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GAM Holding AG: GAM Holding AG 2015 underlying pre-tax profit CHF 197.8 million

GAM Holding AG / GAM Holding AG 2015 underlying pre-tax profit CHF 197.8
million. Processed and transmitted by NASDAQ OMX Corporate Solutions. The
issuer is solely responsible for the content of this announcement.
* Underlying pre-tax profit of CHF 197.8 million, down 9%
* IFRS net profit of CHF 138.3 million, down 18% after a reorganisation
charge and other non-recurring and acquisition-related items
* Diluted underlying earnings per share of CHF 0.98 (CHF 1.06 in 2014)
* Net fee and commission income down 1% to CHF 600.6 million, of which net
performance fees up 26% to CHF 82.8 million
* Expenses down 1% to CHF 403.5 million, with both personnel and general
expenses lower
* Group assets under management of CHF 119.0 billion as at 31 December 2015
(CHF 123.2 billion as at 31 December 2014)
* Investment management with CHF 0.3 billion net inflows; assets under
management down 5% to CHF 72.3 billion, reflecting negative market and
foreign exchange movements
* Private labelling with CHF 2.7 billion net inflows; assets under management
down 1% to CHF 46.7 billion, reflecting sale of the Cayman business
* Proposed dividend of CHF 0.65 per share, unchanged from previous year
* Larry Hatheway and Tim Dana to join the Group Management Board, subject to
customary regulatory approval; Andrew Hanges to step down from the Group
Management Board

Group CEO Alexander S. Friedman said:
"One year ago we set out our strategic agenda for the coming years. Since then
we have focused on disciplined execution, addressing three critical areas:
our brand, our operating model and our growth strategy. While the transition
is not yet complete, we have made good progress, even against a challenging
market backdrop.

The work we undertook in 2015 is not yet fully visible in our financial
results. This is not a surprise - we always knew our plans would take a few
years to be realised in their entirety. The transition we embarked on is
proceeding on schedule and will give GAM a solid foundation for future
profitable growth. Even in difficult times, our business is resilient and
well positioned to take advantage of the opportunities we see in our industry
over the coming years. Following the strategic steps initiated in 2015, we
are focused on executing against our plans, and we have a number of exciting
product launches in the pipeline.

2016 has begun with renewed turbulence in the financial markets. Diverging
monetary policy against the backdrop of weak global growth along with
concerns over the economic slowdown in China and the trajectory of oil prices
are keeping markets volatile. Furthermore, worries about broader financial
stress at a time when central banks and regulators may be limited in their
tools to respond are affecting investor sentiment and flows. Investing will,
no doubt, be challenging. As high-conviction active asset managers with a
strong range of absolute return strategies, the environment ahead should
provide opportunities for us to outperform, but we will not be immune to
negative market trends."

2015 Group results

Net fee and commission income
fell 1% to CHF 600.6 million. The 5% decline in the net management fees and
commissions to CHF 517.8 million (mainly as a result of a decline in the
management fee margin in investment management to 64.6 basis points driven by
the mix of net flows across products and client segments) was largely offset
by a 26% increase in net performance fees to CHF 82.8 million.

Net other income,
which includes net interest income, the impact of foreign exchange movements,
gains and losses on seed capital investments and hedging as well as
fund-related fees and service charges, fell to CHF 0.7 million from CHF 14.7
million. Losses from foreign exchange movements (compared with gains in the
previous year), lower net gains on seed capital and negative interest on the
Group's Swiss franc cash deposits contributed to this decline.

Personnel expenses
decreased 1% to CHF 290.0 million, with declines in both fixed and variable
compensation. The compensation ratio remained largely unchanged at 48.3%
(48.2% in 2014), demonstrating the alignment between revenues and
compensation structures.

General expenses
decreased 1% to CHF 104.9 million, reflecting the firm's cost discipline and a
decline in IT costs.

The underlying pre-tax profit
decreased 9% to CHF 197.8 million. While costs were managed tightly and
variable compensation reduced, the decrease in net fee and commission income
and net other income could not be entirely offset by an equivalent reduction
in expenses.

The underlying effective tax rate
increased to 19.9% from 18.2%, reflecting a shift in the geographic split of
the Group's earnings.Diluted underlying earnings per share
were 8% lower at CHF 0.98, benefiting from the reduction in the number of
shares outstanding through the Group's share buy-back programme.

The IFRS net profit
of CHF 138.3 million, all attributable to the shareholders of GAM Holding AG,
was 18% lower than in 2014 as a result of non-recurring and
acquisition-related items. Non-recurring items led to a net charge of CHF 6.2
million and included a net charge of CHF 9.5 million for the reorganisation
of the business (mainly redundancy payments over the course of 2016 net of a
pension fund curtailment credit) and CHF 1.2 million in deal and integration
costs for corporate transactions. These were partly offset by the CHF 4.5
million gain on the sale of the Cayman fund administration business. Net
charges for acquisition-related items amounted to CHF 13.9 million and
included an adjustment to deferred consideration liabilities and the
amortisation of client relationships from previous acquisitions.

