Gam Holding Ag · SIX:GAM
Gam — H1 2015 Earnings Presentation
33 slides from Gam's earnings presentation, Aug 11, 2015
Slide 1: Results and Review First Half 2015
Results and Review First Half 2015 Presentation for Media, Analysts and Investors Zurich, 11 August 2015
Slide 2: Agenda and Contents
Agenda and Contents 1. H1 2015 Overview Alexander S. Friedman, Group CEO 2. H1 2015 Financial Results Marco Suter, Group CFO 3. H1 2015 Business Review and Update on Strategic Initiatives Alexander S. Friedman, Group CEO 4. Summary and Outlook Alexander S. Friedman, Group CEO Q&A Session Appendix 2
Slide 3: H1 2015 Overview
H1 2015 Overview Six months of focused execution and notable achievements, future plan on track Successfully navigated the negative headwinds from the CHF appreciation • Strong net new money growth, positive investment performance and continued cost discipline • Positive underlying dynamics highligh
Slide 4: Agenda and Contents
Agenda and Contents 1. H1 2015 Overview Alexander S. Friedman, Group CEO 2. H1 2015 Financial Results Marco Suter, Group CFO 3. H1 2015 Business Review and Update on Strategic Initiatives Alexander S. Friedman, Group CEO 4. Summary and Outlook Alexander S. Friedman, Group CEO Q&A Session Appendix 4
Slide 5: Financial Results
Financial Results Highly profitable and financially robust business model ∆ from Robust profitability (CHF m, except where indicated) H1 2014 H2 2014 H1 2015 H1 2014 H2 2014 Successfully countered adverse Operating income 307.4 316.1 303.6 -1% -4% currency impact with: Operating expenses 194.3 212
Slide 6: FX Impact on AuM, Revenues and Expenses
FX Impact on AuM, Revenues and Expenses In order to put our results in context, it is important to start with a note about FX Development of major currencies versus CHF Currency split 100% AuM Operating Operating Currency Investment Private income expenses GBP: -5.1% Management Labelling 95% USD: -5
Slide 7: Operating Income
Operating Income Positive earnings contribution from net new money inflows and solid performance fees (CHF m) 316.1 307.4 303.6 Operating income (down 4% from H2 2014) 5.2 9.5 1.8 34.9 31.0 44.1 Net management fees and commissions - Significant impact from currency translation effects 245.9 255.7
Slide 8: Operating Expenses
Operating Expenses Revenue fluctuation largely mitigated by cost reductions (CHF m) 212.5 4.3 202.1 194.3 4.3 3.5 Operating expenses reduced (down 5% from H2 2014) 56.1 52.6 Personnel expenses down 5% 49.7 - Variable compensation reduced - Lower salary expenses versus H2 2014, helped by weaker GBP
Slide 9: Balance Sheet
Balance Sheet Strong and liquid balance sheet (CHF m) 30.06.2014 31.12.2014 30.06.2015 Strong liquidity H1 2015 dividend payment of Cash and cash equivalents 533 644 504 CHF 104.4m for 2014 financial year 1 Share buy-backs: H1 2015 at Seed capital investments 114 131 101 CHF 24.7m, H2 2014 at CH
Slide 10: Share Count
Share Count Continuous commitment to shareholder capital returns, including share buy-backs 30.06.2014 31.12.2014 30.06.2015 (in millions) H1 2014 H2 2014 H1 2015 1 Shares issued 166.7 166.7 166.7 Shares held for compensation plans 2.9 2.2 1.8 Shares utilised during period 0.9 0.7 0.4 Shares re-purc
Slide 11: Agenda and Contents
Agenda and Contents 1. H1 2015 Overview Alexander S. Friedman, Group CEO 2. H1 2015 Financial Results Marco Suter, Group CFO 3. H1 2015 Business Review and Update on Strategic Initiatives Alexander S. Friedman, Group CEO 4. Summary and Outlook Alexander S. Friedman, Group CEO Q&A Session Appendix 11
Slide 12: AuM Development
