Bellevue Group Ag · SIX:BBN
Bellevue — FY2022 Earnings Presentation
58 slides from Bellevue's earnings presentation, Feb 28, 2023
Slide 1: Bellevue Group Results 2022
Bellevue Group Results 2022 Presentation for investors, analysts and the media Kusnacht, February 28, 2023
Slide 2: Disclaimer
Disclaimer This document was produced by and the opinions expressed are those of Bellevue Group AG («Bellevue») as of the date of writing and are subject to change. It has been prepared solely for information purposes and for the use of the recipient. It does not constitute an offer or an invitation
Slide 3: Agenda
Agenda 1 Introduction André Rüegg, Group CEO 2 A Summary of Fiscal 2022 André Rüegg, Group CEO 3 Results for Fiscal 2022 Michael Hutter, Group CFO 4 Business Update & Outlook André Rüegg, Group CEO 5 Questions & Answers A Appendix 3
Slide 4: Introduction
Introduction André Rüegg, Group CEO 4
Slide 5: Bellevue – a «pure play» asset manager
INTRODUCTION Bellevue – a «pure play» asset manager Company profile Established 1993 Credo Pure asset Differentiated “We eat our own cooking” manager with investment competencies high specialization for an attractive offering Market cap. CHF 503 mn Number of employees (in FTE) 97 AuM CHF 9.4 bn Entr
Slide 6: Clear-cut strategy and distinctive business profile
INTRODUCTION Clear-cut strategy and distinctive business profile Robust, time-tested foundation engenders trust and confidence during uncertain times Simple & understandable Creating value & responsibility • Pure-play, highly specialized asset • Competitive investment performance and manager Busines
Slide 7: The impact of Fed rate increases on US Treasury bonds and stocks
INTRODUCTION The impact of Fed rate increases on US Treasury bonds and stocks Rate hikes had the greatest impact early in the year, much less so at the end of the year 105 5 4.5 100 4 95 3.5 3 90 2.5 85 -12.4% 2 80 1.5 -17.9% 1 75 Fed funds Zum Jahresbeginn rate at year-end von 0.5 Fed erwartete 202
Slide 8: Large vs. Small- & Mid-Cap Healthcare performance
INTRODUCTION Large vs. Small- & Mid-Cap Healthcare performance Picking up interest rate momentum as a turning point for small- & mid-cap stocks Indexed performance in % (USD) Small/mid-cap healthcare stocks in a December 31, 2019 – December 31, 2022 "perfect storm" since spring 2021 180 • 1st phase:
Slide 9: Review of Bellevue healthcare strategy performance
INTRODUCTION Review of Bellevue healthcare strategy performance Rising interest rates clearly hurt the performance of our healthcare strategies, but first signs of recovery were seen in H2 2022 Indexed Performance Bellevue Healthcare strategies (USD) H1 H2 December 31, 2019 – December 31, 2022 Perfo
Slide 10: A Summary of Fiscal 2022
A Summary of Fiscal 2022 André Rüegg, Group CEO 10
Slide 11: Key figures 2022 – Under the spell of a miserable investment environment
A SUMMARY OF FISCAL 2022 Key figures 2022 – Under the spell of a miserable investment environment High dependence on stock markets and positioning leave clear traces in performance criteria Client assets Net new money Income from Asset Mgt. 1) Other income (EBTDA) 2) CHF 9.4 bn CHF -577.4 mn CHF 104
Slide 12: Contraction in asset base due to market dynamics and positioning
A SUMMARY OF FISCAL 2022 Contraction in asset base due to market dynamics and positioning Change in AuM 2016 – 2022 Temporary consolidation after CHF million AuM hit all-time highs in 2020/2021 • AuM shows significant decline of nearly 14'000 12'793 -26% CHF 3.4 bn or -26% to CHF 9.4 bn 12'038 12'00
Slide 13: AuM contraction largely attributable to negative market performance
A SUMMARY OF FISCAL 2022 AuM contraction largely attributable to negative market performance AuM in 2022 Negative investment performance has CHF million wider repercussions – very stable client 12'793 base an important foundation for future results -289 -103 -185 • 83% of the decline in AuM attribut
Slide 14: Earnings recede to pre-pandemic levels after «COVID-19 bull-market»
A SUMMARY OF FISCAL 2022 Earnings recede to pre-pandemic levels after «COVID-19 bull-market» Operating income from asset management activities, 2016 – 2022 Income from asset management CHF million activities declines by 26%, mirroring the decline in AuM 141.1 -26% 3.7 • Earnings have “normalized” ar
Slide 15: Results for Fiscal 2022
Results for Fiscal 2022 Michael Hutter, Group CFO 15
