2013-02-25 07:05:34 -
Bellevue Group AG /
Bellevue Group returns to profitability - impressive investment performance
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* Bellevue Group earned a net profit of CHF 6.5 million in 2012, after a year
of extraordinary write-downs and impairments in 2011.
* The two operating units Bank am Bellevue and Bellevue Asset Management
performed well despite the adverse environment and achieved operating
profits of CHF 1.6 million and CHF 6.9 million.
* Measures taken to reduce personnel and operating expenses have led to
sustainably lower operating costs.
* Bellevue Group has established
an impressive track record with its sound
Swiss stock recommendations and equity-based investment strategies and
earned double-digit returns for its clientele. The company's investment
recommendations and two-thirds of its investment products have outperformed
their respective benchmarks.
* Total shareholders' equity of CHF 161 million provides Bellevue Group with a
solid basis for executing its business model, even in an ongoing challenging
* The Board of Directors will propose a dividend of CHF 2.00 per share at the
general meeting of shareholders. It will also submit a proposal to create
authorized capital equivalent to approximately 15% of paid-up share capital.
Global stock markets performed very well during the past year, even surprising
many experts, but private and institutional investors nevertheless remained on
the sidelines and maintained high cash positions in their portfolios. That is
evident in the historically low stock-market trading volumes. On the SIX Swiss
Exchange, for example, trading turnover was down another 30% in 2012 compared to
the previous year. This had a major impact on Bellevue Group's business in its
three segments of Asset Management, Brokerage and Corporate Finance.
Steady operating performance with sustained reduction in personnel and operating
Bellevue Group generated operating income of CHF 43.0 million (previous year:
CHF 40.1 million) despite the ongoing challenging environment. Fee and
commission income, the Group's main source of income, was steady at CHF 37.7
million (previous year: CHF 37.4 million). On the expense side, the impact of
past restructuring is becoming more visible, as reflected in the 9% reduction in
personnel expense and the 15% reduction in general operating expenses, which
lowered total operating expenses by CHF 4.7 million to CHF 37.3 million
(previous year: CHF 42.1 million). This resulted in a consolidated operating
profit of CHF 5.6 million and net profit of CHF 6.5 million. Bellevue Group's
average FTE headcount in 2012 was 82 (previous year: 93).
"Bellevue Group delivered a satisfying operating performance amid an adverse
environment. Thanks to stringent cost discipline and our efforts to improve
profitability, we were successful in returning the company back to the profit
zone. Proprietary equity research and investment expertise is the basis of our
business model, which we will continue to optimize and strengthen. We view
stocks as the most attractive asset class over a medium-term horizon and are
positioned well to benefit from advancing stock markets," said CEO Urs Baumann
with regard to the 2012 results.
Investment recommendations and products beat performance benchmark
With a host of sound investment recommendations and distinct investment
vehicles, both the brokerage and asset management operations of Bellevue Group
created value for its clients last year. Bank am Bellevue's top 5
recommendations delivered a return of more than 28.2% in 2012, beating the SMI
performance by about 13.8%. Viewed as a whole, its recommendations generated a
return of 19.0%, compared to a performance of 14.4% for the SMI. In a longer-
term comparison going back to 2004, Bank am Bellevue's top 5 recommendations
strongly outperformed the SMI, too, with an average return of 15.1% p.a.
compared to 3.5% for the SMI. The composite performance, based on all
recommendations issued by the bank during the same period, is 14.4% p.a., which
is likewise well above the SMI performance of 3.5%.
All of Bellevue Asset Management's investment vehicles generated positive
returns for investors. Two-thirds of its investment products and strategies beat
their benchmarks. BB Biotech was the top performer with a performance of 42.7%
(in CHF) for the year (outperforming its benchmark by 14.2%). This pleasing
investment performance is attributable to a discerning and disciplined stock-
picking approach and well constructed, diversified portfolios.
