Vontobel Holding Ag · SIX:VONN
Vontobel — H1 2018 Earnings Presentation
53 slides from Vontobel's earnings presentation, Jul 27, 2018
Slide 1: Vontobel half-year 2018 results
Vontobel half-year 2018 results Zeno Staub Martin Sieg Castagnola CEO CFO July 27, 2018
Slide 2: Cautionary statement regarding forward-looking statements and disclaimer
Cautionary statement regarding forward-looking statements and disclaimer July 27, 2018 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-l
Slide 3: Overview
Overview July 27, 2018 Highlights Half-year 2018 results Strategy update Outlook Questions and answers
Slide 4: Vontobel delivers on its investments in growth
Vontobel delivers on its investments in growth: advised client assets reach new high, significant increase in profitability July 27, 2018 Key figures1 as of June 30, 2018 Client assets Net new money CHF 253.6 bn including CHF 191.2 bn CHF 5.1 bn of advised client assets Operating income Group net pr
Slide 5: With strong organic growth and the integration on track, we will stay focused on the future
With strong organic growth and the integration on track, we will stay focused on the future July 27, 2018 Clients continue to endorse our products and services – Operating income growth accelerated to 13%, driven by Combined Wealth Management1 and Asset Management – Net new money (NNM) inflows of CH
Slide 6: Half-year 2018 results
Overview July 27, 2018 Highlights Half-year 2018 results Strategy update Outlook Questions and answers
Slide 7: Advised client assets reach new high at CHF 191 billion
Advised client assets reach new high at CHF 191 billion despite a challenging environment July 27, 2018 Advised client assets (CHF bn, end of period) Advised client assets by client domicile (mid-2018) 191 Others 10% p.a. 187 9 Italy 9 7% 13 13 165 155 7 5% 148 6 11 Switzerland 142 140 UK 6 10 40% 6
Slide 8: Vontobel grows operating income by 13% – Group net profit up 31%
Vontobel grows operating income by 13% – Group net profit up 31% despite investment in growth (up 25% on comparable basis) July 27, 2018 Development of key figures Comments Operating income rose 13% due to 30-06-18 30-06-17 ∆ increased asset base and higher Operating income (CHF mn) 583.3 517.5 +1
Slide 9: Vontobel delivers strong growth in Group net profit
Vontobel delivers strong growth in Group net profit July 27, 2018 Group net profit (CHF mn) Comments C/I Ratio C/I Ratio 76.1% 72.0% – Group net profit increased by 31%, or 25% on an adjusted basis +31% – Growth was driven by Combined 26.6 132.7 Wealth Management and Asset Management 4.6 106.1 – In
Slide 10: Combined Wealth Management with good net new money inflows
Combined Wealth Management1 with good net new money inflows … July 27, 2018 Net new money2 (CHF bn) Development of AuM (CHF bn) AuM Development 4.8% 5.7% 4.8% 6.8% 6.4% ∆ in % 54.9 1.7 31.12.2017 54.0 +9% p.a. 48.5 1.6 42.3 NNM WM 1.3 2.3 38.4 38.9 1.1 1.0 0.9 NNM EAM 0.5 0.9 Other3 -0.9 -1.5 30.06.
