Cembra full-year 2018 results Robert Oudmayer, CEO Pascal Perritaz, - PowerPoint PPT Presentation

Cembra full-year 2018 results Robert Oudmayer, CEO Pascal Perritaz, CFO Volker Gloe, CRO 22 February 2019 Page Cembr bra a Money y Bank

Agenda 1. 1. 2018 8 Highligh lights ts Robert t Oudmayer er 2. FY 2018 Financial results Pascal Perritaz Volker Gloe 3. Strategy and outlook Robert Oudmayer Appendix Page 2 22.02.2019 Full-year 2018 results Cembr bra a Money y Bank

2018 Highlights Excellent performance in 2018 Delivery on all targets Highlights Net financing receivables Return on equity Target for assets growth: in line with Target ROE: >15% ■ +7% net income to Swiss GDP growth. In CHF mn +5% +5% CHF 154.1mn (EPS 5.47) ■ +11% revenues, with stable 16.9% 16.7% 4,807 loss ratio and competitive 4,562 15% 15 cost/income ratio ■ +5% receivables, with growth 31.12.17 31.12.18 2017 2018 across all product lines Capital adequacy (Tier 1) Dividend per share 1 ■ ROE and Tier 1 capital Target Tier 1 capital ratio: >18% Target pay-out: 60% – 70% (in CHF) above targets Pay-Out 69% 69% +6% +6% ■ +6% dividend increase 1 19.2% 19.2% (+ CHF 0.20 to CHF 3.75) 3.75 3.55 18% 18 31.12.17 31.12.18 2017 2018 1 proposed Page 3 22.02.2019 Full-year 2018 results Cembr bra a Money y Bank

2018 Highlights Personal loans and Auto in line with market, Cards outperforming Personal loans Auto loans and leases Credit cards Market environment Consumer loans market, CHF bn Car registrations, in 1,000 cars Transaction volumes, CHF bn New cars -5% 5% +6% +6% +9% +9% 354 317 314 300 2015 2016 2017 2018 Used cars 43.9 7.66 7.19 7.24 40.3 Change of ownership -2% 2% 36.8 34.9 7.06 860 873 873 856 2015 2016 2017 2018 2015 2016 2017 2018 2015 2016 2017 2018E Source: ZEK Sources: Eurotax, auto-Schweiz Source: SNB ■ Net financing receivables +6% ■ Net financing receivables +2% ■ Number of cards issued up 11% in line with market in line with leasing market (+2%) to about 892,000 Cembra 2018 ■ Market share stable despite ■ Market share stable ■ Outperforming market growth, ■ Partnerships performing well aggressive competition transaction volumes up 19% ■ Almost full book repriced, ■ EFL Autoleasing AG successfully Market share 13% in credit establishing new run rate integrated cards (2017: 12%) ■ Strong presence in NFC trans- in H2 2019 actions with 19% market share ■ All partnerships performing well Page 4 22.02.2019 Full-year 2018 results Cembr bra a Money y Bank

2018 Highlights 2018 key focus areas Partnerships Swissbilling Technology • Eny finance partnership • Increased staff to 29 FTE • Launched Cembra mobile app developing very well • Opened Zurich office for credit cards • Lendico still in pilot phase • Signed major contract with • Samsung Pay and Swatch Pay • Harley Davidson and Hyundai Swisscom Directories AG introduced performing successfully (localsearch.ch) Investing in customer digital • journey Organisation • Realigned the organisation towards more customer focus • Refocused management board responsibilities, with new heads B2B and B2C as well as COO Page 5 22.02.2019 Full-year 2018 results Cembr bra a Money y Bank

Agenda 1. 2018 Highlights Robert Oudmayer 2. 2. FY 2018 8 Financia ancial l resu sult lts Pas Pascal l Per errita itaz Volker er Gloe 3. Strategy and outlook Robert Oudmayer Appendix Page 6 22.02.2019 Full-year 2018 results Cembr bra a Money y Bank

FY 2018 Financial results P&L 2018 2017 % Income statement Comments In CHF mn Higher interest income driven by EFL acquisition at Interest income 330.0 308.3 7 1 the end of 2017, as well as credit cards asset Interest expense -20.8 -24.7 -16 growth and pricing change, partially offset by the Net interest income 1 309.2 283.6 9 repricing of the personal loan book Insurance 2 20.5 23.0 -11 Lower interest expense primarily driven by lower Credit cards 3 92.6 75.0 23 debt financing costs Loans and leases 4 13.4 11.8 14 Driven by the termination of partnership with CSS Other 3.2 2.9 10 2 Commission and fee income 129.6 112.7 15 Credit cards performance driven by +14% 3 Net revenues 438.8 396.3 11 originations growth and pricing initiatives Provision for losses 5 -50.1 -45.1 11 CHF 5.2mn reclassification from operating Operating expense 6 -193.0 -167.9 15 expenses (see note) Income before taxes 195.7 183.3 7 CHF 1.4mn reclassification from operating 4 Taxes -41.6 -38.8 7 expenses (see note) Net income 154.1 144.5 7 Loss rate of 1.1% reflecting the continued risk 5 Basic earnings per share (EPS) 5.47 5.13 7 management discipline Key ratios Driven by an increase in FTE, increased business 6 development activities and IT investments Net interest income/ CHF 6.6mn reclassification to commission and fee financing receivables 6.5% 6.5% income (see note) Cost/income 44.0% 42.4% Effective tax rate 21.3% 21.2% Return on average equity (ROE) 16.9% 16.7% Return on average assets (ROA) 2.9% 2.9% Note: With the adoption of ASC 606 (ASU 2014-09) revenue recognition standard as of 1 Jan 2018 regarding gross vs net presentation of fee income, 2018 commission & fee income includes CHF 6.6mn of revenues that would have previously been reported as operating expenses (thereof CHF 3.4mn marketing, CHF 3.2mn collection fees). Page 7 22.02.2019 Full-year 2018 results Cembr bra a Money y Bank

