Bellevue Group Ag · SIX:BBN
Bellevue — H1 2023 Earnings Presentation
39 slides from Bellevue's earnings presentation, Jul 27, 2023
Slide 1: Bellevue Group half-year results 2023
Bellevue Group half-year results 2023 Kusnacht, July 27, 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 Overview of H1 2023 André Rüegg, Group CEO 2 Bellevue in the grip of capital markets Markus Peter, Head Investments and Products 3 H1 2023 Results Michael Hutter, Group CFO 4 Business Update & Outlook André Rüegg, Group CEO A Appendix 3
Slide 4: Overview of H1 2023
Overview of H1 2023 André Rüegg, Group CEO 4
Slide 5: Bellevue – specialized asset management
OVERVIEW OF H1 2023 Bellevue – specialized asset management 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 357 mn Number of employees (in FTE) 101.5 AuM CHF
Slide 6: Key figures for H1 2023
OVERVIEW OF H1 2023 Key figures for H1 2023 High exposure to stocks in core investment area of Healthcare is reflected in key performance criteria Key results reflect specific stock- market developments • Disappointing AuM performance, Assets under management Operating income Operating profit (EBTDA
Slide 7: Attractive business model with a strong foundation
OVERVIEW OF H1 2023 Attractive business model with a strong foundation Navigating the «perfect storm» – with substance! Attractive Healthy Strong business base financial structure platform • AuM-based business model ensures clear • Straightforward balance sheet with • Small but robust organization e
Slide 8: Bellevue in the grip of capital markets
Bellevue in the grip of capital markets Markus Peter, Head Investements & Products 8
Slide 9: Persistent weakness in healthcare sector since H1 2021
BELLEVUE IN THE GRIP OF CAPITAL MARKETS Persistent weakness in healthcare sector since H1 2021 Momentum remained weak in H1 2023: Losers of 2022 are todays winners – and particularly «AI-stocks»! Total return of GICS sectors (in USD) 2023 YTD Total return of GICS sectors (in USD) 3 years IT Energy C
Slide 10: Major shift in interest rates has created market headwinds since early 2022
BELLEVUE IN THE GRIP OF CAPITAL MARKETS Major shift in interest rates has created market headwinds since early 2022 Pressure from interest rates remains high – but relief is in sight! 10 rate hikes – bringing target range above 5%! Interest rate pressure remains high Outlook for H2 2023/24 US fed fu
Slide 11: Monetary policy pressures expected to abate
BELLEVUE IN THE GRIP OF CAPITAL MARKETS Monetary policy pressures expected to abate Possible turning point for small/mid caps – also in the healthcare sector! Performance Russell 1000 HC (Large Caps) vs. Russell 2000 HC (Small- und Mid-Caps) Rebased, in USD, December 31, 2019 – May 31, 2023 1st phas
Slide 12: Attractive valuation of healthcare versus overall market
BELLEVUE IN THE GRIP OF CAPITAL MARKETS Attractive valuation of healthcare versus overall market Valuation of Healthcare vs. Total market, measured by P/E and PEG ratios Subsector US Biotech US Generics US Pharma US Medtech US Services MSCI World HC P/E 2024E 14 6 18 19 13 16 PEG 2024E 1.1 0.8 2.3 2
Slide 13: H1 2023 Results
H1 2023 Results Michael Hutter, Group CFO 13
Slide 14: Contraction in AUM base accentuated by positioning
H1 2023 RESULTS Contraction in AUM base accentuated by positioning Change in AuM 2018 – H1 2023 CHF million Sustainable growth path until 2021 interrupted due to adverse market conditions since H1 2022 14'000 12'793 • Renewed decline in AuM of approx. 12'038 CHF 1.3 bn or 14% in the first half of 20
Slide 15: Stable client base – marginal outflows
H1 2023 RESULTS Stable client base – marginal outflows Development of AuM base in H1 2023 Solid client base reflects high CHF million level of trust and long-term orientation 302 • Sharp decline in AuM base largely 9'413 attributable to negative performance 33 • Sustained tension in the healthcare -
