Slide 1: Full-year results presentation 2011
Full-year results presentation 2011 Zurich, 29 February 2012 Practitioners of the craft of private banking 1
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by EFG International AG solely for use by you for general information only and does not contain and is not to be taken as containing any securities advice, recommendation, offer or invitation to subscribe for or purchase or redemption of any securities
Slide 3: Introduction, Performance, Current status, outlook
1.0 Introduction John Williamson, CEO 2.0 Performance Current status, 3.0 outlook 3
Slide 4: A challenging backdrop in 2011
A challenging backdrop in 2011 • Continued economic uncertainty impacting client confidence / activity. • Comprehensive business review - time and resources impacted growth during H2. 4
Slide 5: Significant impact on 2011 performance
Signficant impact on 2011 performance vs. 2010 Net profit, excl. one-offs CHF 83.5 m 27% IFRS net loss CHF (294.1 m) NM IFRS net profit attributable to ordinary CHF (310.9 m) NM shareholders Net new assets – continuing businesses CHF 0.6 bn Net new assets - total CHF (1.2 bn) Revenue-generating AUM
Slide 6: Good progress in resetting the business
Good progress in resetting the business • Back to a single focus: private banking. • Loss-making businesses addressed. • Looking to IPO EFG Financial Products in 2012 (s.t. market conditions). • Steps taken to improve capital position – and will continue. • Business review on track to deliver antici
Slide 7: Introduction, Performance, Current status, outlook
1.0 Introduction 2.0 Performance Jean-Christophe Pernollet, CFO Current status, 3.0 outlook 7
Slide 8: Underlying net profit versus reported IFRS profit
Underlying net profit versus reported IFRS profit 2011 IFRS net profit reflects exceptional costs and one-off charges (in CHF m) 223.8 83.5 46.0 72.5 10.0 25.3 (294.1) IFRS loss for Life insurance Currency Impairment Restructuring Goodwill & 2011 2011 revenue de- translation loss relating to charges
Slide 9: Financial impact of business review
Financial impact of business review Summing up the impact Expectation at time of Outcome FY 2011 results business review (Oct 2011) One-off restructuring charges & approx. CHF 50 m CHF 46 m provisions CHF 223.8 m plus CHF 10.0 m Goodwill & intangibles impairment approx. CHF 250 m (negative FX impact
Slide 10: Key performance indicators
Key performance indicators Financial results reflect a transformational year Average revenue- generating AUM Net new assets RoAUM Operating income Underlying net profit (in CHF bn) (in CHF bn) (in bps) (in CHF m) (in CHF m) Other income Commission Net interest 808.1 9.7 114.6*** 85.9 763.2 FX 92.0 +
Slide 11: Operating income
Operating income Reduced client activity, low interest rates, strong Swiss franc Net interest Net commissions Net other income (in CHF m) (in CHF m) (in CHF m) 496.3 97.6 250.5 453.9 XXX 211.7 61.3 2010 2011 2010 2011 2010 2011 Low rate environment continues to Impacted by lower average AuM Higher f
Slide 12: Operating expenses
Operating expenses The positive impact of the “Business Review” will start in 2012 Personnel expenses (in CHF m) Other operating expenses (in CHF m) Cost-income ratio (in %) 91.6* 473.9 240.1 88.1** 459.3 Litigation 214.8 27.0 provision 85.2* 85.8*** & legal fees 213.1 2010 2011 2010 2011 2010 2011
Slide 13: AuM development
AuM development Disappointing outcome but some mitigating factors (CHF bn) Total continuning NNA: CHF 0.6 bn NNA for continuing CHF 0.6 bn businesses, reflecting challenging (0.2) market conditions (5.0) 0.5 0.1 Outflows mainly related to (1.8) businesses in process to be exited (primarily in Contin
Slide 14: AuM and NNA by business region
AuM and NNA by business region Outflows in Continental Europe mainly due to business exits Dec 2011 AuMs 2011 NNA CHF 78.4 bn CHF (1.2 bn) Continental 33.0 (3.4) Europe Asia 14.1 0.9 Americas 11.8 0.0 UK 14.8 0.4 Asset 1.5 0.1 Management EFG FP 3.2 0.8 14
Slide 15: Life insurance policies portfolio – Update
Life insurance policies portfolio – Update* Impact of life insurance portfolio on current financials Portfolio “Held to Maturity” Carrying value CHF 680.8 million (acquisition cost, premium paid, accrued interest at 8.1% for 2011) Net revenues in 2011 on all life portfolios of CHF 17.7 million (2010
