Efg International Ag · SIX:EFGN
Efg International — Investor Day (October 2022)
69 slides from Efg International's investor day presentation, Oct 12, 2022
Slide 1: EFG Investor Day: Sustaining profitable growth, achieving scale
EFG INTERNATIONAL EFG Investor Day Sustaining profitable growth, achieving scale 12 October 2022 – Zurich
Slide 2: Important Legal Disclaimer
Important Legal Disclaimer This document has been prepared by EFG International AG (“EFG”) solely for use by In view of these uncertainties, readers are cautioned not to place undue reliance you for general information only and does not contain and is not to be taken as on these forward-looking stat
Slide 3: Our leadership team
Our leadership team Global Executive Committee Business Committee Giorgio Dimitris Vassiliki Martin Maria Enrico Harald Pradelli Politis Dimitrakopoulou Freiermuth Leistner Piotto Reczek Chief Executive Officer Chief Financial Head of Regulatory Global Chief Head of Legal & Chief Risk Officer Head o
Slide 4: Investor Day 2022: Agenda
Investor Day 2022: Agenda 1 Starting point and 2025 ambition 09:30 G. Pradelli 2 Drivers of sustainable profitable growth 09:50 G. Pradelli A. Chiu F. Polloni R. Thomas Clients P. Ramsey S. Mohorovic Simplicity M. Freiermuth 3 Growth accelerators and differentiators 10:20 H. Reczek K. Haueter Conten
Slide 5: Starting point and 2025 ambition
1 Starting point and 2025 ambition Giorgio Pradelli Chief Executive Officer
Slide 6: 2025 ambition: Sustaining profitable growth, achieving scale
2025 ambition Sustaining profitable growth, achieving scale 2023-2025 Sustaining profitable growth, 2019-2022 achieving scale 2016-2018 Profitable growth Acquisition and 3 integration 2 Consistent delivery of operating 1 Cost discipline, consistent leverage and strong focus on delivery and implement
Slide 7: 2019-22 value creation story
2019-22 value creation story Prerequisites for value creation What EFG has delivered • Superior service and impartial advice delivered • ~5% NNA growth p.a. by our distinctive CROs Distinctive Continued • +5bps revenue margin • Holistic product offering value proposition growth to ~85bps and open ar
Slide 8: Entering the new strategic cycle from a position of strength
Entering the new strategic cycle from a position of strength Consistent Diversified Continued cost delivery revenue sources discipline Absolute development 2019-2022 Revenue-generating AuM Cost/income ratio across different regions underlying revenue Latin America Switzerland +8% growth & Italy 85%
Slide 9: Well positioned to benefit from growth trends across geographies and segments
Well positioned to benefit from growth trends across geographies and segments Growing Growth across Growth across Growth in attractive industry all market stages all client segments sustainable investing 180tn financial +5% financial wealth growth in +7% UHNWI growth 16tn sustainable invested wealth
Slide 10: 2025 ambition focused on accelerating profitable growth
2025 ambition focused on accelerating profitable growth Growth accelerators Consistent financial and differentiators performance Drivers of sustainable profitable growth Content innovation Enhancing quality and enriching product offering to drive profitability NNA growth Continued revenue Clients Di
Slide 11: Accelerated revenue growth and cost discipline drive increased operating leverage
Accelerated revenue growth and cost discipline drive increased operating leverage Operating leverage Illustrative revenue and cost development Building on economies of scale to reach a Growth new level of operating leverage acceleration Sustainable We have managed to build a strong and profitable gr
Slide 12: Delivering on 2019-2022 plan, ready to reach 2025 targets
Delivering on 2019-2022 plan, ready to reach ambitious yet realistic 2025 targets 2022 Latest performance targets indicators1 2025 targets2 Financial targets NNA growth 4-6% p.a.3 ~5% p.a.3 4-6% p.a.4 Revenue margin 85bps ~85bps 85bps Cost/income ratio 72-75% ~75% 69% RoTE >15% ~15% 15-18% 1 Current
Slide 13: Entering the next strategic cycle with a clear purpose and vision
