Vontobel Holding AG

Good morning and a very warm welcome from Georg, Thomas and myself. Today, Georg and I will focus on the highlights and share some more details on how we are executing on our strategy. Thomas will then take you through the numbers in detail, after which we look forward to opening the line and taking your questions. Let me start with the environment in which we delivered our half-year results. Equities delivered a choppy yet positive performance. After a shaky start driven by tariff headlines, indices recovered strongly as trade tensions eased. Investors rotated towards Europe and Asia. Bonds generated modest gains. Credit spreads tightened after the April sell-off, while safe-haven demand kept high-quality issues well supported. Government yields moved lower across maturities, most visibly in Switzerland after the S&B cut rates to zero. In the US, rate cut expectations were pushed back, yet yields still drifted down on rising growth concerns. FX markets saw a pronounced shift. The dollar declined sharply against most majors as fiscal worries grew, whereas the Swiss franc appreciated further, cementing its role as a safe haven. For Funtobo, this backdrop had a mixed impact. Lower Swiss rates and the weaker dollar weighed on net interest and translational income, and the extreme volatility of April temporarily slowed down activity of our structured solutions clients, as well as partly of institutional clients. On the other hand, and durably so, the volatility and structural shifts are leading both private and institutional clients to seek firms with a solid balance sheet with high-quality investment capabilities offering diversification potential. And indeed, we could successfully capture these flows. Let me turn to our financial and strategic highlights for the first half. we delivered 148 million profit before tax. This is a solid result in the context of very strong structured solutions revenues last year and a sharply weaker dollar. Our operational resilience, as well as cost discipline, help offset some of the revenue and translational impact. Assets under management increased slightly to 233 billion, supported by 2 billion of net new money. Private clients continued its very strong growth path, achieving 6% net new money growth, right at the top of our target range. Institutional clients' net new money is negative at half-year, but saw a positive second quarter, with strong inflows in our fixed income funds year-to-date, above the industry growth. We closed the first half with a strong CET1 ratio of 16.7%, comfortably absorbing the Basel III final impact and the EHAC client book acquisition. We further diversified our funding base with an inaugural senior unsecured bond. And our overall conservative stance on risk once again proved its value during the exceptional market volatility in April. We also made important progress on our priorities in this first half. We continue to realign and expand our offering towards areas which play into our investment strength, have attractive economics and secular growth prospects. We notably brought three new investment strategies to market. A European Equity Income Fund that builds on the great success of our innovative Swiss equity income product, an active ETF in the US, and an asset-backed finance fund in private credit. Private clients could, for the first time, also access a revised offering centered around personalization and built on a modular, open architecture platform that combines best-in-class internal and external investment modules. The integration of the IHA client book was completed ahead of schedule and we selectively appointed senior hires. These includes a US-based CEO for Funtobo Americas, including SFA, key market heads and institutional clients, and additional relationship managers in our focus markets. Finally, the 100 million efficiency program is tracking firmly to plan. Our priority to sharpen and accelerate our operating model and client delivery is yielding tangible results. Exit rate savings reached 62 million, enabling continued investment in growth areas while keeping the cost base on a downward path. We will execute this program to completion by end 2026. Looking to the second half and beyond, we have a clear strategy and priorities to drive sustainable growth. Fontobo operates a unique, integrated business model. We are an active-only investment firm with a single investment factory that serves two complementary client segments, private clients and institutional clients. We are convinced this setup is the best way to make sure all our clients, wherever they are, in whatever segment they are, can benefit from the full range of our investment capabilities and our products. The balance of the two client segments is mutually reinforcing, complementary and creates clear diversification benefits. Product innovation and best practices move between them. We can address and serve a larger market. We capture both the steadier revenue growth in private clients as well as the more cyclical but highly scalable business of institutional clients. You will hear many asset management firms speaking about wanting to break into wealth management and vice versa. We have both. We strongly believe in this model and our capability to drive it. Building on that conviction, we last year set three clear priorities. We then, together with our more than 2,000 colleagues, move straight into execution. We deliver value to our clients through advice, active management and customization. We grow profitably in private clients and institutional clients. We deliver on our efficiency goals. The wording is intentionally simple. Put clients first, grow profitably, run the firm efficiently. And we will continue to create generational value for our clients, employees and shareholders alike. Let me now home in on how we are in the process of activating this strategy, turning it into concrete actions and results. Starting with investment solutions, the single investment factory that serves both client segments. Consistent with our priority to deliver value to our clients through advice, active management and customization, we are accelerating our execution on a number of priority initiatives. First, build on our leading fixed income capabilities and our market leading strategies and performance. This ambition is already translating into tangible results across several of our flagship fixed income strategies. At 24, assets under management now exceed 24 billion across our asset-backed, multi-sector and outcome-driven strategies. In our fixed-income boutique, the emerging market sovereign debt strategy has grown beyond 3 billion and consistently ranks top quartile across every time horizon. Credit opportunities, which we only began to market this year, already exceeds 500 million in assets and ranks in the top 5% over 1, 3 and 5 years. Second, get ready for the recovery in equity flows. We have sharpened investment processes, tools and teams as needed. Third, expand our private market and solutions offering. We will carry forward the momentum we have with Ancala in private credit, equity solutions and the expanded private offering for private clients. Fourth, build on our strong multi-asset track record in private clients. We are now scaling these capabilities in institutional clients, not only through mandates, where we already have a solid Swiss franchise, but also through mutual funds in key markets like Germany and Italy. And finally, technology. We are accelerating the development of our cutting-edge tech platform, empowering investment teams with advanced tools to deliver mass-customized solutions. Through this disciplined execution, we are systematically expanding our capabilities in faster growing segments that both deliver clear value to our clients and attractive economics for the firm. And now over to Georg.

