Julius Bär Gruppe : Alternative Performance Measures Half-year 2021 | PDF, 53 KB

ALTERNATIVE PERFORMANCE MEASURES

Including reconciliation to IFRS measures

2021 HALF-YEAR RESULTS





INTRODUCTION

The Business Review and other communication to investors contain certain financial measures of historical and future performance and financial position that are not defined or specified by IFRS.

Management believes that these alternative performance measures (APMs) provide useful information regarding the Group's financial and operating performance. These APMs should be regarded as complementary information to, and not as a substitute for, the IFRS performance measures.

The purpose of this document is to provide the definitions of APMs used by Julius Baer Group Ltd. in its communication to investors, together with reconciliations to the most directly reconcilable IFRS line items.

APMs as defined and used by the Group may not be comparable to similarly titled APMs reported by other companies.

ADJUSTED RESULTS

Julius Baer Group Ltd. defines adjusted results as follows:

Adjusted results are derived by excluding from the IFRS financial results the operating expenses related to acquisitions or divestments (M&A) and the taxes on those respective items.

These excluded items related to M&A can include adjustments to each of the five reported IFRS expense lines (personnel expenses; general expenses; depreciation of property and equipment; amortisation and impairment of customer relationships; amortisation and impairment of intangible assets).

The M&A-related adjustments can represent inter alia items such as amortisation of acquired customer relationships; goodwill impairment charges; M&A-related restructuring costs (examples of which include employee termination benefits that relate directly to the restructuring; contract termination costs; onerous contract provisions; consulting fees that relate directly to the restructuring; expected costs from when operations cease until final disposal); fees paid to advisers on the planning, execution or financing of M&A transactions; integration-related IT or other general expenses; additional provisions set up for litigation or the recovered amount from the seller.

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Reconciliations to the most directly reconcilable IFRS line items are provided below:

CHF m	H1 2021	H1 2020	H2 2020
IFRS net profit attributable to shareholders of Julius Baer Group Ltd.	605.8	490.9	207.1
Non-controlling interests	0.2	0.0	0.6
IFRS net profit	606.0	491.0	207.7
Total adjustments to personnel expenses	0.4	4.3	1.8
Total adjustments to general expenses	6.0	5.6	7.6
Total adjustments to depreciation	-	-	0.1
Total adjustments to amortisation and impairment of	28.9	29.3	40.8
customer relationships1
Total adjustments to amortisation and impairment of	-	-	179.0
intangible assets2
Total adjustments to operating expenses and profit before taxes1,2	35.3	39.2	229.3
Impact of total adjustments on income taxes	-4.9	-5.8	-4.8
Adjustments to net profit	30.3	33.5	224.5
Adjusted net profit for the Group	636.3	524.4	432.1
Adjusted non-controlling interests	0.6	0.5	1.0
Adjusted net profit attributable to shareholders of	635.8	524.0	431.1
Julius Baer Group Ltd.

1. Includes CHF 11.4m in H2 2020 for impairment of Kairos customer relationships
2. Includes CHF 179.0m in H2 2020 for Kairos goodwill impairment

CHF m

H1 2021

H1 2020

H2 2020

IFRS personnel expenses	849.1	853.9	741.7
Adjusted personnel expenses	848.7	849.5	739.9
Total M&A-related adjustments	0.4	4.3	1.8
CHF m		H1 2020	H2 2020
H1 2021
IFRS general expenses	318.0	306.1	404.6
Adjusted general expenses	312.1	300.5	397.0
Total M&A-related adjustments	6.0	5.6	7.6
o/w Total BvS-related adjustments	0.5	2.8	1.4

Note: General expenses including provisions and losses.

CHF m	H1 2021	H1 2020	H2 2020
IFRS provisions and losses	31.2	4.1	88.5
Adjusted provisions and losses	31.2	1.8	87.3
Total M&A-related adjustments	-	2.4	1.2
o/w Total BvS-related adjustments	-	2.4	1.2

