Dws Group Gmbh & Co. Kgaa · XETR:DWS
Dws Group Gmbh & Co. Kgaa — DWS — FY2017 Earnings Presentation
26 slides from Dws Group Gmbh & Co. Kgaa's earnings presentation, Feb 19, 2018
Slide 1: DWS Positioned for the Future: FY2017 Update
DWS POSITIONED FOR THE FUTURE FY2017 UPDATE FEBRUARY 19, 2018
Slide 2: Disclaimer
DISCLAIMER This document is being provided to you solely for your information. By opening this document, you agree to be bound by the following terms and conditions. This document has been prepared by DWS Group SE (the “Company”) and may not, without permission, be reproduced, further distributed, o
Slide 3: Key Highlights of Q4 and FY 2017
KEY HIGHLIGHTS OF Q4 AND FY 2017 FY 2017 adjusted profit before tax of €747m, up 5% on 2016 €16bn of FY 2017 net inflows results in 2.3% net flow rate; ex cash & insurance GA net flow rate is 4.9% Management fee margin remains resilient at 31.5bps for FY 2017 FY 2017 adjusted CIR of 70% up from 9M-1
Slide 4: Financial Performance Snapshot
FINANCIAL PERFORMANCE SNAPSHOT x% y-o-y change Adjusted profit before tax (€m) AuM (€bn) Consistent profit generation Return to asset growth 19 (39) 16 (3)% +5% (3)% +1% 731 709 747 714 689 700 2015 2016 2017 2015 2016 2017 xx Net flows (in €bn) Adjusted revenues (€m) Adjusted costs (€m) Stabilized
Slide 5: Strong Net Flows with 2017 Rebound
STRONG NET FLOWS WITH 2017 REBOUND AuM (€bn) AuM development detail (€bn) ~(6)% of AuM ~2% of AuM 0 714 ~3% of AuM 34 3 16 +5% 1 700 29 15 689 714 700 5 (5) 689 19 35 658 (39) 658 (36) ~5% of AuM 582 (16) 30 €31bn or ~7% of €(22)bn or ~(5)% €23bn or ~5% of AuM ex Cash & of AuM ex Cash AuM ex Cash &
Slide 6: Growing Revenues in Focus Areas and Maintaining Margins
GROWING REVENUES IN FOCUS AREAS AND MAINTAINING MARGINS x Management fee margin (bps) x% y-o-y change Adjusted 76 76 AuM (€bn) revenues(1) (€m) 10% Equity 699 765 700 2,357 2,456 44 42 Active 14% Multi 5% Equity Asset 239 250 Active 30% 31% 9% Multi Asset 28 29 Active Active SQI 7% SQI (2)% 174 169
Slide 7: Limited Reliance on One-Off Fees, Leading to a Stable Revenue Base
LIMITED RELIANCE ON ONE-OFF FEES, LEADING TO A STABLE REVENUE BASE Performance & transaction fees breakdown (€m) Other revenues breakdown (€m) Performance and transaction fees historically represent <10% of annual Other revenues comprise: revenues: ‒ Harvest related revenues due to 30% DWS ‒ Real Es
Slide 8: Adjusted Costs – Compensation & Benefits
ADJUSTED COSTS – COMPENSATION & BENEFITS Adjusted compensation & benefits (€m) Highlights FTE (Year-end) 3,877 3,860 3,901 ‒ FTE increase since 9M-17 driven by hires in coverage and investment teams, incremental Comp & ben company set-up functions and technology €220k €179k €200k per FTE(1) ‒ Adjust
Slide 9: Adjusted Costs – General Expense
ADJUSTED COSTS – GENERAL EXPENSE Adjusted general and admin. expenses (€m) Highlights ‒ Adjusted general and admin expenses decreased (7)% by 1% in FY 2017 compared to 2016 (1)% 264 1,033 ‒ Comparing Q4 2017 to 9M-17 quarterly average(2): IT / 958 947 228 45 Communications 187 ‒ Marketing costs incr
Slide 10: Cost Tailwinds and Headwinds
COST TAILWINDS AND HEADWINDS Adjusted cost tailwinds Medium term target (per annum) Expected timing ~20 - 30% in 2018, Cost efficiency initiatives ~€125 - 150m will reach full savings in medium term Below 25% in 2018 and potential further From 30% to below 25% of 2017 adjusted DB Group services opti
Slide 11: DWS Detailed Standalone Financials – FY 2017
DWS DETAILED STANDALONE FINANCIALS – FY 2017 Adjusted profit & loss statement and key performance indicators (€m) Highlights FY 2015 FY 2016 FY 2017 FY16 %Δ FY17 %Δ 1 Favorable market performance Management fees and other recurring 1 driving management fees and other 2,260 2,136 2,195 (6)% 3% reven
Slide 12: DWS Detailed Standalone Financials – Q4 2017
DWS DETAILED STANDALONE FINANCIALS – Q4 2017 Adjusted profit & loss statement and key performance indicators (€m) Highlights Q4 2016 Q4 2017 9M-17 FY-17 1 Decrease in performance and transaction fees following higher Management fees and other recurring revenues 552 542 1,653 2,195 fees in Active Mu
Slide 13: Updated Capital Position – FY2017
UPDATED CAPITAL POSITION – FY2017 Pillar I requirement (€bn)(1) Pillar II requirement(3) (€bn) Pro forma capital Pro forma RWA requirement(2) Targeted excess capital 8.2 0.2 Key differences to Pillar II Pillar 1: Market 3.7 (Base EC and - Operational Risk adverse stress - Structural FX Risk scenario
