Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — Van Lanschot Kempen — H1 2018 Earnings Presentation
25 slides from Kempen European High Dividend Fund N.V. N's earnings presentation, Aug 22, 2018
Slide 1: 2018 half-year results
2018 half-year results Solid results and proposal for special capital return 22 August 2018
Slide 2: Solid results and proposal for special capital return
Solid results and proposal for special capital return Net result €39.3m (H1 2017: €62.3m), underlying net result €47.2m (H1 2017: €69.6m) • Decline in net result predominantly driven by significant sale proceeds in 2017 Strong increase in commission income (+13%) • Increase driven by AuM growth at P
Slide 3: Focus on changing client needs and digitisation
Focus on changing client needs and digitisation Developing new Innovative wealth New website and online Comprehensive strategic payments platform and management apps portal for clients advice service launched payments app with Fidor • Private Markets Fund • Global Impact Pool • Investment funds will
Slide 4: Commission income (+13%) is key driver of net result
Commission income (+ 13%) is key driver of net result Key drivers of underlying net result €m • Increase in commission mainly driven by higher management fees and higher activity at Merchant Banking • Lower interest income due to margin pressure and Corporate Banking run-off • Significant sale proce
Slide 5: Underlying net result Private Banking and Evi in line with H1 2017
Underlying net result Private Banking and Evi in line with H1 2017 Underlying net result €m Private Banking Private Banking continues to grow due to net inflows • Client assets grow by €0.5bn to €31.9bn (2017: €31.4bn) 30.8 20.5 19.4 • AuM increase to €22.8bn (2017: €22.6bn), driven by net inflows o
Slide 6: Increasing underlying net result at Asset Management and Merchant Banking
Increasing underlying net result at Asset Management and Merchant Banking Underlying net result €m Asset Management AuM at Asset Management fairly stable • AuM total €45.4bn (2017: €45.5bn) • Commission income rises by 12% to €50.4m (H1 2017: €44.9m) 5.8 7.4 6.9 • Launch of new investment strategies
Slide 7: Underlying net result at Corporate Banking stable and Other decreases
Underlying net result at Corporate Banking stable and Other decreases Underlying net result €m Other Lower result in Other 36.0 • Decrease in capital gains as a result of the sale of private equity investments and the sale of positions in our own funds in H1 2017 • In August 2018, we agreed to sell
Slide 8: 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 • Management fees up by 12% due to AuM inflows, acquired AuM and market performance • Successful corporate finance and capital market transactions lead to higher other commission a
Slide 9: Margin pressure and a smaller loan portfolio continue to affect interest income
Margin pressure and a smaller loan portfolio continue to affect interest income Interest Interest margin (12-mth moving average) €m % • A smaller loan portfolio – mainly due to the run-off at Corporate Banking – has caused a decline in interest income in recent years • Due to the challenging low int
Slide 10: Income from securities and associates decreases mainly due to sale proceeds H1 2017
Income from securities and associates decreases mainly due to significant sale proceeds H1 2017 Income from securities and associates €m €m Book value Income 30/6/2018 2018 VLP (minority interests) 58.1 11.7 Bolster (new fund) 20.8 1.2 Co-investments in own products 88.7 1.8 Other equity investments
Slide 11: Operating expenses rise 8%
Operating expenses rise 8% Operating expenses €m • Staff costs rise mainly due to salary increases, a higher contribution to cover social security costs and costs associated with the acquisition of UBS in the Netherlands • Consultancy fees and high level of projects reflecting the implementation of
Slide 12: Good progress on strategic investment programme
Good progress on strategic investment programme Strategic investment programme budget Realised €60m • Launch of new website and client portal in H1 2018 Omni-channel • Login app launched in H1 2018 To spend in • Launch of innovative investment app in 2017, further improvements H2 2018 - private 20.8
