20 · the management share purchase plan rewarding managers’ contribution to symbiotics’...

ANNUALREPORT

2018

FOREWORD 3

STRATEGY 4

GOVERNANCE 5

CORPORATE 6

DIGITAL 7

PEOPLE 8

NEW STAFF 9

DEAL SPOTLIGHTS 10

SME Bank 10

Microfinance 11

MARKETS 12

OUR REGIONAL COVERAGE 14

INVESTMENTS 16

DEAL SPOTLIGHTS 20

RenewableEnergy 20

SustainableAgriculture 21

PORTFOLIOS 22

CLIENTS 24

PLUMSEEDS 25

IMPACT 26

CORPORATE SOCIAL RESPONSIBILITY 28

FINANCIAL STATEMENTS 29

CONTENTS

1

A N N U A L R E PO RT 2018

2

2018 A N N U A L R E PO RT

DearShareholders,

Thepastyearhasbeenayearofinvestment,inlinewiththeobjectivessetinour2018–2020businessplan.

Wenotablyreorganizedthemanagementintoadistinctgeneralmanagementfunctionsandeight

headofdivisions(corporate,people,digital,markets,investments,portfolios,clients,impact).Weputa

particularemphasisingrowingtheresourcesonthedigitalandsalesfronts,aswellasonthecontrolling

andinnovationfunctions.

Wealsoembarkedonanumberofregulatoryauthorizationapplications.OurofficeinAmsterdam,

whichservedasabackupforourinvestmentserviceauthorizationacrossEuropefollowingBrexit,

successfullyregistereditselfwiththeDutchfinancialregulatorunderthe‘MiFIdII’directives.Weare

alsoformalizingourpresenceinParis,withtheintentofregisteringwiththeFrenchfinancialregulator

underthe‘AIFM’directives.

TheformerwillallowustomarketourservicesacrosstheEUandserveasalightbrokerforthe

Plumseedsbondplatform.Thelatterwillallowustolaunchourownmanagementcompanyand

investmentfunds,eitherformanagementmandateactivitiesorforfunddistributionactivitiesalso

acrosstheEU.BeyondourcurrentanchorclientsinScandinavianandGermaniccountries,weintendto

mostlygrowinFrance,theNetherlandsandtheUnitedKingdom.Weseeinparticularagreatopportunity

forSymbioticstoshineonthethematicimpactbondmarkets,whereitisuniquelypositioned.

The2018loanoriginationresultswereslightlylowerthanexpected,mirroringthe2017resultsaround

USD800million.OverallthewideninginterestratespreadsbetweenEuropeandNorthAmericaaffected

ourCHF,EURandSEKbasedclients,reducingtheircapacitytogrowforsome,orevenreducingtheir

assetsundermanagementwithus.Thatbeingsaid,wekeptaconservativeapproachtoourexpenditure

andwereabletoreachadecentprofitabilitylevelof15%returnonequity,overallmeetingallofourkey

financialobjectives.

Ourimpactresultsarealsostable,comparableto2017.Weremainveryproudandguidedbythe

1.7millionmicro,smallandmediumenterprises,andthelowandmiddleincomehouseholdswefinance,

in71emergingandfrontiereconomiesthrough274financialpartners.Weareparticularlyattunedto

theiremploymentandentrepreneurshipcapacity,butalsoincreasinglytothevariousUNSustainable

DevelopmentGoals(SDGs)2030thattheytarget.Ournewdedicatedimpactdivisionhascontinuedto

developourblendedfinancesolutions,linkinggovernmentfundinginparalleltoprivateinvestments,in

ordertoenhancesocialperformanceandimpactmeasurement.

Wethankyouagainforyourcontinuedtrustandinterestinourbusiness.

IvanPictet,Chairman

RolandDominicé,CEO

FOREWORD

3


STRATEGY

MISSIONOurmissionistocontributetosustainable

developmentinemergingandfrontiermarkets

byprovidingtraditionallyunderservedbusinesses

increasedaccesstocapitalandfinancialservices.

Weaimtodothisbyofferingspecializedinvestment

solutionsthatconnectsociallyresponsibleinvestors,

tomicro-,smallandmediumenterprisesandvalue

chaindevelopmentprojectsinlow-incomeeconomies

inAfrica,LatinAmerica,EasternEuropeandSouth-

EastandCentralAsia.

VALUESOurcorporatevaluesarefocusedontheprinciples

ofindependence,integrityandinnovation:

independencetowardsourclientsandpartnerswith

regardstoourinvestmentstrategiesandchoices,

integrityofourstaffandwork,andinnovationinour

productsandservices.Moreover,weprideourselves

ondeliveringhigh-qualityproductsandservices

andarestronglycommittedtothebuildingofsolid

humanrelationshipswithallourstakeholders.

SOCIAL CHARTEREachinvestmentmadebySymbioticsneedsto

complywiththefollowingcriteria:

› Targetsdomesticmarketsinemergingand

frontiereconomies.

› Investintherealeconomy,promotingthesocial

functionoffinance.

› Passasocialresponsibilityrating,usingESG

norms,andseeklongtermvaluecreation.

› Positivelyimpactlow-&middle-income

householdsand/ormicro-,smallandmedium

enterprises.

› Fosterjobcreationandaccesstoprimarygoods,

suchastohomes,foodandenergy.

Symbioticsistheleadingmarketaccessplatformforimpactinvesting.

VISION

Ourvisionistopositivelyimpactlow-andmiddle-incomehouseholdsinemergingandfrontiereconomiesinareassuchasjobcreation,foodandagriculture,housing,andenergy.

4


BOARD OF DIRECTORS

LORE VANDEWALLE Member

MICHEL GUILLET Member

BETH KRASNAVice-president

IVAN PICTETChairman

DAVID LEDERMANNSecretary

TINEKE RITZEMAMember

GOVERNANCE

ROLAND DOMINICÉChief Executive Officer

YVAN RENAUDChief Operating Officer

VINCENT DUFRESNEChief Financial Officer

GENERAL MANAGEMENT

5


FINANCE&ADMINISTRATIONTheFinanceunithasgroup-wideresponsibilityon

allfinancialaccounting,consolidationandreporting,

preparationofstatutoryfinancialstatementsand

audit,treasurymanagement,corporatefinancialrisk

managementandasset/liabilitymanagementas

wellasfacilitymanagementatheadquartersandin

supportofSymbiotics’affiliateoffices.

