• open
    News

    Performance of Swiss private banks 2014 (September 2015)

    The operational efficiency of Swiss private banks was 2014 on the lowest level of the last years. Compared to the previous year more than half of the analyzed Banks improved their financial value creation. However, only a few were able to earn the cost of equity.

  • open
    News

    Underestimated currency risk exposure and overestimated effectiveness of measures

    Foreign currency risk management is a demanding challenge. Only an integrated perspective with clear objectives ensures a successful handling of foreign exchange risks. Otherwise, there is a danger that the currency risk exposure is underestimated or the effectiveness of measures taken is overestimated or that even fundamentally false conclusions are drawn.

    Publication in german:

  • open
    News

    IFBC acted as a financial advisor on the sale of a 25% equity stake of Zürcher Landbank AG to Clientis ZRB

    IFBC advised Zürcher Landbank on its branch and equity strategy as well as in the course of the search and evaluation of a strategic partner with equity stake. During the transaction process IFBC determined the future capital need of Zürcher Landbank and supported the bank during contract negotiations and transaction structuring.

    Zürcher Landbank AG is a regional bank in the Winterthur area. It is specialized on the business for retail clients as well as small and medium-sized enterprises.

    Publication in german:

PEOPLE MAKE THE DIFFERENCE

Our resources are experience, know-how and commitment. We place high demands on ourselves – our staff have first-class qualifications and outstanding problem-solving abilities. Since every company is unique in its own way, we address the specific issues arising for our customers individually in order to develop professional made-to-measure solutions. Professionalism is much more than simply providing a service and showing we can do the job: it’s a way of thinking, which we take on board accordingly at IFBC. Transparency, honesty and fairness are the core elements of our business culture.

Our customers should rightly have high expectations of us – and we look forward to living up to them.

OUR EXPERTISE AT A GLANCE

IFBC specialises in the systematic, practice-oriented implementation of Corporate Finance concepts and applies its know-how and long-standing experience to projects in a targeted manner.

CORPORATE FINANCE & FINANCIAL ADVISORY

As one of the leading independent Financial Advisors, IFBC supports companies in the realization of corporate transactions, valuation related questions, the modeling of Business Cases along with the structuring and placement of financial instruments. Our expert opinions provided for the board of directors and management take account of best practice and are always objective and independent.

Your contact person

Thomas Vettiger 016.jpg Dr. Thomas Vettiger, Managing Partner

 

Prof_Dr_Rudolf_Volkart_160.jpg Prof. Dr. Rudolf Volkart, Senior Partner

 

VALUATIONS

IFBC possesses extensive Corporate Finance know-how and long-standing experience in the valuation of companies within various industries along with solutions to specific valuation-related questions. Our services include in particular:

  • Valuation of companies within transactions (M&A, MBO, IPO, Private Equity,
     capital increase and others)
  • Preparation of Fairness Opinions within public tender offers
  • Valuation of direct and indirect benefits within public tender offers
  • Determination of risk-adjusted cost of capital
  • Valuations of investments and intangible assets

 

Company valuations within transactions are characterised by high complexity

The general uncertainty regarding future company development and the fact that information is in most cases limited place high demands on the evaluator. It is only with a deep understanding of the business model of the company being valued and a targeted usage of sensitivity, scenario and benchmarking analyses that reliable predictions can be made regarding the value of the company.


The financial fairness of a public tender offer must be assessed with a Fairness Opinion in an objective and independent way

Based on our long-standing experience and our proven professional competence in questions related to company valuation, IFBC has been certified by the Swiss Takeover Board as a suitably qualified evaluator for the issue of Fairness Opinions.


Due to the decision by the Supreme Court in the Quadrant case, the structuring of public tender offers has become increasingly complex

With the application of the minimum price rule, all (purchase) transactions involving shares in the target company must be investigated and assessed as to possible indirect benefits. IFBC has considerable experience in the practical implementation of this new takeover law as a certified evaluator of the offeror. IFBC thus valued the substantial indirect benefits in the Quadrant case as well as in the public tender offer for Schmolz + Bickenbach.


When determining the cost of capital, every single parameter has to be analysed in detail and defined with sound judgment

The cost of capital (WACC) has a significant impact on the valuation of a company, the determination of the financial value of a project or the assessment of an impairment need. Companies are well advised to establish a cost of capital concept that ensures consistent treatment of the essential cost of capital parameters (including currencies, inflation and risk profile) in the context of valuations.


Standard models for the valuation of investments and intangible assets

For recurring valuations of investments or intangible assets, the usage of standardised valuation models increases process efficiency and improves the quality of decisions.

FINANCING

IFBC has developed financing concepts for well-known companies and overseen their implementation with credit- and capital market financing. Our clients appreciate our long-standing experience, our extensive relationship network, our independence and objectivity as well as our great professional competence. We offer support in the following areas:

  • Establishment of sustainable financing concepts
  • Optimisation of existing or sourcing of new credit/loan financing
  • Overseeing capital market transactions
  • Conduct of rating assessments

 

A sustainable financing concept is an essential requirement for successful company development

A company-specific financing concept has to support the planned strategic development of the company and the requirements of everyday operations. When defining financing concepts, we give particular consideration to central aspects such as the cost of capital, flexibility, stability and security. This means that the financing and especially the capital structure will be aligned to the company’s needs.


A financing arrangement that is optimally aligned to the business model provides security and financial flexibility

The specific arrangement of the financing policy is essentially determined by the company’s debt capacity. When determining these, we take particular account of the business model and the sustainable future cash flows of the company. Using sensitivity and scenario analysis, we also verify the impact of economic deviations and structural risks on the debt levels.


Capital market financing can generate advantages in capital procurement

Companies are increasingly using the capital markets. For companies with access to the capital markets, bond financing offers various comparative advantages. Alongside interest rate benefits, the structure of the creditors can be improved and the dependency on individual investors reduced. In addition, the enhanced potential diversification of various maturities can have significant benefits.


Anticipate rating-developments

Company ratings are becoming increasingly important within the context of capital market financing. Amongst other things, it has an effect on the potential issue volume and pricing of the bond. We assess the potential implications of financial developments on the company’s existing rating (rating assessment). We support initial issuers in their approximate assessment of their expected rating classification.

COMPANY TRANSACTIONS

Acquisitions and sales of companies, corporate mergers or joint ventures not only offer new chances for success, but also entail risks. Based on our experiences gained from past transactions, we support the successful implementation of planned transactions above all in the following fields:

  • Structuring of transactions
  • Leading the transaction process and supporting negotiations
  • Search for investors and securing of transaction financing
  • Execution of financial due diligence
  • Support with post merger integration

 

The successful structuring of a transaction must be based on sound economic analysis and requires experience and creativity

The success of a company transaction will be significantly affected by the financial, legal and fiscal structure. Structuring decisions have to be prepared carefully and must be taken at an early stage. Taking account of all substantial aspects (specifically finance, tax, legal and organisation) and working together with proven professional experts, we make sure that company transactions are structured with a view to the long-term perspective.


