Financial ReportConsolidated financial statementsNotes to the consolidated financial statements

Financial report Notes to the consolidated financial statements

Notes to the consolidated financial statements

1 Segment information

The Group Executive Board is the Group’s chief operating decision maker and reviews the results from a product-related as well as a geographical perspective. Bellevue Group is focusing exclusively on the Asset Management business unit and therefore reports only one reportable segment. As of December 31, 2022, the segment consists of the operating business units Bellevue Asset Management (since 2022 incl. Bellevue Asset Management (Deutschland) GmbH, formerly StarCapital AG) and Bellevue Private Markets. The offering includes a broad-based range of investment funds as well as investment solutions for institutional, intermediary and private clients. Bellevue Asset Management has a clear focus on managing equity portfolios for selected sector and regional strategies, based on a fundamental and research-driven stock picking approach («bottom up»). A small part of the product range pursues a holistic asset management approach based on quantitative and experience-driven investment approaches with pronounced anti-cyclicality. Bellevue Private Markets specializes in developing exclusive investment opportunities in unlisted companies for its investor group. In addition, it acts as investment advisor for private equity funds. This represents a further diversification of the investment universe with low correlation to the capital markets. The two business units operate in similar regions. Group Management monitors the results of the two business units both on a consolidated basis and separately.

The geographical breakdown of operating income is as follows:

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021
Income
Switzerland	81 598	117 932
United Kingdom	10 717	12 272
Germany	4 504	6 268
Other countries	– 957	4 146
Total	95 862	140 618

Non-current assets for this purpose consist of property and equipment as well as goodwill and other intangible assets:

CHF 1 000	31.12.2022	31.12.2021
Non-current assets
Switzerland	34 805	35 814
Germany	14 730	14 654
Other countries	23	63
Total	49 558	50 531

2 Details on the consolidated income statement

2.1 Revenues from asset management services

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021
Management fees	103 789	137 418
Performance fees	184	2 326
Other commission income	3 873	2 850
Fee and commission expense	– 3 463	– 1 498
Revenues from asset management services	104 383	141 096

Management fees are generated from asset management mandates with listed investment companies, regulated funds in various countries, private equity funds or institutional counterparties. The fees are mostly collected on a monthly basis.

Various mandates include performance fees. These are only taken into account when the performance period has been completed. For regulated funds, this is the calendar year. In some cases, mandates are invoiced on a quarterly basis. In the case of private equity funds, depending on the partnership agreement, this takes place when the fund is redeemed or dissolved.

Other commission income includes transaction-related fees.

2.2 Net other income

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021
Dividend income	771	333
Interest income	192	20
Interest expenses	– 49	– 45
Net foreign exchange income/losses	389	– 87
Other	178	133
Total net other income	1 481	354

2.3 Personnel expenses

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021
Fix and variable salaries	41 588	58 649
Pension cost 1)	1 829	2 084
Other social benefits	2 998	4 832
Other personnel expenses	573	480
Total personnel expenses	46 988	66 045

¹⁾ For further details see note 3.8.

The compensation system for Bellevue Group employees is conceived to motivate employees at all operating units to do excellent work. It is a compensation model based on «personal ownership» and merit system principles. In setting fixed salaries, a restrained policy prevails from a business point of view. On the other hand, variable compensation is offered under an attractive ownership-oriented profit-sharing plan. This profit-sharing plan is tied directly to Bellevue Group’s operating results. Moreover, part of this bonus is paid in the form of restricted stock awards and shares of in-house products («we eat our own cooking»). This system is conducive to a culture of high performance with a long-term horizon.

The basis for calculating Bellevue Group’s variable compensation pool is adjusted consolidated earnings before taxes.

A fixed portion of the adjusted Group profit before taxes is allocated to the employees (total pool of variable compensation). Due to the direct link between the Group’s results and the total pool of variable compensation, there is a mechanism in place to ensure that variable compensation is commensurate with the Group’s operating performance (variabilization of profit-sharing).

2.4 Operating expenses

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021
Occupancy and maintenance expenses	1 036	801
IT and telecommunications	3 873	3 539
Travel and representation, PR, advertising	3 442	4 254
Consulting and audit fees	2 327	1 992
Research expenses	1 906	2 188
Other operating expenses	1 472	1 570
Total Other operating expenses	14 056	14 344

2.5 Depreciation and amortization

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021
Depreciation of property and equipment	479	426
Depreciation of rights of use	1 676	1 705
Depreciation of intangible assets	1 469	1 620
Total Depreciation and amortization	3 624	3 751

2.6 Valuation adjustments

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021
Value adjustment Goodwill (Impairment)	–	2 026
Value adjustment intangible assets (Impairment)	–	862
Total Valuation adjustments	–	2 888

For further details, please refer to the comments under section 3.6.

2.7 Tax

2.7.1 Income taxes

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021
Current income taxes	7 182	10 549
Deferred income taxes	– 1 288	– 22
Total	5 894	10 527

Tax income reconciliation
Pre-tax result	31 194	53 590
Expected rate of income tax 1)	19%	19%
Expected income tax	5 927	10 182
Reasons for higher/lower amounts:
Difference between applicable local tax rates and assumed mixed tax rate	– 359	– 81
Non-deductible expenses	261	435
Tax income unrelated to accounting period	–	– 9
Effect change in tax rates	65	–
Total income taxes	5 894	10 527

¹⁾ The expected income tax rate is a mixed tax rate estimated by considering all the different businesses of the Group.


CHF 1 000	1.1.–31.12.2022
Tax effect of other comprehensive income	Amount before taxes	Tax income/ (expense)	Amount after taxes
Currency translation adjustments	– 1 754	–	– 1 754
Gains and losses arising on revaluation of financial assets at fair value through other comprehensive income	– 227	43	– 184
Remeasurement of post-employment benefit obligations IAS 19	– 248	48	– 200
Total	– 2 229	91	– 2 138

CHF 1 000	1.1.–31.12.2021
Tax effect of other comprehensive income	Amount before taxes	Tax income/ (expense)	Amount after taxes
Currency translation adjustments	– 793	–	– 793
Gains and losses arising on revaluation of financial assets at fair value through other comprehensive income	786	– 109	677
Remeasurement of post-employment benefit obligations IAS 19	– 3 877	738	– 3 139
Total	– 3 884	629	– 3 255

2.7.2 Deferred tax assets

CHF 1 000	Other	Total
Balance as of 1.1.2021	433	433
Credited/(charged)
to profit or loss	63	63
Currency translation adjustments	5	5
Balance as of 31.12.2021	501	501

Balance as of 1.1.2022	501	501
Credited/(charged)
to profit or loss	– 107	– 107
Currency translation adjustments	– 36	– 36
Balance as of 31.12.2022	358	358

CHF 1 000	31.12.2022	31.12.2021
Expiry of unrecognized loss carryforwards
1 to 5 years	629	136
More than 5 years	1 566	759
Total	2 195	895

The non-capitalized loss carryforwards originate mainly from Swiss subsidiaries. It is uncertain whether there will be an income tax benefit for Bellevue Group. Based on this fact, no deferred tax asset was capitalized.

2.7.3 Deferred tax liabilities

CHF 1 000	Intangible assets	Assets from pension plans	Other 1)	Total
Balance as of 1.1.2021	1 996	957	3 001	5 954
Charged/(credited)
to profit or loss	– 611	– 46	698	41
to other comprehensive income	–	– 738	109	– 629
Currency translation adjustments	– 28	–	– 3	– 31
Balance as of 31.12.2021	1 357	173	3 805	5 335

Balance as of 1.1.2022	1 357	173	3 805	5 335
Charged/(credited)
to profit or loss	– 388	8	– 1 015	– 1 395
to other comprehensive income	–	– 48	– 43	– 91
Currency translation adjustments	– 31	–	– 26	– 57
Balance as of 31.12.2022	938	133	2 721	3 792

1) Other deferred tax assets refer to the result of the adoption of IFRS 2 (share-based payment) and IAS 19 (other long-term employee benefits).

