Efg International Ag · SIX:EFGN
Efg International — FY2022 Earnings Presentation
43 slides from Efg International's earnings presentation, Feb 22, 2023
Slide 1: FY 2022 results presentation
EFG INTERNATIONAL FY 2022 results presentation 22 February 2023 – Zurich
Slide 2: Important Legal Disclaimer
Important Legal Disclaimer This document has been prepared by EFG International AG (“EFG”) solely for use by In view of these uncertainties, readers are cautioned not to place undue reliance you for general information only and does not contain and is not to be taken as on these forward-looking stat
Slide 3: Key highlights
Key highlights Giorgio Pradelli Chief Executive Officer EFG International I Full-year 2022 results 22 February 2023 Page 3
Slide 4: Record underlying net profit and dividend up 25%
Record underlying net profit and dividend up 25% Strong operational performance 249mn +48% • Solid NNA of CHF 4.2 billion, with positive inflows throughout the year; 4Q22 marks the 15th consecutive quarter of positive NNA • Top-line growth supported by rising interest rates, and stable costs, Underl
Slide 5: Successful completion of 2019-2022 strategic plan
Successful completion of 2019-2022 strategic plan underscores resilience and agility of business model Cumulative figures for 2019-2022 in CHF Financial targets End-2022 Net new assets for end-2022 4-6% 4.7% 26.6bn NNA growth average1 average Underlying net profit Revenue margin 85 bps 91 bps2 Cost/
Slide 6: Financial performance
Financial performance Dimitris Politis Chief Financial Officer & Deputy CEO EFG International I Full-year 2022 results 22 February 2023 Page 6
Slide 7: Strong operating performance leads to record underlying profitability
Strong operating performance leads to record underlying profitability • NNA of CHF 4.2 bn, annual growth rate of 2.4%, reflects deleveraging by clients • AuM at CHF 143.1 bn at year-end 2022. Reflects disposal of A&G of CHF 11.9 bn and negative market correction, partially offset by NNA inflows Busi
Slide 8: Key objectives in 2019-2022: improving profitability and de-risking legacy positions
Key objectives in 2019-2022: (1) improving profitability and (2) de-risking legacy positions Reconciliation of underlying net profit Strong improvement in underlying in CHF mn profitability De-risking of legacy positions • Final settlement of longstanding legacy issue: incremental provision of CHF 2
Slide 9: Financials summary
Financials summary 2022 2021 Revenue-generating AuM, CHF bn 143.1 172.0 Net new assets, CHF bn 4.2 8.8 Net new asset growth 2.4% 5.5% Operating income, CHF mn 1,270.0 1,254.6 Revenue margin, in bps 81 75 Operating expense, CHF mn 975.0 967.9 Cost-income ratio 76.0% 76.2% Operating profit, CHF mn 295
Slide 10: Financials summary
Financials summary 2H22 1H22 2H21 1H21 Revenue-generating AuM, CHF bn 143.1 155.8 172.0 172.0 Net new assets, CHF bn 2.5 1.7 4.6 4.2 Net new asset growth 3.2% 2.0% 5.3% 5.3% Operating income, CHF mn 666.1 603.9 625.3 629.3 Revenue margin, in bps 91 73 73 76 Operating expense, CHF mn 497.9 477.1 492.
Slide 11: Achieving 2022 financial targets through profitable growth and operating leverage
Achieving 2022 financial targets through profitable growth and operating leverage Continued business growth despite challenging markets Underlying net profit up 48% vs. 2021 RoTE NNA growth annualised Evolution of underlying profit in % in CHF mn 16.4% >2x 4.7% 248.7 CAGR 5.5 5.5 167.8 4.0 108.7 114
Slide 12: Strong track record in profitability provides solid starting point for next strategic cycle
Strong track record in profitability provides solid starting point for next strategic cycle Operating leverage driving growth Underlying operating profit Underlying net profit in CHF mn in CHF mn 309.6 248.7 236.5 189.9 167.8 166.9 108.7 114.4 2019 2020 2021 2022 2019 2020 2021 2022 Revenue 79 75 71
Slide 13: Agility in execution drove consistent profit growth in a volatile backdrop
Agility in execution drove consistent profit growth in a volatile backdrop Underlying net profit +5% Decrease in revenues +47% Significant top line growth +48% Strong top line growth offset by strong cost achieved while containing while costs kept flat 2019-2020 reduction 2020-2021 increase in costs
Slide 14: Strong track record in managing costs
Strong track record in managing costs Continuous drive to increase efficiency Underlying cost/income ratio in % -10 pp 85.2 Rigorous cost management 82.7 79.9 75.4 • Performance management based on clear KPIs: for CROs, front support and back-office units 2019 2020 2021 20221 • Strict monitoring of
Slide 15: NNA growth at 2.4% with positive NNA growth throughout 2022
