Slide 1: Full-year 2018 results presentation
EFG International Full-year 2018 results presentation 13 March 2019 Zurich Full-year 2018 results presentation 13 March 2019 Page 1
Slide 2: Important Legal Disclaimer
EFG International 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, purch
Slide 3: Key highlights
Key highlights Giorgio Pradelli, Chief Executive Officer Full-year 2018 results presentation 13 March 2019 Page 3
Slide 4: Today we want to update you on three topics
EFG International Today we want to update you on three topics Our achievements in 2018 in the context of the acquisition and integration of BSI Our strategic plan for the next EFG chapter 2019-22 Our acquisition of Shaw and Partners in Australia Full-year 2018 results presentation 13 March 2019 Page
Slide 5: 2016-18: BSI Acquisition and integration executed
EFG International 2016-18: BSI Acquisition and integration executed Main achievements Return to IFRS net profit of CHF 70 mn from CHF (60) Increased profitability and raised dividend mn in 2017, increased DPS by 20% to CHF 0.30 Further strengthened capital base Total capital from 15.7% in 2015 t
Slide 6: 2019-22: Profitable growth and effective capital deployment
EFG International 2019-22: Profitable growth and effective capital deployment EFG is emerging stronger from BSI acquisition EFG’s business model is distinctive in the current private banking environment Our execution engine is now shifting focus towards profitable growth Financial targets 20
Slide 7: Acquisition of majority stake in Shaw and Partners
Acquisition of majority stake in Shaw and Partners Giorgio Pradelli, Chief Executive Officer Dimitris Politis, Chief Financial Officer Full-year 2018 results presentation 13 March 2019 Page 7
Slide 8: Expansion of Asia Pacific footprint with entry into Australia
EFG International Expansion of Asia Pacific footprint with entry into Australia One of the most attractive and fast growing wealth management markets globally 3.0% average historical growth in real GDP (20Y) Attractive macro 3.5% average historical growth in the stock market environment and inde
Slide 9: Mutually beneficial partnership providing growth opportunities
EFG International Mutually beneficial partnership providing growth opportunities Rationale for the transaction The partnership will allow EFG access to a high growth market: Provide EFG an immediate access to the Australian market and enlarge EFG’s coverage in the Asia Pacific region Additional
Slide 10: Shaw and Partners
EFG International Shaw and Partners Strong and well established domestic player AuM (June year-end) Overview (in CHF bn) ・ Established in 1987 CAGR +19% ・ Well regarded and recognised brand ・ Provides full suite of wealth management 10.9 11.4 services, including brokerage, portfolio 8.9 management a
Slide 11: Transaction structure
EFG International Transaction structure Acquisition of 51% of Shaw and Partners for up to A$ 61 mn via a combination of cash and shares ・ Acquisition of 51% of Shaw and Partners for a total A$ mn Max consideration of up to A$ 61 mn (~CHF 44 mn) Paid Max 61 upfront ・ Implied adjusted P/E 2018 of 11x*
Slide 12: Financial performance
Financial performance Dimitris Politis, Chief Financial Officer Full-year 2018 results presentation 13 March 2019 Page 12
Slide 13: FY 2018 financial results in perspective
EFG International FY 2018 financial results in perspective EFG returns to IFRS net profit and proposes a dividend increase to CHF 0.30 per share 2018 IFRS net profit at CHF 70.3 mn, compared to a loss of CHF (59.8) mn in 2017 Profitability Underlying net profit at CHF 191.8 mn, up 16%; underlyin
Slide 14: Financials summary
EFG International Financials summary 2018 2017 IFRS net profit, CHF mn 70.3 (59.8) Underlying net profit*, CHF mn 191.8 165.0 Underlying operating income*, CHF mn 1,165.1 1,202.3 Underlying revenue margin*, in bps 84 87 Operating income, CHF mn 1,145.6 1,142.7 Revenue-generating AuM, CHF bn 131.2 14
Slide 15: Results highlights (I)
EFG International Results highlights (I) Underlying NNA growth at 1.8% Underlying revenues down 3%, IFRS revenues flat Underlying NNA evolution Underlying operating income / Operating income (in CHF bn) (in CHF mn) 2.5 1,202 1,165 1,143 1,146 2.3 (1.3) Nov-Dec 2016 2017 2018 2017 2018 2017 2018 Unde
