Slide 1: Results and Review Strategy Update Full Year 2020
Results and Review Strategy Update Full Year 2020 18 February 2021
Slide 2: Instructions for Q&A
Instructions for Q&A Questions can only be asked when logged into the CISCO Webex call OPTION 1 – CISCO Webex on PC OPTION 2 – CISCO Webex on mobile 1) On the Webex desktop app in the right 1) In the toolbar at the bottom, hand panel, click the arrow to expand the click on the 3-dot button Q&A box -
Slide 3: Agenda
Agenda Speakers Content 1 2020 Review 2 2020 Financial results Peter Sanderson Group CEO 3 Strategy update and outlook 4 Q&A Richard McNamara Group CFO 5 Appendix 3
Slide 4: 2020 Review
2020 REVIEW Peter Sanderson, Group CEO
Slide 5: 2020 Review
2020 Review Financial performance impacted by pandemic – good progress on strategy • Group AuM of CHF 122bn, down 8% since FY 2019 Results • AuM and revenues significantly impacted by the global pandemic • Underlying pre-tax loss of CHF 14.9m, down from CHF 10.5m profit in FY 2019 • Delivered CHF 71
Slide 6: Financial targets
Financial targets Appropriate financial targets, but time frame reassessed due to Covid-19 impact CHF 100m Financial targets Underlying pre-tax profit • Targets unchanged but delayed from FY 2022 to FY 2024 due to Covid-19 impact 30% Further efficiency gains expected Operating margin • Reduction in
Slide 7: Investment performance
Investment performance Performance recovering from Covid-19 driven market volatility in Q1 2020 % of fund AuM outperforming the benchmark % of fund AuM outperforming Morningstar peer group 78% 86% 74% 69% 70% 60% 61% 57% 55% 56% 52% 39% 42% 34% 23% 27% 22% 22% 17% 14% 31.12.2019 31.03.2020 30.06.202
Slide 8: Spotlight equity performance
Spotlight equity performance Selected strategies – approximately 63% of total equity capability by AuM Positioning in Morningstar Quartile rank Relative returns vs index (%) Sector Fund Active AuM AUM M* rating share 1-Y 3-Y 5-Y 1-Y 3-Y 5-Y (USD (USD m) (%) bn) EQUITY GAM MS Emerging Equity 1’189 **
Slide 9: Assets under management and net flows
Assets under management and net flows AuM in IM stabilised and growth in PLF Investment management (in CHF bn) Private labelling (in CHF bn) 0.3 1.4 0.4 1.2 (2.0) Net flows (2.4) (3.4) (6.5) Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Investment management (in CHF bn) Private lab
Slide 10: Net flow drivers of select strategies
Net flow drivers of select strategies A diverse range of strategies generating net inflows in Q4 2020 Net flow drivers in Q4 2020 (in CHF m) 364 198 161 136 88 55 37 41 23 23 GAM Greensill GAM Star Credit GAM Star Cat GAM Star GAM Star GAM Emerging GAM Star Japan GAM Star GAM Swiss GAM Systematic Su
Slide 11: Management company services
Management company services CHF 114.1bn of combined assets – serviced by 165 FTEs Significant scale and in-house competency Combined management company service AuM (in CHF bn) • Management company services to private labelling 114.1 clients and to internal GAM funds • Combined AuM of CHF 114.1bn • S
Slide 12: FY 2020 Financial Results
FY 2020 FINANCIAL RESULTS Richard McNamara, Group CFO
Slide 13: FY 2020 Financial summary
FY 2020 Financial summary Reduction in AuM impacts revenues and profitability (in CHF m, except where indicated) 2020 2019 Change1 Net management fees and commissions 230.4 317.1 (27%) of which investment management 196.5 284.9 (31%) of which private labelling 33.9 32.2 5% Net performance fees 2.8 1
Slide 14: Management fee margin
Management fee margin 1 Fee margins mainly impacted by asset mix Investment management (in bps) Private labelling (in bps) 7.4 63.6 62.1 59.1 6.3 54.2 51.8 5.4 4.1 3.9 2016 2017 2018 2019 2020 2016 2017 2018 2019 2020 • Investment management full year margin at 51.8bps • Private labelling full year
Slide 15: Expenses
Expenses Expense reductions achieved across all categories and CHF 65m target exceeded (in CHF m, except where indicated) Change Change 2020 2019 in CHF in % Fixed personnel expenses1 118.3 139.9 (21.6) (15%) Driven by headcount reduction Portfolio manager contractual arrangements remain 2 Variable
Slide 16: Efficiency programme
Efficiency programme Substantial rightsizing with total cost reductions of CHF 130m in two years Total expenses (in CHF m) Total cost savings of 373.5 ~CHF 130m in two years 85.7 315.7 CHF 15m savings 57.1 in fixed personnel costs 244.1 and general expenses 32.2 287.8 258.6 211.9 ~197 Variable perso