Slide 11: Increased profitability due to strong revenue growth and lean business model
… and increased profitability due to strong revenue growth and focus on a lean and scalable business model July 27, 2018 Gross margin on AuM (bps) Advised client asset split (%) Profit before tax (CHF mn) and CIR (%) +46% 73 73 69 682 56.2 66 75 76 Other 73 76 13% 37.6 38.4 69 34.2 33.7 Liquidity 20
Slide 12: Asset Management with above-target inflows – new record AuM
Asset Management with above-target inflows – leading to new record AuM … July 27, 2018 Net new money1 (CHF bn) Development of AuM2 (CHF bn) AuM development 13.4% -3.8% -3.0% -21.1% 7.2% ∆ in %3 5.2 +12% p.a. 112.3 31.12.2017 110.3 97.2 3.8 91.3 NNM 3.8 3.4 86.4 72.1 FX 0.5 0.5 Performance -1.9 -1.7
Slide 13: Strong pre-tax profit due to balanced book of business
… and strong pre-tax profit due to our balanced book of business July 27, 2018 Gross margin on AuM1 (bps) Advised client asset split (%) Pre-tax profit (CHF mn) and CIR (%) +33% 51 51 92.5 46 85.3 43 42 67.9 69.5 Multi Asset 75 33% Equity 69 39% 66 60 44.2 59 29% Fixed Income 1H14 1H15 1H16 1H17 1H1
Slide 14: Financial Products is expanding successfully in Europe and Asia
Financial Products is expanding successfully in Europe and Asia – increased turnover of own products and on deritrade® MIP July 27, 2018 Turnover of listed and non-listed Vontobel products1 (CHF bn) Notional volume issued on deritrade® MIP (CHF bn) Listed products in Europe and Asia (mid-2018) MARKE
Slide 15: Financial Products makes significant investments in future growth
Financial Products makes significant investments in future growth but continues to deliver robust profits July 27, 2018 Operating income1 (CHF mn) Investments Pre-tax profit1 (CHF mn) and CIR (%) +1% 159 51.5 51.9 143 121 38.4 111 102 Technology 30.0 73 68 27.3 73 64 67 New markets 1H14 1H15 1H16 1H
Slide 16: Acceleration in Asset Management and Combined Wealth Management
Acceleration in Asset Management and Combined Wealth Management – now jointly accounting for 74% of pre-tax profit2 July 27, 2018 Pre-tax profit of core activities (IFRS, CHF mn) Combined Wealth Management1 Asset Management Financial Products +33% 92.5 69.5 +46% +1% 56.2 51.5 51.9 38.4 1H17 1H18 1H1
Slide 17: Higher capital ratios – capital structure improved by issuing AT1 capital
Higher capital ratios – capital structure improved by issuing additional Tier 1 capital July 27, 2018 Capital ratios 26.4% CET1 ratio improved to 19.1% from 18.4% at end-2017 Tier-1 capital ratio increased significantly to 7.3% 26.4% (18.4%), due to the issuance of notional CHF 450 million Addit
Slide 18: Strategy update
Overview July 27, 2018 Highlights Half-year 2018 results Strategy update Outlook Questions and answers
Slide 19: Strategy 2020: Progress on strategic priorities
Strategy 2020: Progress on strategic priorities July 27, 2018 Deliver the unique Vontobel experience Empower people Create brand excitement among our clients Boost growth and market share Drive efficiency 19
Slide 20: Our efforts to build the leading Swiss wealth manager are paying off
Our continuous efforts to build the leading Swiss wealth manager are paying off July 27, 2018 AuM (in CHF bn) Gross margin2 (in bps) stabilizing +9% p.a. -3% p.a. 54.9 48.5 76 73 73 69 66 68 35.6 38.4 38.9 42.3 Differentiated Services Investment Tailored to Content client needs 1H13 1H14 1H15 1H16 1
Slide 21: Integration of Notenstein La Roche in Combined Wealth Management on track
Integration of Notenstein La Roche in Combined Wealth Management on track July 27, 2018 Closing Front organization Migration – Successfully closed the transaction on – Vontobel now has 13 locations across – System integration (master data / position July 2 Switzerland data) – Goodwill premium is unc
Slide 22: Bringing our track record on innovation to Wealth Management
Bringing our track record on innovation to the Wealth Management space July 27, 2018 Anytime & anywhere Fully bespoke in real-time Relevant, pro-active Excite & engage and learning 22
Slide 23: Asset Management runs a diversified line-up of specialized boutiques
Asset Management runs a well-diversified and global line-up of specialized boutiques focused on high-conviction investing July 27, 2018 Diversified book of business Well positioned for future growth Total advised client assets: CHF 124.2 bn (mid-2018) – Business is well diversified and can distribut