Hello from Zurich and a very warm welcome from my side. Let us move to private clients, where we again have achieved very strong inflows with 6% annualized net new money growth right at the top of our target. All regions were positive and we were notably able to capture growing interest from US clients. all relationship manager tenures had positive flows with seasoned relationship managers contributing more than 40% to the total. Our success is deeply rooted in a disciplined implementation of our investment-led approach, concentrated sharply on our focus markets. We will continue to, first, Selectively add and develop top-calibre relationship managers. We will use our robust process for sourcing, onboarding and developing talent. Our focus remains on relationship managers with established client networks who embrace our investment-led culture and disciplined approach to risk. Second, Put investments and advice first. We will resist the temptation to deploy balance sheet credit to accelerate growth. This reduces capital consumption, earning cyclicality and credit risk. Third, invest in our market-leading digital platform for structured solutions. We will further expand its capabilities and throughput. And fourth, evaluate and selectively seize inorganic growth opportunities, which add scope or scale. We will build on our successful integration of Notenstein LaRoche, UBS SFA and eHAG. These actions will keep our unique private clients growth engine running. Let us move to institutional clients by first reviewing the wider industry context for active asset managers. Please refer to the left-hand chart. The blue line plots cumulative European and cross-border passive fund flows since January 2022. They are up almost 700 billion. The black line shows active funds. After three very tough years, the bottom was reached last late year. Since February, the curve has turned firmly upward. This is the inflection point we anticipated. The middle chart splits those active flows for fixed income and equities. Fixed income is decisively leading the rebound. Equities remain negative, but the trend is clearly improving. On the right now, you see a ranking of 24 European active managers. It shows percentage fund asset growth from January 24 to May 25. The story behind the extremes in this chart is instructive. The leaders have either a strong captive distribution channel or a pure fixed income focus. The laggards are emerging market specialists. Our position between the extremes is consistent with our business model. We deliberately keep an open architecture and put our fiduciary duty towards our clients first. We do not push products and our private clients are not in a captive channel. Second, we went into the 2022 historical sell-offs and resulting home-shoring with recognized but exposed emerging markets capabilities. This negatively affected growth during the period. Third, we are, however, a leading player in actively managed fixed income strategies. In short, we were above the peer median despite two clear headwinds. We do not rely on a captive distribution channel and industry-wide outflows affected our emerging market strategies. Our outperformance speaks to the quality of our fixed income franchise and the reach of our distribution teams. Those of you who attended the Investor Day in November last year know that we, together with Christoph von Reiche and his teams, have been working hard to sharpen and accelerate our delivery in institutional clients. We are focused on evolving our sales approach, implementing globally scalable client journeys and commercializing strong existing track records while activating new strategies. Let me give you a few examples of what this means in practice. First, we have sharpened our coverage model. As opposed to starting with a given product on the shelf, we now start with a complete view of the client's needs. What this means is that coverage teams are no longer organized by product, but by client segments such as pension funds, insurers and global banks, to name a few. Second, we deliberately accelerated our core strengths. Fixed income is the most obvious example. We concentrated our distribution on our strongest strategies and solutions. Fixed income today accounts for almost 40% of our institutional assets. It is a key driver of our flows and we see continued strong client demand. An area we will continue to decidedly lean into. Third, we are in the process of implementing a scalable client service model. All RFP onboarding and reporting processes are increasingly moved from various regional systems onto one global platform. This cuts client response times, error rates and costs. Fourth, we are now systematically concentrating our sales efforts on the markets and client segments where we have the greatest right to win. As Crystal mentioned earlier, we have appointed experienced senior talent to lead our efforts in key markets. And finally, we are improving our efficiency and client service capabilities by making increased use of technology to standardize, accelerate and automate our processes. This includes more traditional systems and data architectures in areas such as client reporting. It also means staying at the forefront of rapidly advancing large language model based tools for select workflows. Taken together, these ongoing measures put us in pole position to capture and outperform on the cyclical recovery we already seeing in actively managed fixed income and we are ready as equities is now following in its path. Importantly, No one is sitting on their hands waiting for traditional tides to