Shuaa Capital (p.s.c) · DFM:SHUAA
Shuaa Capital (p.s.c) — Q2 2020 Earnings Presentation
26 slides from Shuaa Capital (p.s.c)'s earnings presentation, Aug 16, 2020
Slide 1: Q2 2020 Earnings Presentation
Q2 2020 E a r n i n g s P re s e n ta t i o n 16 August 2020 © 2020 SHUAA Capital psc. All rights reserved
Slide 2: Executive Summary
Executive Summary Weathered severe market conditions Net profit at AED 5m in H1-20, EBITDA at AED125m in H1-20 despite AED159m unrealized net FV losses Q2-20 operating income up 19% quarter-on-quarter at AED86m driven by continued improvement in breadth and composition of stable revenues AuM
Slide 3: Q1 vs Q2 2020 – Net Profit
Q1 vs Q2 2020 – Net Profit Quarter-on-Quarter Net Profit1 Commentary AEDm 529m Strong rebound in profitability in Q2 driven 267 55m by: Partial reversal of MTM losses Dividend recognition in consolidated 5 flagship fund (50) Performance fee recognition on selected transaction (262) One-off c
Slide 4: Q1 vs Q2 2020 – Revenue Performance
Q1 vs Q2 2020 – Revenue Performance Quarter-on-Quarter Revenues Commentary AEDm 131m 157.9 Other Income Fee & Trading Income 26 14m Operating income up 19% QoQ in Q2 at 19% AED85.8m 85.8 Slightly higher fee income augmented 72.1 19 by closure of transaction with one-off 7 132 performance fee Adv
Slide 5: 2020 Q1 vs Q2 – Expense Performance
2020 Q1 vs Q2 – Expense Performance Quarter-on-Quarter Expenses Commentary AEDm 85m Provisions G&A 113.5 Staff Costs Other Expenses 30 QoQ Expenses driven by FX losses with 8m underlying cost trend positive 14% 34 52.9 60.5 60.6 AED4m swing in FX losses Q1 to Q2 relating to borrowings and currency
Slide 6: Q1 vs Q2 2020 – Other Income Performance
Q1 vs Q2 2020 – Other Income Performance Quarter-on-Quarter Other Income Commentary AEDm Finance Costs FV Gains/Losses1 517m Associates P&L Other Income/Exp2 Substantial sequential swing in Q2-20 driven 246.0 by: AED231m improvement in net fair value of investments 209 AED112m one-off payment as
Slide 7: 2020 Quarterly Net Profit by Segment
2020 Quarterly Net Profit by Segment Asset Management Investment Banking Corporate AEDm AEDm AEDm 230 4 42 32 (0.3) (37) Net 9 (4) (267) Profit Q1 20 Q2 20 H1 20 Q1 20 Q2 20 H1 20 Q1 20 Q2 20 H1 20 Actuals Actuals Actuals Actuals Actuals Actuals Revs. 38.1 48.6 86.7 3.0 13.2 16.2 31.0 24.0 55.0 EBIT
Slide 8: Cost Development
Cost Development Cost Trend – By Expense Type Commentary 17% 276.6 Other 21 Strong improvement in underlying cost trend Op. Expense Dep & Amor. 47 211.7 242.2 12 228.2 Staff costs down 16% in Q2-20 annualized 58 versus 2019 57 G&A 86 G&A expenses down 26% in Q2-20 annualized versus 2019 73 ECI 9
Slide 9: Revenue and Cost Synergies
Revenue and Cost Synergies Revenue & Cost Synergies Commentary Target vs. H1 2020 Achievement AEDm Revenue Synergies Cost Synergies 48% % Achievement on Target 54.6 Realization of synergies on track 16 48% of target synergies achieved 80% Revenue synergies driven by enhanced deal flow from broad
Slide 10: Continued progress on legacy asset reduction
Continued progress on legacy asset reduction Non-Core Unit Evolution Commentary AEDm 38% 128m Continued progress on net 113 assets in non-core unit (NCU), down 38% since 15 creation of NCU 27 403 AED128m cash proceeds realized so far 247 Reduction mainly through asset disposals 0 NCU Net Asset
Slide 11: Post-merger integration is progressing
Post-merger integration is progressing Q2 2019 Q3 2019 Q4 2019 Q4 2020+ Merger Merger Integration Transformation Announcement Completion Aug 2019 Oct. 2019 Dec. 2019 Feb. 2020 Apr. 2020 Kick-off Corporate Alignment of Group Name New merger Governance Group Policies Decision Branding & integration Co
Slide 12: Our strategy is based on cornerstones
Our strategy is based on 5 cornerstones… Strengthen fund raising capabilities Leading Regional Investment Manager Create permanent capital vehicles and grow AuM Increase product suite and cross-selling opportunities We deliver uncompromising quality to our customers Regional Dominance in Dom
Slide 13: …with defined operating levers
…with defined operating levers Strengthen and Diversify products and services Scale the platform and grow core businesses within core businesses operate more efficiently Expand regional footprint1 Grow fixed income platform Increase operational efficiency Grow asset management business Grow permanen
