Ashmore Group plc · LSE:ASHM
Ashmore — H1 2024 Earnings Presentation
31 slides from Ashmore's earnings presentation, Feb 7, 2024
Slide 1: Ashmore Group plc Results for six months ended 31 December 2023
Ashmore Group plc Results for six months ended 31 December 2023 7 February 2024 www.ashmoregroup.com
Slide 2: Overview
Overview • Delivering outperformance in positive market environment ˗ Ashmore outperforming across broad range of strategies ˗ Index returns of +5% to +7% over the six months ˗ Supported by sound economies, superior GDP growth, falling inflation & lower rates • Financial performance reflects stronge
Slide 3: Emerging Markets continue to deliver strong returns
Continued momentum in Emerging Markets • Strong Emerging Markets returns over six months Asset class returns ‒ Continuing the rally that began in late 2022 6m to Since 31 Dec 2023 30 Sep 2022 ‒ Fixed income outperformed Developed Markets Emerging Markets ‒ Equities lagged slightly due to China, othe
Slide 4: Consistent outperformance across all time periods
Investment performance One year: 61% outperforming Three years: 56% outperforming Five years: 62% outperforming 100% 100% 100% 90% 90% 90% 80% 80% 80% 70% 70% 70% 60% 60% 60% 50% 50% 50% 40% 40% 40% 30% 30% 30% 20% 20% 20% 10% 10% 10% 0% 0% 0% June 2023: 67% June 2023: 69% June 2023: 49% Outperformi
Slide 5: Assets under management stabilising
Assets under management • AuM stabilising AuM development (US$bn) ‒ Performance +US$2.6 billion (H1 2023: +US$0.8 billion) 2.9 ‒ Net outflows of -US$4.5 billion (H1 2023: -US$7.6 billion) 3.9 ‒ Q2 significantly better than Q1 1.3 1.6 • Subscriptions US$3.0 billion, 5% of opening AuM (H1 2023: US$4.3
Slide 6: Diversification delivering AuM growth
Local asset management platforms • Strong growth in AuM to US$7.8 billion (+12% H1, +19% YoY) Increasing contribution from local offices ‒ Colombia capital raising (private equity fund III) 9.0 16% ‒ New institutional funds and additional private equity capital in 8.0 14% Saudi Arabia 7.0 12% ‒ Stro
Slide 7: Financial performance overview
Financial performance overview • Adjusted net revenue -13% H1 2024 H1 2023 ‒ Performance fees doubled to £8.0m £m £m YoY ‒ Lower AuM levels and FX impact - net revenue 93.4 107.7 -13% - operating costs (52.3) (46.2) 13% • Adjusted operating costs +13% ‒ Non-VC costs +2% HoH Adjusted EBITDA 42.6 63.2
Slide 8: Revenues reflect lower average AuM and FX impact
Revenues • Net management fees -16% YoY H1 2024 H1 2023 − Average AuM -10% £m £m YoY − 1bp decline in net management fee margin Net management fees 82.6 98.0 -16% − Higher average GBP:USD rate Performance fees 8.0 3.7 +116% Other revenues 1.7 1.3 +31% • Lower FX hedge gains FX: hedges 1.1 4.7 -77% A
Slide 9: Effectively managing industry cost pressures
Operating costs • Staff costs increased 3% YoY and 2% HoH H1 2024 H1 2023 ‒ Full period effect of wage inflation £m £m YoY ‒ Offset by lower average headcount Staff costs (16.1) (15.6) -3% Other operating costs (12.5) (11.0) -14% • Other operating costs +14% YoY and +2% HoH D&A (1.5) (1.7) +12% ‒ Pr
Slide 10: Supporting strategy and delivering profits
