Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — Van Lanschot Kempen — FY2017 Earnings Presentation
28 slides from Kempen European High Dividend Fund N.V. N's earnings presentation, Feb 22, 2018
Slide 1: 2017 annual results
2017 annual results Strong results driven by successful strategy implementation 22 February 2018
Slide 2: Strong operating performance and good progress on Strategy 2020
Strong operating performance and good progress on Strategy 2020 Duurzaam+ offering Dutch wealth Private equity management activities of investments Next steps in Outsourcing mortgage Net inflow AuM Private Successful integration New product offerings omnichannel private servicing completed Banking:
Slide 3: Market developments in 2017
Market developments in 2017 Equity indices Interest rates 180 160 2.5% 140 2.0% 120 100 1.5% 80 60 1.0% 40 0.5% 20 0 0.0% Jan 17 Jan 18 Jan 12 Jan 13 Jan 14 Jan 15 Jan 16 -0.5% Jan 12 Jan 13 Jan 14 Jan 15 Jan 17 Jan 18 Jan 16 MSCI Europe AEX 10-year swap rate 3-month Euribor 3
Slide 4: Strong overall performance
Strong overall performance Net profit Underlying net result Dividend per share €m €m € +38% +21% +36% 1.45 94.9 112.3 1.20 81.3 69.8 2016 2017 2016 2017 2016 2017 Assets under Management Client assets Common Equity Tier I ratio € bn € bn % +21% +176 bps +27% 83.6 20.3 69.2 69.4 18.6 54.6 2016 2017 2
Slide 5: Highlights 2017
Highlights 2017 Net result rises by 36% to €94.9m (2016: €69.8m) Strong increase • Underlying net result rises to €112.3m (2016: €81.3m) • Growth in commission income of 10% to €267.0m more than offsets decrease in interest income in underlying • Income from securities and associates goes up to €37.
Slide 6: Strong increase in net result to €94.9m (+36%)
Strong increase in net result to €94.9m (+36%) €m 2017 2016 % c hange Commission 267.0 243.7 10% Interest 196.6 212.9 -8% Other income 51.2 25.2 103% Income fr om op er ating activities 514.8 481.8 7% Operating expenses -392.1 -383.6 2% Gr oss r esult 122.7 98.2 25% Loan loss provisioning 11.9 6.9 7
Slide 7: Net profit increases significantly by 36%
Net profit increases significantly by 36% Key drivers of net profit €m 7
Slide 8: Underlying net result advances to €112.3m
Underlying net result advances to €112.3m €m Total Private Banking Evi Asset Management Merchant Banking Other (incl. Corporate Banking) 51.3 112.3 31.8 35.9 81.3 24.1 10.0 13.2 6.2 3.9 -8.2 -9.6 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 2016 2017 8
Slide 9: Growth in commission underscores our successful wealth management strategy
Growth in commission underscores our successful wealth management strategy Total commission Commission by segment €m €m 26.0 4.2 -6.9 267.0 243.7 36.3 124.5 43.2 30.8 26.7 104.0 86.2 92.5 269.7 267.0 243.7 199.8 46.7 41.7 173.8 3.6 4.5 2016 Management Transaction Other 2017 Private Evi Asset Merchan
Slide 10: Margin pressure and a smaller loan portfolio are affecting interest income
Margin pressure and a smaller loan portfolio are affecting interest income Interest Interest margin (12-mth moving average) €m % 1.39% 213.9 213.7 212.9 202.8 196.6 1.32% 1.23% 1.21% 1.19% 1.30% 1.27% 1.19% 1.15% 1.15% 2013 2014 2015 2016 2017 2013 2014 2015 2016 2017 Interest margin Clean interest
Slide 11: Steady income from securities and associates
Steady income from securities and associates Income from securities and associates €m Book value Income 31/12/2017 2017 VLP (minority interests) 53.2 26.1 Bolster (new fund) 16.8 0.0 Co-investments in own products 96.9 11.6 Other equity investments* 9.1 -0.6 Total 176.0 37.0 • Income from securities
Slide 12: Result on financial transactions buoyed up by more favourable markets
Result on financial transactions buoyed up by more favourable markets Results on investment portfolio Other results Total result on financial transactions €m €m €m Consists of: Results from: • Realised gains on AFS portfolio • Brokerage activity • Results on mark-to-market • Currency trading portfol
Slide 13: Operating expenses fairly stable
Operating expenses fairly stable Operating expenses €m 4.8 1.9 -5.6 3.8 3.5 387.3 392.1 383.6 381.5 385.4 378.0 378.0 2016 One-off costs One-off costs Structural costs IT costs Other 2017 KCM London Staalbankiers/ Staalbankiers/ MiFID II/ UBS UBS IFRS 9 • Costs 2% up on 2016, partly due to higher co
Slide 14: Strong AuM growth due to net inflow and acquisition of UBS's Dutch wealth management
Strong AuM growth due to net inflow and acquisition of UBS’s Dutch wealth management activities Net inflow AuM Private Banking AuM Private Banking € bn € bn • AuM increase to €22.8bn (+20%); net inflow excluding former Staalbankiers’ and UBS’s wealth management clients at €0.5bn • Integration of for