AuM Development Successful organic growth counteracts the headwinds from CHF appreciation Investment Management (CHF bn) 3.4 76.1 2.0 0.8 -5.4 73.4 1.1 -1.8 73.5 Positive trend in net new money and investment performance CHF 2.0bn net new money inflows 83% of AuM in funds outperforming benchmark
Slide 13: Investment Management Net New Money Trends H1 2015
Investment Management Net New Money Trends H1 2015 Robust net new money inflows, with accelerating growth momentum in Q2 2015 Absolute return (AuM: CHF 21.5bn) Unconstrained/absolute return bond strategy outperformed vast majority of peers in H1 2015 and achieved net new money inflow: key turnarou
Slide 14: Attractively Differentiated Investment Capabilities
Attractively Differentiated Investment Capabilities Given industry ‘barbell’ dynamics, our products are well positioned for growth Specialised fixed Absolute return Equities income Unconstrained/ Attractive mix of styles & Highly active, strong absolute return Global rates strategy instruments convi
Slide 15: Mid-term Strategic Plan
Mid-term Strategic Plan Redeploying resources in a disciplined manner, while investing in growth areas External Internal Business recognition efficiency expansion Brand Process & systems Streamlining of simplification integration product offering Continuous cost Organic growth Content marketing disc
Slide 16: Progress on Strategic Plan
Progress on Strategic Plan Tangible achievements in H1 2015 and clear plan going forward ● Swiss & Global name discontinued, selective use of JB Funds brand at product level ● ‘Share of voice’ in top tier financial media up 60% year-on-year, all non-paid publicity External recognition: ● Future bran
Slide 17: Internal Efficiency – Future Operating Model
Internal Efficiency – Future Operating Model By year-end 2016, integration of today’s fragmented operating landscape Portfolio management Streamline Streamline and and align align systems systems for for management management and and execution execution of of trades trades across across systems prod
Slide 18: Acquisition of Renshaw Bay's Real Estate Finance Business
Acquisition of Renshaw Bay’s Real Estate Finance Business Industry-leading capability adds diversification to our business mix Renshaw Bay’s real estate business is an excellent strategic and cultural fit • Real estate strategy focused on the origination of commercial real estate loans in Western Eu
Slide 19: Agenda and Contents
Agenda and Contents 1. H1 2015 Overview Alexander S. Friedman, Group CEO 2. H1 2015 Financial Results Marco Suter, Group CFO 3. H1 2015 Business Review and Update on Strategic Initiatives Alexander S. Friedman, Group CEO 4. Summary and Outlook Alexander S. Friedman, Group CEO Q&A Session Appendix 19
Slide 20: Summary and Outlook
Summary and Outlook ● Our business model and earnings capacity is resilient across challenging market conditions Solid profitability, ● Revenue fluctuation, driven predominantly by FX, was largely mitigated by cost flexibility financially robust ● Currency mix of costs and revenues provides natural
Slide 21: Agenda and Contents
Agenda and Contents 1. H1 2015 Overview Alexander S. Friedman, Group CEO 2. H1 2015 Financial Results Marco Suter, Group CFO 3. H1 2015 Business Review and Update on Strategic Initiatives Alexander S. Friedman, Group CEO 4. Summary and Outlook Alexander S. Friedman, Group CEO Q&A Session Appendix 21
Slide 22: Appendix
Appendix P/L & Balance Sheet AuM & NNM Currency Development 22
Slide 23: Consolidated Income Statement (IFRS)