Seed capital • Total value of c.£300m comprises: H1 2024 H1 2023 ‒ Market value of investments (£288.3 million) £m £m ‒ Commitments (£9.7 million) - realised profit 3.1 0.8 - unrealised MTM profit/(loss) 16.5 (17.3) • Successfully recycled £22.6 million from funds in alternatives, local currency Tot
Slide 11: Other P&L items
Other P&L items • Higher interest income H1 2024 H1 2023 £m £m YoY ‒ Cash rolled onto higher market rates Interest income 12.8 6.5 +97% ‒ Average yield of >5% vs 2.5% in H1 2023 Profit before tax 74.5 53.8 +38% • Effective tax rate 19.2%, lower than UK rate of 25.0% Tax (14.3) (9.5) -51% ‒ Geographi
Slide 12: Generation & uses of cash
Generation & uses of cash • Consistent conversion of operating profits Cash flow1 ‒ Operating cash flow of £40.2 million represents 94% of adjusted EBITDA 40.2 9.8 88.0 468.3 11.1 445.7 0.2 445.9 35.9 • Operating cash flow supports returns to shareholders 12.0 and allows investment for future growth
Slide 13: Appropriate balance sheet structure
Balance sheet • Consistent strong & liquid balance sheet Substantial, liquid financial resources(1) (£m) • Well-capitalised with total resources of £671.0 million ˗ Group capital requirement of £80.6 million ˗ Excess capital of £590.4 million, equivalent to 83p/share 624.2 590.4 • Significant liquid
Slide 14: Positive outlook for Emerging Markets returns
Emerging Markets: 2024 outlook • Strong performance across asset classes since September 2022; positive outlook Longer-term view of US rates (%) underpinned by: 8 − Superior GDP growth 7 6 − Inflation challenges addressed, cutting policy rates as inflation falls 5 − Less fiscal stimulus to unwind vs
Slide 15: Summary
Summary • Delivering outperformance in positive market environment • Financial performance reflects stronger markets but lower average AuM levels • Consistent implementation of long-term growth strategy • Positive Emerging Markets outlook 15
Slide 16: Q&A
Ashmore Q&A
Slide 17: Appendices
Ashmore Appendices eee
Slide 18: Appendix 1a Adjusted profits reconciliation
Appendix 1a Adjusted profits reconciliation £m H1 2024 Seed capital FX translation H1 2024 H1 2023 reported (gains)/losses (gains)/losses Adjusted Adjusted Net management fees 82.6 - - 82.6 98.0 Performance fees 8.0 - - 8.0 3.7 Other revenue 1.7 - - 1.7 1.3 Foreign exchange gains 2.2 - (1.1) 1.1 4.7
Slide 19: Appendix 1b Net management and performance fees by theme
Appendix 1b Net management and performance fees by theme H1 2024 H1 2023 H1 2024 H1 2023 £m £m US$m US$m External debt 11.1 18.0 13.9 21.0 Local currency 21.1 22.1 26.5 26.0 Corporate debt 7.1 9.3 8.9 10.9 Blended debt 20.4 24.9 25.6 29.3 Equities 13.6 15.6 17.1 18.2 Alternatives 9.3 8.1 11.7 9.5 To
Slide 20: Appendix 1c Net management fee margins
Appendix 1c Net management fee margins 161 148 H1 2023 H2 2023 H1 2024 140 60 56 55 44 44 43 40 39 36 34 32 30 32 29 28 28 29 26 Group External debt Local currency Corporate debt Blended debt Equities Alternatives Fixed income: 33bps (H1 2023: 34bps) (H2 2023: 32bps) 20
Slide 21: Appendix 2 Seed capital
Appendix 2 Seed capital • Consolidated funds: H1 2024 H1 2023 £m £m − Line-by-line consolidation in financial statements Net losses on investment securities (12.4) (40.8) − FX taken to reserves Third-party interests’ share of losses in consolidated funds 5.5 16.6 − PBT contribution of £nil Operating
Slide 22: Appendix 3a Assets under management