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CHF m

H1 2021

H1 2020

H2 2020

IFRS depreciation of property and equipment	49.0	49.4	51.1
Adjusted depreciation of property and equipment	49.0	49.4	51.0
Total M&A-related adjustments	-	-	0.1
CHF m		H1 2020	H2 2020
H1 2021
IFRS amortisation and impairment of customer relationships	28.9	29.3	40.8
Adjusted amortisation and impairment of customer relationships	-	-	-
Total amortisation and impairment of customer relationships adjustments	28.9	29.3	40.8
related to previous acquisitions
o/w IWM	17.6	17.7	18.2
o/w GPS	1.3	1.5	1.3
o/w Kairos1	4.5	4.5	15.9
o/w Commerzbank Luxembourg	0.8	0.8	0.8
o/w Leumi	0.5	0.5	0.5
o/w Fransad	0.5	0.5	0.5
o/w Wergen	0.4	0.4	0.4
o/w WMPartners	0.7	0.7	0.7
o/w Reliance	1.1	1.2	1.1
o/w NSC Asesores	1.5	1.5	1.5
1 Includes CHF 11.4m in H2 2020 for Kairos impairment on customer relationships
CHF m		H1 2020	H2 2020
H1 2021
IFRS amortisation and impairment of intangible assets	41.0	35.0	225.4
Adjusted amortisation and impairment of intangible assets	41.0	35.0	46.4
Total amortisation and impairment of intangible assets adjustments	-	-	179.0
o/w Kairos goodwill impairment	-	-	179.0
CHF m		H1 2020	H2 2020
H1 2021
IFRS operating expenses	1,286.1	1,273.6	1,463.6
Adjusted operating expenses	1,250.8	1,234.4	1,234.3
Total M&A-related adjustments	35.3	39.2	229.3
o/w Adjustments to personnel expenses	0.4	4.3	1.8
o/w Adjustments to general expenses	6.0	5.6	7.6
o/w Adjustments to depreciation	-	-	0.1
o/w Adjustments to amortisation and impairment of	28.9	29.3	40.8
customer relationships
o/w Adjustments to amortisation and impairment of intangible assets	-	-	179.0
CHF m		H1 2020	H2 2020
H1 2021
IFRS profit before taxes	706.9	577.2	268.7
Adjusted profit before taxes	742.2	616.4	498.0
Total M&A-related adjustments to personnel expenses,	-6.4	-10.0	-9.5
general expenses and depreciation
Total M&A-related adjustments to amortisation and impairment	-28.9	-29.3	-219.9

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CHF m	H1 2021	H1 2020	H2 2020
IFRS income taxes	100.9	86.2	61.1
Adjusted income taxes	105.8	92.0	65.9
Total M&A-related adjustments to personnel expenses,	0.9	1.6	-0.2
general expenses and depreciation
Total M&A-related adjustments to amortisation and impairment	4.1	4.2	5.0
CHF m		H1 2020	H2 2020
H1 2021
IFRS net profit	606.0	491.0	207.7
Adjusted net profit for the Group	636.3	524.4	432.1
Total M&A-related adjustments to personnel expenses,	-5.5	-8.4	-9.6
general expenses and depreciation
Total M&A-related adjustments to amortisation and impairment	-24.8	-25.1	-214.9
CHF m		H1 2020	H2 2020
H1 2021
IFRS net profit attributable to shareholders of Julius Baer Group Ltd.	605.8	490.9	207.1
Adjusted net profit attributable to shareholders of Julius Baer Group Ltd.	635.8	524.0	431.1
Total M&A-related adjustments to personnel expenses,	-5.5	-8.4	-9.6
general expenses and depreciation
Total M&A-related adjustments to amortisation and impairment	-24.4	-24.7	-214.4
CHF		H1 2020	H2 2020
H1 2021
EPS attributable to shareholders of Julius Baer Group Ltd.	2.81	2.28	0.96
Adjusted EPS attributable to shareholders of Julius Baer Group Ltd.	2.95	2.43	2.01
Total adjustments	-0.14	-0.15	-1.04
In %		H1 2020	H2 2020
H1 2021
Adjusted cost/income ratio	61.2%	66.6%	66.2%
Operating income (CHF m)	1,992.9	1,850.8	1,732.3
Adjusted operating expenses excl. adjusted provisions and losses (CHF m)	1,219.6	1,232.6	1,147.0
o/w Adjusted operating expenses (CHF m)	1,250.8	1,234.4	1,234.3
o/w Adjusted provisions and losses (CHF m)	31.2	1.8	87.3
In bp		H1 2020	H2 2020
H1 2021
Gross margin	86.7	91.7	83.6
Operating income (CHF m)	1,992.9	1,850.8	1,732.3
Average assets under management (CHF bn)	459.8	403.7	414.6

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