Efg International Ag · SIX:EFGN

Efg International — H1 2021 Earnings Presentation

42 slides from Efg International's earnings presentation, Jul 21, 2021

1. Slide 1: Half-year 2021 results presentation

   EFG International Half-year 2021 results presentation 21 July 2021 Zurich Half-year 2021 results presentation 21 July 2021 Page 1

2. Slide 2: Important Legal Disclaimer

   EFG International Important Legal Disclaimer This document has been prepared by EFG International AG (“EFG”) 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, purch

3. Slide 3: Key highlights

   Key highlights Giorgio Pradelli, Chief Executive Officer Half-year 2021 results presentation 21 July 2021 Page 3

4. Slide 4: Strong profitability and business momentum in 1H21

   EFG International Strong profitability and business momentum in 1H21 Business growth IFRS profit Net new assets of 106.5 mn 4.2bn +5.3% 3× Quality of the business 2022 strategic plan • Investment led On track • Operational leverage • Rationalisation of global footprint • De-risking legacy • Organic

5. Slide 5: Strong profitability and business momentum in 1H21

   EFG International Strong profitability and business momentum in 1H21 4.2 Maintained strong growth momentum  Annualised growth rate of 5.3%, well within target range High client activity and all-time high of Assets under bn  Management of CHF 172.0 billion Net new assets  Investment led growth res

6. Slide 6: Unlocking the full potential

   EFG International Unlocking the full potential Further improved operating leverage  Underlying revenues up by 5.3%; underlying operating expenses down by 4.0%  Decisive and consistent actions to rationalise footprint of booking centres  Operating leverage contributes to strong net capital generat

7. Slide 7: Financial performance

   Financial performance Dimitris Politis, Chief Financial Officer Half-year 2021 results presentation 21 July 2021 Page 7

8. Slide 8: Presentation of financial performance

   EFG International Presentation of financial performance  The reconciliation of underlying net profit to IFRS results is included on slide 34: The only items excluded from underlying performance are the “contribution of the life insurance portfolios”, the “legacy legal costs and provisions” and the

9. Slide 9: Continued business growth and step change in profitability

   EFG International Continued business growth and step change in profitability Executing on 2022 strategic plan  NNA of CHF 4.2 bn, annualised growth of 5.3%  AuM up to 8.3% to CHF 172.0 bn, strong NNA inflows, positive market and foreign exchange effects. Business development Reflect deconsolidatio

10. Slide 10: Financials summary

    EFG International Financials summary 1H21 1H20 1H19 Revenue-generating AuM, CHF bn 172.0 147.8 147.6 Net new assets, CHF bn 4.2 4.2 0.3 Net new asset growth (annualised) 5.3% 5.5% 0.5% Operating income, CHF mn 629.3 563.7 555.8 Operating expense, CHF mn 475.9 497.2 503.6 Operating profit, CHF mn 153

11. Slide 11: Continued business growth and step change in profitability

    EFG International Continued business growth and step change in profitability NNA growth well within of target range Underlying operating profit up 70% vs. 1H20 NNA growth annualised Evolution of underlying operating profit (pre-tax) (in %) (in CHF mn) +70% 118.5 5.5 5.3 83.9 69.6 0.5 1H19 1H20 1H21

12. Slide 12: Operating leverage driving step change in profitability

    EFG International Operating leverage driving step change in profitability 1H21 underlying operating profit up 70% vs. 1H20; 1H21 cost-income ratio at 79.6% Underlying operating profit evolution (in CHF mn)  1H21 underlying operating profit up 70% vs. 1H20, driven by: Decrease by 7.7 ppts CIR 85.2%

13. Slide 13: IFRS net profit tripled year on year

    EFG International IFRS net profit tripled year on year Underlying profitability vs. IFRS net profit Reconciliation of underlying net profit (in CHF mn)  Life insurance with a substantial RoTE RoTE positive contribution of CHF 33.2 mn 10.8% 14.0% +206% 33.2  Substantial de-risking of legacy life in

14. Slide 14: NNA grow at a rate of 5.3%

    EFG International NNA grow at a rate of 5.3% NNA growth well within of target range NNA growth across all three growth levers Existing CROs (in CHF bn) Revenue-generating AuM evolution 2.8 (in CHF bn) 1.6 1.8 5.2 7.0 4.2 (3.2) 172.0 1H20 2H20 1H21 158.8 158.7 New CROs1 (in CHF bn) 1.5 0.9 0.6 1H20 2

15. Slide 15: Improving CRO scale and efficiency

    EFG International Improving CRO scale and efficiency CRO hiring momentum  1H21 CRO hiring in line with guidance range (70-100 gross hires per annum) Number of CROs +9 CROs approved / signed  Net decrease in CROs of 22 (excl. Shaw and Partners) as a 815 result of continued strict performance manage

