Gam Holding Ag · SIX:GAM
Gam — H1 2022 Earnings Presentation
43 slides from Gam's earnings presentation, Aug 3, 2022
Slide 1: Results and Review Half Year 2022
Results and Review Half Year 2022 3 August 2022 This marketing material is restricted to eligible professional/institutional investors only in compliance with applicable laws. Please see “Important Legal Information” at the end of this presentation. This document is confidential and intended solely
Slide 2: Agenda
Agenda Speakers Content 1 H1 2022 Review Peter Sanderson Group CEO 2 H1 2022 Financial Results 3 Strategic update and outlook 4 Appendix Richard McNamara Group CFO 5 Q&A 2
Slide 3: H1 2022 Review
H1 2022 Review Peter Sanderson, Group CEO
Slide 4: H1 2022 Business Highlights
H1 2022 Business Highlights Business resilience in extraordinary economic and geopolitical conditions • Clients allocating to a number of our high conviction, active strategies, designed to Resilience of help them navigate this challenging environment. Flows • Improving trajectory for IM flows. Fund
Slide 5: H1 2022 Financial results
H1 2022 Financial results Financial performance challenged given current market environment • AuM CHF 83.2bn from CHF 99.9bn as at 31 December 2021. Market movements and FX accounted for 80% of the Group AuM reduction in AuM. Investment • AuM CHF 27.1bn compared to CHF 31.9bn as at 31 December 2021.
Slide 6: Investment Management - Net Flows
Investment Management - Net Flows Improving trajectory for IM flows in challenging markets Investment Management (in CHF bn) 2.6 (1.1) (2.1) (2.2) (2.2) Outflows have significantly (3.5) reduced despite the extraordinarily challenging Net flows (7.6) (8.5) market conditions in H1 2022. (13.1) Client
Slide 7: Fund Management Services - Net Flows
Fund Management Services - Net Flows Net outflow of CHF 2.5 billion mostly relating to previously announced outflow Fund Management Services (in CHF bn) 6.7 2.4 2.6 1.7 0.8 (1.3) Net outflow of CHF 2.5 (3.0) (2.5) billion, most of which relates to a client transferring their Net flows business to an
Slide 8: Investment Management – Net flow drivers
Investment Management – Net flow drivers Top six inflows and outflows across capabilities. Fixed income most notable. Investment Management, funds only (in CHF m) 480 129 86 80 51 21 Cat Bonds1 UK Equity Income MBS Total Return Commodity M-P Strategy Global Rates Japan Equity North America Growth Ja
Slide 9: Investment performance
Investment performance Good performance despite challenging markets % of fund AuM outperforming benchmark 70% 73% 3 years 5 years 68% 60% 3-year investment performance1 with 5-year investment performance1 with 40% 73% 40% 23% of AuM outperforming of AuM outperforming the benchmark the benchmark 31.1
Slide 10: Helping clients navigate market volatility
Helping clients navigate market volatility Examples of high conviction active strategies with strong client engagement Cat Bonds Non-correlated • Top quartile short term performance and 3 & 5 years strategy delivers • Reflects conviction-led approach performance & • Generated CHF 480 million of net
Slide 11: H1 2022 Financial Results
H1 2022 FINANCIAL RESULTS Richard McNamara, Group CFO
Slide 12: H1 2022 Financial summary
H1 2022 Financial summary Continued focus on cost reduction (in CHF m, except where indicated) H1 2022 H1 2021 *H1 2022 vs H1 2021 Net management fees and commissions 90.9 107.8 (19%) of which investment management 76.3 90.6 (19%) of which fund management services 14.6 17.2 (18%) Net performance fee
Slide 13: Management fee margin
Management fee margin Fee margins remain stable1 Investment Management (in bps) Fund Management Services (in bps) 5.4 59.1 54.2 4.6 51.8 51.3 51.1 4.1 4.0 3.9 2018 2019 2020 2021 H1 2022 2018 2019 2020 2021 H1 2022 • Investment management average margin at • Fund Management Services average margin a
Slide 14: Investment Management – capabilities reclassified
Investment Management – capabilities reclassified Focus on 4 key asset classes Investment Management1 (in CHF bn) AuM Net AuM AUM Asset Class AUM Capability Market FX Net flows Market FX 31.12.21 flows 31.03.22 30.06.22 Reclassification 30.06.22 Fixed income 14.1 (0.4) (0.4) (0.1) 13.2 (0.2) (0.6) 0
Slide 15: IM fee margin by capability