Slide 16: Consolidated results
RESULTS FOR FISCAL 2022 Consolidated results Group net profit • Total operating income declined about Operating income Operating expenses Operating profit 32%, but this includes unrealized losses (CHF mn) (CHF mn) (CHF mn) of about CHF 10 mn (prior year: CHF -0.8 -31.8% -24.1% -42.2% mn) on financia
Slide 17: Consolidated results
RESULTS FOR FISCAL 2022 Consolidated results Revenues asset management services • Market-induced decline in management Management fees Performance fees Other fee income (CHF mn) (CHF mn) (CHF mn) fees by almost 25%, in line with AuM base over the course of the year -24.4% -91.3% -71.4% • Stable marg
Slide 18: Consolidated results
RESULTS FOR FISCAL 2022 Consolidated results Operating expenses • Significant reduction in personnel Personnel expenses Operating expenses (CHF mn) (CHF mn) expenses despite ongoing expansion of talent pool -28.8% -1.4% • Very elastic personnel expenses thanks to entrepreneurial compensation model (
Slide 19: Capital structure and management
RESULTS FOR FISCAL 2022 Capital structure and management As at December 31, 2022 (consolidated) Robust and low-risk financial profile CHF million affords flexibility • Equity capital remains solid thanks to 134 sustained earnings power • Reduction in goodwill & intangibles (prior year: CHF 48 mn), w
Slide 20: Attractive value creation for shareholders
RESULTS FOR FISCAL 2022 Attractive value creation for shareholders Confidence in the business model is reflected in the dividend policy Surplus equity Proposed dividend of CHF 2.00 per CHF million share 39 • Dividend proposal of CHF 2.00 per share 12 reflects solid earnings power despite the 27 diff
Slide 21: Business Update & Outlook
Business Update & Outlook André Rüegg, Group CEO 21
Slide 22: Highlights 2022
BUSINESS UPDATE & OUTLOOK Highlights 2022 Business development milestones and priorities to ensure future success Consistent Development of Anti-cyclical strategy execution expertise and performance platform investments • Positioning as a pure-play specialized • Ongoing, successful recruitment of •
Slide 23: Priorities of forwards and growth strategy
BUSINESS UPDATE & OUTLOOK Priorities of forwards and growth strategy Profitable growth = product quality + innovation + client dynamics • Primary focus on the quality and growth of existing products, constantly strengthening "talent pool" “Grow with the products” • Reduce dependency on the stock mar
Slide 24: Development of the new «Bellevue Private Markets» unit
BUSINESS UPDATE & OUTLOOK Development of the new «Bellevue Private Markets» unit Strategic thrust and considerations based on 3 pillars Pillars of expansion Status 2022 Priorities 2023-2025 Strategic objectives • 15 investments currently in the portfolio, 3 new • Continuous management/development of
Slide 25: Development of the new «Bellevue Private Markets» unit
BUSINESS UPDATE & OUTLOOK Development of the new «Bellevue Private Markets» unit New launch: Bellevue Global Private Equity 2023 – «Small transactions are beautiful» Niche strategy for secondaries Top experts with a strong track record • Global, with a focus on developed markets (USA and Europe) 202
Slide 26: ESG – Highlights 2022
BUSINESS UPDATE & OUTLOOK ESG – Highlights 2022 Summary of corporate developments Climate strategy 2030 Employee survey Product-based initiatives • Second annual CO2 measurement • Group-wide employee survey in 2022 • Classification of investment products Art. 8 EU SFDR “light green”) incl. BB Biotec
Slide 27: ESG – Highlights 2022
BUSINESS UPDATE & OUTLOOK ESG – Highlights 2022 ESG integration across investment strategies – breakdown by EU SFDR categories Equity Equity Sustainable Entrepreneur Europe (FNG Label) Healthcare Strategy Asia Pacific Healthcare Sustainable Healthcare (Austrian Ecolabel - UZ49) Diversified Healthcar
Slide 28: Outlook for 2023 – base scenario and positioning
BUSINESS UPDATE & OUTLOOK Outlook for 2023 – base scenario and positioning Structural market correction clearly had an impact – strong position enables a solid performance nevertheless • Market correction that began in H2 2021 is likely to transition into a highly volatile sideways movement in 2023
Slide 29: Outlook for 2023: Long-term goals reiterated despite temporary setback