A closely managed transaction process as a recipe for success

Transaction processes are mostly time and resource intense. Thanks to our many years of experience, we actively manage the transaction process and thus take the pressure off decision makers. Furthermore, we support our clients through negotiations with counterparties or financing banks.


The search for investors and transaction financing as a challenge

In order to ensure a successful corporate sale, the spectrum of potential buyers and investors has to be framed in the best possible terms. A sufficient pool of potential buyers increases the security of the transaction and enhances flexibility. In order to ensure the desired transaction financing, investors and creditors have to be provided with comprehensive documentation and convinced that the transaction will be successful. Drawing on our experience and our extensive network of relationships, we support companies in their search for investors as well as in transaction financing.


Professional financial due diligence as an essential element of corporate transactions

When performing financial due diligence we establish a high level of transparency of the target company. Our analysis focuses on the relevant value drivers, the derivation of normalised income and balance sheet figures (e.g. EBITDA, EBIT, NWC) as well as a systematic valuation of the opportunities and risks of the target. The results of the due diligence provide a sound basis for successful price and contractual negotiations.


Post merger integration ensures successful transactions

The main reasons for the failure of an acquisition often lie in the integration phase. In order to achieve the expected synergies quickly and effectively and to ensure a successful continuation of existing business, structures, processes and systems have to be balanced optimally and aligned in a strategically consistent manner. We support the successful implementation of the transformation and integration process.

FINANCIAL MODELING

Due to efficiency and risk aspects, operational investment processes should be standardised and supported by appropriate management tools. We develop bespoke model solutions in order to ensure the comprehensive and methodically correct assessment of investment projects. Transactions and transformation processes regularly require the development of a Business Case in order to model financial impacts. Alongside this indispensible basis for decision making, this constitutes the precondition for successful implementation. Our Financial Modeling service includes the following support:

  • Development of standardised instruments for the financial assessment of
     investment projects, and the
  • Compilation of Business Cases within transactions and transformation processes

 

A standardised project assessment improves quality of decisions and process efficiency

When dealing with investment projects, companies need to formulate clear processes, including responsibilities and competences, as well as minimum requirements regarding economic feasibility. The use of standardised models is recommended for the financial assessment of investments. These models have to be aligned to the major value and cost drivers, correctly recognise the project risks in addition to the cost of capital as well as demonstrating sensitivity and scenario analysis. Finally, the project proposal has to include the major implementation steps in order to enable effective control of the investment.


The financial Business Case as basis for successful transformation projects

The development of a financial Business Case establishes the decision making basis and preconditions for successful project implementation. The application of adequate key performance indicators (KPI) means that the decision makers are constantly informed of developments in the project, enabling them to take corrective action if necessary.

EXPERT OPINION

As a professional expert, IFBC specializes in handling questions and challenges in the field of Corporate Finance, deploying scientific approaches and current best practice in an objective and understandable manner. Thanks to our know-how and multifaceted experience, IFBC is one of the best known professional experts in financial matters. We provide expert opinions amongst others

  • for supervisory boards
  • in order to make value or price determinations within transactions (valuation
     reports) as well as
  • in order to assess the tender prices within public tender offers (Fairness Opinions)

 

The expert opinions provided by us comply with the most exacting standards imposed by courts, regulatory and supervisory authorities as well as lawyers and auditors. When preparing an expert opinion, we focus in particular on the implementation of the following five principles with reference to the target group:

1.  Holistic analysis of the problem
2.  Implementation based on the latest financial theory
3.  Consideration of best practice
4.  Transparent and comprehensible presentation of results
5.  Clear formulations and material assertions

SELECTED PROJECTS

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Zürcher Landbank

IFBC acted as a financial advisor on the sale of a 25% equity stake of Zürcher Landbank AG to Clientis Zürcher Regionalbank

IIFBC advised Zürcher Landbank on its branch and equity strategy as well as in the course of the search and evaluation of a strategic partner with equity stake. During the transaction process IFBC determined the future capital need of Zürcher Landbank and supported the bank during contract negotiations and transaction structuring.

Zürcher Landbank AG is a regional bank in the Winterthur area. It is specialized on the business for retail clients as well as small and medium-sized enterprises.

open
Swissgrid

Buy side advisory on acquisition of a minority stake in HGRT

IFBC acted as financial advisor to Swissgrid on the acquisition of a minority stake in Holding des Gestionnaires de Réseau de Transport d'Electricité (HGRT). HGRT owns a 49% stake in EPEX SPOT, the leading spot exchange for Central and Western Europe. The mandate focused on the valuation of the target to create a reliable decision basis for the transaction.

Swissgrid is the national grid company, and in its capacity as owner of the transmission system it ensures the secure, reliable and cost-effective operation of the Swiss high-voltage grid.

open
Swissgas

Expert Opinion for Swissgas on the cost of capital of Swiss natural gas high-pressure grid operators

IFBC was mandated to develop a cost of capital framework for the Swiss natural gas high-pressure grid operators taking financial market theory and best practice into account and to determine the adequate cost of capital. Furthermore, IFBC supported Swissgas in the successful negotiations with the Swiss price supervisor to determine the grid usage charge.

Swissgas is a Swiss trading and transmission company for natural gas. Swissgas procures and transmits natural gas on a non-profit basis for the regional distribution companies Erdgas Ostschweiz, Gasverbund Mittelland, Gaznat and Erdgas Zentralschweiz.

open
Alpiq

Valuation of hydropower plants for Alpiq

IFBC performed for Alpiq a valuation of selected minority shareholdings in connection with a portfolio reassessment. The valuations were performed based on the DCF-approach incl. scenario analysis and on valuation multiples.

Alpiq is one of the leading energy companies in Switzerland.

OUR PUBLICATIONS

open
Market Update

Economic Update edition 1/2016

Current economic forecasts show that the Swiss economy has still not fully recovered after the abrupt appreciation of the Swiss franc. Given recent developments in the emerging markets and the hesitant recovery of the EUR - zone only a very moderate growth for Switzerland is expected in 2016.

Publication in german:

Order a publication
open
Market Update

Economic Update edition 2/2015

The predicted downturn in economic growth caused by the SNB decision in January was confirmed during the first half-year. However, according to analysts the Swiss economy will grow more than one percent next year due to the continuing low interest rates and the expected growth in the Euro-Zone.

Publication in german:

Order a publication
open
Article

Economy in a headstand – cost of capital and market failure

A long period of low interest rates has finally led to a lowest or negative interest rate landscape respectively. The end of this extraordinary situation is not in sight. Therewith, the financial and real economy have lost their core steering element.

