VZ (VZN) H1 2024 earnings summary

Executive summary

• Achieved strong business expansion in 1H 2024, with robust economic growth, falling inflation, and supportive interest rate trends in Europe and the US.

• Net profit rose 19.1% to CHF 102.8 million and revenues grew 12.8% to CHF 252.9 million, driven by high client inflow and strong demand for consulting and platform services.

• Added 4,188 new households to platform services and expanded consulting capacity by 7.7% to 237 FTEs, with further increases planned.

• Expanded presence in Germany with a new Berlin branch and advanced UK acquisition and management transition plans.

• Maintained a solid balance sheet with a core capital ratio of 25.0% and a security-oriented asset structure.

Financial highlights

• Revenue grew 12.8% year-over-year to CHF 252.9 million for H1 2024; net profit increased 19.1% to CHF 102.8 million, with a net profit margin of 40.6%.

• EBIT margin reached 47.1%; EBIT was CHF 119.0 million, up from CHF 101.1 million in 1H 2023.

• AUM rose 16.4% to CHF 49.6 billion; net new money totaled CHF 2.34 billion, slightly below prior year.

• All revenue streams grew, with management fees up 13.9% and consulting fees up 2.7% after a strong prior year.

• Net interest income rose 19.3% year-over-year but declined sequentially; trading results up 21.6%.

Outlook and guidance

• Revenue and profit growth for 2024 expected to align with long-term average of around 10%, though growth may slow in H2 due to lower net interest income from SNB rate cuts.

• Digital platform enhancements and branch expansion in Germany and the UK to drive future growth.

• Net interest income projected to decline in H2 2024 and 2025, but impact limited as it represents 13% of revenues.

• Dividend payout ratio to increase to 50% for 2024, pending approval; dividend per share rose to CHF 2.24 for 2023.

• Medium-term targets: EBIT margin of 44% and profit margin of 38%.