Entering the next strategic cycle with a clear purpose and vision Our purpose “Empowering entrepreneurial minds to create value – today and for the future.” Our vision “As a leading Swiss private bank, we want to use our unique client approach to create sustainable and profitable growth.” EFG Intern
Slide 14: Drivers of sustainable profitable growth: Clients
2 Drivers of sustainable profitable growth Clients Client centric approach leveraging unique CRO model
Slide 15: Clients at the centre of our value proposition
Clients at the centre of our value proposition EFG’s value proposition Global reach, CROs with strong Holistic local know-how client focus client solutions Distinctive brand “Bringing entrepreneurial thinking to Swiss private banking” EFG International | Investor Day 12 October 2022 Page 15
Slide 16: Strategic approach to sustainability
Meeting the needs of our clients and next generations: Strategic approach to sustainability Our responsibility as an Our responsibility as a asset allocator firm Allocating capital on behalf of our clients with Meeting the expectations of all our an increasing focus on responsible investing stakehol
Slide 17: Clients benefit from unique entrepreneurial approach of CROs
Clients benefit from unique … embedded in entrepreneurial approach of CROs… EFG's values Accountable Entrepreneurial 1. Focus on 2. Long-term Partnership with approach to provide clients' client clients driven by independent and tailored solutions impartial advice needs relationships and senior expe
Slide 18: Building on our strong track record in attracting talented CROs
Building on our strong track record in attracting talented CROs Good hiring Attracted Increased momentum top performers productivity >70 50% >300mn CHF new joiners of NNA revenue-generating gross p.a. over delivered by AuM/CRO (approx. last 3 years1 new hires2 +40% in 3 years)3 1 Hired since 1 Janua
Slide 19: Ambitious CRO goals to drive future growth
Ambitious CRO goals to drive future growth 2025 guidance Hiring CRO teams with sizeable portfolios 50-70 hired Strong executive management involvement (incl. roadshows) to attract p.a. globally top tier CROs Systematic hiring approach leveraging NNA generation ~50% by new joiners1 strategic recruiti
Slide 20: Developing the next generation of CROs to support growth
Developing the next generation of CROs to support growth Focused hiring Active support to encourage of top talent progression to CRO path Enhanced hiring efforts to Supporting CSOs and top talent to attract junior CROs and high encourage career development potential candidates and move towards CRO p
Slide 21: Tailored service models upgrading client experiences
Tailored service models upgrading client experiences Share of EFG's AuM1 UHNW clients High-quality digitally augmented 50% Holistic and tailored product proposition service tailored to clients' needs with fast-track service model Higher value products available HNW clients to more clients 37% High-q
Slide 22: UHNW clients: Enhancing service offering
UHNW clients: Enhancing service offering Tailored proposition Fast delivery Top deal team Increasing number of Accelerating request Team of top cross- individually tailored, management through functional specialists sophisticated solutions (e.g., improved prioritisation and experts, proactively weal
Slide 23: EFG's CROs Video
EFG's CROs Video EFG's CROs and Heads of Private Banking
Slide 24: Global footprint ensures proximity to clients
Global footprint ensures proximity to clients UK 22bn EFG's total revenue- generating AuM 23bn1 Cont. Europe & Middle East CHF Switzerland 144bn & Italy 42bn 31bn2 16bn Asia includes CHF 10bn Pacific from EFGAM Latin America EFG location Key EFG booking centre Note: Size of circles not to scale EFG
Slide 25: Business Regions Video
Franco Polloni Patrick Ramsey Richard Thomas Head of Switzerland & Italy Head of Continental Europe & Head of UK Region Region Middle East Region Business Regions Video Albert Chiu Sanjin Mohorovic Head of Asia Pacific Region Head of Latin America Region
Slide 26: Pursuing growth and critical mass across all business regions
Pursuing growth and critical mass across all business regions Key growth levers 22bn UK CRO-led growth Switzerland Cont. Europe & Middle East Expansion and & Italy 42bn growth in Asia strategic markets Latin 23bn1 America Pacific Superior service and holistic 16bn 31bn2 product offering 4% 6% EFG NN