NNA growth at 2.4% with positive NNA growth throughout 2022 NNA growth at 2.4% NNA growth across all three growth levers Revenue-generating AuM evolution in CHF bn Existing CROs (in CHF bn) 4.7 4.2 3.4 excl. 2.7 deleveraging 172.0 0.3 (11.9) 2020 2021 2022 New CROs1 (16.2) (in CHF bn) (3.9) (1.0) 14
Slide 16: Continental Europe & Middle East and Switzerland as growth drivers
Continental Europe & Middle East and Switzerland as growth drivers Business development by region Revenue-generating AuMs as % of RoAuM* NNA Growth NNA (excl. loans) Growth CHF 143.1 bn total AuM (in bps) CHF 4.2 bn (in %) CHF 5.2 bn (in %) Switzerland & Italy 42.3 30% 101 1.4 2.9% 1.9 4.8% Continen
Slide 17: Evolution of CRO productivity
Evolution of CRO productivity CRO hiring momentum CRO hiring and performance management remain Number of CROs CROs approved / top priorities +10 signed • EFG’s unique business model continued to 772 740 654 attract CROs with sizable portfolios 205 221 Shaw and A&G 77 A&G 79 218 Partners • Continuous
Slide 18: Net interest income drives overall revenue growth
Net interest income drives overall revenue growth Underlying operating income up 6% year on year Higher NII offsets lower commission income Underlying operating income • NII increased by 58%, benefitting from rising interest in CHF mn rates • Commission income reflects subdued client activity and 71
Slide 19: Stable costs underpin strong track record in cost management
Stable costs underpin strong track record in cost management Underlying cost-income ratio at 75.4% Operating expenses flat year on year Underlying operating expenses in CHF mn • Reflects continued disciplined cost management and successful conclusion of Footprint initiatives FTEs 2,932* 2,775* 2,775
Slide 20: Total balance sheet up 3%, driven by deposit growth
Total balance sheet up 3%, driven by deposit growth Total assets: Total liabilities & equity: CHF 43.5 bn CHF 43.5 bn Due to banks 0.9 Strong and highly liquid Cash & banks 11.6 balance sheet • Loan/deposit ratio of 44%* Treasury bills 3.1 Investment • Liquidity coverage ratio (LCR) 7.7 Deposits 34.
Slide 21: The strongest core regulatory capital position in recent years
The strongest core regulatory capital position in recent years Regulatory capital position Active management of RWAs Active capital management Total Capital Ratios* in % Breakdown of RWAs* in CHF bn • Share buyback of 7.7 mn shares in 2022 to fund employee incentive 21.5 plans 20.5 1.9 18.6 3.9 • Re
Slide 22: Underlying profit drives capital generation
Underlying profit drives capital generation Evolution of CET1 Capital ratio* in % Gross capital generation 3.2% Total Capital Net capital generation 1.8% Ratio 21.5 20.5 Tier 2 Ratio 1.9 0.2 3.2 18.6 Total Capital 0.7 3.9 Ratio Additional 3.8 1.9 Tier 1 Ratio (1.6) 3.9 (0.4) 17.2 (0.7) (0.2) CET1 Ca
Slide 23: 2025 financial targets
2025 financial targets 2025 targets1 Financial targets • Sustained business NNA growth 4-6% p.a.2 growth Revenue margin 85bps • Increasing operating leverage to deliver Cost/income ratio 69% enhanced profitability • New Long-Term RoTE 15-18% Incentive Plan (LTIP) to Capital management framework furt
Slide 24: Outlook and strategic priorities
Outlook and strategic priorities Giorgio Pradelli Chief Executive Officer EFG International I Full-year 2022 results 22 February 2023 Page 24
Slide 25: 2025 ambition: Sustaining profitable growth, achieving scale
2025 ambition Sustaining profitable growth, achieving scale 2023-2025 Sustaining profitable growth, 2019-2022 achieving scale 2016-2018 Profitable growth Acquisition and 3 integration 2 Consistent delivery of operating 1 Cost discipline, consistent leverage and strong focus on delivery and implement
Slide 26: Entering new strategic cycle 2023-2025 from a position of strength
Entering new strategic cycle 2023-2025 from a position of strength and well placed to create value Growth accelerators Consistent financial and differentiators performance Drivers of sustainable profitable growth Content innovation Enhancing quality and enriching product offering to drive profitabil
Slide 27: Capital-light and diversified business model delivers strong operating results
Capital-light and diversified business model delivers strong operating results throughout the cycle Strategic priorities Financial targets1 2025 Maintain growth momentum by delivering NNA growth 4-6% p.a.2 first-class solutions and advice to clients Revenue margin 85bps Expand operating leverage to
Slide 28: EFG International I Full-year 2022 results 22 February 2023 Page 28
EFG International I Full-year 2022 results 22 February 2023 Page 28
Slide 29: Appendix
Appendix EFG International I Full-year 2022 results 22 February 2023 Page 29
Slide 30: Income statement (IFRS)