Slide 13: Total AuM fairly stable and reflects continued trust from clients
Total AuM fairly stable and reflects continued trust from clients Private Banking Evi Asset Management Net inflow AuM AuM client base Net inflow AuM € bn x 1,000 € bn AuM AuM AuM € bn € bn € bn * Excluding former Staalbankiers and UBS clients 13
Slide 14: Net release of loan loss provisions due to positive economic environment
Net release of loan loss provisions due to positive economic environment Loan portfolio (excluding provision) Additions to loan loss provision at 30/06/2018 100% = €9.1bn €m - 7 bps* - 20 bps* - 15 bps* • Loan portfolio at Private Banking stable at €7.8bn • Corporate Banking’s loan portfolio came do
Slide 15: Strong capital position and proposed special capital return
Strong capital position and proposed special capital return Common Equity Tier 1 ratio (fully loaded) Capital return % €m • Special capital return proposal of €1.50 per share (over €60m) • Reiteration of commitment to return at least €250m to shareholders by 2020, based on current plans and currentl
Slide 16: Overview of group targets
Overview of group targets Common Equity Tier 1 ratio* Dividend pay-out ratio** % % 50-70% 15-17% 64% 21.4% 56%*** 18.6% 20.3% 37% 36% 16.3% 28% 13.1% 14.6% 2013 2014 2015 2016 2017 H1 2020 2013 2014 2015 2016 2017 H1 2018 As from 2016 2018 Efficiency ratio**** Return on Common Equity Tier 1** % % 10
Slide 17: Solid results and proposal for special capital return
Solid results and proposal for special capital return Net result at €39.3m Client assets at €83.7bn (H1 2017: €62.3m) (2017: €83.6bn) Underlying net result at €47.2m Assets under management at €69.1bn (H1 2017: €69.6m) (2017: €69.0bn) Capital ratios continue to improve Proposal to return €1.50 per s
Slide 18: Appendix
Appendix
Slide 19: Net profit €23m lower due to significant sale proceeds in H1 2017
Net profit €23m lower due to significant sale proceeds in H1 2017 €m H1 2018 H2 2017 % c hange H1 2017 % c hange Commission 149.9 134.7 11% 132.3 13% Interest 90.0 93.0 -3% 103.6 -13% Other income 18.3 14.3 28% 36.9 -50% Income fr om op er ating activities 258.2 242.0 7% 272.7 - 5% Operating expense
Slide 20: Key figures for H1 2018 by segment
Key figures for H1 2018 by segment €m Private Evi Asset Merchant Corporate Other Total Banking Management Banking Banking Commission income 64.6 2.1 50.4 30.9 0.9 0.9 149.9 Interest income 70.2 1.3 0.0 0.0 11.7 6.7 90.0 Other income 0.5 0.0 0.2 2.5 0.0 15.2 18.3 Income from operating activities 135.
Slide 21: Margin affected by change in AuM mix and acquisitions
Margin affected by change in AuM mix and acquisitions AuM margin - Private Banking AuM margin - Asset Management bps bps • Margin development partly dependent on the product mix • Decrease at Private Banking in H1 2018 due to the acquisition of UBS Netherlands and lower transaction fees • Limited ma
Slide 22: Result on financial transactions
Result on financial transactions 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 portfolio • Interest rate hedges • Medium-te
Slide 23: Commission at Merchant Banking increases by 39%
Commission at Merchant Banking increases by 39% Commission Selection of H1 2018 deals €m • High number of corporate finance and equity capital market transactions, mainly in the Real Estate and Life Sciences teams • Commission income grew by 39% to €30.9m (H1 2017: €22.3m) • Underlying net result do
Slide 24: Private Banking loan book stable, Corporate Banking run-off continues
Private Banking loan book stable, Corporate Banking run-off continues €m 30/06/2018 31/12/2017 % change Impaired Provision Impaired Coverage loans ratio ratio Mortgages 5,776 5,712 1% 71 10 1.2% 14% Other loans 2,015 2,045 -1% 137 73 6.8% 54% Private Banking 7,791 7,756 0% 208 83 2.7% 40% Loans to S
Slide 25: Disclaimer
Disclaimer Disclaimer and cautionary note on forward-looking statements This document may contain forward-looking statements on future events and developments. These forward-looking statements are based on the current insights, information and assumptions of Van Lanschot Kempen’s management about kn