Gam Holding Ag · SIX:GAM
Gam — FY2015 Earnings Presentation
45 slides from Gam's earnings presentation, Mar 1, 2016
Slide 1: Results and Review Full Year 2015
Results and Review Full Year 2015 1 March 2016
Slide 2: Agenda
Agenda 2015 Highlights Alexander S. Friedman, Group CEO 2015 Financial Results Richard McNamara, Group CFO Business Strategy and Outlook Alexander S. Friedman, Group CEO Q&A session Appendix
Slide 3: 2015 Highlights
2015 Highlights Alexander S. Friedman, Group CEO
Slide 4: Strategic Initiatives Update
Strategic Initiatives Update Progress well on track ● Simple brand architecture implemented External recognition ● New GAM brand launched in November 2015 with positive feedback from clients Repositioning GAM ● Content strategy for ‘owned’ and ‘earned’ media in place ● External placement of investme
Slide 5: 2015 Financial Highlights
2015 Financial Highlights Resilient results with net inflows despite market headwinds, dividend affirmed in CHF, except where indicated 2014 2015 Total AuM (bn) 123.2 119.0 Investment management AuM (bn) 76.1 72.3 Private labelling AuM (bn) 47.1 46.7 Investment management net flows (bn) 2.0 0.3 Thre
Slide 6: 2015 AuM Movements
2015 AuM Movements Organic and inorganic growth partially mitigated the impact of market and FX movements Investment management in CHF bn 0.3 (2.4) (2.2) 0.5 76.1 72.3 1 31.12.14 Net flows Market FX Acquisition 31.12.15 performance impact Private labelling in CHF bn 2.7 (0.3) (0.6) (2.2) 47.1 46.7 2
Slide 7: Investment Management Net Flows
Investment Management Net Flows Market headwinds in H2 2015 saw investor appetite weaken in CHF bn Net flows in H2 2015 2.0 Absolute return (CHF +1.0bn) • Strong net inflows from our European market neutral strategy and macro / managed futures • Net outflows in our unconstrained fixed income strateg
Slide 8: Net Flows and AuM by Client Segment
Net Flows and AuM by Client Segment Attractive business mix with equal split between intermediaries and institutional clients Net flows by client segment AuM by client segment in CHF bn as of 31.12.2015 2.0 1.1 10% 0.9 43% (1.7) 47% 1H14 2H14 1H15 2H15 Intermediaries Institutional clients Private cl
Slide 9: Investment Performance
Investment Performance Solid investment outperformance over three and five years Investment performance 1 Capability 3 years 5 years Absolute return 3 44% 59% Fixed income 77% 82% Equity 64% 66% Alternatives2 100% 100% Total3 61% 69% 1 % of AuM in funds (excluding mandates and segregated accounts) o
Slide 10: Diversity and Strength
Diversity and Strength Diverse range of products across all our capabilities Investment management Funds with over CHF 1.0bn AuM Number of funds and % of AuM by capability as of 31.12.2015 in CHF bn as of 31.12.2015 Fund Capability AuM Multi asset Absolute returnJB Local Emerging Bond Fund Fixed inc
Slide 11: 2015 Financial Results
2015 Financial Results Richard McNamara, Group CFO
Slide 12: Financial Highlights
Financial Highlights Resilient results despite market headwinds in CHF m, except where indicated 2014 2015 Change Net management fees and commissions 542.9 517.8 -5% Net performance fees 65.9 82.8 26% Net fee and commission income 608.8 600.6 -1% Net other income 14.7 0.7 -95% Income 623.5 601.3 -4%
Slide 13: Investment Management – Fee Margin
Investment Management – Fee Margin Margin remains resilient; impacted by shifts in product and client mix in bps 70.5 68.8 66.9 64.4 64.8 64.2 2011 2012 2013 2014 1H15 2H15 13
