Vontobel Holding Ag · SIX:VONN
Vontobel — H1 2020 Earnings Presentation
39 slides from Vontobel's earnings presentation, Jul 28, 2020
Slide 1: Vontobel half-year 2020 results
Public Vontobel half-year 2020 results Zeno Staub Martin Sieg Castagnola Thomas Heinzl CEO CFO Designated CFO July 28, 2020
Slide 2: Cautionary statement regarding forward-looking statements and disclaimer
Public Cautionary statement regarding forward-looking statements and disclaimer July 28, 2020 This document may contain projections or other forward-looking statements related to Vontobel that are subject to known and unknown risks, uncertainties and other important factors. These projections and fo
Slide 3: Overview
Public Overview July 28, 2020 Highlights Strategic levers Financial results for first half of 2020 Outlook Questions and answers
Slide 4: Good performance in challenging times
Public Good performance in challenging times July 28, 2020 Key figures as of June 30, 2020 Advised client assets Net new money CHF 218.6 bn of which CHF 193.4 bn CHF 7.4 bn (7.5%1) assets under management Operating income Group net profit Earnings per share CHF 129.2 mn (-1%) CHF 623.0 mn CHF 2.18 (
Slide 5: Investment focus and strong technology infrastructure pay off
Public Investment focus and strong technology infrastructure pay off July 28, 2020 Fully client-centric – Strategic realignment announced in December 2019 implemented investment manager – Performance of business confirms strategic direction – Continuous support for clients throughout lockdown, weath
Slide 6: Strategic levers
Public Overview July 28, 2020 Highlights Strategic levers Financial results for first half of 2020 Outlook Questions and answers
Slide 7: Vontobel has delivered consistently high growth over the last 10 years
Public Vontobel has delivered consistently high growth over the last 10 years July 28, 2020 Move to a pure-play investment manager Global wealth1 AuM (USD tn, CAGR) based on 4 strategic levers to drive further value creation +5.1%3 210–2202 Client-centric Investment-led 137 2011 2020 Vontobel advise
Slide 8: One Vontobel
Public New way of working to realize the full potential of strategic levers and further accelerate growth July 28, 2020 Setup to successfully deploy strategic levers Asset Management Investments – Strict focus of Client Units on creating value for clients One Vontobel Platforms & Services – Fast, ef
Slide 9: Client Units focused on attractive growth opportunities in significant asset and fee pools
Public Client Units are focused on seizing attractive growth opportunities in significant asset and fee pools July 28, 2020 Market size / growth Vontobel-specific opportunities Asset Global AM AuM1 Asset-class specialization and boutique model with global Institutional clients Management 106 (USD
Slide 10: Current business mix is well diversified and resilient
Public Current business mix is well diversified and resilient July 28, 2020 Assets under management by Assets under management by client domicile (June 30, 2020) mandate type (June 30, 2020) Execution / Other custody Collective investments / 10% APAC / EM 14% funds 12% 31% Switzerland 41% Advisory m
Slide 11: Vontobel's investment offering with proven processes and conviction
Public Vontobel’s investment offering with proven processes and conviction July 28, 2020 Advised client assets by asset class Focus and expertise in investments (CHF bn; June 30, 2020) Structured Other1 Products 4% – Each boutique draws on specialized investment 5% Equity talent, a strong performanc
Slide 12: Excellence through the cycle
Public Excellence through the cycle July 28, 2020 Track record in funds Longstanding track record based on a proven (% of 4* & 5* rating, % of 1st and 2nd quartiles1) investment process – Strong medium- to long-term performance 97 85 86 85 – YTD performance of selected high-conviction portfolios 79
Slide 13: Continued strong traction in growth areas
Public Continued strong traction in growth areas July 28, 2020 Emerging Markets – a specialist approach ESG – one of the leaders in Switzerland 27.1 – Driver: 59% of GDP1 already 32.3 – Driver: Global sustainably managed generated in Emerging Markets and assets grew by 15% p.a. since 2011, led (CHF
Slide 14: Financial results for first half of 2020
Public Overview July 28, 2020 Highlights Strategic levers Financial results for first half of 2020 Outlook Questions and answers
Slide 15: Advised client assets at CHF 218.6 billion
Public Advised client assets at CHF 218.6 billion Corona impact partially offset by strong net new money July 28, 2020 Advised client assets AuM development (CHF bn, end of period) (CHF bn) 226 219 213 11 10 193 10 17 191 15 8 17 9 13 14 End 2019 198.9 NNM 7.4 199 193 FX - 4.5 186 169 171 Perf. - 8.
