Bellevue Group reports a net profit of CHF 9.2 mn – market-induced outflow of client assets

Ad hoc announcement pursuant to Art. 53 of the SWX Listing Rules

Zurich, February 25, 2025

2024 annual results

Bellevue Group reports a net profit of CHF 9.2 mn – market-induced outflow of client assets

• Sub-par returns in the healthcare sector weighed on the performance of Bellevue’s dedicated investment solutions and prompted clients to reallocate their assets to other sectors – total assets under management declined by 17% to CHF 5.8 bn
• Due to the lower client asset base, total operating income declined to CHF 70.2 mn, but slight increase in commission income and financial income
• Operating expenses amounted to CHF 53.5 mn, down 8% from the previous year despite additional costs related to personnel changes, organizational optimization, and the move back to the company’s original location in Zurich City
• Consolidated net profit of CHF 9.2 mn, a decline of 40% year-on-year
• Shareholder-friendly dividend policy with a proposed dividend of CHF 0.70 per share, 6.2% dividend yield
• Action taken to optimize the Group's structure and improve efficiency 
• The healthcare sector offers an interesting entry point thanks to favorable conditions in the key US market and attractive valuations

Gebhard Giselbrecht, CEO of Bellevue Group, on the annual results for 2024: «Bellevue Group had to contend with stubborn market headwinds in 2024 stemming from the underperformance of the healthcare sector, Bellevue’s primary investment universe, compared to the global equity market. Those headwinds held back the performance of our healthcare strategies and intensified the reallocation of client assets to other sectors in response to the generally lower potential returns of healthcare investments compared to the global stock market. Strict cost management and the measures taken to streamline the Group’s product portfolio and strengthen its investment processes were unable to completely offset the negative impact of these developments. The reported results are not consistent with Bellevue’s ambitions. We aim to generate value for our clients and shareholders. We have taken action to further optimize our organization and structure and are working diligently to advance our investment strategies to ensure that we are well-positioned to take full advantage of a change in trend for the healthcare sector. Healthcare remains an attractive investment proposition, thanks to the positive environment for the paramount US market and currently low valuations compared to the global equity market, offering an interesting entry point.»

Still no upturn in the healthcare sector – attractive upside potential

The global healthcare sector ended 2024 with a gain of 1.6% in USD (+9.9% in CHF), which placed it near the bottom of the sector performance rankings. After a promising start, healthcare stocks corrected during the latter half of 2024 although Donald Trump’s second term as president is expected to provide positive impetus to the healthcare sector, as already seen during his first term.

The healthcare sector continues to offer attractive prospects. The positive market setting in the US and the widespread deployment of artificial intelligence systems that enable the huge amounts of data that are available across the healthcare landscape to be used even more efficiently in the pursuit of medical innovation are fertile grounds for promising investment opportunities. Attractive entry levels also beckon. The MSCI World Healthcare Index is trading at an 11% discount to the MSCI World Index (based on forward 1-year P/E ratios), whereas, historically, healthcare has traded at an average premium of 3% to the total market over the past 10 years.

Market-induced reallocation of client assets

After a stable period during the first six months of the year, assets under management at the end of 2024 were 17% lower yoy at CHF 5.8 bn. Investors shifted more of their assets from healthcare to other sectors such as IT and communication services. Total outflows amounted to almost CHF 1.5 bn and were only partially offset by new client assets of more than CHF 600 mn, most of which flowed into Bellevue’s traditional healthcare strategies. Non-healthcare strategies also experienced a slight outflow.

The average level of assets under management for 2024 was 18% lower compared to the previous year, which resulted in a corresponding decline in management fees to CHF 65.4 mn. Thanks to an increase in other net fee and commission income and in financial income, total operating income declined by only 14% to CHF 70.2 mn. Operating expenses declined by 8% to CHF 53.5 mn. Additional expenses due to personnel changes and organizational optimization as well as the company’s move back to its original location in the city of Zurich prevented a more significant reduction in the cost base. Consolidated net profit for 2024 came in at CHF 9.2 mn. The resulting cost-income ratio of 76% is clearly above the mid-term target range of 60-65%. 

