Gam Holding Ag · SIX:GAM
Gam — H1 2021 Earnings Presentation
46 slides from Gam's earnings presentation, Aug 4, 2021
Slide 1: Results and Review Half Year 2021
Results and Review Half Year 2021 4 August 2021 This m arketing m aterial is restricted to eligible professional/institutional investors only in com pliance w ith applicable law s. Please see “Im portant Legal Information” at the end of this presentation. This document is confidential and intended s
Slide 2: Agenda
Agenda Speakers Content 1 H1 2021 Review 2 H1 2021 Financial Results Peter Sanderson Group CEO 3 Strategy Update and Outlook 4 Q&A Richard McNamara 5 Appendix Group CFO 2
Slide 3: H1 2021 Review
H1 2021 Review Peter Sanderson, Group CEO
Slide 4: H1 2021 Financial results
H1 2021 Financial results Stability continues with Group assets under management increasing • Group AuM increased to CHF 126.0bn 1 from CHF 122.0bn as at 31 December 2020 • Investment management − AuM slightly down at CHF 34.8bn compared to CHF 35.9bn as at 31 December 2020 − Net client outflows of
Slide 5: Investment performance
Investment performance Good investment management performance as a basis for sustainable growth % of fund AuM outperforming the benchmark % of fund AuM outperforming Morningstar peer group 2 70% 92% 68% 61% 56% 74% 70% 48% 37% 40% 34% 23% 31.12.2020 31.03.2021 30.06.2021 31.12.2020 31.03.2021 30.06.
Slide 6: Spotlight on equity performance
Spotlight on equity performance Good performance leading to significant AuM growth for some strategies Relative returns vs Fund data Quartile rank index (%) Fund AuM Active (USD m) share (%) 1-Y 2-Y 3-Y 1-Y 2-Y 3-Y EQUITY GAM Emerging Equity 951 73 1 2 2 6.7 0.1 0.1 GAM Star Continental European Equ
Slide 7: Assets under management and net flows
Assets under management and net flows Investment Management AuM stabilised Investment management (in CHF bn) Private labelling (in CHF bn) 0.4 0.5 0.3 0.3 (1.0) (1.2) (3.4) Net flows (2.4) Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Investment management (in CHF bn) Private label
Slide 8: H1 2021 Strategic update
H1 2021 Strategic update Strong progress on strategy implementation – building towards sustainable growth Efficiency Transparency • CHF 8.8m of savings in fixed personnel and general expenses • GAM’s first Sustainability Report published – on track with CHF 15m guidance for FY 2021 • Strong support
Slide 9: H1 2021 Financial Results
H1 2021 FINANCIAL RESULTS Richard McNamara, Group CFO
Slide 10: H1 2021 Financial summary
H1 2021 Financial summary Profitability has stabilised (in CHF m, except where indicated) 1 H1 2021 H1 2020 Change Net management fees and commissions 107.8 123.0 (12%) of which investment management 90.6 104.6 (13%) of which private labelling 17.2 18.4 (7%) Net performance fees 17.3 0.8 n.m. Net fe
Slide 11: Management fee margin
Management fee margin 1 Fee margins have stabilised Investment management (in bps) Private labelling (in bps) 62.1 6.3 59.1 54.2 5.4 51.8 51.4 4.1 3.9 3.9 2017 2018 2019 2020 H1 2021 2017 2018 2019 2020 H1 2021 • Investment management average margin at • Private labelling average margin at 3.9bps do
Slide 12: Performance fees
Performance fees Disruptive Growth fund driving significant performance fees Performance fee eligible assets Performance fees by capability (in CHF bn) (in CHF m) 17.3 7.4 3.7 5.4 3.1 2.0 0.8 31.12.2020 30.06.2021 H1 19 H2 19 H1 20 H2 20 H1 21 Unconstrained fixed income Other fixed income strategies
Slide 13: Expenses
Expenses CHF 8.8m of savings in fixed personnel and general expenses in H1 2021 (in CHF m, except where indicated) Change H1 2021 H2 2020 H1 2020 H1 2021 vs H1 2020 Fixed personnel expenses1 55.0 55.7 62.6 (12%) Driven by continued reduced headcount Driven by higher performance fees resulting in an
Slide 14: Efficiency programme
Efficiency programme On track to deliver CHF 15m savings in fixed personnel and general expenses in FY 2021 Fixed personnel and general expenses (in CHF m) 193.3 ~178 95.6 Fixed personnel and general expenses H1 (actual) Fixed personnel and general expenses H2 (actual) 97.7 88.9 Fixed personnel and
Slide 15: IFRS net loss
IFRS net loss H1 2021 H1 2020 (in CHF m, except where indicated) Underlying profit/(loss) before taxes 0.8 (2.0) Acquisition-related items1 6.8 22.2 2 Non-recurring items (1.2) (402.1) IFRS profit/(loss) before taxes 6.4 (381.9) Income tax expense 9.1 8.2 IFRS net loss (2.7) (390.1) Underlying effec
Slide 16: Capital management
