Efg International Ag · SIX:EFGN
Efg International — H1 2020 Earnings Presentation
40 slides from Efg International's earnings presentation, Jul 22, 2020
Slide 1: Half-year 2020 results presentation
EFG International Half-year 2020 results presentation 22 July 2020
Slide 2: Important Legal Disclaimer
EFG International E rG Important Legal Disclaimer This document has been prepared by EFG International AG (“EFG”) solely for use by you for general information only and does not contain and is not to be taken as containing any securities advice, recommendation, offer or invitation to subscribe for,
Slide 3: Key highlights
Key highlights Giorgio Pradelli, Chief Executive Officer Half-year 2020 results presentation 22 July 2020 r Page3
Slide 4: Executing growth strategy amid coronavirus pandemic
EFG International E rG Executing growth strategy amid coronavirus pandemic = Uninterrupted, high-quality private banking service leveraging new digital capabilities = Solid capital position with ample liquidity, reflecting EFG’s conservative balance business G sheet management Q) = Highly secured lo
Slide 5: Financial performance
ErG Financial performance Dimitris Politis, Chief Financial Officer Half-year 2020 results presentation 22 July 2020 Page S
Slide 6: Presentation of financial performance
EFG International Presentation of financial performance Changes from previous reporting periods: = 1H 2020 financial results include Shaw and Partners, which has been consolidated as of 30 April 2019 * The reconciliation of underlying net profit to IFRS results is included on slide 32: The only item
Slide 7: 1H 2020 financial results in perspective
EFG International E rG 1H 2020 financial results in perspective Executing the 2022 strategic plan = Strong NNA of CHF 4.2 bn, annualised growth of 5.5%, at the top end of target range = AuM down 3.9% to CHF 147.8 bn, reflecting negative market and foreign exchange movements = Strong contribution fro
Slide 8: Financials summary
EFG International E rG Financials summary zy ae Revenue-generating AuM, CHF bn 147.8 153.8 147.6 Net new assets, CHF bn 4.2 49 0.3 Net new asset growth (annualised) 5.5% 6.6% 0.5% Operating income, CHF mn 563.7 615.1 555.8 Operating expense, CHF mn 497.2 494.7 503.6 Operating profit, CHF mn 66.5 120
Slide 9: Strong and highly liquid Balance Sheet
— ErG Strong and highly liquid Balance Sheet Highly liquid Balance Sheet Strong capital position Liquidity coverage ratio (LCR) CET1 capital ratio / Total capital ratio* (in %) (in %) 190% 182% 20.1 19.1 Dec 2019 Jun 2020 Dec 2019 Jun 2020 * Swiss GAAP fully applied Half-year 2020 results presentati
Slide 10: Growing the business and improving profitability
EFG International ErG Growing the business and improving profitability NNA growth at the top of 4-6% target range NNA evolution (in CHF bn) 2.0 0.3 a 1H18 1H19 1H20 Half-year 2020 results presentation Positive IFRS operating profit development Evolution of operating profit (pre-tax) (in CHF mn) 1H18
Slide 11: IFRS net profit up 10% year-on-year
EFG International IFRS net profit up 10% year-on-year Underlying profitability vs. IFRS net profit Reconciliation of underlying net profit (in CHF mn) 53 (3.8) (4.4) Underlying net Life insurance Intangible Legacy legal IFRS net profit IFRS net profit profit 1H20 amortisation costs & 1H20 1H19 (incl
Slide 12: 1H20 annualised NNA growth rate of 5.5%
EFG International 1H20 annualised NNA growth rate of 5.5% AuM stabilised following industry-wide decline at beginning of year Revenue-generating AuM evolution (in CHF bn) 42 | Es 6.1) (3.9) (1.3) Dec 19 NNA Market FX Other* Jun 20 * Including reclassification Half-year 2020 results presentation 22 J
Slide 13: Balanced NNA growth
EFG International Balanced NNA growth Investor update growth targets As, 23) e (in CHF bn) MN Se, Rr eg ‘ 2 % Shaw and Partners 11 2018 NNA NNA NNA from Market 2022 adjusted? growth growth business effect from from initiatives? existing new CROs CROs 1 Compound Annual Growth Rate (CAGR) over the fou
Slide 14: Business development by region