Slide 14: Performance Fees
Performance Fees Performance fees from 48 different funds and mandates in 2015 in CHF m 100.7 82.8 +26% 65.9 2013 2014 2015 Number of funds and mandates 47 54 48 generating performance fees Performance fee eligible assets 23.8 25.3 23.7 as of 31 December (in CHF bn) Global macro / managed futures No
Slide 15: Expenses
Expenses Strict cost control and disciplined investment for growth in CHF m, except where indicated 2014 2015 Change 1 • Personnel costs controlled during transition Fixed personnel expenses 166.0 165.1 -1% period 2 Variable personnel expenses 127.2 124.9 -2% • General expenses in 2014 included a cr
Slide 16: Operating Margin and Compensation Ratio
Operating Margin1 and Compensation Ratio2 Stable margin, cost savings that will partly be reinvested in growth Operating margin and compensation ratio Net fee and commission income and in % variable compensation in CHF m 700 654.8 50.1 578.9 608.8 600.6 49.3 49.1 48.3 600 48.2 553.7 500 33.2 33.2 32
Slide 17: Underlying Effective Tax Rate (ETR)
Underlying Effective Tax Rate (ETR) ETR broadly in line with Swiss and UK tax rates 21.2% (4.3%) 0.5% 0.4% 19.6% 0.3% 1.8% 19.9% Swiss tax rate Country mix Permanent Non-tax Other FY15 One-off items FY15 differences deductible underlying ETR underlying ETR expenses pre one-off items 17
Slide 18: Non-Recurring and Acquisition-Related Items
Non-Recurring1 and Acquisition-Related2 Items Primarily related to integration and reorganisation expenses in CHF m 2014 2015 Underlying profit before taxes 216.7 197.8 Reorganisation charge - (11.5) Gain on sale of Cayman business - 4.5 Deal and integration costs - (1.5) Impairment of investments (
Slide 19: Return of Cash and Capital to Shareholders
Return of Cash and Capital to Shareholders Significant returns to shareholders since independent listing in October 2009 in CHF m Dividend payments1 160 1,138 Share buy-backs for cancellation2 56 158 104 53 191 105 665 109 205 82 Dividend maintained at CHF 0.65 per share 117 269 88 175 155 94 473 15
Slide 20: Capital Management
Capital Management Prudent capital management maintained; balancing investments with shareholder returns ● Strong surplus cash resources Cash ● CHF 100m revolving credit facilities ● No external debt ● Authorisation sought at AGM for potential future capital raisings within appropriate limits ● Capi
Slide 21: Summary
Summary A robust and financially strong business Underlying profit before taxes Diluted underlying EPS in CHF m in CHF Underlying profit (5 year233.1 bar chart for each box) 214.0 216.7 1.24 195.2 197.8 1.06 0.94 0.98 0.89 2011 2012 2013 2014 2015 2011 2012 2013 2014 2015 Operating margin Dividend p
Slide 22: Business Strategy and Outlook
Business Strategy and Outlook Alexander S. Friedman, Group CEO
Slide 23: GAM’s Positioning
GAM’s Positioning Specialist investment firm focused on client returns ● Specialist capabilities to take advantage of industry ‘barbell’ dynamics ● Diversified across most attractive capabilities: absolute return, specialist fixed Positioned for industry income, differentiated equity and multi asset
Slide 24: Strategic Evolution of Product Offering
Strategic Evolution of Product Offering Unique market position in leveraging alternative UCITS platform for growth ● Market-leading alternative UCITS franchise Absolute return ● Focus on equity long/short: - US pair-trading strategy launched in Dec 2015 - Expand bench of investment teams with new hi