16. Slide 16: Business development by region

    EFG International Business development by region Switzerland & Italy well within target range; Continental Europe and UK well above target range Revenue-generating AuMs as % of RoAuM* NNA Annualised NNA (excl. loans) Annualised CHF 172.0 bn total AuM (in bps) CHF 4.2 bn growth CHF 3.8 bn growth (in

17. Slide 17: Continued positive trend in mandate penetration

    EFG International Continued positive trend in mandate penetration Evolution of advisory, discretionary mandates & funds (as % of AuM, excl. Loans & externally managed assets)  Discretionary strategies continue to exhibit top quartile performance over 1, 3 and 5 years against peers1 56%  71% of New

18. Slide 18: Consistent, top-quartile performance across the New Capital fund range

    EFG International Consistent, top-quartile performance across the New Capital fund range 71% of New Capital funds have 4 or 5 star Morningstar ratings even as fund range doubles in size 85% 80% 17 % of New Capital funds 75% with 4 and 5 star 70% Morningstar rating 65% 15 60% Number of New Capital 55

19. Slide 19: Quality of revenues improves further

    EFG International Quality of revenues improves further Underlying operating income of CHF 584.3 mn, up 5.3% year on year Underlying operating income Advisory and management fees (gross) (in CHF mn) (in CHF mn) 79 75 bps bps 221.0 146.3 164.7 bn bn 76 71 168.0 bps bps 163.4 vs. 1H20 554.8 584.3 5% 1H

20. Slide 20: Continuous and disciplined cost management

    EFG International Continuous and disciplined cost management Underlying operating expenses down 4.0% year on year Underlying operating expenses (in CHF mn)  Disciplined cost control while investing in growth FTEs 3,127* 3,019* opportunities and digital capabilities CIR 87.3% 79.6%  Optimisation of

21. Slide 21: Transforming EFG's international footprint

    EFG International Transforming EFG’s international footprint Overview of core off-shore private banking booking centers and Shaw and Partners  Project launched in late 2019 to address low margin, high cost-to-income booking centers UK Luxembourg  Actions completed to-date Monaco Switzerland Miami

22. Slide 22: Balance sheet

    EFG International Balance sheet Strong and highly liquid Balance sheet Total assets: Total liabilities & equity: CHF 41.8 bn CHF 41.8 bn Due to banks 0.6 ~50% of Balance sheet in liquid Cash & banks 10.9 assets  Loan-deposit ratio of 52.0%* Treasury bills 1.1 Fair value Deposits 32.3  Liquidity co

23. Slide 23: Sound capital management

    EFG International Sound capital management Strong capital position: CET1 ratio of 16.5%, Total capital ratio at 22.2% Total Capital Ratios* Breakdown of RWAs* (in %) (in CHF bn)  Strengthening of regulatory 22.2 capital base through: 20.1 19.9 1.8 ― Organic capital generation and 3.8 3.9 active cap

24. Slide 24: Strong capital generation

    EFG International Strong capital generation Substantial available CET1 capital allows for expansion Evolution of CET1 Capital ratio* (in %) Underlying net capital generation Total Capital 22.2 Ratio* Total Capital 19.9 AT1 Capital Ratio* 1.0 0.5 3.9 Ratio* (0.5) CET1 Capital CET1 Capital 16.2 (0.6)

25. Slide 25: Executing the 2022 strategic plan

    EFG International Executing the 2022 strategic plan 2019-2020 2021-2022 More Operational efficiency Executing remaining synergies Cost Digital solutions management Investment for growth, e.g. CRO hiring Dividend payout ratio increase to 50% Capital Management Control management Managing excess capit

26. Slide 26: Outlook and strategic priorities

    Outlook and strategic priorities Giorgio Pradelli, Chief Executive Officer Half-year 2021 results presentation 21 July 2021 Page 26

27. Slide 27: Delivering sustainable and profitable growth

    EFG International Delivering sustainable and profitable growth Successful transformation on track 2022 Unlocking full potential and beyond AuM CHF 172 bn (1H21) Achieving new level of 2021 profitability AuM CHF 159 bn Demonstrating strong 2020 resilience AuM CHF 154 bn 2019 Seeding for growth AuM CH

28. Slide 28: We remain focused on three strategic areas

    EFG International We remain focused on three strategic areas Clients Content Simplicity  Superior client service  Maintain consistent, top  Increase operational leverage delivered by experienced quartile performance across  Rationalise international CROs investment strategies and footprint and o

