Efg International Ag · SIX:EFGN
Efg International — H1 2024 Earnings Presentation
38 slides from Efg International's earnings presentation, Jul 24, 2024
Slide 1: Half-year 2024 results presentation
Half-year 2024 results presentation 24 July 2024 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 on you for general information only and does not contain and is not to be taken as these forward-looking stat
Slide 3: Highlights
01 Highlights Giorgio Pradelli Chief Executive Officer
Slide 4: Record profitability and accelerated growth
Record profitability and accelerated growth 4-6% Building scale target range 7.3% p.a. Accelerated growth with strong NNA of CHF 5.2 billion shows that investments made in 2023 are bearing fruit AuM of CHF 159 billion (+12% vs end-2023), driven by strong inflows, market performance as well as su
Slide 5: Financial performance
02 Financial performance Dimitris Politis Chief Financial Officer & Deputy CEO
Slide 6: Record profitability of CHF 163 mn in 1H 2024
Record profitability of CHF 163 mn in 1H 2024 Consistent delivery towards targets Key highlights Evolution of IFRS net profit in CHF mn +10% Net profit up 10% vs. 1H23 Revenues up 3% vs. 1H23 and up 5% vs. 162.8 2H23, despite headwinds from interest 147.6 rates 106.5 100.3 Revenue margin at 97
Slide 7: Accelerated growth momentum and resilient topline
Accelerated growth momentum and resilient topline Business development Profitability Capital & Liquidity NNA Gross capital +7.3% growth +3% Revenue growth vs. +270 bps generation 1H23 Revenue Cost-income ratio, Total capital 97 bps 72.6% down – 0.7 pp vs. 21.3% ratio margin FY 2023 Net profit in CHF
Slide 8: Financials summary
Financials summary In CHF mn 1H24 1H23 Variation vs. 1H23 Revenue-generating AuM (bn) 159.3 146.5 +8.7% Net new assets (bn) 5.2 3.0 +73.3% Net new assets growth rate (%) 7.3% 4.2% +3.1 pp Revenue margin (bps) 97 100 -3 bps Operating income 743.8 724.8 +2.6% Operating expenses 549.4 527.7 +4.1% Opera
Slide 9: Financials summary
Financials summary In CHF mn 1H24 2H23 1H23 Revenue-generating AuM (bn) 159.3 142.2 146.5 Net new assets (bn) 5.2 3.2 3.0 Net new assets growth rate (%) 7.3% 4.4% 4.2% Revenue margin (bps) 97 98 100 Operating income 743.8 705.9 724.8 Operating expenses 549.4 530.2 527.7 Operating profit 194.4 175.7
Slide 10: Consistent delivery
Consistent delivery Net new asset growth Cost/income ratio NNA growth in % Evolution CIR in % 4-6% per 69% annum 7.3 72.1 74.4 72.6 4.2 4.4 1H23 2H23 1H24 1H23 2H23 1H24 Revenue margin Return on tangible equity Evolution RoAuM in bps Evolution RoTE in % 85 bps 15-18% 18.7 19.2 100 17.8 98 97 1H23 2H
Slide 11: NNA growth of 7.3% in 1H 2024 - New hires with strong contribution
NNA growth of 7.3% in 1H 2024 - New hires with strong contribution AuM evolution NNA growth levers Revenue-generating AuM evolution in CHF bn Existing CROs in CHF bn 7.8 4.1 5.2 159.3 0.8 0.7 142.2 0.2 1H22 1H23 1H24 New CROs1 in CHF bn Dec 23 NNA Market FX Jun 24 4.5 Annualised NNA growth at 7.3%
Slide 12: Strong performance across regions
Strong performance across regions Regional business development AuM breakdown NNA Growth Revenue-generating AuM RoAuM* CHF 5.2 bn (in %) CHF 159.3 bn (in bps) Switzerland & Switzerland & 1.0 5.4% Growth in Switzerland 42.5 126 Italy Italy supported by new locations (Gstaad, St. Moritz) Asia Pacifi
Slide 13: Normalised CRO hiring momentum
Normalised CRO hiring momentum CRO evolution CRO additions AuM per CRO # of CROs # of new CROs AuM per CRO (excl. Shaw and Partners) in CHF mn CROs +26 +19 Signed & approved 654 693 707 86 345 Shaw and 316 313 321 218 223 236 21 Partners 42 470 471 65 Shaw and 436 13 Partners 29 29 2021 2022 2023 1H
Slide 14: Resilient operating income, driven by higher AuM with revenue margin maintained at 97 bps
