EFG International AG · SIX:EFGN
EFG International — H1 2007 Earnings Presentation
34 slides from EFG International's earnings presentation, Jul 31, 2007
Slide 1: 1H 2007 Results and Outlook
1H 2007 Results and Outlook Lawrence D. Howell, CEO Rudy van den Steen, CFO Zurich, 31 July 2007
Slide 2: Disclaimer
Disclaimer This presentation has been prepared by EFG International 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 any securities regarding EFG Intern
Slide 3: Content
Content Introduction and Business Overview Lawrence D. Howell, CEO Financials Rudy van den Steen, CFO Outlook on M&A Rudy van den Steen, CFO Summary and Outlook Lawrence D. Howell, CEO Q&A Session
Slide 4: Introduction and Business Overview
Introduction and Business Overview Lawrence D. Howell, CEO
Slide 5: Key Highlights for 1H 2007
Key Highlights for 1H 2007 Financial Results Net profit of CHF 158.0 million, up 57% y-o-y Net profit attributable of CHF 143.7 million, up 63% y-o-y Operating income of CHF 446.6 million, up 55% y-o-y RoAUM of 1.23%, well above strategic goal 1
Slide 6: Key Highlights for 1H 2007 (cont'd)
Key Highlights for 1H 2007 (cont'd) Key Achievements Continue to show sustained, dynamic growth - CROs increased to 469 (incl. announced acquisitions), up 16% from the end of 2006 and up 32% y-o-y - AUMs were CHF 86.9 billion (incl. announced acquisitions), up 18% from the end of 2006 and up 46% y-o
Slide 7: Key Highlights for 1H 2007 (cont'd)
Key Highlights for 1H 2007 (cont'd) Acquisitions Closed acquisitions of Quesada Kapitalförvaltning and PRS Group Integration of Quesada, PRS Group, BMG and Harris Allday proceeding on plan - Clients and AUM retained - Revenues and profits at or above plan Announced entry into Canadian wealth managem
Slide 8: Review of business during 1H 2007
Review of business during 1H 2007 Both established businesses and newer operations performed strongly Over the last 12 months, the Swiss business increased CROs by 19% and AUM by 26% CROs in the Asian business grew by 22% since the end of 2006 - growth during 1H 2007 exceeded 2006 full year CRO grow
Slide 9: Key Performance Indicators
Key Performance Indicators 1H 2007 vs 1H 2006 including announced acquisitions, as per period end as per period end 105% 105% 104% 100% 63% 82% Continued strong increase in number of CROs, 55% up to 469 from 356 at the end of 1H 2006, 46% record organic CRO increase AUM increased from CHF 59.6 billi
Slide 10: CRO growth accelerated in 2Q 2007
CRO growth accelerated in 2Q 2007 1H07 vs 1H06 Growth during 1H 2007 including announced acquisitions, as per period end including announced acquisitions, as per period end +16% 469 469 +10% +32% +6% 428 356 405 1H06 1H07 2006 1Q07 1H07 Added 113 CROs during the last 12 months Added 64 CROs during 1
Slide 11: AUM and AUA Growth
AUM and AUA Growth (in CHF billion, as per period end) +17% 94.7 7.8 Acquisitions of PRS Group and Quesada 81.0 5.5 1.5 Kapitalförvaltning added CHF 3.8 billion 7.4 4.6 in AUM 3.8 Acquisition of Bull Wealth Management will add another CHF 1.5 billion in AUM 79.8 65.2 Strong growth across all regions
Slide 12: Financials
Financials Rudy van den Steen, CFO
Slide 13: Strong NNA Contribution
Strong NNA Contribution (in CHF billion) 79.8 8.0 3.8 12.3% increase in net new assets & 2.7 7.7 65.2 6.4 (NNA) client loans – annualized growth rate 6.1 1.6 (CL) of 26% 10.8% increase in net new assets (excl. client loans) – annualized growth rate of 23% Positive FX impact of CHF 0.9 billion Invest
Slide 14: Breakdown of AUM
Breakdown of AUM (as percentage of total) 2006 1H07 Breakdown in line with previous periods Equities 16.9 17.1 Continued relatively low exposure to equities EFG funds 5.7 6.1 Third party funds proportion increased as Third party funds 16.4 19.6 a result of PRS Group acquisition Structured notes 9.7
Slide 15: Average AUM Development
Average AUM Development (in CHF billion) 72.5 +50% Revenue generating AUMs increased by 22% since the end of 2006 and are up by 48.2 50% year-on-year Revenues up by 55% year-on-year 1H06 1H07 Note: Time-weighted average AUM 10
Slide 16: Overview of 1H 2007 Results
Overview of 1H 2007 Results Δ vs. (In CHF million) 1H06 2H06 1H07 1H06 Operating income 288.6 345.9 446.6 55% Operating expenses (173.9) (200.3) (263.4) 51% Profit before tax 114.6 145.6 183.1 60% Net profit for the period 100.7 129.3 158.0 57% Net profit attributable 88.4 115.6 143.7 63% Return on
Slide 17: Operating Income
Operating Income (in CHF million) 446.6 35.5 8% Net banking fee & commission income up +55% 64% 109.0 24% Net interest income up 40% 288.6 27.0 9% Other income increased by 31% 77.9 27% Revenues from new acquisitions (Quesada and PRS Group) were CHF 23.5 million 302.0 68% 183.7 64% 1H06 1H07 Net ban
