Efg International Ag · SIX:EFGN

Efg International — FY2023 Earnings Presentation

38 slides from Efg International's earnings presentation, Feb 21, 2024

  1. Slide 1: Full-year 2023 results presentation

    Full-year 2023 21 February 2024 results presentation Zurich

  2. 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 on you for general information only and does not contain and is not to be taken as these forward-looking stat

  3. Slide 3: Highlights

    01 Highlights Giorgio Pradelli Chief Executive Officer

  4. Slide 4: Record profitability and accelerated delivery of 2025 strategic plan

    Record profitability and accelerated delivery of 2025 strategic plan brings us one year ahead of schedule +50% Strong operating performance 303 Net profit, in CHF million target range  Resilient and well-diversified business delivering strong and consistent operational performance p.a.  Record pro

  5. Slide 5: Creating value for stakeholders today while investing for the future

    Creating value for stakeholders today while investing for the future Generating attractive returns for shareholders Investing for future growth People +22% 0.55 Hiring 141 new CROs and expanding talent base to accelerate growth, achieve scale and further build brand Dividend per share, in CHF Digita

  6. Slide 6: Financial performance

    02 Financial performance Dimitris Politis Chief Financial Officer & Deputy CEO

  7. Slide 7: Record profit of CHF 303 mn in 2023

    Record1 profit of CHF 303 mn in 2023 Another step change in profitability Key highlights Evolution of IFRS net profit in CHF mn  Net profit up 50% vs. 2022  Revenue outperformance, supported by +50% higher interest rate environment 303.2  Strategically taking the opportunity to 205.8 202.4 invest

  8. Slide 8: Record profitability and strong capital position

    Record profitability and strong capital position Business development Profitability Capital & Liquidity NNA +13% +420 bps Gross capital +4.4% growth Revenue growth generation Revenue CET1 capital 99 bps 73.3% Cost-income ratio, 17.0% ratio margin down -2.7 pp +141 CROs hired, signed & 303.2 m Net pr

  9. Slide 9: Financials summary

    Financials summary In CHF mn 2023 2022 Variation vs. 2022 Revenue-generating AuM (bn) 142.2 143.1 -0.6% Net new assets (bn) 6.2 4.2 +47.6% Net new assets growth rate (%) 4.4% 2.4% +2 pp Revenue margin (bps) 99 81 +18 bps Operating income 1,430.7 1,270.0 +12.7% Operating expenses 1,057.9 975.0 +8.5%

  10. Slide 10: Financials summary

    Financials summary In CHF mn 2H23 1H23 2H22 1H22 Revenue-generating AuM (bn) 142.2 146.5 143.1 155.8 Net new assets (bn) 3.2 3.0 2.5 1.7 Net new assets growth rate (%) 4.4% 4.2% 3.2% 2.0% Revenue margin (bps) 98 100 91 73 Operating income 705.9 724.8 666.1 603.9 Operating expenses 530.2 527.7 497.9

  11. Slide 11: Consistent delivery supports strong start for the 2023-2025 business cycle

    Consistent delivery supports strong start for the 2023-2025 business cycle Net new asset growth Cost/income ratio NNA growth in % Evolution CIR in % 4-6% per 69% annum 84.3 83.1 76.2 76.0 73.3 5.5 5.5 4.0 4.4 2.4 2019 2020 2021 2022 2023 2019 2020 2021 2022 2023 Revenue margin Return on tangible equ

  12. Slide 12: NNA growth of 4.4% in FY 2023 – supported from new hires

    NNA growth of 4.4% in FY 2023 – supported from new hires AuM evolution NNA growth levers Revenue-generating AuM evolution in CHF bn Existing CROs in CHF bn 4.7 6.2 5.9 143.1 (10.2) 142.2 (1.6) 1.3 1.1 2021 2022 2023 New CROs1 in CHF bn Dec 22 NNA Market FX Other Dec 23 5.1  Strongest NNA performanc

