...you
measure
that
number
in
FTEs,
which
reflects
a
9.3%
growth
rate
coming
from
2020.
And
if
we
look
into
2022,
we
see
more
or
less
similar
development
that
we
foresee
going
into
the
current
year.
And
this
is
the
prerequisite
to
increase
our
net
new
money
number.
And
as
you
might
have
seen,
the
net
new
money
number
came
in
last
year
in
2021
quite
remarkably
high.
And
if
we
divide
the
net
new
money
number
by
the
consulting
capacity,
we
reached
a
CHF 25.6
million
net
new
money
number
per
consulting
FTE,
which
is
clearly
above
our
target
range
of
CHF
17
million
to
CHF
20
million.
At
the
moment,
I'm
not
really
sure
that
we
can
keep
that
number
going
forward.
So,
if
we
project
the
business
going
into
the
future,
we
still
stick
to
the
CHF
17
million
to
CHF
20 million
target
range.
But
if
we
see
the
CHF
25
million
number
or
somewhere
in
between,
if
we
see
that
confirmed
over
the
next
years,
then
we
have
to
change
our
target
range
and
move
that
up
a
little
bit.
But
at
the
moment,
this
is
not
the
time
to
do
that
and
to
communicate
that.
So
far,
the
business
development
on
the
core
side
and
then,
of
course,
we
have
seen
the
UK
business
starting
in
May,
June.
At
that
time
point,
we
completed
our
acquisition.
We
did
not
acquire
100%
of
the
Lumin
Group.
We
basically
acquired
50.1%
of
the
Lumin
Group
and
agreed
to
buy
the
remaining
shares
in
2026, five
years
after
completion
of
the
first
step.
In
the
meantime,
we
experiment
with
the
Lumin
Group
in
order
to
integrate
as
many
processes
and
experiences
of
our
existing
business
model
in
Switzerland
into
the
UK
market,
and
we
have
already
done
quite
a
substantial
amount
of
things,
and
we
are
quick
–
at
the
moment,
they
are
really
positive
that
we
see
quite
an
interesting
opportunity
there.
By
using
our
business
model
and
implementing
our
experiences
out
of
Switzerland
into
the
UK
market,
especially
on
the
marketing
side,
but
also
on
the
side
of
developing
an
increase
and
increasing
the
consulting
workforce.
Another
element
that
we
worked
on
last
year
was
our
financial
portal,
which
is
the
digital
interface
vis-à-vis
our
clients,
a
very
important
element
going
forward,
it's
not
only
a
prerequisite,
it's
basically
the
element
that
will
help
us
to
increase
the
penetration
of
our
existing
platform
clients
in
terms
of
platform
usage.
What
we
did
last
year,
we
successfully
migrated
our
existing
client
on
to
an
upgraded
version.
That
was
quite
a
cumbersome
task,
but
it –
the
result
is
really
promising.
We
basically
exchange
our
technology
provider
and
platform
to
a
much
more
elaborated
version
and
this
will
help
us
to
be
– not
only
to
increase
the
performance
vis-à-vis
our
clients
in
terms
of
speed
as
an
example,
but
also
to
be
much
more
agile
in
terms
of
implementing
new
features
much
quicker
and
just
to
be
much
faster
in
developing
that
platform.
That's
also
an
element
that
will
help
us
going
forward.
For
example,
this
year
we
will
introduce
quite
a
substantial
number
of
new
features.
I
will
come
to
that
point
at
the
end
when
we
go
to
the
outlook.
On
the
financial
side,
very
quick,
top
line,
plus
18.3%,
operating
expenses,
plus
15.8%,
resulting
in
a
slight
leverage,
increasing
the
EBIT
margin
to
43.1%.
Bottom
line
increased
22%
coming
to
CHF
143.2
million
net
profit,
which
reflects
a
margin
of
36.8%
on
the
top
line.
And
the
balance
sheet,
very
solid.
Go
to
that
a
little
bit
more
in-depth
afterwards
and
net
new
money
came
in
with CHF
4.8
billion,
already
mentioned
that
before,
and
assets
under
management
reached
a
level
of
CHF
39
billion,
coming
from
CHF
31.5
billion
a
year
before.
Page
number
4, you
see
the
development
of
the
revenue
streams
over
the
past
six
years
and
we
did
see
quite
an
impressive
increase
of
18.3%
on
the
top
line.
And
if
you
go
into
the
different
components,
the
five
most
important
components,
starting
with
the
largest
one,
that's
the
dark
blue
one,
shaded
one,
management
fees
on
the
AuM,
which
make
up
roughly
two-thirds
of
total
revenues,
increased
24.4%,
more
or
less
in
step,
of
course,
with
the
AuM
development,
which
we
discussed
later
on.
The
next
[audio gap]
(00:06:38) slide
of
our
management
fees,
that's
the
light
blue
shaded
of
CHF
27.3
million,
increased
12.8%.
Other
management
fees
are
not
depending
on
the
AuM
development,
they
are
typically
associated
with
managing
corporate
clients
and
pension
fund
schemes
of
corporate
clients
or
insurance
portfolios
of
corporate
clients.
And
there,
we
do
not
charge
or
are
not
getting
revenues
on
a
certain
base.
We
basically
charge
either
on
a
per
employee
basis
or
a
charge
on
a
hourly
basis.
Then
the
net
earned
premiums,
which
is
our
–
reflects
our
insurance,
property and
casualty
insurance
business.
Net
earned
premiums
reflects
the
net
earned
premiums
after
reinsurance
charges
increased
23%
and
it
goes
more
or
less
in
step
as
in
the
years
before.
And
the
next
element
is
the
gray
shaded
one,
and
that's
our
only
components
that
we
are
not
really
happy
with,
because
we
are
not
– we
cannot –
we
don't
have
a
great
visibility
into
the
future.
As
you
remember,
banking
income
encompasses
interest
rate
business
that's
easy
to
understand
and
it's
also
easy
to
foresee
into
the
future,
but
it
also
includes
commissions
and
trading
activities.
I
will
go
a
little
bit
more
in-depth
afterwards
into
that
point.
And
this
is
the
element
on
our
total
revenue
stream,
which
is
not
really
growing.
It's
basically
decreasing
going
forward.
But
all
in
all,
banking
income,
including
interest
rate
business
is
quite
stable.
Then
the
last
component,
the
consulting
fees,
these
are –
the
revenues
generated
out
of
our
–
of
the
pure
consulting
business
basically
charged
on
an
hourly
billing.
And
that
element
also
increased
by
10%.
And
this
is
– was
more
or
less
in
step
with
the
increase
of
our
initial
meetings
that
we
measure,
increase
of
our
marketing
responses
that
we
achieve.
So
that's
the
very
front-end,
out
of
which
we
generate
our
platform
clients.
So,
so
far
to
the
revenues,
now
I
would
like
to
go
a
little
bit
more
in
depth
or
deeper
into
the
banking
income,
page
number
5.
As,
as
already
discussed,
overall,
they
are
quite
volatile
and
difficult
to
predict,
and
we
see
three
components.
Actually
the
component
of
the
interest
rate
business,
this
is
not
so
volatile
anymore
and
it's
– but
this
is
really
predictable
going
forward.
And
it's
also
growing
basically
in
line
with
the
overall
balance
sheet
total.
So
there,
we
don't
have
the
predictability
issue.
But
on
the
other
two
elements,
the
trading
result
and
the
transaction
fee
income,
there,
we
do
have
the
predictability
issue.
Both
of
these
two
last
components
basically
decreased
over
the
past
couple
of
years
and
–
but
overall
they
do
not
make
up
a
real
big
portion
of
our
total
revenue
number
anymore.
Six
years
ago,
that
was
completely
different.
Now,
it
is
really
not
neglectable,
but
it's
at
least
not
an
important
element
anymore.
Nevertheless,
we
see
the
trading
result
overall
stabilized
going
forward
because,
I
mean,
we
see
more
volume
but
less
activity,
and
in
total
that
should
be
a
result
in
a
stable
development.
And
on
the
transaction
fee
side,
the
dark
blue
shaded
component,
there,
we
foresee
still
ongoing
decrease.
But
overall,
if
you
take
all
three
components
together,
we
basically
calculate
with
a
more
or
less
stable
number.
But
all
other
components
of
our
business
and
revenue
components
should
basically
increase
going
forward
in
line
with
more
clients
and
more
penetration
of
our
existing
clients.
Now,
number
6,
you
see
the
net
profit
line
on
a
on
a
long-term
basis
comparison.
Here
again,
you
see
the
22%
increase
from
the
2020
level
and
already
in
2020, we
did
see
a
15%
increase
from
the
2019
level.
And
overall,
the
long-term
target
is
a
36%
net
profit
margin,
we
are
slightly
above
that
level
and
are
not –
I
think
we
are
not
in
a
position
to
change
that.
We
still
believe
that
we
don't
see
going
forward
a
much
greater
or
bigger
leverage.
We
are
basically
more
inclined
to –
if we see
scaling
effects,
we
are
much
more
open
to
use
these
productivity
gains
and
scaling
effects
to
use
in
order
to
increase
our
attractivity
vis-à-vis
our
clients
and
to
increase
–
so
that
is
helpful
to
increase
our
client
growth,
so
that
the
client
number
can
grow
going
forward
and
also
to
increase
our
attractivity
on
the
job
market
to
gain
as
much
talent
as
possible.
And
therefore,
we
are –
going
forward,
we
are
basically
planning
with
a
stable
long-term
net
profit
margin
of
36%.
Now,
on
page
number
7,
some
information
on
the
operational
business
in terms
of
what happens
at
the front-end.
On
the
right
side,
you
see
the
net
new
money
development, CHF
4.8
billion,
upper
right
corner
of
that
chart,
number
7.
It's
number
7.
And
if
divide
the
CHF
4.8
billion
by
the
188
FTE
capacity
at
the
consulting
front-end,
you
get
on
the
lower
right
end
the
CHF 25.6
million
net
new
money
per
consultant
FTE.
And
that
number
is
clearly
above
our
CHF
17
million
to
CHF
20 million
target
range
of
net
new
money
per
consultant
FTE.
As
I
mentioned
already
at
the
beginning,
it's
–
at
the
moment,
it's
questionable
if
we
can
really
keep
that
number
at
this
high
level.
It
is
possible.
Of
course,
we
do
have
the
ambition
to
reach
that
again.
But
before
we
can
really
set
that
new
level
as
a
target,
we
have
to
confirm
it
not
only
one
year.
We
have
to
confirm
it
two
years
in
a
row
so
that
we
can
see.
Well,
we
can
calculate
and
measure
with
a
new
metrics.
But
at
the
moment,
I
would
still
stick
to
the
former
range
of
CHF
17 million
to
CHF 20
million
per
FTE
and
calculate
–
take
that
as
a
basis
for
the
future
development
if
you
project
the
business
on
a –
into
the
future.
What
is
clearly
–
what
can
clearly
be
set
is
the
capacity
development
there,
we
see
a
development
from
188
FTEs
to
a
204
FTEs.
This is –
there
we
have
a
lot
of visibility
of
what's
going on
because
we
do
the
training
internal
of
all
these
new
consultants,
and
that's
why
we
know
exactly
what
– more
or
less
what
the
development
should
be
going
forward.
Now,
on
page
number
8,
you
see
what
happens
on
the
wealth
management
side.
Again,
we
see
the
AuM
development
of
plus
24%
coming
from
CHF
31.5
billion
going
to CHF
39
billion
by
the
end
of
the
year,
so
that's
a
24%
increase.
Of
course,
stock
market
helped.
But
one
has
to
bear
in
mind
that
the
bond
markets
basically
were
negative,
so
it's
not
only
clear
sunshine.
It
was
not
only
clear
sunshine,
as
you
may
know.
There
were
also
shadows
on
the
financial
markets.
