Julius Baer Gruppe AG · SIX:BAER
Julius Baer Gruppe — Julius Baer Group — FY2006 Earnings Presentation
28 slides from Julius Baer Gruppe's earnings presentation, Feb 8, 2007
Slide 1: 2006 Results and Review
2006 Results and Review Presentation for Media and Analysts/Investors Zurich, 8 February 2007 Cautionary Statement On Forward-Looking Information This presentation may contain projections or other forward-looking statements regarding future financial performance and results and other statements that
Slide 2: Program and Content / Group Highlights 2006
Program and Content Introduction Johannes A. de Gier, Group CEO 2006 Financial Results Dieter A. Enkelmann, Group CFO Asset Management David M. Solo, CEO Asset Management Private Banking Alex W. Widmer, CEO Private Banking Summary and Outlook Johannes A. de Gier Q&A Session Appendix 3 Group Highligh
Slide 3: Leading Dedicated Wealth Manager in Switzerland
Leading Dedicated Wealth Manager in Switzerland Two distinct businesses and brands { AuM: CHF 361bn Private Banking Asset Management AuM: CHF 138bn AuM: CHF 223bn { { 5 Breakdown of Group Assets under Management By division Total AuM: By client segment CHF 361bn 60bn 17% 138bn 38% 183bn 223bn 51% 62
Slide 4: Development of Group Assets under Management
Program and Content Introduction Johannes A. de Gier, Group CEO 2006 Financial Results Dieter A. Enkelmann, Group CFO Asset Management David M. Solo, CEO Asset Management Private Banking Alex W. Widmer, CEO Private Banking Summary and Outlook Johannes A. de Gier Q&A Session Appendix 7 Development of
Slide 5: Significant Income Growth / Cost Development under Control
Significant Income Growth / Cost Development under Control Operating expenses up only 1% Operating Income due to tight cost management Investments in growth initiatives + 12% offset by cost synergies Group cost/income ratio improved from 64.5% to 59.5% + 1% Operating Expenses 2005 2006 9 Opera
Slide 6: Operating Expenses well controlled
Operating Expenses well controlled CHFm 1,676 1,692 + 1% 1,800 Personnel expenses grew by 4% 62 44 1,600 to CHF 1,187m, mainly due to overall increase of FTEs by 5% 1,400 467 461 from 3,512 to 3,684 and shift in - 1% 1,200 staff profile from back to front office General expenses slightly decline
Slide 7: Consolidated 2006 Results
Consolidated 2006 Results Profit & Loss account 1,2 1 (CHFm) 2005 2006 Change Net interest income 195 199 2% Results from comm. and service fees 2,088 2,349 12% Results from trading operations 218 251 15% Other ordinary results 20 24 20% Operating income 2,521 2,823 12% Personnel expenses 1,147 1,18
Slide 8: Key Figures Balance Sheet
Key Figures Balance Sheet (CHFbn, December 31) 2005 2006 Change Total Assets 28.6 36.0 26% Equity 6.2 6.9 11% Risk-weighted assets 11.4 12.8 12% Tier 1 regulatory capital 1.4 2.2 56% BIS Tier 1 ratio after dividend 12.7% 17.1% 1 Return on Equity 21.1% 24.3% Moody's rating Bank Julius Baer Aa3 Aa3 BI
Slide 9: Asset Management Division - AuM
Asset Management Division - AuM Exceptional net new money contribution across business units CHFbn 250 Divisional AuM increased by 22% 23 -3 223 21 Strong NNM growth of 11% 200 182 Strong investment performance, benefiting from market environment, 150 produced equivalent increase even with cur
Slide 10: 2006 Gross Margin by Business Segment
2006 Gross Margin by Business Segment RoA stable across business areas while AuM grows Gross Margin on AuM Excluding Performance Fees (bps) JB AM GAM JB IL 2005 55 94 54 2006 55 92 36 Business priority is fixed fees, not volatile performance fees, to maximize shareholder value Blended divisional
Slide 11: Asset Management - AuM Breakdown by Products
Asset Management - AuM Breakdown by Products as of 31 December 2006 AuM by product type of Julius Baer AM 5% 19% Total AuM: CHF 223bn 55% 21% 65bn Equity long Hedge Bond long PLF 83bn 30% 37% AuM by product type of GAM 25% 35% 74bn 33% 7% 33% GAM JB AM US JB AM Europe Long only Mngd portfolio & Comp
Slide 12: Update on Asset Management Europe
Update on Asset Management Europe Focus on continental business with divestment of UK team Overall Business AuM increased by 19% from 2005 year-end to CHF 74bn Leading Private Label Fund & Custody businesses with continued robust inflows Rebuilding of core Zurich investment management continue
Slide 13: Update on Asset Management US
Update on Asset Management US Outstanding performance & growth, with ongoing product diversification Overall Business AuM increased by 39% year on year to CHF 65bn, from NNM and performance JB US investment business retains distinct, proven approach, operating with an independent infrastructure,
Slide 14: Private Banking division AuM