Slide 27: Drivers of sustainable profitable growth: Simplicity
2 Drivers of sustainable profitable growth Simplicity Improving operating leverage via simplification
Slide 28: Maintaining cost discipline and efficiency gains over the next strategic cycle
Maintaining cost discipline and efficiency gains over the next strategic cycle Cost/income ratio 2019 - 2022 Continued cost reduction and efficiency improvements • Discontinued operation of underperforming booking centres 85% • Reduced process complexity and simplified operating model • Improved cos
Slide 29: Simplicity programme to deliver cost benefits in four areas
Simplicity programme to deliver cost benefits in four areas 1 Digitalisation and 2 Overall 3 e2e process 4 Front-to-back automation rationalisation centralisation client lifecycle 12 52 24 5 initiatives initiatives initiatives initiatives • Revamping IT demand • Applying cost discipline • Consolidat
Slide 30: Simplicity Video
Simplicity Video Martin Freiermuth Global Chief Operating Officer
Slide 31: Growth accelerators and differentiators: Content innovation
3 Growth accelerators and differentiators Content innovation Enhancing quality and enriching product offering to drive profitability
Slide 32: Holistic product offering tailored to client needs
Holistic product offering tailored to client needs Dedicated offering EFG clients Global markets access UHNW clients Discretionary and Portfolio Product advisory solutions and credit managers specialists Structured products HNW clients Investment Sustainability Financing and counsellors CROs experts
Slide 33: Building on a positive momentum in mandate penetration
Building on a positive momentum in mandate penetration Evolution of mandate penetration Penetration of advisory, discretionary mandates and funds as % of AuM, excluding loans and IAM business High-quality advice supporting clients' needs 65-70% 57% 55% 52% 54% Open architecture ensuring tailored off
Slide 34: Sustainability as integral part of the investment advice to clients
Sustainability as integral part of the investment advice to clients Proactively engage with Enhance in-house Capitalise on investment clients to understand training, expertise process incl. responsible their approach to and ESG-related investment offering and sustainability research distribution Eng
Slide 35: Content innovation based on four pillars
Content innovation based on four pillars 1 2 3 4 Investment Global Markets Wealth Credit Solutions & Treasury Solutions Solutions • Expansion of ESG and • Bring institutional • Positioning of • Leverage our strength Alternatives offering content, specialist Wealth Solutions to in Lombard lending, •
Slide 36: Content innovation Video
Harald Reczek Moz Afzal Head of Investment Solutions Chief Investment Officer Content innovation Video Kurt Haueter Anthony Cooke-Yarborough Head of Global Markets & Treasury Private Banking Chairman
Slide 37: EFG stands for independent advice, sophisticated solutions and client proximity
EFG stands for independent advice, sophisticated solutions and client proximity 1 2 3 Independent Sophisticated Client advice solutions proximity • Open product • Institutional-like • Products and services architecture investment process tailored to client needs • Holistic advice across • Extensive
Slide 38: Growth accelerators and differentiators: Digital acceleration
3 Growth accelerators and differentiators Digital acceleration Embracing digital experiences and driving technological scalability
Slide 39: Digital acceleration supports delivery of profitable growth
Digital acceleration supports delivery of profitable growth 5-pillar digital strategy… …directly impacting key business metrics 1 Client, user and CRO experience Revenue 2 Value from data growth Optimising for 3 Efficiency and simplicity cost reduction 4 Core banking platform Strengthening 5 Cyber-s
Slide 40: Clear roadmap to achieve digital acceleration and improve operational efficiency
Clear roadmap to achieve digital acceleration and improve operational efficiency Focus up to 2022 Digital roadmap of 2023-2025 strategic cycle Reinforcing our Improving CX / UX and Introducing next technological core operational efficiency generation technology • Rolled out T241 phase 1 • Implementi