IM fee margin by capability1 Post reclassification Management fee margin by capability1 (in bps) Fixed income Equity 68 64 61 61 61 58 H2 2021 FY 2021 H1 2022 H2 2021 FY 2021 H1 2022 Alternatives Multi asset 52 46 47 20 23 24 H2 2021 FY 2021 H1 2022 H2 2021 FY 2021 H1 2022 Source: GAM 15 1 Average m
Slide 16: Expenses
Expenses Total expenses 9% lower compared to H1 2021 (in CHF m, except where indicated) Change H1 2022 H1 2021 H1 2022 vs H1 2021 1 Fixed personnel expenses 49.6 55.0 (10%) Driven by continued reduced headcount Variable personnel expenses 2 12.5 22.9 (45%) Driven by lower AuM and performance fees Pe
Slide 17: Efficiency programme
Efficiency programme Further cost savings in 2022 and 2023 Total expenses (in CHF m) 373.5 315.7 177.8 244.1 150.5 234.5 ~215 119.1 113.9 ~105.5 Total expenses H1 (actual) Total expenses H2 (actual) 195.7 165.2 Expected total expenses in H2 2022 125 120.6 109.5 FY 2018 FY 2019 FY 2020 FY 2021 Expect
Slide 18: IFRS net loss
IFRS net loss Driven by non-cash impairment charge of CHF 264 million (in CHF m, except where indicated) H1 2022 H1 2021 Underlying (loss) / profit before taxes (15.4) 0.8 Acquisition-related items 0.2 6.8 Non-recurring items (260.7) 1.2 Tax on non-core tax item (0.7) 0.2 Non-core tax item 0.0 (6.3)
Slide 19: Capital management
Capital management Focus on cost control and capital efficiency Capital Cash and adjusted tangible equity¹ (in CHF m) • No external debt • Decrease in adjusted tangible equity due 316 272 271 to H1 loss 251 250 235 • Continue to optimise capital allocation 197 189 196 178 174 across our legal entiti
Slide 20: Strategy Update and Outlook
STRATEGY UPDATE AND OUTLOOK Peter Sanderson, Group CEO
Slide 21: Strategic priorities
Strategic priorities Stay close to clients and return to net inflows Deliver • Focus on high conviction, high alpha strategies in niche areas of mainstream asset classes investment • Facilitate information sharing across investment teams to share diverse insights performance • Empower enhanced decis
Slide 22: Outlook
Outlook • We expect markets to remain volatile and clients to remain cautious. • However, we expect clients to continue to allocate to our diverse, high conviction strategies designed to help them navigate the risks and Outlook opportunities during this challenging period. • We are confident that ou
Slide 23: Appendix
APPENDIX
Slide 24: Assets under management
Assets under management Investment Management (in CHF bn) (1.1) (3.7) (0.007) 31.9 34.8 27.1 31.12.2021 Net flows Market performance FX impact 30.06.2022 Fund Management Services1 (in CHF bn) 1 (2.5) (9.4) 68.0 56.1 31.12.2021 Net flows Market performance & FX 30.06.2022 development Source: GAM 24 1
Slide 25: Investment performance - % AuM benchmark
Investment performance - % AuM benchmark 73% of fund AuM outperforming the benchmark in the 3-year window % of AuM outperforming benchmark¹ % of AuM outperforming benchmark1 3-year 5-year Capability 30.06.2022 31.03.2022 31.12.2021 30.06.2022 31.03.2022 31.12.2021 Fixed income 82% 82% 56% 40% 44% 46
Slide 26: Investment performance – % Morningstar peer group
Investment performance – % Morningstar peer group 69% of fund AuM outperforming the Morningstar peer group in the 3-year window % of fund AuM outperforming Morningstar peer group1 % of fund AuM outperforming Morningstar peer group 2 3-year 5-year Capability 30.06.2022 31.03.2022 31.12.2021 30.06.202
Slide 27: IM fee margin by capability
IM fee margin by capability1 Prior to reclassification (see slide 14 for post reclassification) Management fee margin by capability1 (in bps) Fixed income Equity Systematic 68 64 61 61 61 58 46 30 28 H2 2021 FY 2021 H1 2022 H2 2021 FY 2021 H1 2022 H2 2021 FY 2021 H1 2022 Alternatives Multi asset Abs
Slide 28: Performance fees
Performance fees Systematic strategies continued to perform well Performance fee eligible assets Performance fees by strategy (in CHF bn) (in CHF m) 17.3 3.1 2.8 2.6 2.0 2.0 0.8 H1 20 H2 20 H1 21 H2 21 H1 22 31.12.2021 30.06.2022 Global macro/managed futures Systematic Non-directional equity GAM Sta
Slide 29: AuM and net flows by capability
AuM and net flows by capability Prior to reclassification Investment Management AuM by capability (in CHF bn) 30.06.19 31.12.19 30.06.20 31.12.20 30.06.21 31.12.21 30.06.22 Fixed income 27.1 25.8 17.6 17.1 15.6 14.1 12.6 Equity 7.1 7.2 5.8 6.9 7.9 8.0 5.6 Multi asset 7.8 7.8 7.2 7.5 7.6 7.7 7.0 Syst
Slide 30: AuM and net flows by capability