Income statement (IFRS) (in CHF million) 2022 2021 Net interest income 395.5 259.3 Net banking fee & commission income 629.5 756.5 Net other income 245.0 238.8 Operating income 1,270.0 1,254.6 Personnel expenses (688.7) (691.0) Other operating expenses (203.6) (194.6) Amortisation of tangible fixed
Slide 31: Income statement (IFRS)
Income statement (IFRS) (in CHF million) 1H21 2H21 1H22 2H22 Net interest income 127.2 132.1 152.0 243.5 Net banking fee & commission income 374.1 382.4 355.9 273.6 Net other income 128.0 110.8 96.0 149.0 Operating income 629.3 625.3 603.9 666.1 Personnel expenses (345.8) (345.2) (334.2) (354.5) Oth
Slide 32: Underlying income statement
Underlying income statement (in CHF million) 2022 2021 Net interest income 406.9 257.5 Net banking fee & commission income 629.5 756.5 Net other income 224.9 171.1 Operating income 1,261.3 1,185.1 Personnel expenses (688.7) (691.0) Other operating expenses (263.0) (257.6) Total operating expenses (9
Slide 33: Underlying income statement
Underlying income statement (in CHF million) 1H21 2H21 1H22 2H22 Net interest income 127.1 130.4 154.0 252.9 Net banking fee & commission income 374.1 382.4 355.9 273.6 Net other income 83.1 88.0 91.9 133.0 Operating income 584.3 600.8 601.8 659.5 Personnel expenses (345.8) (345.2) (334.2) (354.5) O
Slide 34: Reconciliation of Underlying results to IFRS results 2022
Reconcilation of Underlying results to IFRS results 2022 Acquisition relate Exceptional legal costs & (in CHF million) Underlying results 2022 Life insurance IFRS results 2022 intangible amortisation provisions Net interest income 406.9 (12.0) 0.6 395.5 Net banking fee & commission income 629.5 629.
Slide 35: Balance sheet (IFRS)
Balance sheet (IFRS) (in CHF million) Dec 2021 Dec 2022 Cash and balances with central banks 9,802 9,488 Treasury bills and other eligible bills 1,453 3,055 Due from other banks 2,562 2.096 Derivative financial instruments 974 1,796 Financial assets at fair value through P&L 1,807 1,458 Investment s
Slide 36: Breakdown of AuM
Breakdown of AuM 31 Dec 2022 By category 31 Dec 2021 31 Dec 2022 (in CHF bn) Cash & deposits 21% 25% 35.8 Bonds 20% 20% 29.0 Equities 36% 31% 44.9 Structured products 3% 3% 4.2 Loans 11% 12% 17.3 Hedge funds 2% 2% 3.2 Other 7% 6% 8.7 Total 100% 100% 143.1 31 Dec 2022 By currency 31 Dec 2021 31 Dec 2
Slide 37: Evolution of mandate penetration
Evolution of mandate penetration Evolution of mandate penetration Penetration of advisory, discretionary mandates and funds as % of AuM, excluding loans and IAM business 65-70% 57% 56% 52% 54% 40% 20181 2019 2020 2021 2022 2025 target 1 2018 includes IAM business EFG International I Full-year 2022 r
Slide 38: Segmental analysis 2022
Segmental analysis 2022 Continental Investment Global Performance summary Switzerland Europe & Americas UK Asia Pacific & Wealth Markets & Corporate Elimination Total (in CHF mn) & Italy Middle East Solutions Treasury Segment revenues 359.3 194.2 102.3 154.6 166.6 139.6 173.5 (20.1) - 1,270.0 Segmen
Slide 39: Segmental analysis 2021
Segmental analysis 2021 Continental Investment Global Performance summary Switzerland Europe & Americas UK Asia Pacific & Wealth Markets & Corporate Elimination Total (in CHF mn) & Italy Middle East Solutions Treasury Segment revenues 295.7 208.4 79.5 145.4 178.9 150.8 114.9 81.0 - 1,254.6 Segment e
Slide 40: New Long-Term Incentive Plan to further align interests with shareholders
New Long-Term Incentive Plan to further align interests with shareholders Key terms of the proposed Long-Term Incentive Plan (LTIP) • Proposal to AGM 2023 to introduce a new Long-Term Incentive Plan (LTIP) for senior management1 • LTIP with specific profitability and growth targets, based on financi
Slide 41: Update on Life Insurance Exposures
Update on Life Insurance Exposures Life insurance related portfolios Outright portfolio • Legacy exposures acquired more than 10 years ago Death Outright portfolio carried at fair value (marked-to-model, Level 3) for IFRS accounts – small benefits Net Cashflow • size of portfolio introduces substant
Slide 42: Update on Life Insurance Exposures (II)
Update on Life Insurance Exposures (II) • Death benefit: CHF 1,065.2 mn • Non-underlying Direct holding of life insurance policies for 156 Carrying value: CHF 558.4 mn Operating income CHF 4.8 mn Outright • • insureds (2021: 181) of an portfolio average age of 93.5 years • 2022 premium: CHF 118.7 mn
Slide 43: Contacts
Contacts Investors Media Investor Relations Marketing & Communications Jens Brueckner Daniela Haesler Head of Investor Relations Head of Marketing & Communications Phone +41 44 226 1799 Phone +41 44 226 1804 jens.brueckner@efginternational.com daniela.haesler@efginternational.com EFG International A