Slide 41: Digital acceleration Video
Digital acceleration Martin Freiermuth Demis Stucki Global Chief Operating Officer Global Private Banking COO Video
Slide 42: Growth accelerators and differentiators: EFG's people
3 Growth accelerators and differentiators EFG’s people Fostering a culture in which people thrive and create value for our clients
Slide 43: People are EFG's most important asset
People are EFG's most important asset Attracting talent Developing our people Engaging our people Become an employer of Enabling our people to Mobilising our people choice to attract and develop professionally and behind our purpose and retain talented investing in future skills as fostering a diver
Slide 44: Our culture is built on our corporate values
Our culture is built on our corporate values that are lived day by day Accountable Take ownership for tasks, act responsibly with a focus on our bank’s and our clients’ long-term interests Hands-on Our values are a core Being proactive to rapidly deliver high-quality results part of our appraisal, p
Slide 45: EFG's People Video
EFG's People Ioanna Archimandriti Global Head of Human Resources Video Graduates and CROs
Slide 46: Core foundation: Resilience
4 Core foundation Resilience Key prerequisite for sustainable growth
Slide 47: Robust compliance and risk management framework
Robust compliance and risk management framework are a prerequisite to sustainable growth Reinforcing our strong compliance culture • Continuously enhance internal control processes and increase standardisation • Optimise client experience and simplify Compliance automated client data processes Pre-
Slide 48: Resilience Video
Resilience Vassiliki Dimitrakopoulou Enrico Piotto Head of Regulatory Affairs Chief Risk Officer Head of Legal & Compliance (a.i.) Video
Slide 49: Proven operational and financial resilience
Proven operational and financial resilience 1 2 3 Strong De-risked Proven ability to balance operational react quickly to sheet platform external shocks EFG International | Investor Day 12 October 2022 Page 49
Slide 50: Consistent financial performance
5 Consistent financial performance Dimitris Politis Chief Financial Officer & Deputy CEO
Slide 51: Achieving 2022 financial targets through profitable growth and operating leverage
Achieving 2022 financial targets through profitable growth and operating leverage Continued growth despite challenging markets Strong performance in operating leverage ~2x vs. 2019 NNA growth (annualised) Underlying net profit in % in CHF mn 5.5 5.5 4.0 167.8 108.7 114.4 2.0 115.0 1H2022 2019 2020 2
Slide 52: 2025 financial targets: Continued business growth and increased operating leverage
2025 financial targets: Continued business growth and increased operating leverage to deliver enhanced profitability 2022 Latest performance targets indicators1 2025 targets2 Financial targets NNA growth 4-6% p.a.3 ~5% p.a.3 4-6% p.a.4 Revenue margin 85bps ~85bps 85bps Cost/income ratio 72-75% ~75%
Slide 53: Enhanced CRO productivity and hiring to drive NNA generation
Going forward: Enhanced CRO productivity and hiring to drive NNA generation Further scope to improve CRO productivity AuM per CRO in CHF mn Peers1 +30% Continue to improve productivity of existing CROs by onboarding 271 316 new clients and increasing share 4-6% 224 of wallet across client base NNA g
Slide 54: 2022 revenue margin target achieved
2022 revenue margin target achieved Underlying RoAuM in bps ~85 ~150 NII sensitivity2 for GBP 79 NII benefitting additional 100bps USD 75 from rising increase in interest 71 Net interest rates CHF 23 33 interest rates 20 income 15 EUR in CHF mn Contribution increased during last strategic cycle 41 C
Slide 55: Targeting 85 bps revenue margin by 2025
Going forward: Targeting 85 bps revenue margin by 2025 Underlying RoAuM Illustrative in bps 3 key levers with impact on margin growth ~85 C 85 A B Current run rate1 Net interest income Commission income Other income 2025 target contribution contribution contribution • Tailwinds from rising • Enhance
Slide 56: Strong track record in managing costs
