Gam Holding Ag · SIX:GAM
Gam — H1 2020 Earnings Presentation
40 slides from Gam's earnings presentation, Aug 4, 2020
Slide 1: Results and Review Half Year 2020
Results and Review Half Year 2020 4 August 2020
Slide 2: Instructions for Q&A
Instructions for Q&A Questions can only be asked when logged into the CISCO Webex call OPTION 1 – CISCO Webex on PC OPTION 2 – CISCO Webex on mobile 1) In the toolbar at the bottom, 1) In the toolbar at the bottom, click on the 3-dot button click on the 3-dot button - IOS: 3 horizontal dots - Androi
Slide 3: Agenda
Agenda H1 2020 Highlights Peter Sanderson, Group CEO H1 2020 Financial results Richard McNamara, Group CFO Summary and outlook Peter Sanderson, Group CEO Q&A Appendix 3
Slide 4: H1 2020 Highlights
H1 2020 HIGHLIGHTS Peter Sanderson, Group CEO
Slide 5: Covid19 – Providing leadership in a time of uncertainty
Covid19 – Providing leadership in a time of uncertainty Remote working and operational resilience established early Clients Employees • New ways of client interaction rapidly adopted • Working remotely since mid-March across the company • Rapid adjustment to the new reality • Increased and adapted c
Slide 6: Progress on strategy
Progress on strategy Good momentum on key strategic initiatives Mobilising for growth Efficiency Transparency Growth Bold action to create synergies and Better reporting and processes Pursuing growth via core business adapt to the industry environment based on clarity, accountability and driving ass
Slide 7: Assets under management and net flows
Assets under management and net flows Material reduction in outflows in Q2 2020 Net flows Market overview1: (in CHF bn) 0.3 1.4 Unprecedented market volatility 1.2 (1.4) Long term active fund outflows in fixed income (1.6) (2.0) and equities in Q1 2020 (1.1) (2.1) (0.6) Rebound in Q2 2020 (6
Slide 8: Investment performance
Investment performance Performance recovering from Covid-driven market volatility in Q1 2020 1 % of AuM outperforming benchmark 3-year 5-year Capability 30.06.2020 31.03.2020 31.12.2019 30.06.2020 31.03.2020 31.12.2019 Fixed income 32% 1% 89% 33% 3% 89% Absolute return 39% 29% 77% 49% 41% 50% Equity
Slide 9: H1 2020 Financial Results
H1 2020 FINANCIAL RESULTS Richard McNamara, Group CFO
Slide 10: H1 2020 Financial summary
H1 2020 Financial summary 25% reduction in total expenses Change1 H1 2020 H1 2019 H1 2020 vs H1 2019 (in CHF m, except where indicated) Net management fees and commissions 123.0 165.7 (26%) of which investment management 104.6 148.3 (29%) of which private labelling 18.4 17.4 6% Net performance fees
Slide 11: Management fee margin
Management fee margin Capability margins stable – average management fee margin at 51.3bps1 Management fee margin by capability (in bps) Fixed income Equity Systematic 69 70 67 67 56 57 57 62 49 H1 2019 2019 H1 2020 H1 2019 2019 H1 2020 H1 2019 2019 H1 2020 Absolute return Alternatives Multi asset 1
Slide 12: Expenses
Expenses Total expenses reduction of 25% with headcount down by 13% period on period Change H1 2020 H2 2019 H1 2019 H1 2020 vs (in CHF m, except where indicated) H1 2019 1 Driven by a reduction in headcount as a result of the Fixed personnel expenses 62.6 66.3 73.6 (15%) accelerated efficiency progr
Slide 13: Efficiency programme
Efficiency programme Accelerated efficiency plans on track – at least CHF 65m of total cost savings in FY 2020 Total expenses Total headcount (in CHF m) (in FTE) At least CHF 65m of ~20% reduction 316 cost savings in FY 2020 927 925 in past 18 months max. 250 817 125 747 ~680 125 FY17 FY18 FY19 HY20
Slide 14: IFRS net loss
IFRS net loss Loss driven by legacy goodwill write-off H1 2020 H1 2019 (in CHF m, except where indicated) restated Underlying (loss)/profit before taxes (2.0) 2.1 Acquisition-related items1 22.2 (42.4) 2 Non-recurring items (402.1) (7.5) IFRS (loss)/profit before taxes (381.9) (47.8) Income tax expe
Slide 15: Acquisition-related and non-recurring items
Acquisition-related and non-recurring items Covid-19 impacts drove the need to impair legacy goodwill Acquisition-related items (pre-tax)1 Acquisition-related items (in CHF m) H1 2020 H1 2019 mainly driven by adjustments restated to the financial liability Adjustments to financial liability 29.2 (
Slide 16: Capital management
Capital management Debt-free balance sheet Cash levels reflecting typical seasonal Cash and adjusted tangible equity1 effects (in CHF m) Lower adjusted tangible equity driven by 374 353 the pension liability revaluation and 328 328 316 Cash FX impacts 281 272 251 and capital No external debt
Slide 17: Summary and Outlook
SUMMARY AND OUTLOOK Peter Sanderson, Group CEO
Slide 18: GAM
GAM Attracting and empowering the brightest minds Providing the platform for investment leadership, innovation and sustainable thinking, needed to protect our clients’ financial future Non-traditional sources of return and differentiated investment strategies 1 Includes alternatives and multi asset.