In2018,thedivisionreincorporatedtheproduction

ofstatutoryaccountsofourSymbiotics’SouthAfrican

affiliate.Furthermore,theunitmanagedthegrowth

andrenovationofourofficesinGeneva,CapeTown

andMexicoCity..

COMMUNICATIONSTheCommunicationsunitmanagescorporate

communicationstowardexternalaudiences

(investors,investees,themedia,andpartners).In

chargeofmanagingexternalevents,thewebsite

andsocialmediaplatforms,itproducestoolsranging

frommarketingcollateral,theannualreportto

audio-visualcontent.

CONTROLLINGLastyearwasatransitionalyearfortheControlling

unit.Aspecificeffortwastoreinforcetheautomated

productioncapacityoffinancialinformationfor

decision-makingpurposesunderthebudget/actual/

forecast(BAF)framework.Tothatend,thedivision

startedtherolloutofacompanyperformance

managementsolutiontobetterusefinancialdata

fordecisionmaking.

LEGALTheEuropeanUnion(EU)’slegalandregulatory

requirementsarebecomingincreasinglycomplex,

requiringadequateresponsestodevelopand

maintainourbusinessabroad.TheLegalunit’s

mainprojectsin2018weretheapplicationfora

MarketsinFinancialInstrumentsDirective(MiFID)

distributionlicensebySymbioticsNetherlandsand

thepreparatoryworkforthesetupofaLuxembourg

fundfullycompliantwiththeAlternativeInvestment

FundManagersDirective(AIFMD).Finally,Symbiotics

USAwasincorporatedinNovember2018.

CORPORATE CHRISTOPHE FAVREHead of Corporate

“ Endeavoring to work as a strategic, coherent and effective whole.”

6


OVERVIEWLastyearwasaturn-aroundyearfortheDigital

division,whichdoubledinsizeto10peopleto

addressthegrowingneedsofthecompany.

OntopofdevelopingthePlumseedswebsite,

Digital’skeychallengelastyearwasmanaging

theevolutionfromasingleteamofsoftware

developershostedwithinthecorporatedivisiontoan

independentdivisioncarryingoutseveralfunctions

andspanningfourunits.

DigitalisinchargeofSymbiotics’maindigital

platforms,SyminvestandAdmin,designed

respectivelyforexternalclientsandin-houseusers.

Itthusworksinclosecollaborationwithallcompany

divisionstoclarifyandspecifyneedsbeforeeach

softwaredevelopment.

CORESOLUTIONS&DIGITALPROJECTSTogivemorestructure,accountabilityand

transparencytoitswork,Digitalcreatedtwo

projectmanagementunitstaskedwithtriaging,

organizingandplanningdevelopmentwork:

CoreSolutions.Thankstoauserexperience

specialist,theunitisinchargeofimprovingand

supportingthedevelopmentofexistinginternal

systems,whileDigitalProjects,isdedicatedto

developingnewsolutions.

DIGITAL SOLUTIONSAthirdunit,DigitalSolutions,ismadeupoffive

developersdedicatedtoprovidinganappropriate

solutiontoeveryproblemraisedwithinspecific

projects,throughenhancementsandbugfixing.The

unitheadisalsothesoftwarearchitect,chargedwith

definingthevisionforthetechnologyandsystems

thatwillbeusedtoensurethatdigitalsolutions

remainuptodateandefficientovertime.

CORPORATE SOLUTIONSAfourthunit,CorporateSolutions,covering

theformerITsupportservicesforallstaff,

effectivelyjoinedtheDigitaldivisionin

December2018.

Byleveragingsynergiesacrossprofessionals

withcommonmindsetsandvariedskillsets,this

restructuringshouldfurthersupportSymbiotics’

capacitytogenerateinnovativesolutionstoclients

andstaff.

DIGITAL JOHNSTAEHLIHead of Digital

“ We embrace change and innovation to improve customer satisfaction.”

7


PEOPLE

OVERVIEWThePeopledivisionconductedkeyactivitiesin

2018tosupporttheattainmentofthe2018–20

businessplanobjectives.

ThePeopledivisionplayedakeyroleinsupporting

theimplementationofSymbiotics’reorganization

intoeightdivisions,reportingintotheGeneral

Managementtobetteralignthecompanywithits

newstrategicobjectives.Inparticularthroughthe

hiringof15newstaffmembers,includingastrategic

post,theMexico-basedRegionalManagerLatin

America,thusincreasingthetotalheadcountby

11%to147.

Toensurealignmentofpeople-relatedinitiatives

withSymbiotics’2020strategicobjectives,it

producedtheStrategicFrameworkandDivisionPlan.

Italsodevelopedandimplementedatthehuman

resourcelevelarangeofnewstandardprocesses

andpoliciestoimproveefficiencyandregulatory

compliancesuchastheTravelSecurityandSafety

PolicyorGDPRCompliancePolicy.

Itanalyzedthecurrentsalarystructure,reviewedand

implementedanewsalarygrid,selectedapension

fundforSymbioticsNetherlands,andimplemented

theManagementSharePurchasePlanrewarding

managers’contributiontoSymbiotics’successover

thepreviousbusinessplanbiennium.Withaview

toboostthecontinuousprofessionalizationof

ourstaff,itlaunchedlearningopportunitiesinthe

fieldsofmanagementandsustainablefinance.To

ensureteamcohesion,itorganizedand/orpromoted

initiativessuchaslunchtimemindfulnesssessions,or

asponsoredSymbioticsrunningchallenge.

Finally,thePeopledivisionalsocontributedtoother

cross-divisionprojects,inparticularbyleadingthe

newprojectmanagementmethodologydesignedto

enhancecross-divisionalefficiencyinthedeliveryof

strategicobjectives.

YVONNE CACHINHead of People

“ As drivers of our vision, Symbiotics’ people work every day to make our impact bigger, better and sustainable.”