Slide 17: IFRS net loss
IFRS net loss IFRS net loss mainly driven by impairment of legacy goodwill (in CHF m, except where indicated) 2020 2019 Underlying (loss) / profit before taxes (14.9) 10.5 Acquisition-related items1 19.8 (12.5) 2 Non-recurring items (402.4) 3.2 IFRS (loss) / profit before taxes (397.5) 1.2 Income ta
Slide 18: Capital management
Capital management Cash and capital impacted by restructuring and financial performance Cash and adjusted tangible equity¹ (in CHF m) Cash and capital • Cash and capital levels remain robust compared to H1 2020 328 316 • No external debt 272 271 • Legal entity simplification providing ability to fur
Slide 19: Strategy Update and Outlook
STRATEGY UPDATE AND OUTLOOK Peter Sanderson, Group CEO
Slide 20: Strong conviction in our future
Strong conviction in our future Tilting our strategic efforts towards growth Strategy on track – Building strong foundation for growth Positioning – Rebuilding reputation – strong portfolio of products with focus on growth Performance – Solid operational performance – strong investment performance P
Slide 21: Distribution strategy
Distribution strategy Innovation, diversification and differentiation • Embed sustainability across our actively managed product range Optimise • Ensure all products offer value for money product platform • Strengthen investment specialist function • Develop thematic products • Build UK and expand i
Slide 22: An active approach to sustainable investment
An active approach to sustainable investment Positioning GAM in a USD 37 trillion1 market growth opportunity Product strategy Increase AuM growth in sustainable investments Further embed ESG Design a distinctive and successful considerations across set of sustainable products investment teams and st
Slide 23: Strategic priorities 2021
Strategic priorities 2021 All eyes on growth • Implement new distribution strategy and drive AuM growth • Launch a range of sustainable investment strategies • Invest in new investment specialist team Growth • Continue to deliver strong investment performance • Leverage new and empower existing tale
Slide 24: Outlook
Outlook • GAM well-positioned to service client demand as world emerges from pandemic • Expect the market environment to remain volatile Outlook 2021 • Client demand to remain resilient • Focus on growth and further business simplification FY 20241 • Underlying pre-tax profit of CHF 100m Financial t
Slide 25: Q&A
Q&A
Slide 26: Appendix
APPENDIX
Slide 27: Assets under management
Assets under management Investment management (in CHF bn) (10.6) (0.9) 0.9 (1.9) 1 48.4 35.9 31.12.2019 Net flows Sale Market performance FX impact 31.12.2020 Private labelling (in CHF bn) (0.4) 3.9 (1.7) 86.1 84.3 31.12.2019 Net flows Market performance FX impact 31.12.2020 Source: GAM 27 1 Includi
Slide 28: AuM development by capability
AuM development by capability Investment management (in CHF bn) AuM AuM AuM Capability Net flows Sale Market FX Net flows Sale Market FX 31.12.19 30.06.20 31.12.20 Fixed income 25.8 (5.7) (0.5) (1.4) (0.6) 17.6 (0.9) (0.4) 1.3 (0.5) 17.1 Multi asset 7.8 (0.2) - (0.2) (0.2) 7.2 (0.4) - 0.6 0.1 7.5 Eq
Slide 29: Investment performance
Investment performance Performance recovering from Covid-19 driven market volatility in Q1 2020 1 % of AuM outperforming benchmark 3-year 5-year Capability 31.12.2020 30.09.2020 30.06.2020 31.03.2020 31.12.2019 31.12.2020 30.09.2020 30.06.2020 31.03.2020 31.12.2019 Fixed income 6% 15% 32% 1% 89% 67%
Slide 30: IM fee margin by capability
IM fee margin by capability1 Capability margins largely stable Management fee margin by capability1 (in bps) Fixed Income Fixed income Equity Systematic Equity Systematic 70 67 67 57 57 58 62 49 50 FY 2019 H1 2020 FY 2020 FY 2019 H1 2020 FY 2020 FY 2019 H1 2020 FY 2020 Multi asset Absolute Return Al
Slide 31: AuM and net flows by capability
AuM and net flows by capability Investment management AuM by capability (in CHF bn) 31.12.16 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 Fixed income 20.8 27.4 37.1 38.6 29.2 27.1 25.8 17.6 17.1 Equity 12.5 11.0 12.6 12.5 8.7 7.1 7.2 5.8 6.9 Multi asset 9.6 9.1 9.5 9.3 7.