Publication in german:

Order a publication
open
Article

Capital markets without a compass

Almost 5 years ago we concluded that the dangerous low interest rate level will cause misallocations of capital and that the impact on the real estate market will only be fully recognized in the medium-to-long term. The repeatedly expected rise in interest rates has not yet been occurred.

Publication in german:

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FINANCIAL BUSINESS CONSULTING

Our value based management approach enables integrated and holistic financial leadership and business management in conjunction with appropriate steering and planning instruments.

Your contact person

Thomas Vettiger 016.jpg Dr. Thomas Vettiger, Managing Partner

 

Christian Hirzel 106.jpg Christian Hirzel, Partner

 

FINANCIAL MANAGEMENT

We align the financial management with the business model specific to the company. We support companies in the following areas in relation to the further development of financial management:

  • Implementation of a value based management approach
  • Definition and establishment of a overarching financial policy
  • Improvement of the financial management process (specifically increasing
     efficiency and enhancing efficacy in planning and budgeting)
  • Alignment of reporting with the main value drivers

 

The highest guideline for the financial management is sustainable value creation

The board of directors and management need to consider regularly whether value has been created for the company and therefore for the shareholders and whether the financial management instruments are strictly focused on value creation. Sustainable financial value creation has to take place – based on first-class management know how corresponding high requirements on CEO and CFO – through the three value levers of growth, cost efficiency and capital efficiency. Our value focused management approach provides the basis for this.


Financial policy sets the main guidelines for financial management

Financial policy essentially includes the areas liquidity, capital structure, investment and risk policy. A holistic and company specific presentation of these areas within financial policy lays the basis for the financial management of the company.



Rethinking during the planning and budgeting processes

Various challenges arise within the planning and budgeting processes. There is not infrequently a lack of clear and inherently logical targets, well structured processes, clearly defined responsibilities or consistent data. It would thus be advisable for many companies, to test existing budgetary processes regularly. In addition to the level of detail, consideration of different management levels and other qualitative aspects, it is also necessary to question traditional budgetary models. We recommend reducing the intensity of budgeting in favour of flexible planning and target setting processes by placing key performance indicators at the centre with decentralised planning that is updated continuously. In our experience, this significantly improves efficiency and the quality of planning and budgeting.


Effective reporting – less is more

The information value of reporting has a significant impact on the quality of strategic and operational corporate management and represents an important cornerstone for companies’ internal and external communication. Experience shows that reporting is often not sufficiently focused on financial value drivers, is far too broad sweeping and consequently not sufficiently effective for corporate management. Effective reporting has primarily to represent the main value and cost drivers, the conformation of which must in any case be focused on the target audience.

TREASURY & FINANCIAL RISK MANAGEMENT

Treasury and Financial risk management plays a particularly important role due to the current market development of the currencies, interest rates and commodity prices. Dealing correctly with particularly complex questions can have a significant impact on the success of the company.

 

Create added value with Financial risk management

The starting point is a clearly defined treasury policy and a target oriented strategy for dealing with financial risks. IFBC supports companies in developing a risk strategy that is tailored to the business and the propensity to risk. The guidelines concerning hedging policy and the requirements for processes, systems and instruments are of central importance. We clearly distinguish between a cash flow view and a result-oriented view (market view versus accounting view) in relation to the management of risk exposure.


Fast changing framework conditions represent new challenges for the Corporate Treasury

The treasury function is characterised by the strong linkage between the company as a whole and the financial markets. It is only by adopting a holistic approach that the various challenges can be mastered. Treasury policy, structures, processes and systems have to be aligned consistently and the treasury strategy has to be tested on a regular basis. Our standardised approach enables us to create a snapshot of the company. Based on the results we establish potential for improvement in the fields of treasury policy and strategy as well as structures, processes and systems.

SELECTED PROJECTS

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EKS AG

Valuation of a district heating grid for EKS AG

IFBC was mandated to value a planned district heating grid for EKS AG using the real options approach. With this approach we captured the specific financial characteristics of the project.

EKS AG is an electric supply company serving about 43’000 customers in the canton of Schaffhausen and southern Germany.

open
Belimo

Review of FX-Management for Belimo

IFBC was instructed to assess Belimo’s FX management and specific FX aspects as well as to identify potential improvements. Therefore the existing FX risks were analyzed, quantified and assessed. Based on these results the hedging and communication strategy for the FX topics was assessed and specific recommendations for action were elaborated.

Belimo is the global market leader in the development, production and marketing of actuator solutions for controlling heating, ventilation and air conditioning systems.

open
Helsana

Management of operating cost at Helsana

Within the scope of a strategy revision IFBC supported Helsana in the further development of the strategic management of operating cost. A major task of the project was a systematic collection and analysis of operating cost and the accordant services in order to identify possible potential to improve operating efficiency.

The Helsana Group is the leading health and accident insurance in Switzerland.

open
Emmi

Enhancement of the financial management of Emmi

Together with Emmi IFBC developed a value based performance management. The key elements of the concept were the implementation of a value based financial framework based on the economic profit approach, the new conception of a group wide reporting, the restructuring of the investment process as well as the development of a standardized tool for investment assessments.

Emmi is the largest Swiss milk processor, one of the most innovative premium dairies in Europe and a worldwide renowned specialist for Swiss cheese.

OUR PUBLICATIONS

open
Market Update

Economic Update edition 1/2016

Current economic forecasts show that the Swiss economy has still not fully recovered after the abrupt appreciation of the Swiss franc. Given recent developments in the emerging markets and the hesitant recovery of the EUR - zone only a very moderate growth for Switzerland is expected in 2016.

Publication in german:

Order a publication
open
Market Update

Economic Update edition 2/2015

The predicted downturn in economic growth caused by the SNB decision in January was confirmed during the first half-year. However, according to analysts the Swiss economy will grow more than one percent next year due to the continuing low interest rates and the expected growth in the Euro-Zone.

Publication in german:

Order a publication
open
Article

Economy in a headstand – cost of capital and market failure

A long period of low interest rates has finally led to a lowest or negative interest rate landscape respectively. The end of this extraordinary situation is not in sight. Therewith, the financial and real economy have lost their core steering element.

Publication in german:

Order a publication
open
Article

Capital markets without a compass

Almost 5 years ago we concluded that the dangerous low interest rate level will cause misallocations of capital and that the impact on the real estate market will only be fully recognized in the medium-to-long term. The repeatedly expected rise in interest rates has not yet been occurred.

