Ubs Group Ag · SIX:UBSG
Ubs — Q1 2004 Earnings Presentation
29 slides from Ubs's earnings presentation, May 4, 2004
Slide 1: First Quarter Results 2004
First Quarter Results 2004 Zurich, 4th May 2004 Peter Wuffli, Chief Executive Officer Clive Standish, Chief Financial Officer Mark Branson, Chief Communication Officer
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements This communication contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to the implementation of strategic initiatives, such as the European wealth management business, and other statements r
Slide 3: A record quarter
A record quarter Operating income up 33% y-on-y 82% y-on-y net profit growth Quarterly "bests" EPS growth of 95% y-on-y 32% RoE CHF 19 bn private client net new money 2
Slide 4: Net profit, quarterly
Net profit, quarterly Adjusted for significant financial events CHF m 3,000 2,648 2,423 2,500 2,200 2,033 2,033 1,923 2,000 1,773 1,808 1,685 1,627 1,574 1,574 1,535 1,451 1,500 1,251 1,243 1,238 1,325 1,227 1,166 1,209 1,096 922 1,000 813 500 0 Avg Avg Avg 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q
Slide 5: Operating leverage with balanced growth
Operating leverage with balanced growth 120% 3x 2x 100% 6x 3x 80% 3x 60% 40% 20% 1x 0% WM BBS Global AM IB WM-US1 UBS y-on-y % change in operating income y-on-y % change in performance before tax 1Before acquisition costs Invested Asset P&L Capital Assets Quality 4
Slide 6: Shareholder returns
Shareholder returns ROE1 Basic EPS2 CHF 35% 3.0 32% 2.46 30% 2.5 25% 2.0 20% 1.5 15% 1.0 10% 5% 0.5 0% 0.0 1999 2000 2001 2002 3M03 6M03 9M03 12M03 3M04 Avg99 Avg00 Avg01 Avg02 1Q03 2Q03 3Q03 4Q03 1Q04 1 Year to date annualized net profit less the amortization of goodwill and other intangible assets
Slide 7: Cost control across all areas
Cost control across all areas Cost / Income1 80% 90% 1Q03 1Q04 75% 80% 70% 70% 65% 60% 60% 50% 1999 2000 2001 2002 1Q03 2Q03 3Q03 4Q03 1Q04 WM BBS Global IB WM- UBS AM US2 1 Operating expenses less the amortization of goodwill and other intangible assets and significant financial events / operating
Slide 8: Performance against targets
Performance against targets Wealth management units net new money 1 CHF bn 20 15 10 5 0 Avg 00 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 WM-US WM 1 Excludes interest and dividend income Invested Asset P&L Capital Assets Quality 7
Slide 9: Invested assets
Invested assets Quarterly trend CHF bn 2,300 2,200 2,100 2,000 31.12.03 Net new money Performance Currency 31.03.04 Market performance - 1Q04 5% MSCI World Bond Index USD/CHF DJ Euro 0% Stoxx SMI EUR/CHF NASDAQ DJIA FT-SE 100 -5% Invested Asset P&L Capital Assets Quality 8
Slide 10: Revenue trends
Revenue trends CHF m 11,000 9,000 7,000 5,000 3,000 1,000 0 -1,000 Avg 99 Avg 00 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 Credit loss Net fee & commission income Net income from interest margin Net income from trading activities activities Other Invested Asset P&L Capital Assets Quality 9
Slide 11: Balanced business mix
Balanced business mix Revenues1 by operating business area 2002 2003 1Q04 2% 2% 5% 6% 5% 4% 16% 16% 12% 19% 22% 25% +59% -2% +19% +21% +109% 16% 41% 14% 41% 17% 37% Numbers in graph indicate y-on-y change in absolute revenues Domestic Banking Wealth & Asset Mgmt Equities Fixed Income Investment Bank
Slide 12: Quality of trading revenues
Quality of trading revenues 1Q04 VaR and income from trading activities 75% 50% 62% 25% 31% 33% 34% 0% Q-on-q change Y-on-y change Total trading activity income Group VaR Quality of trading revenue 25 20 Frequency 15 10 5 0 -120 -105 -90 -75 -60 -45 -30 -15 0 15 30 45 60 75 90 105 120 More Daily tra
Slide 13: Cost trends
Cost trends CHF m 8,000 6,000 4,000 2,000 0 Avg 99 Avg 00 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 Personnel General & administrative Depreciation Amortization of goodwill & other intangible assets Invested Asset P&L Capital Assets Quality 12
Slide 14: Actual credit loss expense
Actual credit loss expense WM&BB Investment Bank CHF m CHF m 200 200 150 150 100 100 50 50 0 0 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 -50 -50 -100 -100 Invested Asset P&L Capital Assets Quality 13
Slide 15: Business unit results
Business unit results