Slide 14: Implementing an immediate focus to executing our strategy
Implementing an immediate focus to executing our strategy Strengthen and grow core businesses Diversify products and services within core businesses Scale the platform and operate more efficiently Asset Management & Investment Solutions Investment Banking Corporate Special Situation Bespoke and Rest
Slide 15: Delivering long term value for shareholders
Delivering long term value for shareholders Integration Transformation Medium-term ambition Long-term ambition > 15% 7-12% Return on Equity Return on Equity < 60% Cost Income Ratio1 70% Cost Income Ratio1 < 60% Leverage Ratio New business drivers to focus on recurring revenues and low capital intens
Slide 16: Key Takeaways
Key Takeaways We have a We are uniquely We will engineer We will digitize our demonstrated track positioned to capitalize innovations to drive AuM businesses and record of creating value on our combined growth and IB mandates processes for clients operating platform We have substantial valuation ups
Slide 17: Appendix
Appendix
Slide 18: Quarterly P&L
Quarterly P&L AEDm Quarterly Financials H1 2020 vs H1 2019 Variance Q1 Q2 Q3 Q4 FY Q1 Q2 H1 H1 H2 QoQ Variance H1 20 vs 2019 2019 2019 2019 2019 2020 2020 2019 2020 2019 H1 19 Interest income 3 42 9,552 5,531 15,128 5,563 3,212 (2,351) 45 8,775 15,083 8,730 Interest expense 0 0 (4,096) 2,568 (1,528)
Slide 19: Balance Sheet Summary
Balance Sheet Summary AED '000 30-Jun 31-Mar 31-Dec 30-Sep 30-Jun 31-Mar 2020 2020 2019 2019 2019 2019 Assets Cash and deposits with banks 327,993 293,701 360,193 297,852 63,790 51,572 Receivables and other debit balances 225,997 187,943 159,775 184,829 46,859 55,254 Loans, advances and finance leas
Slide 20: Segmental Financials H1 2020
Segmental Financials H1 2020 Public Private Investment Asset Investment Principal AED '000 Real Estate Banking Markets Non-core Others Corporate H1 2020 Markets Markets Solutions Management Banking investment Net fee and commission income 41,973 8,664 1,386 3,510 55,532 0 679 679 44,173 2,465 43 46,
Slide 21: Segmental Financials Q2 2020
Segmental Financials Q2 2020 Public Private Investment Asset Investment Principal AED '000 Real Estate Banking Markets Non-core Others Corporate Q2 2020 Markets Markets Solutions Management Banking investment Net fee and commission income 21,405 5,201 694 2,943 30,243 0 517 517 21,620 1,293 14 22,92
Slide 22: Segmental Financials Q1 2020
Segmental Financials Q1 2020 Public Private Investment Asset Investment Principal AED '000 Real Estate Banking Markets Non-core Others Corporate Q1 2020 Markets Markets Solutions Management Banking investment Net fee and commission income 20,568 3,463 692 567 25,289 0 163 163 22,552 1,172 29 23,753
Slide 23: Segmental Financials Q4 2019
Segmental Financials Q4 2019 Public Private Investment Asset Investment Principal AED '000 Real Estate Banking Markets Non-core Others Corporate Q4 2019 Markets Markets Solutions Management Banking investment Net fee and commission income 8,673 -3,463 694 872 6, 776 2 -240 -238 19,563 1,548 0 21,111
Slide 24: Disclaimer
Disclaimer THIS PRESENTATION IS BEING PROVIDED TO YOU SOLELY FOR YOUR INFORMATION. THIS PRESENTATION MAY NOT BE PUBLISHED OR FURTHER DISTRIBUTED, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, TO ANY OTHER PERSON IN ANY JURISDICTION WHERE, OR TO ANY OTHER PERSON TO WHOM, TO DO SO WOULD BE UNLAWFUL. By
Slide 25: Cautionary Statement Regarding Forward-Looking Information
Cautionary Statement Regarding Forward-Looking Information This document contains forward-looking statements. Forward-looking statements are neither historical facts nor assurances of future performance. Instead, they are based only on our current beliefs, expectations and assumptions regarding the
Slide 26: SHUAA Capital psc Head Office
SHUAA Capital psc Head Office: The H Hotel Dubai, Offices Tower, Level 15, Office No. 1502 P.O. Box: 31045, Dubai, United Arab Emirates Tel: +971 (4) 330 3600, Fax: +971 (4) 330 3550, E-mail: info@shuaa.com, Website: www.shuaa.com A financial investment company licensed and regulated by the U.A.E. S