Half-year results 2019 Presentation 1 August 2019 Peter Harrison - - PowerPoint PPT Presentation
Half-year results 2019 Presentation 1 August 2019 Peter Harrison Group Chief Executive Strat rategi egic foc c focus us for for long lo ng-term grow term growth th Peter Harrison Group Chief Executive Selective acquisitions
Peter Harrison Group Chief Executive
Presentation 1 August 2019
Half-year results 2019
Half-year results 2019
1
Peter Harrison
Group Chief Executive
Good progress in partnership with Lloyds Continued investment in growth areas Subdued investor demand in “risk off” environment Selective acquisitions aligned to strategic
Half-year results 2019
2
Peter Harrison
Group Chief Executive
Good progress in partnership with Lloyds Continued investment in growth areas Subdued investor demand in “risk off” environment Selective acquisitions aligned to strategic
H1 2019 H1 2018 Change
Net income1
£1,032.6m £1,086.1m (5)%
Profit before tax1
£340.4m £397.1m (14)%
AUM
£444.4bn £435.7bn 2%
Net new business
£(1.2)bn £1.2bn –
Basic EPS1
98.6p 114.0p (14)%
Total dividend per share
35.0p 35.0p –
1 Before exceptional items. Half-year results 2019
3
Ongoing “risk off” environment across Intermediary
£bn
Continued subdued investor demand
(15) (10) (5) 5 10 15 2015 2016 2017 2018 H1 2019
Institutional Intermediary Wealth Management
Continued momentum in Wealth Management Positive net new business from Institutional clients
Half-year results 2019
4
(3) (2) (1) 1 2 3 4
UK Asia Pacific Americas EMEA £bn
Despite macro concerns, positive net flows Outflows driven by Australian redemptions Challenging market across both channels Small Institutional
and Latin America Institutional demand for Multi-asset and Fixed Income Partly offset by clients in mainland China, Singapore & Taiwan Intermediary
concentrated
Net inflows into Hartford range, now £5.8bn AUM UK Asia Pacific Americas EMEA
Half-year results 2019
5
Positive net new business across both channels Continued demand for Multi-asset strategies Ongoing momentum in segment Outflows through one real estate mandate Institutional flows into US & convertibles, Intermediary for EMD and European credit Led by UK Institutional clients into LDI and risk mitigation Positive flows across both Cazenove and Benchmark Continued demand for securitised credit
(8) (6) (4) (2) 2 4
Fixed Income Multi-asset Wealth Management Private Assets & Alternatives Equities
£bn Limited demand with
“risk off” across both channels Global and EAFE strategies generated positive flows
Fixed Income Multi-asset Wealth Management Private Assets Equities
Richard Keers Chief Financial Officer
6
Half-year results 2019
7
Profit before tax and exceptional items -14%
to
Group segment 1.0 Group segment 4.8 Profit before tax 319.3 Asset Management 347.4 Asset Management 292.4 Net income Compensation costs Non-compensation costs Exceptional items (21.1)
H1 - 17 H1 - 18 H1 - 18
H1 2019 H1 2019 H1 2018
Profit before tax and exceptional items 397.1 Profit before tax and exceptional items 340.4
£m £m
48.7 (53.5) 18.6 (21.8) 43.2 Wealth Management Wealth Management
Half-year results 2019
8
Net income -5%
to
2017 2018
Asset Management
921
Asset Management
865
Wealth Management Wealth Management Group segment 24 Group segment 21 Net operating revenue £(58)m Net income 1,033 Net income 1,086
Other income 5 Performance fees (14) FX 11 Markets (42) Net new business (23) Acquisitions 4 144
£m
144
Markets and FX £(31)m Performance fees and net carried interest £(8)m
H1 2018
Net carried interest 6
H1 2019
Half-year results 2019
9
£m Closing AUM of
Average AUM
from HY 18
Net operating revenue margin1
(100) (80) (60) (40) (20) 20 40 60 (10) (8) (6) (4) (2) 2 4 6
Q1 Q2 Q3 Q4 Q1 Q2
Net new business Annualised net new revenue 2018 - 2019