BUSINESS UPDATE & OUTLOOK Outlook for 2023: Long-term goals reiterated despite temporary setback Our Key Performance Indicators Assets under management • Steady expansion of business base targeted, but clearly depends on stock market developments 1 (AuM) • Organic new money growth of 5-10% p.a. over
Slide 30: Questions & Answers
Questions & Answers » Bellevue | 20
Slide 31: Appendix
Appendix 28 Bellevue | 3:
Slide 32: Additional details of fiscal results 2022
Additional details of fiscal results 2022 32
Slide 33: Consolidated financial statements 2022
ADDITIONAL DETAILS OF 2022 RESULTS Consolidated financial statements 2022 Consolidated income statement CHF 1,000 1.1.-31.12.2022 1.1.-31.12.2021 Change Revenues from asset management services 104 383 141 096 - 36 713 Income from financial investments - 10 002 - 832 - 9 170 Net other income 1 481 35
Slide 34: Consolidated financial statements 2022
ADDITIONAL DETAILS OF 2022 RESULTS Consolidated financial statements 2022 Consolidated balance sheet • Asset mix is as follows: CHF million - CHF 120.7 mn current - CHF 64.5 mn non-current Assets Liabilities • Liability mix is divided as follows: - CHF 36.0 mn current 43.0 Liabilities Cash 64.7 - CH
Slide 35: Consolidated financial statements 2022
ADDITIONAL DETAILS OF 2022 RESULTS Consolidated financial statements 2022 Alternative Performance Indicators CHF 1,000 1.1.-31.12.2022 1.1.-31.12.2021 Change Operating income 95 862 140 618 - 44 756 Personnel expenses - 46 988 - 66 045 + 19 057 Other operating expenses - 14 056 - 14 344 + 288 Operat
Slide 36: Consolidated financial statements 2022
ADDITIONAL DETAILS OF 2022 RESULTS Consolidated financial statements 2022 Key figures (1/2) 1.1.-31.12.2022 1.1.-31.12.2021 Change Consolidate income statement Cost/Income ratio 63.7% 57.2% - Earnings per share (in CHF) 1.90 3.24 - 41.4% 31.12.2021 31.12.2020 Change Asset under management (in CHF mi
Slide 37: Consolidated financial statements
ADDITIONAL DETAILS OF 2022 RESULTS Consolidated financial statements Key figures (2/2) 31.12.2022 31.12.2021 Change Dividend Ordinary dividend per share (in CHF) 2.00 2.70 - 25.9% Dividend yield 5.3% 6.6% - Staff (FTEs) Number of staff (at cutoff date) 96.9 91.4 + 6.0% Share price Closing price, Bel
Slide 38: Shareholder base
ADDITIONAL DETAILS OF 2022 RESULTS Shareholder base Structure of the shareholder base as of December 31, 2022 Attractive value creation leads to Non-registered public shareholders stable shareholder base (n/a) • Strong commitment of core shareholders 12.0% Core • Management/employee shareholders sha
Slide 39: Bellevue Group shares (BBN SW)
ADDITIONAL DETAILS OF 2022 RESULTS Bellevue Group shares (BBN SW) Compelling performance compared to relevant indices and other asset managers Total return in CHF (5 years) Indexed to 100 (in %) 300 Market capitalization as of Bellevue Group AG 31.12.22 250 +133.5% 200 CHF 503 mn Partners Group Hold
Slide 40: Business profile & strategy
Business profile & strategy 40
Slide 41: Bellevue a «pure play» asset manager
BUSINESS PROFILE & STRATEGY Bellevue a «pure play» asset manager A clear mission statement As a specialty investment manager, we create attractive returns and performance for our clients and shareholders. We apply our expertise and competence to important issues of our times and are a responsible co
Slide 42: International reach, locally anchored
BUSINESS PROFILE & STRATEGY International reach, locally anchored Ongoing development of international office locations High workforce stability and quality • Very low voluntary turnover rate, thanks to high London employee satisfaction 6 • Strong commitment from key individuals and talents in all b
Slide 43: ESG – Highlights 2022
BUSINESS PROFILE & STRATEGY ESG – Highlights 2022 Embedding environmental measures in the corporate objectives CO2 footprint: Total emissions 2021 Transportation & Mobility Waste management / recycling 2% • Arrival in 1st prio. with public transport, bicycle • Collection/recycling of materials (card
Slide 44: Corporate ESG – Contributions to the UN SDGs
BUSINESS PROFILE & STRATEGY Corporate ESG – Contributions to the UN SDGs Active contributions at corporate level to the UN Sustainable Development Goals (SDGs) Goal 4: Bellevue supports training for all employees and encourages lifelong learning Goal 5: Bellevue fosters a culture of gender equality
Slide 45: Corporate ESG – Social practices
