Schroders Plc · LSE:SDR
Schroders — FY2024 Earnings Presentation
82 slides from Schroders's earnings presentation, Mar 6, 2025
Slide 1: Strategy Update and Annual Results 2024
Strategy Update and Annual Results 2024
Slide 2: Richard Oldfield, Group Chief Executive
Richard Oldfield Group Chief Executive
Slide 3: Creating prosperity together
Creating prosperity together ® Active Client Strong management centricity performance © ©) @
Slide 4: Total fund performance score: UBS
Total fund performance score: UBS 50 40 30 20 10 0 2019 2020 2021 2022 2023 2024 SDR Peer 1 Peer 2 Peer 3 Peer 4 Peer 5 Peer 6 See p11 of the press release for more information on our client investment performance. Source: UBS European Asset Managers Fund Performance Tracker, January 2025. Data capt
Slide 5: Creating prosperity together
Creating prosperity together ra (x 920 \ { J//, 17) Ww) Ke Pee NG ool] = Active Client Strong management centricity performance © © ©
Slide 6: Annual results 2024 and Strategy Update agenda
Annual results 2024 Simplification and scale Meagen Burnett, Chief Financial Officer Meagen Burnett, Chief Financial Officer Annual results 2024 Q&A Business deep dive Richard Oldfield, Group Chief Executive Public Markets Meagen Burnett, Chief Financial Officer Schroders Capital Break Wealth Manage
Slide 7: Presenters and management team
Richard Oldfield Johanna Kyrklund Georg Wunderlin Mary-Anne Daly Karine Szenberg Group Chief Executive Group CIO & CEO, Public Markets CEO, Schroders Capital CEO, Wealth Management Global Head of Client Group Meagen Burnett Ed Houghton Neil Tomlinson Sonia Jenkins Chief Financial Officer Group Head
Slide 8: Annual Results 2024
Annual Results 2024 Meagen Burnett
Slide 9: Annual results 2024 key figures
2023 2024 Change AUM including JVs and associates (£bn) 750.6 778.7 4% NNB including JVs and associates (£bn) 1.0 (4.7) n/a Net operating revenue ex. performance fees and carried 2,250.2 2,294.3 2% interest (£m) Net operating income (£m) 2,419.0 2,426.8 – Operating expenses (£m) (1,758.0) (1,786.3)
Slide 10: AUM by business area
AUM by business area £bn 300 -6% 2023 2024 200 228.3 +5% 213.5 +15% +8% +7% 134.2 140.6 +6% 100 126.8 103.5 110.8 110.2 108.2 116.9 66.2 70.1 0 Public Markets Mutual Funds Institutional Solutions Wealth Schroders JVs and Management Capital associates 2024 1.3 (6.3) (16.6) 6.3 4.5 6.1 NNB 1Ex. JVs an
Slide 11: Net operating income
Net operating income £m 126.0 (39.9) (48.4) 2,426.8 2,419.0 (20.8) (3.5) (5.6) FY 2023 Markets, mix FX NNB Performance JVs and Other FY 2024 and fees and associates investment carried performance interest 1In-year revenue impact of net new business. 11
Slide 12: Net operating revenue by business area
Net operating revenue1 by business area £m FY 2023 260.3 720.4 478.6 368.3 1,827.6 FY 2024 246.2 707.8 470.7 391.4 1,816.1 Solutions Mutual Funds Institutional Schroders Capital Operating profit progression AUM £m £bn 800 712.7 70.1 587.7 593.1 600 510.5 467.9 213.5 140.6 535.0 400 200 110.8 0 Solut
Slide 13: Net operating revenue by business area and margins