Publication in german:

Order a publication

Banking Services

The banking business includes various specialties, which implies specific characteristics within corporate management. IFBC takes account of this fact with specialised services. We support banks amongst other things in the following areas:

  • Strategy development and verification of the business model
  • Realisation of corporate transactions 
  • Definition of equity strategy and capital allocation
  • Implementation of value based overall bank management
  • Realisation of initiatives to mitigate increasing pressure on earnings and cost
     (operational excellence)
  • Support in the further professionalisation and the consistent development of
     corporate customer business

Your contact person

Thomas Vettiger 016.jpg Dr. Thomas Vettiger, Managing Partner

 

Markus Varga 063.jpg Markus Varga, Partner

 

Banking strategy

Decreasing margins in interest margin business as well as in the other businesses, increasing costs, changing customer needs as well as the fast technological development and increasing regulation confront banks with major challenges. The core duty of the board of directors is to react to these demands strategically and in an operationally appropriate manner in order to ensure sustainable value creation. IFBC accompanies banks in the process of strategy definition and subsequent strategy implementation. Specifically, we offer support in the following areas:

  • Strategy review and development 
  • Examination of the equity and liquidity strategy
  • Support in the realisation of corporate transactions
  • Development of a roadmap for implementation

 

A prospective strategy is a crucial requirement for a long-term business success

The strategic positioning and the business model of the bank have to be tested regularly with regard to their medium and long-term prospects for success. The starting point is a detailed analysis of current market conditions and expected medium-term developments. It is then necessary to devise strategic action options and to assess these from various perspectives. We carry out the various analyses necessary and support banks both in their strategy development as well as in the realisation of defined strategic initiatives.


High importance of the equity strategy

National regulatory authorities are imposing higher equity ratios on banks, in line with international groups of experts. Alongside increased capital requirements for individual banking transactions, the leverage ratio (i.e. equity as a proportion of the balance sheet total) has also been increased. These developments entail a critical examination of business models. Dividend policy also has to be re-assessed and in some cases external additional capital funding has to be considered. The equity strategy must not only comply with regulatory requirements and risk policy principles, but must also adequately consider the costs of equity in the sense of risk-adjusted return.


Successful strategy implementation on company transactions

Many banks also discuss and examine potential corporate transactions as part of the strategic realignment of business models. Whilst some banks focus in many cases on the specific activities of the value chain and thus wish to divest business that no longer complies with the strategy, other banks wish to access new markets with acquisitions, increase market share and create synergies. We support and accompany our clients throughout the whole transaction process and contribute to their success with our experience.

BANK MANAGEMENT

A successful strategy implementation requires an effective overall bank management. We distinguish between centralised structure management and sales and distribution management. Whilst structure management focuses on meeting targets relating to risk, return and profitability on bank level and the businesses, sales and distribution management supports tangible value performance on the costumer side. We support banks in the development and implementation of integrated bank management in amongst others the following areas:

  • Development of a concept for overall bank management
  • Setting targets for the bank and business areas
  • Development and implementation of the Economic Profit concept, taking account
     of capital allocation
  • Professionalisation of asset and liability management 
  • Establishment of a liquidity concept, taking account of the qualitative and
     quantitative regulatory requirements
  • Concept development for sales and distribution management
  • Implementation and further development of the contribution accounting
  • Establishment of proper management processes and instruments

Operational Excellence

The increasing pressure on earnings and costs requires a periodical testing of the business processes. This focuses both on saving potential on the cost side as well on potential increased earnings.

Our structured analysis approach has the goal of eliminating consistently the duplication of processes, defining processes as efficiently as possible and optimally defining business cuts and sourcing partners. When analysing business processes we not only seek to identify cost-reduction options, but also analyse fee structures and the efficiency of the sales and distribution. On the basis of the results of the analysis, we identify and quantify value increasing potentials and elaborate concrete implementation measures.

IFBC supports banks in process optimisation in the following areas:

  • Credit lending and credit processing (for private individuals and companies)
  • Payment transactions
  • Securities administration
  • Sales and distribution performance

Corporate clients busines

The intense examination of the business model of a corporate client is an essential factor in the success of a farsighted credit decision. If the business model is clearly understood, it will be possible to interpret the results of the financial analysis correctly and in particular to make a feasible assessment of sustainable debt capacity. In addition, sensitivity analysis and scenario thinking are often essential within a comprehensive and prospective assessment of the debt capacity of a corporate client.


IFBC has long-standing consultancy experience in the field of corporate banking. Our support covers amongst others the following areas:

  • Assessment of the credit policy
  • Development of analytical instruments to assess corporate client borrowing
     (such as business model analysis, debt capacity approach)
  • Assessment of rating and credit pricing
  • Basic and advanced training of corporate client advisors and credit analysts
     (credit office
    )

SELECTED PROJECTS

open
Zürcher Landbank

IFBC acted as a financial advisor on the sale of a 25% equity stake of Zürcher Landbank AG to Clientis Zürcher Regionalbank

IIFBC advised Zürcher Landbank on its branch and equity strategy as well as in the course of the search and evaluation of a strategic partner with equity stake. During the transaction process IFBC determined the future capital need of Zürcher Landbank and supported the bank during contract negotiations and transaction structuring.

Zürcher Landbank AG is a regional bank in the Winterthur area. It is specialized on the business for retail clients as well as small and medium-sized enterprises.

open
Marxer Stiftung für Bankwerte

IFBC acted as a sole financial advisor to Marxer Stiftung für Bankwerte on the sale of Centrum Bank Ltd., Vaduz to VP Bank Ltd.

IFBC supported Marxer Stiftung für Bankwerte on the sale of Centrum Bank Ltd., Vaduz to VP Bank Ltd. Our support covered the development of the transaction structure, the company valuation and the negotiations on the SPA as well as closing activities. 

Centrum Bank AG, Vaduz was prior to the sale the fourth-largest private bank in the Principality of Liechtenstein with more than 6 billion CHF assets under management. The bank focuses on investment advisory services, asset management and financial consulting dedicated to domestic and international clients/high net individuals. As of 7 January 2015, Centrum Bank Ltd. became a wholly owned subsidiary of VP Bank Ltd. The merger of VP Bank Ltd. and Centrum Bank Ltd. will be completed in the coming months.

open
UBS

New Debt Capacity Framework for UBS

IFBC supported UBS in the development and implementation of process-specific debt capacity frameworks for corporate clients as well as the corresponding strategic analysis.

UBS is a leading global financial services company for private and corporate clients as well as institutional clients.

open
Valiant

Early warning tool for credit to small and medium-sized enterprises (SME) for Valiant Bank AG

IFBC supported Valiant Bank AG in developing an early warning tool to identify deteriorations in the credit standing of SME at an early stage.

Valiant is an independent, supra-regional retail bank with strong competences in private banking.

OUR PUBLICATIONS

open
Market Update

Banking Update edition 2/2015

Despite the further declining interest margin, the listed Swiss retail banks increased their operational efficiency by mid-2015 - measured by the cost-income ratio. Simultaneously, the expectations for future performance improvements decreased to a negative level.

Publication in german:

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open
Market Update

Performance of Swiss private banks 2014 (September 2015)

The operational efficiency of Swiss private banks was 2014 on the lowest level of the last years. Compared to the previous year more than half of the analyzed Banks improved their financial value creation. However, only a few were able to earn the cost of equity.

