GAM (GAM) H2 2023 earnings summary

Executive summary

• Underlying loss before tax widened to CHF 49.5m from CHF 42.5m, while IFRS net loss narrowed to CHF 82.1m from CHF 290.0m.

• Investment Management AuM closed at CHF 19.3bn, down from CHF 23.2bn; 78% of AuM outperformed benchmarks over three years and 81% over five years.

• Following NJJ’s investment and a September 2023 shareholder vote, a new board and CEO Elmar Zumbuehl took charge; fund redemption rates slowed markedly in Q4.

• Strategy targets sustainable growth and a return to profitability through client focus, amplification, diversification and greater effectiveness.

Financial highlights

• Net fee and commission income fell 21.7% to CHF 129.2m, mainly due to lower average AuM and a slightly lower average management fee margin.

• Net management fees and commissions decreased 23% to CHF 124.4m; net underlying performance fees rose 50% to CHF 4.8m.

• Underlying expenses declined 14% to CHF 178.3m; underlying net loss after tax was CHF 49.8m versus CHF 39.0m in 2022.

• Cash and cash equivalents fell to CHF 87.2m from CHF 137.9m; adjusted tangible equity declined to CHF 11.5m from CHF 68.7m.

• Diluted underlying EPS was CHF -0.32 versus CHF -0.25; IFRS net loss was CHF 82.1m versus CHF 290.0m.

Outlook and guidance

• FY 2024 average Investment Management fee margin is expected to fall to ~45 bps, depending on client flows and market movements.

• A single operating platform, including investment management activities on cloud-based SimCorp, is targeted for completion by end-2024; strategic cost-reduction initiatives continue.

• 2024 priorities include clients, innovation and maintaining investment performance; Singapore is planned as an Asian investment and distribution hub, subject to regulatory approval.

• Twelve strategies generated positive net new money year to date 2024; the next financial update is scheduled for 8 August, with quarterly Interim Management Statements discontinued.