Slide 19: Outlook
Outlook Expect market environment to remain volatile and investors likely to remain cautious GAM well positioned to satisfy client appetite for actively managed specialist strategies with its distinctive products and global distribution On track to deliver at least CHF 65m of total cost saving
Slide 20: Appendix
APPENDIX
Slide 21: GAM strategy
GAM strategy GAM: fit for the future Efficiency Transparency Growth Bold action to create synergies and Better reporting and processes Pursuing growth via core business adapt to the industry environment based on clarity, accountability and driving AuM and trust • One GAM – integrating • Accountabili
Slide 22: Assets under management
Assets under management Investment management (in CHF bn) (8.5) 48.41 (0.5)2 (2.9) (1.0) 35.51 31.12.2019 Net flows Disposal Market performance FX impact 30.06.2020 Private labelling (in CHF bn) 2.6 (1.7) (1.3) 84.3 83.9 31.12.2019 Net flows Market performance FX impact 30.06.2020 1 Including CHF 0.
Slide 23: AuM development by capability
AuM development by capability Investment management (in CHF bn) AuM AuM AuM Capability Net flows Market FX Net flows Disposal Market FX 31.12.19 31.03.20 30.06.20 1 1 2 1 Fixed income 25.8 (5.0) (2.7) (0.4) 17.7 (0.7) (0.5) 1.3 (0.2) 17.6 Equity 7.2 (0.7) (1.4) - 5.1 (0.1) - 0.9 (0.1) 5.8 Multi asse
Slide 24: AuM and net flows by capability
AuM and net flows by capability Investment management AuM by capability (in CHF bn) 30.06.16 31.12.16 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 1 1 Fixed income 19.3 20.8 27.4 37.1 38.6 29.2 27.1 25.8 17.6 Equity 10.7 12.5 11.0 12.6 12.5 8.7 7.1 7.2 5.8 Multi asset 10.7 9.6 9.1
Slide 25: AuM by product type
AuM by product type Investment management AuM by product type (in CHF bn) 30.06.16 31.12.16 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 Luxembourg SICAVs 20.5 19.0 20.5 23.5 22.8 14.6 14.1 12.4 8.3 Segregated accounts 15.6 17.4 15.3 15.7 15.2 10.1 9.1 8.1 6.3 Ireland UCITS 14.7 14
Slide 26: AuM and net flows by client segment
AuM and net flows by client segment Investment management AuM by client segment (in CHF bn) 30.06.16 31.12.16 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 1 1 Intermediaries 27.2 28.4 31.7 40.6 41.8 27.4 23.9 23.0 16.1 Institutional clients 32.0 34.0 35.4 38.5 37.6 24.7 24.5 21.8 1
Slide 27: Private labelling AuM breakdowns
Private labelling AuM breakdowns By fund domicile (in CHF bn) 30.06.16 31.12.16 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 Switzerland 31.7 31.7 33.1 33.6 34.2 33.3 36.4 34.5 33.7 Rest of Europe 16.3 20.8 26.0 40.7 45.2 42.8 47.6 49.8 50.2 Total 48.0 52.5 59.1 74.3 79.4 76.1 84.0
Slide 28: Key figures
Key figures Investment management (in CHF, except where indicated) H1 2016 H2 2016 FY 2016 H1 2017 H2 2017 FY 2017 H1 2018 H2 2018 FY 2018 H1 2019 H2 2019 FY 2019 H1 2020 Net management fees and commissions (m) 214.1 220.3 434.4 218.7 245.1 463.8 261.6 192.0 453.6 148.3 136.6 284.9 104.6 Net perform
Slide 29: Performance fee eligible assets and income
Performance fee eligible assets and income Performance fee eligible assets1 (in CHF bn) 30.06.15 31.12.15 30.06.16 31.12.16 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 Unconstrained fixed income 10.6 8.7 6.7 5.9 6.2 6.6 6.2 - - - - Global macro/managed futures 3.4 3.9 3.2 2.4 1.7
Slide 30: Performance fee eligible assets analysis