But
it
was
very
helpful
that
we've
seen
the
stock
market
increasing
that
considerably.
And
if
you
break
the
AuM
total
down
into
PM
mandates
in
the
other
line,
we
see
that
the
margin heavy
line,
the
PM
mandates
increased
even
stronger
than
the
other
line,
which
typically
bears
lower
margins.
So,
that's
helpful
going
forward
to
keep
the
margin
level
at
the
existing
level.
Net
new
money
in
the
longer
timeline,
you
see
constantly
increasing
from
starting
in
2017
with
CHF
2.3
billion
going
to
CHF 2.6
billion,
CHF
2.732 billion,
and
now
reached
CHF
4.8
billion.
As
I
said
before,
if
we
can
keep
the
net
new
money
per
consultant
at
the
same
level,
we
should
even
be
able
to
overshoot
that
number
in
2022.
But
I
would
be
a
little
bit
more
cautious
and
calculate
with
a
slightly
lower
number
than
the
CHF
4.8
billion
just
because
of
the
reasons
that
we
just
discussed
before.
What
is
very
helping
and
what
is
basically
the
crucial
element
is
the
development
of
the
clients,
the
number
of
clients.
It
represented
in
the
two
last
lines
on
that
chart,
and
very
positive
was
the
delta,
basically,
the
net
new
client
number
that
we
gained
over
the
2021
period
or
during
the
year
of
2021,
reaching
8,179.
This
is
really
remarkable
compared
to
the
last
year,
which
was
already
quite
good.
And
as
we
look
into
the
future,
we
believe
that
we
can
keep
that
number
at
least
on
that
level.
So,
it's
not
that
we
– that's
not
a
–
whatever
a
data
point
that
is
completely
out
of
scope.
It's
really –
it's
going
that
line
further
up,
we
believe,
because
demand
is
just
increasing.
And
it's
really
– and
also
our
front-end
is
increasing
or
everything
helps
to
increase
that
number
going
forward
with
the
result
of that
our
bucket
of
clients
on
the
wealth
management
side
increases
– will
increase
steadily
going
forward
and reaches
now
57,000
or
a
little
bit
more.
And
if
you
calculate
that
over
the
next
five
years,
it's
easy
to
understand
that
we
see
sometimes
not
only
five
digits,
but
six
digits
on
the
number, on
the
second
last
sign.
Page
number
9,
if
we're
talking
about
the
wealth
management
clients,
the
total of
the
wealth
management
clients,
we
work
on
increasing
the
penetration,
cross-selling
of
our
five
or
six –
five
platforms
that
we
work
on.
That's
a
very
important
element
going
forward
not
only
to
bring
in
new
clients
and
bring
them
and
convert
them
on
one
platform.
But
as
soon
as
you
have
a
client
on
one
platform,
we
start
trying
to
cross-sell
our
other
platform.
So
for
example,
if
you
start
with
a
portfolio
management
mandate
as
a
client,
that's
a
typical
situation.
Then,
you
start
cross-selling
the
mortgage
platform,
the
insurance
platform.
And
if
he's
younger
than
65,
you
start
cross-selling
the
third
pillar
platform,
the
second
pillar
platform.
And
also,
basically,
the
banking
platform,
we
understand
on
the
banking
platform,
the
basic
services
of
a
bank
on
payment,
transactional
side
and
custodian
side
as
services,
right.
And
doing
– our
targets
are or
the
target
is,
overall,
that
we
bring
33%
of
our
total
wealth
management
client
bucket
or
silo
to
situation
that
they
use
three
or
more
platforms.
Now,
we
are
at –
on
the
right
side
of
the
page
number
9.
You
see
that
on
a
number
of
21.6%.
So
we
increase
that
number
every
year
somewhere
around
2
percentage
points.
Bearing
in
mind
that
if
you
add
new
clients
of,
let's
say,
8,000,
these
8,000
do
typically
start
with
one
platform.
And
it
takes
at
least
two
or
three
years
until
you
can
cross
sell
the
second
or
the
third
platform.
So
it
takes
a
lot
of
time,
so.
And
if
we
increase
the
number
of
clients
every
year
with
a
higher
absolute
number,
it's
getting
more
and more
difficult
to
increase
to
the
three-plus
platform
clients.
But
nevertheless,
we
try
hard,
and
we
are
optimistic
that
we
can
–
that
we
achieve
the
33%.
At
least
mid-term,
if
you
calculate it
mid-term,
then
you
basically
should
reach
to
33%
in
six
years.
Yeah.
Let's
see.
It's
a
long
time,
but
we
are
optimistic
that
we
have
reached
that
target.
Then
number
10,
that's
an
important
information
also
supporting
all
our
cross-selling
efforts,
by
the
way,
it
helps
to
understand
how
satisfied
our
clients
are.
And
as
I
already
mentioned
in
the
last
reporting
season
or
seasons,
we
measure
the
client
satisfaction
with
or
along
the
methodology
of
the
net
promoter
score,
and
we
have
different
measurement
points.
And
one
measurement
point
is
as
soon
as
a
client
went
through
a
consulting
phase,
so
basically
concluded
a
consulting
project,
he
is
basically
asked
the
question
whether
or
what's
the
likelihood
that
he
is
going
to
recommend
our
service
to
a
good
friend.
And
there
he
can
basically
take
a
box
from
0
to
10,
10
and
9
or
10
is
extremely
likely
and
0
is
not
at
all
likely.
And
the
9s
and
the
10s
are
the
promoters.
The
7
and
8
are
basically
neutrals
or
passives.
And
everything's
below
7,
basically
6, 5,
4
and
so
forth
are –
is
a
detractor.
And
then
you
take
all
the
promoters
as
a
percentage
of
the
total
[ph]
asked (00:24:52) population
as
a
percentage
point
minus
the
percentage
points
of
all
detractors
of
the total
[ph]
asked (00:25:02)
population,
and
that
gives
you
the
NPS,
the
Net
Promoter
Score.
So,
mathematically,
the
score
can
go
from
plus
100
to
minus
100.
And
if
we
look
at
our
consulting
clients
on
the
left
side
of
the
page
10,
you
see
we
reached
a
net
promoter
score
in
2021
of
72.1,
which
is
extremely
high.
Same
thing
in
the
middle
of
the
portfolio
management
client.
Here
we
ask
all
clients
in
a
regular
process,
every
four
year
basically,
to
answer
that
questions,
along
with
other
questions,
of
course.
And
there
we
reached
an
NPS
of
83.1,
which
is
also
extraordinary
high.
And
the
third
measurement
point
that
we
illustrate
here
is
the
financial
portal.
And
that's
a
somewhat
different
measurement
point,
because
that's
a
measurement
point
where
we
ask
people
that
have
an
issue
with
the
financial
portal
when
they
want
to
reach
our
hotline.
Our
– that's
basically
the
first
support
line.
And
then
they
get
whatever
advice
on
how
to
solve
the
problem
on
the
financial
portal,
typically
handling
problems
or
technology
problems,
either
with
smartphone
or
tablet
and
so
forth.
And
at
the
end
of
that
process,
we
asked
the
same
client,
the
NPS
question,
and
there
we
reached
typically
a
lower
number,
of
course.
But
still,
that
number
is
very
high
compared
to
other
industries
or
other
competitors,
as
far
as
we
understand
it.
But
that
gives
you
an
idea.
I
mean,
what's
the
sentiment
amongst
our
clients
and
also
gives
you
an
idea
on
what
the
impact
is
of
our
service
to
these
clients.
Then
on
page
number
11,
you
see
the
branch
office
network
developing
on
– yeah,
in
Switzerland,
we
will
open
three
new
branch
offices
over
the
next
24
months,
so
two
years.
So,
it's
a
timeline.
Not
only
one
year,
it's the
two
year
timeline.
We
will
open
one
in
Bellinzona,
which
is
the
second
one
in
the
Italian
speaking
part;
another
one
in
Nyon,
that's
the
French
speaking
part
of
Switzerland;
and
in
[ph]
Ville (00:27:52),
that's
the
Swiss
German
speaking
part
of
Switzerland.
So,
three
new
branch
offices
in
Switzerland
foreseen
over
the
next
24
months.
Nevertheless,
the
focus
will
be
not
only
to
increase
the
number
of
branch
offices.
That's
not
the
idea
of
course.
But
to
increase
to
the
total
front-end
capacity
and
by
doing
that,
we
basically
increase
our
existing
branch
offices
in
terms
of
capacity.
That's
much
more
to
focus
rather
than
– I
mean
going
forward
over
the
next
5
to
10
years
we
don't
see
a
doubling
of
our
branch
office
number.
It's
much
more
that
we
add
on
some
other
locations.
But
overall,
the
focus
is
much
more
to
increase
our
existing
branch
offices
in
terms
of
capacity.
Then
on
the
Germany,
the
German
side,
we
will
open
our
–
in
the
process
of
opening
a
branch
offices
in
Lörrach.
That's
in
the
border
region
to
Basel,
it's a
very
attractive
region
in
terms
of
cross-border
issues
because
there
are
many
Germans
living
in
Lörrach
and
Freiburg
and
in Breisgau
in
that
region
and
working
in
Basel,
especially
in
the
pharma
industry.
It's
about
50,000 people
working
out
of
that
region
in
Basel,
and
they
– all
of
these
potential
clients
basically
do
have
a
pension
plan,
a
Swiss
pension
plan,
and
they
have
a
lot
of
tax
issues
on
the
cross-border
side.
And
there
we
are
basically
helping
these
clients
to
basically
plan
their
retirement
and
do
the
right
–
take
the
right
decisions
on
the
tax
side
and
everything.
And
it
is
a
very
interesting
entry
point
for
new
clients
in
that
border
region.
That
has
already
started,
and
it's
quite
positive,
the
developments,
of
course.
Then
in
the
United
Kingdom,
we
started
last
year,
out
of
St.
Albans,
a
new
branch
office
in
London,
in
the
city
of
London.
And
that's
very
important
to
have
a
premise
and
operate
the
premise
in
London
itself,
in
the
center
of
London.
And
that's
done,
and
we
are
going
forward
in
the
United
Kingdom
and
see
quite
interesting
development
hopefully.
Then
on
the
financial
side,
you
see
page
number
3.
There,
again,
the
five
basically
or
six
different
revenue
streams
totaling
into
the
operating
revenue
number
of
CHF
388.9
million,
increasing
by
18.3%.
And
then
you
see
the
three
cost
lines.
Personnel
expenses
increasing
12.3%.
Other
operating
expenses
significantly
higher
increase,
25%
available
to
debt.
Come
to
that
later
on
more
in
detail.
And
then
the
expenses
of the
insurance
contracts,
so
that's
basically the
claims that we pay
on
the
property, casualty
side, that
we
take on
our
books, and
this
increased –
that number
increased
substantially.
But that's
a
base
effect because,
in
2020, we
have
seen
almost
an
extremely
low
claims
number
whereas,
in
2021,
the
development
of
the
claims
normalized
and
came
back
to
the
levels
that
we
have
seen
in
2019 and
in
2018 in
terms
of
the
KPI.
So
that's
not
a
disturbing
number, it's
basically
a
normalization
of
the
situation.
That's
okay.
EBITDA,
next
slide,
14,
page
14,
going
from
the
EBITDA
number
down
to
the
net
profit
number.
EBITDA
is
not
so
meaningful,
much
more
meaningful
is
the
EBIT
number.
Because
of
certain
IFRA
methodology
that
has
changed.
Today,
it's
much
more
the
EBIT
number
that
is
really
meaningful.
And
then
you
go
down
to
the
profit
before
income
tax
and
income
tax,
which
increased slightly
higher
than
in
the
year
before,
and
then
we come
to
the
net
profit
above
22%.
Page
number
15,
some
more
insights
on
the
personnel
expenses.