Slide 16: Increasing transparency
Increasing transparency New quarterly disclosure Split of underwriting fees between equity and debt Impact of collateral holdings on impaired loans coverage ratio Split of BBS revenues to show interest income Split of WM-US revenues to show munis impact New WM-US KPI: financial advisor productivity
Slide 17: Improving profitability
Improving profitability 1,000 110 900 108 800 106 700 104 Pre-tax profit (CHF m) Gross margin (bps) 600 102 500 100 400 98 300 96 200 94 100 92 0 90 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 Performance before tax Gross margin Global WM- WM BBS IB AM US 16
Slide 18: Net new money
Net new money CHF bn 18 16 14 12 10 8 6 4 2 0 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 -2 Swiss Clients European Wealth Management business International Clients (excluding EWM) Total Wealth Management NNM Net outflow from Italian Tax Amnesty Global WM- WM BBS IB AM US 17
Slide 19: Progress in European domestic business
Progress in European domestic business NNM, Invested assets Revenues 5 60 CHF m 100 80 50 60 4 Net new money (CHF bn) Invested assets (CHF bn) 40 20 40 0 Invested Assets (CHF bn) 3 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q Q E 2001 2002 2003 2004 ) 30 Invested assets by country + & 0 1 1 2 20 Italy UK
Slide 20: Business Banking revenues
Business Banking revenues1 CHF m 1,500 1,000 500 0 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 Interest income Non-interest income 1 Before credit loss expense Global WM- WM BBS IB AM US 19
Slide 21: Improving profitability
Improving profitability 200 600 150 Operating income (CHF m) 400 Performance (CHF m) 100 200 50 0 0 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 Performance before tax Operating income Global WM- WM BBS IB AM US 20
Slide 22: Net new money
Net new money Institutional Wholesale intermediary CHF bn bps CHF bn bps 15 40 15 40 35 35 10 10 30 30 5 5 25 25 0 20 0 20 15 15 -5 -5 10 10 -10 -10 5 5 -15 0 -15 0 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 Money market Money market Non-money market Non-money mark
Slide 23: Improving profitability
Improving profitability 5,000 2,000 4,000 1,500 Operating income ( CHF m) Performance (CHF m) 3,000 1,000 2,000 500 1,000 0 0 Avg 00 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 Operating income before credit loss expense Performance before tax Global WM- WM BBS IB AM US 22
Slide 24: FIRC – a diversified portfolio of businesses
FIRC – a diversified portfolio of businesses Revenue split Revenue progression 3,000 Principal Finance Fixed & Commercial Income 2,000 CHF m Real Estate 29% 18% 1,000 0 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 Distribution of daily revenue 30 Number of days FX, Cash & 20 Collateral Trading Rates
Slide 25: Equity business: #1 and gaining share
Equity business: #1 and gaining share Global secondary equity commission pool and UBS market share 4.5 16% 4.0 14% 3.5 Global revenue pool (US$bn) 12% 3.0 10% Market share 2.5 8% 2.0 6% 1.5 4% 1.0 0.5 2% 0.0 0% 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 Revenue Pool UBS share Average of next two Source
Slide 26: Strong profitability
Strong profitability millions CHF USD 175 95% 250 150 90% 200 125 100 85% 150 75 80% 100 50 75% 50 25 0 70% 4Q00 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 Performance before tax1 Cost/Income ratio1 (%) CHF USD 1Before acquisition costs Global WM- WM BBS IB AM US 25
Slide 27: Increasing productivity
Increasing productivity Financial advisor productivity CHF '000 225 200 175 150 125 100 75 50 25 0 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 Global WM- WM BBS IB AM US 26
Slide 28: Market cross-currents
Market cross-currents Strong corporate earnings... …Concern over Fed tightening 50% 5 30/04/04 % positive earnings surprises 30/03/04 40% 4 Yield (%) 30/04/03 30% 3 20% 2 10% 1 % negative earnings surprises 0% 0 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 3M 6M 1Y 2Y 3Y 4Y 5Y 6Y 7Y 8Y 9Y 10Y Source: UBS. Sample o
Slide 29: First Quarter Results 2004
First Quarter Results 2004 Zurich, 4th May 2004 Peter Wuffli, Chief Executive Officer Clive Standish, Chief Financial Officer Mark Branson, Chief Communication Officer