Slide 24: Financial Products continues to gain market share and leverage technology
Financial Products continues to gain market share and further leverages technology leadership July 27, 2018 Focus on existing Gain market share in Enter markets with business in Europe newly entered markets low marginal cost of entry Market share gains and new markets Hong Kong Denmark & Norway Asia
Slide 25: With our results we hit our 2020 goals
With our results we hit our 2020 goals July 27, 2018 Growth Profitability Capital and payout Top-line growth (in %) Return on equity (in %) Total capital ratio (in %, end of period) 13 26.4 15.1 > 12 > 162 4-6 1H18 Target 20201 1H18 Target 2020 1H18 Target 2020 Net new money growth (in %) Cost/incom
Slide 26: Vontobel raises targets after strong performance and Notenstein La Roche acquisition
Vontobel raises targets after strong performance and Notenstein La Roche acquisition July 27, 2018 new Growth Profitability Capital and payout CET1 capital >12% Top-line >14% 4 - 6% RoE >12% growth1 Total Vontobel capital >16% Net new <72% 4 - 6% CIR <75% money Payout >50% > 68 Combined RoA > 65 bps
Slide 27: Outlook
Overview July 27, 2018 Highlights Half-year 2018 results Strategy update Outlook Questions and answers
Slide 28: We need to focus on agility, selectivity and talent
We need to focus on agility, selectivity and above all on talent in today’s new world July 27, 2018 A few trends are coming to an end … In this world … – A rising tide of liquidity that lifts all boats and has – Agility is more important than sheer scale driven the largest bond bull market ever, as
Slide 29: Outlook
Outlook July 27, 2018 A growing industry in a Accelerated profit growth Vontobel to focus on organic challenging environment despite investments growth – Expansion of asset pools driven – Strong brand to foster organic by generation of new wealth and growth long-term asset appreciation 25% 132.7 – C
Slide 30: Questions and answers
Overview July 27, 2018 Highlights Half-year 2018 results Strategy update Outlook Questions and answers
Slide 31: Appendix
Appendix 31
Slide 32: Vontobel is focused on solidly growing markets
Vontobel is focused on solidly growing markets and is delivering value through a distinctive first-class offering July 27, 2018 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 HNWI
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 July 27, 2018 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 assets
Slide 34: All core activities with ambitious targets for 2020
All core activities with ambitious targets for 2020 July 27, 2018 Combined Wealth Management1 Asset Management Financial products NNM growth2 (in %) NNM growth2,3 (in %) Operating income2 6.4 7.2 317.4 > 300 4-6 4-6 1H18 Target 20201 1H18 Target 2020 1H18 Target 2020 Gross margin on AuM (in bps) Gro
Slide 35: 95% of advised client assets stem from home and focus markets
95% of advised client assets stem from home and focus markets July 27, 2018 Advised client assets by client domicile as of mid-2018 (CHF bn) Home Focus markets Other markets market EMERGING SWITZERLAND GERMANY ITALY UK US Total MARKETS1 Advised client assets 77.2 23.5 10.4 18.4 20.8 28.2 12.7 191.2
Slide 36: Vontobel sets itself apart with client-specific needs offering
Vontobel sets itself apart by providing an offering based on client-specific needs – an important driver of organic growth July 27, 2018 Clients are traditionally segmented by the … but Vontobel’s offering is industry according to their wealth … based on client-specific needs Ultra-high-net-worth in
Slide 37: Clients and third parties reward us for our offerings
Clients and third parties reward us for our offerings July 27, 2018 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 promote
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 July 27, 2018 Private banks in Switzerland Comments ~ –30% – Number of Swiss private banks has 158 decreased by around 30% since 147 2011 138 131 – Structural change is expected 119
Slide 39: Wealth Management clearly distinguishes itself from competitors
Wealth Management clearly distinguishes itself from its competitors and attracts top-tier talent July 27, 2018 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 pref
Slide 40: EAM business has unique market position
