Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — Van Lanschot — Shareholder Meeting (May 2008)
45 slides from Kempen European High Dividend Fund N.V. N's shareholder meeting presentation, May 8, 2008
Slide 1: Van Lanschot NV Annual General Meeting of Shareholders
Van Lanschot NV Annual General Meeting of Shareholders ‘s-Hertogenbosch, 8 May 2008
Slide 2: Item 2a: Report of the Board of Managing Directors for 2007
Item 2a Report of the Board of Managing Directors for 2007 1
Slide 3: Van Lanschot's strategy (I)
Van Lanschot’s strategy (I) Distinct positioning Real alternative to the large banks Independence is our distinguishing feature Full-service niche bank Large enough to provide full-service concept to target groups Small enough to ensure genuine personal service Client intimacy The client is key, als
Slide 4: Van Lanschot's strategy (II)
Van Lanschot’s strategy (II) - Objective: to be the best private bank in the Netherlands and Belgium - Increased focus on asset management and advice for the higher segments - Specialist teams offering tailor-made solutions - Emphasis on asset planning - Deliberate choice for a low risk profile 3
Slide 5: Van Lanschot's strategy (III)
Van Lanschot’s strategy (III) - The statutory client due diligence requirements demand a great deal from the organisation - A strict and systematic approach is necessary - The Board of Managing Directors enforces the importance of risk management and client due diligence in the form of objectives an
Slide 6: Financial targets
Financial targets 2007 Target Growth in EPS (%) 8.4 >10 Growth in income (%) 28.6 >5 Efficiency ratio (%) (1) 64.0 50 – 60 Return on shareholders’ funds (%) 16.9 18.0* BIS total capital ratio (%) 12.0 12.5 BIS Tier I ratio (%) 9.0 9.5 BIS Core Tier I ratio (%) 6.7 7.5 Credit rating A A (1) Excluding
Slide 7: Net profit
Net profit Net profit for 2007 rises 16.7% to € 215.4 million 215,369 CAGR 17.7% 184,488 152,398 119,400 106,664 97,576 90,008 80,759 62,443 49,583 1998 1999 2000**2001** 2002 2003 2004* 2005 2006 2007 * Excluding effects of the acquisition of CenE Bankiers **Excluding extraordinary income Net profi
Slide 8: Return on shareholders' funds
Return on shareholders’ funds Target: average 18% 17.0 17.4 16.9 16.4 16.1 16.3 15.6 15.7 14.9 13.1 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Return on shareholders’ funds 1998 – 2007 (%) 7
Slide 9: Earnings per share
Earnings per share 8.4% growth in EPS in 2007 5.94 Average number of 5.48 CAGR 14.7% outstanding shares +7.9% 4.65 due to the acquisition of 4.11 Kempen 3.66 3.33 3.00 2.71 2.12 1.73 1998 1999 2000 2001 2002 2003 2004* 2005 2006 2007 * Excluding effects of the acquisition of CenE Bankiers Earnings p
Slide 10: Dividend per share
Dividend per share Amount available to shareholders in 2007 € 6.04 3.00 2.75 CAGR 15.2% Proposed dividend of 2.50 € 3.00 per share (+9.1%) 2.11 1.83 Pay-out ratio: 49.7% 1.63 1.50 1.35 0.94 0.84 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 Dividend per share 1998 – 2007 (€) 9
Slide 11: Total return for shareholders in 2007 of 6%
Van Lanschot: total return for shareholders (price increase + dividend) in 2007 of 6% 76 74 72 70 68 66 64 JA N F EB MAR APR MA Y JU N JU L AU G SE P O CT NOV D EC VAN L AN SCH O T S o u r ce : DA T A S T R E A M 10
Slide 12: Share price Van Lanschot vs SNS, ING and Fortis
Share price Van Lanschot vs SNS, ING and Fortis, January 2007 – to date 120 110 100 90 80 70 60 50 40 J F M A M J J A S O N D J F M A M Va n L a nscho t Ba nk ie r s F o rt is SN S Re a a l IN G G ro e p S o u r ce : DA T A S T R E A M 11
Slide 13: Van Lanschot vs Julius Baer, Vontobel, Credit Suisse and UBS
Van Lanschot vs Julius Baer, Vontobel, Credit Suisse and UBS, January 2007 – to date 160 140 120 100 80 60 40 20 J F M A M J J A S O N D J F M A M Va n L a nscho t Ba nk ie rs Cre dit Suisse Julius Ba e r U BS Vo nt o be l S o u r ce : DA T A S T R E A M 12
Slide 14: Annual profit for 2007 climbs 16.7%
Annual profit for 2007 climbs 16.7% - Strong growth in clients and funds entrusted continues - Income from operating activities rose 28.6% to € 648.0 million in particular thanks to substantially higher commission income - Net profit up 16.7% to € 215.4 million - Earnings per share € 5.94, an increa
Slide 15: Net profit for 2007
Net profit for 2007 H2: Gain on sale of Assurantiën of € 20.8 million 113.8 20.8 Kempen had an excellent H1 thanks to the positive stock markets and the Gain on sale performance fees received. Net profit The negative sentiment on the equity markets in H2 led 101.6 93.0 to fewer securities transactio
Slide 16: Kempen & Co