Net operating revenue by business area £m FY 2023 260.3 720.4 478.6 29.1 1,488.4 FY 2024 246.2 707.8 470.7 27.6 1,452.3 Solutions Mutual Funds Institutional Performance fees Net operating revenue margins1 and AUM Breakdown of Solutions Exit FY 2023 FY 2024 FY 2023 FY 2024 rate2 AUM Margin AUM Margin
Slide 14: Schroders Capital net operating revenue
Net operating revenue £m FY 2023 359.1 54.5 9.2 422.8 FY 2024 378.0 35.3 13.4 426.7 Management fees Performance fees and net carried interest Other fees AUM, ANNR and net operating revenue margin1 Gross fundraising and NNB by pillar FY 2023 FY 2024 FY 2023 FY 2024 Gross Gross AUM (£bn) 66.2 70.1 £bn
Slide 15: Wealth Management net operating revenue
Net operating revenue1 £m FY 2023 327.5 32.4 63.3 423.2 FY 2024 377.1 39.3 62.3 478.7 Management fees Transaction, performance and other fees Net banking interest income 5-year operating profit including SPW AUM, ANNR and net operating revenue margin3 £m 200 3 12 10 FY 2023 FY 2024 150 8 16 2 8 3 10
Slide 16: Total expenses
Total expenses £m 2,000 1,810.9 1,839.3 52.9 53.0 Central costs 1,500 645.6 663.0 Operating non-compensation 1,000 costs 500 1,112.4 1,123.3 Operating compensation costs 0 FY 2023 FY 2024 Total expenses £m 1,900 13 58 1,839 1,850 1,811 (22) 1,800 13 (34) 1,750 1,700 1,650 1,600 FY 2023 FY 2023 Savin
Slide 17: Capital base
Capital base £m FY 2023 FY 2024 Equity capital base 4,464 4,495 Regulatory deductions1 (2,158) (2,116) Dividend2 (233) (233) Regulatory capital requirement (1,443) (1,477) Equity capital surplus 630 669 Tier 2 bond – 250 Board approved early warning allowance (79) (81) Capital surplus 551 838 1Regul
Slide 18: Profit, EPS and dividend
£m 2023 2024 Change Operating profit 661.0 640.5 (3%) Profit before tax (before restructuring costs) 573.8 558.1 (3%) Restructuring costs (86.2) – 100% Profit before tax 487.6 558.1 14% Basic EPS (pence) 24.6 26.4 7% Final proposed dividend (pence) 15.0 15.0 – 18
Slide 19: Income statement; AUM, flows, margins; Quarterly reporting
Income statement AUM, flows, margins Quarterly reporting 19
Slide 20: Q&A
Q&A
Slide 21: Strategy Update: Driving profitable growth
Strategy Update Driving profitable growth
Slide 22: Our strategy
Our strategy Richard Oldfield
Slide 23: Top 5 global asset management brand
Top 5 global asset management brand, with a 220-year heritage Rank Company Country of origin 1 Blackrock Strong franchises in UK, Europe and Asia 2 J.P. Morgan 3 PIMCO Leading wealth management offering with sustained growth 4 Fidelity 5 Schroders Proven track record in long-term alpha generation 6
Slide 24: Strong franchises in UK, Europe and Asia
Top 5 global asset management brand, with a 220-year heritage Multi- Strong franchises in UK, Europe and Asia Fixed asset/ Private % income Equities Solutions Markets Passive Americas 5 5 8 9 7 Leading wealth management offering with sustained growth APAC 7 7 7 10 12 Proven track record in long-term
Slide 25: Leading wealth management offering
Top 5 global asset management brand, with a 220-year heritage Type Schroders’ share of UK market Affluent 7.5% Strong franchises in UK, Europe and Asia Core HNW 2.2% Leading wealth management offering with sustained growth Upper HNW 5.8% Proven track record in long-term alpha generation Ultra HNW 4.