Despite international acknowledgment of the stellar investment performance,
asset inflows did not increase as much as expected, mainly because of the
difficult market environment. Total assets under management remain roughly
unchanged year-on-year at CHF 3.6 billion.
Bank am Bellevue: Increase in brokerage market share
Being a pure equity house offering research/brokerage and corporate finance
services, business at Bank am Bellevue was clearly affected by the general
market environment, which was marked by risk-averse institutional investors and
low trading turnover. Despite the proven success of its stock recommendations,
total operating income declined by 19% from the prior-year level to CHF 18.5
million. This decrease was partially offset by a 13% decline in operating
expenses to CHF 18 million. Resulting after-tax profit amounted to CHF 1.6
million. Bank am Bellevue's position as a first-class local broker allowed it to
selectively strengthen its international Sales Team during the year under
review. Thanks to these anti-cyclical investments, the company increased its
share of the brokerage market in Swiss equities by more than 13%. With a Tier 1
ratio of 49%, Bank am Bellevue has a solid balance sheet and capital structure.
Bank am Bellevue shareholders' equity as of year-end 2012 amounted to CHF 41.8
Bellevue Asset Management: Initial payback from consistent repositioning
In the Asset Management segment the realignment of the business model towards
recurring commission income and the focus on core competencies in healthcare and
regional (Europe and New Markets) themes were consistently executed. Operating
income consequently surged 43% to CHF 24.4 million. The restructuring program
initiated in the previous fiscal year reduced total operating expenses by 8% to
CHF 17.6 million and resulted in after-tax profit of CHF 6.9 million.
Investments in own products (seed capital) were scaled back significantly,
reducing the risk of losses on financial investments in future reporting
periods. The distinct positioning and good performance of the investment
products have not yet attracted the anticipated inflows of client assets, but
Bellevue Asset Management's fund solutions are increasingly being recommended by
top-rated financial services providers.
The positive Group results and very strong capital base (Tier 1 ratio of 33%,
Group shareholders' equity of CHF 161.2 million) once again allow the company to
distribute a dividend. Returning capital to shareholders that is no longer
needed for operational purposes remains a central goal of Bellevue Group's
dividend policy. The Board of Directors will therefore propose a dividend of CHF
2.00 per share at the upcoming general meeting of shareholders. Shareholders at
the general meeting will also be asked to vote on the creation of authorized
capital equivalent to approximately 15% of paid-up share capital. This is
intended to ensure that Bellevue Group has the flexibility to pursue and take
advantage of strategic opportunities if and when they arise. In return, the
conditional capital will be reduced by half.
Well positioned for future growth
Bellevue Group has positioned itself astutely for the new reality in the
financial industry with the ongoing optimization of its two operating units and
its sustainable cost management policies. Developments on global stock markets
will continue to have a strong impact on the company's business model given its
focus on active equity strategies. From a medium- to long-term perspective,
Bellevue Group continues to view equities as the most attractive asset class. In
the current market environment, the immediate organic growth prospects for a
financial boutique with proprietary equity and capital market expertise remain
challenging. However, its proven equity expertise and strong capital base,
favorable cost structure and limited overall risk put it in an opportune
position to profit both from further market advances and from structural changes
within the financial industry. Opportunities to selectively expand the existing
business model will be examined carefully.
The full version of the annual report 2012 is available at www.bellevue.ch
Media / Investor Relations: Daniel Koller, CFO
Telephone +41 44 267 67 00, Fax +41 44 267 67 01, email@example.com
Bellevue Group is an independent Swiss financial boutique listed on the SIX
Swiss Exchange. Established in 1993, the company and its approximately 100
employees are specialists in the fields of Brokerage, Corporate Finance and
Asset Management. Bellevue Group includes the two subsidiaries Bank am Bellevue
and Bellevue Asset Management. Bank am Bellevue boasts superb knowledge of the
Swiss stock and bond market and offers independent research opinions and
recommendations as well as viable solutions for capital market transactions.
Bellevue Asset Management is focused on selected active equity investment
strategies in fast growing markets, healthcare and in special themes such as
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