Slide 14: Positioned to Deliver Shareholder Value
POSITIONED TO DELIVER SHAREHOLDER VALUE Strategy KPI 2017 Medium term financial targets Positioned to Net flows (% of BoP AuM) 2.3% 3% to 5% capture net flows Management Consistent fee margin 31.5bps ≥30bps margin resilience Adjusted Operational 70% <65% CIR leverage and cost discipline Dividend pay
Slide 15: Appendix
ADWS APPENDIX
Slide 16: Reconciliation from Deutsche AM Reported Segment to Adjusted DWS Standalone
RECONCILIATION FROM DEUTSCHE AM REPORTED SEGMENT TO ADJUSTED DWS STANDALONE Q4 2017 AND FY 2017 DWS Perimeter adjustments Adjustments Adjusted DWS Deutsche AM standalone standalone reported Sold & Other reported DB Group DWS Q4 2017 Q4 2017 Abbey Life discontinued perimeter Q4 2017 definition(3) spe
Slide 17: Adjusted PBT Includes a Number of One-Off Adjustments
ADJUSTED PBT INCLUDES A NUMBER OF ONE-OFF ADJUSTMENTS Reconciliation from reported Deutsche AM to adjusted DWS standalone 2017 (pro forma) (€m) 783 58 (52) 747 16 725 Adjustments mainly for sold & discontinued business and DB Group treasury allocations 2017 Perimeter adjustments 2017 Insurance Cost
Slide 18: Reconciliation from DWS Standalone Reported to Adjusted PBT
RECONCILIATION FROM DWS STANDALONE REPORTED TO ADJUSTED PBT PBT reconciliation (€m) Adjustments FY-15 FY-16 FY-17 Q4 2016 Q4 2017 1 Proceeds from the sale of the PowerShares Profit before Tax (reported) 633 647 783 215 136 fund in the Americas in 2015 Revenue adjustment items 2 Mark-to-market valu
Slide 19: Historic Quarterly AuM Development
HISTORIC QUARTERLY AUM DEVELOPMENT Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY Q1 Q2 Q3 Q4 FY All figures in €bn 2014 2014 2014 2014 2014 2015 2015 2015 2015 2015 2016 2016 2016 2016 2016 2017 2017 2017 2017 2017 Active Equity (1) (1) (1) (1) (4) (0) (1) (1) 1 (1) 0 (1) 0 (2) (2) (0) (1) (0) (1) (2
Slide 20: Regional Management Fees Breakdown
REGIONAL MANAGEMENT FEES BREAKDOWN AuM Management fees Highlights As of Dec 31, 2017 (€bn) FY 2017 (€m) ‒ Booking view management fees influenced by 700 2,195 transfer pricing principles (e.g. attributing revenue to fund domicile and manufacturing regions) 23% ‒ Therefore, estimating margins based o
Slide 21: Historic Management Fee Margins
HISTORIC MANAGEMENT FEE MARGINS 2015 2016 9M-17(1) 2017 Management fee margins in bps Active Equity 75.8 75.6 75.7 75.8 Active Fixed Income 16.9 15.0 14.4 14.2 Active Multi Asset 40.7(2) 44.4 42.1 42.0 Active SQI 31.3 27.7 27.6 29.0 Cash 8.3 7.8 8.3 8.6 Passive 29.5 26.8 24.9 24.3 Alternatives 58.4
Slide 22: Historic Management Fees
HISTORIC MANAGEMENT FEES 2015 2016 9M-17 2017 Management fees in €m Active Equity 661 650 533 711 Active Fixed Income 442 388 269 353 Active Multi Asset 150 192 166 224 Active SQI 172 149 108 151 Cash 62 49 36 50 Passive 305 265 194 257 Alternatives 434 411 327 425 Other(1) 34 31 20 23 Total 2,260 2
Slide 23: Balance Sheet: Translation from IFRS Reported to Economic View
BALANCE SHEET: TRANSLATION FROM IFRS REPORTED TO ECONOMIC VIEW IFRS Consolidated DB Vita Economic FY-17 (€bn) (1) Highlights reported Funds and pending view Assets €2.3bn adjustments comprise: Cash and bank balances 3.3 0.0 0.0 3.3 1 – Guaranteed Funds (€1.3bn) Fin. assets at FV through P&L 1.9 1.2
Slide 24: DWS – A Simple and Stable Balance Sheet
DWS – A SIMPLE AND STABLE BALANCE SHEET Economic view (€bn) FY-15 FY-16 FY-17 Cash and bank balances covers regulatory requirements, dividend payments, daily Assets operations Cash and bank balances 3.3 3.3 3.3 Seed & co-investments Fin. assets at FV through P&L 0.1 0.2 0.1 includes co-investments i
Slide 25: Workforce Footprint – ~3,900 Employees in 22 Countries
WORKFORCE FOOTPRINT – ~3,900 EMPLOYEES IN 22 COUNTRIES Americas FTE – 929 APAC FTE – 798 COO Active Passive Active 66 137 17 126 Alternatives Central Passive 49 Support 29 Coverage 110 95 Trading and Trading and Products Products Alternatives 14 65 COO 222 446 Central Coverage Support 240 111 EMEA(1
Slide 26: Financial Glossary
FINANCIAL GLOSSARY Terminology Definition AuM is defined as (a) assets we hold on behalf of customers for investment purposes and/or (b) client assets that are managed by us on a discretionary or advisory basis. AuM represents both collective investments (Mutual Funds, Exchange-Traded Funds, etc.) a