Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — Van Lanschot Kempen — FY2019 Earnings Presentation
32 slides from Kempen European High Dividend Fund N.V. N's earnings presentation, Feb 20, 2020
Slide 1: Annual results 2019
Annual results 2019 20 February 2020
Slide 2: We want to be a leading wealth manager in our markets
We want to be a leading wealth manager in our markets Focused wealth • We’re a well-capitalised, profitable wealth manager with a strong position in the market management • We believe that our knowledge and experience, personal, client-focused approach, unique combination strategy of activities and
Slide 3: In 2019, we have made good progress in delivering on our ambitions
In 2019, we have made good progress in delivering on our ambitions Accelerate growth • Client assets grew 26% to €102.0bn – organically and • Net inflows of AuM at Private Banking and at Asset Management inorganically • Ongoing search for acquisitions to accelerate our growth • Co-creation between P
Slide 4: From responsible to sustainable wealth manager – 2019 highlights
From responsible to sustainable wealth manager – 2019 highlights 98% of fund managers AuM at Private Banking on the approved list invested in sustainable or are scored on their impact investing solutions Increased range of overall sustainability grew by 55% to more than sustainable and impact profil
Slide 5: Our positioning in a changing environment
Our positioning in a changing environment Key themes Our positioning • Focus on wealth management, reducing dependence on interest income Low interest rates impact our • Keep Private Banking loan portfolio stable interest income • Charge negative interest rates for larger savings balances (above €1
Slide 6: 2019 annual results
2019 annual results VAN LANSCHOT KEMPEN
Slide 7: Good overall performance
Good overall performance Net result €98.4m (2018: €80.3m) Commission income €290.4m (-1%) Underlying net result €108.8m Interest income €175.3m (0%) (2018: €103.0m) Operating expenses Efficiency ratio 75.5% €384.1m (-3%) (2018: 79.4%) Client assets €102.0bn (+26%) AuM net inflow €9.9bn AuM €87.7bn (
Slide 8: 2019 highlights
2019 highlights Sale AIO II Fourth closing of Successfully Infrastructure for and VLC & European Private completed 37 advanced Partners Equity Fund at Corporate Finance analytics €193 million and ECM transactions 2019 2020 New payments Niche strategies Over €2.0 billion Special capital platform and
Slide 9: Overview net result
Overview net result €m 2019 2018 % chang e Commission 290.4 293.2 -1% Interest 175.3 175.6 0% Other income 43.1 30.3 42% Income fr om op er ating activities 508.7 499.2 2% Operating expenses -384.1 -396.4 -3% Gr oss r esult 124.7 102.8 21% Loan loss provision 12.1 12.7 -5% Other impairments -34.9 0.
Slide 10: Net result considerably up to €98.4m
Net result considerably up to €98.4m Key drivers of net result €m incl. book profit VLC & Partners • Impairment of goodwill relates to the write-down of goodwill involved in the acquisition of Kempen & Co in 2007 and more specifically to its Merchant Banking activities • Ignoring exceptional items,
Slide 11: Cost-saving measures lead to operating expenses below the 2019 target
Cost-saving measures lead to operating expenses below the 2019 target Operating expenses €m • Cost level well below 2019 cost target of €390m • Focus on costs reflected mainly in lower consultancy fees and marketing costs • In 2019 total headcount decreased by approximately 60, partly as a result of
Slide 12: Private Banking client assets rose 13% to €34.5bn
Private Banking client assets rose 13% to €34.5bn Net result Private Banking* Private Banking client assets* €m € bn • Net result amounted to €44.0m (2018: €38.1m) • Strategic investment programme successfully completed in 2019 • Client assets rose to €34.5bn, mainly due to positive market performan
Slide 13: Successful completion of strategic investment programme in 2019
Succesful completion of strategic investment programme in 2019 Multichannel Omnichannel Discretionary management app Introduced New website and online portal New payments platform and merged into investment app; Vermogenshorizon in 2018, for clients in 2018, payments app in 2019 functionality furthe
Slide 14: Net inflow at Asset Management amounted to €9.8bn
Net inflow at Asset Management amounted to €9.8bn Net result Asset Management AuM Asset Management €m € bn • Net result rose to €15.2m (2018: €11.9m) thanks to higher commission income, lower operating expenses and lower restructuring charges • Net inflow driven by fiduciary mandates, mainly St. Pen
Slide 15: Private Banking's AuM margin fairly stable, decline at Asset Management
Private Banking’s AuM margin fairly stable, decline at Asset Management due to mix effect AuM margin – Private Banking AuM margin – Asset Management bps bps Annualised • Private Banking’s AuM margin relatively stable in 2019; higher margin in 2017 was recurring due to higher transaction provisions a
Slide 16: Evi's net result improved, client assets relatively stable
