DWS Group GmbH & Co. KGaA

Ladies and gentlemen, welcome to the DWS Group Q1 2024 results with Investor and Analyst Conference School. I'm Alice, the chorus collaborator. I would like to remind you that all participants have been listed on the mode and the conference is being recorded. The presentation will be followed by a Q&A session. You can register for questions at any time by pressing star and one on your telephone. For operator assistance, please press star and zero. The conference must not be recorded for publication or broadcast. At this time, it's my pleasure to hand over to Oliver Flader. Please go ahead.

Operator, thank you very much, and a good morning to everybody from Frankfurt. This is Oliver Flade from Investor Relations, and I would like to welcome everybody to our earnings call for the first quarter of 2024. Before we start, I would like to remind you that the upcoming Deutsche Bank analyst call will outline the asset management segments results, which have a different parameter basis to the DWS results we're presenting now. I'm joined by Stefan Hobbs, our CEO, and Markus Kobler, our CFO, Stefan will start with some opening remarks and Markus will take us through the presentation. For the Q&A afterwards, please could you limit yourself to the two most important questions so that we can give as many people a chance to participate as possible. I would also like to remind you that the presentation may contain forward-looking statements, which may not develop as we currently expect. and I therefore ask you to take note of the disclaimer and the precautionary warning on the forward-looking statements at the end of our materials. And for this quarter, we would also like to make you aware of the following. In the interest of increased transparency and due to the different nature and dynamics of the businesses, DWS has decided to separately show assets under management and flows from cash products and advisory services on the one hand, and other assets and flows from the active, passive, and alternative area that are comparatively more long-term oriented than the former. Going forward, DWS will therefore disclose within total assets under management the separate categories long-term assets under management, cash assets under management, and advisory services assets under management. In terms of net flows, the corresponding categories within total net flows will be long-term net flows, cash net flows, and advisory services flows. And with that, I will now pass on to Stefan.

Thank you, Oliver. Good morning, ladies and gentlemen, and welcome to our Q1 2024 earnings call. In the last few quarters, the opening statements of any asset manager's earnings calls could have been written by chat GPT, using terms such as uncertainty, volatility, geopolitics, and central bank actions. Now, we need to recognize that the last two quarters, including Q1 of this year, were quite different. We have seen a much welcome tailwind from market appreciation. However, given that investors remain in risk-off mode, there has been a greater appetite for passive than for active strategies. Given this new environment, our key focus at DWS has been twofold. One, Don't allow higher management fee revenues to get in the way of our continued cost discipline. And two, attract net inflows that will help offset margin pressure attached to the current active to passive flow mix. For the latter, we see continued progress as reflected in our Q1 financial results. We reported another quarter of substantial net inflows in Q1 driven by passive including X trackers. Notably, we remain the number two ETP provider in EMEA by net inflows, with growth outpacing the market and hence gaining further market share. In addition, we reported net inflows into active fixed income and SQI, which helped to offset net outflows from active equity, multi-asset and alternatives. To be clear, we are mindful that this flow mix is a challenge. but we draw comfort from our diversified product offering, which allows us to counterbalance the active to passive industry trend, and we also believe that we are well positioned for a turnaround in alternatives. Furthermore, this positive flow momentum supported our quarterly increase in total global AUM, which is now at a record €941 billion. Markus will provide further details on our financials later on, But for now, allow me to briefly highlight two points, our ongoing transformation program and the resolution of the ESC matter. Let's start with our transformation program. As indicated in our Q3 results call last year, we have been assessing the progress of our multi-year transformation program with the aim of improving our operational setup and standalone capabilities. The assessment has now concluded. and we've agreed on the following solution. We've decided to focus our efforts on areas that are differentiating factors for us as an asset manager. That includes a policy framework suitable for an asset manager and our own corporate functions for almost all areas where we've made significant progress. When it comes to IT infrastructure, we agreed on adopting a hybrid model. On the one side, we continue with our cloud migration into our separate DWS cloud environment. Again, a differentiating factor for us as an asset manager, as this enables us to faster deploy our own asset management specific applications. At the same time, on the other hand, we will take advantage of economies of scale by partnering with Deutsche Bank and continue leveraging the bank's capabilities in areas that are well-functioning while not being differentiating, such as data center operations, networks, or hardware. This hybrid model is in the best interest of DWS and offers the best level of security and stability in the IT landscape as we seek to avoid solutions that are needlessly complex in areas where things currently work well. At this stage, we have to acknowledge that the initially targeted cost saves are not achievable due to a variety of reasons ranging from inflation to an enhanced cybersecurity threat landscape. And while we do not expect the outlined hybrid option to generate cost savings compared to our current run rate, this option is in fact cheaper than a full separation due to Deutsche Bank's scale and reduced transformation costs. Another area that I would like to update you on is the ongoing ESG matter. As you know, the US authorities closed their ESG-related investigations last year. With that, the investigation by the Frankfurt Public Prosecutor's Office is the only remaining ESG investigation. However, as stated previously, the timeline for completion is not in our hands. As we've said before, we provided documents and information to the Frankfurt Public Prosecutor's Office at their request. Recently, we increased our inventory of other provisions effective year-end 2023, which also includes provisions required for matters such as the public prosecutor's investigation into the ESC allegations. While the outcome of this is yet to be concluded, This means that we are making progress with regards to the Frankfurt public prosecutor. We will continue to cooperate fully to come to a resolution of this investigation as quickly as possible, but we are dependent on the timing of the prosecutor's office. Now, coming back to the purpose of today's call, our financial performance and the way forward. Overall, we had a solid first quarter of positive net inflows, as well as continued cost discipline and focused implementation of our strategic plan. And as we approach the halfway point towards our financial ambitions, as announced at our Capital Markets Day, we will provide more clarity and transparency on how we assess our progress and outline a bridge towards our 2025 targets. But for now, I would like to hand over to my partner, Markus, to explain our Q1 results.