Publication in german:

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open
Article

Performance of Swiss Private Banks 2014

“Diät im Private Banking” and „Hartes Pflaster Private Banking“ headlined Finanz und Wirtschaft referring to the findings of our analysis “Performance der Schweizer Privatbanken 2014” published in the IFBC Banking UpDate. Within this UpDate we show that Swiss Private Bank’s insufficient profitability and value creation is in particular because of the missing alignment of personnel expense to today’s income situation.

Publication in german:

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IFRS ADVISORY

IFRS rules are becoming increasingly complex and more extensive. A detailed understanding of the relevant standards and Corporate Finance is essential especially in relation to company mergers, investments as well as financial instruments. As an independent expert with long-standing experience, IFBC specialises in the following areas:

  • Purchase Price Allocation (PPA)
  • Impairment tests
  • Share-based payments
  • Valuation of financial instruments

Your contact person

Christian Hirzel 106.jpg Christian Hirzel, Partner

 

Thomas Vettiger 016.jpg Dr. Thomas Vettiger, Managing Partner

 

Purchase Price Allocation (PPA)

According to IFRS 3 "Business Combinations", within an acquisition the purchase price must, from an accounting perspective, be allocated to the assets and liabilities identified. This results in positive or negative goodwill at the acquisition date. The specific implementation of the Purchase Price Allocation is associated with various problems.

As an independent expert we carry out Purchase Price Allocations according to IFRS requirements and thus increase certainty for the board of directors, management and the auditors when dealing with transactions from an accountancy perspective. We divide the process into four phases:

1.  Determination of the PPA-strategy
2.  Transaction analysis
3.  Performance of the Purchase Price Allocation
4.  Disclosure


The PPA strategy assesses the effects of the purchase price allocation on future results

Due to their scope for amortisation, the values of the newly identified intangible assets and goodwill have a direct impact on the future financial performance of a company. In order to determine an IFRS-compliant PPA strategy, the implications of the purchase price allocation have to be estimated and evaluated at an early stage.


The relevant purchase price for the PPA is not always apparent at first glance

When analysing a transaction, it is necessary first and foremost to determine the relevant purchase price for the PPA. We analyse the transaction in detail (including in particular for earn-out clauses, purchase and disposal rights) and determine the transaction price taking account of the relevant IFRS standards.


The actual performance of the Purchase Price Allocation requires considerable valuation know-how

The implementation of the Purchase Price Allocation can be divided into the following steps:

  • re-valuation of existing assets and liabilities (fair value determination)
  • identification of new intangible assets (according to identification criteria
     of IAS 38
    )
  • valuation of intangible assets (according to market value approach, income
     approach and cost approach
    )
  • identification and allocation of goodwill (residual purchase price for the target and
     fair value of all net assets
    )


Our report to decision makers includes detailed and easy to understand presentation of the valuation as well as the results for intangible asset values and goodwill
.


The application of IFRS 3 is associated with various declaratory obligations

Various declaratory obligations have to be considered in relation to the IFRS in order to enable the recipients of the report to assess the financial implications of the corporate transaction. We know both the minimum requirements as well as best practice.

IMPAIRMENT

According to IAS 36, the goodwill created out of a transaction and all other intangible assets without a defined life-span are assessed every year and subject to an impairment test following the occurrence of specific events (Triggering Events). IFBC offers support during:

  • testing of the impairment models used according to IFRS requirements and current
     best practice
  • development and realisation of customised, IFRS-compliant models that enable a
     standardised approach to be followed
  • determination of the cost of capital for the impairment

 

Impairment models have to be tested regularly for IFRS-compliance and should be imbedded within an efficient process

The IFRS-compliance of the impairment models as well as the quality and accuracy of the data used (especially cost of capital) should be tested periodically. Our standardised approach allows us to assess the impairment testing efficiently with regard to IFRS-compliance and best practice and to establish any requirement for adaptation of processes, models and valuation parameters.


Standardised processes and models reduce time expenditure and enhance security during impairment testing

The implementation of standardised processes and models for impairment testing can ensure both efficient processing as well as a high degree of certainty.


IFBC tests the Impairment-WACC of various quoted companies each year

The cost of capital play an important role in the financial management of a company. Their different fields of application (e.g. CAPEX, acquisitions, value based management and IFRS) should thus be brought together within a holistic cost of capital concept. The WACC used for performing the impairment tests has to comply with the IAS 36 requirements as well as Corporate Finance principles.

Share-based Payments

Shared based payments are commonplace, in particular for listed companies. IFRS 2 provides clear guidelines for accounting for such payment instruments. The chosen fulfilment method (shares or cash) determines the valuation method and the accounting treatment. Accordingly, the implications for valuation and accounting treatment have to be analysed as part of the regulatory structuring of employee participation schemes. We support our customers in defining variable payment instruments and their periodical valuation.

VALUATION OF FINANCIAL INSTRUMENTS

Various valuation questions arise within an IFRS-compliant treatment of financial instruments. This is the case in particular for the valuation of derivatives and convertible and option bonds. The standards that are relevant in this context, such as IAS 32 and IAS 39, respectively new IFRS 7 and IFRS 9, have been constantly redeveloping and developing further for some time and their implementation is complex. Since financial instruments have to be re-evaluated regularly at reporting dates, we recommend that a standardised valuation process is implemented. IFBC specialises in these issues

SELECTED PROJECTS

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Spice Private Equity Ltd

Determination of fair value of employee stock options

For the annual report according to IFRS, Spice Private Equity Ltd regularly engages IFBC as independent financial advisor to determine the fair value of the employee stock options issued.  

Spice Private Equity is a Swiss investment company with a main focus on private equity in emerging markets. The company is listed on the SIX Swiss Exchange and is included in the Swiss Performance Index (SPI) since May 2015.

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Aryzta

Implementation of Purchase Price Allocations for various acquisitions

IFBC was instructed by Aryzta to implement Purchase Price Allocations (PPA) for numerous acquisitions (such as the acquisitions of Great Kitchen, FSB Group, Honeytop, Fullbloom, Maidstone, Klemme AG and Bakery Holding) according to the requirements of IFRS 3.

Aryzta AG is a global business with a leadership position in specialist bakery products.

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Swissport

Implementation of Purchase Price Allocation for the acquisition of Swissport by PAI Partners

In 2011 Swissport was acquired by the private equity company PAI. IFBC was instructed to carry out the Purchase Price Allocation in accordance with IFRS 3 and to summarise the results in an independent report to the auditors.

Swissport International Ltd. provides ground handling and cargo services in over 180 airports worldwide.