  13. Slide 13: Double-digit NNA growth in three major business regions

    Double-digit NNA growth in three major business regions Regional business development AuM breakdown NNA Growth NNA (excl. loans) Revenue-generating AuM RoAuM* CHF 6.2 bn (in %) growth (in %) CHF 142.2 bn (in bps) Switzerland &  Asia Pacific region recorded Switzerland & -1.5 -3.7% -3.1% strong infl

  14. Slide 14: Strong hiring momentum results in 141 new CROs

    EFG positioned as an attractive employer of choice – Strong hiring momentum results in 141 new CROs CRO evolution CRO additions AuM per CRO # of CROS # of new CROs AuM per CRO (excl. Shaw and Partners) in CROs approved / +26 CHF mn signed 141 Shaw and 661 654 693 21 Partners Shaw and Approved 5 221

  15. Slide 15: Revenue margin increases to 99 bps

    Revenue margin increases to 99 bps Substantial increase in operating income Key highlights Operating income in CHF mn  Significant increase in NII vs. 2022, driven by 81 99 interest rate environment bps bps  Commission margin increased by 1 bp vs. 156.2 143.9 2022, supported from higher recurring

  16. Slide 16: Strengthening EFG’s content capabilities

    Strengthening EFG’s content capabilities Evolution of mandate penetration Key developments Penetration of advisory, discretionary mandates and funds as % of AuM, excluding loans and IAM business  Continued focus on increasing mandate penetration to drive improvements in 65-70% recurring revenue mar

  17. Slide 17: Focus on revenue margin evolution and drivers

    Focus on revenue margin evolution and drivers – Actions to increase commission margin Revenue margin evolution What drives Net Interest Income in bps – excl. life insurance portfolio Sight deposits, in CHF bn Interest rate sensitivity1 for a 100 bps decrease in interest rates in CHF mn -63 USD 24.6

  18. Slide 18: Further improving efficiency, while investing in growth

    Further improving efficiency, while investing in growth Cost-to-income ratio improves to 73.3% Increase in personnel expenses reflects growth investment Key highlights Operating expenses in CHF mn  Cost-to-income ratio improves to 73.3%, despite investing in talent and technology FTEs 2,828 3,025 

  19. Slide 19: Active cost management in place

    Active cost management in place Operating expense evolution in FY 2023 Key highlights in CHF mn  Ongoing rigorous cost management efforts CIR 76.0% -3 pp 73.3%  Expanded the Simplicity cost management scope1 to CHF 60 mn (previously CHF 40 mn) by 2025 23 69 41  On track to deliver the announced c

  20. Slide 20: Strong balance sheet & liquidity

    Strong balance sheet & liquidity Balance sheet highlights Key metrics in CHF bn 31 Dec 2022 31 Dec 2023 38.6 38.6 Assets bn bn Liabilities & Equity CET1 capital ratio (%) 14.7% / 16.6%* 17.0% 0.9 Due to banks Total capital ratio (%) 18.6% / 20.5%* 21.0% Cash & banks 7.3 RWAs (CHF bn) 9.0 bn 8.6 bn T

  21. Slide 21: Strong profitability trend drives capital generation

    Strong profititability trend drives capital generation Dividend of CHF 0.55 per share, up 22% Evolution CET1 capital ratio Gross capital generation 4.2% Net capital generation 1.5% 20.5 21.0 4.2 Total Capital Total Capital 3.9 (0.6) 4.0 Ratio Ratio (2.1) CET1 Capital (0.9) (0.2) 17.0 CET1 Capital 16

  22. Slide 22: Key takeaways of FY 2023 financial results

    Key takeaways of FY 2023 financial results 2025 Financial targets Strong start into the 2023-2025 financial cycle NNA growth 4-6% p.a. Revenue margin 85 bps Confident on delivery in 2025 Cost/income ratio 69%  Business development RoTE Priorities for 2024  Recurring commission income 15-18%  Cost

  23. Slide 23: Outlook and priorities

    03 Outlook and priorities Giorgio Pradelli Chief Executive Officer

  24. Slide 24: Strong start to the 2023-2025 strategic cycle

    Strong start to the 2023-2025 strategic cycle and increasing confidence to exceed 2025 ambitions 2023 - 2025 2023 2023 Sustaining profitable Faster delivery than Investing in the 2019 - 2022 growth, achieving scale planned future Strong track record of profitable growth People 15- RoTE 6.8% 13.4% 18