NNB £bn ANNR £m
Net new business and annualised net new revenue
(NNB and ANNR)
2018 2019 100 200 300 400 500 600 700 800 900 1,000 Performance fees and net carried interest H1 2018 H2 2018 H1 2019 877.7 875.7 858.5 911.1 852.9
35.4 19.2 27.3
825.6
Half-year results 2019
10
106.2 110.0 109.3 20.6 17.9 18.3 12.8 14.0 12.7
0.3 0.1
0.1 20 40 60 80 100 120 140 160 H1 2018 H2 2018 H1 2019 Performance fees Net banking interest income Transaction fees Management fees 139.9 142.0 140.4 Average AUM
from HY 18
Closing AUM of
£m
Net operating revenue margin1
1Excluding performance fees2 4 6 8 10 12 0.0 0.2 0.4 0.6 0.8 1.0 1.2
Q1 Q2 Q3 Q4 Q1 Q2
Net new business Annualised net new revenue 2018 - 2019
2018 2019
Net new business and annualised net new revenue
(NNB and ANNR)
NNB £bn ANNR £m
Half-year results 2019
11
Total compensation ratio
H1 2018: 43.5%
Ratio of total cost to net income
H1 2018: 63%
472.0 453.4 217.0 238.8 100 200 300 400 500 600 700 800 H1 2018 H1 2019
692.2
706.6 [X]
689.0 17.6
711.3 19.1 Compensation costs Non-compensation costs Exceptional items £m
Half-year results 2019
12
1,115 1,154 1,126 1,084 216 96 1,164 1,242 1,000 2,000 3,000 4,000 31 December 2018 30 June 2019 Capital base
1Final 2018 dividend/proposed 2019 interim dividend 2Comprises regulatory deductions, principally goodwill, intangible assets and pension scheme surplus1,115 1,154 165 176 465 474 535 567 1,341 1,205 1,000 2,000 3,000 4,000 31 December 2018 30 June 2019 Capital allocation 3,576 3,621 3,621 3,576 Working capital – Other Working capital – Seed and co-investment Investment capital – Liquid Investment capital – Illiquid Other items2 £m Other items2 Overall regulatory capital requirement Dividend1 Capital surplus
Half-year results 2019
13
Net income1
Profit before tax and exceptional items
Interim dividend unchanged at
Basic EPS before exceptional items
£m £m
1Before exceptional items.1,086.1 1,032.6 397.1 340.4 Profit before tax and exceptional items Net income1 H1 2018 H1 2019 H1 2018 H1 2019
Peter Harrison Group Chief Executive
Half-year results 2019
15
Expand core business
Scottish Widows mandate
Grow Private Assets & Alternatives
Real Estate: Blue Asset Management Impact investing: BlueOrchard Thirdrock
Closer proximity to consumer
Schroders Personal Wealth Progress in China
Half-year results 2019
16
Focused strategy for long-term growth
Strong pipeline despite environment of limited investor demand Progress against strategic objectives to drive future growth
Half-year results 2019
17
These presentation slides may contain forward-looking statements with respect to the financial condition, performance and position, strategy, results of operations and businesses of the Schroders Group. Such statements and forecasts involve risk and uncertainty because they are based on current expectations and assumptions but relate to events and depend upon circumstances in the future and you should not place reliance on them. Without limitation, any statements preceded or followed by or that include the words ‘targets’, ‘plans’, ‘sees’, ‘believes’, ‘expects’, ‘aims’, ‘confident’, ‘will have’, ‘will be’, ‘will ensure’, ‘likely’, ‘estimates’ or ‘anticipates’ or the negative of these terms or other similar terms are intended to identify such forward- looking statements. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by forward-looking statements and forecasts. Forward-looking statements and forecasts are based on the Directors’ current view and information known to them at the date of this statement. The Directors do not make any undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Nothing in these presentation slides should be construed as a forecast, estimate or projection of future financial performance.