EANS-Adhoc: Valartis Group AG / Group profit of CHF 3.3 million for Valartis shareholders

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08.04.2009

The Valartis Group achieved a consolidated net profit of CHF 3.3 million in 2008
(prior year: CHF 49.9 million). With shareholders´ equity of CHF 285.9 million
(including minority interests of CHF 47 million) the Group has retained its
strong capital and financing base (prior year: CHF 244.4 million). Client assets
under management as at year-end were CHF 4.015 billion (prior year: CHF 4.239
billion). The Board of Directors will propose to the General Assembly of 5 May
2009 to pay out a dividend of CHF 0.50 per bearer share (prior year: CHF 2.75).
It also will propose the reelection of Erwin W. Heri and Stefan Holzer to the
Board of Directors of Valartis Group AG.

A challenging financial year
The Valartis Group´s earnings in 2008 were heavily impacted by the turmoil on
the financial markets. The year can only be deemed an "annus horribilis" for
Investment Banking, which recorded net trading income of CHF -56.4 million (CHF
23.0 million). This was mainly due to the larger trading positions of this
segment in Swiss small and mid caps, which sharply declined in value due to
extremely poor performance on the global equity markets in the second half of
2008.

Earnings also weakened in commission business with securities and investments,
which dropped from CHF 86.4 million (prior year) to CHF 48.6 million. First,
lower transaction volumes resulted in reduced earnings from client-related stock
and derivatives trading (brokerage). Second, the drop in assets under
management, and in particular the loss of performance-related income - primarily
from equity funds focussed on Russia and Eastern Europe - negatively affected
commission earnings. The real estate activities of the Asset Management segment
saw much more positive developments. For instance, construction of a shopping,
entertainment and office complex progressed according to schedule in Algeria;
the centre is expected to open in the second half of 2009. In the international
real estate funds segment, Valartis received two advisory mandates, for which
initial investments were made in Europe, Asia and Latin America.

The turmoil on the international financial markets, however, has also given rise
to new opportunities. For instance, the Valartis Group was able to purchase a
50% stake in the investment company ENR Russia Invest (ENR) for well under book
value and a 20% investment in Eastern Property Holdings (EPH). These companies
were fully and partly consolidated, respectively, which resulted in income from
business combination of CHF 14.0 million and income from associates of CHF 41.5
million.

On the cost front, personnel and operating costs were CHF 58.2 million (CHF 50
million). The increase compared with the prior year is primarily due to the
expansion of corporate finance and M&A activities in Europe, the Asset
Management segment´s expansion of its real estate activities and investments in
Private Banking. In response to poor market conditions in the second half of
2008, the Group initiated its first cost-saving measures. Apart from changes to
remuneration policy, the measures mainly target the service range offered by
Investment Banking; the effects of these measures, however, will not be felt
until sometime later this year.

After taking deferred tax assets of CHF 5.1 million (CHF -10.1 million) into
account and factoring in the share of losses of minority interests of CHF 7.3
million (CHF 0.7 million), the net profit for the shareholders of the Valartis
Group AG is CHF 3.3 million (CHF 49.9 million).

Setting the course in private banking
By acquiring a private bank in Vienna at the end of 2008, which started 2009
under the new name Valartis Bank (Austria) AG, the Group has significantly
expanded its Wealth Management activities while also expanding its fund business
in the Asset Management sector. The Group´s earning power is now not only more
broadly based but also strengthened by seizing new growth opportunities. In
Switzerland, the company´s Private Banking presence has been selectively
expanded in Geneva and Zurich. As at the end of 2008, the Wealth Management
segment had some CHF 2 billion in assets under management and advised some 4,000
clients worldwide.

As a result of this new focus, the Investment Banking segment has massively
reduced its limits for proprietary trading in Swiss equities and derivatives.
This reorientation was prompted by the conviction that, in the long run, the
conservative investment philosophy in Private Banking, with its focus on capital
protection and long-term capital growth, is not compatible with large volatile
trading positions in Investment Banking.

Capital base remains strong
The consolidation of the bank in Vienna as at 31 December 2008 also had a
profound impact on the Group´s balance sheet. Total assets increased compared
with the prior year by a good CHF 1 billion to CHF 1.501 billion. About
two-thirds of the total assets represent client assets that are temporarily
invested in high-quality domestic and international banking institutions. This
indicates that going forward, interest operations will be of much greater
significance to Valartis. With equity of CHF 285.9 million, the Group continues
to have a strong capital and financial base; excluding minority shares, the book
value per bearer share is CHF 48.60 (CHF 49.80).

On a consolidated basis, the Group managed assets of CHF 4.015 billion (CHF
4.239 billion) as at the end of 2008.

Changes to the Group Executive Board
Reto Peczinka, a member of the Group Executive Board and member of Valartis
Bank's Executive Board, will leave the Group at the end of April 2009 to pursue
other opportunities. He has held various positions for Valartis since 1995 in
trading and brokerage. The Board of Directors thanks Reto Peczinka for his many
years of dedication and wishes him much success for his future professional
life. Gustav Stenbolt, Group CEO, will take over management of Investment
Banking for the transitional period.

Proposals of the Board of Directors - reduced dividends
In light of the lower earnings, Valartis Group AG´s Board of Directors will
propose to the General Assembly of 5 May 2009 to pay out a lower dividend this
year of CHF 2.5 million (prior year: CHF 13.75 million), i.e., CHF 0.50 (prior
year: CHF 2.75) per bearer share. It also proposes the re-election of Erwin W.
Heri and Stefan Holzer to the Board of Directors of Valartis Group AG.

Dates and information
Financial results press conference 8 April 2009, 10:30 a.m. Widder Hotel, Zurich
General Assembly 5 May 2009, 5:00 p.m. World Trade Center, Zurich

The 2008 Annual Report can be downloaded as a PDF from our Web site:
www.valartis.ch

Further inquiry note:
Gustav Stenbolt, CEO Valartis Group
Tel. +41 43 336 81 11

end of announcement euro adhoc
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emitter:      Valartis Group AG
              Blegistrasse 11a
              CH-6340 Baar
phone:        +41 (0)44 215 63 60
FAX:          +41 (0)44 215 63 90
mail:         d.reptsis@valartis.ch
WWW:          http://www.valartis.ch
sector:       Financial & Business Services
ISIN:         CH0001840450
indexes:      SPI, SPIEX, SSCI
stockmarkets: official market: SWX Swiss Exchange 
language:     English

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