Slide 16: Continued strong & liquid balance sheet
Continued strong & liquid balance sheet Total assets: CHF 21.0 bn Total liabilities & equity: CHF 21.0 bn Minimum A- rated banks Due to banks 0.8 Cash & banks 3.3 Deposits 14.4 Sovereign / AAA Treasury bills 0.8 Derivatives 0.5 Available 4.0 for sale - Sovereign; - EU Quasi-Sovereign AAA/AA; Financi
Slide 17: Capital position
Capital position Evolution of BIS capital position Breakdown of RWAs (in CHF bn) 14.0% 12.9% Total Capital Ratio 13.9% 12.8% Tier 1 Ratio 5.5 5.6 0.5 0.6 XX 1.4 1.4 14.0% 12.9% XX 3.6 3.6 Dec 10 Dec 11 Dec 10 Dec 11 Market / Settlement / Non- counterparty related Evolution of BIS capital ratio Opera
Slide 18: Impact of BdP restructuring on capital ratios
Impact of BdP restructuring on capital ratios Rationale & results of the EFG Fiduciary Certificate Exchange offer Rationale for the Exchange Offer Breakdown of capital ratio (in %) Proactive strengthening of regulatory capital in the light of the impending transition to the Basel III Framework Repla
Slide 19: Introduction, Performance, Current status, outlook
1.0 Introduction 2.0 Performance Current status, 3.0 John Williamson, CEO outlook 19
Slide 20: Manifold strengths as a private bank
Manifold strengths as a private bank • Market – substantial and growing. • Positioning – more of a private bank than most. • Scale – a good size: international breadth, full range of services, intimacy of relationship-driven model. • On / offshore - legacy offshore / undeclared tax business less of
Slide 21: Most PB businesses performing well
Most PB businesses performing well With steps to address areas of weakness. Continental Europe (inc. Switzerland) - Luxembourg, Spain and Monaco made good progress. - Switzerland below expectations. UK Loss-making businesses being exited a Solid increase in profit, with significant drag on results.
Slide 22: Strong progress resetting private banking business
Strong progress resetting private banking business Canada Scandinavia Number of offices closed during 2011. - EFG Bank AB in Sweden being wound down. Certain activities transferred to Quesada. - Transferred PB activities of EFG Bank to SEB Wealth Management. - EFG Bank AB in Helsinki being closed. O
Slide 23: But still a strong international presence
But still a strong international presence Active in 32 locations, with 15 booking centres. Stockholm Ottawa Birmingham Toronto London Luxembourg Jersey, Paris Frankfurt New York Guernsey Switzerland Liechtenstein Los Angeles Shanghai Miami Monaco Key Biscayne Lyford Cay Taipei Nassau Hong Kong Madri
Slide 24: Exiting non core businesses to enhance focus
Exiting non core businesses to enhance focus Steps to ensure fully focused on core business of private banking: • SIF Swiss Investment Funds S.A., EFG’s Swiss-based fund admin. business, to be taken over by CACEIS (s.t. regulatory approval). • EFG Financial Products earmarked for IPO. • Additional s
Slide 25: On track to deliver significant reduction in costs
On track to deliver significant reduction in costs • On track to deliver net P&L benefit from resetting business of c. CHF 35m - in part in 2012; in full from 2013. • Also improving operational efficiency - standard operating model where possible; cost savings and efficiencies in Switzerland; enhanc
Slide 26: Continued emphasis on CRO productivity
Continued emphasis on CRO productivity • CROs down from 675 at end-2010 to 594 (PB: 531) in Oct-11 (business review). Addressing unprofitable CROs / recognising client support roles. • At end-2011, 567 CROs (PB: 508) - continuing to address underperformers identified in the business review. • Proces
Slide 27: Progress in relation to investment solutions
Progress in relation to investment solutions • EFGAM an integral part of core private banking business, delivering investment solutions to CROs and their clients. • Significant progress in 2011: strong double-digit growth in managed accounts. Momentum bodes well for current year. • Additional steps
Slide 28: Aim to IPO EFG Financial Products