Slide 16: Earnings power in step with AuM base
H1 2023 RESULTS Earnings power in step with AuM base Development of income from asset management activities, 2018 – H1 2023 Traceable period-on-period decline in CHF million 14'000 ñôä»Äÿ¥Ä×Äÿėä»ŰŮɇǦÄÞøÿ°ñđÄÿÁȿĄG base 12'000 • Earnings power down to 2017/2018 70.4 70.7 levels 2.3 1.3 -20% 60.1 10'0
Slide 17: Consolidated results
H1 2023 RESULTS Consolidated results Operating income • Reduction in income from AM services Income, AM services Income, financial Other Income attributable to lower AuM (CHF mn) investments (CHF mn) (CHF mn) -71.4% • Unrealized loss of CHF 0.5 mn on -20.0% investments in proprietary products and +7
Slide 18: Consolidated results
H1 2023 RESULTS Consolidated results Operating expenses • Entrepreneurial compensation model leads to Personnel expenses Operating expenses (CHF mn) (CHF mn) significantly lower compensation as a result of lower earnings +4.9% +5.6% • This reduction was offset by an increase in costs for share progr
Slide 19: Consolidated results
H1 2023 RESULTS Consolidated results Group results and balance sheet Consolidated results (in CHF 000, earnings per share in CHF) Balance sheet (as of June 30, 2023) 1.1.-30.06.2023 1.1.-30.06.2022 Change Operating income 41 253 46 784 - 5 531 Personnel expenses - 21 464 - 20 534 - 930 Other operati
Slide 20: Business Update & Outlook
Business Update & Outlook André Rüegg, Group CEO 20
Slide 21: Priorities for H2 2023/2024
BUSINESS UPDATE & OUTLOOK Priorities for H2 2023/2024 Focus on new growth opportunities 1 Positioning sharpen and further develop 2 Growth drivers manage consistently 3 Competitiveness maintain and increase • Focus on attractive niche strategies • Improve and sustain investment • Deploy new technolo
Slide 22: BB Biotech AG – Difficult first half despite positive news flow
BUSINESS UPDATE & OUTLOOK BB Biotech AG – Difficult first half despite positive news flow 2023 has been disappointing for biotech investors, rotation out of the sector observed during the second quarter Total return (rebased) over 10 years June 30, 2013 – June 30, 2023, in CHF • Portfolio (NAV) fail
Slide 23: Other developments in healthcare field
BUSINESS UPDATE & OUTLOOK Other developments in healthcare field Healthcare small & mid caps catching up with large caps, Asia lagging again this year • Significant outperformance vs. lagging MSCI World Healthcare Index Bellevue Healthcare • Benchmark-unconstrained, high-conviction portfolio with a
Slide 24: Other developments in the healthcare field – initial signs of a recovery
BUSINESS UPDATE & OUTLOOK Other developments in the healthcare field – initial signs of a recovery Medtech & Services, Digital Health and Healthcare Trust display positive momentum, Asia remains under pressure Rebased performance of Bellevue Healthcare strategies June 30, 2022 – June 30, 2023, in US
Slide 25: Developments beyond the healthcare field
BUSINESS UPDATE & OUTLOOK Developments beyond the healthcare field Positive dynamics in Entrepreneur and liquid alternative strategies • Equity strategies with regional focus overall with low demand, clients favoring Swiss equity funds over European strategies Entrepreneur • H1 2023 performance show
Slide 26: Attractive return potential of established and new investment strategies
BUSINESS UPDATE & OUTLOOK Attractive return potential of established and new investment strategies SMID cap Entrepreneur funds outperform and Option Premium strategy offers stable returns in challenging times Selected Entrepreneur Strategies - 2023 YTD (CHF & EUR) Bellevue Option Premium – 2023 YTD
