Valuation Simulator

Objective:

• To provide a tool that allows to determine the value of EFG International
• Valuation benchmarking against Swiss wealth management peers
• Developed for teaching purposes

Solution:

• Development of interactive tool allowing the simulation of value driver target levels and valuation parameters
• Value drivers included relate to volumes, Client Relationship Officers, non-organic growth parameters, margins, cost-income ratio, etc.
• Valuation parameters include risk free rate, market risk premium, terminal growth rates, dividend pay-out ratios, tax rate, capital requirements, etc.
• Automatic calculation of valuation multiples based on interactively chosen value driver and valuation parameter levels
• Valuation multiples: P/E, P/B, P/AuM, Franchise Value, EP and its components, Tier 1 Capital Ratio, RWA metrics, RoRWA, etc.
• Tool determines a theoretical share price based on the level of input parameters chosen
• All valuation multiples and value drivers are benchmarked against Swiss Private Banking peers
• All financial parameters of the valuation target & peer companies adjusted for extraordinary items and goodwill.
• Beta components used have been determined via a 60-month-regression, based on peer companies.

Main value added of Valuation Simulator:

• Extensive use in guest lectures held at Universities of St. Gallen and Berne since 2007, for illustration purposes
• Annual update of financial performance metrics allows for a “quick glance” of valuation characteristics of main Swiss wealth management players