Kempen & Co - Acquisition of Kempen & Co reinforces private banking profile – Van Lanschot Kempen – Kempen Capital Management - Investment expertise of Kempen used to offer clients a wider range of products and services - Kempen is specialist in European property and European small and midcap equiti
Slide 17: Van Lanschot capitalises on consolidation battle
Van Lanschot capitalises on consolidation battle Private banking strategy and takeover battle in the Dutch 7.1 financial sector in 2007 led to substantial inflow of new clients and funds entrusted Savings accounts and 4.0 deposits of private clients 3.3 +77.5% to € 7.1 billion 2.4 2.2 Assets under d
Slide 18: Assets under Management and funds entrusted
Assets under Management and funds entrusted 14.6 29.9 28.1 4.8 4.4 11.4 5.8 5.1 9.8 Funds entrusted: In- house funds private c lients 6.6 Funds entrusted: Institutions c orporate 19.3 18.6 Private c lients 4.8 4.8 2006 2007 2006 2007 Total assets under management (x € billion) Funds entrusted (x € b
Slide 19: Assets under Discretionary Management
Assets under Discretionary Management 15.4 14.7 0.3 1.0 4.8 4.4 In- house funds 4.9 4.0 Institutions 15.4 14.7 Private c lients 5.7 6.3 2006 2007 1-1-2007 Net new Market 31-12-2007 assets performance Assets under discretionary management Development in 2007 (x € billion) (x € billion) 18
Slide 20: Low risk profile
Low risk profile - Deliberate choice for low risk profile; in line with profile of a private bank - No direct or indirect investments in subprime sector, no CDOs, no SIVs - High-quality loans portfolio - Loans almost exclusively provided to Dutch companies and Dutch and Belgian wealthy private indiv
Slide 21: Solid liquidity position
Solid liquidity position Funding ratio in 2007 up 95 from 77.4% to 91.2% 90 Target: further growth in funding ratio in 2008 85 € 1.5 billion RMBS securitisation in H1 2007 80 Repayment of € 1 billion in Floating Rate Notes in 2008: 75 - Early repayment of € 600 million FRN 2012 - No refinancing of 7
Slide 22: Segment analysis
Segment analysis 9% Other activities 25% 11% Corporate Finance and 10% Securities 26% Business Banking 19% Asset Management 17% 12% Private Banking 34% 37% 2006 2007 Operating profit before tax by segment 21
Slide 23: Solid financial position
Solid financial position -- BIS total capital ratio 16 12.0% 14 (target 12.5%) -- BIS Tier I ratio 9.0% 12 (target 9.5%) -- BIS core Tier I ratio 6.7% 10 (target 7.5%) 8 Basel II: standardised 6 approach per 1-1-2008 4 Risk weighted assets 2 +16.2% to € 13.6 billion 0 Return on shareholders’ 2003 20
Slide 24: Developments in Q1 2008 (I)
Developments in Q1 2008 (I) - Consolidation battle in the Netherlands provides opportunities for attracting new clients and new private bankers - Inflow of new clients continued in the first three months of 2008 - Inflow of funds entrusted continues, albeit at a slightly slower pace than last year -
Slide 25: Developments in Q1 2008 (II)
Developments in Q1 2008 (II) - Financial markets are still continuing to feel the impact of the credit and confidence crisis - The unrest on the financial markets is putting pressure on commission income; in the first three months of 2008, commission income lagged strongly behind last year 24
Slide 26: Developments in Q1 2008 (III)
Developments in Q1 2008 (III) - Interest margins recover slightly, mainly on the asset side - On the liabilities side, growth in funds entrusted continues, despite fiercer competition - Impact on profit of improved interest margins will be noticeable with some delay - In the Netherlands, the bank gr
Slide 27: Outlook for 2008
Outlook for 2008 - Based on the results for the first three months of the year, the bank expects earnings per share for 2008 to be lower compared with that for 2007 - The final amount of earnings per share will depend in part on when the sentiment on the stock markets returns to normal 26
Slide 28: The bank continues to invest (I)
The bank continues to invest (I) IT project - 2008 is the year for testing and training - 2009 will see the roll-out of the core banking system - The new IT system will free up more time to be spent serving clients - Progress is satisfactory - Less satisfactory are the obstacles encountered within t
Slide 29: The bank continues to invest (II)
The bank continues to invest (II) Investing in the recruitment, training and retention of quality employees - Dedicated recruitment campaign in recent months has led to a large number of experienced and expert private bankers joining the bank - Successful introduction of employee share plan – 34% of
Slide 30: Van Lanschot NV Annual General Meeting of Shareholders
Van Lanschot NV Annual General Meeting of Shareholders ‘s-Hertogenbosch, 8 May 2008