As
you
know,
we
have
a
long-term
personnel
expense
ratio
that
we
target
or
that
we
basically
envision
at
39%.
We
are
below
at
37.2%.
If
this
39%
target
is
too
high,
needs
to
be
scrutinized
and
monitored,
maybe we
will
change
that
going
forward.
It's
– between
the
personnel
expenses
and
operational
expenses,
there
might
have
– there
might
be
–
might
come
some
structural
changes
because
we
are
outsourcing
more
and
more
services
that
we
do
not
execute
internally,
and
then
you
have
a
shift
from
the
personnel
expense
line
down
to
the
operational
expense
line
which
happens
over
time.
So,
that's
not
a
jump
or
a
leap.
Typically,
it's
a
smooth
development
of
these
effects.
In
total,
we
have
1,142.5
FTEs
employed.
This
translates
into
headcounts
via
– on
average,
we
have
85%
[indiscernible]
(00:34:34)
or
average
employeeship.
So
that
translates
into
1,340
employees
or
head
count.
Going
forward,
going
to
2022,
to
increase
the
head
count
at
least
at
the
same
speed
that
we
have
seen
last
year,
maybe
a
little
bit
more
compared
to
last
year.
Next
slide,
page
16,
other
operating
expenses.
Our
long-term
target
here
is
that
we
are
landing
somewhere
between
11%
and
13%
with
our
operating
expenses.
On
the
top
line,
we
came
in
with
12.6%,
but
it's
quite
obvious
that
we
have
seen
a
substantial
increase
of
25%
coming
from CHF
39
million
up
to
CHF
49
million.
And
the
major
impact
is
– happened
basically
on
the
general
and
administrative
expenses.
They
include
all
IT-related
investments
and
IT-related
costs.
And
one
important
driver
last
year
was
the
installation
of
that
new
e-banking
technology.
I
already
discussed
that
before
where
we
migrated
our
total
client
base
on
a
completely
new
platform,
and
this
was
quite
costly,
but
the
effect
will
be
seen
going
forward.
I
already
explained
that.
And
it
also
includes
the
UK
acquisition,
all
one
time
or
one-off
effect
of
an
acquisition.
It's
included
there.
And
it's
also
– it
does
also
include,
as
I've
said
before,
all
upgrading
elements
of
our
financial
portal.
Going
forward
into
2022,
we
clearly
don't
see
such
a
strong
development.
Again,
we
foresee
basically
an
increase
somewhere
between
3%
and
5%
of
the
CHF 49
million,
so
that
we
see
a
certain
normalization
of
that.
And
also
importantly,
office
space.
There,
we
have
also
seen
quite
a
substantial
increase
of
19%.
And
there,
the
reason
behind
that
is
in
Zurich,
we
have
a
reshuffling.
You
see
a
reshuffling
of
our
total
space
usage.
And
there,
we
still
have – we
still
pay
the
double
rent
because
we
have
a
double
– still
the
double
size
of
space
that
we
rent.
And
this
will
be
cleared
by
–
in
the
second
half of
this
year.
And
then
all
the
work
has
– should
be
done.
And
afterwards,
we
also
should
see
a
normalization.
So,
this
is
not
– this
is
really
extraordinary,
the
19%
increase
in
the
office
space
line.
Number
17,
EBIT
margin,
long-term
target,
42%.
We
came
in
with
43.1%,
so
above
our
long-term
target.
At
the
moment,
we
still
believe
to
keep
at
that
level,
at
the
42%
level
as
a
target
level,
although
we
see
an
overshooting
of
that
number
last
year.
If
we
see
the
same
picture
in
the
second
–
in
the
2022
numbers,
then
we
can
think
about
of
changing
it.
But
at
the
moment,
we
keep
it
at
that
level.
On
page
number
18,
you
see
the
balance
sheet,
very
simplified
form
of
the
balance
sheet.
It
should
reflect
basically
the
simplicity
of
our
balance
sheet,
especially
of
the
left
side
or
the
asset
side
of
the
balance
sheet
because
if
you
look
at
our
balance
sheet,
we
basically
invest
our
clients'
money,
the
client
– the
customer
deposits.
Either
they
are
allocated
to
the –
to
the
account
that we
operate account
of
– that
we
operate
with
the
Swiss
National
Bank,
that's
the
first
line,
or
we
allocate
these
funds
into
a
highly
diversified
residential
mortgage
portfolio
in
Switzerland
or
we
allocate
it
into
a
age in
a
very
highly
liquid
asset
bond
portfolio.
Basically,
marketable
securities,
but
HQLA-profiled
bond
portfolio,
which
can
be
very
simply
liquidated
and
turned
into
liquidity.
These
are
the
three
buckets
that
we
basically
operate
and
it's
very
simple
and
very
transparent
and
as
low
risk
as
possible.
The
balance
sheet
total
increased
from
CHF
5
billion to CHF
5.8
billion.
And
the
increase
is
primarily
or
almost
only
driven
by
the
increase
of
the
customer
deposits
and
new
clients,
basically.
Then
on
to
page
19,
you
see
the
payout
ratios
developing
from
40%
up
to
44%.
We
will
increase
the
dividend
per
share
from CHF
1.23
to
CHF 1.57.
This
is
reflecting
an
increase
of
28%.
So,
quite
substantial
to
be
attractive
for
the
capital
market.
And
on
the
right
side,
you
see
the
–
some
risk
ratios,
important risk
ratios,
total
equity,
CHF 700
million
leads
to
a
equity
ratio
or
leverage
ratio
of
12.1%,
which
is
very
sound.
And
core
capital
ratios
of
25.2%,
they
decreased
slightly
and
this
is
basically
only
because
we
have
executed
the
acquisition
in
the
UK.
There,
we
not
only
have
considered
that
50.1%
stake,
we
basically
considered
as
the
– 100%
stake.
Although
we
did
not
take
the
100%
now,
but
since
we
have
an
option
to
take
over
100%
until
2026,
we
have
to
consider
this
acquisition
as
a
full
100%
acquisition.
That's
why
the
ratio
of
core
– the
core
capital
ratio
came
down
a
little
bit
to
25%.
Outlook
on
page
number
21,
on
the
business
side,
there
is
not
much
changing.
We
are
working
on
our –
on
developing
our
existing
business,
on
making
the
business
greater,
bigger,
even
more
profitable,
hopefully.
And
we
continue
–
that
means
that
we
continue
to
work
on
–
be
more
attractive
to
our
clients
to
increase
the client
inflow,
to
increase
the
consulting
capacity,
to
work
on
the
conversion
side
from
consulting
clients
to
platform
clients.
And
within
the
platform
client
bucket,
we
work
on
increasing
the
platform
usage
per
client.
So
that's
the
core
on
which
we
work.
And
then
the
second
element,
which
is
very
important
that
should
support
the
whole
process,
the
whole
client
journey,
is
to
develop
the
financial
portal,
our
digital
interface
to
our
clients,
and
bring
in
and
add
additional
features.
And
we
start
with
the
trading
– the
e-trading
desktop
which
is
getting
live
to
all
clients
by
mid-March.
Now,
we
are
in
a
friends
and family
program
and
we
will
release
that
mid-March
to
everybody.
At
the
same
time,
we
will
introduce
an
SOB
process
which
is
a
self on boarding
process,
fully
digitalized
which
is
very
rare
here
in
Switzerland. We
are
one
of
the
first
providers
that
has
a
fully
digitalized
self on boarding
process
to
two
new
clients
but
also
to
existing
clients,
so
new
client
can
open
very
simply
a
new
account
but
also
existing
clients
can
open
new
clients
very
simply.
And
then
another
element
is
the
cryptocurrency
trading.
It's
now
– it's
already
open
via
a
telephone
trade.
Now,
we
are
opening
and
developing
that
and
providing
it
via
the
financial
portal,
the
digital
interface,
so
that
you
can
digitally
trade
online
the
cryptocurrencies.
But
be
aware,
we
don't
open
all
cryptocurrencies
to
everybody.
We
are
very
restricted
to
a
maximum
10 –
selected
number
of 10
cryptocurrencies,
and
that
should
also
be
released
by
mid-March.
Then
in
the
second
half
of
2022,
we
will
basically
introduce
on
the
digital
platform
on
the
financial
portal
introduced
all
functionalities
that
a
Revolut
or
Neon
Bank
offers
to
its
clients,
which
is
–
it's
basically
payment
services,
card
management,
card
services,
and there
we
integrate
old
functionalities
that
the
Revolut
platform
does
provide
and
integrate that
into
the
financial
portal.
That
makes
it
very
strong,
and
it
simplifies
many
things.
That
includes,
for
example,
peer-to-peer
payments,
[indiscernible]
(00:46:02)
overview
of
all
transactions –
on
the
payment
side,
physical
card,
but
also
virtual
card
management
and
so
forth,
right.
That
should
be
introduced
in
the
second
half
of
2022.
We
are
working
on
that,
and
it
looks
quite
positive
that
we
should
reach
that
level.
And
being
able
to
introduce
all
these
services,
the
prerequisite
was
that
we
had
needed
to
migrate
all
clients
last
year
on
that
new
state-of-the-art
e-banking
platform.
Then
in
Germany,
of
course,
we
work
on
the
marketing
side
very
intensively,
that's
the
core
theme
there.
And
in
UK,
we
intensify
the
integration
work.
We
put
a
lot
of
efforts
to
introduce
our
marketing
experience
out
of
Switzerland
into
the
German
– into
the
UK
market.
We work
on
installing
an
internal
advisor
trainee
program,
which
is
already
ongoing,
by
the
way,
we
have
already
five
participants,
so
it's
a
very
small
number
but
nevertheless,
it
shows
you
that
something
is
going
on
there.
And
we
also
work
on
further
integrate
smaller
IFA
organizations,
so
small
IFAs,
that's
an
interesting
element
to
add
on
and
to
grow
a
little
faster
than
if
you
just
do
it
on
an
organic –
in
an
organic
way.
Then
you
might
have
seen,
in
2023,
we
do
envision
some
personnel
changes
at
the
top
of
the
organization.
Me,
myself
basically,
is
moving
out
of
the
current
position
of
the
Group
CEO
by
the
end
of
this
year.
So
1st
January
of
next
year
of
2023,
Giulio
Vitarelli,
will
take
over
from
me
as
Group
CEO. Giulio
Vitarelli
is
a
very
experienced
person
and
he
is
already
since
1998
part
of
the
team
and
led
for –
since
2012
,the
Swiss
front
organization
including
all
the
consulting
activities
and
leading
all
the
branch
offices.
So
he's
very
experienced
and
will
take
over
from
me
and
stands
for
continuity
and
stability
in
that
way.
And
me, myself,
I
will take over
as
Chairman.
By
–
that
should
take
place
in
April
2023
and
I
will
take
over
the
position
from
Fred
Kindle.
Right.
And
on
the
financial
side
–
coming
from
the
situation
that
we
basically
increase
our
client
number
every
day
or
every
week
and
every
month,
we
should
see
constantly
increasing
top
line
and
a
constantly
increasing
bottom
line.
If,
of
course,
we
don't see
complete
disruptions
on
the
financial
markets
which
are
– which
can
really
distort
the
situation
short
term,
but
in
the
longer
term,
the
effect
is
quite
negligible.
And
given
the
situation
that
we
have
a
stable
market
going
forward,
we
should
basically
see
a
development
on
the
top
and
the
bottom
line
that
we
have
seen
on
average
in
the
past
years.
And
I
mentioned
that
already
the
transaction-based
revenues
on
the
banking
platform
is
unpredictable.
And
I
explained
that
before.
EBIT
margin
and
net
profit
margin
should
basically
leveling
at
the
target
levels
and
dividend
payout
increases
to
50%
over
the
next
coming
years.
