Ashmore Group Plc · LSE:ASHM
Ashmore — FY2024 Earnings Presentation
31 slides from Ashmore's earnings presentation, Sep 5, 2024
Slide 1: Ashmore Group plc Results for year ended 30 June 2024
Ashmore Group plc Results for year ended 30 June 2024 5 September 2024 www.ashmoregroup.com
Slide 2: Overview
Overview • Emerging Markets delivering positive returns, Ashmore outperforming for clients ˗ Index returns of +1% to +13% over the year ˗ Fixed income assets outperformed Developed Markets ˗ Equities had strong returns notwithstanding headwind from China ˗ Ashmore outperforming across broad range of
Slide 3: Robust macroeconomic fundamentals across Emerging Markets
Robust macroeconomic fundamentals across Emerging Markets • Emerging Markets have been resilient to external shocks due to effective Inflation & local rates (%) fiscal & monetary policies 10 EM CPI • Inflation under control, real interest rates remain high: potential for 9 Policy rate further rate c
Slide 4: Diversification & strong performance in Emerging Markets
Diversification & strong performance in Emerging Markets • Emerging Markets indices delivered positive returns over the year Positive asset class returns over the year Emerging Markets ‒ Fixed income outperformed global bonds External debt (EMBI GD) +9% ‒ Strong equities performance Local currency (
Slide 5: Investment performance
Investment performance One year: 40% outperforming Three years: 59% 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 6: Assets under management
Assets under management • Performance added US$2.1 billion to AuM, reflecting good market AuM development (US$bn) returns and outperformance over the 12 months 4.5 2.6 4.0 • Subscriptions US$7.2 billion, 13% of opening AuM (FY2023: US$7.2 billion, 11%) 0.5 0.2 ‒ Flows into local currency funds, new
Slide 7: Financial performance overview
Financial performance overview • Adjusted net revenue -4% FY2024 FY2023 ‒ Impact of lower AuM offset by higher performance fees £m £m YoY Adjusted net revenue 187.8 195.4 -4% • Adjusted operating costs +22% Adjusted operating costs (113.0) (92.4) -22% ‒ Non-VC costs +5% ‒ VC accrued at 31% Adjusted
Slide 8: Revenues
Revenues • Net management fees -12% YoY FY2024 FY2023 − Average AuM -10% £m £m YoY − Higher average GBP:USD rate, -3% impact Net management fee margin (bps) 39 38 +1bp − 1bp increase in net management fee margin Net management fees 160.4 183.2 -12% Performance fees 22.7 5.1 +345% • Lower FX hedge ga
Slide 9: Operating costs
Operating costs • Staff costs increased 3% FY2024 FY2023 £m £m YoY ‒ Full period effect of wage inflation Staff costs (32.2) (31.4) -3% Other operating costs (25.3) (23.3) -9% • Other operating costs +9% YoY D&A (3.1) (3.2) +3% ‒ Higher professional fees Operating costs before VC (60.6) (57.9) -5% V
Slide 10: Seed capital
Seed capital • Total value of c.£265 million comprises: FY2024 FY2023 ‒ Market value of investments (£257.6 million) £m £m ‒ Commitments (£7.2 million) - realised profit 11.3 2.4 - unrealised MTM profit/(loss) 10.4 (10.7) • Profitably recycled £68.9 million principally from alternatives and equities
Slide 11: Other P&L items
Other P&L items • Higher interest income FY2024 FY2023 ‒ Achieved average yield of >5% vs 3% in FY2023 £m £m YoY Interest income 24.9 15.9 +57% • Small business disposals in Latin America & Asia Realised gains on disposal 5.2 - - of investments Profit before tax 128.1 111.8 +15% • Effective tax rate
Slide 12: Financial resources
Financial resources • Well-capitalised with total resources of £696.2 million Substantial, liquid financial resources(1) (£m) ˗ Group capital requirement of £97.0 million 113.5 23.4 124.4 ˗ Excess capital of £599.2 million, equivalent to 68.2 20.9 3.6 505.7 84p/share 468.3 13.8 • Significant liquid
Slide 13: Local offices adding diversification & growth
Local offices adding diversification & growth • AuM growth of +7% YoY to US$7.5 billion, now 15% of Group Increasing contribution from local offices ‒ Private equity fund raising in Colombia (AuM +18% YoY) 8.0 18% ‒ New institutional mandates and additional private equity 7.0 16% capital in Saudi Ar
Slide 14: Emerging Markets outlook
Emerging Markets outlook Attractive EM valuations • Strong asset class performance since late 2022 ‒ Underweight investors are missing out Index Valuation ‒ Valuations & positive outlook support future outperformance EMBI GD yield / spread 7.9% / 400bps ‒ Active management critical to capturing the