Slide 27: Developments in Private Markets segment
BUSINESS UPDATE & OUTLOOK Developments in Private Markets segment Three-pronged strategic initiative, fueled by structural market growth (1/2) • Democratization of private markets is fueling structural market growth Private Markets • Clearly defined niche strategies ensure differentiation in the fac
Slide 28: Developments in Private Markets segment
BUSINESS UPDATE & OUTLOOK Developments in Private Markets segment Multi-pronged initiative fueled by structural market growth (2/2) • «Bellevue Global Private Equity 2023» launched – first closing with a volume of >USD 50 mn planned for Q3 (target volume Q1 2025: USD 150-200 mn) • Distinctive strate
Slide 29: Consistent further development of the platform
BUSINESS UPDATE & OUTLOOK Consistent further development of the platform Ongoing investments to secure a sustainable growth path • Dedicated team of 3 data scientists in the fields of AI/big-data and Neurology for BB Biotech team established • Healthcare team strengthened with recruitment of 3 young
Slide 30: ESG highlights H1 2023
BUSINESS UPDATE & OUTLOOK ESG highlights H1 2023 Sustainability as an important factor in Bellevue Group’s business strategy CO2 emissions Sustainability reporting • Targeted 30% reduction by 2030 in emissions per FTE compared • Ongoing refinement of sustainability reporting in accordance with to ba
Slide 31: Strategic growth prospects of the business model
BUSINESS UPDATE & OUTLOOK Strategic growth prospects of the business model Positioning and growth drivers translate into long-term value creation Elements of value creation AUM base Profitability of Performance fees Balance sheet & Core business AuM base Income booster capital management Attractive
Slide 32: Outlook for H2 2023
BUSINESS UPDATE & OUTLOOK Outlook for H2 2023 Long-term targets confirmed – but market-driven contraction in 2022/23 has clearly left a mark Long-term goals Outlook for 2023 • Marked market-related setback makes 2023 growth • Organic growth in the target range of 5-10% p.a. target impossible 1 AUM b
Slide 33: Appendix
Appendix 2 Bellevue | ss
Slide 34: Additional details of H1 2023 results
Additional details of H1 2023 results 34
Slide 35: Consolidated financial statements 2023
ADDITIONAL DETAILS OF H1 2023 RESULTS Consolidated financial statements 2023 Consolidated income statement CHF 1,000 1.1.-30.06.2023 1.1.-30.06.2022 Change Revenues from asset management services 43 330 54 119 - 10 789 Income from financial investments - 2 472 - 8 733 + 6 261 Net other income 395 1
Slide 36: Consolidated financial statements 2023 – Key figures (1/2)
ADDITIONAL DETAILS OF H1 2023 RESULTS Consolidated financial statements 2023 Key figures (1/2) 1.1.-30.06.2023 1.1.-30.06.2022 Change Consolidate income statement Cost/Income ratio 70.1% 59.1% - Earnings per share (in CHF) 0.60 1.07 - 43.9% 30.06.2023 31.12.2022 Change Asset under management (in CHF
Slide 37: Consolidated financial statements 2023 – Key figures (2/2)
ADDITIONAL DETAILS OF H1 2023 RESULTS Consolidated financial statements 2023 Key figures (2/2) 30.06.2023 31.12.2022 Veränderung Staff (FTEs) Number of staff (at cutoff date) 101.5 96.9 + 4.7% Share price Closing price, Bellevue Group registered shares (in CHF) 26.55 37.40 - 29.0% High / Low (in CHF
Slide 38: Corporate Events & Contact
Corporate Events & Contact Corporate Events February 27, 2024 Publication annual report 2023 March 20, 2024 Annual General Meeting 2024, AURA Zurich July 25, 2024 Publication Half-year results 2024 Investor Relations Michael Hutter CFO Bellevue Group Phone +41 44 267 67 00 [email protected] Media Relat
Slide 39: Bellevue Group AG
Bellevue Group AG Seestrasse 16 CH-8700 Küsnacht T +41 44 267 67 00 [email protected] www.bellevue.ch 39