So
far
to
the
presentation,
now
I
hand
over
to
the
operator
to
organize
the
Q&A
session.
Operator
We
will
now
begin
the
question-and-answer
session.
[Operator Instructions]
The
first
question
comes
from
Andreas
Venditti
from
Vontobel.
Please
go
ahead,
sir.
A
Andreas Venditti
Analyst, Bank Vontobel AG (Research Firm)
Yes.
Thank
you
for
taking
my
questions.
Maybe
can
I
start
with
the
actual
situation
in
the
Ukraine?
Can
you
maybe
confirm
that
you
don't
have
any
exposure
to
that,
which
I
think,
but
maybe
you
can
confirm
that?
And
what
other
impacts
you
might
see
from
the
whole
situation,
if
any
on
[indiscernible]
(00:51:48)?
Then,
next
question
will
be
on
the
margin
developments,
whether
you
can
provide
some
updates
there,
mainly
the
mix
shift
that
we
discussed
over
the
last
few
years.
How
you
see
that
going
forward?
And
maybe one
question
on
one
slide
that
is
not
in
the
pack
that
used
to
be
in
the
last
few
presentations,
which
is
related
to
some
indicators
of
activity
on
the
financial
portal.
Is
the
reason
that
we
had
this
significant
migration
and
that's
why
you
decided
not
to
show
these
indicators
on
the
slide
or
is
there
another
reason?
Thank
you
very
much.
M
Matthias Daniel Reinhart
Thank
you,
Mr.
Venditti.
To
your
last
question,
actually,
we
exchanged
that
chart
with
the
NPS,
the
Net
Promoter
Score
information,
which
we
thought
might
be
more
informative
to
the
audience
because
the
financial
portal, of
course,
with
the
activities
are
getting
higher
and
higher.
I
mean,
you
see
a
quite
a
positive
development
there.
We
can
add
that
if
you
like.
I
mean,
you
can
–
that's
no
problem.
But
at
the
moment,
I
think
it's
not
so
informative.
It
just
goes
up
every
month.
That's
okay.
But
we
can –
going
forward,
we
can
basically
add
that
information
or
some
similar
information
to
the
financial
portal
just
to
give
you
an
idea
on
what
the
activity
status
is
there.
Then
to
your
first
question,
Ukraine
exposure,
no,
we
don't
have
any
exposure.
We
don't
have
any
clients
stemming
or
coming
out
of
Russia
or
Ukraine
or
Belarus
or
somewhere.
As
you
know
and
assumed,
our
target
is
always
the
domestic
market.
We
don't
focus
on
any
cross-border
situation
except
new
–
that's
new,
that
we
are
focusing
in
a
very
small
region
in Lörrach,
Freiburg,
Basel.
So,
in
that
region,
we
are
developing
the
cross-border
situation.
But
that's
a
completely
different
question.
There
we
are
basically
onshore –
consulting
onshore
in
Germany
and
supporting
out
of
Switzerland
but
from
a
technical
edge.
So,
it's
not
a
classical
cross-border
situation.
And
the
impact
of
the
Ukraine
situation,
well,
we
don't
see
any
greater
impact,
except,
of
course,
what
we –
as
everybody,
what
we
are
in
a
certain
way
affected
by
the
stock
market
and
interest
rate
market
development.
There,
of
course,
we
have
a
certain
impact.
But
the
sentiment
amongst
our
existing
clients,
the
sentiment
amongst
the
new
clients
is
at
least
how
we
see
it
today
is
not
changing
at
the
moment.
So,
the
client
inflow
is
going
fine
and
at
the
moment,
we don't
see
really
a
disruption.
Hope
that
remains
that
way.
Then
the
margin
development
and
mix
shift,
you're
right,
we
discussed
that
many
times.
Overall,
we
left
a
lot
of
basis
point
on
the
table
over
the
past
six,
seven
years.
And
if
we
look
now
at
the
situation
in
the
2021
numbers,
we
see
basically
a
stabilization
compared
to
the
2020
numbers
and
they
came
in
at
excluding
the
banking
revenues,
came
in
at
a
level
of
72
basis points or
71.5
basis
points.
And
if
you
include
the
banking
revenues,
you
end
up
overall
at
90.6
basis
points.
So,
it's –
yeah.
That
was
the
same
number
more
or
less
in
2020.
And
if
you
go
back
in
2019,
that
number
was
97 basis points;
in
2018
it
was
104 basis points;
in
2015
it
was
123 basis points.
So,
we
left
33
basis
points
on
the
table
over
the
past
six
years,
which
is
remarkable.
And
at
the
same
time,
we
grew
the
total
business
and
we
believe
at
the
moment
that
we
are
in
a
stable
situation.
Of
course, you
have
certain
shifts
amongst
the
different
buckets,
second
pillar,
third
pillar
and
free
monies
that
is
invested
and
mortgage
and
everything.
But
overall,
we
don't
see
a
big
shift
anymore,
certainly
not
such
a
big
shift
that
we
have
seen
in
the
past
five,
six
years.
We
internally
calculate
with
a –
going
forward
with
that
we
leave,
let's
say,
1 basis
points
or
2
basis
points
on
the
table
going
forward
just
to
be
on
the
safe
side.
But
let's
see,
I
mean
–
but
we
don't
see
that
such
a
harsh
reduction that
we've
seen
in
the
past.
Hope
this helps.
A
Andreas Venditti
Analyst, Bank Vontobel AG (Research Firm)
Thank
you
very
much.
Yes.
[Operator Instructions]
Operator
So far,
there
are
no
more
questions.
M
Matthias Daniel Reinhart
Good.
Operator
Sorry to
interrupt.
We
have
a
follow-up
question –
we
have
a
question
from
Mr.
Mike –
Michael
Schulz
from
JMS
Invest.
Please
go
ahead.
M
Michael Schulz
Managing Director, JMS Invest AG
Hi.
Good morning,
Mr.
Reinhart.
I
have
a
question
regarding
the
margin
too.
So,
in
your
presentation
in
the
conclusion, in
the outlook, you said
that
you
see
the
net
profit
margin
and
EBIT
margin
going
back
to
the
basically
the
guided
or
longer
term
guided
range.
However,
you
also
said
that
general
expenses
would
be
not
declining
but
not
growing
as
fast
as
we
saw
it
now.
I
mean,
the
difference
would
then
at
the
top
line
margin
basically
also
is
not
declining
further.
The
difference
to
bring
that
back
to
the
longer
term
range would
then
come
from
the
personnel
expenses
that
would
have
to
grow
faster
than
your
top
line.
I
mean,
is
that
a
new
ambition
to
grow
your
capacity
faster
basically
or
how
do
I
have
to
understand
that?
Otherwise,
I
would
assume
a
certain
leverage
going
forward
if
your
top-line
margin
has
stabilized
more
or
less.
M
Matthias Daniel Reinhart
Yeah.
M
Michael Schulz
Managing Director, JMS Invest AG
Yeah.
M
Matthias Daniel Reinhart
Yeah.
Understand.
Thank
you,
Mr.
Schulz.
Of
course,
I
mean,
what
I've
said
does
not
really
match.
I
understand
that.
And
that's
also
clear.
But
I
want
to
be
on
the
cautious
side,
if
we
are
talking
about
targets
and
target
levels
and
that's
not
the
target
level
for
the
current
year.
It's
basically
all
this
– we
are
basically
talking
about
target
levels
of, let's
say,
three,
four,
five
years.
And,
there,
we
don't
see
at –
of
course,
you
are
absolutely
right.
I
mean,
if
I
add
up
all
what
I've
said,
then
you
should
basically
– that
should
basically
lead
to
higher
net
profit
margins.
And
–
but
just
to
be
on
the
cautious
side,
we
would
like
to
keep
it
at
the
36%
level.
And
this
is
the
major
number
that
needs
to
be
considered.
And
I
mean,
of
course,
this
year,
it
could
be
different.
This
year,
it
could
be
higher
if
everything
goes
well.
But
in
the
longer
term,
I'm
not
so
sure
because
we
want
to
be
–
from
a
strategy
point
or
strategic
point
of
view,
it
would
make
going
forward
and
to
grow
the
business
sustainably
longer
term
substantially,
it
would make
a lot
of
sense
to keep
some reserves
to
be flexible
on
the price
side
vis-à-vis
on
your products
or
on
your offerings,
and
to
be
more
– and
to stay
and
to become
more attractive
on
the
labor
market,
and
that
includes,
of
course,
more
attractive
salaries
at
the
end
of
the
day.
And,
combining
all
of
that
together
with
the
productivity
gains
which
we
will
attain,
we
clearly
reach
and
gain
productivity
improvements,
and
that
leads
to
a
scalable
effect.
But,
if
you
add
that
all
up,
and
I've
always
said
that,
we
do
not
target
a
leverage
primarily,
we
primarily
target
to
develop
and
grow
the
top
line.
And,
if
you
look
at
that
in
the
longer
term,
then
you
are
just
on
the
safe
side
if
you
keep
the
net
profit
margin
at
the
36%,
and
we
have
already
increased
that
from
the
35%
last
year
or
to
the
year
before,
I
believe, the
year
before.
M
Michael Schulz
Managing Director, JMS Invest AG
May
I
ask
another
one
or
two
questions?
M
Matthias Daniel Reinhart
Sure.
M
Michael Schulz
Managing Director, JMS Invest AG
One,
regarding
the
PM
mandates
and
the
share
of
the
assets
under
management
in the
mandates.
That
increased
to
63.6%
this
year
from
the
60%
level.
How
does
that
work
usually?
Are
these
new
clients
that
[ph]
complete
(01:02:34)
with
a
mandate
or
basically
start
with
a
mandate
with
you
or
is it
a
conversion
of existing
clients
from
self-managed
money
to
mandates?
What's
the
biggest
driver
there
and
how
do
you
see
that
going
on?
M
Matthias Daniel Reinhart
Yeah.
The
biggest
driver
is
the
net
new
client
inflow, clearly.
I
mean, that's
the
number one
driver. The
number two
driver
is the
cross-selling
efforts
with
the –
amongst
our
existing
platform
clients.
But
the
clear –
I
mean,
the
absolute
top
driver
is
the
ability
to
attract
new
clients
and that's
the...
M
Michael Schulz
Managing Director, JMS Invest AG
So,
the
new...
M
Matthias Daniel Reinhart
Yeah.
M
Michael Schulz
Managing Director, JMS Invest AG
...so,
the
new
money –
the
penetration
among
the
new
clients
is,
say,
around
80%,
90%
or
so
in
order
to
– or
just
higher
than
the
60%.
That's
basically
what
you're
saying.
I
mean,
the
new
clients
they
come
mostly
in
with
a
new
mandate.
M
Matthias Daniel Reinhart
Correct.
Correct.
M
Michael Schulz
Managing Director, JMS Invest AG
Okay.
M
Matthias Daniel Reinhart
Yeah.
M
Michael Schulz
Managing Director, JMS Invest AG
So,
this
should
go
on
going
forward
and
that...
M
Matthias Daniel Reinhart
Of
course
[indiscernible]
(01:03:45)
[indiscernible]
M
Michael Schulz
Managing Director, JMS Invest AG
(01:03:46)
M
Matthias Daniel Reinhart
Right.
Because
you
must
understand,
many
of
our
clients
of
our
existing
portfolio
management
clients,
when
they
are
retired,
they
use
their
money
on
a
–
at
least
they
take
out,
on
average,
I
would
say
some
3%,
4%,
5%
of
their
monies.
Ad
others
add
the
portfolio.
That
also
happens,
of
course.
But
the
typical
client
situation
is
that
they
live
out
of
their
funds
over
after
retirement.
So,
that's
why
the
largest
chunk
of
the
net
new
money –
of
the
net money,
I'm
talking
net
new
money
is
driven
by
new
clients.
M
Michael Schulz
Managing Director, JMS Invest AG
Okay.