Slide 16: Results highlights (II)
EFG International Results highlights (II) Operating expenses continue to decrease Underlying profit up 16%; positive IFRS net profit Underlying operating expense / Operating expense Evolution of underlying net profit / IFRS net profit (in CHF mn) (in CHF mn) 12.8% RoTE -6% -11% 1,190 191.8 1,064 165
Slide 17: Results highlights (III)
EFG International Results highlights (III) Underlying profitability at CHF 191.8 mn, up 16% vs. 2017 Evolution of underlying net profit (in CHF mn) [13.1]% RoTE Challenging market environment, especially during the second half of 12.8% the year, impacting underlying revenues Fair value impact 12.9
Slide 18: Revenue-generating AuM development
EFG International Revenue-generating AuM development Underlying NNA of CHF 2.5 bn, annual growth rate of 1.8% Current AuM at CHF 146.4 bn adjusted for Shaw and Partners Revenue-generating AuM evolution (in CHF bn) 146.4 2.5 11.0* Shaw and Partners 142.0 (4.6) 135.4 (5.9) (1.9) 131.2 (0.9) Dec 17 Und
Slide 19: Evolution of NNA & AuM attrition
EFG International Evolution of NNA & AuM attrition Underlying NNA improved versus last year Underlying NNA evolution AuM attrition evolution (in CHF bn) (in CHF bn) (1.4) (0.4) (3.7) 2.5 (1.6) 2.3 (4.6) (3.4) (1.2) (3.3) (1.3) (8.2) Nov-Dec 2016 2017 2018 Nov-Dec 2016 2017 2018 Forced attrition Volu
Slide 20: Business development by region
EFG International Business development by region Growth within the target range in all regions, except for Switzerland region 2018 AuMs as % of RoAuM* 2018 AuM attrition 2018 Underlying NNA Annualised growth CHF 131.2 bn total AuM (in bps) CHF 4.6 bn CHF 2.5 bn (in %) Switzerland 2.0 (2.5) 41.1 31%
Slide 21: Evolution of mandates penetration
EFG International Evolution of mandates penetration Current mandate penetration of 40% (advisory, discretionary mandates & funds) Evolution of advisory, discretionary mandates & funds (in %, excl. loans) 39% 40% Fully deploy the enhanced Investment Solutions platform Future developments: ― Regul
Slide 22: CRO performance
EFG International CRO performance Improved CRO productivity at CHF 229 mn AuM per CRO (up 27% since 2015) Number of CROs 580 671 617 Subdued CRO hiring activity during 2018, with 39 new CROs hired globally 697 644 590 Ongoing performance management efforts driving CRO reduction over the course o
Slide 23: Underlying operating income
EFG International Underlying operating income Underlying operating income of CHF 1,165.1 mn Underlying operating income (in CHF mn) 138.6 87 139.5 84 bn bps bn bps Underlying operating income down 3% year-on- 1,202.3 1,165.1 20.3 2 bps year, with one-off gains at similar levels 22.8 2 bps 212.2 15
Slide 24: Underlying operating expenses
EFG International Underlying operating expenses Underlying operating expenses down 6% vs. 2017, underlying cost-income ratio at 82.9% Underlying operating expenses (in CHF mn) Cumulative cost savings of 23% since 2015 (based on 85.9% 3,366 82.9% 3,153* FY 2015 pro-forma cost base of CHF 1,254.4 mn
Slide 25: Update on cost synergies from BSI transaction
EFG International Update on cost synergies from BSI transaction Delivery of additional CHF 79 mn of cost synergies in 2018, exceeding cumulative target Cumulative targeted cost synergies (pre-tax) (in CHF mn) Delivered cumulative cost synergies of CHF 187 mn for 240 2018, exceeding target for the
Slide 26: Final update on integration costs
EFG International Final update on integration costs Cumulative integration costs of CHF 267.5 mn for the full BSI integration Evolution of integration costs (pre-tax) Breakdown of integration costs (pre-tax) (in CHF mn) (in CHF mn) 34.8 267.5 91 90 250 36.8 98.1 52 42.7 45 46 47 42 10.0 38 55.1 32.7
Slide 27: Balance sheet
EFG International Balance sheet Strong and highly liquid Balance sheet Total assets: Total liabilities & equity: CHF 40.2 bn CHF 40.2 bn Due to banks 0.3 50% of Balance sheet in Cash & banks 10.3 liquid assets Loan-deposit ratio of 53% Liquidity coverage ratio (LCR) Treasury bills 1.2 Fair value
Slide 28: Capital position (I)
EFG International Capital position (I) Strong and improving capital position: CET1 ratio of 17.6%, Total capital ratio at 21.6% Proposal to increase the dividend to CHF 0.30 per share Total Capital Ratios* Breakdown of RWAs* (in %) (in CHF bn) 21.0 21.6 RWAs declined by 7% largely 3.9 through capi
