Ubs Group Ag · SIX:UBSG
Ubs — Q2 2004 Earnings Presentation
29 slides from Ubs's earnings presentation, Aug 10, 2004
Slide 1: Second Quarter Results 2004
ab Second Quarter Results 2004 Zurich, 10th August 2004 Peter Wuffli, Chief Executive Officer Clive Standish, Chief Financial Officer Mark Branson, Chief Communication Officer
Slide 2: Caution regarding forward-looking statements
Caution regarding forward-looking statements This communication contains statements that constitute “forward-looking statements”, including, but not limited to, statements relating to the implementation of strategic initiatives, such as the European wealth management business, and other statements r
Slide 3: A solid quarter...
A solid quarter... 24% y-on-y net profit growth EPS growth of 32% y-on-y 29% RoE CHF 17 bn net new money ab 2
Slide 4: A more challenging market environment
A more challenging market environment Market volumes 2Q04 vs 1Q04 US Investor Optimism SMI FTSE S&P NASDAQ 0% 150 2Q 125 -5% 100 -10% 75 -11% 50 -15% -15% 25 -20% -20% 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 -23% 2002 2003 2004 -25% Source: UBS Index of Investor Optimism, www.ubs.com/investoroptimism Volati
Slide 5: Net profit, quarterly
Net profit, quarterly Adjusted for significant financial events CHF m 3,000 2,648 2,500 2,423 2,200 2,199 2,033 2,033 1,974 2,000 1,923 1,773 1,808 1,685 1,574 1,535 1,451 1,500 1,381 1,251 1,243 1,209 1,166 1,075 1,000 500 0 Avg 99 Avg 00 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Net profit after
Slide 6: Year-on-year revenue development
Year-on-year revenue development CHF m 10,000 130 220 109 238 65 21 9,000 -98 -21 9,484 8,000 8,820 7,000 2Q03 Wealth and BBS Equities FIRC IBD Private Other2 Credit 2Q04 asset mgmt Equity businesses1 1 Includes Wealth Management, Global Asset Management, Wealth Management USA ab 2 Corporate Center
Slide 7: Seasonality of net profit
Seasonality of net profit 2H net profit vs 1H net profit (% delta)1 20% 16.2% 10% 2003 0% 1999 2000 2001 2002 -10% -9.0% -14.6% -20% -30% -26.7% -28.3% 1 Net profit adjusted for SFEs and pre--goodwill, excluding private equity disposals and writedowns ab P&L Invested Assets Asset Quality Capital 6
Slide 8: Shareholder returns
Shareholder returns ROE1 Basic EPS2 CHF 35% 3.0 32% y-on-y increase 30% 29.2% 2.5 25% 2.06 2.0 20% 1.5 15% 1.0 10% 0.5 5% 0% 0.0 1999 2000 2001 2002 3M03 6M03 9M03 12M03 3M04 6M04 Avg Avg Avg Avg 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 99 00 01 02 1 Year to date annualized net profit less the amortization of
Slide 9: Continued cost control
Continued cost control Cost / Income1 80% 90% 2Q03 2Q04 80% 3 percentage 75% points y-on-y decline 71.2% 70% 70% 65% 60% 60% 50% 1999 2000 2001 2002 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 WM WM- BBS Global IB UBS US 2 AM 1 Operating expenses less the amortization of goodwill and other intangible assets and s
Slide 10: Performance against targets
Performance against targets Wealth management units net new money1 CHF bn CHF 59bn in last 4 quarters 20 15 10 5 0 Avg 99 Avg 00 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 WM WM-US 1 Excludes interest and dividend income ab P&L Invested Assets Asset Quality Capital 9
Slide 11: Invested assets
Invested assets Quarterly trend CHF bn Total +16.9 20 invested +11.8 assets Performance CCY q-on-q 0 Net new Acquisitions Money -4.1 -7.0 -20 -31.6 -40 Market performance - 2Q04 5% MSCI World Bond Index EUR/CHF USD/CHF 0% DJIA FT-SE 100 SMI DJ Euro NASDAQ Stoxx -5% ab P&L Invested Assets Asset Quali
Slide 12: Revenue trends
Revenue trends CHF m 11,000 10,000 CHF 9.5bn 9,000 8,000 7,000 6,000 5,000 4,000 3,000 2,000 1,000 0 -1,000 Avg 99 Avg 00 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Credit loss / recovery Net fee & commission income Net income from interest margin activities Net income from trading activities Other
Slide 13: Trends in fee income
Trends in fee income Investment funds fees Portfolio and other management and advisory fees CHF m CHF m 1,400 1,400 CHF 1.16bn CHF 1.15bn 1,200 1,200 1,000 1,000 800 800 600 600 400 400 200 200 0 0 Avg Avg Avg Avg 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Avg Avg Avg Avg 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 99 00 01 0
Slide 14: Cost trends
Cost trends CHF m 2% y-on-y increase 8,000 6,000 4,000 2,000 0 Avg 99 Avg 00 Avg 01 Avg 02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Personnel costs Non-personnel costs ab P&L Invested Assets Asset Quality Capital 13