MEXICO CITY

46%WOMEN

54%MEN

GLOBAL STAFF

NATIONALITIES

33

OF WHOM 51 ARE STAFF MEMBERS

SHAREHOLDERS

AVERAGE AGE

37

7 AMSTERDAM CAPE TOWNGENEVA (HQ)LONDONMEXICO CITYSINGAPOREZURICH

OFFICE LOCATIONS

As of end of December 2018

8


NEW STAFF

CAPE TOWN

TAKUDZWA MUNASHEAnalyst IMPACT

SINGAPORE

AMSTERDAM

ZURICH

MEXICO CITY

HUMBERTO CHAVEZAnalystMARKETS

LÉA GIRARDINAnalyst MARKETS

KLAUS GEYERDirector MARKETS

SUHAILA ISMAILSenior Associate CORPORATE

MARA GNOSAssociate CLIENTS

THOMAS HOFERSenior Analyst CLIENTS

ULRICH HINTERBERGERSenior Manager PORTFOLIOS

GENEVA

ALEXANDRE PRAUTZSCHDirector CLIENTS

SOPHIA VELISSARATOUSenior AnalystINVESTMENTS

DEBORAH KESTENERAnalystPEOPLE

MARION VILLANOVAAnalystCRO OFFICE

SÉBASTIEN DUQUETConsultant CLIENTS

AMY BERGSTRAESSERAnalystCORPORATE

KATERINA ERMIDOUAnalystMARKETS

MICHAEL BELPAIRESenior AnalystPORTFOLIOS

SERGIO COSTA PEREIRASenior AnalystDIGITAL

THIBAULT WATINEAnalyst PORTFOLIOS

AZAM YVES KAZMIAssociate MARKETS

IMANE SALLEMManagerDIGITAL

PHILIPPE KALEASAssociatePORTFOLIOS

BAPTISTE GIRODSenior Analyst DIGITAL

JEAN-BAPTISTE RANSONSenior ManagerDIGITAL

REEMT BEHRENSSenior AnalystINVESTMENTS

BRENDAN MACKINNON LACASAAssociateIMPACT

LAURA LIGHTBODYAnalyst INVESTMENTS

ROMAIN MATHONAnalystDIGITAL

9


SMEBANK|KYRGYZSTAN:KOMPANION

Kompanionwasestablishedin2004totakeover

severalmicrocreditprogramsmanagedbyMercy

Corps,aworldwidehumanitarianNGOthathadbeen

operatingintheKyrgyzRepublicsince1994.Initially

runningasalimitedliabilitycompany,Kompanion

morphedintoabankinJanuary2016.Today,thanks

toitspresenceacrossallthecountry’sregions,the

companyboastsoneofthelargestclientbasesinthe

KyrgyzRepublic.

Kompanionhistoricallyfocusedonproviding

solidaritygrouploansandtechnicalassistanceto

microentrepreneurs,inparticularsmall-scalefarmers,

livestockherdersandshepherdsoperatinginremote

areas.Itsbankinglicenseallowedittoofferdeposit

servicesaswellashigherindividualloans,which

explainswhyitsshareofSMEandurbanclientshas

continuallyincreasedinrecentyears.ByDecember

2017,morethanhalf(53%)ofKompanion’sclients

livedinurbanareas(upfrom18%in2015),while

individualloansareexpectedtobecometheleading

productintermsofvolumeinthenearfuture.

AspartoftheAgriculturalFinancingstateprogram,

andinaccordancewithitshistoricalclientele,

Kompanionofferspreferentialtermsonindividual

loansforthedevelopmentofstockbreeding,crop

productionandprocessingofagriculturalproducts.

Itsadoptionofclientprotectionprincipleshasled

KompaniontobethefirstKyrgyzcompanycertified

bytheSmartCampaign,inApril2014(acertification

thatwasvalidatedonceagaininApril2017).In

November2014,Kompanionbecamethefirst

institutioninCentralAsiatowintheEuropean

MicrofinanceAward.Thejuryrecognizedthe

innovationofitsPastureLandManagement

initiative,whichcombinestailoredfinancial

productsandeducationprogramsonthe

preservationofpasturelandsandmitigationof

soildegradationrisks.

Since2006Kompanionreceived51millionUSD

offundingfromSymbioticsandtheoutstanding

exposureis7.5millionUSDattheendof2018.

DEAL SPOTLIGHT

10


MICROFINANCE|ECUADOR:RIOBAMBA

Foundedin1986,Cooperativa de Ahorro y Crédito

Riobamba(COACRiobamba)isanEcuadoransavings

cooperativethatoffersfinancingsolutionsinthe

areasofagriculture,craftindustries,consumption,

housing,tradingandmicroenterpriseswithaview

topromotesocio-economicdevelopmentatthe

communitylevel.

Microenterpriseloansofbetween200and20,000

USDmakeupitsmaincreditproduct,accounting

foroverhalfofitsgrossloanportfolio.Inaddition

totraditionalloansandsavingsproducts,Riobamba

alsooffersanumberofservicesincluding:household

consumptionandhousingmicroloans;funerary

insurance;paymentfacilitiesforpension,education,

utilitiesandhealthservicebills,remittances;

ATMcards.

Thecooperativehashistoricallyfocusedon

placementquality,whichhasenableditto

maintainlowPAR30values(loansaffectedby

arrearsofmorethan30days).Itshighlyefficient

modelhasensuredadequateprofitsandgrowth

(+17%perannum)andhasbeenfueledbythe

cooperative’sreliableandloyaldepositors.

Riobambaisalsoastrongperformeronthesocial

front,maintainingitsfoundingsocialvaluesdespite

becomingoneofEcuador’slargestcooperatives.Itis

alsohighlycommittedtoclientprotectionthrough

internalpolicies,transparentcommunicationand

closeworkingrelationshipswiththelocalcredit

bureauinordertopreventover-indebtedness.

Today,Riobambaservesmorethan25,000borrowers

and85,000saversthrough12regularservicepoints.

Symbioticshadlentit3.5millionUSDattheend

of2018.

DEAL SPOTLIGHT

11


MARKETS

Lastyearwasachallengingyearforemergingand

frontiermarkets,whichhadtocopewithrising

yieldsintheUnitedStates,US–Chinatradetensions

andcurrencycrisesinTurkeyandArgentinathat

threatenedtospreadbeyondboundaries.

Inaratheruncertainglobalenvironment,Symbiotics

useditsglobalknowledgeandbroadgeographical

spantoproposeappropriatesolutionstoourclients.