BUSINESS PROFILE & STRATEGY Corporate ESG – Social practices Value for the client is created by employees Health/Wellness Diversity Talent • Free gym memberships for • Balanced gender & age mix • Multi-stage, participatory employee 27% 73% employees selection process (assessment, 360 Women in % Male
Slide 46: ESG at product level
BUSINESS PROFILE & STRATEGY ESG at product level Implementation of European ESG regulations – EU SFDR / RTS II / MiFID II MSCI ESG rating distribution of the liquid investment strategies Share of investments with sustainable characteristics and of Bellevue Asset Management1) investments of liquid in
Slide 47: ESG at product level
BUSINESS PROFILE & STRATEGY ESG at product level Implementation of European ESG regulations – EU SFDR / RTS II / MiFID II ESG Engagement Contributions UN SDG Proxy Voting • Initiation of 22 formal Company Engagements • For the purpose of determining the share of • Expansion of proxy voting under con
Slide 48: Product offering and investment strategies
Product offering and investment strategies 48
Slide 49: Attractive offering with clearly differentiated investment expertise
PRODUCT OFFERING AND INVESTMENT STRATEGIES Attractive offering with clearly differentiated investment expertise Good balance between “specialty” and “diversification” – for investors and shareholders! Alternative Investment companies Attractive direct investments Alternative investment strategies •
Slide 50: Bellevue healthcare strategies in a "perfect storm"
PRODUCT OFFERING AND INVESTMENT STRATEGIES Bellevue healthcare strategies in a "perfect storm" Focus on innovation and above-average growth face headwinds Medtech Holdings Generics Services Pharma Biotech Europe APAC Small Large USA Mid EM 20 - 35 25 - 35 35% 25% 15% 25% 40 35% 25% 15% 25% 40 40 - 6
Slide 51: Long-term competitive profile fully intact, short-term cyclical weakness
PRODUCT OFFERING AND INVESTMENT STRATEGIES Long-term competitive profile fully intact, short-term cyclical weakness 2022 was a particularly difficult year for strategies focused on growth and small & mid caps Competitive performance of investment strategies Percentage share of AuM1) in 1st or 2nd Li
Slide 52: Annual performance highlights scope of global financial market turmoil
PRODUCT OFFERING AND INVESTMENT STRATEGIES Annual performance highlights scope of global financial market turmoil Specialized healthcare strategies Traditional and alternative investment strategies ** Absolute Performance 2022, in USD Absolute Performance 2022, in base currency Bellevue Diversified
Slide 53: In the 2nd half of the year, some strategies already showed signs of recovery
PRODUCT OFFERING AND INVESTMENT STRATEGIES In the 2nd half of the year, some strategies already showed signs of recovery Specialized healthcare strategies Traditional and alternative investment strategies * Absolute Performance H2 2022, in USD Absolute Performance H2 2022, in based currency Bellevue
Slide 54: Targeted expansion of new «Bellevue Private Markets» unit
PRODUCT OFFERING AND INVESTMENT STRATEGIES Targeted expansion of new «Bellevue Private Markets» unit Attractive positioning in direct equity investment business Facts & Figures1 Profile & Highlights 2022 Strategy: • "Deal-by-deal" investor club consisting of wealthy private investors Financial stabi
Slide 55: Development of the new «Bellevue Private Markets» unit
PRODUCT OFFERING AND INVESTMENT STRATEGIES Development of the new «Bellevue Private Markets» unit Bellevue Entrepreneur Private I Growth capital for SMEs in the DACH region Competent team with many years of experience • Equity investments to fund the growth of successful SMEs • Highly experienced te
Slide 56: Rapid rise in consumer prices
PRODUCT OFFERING AND INVESTMENT STRATEGIES Rapid rise in consumer prices Inflation has already passed the turning point - return to target level unlikely Headline and core inflation rates, % change yoy 11 11 11 10 10 10 9 9 9 8 8 8 7 7 7 6 6 6 5 5 5 4 4 4 3 3 3 2 2 2 1 1 1 0 0 0 -1 -1 -1 -2 -2 -2 De
Slide 57: Corporate Events & Contact
APPENDIX Corporate Events & Contact Corporate Events March 21, 2023 Annual General Meeting 2023 July 27, 2023 Publication Half-year results 2023 Investor Relations Michael Hutter CFO Bellevue Group Phone +41 44 267 67 00 [email protected] Media Relations Jürg Stähelin IRF Phone +41 44 244 81 51 staehel
Slide 58: Bellevue Group AG
Bellevue Group AG Seestrasse 16 CH-8700 Küsnacht/Zürich T +41 44 267 67 00 [email protected] www.bellevue.ch 58