Investment management assets and flows

Assets under management movements (CHF bn)

| Capability Opening AuM Net flows Market/FX Acquisition Closing AuM |
| |
| 1 Jan 2015 31 Dec 2015 |
| Absolute return 22.2 2.1 -1.2 - 23.1 |
| Fixed income 19.5 0.4 -1.8 0.5 18.6 |
| Equity 13.8 -0.5 0.1 - 13.4 |
| Alternatives 7.7 -1.6 -0.8 - 5.3 |
| Multi asset 12.9 -0.1 -0.9 - 11.9 |
| Total 76.1 0.3 -4.6 0.5 72.3 |
In investment management, assets declined by CHF 3.8 billion to CHF 72.3
billion. Net inflows of CHF 0.3 billion and assets of CHF 0.5 billion
acquired with the real estate debt business of Renshaw Bay were offset by the
negative impact from markets (CHF 2.4 billion) and foreign exchange movements
(CHF 2.2 billion, reflecting the strengthening of the Swiss franc).

Net flows by capability

Investors added net CHF 2.1 billion to absolute return strategies in 2015. The
unconstrained/absolute return bond strategy saw redemptions from financial
intermediaries following weak performance in the second half of 2014 and
2015, but continued to win substantial inflows from institutional investors
thanks to its ten-year track record of capital protection across market
cycles. The JB Absolute Return Europe fund, which takes long and short
positions in equities and equity-related securities of European companies,
attracted strong inflows, as did the GAM Star Global Rates fund.

In fixed income, the GAM Star Credit Opportunities fund, which predominantly
invests in investment grade debt or high-quality issuers, attracted solid
inflows, as did specialised products such as the GAM Star MBS Total Return
and GAM Star Cat Bond funds. These were moderated by outflows in emerging
market strategies, driven by investor sentiment. Net inflows into fixed
income strategies totalled CHF 0.4 billion in 2015.

The largest inflows into equity strategies came from the JB Japan fund as
strong performance helped drive client demand. The GAM Star Continental
European fund also saw solid inflows, while GAM Star China posted outflows
amid negative investor sentiment despite outperformance versus benchmark. GAM
Star US All Cap Equity, managed externally, also saw outflows following a
prolonged period of weak performance. Net outflows from equity strategies
totalled CHF 0.5 billion in 2015.

Overall net outflows in multi asset products were CHF 0.1 billion for the
year. Good net inflows into institutional relative return products and
mandates as well as risk rated solutions for financial advisers were more
than offset by redemptions in private client advisory and mandates stemming
from GAM's previous affiliation with UBS and Julius Baer as well as in
lower-margin institutional mandates.

Net outflows from alternatives amounted to CHF 1.6 billion, mainly reflecting
withdrawals from alternative risk premia mandates, traditional funds of hedge
funds and the JB Physical Gold Fund.

Net flows by client segment

Net inflows from institutional investors amounted to CHF 1.3 billion in 2015
as strong inflows in the first half of the year were partly offset by
redemptions and the loss of two alternative risk premia mandates in the
second half. Net outflows from private clients of CHF 1.1 billion were mainly
related to GAM's previous captive channels. Financial intermediaries
contributed CHF 0.1 billion to net inflows for the year as redemptions in the
fourth quarter almost offset solid inflows in the first nine months.

Private labelling assets and flows

Assets under management movements (CHF bn)

| Fund domicile Opening AuM Net flows Market/FX Disposal Closing AuM |
| |
| 1 Jan 2015 31 Dec 2015 |
| Switzerland 35.4 -3.6 -0.4 - 31.4 |
| Rest of Europe 9.0 6.7 -0.4 - 15.3 |
| Other 2.7 -0.4 -0.1 -2.2 - |
| Total 47.1 2.7 -0.9 -2.2 46.7 |
Assets under management in private labelling fell to CHF 46.7 billion from CHF
47.1 billion a year earlier. The loss of one large mandate in the second half
of the year was more than offset by new business wins in Switzerland and
Italy, leading to net inflows of CHF 2.7 billion in 2015. This was
counteracted by the sale of our fund administration business in the Cayman
Islands, which reduced assets by CHF 2.2 billion, and negative market and
foreign exchange movements that led to a CHF 0.9 billion decrease.

Net cash and tangible equity

The Group's balance sheet continues to be highly liquid (cash and cash
equivalents of CHF 632.9 million as at 31 December 2015) and strongly
capitalised (tangible equity of CHF 487.0 million as at 31 December 2015).
The strong cash flow generation of the Group's operating activities, combined
with low capital consumption, forms a solid basis for a continued policy of
shareholder distributions.

Dividend and capital management

At the upcoming Annual General Meeting (AGM) of GAM Holding AG on 27 April
2016, the Board of Directors will propose a dividend of CHF 0.65 per share
for the 2015 financial year, unchanged from the previous year, representing
an estimated total distribution of about CHF 103 million or 65% of the
underlying net profit. This underscores the Board's commitment to maintaining
its policy of progressive, sustainable and predictable dividends, increasing
in line with earnings growth through the busine...

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