Strong track record in managing costs Continuous drive to increase efficiency Significant cost reduction achieved Underlying cost/income ratio via footprint rationalisation in % Sale of Chilean booking centre -10 pp 2020 85.2 Sale of French Oudart entity 82.7 79.9 Sale of personal and corporate 75.8
Slide 57: Operational efficiency through Simplicity programme and cost management
Going forward: EFG to drive operational efficiency through Simplicity programme and rigorous cost management Simplicity programme Rigorous cost management Simplicity programme initiatives expected to • Performance management based on generate cost benefit of CHF 40mn by 2024 clear KPIs: for CROs, fr
Slide 58: Future investments in technology to be focused and progressive
Future investments in technology to be focused and progressive IT investment plan (capex) Focus of investments within 5-pillar digital strategy in CHF mn 2019-2022 2023-2025 Client, user and CRO experience 40 37 36 34 Value from data 31 Efficiency and 23 simplicity Core banking platform Cyber-securi
Slide 59: Delivering targeted efficiency gains by 2025
Delivering targeted efficiency gains by 2025 Illustrative Projection of underlying cost/income ratio in % Key drivers with impact on CIR ~75 A 69 B C D Current run rate1 Efficiency Digital Revenue Inflation 2025 target improvements enhancements improvements • Simplicity ~ • Focused • Attracting new
Slide 60: Business growth and efficiency gains to create further operating leverage
Business growth and efficiency gains to create further operating leverage Underlying profit after tax Illustrative in CHF mn RoTE: RoTE: ~15% 15-18% ~15% p.a 2022E Increase in Controlled increase 2025 target underlying in underlying operating income operating expenses EFG International | Investor Da
Slide 61: Agility in execution drove consistent profit growth in a volatile backdrop
Agility in execution drove consistent profit growth in a volatile backdrop Underlying net profit +5% Decrease in revenues +47% Significant top line growth +40% Top line growth with offset by strong cost achieved while containing zero cost growth 2019-2020 reduction 2020-2021 increase in costs H1 202
Slide 62: Solid capital position underpins growth ambition
Solid capital position underpins growth ambition Principles guiding our capital Clearly defined capital management framework management framework CET1 capital ratio from 2023 onwards1 Surplus capital potentially Capital-light operating model available for distribution subject to: • Market conditions
Slide 63: On the lookout for accretive M&A opportunities
On the lookout for accretive M&A opportunities 1 Acquire market share and/or capabilities in strategic markets where we are already present and realise synergies Key 2 Ensure transactions with strong cultural fit and assessment complementary organisational elements parameters 3 Consider transactions
Slide 64: 2025 financial targets: Sustained business growth and increased operating leverage
2025 financial targets: Sustained business growth and increased operating leverage to deliver enhanced profitability 2025 targets1 Financial targets NNA growth 4-6% p.a.2 Revenue margin 85bps Cost/income ratio 69% RoTE 15-18% Capital management framework CET1 management floor 12%3 Dividend payout 50
Slide 65: Final remarks
6 Final remarks Giorgio Pradelli Chief Executive Officer
Slide 66: 2025 ambition: Sustaining profitable growth, achieving scale
2025 ambition Sustaining profitable growth, achieving scale 2023-2025 Sustaining profitable growth, 2019-2022 achieving scale 2016-2018 Profitable growth Acquisition and 3 integration 2 Consistent delivery of operating 1 Cost discipline, consistent leverage and strong focus on delivery and implement
Slide 67: Ambition 2025: Committed to increase value for our stakeholders
Ambition 2025 Committed to increase value for our stakeholders 2025 financial targets1 Our clients Comprehensive product and service offering via client-centric entrepreneurial CRO model NNA growth 4-6% p.a.2 Integrating sustainability across value chain, covering needs and expectations of existing
Slide 68: E tr G
E tr G
Slide 69: Contacts
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 EFG International A