3 Details on the consolidated balance sheet

3.1 Financial assets and financial liabilities

3.1.1 Fair value of financial instruments

CHF 1 000	31.12.2022	31.12.2021
	Book value	Book value
Assets
Financial investments
Investments in own products	25 063	28 251
Investments in own products to fulfill long-term incentive plans	12 213	20 287
Derivative financial instruments	–	32
Other investments in equity instruments	878	1 037
Financial assets at fair value through profit and loss	38 154	49 607

Financial investments
Investments in own products	5 076	3 528
Financial assets with OCI fair value measurement	5 076	3 528

Total financial assets at fair value	43 230	53 135

Liabilities
Other financial liabilities	27	27
Financial liabilities at fair value through profit and loss	27	27

Total financial liabilities at fair value	27	27

The fair value of other financial instruments measured at amortised cost does not differ significantly from their book value.

3.1.2 Valuation methods of financial instruments

CHF 1 000	Level 1	Level 2	Level 3	Total
31.12.2022 Assets
Financial investments
Investments in own products	87	22 526	7 526	30 139
Investments in own products to fulfill long-term incentive plans	12 213	–	–	12 213
Other investments in equity instruments	554	–	324	878
Financial assets at fair value	12 854	22 526	7 850	43 230

Liabilities
Other financial liabilities	–	27	–	27
Financial liabilities at fair value	–	27	–	27

CHF 1 000	Level 1	Level 2	Level 3	Total
31.12.2021 Assets
Financial investments
Investments in own products	126	24 188	7 465	31 779
Investments in own products to fulfill long-term incentive plans	20 287	–	–	20 287
Derivative financial instruments	–	32	–	32
Other investments in equity instruments	635	–	402	1 037
Financial assets at fair value	21 048	24 220	7 867	53 135

Liabilities
Other financial liabilities	–	–	27	27
Financial liabilities at fair value	–	–	27	27

No transfer between levels of the fair value hierarchy took place in 2022 or in the previous period.

Level 1 instruments

If a financial instrument is traded in an active market, its fair value is based on listed market prices. In the fair value hierarchy prescribed in IFRS 13, this type of financial instrument is classified as a level 1 instrument. The fair value of these positions corresponds to the current price (e.g. settlement price or closing price) multiplied by the number of units of the financial instruments held.

Level 2 instruments

If there is no active market, the fair value is determined on the basis of valuation models or other generally accepted valuation methods (primarily option pricing and discounted cash flow models). If all the significant inputs can be observed directly or indirectly in the market, the instrument is classified as a level 2 instrument. The valuation models take account of the relevant parameters such as contract specifications, the market price of the underlying asset, foreign exchange rates, yield curves, default risks and volatility.

Level 3 instruments

If at least one significant input cannot be observed directly or indirectly in the market, the instrument is classified as a level 3 instrument. These instruments include private-equity funds and unlisted equity instruments, as well as the contingent purchase price liability. The fair value of private equity funds is determined based on the last available net asset values, less necessary value adjustments according to own assessment. The fair value of unlisted equity instruments is determined primarily based on currently available financial information. Secondarily, depending on the equity security, different multiples based on currently available financial information are used to verify the valuation. If no multiples are applicable, the net asset value is used. The valuation of the contingent purchase price liability is mainly based on the underlying contractual share purchase terms and conditions.

3.1.3 Level 3 financial instruments

CHF 1 000	31.12.2022	31.12.2021
	Financial investments	Financial investments
Holdings at the beginning of the year as 1.1.	7 867	17 349
Investments	1 775	1 964
Redemptions/Payments	– 38	– 10 947
Losses recognized in the income statement	– 1 527	– 1 389
Losses recognized in other comprehensive income	– 227	–
Gains recognized in the income statement	–	104
Gains recognized in other comprehensive income	–	786
Total book value at balance sheet date	7 850	7 867
Unrealised profit/losses from level 3 instruments which were held on the balance sheet date recorded in the income statement in the period	– 1 527	– 1 285

Key assumptions for the valuation of level 3 financial instruments vary from investment to investment. The following table shows the effect on the valuation when these assumptions are changed:

Sensitivity analysis	Fair value	Key assumption	Changes in key assumption	Change in fair value in CHF 1 000
Private Equity funds	7 850	Net asset value	+ 5 percentage points	393
			– 5 percentage points	– 393

	31.12.2022	31.12.2021
CHF 1 000	Other financial liabilities	Other financial liabilities
Holdings at the beginning of the year	27	80
Payments	–	– 45
Gains recognized in the income statement	– 27	– 8
Total book value at balance sheet date	–	27
Unrealised profit/losses from level 3 instruments which were held on the balance sheet date and recorded in the income statement in the period	–	–

The contingent purchase price payment from the acquisition of REALWERK AG in 2020 is included in the balance sheet item «Other financial liabilities» and represents the remaining purchase price liability owed. The valuation is mainly based on the underlying share purchase agreement provisions. In the first half-year 2021 a payment of TCHF 45 has taken place. The remaining liability was derecognized in profit or loss in the first half of 2022.

3.1.4 Derivative financial instruments

CHF 1 000	Positive replacement value	Negative replacement value	Contract volume
31.12.2022
Forward contracts (OTC) 2)	–	27	3 861
Futures 1)	–	–	5 004
Total	–	27	8 865

31.12.2021
Forward contracts (OTC) 2)	32	–	5 519
Futures 1)	–	–	3 910
Total	32	–	9 429

1) Level 1: listed on an active market

2) Level 2: valuated on the basis of models with observable input factors

Derivatives are used exclusively for economic hedging purposes and not as speculative investments. However, if derivatives do not meet the criteria for hedge accounting, they are classified as «Financial investments» and recognized at fair value through profit or loss for financial reporting purposes.

3.2 Trade and other receivables

CHF 1 000	31.12.2022	31.12.2021
Trade receivables	10 456	13 445
Prepayments	841	475
Other receivables	831	4 301
Total	12 128	18 221

3.3 Financial investments

CHF 1 000	31.12.2022	31.12.2021
Investments in own products	30 139	31 779
Investments in own products to fulfill long-term incentive plans	12 213	20 287
Derivative financial instruments	–	32
Other investments in equity instruments	878	1 037
Total	43 230	53 135

Current	35 380	45 269
Non-current	7 850	7 866
Total	43 230	53 135

3.4 Other assets

CHF 1 000	31.12.2022	31.12.2021
Assets related to other employee benefits	12 768	16 703
Assets from pension plans	706	913
Other	1 506	1 412
Total	14 980	19 028

Current	8 241	9 462
Non-current	6 739	9 566
Total	14 980	19 028

3.5 Property and equipment

CHF 1 000	IT equipment	Right of use	Other fixed assets	Total
Acquisition cost
Balance as of 1.1.2021	2 432	8 481	1 995	12 908
Additions	–	76	118	194
Disposals	– 109	– 61	– 15	– 185
Balance as of 31.12.2021	2 323	8 496	2 098	12 917
Additions	–	2 373	974	3 347
Disposals	– 1 463	– 1 897	– 1 720	– 5 080
Foreign currency impact	– 2	– 56	– 8	– 66
Balance as of 31.12.2022	858	8 916	1 344	11 118

Accumulated depreciation
Balance as of 1.1.2021	– 1 893	– 4 276	– 1 707	– 7 876
Additions	– 289	– 1 705	– 137	– 2 131
Disposals	109	–	15	124
Foreign currency impact	–	– 1	–	– 1
Balance as of 31.12.2021	– 2 073	– 5 982	– 1 829	– 9 884
Additions	– 251	– 1 676	– 228	– 2 155
Disposals	1 464	1 896	1 714	5 074
Foreign currency impact	2	28	4	34
Balance as of 31.12.2022	– 858	– 5 734	– 339	– 6 931

Net carrying values
Balance as of 1.1.2021	539	4 205	288	5 032
Balance as of 31.12.2021	250	2 514	269	3 033
Balance as of 31.12.2022	–	3 182	1 005	4 187

3.6 Goodwill and other intangible assets

CHF 1 000	31.12.2022	31.12.2021
Goodwill	40 996	41 545
Other intangible assets	4 375	5 953
Total	45 371	47 498

CHF 1 000		Total
Goodwill Acquisition cost
Balance as of 1.1.2021		109 788
Foreign currency effect		– 476
Reclass foreign currency effect		– 679
Balance as of 31.12.2021		108 633
Write-offs		– 1 542
Foreign currency effect		– 1 274
Balance as of 31.12.2022		105 817

Accumulated valuation adjustments
Balance as of 1.1.2021		– 65 741
Reclass foreign currency effect		679
Additions		– 2 026
Balance as of 31.12.2021		– 67 088
Write-offs		1 542
Foreign currency effect		725
Balance as of 31.12.2022		– 64 821

Net carrying values
Balance as of 1.1.2021		44 047
Balance as of 31.12.2021		41 545
Balance as of 31.12.2022		40 996

Bellevue Group basically examines the value of the goodwill annually, based on the estimated recoverable amount that can be obtained per each single cash-generating unit, or group of such units (depending on allocation). If events or a change of circumstances indicate a possible impairment, the test is carried out more frequently.