Slide 15: Actual credit loss expense
Actual credit loss expense WM&BB Investment Bank CHF m CHF m 200 200 150 150 100 100 50 50 3Q01 2Q03 3Q03 2Q04 2Q02 3Q02 4Q02 3Q03 4Q03 1Q04 2Q04 0 1Q01 2Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 4Q03 1Q04 0 1Q01 2Q01 3Q01 4Q01 1Q02 1Q03 2Q03 -50 -50 -100 -100 ab P&L Invested Assets Asset Quality Capital 14
Slide 16: Return of capital to shareholders
Return of capital to shareholders 12% CHF bn 1.4 29.7 30 7.2 1.4 10% 4.4 25 8.2 2.8 8% 17.5 20 5.9 6% 15 4.4 2.3 1.9 4% 10 6.4 2.5 4.0 12.2 2% 5 2.2 2.4 2.2 0 0% 1999 2000 2001 2002 2003 1H04 Total Dividend/Par value reduction Tier 1 ratio (%) Buyback program ab P&L Invested Assets Asset Quality Cap
Slide 17: Business unit results
Business unit results
Slide 18: Reporting enhancements and changes
Reporting enhancements and changes Implemented in second quarter 2004 New line disclosure for services between business units New PB & GAM business unit To be implemented in third quarter 2004 Full consolidation of Motor-Columbus To be implemented in first quarter 2005 Accounting for stock and optio
Slide 19: Improving profitability
Improving profitability CHF m bps 1,000 110 900 108 800 106 700 104 600 102 500 100 400 98 300 96 200 94 100 92 0 90 Avg 01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Pre-tax profit Gross margin (bps) ab WM BBS Global AM IB WM- US 18
Slide 20: Continued strong, stable gross margin
Continued strong, stable gross margin bps 120 104 bps 100 26 26 27 26 26 27 33 29 30 31 27 80 60 40 70 70 72 71 71 71 71 72 70 76 77 20 0 Avg 01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Recurring fees Transactional fees ab WM BBS Global AM IB WM- US 19
Slide 21: Net new money
Net new money CHF bn CHF 40bn in last 4 quarters 18 16 14 12 10 8 6 4 2 0 -2 Avg 01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Swiss Clients European Wealth Management business International Clients (excluding EWM) Total Wealth Management NNM Net outflow from Italian Tax Amnesty ab WM BBS Glo
Slide 22: Progress in European domestic business
Progress in European domestic business NNM, Invested assets Revenues CHF bn CHF m CHF 99 m 5 70 100 CHF 65 bn 60 4 80 50 3 60 40 30 2 40 20 1 20 10 0 0 0 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 2001 2002 2003 2004 2001 2002 2003 2004 EWM Net new money EWM
Slide 23: Business Banking profitability
Business Banking profitability CHF m 700 600 CHF 508m 500 400 300 200 100 0 Avg 01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Business unit performance before tax ab WM BBS Global AM IB WM- US 22
Slide 24: Global Asset Management profitability
Global Asset Management profitability CHF m CHF m 600 200 150 400 100 200 50 0 0 Avg 01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Performance before tax Operating income ab WM BBS Global AM IB WM- US 23
Slide 25: Net new money
Net new money Institutional Wholesale intermediary CHF bn bps CHF bn bps 15 40 15 40 35 35 10 10 30 30 5 5 25 25 0 20 0 20 15 15 -5 -5 10 10 -10 -10 5 5 -15 0 -15 0 Avg Avg 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Avg Avg 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 01 02 01 02 Money market Money market Non-money market Non-
Slide 26: Investment Bank operating income
Investment Bank operating income CHF m 5,000 4,000 3,000 2,000 1,000 0 Avg 01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 3Q03 4Q03 1Q04 2Q04 Operating income before credit loss expense ab WM BBS Global AM IB WM- US 25
Slide 27: Profitability drivers
Profitability drivers Year-on-year change in performance1 CHF m 1,400 109 11 1,200 65 21 -15 -21 1,000 -217 -19 -9 800 600 1,071 996 400 200 0 2Q03 IB EQ FIRC Private Adj. Personnel G&A2 Services Depre- 2Q04 revenue revenue revenue Equity expected to/from ciation credit other loss business 1 Busines
Slide 28: Business momentum since acquisition
Business momentum since acquisition Profitability1 Net new money CHF m USDm CHF bn 175 95% 9 250 150 8 90% 7 200 125 6 85% 150 100 5 75 80% 4 100 3 50 50 75% 2 25 1 0 70% 0 Avg 01 Avg 01 4Q02 1Q03 2Q03 3Q03 2Q02 1Q03 3Q03 1Q02 2Q02 3Q02 4Q03 1Q04 2Q04 1Q02 3Q02 4Q02 2Q03 4Q03 1Q04 2Q04 CHF USD Cost/
Slide 29: Second Quarter Results 2004
ab Second Quarter Results 2004 Zurich, 10th August 2004 Peter Wuffli, Chief Executive Officer Clive Standish, Chief Financial Officer Mark Branson, Chief Communication Officer