Slide 32: AuM by product type
AuM by product type Investment management AuM by product type (in CHF bn) 31.12.16 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 Luxembourg SICAVs 19.0 20.5 23.5 22.8 14.6 14.1 12.4 8.3 7.4 Segregated accounts 17.4 15.3 15.7 15.2 10.1 9.1 8.1 6.3 6.3 Ireland UCITS 14.3 18.9
Slide 33: AuM and net flows by client segment
AuM and net flows by client segment Investment management AuM by client segment (in CHF bn) 31.12.16 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 Intermediaries 28.4 31.7 40.6 41.8 27.4 23.9 23.0 16.1 18.3 Institutional clients 34.0 35.4 38.5 37.6 24.7 24.5 21.8 16.5 14.7
Slide 34: Private labelling AuM breakdowns
Private labelling AuM breakdowns By fund domicile (in CHF bn, except where indicated) 31.12.16 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 Switzerland 31.7 33.1 33.6 34.2 33.3 36.4 34.5 33.7 34.9 Rest of Europe 20.8 26.0 40.7 45.2 42.8 47.6 49.8 50.2 51.2 Total 52.5 59.1
Slide 35: Our ManCo client segments
Our ManCo client segments Three main client segments with specific needs Segments 1. Asset owners 2. Asset managers 3. Wealth managers Client needs • Access to best-in-class third-party • Distribution support • Solution development investment managers • Access to distribution networks • Life-cycling
Slide 36: Our ManCo service offering
Our ManCo service offering Client-oriented solutions across the investment value chain Our clients’ challenges Our solutions across the value chain • Regulated and licensed corporate structure, adequately capitalised Focus on investment • Risk management and investment controlling management & distr
Slide 37: ManCo growth initiatives
ManCo growth initiatives Select initiatives based on collaboration between IM and PLF Fund of mandates • Consolidated tailored UCITS-platform for pension funds for institutional • Flexible allocation to best-in-class external investment managers and GAM strategies asset owners • Comprehensive perfor
Slide 38: Key figures
Key figures Investment management (in CHF, except where indicated) FY 2016 H1 2017 H2 2017 FY 2017 H1 2018 H2 2018 FY 2018 H1 2019 H2 2019 FY 2019 H1 2020 H2 2020 FY 2020 Net management fees and commissions (m) 434.4 218.7 245.1 463.8 261.6 192.0 453.6 148.3 136.6 284.9 104.6 91.9 196.5 Net performa
Slide 39: Performance fees
Performance fees Other fixed income and non-directional equity strategies as main drivers Performance fee eligible assets and performance fees (in CHF) 5.0bn 3.7bn Unconstrained fixed income 31.12.2019 31.12.2020 Global macro/managed futures Non-directional equity 12.8m 2.8m Other fixed income strat
Slide 40: Performance fee eligible assets and income
Performance fee eligible assets and income Performance fee eligible assets¹ (in CHF bn) 31.12.16 30.06.17 31.12.17 30.06.18 31.12.18 30.06.19 31.12.19 30.06.20 31.12.20 Unconstrained fixed income 5.9 6.2 6.6 6.2 - - - - - Global macro/managed futures 2.4 1.7 1.6 1.1 0.6 0.4 0.3 0.1 0.1 Non-direction
Slide 41: Performance fee eligible assets analysis
Performance fee eligible assets analysis Other fixed Global macro/ Non-directional Systematic income Other1 Total managed futures equity strategies Performance fee eligible AuM (CHF bn) 0.1 0.5 1.1 1.1 0.9 3.7 No. of PF eligible funds/mandates 1 7 8 7 8 31 Performance fees FY 2020 (CHF m) 0.0 0.5 0.