turn. Our distribution teams have already demonstrated great success in enabling our systematic expansion into solutions, private markets and other strategies. Tangible examples include partnering with Ancala teams and the great success in distributing our innovative products such as Swiss Sustainable Equity Income Plus, which has attracted more than 800 million over the last six months. The momentum we are creating with our actions gives us tangible proof that our strategy is working and that we are well positioned to turn this industry and macro backdrop into another cycle of profitable growth. Moving on to our priority to sharpen and accelerate how we operate and serve our clients, thereby improving efficiency. Let me start with the bottom line. 18 months in, our 100 million efficiency program is tracking to plan. Exit rate savings already amount to 62 million. Last year, together with our leadership team, including our COO, Markus Pfister, we presented the levers to improve our efficiency. These are unchanged. But let me give you three tangible examples of what we have achieved. We now operate six core platforms after retiring more than 30 legacy systems and migrating an increasing share of our compute to the cloud. We have insourced high value roles. 32 external contractors have already converted to permanent staff with another dozen to follow by year end. And we have renegotiated approximately 340 vendor contracts and engagements ranging from data service providers to facilities management firms. We remain committed to completing this program by end 2026. By becoming more efficient and freeing up resources, we will at an accelerated rate generate the capital which can be deployed for organic and inorganic growth. Our clear objective is to continue our track record of through-the-cycle growth and attractive shareholder returns. We last year reaffirmed our strategy and explained why we are doubling down on our integrated model. We today showed the concrete actions that are already underway. With disciplined execution, we are confident that we will reach our through-the-cycle targets. They remain unchanged. With this, let me hand over to Thomas who will cover the financials.

Thank you, Georg. Good morning and a warm welcome from me as well. Profit before tax in the first half of 2025 stands at 148 million Swiss francs, compared with 173 million in the prior year period. This amounts to a decline of 15% or 10% at constant currency. Despite the decline, we view these numbers as solid given significant macroeconomic headwinds. We have seen SMB and ECB rate cuts, a significantly weaker dollar, and structured solutions revenues normalizing from last year. This led to 29 million lower revenues at constant foreign exchange rates, or 39 million as reported. Our efficiency program offset some of these headwinds and contributed 21 million to the profit before tax. We continue to invest into growth in private client. This amounted to additional costs of 8 million in the half year, which are comprised of the EHAC teams and selective hiring of relationship managers. The foreign exchange rate development reduced profit by 8 million. Like many Swiss multinationals, we carry a structural Swiss franc exposure. About 80% of our costs are in Swiss francs, while only around a third of our revenues are. We also have seen one-offs linked to the efficiency program and the final EHAG integration of 10 million Swiss francs, one million more than last year. The effective tax rate fell to 22%, reflecting that the one-offs from last year did not repeat and reflecting the implementation of selected improvement measures. That also offset the increase in the Dubai tax rate from 9% to 15%. For the full year, we continue to guide to a 22% tax rate. That all leaves the group net profit at 116 million or 124 million at constant exchange rates. All in all, a solid result given the environment. Turning now to assets and flows. Assets under management increased to 233 billion, despite the 9 billion for an exchange headwind on the decline of the US dollar. Net new money contributed 2 billion, and market performance contributed 11.3 billion, including the 1.8 billion from IHAG. On flows, private clients delivered very strong 3.3 billion Swiss francs inflows. 6% annualized net new money, which is an almost 40% acceleration versus the first half last year. What is equally important is the fact that inflows were broad-based, with inflows across all regions and across all relationship manager tenures. Institutional clients recorded 1.3 billion outflows, mainly due to the loss of one large quant mandate of 1.3 billion in the second quarter. Please note that the 1.3 billion include 500 million of inflows which are booked in the Centre of Excellence for technical reasons. The flows in the second quarter have been positive, driven mostly by fixed income and equity solutions. The operating income was resilient at 689 million Swiss francs, 5% below last year. Net interest income as guided at the last full year results declined by 29%. This reduction is explained by the S&B rate cuts and the fact that just short of 50% of our deposits are denominated in Swiss francs. Net fee and commission income grew 2% on higher mandate assets and higher asset levels. trading and other income was 11% lower than prior year. However, last year we had strong trading volume from February to May driven by high demand for MAC 7 and crypto products. What we have seen this year in contrary is four to six weeks of muted client activity after liberation day. By segment, private client revenues normalized