Consolidated Income Statement (IFRS) ∆ from H1 2014 H2 2014 H1 2015 (CHF m) H1 2014 H2 2014 Fee and commission income 491.0 519.3 491.2 0% -5% Distribution, fee and commission expenses -223.7 -243.7 -233.5 4% -4% Net management fees and commissions 267.3 275.6 257.7 -4% -6% Net performance fees 34.9
Slide 24: Group Balance Sheet
Group Balance Sheet ∆ from (CHF m) 30.06.2014 31.12.2014 30.06.2015 30.06.2014 31.12.2014 Cash and cash equivalents 533.0 643.9 504.3 -5% -22% Trade and other receivables 45.8 31.7 63.6 39% 101% Accrued income and prepaid expenses 143.6 138.0 160.0 11% 16% Financial investments 104.5 117.7 92.2 -12%
Slide 25: Investment Management - Fund Performance over Three Years
Investment Management - Fund Performance over Three Years by Investment Capability and Product Brand1 Compelling performance track record % of AuM in funds outperforming their benchmark over three years (as at 30 June 2015) Alternative Total Absolute return Equity Fixed income investments solutions
Slide 26: Investment Management – AuM by Capabilities
Investment Management – AuM by Capabilites 31.12.2013 30.06.2014 31.12.2014 30.06.2015 (in CHF bn) Fixed income 20.1 21.8 23.7 22.9 Absolute return single manager 22.2 22.6 22.1 21.5 Equity 13.6 14.9 16.0 16.1 Discretionary & advisory portfolios 4.3 4.6 4.9 4.6 Alternative investments solutions 5.2
Slide 27: Investment Management – AuM and NNM by Client Segment
Investment Management – AuM and NNM by Client Segment AuM by client segment 31.12.2013 30.06.2014 31.12.2014 30.06.2015 (in CHF bn) Institutional clients 29.8 31.8 34.3 33.8 Intermediaries 32.1 33.3 32.8 31.6 Private clients 7.9 8.3 9.0 8.1 Investment management 69.8 73.4 76.1 73.5 NNM by client seg
Slide 28: Investment Management – AuM by Currency
Investment Management – AuM by Currency 31.12.2013 30.06.2014 31.12.2014 30.06.2015 (in CHF bn) USD 24.9 26.8 30.3 28.5 EUR 24.2 24.5 22.0 20.4 CHF 13.0 13.2 13.4 13.0 GBP 5.5 6.3 7.2 7.3 Other 2.2 2.6 3.2 4.3 Investment management 69.8 73.4 76.1 73.5 28
Slide 29: Investment Management – Performance Fee Eligible Assets
Investment Management – Performance Fee Eligible Assets 31.12.2013 30.06.2014 31.12.2014 30.06.2015 (in CHF bn) Unconstrained fixed income 14.1 14.1 12.4 10.6 Global macro / managed futures 2.7 2.8 3.0 3.4 Non-directional equity 2.7 3.6 3.8 4.1 Other fixed income strategies 1.1 1.4 1.4 1.3 Other 3.2
Slide 30: Private Labelling – AuM Development
Private Labelling – AuM Development AuM by fund domicile 31.12.2013 30.06.2014 31.12.2014 30.06.2015 (in CHF bn) Switzerland 34.9 35.6 35.4 37.9 Luxembourg 6.7 7.7 9.0 10.6 Other 3.0 2.9 2.7 2.2 Private Labelling 44.6 46.2 47.1 50.7 AuM by asset class (in CHF bn) 31.12.2013 30.06.2014 31.12.2014 30.
Slide 31: Development of Major Currencies Against the CHF
Development of Major Currencies Against the CHF 1.05 1.30 USD/CHF EUR/CHF 1.00 1.20 0.95 1.10 0.90 0.85 1.00 31.12.13 30.06.14 31.12.14 30.06.15 31.12.13 30.06.14 31.12.14 30.06.15 1.60 Period-end FX rates GBP/CHF 1.50 USD/CHF EUR/CHF GBP/CHF 31.12.13 0.889 1.225 1.473 1.40 30.06.14 0.887 1.214 1.51
Slide 32: Corporate Calendar and Contacts
Corporate Calendar and Contacts Forthcoming events 20.10.2015 Interim management statement Q3 2015 01.03.2016 Full-year results 2015 20.04.2016 Interim management statement Q1 2016 27.04.2016 Annual General Meeting Contacts For investors and analysts: Patrick Zuppiger T +41 58 426 31 36 patrick.zupp
Slide 33: 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 nor is it designed to invite any such offer or invitation. This presentation by the Company includes for