Vontobel Holding AG

Today, Georg, Thomas and I will provide you with an update on our 2023 results and key decisions that we will implement to accelerate the execution of our strategy. Let me first share our observations on the market backdrop in 2023 and how this shaped our results. Entering 2023, the questions on every investor's mind were how high will interest rates go and how much damage will these do to the growth outlook? In addition, it was clear that after a disastrous 2022, the priority of investors, and in particular the more tactical ones, was to protect capital at all costs. This starting point, coupled with the highest cash rate since before the global financial crisis, led investors to either wait and see or flee towards safe products and money markets. Emerging market equities were particularly hit due to the geopolitical tensions and a China that has been viewed less and less market friendly. The last quarter of the year has given a glimpse of what is probably now in store. As major central banks indicated that they reached the peak in the tightening cycle, equity and fixed income assets enjoy a significant rebound and the dollar was hurt. With growth data remaining relatively robust globally, the end of the tightening cycle reached, and yields in fixed income historically elevated, this should induce investors to start dipping their investment tools again in 2024. Turning to our key messages for 2023. Our operating profitability is robust at 263 million before tax, with good momentum in our private clients' business. Our assets under management are stable at 207 billion on inflows from private clients and market performance. We retain a very strong capital position with a CT1 ratio of 18.7% that enables us to propose a non-change dividend of 3 Swiss francs per share at the upcoming 2024 Annual General Meeting. 2024 will be about sharpening and accelerating our strategic execution, and it will be about continuing to anticipate our clients' needs. Today, we are sharpening our delivery model by organizing around two client segments only, private clients and institutional clients. To these clients we will offer all of Fontobel's investment solutions and digital capabilities. Anticipating the future demand for infrastructure and the benefits for our clients to get access to this segment, we are entering the highly attracting sector of private infrastructure equity by taking a significant minority stake in Ankala, a successful independent investment manager focusing on critical mid-market infrastructure. We also recognize that we must free up resources for growth. This is why we are launching an additional cost program targeting 100 million in cost savings by the end of 2026. Let me now hand over to Georg.

Good morning and a very warm welcome also from my side. As Crystal just said, we are announcing today that we will operate with two client segments going forward. private clients and institutional clients. Both will continue to benefit from all of Fontobo's investment products and of course be powered by a robust digital platform. Digital investing, our hub for innovation and digitalization, will be integrated into the organization. This segment has been instrumental in incubating the technology for serving clients who prefer a digital interaction. Now it's time to leverage these skills across the organization. In other words, with this integration, we accelerate our firm-wide digital transformation. Now let's turn to our private client business, combining former wealth management and former digital investing. Overall, we had a good momentum with operating income up by 8%. This business has four key success factors. Firstly, we are investment-led, not credit-led. This allows us to maintain a conservative risk profile and to grow in a highly capital-efficient manner. Secondly, more than 90% of assets under management are from developed markets, where we have demonstrated capability to grow. This footprint also reduces our exposure to geopolitical risks. Thirdly, we have a very successful approach for hiring and developing new relationship managers. This enabled us to seize further opportunities last year. We successfully increased the number of relationship managers to almost 360. That is a net increase of 42. For this, over 700 candidates were interviewed and evaluated. Finally, our industry-leading digital distribution model for structured solutions will continue to play a crucial role in servicing our clients. Now let me turn to our institutional client business. During the past year, we saw investors increasing their allocations to cash and money market products. They also adopted the risk-off stance, increasing their allocations to benchmarks and indices, while reducing their exposure to emerging markets. We could not escape these industry dynamics. Still, Assets under management were fairly stable, based on a positive market performance and a moderate recovery in flows. After two consecutive years of negative industry fund flows, we do believe that central banks might be reaching the end of the tightening cycle. The last quarter of 2023 showed some first encouraging signs with increasing forward visibility and a more constructive sentiment. We are well placed to benefit from such an industry recovery. Fixed income is likely to lead and in this space we have a strong product offering. In addition, the large majority of our flagship funds are well ranked. We do recognize that we have more work to do on our emerging market franchises. And finally, we see new opportunities for growth with our entrance in the private infrastructure market. Now back to you, Crystal.

Fontobol is by choice and conviction a resolutely active investment manager. To be successful, it relies on highly experienced teams of specialists focused on the segment of expertise. All these teams, independent of the target client segment, whether private or institutional, are part of investments and receive the exact same mission, to deliver institutional investment quality. We have an offering that spans all asset classes, in particular as we are now entering private markets as well. While performance of active asset managers always fluctuates through the cycle, Let us look at the important three year time horizon and the percentage of our assets ranked in the top best 25 or 50% of the categories, or in other words, ranked first or second quartile. We see that 56% of our equity funds, 70% of our fixed income funds and 93% of our multi-asset products are ranked in the first or second quartile. Our multi-asset products are primarily mandates and so not immediately accessible to analysts, yet they represent a substantial and growing share of our assets under management and one that is strongly performing as can be seen. Our equity ranking is currently penalized by our emerging markets franchise, where we are working with the teams to improve on performance. On the other hand, our impact equity fund and our developed market equity franchises are well positioned versus their peers. Now let's turn to our announced investment in Ankala. This marks an important milestone in delivering on our strategic priority to enter private markets. Encala is a highly experienced, London-based, independent private infrastructure manager with strong growth prospects. Private infrastructure has seen strong demand in the past 10 years and is expected to be one of the fastest growing segments of private markets in the years ahead, with an expected compounded annual growth rate of around 16% over the next 3 to 5 years. a growth that is strongly supported by favourable structural macro tailwinds. Through this acquisition, our clients will be able to access the stable cash flows, the inflation protection and the low correlation to the overall economic cycle that this asset class offers. Their returns will be further enhanced by the long-term value creation brought by Encala's active management of the underlying assets. Ancala is a firm founded in 2010 with more than 4 billion euros in assets under management. It has a solid performance track record and a demonstrated ability to source unique investment opportunities. It focuses on critical mid-market infrastructure and has proven to add long-term value by proactively managing its assets. Ancala recently closed its third flagship fund, which raised 1.4 billion euros in commitment, surpassing its target. Frontobo is today acquiring a significant minority stake. We are fully aligned for future growth and success and have agreed with Ancala, our associate, about acquiring remaining stakes over time. The transaction is conducted out of fundable excess capital and as a consequence is earnings accretive from day one. The transaction structure ensures that we are fully aligned with Ankala to generate long-term growth and that when we do increase our investment in the future, we will buy locked-in revenues. Now let me turn to costs. Despite good operational performance and savings of 65 million at an exit rate last year, our cost-income ratio is above our target. This is in part due to our strategic long-term investments through the hiring of relationship managers and the acquisition of SFA. Today, we recognise the need to do more and are initiating an efficiency programme targeting cost savings of 100 million by end 2026. We strongly believe that we can further sharpen our organization and become leaner in how we operate. This is how we will reach our 72% target. Beyond this target, we view this program as critical to retain our full strategic flexibility and being able to release the necessary resources for future growth and improvement opportunities. We will share details on how we progress over the course of the year. Back to Georg.