from last year, while institutional client revenues mainly reflect the impact of the US dollar and a lower share of emerging market products. The prior rate client revenue margin declined by 14 basis points to 87 basis points. Roughly half of the change stems from lower structural solutions revenues compared to the strong last year. The other half comes from previously guided compression in net interest margins as Swiss rates are now back to zero. But now let's take a closer look at the institutional client margin, which stands at 34 basis points. For three years, industry demand for emerging market funds and mandates has been weak. We also see this in our business mix. The share of emerging market related products has declined from 21% three years ago to 10% today. This has directly impacted the overall margin because emerging market strategies generally carry higher margins across all asset classes. If we look ahead, there are both head and tailwinds. On one hand, the second half 2025 year-on-year comparison might still show some residual mixed pressure. On the other hand, several developments point to higher margins. First of all, client interest in our emerging market strategies is returning and we have seen positive inflows into the emerging market debt fund. In other words, there are clear indications that the share of assets of emerging markets has flattened out. Second, our strategic priorities to expand our capabilities in solutions and private markets will be margin accretive over the medium term. And finally, the fixed income flows are concentrated in higher margin products. So based on the recent inflows and the current pipeline that we see for new business, we expect margins to remain broadly stable in the second half. Moving on to costs, operating expenses decreased by 2% to $541 million as our efficiency program is starting to yield tangible results. Personnel costs were $355 million, down 2% despite some inflation, selective hiring and the ongoing insourcing of external resources. our efficiency program could offset parts of the revenue decline. The cost-income ratio finished at 77.9% or 77.1% at constant foreign exchange rates. This increase is entirely driven by lower revenues in net interest income and transaction revenues, both of which have very low marginal costs. Let's move on to the balance sheet. We continue to maintain a strong and highly liquid balance sheet. In the first half, total assets rose by 2.6 billion to 35.5 billion, driven by seasonally higher delivery versus payment positions and a billion of additional client deposits. Our balance sheet comprises more than 20 billion of liquid assets and our liquidity coverage ratio stands at 160%. Leveraging this strength, we have successfully placed our first 200 million senior unsecured bonds in March. The bond issuance diversifies our funding base and represents a first step towards establishing Fontobel as a regular capital markets issuer. Credit exposure remains low, in line with our investment-led growth strategy. And we will continue to operate with a conservative risk stance, which has consistently served us well through periods of market stress, most recently during April. The CET1 ratio increased by 60 basis points to 16.7%. Net capital generation from retained earnings added 80 basis points. The gross impact of the Basel III final regulation, which became effective on January 1st in Switzerland, amounted to 80 basis points, but was more than offset by 130 basis points of continued capital management improvements during the first half. Since last year, Basel III final regulation in total has amounted to a gross CET1 ratio reduction of 2.2 percentage points, of which we have already offset 1.5. The IHA client book acquisition resulted in a 20 basis point decline due to associated goodwill and intangibles. In short, our CT1 ratio is comfortably above the 8% regulatory minimum and our 12% internal target. This leaves further headroom to support organic and inorganic growth. We now turn our focus to the long-term health aspect of Fontobel. As previously mentioned many times, we assess Fontobel's health against three key measures. First, the ability to grow revenues and profits. We focus on delivering long term through the cycle growth, even if macro conditions weigh on individual periods as we have seen in this first half. Second, the ability to create value. With a return on equity of 10.2% versus an estimated cost of equity of 9.1%, we generated positive economic value. And finally, generating capital. tangible book value per share growth, including the cumulative dividends paid, further increased and remains among the strongest in the industry. The return on equity, the return on tangible equity of 13.8 and the return on CT1 capital at 18.5 remain ahead of their respective hurdles, confirming that our strategy is generating sustainable shareholder value. Now, to summarize the financials, we generated a solid profit before tax of 148 million amid lower rates, a weak dollar and a sharp but brief slowdown in client activity after Liberation Day. Operating expenses declined as the benefits of our efficiency program become visible in the P&L. Private clients continued their strong trajectory with 6% annualized growth, while institutional clients turned positive in the second quarter. Also, our balance sheet remained strong. The CET1 ratio rose to 16.7% despite the new Basel III final FRTB regulation. And we further diversified funding with a successful first issuance of a senior unsecured bond. And with that, I hand back to Georg. Thank you, Thomas.