Slide 29: Capital position (II)
EFG International Capital position (II) 2018 underlying net capital generation of 210 bps Evolution of Total Capital ratio* (in %) Underlying net capital generation 1.8 1.1 (0.3) (0.8) (0.7) 21.6 21.6 21.0 (0.4) 31 Dec 2017 Underlying P&L Dividend RWA decrease and Share buyback Integration costs Non
Slide 30: EFG International Full-year 2018 results presentation 13 March 2019
EFG International Full-year 2018 results presentation 13 March 2019 Page 30
Slide 31: Appendix
Appendix Full-year 2018 results presentation 13 March 2019 Page 31
Slide 32: Income statement (IFRS)
EFG International Income statement (IFRS) (in CHF million) 2017 2018 Net interest income 345.3 361.3 Net banking fee & commission income 617.3 564.6 Net other income 180.1 219.7 Operating income 1,142.7 1,145.6 Personnel expenses (726.0) (708.3) Other operating expenses (424.2) (313.6) Amortisation
Slide 33: Income statement (IFRS)
EFG International Income statement (IFRS) (in CHF million) 1H 2017 2H 2017 1H 2018 2H 2018 Net interest income 160.5 184.8 177.7 183.6 Net banking fee & commission income 315.1 302.2 295.1 269.5 Net other income 171.5 8.6 97.6 122.1 Operating income 647.1 495.6 570.4 575.2 Personnel expenses (356.0)
Slide 34: Underlying income statement
EFG International Underlying income statement (in CHF million) 1H 2017 2H 2017 1H 2018 2H 2018 Net interest income 161.7 192.2 183.5 189.2 Net banking fee & commission income 314.4 301.5 295.1 269.5 Net other income 163.7 68.8 126.0 101.8 Operating income 639.8 562.5 604.6 560.5 Personnel expenses (
Slide 35: Reconciliation of Underlying results to IFRS results 2018
EFG International Reconciliation of Underlying results to IFRS results 2018 Exceptional Underlying Integration BSI intangible IFRS results (in CHF million) Life insurance legal costs and results 2018 costs amortisation 2018 provisions Net interest income 372.7 (11.4) 361.3 Net banking fee & commissi
Slide 36: Balance sheet (IFRS)
EFG International Balance sheet (IFRS) (in CHF million) Dec 2017 Dec 2018 Cash and balances with central banks 9,700 7,142 Treasury bills and other eligible bills 1,482 1,199 Due from other banks 2,576 3,206 Derivative financial instruments 696 1,220 Financial asset at fair value through P&L 2,192 2
Slide 37: Breakdown of AuM
EFG International Breakdown of AuM 31.12.18 By category 31.12.17 31.12.18 (in CHF bn) Cash & deposits 25% 25% 32.4 Bonds 25% 25% 32.3 Equities 23% 21% 26.9 Structured products 3% 3% 4.0 Loans 13% 14% 18.8 Hedge funds 3% 3% 3.3 Other 8% 10% 13.4 Total 100% 100% 131.2 31.12.18 By currency 31.12.17 31.
Slide 38: Segmental analysis 2018
EFG International Segmental analysis 2018 Global Performance summary Switzerland, Continental Investment Corporate Americas UK Asia Markets & Eliminations Total (in CHF m) & Italy Europe Solutions Overheads Treasury Segment revenues 310.5 198.9 121.2 147.7 141.6 99.3 135.4 (9.0) - 1,145.6 Segment ex
Slide 39: Segmental analysis 2017
EFG International Segmental analysis 2017 Global Performance summary Switzerland, Continental Investment Corporate Americas UK Asia Markets & Eliminations Total (in CHF m) & Italy Europe Solutions Overheads Treasury Segment revenues 347.6 195.6 138.0 131.4 163.1 113.6 141.2 (87.8) - 1,142.7 Segment
Slide 40: Update on Life Insurance Exposures
EFG International 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 – small size of portfolio introduces substantial P&L volatility. For regul
Slide 41: Update on Life Insurance Exposures (II)
EFG International Update on Life Insurance Exposures (II) Direct holding of life insurance Death benefit: CHF 1,432 mn Non-underlying Carrying value: CHF 565.6 mn P&L impact: CHF (29.9) mn policies for 145 insureds (2017: 156) of Outright portfolio 2018 premium: CHF 106.7 mn Excl. interest
Slide 42: Contacts
EFG International Contacts Investors Media Investor Relations Marketing & Communications Jens Brueckner Daniela Haesler Head of Investor Relations Head of Marketing & Communications Phone +41 44 226 1799 Phone +41 44 226 1804 jens.brueckner@efginternational.com daniela.haesler@efginternational.com E