Interim presentation 14 February 2018
Highlights Revenues (NOKm) Operating margin % EPS basic (NOK) 391 231 350 242 420 312 297 271 403 26% 15% 24% 15% 27% 25% 23% 20% 28% 0.14 0.13 0.20 0.12 0.11 0.09 0.18 0.06 0.06 2015 2015 2015 Strong quarter of NOK 403m in revenues brings full year revenues of NOK 1,283m vs 1,243 last year (+3%) EPS of NOK 0.52 relative to NOK 0.45 in (NOK 0.18 for ) Proposed dividend of NOK 0.50 per share for to be paid out in May Proposal to pay semi-annual dividends for 2018, starting in second half of 2018 2
01/01/2008 01/01/2009 01/01/2010 01/01/2011 01/01/2012 01/01/2013 01/01/2014 01/01/2015 01/01/ 01/01/ 01/01/2008 01/01/2009 01/01/2010 01/01/2011 01/01/2012 01/01/2013 01/01/2014 01/01/2015 01/01/ 01/01/ 01/01/2008 01/01/2009 01/01/2010 01/01/2011 01/01/2012 01/01/2013 01/01/2014 01/01/2015 01/01/ 01/01/ Low cost of capital and low volatility has been favourable for market pricing and transaction activity Interest rates 5% 4% Equity market volatility 100 90 80 Equity indices 200 180 160 3% 70 60 140 120 2% 50 100 1% 40 30 80 60 0% 20 10 40 20-1% 0 0 10 year US interest rate 10 year German interest rate VIX volatility index S&P 500 MSCI Nordic 3
Markets division: Solid quarter supported by a strong primary market within debt and equity Revenues (NOKm) Revenues 4 quarter rolling average (NOKm) 191 177 197 185 178 183 174 167 162 164 165 176 176 173 169 139 146 132 2015 2015 Total revenues of NOK 183m, down 7% from NOK 197m last year, while full year revenues up 3% to NOK 678m Strong Prospera rankings within Equity Sales and Research 4
Markets division: Fixed income operation continuing to improve diversification within Markets Revenues (NOKm) 250 200 150 100 50 50 141 27 113 41 136 32 114 36 161 47 49 138 129 39 93 43 140 0 2015 Equities Non-Equities (Fixed Income, CB, FX) Revenues from Equities were down 13% y-o-y, with secondary brokerage and research revenues being under some pressure prior to the implementation of MiFID II Non-Equities revenues of NOK 43m, up 19% y-o-y, positively impacted by several primary DCM transactions 5
Investment Banking division: revenues in line with last year Revenues (NOKm) Revenues 4 quarter rolling average (NOKm) 199 222 220 174 124 122 139 155 145 144 140 146 154 141 152 151 92 96 2015 2015 Revenues positively impacted by active ECM market, as well as all time high DCM market in ABGSC voted top 3 Investment Bank overall in the Prospera ranking for Corporate Finance advisors in the Nordics, including #1 overall in Norway, Also winner of two categories in Mergermarket awards, «M&A Financial Advisor of the Year in Norway» and as advisor to «European Deal of the Year» 6
Selected Investment Banking transactions Selected transactions Pandox Komplett bank Mølleparken Kistefos TCM Group Lyko SEK 1,480m Private placement NOK 1,031m Initial public offering SEK 240m Senior secured bond NOK 600m Senior unsecured bond DKK 789m Initial public offering SEK 284m Initial public offering Joint bookrunner Joint global coordinator and joint bookrunner Sole manager Joint manager and bookrunner Joint bookrunner Sole global coordinator and bookrunner SKAGEN Fondene Compactor Fastigheter Sonans Gruppen M2 asset management Tulip Oil Salling Bank NOK 1,600m Acquisition by Storebrand SEK 500m Senior unsecured bond issue Undisclosed Sale to EMK Capital SEK 300m Senior unsecured tap issue EUR 87m Senior secured bond issue DKK 138m Rights Issue Advisor to Storebrand Sole manager and bookrunner Advisor to Procuritas Joint bookrunner Sole manager and bookrunner Sole lead manager and financial advisor Borr Drilling Mijodan Ryds bilglas Glamox Insr Insurance Group Nemi Forsikring USD 650m Private placement Joint bookrunner Undisclosed Acquisition by Reconor Advisor to Reconor Undisclosed Sale to Nordic Capital Advisor to Nalka Invest NOK 3,850m Sale to Triton Advisor to Arendals Fossekompani NOK 400m Private placement Sole manager and bookrunner NOK 320m Acquisition of Nemi Forsikring Advisor to Insr Insurance Group