OUR RESEARCHOurresearchcoveragecontinuedtoincreasethanks

totheadditionofeightcountriesand59first-time

investees,comparedto55institutionsaddedin2017,

bringingourtotalto274spreadacross71emerging

andfrontiermarkets.

Figure 1

INVESTEES ADDED IN 2018 2018 2017

Central&EasternEurope 4 3

Russia,Caucasus&CentralAsia 6 7

MiddleEastandNorthAfrica 4 1

Eastern Europe, Central Asia & MENA 14 11

SouthAmerica 6 3

CentralAmerica,Mexico&Caribbean 8 10

Latin America & the Caribbean 14 13

SouthAsia 11 14

EastAsia&Pacific 3 8

South & East Asia 14 22

Sub-Saharan Africa 16 9

North America 1 0

TOTAL 59 55

Asareflectionoftheaboveglobalbusiness

environment,theadditionsin2018wereequally

spreadamongregions,with16institutionsaddedin

Africa,14inLatinAmericaandSouthandEastAsia,

10inECAandfourintheMENAregion.Theonly

regionwhosegrowthdrippedslightlylastyearwas

SouthEastAsiawithadropofathird.

OUR INVESTMENT PARTNERSThevastmajorityofourinvesteeslastyearagain

comprisedfinancialinstitutions activeinfinancial

inclusionandsmallbusinessfinancewithaNon-

BankFinancialInstitution(NBFI)status.Someof

thesefocusonspecificimpactthemes,suchas

affordablehousing,renewableenergyoreducation.

VINCENT LEHNER Head of Markets

“ Our global team gathers knowledge and develops social and financial analysis mostly on financial institutions in emerging and frontier markets.”

Number of new investees brought by Symbiotics to its clients

12


Symbioticsalsocontinueditseffortstobroaden

itsreachintonewtypesofimpactthroughthese

investments,aligningitsobjectiveswiththeSDGs.

TheMarketsdivisionanalyzesandselectscompanies

withintheoff-gridsolarleasingsector,monitoring

itsevolutionandmaturingbusinessmodel.Italso

expandeditsknowledgeandprospectionefforts

inthe‘energyaccess’spacetoincluderooftopsolar

installationsforSMEsandhouseholds.Our

expansionintonewthemesremain,however,

belowtargetfor2018.

Ontopofthetraditionalfinancialinstitutions,

ourotherprospectioneffortsextendedtoFintech

companies,particularlydigitallendersandmobile

Figure 2

Symbiotics’ financial partners’ key

performance indicators

KEY PERFORMANCE INDICATORS 2017 2018

Returnonequity(%) 8.9% 13.1%

Portfolioyield(%) 23.4% 22.8%

Portfolioatrisk>30days(%) 5.7% 5.7%

PortfolioOperatingExpenseratio(%) 14.6% 12.5%

Costoffunding(%) 8.9% 8.7%

paymentcompaniesthatareusingtechnologyfirst

andforemosttooffernewtypesoffinancialinclusion.

Theprofitabilityoftheinstitutionsweworkedwith

improvedin2018(withanROEof13%,up45%from

lastyear)eventhoughtheywerecharginglessto

endclients(portfolioyieldtoendclients22%vs.

23%in2017).Thiscanbeexplainedbyimproved

operationalperformancetogetherwithcontrolled

costsoffundingandcostofrisk.

Ourpartneringfinancialinstitutionssawtheir

balancesheetsizegrowbyalmost20%toUSD793

millionlastyear,including20%grossloanportfolio

(GLP)growthtoUSD546million.Thistrendis

due,ontheonehand,totheorganicgrowthofour

institutionsincountrieswherethepopulationis

risingandsignificantlyunder-banked,andonthe

other,totheonboardingoflargerbanks.

13


LATINAMERICA&THECARIBBEAN

35%SouthAmerica17%

CentralAmerica,Mexico&theCaribbean17%

DUNCAN FRAYNERegional Director Sub-Saharan Africa

ALEXANDR FANDOCo-Regional Manager Eastern Europe, Central Asia and MENA

SOFIA TULUPOVACo-Regional Manager Eastern Europe, Central Asia and MENA

PATRICKD’HUARTRegional Manager South and East Asia

KLAUS GEYERRegional Director Latin America and the Caribbean

OUR REGIONAL COVERAGE

14


SUB-SAHARAN AFRICA

14%

EASTERNEUROPE, CENTRALASIA&MENA

22%Russia,Caucasus&CentralAsia17%

Central&EasternEurope3%MiddleEast&NorthAfrica(MENA)2%

SOUTH&EASTASIA

29%EastAsia&Pacific15%

SouthAsia14%

CountrieswhereSymbiotics wasactivein2018

CountrieswhereSymbiotics hasbeenactivesinceitsinception

Percentageofportfolio outstanding(atendof2018)%

15


INVESTMENTS

MARKET OVERVIEWWithUSD797milliondisbursed,2018wasgenerally

inlinewith2017’sloanoriginationvolume(USD809

million)butclearlyshortoftheoriginalplanof

USD950million.

Regionaldiversificationremainedrelatively

stablelastyearcomparedwith2017,whichsaw

considerableportfolioreallocation.

Latin America and the Caribbeancontinuedtogrowdynamicallydespitepoliticalandeconomiccrisesin

severalcountries.Originationthereremainedsteady

atUSD261million(vs.259millionin2017)

In Eastern Europe, Central Asia & MENA,theoveralllandscaperemainedstable,supportedbyfavorable

commoditypricesandinsomecasespositive

politicalshifts,notablyincludingArmeniaand

acontinuedpositivemomentuminUzbekistan.

Severalcountriesimprovedintermsofeaseofdoing

businessandaccommodatedthelaunchofsizeable

infrastructureprojects,whichshouldsupportthe

region’sgrowthinthelongterm.Asaresult,the

numberofnewinvestmentsincreasedmoderately

(+14%atUSD181million),bringingthisregion

fromthird-tosecond-biggestcontributortoour

investmentsorigination.

DANIEL SCHRIBER Head of Investments

“ We are the marketplace where funding offer meets funding demand. We identify, negotiate, close and service investment opportunities in emerging and frontier markets.”

