 852 1308 54% Results from trading operations 185 196 6% Other income 26 34 29% Net operating income 1,207 1,729 43% Personnel expenses 497 691 39% Other operating expenses 284 317
Slide 24: Segment reporting 2000
Segment reporting 2000 CHF mn Priv. Inst. Mut. Bro- Trad- Corp. Group Bank Asset Funds kerage ing Cent. total Net operating income 607 228 199 380 234 81 1,729 Operating expenses 398 94 66 276 112 128 1,074 Result before taxes 209 134 133 104 122 -47 655 Taxes 53 39 33 49 34 -15 193 Result after tax