Slide 15: Evi's client base grew significantly, leading to AuM growth
Evi’s client base grew significantly, leading to AuM growth Evi’s AuM client base AuM Evi €m + 45% • Evi’s AuM client base grew by 45% to c. 13,000 clients* • Shift from savings to AuM, with total client assets stable at €1.5bn • Outflow of savings in Belgium in line with funding strategy • Commissi
Slide 16: AuM growth at Asset Management accelerates with new mandates
AuM growth at Asset Management accelerates with new mandates Net inflow AuM AuM Asset Management € bn € bn • Assets under management rise to €45.5bn (+31%) • Increase mainly driven by new mandates, e.g. Stichting Pensioenfonds UWV with c. €7.3bn of AuM • Commission income increases to €92.5m (2016:
Slide 17: High activity in all Merchant Banking niches
High activity in all Merchant Banking niches Selection of 2017 deals Commission €m • Commission income at €41.7m (2016: €46.7m) • Underlying net result at €3.9m (2016: €6.2m) • MiFID II succesfully implemented • Structured products team achieved strong income growth thanks to a large number of new p
Slide 18: Mortgage book stable, Corporate Banking run-off continues
Mortgage book stable, Corporate Banking run-off continues €m 31/12/2017 31/12/2016 % change Impaired Provision Impaired Coverage loans ratio ratio Mortgages 5,712 5,826 -2% 55 11 1.0% 20% Other loans 2,045 2,092 -2% 140 69 6.8% 50% Private Banking 7,756 7,917 -2% 195 81 2.5% 41% Loans to SMEs 457 67
Slide 19: Net release of loan loss provisions
Net release of loan loss provisions Additions to loan loss provision €m + 74 bps* Additions to loan loss provision 2015 2016 2017 Private Banking 22.1 1.2 -3.3 - 11 bps* - 22 bps* Corporate Banking 23.9 0.0 -6.0 Other 5.0 -8.1 -2.6 Total 51.0 -6.9 -11.9 • We saw a net release of loan loss provisions
Slide 20: Our CET I ratio increases to 20.3%
Our CET I ratio increases to 20.3% Common Equity Tier I ratio (fully loaded) Total capital ratio (fully loaded) % % 0.8% 0.5% 0.2% 1.8% -0.7% 0.6% 1.1% 22.1% 21.3% 20.3% 20.1% 20.1% 20.3% 19.5% 19.5% 19.7% 18.6% 18.6% 31/12/2016 Corporate Credit quality Data quality Capital return Other 31/12/2017 3
Slide 21: Increased focus on our core wealth management activities
Increased focus on our core wealth management activities Outsourcing Spin-offs Activities • Stater is a large Dutch • Fidor is a German • Bolster (formerly Van • Captin (formerly Equity mortgage servicer fintech company Lanschot Participaties) Management Services is an independent long- (EMS)), offe
Slide 22: Good progress on long-term value creation
Good progress on long-term value creation Employee • Launch of Duurzaam+ engagement 81% • Expanded impact Score: investing solutions • Increased awareness Charity & Impact Investing services Good start with Van Investments in New product offerings at Selection of 5 SDGs Lanschot Kempen development a
Slide 23: Overview of group targets
Overview of group targets Common Equity Tier I ratio* Dividend pay-out ratio** % % 50-70% 15-17% 20.3% 64% 18.6% 55% 16.3% 14.6% 37% 36% 13.1% 28% 11.0% 0% 2012 2013 2014 2015 2016 2017 2020 2012 2013 2014 2015 2016 2017 As from 2016 Efficiency ratio*** Return on Common Equity Tier I** % % 10-12% 60
Slide 24: Strong results driven by successful deployment of strategy
Strong results driven by successful deployment of strategy Net result rises to €94.9m Client assets €83.6bn (+21%) (2016: €69.8m) Assets under management Underlying net result rises to €112.3m €69.2bn (+27%) (2016: €81.3m) Capital ratios continue to improve Dividend per share up CET I ratio at 20.3%
Slide 25: Appendix
Appendix
Slide 26: Key figures for 2017 by segment
Key figures for 2017 by segment €m Private Evi Asset Merchant Corporate Other Total Banking Management Banking Banking Commission income 124.5 4.5 92.5 41.7 2.6 1.1 267.0 Interest income 151.4 3.3 0.0 0.0 33.1 8.8 196.6 Other income 1.0 0.0 -1.3 4.5 0.0 46.9 51.2 Income from operating activities 276
Slide 27: Good progress on Strategy 2020 investment programme
Good progress on Strategy 2020 investment programme Budget for Strategy 2020 investment programme € 60m • Launch of investment app • Discretionary management app improved Omni- • Workflow automation tool implemented channel • Good progress on new client portal, to be launched in 2018 • Intake invest
Slide 28: Disclaimer
Disclaimer Disclaimer and cautionary note on forward-looking statements This document contains forward-looking statements on future events and developments. These forward-looking statements are based on the current information and assumptions of Van Lanschot Kempen’s management about known and unkno