And
just
maybe
one
last
question.
And
is
there
a
– looking
at
figures
on
how
your
performance
on
the
mandates
is
in
phases
like
last
year,
where
we had
kind
of
a
booming
market
and
maybe
this
year
where
we
have
more
difficult markets
more
difficult
markets compared
to
individually
managed
funds, I mean...
M
Matthias Daniel Reinhart
Sure,
that's –
yeah,
absolutely.
That's
one
of
the
key
tasks
the
asset
management
has
to
undertake
where
– by
measuring
the
performance
vis-à-vis
the
competition
and
vis-à-vis
the
benchmark.
And
there,
we
clearly
can
say
that
we
are
at
the
top
of
the
list
compared
to
every
bank
here
in
Switzerland.
And
we
do
that
on
a
very
systematic –
in
a
very
systematic
way.
Typically
what
we
see
is
that
the
best
measurement
or
comparison
of
your
own
performance
is
if
you
compare
the
performance
of
your
clients,
of
your
offerings
vis-à-vis
the
strategy
fund
that
a
–
let's
say,
Credit
Suisse
or
UBS
or Raiffeisen
or Migros
or
whoever
is
offering,
and
because
those
offerings
within
these
banks
are
typically
better
or
better
developing
than
the
individual
mandates
within
these
institutions.
So,
if
you
take,
for
example,
UBS,
the
UBS
Strategy
Fund
balanced
– the
balanced
profile
is
typically
better
performing
than
a
UBS
individually
managed
PM
mandate
with
the
same
risk
profile.
That's
what
we
can
prove,
because
we
have
thousands
of
portfolios
that
we
analyze
of
the
competition. And
if
you
take
our performance
of
our
mandates
and we
have
five
different
mandates
tied,
one
is
very
simple
executed
via
ETFs
and
index
funds,
very
sticky
to
the
strategy,
the
overall
strategy
and
the
profile
that
is
given.
And
that's
an
extremely
performing
mandate,
which
is
also
quite
inexpensive.
That's
very
attractive
for
our
clients.
Another
one
is
much
more
geared
or
leaned
at
the
asset
allocation
of
the
pension
fund
system.
That's
also
performing
extremely
well.
These
two
mandate
types
are
clearly
at
the
top.
And
if
you'll –
we
changed
that
in
by
mid-2019,
the
way
of
how
we
manage
the
assets.
They
are
from
the
beginning
at
the
top.
And
that's
why
they
are
also
chosen
by
every
–
by
mostly
by
all
consultants
to
recommend
to
their
clients.
M
Michael Schulz
Managing Director, JMS Invest AG
So
that's
a
big
selling
driver
for
you,
basically.
M
Matthias Daniel Reinhart
Absolutely.
Absolutely.
M
Michael Schulz
Managing Director, JMS Invest AG
Okay.
Okay.
Can
you
just
remind
me
how
much
is
the
average
assets
under
management?
How
much
still
is
the
equity
portion
and
the
bond
portion?
M
Matthias Daniel Reinhart
Overall,
if
you
take
the
CHF 39
billion,
it's
– let
me
see
– I
believe
30%.
30%,
yeah.
M
Michael Schulz
Managing Director, JMS Invest AG
In
equities?
M
Matthias Daniel Reinhart
Yeah,
30%
equity
exposure.
But
if
you
just
take
the
CHF
39
billion
to
total
AuM,
yeah.
M
Michael Schulz
Managing Director, JMS Invest AG
And
the
rest?
M
Matthias Daniel Reinhart
The
rest
is
basically
interest
rate linked.
And
some
of it is basically interest rate linked, and
some
of
it
is
also
mortgages.
So,
CHF
7.5
billion
is
basically
mortgages.
And
there, you
don't
have
any
price
effect,
you
don't
see
any
fluctuation
of
the
prices.
M
Michael Schulz
Managing Director, JMS Invest AG
Okay.
Very
good.
Thank
you
very
much.
M
Matthias Daniel Reinhart
You're
welcome.
Operator
The
next question
comes
from
Christian
Schmidiger
from
ZKB.
Please
go
ahead.
C
Christian Schmidiger
Analyst, Zürcher Kantonalbank
Hello,
Mr.
Reinhart,
thanks
for
taking
my
questions.
I
would
have
two.
The
first
one
is
regarding
the
UK
market.
You
write
that
you
work
on
further
small
IFA
acquisitions.
Could
you
define
smaller
in-depth
context?
Maybe
in
comparison
to
the
Lumin
Group,
smaller
or
similar
sized?
And
my
second
questions
would
be
regarding
the
management
change
in
2023.
Can
you
already
give
some
visibility
on
whether
you
have
the
intention
to
reduce
your
61%
stake
and
also
increase
the
liquidity
of
the
[ph]
VZ (01:09:49)
share.
M
Matthias Daniel Reinhart
Yes.
Thank
you,
Mr.
Schmidiger.
No.
To
your
last
question,
no,
I
will
not
reduce
my
61%
stake.
I
think
there
is
no
better
investment
than
your
own
company.
That's
number
one,
just
to
keep
that
clear.
And,
of
course,
the
management
change
happens
as
a
–
that's
a
demographic
impact,
reflecting
my
age,
and
that's
normal.
And
I
will –
out
of
the
Chairman
position,
I
will
oversee
the
development,
very
thoroughly,
of
course,
and
need
also
the
strategic
developing
going
forward.
And
we
are
very
happy,
by
the
way,
to
be
able
to
organize
the
succession
planning
internally
in
a
very
positive
way.
And
all
these
changes
are
basically
a
result
of
intense
discussions
amongst
the
two
bodies
of
the
board
and
the
board
of
directors
and
also
the
executive
board,
and
all
individuals
are
basically
standing
behind
that
solution.
And
that
was
for
me
very
important,
right.
That's
to
your
second
question.
Now
to
your
first
question,
UK.
UK
is
if
you
look
into
the
acquisition
methodology
or
strategy
that
we
follow,
we
do
not
envision
larger
acquisitions.
What
happens
in
the
UK
is
that
overall
it's
a
consolidation
phase
that
we
see
over
the
next
coming
years
and
many
small IFAs,
we
are
talking
about
three,
four,
five
people
IFAs.
So
very
small
organizations
are
seeking
a
succession
and
are
seeking
an
integration
into
a
larger
institution
such
as
we
to
represent
one.
And
that's
the
strategy.
And
you
typically
buy
such
a
smaller
organization
at
an
EBIT
multiple
or
EBITDA
multiples.
Well,
the
difference
is
not
really
big
between
EBITDA
and
EBIT
because
they
do
not
have
any
depreciation
on
average.
You
purchase
that
at
a
level
of,
let's
say,
3
– somewhere
between
3,
3.5,
maximum
4.
That's
what
you
pay
for
it.
And
many
consolidators,
typically
private
equity
led
or
consolidators
to
exactly
that
came
by
4 –
an
EBITDA
multiple
of
4
and
sell
the
whole
organization
for
an
EBITDA
multiple
of 12.
That's
their
game,
and
the
whole
thing
is
leveraged.
So,
that's
the
idea,
but
we
don't
have
that
idea.
We
actually
have
a
very
long
term
idea.
We
use
these
small
additions
to
enlarge
our
customer
base
and
grow
out
of
these
customer
bases
with the – on
the
one
side
with
referrals,
but
also
with
getting
new
addresses
for
our
marketing
efforts.
So,
we
try
to
combine
in
the
UK,
our
marketing
experience
that
we
have
out
of
the
Swiss
market
with
the
acquisition
strategy
of
small
and
very
small
IFA.
But
I
cannot
give
you
to
that –
for
example,
this
year,
we
will
maybe
add
two
or
three
smaller
IFA
organizations,
and
we
already
have
–
we
have
a
pipeline
of
quite
a
substantial
number
that
we
could
add,
but
we
have
a
limited
capacity
and
not
only
on
the
fund
side,
but
also
on
the
personnel
side.
And
that's
why
we
have
to
balance
all
these
efforts.
But
it's
very
low
risk
at
the
end
of
the
day.
And
that's
the
nice
thing
behind
it.
C
Christian Schmidiger
Analyst, Zürcher Kantonalbank
Perfect.
Thank
you very
much.
[Operator Instructions]
Operator
We
have
a
follow
up
question
from
Mr.
Andreas
Venditti
from
Vontobel.
Please
go
ahead.
A
Andreas Venditti
Analyst, Bank Vontobel AG (Research Firm)
Yes,
thank
you.
I
would
like
to
know
the
interesting
approach
you're
taking
on
the
Lörrach
branch
because
I
think
there's –
there
might
be
other
opportunities,
obviously, if
you
think
about
Geneva
where
you
also
have
quite
a
large
base
of
French-domiciled
people
working
in
Geneva.
Would
there
be
something
that,
let's
say,
if
you're
happy
with
developments
in
Lörrach
would
be
possibly
something
that
you're
looking
at?
Thank
you.
M
Matthias Daniel Reinhart
Yes
and
no.
Lörrach
is
basically
a
very
simple
play
because
we
already
have
in
Germany
the
full
organization
if
you
have
a
bank
and
everything,
and we
are
basically
fully
operational
in
Germany.
That's
why
it's
so
easy
out
of –
working
out
of Lörrach
also
from
a
regulatory
standpoint.
If
you
look
into
the
Geneva
region,
there,
it's
much
more
complicated
because
we
could
do
it. I
mean,
we
could
basically
–
we
could
move
the
license
that
we
have
in
Germany
into
the
France
territory
and
then
start
working
there.
But
I'm
not
really
sure
if
that
is
a
good
idea
at
the
moment.
But
it's
–
we
have
to
think
about
it,
definitely.
And
there
is –
you're
right.
I
mean,
in
Geneva,
you
have,
I
mean,
a
huge
workforce
working
in
– on
the
territory
of
Geneva
but
living
in
France.
That's
right.
I
don't know
if that's
at
least
100,000
overall
in
that
region.
Could
be
an
option,
but
it
takes
much
more
effort
to
do
that.
The
same
thing
is
going
on,
on
the
Italian –
I
mean
in
the
Ticino
region, which
could
be
even
more
attractive
because
the
Milano
region
is
extremely
– itself
is
extremely
attractive.
So,
these
two
regions
we
are
following
very
closely
and
think
about
it.
But
at
the
moment,
I
mean,
it's
basically
quite
a
low
hanging
fruit
in
Lörrach.
That's
what
we
want
to
pick
and
try
to
develop
that
at
the
moment.
A
Andreas Venditti
Analyst, Bank Vontobel AG (Research Firm)
Thank
you.
Operator
There
are
no
more
questions,
sir.
M
Matthias Daniel Reinhart
Very
good.
Thanks
a
lot
for
all
the
questions
that
you
have
asked
and
hope
it
was
helpful
for
you
and
wish
you
a
good
day
and
bye-bye.
Thank
you.
Operator
Ladies
and
gentlemen,
the
conference
is
now
over.
Thank
you
for
choosing
Chorus
Call
and
thank
you
for
participating
in
the
conference.
You
may
now
disconnect
your
lines.
Goodbye.
[Abrupt Start]
...you measure that number in FTEs, which reflects a 9.3% growth rate coming from 2020. And if we look into 2022, we see more or less similar development that we foresee going into the current year. And this is the prerequisite to increase our net new money number. And as you might have seen, the net new money number came in last year in 2021 quite remarkably high. And if we divide the net new money number by the consulting capacity, we reached a CHF 25.6 million net new money number per consulting FTE, which is clearly above our target range of CHF 17 million to CHF 20 million.
At the moment, I'm not really sure that we can keep that number going forward. So, if we project the business going into the future, we still stick to the CHF 17 million to CHF 20 million target range. But if we see the CHF 25 million number or somewhere in between, if we see that confirmed over the next years, then we have to change our target range and move that up a little bit. But at the moment, this is not the time to do that and to communicate that.
