Kempen European High Dividend Fund N.V. N · EURONEXT:KEHDF
Kempen European High Dividend Fund N.V. N — Van Lanschot Kempen — Investor Presentation (May 2020)
50 slides from Kempen European High Dividend Fund N.V. N's investor presentation, May 2020
Slide 1: Investor presentation May 2020
Investor presentation May 2020
Slide 2: Van Lanschot Kempen at a glance
Van Lanschot Kempen at a glance Profile Solid performance on all key financials • Well capitalised, profitable wealth manager with a strong 2019 2018 specialist position in the market • Net result €98.4m €80.3m • Strong brand names, reliable reputation, rich history • Underlying net result €108.8m €
Slide 3: Van Lanschot Kempen is a specialist, independent wealth manager
Van Lanschot Kempen is a specialist, independent wealth manager
Slide 4: Van Lanschot Kempen's rich history reaches back over 280 years
Van Lanschot Kempen’s rich history reaches back over 280 years Acquisition Staalbankiers’ private banking activities Strategic review Successful placement secondary offering of 30% stake Launch of Capital return Van Lanschot Acquisition Evi van Strategy 2020 of €1.50 per Switzerland CenE Bankiers La
Slide 5: Our transformation to a specialised wealth manager
Our transformation to a specialised wealth manager Client assets and AuM (€bn) Risk-weighted assets (€bn) Commissions as % of operating income (€m) 102.0 10.5 57.1 +15.8 pps +95% 14.3 -60% 41.3 6.1 52.3 11.4 4.2 87.7 40.9 4.4 3.9 0.3 2012 2019 2012 2019 2012 2019 AuM Savings and other Private Bankin
Slide 6: As a wealth manager Van Lanschot Kempen builds on the experience of its core activities
As a wealth manager Van Lanschot Kempen builds on the experience of its core activities Private Banking Evi Asset Management Merchant Banking ‒ Discretionary asset ‒ Online wealth management ‒ Comprehensive fiduciary ‒ Equities research and management, investment services for the mass affluent wealt
Slide 7: We are a leading wealth manager in our markets
We are 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 of activities and track record set
Slide 8: We have defined four strategic pillars that enable us to deliver on our ambitions
We have defined four strategic pillars that enable us to deliver on our ambitions • Pursue a solutions-led • Create solutions based on approach building on clients’ Accelerate Advance through superior insights into clients’ needs growth- digitalisation and needs & market developments • Consider acqu
Slide 9: 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 – organically and inorganically Advance through digitalisation and analytics • Client assets grew 26% to €102.0bn • Outsourced payment services to Fidor: new payments • Net inflows of AuM at Private Banking and at A
Slide 10: 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 11: 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 12: Annual results 2019: net profit over €98 million
Annual results 2019: net profit over €98 million
Slide 13: 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 14: 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 15: 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 16: 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 17: 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 18: 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 19: 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 20: 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 21: Private Banking's AuM margin fairly stable, decline at Asset Management due to mix effect
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 22: 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 23: 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 24: 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 25: 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 26: 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 27: Loan portfolio relatively stable, net increase in Private Banking's 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 28: 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 29: 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 30: 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 31: 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 32: Q1 trading update 2020
Q1 trading update 2020
Slide 33: Exceptional market circumstances in Q1 2020
Exceptional market circumstances in Q1 2020 • The coronavirus outbreak is having a major impact on the Dutch economy and on the financial sector Challenging • It triggered a chain of events in the markets that has led to an increase in the volatility and illiquidity markets of these markets • The de