Capital management Cash and capital stable – maintaining a robust position Cash and capital Cash and adjusted tangible equity¹ (in CHF m) • No external debt 316 • Adjusted tangible equity increased, partially due to the remeasurement of the pension liability 272 271 251 250 • Cash lower mainly as 20
Slide 17: Strategy Update and Outlook
STRATEGY UPDATE AND OUTLOOK Peter Sanderson, Group CEO
Slide 18: Strategic focus: Fit for the future
Strategic focus Consolidating on gains in efficiency and transparency – shifting focus to growth Efficiency Transparency Growth Bold action to create Better reporting and Pursuing growth via synergies and adapt to the processes based on clarity, core business and industry environment accountability
Slide 19: Driving growth by deepening our product offering
Driving growth by deepening our product offering Building on existing capabilities in Sustainability, Thematics and Alternatives GAM focus Sustainable Thematic Alternatives and themes investing investing Solutions • Allocations to sustainable • Long-term societal trends for • Allocations to alternat
Slide 20: Driving growth by embedding sustainability
Driving growth by embedding sustainability Embracing sustainability through our entire business Embedding ESG New products and solutions • ESG dashboard – detailed ESG criteria • SFDR review of existing funds completed – now available for 100% of equity and 8 key funds now SFDR 8 compliant, one thir
Slide 21: Driving growth in wealth management
Driving growth in wealth management Distinct investment management edge for individuals, families, and charities Wealth management Wealth management market2 • GAM wealth management to leverage existing private • USD 226.4tn global wealth management market client base – new head based in Switzerland
Slide 22: Outlook
Outlook • On track to deliver savings of CHF 15m in fixed personnel and general expenses in FY 2021 • Expect the market environment to remain challenging Outlook 2021 • GAM well-positioned to service client demand across a broad range of products • Financial targets remain unchanged, reflecting our
Slide 23: Appendix
APPENDIX
Slide 24: Financial targets
Financial targets CHF 100m Financial targets Underlying pre-tax profit • Targets unchanged but delayed from FY 2022 to FY 2024 due to Covid-19 impact 30% Further efficiency gains expected Operating margin • Reduction in fixed personnel costs and general expenses of approximately CHF 15m in FY 2021 •
Slide 25: Investment performance
Investment performance Performance recovering from Covid-19-driven market volatility in Q1 2020 % of AuM outperforming benchmark¹ 3-year 5-year Capability 30.06.2021 31.03.2021 31.12.2020 30.06.2021 31.03.2021 31.12.2020 Fixed income 19% 31% 6% 75% 98% 67% Absolute return 66% 61% 39% 60% 55% 48% Equ
Slide 26: Assets under management
Assets under management Investment management (in CHF bn) (2.2) (0.8) 1.0 0.9 35.9 34.8 31.12.2020 Net flows In liquidation Market performance FX impact 30.06.2021 Private labelling (in CHF bn) 1.4 0.8 2.9 91.21 86.1 31.12.2020 Net flows Market performance FX impact 30.06.2021 Source: GAM 26 1 As co
Slide 27: AuM development by capability
AuM development by capability Investment management (in CHF bn) AuM Funds in AuM Funds in AuM Capability Net flows Market FX Net flows Market FX 31.12.20 liquidation 31.03.21 liquidation 30.06.21 Fixed income 17.1 (0.5) (0.8) (0.3) 0.8 16.3 (0.7) - 0.3 (0.3) 15.6 Multi asset 7.5 (0.3) - - 0.2 7.4 -
Slide 28: IM fee margin by capability
IM fee margin by capability1 Capability margins largely stable Management fee margin by capability1 (in bps) Fixed income Equity Systematic 67 67 68 57 58 58 49 50 46 H1 2020 FY 2020 H1 2021 H1 2020 FY 2020 H1 2021 H1 2020 FY 2020 H1 2021 Absolute return Alternatives Multi asset 94 94 75 48 40 43 20
Slide 29: AuM and net flows by capability
AuM and net flows by capability Investment management AuM by capability (in CHF bn) 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 30.06.21 Fixed income 27.4 37.1 38.6 29.2 27.1 25.8 17.6 17.1 15.6 Equity 11.0 12.6 12.5 8.7 7.1 7.2 5.8 6.9 7.9 Multi asset 9.1 9.5 9.3 7.7 7.8
Slide 30: AuM by product type
AuM by product type Investment management (in CHF bn) 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 30.06.21 Luxembourg SICAVs 20.5 23.5 22.8 14.6 14.1 12.4 8.3 7.4 6.6 Segregated accounts 15.3 15.7 15.2 10.1 9.1 8.1 6.3 6.3 6.1 Ireland UCITS 18.9 26.1 26.7 16.5 15.3 15.9 1
Slide 31: AuM and net flows by client segment