The recoverable amount is determined to be the value-in-use and is calculated using the discounted cash flow method. The projected free cash flows for the respective cash-generating units are estimated based on five-year financial plans. The business plans approved by management serve as the basis for these estimates of projected free cash flows. These cash flows are discounted to present value.

The following key parameters and their single components have been taken into account in the discounted cash flow method:

Income on the average assets under management and the expected return on assets (management and performance fees);
Transaction-related income;
Discount rate.

An impairment test was carried out for all CGUs at the end of December 2022. The discount rate used in these calculations was 12.3% (31.12.2021: 10.0%) and the assumed growth rate was 1% (31.12.2021: between 1% and 2%).

As of December 31, 2022, and December 31, 2021, Bellevue Group did not identify any impairment (as of June 30, 2021, the review of the goodwill of the former StarCapital AG resulted in an impairment of CHF 2.0 million). The goodwill as of December 31, 2022 is attributable to the CGU-groups Bellevue Asset Management (Bellevue Asset Management AG, CHF 23.8 million and Bellevue Asset Management (Deutschland) GmbH, CHF 11.4 million) and Bellevue Private Markets (CHF 5.8 million).

At the time of preparation of the consolidated financial statement, Bellevue Group’s management does not assume that a reasonably possible change in a parameter underlying the impairment test would lead to a goodwill impairment.

CHF 1 000	Client base	Brand	Other	Total
Other intangible assets Acquisition cost
Balance as of 1.1.2021	49 200	374	372	49 946
Foreign currency effect	– 96	–	–	– 96
Reclass foreign currency effect	– 845	– 18	–	– 863
Balance as of 31.12.2021	48 259	356	372	48 987
Disposals	– 969	–	–	– 969
Foreign currency effect	– 691	– 12	–	– 703
Balance as of 31.12.2022	46 599	344	372	47 315

Accumulated valuation adjustments
Balance as of 1.1.2021	– 40 998	– 351	– 66	– 41 415
Additions	– 1 504	– 23	– 93	– 1 620
Impairment	– 862	–	–	– 862
Reclass foreign currency effect	845	18	–	863
Balance as of 31.12.2021	– 42 519	– 356	– 159	– 43 034
Additions	– 1 376	–	– 93	– 1 469
Disposals	969	–	–	969
Foreign currency effect	582	12	–	594
Balance as of 31.12.2022	– 42 344	– 344	– 252	– 42 940

Net carrying values
Balance as of 1.1.2021	8 202	23	306	8 531
Balance as of 31.12.2021	5 740	–	213	5 953
Balance as of 31.12.2022	4 255	–	120	4 375

The other intangible assets are amortized over a period of 5 to 15 years and are included in the impairment test described under «Goodwill» (see above).

As of December 31, 2022, and December 31, 2021, no impairment was recognized in the review of the residual values (as of June 30, 2021, the review of the residual values of the StarCapital AG client base resulted in an impairment of CHF 0.9 million). The discount rate used for this purpose was currently between 13.5% and 13.8% (December 31, 2021: between 10.0% and 11.5%) and the applied growth rate between 1% and 2% (December 31, 2021: between 1% and 2%).

3.7 Trade and other payables

CHF 1 000	31.12.2022	31.12.2021
Trade payables	567	659
Accrued expenses	41 313	64 204
Other payables	1 093	1 423
Total	42 973	66 286

Current	33 222	50 677
Non-current	9 751	15 609
Total	42 973	66 286

3.8 Employee benefit plans

There are pension plans for most of the employees at Bellevue Group. These plans provide benefits in the event of death, disability, retirement or termination of employment. There were no unfunded liabilities due to employee pension plans as at the balance sheet date (previous year: no liabilities either). In Switzerland, pension contributions are paid equally by the employer and the employee. The foundation board is composed of an equal number of employee and employer representatives. According to Swiss law and the pension regulations, foundation boards are obliged to act solely in the interest of the foundation and its beneficiaries (active workforce and recipients of pensions). Hence, the employer cannot single-handedly determine the benefits and the funding; all resolutions have to be agreed on by both sides. The members of the foundation board are responsible for defining the investment strategy, for deciding on amendments to the pension regulations, and in particular for determining the funding of the pension benefits.

In the events of death and disability, pension benefits are based on the insured salary. In the event of old age, they are based on pension assets. At the time of retirement, insured persons can choose between a life annuity, which includes a prospective spouse pension, and a lump sum payment. Apart from retirement benefits, pension benefits also include disability and surviving spouse or partner pensions. Furthermore, insured persons can improve their pension situation up to the regulatory maximum by paying in additional amounts, or withdraw money early to acquire property that they occupy themselves. At the time of termination of an employment contract, the vested benefits will be transferred to the pension plan of the new employer or a vested benefits scheme. This type of benefit can result in pension payments fluctuating considerably from year to year.

When determining the benefits, the minimum requirements of the Federal Act on Occupational Old Age, Survivors’ and Invalidity Pension Provision (OPA) and its implementing provisions must be considered. The LOB defines minimum insured salary and minimum retirement assets. The Federal Council determines the minimum interest on these minimum retirement assets at least every two years. In 2022, it amounts to 1% (previous year: 1%).

Due to the nature of the pension plans and the provisions of the OPA, the employer is exposed to actuarial risks. The risks of death, disability and longevity are largely covered by an insurance policy. The major remaining risks include investment risk, interest risk and the risk of the insurer adjusting the premiums.

All employer and employee contributions are determined by the foundation board. The employer is to bear a minimum of 50% of the required contributions. In the case of underfunding, both employer and employee are entitled to pay in amounts to close the funding gap.

As of December 31, 2022, the extended risk sharing between employee and employer will be applied for the first time. Due to the interest rate development, the employer and also the foundation Board assume that the conversion rates used for the calculation of retirement benefits (2022: age 65, 3.45%) will increase in the future and lead to higher retirement benefits. This circumstance is taken into account in the calculation as of December 31, 2022. It is assumed that the conversion rates will increase by around 30% in the long term. As of December 31, 2022, this resulted in an increase of the dynamic present value of the pension obligations by CHF 1.4 million. This amount is included in the effects of changes in financial assumptions.

CHF 1 000	31.12.2022	31.12.2021
Consolidated balance sheet
Fair value of plan assets	45 030	46 846
Present value of pension obligations	– 41 758	– 38 747
Assets not available to Company	– 2 566	– 7 186
Asset/Provision for pension obligation	706	913

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021
Pension cost recognised in the income statement
Service cost
Current service cost	– 1 631	– 1 897
Net interest expenses/income	6	12
Administrative expenses	– 53	– 72
Total pension cost for the period	– 1 678	– 1 957

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021
Revaluation components recorded in other comprehensive income
Actuarial gains/losses
Arising from changes in demographical assumptions	–	1 093
Arising from changes in economic assumptions	2 069	576
Arising from experience	– 2 539	– 959
Return on plan assets (excluding amounts included in net interest expenses)	– 4 420	2 380
Changes in asset ceiling	4 643	– 6 967
Total of amounts recognised in other comprehensive income	– 247	– 3 877

CHF 1 000	2022	2021
Development of pension obligations
At January 1	– 38 747	– 41 622
Current service cost	– 1 631	– 1 897
Employee contributions	– 515	– 358
Interest expenses on the present value of the obligations	– 117	– 79
Pension payments and vested benefits	1 433	6 142
Additions from admissions and voluntary contributions	– 1 711	– 1 643
Actuarial gains/losses	– 470	710
At December 31	– 41 758	– 38 747

Development of plan assets
At 1 January	46 846	46 875
Interest income	146	91
Plan participants' contribution	515	358
Company contributions	1 718	1 713
Pension payments and vested benefits	– 1 433	– 6 142
Additions from admissions and voluntary contributions	1 711	1 643
Return on plan assets (excluding amounts in net interest)	– 4 420	2 380
Administration expense	– 53	– 72
At December 31	45 030	46 846

Actual return on plan assets	– 4 274	2 471

CHF 1 000	31.12.2022	31.12.2021
Allocation of plan assets
Equities
Listed investments	16 161	19 139
Bonds
Listed investments	9 025	3 793
Real estate
Investments in funds	3 223	3 484
Alternative investments	5 372	4 717
Qualified insurance policies	2 050	2 750
Liquidity	9 199	12 963
Total	45 030	46 846

The plan assets allocation as at December 31, 2022, as well as at December 31, 2021, do not include shares of Bellevue Group AG. The foundation board issues investment guidelines for the investment of plan assets. These guidelines include tactical asset allocation and benchmarks for comparing the results with a general investment universe. The plan assets are well diversified. In terms of diversification and security, the Swiss pension plan is subject to the provisions of the OPA. As a rule, bonds receive at least a rating of A.