Slide 25: Outlook
Outlook ● Continued market volatility against the backdrop of sub-trend global growth ● Investor sentiment weighing on fund flows ● Investing will be challenging, though the environment ahead should provide opportunities for our product set and styles ● We are highly focused on executing against our
Slide 26: Appendix
Appendix
Slide 27: Reconciliation Underlying and IFRS Net Profit
Reconciliation Underlying and IFRS Net Profit in CHF m 2014 2015 Change Fee and commission income 1,010.3 985.2 -2% Distribution, fee and commission expenses (467.4) (467.4) 0% Net management fees and commissions 542.9 517.8 -5% Net performance fees 65.9 82.8 26% Net fee and commission income 608.8
Slide 28: Performance Fee Details
Performance Fee Details 31.12.13 31.12.14 31.12.15 Performance fee eligible assets (in CHF bn) from absolute return capabilities 20.3 20.6 18.6 from other capabilities 3.5 4.7 5.1 Total performance fee eligible assets 23.8 25.3 23.7 2013 2014 2015 Performance fees (in CHF m) from absolute return cap
Slide 29: Performance Fee Eligible Assets and Income
Performance Fee Eligible Assets and Income Performance fee eligible assets in CHF bn 31.12.12 31.12.13 31.12.14 31.12.15 Unconstrained fixed income 13.0 14.1 12.4 8.7 Global macro / managed futures 2.0 2.7 3.0 3.9 Non-directional equity 1.4 2.7 3.8 5.7 Other fixed income strategies 0.9 1.1 1.4 1.4 O
Slide 30: Performance Fees
Performance Fees in CHF bn, except where indicated Unconstrained Global macro / Non-directional Other fixed Other Total fixed income managed futures equity income Performance fee eligible AuM 8.7 3.9 5.7 1.4 4.0 23.7 Number of performance fee eligible funds 14 10 20 19 29 92 Performance fees 2015 (C
Slide 31: General Expenses
General Expenses in CHF m 2014 2015 Change Comments Occupancy expenses 28.8 28.6 -1% - Lower IT consultancy costs IT expenses 22.7 18.3 -19% - Custodian migration costs in 2014 Communication and marketing expenses 28.2 29.4 4% - Higher costs related to market data services - Release of tax on equity
Slide 32: Operating Margin, C/I and Compensation Ratio
Operating Margin, C/I and Compensation Ratio in CHF m 2011 2012 2013 2014 2015 Net fee and commission income 553.7 578.9 654.8 608.8 600.6 Net other income 44.8 16.0 15.4 14.7 0.7 Income 598.5 594.9 670.2 623.5 601.3 Personnel expenses 277.2 285.6 321.3 293.2 290.0 General expenses 100.5 106.9 108.7
Slide 33: Basic and Diluted EPS Calculation
Basic and Diluted EPS Calculation in CHF, except where indicated 2011 2012 2013 2014 2015 Weighted average number of shares outstanding for basic EPS (m) 183.1 171.2 163.4 162.3 159.9 Dilution driven by share-based compensation plans (m) 2.5 - 2.6 1.1 0.9 Weighted average number of shares outstandin
Slide 34: Currency Split on AuM, Revenues and Expenses
Currency Split on AuM, Revenues and Expenses Currency split full year 2015 Group income Group expenses 12% 14% 9% 39% 35% 16% 36% 33% AuM currency split in investment management as of 31.12.2015 6% 17% 35% 11% USD EUR GBP CHF Other 31% 34
Slide 35: Group Balance Sheet
Group Balance Sheet in CHF m 31.12.14 31.12.15 Cash and cash equivalents 644 633 Seed capital investments 131 67 Other assets 224 208 Goodwill and other intangible assets 1,372 1,389 Assets 2,371 2,297 Current liabilities 319 297 Non-current liabilities 136 124 Equity 1,916 1,876 Liabilities & equit