Appendix 3a Assets under management AuM by theme (US$bn) AuM as invested (US$bn) 1.6 1.6 6.5 9.5 External debt 6.5 16.4 External debt Local currency Local currency Corporate debt 7.1 Corporate debt 12.4 Blended debt Equities Equities 18.8 Alternatives Alternatives 5.2 22.4 AuM by client type AuM by
Slide 23: Appendix 3b Investment themes
Appendix 3b Investment themes FIXED INCOME ALTERNATIVES (US$45.9bn) (US$1.6bn) EQUITIES (US$6.5bn) Local Corporate External Debt Blended Debt THEME Currency Debt (US$9.5bn) (US$12.4bn) (US$18.8bn) (US$5.2bn) GLOBAL • Broad • Bonds • Broad • Blended • Active • EM Equity (All • Frontier • Private equi
Slide 24: Appendix 3c Quarterly net flows
Appendix 3c Quarterly net flows +8.0 +6.0 +4.0 +2.0 USD billion +0.0 -2.0 -4.0 -6.0 -8.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 24
Slide 25: Appendix 4 AuM movements by investment theme
Appendix 4 AuM movements by investment theme AuM Gross Gross AuM US$bn 30 June 2023 Performance subscriptions redemptions Net flows Reclassifications 31 December 2023 External debt 11.0 0.6 0.3 (2.4) (2.1) - 9.5 Local currency 18.8 0.7 1.2 (1.9) (0.7) - 18.8 Corporate debt 6.5 0.1 0.1 (1.1) (1.0) (0
Slide 26: Appendix 5 Foreign exchange
Appendix 5 Foreign exchange • GBP:USD rate Currency exposure of cash and deposits(1) − Period-end rate moved from 1.2714 to 1.2748 31 December 2023 % 30 June 2023 % £m £m − Average rate 1.2572 vs 1.1795 in H1 2023 US dollar 115.3 26 62.7 13 Sterling 296.7 67 374.0 80 • P&L FX effects in H1 2024: Oth
Slide 27: Appendix 6 Cash flows and consolidated funds H1 2024
Appendix 6 Cash flows and consolidated funds H1 2024 £m As reported Consolidated funds Group ex funds Cash from operations 39.0 (1.2) 40.2 Taxation (9.8) - (9.8) Interest 23.6 11.2 12.4 Seeding activities 22.2 (13.7) 35.9 Dividends paid (88.0) - (88.0) EBT purchases (12.0) - (12.0) Other (1.3) - (1.
Slide 28: Appendix 7 Investment performance
Appendix 7 Investment performance 1yr 3yr 5yr 31st December 2023 Ashmore Benchmark Ashmore Benchmark Ashmore Benchmark External debt Broad 14.1% 11.1% -5.3% -3.6% -0.2% 1.7% Sovereign 22.1% 11.1% -1.7% -3.6% 2.1% 1.7% Sovereign IG 7.6% 7.1% -4.5% -5.6% 2.3% 1.4% Local currency Bonds 16.7% 12.7% -0.5
Slide 29: Appendix 8 Historical valuations relative to Developed Markets
Appendix 8 Historical valuations relative to Developed Markets External debt Local currency Index: 69 countries / 161 issuers / 944 bonds Index: 20 countries / 20 issuers / 337 bonds 800 8.00 EMBI GD spread over UST, bps GBI-EM GD yield (%) Difference: GBI-EM vs GBI global (%) 700 7.00 600 6.00 500
Slide 30: Appendix 9 Disclosures
Appendix 9 Disclosures Page 4: − Gross performance is shown, weighted by fund AuM, to provide a representative view to analysts and shareholders of Ashmore’s investment performance over relevant time periods − Only funds at 31 December 2023 and with a performance benchmark are included, which specif
Slide 31: Disclaimer
Disclaimer IMPORTANT INFORMATION This document does not constitute an offer to sell or an invitation to buy shares in Ashmore Group plc or any other invitation or inducement to engage in investment activities. Certain statements, beliefs and opinions in this document are forward-looking, which refle