Resilient operating income, driven by higher AuM with revenue margin maintained at 97 bps Increasing operating income Key highlights Operating income in CHF mn AuM growth supports revenue resilience 100 98 97 Decrease in NII year on year, reflecting bps bps bps increased cost of deposits from co
Slide 15: Revenue margin drivers – Focus on interest components
Revenue margin drivers – Focus on interest components Revenue margin evolution What drives Net Interest Income in bps Sight deposits, in CHF bn Interest rate sensitivity 1 for a 100 bps decrease in interest rates in CHF mn -62 USD 100 97 24.6 24.4 GBP 17.2 CHF 18 13.6 11.0 11.0 22 EUR 7 2021 1H22 2H
Slide 16: Commissions driving the sustainable improvement in revenues
Commissions driving the sustainable improvement in revenues Commission margin Key highlights and developments (in bps) Increased net commission income (+11% year on year) benefitting from higher 44 45 43 management fees on the back of higher AuM 41 40 41 and increased client trading activity Man
Slide 17: Increase in operating expenses reflects growth investments
Increase in operating expenses reflects growth investments Cost-to-income ratio improves to 72.6%* Increase in personnel expenses reflects growth investment Key highlights Operating expenses in CHF mn Cost-to-income ratio improves vs. FY 2023 to 72.6%* FTEs 2,882 3,025 3,118 Strategic investment
Slide 18: Active cost management
Active cost management Operating expense evolution year on year Key highlights in CHF mn Ongoing rigorous cost management efforts CIR 72.1% +0.5 pp 72.6% Simplicity program on track to deliver the announced expanded cost savings of CHF 60 mn by 2025 27 8 5 24 Currently level of execution at CH
Slide 19: Strong balance sheet
Strong balance sheet Balance Sheet highlights Key metrics in CHF bn 31 Dec 2023 30 Jun 2024 41.2 41.2 CET1 capital ratio (%) 17.0% 17.5% Assets bn bn Liabilities & Equity Total capital ratio (%) 21.0% 21.3% 0.9 Due to banks RWAs (CHF bn) 8.6 bn 9.3 bn Cash & banks 9.1 Leverage ratio (FINMA) (%) 4.7%
Slide 20: Strong profitability drives capital generation
Strong profitability drives capital generation Evolution CET1 capital ratio Gross capital generation 2.7% Net capital generation 1.2% Total Capital 21.0 21.3 Total Capital Ratio Ratio 2.7 4.0 0.1 3.8 (0.4) (1.2) 17.5 CET1 Capital CET1 Capital 17.0 (0.7) Ratio Ratio Enhanced return to shareholders 31
Slide 21: Key takeaways of 1H 2024 financial results
Key takeaways of 1H 2024 financial results 2025 Financial targets Midway through 2023-2025 strategic cycle, with consistent and successful execution 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 Recurr
Slide 22: Outlook and priorities
03 Outlook and priorities Giorgio Pradelli Chief Executive Officer
Slide 23: EFG is well placed to successfully navigate complex environment
EFG is well placed to successfully navigate complex environment Environment Priorities Outlook Shaped by significant macroeconomic Maintain growth momentum to Well-diversified business model uncertainties and heightened continue building scale supports delivery of resilient top line geopolitic
Slide 24: EFG one year ahead of plan after reaching midway point in strategic cycle
EFG one year ahead of plan after reaching midway point in strategic cycle with consistent execution of strategy 2023 - 2025 2023 - 2024 Sustaining profitable Consistent execution 2019 - 2022 growth, achieving scale and delivery Strong track record of profitable growth 19.2% RoTE 12.7% 17.8% ~28% p.a
Slide 25: On track and confident for the second half of the 2025 strategic cycle
On track and confident for the second half of the 2025 strategic cycle Resilient financial performance Focus on capitalising Increasing confidence to with accelerated growth and on investments made meet or exceed 2025 record profitability in 2023 ambitions EFG International I Half-year 2024 results
Slide 26: Thank you for your attention
Thank you for your attention. 24 July 2024 Page 26
Slide 27: EFG
ErFG E y= Entrepreneurial thinking. r Private banking.
