Schroders 2015 Half-Year Results 30 July 2015 Michael Dobson Chief - - PowerPoint PPT Presentation

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Oct 07, 2022 123 likes •300 views

Schroders 2015 Half-Year Results 30 July 2015 Michael Dobson Chief Executive 29/07/2015 20:19:13 H1 2015 Net revenue 806.2m (H1 2014: 728.6m) Profit before tax and exceptional items 305.7m (H1 2014: 261.5m) Net inflows

SLIDE 1

Schroders

2015 Half-Year Results

Michael Dobson Chief Executive 30 July 2015

SLIDE 2

H1 2015

 Net revenue £806.2m (H1 2014: £728.6m)  Profit before tax and exceptional items £305.7m (H1 2014: £261.5m)  Net inflows £8.8bn (H1 2014: £4.8bn)  Assets under management £309.9bn (30 June 2014: £271.5bn)  Interim dividend 29 pence per share (interim dividend 2014: 24.0 pence)

29/07/2015 20:19:13

2015 Half-Year Results | July 2015

SLIDE 3

 Net revenue £694.3m (H1 2014: £621.0m)  Profit before tax and exceptional items

£271.0m (H1 2014: £235.1m)

 77% of assets outperforming over three years  Net inflows £8.4bn (H1 2014: £4.5bn)  Significant growth in Asia  Strong inflows in European Intermediary  Building scale in Fixed Income and Multi-asset

2 4 6 8 10 12 H1 2015 H1 2015 H1 2015

Asset Management

Diversified growth

29/07/2015 20:19:13 £bn

2015 Half-Year Results | July 2015

SLIDE 4

1 2 3 4 5 H1 2015 H1 2015

 £16.7bn of new mandates (H1 2014: £11.4bn)  Net inflows £3.6bn (H1 2014: £0.7bn)  Strong performance in Japan, China  Net inflows in Global and US fixed income,

multi-asset strategies, Japanese equities

 Outflows in Commodities, Global equities

Institutional

Assets under management £175.5bn (30 June 2014: £148.0bn)

29/07/2015 20:19:13 £bn

2015 Half-Year Results | July 2015

SLIDE 5

1 2 3 4 5 6 7 H1 2015 H1 2015

 Gross sales £28.6bn (H1 2014: £23.3bn)  Net inflows £4.8bn (H1 2014: £3.8bn)  Significant inflows in Asia and Europe  Outflows in UK  Diversified flows across European bonds,

Global, Japanese and European equities, Asian multi-asset

Intermediary

Assets under management £102.4bn (30 June 2014: £92.8bn)

29/07/2015 20:19:13 £bn

2015 Half-Year Results | July 2015

SLIDE 6

 Net revenue £105.5m (H1 2014: £100.5m)  Profit before tax and exceptional items £30.0m

(H1 2014: £26.3m)

 Net inflows £0.4bn  Differentiated proposition for UK market  Repositioning international business

Wealth Management

Assets under management: £32.0bn (30 June 2014: £30.7bn)

29/07/2015 20:19:13

AUM by client size

2015 Half-Year Results | July 2015

SLIDE 7

Schroders

2015 Half-Year Results

Richard Keers Chief Financial Officer 30 July 2015

SLIDE 8

16 24 29 5 10 15 20 25 30 H1 2013 H1 2014 H1 2015 66.3 77.1 88.5 64.1 74.5 86.1 50 60 70 80 90 H1 2013 H1 2014 H1 2015

221.7 233.9 290.3 6.3 27.6 15.4 50 100 150 200 250 300 350 H1 2013 H1 2014 H1 2015

Profit before tax (£m) Net revenue, including performance fees (£m)

Financial highlights

Basic and diluted earnings per share before exceptional items (pence) Dividend per share (pence)

228.0 261.5 633.3 720.2 800.3 11.8 8.4 5.9 100 200 300 400 500 600 700 800 900 H1 2013 H1 2014 H1 2015 806.2 728.6 645.1

Exceptional items (£m)