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Holcim

Development of an impairment tool

IFBC was instructed to develop a standardised impairment tool for use by all country units which complies with the requirements of IAS 36 and reflects enterprise valuation best practise. In addition, a group-wide cost of capital matrix was developed taking account of different currencies and inflation rates.

Holcim is a global supplier of cement.

OUR PUBLICATIONS

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Article

Prof. Dr. Rudolf Volkart received the Dr. Kausch-Prize 2014

Prof. Dr. Rudolf Volkart, Senior Partner and Member of the Board of Directors at IFBC for many years, was awarded the Dr. Kausch-Prize 2014 at the University of St.Gallen (HSG). Rudolf Volkart received the price for his contribution to the fields of financial accounting and corporate finance.

Since 1984 each year outstanding characters are awarded for their accomplishments in research and practice in management sciences in the field of accounting and finance.

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Article

Currency turbulences increase impairment risks

Growing uncertainty within the cost of capital determination – particularly high challenges relating to valuation especially for foreign investments.

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Whitepaper

Purchase Price Allocation according to IFRS 3

A purchase price allocation (PPA) should be an integrated part of every acquisition process. Addressing the PPA very soon during an acquisition process makes it possible to avoid significant negative effects as a result of the PPA.

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PUBLICATIONS

We specialise in the conceptualisation of financial management instruments and the preparation of reports to assist the decision making process for boards of directors and business management.

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Market Update

Economic Update edition 1/2016

Current economic forecasts show that the Swiss economy has still not fully recovered after the abrupt appreciation of the Swiss franc. Given recent developments in the emerging markets and the hesitant recovery of the EUR - zone only a very moderate growth for Switzerland is expected in 2016.

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Market Update

Banking Update edition 2/2015

Despite the further declining interest margin, the listed Swiss retail banks increased their operational efficiency by mid-2015 - measured by the cost-income ratio. Simultaneously, the expectations for future performance improvements decreased to a negative level.

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Market Update

Performance of Swiss private banks 2014 (September 2015)

The operational efficiency of Swiss private banks was 2014 on the lowest level of the last years. Compared to the previous year more than half of the analyzed Banks improved their financial value creation. However, only a few were able to earn the cost of equity.

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Article

Performance of Swiss Private Banks 2014

“Diät im Private Banking” and „Hartes Pflaster Private Banking“ headlined Finanz und Wirtschaft referring to the findings of our analysis “Performance der Schweizer Privatbanken 2014” published in the IFBC Banking UpDate. Within this UpDate we show that Swiss Private Bank’s insufficient profitability and value creation is in particular because of the missing alignment of personnel expense to today’s income situation.

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Market Update

Economic Update edition 2/2015

The predicted downturn in economic growth caused by the SNB decision in January was confirmed during the first half-year. However, according to analysts the Swiss economy will grow more than one percent next year due to the continuing low interest rates and the expected growth in the Euro-Zone.

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Article

Economy in a headstand – cost of capital and market failure

A long period of low interest rates has finally led to a lowest or negative interest rate landscape respectively. The end of this extraordinary situation is not in sight. Therewith, the financial and real economy have lost their core steering element.

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Study

Value creation of Swiss retail banks 2014 (July 2015)

The operating performance of the evaluated Swiss retail banks slightly decreased in 2014. There are significant differences among individual banks, which are partly size-driven – larger retail banks were able to benefit from economies of scale.

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Article

Capital markets without a compass

Almost 5 years ago we concluded that the dangerous low interest rate level will cause misallocations of capital and that the impact on the real estate market will only be fully recognized in the medium-to-long term. The repeatedly expected rise in interest rates has not yet been occurred.

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Article

Financial reporting is subject to change

The article is based on the testimonial lecture during the ceremony for the Dr. Kausch Prize 2014 on February 26 2015 at the University of St. Gallen. Prof. Dr. Rudolf Volkart received the price for his contribution to the fields of financial accounting and corporate finance.

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Study

Financial performance of Swiss industrial companies 2014 (June 2015)

Two third of the Swiss industrial companies could improve the operating performance in 2014 due to the improved economic situation.

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Market Update

Impairment testing in the current interest and currency environment (June 2015)

After SNB decision to discontinue the minimum EUR-exchange rate and to implement negative interest rates corporates face several challenges to perform the annual impairment tests. Especially the following two questions have to be answered in this connection: How should the impairment WACC be determined within the current interest rate environment and how should the current currency situation be taken into account? In this Finance Update this two questions are answered considering different perspectives and recommendations for impairment testing are made.
 
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Market Update

Banking Update edition 1/2015

Due to tightened conditions in the Swiss private banking market the consolidation process has further accelerated. Nevertheless, the listed private banks were able to increase the operating performance in 2014. In contrast, the operating performance of the listed retail banks decreased.

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Market Update

Underestimated FX-effects and overestimated impacts of hedging (May 2015)

Foreign currency risk management is a demanding challenge. Only an integrated perspective with clear objectives ensures a successful handling of foreign exchange risks. Otherwise, there is a danger that the currency risk exposure is underestimated or the effectiveness of measures taken is overestimated or that even fundamentally false conclusions are drawn.

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Article

Prof. Dr. Rudolf Volkart received the Dr. Kausch-Prize 2014

Prof. Dr. Rudolf Volkart, Senior Partner and Member of the Board of Directors at IFBC for many years, was awarded the Dr. Kausch-Prize 2014 at the University of St.Gallen (HSG). Rudolf Volkart received the price for his contribution to the fields of financial accounting and corporate finance.

Since 1984 each year outstanding characters are awarded for their accomplishments in research and practice in management sciences in the field of accounting and finance.

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Market Update

Economic Update edition 1/2015

In the course of the SNB decision to discontinue the Euro minimum exchange rate and to lower the interest rate, the growth expectations for Switzerland have been adjusted downwards. The uncertainty about the currency situation as well as the negative interest level will pose new challenges for all market participants.

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Market Update

Financial Business Case – The basics for successful transformation projects (November 2014)

Transformation projects are conducted by companies in order to secure the sustainable economical success. These projects are usually very complex since the defined measures involve the entire company. The main tasks of the Financial Business Case are to financially assess the measures as well as to make the project impact transparent.

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Market Update

Banking Update edition 2/2014

During the twelve-month period ending on 30 June 2014 the listed retail banks increased their operating performance measured by the cost-income-ratio despite a further diminishing interest margin. Contrary to the trend of the listed private banks, the expectations regarding future performance improvements increased as well.

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Market Update

Value creation of Swiss private banks 2013 (September 2014)

The vast majority of the analyzed Private Banks generated a negative economic performance in 2013, whereby a positive correlation between the size of a bank and its economic profit could be identified. Furthermore, the current industry consolidation led to high extraordinary effects for several Private Banks, and had accordingly a material impact on the value creation in 2013.

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Market Update

Economic Update edition 2/2014

In 2014 analysts expect a solid GDP growth of around 2 per-
cents. The interests should slightly rise again in the second half of the year
.