The foundation board regularly reviews the selected investment strategy as to whether it meets the requirements of the pension plan and whether the risk budget is in line with the demographic structure. Adherence to investment guidelines as well as results achieved by investment advisors are reviewed on a quarterly basis. Furthermore, an external consultancy periodically examines the investment strategy with regard to whether it is effective and appropriate.

Defined-benefit obligations are distributed as follows:

CHF 1 000	31.12.2022	31.12.2021
Active workforce	39 708	35 997
Pensioners	2 050	2 750
Total	41 758	38 747

The maturity of the obligation is 15.8 years as at December 31, 2022 (previous year: 17.6 years). The expected employer’s contributions for 2022 are estimated at CHF 1.9 million.

	31.12.2022	31.12.2021
Actuarial assumptions
Biometric assumptions	BVG 2020GT	BVG 2020GT
Life expectancy at the age of 65
Year of birth	1 957	1 956
Men	22.70	22.57
Women	24.48	24.37
Year of birth	1 977	1 976
Men	24.97	24.86
Women	26.49	26.40
Discount rate	2.25%	0.31%
Expected rate of salary increases	2.25%	1.25%
Expected rate of pension increases	0.00%	0.00%
Interest on pension assets	2.25%	1.00%

Changes to the present value of a defined-benefit obligation

CHF 1 000	31.12.2022	31.12.2021
	+ 0.25%	+ 0.25%
Assumed interest rate	– 884	– 1 129
Salary development	176	205
Interest on pension assets	455	547

	+ 1 year	+ 1 year
Development of life expectancy	247	445

The most important factors influencing the development of pension obligations are assumed interest rate, salary development, pension index and development of life expectancy.

3.9 Share capital

	Number of shares	Par value CHF 1 000
Share Capital (registered shares)
Balance as of 1.1.2021	13 461 428	1 346
Balance as of 31.12.2021	13 461 428	1 346
Balance as of 31.12.2022	13 461 428	1 346

Conditional capital
Balance as of 1.1.2021	1 000 000	100
Balance as of 31.12.2021	1 000 000	100
Balance as of 31.12.2022	1 000 000	100

The purpose of the conditional capital (in total) according to Art. 3a of the Articles of Association is as follows:

a sum of up to CHF 50 000 through the exercise of option rights granted to shareholders;
a sum of up to CHF 50 000 through the exercise of option rights granted to employees and the member of the Board of Directors.

The subscription rights of shareholders are excluded. After acquisition, the new registered shares are subject to the transfer restrictions pursuant to Art. 5 of the Articles of Association.

The conditional capital amounts to a maximum of CHF 100 000 as of the balance sheet date, which represents approximately 7.4% of the existing share capital.

No such optional rights had been granted as of the balance sheet date.

The Company has no authorized capital as at December 31, 2022 and December 31, 2021.

3.10 Treasury shares

	Number	CHF 1 000
Balance as of 1.1.2020	86 142	2 193
Purchases	339 213	13 948
Disposals	– 269 724	– 10 062
Balance as of 31.12.2020	155 631	6 079
Purchases	294 750	10 069
Disposals	– 208 305	– 7 813
Balance as of 31.12.2021	242 076	8 335

4 Significant estimates, assumptions and judgments

4.1 Estimates, assumptions and the exercising of discretion by management

In applying the accounting principles, management must make estimates, assumptions and discretionary decisions that influence the level of reported assets and liabilities, expense and income, as well as the disclosure of contingent assets and liabilities. Bellevue Group is convinced that in all material respects these consolidated financial statements provide a true and fair view of its financial position, its results of operations and its cash flows. Management reviews its estimates and assumptions on an ongoing basis and adjusts them according to new findings and conditions. This may, among other things, have a material impact on the following positions of the consolidated financial statements.

Income taxes

Bellevue Group AG and its subsidiaries are liable for income tax in most related countries. The current tax assets and current tax liabilities reported as at the balance sheet date as well as the resulting current tax expense for the period under review are based on estimates and assumptions and may therefore differ from the amounts determined in the future by the tax authorities.

Provisions

A provision is recorded if, as the result of a past event, Bellevue Group has a current liability as at the balance sheet date that will probably lead to an outflow of funds and if the amount of the liability can be reliably estimated. When determining whether a provision should be recorded and whether the amount is appropriate, best possible estimates and assumptions as at the balance sheet date are applied. These estimates and assumptions may be subject to change according to new findings and conditions.

Level 3 financial instruments (fair value)

Level 3 financial instruments are valued based on the inputs that are not based on observable market data. For details to the valuation methods applied for level 3 financial instruments refer to the notes to the consolidated financial statements on note 3.1.2 «Fair value financial instruments».

For details to the effect of significant changes on the assumptions behind the classification method for level 3 financial instruments refer the notes to the consolidated financial statements on note 3.1.3 «Level 3 financial instruments».

Pension plan

Management sets the actuarial assumptions and determines whether a pension plan surplus can be capitalized as an economic benefit for Bellevue Group. Pension costs are also subject to estimates and assumptions. The management believes that the assumptions and estimates which have been made are appropriate.

Review of goodwill and other intangible assets for impairment

Established that an event or any circumstances cause a reduction in value of the goodwill, examinations will be performed more frequently.

The Group’s approach to determine the key assumptions and related growth expectations is based on management’s knowledge and reasonable expectations of future business, using internal and external market information, planned business initiatives and other reasonable intentions of management. For that purpose, the Group uses historical information by taking into consideration the current and expected market situations.

Changes in key assumptions: deviations of future actual results achieved vs. forecasted/planned key assumptions, as well as future changes of any of the key assumptions based on a future different assessment of the development of relevant markets, and/or the businesses, may occur. Such deviations may result from changes in the market environment and the related profitability, required types and intensity of personnel resources, general and company specific driven personnel cost development and/or changes in the implementation of known or addition of new business initiatives and/or other internal and/or external factors. These changes may cause the value of the business to alter and therefore either increase or reduce the difference between the carrying value in the balance sheet and the unit’s recoverable amount or may even lead to a partial impairment of goodwill.

5 Risk management and risk control

5.1 Risk evaluation and risk policy

Risk management is based on the evaluation of risks by the Board of Directors and is ensuing risk policy, which is reviewed periodically. Independent risk control bodies monitor the risks at the individual operating unit level and at Group level. The Group Executive Board is informed on a regular basis about the assets, financial positions, liquidity and earnings of the Group and all related risks by means of financial and risk reporting procedures commensurate with each particular level of management. Risk reports are prepared at the individual operating unit level as well as at the Group level.

5.2 Market risk

Market risks arise through fluctuations in market pricing of interest rates, exchange rates and equities as well as the corresponding volatilities. Market risk management entails the identification, measurement, control and regulation of market risk exposure. This exposure primarily pertains to the financial investments.

Market risks are monitored by an independent function on a daily basis. Risk reports are prepared at the individual operating unit level as well as at Group level. Market risks are minimized through constant monitoring of risk.

