Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — Van Lanschot Kempen — FY2022 Earnings Presentation
31 slides from Kempen European High Dividend Fund N.V. N's earnings presentation, Feb 23, 2023
Slide 1: 2022 full-year results
ee 23 February 2023 2022 full-year results
Slide 2: The year in review
The year in review Our clients Our employees Our shareholders Society NPS of 36 for Private eNPS of 18 (target >10) Payment of €3.50 per Progress on our 2050 share (capital return: net zero goals, but still a Clients (target 20) lot of work to do Gender pay gap from 4% €1.50 and 2021 dividend: €2.00
Slide 3: 2022: Key financial highlights
2022: Key financial highlights • Net profit of €84.3m • Underlying net profit of €117.8m • Net AuM inflow at €13.7bn • AuM at €107.8bn Medium-term financial targets: • CET 1 ratio at 20.6% (target: 15% + M&A add-on of 2.5%) • RoCET 1 at 12.3% (target: 12% through the cycle) • Efficiency ratio at 73.
Slide 4: Sustainable and profitable growth with a capital-light balance sheet
Sustainable and profitable growth with a capital-light balance sheet Organic growth Bolt-on acquisitions Market performance
Slide 5: 2022 full-year results
ee 2022 full-year results
Slide 6: 2022: Key messages
2022: Key messages Net profit: €84.3m (2021: €143.8m), underlying net profit €117.8m (2021: €159.9m) • Commission income (+6%); stable margins – Private Clients: 63 bps, Wholesale & Institutional Clients: 12 bps • Increase in interest income (+6%) • Operating expenses up (+7%) Net AuM inflow of €13.
Slide 7: 2022: Performance
2022: Performance Net result €84.3m Operating expenses AuM €107.8bn Strong capital position (2021: €143.8m) €438.2m (2021: €115.6bn) CET 1 ratio 20.6% (+7%) (2021: 23.7%) Underlying net result €117.8m RoCET 1 at 12.3% (2021: €159.9m) (2021: 15.7%) Commission Efficiency ratio Client assets €124.2bn D
Slide 8: Net result amounts to €84.3m
Net result amounts to €84.3m Key drivers of net result (€ m) 9.1 22.3 -26.4 -28.2 -18.6 166.1 -11.7 143.8 143.8 148.7 -5.9 120.5 101.9 90.2 84.3 84.3 2021 Commission Interest Other income Operating One-off Reverse Tax and 2022 income income expenses charge for impairments other** Mercier and NSI* Va
Slide 9: Overview of net result
Overview of net result €m 2022 2021 % change Commission 407.8 385.5 6% Interest 162.7 153.6 6% Other income 29.2 55.6 -48% Income from operating activities 599.7 594.7 1% Operating expenses -438.2 -409.9 7% Gross result 161.5 184.8 -13% Loan loss provision 7.7 11.7 -34% Other impairments -1.1 6.5 Op
Slide 10: Private Clients: Continued high net inflows
Private Clients: Continued high net inflows AuM (€ bn) 2.0 • Net inflows: 55% non-discretionary, 42% -6.3 discretionary and 3% investment strategies • Net inflows well spread across NL, BE and CH • Operating profit before tax at €117.1m (2021: 44.8 44.8 €114.3m) 40.5 40.5 • Underlying operating prof
Slide 11: Private Clients: Strong net AuM inflow in Belgium of €0.7bn
Private Clients: Strong net AuM inflow in Belgium of €0.7bn • Van Lanschot Kempen acquired a 70% stake in Mercier Vanderlinden in 2021 and will add the remaining 30% stake in Q1 2023 • Ambition: to become a top-three player in the independent private banking market in Belgium • Van Lanschot Belgium
Slide 12: Wholesale & Institutional Clients: €11.6bn net inflow
Wholesale & Institutional Clients: €11.6bn net inflow AuM (€ bn) 12.0 -0.2 -0.2 -15.2 82.7 82.5 70.9 70.9 67.3 67.3 31/12/2021 Net fiduciary Net Net asset class Market 31/12/2022 management investment solutions performance inflows strategies inflows inflows • Two large new clients: BPF Schilders pen
Slide 13: Stable margins at both Private Clients and Wholesale & Institutional Clients
Stable margins at both Private Clients and Wholesale & Institutional Clients Annualised recurring fees* (€ m) AuM breakdown (~%) 11% 23% Private Clients 65% 359.5 329.6 339.8 306.9 270.3 23% 27% Wholesale & Institutional Clients YE2020 HY2021 YE2021 HY2022 YE2022 50% Equities Bonds Other • Stable Au
Slide 14: Investment Banking Clients: Stable commission income in challenging markets
Investment Banking Clients: Stable commission income in challenging markets Commission income (€ m) 48.9 55.3 56.0 2020 2021 2022 • Operating profit before tax fell to €9.7m (2021: €18.8m) in the wake of higher staff costs, lower income from securities trading and a book profit from the sale of Glob
Slide 15: Interest margins improved in H2 2022
Interest margins improved in H2 2022 Interest income (€ m) Interest margin (12-mth moving average, %) 93.0 1.01% 0.98% 0.95% 77.0 75.1 76.1 77.5 69.7 0.88% 0.94% 0.92% 0.94% 0.86% H1 2020 H2 2020 H1 2021 H2 2021 H1 2022 H2 2022 H1 2021 H2 2021 H1 2022 H2 2022 Clean interest margin* Interest margin •
Slide 16: Convergence path of savings rate to ECB deposit rate main driver of interest income