Slide 16: Relative strength translates into strong net new money flows
Public Relative strength translates into strong net new money flows Vontobel ranks in top 2 in European cross-border fund flows July 28, 2020 Strong flows of institutional clients All asset classes with good inflows (CHF bn) (CHF bn) 7.4 7.4 6.4 5.3 6.4 1.2 5.3 0.8 2.6 6.8 5.2 6.5 4.0 4.9 AM P&S Equ
Slide 17: Assets under management recovered after lows in March
Public Assets under management recovered after lows in March – average AuM above first-half and close to second-half of 2019 July 28, 2020 Assets under management Assets under management by Client Unit (CHF bn) by asset class (CHF bn) +4% 199 193 199 193 186 186 45 43 42 112 121 120 45 40 45 AM 14 1
Slide 18: RoA across Client Units reflects quality of our offerings
Public RoA across Client Units reflects quality of our offerings with a large recurring commission-based component July 28, 2020 Asset Management Platforms & Services – EAM Wealth Management RoA1 (bps) RoA1 (bps) RoA1 (bps) 74 74 75 11 11 11 59 56 53 18 47 10 7 16 15 44 42 8 1 2 0 23 20 24 43 45 42
Slide 19: Large proportion of asset-linked revenues confirms focus on stability
Public Large proportion of asset-linked revenues confirms focus on stability July 28, 2020 Operating income Comments (CHF mn) Operating income was flat. On an adjusted basis, i.e. excluding the one-off SIX dividend 625.6 -8.0 +6.9 -1.9 +0.4 623.0 in 2019, operating income increased by 1%. 47.8 39.
Slide 20: Operating income generated by institutional and private clients increased
Public Operating income generated by institutional and private clients increased July 28, 2020 … by client units (CHF mn) … by centers of excellence (CHF mn) 626 636 623 626 636 623 238 272 249 AM 464 503 484 77 73 Investments 74 P&S Structured 211 216 WM Solutions & 219 DI Treasury 148 104 143 86 7
Slide 21: Operating expense down by 2%
Public Operating expense down by 2% July 28, 2020 … by focus (CHF mn) Comments -2% -2% Operating expense was down 2%, driven by 476 479 467 lower direct expenses in Client Units and Centers of Excellence. 161 166 160 Client Units From a cost category perspective, lower operating expense was driv
Slide 22: Adjusted pre-tax profit increases 6%
Public Adjusted pre-tax profit increases 6% July 28, 2020 Pre-tax profit Comments (CHF mn) Cost/income ratio improved slightly driven by lower expenses. C/I ratio C/I ratio C/I ratio C/I ratio 75.8% 75.4% 74.1% 74.7% Trade off between growth ambitions and cost efficiency remains a +6% challenge.
Slide 23: Good performance translates into solid net profit despite higher taxes
Public Good performance translates into solid net profit despite higher taxes July 28, 2020 Group net profit Comments (CHF mn) Group net profit declined by 1% H1 2020 H1 2019 ∆ to CHF 129.2 million. Operating income 623.0 625.6 0% Taxes were 46% higher in H1 excl. one-offs1 623.0 618.7 +1% 2020.