Slide 36: Net Cash
Net Cash in CHF m 158.4 (104.4) (55.5) 54.7 (19.1) (6.3) (38.8) 643.9 632.9 Net cash Underlying net Dividend Share buy-backs Net seed capital FX impact Net impact of Changes in net Net cash 1 31.12.14 profit for cancellation proceeds M&A assets and other 31.12.15 1 Acquisition of Renshaw Bay (CHF -1
Slide 37: Tangible Equity
Tangible Equity in CHF m 138.3 (104.4) (55.5) (10.5) (17.6) (3.9) 540.6 487.0 Tangible equity IFRS net profit Dividend Share buy-backs FX impact M&A activities Other Tangible equity 31.12.14 for cancellation 31.12.15 37
Slide 38: Net Flows by Capability
Net Flows by Capability Investment management in CHF bn AuM Net Market AuM Net 1 Market AuM Capability Acquisition 31.12.14 flows & FX 30.06.15 flows & FX 31.12.15 Absolute return 22.2 1.1 (1.8) 21.5 1.0 - 0.6 23.1 Fixed income 19.5 1.0 (1.5) 19.0 (0.6) 0.5 (0.3) 18.6 Equity 13.8 (0.2) 0.3 13.9 (0.3
Slide 39: AuM and Fund Flows by Capability
AuM and Fund Flows by Capability Investment management AuM by capability in CHF bn 31.12.13 31.12.14 31.12.15 Absolute return 22.2 22.2 23.1 Fixed income 16.2 19.5 18.6 Equity 11.7 13.8 13.4 Alternatives 8.1 7.7 5.3 Multi asset 11.6 12.9 11.9 Investment management 69.8 76.1 72.3 Investment managemen
Slide 40: Reconciliation of AuM by Capability
Reconciliation of AuM by Capability Investment management in CHF bn, as of 31.12.2015 New capabilities Based on previous disclosure Total Alternative Discretionary & Absolute return Fixed income Equity investments Commodities advisory solutions portfolios Absolute return 22.9 - 0.2 - - - 23.1 Fixed
Slide 41: AuM and Fund Flows by Client Segment
AuM and Fund Flows by Client Segment Investment management AuM by client segment in CHF bn 31.12.12 31.12.13 31.12.14 31.12.15 Intermediaries 32.4 32.1 32.8 31.4 Institutional clients 31.8 29.8 34.3 33.7 Private clients 8.4 7.9 9.0 7.2 Investment management 72.6 69.8 76.1 72.3 Investment management
Slide 42: AuM by Product Type
AuM by Product Type Investment management in CHF bn 31.12.13 31.12.14 31.12.15 Luxembourg SICAVs 30.7 30.6 28.1 Segregated accounts 16.5 18.2 17.4 Ireland UCITS 11.1 14.4 15.7 Offshore 7.1 8.3 7.4 Swiss funds 3.0 2.7 2.0 OEICs / unit trusts 1.4 1.9 1.5 LPs & LLCs - - 0.2 Total 69.8 76.1 72.3 42
Slide 43: Private Labelling AuM Breakdowns
Private Labelling AuM Breakdowns AuM by fund domicile in CHF bn 31.12.12 31.12.13 31.12.14 31.12.15 Switzerland 33.7 34.9 35.4 31.4 Rest of Europe 6.1 6.7 9.0 15.3 Other 3.8 3.0 2.7 - Private labelling 43.6 44.6 47.1 46.7 AuM by asset class in CHF bn 31.12.12 31.12.13 31.12.14 31.12.15 Equity 16.3 1
Slide 44: Corporate Calendar and Contacts
Corporate Calendar and Contacts Forthcoming events 01.03.2016 Full-year results 2015 20.04.2016 Interim management statement Q1 2016 27.04.2016 Annual General Meeting 03.08.2016 Half-year results 2016 20.10.2016 Interim management statement Q3 2016 Contacts For investors and analysts: Patrick Zuppig
Slide 45: Cautionary Statement on Forward-Looking Information
Cautionary Statement on Forward-Looking Information This presentation by GAM Holding AG (‘the Company’) does not constitute an invitation or offer to acquire, purchase or subscribe for securities. This presentation by the Company includes forward-looking statements that reflect the Company’s intenti