Performance fee eligible assets analysis Other fixed Global macro/ Non-directional Systematic income Other1 Total managed futures equity strategies Performance fee eligible AuM (CHF bn) 0.1 0.6 1.0 1.2 0.8 3.7 No. of PF eligible funds/mandates 1 8 9 7 8 33 Performance fees H1 2020 (CHF m) - - 0.1 -
Slide 31: Key performance fee eligible strategies
Key performance fee eligible strategies As at 30.06.2020 AuM % (below)/ Crystallisation Fund above Performance fee rate Last HWM date date (CHF bn) HWM GAM Systematic Core Macro (Cayman) Fund 0.37 (5%) Quarterly 10% 30.09.2019 Managed accounts 0.34 (8%) Various Various Various Alternative Risk Premi
Slide 32: General expenses
General expenses (in CHF m) Change H1 2020 H2 2019 H1 2019 H1 2020 vs Comments H1 2019 Occupancy 2.9 4.3 3.7 (22%) Lower maintenance and utility costs Technology and communication 7.2 8.0 11.0 (35%) Lower maintenance and support costs Data and research 9.4 10.0 10.7 (12%) Reduced level of service Pr
Slide 33: Operating margin and compensation ratio
Operating margin and compensation ratio (in CHF m) H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 Net fee and commission income 232.8 240.7 257.7 290.0 287.7 212.2 171.1 158.8 123.8 Net other income/(expenses) 2.7 2.4 (0.2) 2.4 (0.7) 1.0 (3.8) 0.1 (1.3) Income 235.5 243.1 25
Slide 34: Basic and diluted underlying EPS
Basic and diluted underlying EPS (in million shares, except where indicated) H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 Weighted average number of shares in issue 166.7 163.7 163.4 160.5 160.3 159.7 159.7 159.7 159.7 159.7 159.7 Weighted average number of
Slide 35: Currency split – revenues, expenses and AuM
Currency split – revenues, expenses and AuM Group income1 Group expenses2 Investment management AuM3 HY 2020 HY 2020 as at 30.06.2020 10% 4% 10% 15% 15% 39% 19% 40% 35% 12% 6% 8% 30% 34% 23% USD EUR GBP CHF Other 1 Percentage splits are estimated based upon the currency exposure of the underlying Au
Slide 36: Group balance sheet
Group balance sheet 30.06.15 31.12.15 30.06.16 31.12.16 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 (in CHF m) restated restated restated restated restated restated Cash and cash equivalents 504 633 481 353 281 374 328 328 251 316 272 Seed capital investments 101 67 73 84 52 84 51
Slide 37: Net cash
Net cash (in CHF m) (3.5) (9.7) 17.3 (9.5) (38.3) 315.8 272.1 Net cash Underlying Acquisition- Net seed FX Changes in Net cash 31.12.2019 net loss related capital impact net assets and other 30.06.2020 H1 2020 deferred sales impacts consideration payments 37
Slide 38: Adjusted tangible equity
Adjusted tangible equity (in CHF m) 31.3 6.1 (29.2) (390.1) 377.7 (10.3) 4.2 (5.2) (3.4) 197.2 178.3 Adjusted IFRS Impairment Amortisation/ Finance Revaluation Remeasurement Share- FX impact Other Adjusted tangible net loss of goodwill impairment charges on of Cantab of pension based impacts tangibl
Slide 39: Corporate calendar and contacts
Corporate calendar and contacts Forthcoming events 21 October 2020 Interim management statement Q3 2020 18 February 2021 Full-year results 2020 21 April 2021 Interim management statement Q1 2020 Group Communications and Investor Relations Charles Naylor Jessica Grassi Head of Group Communications In
Slide 40: Cautionary statement on forward-looking information
Cautionary statement on forward-looking information This presentation by GAM Holding AG (‘the Company’) does not constitute an invitation or offer to acquire, purchase or subscribe for securities. This presentation by the Company includes forward-looking statements that reflect the Company’s intenti