Slide 42: Key performance fee eligible strategies
Key performance fee eligible strategies As at 31.12.2020 AuM % (below)/ Crystallisation Fund above Performance fee rate Last HWM date (CHF bn) date HWM GAM Systematic Core Macro (Cayman) fund 0.4 (1%) Quarterly 10% 30.09.2019 Managed accounts 0.3 0% Various Various Various Alternative Risk Premia 0.
Slide 43: General expenses
General expenses (in CHF m) 2020 2019 Change Comments Occupancy 5.6 8.0 (30%) Lower maintenance and utility costs Technology and communication 15.2 19.0 (20%) Lower maintenance and support costs Data and research 20.6 20.7 (0%) Professional and consulting services 8.3 18.1 (54%) Lower level of consu
Slide 44: Operating margin and compensation ratio
Operating margin and compensation ratio (in CHF m) 2016 2017 2018 2019 2020 Net fee and commission income 473.5 547.7 499.9 329.9 233.2 Net other (expenses) / income 5.1 2.2 0.3 (3.7) (4.0) Income 478.6 549.9 500.2 326.2 229.2 Personnel expenses 246.2 264.6 239.6 197.0 150.5 General expenses 102.9 1
Slide 45: Basic and diluted underlying EPS
Basic and diluted underlying EPS (in million shares, except where indicated) 2016 2017 2018 2019 2020 Weighted average number of shares in issue 162.0 160.0 159.7 159.7 159.7 Weighted average number of treasury shares held 4.3 3.0 4.3 4.2 3.1 Weighted average number of shares outstanding for basic E
Slide 46: Currency split – revenues, expenses and AuM
Currency split – revenues, expenses and AuM Group income 1 Group expenses2 Investment management AuM FY 2020 FY 2020 as at 31.12.2020 10% 4% 10% 14% 15% 39% 30% 11% 18% 40% 6% 8% 30% 41% 24% USD EUR GBP CHF Other Source: GAM 46 1 Percentage splits are estimated based upon the currency exposure of th
Slide 47: Group balance sheet
Group balance sheet (in CHF m) 31.12.16 31.12.17 31.12.18 31.12.19 31.12.20 restated restated restated Cash and cash equivalents 353 374 328 316 271 Seed capital investments 84 84 68 46 23 Other assets 205 271 207 260 230 Goodwill and other intangible assets 1’878 1’852 725 713 296 Assets 2’520 2’58
Slide 48: Net cash
Net cash (in CHF m) (14.9) 18.6 (6.8) (9.7) (3.5) (28.6) 315.8 270.9 Net cash 2020 underlying Acquisition-related Share repurchases Net seed capital FX impact Changes in net Net cash 31.12.2019 net loss deferred for share-based sales assets and other 31.12.2020 consideration schemes impacts payment
Slide 49: Adjusted tangible equity
Adjusted tangible equity1 (in CHF m) 31.7 7.8 (28.9) 11.1 (1.2) (388.4) 373.7 (3.0) (11.3) 197.2 188.7 Adjusted IFRS Impairment Amortisation/ Finance Revaluation Remeasurement Share- FX impact Other Adjusted tangible net loss of goodwill impairment charges on of GAM of pension based impacts tangible
Slide 50: Corporate calendar and contacts
Corporate calendar and contacts Forthcoming events 21 April 2021 Q1 2021 Interim management statement 29 April 2021 Annual General Meeting 2021 4 August 2021 Half-year results 2021 21 October 2021 Q3 2021 Interim management statement Group Communications and Investor Relations Charles Naylor Jessica
Slide 51: Cautionary statement on forward-looking information
Cautionary statement on forward-looking information This presentation by GAM Holding AG (‘the Company’) does not constitute an invitation or offer to acquire, purchase or subscribe for securities. This presentation by the Company includes forward-looking statements that reflect the Company’s intenti
Slide 52: www.gam.com
GAM Investments wwv.gam.com