305.7

Basic Diluted

2015 Half-Year Results | July 2015

SLIDE 9

Net revenue – driven by investment returns and organic growth

Net revenue up 11% to £806m

£m

Net revenue 728.6 Net new business 40 Markets & FX 44 Performance fees (2) Other (4) Group segment 7 Group segment 6 Asset Management 621 Asset Management 694 Wealth Management 101 Wealth Management 106 H1 2014 H1 2015 Net revenue 806.2

2015 Half-Year Results | July 2015

SLIDE 10

267.5 287.5 304.8 345.2 369.1 383.6 6.3 21.5 5.6 273.8 309.0 310.4 50 100 150 200 250 300 350 400 450 Institutional Intermediary Performance fees 345.2 369.1 383.6 2.0 4.4 0.3 347.2 373.5 383.9

Asset Management net revenues

Net revenue margins, excluding performance fees, at 49 bps

H1 2014 H2 2014 H1 2015

£m

2015 Half-Year Results | July 2015

SLIDE 11

Wealth Management net revenues

Net revenue margins at 66 bps

£m 77.0 77.8 78.1 17.0 18.1 20.0 6.5 8.1 7.4 100.5 113.0 105.5 20 40 60 80 100 120 H1 2014 H2 2014 H1 2015

Management fees Transaction fees Net banking interest income Net loan loss recoveries and performance fees

9.0

2015 Half-Year Results | July 2015

SLIDE 12

Operating expenses

Cost control in line with projections

2015 Half-Year Results | July 2015

£m H1 2014 H2 2014 H1 2015 H1 2015 versus H1 2014 AM & Group WM Total Compensation costs 340.9 346.9 317.2 48.7 365.9 +7% Non-compensation costs 137.2 159.3 128.0 26.8 154.8 +13% Operating expenses (excl. exceptional items) 478.1 506.2 445.2 75.5 520.7 +9% Exceptional items 26.5 22.3 10.3 4.0 14.3

Operating expenses (incl. exceptional items) 504.6 528.5 455.5 79.5 535.0 +6% Headcount 3,540 3,556 3,074 611 3,685 +4% H1 2014 FY 2014 H1 2015 Compensation cost:net revenue ratio 47% 45% 45% Cost:net revenue ratio 66% 64% 65%

SLIDE 13

Profit before tax and exceptional items

Up 17% to £305.7m reflecting strong business performance

£m

Profit before tax and exceptional items 261.5 Net revenue 78 Compensation costs (25) Other costs (18) Net finance income and associates 9 Profit before tax and exceptional items 305.7 Tax (64) Profit before exceptional items 241.6 Group segment 0.1 Group segment 4.7 Asset Management 235.1 Asset Management 271.0 Wealth Management 26.3 Wealth Management 30.0 H1 2014 H1 2015

2015 Half-Year Results | July 2015

SLIDE 14

Movement in Group capital

Increase of £72m since 31 December 2014

£m

Profit after tax 229 Dividends (147) Foreign exchange (12) Other 2 31 December 2014 30 June 2015 Group Capital H2 2014 2,538 Group Capital H1 2015 2,610

2015 Half-Year Results | July 2015

SLIDE 15

Analysis of Group Capital

Increase of £72m since 31 December 2014

** Not included in AUM

£m H1 2014 H2 2014 H1 2015 Regulatory capital 617 673 695 Other operating capital 437 284 116 Investment capital* 573 725 957 Seed capital* 182 163 154 Other items** 514 693 688 Statutory Group capital 2,323 2,538 2,610

** Comprises goodwill, intangible assets, pension scheme surpluses, other associates and joint ventures, and deferred tax

2015 Half-Year Results | July 2015

SLIDE 16

Outlook

 Solid pipeline of new business in Institutional  Uncertainties around eurozone, China and US interest rates affecting investor demand  Building scale and improving efficiencies to offset declining fee margins  Investing in organic growth  Diversified business model provides long-term growth opportunities

2015 Half-Year Results | July 2015

SLIDE 17

Forward looking statement

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

n them. Without limitation, any statements preceded or followed by or that include the words ‘targets’, ‘plans’,

‘sees’, ‘believes’, ‘expects’, ‘aims’, ‘will have’, ‘will be’, ‘estimates’ or ‘anticipates’ or the negative of these terms or

ther 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 presentation. 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 this presentation should be construed as a forecast, estimate or projection of future financial performance.

2015 Half-Year Results | July 2015