Price change risks

The Group’s exposure to foreign exchange risk arises from financial assets held by the Group, which are either recognized at fair value through profit or loss or directly in equity. To manage the price risk, the Group diversifies the portfolio and partially hedges it with index futures or listed index options. Financial assets are mainly investments in own products (equities, investment funds and private equity funds) and other financial assets (equities, private equity funds and various). Investments in own products for the fulfillment of long-term incentive plans are held to secure liabilities from entitlements of such plans and are therefore considered as economic hedges. All positions in financial assets are valued at fair value. Wherever possible, stock market prices are automatically imported into our systems and used for valuation purposes. The positions are monitored on a daily basis. Any change in price is fully reflected in profit or loss or comprehensive income.

A change in fair value of 10% in relation to the year-end value (net after hedging) would result in a change in equity of CHF 4.3 million (previous year: CHF 5.3 million) for the financial assets measured at fair value, of which CHF 3.8 million (previous year: CHF 5.0 million) would be recognized in profit or loss.

Interest risk

The Group’s exposure to interest rate risk is marginal. On the one hand, the Group’s cash and cash equivalents available on demand bear interest at market rates and, on the other hand, the influence of debt interest is low due to the high equity ratio. If borrowings are necessary, these are short-term fixed loans that bear interest at market rates.

Currency risk

CHF 1 000	CHF	EUR	USD	Other
Net position on 31.12.2021		22 736	9 665	177
10% change in fair value	+/– 3258
Net position on 31.12.2020		21 078	13 231	382
10% change in fair value	+/– 3469

5.3 Default risk

The Group is exposed to default risk, which is the risk that a counterparty is unable to pay the amount due in full when due. The Group measures default risk and expected default losses based on the probability of default, exposure at default and loss given default. In determining expected default losses, the Group considers both historical analysis and forward-looking information. The Group manages and controls its default risk by maintaining business relationships only with counterparties with an acceptable credit rating.

The following table shows the maximum credit risk exposure of Bellevue Group at the balance sheet date:

CHF 1 000	31.12.2022	31.12.2021
Cash and cash equivalents	64 681	84 363
Trade and other receivables	12 128	18 221
Other assets	1 506	1 412
Total	78 315	103 996

As of December 31, 2022, there are no financial assets that are impaired (December 31, 2021: none) and there are no indications of material adverse effects on the credit quality of financial assets. In 2022, no impairments were identified on financial assets exposed to credit risk.

The following table provides an analysis of the maturity of financial assets with credit risk:

CHF 1 000	Due within 3 months	Due within 3 to 12 months	Due between 1 and 5 years	Total
31.12.2022
Cash and cash equivalents	64 681	–	–	64 681
Trade and other receivables	11 186	942	–	12 128
Other assets	2	–	1 504	1 506
Total	75 869	942	1 504	78 315

31.12.2021
Cash and cash equivalents	84 363	–	–	84 363
Trade and other receivables	14 173	4 048	–	18 221
Other assets	38	–	1 374	1 412
Total	98 574	4 048	1 374	103 996

As of December 31, 2022 and 2021, the ECL impairment model had no material impact as (i) the majority of financial assets are measured at fair value through profit or loss and the impairment requirements do not apply to such instruments; and (ii) the financial assets «at amortized cost» are mainly current. Consequently, no impairment loss has been recognized based on expected credit losses.

5.4 Liquidity risk

The CFO of Bellevue Group is responsible for managing liquidity and financing risks. Financing risks refer to the risk of Bellevue Group or one of its operating units being unable to refinance its current or anticipated obligations on an ongoing basis at acceptable conditions. Liquidity risks refer to the risk of Bellevue Group or one of its operating units being unable to fulfill its payment obligations when due. Whereas financing risks relate to the ability to finance business operations at all times, liquidity risks primarily concern the ability to ensure sufficient liquidity an any point in time.

Bellevue Group manages its liquidity and financing risks on an integrated basis at the consolidated level. Day-to-day liquidity management is performed at the level of the individual Group companies by functions responsible for this. Financing capacities are managed through appropriate diversification of funding sources and the provision of collateral, thereby reducing liquidity risks.

Risk management ensure that Bellevue Group always has sufficient liquidity to be able to fulfill its payment obligations, even in stress scenarios. The liquidity risk management system therefore comprises functional risk measurement and control systems to ensure its continuous ability to pay its obligations at any time. It also defines strategies and requirements for the management of liquidity risk under stress conditions as part of the defined liquidity risk tolerance. They mainly include risk mitigation measures, the holding of a liquidity buffer comprising highly liquid assets, and a contingency plan to manage any liquidity shortfalls. In the event of an unexpected tightening of liquidity, the Group can also access a portfolio of positions that retain their value and can easily be liquidated and has access to two existing credit lines at different banks.

The maturity structure of financial liabilities is as follows:

CHF 1 000	Due within 3 months	Due within 3 to 12 months	Due between 1 and 5 years	Total
31.12.2022
Trade and other payables	26 283	6 939	9 751	42 973
Leasing liabilities 1)	484	1 130	1 774	3 388
Other financial liabilities	27	–	–	27
Total	26 794	8 069	11 525	46 388

1) According to IFRS 7 B11D, the undiscounted contractual cash flows relating to the gross lease liabilities must be disclosed. The corresponding undiscounted cash flows differ from the amount recognised in the balance sheet because the amount is based on discounted cash flows.

CHF 1 000	Due within 3 months	Due within 3 to 12 months	Due between 1 and 5 years	Total
31.12.2021
Trade and other payables	37 266	13 411	15 609	66 286
Leasing liabilities 1)	379	1 087	1 041	2 507
Other financial liabilities	14	13	–	27
Total	37 659	14 511	16 650	68 820

5.5 Operational risk

Operational risks represent the risk of losses resulting from the inadequacy or failure of internal processes, people and systems or from external events.

All business activities entail operational risks, which are prevented, mitigated, transferred or even assumed based on cost/benefit considerations. During this process, potential legal, regulatory and compliance-related risks are taken into account, as are follow-on risks in the form of reputational risks.

The Group-wide process model represents the basis for the management of operational risks. As part of the systematic assessments that are performed annually, the operational risks in all critical processes and process entities are identified and evaluated. In addition, further attention is focused on core security topics such as data protection and business continuity management, which are guaranteed through the use of extra tools.

All measures to control operational risks from part of the Internal Control Systems (ICS).

5.6 Legal and compliance risks

Legal and compliance risks refer to risks related to legal and regulatory issues, primarily liability and default risks. These risks are minimized when processing orders by requiring standardized master agreements and individual agreements. Risk related to the acceptance of client assets and adherence to due diligence obligations are monitored at the respective operating unit level. When appropriate, external attorneys will be consulted to limit legal risks.

6 Major subsidiaries


					31.12.2022		31.12.2021
					Share of		Share of
Company name	Domicile	Purpose	Currency	Share capital/Nominal capital	Capital	Voting rights	Capital	Voting rights
Fully consolidated companies
Bellevue Group AG	Küsnacht, Switzerland	Holding	CHF	1 346 143	Parent company		Parent company
Bellevue Asset Management AG	Küsnacht, Switzerland	Asset Management	CHF	1 750 000	100%	100%	100%	100%
Bellevue Asset Management (Deutschland) GmbH (previously: StarCapital AG) 1)	Frankfurt am Main, Germany	Asset Management	EUR	540 000	100%	100%	100%	100%
Bellevue Asset Management (UK) Limited	London, UK	Asset Management	GBP	50 000	100%	100%	100%	100%
Asset Management BaB N.V.	Curaçao	Asset Management	USD	6 001	100%	100%	100%	100%
Bellevue Research Inc.	New York, USA	Research	USD	100	100%	100%	100%	100%
BB Biotech Ventures GP	Guernsey	Investment Advisor	GBP	10 000	100%	100%	100%	100%
BB Pureos Bioventures GP Limited	Guernsey	Investment Advisor	GBP	60 000	99%	99%	99%	99%
Bellevue Private Markets AG	Zug, Switzerland	Investment Advisor	CHF	1 000 000	100%	100%	100%	100%
adbodmer AG	Zug, Switzerland	Investment Advisor	CHF	100 000	100%	100%	100%	100%
Bellevue Komplementär AG	Küsnacht, Switzerland	Asset Management	CHF	200 000	100%	100%	100%	100%
Bellevue Private Markets Management I S.à.r.l. 2)	Luxembourg	Asset Management	EUR	12 000	100%	100%	0%	0%
Bellevue Asset Management (Deutschland) GmbH (old) 1)	Frankfurt am Main, Germany	Asset Management	EUR	25 000	0%	0%	100%	100%
Realwerk AG 3)	Zug, Switzerland	Investment Advisor	CHF	100 000	0%	0%	100%	100%

1) Bellevue Asset Management (Deutschland) GmbH was absorbed by StarCapital AG as of July 1, 2022. StarCapital AG was subsequently renamed Bellevue Asset Management (Deutschland) GmbH as part of change in legal form.