So far, the business development on the core side and then, of course, we have seen the UK business starting in May, June. At that time point, we completed our acquisition. We did not acquire 100% of the Lumin Group. We basically acquired 50.1% of the Lumin Group and agreed to buy the remaining shares in 2026, five years after completion of the first step.
In the meantime, we experiment with the Lumin Group in order to integrate as many processes and experiences of our existing business model in Switzerland into the UK market, and we have already done quite a substantial amount of things, and we are quick – at the moment, they are really positive that we see quite an interesting opportunity there. By using our business model and implementing our experiences out of Switzerland into the UK market, especially on the marketing side, but also on the side of developing an increase and increasing the consulting workforce.
Another element that we worked on last year was our financial portal, which is the digital interface vis-à-vis our clients, a very important element going forward, it's not only a prerequisite, it's basically the element that will help us to increase the penetration of our existing platform clients in terms of platform usage. What we did last year, we successfully migrated our existing client on to an upgraded version. That was quite a cumbersome task, but it – the result is really promising. We basically exchange our technology provider and platform to a much more elaborated version and this will help us to be – not only to increase the performance vis-à-vis our clients in terms of speed as an example, but also to be much more agile in terms of implementing new features much quicker and just to be much faster in developing that platform.
That's also an element that will help us going forward. For example, this year we will introduce quite a substantial number of new features. I will come to that point at the end when we go to the outlook.
On the financial side, very quick, top line, plus 18.3%, operating expenses, plus 15.8%, resulting in a slight leverage, increasing the EBIT margin to 43.1%. Bottom line increased 22% coming to CHF 143.2 million net profit, which reflects a margin of 36.8% on the top line. And the balance sheet, very solid. Go to that a little bit more in-depth afterwards and net new money came in with CHF 4.8 billion, already mentioned that before, and assets under management reached a level of CHF 39 billion, coming from CHF 31.5 billion a year before.
Page number 4, you see the development of the revenue streams over the past six years and we did see quite an impressive increase of 18.3% on the top line. And if you go into the different components, the five most important components, starting with the largest one, that's the dark blue one, shaded one, management fees on the AuM, which make up roughly two-thirds of total revenues, increased 24.4%, more or less in step, of course, with the AuM development, which we discussed later on.
The next [audio gap] (00:06:38) slide of our management fees, that's the light blue shaded of CHF 27.3 million, increased 12.8%. Other management fees are not depending on the AuM development, they are typically associated with managing corporate clients and pension fund schemes of corporate clients or insurance portfolios of corporate clients.
And there, we do not charge or are not getting revenues on a certain base. We basically charge either on a per employee basis or a charge on a hourly basis. Then the net earned premiums, which is our – reflects our insurance, property and casualty insurance business. Net earned premiums reflects the net earned premiums after reinsurance charges increased 23% and it goes more or less in step as in the years before.
And the next element is the gray shaded one, and that's our only components that we are not really happy with, because we are not – we cannot – we don't have a great visibility into the future.
As you remember, banking income encompasses interest rate business that's easy to understand and it's also easy to foresee into the future, but it also includes commissions and trading activities. I will go a little bit more in-depth afterwards into that point. And this is the element on our total revenue stream, which is not really growing. It's basically decreasing going forward. But all in all, banking income, including interest rate business is quite stable.
Then the last component, the consulting fees, these are – the revenues generated out of our – of the pure consulting business basically charged on an hourly billing. And that element also increased by 10%. And this is – was more or less in step with the increase of our initial meetings that we measure, increase of our marketing responses that we achieve. So that's the very front-end, out of which we generate our platform clients.
So, so far to the revenues, now I would like to go a little bit more in depth or deeper into the banking income, page number 5. As, as already discussed, overall, they are quite volatile and difficult to predict, and we see three components. Actually the component of the interest rate business, this is not so volatile anymore and it's – but this is really predictable going forward. And it's also growing basically in line with the overall balance sheet total. So there, we don't have the predictability issue. But on the other two elements, the trading result and the transaction fee income, there, we do have the predictability issue.
Both of these two last components basically decreased over the past couple of years and – but overall they do not make up a real big portion of our total revenue number anymore. Six years ago, that was completely different. Now, it is really not neglectable, but it's at least not an important element anymore.
Nevertheless, we see the trading result overall stabilized going forward because, I mean, we see more volume but less activity, and in total that should be a result in a stable development. And on the transaction fee side, the dark blue shaded component, there, we foresee still ongoing decrease. But overall, if you take all three components together, we basically calculate with a more or less stable number. But all other components of our business and revenue components should basically increase going forward in line with more clients and more penetration of our existing clients.
Now, number 6, you see the net profit line on a on a long-term basis comparison. Here again, you see the 22% increase from the 2020 level and already in 2020, we did see a 15% increase from the 2019 level. And overall, the long-term target is a 36% net profit margin, we are slightly above that level and are not – I think we are not in a position to change that. We still believe that we don't see going forward a much greater or bigger leverage. We are basically more inclined to – if we see scaling effects, we are much more open to use these productivity gains and scaling effects to use in order to increase our attractivity vis-à-vis our clients and to increase – so that is helpful to increase our client growth, so that the client number can grow going forward and also to increase our attractivity on the job market to gain as much talent as possible. And therefore, we are – going forward, we are basically planning with a stable long-term net profit margin of 36%.
Now, on page number 7, some information on the operational business in terms of what happens at the front-end. On the right side, you see the net new money development, CHF 4.8 billion, upper right corner of that chart, number 7. It's number 7. And if divide the CHF 4.8 billion by the 188 FTE capacity at the consulting front-end, you get on the lower right end the CHF 25.6 million net new money per consultant FTE. And that number is clearly above our CHF 17 million to CHF 20 million target range of net new money per consultant FTE.
As I mentioned already at the beginning, it's – at the moment, it's questionable if we can really keep that number at this high level. It is possible. Of course, we do have the ambition to reach that again. But before we can really set that new level as a target, we have to confirm it not only one year. We have to confirm it two years in a row so that we can see. Well, we can calculate and measure with a new metrics.
But at the moment, I would still stick to the former range of CHF 17 million to CHF 20 million per FTE and calculate – take that as a basis for the future development if you project the business on a – into the future.
What is clearly – what can clearly be set is the capacity development there, we see a development from 188 FTEs to a 204 FTEs. This is – there we have a lot of visibility of what's going on because we do the training internal of all these new consultants, and that's why we know exactly what – more or less what the development should be going forward.
Now, on page number 8, you see what happens on the wealth management side. Again, we see the AuM development of plus 24% coming from CHF 31.5 billion going to CHF 39 billion by the end of the year, so that's a 24% increase. Of course, stock market helped. But one has to bear in mind that the bond markets basically were negative, so it's not only clear sunshine. It was not only clear sunshine, as you may know. There were also shadows on the financial markets. But it was very helpful that we've seen the stock market increasing that considerably.
And if you break the AuM total down into PM mandates in the other line, we see that the margin heavy line, the PM mandates increased even stronger than the other line, which typically bears lower margins. So, that's helpful going forward to keep the margin level at the existing level. Net new money in the longer timeline, you see constantly increasing from starting in 2017 with CHF 2.3 billion going to CHF 2.6 billion, CHF 2.732 billion, and now reached CHF 4.8 billion.
As I said before, if we can keep the net new money per consultant at the same level, we should even be able to overshoot that number in 2022. But I would be a little bit more cautious and calculate with a slightly lower number than the CHF 4.8 billion just because of the reasons that we just discussed before. What is very helping and what is basically the crucial element is the development of the clients, the number of clients. It represented in the two last lines on that chart, and very positive was the delta, basically, the net new client number that we gained over the 2021 period or during the year of 2021, reaching 8,179.
This is really remarkable compared to the last year, which was already quite good. And as we look into the future, we believe that we can keep that number at least on that level. So, it's not that we – that's not a – whatever a data point that is completely out of scope. It's really – it's going that line further up, we believe, because demand is just increasing. And it's really – and also our front-end is increasing or everything helps to increase that number going forward with the result of that our bucket of clients on the wealth management side increases – will increase steadily going forward and reaches now 57,000 or a little bit more. And if you calculate that over the next five years, it's easy to understand that we see sometimes not only five digits, but six digits on the number, on the second last sign.
Page number 9, if we're talking about the wealth management clients, the total of the wealth management clients, we work on increasing the penetration, cross-selling of our five or six – five platforms that we work on. That's a very important element going forward not only to bring in new clients and bring them and convert them on one platform. But as soon as you have a client on one platform, we start trying to cross-sell our other platform.
So for example, if you start with a portfolio management mandate as a client, that's a typical situation. Then, you start cross-selling the mortgage platform, the insurance platform. And if he's younger than 65, you start cross-selling the third pillar platform, the second pillar platform. And also, basically, the banking platform, we understand on the banking platform, the basic services of a bank on payment, transactional side and custodian side as services, right.
And doing – our targets are or the target is, overall, that we bring 33% of our total wealth management client bucket or silo to situation that they use three or more platforms. Now, we are at – on the right side of the page number 9. You see that on a number of 21.6%. So we increase that number every year somewhere around 2 percentage points. Bearing in mind that if you add new clients of, let's say, 8,000, these 8,000 do typically start with one platform. And it takes at least two or three years until you can cross sell the second or the third platform. So it takes a lot of time, so.
And if we increase the number of clients every year with a higher absolute number, it's getting more and more difficult to increase to the three-plus platform clients. But nevertheless, we try hard, and we are optimistic that we can – that we achieve the 33%. At least mid-term, if you calculate it mid-term, then you basically should reach to 33% in six years. Yeah. Let's see. It's a long time, but we are optimistic that we have reached that target.
Then number 10, that's an important information also supporting all our cross-selling efforts, by the way, it helps to understand how satisfied our clients are. And as I already mentioned in the last reporting season or seasons, we measure the client satisfaction with or along the methodology of the net promoter score, and we have different measurement points. And one measurement point is as soon as a client went through a consulting phase, so basically concluded a consulting project, he is basically asked the question whether or what's the likelihood that he is going to recommend our service to a good friend. And there he can basically take a box from 0 to 10, 10 and 9 or 10 is extremely likely and 0 is not at all likely. And the 9s and the 10s are the promoters. The 7 and 8 are basically neutrals or passives. And everything's below 7, basically 6, 5, 4 and so forth are – is a detractor.
And then you take all the promoters as a percentage of the total [ph] asked (00:24:52) population as a percentage point minus the percentage points of all detractors of the total [ph] asked (00:25:02) population, and that gives you the NPS, the Net Promoter Score. So, mathematically, the score can go from plus 100 to minus 100. And if we look at our consulting clients on the left side of the page 10, you see we reached a net promoter score in 2021 of 72.1, which is extremely high.
Same thing in the middle of the portfolio management client. Here we ask all clients in a regular process, every four year basically, to answer that questions, along with other questions, of course.
And there we reached an NPS of 83.1, which is also extraordinary high. And the third measurement point that we illustrate here is the financial portal. And that's a somewhat different measurement point, because that's a measurement point where we ask people that have an issue with the financial portal when they want to reach our hotline. Our – that's basically the first support line. And then they get whatever advice on how to solve the problem on the financial portal, typically handling problems or technology problems, either with smartphone or tablet and so forth.
And at the end of that process, we asked the same client, the NPS question, and there we reached typically a lower number, of course. But still, that number is very high compared to other industries or other competitors, as far as we understand it. But that gives you an idea. I mean, what's the sentiment amongst our clients and also gives you an idea on what the impact is of our service to these clients.
