28.02.2017 – 07:04

Bellevue Group AG

EQS-News: Bellevue Group's operating profit at CHF 14.5 mn - increase in recurring revenues - assets under management at record high

EQS Group-News: Bellevue Group AG / Key word(s): Final Results
Bellevue Group's operating profit at CHF 14.5 mn - increase in recurring
revenues - assets under management at record high

28.02.2017 / 07:00
--------------------------------------------------------------------------------
Media Release

Küsnacht, February 28, 2017

Bellevue Group's operating profit at CHF 14.5 mn - increase in recurring 
revenues - assets under management at record high
 
Group operating profit declines 41% to CHF 14.5 mnRecurring revenues increase to
81% of total revenuesAssets under management up 48% at CHF 7.9 bnNet new money
of CHF 2.8 bn, of which CHF 341 mn organic (+6%)Asset Management contributes CHF
21.4 mn in operating profit thanks to strong second halfOperating loss of CHF
3.6 mn at Bank am Bellevue - restructuring plannedProfit before tax just under
CHF 1 mn, owing to the impairment and write-down announced in December of
2016Tax-free cash dividend of CHF 1.00 per share proposedExtension of the Board
of Directors​
2016 was a turbulent year for both investors and asset managers. The dark clouds
that appeared right at the beginning of the year when oil prices corrected and
economic growth in China slowed down persisted as the year progressed. Investor
confidence was hampered by the surprising outcome of the Brexit vote and the US
presidential elections, even though financial markets took these events in
stride following a brief sell-off.

Diversification of expertise broadens Bellevue Group's strategic business

The successful acquisition and integration of the independent German asset
manager StarCapital AG marked another step forward in the selective
diversification of Bellevue Group's product and service range. Building on its
strong position in the healthcare sector, this transaction significantly
complemented the Group's competencies and product offering with a variety of
multi-asset strategies, global equity and bond strategies, and ETF-based
strategies. The transaction was financed with the first capital increase in the
history of Bellevue Group. Close to three million new registered shares were
issued, raising CHF 32.9 mn in gross proceeds. Furthermore, in the year under
review the Group launched new wealth management services for entrepreneurial
private clients. In addition to investment solutions, Bellevue Investment
Partners offers asset consolidation and family office services.

Sustained increase of recurring revenues - stronger second half

Like its peers across the financial services industry, Bellevue Group was faced
with global market downturns right from the beginning of the year. Those
downturns were particularly significant in the biotech and entire healthcare
space. Thanks to an improved operating performance during the second half of the
year, supported by the acquired StarCapital AG, net fee and commission income
declined by only 2% to CHF 68.9 mn (2015: CHF 70.6 mn). While the Group's asset
management business was able to increase its operating income slightly by 1% to
CHF 57.9 mn (CHF 57.1 mn), Bank am Bellevue's operating income fell by 29% to
CHF 14.7 mn (CHF 20.6 mn) due to its persistently weak business activities.
Recurring revenues as a percent of total Group revenues rose further to 81% (end
2015: 71%). As expected, strategic initiatives (the acquisition of StarCapital
AG, launch of wealth management services for private clients) contributed to
approximately 9% higher costs at CHF 57.6 mn (CHF 52.7 mn). These developments
resulted in a 41% drop in consolidated operating profit to CHF 14.5 mn (CHF 24.6
mn). Taking into account the losses on seed capital and all depreciation,
amortization and impairment charges, the Group recorded a profit before tax of
CHF 0.9 mn (CHF 0.5 mn).

André Rüegg, CEO of Bellevue Group, on the 2016 results: "Bellevue Group
continued to execute its strategy of diversifying its income flows and focusing
on recurring revenues in a very demanding market environment in 2016, and it
also broadened its operational footprint. Our expanded range of investment
competencies allows us to address new client groups. We experience steady new
money inflows driven by growing demand from institutional and private clients.
Our investment expertise, rising assets under management and the ensuing
improvement in earnings quality build a solid foundation upon which Bellevue
Group can build its growth."