Slide 28: Appendix
ErG () / Appendix
Slide 29: Income statement (IFRS)
Income statement (IFRS) In CHF mn 1H24 2H23 1H23 2H22 1H22 Net interest income 182.5 262.6 249.4 243.5 152.0 Net banking fee & commission income 325.5 293.0 294.2 273.6 355.9 Net other income 235.8 150.3 181.2 149.0 96.0 Operating income 743.8 705.9 724.8 666.1 603.9 Personnel expenses (393.9) (383.
Slide 30: Balance sheet highlights
Balance sheet highlights In CHF mn 31 Dec 2023 30 Jun 2024 Cash & banks 7,345 9,110 Treasury bills 2,341 2,238 Derivatives 1,574 1,213 Financial instruments 9,853 9,869 Loans 16,019 16,964 Goodwill & intangibles 204 198 Other 1,250 1,576 Total assets 38,586 41,168 Due to banks 943 881 Due to custome
Slide 31: AuM evolution
AuM evolution AuM by asset class AuM by asset class in % FY 2023 in % 1H 2024 Other Other Hedge funds Hedge funds 6% Cash & Deposits 6% 2% 2% Cash & Deposits Loans 23% Loans 22% 12% 11% Structured Structured products 3% 3% products CHF 142.2 bn CHF 159.3 bn 23% 23% 32% Bonds Bonds 33% Equities Equit
Slide 32: Segmental analysis 1H24
Segmental analysis 1H24 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 236.7 133.0 64.3 104.0 96.1 62.2 12.7 34.8 - 743.8 Segment expens
Slide 33: Segmental analysis 1H23
Segmental analysis 1H23 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 237.2 127.4 68.5 87.2 85.0 61.7 40.8 17.0 - 724.8 Segment expense
Slide 34: Segmental analysis 2H23
Segmental analysis 2H23 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 214.7 129.3 64.6 91.0 80.5 60.7 42.9 22.2 - 705.9 Segment expense
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
Slide 36: Update on Life Insurance Exposures (II)
Update on Life Insurance Exposures (II) Direct holding of life insurance policies for Death benefit: CHF 667.4 mn 101 insureds (2023: 125) of an average age Carrying value: CHF 383.3 mn Outright of 94.6 years portfolio 1H2024 premium: CHF 45.4 mn Life expectancy: 3.5 years Operating inco
Slide 37: Financial calendar 2024 & 2025
Financial calendar 2024 & 2025 Event Date 10M business update 2024 20 November 2024 Full-year 2024 financial results 19 February 2025 Annual General Meeting 2025 21 March 2025 EFG International I Half-year 2024 results 24 July 2024 Page 37
Slide 38: Contacts
Contacts INVESTORS MEDIA Investor Relations Corporate Communications Jens Brueckner Daniela Haesler Head of Investor Relations Head of Corporate Communications Phone +41 44 226 1799 Phone +41 44 226 1804 jens.brueckner@efginternational.com daniela.haesler@efginternational.com EFG International AG Bl