EAM business has unique market position and growth translates into significantly higher pre-tax profit July 27, 2018 Growth of asset base combined with stable margin translates into Vontobel has built a significantly higher pre-tax profit due to operating leverage unique market position – Outstandin
Slide 41: Vontobel Asset Management's client coverage
Vontobel Asset Management’s client coverage July 27, 2018 ICELAND CANADA MAJOR EUROPEAN MARKETS SOUTH USA KOREA CHINA JAPAN VARIOUS CARIBBEAN MIDDLE EASTERN TAIWAN ISLANDS MARKETS HONG KONG THAILAND COLOMBIA SINGAPORE PERU BRAZIL BOTSWANA AUSTRALIA CHILE SOUTH AFRICA NEW ZEALAND 41
Slide 42: Vontobel provides asset management offering to financial institutions
Vontobel provides compelling asset management offering to financial institutions July 27, 2018 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 Luxemb
Slide 43: Financial Products competitive lead
Leading offering and technology, well-balanced business model and cost leadership give Financial Products a competitive lead July 27, 2018 Leading offering / technology Well-balanced business model Cost leadership Vontobel products issued – Vontobel sells volatility through leverage – Industry-leadi
Slide 44: Vontobel Financial Products business model
Vontobel Financial Products provides investment content and bespoke structured products through a well-balanced business model July 27, 2018 Capital markets Vontobel’s derivatives factory Distribution advisory Investment content Risk – Exchanges – OTC – Interbank markets Asset classes open – Fixed i
Slide 45: 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 July 27, 2018 Innovation cycles Benefits of Vontobel’s multi-issuer platform – deritrade® MIP provides full customization capabilities at best prices – bringing the Internet
Slide 46: Financial Products market share across all markets (1/2)
Financial Products with stable or growing market share across all markets (1/2) July 27, 2018 Switzerland (CHF bn) 8 60% Rank #11 6 45% MARKET SHARE 4 30% Turnover 31.0%1 2 15% 0 0% # of trades 44.5%1 Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dez Jun 07 08 08 09
Slide 47: Financial Products market share across all markets (2/2)
Financial Products with stable or growing market share across all markets (2/2) July 27, 2018 Italy2 (EUR bn) 8 20% Rank #41 6 15% MARKET SHARE 4 10% Turnover 7.4%1 2 5% 0 0% # of trades 10.4%1 Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dec Jun Dez Jun 07 08 08 09 09 10
Slide 48: High quality of bond portfolio maintained
High quality of bond portfolio maintained July 27, 2018 Counterparty exposure by rating (mid-2018) Counterparty exposure by sector (mid-2018) 5% 1% 21% 21% 33% 46% 27% 46% AAA A Other Government/public sector bodies AA BBB Financials Corporates (non-financials) Note: Total issuer risk from debt inst
Slide 49: Financial Products accounts for less than one-third of capital usage
Financial Products accounts for less than one-third of capital usage July 27, 2018 Capital consumption as of mid-2018 (CHF mn) 270.0 781.9 217.1 290.2 5.7 196.1 38.4 194.7 89.8 150.3 98.7 155.5 5.1 41.7 216.7 0.0 61.2 65.1 64.6 32.4 124.7 10.2 0.0 17.5 Combined Wealth Asset Management Financial Prod
Slide 50: Amortization of intangibles from former acquisitions is declining
Amortization of intangibles from former acquisitions is declining and will lead to an improvement in the CIR of around 1pp July 27, 2018 Amortization of intangibles from former acquisitions (CHF mn) Comments CIR -1 pp – Amortization of intangibles includes these acquisitions: 12.5 11.9 – Commerzbank
Slide 51: Strategy has delivered attractive returns to shareholders
Successful implementation of Vontobel’s strategy has delivered attractive returns to shareholders for more than a decade July 27, 2018 Return on equity and dividends Comments – Attractive business with average 21.6% return on equity of 12.0% since 19.2% 2003 – clearly above Vontobel’s 18.0% cost of
Slide 52: Additional transparency on wealth management activities
Vontobel provides additional transparency on its wealth management activities July 27, 2018 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 Asset Ma
Slide 53: Vontobel families hold more than 50% of share capital
Vontobel families hold more than 50% of share capital and are strongly committed to Vontobel July 27, 2018 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 10.0