AuM and net flows by capability Post reclassification Investment Management AuM by capability (in CHF bn) 30.06.19 31.12.19 30.06.20 31.12.20 30.06.21 31.12.21 30.06.22 Fixed income 27.1 25.8 17.6 17.1 15.6 14.1 12.6 Equity 7.1 7.2 5.8 6.9 7.9 8.0 5.6 Multi asset 7.8 7.8 7.2 7.5 7.6 7.7 7.0 Alternat
Slide 31: AuM and net flows by client segment
AuM and net flows by client segment Pre & post reclassification Investment Management AuM and net flows by client segment1 (in CHF bn) Opening AuM 1 Net Flows Market/FX Closing AuM Client Segment Closing AuM 30 Jun 1 1 Jan 2021 H1 2022 H1 2022 30 Jun 2022 Reclassification 2022 adjusted Intermediarie
Slide 32: Fund Management Services AuM breakdowns
Fund Management Services AuM breakdowns By fund domicile (in CHF bn) 30.06.20 31.12.20 30.06.21 31.12.21 30.06.22 Switzerland 33.7 34.9 36.6 14.4 12.7 Rest of Europe 50.2 51.2 54.6 53.6 43.4 Total 83.9 86.1 91.2 68.0 56.1 By asset class1 (in CHF bn) 6% 19% Equity Fixed Income Multi Assets 21% 54% Al
Slide 33: Key figures
Key figures Investment Management (in CHF, except where indicated) H1 2019 H2 2019 FY 2019 H1 2020 H2 2020 FY 2020 H1 2021 H2 2021 FY 2021 H1 2022 Net management fees and commissions (m) 148.3 136.6 284.9 104.6 91.9 196.5 90.6 85.1 175.6 76.3 Net performance fees (m) 5.4 7.4 12.8 0.8 2.0 2.8 17.3 1.
Slide 34: Performance fee eligible assets and income
Performance fee eligible assets and income Systematic strategies continued to perform well Performance fee eligible assets¹ (in CHF bn) 30.06.19 31.12.19 30.06.20 31.12.20 30.06.21 31.12.21 30.06.22 Unconstrained fixed income - - - - - - - Global macro/managed futures 0.4 0.3 0.1 0.1 0.1 0.1 0.2 Non
Slide 35: General expenses
General expenses in CHF m Change H1 2022 H2 2021 H1 2021 H 1 2022 vs H 1 2021 Occupancy 2.8 3.3 2.9 (3%) Technology and communication 8.3 7.7 8.6 (3%) Data and research 9.9 11.4 8.6 15% Professional and consulting services 5.5 4.4 3.4 62% Marketing and travel 2.8 3.7 2.1 33% Administration 1.8 2.6 2
Slide 36: Basic and diluted underlying EPS
Basic and diluted underlying EPS in million shares, except where indicated 2018 2019 2020 H1 2021 H2 2021 H1 2022 Weighted average number of shares outstanding for basic EPS (m) 156.6 157.0 161.3 156.0 156.3 156.5 Basic underlying EPS (CHF) 0.6 0.03 (0.10) (0.05) (0.03) (0.09) Basic IFRS EPS (CHF) (
Slide 37: Currency split – revenues and expenses
Currency split – revenues and expenses Group income¹ Group expenses² H1 2022 H1 2022 7% 4% 14% 17% 25% 37% 14% 8% 31% 43% USD EUR GBP CHF Other Source: GAM 37 1 Percentage splits are estimated based upon the currency exposure of the underlying AuM on which the revenues are earned. 2 Percentage split
Slide 38: IM – AuM by capability and currency
IM – AuM by capability and currency Capabilities reclassed to four from six Investment Management AuM by capability1 Investment Management AuM by currency2 as at 30.06.2022 as at 30.06.2022 7% 8% 22% 35% 28% 45% 11% 20% 24% Fixed Income USD GBP Equity EUR Other Multi-Asset CHF Alternatives Source: G
Slide 39: Group balance sheet
Group balance sheet Adjusted tangible equity of CHF 164m in CHF m 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 30.06.21 30.06.21 31.12.21 30.06.22 Cash and cash equivalents 328 328 251 316 272 271 250 250 235 172 Seed capital investments 51 68 55 46 28 23 11 11 16 12 Other assets 228 207 35
Slide 40: Net cash
Net cash in CHF m (14) (21) 235 (11) (5) (4) (3) (5) 172 Net cash Underlying 2021 cash Payment of Pension Lease FX Others Net cash 31.12.2021 net loss bonuses FCA fine repair obligations & 30.06.2022 payments investment in platform Source: GAM 40 - 2021 cash bonuses: Includes the cash payments made
Slide 41: Corporate calendar and contacts
Corporate calendar and contacts Forthcoming events 20 October 2022 Interim management statement Q3 2022 28 February 2023 Full year results 2022 Group Communications and Investor Relations Charles Naylor Ute Dehn Christen Stephen Gardner Head of Group Communications Senior Communications Manager Grou
Slide 42: Cautionary statement on forward-looking information
Cautionary statement on forward-looking information This presentation by GAM Holding AG (‘the Company’) does not constitute an invitation or offer to acquire, purchase or subscribe for securities. This presentation by the Company includes forward-looking statements that reflect the Company’s intenti
Slide 43: www.gam.com
GAM Investments www.gam.com