2) The Company was founded on August 30, 2022.

3) Realwerk was merged with Bellevue Private Markets Ltd as of January 1, 2022.

Minority shareholders’ equity ownership of BB Pureos Bioventures GP Limited is 1%. Due to the non-materiality of this ownership with respect to the overall Bellevue Group’s equity and comprehensive income, no separate disclosure of minority shareholders has been published on the Group’s financial statements.

7 Guarantees and contingent liabilities

CHF 1 000	31.12.2022	31.12.2021
Rent deposit accounts in connection with leasing contracts	1 178	950
Contingent liabilities	4 731	6 465

8 Events after the balance sheet date

No events have occurred since the balance sheet date that would have a material impact on the information provided in the year 2022 consolidated financial statements and would therefore need to be disclosed.

9 Transactions with related companies and persons

9.1 Compensation paid to members of the Board of Directors and to members of the Group Executive Board

CHF 1 000	Fixed compensation paid in cash	Short-term variable compensation paid in cash	Short-term variable compensation paid in shares	Long-term variable compensation paid in shares	Total
Total 1.1.–31.12.2022
Compensation to members of the Board of Directors	613	–	181	–	794
Compensation to members of the Group Executive Board	1 018	632	1 482	– 110	3 022
Total 1.1.–31.12.2021
Compensation to members of the Board of Directors	616	–	245	–	861
Compensation to members of the Group Executive Board	1 124	1 547	1 075	150	3 896

The amounts listed for fixed and variable compensation also include any employer contributions to statutory or regulatory social security schemes.

The short-term variable compensation in shares of the Board of Directors consists of the following items:

TCHF 147 (2021: TCHF 147) in 4 years restricted shares
TCHF 34 (2021: TCHF 98) in 3 years blocked and discounted shares from participation program (monetary benefit)

The short-term variable compensation in shares of the Group Executive Board consists of the following items:

TCHF 283 (2021: TCHF 318) in 4 years restricted shares
TCHF 1 136 (2021: TCHF 592) in 4 years restricted shares with one-year service period and right of redemption (taking into account the service/vesting period in accordance with IFRS 2)
TCHF 63 (2021: TCHF 165) in 3 years blocked and discounted shares from participation program (monetary benefit)

Members of the Group Executive Board partially participate in an employee stock ownership plan in connection with the asset management mandate of BB Biotech AG. Within the scope of these plans, some of the members of the Group Executive Board are entitled to receive a maximum number of shares in BB Biotech AG. The actual number of shares awarded depends on various conditions. Awarded shares are subject to a three-year vesting period beginning on the date of grant. In addition, the actual number of shares distributed will depend on the achievement of certain performance targets over the subsequent three fiscal years in connection with the respective investment mandates. The cost of this employee program is recognized as long-term variable compensation.

In the financial years 2022 and 2021, no compensation was paid to related parties of members of the Board of Directors and Group Executive Board, nor to former members of the Board of Directors.

9.2 Transactions with related companies and persons

As of December 31, 2022 and 2021, there were neither receivables nor liabilities to related companies and persons.

10 Share-based payments

10.1. Variable compensation (share of profit) with service conditions

According to the rules for the payment of variable compensation set by the Board of Directors, higher variable compensation (>TCHF 200) is partly paid in blocked shares with a 1-year (pro rata) service condition. The cost of this portion of the variable compensation is recognized over the service period from the grant date. In 2022, TCHF 1 140 (2021: TCHF 1 623) of share-based compensation costs were recognized in personnel expenses.

10.2. Voluntary employee stock ownership plan

In 2022, the Board of Directors approved a voluntary employee stock option program for a total of 100 000 shares (2021: 200 000 shares). Depending on the management level, the Board of Directors, Executive Board and employees were offered a certain number of Bellevue Group AG shares at a discounted purchase price of CHF 23.75 per share (2021: CHF 31.75 per share). This corresponded to a discount of almost 25% on the volume-weighted average price of the quarter prior to the grant date of the entitlements. The difference between the market value at the effective grant date and the purchase price corresponds to a monetary benefit of CHF 0.6 million (2021: CHF 1.2 Mio.), which was recognized in personnel expenses. 66 310 rights (2021: 133 241 rights) were exercised (thereof 4 500 (2021: 10 000) by the Board of Directors and 8 200 (2021: 16 755) by the Group Executive Board).

11 Earnings per share

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021
Group net profit	25 300	43 063
Weighted average number of issued registered shares	13 461 428	13 461 428
Less weighted average number of treasury shares	– 170 904	– 157 909
Weighted average number of shares outstanding (undiluted)	13 290 524	13 303 519
Weighted average number of shares outstanding (diluted)	13 290 524	13 303 519

Earning pro shares
Undiluted earnings per share (in CHF)	1.90	3.24
Diluted earnings per share (in CHF)	1.90	3.24

12 Dividend payment

The Board of Directors will propose a dividend distribution of CHF 2.00 per registered share to the Annual General Meeting of Bellevue Group AG on March 21, 2023. This corresponds to a total distribution of CHF 26.9 million.

13 Approval of the consolidated financial statements

The Audit & Risk Committee discussed and approved the consolidated financial statements at its meeting on February 20, 2023, and the Board of Directors at its meeting on February 21, 2023. The consolidated financial statement will be submitted to the Annual General Meeting on March 21, 2023, for approval.

14 Summary of significant accounting policies

14.1. Company and business activity

Bellevue Group AG is a public limited company listed on the SIX Swiss Exchange and has its registered office at Seestrasse 16, 8700 Küsnacht/Switzerland. The company acts as a pure asset manager with a multi-boutique approach and specializes in investment themes that require an active investment style.

14.2 Accounting principles

The consolidated financial statements of Bellevue Group AG have been prepared in accordance with International Financial Reporting Standards (IFRS) and comply with the listing regulations of the Swiss Stock Exchange.

The principal accounting policies applied in the preparation of these consolidated financial statements are set out below. The application of the underlying principles is unchanged from the previous year, with the exception of the accounting standards newly applied in item 14.3.

14.3 New accounting standards used

The following new or revised standards and interpretations did not have any material impact on Bellevue Group when they were applied for the first time as of January 1, 2022:

		To be applied as of
IFRS 3 Amendments: Reference to the Conceptual Framework		01.01.2022
IAS 16 Amendments: Property, Plant and Equipment: Proceeds before Intended Use		01.01.2022
IAS 37 Amendments: Onerous Contracts - Costs of Fulfilling a Contract -		01.01.2022

14.4 International Financial Reporting Standards and interpretations which will be introduced in 2023 or later

Based on early stage analysis, the following new standards and/or standards’ updates will not have a significant effect on Bellevue Group’s financial statements:

		To be applied as of
IFRS 17: Insurance Contracts		01.01.2023
IAS 1 Amendments: Classification of Liabilities as Current or Non-current		01.01.2023
IAS 8 Amendments: Definition of Accounting Estimates		01.01.2023

14.5 Important accounting principles

14.5.1 Consolidation principles

Fully consolidated companies

The annual consolidated financial statements comprise the annual accounts of Bellevue Group AG and its subsidiaries. All companies that are directly or indirectly controlled by Bellevue Group AG are consolidated. Subsidiaries are fully consolidated from the date on which control is transferred to the Group, and deconsolidated from the date when control ceases.

Method of consolidation

The Group applies the acquisition method to account for business combinations. Under this method, the book value of the participation held by the parent company is offset against its share of the shareholders’ equity of the subsidiary at the time of the acquisition. The effects of intercompany transactions are eliminated during the preparation of the consolidated financial statements.