Slide 15: Summary
Summary • Emerging Markets delivering positive returns, Ashmore outperforming for clients • Operating performance reflects lower AuM, higher statutory profit driven by performance fees & balance sheet returns • Emerging Markets performing, with superior growth & attractive valuations 15
Slide 16: Q&A
Ashmore Q&A
Slide 17: Appendices
Ashmore Appendices eee
Slide 18: Adjusted profits reconciliation
Appendix 1a Adjusted profits reconciliation £m FY2024 Seed capital FX translation FY2024 FY2023 Reported (gains)/losses (gains)/losses Adjusted Adjusted Net management fees 160.4 - - 160.4 183.2 Performance fees 22.7 - - 22.7 5.1 Other revenue 3.7 - - 3.7 2.7 Foreign exchange gains 2.5 - (1.5) 1.0 4
Slide 19: Net management and performance fees by theme
Appendix 1b Net management and performance fees by theme FY2024 FY2023 FY2024 FY2023 £m £m US$m US$m External debt 18.8 32.5 23.6 39.1 Local currency 40.6 43.0 51.2 51.8 Corporate debt 13.5 16.2 17.0 19.5 Blended debt 40.9 46.8 51.6 56.3 Equities 27.8 29.5 35.1 35.6 Alternatives 18.8 15.2 23.6 18.3
Slide 20: Net management fee margins
Appendix 1c Net management fee margins 162 144 FY2023 FY2024 58 55 44 38 39 37 31 33 33 28 29 30 Group External debt Local currency Corporate debt Blended debt Equities Alternatives Fixed income: 33bps (FY2023: 33bps) 20
Slide 21: Seed capital
Appendix 2 Seed capital • Consolidated funds: FY2024 FY2023 £m £m − Line-by-line consolidation in financial statements Net losses on investment securities (17.2) (25.0) − FX taken to reserves Operating costs (1.4) (1.3) − PBT contribution of £(4.7) million Investment income 13.9 11.0 Sub-total: cons
Slide 22: Assets under management
Appendix 3a Assets under management AuM by theme (US$bn) AuM as invested (US$bn) 1.3 1.4 6.7 7.2 6.6 External debt 14.9 External debt Local currency Local currency Corporate debt 6.5 Corporate debt 11.7 Blended debt Equities 17.7 Equities Alternatives Alternatives 4.7 19.9 AuM by client type AuM by
Slide 23: Investment themes
Appendix 3b Investment themes FIXED INCOME ALTERNATIVES (US$41.3bn) (US$1.3bn) EQUITIES (US$6.7bn) Local Corporate External Debt Blended Debt THEME Currency Debt (US$7.2bn) (US$11.7bn) (US$17.7bn) (US$4.7bn) GLOBAL • Broad • Bonds • Broad • Blended • Active • EM Equity (All • Frontier • Private equi
Slide 24: Quarterly net flows
Appendix 3c Quarterly net flows +8.0 +6.0 +4.0 +2.0 USD billion +0.0 -2.0 -4.0 -6.0 -8.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 FY22 FY23 FY24 24
Slide 25: AuM movements by investment theme
Appendix 4 AuM movements by investment theme AuM Gross Gross AuM US$bn 30 June 2023 Performance subscriptions redemptions Net flows Other 30 June 2024 External debt 11.0 0.7 0.7 (2.8) (2.1) (2.4) 7.2 Local currency 18.8 - 3.3 (4.4) (1.1) - 17.7 Corporate debt 6.5 0.2 0.1 (1.7) (1.6) (0.4) 4.7 Blende
Slide 26: Foreign exchange
Appendix 5 Foreign exchange • GBP:USD rate Currency exposure of cash and deposits(1) − Period-end rate moved from 1.2714 to 1.2641 30 June 2024 % 30 June 2023 % £m £m − Average rate 1.2609 vs 1.2079 in FY2023 US dollar 223.8 44 62.7 13 Sterling 241.8 48 374.0 80 • P&L FX effects in FY2024: Other 40.
Slide 27: Cash flows and consolidated funds FY2024
Appendix 6 Cash flows and consolidated funds FY2024 £m As reported Consolidated funds Group ex funds Cash from operations 112.5 (1.0) 113.5 Taxation (23.4) - (23.4) Interest 40.7 19.8 20.9 Seeding activities 45.3 (22.9) 68.2 Dividends paid (124.4) - (124.4) EBT purchases (13.8) - (13.8) Other (3.6)
Slide 28: Investment performance
Appendix 7 Investment performance 1yr 3yr 5yr 30th June 2024 Ashmore Benchmark Ashmore Benchmark Ashmore Benchmark External debt Broad 13.1% 9.2% -4.8% -2.6% -2.2% 0.0% Sovereign 18.6% 9.2% -0.6% -2.6% 0.2% 0.0% Sovereign IG 3.5% 3.1% -3.8% -4.9% 0.1% -0.8% Local currency Bonds 0.7% 0.7% -1.0% -3.3%
Slide 29: Historical valuations relative to Developed Markets
Appendix 8 Historical valuations relative to Developed Markets External debt Local currency 800 8.00 GBI-EM GD yield (%) Difference: GBI-EM vs GBI global (%) EMBI GD spread over UST, bps 700 7.00 600 6.00 500 5.00 400 4.00 300 3.00 200 2.00 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 30: Disclosures
Appendix 9 Disclosures Page 5: − 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 30 June 2024 and with a performance benchmark are included, which specifical
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