DWS Group GmbH & Co. KGaA

Good morning, ladies and gentlemen, and welcome to the DWS Group Q2 2025 conference call and live webcast. I am Yousef, the chorus call operator. I would like to remind you that all participants will be in listen-only mode in that this 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 followed by 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.

Thank you very much, operator, and good morning to everybody from sunny Frankfurt. This is Oliver from Investor Relations, and I would like to welcome everybody to our earnings call for the second quarter of 2025. Before we start, I would like to remind you that the upcoming Deutsche Bank analyst call will outline the asset management segment result, which have a different parameter basis to the DWS results that we're presenting now. I'm joined as usual by Stefan Hobbs, our CEO, and Markus Kobler, our CFO. And Stefan will start with some opening remarks as well as closing remarks, and Markus will take you through the main part of 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. And please note that the Q&A session can also be extended beyond 11 o'clock if needed. I would 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 with that, I will now pass on to Stefan.

Thank you, Oliver. Good morning, ladies and gentlemen, and welcome to our Q2 2025 earnings call. You will notice that my introduction today will be a bit longer than usual. I would like to take more time to walk you through our view on our financial performance and present our hypothesis for the path ahead, not just for this quarter, but for the year as a whole and the trajectory we see for 2026 and 2027. As Markus takes you through the financials, I would like to ask you to keep this hypothesis in mind, which will hopefully help you challenge the numbers constructively. To put it simply, we are delivering exactly what we promised, sustainable earnings that put us firmly on track for the €4.50 EPS this year, which we see as the jump-off point for 10% annual EPS growth in 2026 and 2027. To frame that, I will start by revisiting the bridge we first outlined in 2024, then discuss the sustainability of our current earnings, the long-term investments we are making, and the path to our 2025 EPS target of €4.50. I will then hand over to Markus, who will take you through our Q2 financials in detail and provide a deep dive into our balance sheet. And finally, I will return to present the outlook and explain why we feel very positioned to deliver consistent 10% EPS growth annually in 2026 and 2027. With that, let me begin with the first point, credibility of the bridge we laid out back in April 2024. More than a year ago, when we communicated our Q1 2024 results, we first presented the path to reach our 2025 financial targets. From the outset, the bridge was designed to be both clear and tangible, with its main pillars being reduced cost adjusted items, higher performance fees, and rising management fees. We committed to this bridge and have remained consistent in our financial steering ever since. Today, the numbers show that we are on track to deliver what we promised to the market, and we believe that consistency is what builds long-term trust. Second, our growth does not come from one-offs. It's hard-earned, sustainable, and the result of disciplined execution over the past years. What you see in our numbers is not a one-time lift. So we didn't just get in summer shape once. This was the result of systematic and sometimes difficult run rate optimizations that have reshaped the business for the long term. We've taken deliberate steps to optimize our platform, including reorganizing our legal entities to simplify our operating model, advancing our large-scale IT transformation project, and reducing the number of internal committees by 42% to speed up decision-making. As an additional example, we've reshaped our workforce, our largest cost line, but also one of our greatest sources of long-term value. As Markus outlined in his cost deep dive three quarters ago, we are growing talent from within. Since 2023, we have quadrupled our graduate intake and implemented development programs to reduce our reliance on costly external hires. We've also built up teams in India and the Philippines, creating scalable, cost-effective hubs, which tap into deep resource pools. None of this happened overnight. Every improvement from cost management to platform efficiency has been the result of consistent, focused effort over time. These tangible actions are central to how we've built a more efficient DWS optimized for the future. And we are confident in our ability to keep these costs stable while continuing to grow. When Markus walks you through the financials, he will provide further insights into how these optimization efforts are reflected in our numbers. Third, we are investing for the long term. Alongside our cost discipline, we are also deploying resources with a clear focus on future growth to strengthen parts of the business that will matter most over the next decade. We continue to expand X-Trackers in our alternatives platform, both of which are already delivering momentum and flows. To be more specific, we've recently signed off on our next multi-year growth plan for X-Trackers and we'll double down on our European infrastructure franchise with additional hires. We are also investing in the digital infrastructure that we believe will define the future of finance. A key example is AllUnity, our joint venture with Float Traders and Galaxy, which recently received regulatory approval to issue Germany's first fully licensed, MECA-compliant, Euro-denominated stablecoin. Bringing the Euro onto the blockchain is a foundational step towards a faster, more transparent and efficient European financial system. and exactly the kind of forward-looking innovation we aim to lead. We view DWS much like a family business. Our responsibility is to leave the firm stronger for the next generation. That means making the right investments today to ensure we remain resilient, relevant, and positioned for sustainable growth. Fourth, we are firmly on track to deliver our €4.50 EPS target for 2025 which we see as the jump off point for the next few years. Markus will provide more detail in a moment, but let me share how I view the numbers and why we see this target as entirely within reach. In Q1, we delivered an EPS of around one euro. And despite a very difficult April with heightened volatility and a weakening dollar, we delivered an EPS of one euro and seven cents in Q2. Given that our current AUM is higher than the average AUM in Q2 and with an extra business day in both Q3 and Q4, you may assume a slightly higher EPS in the next couple of quarters, provided market conditions remain supportive. This would put us on track for an EPS in the mid €4.20s for the full year. To close the gap to our €4.50 target, we would need to generate roughly an additional €50 million of net income or €70 million of profit before tax. As you know, we have some seasonality in our revenue generation. In Q4, we expect additional contribution from two recurring key drivers. Firstly, performance fees from our flagship multi-asset fund, Concept Calde Morgen. And secondly, as I've referenced in prior calls, the P4 Fundraise is on track for a significant closing by year end, with management fees accruing back to August 2024. So when we say we are at a run rate that supports €4.50 in EPS for 2025, we are on solid ground to meet this target. Importantly, we view this not as a one-off achievement, but as a hard-earned run rate, supported by the structural improvements and strategic investments we have made. Many of these investments, particularly in alternatives, digital assets, platform efficiency, and the next phase of our X-Trackers growth plan, will show their full value in the years ahead. With that, I now hand over to my partner, Markus, who will walk you through our financial performance in more detail and provide a comprehensive view of our balance sheet.