Business combinations

In a business combination, the acquirer obtains control of the net assets of one or more businesses. The business combination is accounted for using the acquisition method. This requires the recognition of the identifiable assets acquired, including previously unrecognized intangible assets, and liabilities assumed of the acquired business at their fair values at the acquisition date. Any excess of the consideration transferred over the net identifiable assets acquired is recognized as goodwill. Consideration transferred is assets or equity instruments issued that are measured at fair value at the acquisition date. Transaction costs are immediately charged to the income statement.

Contingent consideration, which is accounted for as part of the consideration transferred for the acquiree, is measured at fair value at the acquisition date. Subsequent changes in the fair value of contingent consideration are recognized in the income statement in accordance with IFRS 9.

14.5.2 General principles

Foreign currency translation

The items included in the financial accounts of each of the Group’s company are measured using the currency of the primary economic environment, in which the company operates (functional currency). The consolidated financial statements are presented in Swiss Francs, which is also the functional and presentation currency of Bellevue Group AG.

Assets and liabilities denominated in foreign currencies at foreign group member companies are converted into Swiss francs using the applicable exchange rates for the balance sheet date. For the income and cash flow statements, year-average exchange rates are used. The differences resulting from consolidation are booked directly in other comprehensive income.

In the individual year-end accounts of group member companies transactions are booked in foreign currency at the respective daily exchange rates. Monetary assets are translated at the respective daily exchange rate and any gains or losses are recognized in the income statement. Monetary items carried on the balance sheet at historical cost in a foreign currency are translated at the historical exchange rate.

The following exchange rates apply to the translation of significant currencies:


	2022		2021
	Year-end rate	Average rate	Year-end rate	Average rate
EUR	0.98956	1.00295	1.03740	1.07929
USD	0.92450	0.95344	0.91290	0.91271
GBP	1.11870	1.17416	1.23390	1.25362

Cash and cash equivalents

Cash and cash equivalents comprise cash on hand and current accounts as well as call money at banks with a maturity of less than three months. These are measured at nominal value, which corresponds to fair value due to the short-term maturities.

Accrual of income

The Group’s revenue consists mainly of asset management fees. A distinction is made between the following fees: Management fees result from the management of collective capital contributions and institutional asset management mandates. Performance fees are only recognized when all performance criteria have been met. Interest is accrued on an accrual basis.

14.5.3 Financial instruments

Initial recognition

Purchases and disposals of financial assets are recognized in the balance sheet on the trade date. At the time of initial recognition, financial assets or financial liabilities are classified in the respective category according to criteria set forth in IFRS 9 and measured at the fair value of the consideration given or received, including directly attributable transaction costs. In the case of trading portfolio assets and other financial instruments carried at fair value, transaction costs are immediately recognized in the income statement, except of value changes of financial instruments, which are recorded in the comprehensive income.

Determination of fair value

At initial recognition, the fair value of financial instruments is ascertained from quoted market prices provided that the financial instrument is traded on an active market (level 1). Whenever possible, the fair value of other financial instruments is determined using generally recognized valuation models (level 2). These models are based on input parameters other than level 1 that can be observed on the market. For a residue of financial instruments, there are no available market listings or valuation models or methods based on market prices. For such instruments, in-house valuation methods or models are used (level 3). In such cases, the fairness of the valuation is assured by clearly defined methods and processes and by independent checks.

Financial investments at amortized costs

Investments whereby the objective is to hold financial assets to collect contractual cash flows and for which the contractually agreed cash flows comprise only interest and the repayment of parts of the nominal value are entered on the balance sheet as amortised costs using the effective interest method. Any expected credit losses are deducted from the book value of the item.

Financial assets and liabilities from financial assets

Financial instruments that do not meet the criteria for recognition at amortized cost are recognized at fair value. The resulting income is reported under the item «Income from financial investments». Liabilities from financial assets are reported under the item «Other financial liabilities».

Investments at fair value with fair value changes recognized in other comprehensive income

Investments in equity instruments that are not held for trading purposes are carried fair value in the balance sheet. Changes in value are recognised in the income statement except in cases where Bellevue Group has irrevocably decided to recognised them at fair value through other comprehensive income.

Derivative financial instruments

Derivative financial instruments are recognized in the balance sheet under «Financial assets» or «Other financial liabilities». No offsetting takes place on the basis of master netting agreements. Realized and unrealized gains and losses are recognized in «Income from financial investments».

14.5.4 Other principles

Treasury shares and derivatives on treasury shares

Bellevue Group AG shares held by Bellevue Group are designated as treasury shares and are deducted from shareholders’ equity at weighted average cost. Changes in fair value are not recognized. The difference between the sales proceeds of treasury shares and the corresponding acquisition cost is recorded in retained earnings.

Derivatives on own shares that must be settled in cash or that offer a choice of settlement method are treated as derivative financial instruments.

Share-based payments

Bellevue Group maintains various share-based payment plans in the form of share plans for selected employees. When such payments are made to these employees, the fair value of these payments at grant date serves as the basis for calculating the personnel expenses. Share-based payments that are not subject to any further conditions are expensed immediately at grant date. Share-based payments that are subject to the completion of a service period or to other vesting conditions are expensed over the respective vesting period starting at grant date. The amount recognised as an expense is adjusted to reflect the number of share awards for which the related services and non-market performance vesting conditions are expected to be met.

Property and equipment

Property and equipment include leasehold improvements, information technology and telecommunications equipment, capitalized right of use from leases and other fixed assets. The acquisition or production costs of property and equipment are capitalized when it is probable that future economic benefits associated with the item will flow to the Group and the cost of the item can be measured reliably.

Bellevue Group mainly acts as a lessee in the context of the leasing of business premises. At the lease commencement date, a lease liability corresponding to the present value of lease payments over the lease term is recognized. The lease term basically corresponds to the non-cancellable period during which Bellevue Group has the right to use the business premises but it also takes account of the period covered by an option to extend the lease if Bellevue Group is reasonably certain to exercise that option, and the period covered by an option to terminate the lease if Bellevue Group is reasonably certain not to exercise that option.

At the same time as the lease liability is recognized, a right to use the underlying asset, which corresponds to the lease liability plus prepaid lease payments, directly attributable costs and any reinstatement obligations, is capitalised. After initial recognition, the interest component on the lease liability is accrued in the period in which it is incurred using the effective interest method and is recognized in «Net other income». The lease liability is adjusted to reflect interest recognized and lease payments made. The right-of-use asset is depreciated on a straight-line basis over the lease term. The depreciation charge and any impairment charge are recognized in the income statement in «Depreciation and amortization».

If there is any change to the lease term or if lease payments are adjusted to an index, the lease liability is remeasured. In the first case, the current incremental borrowing rate is used to calculate the present value; in the second case, the original incremental borrowing rate is used. The amount of the remeasurement of the lease liability is recognized as an adjustment to the right-of-use asset. Right-of-use assets are recognized in the balance sheet item «Property and equipment». The carrying amount of the right-of-use assets and changes in that value are shown in note 3.5. Lease liabilities related to leased office space are recognized in the balance sheet item «Lease liabilities». Bellevue Group applies the accounting exceptions for short-term leases and leased assets of low value. Neither a lease liability nor a right-of-use asset is recognized for these leases.

Property and equipment are depreciated on a straight-line basis over their estimated useful life as follows:


Leasehold improvements		max. 10 years
Information technology and communications equipment		max. 5 years
Rights of use		over leasing contract duration
Other fixed assets		max. 5 years

Property and equipment are reviewed for impairment if events or circumstances indicate that the carrying amount may be impaired. If the carrying amount exceeds the realizable amount, an impairment loss is charged. Any reversals of impairments at a later date will be recognized in the income statement.

Goodwill and other intangible assets

Goodwill arises from the acquisition of subsidiaries and represents the future economic benefits from other assets acquired in a business combination that are not individually identified and are recognised separately. For the purposes of impairment testing, goodwill acquired in a business combination is allocated to each of the CGUs (cash generating unit) or group’s of CGUs, that is expected to benefit for synergies from combination. Each unit or group of units to which goodwill is allocated represents the lowest level within the entity at which the goodwill is monitored for internal management purposes. Goodwill is monitored at the level of the CGU respectively group of CGU’s, taking into account the internal reporting and management structure. Goodwill is capitalized and tested for impairment at least on an annual basis, or if events or changed circumstances indicate a potential impairment. The test is carried out more frequently to determine whether the book value exceeds its recoverable amount. The recoverable amount is the higher of fair value less costs to sell and the value in use. If the book value exceeds the recoverable amount an impairment loss is recorded.