USD million

20172018

Investment origination by region

0

50

100

150

200

250

300

Eastern Europe, Central Asia

& MENA

Latin America& the

Caribbean

South &East Asia

Sub-SaharanAfrica

Figure 3

Investment origination by region

16


Asforthe South and East Asian region,ChinaandIndiaenjoyedpoliticalcontinuity,whichhelped

drivetheregion’sgrowth.Indiagotitsgrowth

momentumbackafterslowingin2017mostly

becauseofthedemonetization.

Theregion,whichhadbeenourfastest-growing

andlargestcontributortototaloriginationin2017,

sawitsdisbursementlevelcutbyoverathirdto

USD192million,droppingtosecondplacebehind

LatinAmerica.

Thiscanbeexplainedbyvariousexogenousfactors.

First,regulatorychangesoccurredinIndiaandSri

Lanka,puttinganumberoftransactionsonholdfor

severalmonthsandinmanyinstancescancelling

themaltogether.Second,increasingUSdollarrates

andvolatilityinhedgingcostspreventedSymbiotics

fromdisbursingwell-pricedtransactionsina

numberofothercountriessuchasthePhilippines,

Nepal,Indonesia,andBangladesh.Third,manyfunds

decreasedtheirexposureinCambodiainthefaceof

generalelectionsandrisingfearofoverheatingin

thissmallandfast-growingcountry.

Incontrast,aftertwoextremelychallengingyears,

Sub-Saharan Africabenefittedfromincreasedand

morestablecommodityprices.Originationtherefore

doubledto119millionfromUSD60millionasthe

regionreboundedwithapositivegrowthoutlook,

supportedbyimprovedcommodityprices.Overallthe

financialsectorremainedresilient,seeingaslowbut

steadyimprovementinbusinessconditionsacross

thecontinent.

Figure 4

Portfolio outstanding by region, 2017 and 2018

Eastern Europe, Central Asia & MENA Latin America & the Caribbean South & East Asia Sub-Saharan Africa

December 2018

14% 22%

29% 35%

Eastern Europe, Central Asia & MENA Latin America & the Caribbean South & East Asia Sub-Saharan Africa

December 2017

15% 17%

32% 36%

17


Overall,theoutstandingportfolioregional

diversificationremainedfairlystablein2018,with

thetopfivecountriesrepresenting33%in2018vs

35%in2017;thetopfiveinvesteesremainingstable

at10%;theaverageoutstandingloansperinvestee

increasingslightlytoUSD7.3millionin2018from

USD6.9millionin2017;andoveralloutreach

increasingthankstotheadditionof62

newinvesteesandeightnewcountries–Vietnam,

Chile,Serbia,Nepal,Togo,Lebanon,Palestineand

theUS(investmentthroughaUS-basedoff-grid

holdingcompany).

Figure 5

Investment origination by tier

Intotal,36institutionsdroppedoutoftheportfolio,

mostlyforriskconsiderations(forinstance,not

performingwell)orbecausewewerenotableto

matchtheinstitution’sfundingrequest(funding

conditionsnotattractivetoourinvestors).

Intermsofthesizeofmicrofinanceinstitutions(MFIs)

inourpipeline,nosignificantchangeswereobserved

lastyear.Theonlycategorytohavedisplayedan

evolutionweretier2companies,whosesharerose

by12%toUSD224million,remainingSymbiotics’

second-largestsourceoftransactionorigination.

Ourmainsourceoftransactionorigination,tier1

companies,stillmadeupmorethanhalfoftotal

transactionorigination,whilethelargestMFIs(tier0)

institutionsremainedSymbiotics’third,andtier3and

otheronesremainedinsignificant.

USD million

Investment origination by tier

0

100

200

300

400

500

Tier 0

20172018

Tier 1 Tier 2 Tier 3 Other

18


INVESTMENT INSTRUMENTSAltogether,Symbioticsdisbursed469transactions

to163financialinstitutionsin59countries.We

handled404ofthesetransactionsthroughdirect

promissorynotesorloanagreementsbetweenfunds

andfinancialinstitutions(FIs)and20weresecondary

trades(loanstransferredfromonefundtoanother).

Wedisbursedtheremaining45transactions,as

impactbondissuances,syndicatingdiscretionary

mandates,advisorymandatesandexternalinvestors.

BondissuancesamountedtoUSD314million(vs.

340millionin2017),representing39%oforigination

intermsofvolume,includingsixdevelopment

financeinstitutionparticipationsforatotalof

USD49million.

RISK AND RECOVERYAftertwoyearsinarowat24,thenumberof

ongoingworkoutcasesdecreasedto19byendof

2018.Thisistheoutcomeoftheclosingof10cases

andtheopeningoffivenewones.Inlinewiththe

decliningnumberofcases,Symbiotics’exposureat

riskdecreasedbothinabsolute(USD)andrelative

(%ofportfolio)termstoreachrespectivelyUSD75.5

million(–16%YoY)and3.9%(–1.23percentage

pointsYoY).Undertheimpulseofrecoveries,

USD4.6millioninwrite-offsandportfoliogrowth,

itisthefirsttimesince2015thatthelattermetric

dropsbelow4%.

Fromageographicperspective,thedecreasewas

mostimportantinSub-SaharanAfricaandCentral

Asia,whereexposureatriskdecreasedby5.4ppand

1.2pptoreach14.4%and1.86%respectively.

Africaremained,however,theregionwheremostof

thestresscasestookplacelastyear(53%ofprincipal

inworkout),owingtoamixofinstitutionspecific

factorsandpersistingcurrencycrisesinZimbabwe

andAngola.Totalrecoveriesfor2018standatUSD

26.25million.Asubstantialportionoftheamount

paidoutbyinstitutionsalreadyinworkoutatyear

startcamefromNigeriancasesforanamount

correspondingto29%oftotalrecoveriesfollowing

theresumingofoutboundUSDpaymentsenabled

bytheopeningofanalternativepaymentplatform

(NiFEX).Another40%camefromworkoutcasesthat

startedduringtheyear,notablyprepaymentfromFIs

inMexicoandGhana.

AstheworseningeconomicsituationinNicaragua

hassofaronlytranslatedintoonenewstresscase,

andnoothermacroeventsignificantlyaffected

theportfolioin2018,amorediversifiedinterms

ofgeographyandmore‘mature’(i.e.eitherfully

restructuredorinadeadlock)populationofworkout

casesemergesatyear-end.