Full year operating costs of NOK 972m in line with last year (NOK 976m) Personnel costs (NOKm) Non-personnel costs (NOKm) Total personnel costs / Revenues 217 202 242 219 133 147 173 162 156 55% 58% 58% 61% 58% 56% 54% 58% 54% 71 64 65 57 65 62 68 61 72 2015 2015 2015 Total personnel costs for the year is down 2% with an increased tilt towards variable compensation Full year Non-personnel costs up 3% compared to last year 8
Closing remarks High level of capital market activity with several transactions closing towards the end of the year MiFID II regulations is expected to have a significant impact on the market for research and brokerage services. ABGSC will not weaken its leading product offering and seek to offset any lost revenues within this area by growing our market share and further developing our primary capital market business Swedish operation continuing growth to new all-time high revenues in Investments in fixed income / DCM operation has paid off with increased market share in Norway (34 high yield transactions / 1 convertible bond transaction completed in the Nordics during the year) Ambition to further grow our client base while maintaining our traditional tight cost control Mandated transaction pipeline throughout the firm on a 10-year high, however recent market development may impact execution Improved cash distribution to shareholders through proposed semi-annual dividends starting in 2H 2018 9
Appendix: Key figures Y-o-Y YTD YTD Y-o-Y Revenues NOKm 403 420-4% 1,283 1,243 3% Personnel costs NOKm -219-242 -9% -711-724 -2% Non-personnel costs NOKm -72-65 10% -262-252 4% Total operating costs NOKm -291-307 -5% -972-976 0% Operating profit NOKm 112 113-1% 311 267 16% Net financials NOKm 10 11-10% 20 15 34% Profit before tax NOKm 122 124-1% 331 282 17% Taxes NOKm -32-29 10% -84-71 19% Non-controlling interests NOKm -5 0 NA -6 0 NA Net profit NOKm 85 95-10% 240 211 14% EPS (basic) NOK 0.18 0.20-10% 0.52 0.45 16% EPS (diluted) NOK 0.17 0.19-11% 0.49 0.43 14% Book value per share NOK 1.83 1.87-2% 1.83 1.87-2% Headcount (average) # 262 252 4% 257 253 2% Revenues per head (average) NOKm 1.54 1.66-7% 5.00 4.91 2% Operating costs per head (average) NOKm -1.11-1.22-9% -3.79-3.86-2% Operating cost / Revenues % 72.2% 73.2% 75.8% 78.5% Total compensation / Revenues % 54.4% 57.6% 55.4% 58.3% Operating margin % % 27.8% 26.8% 24.2% 21.5% Return on Equity (annualised) % 42.0% 45.2% 29.3% 28.3% 10
Appendix: Consolidated income statement (unaudited) NOKm YTD YTD 2015 Brokerage revenues 113.2 129.2 434.1 495.4 602.7 Corporate Finance revenues 290.0 290.5 849.1 747.6 711.2 Total revenues 403.1 419.7 1,283.1 1,243.0 1,313.9 Fixed personnel costs -101.7-112.6-384.8-426.4-385.6 Other operating costs -68.6-64.2-253.4-245.5-257.2 Depreciation -3.1-1.0-8.5-6.3-8.8 Total operating costs -173.4-177.8-646.7-678.2-651.6 Operating profit before variable compensation 229.7 242.0 636.4 564.8 662.3 Variable personnel costs -117.7-129.3-325.7-297.9-338.0 Operating profit after variable compensation 112.0 112.7 310.7 266.9 324.3 Net financial result 9.8 10.9 20.1 15.0 17.1 Profit before tax 121.8 123.6 330.8 281.9 341.4 Taxes -31.7-28.7-84.5-71.2-111.1 Net profit 90.1 94.8 246.3 210.7 230.3 Profit / loss to non-controlling interests 5.0 0.0 5.8 0.0 0.0 Profit / loss to owners of the parent 85.2 94.8 240.5 210.7 230.3 11
Appendix: Consolidated balance sheet (unaudited) NOKm 31/12/ 31/12/ 31/12/2015 Total intangible assets 124.6 53.8 53.3 Plant and equipment 18.7 19.3 19.1 Financial non-current assets 19.3 16.6 27.0 Total non-current assets 162.6 89.7 99.4 Receivables 893.8 1,728.6 1,166.5 Investments 83.4 246.7 291.5 Cash and bank deposits 902.0 748.5 853.5 Total current assets 1,879.3 2,723.9 2,311.5 Total assets 2,041.9 2,813.6 2,410.8 Paid-in capital 305.2 305.4 288.7 Retained earnings 552.1 570.6 709.0 Equity attributable to owners of the parent 857.4 876.0 997.7 Non controlling interests 58.3 0.0 0.0 Total equity 915.7 876.0 997.7 Long-term liabilities 14.8 16.8 17.6 Short-term liabilities 1,111.4 1,920.8 1,395.5 Total liabilities 1,126.2 1,937.6 1,413.1 Total equity and liabilities 2,041.9 2,813.6 2,410.8 12
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