Other intangible assets include client relationships and brands acquired during business combination as well as softwares. Such intangible assets are capitalized if their fair value can be reliably determined. They are amortized on a straight-line basis over their useful life of not more than 5 years (software), 10 to 15 years (client relationships) or 5 years (brands). Other intangible assets are reviewed for impairment if events or circumstances indicate that the carrying amount may not be recoverable. If the carrying amount exceeds the realizable amount, an impairment loss is charged. Any reversals of impairments at later date will be recognized in the income statement. At present, there are no other intangible assets with an indefinite useful life capitalized in Bellevue Group’s balance sheet.

Income taxes

The current income tax charge is calculated on the basis of the applicable tax laws enacted or substantially enacted at the balance sheet date in the countries where the Company and its subsidiaries operate and generate taxable income and recognized as expense in the period in which the related profits are made. Receivables or liabilities related to current income taxes are reported in the balance sheet in the items «Current tax assets» or «Current tax liabilities». Tax effects arising from temporary differences between the carrying amounts of assets and liabilities in the balance sheet and their corresponding tax values are recognized as «Deferred tax assets» and «Deferred tax liabilities» respectively. Deferred tax assets arising from temporary differences and from tax loss carry forwards can be offset. Deferred tax assets and deferred tax liabilities are calculated at the tax rates expected to apply in the period in which the tax assets will be realized, or the tax liabilities settled. Tax receivables and tax liabilities are offset when they refer to the same taxable entity, fall under the same jurisdiction, and the enforceable rights to offset exists.

Current and deferred taxes are credited or charged directly to shareholders’ equity if the taxes are related to items that are credited or charged under other comprehensive income in the same or a different period.

Provisions

A provision is recognized if Bellevue Group has, as a result of a past event, a current liability at the balance sheet date that will probably lead to an outflow of funds and whose amount can be reliably estimated. If an outflow of funds is unlikely to occur, or the amount of the liability cannot be reliably estimated, a contingent liability is shown. If there is, as a result of a past event, a possible liability as at the balance sheet date whose existence depends on future developments that are not fully under Bellevue Group’s control, a contingent liability is likewise shown. The recognition and reversal of pro-visions are recognized under «Valuation adjustments and provisions» except for changes in actuarial pension provisions, which are recognized under «Other comprehensive income», with the exception of changes in actuarial provisions which are recorded in the income statement.

Pension funds

Bellevue Group maintains in Switzerland a defined-contribution pension plan. The pension fund is set up in accordance with Swiss defined-contribution regulations, but does not meet all of the criteria of a defined-contribution plan as defined by IAS 19. Therefore, this plan is treated as a defined-benefit plan.

Pension obligations are met exclusively with pension fund assets held by a pension foundation legally separated from and independent of Bellevue Group. It is managed by a Board of Trustees, consisting in equal parts of representatives of management and employees. The organization, operational management and financing of the pension fund are conducted in accordance with legal regulations, the foundation’s charter and applicable pension fund regulations. Employees and pensioners, or their survivors, receive legally determined benefits upon leaving the Company, during retirement, at death, and in the event of invalidity. These benefits are financed by employee’s and employer’s contributions.

For defined-benefit plans, pension costs are determined on the basis of different economic and demographic assumptions using the projected unit credit method. This method uses the number of service years until the key date. The assumptions to be evaluated by the Group include expectations of future salary development, long-term interest on retirement assets, retirement trends and life expectancy. The valuations are carried out by independent actuaries every year. The pension assets are valued annually at fair value.

Pension cost is composed of three components:

Service cost, which is recorded as personnel expenses in the income statement;
Net interest expenses, which are recorded in the position «Other financial income» in the income statement; and
Revaluation components, which are recognised in the statement of comprehensive income.

Service cost encompasses the current service cost, past service cost, and gains and losses from non-routine plan settlements. Gains and losses from plan curtailments are treated the same way as past service cost. Employee contributions and third-party contributions reduce the service cost and are deducted from it, provided they are required by the benefit regulations or are the result of a factual obligation.

Net interest expenses are the result of the assumed interest rate multiplied by the pension obligations or the pension assets. Capital flows and changes of less than a year are included on a weighted basis.

Revaluation components include actuarial gains and losses from changes in the net present value of the pension obligations and the pension assets. Actuarial gains and losses are calculated on the basis of changes in assumptions and experience adjustments. Gains and losses on assets are the result of income on assets less the amounts contained in net interest expenses. The revaluation component also includes changes in unrecognised assets less effects included in net interest expenses. Revaluation components are recorded in the statement of comprehensive income and cannot be recycled. Amounts recorded in the statement of comprehensive income can be reallocated within equity.

Pension obligations or assets recorded in the consolidated financial statements correspond to the funding surplus or shortfall of the defined-benefit plans. However, pension assets are restricted to the net present value of the Group’s economic benefit from future curtailments or repayments. Pension obligations in Swiss benefit plans are currently valued on the basis of employers and employees sharing the risk.

15 Alternative Performance Indicators (unaudited)

CHF 1 000	1.1.–31.12.2022	1.1.–31.12.2021	Change
Income	95 862	140 618	– 44 756

Personnel expenses	– 46 988	– 66 045	+19 057
Other operating expenses	– 14 056	– 14 344	+288
Operating expenses	– 61 044	– 80 389	+19 345

Operating profit	34 818	60 229	– 25 411

Depreciation and amortization	– 3 624	– 3 751	+127
Valuation adjustments	–	– 2 888	+2 888
Group profit before tax	31 194	53 590	– 22 396
Taxes	– 5 894	– 10 527	+4 633
Group net profit	25 300	43 063	– 17 763

Consolidated financial statements

Financial statements of Bellevue Group AG

Notes to the consolidated financial statements

1 Segment information

2 Details on the consolidated income statement

2.1 Revenues from asset management services

2.2 Net other income

2.3 Personnel expenses

2.4 Operating expenses

2.5 Depreciation and amortization

2.6 Valuation adjustments

2.7 Tax

2.7.1 Income taxes

2.7.2 Deferred tax assets

2.7.3 Deferred tax liabilities

3 Details on the consolidated balance sheet

3.1 Financial assets and financial liabilities

3.1.1 Fair value of financial instruments

3.1.2 Valuation methods of financial instruments

Level 1 instruments

Level 2 instruments

Level 3 instruments

3.1.3 Level 3 financial instruments

3.1.4 Derivative financial instruments

3.2 Trade and other receivables

3.3 Financial investments

3.4 Other assets

3.5 Property and equipment

3.6 Goodwill and other intangible assets

3.7 Trade and other payables

3.8 Employee benefit plans

Changes to the present value of a defined-benefit obligation

3.9 Share capital

3.10 Treasury shares

4 Significant estimates, assumptions and judgments

4.1 Estimates, assumptions and the exercising of discretion by management

Income taxes

Provisions

Level 3 financial instruments (fair value)

Pension plan

Review of goodwill and other intangible assets for impairment

5 Risk management and risk control

5.1 Risk evaluation and risk policy

5.2 Market risk

Price change risks

Interest risk

Currency risk

5.3 Default risk

5.4 Liquidity risk

5.5 Operational risk

5.6 Legal and compliance risks

6 Major subsidiaries

7 Guarantees and contingent liabilities

8 Events after the balance sheet date

9 Transactions with related companies and persons

9.1 Compensation paid to members of the Board of Directors and to members of the Group Executive Board

9.2 Transactions with related companies and persons

10 Share-based payments

10.1. Variable compensation (share of profit) with service conditions

10.2. Voluntary employee stock ownership plan

11 Earnings per share

12 Dividend payment

13 Approval of the consolidated financial statements

14 Summary of significant accounting policies

14.1. Company and business activity

14.2 Accounting principles

14.3 New accounting standards used

14.4 International Financial Reporting Standards and interpretations which will be introduced in 2023 or later

14.5 Important accounting principles

14.5.1 Consolidation principles

Fully consolidated companies

Method of consolidation

Business combinations

14.5.2 General principles

Foreign currency translation

Cash and cash equivalents

Accrual of income

14.5.3 Financial instruments

Initial recognition

Determination of fair value

Financial statements of
Bellevue Group AG