  25. Slide 25: Outlook and priorities for 2024

    Expected change in monetary policy and elevated geopolitical risks will continue to dominate operating environment in 2024 Interest rates peaked1 Elevated geopolitical Outlook and priorities for 2024 risks Manage declining net interest margin More volatile operating conditions with reversal of globa

  26. Slide 26: Record 2023 financial results and confident outlook for 2025 and beyond

    Record 2023 financial results and confident outlook for 2025 and beyond Step-change in profitability brings us one year ahead of schedule Strategic investments expected to accelerate sustainable and profitable growth Increasing confidence to exceed 2025 ambition EFG International I Full-year 2023 re

  27. Slide 27: EFG International I Full-year 2023 results 21 February 2024 Page 27

    EFG International I Full-year 2023 results 21 February 2024 Page 27

  28. Slide 28: Appendix

    ErG () / Appendix

  29. Slide 29: Income statement (IFRS)

    Income statement (IFRS) In CHF mn 2023 2022 Net interest income 512.0 395.5 Net banking fee & commission income 587.2 629.5 Net other income 331.5 245.0 Operating income 1,430.7 1,270.0 Personnel expenses (764.8) (688.7) Other operating expenses (214.5) (203.6) Amortisation of tangible fixed assets

  30. Slide 30: Income statement (IFRS)

    Income statement (IFRS) In CHF mn 2H23 1H23 2H22 1H22 Net interest income 262.6 249.4 243.5 152.0 Net banking fee & commission income 293.0 294.2 273.6 355.9 Net other income 150.3 181.2 149.0 96.0 Operating income 705.9 724.8 666.1 603.9 Personnel expenses (383.2) (381.6) (354.4) (334.2) Other oper

  31. Slide 31: Balance sheet highlights

    Balance sheet highlights In CHF mn 31 Dec 2022 31 Dec 2023 Cash & banks 11,584 7,345 Treasury bills 3,055 2,341 Derivatives 1,796 1,574 Financial instruments 9,128 9,853 Loans 16,748 16,019 Goodwill & intangibles 239 204 Other 988 1,250 Total assets 43,538 38,586 Due to banks 923 943 Due to customer

  32. Slide 32: AuM evolution

    AuM evolution AuM by asset class AuM by asset class in % FY 2022 in % FY 2023 Other Other Hedge funds Hedge funds 6% 6% Cash & Deposits 2% 2% Loans Cash & Deposits Loans 25% 23% 12% 12% Structured Structured 3% 3% products products CHF 143.1 bn CHF 142.2 bn 20% 23% 31% 32% Bonds Bonds Equities Equit

  33. Slide 33: Segmental analysis 2023

    Segmental analysis 2023 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 451.9 256.7 133.1 178.2 165.5 122.4 83.7 39.2 - 1,430.7 Segment e

  34. Slide 34: 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

  35. Slide 35: Update on Life Insurance Exposures (I)

    Update on Life Insurance Exposures (I) Life insurance related portfolios  Legacy exposures acquired more than 10 years ago Outright portfolio  Outright portfolio carried at fair value (marked-to-model, Level 3) for IFRS accounts – small size Death of portfolio introduces substantial P&L volatility

  36. Slide 36: Update on Life Insurance Exposures (II)

    Update on Life Insurance Exposures (II)  Direct holding of life insurance policies for  Death benefit: CHF 754.2 mn 125 insureds (2022: 156) of an average age Carrying value: CHF 426.3 mn Outright  of 94.3 years portfolio  2023 premium: CHF 80.3 mn  Life expectancy: 3.5 years  Operating income

  37. Slide 37: Financial calendar 2024

    Financial calendar 2024 Event Date Annual General Meeting 2024 22 March 2024 4M business update 2024 28 May 2024 Half-year 2024 financial results 24 July 2024 EFG International I Full-year 2023 results 21 February 2024 Page 37

  38. Slide 38: 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

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