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Study

Financial performance of Swiss industrial companies 2013 (June 2014)

Due to the economic recovery  around two thirds of the Swiss industrial companies improved their operating performance in 2013 and nearly 80% achieved a positive total shareholder return.

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Market Update

Banking Update edition 1/2014

In the medium term (6M, 1Y) stocks of listed private banks significantly outperformed the SPI as well as stocks of SIX- and OTC-X-listed retail banks. As a consequence thereof listed private banks attained increasing valuation multiples and a high Total Shareholder Return.

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Article

Private Banking – Several players have to take actions

During recent years several private banking firms had to accept a significantly diminishing operating efficiency due to substantially changed circumstances. These firms in particular and the Swiss private banking industry overall must review their business models. Key issues in this respect are tax compliance and a stronger focus an clients‘ needs. 

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Market Update

Economic Update edition 1/2014

For the year 2014, analysts expect an increase in Swiss economic growth of around 2 percentage points, mainly due to the continuing robust performance of the domestic economy, but also to a slight recovery in exports.

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Market Update

The increased capital requirements are a challenge for banks (February 2014)

 

If banks need to raise more equity capital, either on regulatory grounds or due to growth requirements, this will require amongst other things a critical examination of their business model in order to be able to generate a sustainable risk-adjusted return for investors from existing and additional equity capital.

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Article

Increase capital requirements place demands on the banks

If banks need to raise more equity capital, either on regulatory grounds or due to growth requirements, this will require amongst other things a critical examination of their business model in order to be able to generate a sustainable risk-adjusted return for investors from existing and additional equity capital.

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Market Update

Banking Update edition 2/2013

The share performance of listed retail banks as well as comparative market valuation indicators were significantly lower in mid-2013 than the SPI return and values at the end of 2012. The operating performance remained steady compared to last year, with a slightly higher cost income ratio.

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Market Update

Economic Update edition 2/2013

A slight increase in economic growth is expected in 2013 and 2014 in Switzerland. While the long-term interest rates increased significantly during the last half-year, it is expected that they will fall again in the second half of 2013.

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Market Update

Banking Update edition 1/2013

The listed private banks reported a significant operative upturn in 2012 compared to listed and OTX-listed retail banks. The market-to-book and equity-value-to-AUM-multiples, which remained low, also demonstrated the attractive framework conditions for transactions.

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Study

Financial performance of Swiss industrial companies 2012 (June 2013)

Most Swiss industrial companies increased sales in 2012, although many only did so at the expense of decreasing margins. Overall operating performance fell. Nevertheless, the valuation level increased significantly due to optimistic expectations regarding the future performance.

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Market Update

Economic Update edition 1/2013

Slightly increased growth is expected in Switzerland in 2013. However, the continuing strength of the Swiss franc – despite the slight devaluation in January - as well as the cyclical uncertainty of sales markets are both continuing to place pressure on export-oriented industrial companies.

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Market Update

Banking Update edition 2/2012

With the acquisition of Bank Sarasin & Cie AG by the Safra Group as well as the announced acquisition of the international wealth management business of Merill Lynch by the Julius Bär Group, two prominent transactions were concluded in 2012.

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Market Update

Economic Update edition 2/2012

The current low interest rate level provides Swiss companies with favorable financing and attractive investment opportunities. A slightly economic recovery and interest rate rise is expected in 2013.

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Study

Value creation of Swiss banking industry 2011 (July 2012)

The implications of the financial crisis are still having a substantial effect on Swiss banks, which has been intensified by developments in the euro zone. Considering all bank groups, only few institutes were able to increase their financial performance in 2011.

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Market Update

Banking Update edition 1/2012

A negative share performance by listed retail and private banks in the second half of 2011 – in line with the development of the Swiss market (SPI) - in conjunction with continuing margin erosion led to a decrease of the relative valuation level.

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Study

Financial performance of Swiss industrial companies 2011 (June 2012)

The financial management faces significant and new challenges today. Therefore, we analysed 122 listed Swiss companies with regard to their valuation level, operating performance, liquidity and financing structure.

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Article

Currency turbulences increase impairment risks

Growing uncertainty within the cost of capital determination – particularly high challenges relating to valuation especially for foreign investments.

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Market Update

Economic Update edition 1/2012

Despite major economic uncertainty, the financing conditions within the credit and capital markets are favorable. Especially companies with a stable business model and low cash flow volatility will benefit from the low interest rate level and moderate credit spreads.

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Whitepaper

Purchase Price Allocation according to IFRS 3

A purchase price allocation (PPA) should be an integrated part of every acquisition process. Addressing the PPA very soon during an acquisition process makes it possible to avoid significant negative effects as a result of the PPA.

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Article

Against the abolition of the control premium

The adaptation in line with EU law sought by the Swiss Federal Council (“Bundesrat”) deprives Switzerland of a competitive advantage.

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Market Update

Banking Update edition 2/2011

The share performance of Swiss retail banks was significantly better than the performance of the SPI. Despite the decreasing interest rate margin, the average cost-income-ratio remained stable in most cases compared to the previous period.

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Study

Financial performance of Swiss industrial companies 2010 (June 2011)

Swiss industrial companies were generally able to increase their operating performance last year with the economical and cyclical upturn. Nevertheless, 60% of the companies were unable to achieve a risk adjusted return on their invested capital.

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Market Update

Banking Update edition 1/2011

Last year Swiss banks were able to increase their relative valuation level and to post a generally positive share performance compared to the Swiss Performance Index.

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Whitepaper

Cost of capital of banks

The concept of capital allocation is an important component of the strategic bank management. If designed correctly, it enables sustainable value creation by the bank as a whole and its business units to be measured.

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Whitepaper

Investment analysis

The efficient allocation of financial resources is a core element of financial enterprise management. In addition to the required investment analysis and decision making processes, a target oriented investment controlling focusing on value creation also has to be established.

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Article

Challenges in the determination of cost of capital in accordance with IFRS 3, IAS 38 and IAS 36

The applied cost of capital is a key parameter the first time an acquisition is reported and within the regular impairment testing in accordance with IFRS rules.

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Study

Value creation of Swiss banking industry 2009 (June 2010)

The domestic banking groups benefited differently from the partial recovery of the financial markets. The two big players as well as the cantonal banks were able to increase their operating performance. On the other hand, performance fell for regional and private banks.

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Article

Practical application of the IFRS requirements to corporate acquisitions

Article in: Finance and accounting, Yearbook 2009 by Conrad Meyer and Dieter Pfaff

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Study

Value creation of Swiss industrial companies 2001 to 2008 (September 2009)

For the first time IFBC conducted a comprehensive analyses of value creation by Swiss industrial companies. All companies of the Swiss Performance Index were analysed, with the exception of those from the financial and real estate industry.