Convergence path of savings rate to ECB deposit rate main driver of interest income in the next few years Potential convergence paths of client rate on savings to ECB Interest income to benefit from slow convergence to deposit facility rate ECB deposit facility rate (€ m – delta to total interest in
Slide 17: Income from securities and associates
Income from securities and associates • Income from securities and associates at €7.8m (2021: €65.9m), with the decrease caused by: • Participating interests (Van Lanschot Participaties and Bolster Investment): • In 2022, the result on holdings in the private equity portfolio amounted to €16.3m, par
Slide 18: Result on financial transactions
Result on financial transactions Result on financial transactions at €21.3m (2021: -€10.3m), driven by • Result on futures €11.5m (2021: -€9.8m) – see previous slide • Result due to hedge accounting ineffectiveness of €9.3m (2021: -€6.1m) • Result on structured products activities • Year-end result:
Slide 19: Operating expenses developed in line with organic and inorganic growth
Operating expenses developed in line with organic and inorganic growth Operating expenses (€ m) 20.5 7.2 0.6 409.9 409.9 430.4 437.6 438.2 2021 Staff costs Mercier Other 2022 Vanderlinden • Staff costs up, mainly driven by a higher number of FTEs at 1,780 (2021: 1,654), reflecting our growth ambitio
Slide 20: Loan portfolio
Loan portfolio €m Loan Loan % change Impaired Provision Impaired Coverage portfolio portfolio loans ratio ratio 31/12/2022 31/12/2021 Mortgages 6,341 6,337 0% 24 1 0.4% 6% Other loans 2,371 2,199 8% 82 25 3.5% 31% Loan portfolio 8,712 8,536 2% 106 27 1.2% 25% Mortgages distributed by third parties 3
Slide 21: Release from loan loss provisions
Release from loan loss provisions Additions to loan loss provisions (€ m) Loan loss provision per stage €m 31/12/2021 31/12/2022 % change + 4 bps* -29 bps* -19 bps* Stage 1 3.6 6.1 69% 1.9 Stage 2 3.5 7.0 101% Stage 3 42.4 26.9 -36% Total 49.5 40.0 -19% -7.7 • Current management overlay amounts to -
Slide 22: Strong CET 1 ratio at 20.6%
Strong CET 1 ratio at 20.6% Dividend proposal of €1.75 per share (total €74.2m) Common Equity Tier 1 ratio (%) -2.8 1.1 -1.4 23.7 20.9 19.5 19.5 20.6 31/12/2021 DNB Capital Other 31/12/2022 Mortgage return floor Expected CET 1 ratio developments in 2023: • Impact of +0.8 percentage points related to
Slide 23: Solid capital position
Solid capital position Continued commitment to return excess capital • Our target for the CET 1 ratio: 15% plus an M&A add-on of 2.5% • At the time of announcement of the target, excess capital amounted to €145m (May 2022) • €61m excess capital returned in December 2022 • Plan to return €2.00 per sh
Slide 24: Financial targets overview
Financial targets overview Common Equity Tier 1 ratio Dividend pay-out ratio* 50-70% 15% + 2.5% 23.8% 24.3% 23.7% 21.1% 20.6% 65% 67% 61% 57% 53% 2018 2019 2020 2021 2022 Medium 2018 2019 2020 2021 2022 Medium term term Efficiency ratio Return on Common Equity Tier 1* 70.0% 12.0% 79.4% 85.7% 75.5% 6
Slide 25: Acquisition of Robeco online investment platform
Acquisition of Robeco online investment platform Positioning Evi van Lanschot for further growth Evi van Lanschot and Robeco The combined activities The future Evi van Lanschot • Online and personal • Become leader in mass- • €1.3bn in AuM • Combined €6.0bn in AuM affluent market • c. 25,000 clients
Slide 26: 2022: Performance
2022: Performance Net result €84.3m Operating expenses AuM €107.8bn Strong capital position (2021: €143.8m) €438.2m (2021: €115.6bn) CET 1 ratio 20.6% (+7%) (2021: 23.7%) Underlying net result €117.8m RoCET 1 at 12.3% (2021: €159.9m) (2021: 15.7%) Commission Efficiency ratio Client assets €124.2bn D
Slide 27: Appendix
ee Appendix
Slide 28: Key figures by segment: 2022
Key figures by segment: 2022 €m Private Wholesale & Investment Other Total Clients Institutional Banking Clients Clients Commission income 270.4 78.4 56.0 2.9 407.8 Interest income 155.8 -0.0 -0.0 7.0 162.7 Other income 2.2 -0.2 -1.0 28.1 29.2 Income from operating activities 428.3 78.2 55.0 38.1 59
Slide 29: Progress on our non-financial KPIs
Progress on our non-financial KPIs KPI Targets Performance in 2022 Performance in 2021 Manufactured Three-year relative performance of our managed propositions > benchmark 0.2% n/a capital Human and Employer Net Promoter Score (eNPS) >10 18 13 intellectual Employee engagement score (EES) > 80% 88% 8
Slide 30: High scores on external ESG ratings
High scores on external ESG ratings Governance: 1 B- rating Lower governance risk = 1 Higher governance risk = 10 ISS ESG Corporate Rating 8th place in league table of AA rating 486 entrants on resilience to ESG risks 21st place in a league table 4 and 5 stars (out of 5) for of 78 multinationals res
Slide 31: Disclaimer
Disclaimer Disclaimer and cautionary note on forward-looking statements This document may contain forward-looking statements and targets on future events and developments. These forward-looking statements and targets are based on the current insights, information and assumptions of Van Lanschot Kemp