Strong balance sheet, sturdy financial foundation

Bellevue’s strong balance sheet gives it the resilience it needs to successfully navigate adverse market conditions while enabling it to continue to refine and develop its business activities and its product range. This sturdy financial foundation also enables it to maintain a shareholder-friendly dividend policy. The Board of Directors will propose a dividend of CHF 0.70 per share at the Annual General Meeting of Bellevue Group. This corresponds to a dividend yield of approximately 6.2% based on the stock’s closing price on the final day of trading in 2024.

Pleasing returns from selected strategies

Despite the difficult market environment Bellevue managed to create value with several of its healthcare investment strategies. The Bellevue Medtech & Services Lux Fund gained almost 9% in USD (+17.2% in CHF), for example, beating its benchmark. The Bellevue Digital Health Fund also showed a pleasing return of 4.7% in USD (+12.7% in CHF). Bellevue AI Health and Bellevue Obesity Solutions, two recently launched funds that invest in attractive long-term growth trends, had a successful start in 2024. After performing very well during the first half of the year, both funds came under pressure towards the end of the year, resulting in full-year returns, respectively, of 2.8% and 0.5% in USD (+10.7% and +8.3% in CHF).

Bellevue’s flagship product BB Biotech reported a 3% increase in the Net Asset Value (NAV) of its portfolio, but its share price declined by 13.5%. As a result the stock’s discount to NAV widened, especially towards the end of the year. Its new leadership is strongly committed to guiding the company back to its former growth trajectory. The new year began on a good note for BB Biotech with Johnson & Johnson's announcement in January 2025 of a USD 14.6 bn bid for Intra-Cellular Therapies, a core position in BB Biotech’s portfolio.

Turning to Bellevue’s traditional and alternative investment solutions, the Bellevue Option Premium strategies stood out with a positive return of 7.8% in EUR. The Bellevue Global Macro Fund also showed a solid investment performance of 6.5% in EUR. The Bellevue Entrepreneur Europe Small Fund returned 3.5% in EUR and outperformed its benchmark.

Bellevue continues to view its private markets business as a source of attractive additional income flows because of its broadly diversified and mature portfolio. Bellevue Private Markets focuses on proprietary growth equity investments in SMEs in the DACH region. Bellevue’s exclusive group of investors enhances its prospective investment opportunities while giving it access to a deep pool of entrepreneurial know-how. This led to two new investments in 2024. In view of the still challenging environment for M&A, any exits in the near future are likely to be arranged opportunistically. A broader group of investors can participate in attractive direct equity opportunities through Bellevue Entrepreneur Private. There are plans to expand this product range as soon as the targeted exits from the first vintage have been successfully executed.

Various measures taken to increase efficiency

Bellevue optimized its organizational structure last year in order to further improve operating efficiency. The Group Executive Board was strengthened through the appointment of Fabian Stäbler as Chief Operating Officer. Client activity picked up after the sales team for the domestic Swiss market was enlarged. The move back to the company’s original address in the heart of Zurich City will also facilitate and enhance client interaction. The establishment of a branch office in Singapore marks another milestone in the Group’s development. A greater local presence puts the Group in a better position to build on its existing client base and assets under management and to take better advantage of the growth opportunities that Asia offers. As for the product range, a few minor adjustments were made and smaller funds were merged or closed. Changes were also made to the organizational and management structures of fixed income and multi-asset strategies. Initial, encouraging signs were observed during the course of 2024.

The 2024 annual report and presentation slides are available at  www.bellevue.ch and https://report.bellevue.ch/2024

Financial calendar 2025:
March, 18, 2025  Annual General Meeting
July, 24, 2025  Publication H1 2025 results

Contact
Investor Relations:  Stefano Montalbano, CFO Bellevue Group
Phone: +41 44 267 67 00, smn@bellevue.ch

Media Relations:  Jürg Stähelin, IRF
Phone: +41 43 244 81 51, staehelin@irf-reputation.ch

Bellevue 
Bellevue is a specialized asset manager listed on the SIX Swiss Exchange with core competencies covering healthcare strategies, alternative investments (including private equity) and selected niche strategies. Established in 1993, Bellevue, a House of Investment Ideas staffed by 90 professionals, generates attractive investment returns and creates value added for clients and shareholders alike. Assets under management at the end of 2024 amounted to CHF 5.8 bn.