19


RENEWABLEENERGY:SOLARHOMESYSTEMS

DEAL SPOTLIGHT

Weclosedtwotransactionsin2018withoff-grid

solarcompanies.

Foundedin2007,Greenlight Planet (GLP) isaleadingglobalproviderofsolarenergyproductstoover27

millionoff-gridconsumers.Itsmissionistoexpand

accesstoenergytolow-incomehouseholdsin

emergingeconomies,inanefforttohelpeliminate

oneofthemajorhurdlesforsocialandeconomic

developmentforhouseholdsatthebottomofthe

pyramid.Forexample,accesstoenergyallows

businessestoopenlongerhours,householdstorely

onacleansourceofenergyforcooking,orschool

childrentodotheirhomeworkaftersunset.Todate,

GLPhassold7.25millionproductsanddevelopeda

networkofover300partnersselling100,000units

permonth.ThecompanyoperatesprincipallyinIndia,

EastAfricaandNigeria.

Zola Electric Tanzania,ourotherpartnerintheoff-gridsolarspace,pursuesasimilarapproach.

Thecompanyelectrifiedanestimatedhalfa

millionhouseholdsintheEastAfricancountryand

isplanningtoexpandtoothercountriesinthe

region.SimilartoGLP, theoff-gridsolarpanelsare

distributedviafinancialleasing–customersmust

makemonthlypaymentsfor36months,thereby

makingtheproductaccessibletolow-income

householdswhowouldnothavethefinancial

capacitytopayfortheproductupfront.

Installing off-grid solar panels through

Zola Electric Tanzania

Man reading a newspaper in India thanks to a solar

lamp commercialized by Greenlight Planet

phot

o: G

reen

light

Pla

net

phot

o: Z

ola

Elec

tric

Tan

zani

a

20


SUSTAINABLEAGRICULTURE:ORGANICTEA

Women plucking organic tea at the

Ambootia tea estate in Darjeeling, India

phot

o: A

mbo

otia

DEAL SPOTLIGHT

Foundedin1986,Ambootiaisbuyingsickteaestates

andconvertsthemintofullycertifiedorganicestates.

Itisexporting90%ofitsproductiontoEurope,

JapanandNorthernAmerica.Itisapioneerandnow

leadingorganicandbiodynamicteaproducerofthe

DarjeelingregioninIndia.Ambootiahasaholistic

approachtoitssocialresponsibility,producingan

excellentproductbyrespectingtheenvironmentand

evenrecreatingahealthyandsoundbiotopeinthe

estate;providingadequatewages,housing,schooling,

healthservicesandjobsecuritytoemployeesand

theirfamilies;advocatinginIndiaaboutthebenefit

oforganicagriculture.

WeissuedabondofEUR9millionwhichwasbought

byspecificinvestorsandnotourusualinvestorbase

giventheatypicalinvestmenttheme.

21


OVERVIEWThe20+mandatescoveredin2018included

third-partyanddedicatedsingleinvestorfunds,

evergreenandclosed-endfunds,butalsomulti-layer

blendedfunds.

Therangewasalsowideintermsofinvestment

strategies:althoughthecoreoftheportfoliosfocuses

onprivatedebtinstruments,somefundshavea

globalemergingmarketuniverse,whileothershave

amoreregionalfocus.Otherdifferentiatingfactors

layintheapproachtowardscurrencyhedgingand

theimpactthemescoveredfromfinancialinclusion

viamicrofinanceandSMElendingtoawiderscopeof

directcorporateimpactlending.

During2018,thedivisionlaunchedtwonew

unhedgedlocalcurrencyfundswithSkandinaviska

EnskildaBankenAB(SEB)WealthManagement:

oneclosed-endunhedgedlocalcurrencyfund

focusingonMSMElendingandanotheropen-end

fundwithalargerinvestmentuniversetargeting

theSDGsviacorporate,projectfinanceandfinancial

intermediationlending.

Afterthestrongrecoveryofemergingandfrontier

marketsin2017,thedynamicsretreatedin2018,

hitbycapitaloutflowsfromemergingmarket(EM)

towardtheUSDdenominatedassetswithrisingUS

rates,US–Chinatradetensionsandburstsofcurrency

crisesinTurkeyandArgentinaovermacroeconomic

concerns.ThebroadEMdebtmarketindicesalso

confirmed2018asagloomyyear,astheJPMEMBI

trackingUSD-denominatedbondsanditsequivalent

trackinglocalcurrencydenominateddebtlost4.6%

and6.9%respectively.

Figure 6

Annual performance of Symbiotics –

hedged managed funds

Figure 7

Figure 7 Annual performance of Symbiotics –

unhedged managed funds

VALÉRIE DENOUVILLIEZDUJARDINHead of Portfolios

“ Our team implements investment strategies by applying its fiduciary duty and enhancing financial and impact return for the end investors.”

100

102

104

106

EIBFLFGGMF

SMXFNTC IILIBOR 3M

FNTC

Jan 18

Dec 17

Feb 1

8

Mar 18

Apr 18

May 18

Jun 18

Jul 18

Aug 18

Sep 1

8

Oct 18

Nov 18

Dec 18

Styletile

100

104

108

112

SEB II (SEK)SEB Life (SEK)SEB III (SEK)

SEB IV (SEK)SGFIF (CHF)SEB V (SEK)

DUAL LC (USD)

Jan 18

Feb 1

8

Mar 18

Apr 18

May 18

Jun 18

Jul 18

Aug 18

Sep 1

8

Oct 18

Nov 18

Dec 18

PORTFOLIOS

22


Despitethisbleakeconomicenvironment,all

managedfundsperformedabovetargetand

benchmarkthankstohigherreturnsontheUSD

floatingportfolio,strongportfolioqualityandlow

cashlevels,withUSDequivalentreturnsabove4.0%.

Symbioticsalsogrewitsassetsunderadvisoryand

managementtoanewalltimehighofUSD2.1

billionattheendof2018,upalmost17%fromUSD

1.8billionthepreviousyear,confirmingthecontinued

attractivenessoftheassetclassandstrongtrack

recordofSymbiotics.

Followingthetrendinitiatedin2012,unhedged

localcurrencyportfoliosadvisedandmanagedby

Symbioticscontinuedtogrowduringtheyear,toUSD

643millionin2018fromUSD501millionin2017.

