VZ Group records solid results in a challenging market environment
Operating revenues up 10%
Relative to the previous year, operating revenues rose 10% to reach CHF 103.8 million. Overall revenues primarily consist of consulting fees, management fees and banking revenues. Portfolio management fees declined as a result of the drop in value of the assets under management due to the financial market crisis. Nevertheless, VZ Group's total revenues increased, because banking revenues nearly tripled and consulting fees came in slightly higher. The decrease in value of the managed portfolios was partly offset by newly acquired clients. During the year under report, assets under management declined from CHF 5'760 million to CHF 5'456 million.
Slightly higher profit
Costs grew faster than revenues in 2008. Therefore, net profit rose 3.3% (excluding one-off costs in 2007) to reach CHF 34.3 million. If one-off costs in 2007 are excluded, personnel expenses increased 14% while other operating expenses came in 20% higher. The rise in personnel expenses is attributable primarily to the additional staff at VZ Depository Bank and our branch offices. Under other operating expenses, VZ Depository Bank's business activities were recorded for a full 12 months for the first time in 2008. The greater emphasis on cost efficiency measures began to take effect towards the end of the financial year 2008.
Strong balance sheet growth Since VZ Depository Bank was launched in the spring of 2007, VZ Group's balance sheet total has grown strongly. In 2008 it rose from CHF 548.9 million to reach CHF 771.2 million. By the end of 2008, cash account deposits by VZ Depository Bank clients accounted for around 80% of the balance sheet total. Equity capital also rose CHF 20 million. VZ Group's equity ratio now lies at 14%, which is significantly above the average for the sector.
Business model stands the test
VZ Group's business model combines consultancy and management services. The experience of the past two years has demonstrated that this model facilitates growth even in an unfavourable environment. Demand for independent advice remains strong in uncertain times, particularly when it relates to retirement or estate planning.
Therefore, the looming economic downturn in the current year will affect VZ Group to a lesser extent than other sectors. A significant share of VZ Group's revenue growth depends upon the financial market performance, as the volume effects are very pronounced. From the present perspective it is not possible to foresee whether financial markets will recover substantially in the current year. In view of its revenue and expense structure, the company nevertheless expects to record solid results in 2009.
At the shareholders' meeting on 3 April 2009, the Board of Directors is due to propose an unchanged dividend of CHF 1.50 per share. This means around 35% of VZ Group's net profit will be distributed. The company will use the retained profit to strengthen its balance sheet and to continue financing organic growth.
VZ Group's detailed annual report as well as an investor presentation can be downloaded from our website: www.vzch.com/ir.
This press release contains forward-looking statements that involve known and unknown risks, uncertainties or other factors that may cause the actual results to be materially different from any future results, performance, or achievements expressed or implied by such statements. Against the background of these uncertainties, readers should not rely on such forward-looking statements. The company assumes no responsibility to up-date forward-looking statements or to adapt them to future events or developments.
VZ Group is an independent Swiss financial service company listed on the SIX Swiss Exchange since March 2007. The company specialises in the areas of retirement planning and portfolio management for individuals as well as in insurance and pension fund management for companies. The services are focused on wealthy private clients aged 55 or older and on corporate clients with more than 20 employees. VZ does not sell any proprietary financial products and is not a product broker. Instead, it is financed by consulting fees and management fees. As at 31 December 2008, VZ managed client assets in the amount of 5.5 billion Swiss francs and employed approximately 420 people. VZ is headquartered in Zurich and has branches in Aarau, Basel, Bern, Geneva, Lausanne, Lucerne, Neuchâtel, Rapperswil, St. Gallen, Thun, Winterthur and Zug as well as in Munich and Frankfurt.