Program and Content Introduction Johannes A. de Gier, Group CEO 2006 Financial Results Dieter A. Enkelmann, Group CFO Asset Management David M. Solo, CEO Asset Management Private Banking Alex W. Widmer, CEO Private Banking Summary and Outlook Johannes A. de Gier Q&A Session Appendix 27 Private Banki
Slide 15: Turnaround in Private Banking Net New Money
Turnaround in Private Banking Net New Money CHFbn Net New Money (CHFbn) 7 First year with positive NNM for 6 6 a number of years 5 CHF 6bn of NNM from 4 H2 - Strong inflows in emerging 5 3 PB markets, particularly Far 2 AM East and Middle East 1 - Stopped outflows from Swiss -3 0 -2 -1 1 H1 onsh
Slide 16: Increased Focus on Revenue Management
Increased Focus on Revenue management as from Q4 2006 bps 120.0 Gross margin remained stable >100 - AuM base significantly 100.0 increased in H2 06 91.4 91.4 - Time lag in revenue effect 80.0 Continued focus on revenue mana- gement in order to achieve gross 60.0 margin of at least 100bps by 2008
Slide 17: Update on enlargement of global footprint
Update on enlargement of global footprint (1/2) Achievements 2006 Priorities 2007 Enhanced booking center platform Obtain wholesale banking Far East in Singapore with local product license in Singapore and trading/execution capabilities Continue ongoing Set up Rep. Office in Hong Kong enhanc
Slide 18: Placing Importance on People
Placing Importance on People Becoming employer of choice Development of number of Relationship Managers Number of RMs increased by 23% in 2006 due to attractiveness of 500 Julius Baer as employer of choice 456 +23% Main focus of hirings in growth markets: 400 370 - North and South Asia - Middle
Slide 19: Strengthened Private Banking Product Platform
Strengthened Private Banking Product Platform Achievements 2006 Priorities 2007 Launched portfolio advisory service Continue focus on investment Strengthened significantly investment consulting consulting unit (decentralized) Introduce a cutting-edge advisory Implemented three-pillar strat
Slide 20: Expanding the Franchise of Julius Baer
Program and Content Introduction Johannes A. de Gier, Group CEO 2006 Financial Results Dieter A. Enkelmann, Group CFO Asset Management David M. Solo, CEO Asset Management Private Banking Alex W. Widmer, CEO Private Banking Summary and Outlook Johannes A. de Gier Q&A Session Appendix 39 Expanding the
Slide 21: Questions & Answers
Group Highlights 2006 Integration Results Capital Management Integration completed Increase of profit Payout policy Insignificant client and before taxes by 34% - Stable dividend staff attrition to CHF 1,131m1 as basis Net profit up by 35% - Buy back programs Cost and revenue synergies f
Slide 22: Appendix
Julius Bar Appendix Julius Bar
Slide 23: Business Profile of the Julius Baer Group
Business Profile of the Julius Baer Group Julius Baer is Switzerland’s leading dedicated wealth manager Our business focus is on managing wealth for high net worth individuals and on managing and distributing investment funds Private Banking emphasis is on offshore rather than on onshore busin
Slide 24: Analysis of Group Assets under Management
Analysis of Group Assets under Management1 (CHFbn) 31.12.05 31.12.06 Change Assets in own-managed funds 119 147 24% Assets with management mandate 88 101 15% Other assets under management 97 113 16% Total assets under management 304 361 19% of which double counting 31 36 15% 1 AuM are stated accordi
Slide 25: Asset Management Division - 2006 Results
Asset Management Division - 2006 Results Profit & Loss account 1,2 1 (CHFm) 2005 2006 Change Operating income 1,398 1,575 13% Personnel expenses 582 586 1% 3 General expenses 223 209 -6% Depreciation and amortization 9 16 78% Operating expenses 814 811 0% Profit before taxes 584 764 31% Gross margin
Slide 26: Key GAM Products Performance
Key GAM Products Performance Fund Inception Total YTD I Year 2 Years 3 Years 5 Years 10 Years Date Inv Pool Abs Perf Abs Perf Abs Perf Abs Perf Abs Perf Abs Perf USDm (%) (%) (%) (%) (%) (%) GAM Multi-Manager Funds GAM Diversity 29-Dec-89 5532 14.2 14.2 24.2 30.1 50.9 213.8 GAM Diversity II USD 27-J
Slide 27: Realization of Cost Synergies in Private Banking
Realization of Cost Synergies in Private Banking Savings realised in 2006 according to plan CHFm Cost Synergies 80 76 Cost synergies delivered from: 70 - FTE reductions in 60 IT/Operations, staff and 60 product functions 50 48 - cost-savings due to a single Swiss platform, and 40 - the consolidati
Slide 28: Market View on Julius Baer
Market View on Julius Baer Market capitalization CHF 16.9 bn on 05.02.2007 275 Share price up 44% from 250 CHF 93 to CHF 134 in 225 2006 200 Share price up 81% from 175 CHF 74 to CHF 134, from 150 date of acquisition announcement, 05.09.2005 125 to 31.12.2006 100 SMI up, Julius Baer up 75 Jan/