EFG International E rG Business development by region Continental Europe, UK and Latin America all recorded NNA growth above target range 1H20 Revenue-generating AuMs as%of RoAUM* 1H20NNA ee 1H20 Net New Money ee CHF 147.8 bn totalAuM (in bps) CHF 4.2 bn (in %) CHF 3.7 bn (in %) & Italy Continental
Slide 15: Continued positive trend in mandate penetration
EFG International E rG Continued positive trend in mandate penetration Evolution of advisory, discretionary mandates & funds (in %, excl. loans) = Increasing penetration of advisory, discretionary mandates and funds driven by: >60% - Solid performance of discretionary offering — Increased utilisatio
Slide 16: CRO performance
EFG International CRO performance CRO hiring momentum CROs approved / Number of CROs signed 815 Shaw and Partners 5 590 629 2018 2019 1H20 Number of new CROs 161 28 3 Approved 2016 2017 2018 2019 1H20 BSI integration Half-year 2020 results presentation ErG = CRO hiring activity: YTD 28 CROs have bee
Slide 17: Improving quality of revenues
EFG International ErG Improving quality of revenues Underlying operating income of CHF 554.8 mn Underlying operating income (in CHF mn) vs. 1H19 5759 13.6 2 bps 554.8 112.9 16 bps 68.1 9 bps ~40% 25 bps 5% +17% 1H19 1H20 Underlying net other income (one-off gain) O Average revenue-generating AuM (in
Slide 18: Consistent and continued cost reduction efforts
EFG International E rG Consistent and continued cost reduction efforts Underlying operating expenses (in CHF mn) = Ona like-for-like basis, underlying operating expenses decreased by 5% year- FTEs* on-year and by approx. 30% since the acquisition of BSI CIR = Consistent reduction in general and admi
Slide 19: Balance sheet
EFG International E rG Balance sheet Strong and highly liquid Balance sheet ~50% of Balance sheet in liquid assets Total assets: Total liabilities & equity: + Loan-deposit ratio of 51%* CHF 42.3 bn CHF 423 bn = Liquidity coverage ratio (LCR) of to b 190% : = CHF 13 bn deposit increase in Cash & bank
Slide 20: Capital position (I)
EFG International Capital position (I) ErG Continued strong capital position despite challenging market environment Total Capital Ratios* Breakdown of RWAs* (in %) (in CHF bn) 20.1 10.1 10.4 2.0 2.0 - 31 Dec 2019 30 Jun 2020 31 Dec 2019 30 Jun 2020 =Common Equity Additional Tier1 Tier 2 m Market / S
Slide 21: Capital position (II)
EFG International ErG Capital position (II) Substantial available CET1 capital allows for expansion Evolution of CET1 Capital ratio* (in %) Underlying net capital generation | Total Capital Ratio* ao Total Capital Ratio* CET1 Capital CET1 Capital Ratio* (0.4) (0.2) (0.1) (0.4) Ratio* 0.4, EFG Minimu
Slide 22: As ct 7348S,
EFG International y= As ct 0 7348S, Dp, log xecuti Hao, 279 2019-2020 2021-2022 24 0 ional effici erational efficienc 2 Seca _ . Y P y Gann xecuting remaining synergies vital solut Y management Digital solutions Investment for growth, e.g. CRO hiring VY Dividend payout ratio increase to 50% Vv ) Cap
Slide 23: Evolution of underlying profitability
EFG International ErG Evolution of underlying profitability Illustration of underlying net profit evolution excluding material one-off items Evolution of underlying net profit (in CHF mn) (13.6) | (9.9) 1H19 SIX one-off Reversal of 1H19 adjusted gain ECL charge Half-year 2020 results presentation 1H
Slide 24: The way forward in 2020
EFG International The way forward in 2020 Executing the 2020 strategic plan Underlying profitability (after tax) (+) (CHF mn) (-) (+) 52.1 (+) 1H19 1H20 Note: Illustration of underlying profitability excluding significant one-off items as highlighted on previous slide Half-year 2020 results presenta
Slide 25: Strategic priorities & outlook
ErG Strategic priorities & outlook Giorgio Pradelli, Chief Executive Officer Half-year 2020 results presentation 22 July 2020 Page 25
Slide 26: Key focus: Driving profitability
— ErG Key focus: Driving profitability Structural pressure on revenues and impact of coronavirus pandemic on global economy expected to fully materialise in coming months. Challenging market = Continuation of extremely low interest rate levels environment = Heightened foreign exchange impacts with s
Slide 27: Taking stock and moving forward