FY 2018 Financial results Net revenues by source +11% growth In CHF mn Revenues by source Personal loans Auto lease and loans Credit cards Net financing receivables Net financing receivables Net financing receivables +11% +6% +6% +2% +2% +13% +13% 439 439 1,885 1,974 940 1,942 1,782 396 396 833 130 113 2017 2018 2017 2018 2017 2018 Yield (2pt avg) and Interest Income Yield (2pt avg) and Interest Income Yield (2pt avg) and Interest Income 9.3% 8.6% 4.9% 5.0% 7.8% 8.0% 330 72 1 98 4 1 0 7 308 167 13 16 9 0 161 60 84 -21 -25 2017 Volume Rate Other 2018 2017 Volume Rate Other 2018 2017 Volume Rate Other 2018 2017 2018 Interest income Interest expense Commission and fee income Page 8 22.02.2019 Full-year 2018 results Cembr bra a Money y Bank

FY 2018 Financial results Operating expenses 2018 2017 % Income statement Comments In CHF mn Increase in FTE driven by the acquisition of EFL 97.7 1 Compensation and benefits 1 105.8 8 1 Autoleasing AG, Swissbilling growth and digital Professional services 2 18.6 11.4 63 investments Marketing 3 8.5 6.1 40 Driven by strategic initiatives and technology 2 investments Collection fees 4 10.9 5.8 88 Postage and stationary 9.9 9.3 6 Driven by CHF 3.4mn reclassification to income 3 due to ASC 606 (see note) offset by CHF 1.0mn Rental expenses (under operating leases) 4.9 4.7 4 reduction of various marketing activities Information technology 5 24.9 23.6 6 Driven by CHF 3.2mn reclassification to income 4 Depreciation and amortisation 6 13.0 8.7 49 due to ASC 606 (see note), CHF 1.2mn primarily due to increased activities with third party 0.7 1 Other 7 -3.5 n/a collection services Total operating expenses 193.0 167.9 15 CHF 3.6mn reimbursement received for the 5 cancellation of the data centre sourcing project Cost / Income ratio 44.0% 42.4% partially offset by an expansion on IT services and other investments Driven by CHF 1.4mn increase due to asset write- Full-time equivalent employees 1 783 735 7 6 offs, and CHF 2.8mn increase due to investments Cembra Money Bank 754 720 5 in IT and Project releases Swissbilling 29 15 93 Primarily driven by CHF 1.7mn lower pension costs 7 Notes es With the adoption of ASC 606 (ASU 2014-09) revenue recognition standard as of 1 Jan 2018 regarding gross vs net presentation of fee income, 2018 commission & fee income includes CHF 6.6mn of revenues that would have previously been reported as operating expenses (thereof CHF 3.4mn Marketing, CHF 3.2mn collection fees). 1 Full-year 2017 restatement of CHF 2.3mn due to adoption of ASC 715 «Compensation – Retirement Benefits: Improving the Presentation of Net Periodic Pension Costs and Net Periodic Postretirement Benefit Cost» Page 9 Full-year 2018 results Cembr bra a Money y Bank

FY 2018 Financial results Operating expenses walk Increase largely driven by strategic initiatives Operating expenses walk In CHF mn 193.0 6.6 186.4 7.6 5.6 167.9 8.9 3.6 2017 One-off Strategic Acquisition incl Underlying 2018 Impact of new 2018 Actual data sourcing investments integration OPEX before ASC 606 Actual 1 project reclassification Standard Cost st/ income ome + 0.7% 42.4% .4% 43.1% 44.0% .0% 1 With the adoption of ASC 606 (ASU 2014-09) revenue recognition standard as of 1 Jan 2018 regarding gross vs net presentation of fee income, 2018 commission & fee income includes CHF 6.6mn of revenues that would have previously been reported as operating expenses (thereof CHF 3.4mn marketing, CHF 3.2mn collection fees). Page 10 22.02.2019 Full-year 2018 results Cembr bra a Money y Bank