Intermsoforigination,thespreadofadvisoryversus

fundmanagementserviceshasevolvedasfollows

sincelastyear:

Figure 8

Spread of advisory vs. fund management services offered

to Symbiotics clients in 2018

Figure 9

Portfolio by currency exposure %

Hard CurrencyUnhedged Local CurrencyHedged Local Currency

2017 20180

20

40

60

80

100

ManagementAdvisory

2018USD 2.1Bn

23


OVERVIEWLastyearmarkedakeytransitioninSymbiotics’

businessdevelopment,asthefirmkickedoffits

effortstoimplementitsnew2020clientstrategy,ina

moreelaborateandstructuredway,withadedicated

clientdivision.

Thefirststepwastoregroupthesalesteam,the

blendedfinanceteam(inchargeofgovernment

anddevelopmentbankrelationships),theproduct

developmentteamandthemarketingteamundera

singledivision,andgraduallygrowitsresourceand

capacity,in-linewiththeambitionofthefirm.

Wefocusedonimprovingtheclientexperience

andcustomersatisfactionontheexistingclientele.

Thisincluded:streamliningourclientreporting

andperiodicmeetingsandreviews;beefingup

ourcustomerrelationshipmanagementdatabase,

knowledgemanagementandcompliancetools;

runningqualitycontrolandsatisfactionsurvey

initiatives;offeringsystematicsalessupportand

trainingtoourpartnersinthedistributionefforts;

andgenerallyengagingwithmorerelationship,

feedbackandlisteningtime.

Inparallel,weworkedonstreamliningournew-

productdevelopmentprocessandbetteraligning

itwithourmarketingefforts(research,collaterals,

eventsandleadacquisition).

CLIENT SEGMENTATIONThesalesandclientdevelopmentprocessisgeared

towardsthreeclientsegments:

1.Portfoliomandates:Keyclients

Wetargetprimarilyglobalbanksandlargeasset

managersforwhichwecustomizeportfolioadvisory

ordiscretionarymandates,startingatUSD50million.

2.Funddistribution:Qualifiedinvestors

Weseektodistributeourinnovationfunds(which

focusonlistedbonds,unhedgedforex,venture

capitalorinfrastructureinvestments),intargeted

jurisdictionswherewehaveanofficepresenceand

regulatoryclearance.

3.Dealbrokerage:Specializedfundmanagers

Weapproachspecializedfundmanagersfocusing

onprivatedebt,emergingdebtorsustainabledebt

throughPlumseeds:ourbrokerageplatformoffering

deal-by-dealaccesstothematicimpactbonds,either

throughprimaryissuancesorsecondarytrades.

CLIENT GEOGRAPHYTheincreasingcomplexityoftheregulatory

environment,inparticularwithintheEU,has

lengthenedthedecisionandonboardingprocess

ofnewmandatesandhassloweddownsomelead

acquisitionin2018.Wewerestillabletobroaden

therangeofEuropeancountrieswetargetto

France,theNetherlandsandtheUnitedKingdom

fromourcurrentmainmarketsofAustria,Germany,

ScandinaviaandSwitzerland,withaviewto

effectivelyonboardthesenewclientsin2019.

“Private debt funds in frontier markets are defensive vehicles offering global investors the double advantage of good returns and high diversification.”

CLIENTS ALEXANDRE PRAUTZSCHHead of Clients

24


FLORIAN GROHSManaging Director of Symbiotics Netherlands

OurPlumseedsplatformwentliveon5March2018

withsevenexistinginvestors.Itsobjectiveisto

provideinformationaboutaselectionofSymbiotics’

impactbonds,whichwerepreviouslyonlyavailable

toclientsaspartoffundmanagementservices.It

thusallowsaccreditedprofessionalinvestorsto

investsmalleramountsalongsidetheseinstitutions,

broadeningtheirinvestmentuniverse.Theplatform

providesinformationabouttheunderlyinginstitution,

theindicativetermsoftheimpactbondandthe

expectedimpactmeasuredagainstcertainSDGs.

Bytheendof2018,Plumseedspresented27bonds

onitswebsite,surpassingthe20targetedforthe

year.Itopened32accountstoaccreditedprofessional

investors,10ofwhominvestedatotalofUSD16

millioneuros,fallingshortoflastyear’sUSD20

milliontargetassetsundermanagement.For2019,

theplanisfortheplatformtodoubleitsvolumeto

50millioneurosinbondsover75accounts.

“ Impact bonds: Deal-by-deal brokerage for specialized fund managers.”

25


OVERVIEWToguideinvestmentdecisions,Symbiotics

measures,managesandreportsonthesocial

impactofitsinvestments.

BornoutoftheJuly2018restructuring,theImpact

divisionembodiesthecompany’smissiontogenerate

positivesocialandenvironmentalimpactthroughout

itsactivities.

SOCIALPERFORMANCE&IMPACTMEASUREMENTTheSocialPerformance&ImpactMeasurement

unitmonitorsthesocialoutreachofthecompany’s

investments.

Lastyear,Symbiotics’portfoliofinancedmorethan

1.7millionMSMEsinemergingandfrontiermarkets,

providingatotalof3.1millionjobs.Abouthalf(48%)

ofborrowerswerewomen,basedinurbanareas

(58%),workingmostlyinsmalltradingactivities

(23%),agriculture(17%)andservices(16%).Small

manufacturingwastheleastrepresentedsector(6%).

TheunitalsoproducesSocial Performance Reports

forfourofthefundsthatSymbioticsmanagesorfor

whichitprovidesadvisoryservices.Thesereports

allowSymbiotics’clientstocommunicateontheir

funds’contributiontosocio-economicdevelopment

andadvancementtowardstheSDGs.

LastyearsawthebirthofSymbiotics’flagshipseries

onthesocialimpactofSMEfinancing,withthe

publicationofthefirstSME Finance: Loans for Growth

Impact Report.

Thisuniquefour-yearstudyassesseswhether,by

enablingSMElending,Symbioticsdesignedand

managedLoansforGrowth(LFG)impactfundfosters

MARIANO LARENAHead of Impact

“ Managing impact involves showing the ultimate beneficiaries of our investments and the progress made in achieving the SDGs.”

