Resilient results despite the challenging conditions
- Business performance:
- Global Advisory: robust performance in a challenging year with full year revenue of €1,146 million, down 1% compared to last year (2019: €1,160 million)
- Wealth & Asset Management: strong Net New Assets in Wealth Management of €2.9 billion, up 16%. Resilient financial performance in Europe with revenue up 3% at €470 million (2019: €458 million) and profit before tax up 9% at €74 million (2019: €68 million). Very conservative loan book, with no material issues in the current environment. Difficult year for Asset Management in the US
- Merchant Banking: full year revenue down 25% to €148 million (2019: €197 million) due to lower value accretion on investments than in 2019, although strong increase of 24% in recurring revenue as a result of strong AUM growth driven by recent successful fundraisings
- Revenue decreased by 4% to €1,799 million (2019: €1,872 million)
- Net income - Group share excluding exceptionals1: €173 million (2019: €233 million). Net income - Group share including exceptionals: €161 million (2019: €243 million)
- Earnings per share (EPS) excluding exceptionals1: €2.37 (2019: €3.24) and EPS including exceptionals: €2.20 (2019: €3.38)
- Foreign exchange translation effects decreased revenue by €17 million and Net income – Group share by €1 million
- 2020 dividend restricted to €0.70 per share (following the 2019 dividend of €0.85 being cancelled). As a consequence, we expect to make a special interim payment in Q4 2021 of €1.04 per share, subject to restrictions being lifted.
Alexandre de Rothschild, Executive Chairman, commented:
“2020 was a particularly challenging year for all our stakeholders. In these unprecedented circumstances, our focus has been on ensuring the welfare of all our colleagues who all reacted swiftly and remained focused on our clients’ needs during the challenging conditions. Thanks to this strong commitment and collaboration on a global scale, the business continued to operate effectively and produced a robust set of results.
The M&A market was interrupted by the pandemic during the year but finished the year strongly. In addition, our broad offering in financing advisory helped ensure that our results overall in Global Advisory were very resilient. We remain the leading advisor in terms of number of M&A transactions in Europe and second globally.
The Wealth Management business successfully collected a high level of net new assets, reflecting the strength of our brand, our excellent client service and the quality of our advice in this complex financial landscape. In line with our strategy, we announced the acquisition of Banque Pâris Bertrand, consolidating our position in the Swiss market. Asset Management had a tougher year with net outflows in North America, but we have refocused and are more confident for 2021.
Merchant Banking’s resilience was demonstrated by the increasing recurring revenue from the growth in assets under management enjoyed recently. Our stringent investment criteria, focussed on three sectors: healthcare, data & software, and technology-enabled business services, and the quality of assets, allowed us to finish the year with a portfolio that increased in value during 2020 despite the difficult environment.
2020 has shown us that the Group is resilient and agile, and able to face up to immense challenges. We have started 2021 in a strong position and our business model, built on three different pillars across several geographies has proved extremely solid. We are convinced that our strategy of focussing on long-term performance and value creation positions us well for the next stage of our development. Amongst all the hardship and economic disruption caused by the pandemic in 2020, Rothschild & Co is committed to contributing to a sustainable recovery and strongly believes that addressing identified ESG risks can represent value creation opportunities for the business and its stakeholders”.
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