29. Slide 29: Outlook and priorities

    EFG International Outlook and priorities Outlook Priorities  Supportive markets  Maintain business momentum  No material change in interest rates  Further reduce complexity and simplify globally for 2H21 operating model  Investor sentiment remains sensitive  Regulatory compliance and risk to p

30. Slide 30: EFG International Half-year 2021 results presentation 21 July 2021

    EFG International Half-year 2021 results presentation 21 July 2021 Page 30

31. Slide 31: Appendix

    Appendix Half-year 2021 results presentation 21 July 2021 Page 31

32. Slide 32: Income statement (IFRS)

    EFG International Income statement (IFRS) (in CHF million) 1H20 2H20 1H21 Net interest income 163.6 136.3 127.2 Net banking fee & commission income 320.2 335.5 374.1 Net other income 79.9 95.1 128.0 Operating income 563.7 566.9 629.3 Personnel expenses (362.3) (312.7) (345.8) Other operating expense

33. Slide 33: Underlying income statement

    EFG International Underlying income statement (in CHF million) 1H20 2H20 1H21 Net interest income 166.5 136.3 127.1 Net banking fee & commission income 320.2 335.5 374.1 Net other income 68.1 88.0 83.1 Operating income 554.8 559.8 584.3 Personnel expenses (362.3) (312.7) (345.8) Other operating expe

34. Slide 34: Reconciliation of Underlying results to IFRS results 1H21

    EFG International Reconciliation of Underlying results to IFRS results 1H21 Acquisition Exceptional legal Underlying results (in CHF million) Life insurance related intangible costs and IFRS results 1H21 1H21 amortisation provisions Net interest income 127.1 (0.5) 0.6 127.2 Net banking fee & commiss

35. Slide 35: Balance sheet (IFRS)

    EFG International Balance sheet (IFRS) (in CHF million) Dec 2020 Jun 2021 Cash and balances with central banks 8,643 8,756 Treasury bills and other eligible bills 1,027 1,113 Due from other banks 3,097 2,179 Derivative financial instruments 1,155 881.9 Financial asset at fair value through P&L 2,132

36. Slide 36: Breakdown of AuM

    EFG International Breakdown of AuM 30.06.21 By category 31.12.20 30.06.21 (in CHF bn) Cash & deposits 22% 21% 35.7 Bonds 22% 21% 35.3 Equities 32% 35% 60.9 Structured products 3% 3% 4.8 Loans 12% 12% 20.3 Hedge funds 2% 2% 3.2 Other 7% 7% 11.7 Total 100% 100% 172.0 30.06.21 By currency 31.12.20 30.0

37. Slide 37: Segmental analysis 1H21

    EFG International Segmental analysis 1H21 Continental Investment Global Performance summary Switzerland Corporate Europe & Americas UK Asia Pacific & Wealth Markets & Eliminations Total (in CHF m) & Italy Overheads Middle East Solutions Treasury Segment revenues 148.2 102.0 40.9 73.9 86.7 73.2 65.1

38. Slide 38: Segmental analysis 1H20

    EFG International Segmental analysis 1H20 Continental Investment Global Performance summary Switzerland Corporate Europe & Americas UK Asia Pacific & Wealth Markets & Eliminations Total (in CHF m) & Italy Overheads Middle East Solutions Treasury Segment revenues 147.6 92.5 43.8 71.9 78.8 58.4 78.2 (

39. Slide 39: Segmental analysis 2H20

    EFG International Segmental analysis 2H20 Continental Investment Global Performance summary Switzerland Corporate Europe & Americas UK Asia Pacific & Wealth Markets & Eliminations Total (in CHF m) & Italy Overheads Middle East Solutions Treasury Segment revenues 137.0 89.7 37.9 68.2 82.6 72.4 84.3 (

40. Slide 40: Update on Life Insurance Exposures

    EFG International Update on Life Insurance Exposures Life Insurance related portfolios  Legacy exposures acquired more than 10 years ago  Outright portfolio carried at fair value (marked-to-model, Level 3) for IFRS accounts – For regulatory capital purposes (Swiss GAAP), this portfolio is carried

41. Slide 41: Update on Life Insurance Exposures (II)

    EFG International Update on Life Insurance Exposures (II) Direct holding of life insurance  Death benefit: CHF 1,339.0 mn  Non-underlying Carrying value: CHF 712.9 mn  Operating income: CHF 40.0* mn policies for 200 insureds (2020: 219)  of an average age of 92.3 years  1H 2021 premium: CHF 71.

42. Slide 42: Contacts

    EFG International Contacts Investors Media Investor Relations Marketing & Communications Jens Brueckner Daniela Haesler Head of Investor Relations Head of Marketing & Communications Phone +41 44 226 1799 Phone +41 44 226 1804 jens.brueckner@efginternational.com daniela.haesler@efginternational.com E

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