IMPACT

UrbanRural

58%

42%

WomenMenLegal Entities

8%

48%

45%

AgricultureProductionTradeServicesOther

17%

6%

38%

23%

16%

Figure 10

End-client location

End-client gender

End-client activity

26


jobcreation,employmentandentrepreneurship,

ultimatelyhelpingtoadvanceSDGsinemerging

andfrontiermarkets.Thestudy,conductedoverfour

yearsuntil2020,collectsdatafromatotalof500

SMEsthroughin-depthfieldsurveys.Ittracksaset

ofoutcomes,includinggenderofemployees,typeof

employment,wagelevels,sourcesofSMEfinancing,

andtypeofassets.

CAPACITY BUILDINGContributingtostrengtheningtheexpertiseof

financialintermediariesinfrontierandemerging

marketisasignificantfootholdinSymbiotics’

impactinvestingapproach.In2018,atotalof

EUR274koffundingwasdedicatedtocapacity

buildingthroughscholarshipgrantsandtechnical

assistanceprogramsprovidedto20investeesin

14countriesmostlylocatedinSub-SaharanAfrica.

Digitaltransformationanddigitalfinancialservices

(DFS)wereoneofthefocusareasoftheyear.Other

topicswereSMElending,savings

mobilization,newproductdevelopment,human

resources,businessstrategyandgovernance.

MARKET RESEARCHIn2018,theImpactdivisioncontinuedto

disseminatemarketintelligenceonSymbiotics

impactinvestments.

Apartfromthepublicationoftheresultsofour

12thAnnual Survey on Microfinance Investment

Vehicles (MIVs),2018broughtanadditionallayerto

ourfundanalysisecosystemthankstoaninnovative

researchpartnershipwiththeGlobal Impact Investing

Network (GIIN).Titled‘The Financial Performance

of Impact Investing through Private Debt’,thisnew

researchhasbeenanimportantmilestonefor

theindustryasitbroughtincreasedtransparency

aboutthereturnpatternsofprivatedebtfunds

investinginthemessuchasaffordablehousing,

education,oragriculture,tonameafew.

Symbioticswillcontinuetoupdatethisbenchmark

onanannualbasis.

Awhitepaperentitled‘Banking for Impact’reviewed

thekeydevelopmentsthatshapedinclusivefinance

markets.Usingthelensofourpoolofpastand

presentinvestees,thereportprovidesinsightsabout

theirbusinessmodels,describingtheirdiversity,

depth,successandsenseofpurposesince2006.

27


ART IN HOSPITALSLastyearagain,manyheadquarterstaffmembersran

theEscaladeraceinGenevainsupportofthe Paint a

Smile Foundation,anon-governmentalorganization

whosemissionistolivenuppediatricwardsand

elderlyhomeswithcolorfulpaintingsmadeby

professionalartists.

Sinceitsinceptionin2000,PaintaSmilehasbeen

dedicatedtohospitalizedchildren,peoplewith

disabilities,andretirementhomeresidents.

Todate,PaintaSmilehasdecorated181healthcare

institutionsin18countriesaroundtheworld.

In2018,Symbioticsalsodonated5,000CHFtowards

thedecorationofapediatricwardinOnex,the

MaisondesantéCitéGénérations.

CARBON OFFSETTINGWorkingacrossmorethan80emergingmarkets,

Symbioticsstaffspendmuchoftheirtimetraveling

byair.Thecompanythusdecidedtopartnerwith

theClimate Neutral Group(CNG)inordertobegin

offsettingitscarbonemissionsfootprint.CNG,

basedinCapeTown,allowscompaniestomanage

andreducetheirclimateimpactbyreinvesting

theircarboncreditsin‘offsetprojects’thatreduce

greenhousegasemissionsandpositivelyimpact

communitiesthatarethreatenedbyclimatechange.

CNGcomplieswiththethreemostinternationally

recognizedcarboncreditstandards:theGold

Standard,VerifiedCarbonStandardandtheClean

DevelopmentMechanism.

In2018,Symbioticsoffset563tonsofCO2equivalent

ofitsflightemissions.Itscarboncreditsallowedusto

fund45wonderbagsoftheWonderbagProjectSouth

AfricaandsixbiogasinstallationsoftheNationalBio

DigesterProgamTanzania.

VENTURE PHILANTHROPYSymbioticsisaproudpartnerof1to4,aventure

philanthropyfoundationbasedinSwitzerland.

Through1to4’sGiftVestprogram,earlystagesocial

businessesreceiveseedinvestmentdonations

tostartoutontheirjourneytocreatejobsand/or

provideaccesstoproductsandservicesforlow-

incomefamiliesindevelopingcountries.Lastyear

weagaindisbursed10,000CHFto1to4.

Wall decoration of a pediatric

ward of the Maison

de santé Cité Générations.

CORPORATE SOCIAL RESPONSIBILITY

28


DisclaimerThisAnnualReportcontainsgeneralinformationaboutSymbioticsSAanditssubsidiaries(together‘Symbiotics’)andisintendedforinformationalpurposesonly.Investorsshoulddetermineforthemselveswhetheraparticularserviceorfinancialinstrumentissuitablefortheirinvestmentneedsandshouldseekprofessionaladvicefortheirparticularsituation.AnyrelianceplacedonthisAnnualReportisdoneentirelyattheriskofthepersonplacingsuchreliance.Brandnames,logosandtrademarksusedhereinareforinformationpurposesonly.Thelistingofanycompanyortheirlogosisnotintendedtoimplyanysponsorship,endorsementoraffiliationwithSymbiotics.TheinformationcontainedinthisAnnualReportisnotanoffertosellorasolicitationofanoffertopurchaseinterestsneitherinSymbioticsnorinanyfinancialinstrumentsmanagedorofferedbySymbiotics,norisitintendedtoprovide,andshouldnotbereliedonfor,investment,tax,legalorfinancialadvice.ThecontentofthisAnnualReportisasummaryonly,isnotcomplete,anddoesnotincludeallmaterialinformationaboutfinancialservicesorinstrumentsmanagedorofferedbySymbiotics,includingpotentialconflictsofinterestandrisksassociatedwithaninvestmentbySymbiotics.Pleaserefertoofferingdocumentsforfurtherinformationconcerningspecificinstruments.01

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.19

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