Then on page number 11, you see the branch office network developing on – yeah, in Switzerland, we will open three new branch offices over the next 24 months, so two years. So, it's a timeline. Not only one year, it's the two year timeline. We will open one in Bellinzona, which is the second one in the Italian speaking part; another one in Nyon, that's the French speaking part of Switzerland; and in [ph] Ville (00:27:52), that's the Swiss German speaking part of Switzerland.
So, three new branch offices in Switzerland foreseen over the next 24 months. Nevertheless, the focus will be not only to increase the number of branch offices. That's not the idea of course. But to increase to the total front-end capacity and by doing that, we basically increase our existing branch offices in terms of capacity. That's much more to focus rather than – I mean going forward over the next 5 to 10 years we don't see a doubling of our branch office number. It's much more that we add on some other locations. But overall, the focus is much more to increase our existing branch offices in terms of capacity.
Then on the Germany, the German side, we will open our – in the process of opening a branch offices in Lörrach. That's in the border region to Basel, it's a very attractive region in terms of cross-border issues because there are many Germans living in Lörrach and Freiburg and in Breisgau in that region and working in Basel, especially in the pharma industry.
It's about 50,000 people working out of that region in Basel, and they – all of these potential clients basically do have a pension plan, a Swiss pension plan, and they have a lot of tax issues on the cross-border side. And there we are basically helping these clients to basically plan their retirement and do the right – take the right decisions on the tax side and everything. And it is a very interesting entry point for new clients in that border region. That has already started, and it's quite positive, the developments, of course.
Then in the United Kingdom, we started last year, out of St. Albans, a new branch office in London, in the city of London. And that's very important to have a premise and operate the premise in London itself, in the center of London. And that's done, and we are going forward in the United Kingdom and see quite interesting development hopefully.
Then on the financial side, you see page number 3. There, again, the five basically or six different revenue streams totaling into the operating revenue number of CHF 388.9 million, increasing by 18.3%. And then you see the three cost lines. Personnel expenses increasing 12.3%. Other operating expenses significantly higher increase, 25% available to debt. Come to that later on more in detail. And then the expenses of the insurance contracts, so that's basically the claims that we pay on the property, casualty side, that we take on our books, and this increased – that number increased substantially.
But that's a base effect because, in 2020, we have seen almost an extremely low claims number whereas, in 2021, the development of the claims normalized and came back to the levels that we have seen in 2019 and in 2018 in terms of the KPI. So that's not a disturbing number, it's basically a normalization of the situation. That's okay.
EBITDA, next slide, 14, page 14, going from the EBITDA number down to the net profit number. EBITDA is not so meaningful, much more meaningful is the EBIT number. Because of certain IFRA methodology that has changed. Today, it's much more the EBIT number that is really meaningful. And then you go down to the profit before income tax and income tax, which increased slightly higher than in the year before, and then we come to the net profit above 22%.
Page number 15, some more insights on the personnel expenses. As you know, we have a long-term personnel expense ratio that we target or that we basically envision at 39%. We are below at 37.2%. If this 39% target is too high, needs to be scrutinized and monitored, maybe we will change that going forward. It's – between the personnel expenses and operational expenses, there might have – there might be – might come some structural changes because we are outsourcing more and more services that we do not execute internally, and then you have a shift from the personnel expense line down to the operational expense line which happens over time. So, that's not a jump or a leap. Typically, it's a smooth development of these effects.
In total, we have 1,142.5 FTEs employed. This translates into headcounts via – on average, we have 85% [indiscernible] (00:34:34) or average employeeship. So that translates into 1,340 employees or head count. Going forward, going to 2022, to increase the head count at least at the same speed that we have seen last year, maybe a little bit more compared to last year.
Next slide, page 16, other operating expenses. Our long-term target here is that we are landing somewhere between 11% and 13% with our operating expenses. On the top line, we came in with 12.6%, but it's quite obvious that we have seen a substantial increase of 25% coming from CHF 39 million up to CHF 49 million. And the major impact is – happened basically on the general and administrative expenses. They include all IT-related investments and IT-related costs. And one important driver last year was the installation of that new e-banking technology. I already discussed that before where we migrated our total client base on a completely new platform, and this was quite costly, but the effect will be seen going forward. I already explained that. And it also includes the UK acquisition, all one time or one-off effect of an acquisition. It's included there. And it's also – it does also include, as I've said before, all upgrading elements of our financial portal.
Going forward into 2022, we clearly don't see such a strong development. Again, we foresee basically an increase somewhere between 3% and 5% of the CHF 49 million, so that we see a certain normalization of that. And also importantly, office space. There, we have also seen quite a substantial increase of 19%. And there, the reason behind that is in Zurich, we have a reshuffling. You see a reshuffling of our total space usage. And there, we still have – we still pay the double rent because we have a double – still the double size of space that we rent. And this will be cleared by – in the second half of this year. And then all the work has – should be done. And afterwards, we also should see a normalization. So, this is not – this is really extraordinary, the 19% increase in the office space line.
Number 17, EBIT margin, long-term target, 42%. We came in with 43.1%, so above our long-term target. At the moment, we still believe to keep at that level, at the 42% level as a target level, although we see an overshooting of that number last year. If we see the same picture in the second – in the 2022 numbers, then we can think about of changing it. But at the moment, we keep it at that level.
On page number 18, you see the balance sheet, very simplified form of the balance sheet. It should reflect basically the simplicity of our balance sheet, especially of the left side or the asset side of the balance sheet because if you look at our balance sheet, we basically invest our clients' money, the client – the customer deposits. Either they are allocated to the – to the account that we operate account of – that we operate with the Swiss National Bank, that's the first line, or we allocate these funds into a highly diversified residential mortgage portfolio in Switzerland or we allocate it into a age in a very highly liquid asset bond portfolio. Basically, marketable securities, but HQLA-profiled bond portfolio, which can be very simply liquidated and turned into liquidity. These are the three buckets that we basically operate and it's very simple and very transparent and as low risk as possible. The balance sheet total increased from CHF 5 billion to CHF 5.8 billion. And the increase is primarily or almost only driven by the increase of the customer deposits and new clients, basically.
Then on to page 19, you see the payout ratios developing from 40% up to 44%. We will increase the dividend per share from CHF 1.23 to CHF 1.57. This is reflecting an increase of 28%. So, quite substantial to be attractive for the capital market. And on the right side, you see the – some risk ratios, important risk ratios, total equity, CHF 700 million leads to a equity ratio or leverage ratio of 12.1%, which is very sound. And core capital ratios of 25.2%, they decreased slightly and this is basically only because we have executed the acquisition in the UK. There, we not only have considered that 50.1% stake, we basically considered as the – 100% stake. Although we did not take the 100% now, but since we have an option to take over 100% until 2026, we have to consider this acquisition as a full 100% acquisition. That's why the ratio of core – the core capital ratio came down a little bit to 25%.
Outlook on page number 21, on the business side, there is not much changing. We are working on our – on developing our existing business, on making the business greater, bigger, even more profitable, hopefully. And we continue – that means that we continue to work on – be more attractive to our clients to increase the client inflow, to increase the consulting capacity, to work on the conversion side from consulting clients to platform clients. And within the platform client bucket, we work on increasing the platform usage per client. So that's the core on which we work.
And then the second element, which is very important that should support the whole process, the whole client journey, is to develop the financial portal, our digital interface to our clients, and bring in and add additional features. And we start with the trading – the e-trading desktop which is getting live to all clients by mid-March. Now, we are in a friends and family program and we will release that mid-March to everybody.
At the same time, we will introduce an SOB process which is a self on boarding process, fully digitalized which is very rare here in Switzerland. We are one of the first providers that has a fully digitalized self on boarding process to two new clients but also to existing clients, so new client can open very simply a new account but also existing clients can open new clients very simply.
And then another element is the cryptocurrency trading. It's now – it's already open via a telephone trade. Now, we are opening and developing that and providing it via the financial portal, the digital interface, so that you can digitally trade online the cryptocurrencies. But be aware, we don't open all cryptocurrencies to everybody. We are very restricted to a maximum 10 – selected number of 10 cryptocurrencies, and that should also be released by mid-March.
Then in the second half of 2022, we will basically introduce on the digital platform on the financial portal introduced all functionalities that a Revolut or Neon Bank offers to its clients, which is – it's basically payment services, card management, card services, and there we integrate old functionalities that the Revolut platform does provide and integrate that into the financial portal. That makes it very strong, and it simplifies many things.
That includes, for example, peer-to-peer payments, [indiscernible] (00:46:02) overview of all transactions – on the payment side, physical card, but also virtual card management and so forth, right. That should be introduced in the second half of 2022. We are working on that, and it looks quite positive that we should reach that level. And being able to introduce all these services, the prerequisite was that we had needed to migrate all clients last year on that new state-of-the-art e-banking platform.
Then in Germany, of course, we work on the marketing side very intensively, that's the core theme there. And in UK, we intensify the integration work. We put a lot of efforts to introduce our marketing experience out of Switzerland into the German – into the UK market. We work on installing an internal advisor trainee program, which is already ongoing, by the way, we have already five participants, so it's a very small number but nevertheless, it shows you that something is going on there. And we also work on further integrate smaller IFA organizations, so small IFAs, that's an interesting element to add on and to grow a little faster than if you just do it on an organic – in an organic way.
Then you might have seen, in 2023, we do envision some personnel changes at the top of the organization. Me, myself basically, is moving out of the current position of the Group CEO by the end of this year. So 1st January of next year of 2023, Giulio Vitarelli, will take over from me as Group CEO. Giulio Vitarelli is a very experienced person and he is already since 1998 part of the team and led for – since 2012 ,the Swiss front organization including all the consulting activities and leading all the branch offices. So he's very experienced and will take over from me and stands for continuity and stability in that way.
And me, myself, I will take over as Chairman. By – that should take place in April 2023 and I will take over the position from Fred Kindle.
Right. And on the financial side – coming from the situation that we basically increase our client number every day or every week and every month, we should see constantly increasing top line and a constantly increasing bottom line.
If, of course, we don't see complete disruptions on the financial markets which are – which can really distort the situation short term, but in the longer term, the effect is quite negligible. And given the situation that we have a stable market going forward, we should basically see a development on the top and the bottom line that we have seen on average in the past years.
And I mentioned that already the transaction-based revenues on the banking platform is unpredictable. And I explained that before. EBIT margin and net profit margin should basically leveling at the target levels and dividend payout increases to 50% over the next coming years.
So far to the presentation, now I hand over to the operator to organize the Q&A session.
We will now begin the question-and-answer session. [Operator Instructions] The first question comes from Andreas Venditti from Vontobel. Please go ahead, sir.
Yes. Thank you for taking my questions. Maybe can I start with the actual situation in the Ukraine? Can you maybe confirm that you don't have any exposure to that, which I think, but maybe you can confirm that? And what other impacts you might see from the whole situation, if any on [indiscernible] (00:51:48)?
Then, next question will be on the margin developments, whether you can provide some updates there, mainly the mix shift that we discussed over the last few years. How you see that going forward? And maybe one question on one slide that is not in the pack that used to be in the last few presentations, which is related to some indicators of activity on the financial portal. Is the reason that we had this significant migration and that's why you decided not to show these indicators on the slide or is there another reason? Thank you very much.
Thank you, Mr. Venditti. To your last question, actually, we exchanged that chart with the NPS, the Net Promoter Score information, which we thought might be more informative to the audience because the financial portal, of course, with the activities are getting higher and higher. I mean, you see a quite a positive development there. We can add that if you like. I mean, you can – that's no problem. But at the moment, I think it's not so informative. It just goes up every month. That's okay. But we can – going forward, we can basically add that information or some similar information to the financial portal just to give you an idea on what the activity status is there.