Asset Management: Assets under management at new record high

Asset Management is increasingly benefiting from the acquisition of StarCapital
AG and the resulting diversification of its investment competencies as well as
the enlarged offering of products and services. Fee and commission income rose
by about 40% in the second half and assets under management grew by 47% to CHF
7.8 bn. The sharp increase in assets under management is solely attributed to
new money inflows in the amount of CHF 2.8 bn. Besides the acquisition of
StarCapital, there was also an organic net new money inflow of CHF 320 mn, which
represents an annualized growth rate of about 6%. Over CHF 190 mn of the
increase in new money was from the successful listing of BB Healthcare Trust on
the London Stock Exchange. BB Healthcare Trust is a UK investment company that
allows Bellevue to address local investor needs in the UK in a more targeted
way. Moreover, Bellevue investment funds for non-healthcare themes continue to
draw attention, first and foremost the BB Global Macro Fund. Its good full-year
performance attracted additional investors with the fund growing to well over
CHF 300 mn in assets. BB Entrepreneur Switzerland (16%) and the BB Entrepreneur
Europe Small (12%) funds, both performed exceptionally well beating their
benchmarks by a wide margin. StarCapital delivered excellent investment results
across the asset classes, first and foremost its flagship fund Huber Strategy 1
(mixed, equity bias) with a performance of 20%, Winbonds plus (mixed, bond bias)
up 12%, Starpoint (international equities) up 19% and Argos (international
bonds) up 10%. The strong performance in the second half of the year could only
partially offset the weakness from the first quarter of the year and segment
operating profit for the year declined by 14% to CHF 21.4 mn (CHF 24.9 mn).

Bank am Bellevue: Further erosion of earnings in core business

Earnings in the Bank's core business continued to erode further. Brokerage
activity had already subsided to a low level in the preceding year and it
continued to decline in 2016 due to demanding structural and regulatory
requirement. Corporate Finance earnings were substantially lower as well. The
steep drop in interest income, which mostly reflects the now normalized dividend
payout from SIX Group, additionally weakened the revenue base. Despite these
developments, the launch of wealth management services for entrepreneurial
private clients will proceed as planned. The related investments added to the
Bank's cost base, resulting in an operating loss of CHF 3.6 mn (2015 profit: CHF
4.1 mn).

In response to fundamental change in the Bank's operating environment (ongoing
margin pressure, growing regulatory requirements, technology issues) and the
resulting erosion of earnings in the Bank's core business activities, we intend
to discontinue the Brokerage and Corporate Finance activities at the end of June
2017 (see press release dated February 21, 2017). The tentative restructuring
costs of an estimated CHF 3-5 mn will be charged in full to the income statement
for fiscal 2017. Bank am Bellevue will continue to provide services for its
custody, trading execution and market-making clients and none of the other
operations at Bellevue Group will be affected this planned restructuring.

Continuation of shareholder-friendly dividend policy

The Board of Directors reiterates its shareholder-friendly dividend policy and
will propose a tax-free cash dividend of CHF 1.00 per share from capital
contribution reserves at the Annual General Meeting on March 21, 2017. This
underscores the financial strength of Bellevue Group.

Extension of the Board of Directors

The Board of Directors will be extended by one additional member. Dr. Rupert
Hengster will be proposed for election at the upcoming Annual General Meeting.
Dr. Hengster is the managing partner of the firm Dr. Hengster, Loesch & Kollegen
and holds a degree in law and economics. He has longtime experience in various
leading positions in the asset management industry in Germany. His professional
career includes positions with Commerzbank in Frankfurt, Westdeutsche Landesbank
in Düsseldorf, Sal. Oppenheim in Cologne, and Edmond de Rothschild Asset
Management in Frankfurt.

A full copy of the 2016 annual report can be viewed atwww.bellevue.ch
 

Contact

Media / Investor Relations: Daniel Koller, CFO
Telephone +41 44 267 67 00, Fax +41 44 267 67 01,  ir@bellevue.ch
--------------------------------------------------------------------------------
Additional features:

Document:http://n.eqs.com/c/fncls.ssp?u=QFBKRDKRLE
Document title: Media release

--------------------------------------------------------------------------------
End of Corporate News
--------------------------------------------------------------------------------

Language: English

Company:  Bellevue Group AG

          Seestraße 16

          8700 Küsnacht

          Switzerland

Phone:    +41 44 267 67 00

Fax:      +41 44 267 67 01

E-mail:    info@bellevue.ch

Internet: www.bellevue.ch

ISIN:     CH0028422100

Valor:    A0LG3Z

Listed:   SIX Swiss Exchange



 

End of News EQS Group News Service

--------------------------------------------------------------------------------

547943  28.02.2017