Evi’s net result improved, client assets relatively stable Net result Evi Evi’s AuM €m €m • Net result amounted to -€2.1m (2018: -€6.7m) • Operating expenses fell by €5.0m compared with 2018, due to lower marketing and IT costs • AuM grew due to positive market performance; total client assets add u
Slide 17: Solid results at Merchant Banking
Solid results at Merchant Banking Net result Merchant Banking Commission €m €m • Solid results in 2019, after a very strong 2018 • Net result came in at €7.5m (2018: €10.5m), partly due to the €2.7m impact of model adjustments • Last year, a total 37 Corporate Finance and ECM deals were closed, of w
Slide 18: Margin pressure due to low interest rate environment
Margin pressure due to low interest rate environment Interest Interest margin (12-mth moving average)* €m % • Margin pressure as a result of low interest rate climate and a smaller Corporate Banking loan portfolio • Nevertheless, interest income and charges were almost equal to 2018, partly due to a
Slide 19: Income from securities and associates increases mainly due to book profits
Income from securities and associates increases mainly due to book profits Income from securities and associates €m €m Book value Income 31/12/2019 2019 VLP (minority interests) 41.3 18.1 Bolster Investments Coöperatief U.A. 19.3 1.7 Co-investments in own products 119.4 14.3 Other equity investments
Slide 20: Lower result on financial transactions
Lower result on financial transactions Results on investment portfolio Other results Total result on financial transactions €m €m €m • Result on financial transactions decreased by €6.6m to -€7.4m • Fewer sales and the current investment climate led to a lower result on the investment portfolio • Ot
Slide 21: Loan portfolio relatively stable, net increase in mortgage portfolio
Loan portfolio relatively stable, net increase in Private Banking’s mortgage portfolio €m Lo an Lo an % c hange Impaired P ro vis io n Impaired Co verage po rtfo lio po rtfo lio lo ans ratio ratio 31/12/2019 31/12/2018 Mortgages 5,885 5,756 2% 60 6 1.0% 10% Other loans 1,906 1,793 6% 73 36 3.8% 49%
Slide 22: Net release of loan loss provisions thanks to positive economic conditions
Net release of loan loss provisions thanks to positive economic conditions Loan portfolio (excluding provisions) Additions to loan loss provisions at 31/12/2019 100% = €8.7bn €m - 22 bps* - 27 bps* - 27 bps* • Corporate Banking loans came down from €0.5bn to €0.3bn (RWA Corporate Banking loans: €0.3
Slide 23: Strong capital position
Strong capital position Common Equity Tier 1 ratio* % • CET 1 ratio increased strongly from 21.1% to 23.8%, with a 2023 target of 15–17% • We expect an increase of around 15% in total RWA due to DNB’s announced minimum risk-weight floor on Dutch mortgages. This absorbs our previously disclosed impac
Slide 24: Delivering on our promise
Delivering on our promise Capital return and dividend €m • Special capital return in December of €1.50 per share • Total shareholder return since 2013: 2.1x • In future, we will continue to optimise our capital base while leaving room for possible acquisitions. If possible, we will also consider pay
Slide 25: Overview of 2023 financial group targets
Overview of 2023 financial group targets Common Equity Tier 1 ratio* Dividend pay-out ratio** % % 50-70% 15-17% 23.8% 18.6% 20.3% 21.1% 64% 16.3% 56% 61% 57% 36% 2015 2016 2017 2018 2019 2023 2015 2016 2017 2018 2019 Efficiency ratio Return on Common Equity Tier 1** % % 70-72% 10-12% 79.6% 76.2% 79.
Slide 26: Good overall performance
Good overall performance Net result €98.4m (2018: €80.3m) Commission income €290.4m (-1%) Underlying net result €108.8m Interest income €175.3m (0%) (2018: €103.0m) Operating expenses Efficiency ratio 75.5% €384.1m (-3%) (2018: 79.4%) Client assets €102.0bn (+26%) AuM net inflow €9.9bn AuM €87.7bn (
Slide 27: Appendix
Appendix VAN LANSCHOT KEMPEN
Slide 28: Key figures 2019 by segment
Key figures 2019 by segment €m Private Evi Asset Merchant Other Total Banking Management Banking Commission income 130.1 5.1 101.7 52.2 1.2 290.4 Interest income 154.0 3.2 0.1 -0.1 18.1 175.3 Other income 1.2 - -0.7 2.6 40.0 43.1 Income from operating activities 285.3 8.2 101.1 54.7 59.3 508.7 Opera
Slide 29: Decline in commission income at Merchant Banking not fully offset by other segments
Decline in commission income at Merchant Banking not fully offset by other segments Total commission Commission by segment €m €m 29
Slide 30: Financial and non-financial KPIs
Financial and non-financial KPIs Theme KPI Target 2019 Score 2019 Score 2018 • This set of KPIs demonstrates our belief in Financial and risk 1. CET 1 ratio 15-17% 23.8% 21.1% value creation for the long term. It reflects management 2. Return on equity (CET 1) 10-12% 10.5% 9.8% both the interests of
Slide 31: High scores on external ESG ratings
High scores on external ESG ratings 1st Sustainability certificates in our peer group of on responsible investment policy medium-sized banks and balance sheet screening 10th B rating Transparantiebenchmark: place in league table of assessed by Carbon Disclosure 250 entrants Project C+ rating A and A
Slide 32: 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