AuM and net flows by client segment Investment management AuM by client segment (in CHF bn) 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 30.06.21 Intermediaries 31.7 40.6 41.8 27.4 23.9 23.0 16.1 18.3 17.8 Institutional clients 35.4 38.5 37.6 24.7 24.5 21.8 16.5 14.7 14.0
Slide 32: Private labelling AuM breakdowns
Private labelling AuM breakdowns By fund domicile (in CHF bn) 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 30.06.21 Switzerland 33.1 33.6 34.2 33.3 36.4 34.5 33.7 34.9 36.6 Rest of Europe 26.0 40.7 45.2 42.8 47.6 49.8 50.2 51.2 54.6 Total 59.1 74.3 79.4 76.1 84.0 84.3 83.9
Slide 33: Key figures
Key figures Investment management (in CHF, except where indicated) H1 2018 H2 2018 FY 2018 H1 2019 H2 2019 FY 2019 H1 2020 H2 2020 FY 2020 H1 2021 Net management fees and commissions (m) 261.6 192.0 453.6 148.3 136.6 284.9 104.6 91.9 196.5 90.6 Net performance fees (m) 2.3 2.2 4.5 5.4 7.4 12.8 0.8 2
Slide 34: Performance fee eligible assets and income
Performance fee eligible assets and income Performance fee eligible assets¹ (in CHF bn) 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 31.06.21 Unconstrained fixed income 6.2 6.6 6.2 - - - - - - Global macro/managed futures 1.7 1.6 1.1 0.6 0.4 0.3 0.1 0.1 0.1 Non-directional
Slide 35: 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 0.4 0.3 1.3 1.0 3.1 No. of PF eligible funds/mandates 1 6 6 6 8 27 Performance fees H1 2021 (CHF m) 0.6 2.1 3
Slide 36: Key performance fee eligible strategies
Key performance fee eligible strategies As at 30.06.2021 AuM % (below)/ Fund Crystallisation date Performance fee rate Last HWM date (CHF bn) above HWM GAM Systematic Core Macro (Cayman) Fund 0.0 6% Quarterly 10% 30.03.2021 GAM Systematic Core Macro 0.0 5% Quarterly 10% 30.03.2021 Systematic Alterna
Slide 37: General expenses
General expenses in CHF m Change H1 2021 H2 2020 H1 2020 H1 2021 vs Comments H1 2020 Occupancy 2.9 2.7 2.9 0% Technology and communication 8.6 8.0 7.2 19% Driven by higher software licence costs Data and research 8.6 11.2 9.4 (9%) Professional and consulting services 3.4 4.9 3.4 0% Marketing and tra
Slide 38: Operating margin and compensation ratio
Operating margin and compensation ratio in CHF m H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H2 2020 H1 2021 Net fee and commission income 257.7 290.0 287.7 212.2 171.1 158.8 123.8 109.4 125.1 Net other income/(expenses) (0.2) 2.4 (0.7) 1.0 (3.8) 0.1 (1.3) (2.7) (3.7) Income 257.5 292.4
Slide 39: Basic and diluted underlying EPS
Basic and diluted underlying EPS in million shares, except where indicated H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H2 2020 H1 2021 Weighted average number of shares in issue 160.3 159.7 159.7 159.7 159.7 159.7 159.7 159.7 159.7 Weighted average number of treasury shares held (3.0) (3
Slide 40: Currency split – revenues, expenses and AuM
Currency split – revenues, expenses and AuM Group income¹ Group expenses² Investment management AuM H1 2021 H1 2021 as at 30.06.2021 10% 3% 12% 11% 15% 38% 30% 12% 18% 37% 6% 9% 31% 43% 25% USD EUR GBP CHF Other Source: GAM 40 1 Percentage splits are estimated based upon the currency exposure of the
Slide 41: Group balance sheet
Group balance sheet in CHF m 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 30.06.21 Cash and cash equivalents 281 374 328 328 251 316 272 271 250 Seed capital investments 52 84 51 68 55 46 28 23 11 Other assets 241 271 228 207 358 260 226 230 249 Goodwill and other intangib
Slide 42: Net cash
Net cash in CHF m (2.3) (4.9) 12.8 5.9 (32.3) 270.9 250.1 Net cash Underlying Acquisition- Net seed FX Changes in Net cash 31.12.2020 net loss related capital impact accruals and other 30.06.2021 H1 2020 deferred sales impacts consideration payments Source: GAM 42
Slide 43: Adjusted tangible equity
Adjusted tangible equity in CHF m 15.3 5.2 4.9 (10.7) (2.7) 0.4 1.7 (6.6) 188.7 196.2 Adjusted IFRS Amortisation/ Finance Revaluation Remeasurement Share- FX impact Other Adjusted tangible net loss impairment charges on of GAM of pension based impacts tangible equity HY 2021 of IMCCs discounted Syst
Slide 44: Corporate calendar and contacts
Corporate calendar and contacts Forthcoming events 21 October 2021 Interim management statement Q3 2021 17 February 2022 Full year results 2021 20 April 2022 Interim management statement Q1 2022 Group Communications and Investor Relations Charles Naylor Jessica Grassi Kathryn Jacques Ute Dehn Christ
Slide 45: 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
Slide 46: www.gam.com
GAM Investments wwv.gam.com