Rothschild & Co: 2020 – Half Year results release

  • Robust underlying business performance as evidenced by:
    • Global Advisory: revenue down 3% to €529 million compared to H1 2019, reflecting momentum in M&A going into the current crisis and our ability to respond to clients’ changing needs
    • Wealth & Asset Management: record level of revenue of €252 million, up 5% compared to H1 2019, due to the strong growth of Assets Under Management (AUM) enjoyed in 2019 and high transaction volumes. Continuing strong Net New Assets (NNA) in Wealth Management
    • Merchant Banking: revenue down 52% to €53 million compared to H1 2019 due to no increase in investment valuations in H1 2020, although strong increase of 29% in recurring revenue as a result of strong AUM growth driven by recent successful fundraisings
  • Revenue decreased by 7% to €838 million (H1 2019: €898 million)
  • Net income - Group share excluding exceptionals : €65 million (H1 2019: €124 million), mainly reflecting the lack of investment revenue in Merchant Banking which has a direct impact on the Group’s net income. Net income - Group share including exceptionals: €60 million (H1 2019: €134 million)
  • Earnings per share (EPS) excluding exceptionals: €0.88 (H1 2019: €1.73) and EPS including exceptionals: €0.82 (H1 2019: €1.88)
  • Foreign exchange translation effects increased revenue by €4 million but negligible effect on Net income – Group share of €1 million

Alexandre de Rothschild, Executive Chairman, commented:

“Our priority during the COVID-19 crisis has been and remains the health and well-being of our colleagues, and it was thanks to their flexibility and hard work that we are pleased to announce such robust results today, which underscore the resilience of our business model in the face of such challenging market conditions.

Following a very strong start to the year in M&A, our Global Advisory business pivoted towards advising clients on liquidity and financing matters which in turn supported revenue performance in the second quarter. Our Wealth & Asset Management business saw revenues and net new assets rise in the first half. As anticipated, our Merchant Banking business revenues suffered due to the lack of investment valuation increases, although recurring revenues grew, thanks to strong AUM growth driven by recent successful fundraisings.

Our business has prospered for many generations and for more than two centuries by putting its clients first and taking a conservative approach. Today, we have a solid financial structure with a strong balance sheet and a high capital ratio of 19.6%.

Our independent model and global footprint in Global Advisory have positioned us well to serve clients effectively during this period. We are experiencing encouraging levels of activity so far in the third quarter, although this progress remains dependent on improving market stability.

Our Wealth & Asset Management business, whilst robust, faces a more challenging second half of the year due to expected lower transaction volumes and the lower interest rate environment.

Merchant Banking’s business model is proving to be resilient reflecting the sector focus of its investments and a growing stream of recurring revenue.”

- ENDS -

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