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Whitepaper

Financial management in times of crises

Management, Boards of Directors and CFOs of companies face big challenges in times of crises in relation to financial management. The securing of liquidity must always take prominence in the short-term as basis for securing operating activity over a medium-term perspective.

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Whitepaper

Steering the business portfolio of banks

Value based business portfolio management supports decision makers in identifying the strategic value enhancing potential and leads to transparency in investment and divestment decisions.

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Article

Value creation in the Swiss banking industry

As part of the 2008 banking study, IFBC analysed the extent to which Swiss banks had been able to create financial added value for their shareholders during the previous years (2000 – 2007).

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The optimum level of liquidity

One of the main tasks of the financial management is to secure company liquidity. The level and structure of the liquidity required for operations has to be determined, weighing up the need to minimise the risk of illiquidity against the opportunity costs of liquidity retention.

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Article

Methodological approach ensures objective enterprise valuation

The discounted cash flow-approach has established itself. However, it only prevents subjective mispricing if various details are considered strictly.

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Article

Value creating FX-management

Due to changes in IFRS requirements, trade-offs arise between the development and implementation of hedging strategies. When deciding on hedging strategies, the implications for the balance sheet and income statement as well as on the cash flow profile of the company have to be known.

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Limits of budgeting

Traditional planning and budgeting concepts are being increasingly criticised. The quality and efficiency of planning now are suffering more due to the increasing complexity and dynamics of today’s environment. Greater time is being dedicated to getting uncertainty under control in future.

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Handling uncertainties within enterprise valuation

Enterprise valuation is subject to uncertainty due to its future orientation, although this can be assessed and transparently presented using a valuation approach based on simulations. Decision makers will thus gain important information regarding value drivers.

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Option based liquidity planning

Liquidity planning is a core instrument within the financial corporate management. An essential precondition is that the financial characteristics of the company’s business model are reflected in its liquidity planning.

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Article

High importance of cost of capital within the financial management of a company

The cost of capital becomes increasingly important within the financial management of a company. This can be explained with reference to three essential trends.

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Article

Financial management from the perspective of the Board of Directors

The role of the board of directors is subject to major changes, in particular in relation to the financial management of companies.

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Article

Objectivise the planning process

The planning and budgeting process requires financial targets to be defined by bank management on group and business unit level. This target setting process is often affected by subjective considerations and inefficient negotiation procedures.

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Target setting

Financial targets have to be set on group and on business unit level within the planning and budgeting process. It is often unclear whether these targets also create shareholder value. This article shows how concrete targets can be inferred from capital market expectations.

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Shareholder oriented management information

Shareholders expect a risk adjusted return on their financial investment. The enterprise value is therefore the starting point for a value based management approach. By analysing the enterprise value, information can be obtained regarding the expected operating performance.

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Capital market efficiency

Capital market information on the enterprise value represents the cornerstone of a value based management system. Any incorrect valuation has to be taken into account, which can be considered by referring to sustainable values and verifying input parameters against industry benchmarking.

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Early warnings through financial transparency

Unternehmenskrisen haben vielfältige Ursachen. In den meisten Fällen von existenzbedrohenden Unternehmenssituationen ist jedoch eins gemeinsam: Die Probleme brechen nicht von heute auf morgen über das Unternehmen herein, sondern sind das Ergebnis einer längeren negativen Entwicklung.

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Integrated valuation of venture capital companies

Venture capital companies regularly require new injections of equity in order to ensure liquidity. Investors are only able to gain information regarding the operating performance of their investments with reference to the enterprise value disclosed. This is why the valuation has to be an integral part of financial management.

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Target setting for banks

Financial targets have to be set within the planning and budgeting process. This process is often affected by subjective considerations and inefficient negotiation procedures. In addition, it is unclear whether these targets also create shareholder value.

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Goodwill impairment according to IAS 36

IFRS 3 governs the accounting treatment of business combinations. The goodwill resulting from a transaction has to be tested annually for impairment. This impairment test is focused on the business model, which must be in compliance with the requirements of IAS 36.

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IFRS 3 & Purchase price allocation

The introduction of IFRS 3 and the related adjustment of IAS 36 and IAS 38 have consequences for the entire purchase price allocation process. The treatment of intangible assets is more important. They must be accounted separately from goodwill.

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IFRS 2 Share based payments

The accounting treatment is explained with reference to two case studies. In addition, the effects of the settlement method and the vesting conditions on staff costs are described and clarification is provided regarding the application of hedge accounting to share-based compensation payments

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Disclosure requirements according to IFRS 7

IFRS 7 combines the existing disclosure requirements under IAS 30 and IAS 32 in relation to financial instruments, whilst also requiring certain additional disclosures along with the revised IAS 1. The preparation of the basic information will have various impacts on companies.

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Article

Clearly formulated targets create added value for investors

As part of strategic leadership, the board of directors and management have to define targets that create added values for shareholders. The objective implementation of the guidelines and the efficient design of the target setting process must take account of the capital market’s expectations.

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Article

New goodwill standards according to IFRS - a curse or a blessing?

Periodical impairment testing – impairment accounting against the income statement – profit volatility increases.

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Article

The Implications of IAS 39 for the Treasury

The implementation of IAS 39 is causing an immense amount of work for the treasury department. In this article the authors discuss first the complexity of the new regulation, and then provide some useful pointers as to how corporate can best approach them by describing the case of Holcim Group.

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Cost of capital and enterprise value

The cost of capital is a key component within enterprise valuation. An idea regarding the plausible cost of capital is always necessary when interpreting the results and in the material assessment of the resulting values.

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Financial management from the perspective of the Board of Directors

Business activity must generate a profit in line with the market and has to increase the value of the company. Therefore, the board of directors must have a deep understanding of the duties of modern financial management.

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New Economy Valuation

It is not infrequently said that “traditional” valuation approaches are no longer adequate for valuing new economy shares and enterprises and therefore that new valuation standards have to be found.

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Article

Value based management

The term "shareholder value” has led to misunderstandings in the past. Discussions focused on different views concerning the time period relevant for the decision as well as the mixture of theoretical concepts with corporate action.

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Implementation of value creating strategies

This article summarises the implementation of value creating strategies with the assistance of the balanced scorecard.

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Enterprise value

Enterprise value is the key success indicator within the modern value based management concept. From a financial point of view, the goal of corporate action must be to increase enterprise value.

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The stock exchange will reward value reporting

Value based management has become best practise in recent years. Therefore, the capital markets are increasingly used as a reference for assessing investment projects and compensations schemes.

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On the shareholder value optimisation of major Swiss companies

In the autumn of 1996, the Swiss banking institute at the university of Zurich conducted a survey of big Swiss enterprises in conjunction with PwC. The goal of the survey was to establish a picture of shareholder value orientation.

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+41 43 255 14 55
Fax
+41 43 255 14 50

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