Slide 18: Return on AUM up from 2006
Return on AUM up from 2006 (in bps) 125 123 Margin remained strong, in line with previous 121 range due to continued returns from Alternative Investment Products (Hedge Funds, Structured 119 > 110 Products, Insurance Products) 2005 1H06 2006 1H07 Strategic Goal RoAUM = Return on Assets under Managem
Slide 19: Operating expenses
Operating expenses (In CHF million) 1H06 1H07 Personnel expenses 118.2 178.7 Non-personnel expenses 46.3 65.9 164.5 244.6 Revenues 288.6 446.6 Cost-income ratio (%) 57.0 54.8 Depreciation & amortisation expense 4.9 5.9 Amortisation of acquisition related intangibles 4.6 12.9 Total operating expenses
Slide 20: Development of Personnel Expenses
Development of Personnel Expenses Total personnel expenses increased by 51% to CHF 178.7 million Total headcount increased by 40% from 1,171 at the end of 1H06 to 1,645 at the end of 1H07 +55% 446.5 Compensation ratio declined to 40% from 41% in 1H 2006 Impact of amortisation expense of share option
Slide 21: Balance Sheet Highlights
Balance Sheet Highlights (In CHF million) as of Dec. 31, 2006 as of Jun 30, 2007 Δ (in %) Loans and advances to customers 6,146 7,699 +25% Intangible assets 910 1,191 +31% Due to customers 11,994 12,504 +4% Total shareholders‘ equity 2,305 2,437 +6% Risk Weighted Assets 4,599 5,344 +16% BIS Tier 1 C
Slide 22: Outlook on M&A
Outlook on M&A Rudy van den Steen, CFO
Slide 23: Outlook on M&A Activities
Outlook on M&A Activities 1H 2007 Activities Outlook Capital Status Entry into Canadian wealth Currently upward pressure on Excess Tier 1 Capital capacity management market through valuations for incremental goodwill stands announced acquisition of Bull at approx. CHF 700 million Highly disciplined
Slide 24: Summary and Outlook
Summary and Outlook Lawrence D. Howell, CEO
Slide 25: Financial Performance – Growth has accelerated since IPO
Financial Performance – Growth has accelerated since IPO 2000 – 2004 CAGR (Swiss GAAP) 1H05 – 1H07 CAGR (IFRS) 117% 78% 65% 50% 43% 42% 44% 34% CROs AUM Revenues Net Profit CROs AUM Revenues Net Profit attributable CROs: from 226 to 469 AUM: from CHF 36.3 bn to CHF 81.3 bn Revenues: from CHF 140.6 m
Slide 26: Outlook – Reaffirming medium-term strategic goals
Outlook – Reaffirming medium-term strategic goals CRO growth - Organic growth is running within anticipated range, pipeline remains strong - EFG International remains highly attractive destination for private bankers Organic growth - Intend to continue developing existing businesses and launch new o
Slide 27: Confident to achieve strategic goals, looking ahead on 2H 2007
Confident to achieve strategic goals, looking ahead on 2H 2007 2007 and 2008 strategic goals reaffirmed Including announced acquisitions CROs currently at 469, confirming target of 540 for the end of 2007 Strategic goal for revenue margin is 1.10%, today at 1.23%, a margin close to 1.20% should be a
Slide 28: Appendix
Appendix
Slide 29: Strategic Goals
Strategic Goals 2006 1H 2007 2007 2008 Status Status Strategic Goals Strategic Goals CROs 405 (1) 469 (3) 540 675 AUM Growth Above CHF Above CHF CHF 30 m CHF 30 m per CRO 40.0 m 40.0 m per year per year CHF 10-15 bn CHF 10-15 bn CHF 11.7 bn CHF 1.5 bn Acquisitions per year (incl. per year (incl. AUM
Slide 30: Strategic Goals (cont'd)
Strategic Goals (cont’d) 2006 1H 2007 2007 2008 Status Status Strategic Goals Strategic Goals Revenue 1.19% of 1.23% of ~ 1.10% of ~ 1.10% of Margin Average AUM Average AUM Average AUM Average AUM Cost-Income 55.6% 54.8% 51% - 55% 50% - 55% Ratio 22
Slide 31: Consolidated Income Statement (unaudited)
Consolidated Income Statement (unaudited) (In CHF million) 1H06 2H06 1H07 Δ vs. 1H06 Net interest income 77.9 94.3 109.0 40% Net banking fee and commission income 183.7 222.6 302.0 64% Net trading income 26.2 27.4 32.2 23% Other operating income / (expense) 0.8 1.6 3.3 NM Net other income 27.0 29.0
Slide 32: Consolidated Balance Sheet (unaudited)
Consolidated Balance Sheet (unaudited) (In CHF million) Dec 2006 Jun 2007 Δ vs. Dec 2006 Cash and balances with central banks 44 37 -16% Treasury bills and other eligible bills 827 742 -10% Due from other banks 5,343 4,188 -22% Other financial assets at fair-value-through-profit-or-loss 9 55 NM Deri
Slide 33: CRO Statistics
CRO Statistics AUM* per CRO** (as of period-end) Annualised Revenue per Average CRO* AUM in CHF million Revenues in CHF million 2.10 1.93 171 1.73 163 164 1.63 428 138 331 466 398 268 195 145 160 2004 2005 2006 1H07 2004 2005 2006 1H07 CROs AUM per CRO Avg. CROs for the period Revenue per Avg. CRO *
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