Slide 1: Annual Results 2017
Annual Results 2017 Presentation 1 March 2018 Peter Harrison Group Chief Executive
Slide 2: Growth across key metrics
Growth across key metrics Revenue growth with cost discipline Key metrics at record levels Positive net new business Improved ratio of total costs Dividend increased by 22% to net income 2017 2016 Change Net income* £2,068.9m £1,793.1m 15% Ratio of total costs to net income 61% 64% - Profit before t
Slide 3: Net flows by channel
Net flows by channel £bn 14 Positive across 12 all channels 10 8 £9.6bn net new business 6 Robust Institutional demand 4 Good net new business across 2 Wealth Management 0 -2 Overall positive net inflows in Intermediary -4 -6 2013 2014* 2015 2016 2017 Institutional Intermediary Wealth Management * E
Slide 4: Net flows by channel
Net flows by channel £bn 14 Strong demand for 12 branded funds 10 8 £7.6bn net inflows in branded funds 6 Highest net sales in branded funds 4 since 2009 2 Sub-advisory outflow in H1 0 -2 All regions, apart from North America, saw sub-advisory -4 net inflows -6 2013 2014* 2015 2016 2017 Institutiona
Slide 5: Net flows by asset class
Net flows by asset class £bn 15 Client demand diversified across products 10 Strong underlying Multi-asset 5 demand Equities flat, all other asset classes 0 net positive sales £3.5bn into Fixed Income -5 £2.5bn into Private Asset & Alternatives -10 2013 2014* 2015 2016 2017 Equities Fixed Income Mul
Slide 6: Net flows by region
Net flows by region £bn 15 Positive net inflows, 13 good underlying growth 11 9 Strong demand from clients in Continental Europe 7 5 UK demand in both branded funds and Institutional 3 1 Asia Pacific trends in first half continued through second -1 -3 Americas only region to see net -5 negative sale
Slide 7: Richard Keers, Chief Financial Officer
Richard Keers Chief Financial Officer
Slide 8: Profit before tax and exceptional items
Profit before tax and exceptional items Profit before tax and exceptional items up 24% to £800.3m £m Compensation Net income costs 275.8 (89.7) Non-compensation Profit before tax costs and exceptional items Tax (30.5) 800.3 (171.6) Profit before tax and exceptional Wealth Profit after tax items and
Slide 9: Net income
Net income Net income up 15% to £2,069m £m Net new business Performance fees Markets and FX Net income 10 37 2,069 193 Net income Acquisitions Wealth Other income 1,793 57 Management (21) 273 Wealth Management 224 Net operating revenue + £297m Asset Asset Management Management 1,758 1,534 Group segm
Slide 10: Institutional net operating revenue
Institutional net operating revenue £m 814.0 800 692.5 57.6 628.7 600 26.2 27.2 Average AUM up £37bn from FY 2016 400 756.4 602.5 665.3 200 - Net operating revenue margin excluding performance fees 32bps 0 (FY 2016: 32bps) 2015 2016 2017 Performance fees 15 £m Annualised revenue on net new business
Slide 11: Intermediary net operating revenue
Intermediary net operating revenue £m 1,000 929.3 19.9 764.7 797.0 800 11.6 9.5 Average AUM up 600 909.4 £18bn from FY 2016 400 755.2 785.4 200 - Net operating revenue margin excluding performance fees 72bps 0 (FY 2016: 73bps) 2015 2016 2017 Performance fees £m 20 Annualised revenue on net new busin
Slide 12: Wealth Management net operating revenue
Wealth Management net operating revenue £m 266.9 0.9 250 21.4 223.3 207.3 20.6 2.4 40.8 Closing AUM at record 200 15.5 0.6 36.0 38.8 high of £45.9bn 150 100 203.8 - Management fees up 26% 155.2 161.5 - from FY 2016 50 0 - Transaction fees up 5% 2015 2016 2017 - from FY 2016 Management fees Transacti
Slide 13: Operating expenses
Operating expenses Ratio of total costs to net income 61% £m 1,400 2016 2017 1,303.4 34.8 1,171.6 1,200 23.2 Total compensation ratio 44% 43% 387.3 1,000 356.8 Ratio of total costs to net income 64% 61% 800 600 1,268.6 1,148.4 881.3 400 791.6 200 0 2016 2017 Exceptional items Non-compensation costs
Slide 14: Group Capital
Group Capital £m £m 4,000 4,000 3,471 3,471 3,500 3,500 3,153 3,153 3,000 3,000 1,165 1,090 879 2,500 1,274 2,500 216 392 2,000 325 2,000 175 944 696 1,500 915 1,500 814 147 Capital Surplus 1,000 1,000 144 Working Capital – Other 500 1,146 1,146 500 Working Capital – Seed Final Dividend* 890 890 and
Slide 15: Summary
Summary Strong results reflecting good cost discipline £m Net income up 15% to 2,068.9 £2,069m 1,793.1 Ratio of total costs to net income down to 61% Profit before tax and exceptional items up 24% to £800.3m 800.3 644.7 EPS up 22% to 226.9p Final dividend up 23% to 79p 2016 1 2017 2 3 2016 4 2017 5
Slide 16: Peter Harrison, Group Chief Executive
Peter Harrison Group Chief Executive
Slide 17: Key areas of strategic growth
Key areas of strategic growth Progress against each in 2017 Product Fixed North Asia Technology Private Wealth innovation Income and America Pacific Assets & Management and Solutions Multi-asset Alternatives 16
Slide 18: Private Assets & Alternatives
Commodities EMD Absolute 3% Return 8% GAIA 10% Private Assets Real Estate 36% & Alternatives Securitised Credit £33.3bn AUM in new category of 14% Private Assets and Alternatives £2.5bn in net new business Infrastructure Finance Net flows well diversified by Insurance- 3% investment capabilities Lin
Slide 19: Wealth Management
Wealth Management Organic growth and selective acquisitions Good financial performance Growing business Selective acquisitions – Net income up 22% – Now £57.2bn AUMA – Discretionary wealth management of C. Hoare & Co – Pre-exceptional PBT up 36% – £2.0bn of net client inflows – Full year benefit fro
Slide 20: Outlook
Outlook Continue to invest in long-term growth opportunities Diversifying product Expanding our Leveraging opportunities offering through new geographical footprint created by latest investment expertise technology 19
Slide 21: Thank you
Thank you
Slide 22: Forward looking statements
Forward looking statements 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 the