EFG International E rG Taking stock and moving forward CG Demonstrated the operational resilience and financial solidity of ©) EFG’s business “&. Maintain positive growth momentum, building on EFG’s distinctive : : business model and leveraging new digital capabilities to facilitate A.A client inter
Slide 28: Half-year 2020 results presentation 22 July 2020 Page 28
Half-year 2020 results presentation 22 July 2020 Page 28
Slide 29: Appendix
ErG Appendix Half-year 2020 results presentation 22 July 2020 Page 29
Slide 30: Income statement (IFRS)
EFG International E rG Income statement (IFRS) Net interest income 169.3 156.6 163.6 Net banking fee & commission income 274.7 318.3 320.2 Net other income 111.8 140.2 79.9 Operating income 555.8 615.1 563.7 Personnel expenses (357.8) (339.1) (362.3) Other operating expenses (105.1) (116.6) (93.2) A
Slide 31: Underlying income statement
EFG International Underlying income statement Net interest income 174.7 161.7 166.5 Net banking fee & commission income 274.7 318.3 320.2 Net other income 126.5 86.9 68.1 Personnel expenses (357.8) (339.1) (362.3) Other operating expenses (134.2) (144.8) (122.9) Provisions (7.0) (11.4) (15.7) Loss a
Slide 32: Reconciliation of Underlying results to IFRS results 1H20
EFG International E rG Reconciliation of Underlying results to IFRS results 1H20 Net interest income 166.5 (3.8) 163.6 Net banking fee & commission income 320.2 320.2 Net other income 68.1 79.9 Personnel expenses (362.3) (362.3) Other operating expenses (122.9) (134.9) Provisions (15.7) (15.7) Loss
Slide 33: Balance sheet (IFRS)
EFG International Balance sheet (IFRS) MincHEmiltion) e209 Jun 2020 Cash and balances with central banks 8,384 7,616 Treasury bills and other eligible bills 1,375 1,092 Due from other banks 2,622 4,034 Derivative financial instruments. 801 1,345, Financial asset at fair value through P&L 2,400 2,343
Slide 34: Breakdown of AuM
EFG International E rG Breakdown of AuM 30.06.20 By category saosee Gn cab) Cash & deposits 23% 24% 35.3 Bonds 23% 23% 34.5 Equities 30% 28% 41.8 Structured products 3% 3% 3.9 Loans 13% 13% 19.2 Hedge funds — — 2.6 Other 10.5 USD 42% 44% 65.3 EUR 27% 26% 37.7 GBP 10% 9% 14.0 AUD 8% 8% 12.0 CHF — — -
Slide 35: Segmental analysis 1H20
_ ErG Segmental analysis 1H20 - Global Performance summary Switzerlani ‘ontinental Investment Corporate (in CHF m) & Italy Europe Asia Pacific | solutions = — Overheads > Tell Segment revenues 147.6 92.5 43.8 78.8 78.2 (7.5) - 563.7 Segment expenses (129.2) (89.8) (43.5) (63.6) (67.4) (44.9) (33.1)
Slide 36: Segmental analysis 1H19
EFG International E rG Segmental analysis 1H19 - Global Performance summary Switzerlani ‘ontinental Investment Corporate (in CHF m) & Italy Europe Asia Pacific | solutions ne — Overheads > Tell Segment revenues 148.8 8.1 57.0 75.0 64.4 53.3 89.3 (20.1) - 555.8 Segment expenses (138.5) (84.1) (54.5)
Slide 37: Segmental analysis 2H19
_ ErG Segmental analysis 2H19 7 . Global Performance summary Switzerlani ‘ontinental . y Investment Corporate (in CHF m) & Italy Europe pata eaatite Solutions i Overheads 5 veel Segment revenues 150.4 108.5 51.4 13 81.9 56.6 443 50.7 - 615.1 Segment expenses (133.1) (90.7) (51.7) (58.2) (73.7) (46.2
Slide 38: Update on Life Insurance Exposures
EFG International E rG Update on Life Insurance Exposures Life Insurance related portfolios = Legacy exposures acquired more than 10 years ago * Outright portfolio carried at fair value (marked-to-model, Level 3) for IFRS accounts - incorporation of Lombard loan portfolio (LFS) in December 2019 intr
Slide 39: Update on Life Insurance Exposures (I)
EFG International Update on Life Insurance Exposures (I) Outright portfolio Synthetic portfolio *includes result of interest rate hedge Half-year 2020 results presentation Direct holding of life insurance policies for 237 insureds (2019: 255) of an average age of 91.6 years. Portfolio size increased
Slide 40: Contacts
EFG International Contacts ErG Investors Media Investor Relations Jens Brueckner Head of Investor Relations Phone +41 44 226 1799 jens.brueckner@efginternational.com EFG International AG Bleicherweg 8 8001 Zurich Switzerland Phone +41 44 212 73 77 Fax +41 44 226 18 55 efginternational.com Reuters: E