Then to your first question, Ukraine exposure, no, we don't have any exposure. We don't have any clients stemming or coming out of Russia or Ukraine or Belarus or somewhere. As you know and assumed, our target is always the domestic market. We don't focus on any cross-border situation except new – that's new, that we are focusing in a very small region in Lörrach, Freiburg, Basel. So, in that region, we are developing the cross-border situation. But that's a completely different question. There we are basically onshore – consulting onshore in Germany and supporting out of Switzerland but from a technical edge. So, it's not a classical cross-border situation.
And the impact of the Ukraine situation, well, we don't see any greater impact, except, of course, what we – as everybody, what we are in a certain way affected by the stock market and interest rate market development. There, of course, we have a certain impact. But the sentiment amongst our existing clients, the sentiment amongst the new clients is at least how we see it today is not changing at the moment. So, the client inflow is going fine and at the moment, we don't see really a disruption. Hope that remains that way.
Then the margin development and mix shift, you're right, we discussed that many times. Overall, we left a lot of basis point on the table over the past six, seven years. And if we look now at the situation in the 2021 numbers, we see basically a stabilization compared to the 2020 numbers and they came in at excluding the banking revenues, came in at a level of 72 basis points or 71.5 basis points. And if you include the banking revenues, you end up overall at 90.6 basis points. So, it's – yeah. That was the same number more or less in 2020.
And if you go back in 2019, that number was 97 basis points; in 2018 it was 104 basis points; in 2015 it was 123 basis points. So, we left 33 basis points on the table over the past six years, which is remarkable. And at the same time, we grew the total business and we believe at the moment that we are in a stable situation. Of course, you have certain shifts amongst the different buckets, second pillar, third pillar and free monies that is invested and mortgage and everything. But overall, we don't see a big shift anymore, certainly not such a big shift that we have seen in the past five, six years. We internally calculate with a – going forward with that we leave, let's say, 1 basis points or 2 basis points on the table going forward just to be on the safe side. But let's see, I mean – but we don't see that such a harsh reduction that we've seen in the past. Hope this helps.
Thank you very much. Yes. [Operator Instructions]
So far, there are no more questions.
Good.
Sorry to interrupt. We have a follow-up question – we have a question from Mr. Mike – Michael Schulz from JMS Invest. Please go ahead.
Hi. Good morning, Mr. Reinhart. I have a question regarding the margin too. So, in your presentation in the conclusion, in the outlook, you said that you see the net profit margin and EBIT margin going back to the basically the guided or longer term guided range. However, you also said that general expenses would be not declining but not growing as fast as we saw it now.
I mean, the difference would then at the top line margin basically also is not declining further. The difference to bring that back to the longer term range would then come from the personnel expenses that would have to grow faster than your top line. I mean, is that a new ambition to grow your capacity faster basically or how do I have to understand that? Otherwise, I would assume a certain leverage going forward if your top-line margin has stabilized more or less.
Yeah.
Yeah.
Yeah. Understand. Thank you, Mr. Schulz. Of course, I mean, what I've said does not really match. I understand that. And that's also clear. But I want to be on the cautious side, if we are talking about targets and target levels and that's not the target level for the current year. It's basically all this – we are basically talking about target levels of, let's say, three, four, five years. And, there, we don't see at – of course, you are absolutely right. I mean, if I add up all what I've said, then you should basically – that should basically lead to higher net profit margins. And – but just to be on the cautious side, we would like to keep it at the 36% level. And this is the major number that needs to be considered.
And I mean, of course, this year, it could be different. This year, it could be higher if everything goes well. But in the longer term, I'm not so sure because we want to be – from a strategy point or strategic point of view, it would make going forward and to grow the business sustainably longer term substantially, it would make a lot of sense to keep some reserves to be flexible on the price side vis-à-vis on your products or on your offerings, and to be more – and to stay and to become more attractive on the labor market, and that includes, of course, more attractive salaries at the end of the day.
And, combining all of that together with the productivity gains which we will attain, we clearly reach and gain productivity improvements, and that leads to a scalable effect. But, if you add that all up, and I've always said that, we do not target a leverage primarily, we primarily target to develop and grow the top line.
And, if you look at that in the longer term, then you are just on the safe side if you keep the net profit margin at the 36%, and we have already increased that from the 35% last year or to the year before, I believe, the year before.
May I ask another one or two questions?
Sure.
One, regarding the PM mandates and the share of the assets under management in the mandates. That increased to 63.6% this year from the 60% level. How does that work usually? Are these new clients that [ph] complete (01:02:34) with a mandate or basically start with a mandate with you or is it a conversion of existing clients from self-managed money to mandates? What's the biggest driver there and how do you see that going on?
Yeah. The biggest driver is the net new client inflow, clearly. I mean, that's the number one driver. The number two driver is the cross-selling efforts with the – amongst our existing platform clients. But the clear – I mean, the absolute top driver is the ability to attract new clients and that's the...
So, the new...
Yeah.
...so, the new money – the penetration among the new clients is, say, around 80%, 90% or so in order to – or just higher than the 60%. That's basically what you're saying. I mean, the new clients they come mostly in with a new mandate.
Correct. Correct.
Okay.
Yeah.
So, this should go on going forward and that...
Of course [indiscernible] (01:03:45) [indiscernible]
(01:03:46)
Right. Because you must understand, many of our clients of our existing portfolio management clients, when they are retired, they use their money on a – at least they take out, on average, I would say some 3%, 4%, 5% of their monies. Ad others add the portfolio. That also happens, of course. But the typical client situation is that they live out of their funds over after retirement. So, that's why the largest chunk of the net new money – of the net money, I'm talking net new money is driven by new clients.
Okay. And just maybe one last question. And is there a – looking at figures on how your performance on the mandates is in phases like last year, where we had kind of a booming market and maybe this year where we have more difficult markets more difficult markets compared to individually managed funds, I mean...
Sure, that's – yeah, absolutely. That's one of the key tasks the asset management has to undertake where – by measuring the performance vis-à-vis the competition and vis-à-vis the benchmark. And there, we clearly can say that we are at the top of the list compared to every bank here in Switzerland. And we do that on a very systematic – in a very systematic way.
Typically what we see is that the best measurement or comparison of your own performance is if you compare the performance of your clients, of your offerings vis-à-vis the strategy fund that a – let's say, Credit Suisse or UBS or Raiffeisen or Migros or whoever is offering, and because those offerings within these banks are typically better or better developing than the individual mandates within these institutions.
So, if you take, for example, UBS, the UBS Strategy Fund balanced – the balanced profile is typically better performing than a UBS individually managed PM mandate with the same risk profile. That's what we can prove, because we have thousands of portfolios that we analyze of the competition. And if you take our performance of our mandates and we have five different mandates tied, one is very simple executed via ETFs and index funds, very sticky to the strategy, the overall strategy and the profile that is given. And that's an extremely performing mandate, which is also quite inexpensive. That's very attractive for our clients.
Another one is much more geared or leaned at the asset allocation of the pension fund system. That's also performing extremely well. These two mandate types are clearly at the top. And if you'll – we changed that in by mid-2019, the way of how we manage the assets. They are from the beginning at the top. And that's why they are also chosen by every – by mostly by all consultants to recommend to their clients.
So that's a big selling driver for you, basically.
Absolutely. Absolutely.
Okay. Okay. Can you just remind me how much is the average assets under management? How much still is the equity portion and the bond portion?
Overall, if you take the CHF 39 billion, it's – let me see – I believe 30%. 30%, yeah.
In equities?
Yeah, 30% equity exposure. But if you just take the CHF 39 billion to total AuM, yeah.
And the rest?
The rest is basically interest rate linked. And some of it is basically interest rate linked, and some of it is also mortgages. So, CHF 7.5 billion is basically mortgages. And there, you don't have any price effect, you don't see any fluctuation of the prices.
Okay. Very good. Thank you very much.
You're welcome.
The next question comes from Christian Schmidiger from ZKB. Please go ahead.
Hello, Mr. Reinhart, thanks for taking my questions. I would have two. The first one is regarding the UK market. You write that you work on further small IFA acquisitions. Could you define smaller in-depth context? Maybe in comparison to the Lumin Group, smaller or similar sized?
And my second questions would be regarding the management change in 2023. Can you already give some visibility on whether you have the intention to reduce your 61% stake and also increase the liquidity of the [ph] VZ (01:09:49) share.
Yes. Thank you, Mr. Schmidiger. No. To your last question, no, I will not reduce my 61% stake. I think there is no better investment than your own company. That's number one, just to keep that clear. And, of course, the management change happens as a – that's a demographic impact, reflecting my age, and that's normal. And I will – out of the Chairman position, I will oversee the development, very thoroughly, of course, and need also the strategic developing going forward. And we are very happy, by the way, to be able to organize the succession planning internally in a very positive way. And all these changes are basically a result of intense discussions amongst the two bodies of the board and the board of directors and also the executive board, and all individuals are basically standing behind that solution. And that was for me very important, right. That's to your second question.
Now to your first question, UK. UK is if you look into the acquisition methodology or strategy that we follow, we do not envision larger acquisitions. What happens in the UK is that overall it's a consolidation phase that we see over the next coming years and many small IFAs, we are talking about three, four, five people IFAs. So very small organizations are seeking a succession and are seeking an integration into a larger institution such as we to represent one.
And that's the strategy. And you typically buy such a smaller organization at an EBIT multiple or EBITDA multiples. Well, the difference is not really big between EBITDA and EBIT because they do not have any depreciation on average. You purchase that at a level of, let's say, 3 – somewhere between 3, 3.5, maximum 4. That's what you pay for it. And many consolidators, typically private equity led or consolidators to exactly that came by 4 – an EBITDA multiple of 4 and sell the whole organization for an EBITDA multiple of 12. That's their game, and the whole thing is leveraged.
So, that's the idea, but we don't have that idea. We actually have a very long term idea. We use these small additions to enlarge our customer base and grow out of these customer bases with the – on the one side with referrals, but also with getting new addresses for our marketing efforts. So, we try to combine in the UK, our marketing experience that we have out of the Swiss market with the acquisition strategy of small and very small IFA.
But I cannot give you to that – for example, this year, we will maybe add two or three smaller IFA organizations, and we already have – we have a pipeline of quite a substantial number that we could add, but we have a limited capacity and not only on the fund side, but also on the personnel side. And that's why we have to balance all these efforts. But it's very low risk at the end of the day. And that's the nice thing behind it.
Perfect. Thank you very much. [Operator Instructions]
We have a follow up question from Mr. Andreas Venditti from Vontobel. Please go ahead.
Yes, thank you. I would like to know the interesting approach you're taking on the Lörrach branch because I think there's – there might be other opportunities, obviously, if you think about Geneva where you also have quite a large base of French-domiciled people working in Geneva. Would there be something that, let's say, if you're happy with developments in Lörrach would be possibly something that you're looking at? Thank you.
Yes and no. Lörrach is basically a very simple play because we already have in Germany the full organization if you have a bank and everything, and we are basically fully operational in Germany. That's why it's so easy out of – working out of Lörrach also from a regulatory standpoint. If you look into the Geneva region, there, it's much more complicated because we could do it. I mean, we could basically – we could move the license that we have in Germany into the France territory and then start working there. But I'm not really sure if that is a good idea at the moment. But it's – we have to think about it, definitely.
And there is – you're right. I mean, in Geneva, you have, I mean, a huge workforce working in – on the territory of Geneva but living in France. That's right. I don't know if that's at least 100,000 overall in that region. Could be an option, but it takes much more effort to do that. The same thing is going on, on the Italian – I mean in the Ticino region, which could be even more attractive because the Milano region is extremely – itself is extremely attractive. So, these two regions we are following very closely and think about it. But at the moment, I mean, it's basically quite a low hanging fruit in Lörrach. That's what we want to pick and try to develop that at the moment.
Thank you.
There are no more questions, sir.
Very good. Thanks a lot for all the questions that you have asked and hope it was helpful for you and wish you a good day and bye-bye. Thank you.
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