Aim to IPO EFG Financial Products Established as leading player: Strong performance in 2011: • Fully integrated structured products • Revenues from startup in 2007 to issuer across range of asset-classes. CHF 109 m in 2011. • HQ in Zurich; offices in Geneva, • PBT of CHF 17.6 m. Frankfurt, Hong Kong
Slide 29: Key challenges for 2012 (and beyond)
Key challenges for 2012 (and beyond) Now Resetting 2012-14 Optimising 2013- • Exit underperforming / non- Moving forward core business (complete • Delivering the budget – asap). controlled, profitable growth. • Headcount reductions / • Net business growth. • Continue to challenge all improvements to
Slide 30: Committed to delivering medium-term objectives
Committed to delivering medium-term objectives Economic and market backdrop uncertain, but performance in opening weeks of 2012 where it needs to be for business to deliver on expectations for year. Committed to delivering medium-term objectives: • Net new assets in the range 5-10% per annum. • Redu
Slide 31: Practitioners of the craft of private banking
Practitioners of the craft of private banking www.efginternational.com 31
Slide 32: Appendix
4.0 Appendix 32
Slide 33: Consolidated income statement (IFRS)
Consolidated income statement (IFRS) * 2010 impact of MBAM impairment 33
Slide 34: Consolidated income statement (IFRS)
Consolidated income statement (IFRS) * 2010 impact of MBAM impairment 34
Slide 35: Consolidated balance sheet (IFRS)
Consolidated balance sheet (IFRS) (in CHF million) Dec 2010 Dec 2011 Cash and balances with central banks 712 1,079 Treasury bills and other eligible bills 2,038 824 Due from other banks 2,227 2,207 Derivative financial instruments 354 537 Financial instruments 5,710 6,264 Loans and advances to cust
Slide 36: Breakdown of Assets under Management
Breakdown of Assets under Management 31.12.11 By category 31.12.10 31.12.11 (in CHF bn) Cash & Deposits 23.3% 24.9% 19.5 Bonds 17.4% 18.7% 14.6 Equities 27.1% 23.4% 18.3 Structured products 9.3% 8.8% 6.9 Loans 11.0% 12.8% 10.1 Hedge Funds / Funds of HFs 8.3% 6.4% 5.0 Other 3.6% 5.0% 4.0 Total 100.0%
Slide 37: Details on goodwill & intangibles position as of Dec 2011
Details on goodwill & intangibles position as of Dec 2011 (in CHF m) 31 Dec 2010 Action 31 Dec 2011 Specialist Product Businesses Goodwill / Asset Total Goodwill & Intangible assets Goodwill Total Write-down intangible assets DSAM 7.9 69.2 77.1 Fully 0.0 Private Banking Businesses Goodwill / Asset T
Slide 38: Segmental breakdown – 2011
Segmental breakdown – 2011 38
Slide 39: Segmental breakdown – 2010
Segmental breakdown – 2010 39
Slide 40: EFG Financial Products today
EFG Financial Products today A leading provider of structured products • Fully integrated structured products issuer • EFG Financial Products has won a across various asset-classes (including number of industry awards since inception White labelling / B2B platform) • Leading market shares in Switzer
Slide 41: A very strong growth story since inception
A very strong growth story since inception Currently issuing 20-50 products per day High turnover of products Number of products issued and outstanding (1) Turnover and AUM – year end (CHFbn) (1) 2008-2011 2008-2011 CAGR of 67% Turnover CAGR > 100% (issued products) AUM CAGR of 66% (1) Unaudited EFG
Slide 42: 2011 highlights
2011 highlights The business continues to grow as it expands its international footprint • EFG Financial Products standalone revenues grew from CHF 0 in 2007 to CHF 109 m in 2011 • Profit before tax contribution to EFGI of CHF 17.6 m • ~234 employees, of which 55 CROs • Swiss Derivative Awards 2011
Slide 43: EFG FP – Consolidated income statement
EFG FP – Consolidated income statement Revenues continue to grow considerably per annum • Additional revenues derived from the funding generated by EFGFP issued products are currently realized by EFGI (1) There are differences between figures on an EFGI and EFG FP basis due to different accounting p
Slide 44: Contacts
Contacts Media Investors Strategic Marketing & Communications EFG International Investor Relations Keith Gapp, Head of SMC Jens Brueckner, Head of IR Telephone: +41 44 226 1217 Telephone: +41 44 226 1799 E-mail: keith.gapp@efginternational.com E-mail: jens.brueckner@efginternational.com EFG Internat