Slide 24: Further improvement in capital ratios reflects solid financial base
Public Further improvement in capital ratios reflects solid financial base July 28, 2020 Capital ratios 20.2% CET1 ratio increased to a very solid 13.8% 19.9% Total Capital Ratio was 20.2%, compared to 19.9% at end-2019 16.0% 6.4% 6.4% In H1 2020, risk-weighted assets were flat 4.0% compared t
Slide 25: Outlook
Public Overview July 28, 2020 Highlights Strategic levers Financial results for first half of 2020 Outlook Questions and answers
Slide 26: We are in line with our 2020 targets
Public We are in line with our 2020 targets for net new money, capital and the payout ratio July 28, 2020 Growth Profitability Capital and payout Top-line growth (in %) Return on equity (in %) Total capital ratio (in %, end of period) 20.2 4-6 13.4 > 14 > 163 0.71 1H20 Target 2020 1H20 Target 2020 1
Slide 27: Future business planning is focused on strategy execution
Public Future business planning is focused on strategy execution based on 2-year planning cycles July 28, 2020 Pure-play investment manager based on 4 strategic levers Client Centric Investment-led Targets 2022 Checkpoint Checkpoint Technology- Powered by enabled people Jun 2020 Checkpoint Jan June
Slide 28: Ambitious growth targets extended to 2022
Public Ambitious growth targets extended to 2022 despite uncertain and challenging times July 28, 2020 Capital and payout Growth Profitability Top-line CET1 4 – 6% RoE >14% >12% growth capital Net new Total 4 – 6% CIR <72% >16% money capital Payout >50% 28
Slide 29: Committed to building on strong foundations to transform change into opportunities
Public Committed to building on strong foundations to transform change into opportunities July 28, 2020 Strong asset base with Investment-led and Increased client focus will stable margin outlook technology-enabled deliver growth AuM (in CHF billion) – Anticipating growing demand for – Complement we
Slide 30: Q&A
Public Q&A 30
Slide 31: Appendix
Public Appendix 31
Slide 32: Successful strategy implementation has delivered attractive returns to shareholders
Public Successful implementation of Vontobel’s strategy has delivered attractive returns to shareholders for more than a decade July 28, 2020 Return on equity and dividends Comments – Attractive business with average 21.6% return on equity of 12.1% since 2003 – clearly above Vontobel’s 19.2% 18.0% c
Slide 33: Technology and data as key success factors going forward
Public Technology and data as key success factors going forward July 28, 2020 – Critical mass and depth to attract tech talent People – Continued investments in full stack, artificial intelligence and cloud skills – Offer working environment with bridge to tech culture – Technology area shifts to on
Slide 34: Strong net new money flows and increased market share in structured products
Public Relative strength reflected in strong net new money flows and increased market share in structured products July 28, 2020 Cumulative flows in active funds1 (CHF bn) Market share of listed structured products Market: Flows across European Vontobel: Broad-based flows and cross-border funds acro
Slide 35: Swiss market is fragmented and undergoing structural change
Public Swiss market is fragmented and undergoing structural change – creating opportunities for Vontobel to accelerate growth July 28, 2020 Private banks in Switzerland Comments – Number of Swiss private banks has -37% decreased by more than 30% since 158 2011 147 138 – Structural change is expected
Slide 36: High quality of bond portfolio maintained
Public High quality of bond portfolio maintained July 28, 2020 Counterparty exposure by rating Counterparty exposure by sector (end June 2020) (end June 2020) 5% 24% 16% 36% 38% 33% 48% Government / public sector bodies AAA A Other Financials AA BBB Corporate (non-financials) Note: Total issuer risk
Slide 37: Strong track record in ESG investing and expertise across the firm
Public Strong track record in ESG investing and expertise across the firm July 28, 2020 Pioneer in ESG investing One of the leading ESG managers in Switzerland AuM (CHF billion) – Own ESG research team for more than 20 years; 32.3 30.7 today, more than 40 investment experts focus on ESG investment s
Slide 38: Sustainability memberships and ratings
Public Sustainability memberships and ratings January July 2020 28, 2020 UN Global Compact: Vontobel is committed to aligning its business activities and strategies with ten universally recognized principles on human rights, labor standards, environmental protection, and the fight against corruption
Slide 39: Vontobel families hold more than 50% of share capital
Public Vontobel families hold more than 50% of share capital and are strongly committed to Vontobel July 28, 2020 Shareholder structure1 Vontobel Foundation and Pellegrinus Holding 19.6% Vontrust AG Free float 49.3% 14.3% Pooled shares total Shares in the core pooling 50.7% agreement 44.4% Advontes