Julius Bär Gruppe : Alternative Performance Measures Full Year 2020 | PDF, 64 KB

ALTERNATIVE PERFORMANCE MEASURES

Including reconciliation to IFRS measures

2020 full-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 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.

2





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

CHF m	2020	H2 2020	H1 2020	2019	H2 2019	H1 2019
IFRS net profit attributable to shareholders of Julius Baer Group Ltd.	698.0	207.1	490.9	464.8	121.7	343.1
Non-controlling interests	0.6	0.6	0.0	0.2	0.4	-0.2
IFRS net profit	698.6	207.7	491.0	465.0	122.1	342.9
Total adjustments to personnel expenses	6.1	1.8	4.3	2.9	0.9	2.0
Total adjustments to general expenses1	13.2	7.6	5.6	167.5	160.3	7.2
Total adjustments to depreciation	0.1	0.1	-	-	-	-
Total adjustments to amortisation and impairment of
customer relationships	70.1	40.8	29.3	81.2	38.0	43.2
Total adjustments to amortisation and impairment of
intangible assets2	179.0	179.0	-	99.2	99.2	-
Total adjustments to operating expenses and profit before taxes1,2	268.5	229.3	39.2	350.7	298.4	52.3
Impact of total adjustments on income taxes	-10.6	-4.8	-5.8	-43.7	-39.0	-4.7
Adjustments to net profit	257.9	224.5	33.5	307.0	259.4	47.6
Adjusted net profit	956.6	432.1	524.4	772.0	381.5	390.5
Adjusted non-controlling interests	1.5	1.0	0.5	0.9	0.8	0.1
Adjusted net profit attributable to shareholders of	955.1	431.1	524.0	771.1	380.7	390.4
Julius Baer Group Ltd.

1. Includes CHF 152.9m for "BvS case"
2. Includes CHF 179.0m in 2020 and CHF 99.2m in 2019 for Kairos goodwill impairment

CHF m	2020	H2 2020	H1 2020	2019	H2 2019	H1 2019
IFRS personnel expenses	1,595.5	741.7	853.9	1,616.2	781.4	834.8
Adjusted personnel expenses	1,589.4	739.9	849.5	1,613.3	780.5	832.8
Total M&A-related adjustments	6.1	1.8	4.3	2.9	0.9	2.0
CHF m				2019	H2 2019	H1 2019
2020	H2 2020	H1 2020
IFRS general expenses	710.7	404.6	306.1	850.8	526.9	323.9
Adjusted general expenses	697.5	397.0	300.5	683.3	366.6	316.7
Total M&A-related adjustments	13.2	7.6	5.6	167.5	160.3	7.2
o/w Total BvS-related adjustments	4.2	1.4	2.8	152.9	152.9	-

Note: General expenses including provisions and losses.

CHF m	2020	H2 2020	H1 2020	2019	H2 2019	H1 2019
IFRS provisions and losses	92.6	88.5	4.1	213.9	191.6	22.3
Adjusted provisions and losses	89.0	87.3	1.8	61.2	38.9	22.3
Total M&A-related adjustments	3.6	1.2	2.4	152.7	152.7	-
o/w Total BvS-related adjustments	3.6	1.2	2.4	152.7	152.7	-

Note: In December 2019, Julius Baer booked a CHF 153 million (CHF 119 million net of taxes) provision related to the claim by the Bundesanstalt für vereinigungsbedingte Sonderaufgaben (BvS) (against Bank Julius Baer & Co. Ltd.as successor to Bank Cantrade Ltd., which was acquired in 2005) in relation to alleged unauthorised withdrawals between 1990 and 1992 from a Cantrade account.

3





CHF m	2020	H2 2020	H1 2020	2019	H2 2019	H1 2019
IFRS depreciation of property and equipment	100.5	51.1	49.4	100.0	51.2	48.9
Adjusted depreciation of property and equipment	100.4	51.0	49.4	100.0	51.2	48.9
Total M&A-related adjustments	0.1	0.1	-	-	-	-
CHF m				2019	H2 2019	H1 2019
2020	H2 2020	H1 2020
IFRS amortisation and impairment of customer relationships	70.1	40.8	29.3	81.2	38.1	43.2
Adjusted amortisation and impairment of customer relationships	0.0	0.0	0.0	0.0	0.0	0.0
Total amortisation and impairment of customer relationships adjustments
related to previous acquisitions	70.1	40.8	29.3	81.2	38.0	43.2
o/w ING	-	-	-	16.3	8.2	8.2
o/w IWM	35.9	18.2	17.7	40.6	17.6	23.0
o/w GPS	2.8	1.3	1.5	3.8	1.9	2.0
o/w Kairos	20.3	15.9	4.5	8.9	4.5	4.5
o/w Commerzbank Luxembourg	1.7	0.8	0.8	1.7	0.8	0.8
o/w Leumi	1.0	0.5	0.5	1.0	0.5	0.5
o/w Fransad	0.9	0.5	0.5	0.9	0.5	0.5
o/w Wergen	0.8	0.4	0.4	0.8	0.4	0.4
o/w WMPartners	1.4	0.7	0.7	1.4	0.7	0.7
o/w Reliance	2.3	1.1	1.2	3.3	1.6	1.7
o/w NSC Asesores	3.0	1.5	1.5	2.5	1.5	1.0
CHF m				2019	H2 2019	H1 2019
2020	H2 2020	H1 2020
IFRS amortisation and impairment of intangible assets	260.4	225.4	35.0	168.5	137.7	30.7
Adjusted amortisation and impairment of intangible assets	81.3	46.4	35.0	69.3	38.6	30.7
Total amortisation and impairment of intangible assets adjustments	179.0	179.0	-	99.2	99.2	-
o/w Kairos goodwill impairment	179.0	179.0	-	99.2	99.2	-
CHF m				2019	H2 2019	H1 2019
2020	H2 2020	H1 2020
IFRS operating expenses	2,737.2	1,463.6	1,273.6	2,816.7	1,535.2	1,281.5
Adjusted operating expenses	2,468.7	1,234.3	1,234.4	2,465.9	1,236.8	1,229.2
Total M&A-related adjustments	268.5	229.3	39.2	350.7	298.4	52.3
o/w Adjustments to personnel expenses	6.1	1.8	4.3	2.9	0.9	2.0
o/w Adjustments to general expenses	13.2	7.6	5.6	167.5	160.3	7.2
o/w Adjustments to depreciation	0.1	0.1	-	-	-	-
o/w Adjustments to amortisation and impairment of
customer relationships	70.1	40.8	29.3	81.2	38.0	43.2
o/w Adjustments to amortisation and impairment of
intangible assets	179.0	179.0	-	99.2	99.2	-
CHF m				2019	H2 2019	H1 2019
2020	H2 2020	H1 2020
IFRS profit before taxes	845.9	268.7	577.2	566.2	148.7	417.5
Adjusted profit before taxes	1,114.5	498.0	616.4	916.9	447.1	469.8
Total M&A-related adjustments to personnel expenses,
general expenses and depreciation	-19.4	-9.5	-10.0	-170.4	-161.2	-9.1
Total M&A-related adjustments to amortisation and impairment	-249.1	-219.9	-29.3	-180.4	-137.2	-43.2

4