Slide 31: Earnings per share / Amount available to shareholders
Earnings per share / Amount available to shareholders (in millions of euros) 2007 Net profit 215.4 Interest on Perpetual loan -10.7 Net profit for calculation of EPS 204.7 Average number of ordinary shares (x1,000) 34,422 Earnings per share € 5.94 Net profit 215.4 Interest on Perpetual loan -10.7 Ne
Slide 32: Van Lanschot NV Annual General Meeting of Shareholders
Van Lanschot NV Annual General Meeting of Shareholders ‘s-Hertogenbosch, 8 May 2008
Slide 33: Item 7: Remuneration policy for Board of Managing Directors
Item 7 Remuneration policy for members of the Board of Managing Directors 32
Slide 34: Director remuneration package
Director remuneration package In putting together the remuneration package for the Board of Managing Directors in 2004, the aim was to create a package that: - “Is balanced in composition - Measures up to remuneration packages offered by financial enterprises and businesses of similar size and marke
Slide 35: Director remuneration package
Director remuneration package Base salaries are revised twice a year based on: - Development and performance of the Company - Development and performance of the Managing Director - Remuneration trends in the Dutch banking sector - Developments in the CPI index Short-term variable benefits are based
Slide 36: Remuneration package 2004 to 2008 (short-term benefits)
Remuneration package 2004 to 2008 (short-term benefits) Short-term variable benefits are based on the defined RAROC target rate: - RAROC more than 0.5% below target: no benefits - RAROC less than 0.5% below target: 20% of base salary - RAROC between target and 0.5% above target: 40% of base salary -
Slide 37: Remuneration package 2004 to 2008 (long-term benefits)
Remuneration package 2004 to 2008 (long-term benefits) The target used for calculating long-term variable benefits is an average increase in EPS by 10% per year for a three-year period. If EPS rises by less than 5%, no benefits are awarded. A sliding scale applies to increases above 5%. Performance
Slide 38: Competitiveness of remuneration package
Competitiveness of remuneration package Towers Perrin conducted a benchmark study in 2007 involving: - Base salaries - Short-term variable benefits - Long-term variable benefits A proposal to amend the remuneration package was drafted based on the outcome of the benchmark 37
Slide 39: Competitiveness of remuneration package (benchmark)
Competitiveness of remuneration package (benchmark) Van Lanschot Labour market peer group ABN AMRO BU NL ABN AMRO N.V. ING Retail Banking Fortis Bank Retail Banking Fortis Bank Merchant Banking Rabobank Nederland NIBC SNS Bank Friesland Bank KAS Bank Oyens en van Eeghen UBS NL Petercam Citibank NL D
Slide 40: Findings from benchmark study
Findings from benchmark study Chairman: current total direct compensation is between the 25th percentile and median market level. Both base salary and variable benefits are below median level. Members of the Board of Managing Directors: current total direct compensation is above median level, both w
Slide 41: Interpretation and adjustments (general)
Interpretation and adjustments (general) Labour market benchmarks are based on peer groups. The members of the Board of Managing Directors are benchmarked against the median; the Chairman is benchmarked against the Q3 of the labour market peer group. A benchmark study is conducted every two years to
Slide 42: Adjustments to base components
Adjustments to base components Base salary component from: to: Chairman Deckers € 500,000 € 550,000 Sevinga € 325,000 € 330,000 Loven, Zwart € 310,000 € 330,000 Idzerda (to 1-10-2008) € 340,000 € 340,000 Pension contributions from: to: basic/disability cover basic/disability cover Chairman 23.6%/3.2
Slide 43: Adjustments to variable components
Adjustments to variable components Short-term variable component from: to: at target/maximum at target/maximum Chairman 50%/75% 75%/100% Members 50%/75% 50%/75% Ratio Individual vs. RAROC 20/80 40/60 Discretionary element: up to 25% of base salary Long-term variable component from: to: at target/max
Slide 44: Adjustments to base and variable components
Adjustments to base and variable components (financial impact in 2008 at target) from: to: Salaries € 1,700,000 € 1,795,000 Short-term variable benefits € 850,000 € 1,035,000 Long-term variable benefits € 730,000 € 1,170,000 Pension contributions + disability € 480,625 € 542,377 ___________ ________
Slide 45: Van Lanschot NV Annual General Meeting of Shareholders
Van Lanschot NV Annual General Meeting of Shareholders ‘s-Hertogenbosch, 8 May 2008