Slide 34: The core of our wealth management model delivers to our clients
The core of our wealth management model delivers to our clients • Net inflow at Private Banking €0.5bn (Q1 2019: -€0.1bn) Strong AuM inflow • Net inflow at Asset Management €1.4bn (Q1 2019: -€0.2bn) • We continued to provide proactive communication combined with tailored advice • Healthy AuM pipelin
Slide 35: Our Q1 results
Our Q1 results • Net result -€10.5m (Q1 2019: €15.3m, excluding one-off sale proceeds) • Decline driven by incidental losses due to market circumstances • 15% increase in commission income compared with Q1 2019 • Increase in securities commission, thanks to higher average AuM compared with Q1 2019,
Slide 36: Further explanation on incidentals
Further explanation on incidentals Losses on structured products activities amount to €21.9m • Structured products involve using company-issued debt with embedded derivates linked to equity indices • The structured products cater to the need of our Private Banking clients offering an alternative ins
Slide 37: Well positioned under difficult circumstances
Well positioned under difficult circumstances • Sentiment among clients still good State of business • Asset Management won two new mandates, which will start in the course of 2020 • Evi welcomed c. 6,600 clients with over €150m in AuM from the partnership agreement with a.s.r. bank • Annualised rec
Slide 38: Annualised recurring management fee back to early 2019 levels
Annualised recurring management fee back to early 2019 levels Development annualised recurring management fees +15% -13% End 2018 End 2019 March 2020 • As result of the significant market decline in Q1 2020, the impact on our annualised recurring management fee is estimated at -13%; this brings us b
Slide 39: Strong capital position
Strong capital position Common Equity Tier 1 ratio • A strong CET 1 ratio of 22.8% (end 2019: 23.8%), with a 2023 target of 15–17% • The capital ratio decreased due to the first quarter loss, higher RWA and other effects • Compared with the midpoint of our target range, the excess capital amounts to
Slide 40: Appendix
Appendix
Slide 41: 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 42: Overview net result Q1 2020
Overview net result Q1 2020 €m Q1- 2020 Q1- 2019* % chang e Commission 78.3 68.3 15% Interest 37.0 43.5 -15% Other income -26.9 8.4 - Income fr om op er ating activities 88.3 120.2 - 27% Operating expenses -99.3 -95.9 4% Gr oss r esult - 10.9 24.4 - Loan loss provision -2.4 0.4 - Other impairments -
Slide 43: 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 both management 2. Return on equity (CET 1) 10-12% 10.5% 9.8% the interests of
Slide 44: 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 45: Balance sheet shows strong capital and funding position
Balance sheet shows strong capital and funding position Balance sheet 31 December 2019 € bn, balance sheet total = €14.3bn 0.1 Due to banks Cash and cash equivalents 1.7 and balances at banks Financial instruments 3.1 9.5 Savings and deposits Loans and advances 8.6 2.6 Debt securities 0.7 Other Othe
Slide 46: Executive Board
Executive Board Personal details of members of the Executive Board Karl Guha Constant Korthout Arjan Huisman Richard Bruens Leonne van der Sar (1964) (1962) (1971) (1967) (1969) Chairman CFO/CRO COO Private Banking Asset Management Merchant Banking Appointed Appointed Appointed Appointed Appointed 2
Slide 47: Supervisory Board
Supervisory Board Personal details of members of the Supervisory Board* Willy Duron Manfred Schepers Jeanine Helthuis Bernadette Langius Lex van Overmeire Maarten Muller Frans Blom (1945) (1960) (1962) (1960) (1956) (1954) (1962) Chairman Vice-Chairman Chairman board of Member of the Managing Direct
Slide 48: Van Lanschot Kempen shares
Van Lanschot Kempen shares Development of share price and trading volume Movements in Van Lanschot Kempen's share price compared with industry indices May-17: Ex- Dec-17: Ex-date Jun-18: Ex- Jun-19: Ex- dividend €1.20 capital return €1 dividend €1.45 dividend €1.45 250% €30 70000.0 60000.0 €25 200%
Slide 49: Diversified shareholder base
Diversified shareholder base Van Lanschot Kempen’s shareholder base at 11/05/2020 APG Asset Management 9.9% LDDM Holding Janus Henderson Group 9.7% Reggeborgh Invest 39.8% FMR 5.6% Management & employees 5.0% NN Group 5.0% T Rowe Price B.H.F. ten Doeschot 3.9% Investec Asset Management 2.9% 3.2% Inv
Slide 50: 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
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