Slide 26: Successful and expanding partnerships
Top 5 global asset management brand, with a 220-year heritage AUM Established Strong franchises in UK, Europe and Asia £68bn 2005 Leading wealth management offering with sustained growth Proven track record in long-term alpha generation £30bn 2009 Successful and expanding partnerships £16bn 2018 26
Slide 27: Headwinds in Public Markets: fee margins
Headwinds in Public Markets bps 2022 2023 2024 Driving flows into Schroders Capital Institutional 34 35 34 Achieving the full potential of acquisitions Mutual Funds 71 69 66 Costs and complexity Solutions 13 12 11 Reducing shareholder returns 1Revenue margin ex. performance fees. 27
Slide 28: Headwinds in Public Markets: Schroders Capital flows
Headwinds in Public Markets £bn 16 Driving flows into Schroders Capital 14.2 14 13.1 12 10.5 Achieving the full potential of acquisitions 10 9.3 7.7 8 Costs and complexity 6 4 2 Reducing shareholder returns 0 2020 2021 2022 2023 2024 28
Slide 29: Headwinds in Public Markets: acquisitions
Headwinds in Public Markets AUM Acquisition Date acquired Business line (£bn) Driving flows into Schroders Capital Benchmark 2016 Wealth Management 34.5 Achieving the full potential of acquisitions Adveq 2017 Schroders Capital 11.4 BlueOrchard 2019 Schroders Capital 3.6 Costs and complexity SPW 2019
Slide 30: Headwinds in Public Markets: costs and complexity
Headwinds in Public Markets £bn 2.00 +6% Driving flows into Schroders Capital 1.84 1.80 1.81 1.80 1.73 Achieving the full potential of acquisitions 1.60 1.48 Costs and complexity 1.40 1.20 Reducing shareholder returns 1.00 2020 2021 2022 2023 2024 30
Slide 31: Headwinds in Public Markets: shareholder returns
Headwinds in Public Markets 30 24 Driving flows into Schroders Capital 20 10 Achieving the full potential of acquisitions 0 -10 Costs and complexity -20 -30 -29 Reducing shareholder returns -40 2019 2020 2021 2022 2023 2024 Chart shows weekly return data. 31
Slide 32: A clear purpose and vision
A clear purpose and vision 32 Our purpose Creating prosperity together Our vision We partner with our clients to provide trusted advice and invest in the assets and markets that matter to them, building their future prosperity through delivering excellent investment outcomes
Slide 33: Client needs across wealth, institutions and insurance
Return opportunities Income Future proofing – Growing global wealth pool Wealth – Intergenerational wealth transfer – Cost pressures and scale – Impact of sustained high rates and central bank policies Long Term – Increasing demand for access to real assets Asset Owners – Risk oversight and investme
Slide 34: Reduce complexity, improve execution, realise efficiencies
1 Focus on leading capabilities 1 Scale differentiated propositions 1 Grow senior client team 2 Increase client access 2 Establish specialist sales team 2 Make selective acquisitions 3 Enhance operating platform 3 Expand wealth and partnerships 3 Upgrade technology platform Reduce complexity | Impro
Slide 35: Strategic actions across the business
– Re-platforming and scaling of Wealth Management – £40m cost efficiencies by simplifying operating model – Moving to core platforms, creating centres of – Product range simplification in Public Markets excellence in Public Markets – Simplifying our geographical footprint – Build Schroders Capital s
Slide 36: Achieve £150m of cost efficiencies by FY27
Achieve £150m of cost efficiencies by FY27, Costs reducing the adjusted cost to income ratio to <70% by FY271 Revenues Generate £20bn Achieve NNB rate of 5–7% Stabilise revenues1 cumulative NNB per annum2 Earnings Return to earnings growth 1Subject to normal market conditions. 2Of opening AUM. 36
Slide 37: Leadership in active management
Leadership in active management Johanna Kyrklund
Slide 38: Lines between active and passive have blurred
Lines between active and passive have blurred Gross inflows Weight of ten largest stocks in S&P 500 £bn 40% 160 37% 140 35% 120 100 30% 80 25% 60 40 20% 20 15% 0 1980 1991 2002 2013 2024 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Asset Management Wealth Management Source: LSEG Datastream, S&P
Slide 39: Active capabilities and leveraging our strengths
Return opportunities Income Future proofing Active asset allocation and security selection Alternative sources of return Leveraging our Downside protection and risk management capabilities Commitment to proprietary research Holistic financial planning Sustainability expertise 39
Slide 40: Investment outperformance trends
1-year trend shows clear improvement 3-year trend reflects returns in 2022 5-year trend remains strong 100% 100% 100% 80% 80% 80% 60% 60% 60% 40% 40% 40% 20% 20% 20% 0% 0% 0% 2015 2017 2018 2020 2021 2023 2024 2015 2017 2018 2020 2021 2023 2024 2015 2017 2018 2020 2021 2023 2024 1-year outperformanc
Slide 41: Our focus on active gives us a clear purpose
Our focus on active gives us a clear purpose and sets the highest standards Our investors’ extensive experience and the development of resilient investment processes have never been more relevant in today's uncertain world Our long-term approach gives time for strategies to succeed and deliver 41
Slide 42: Simplification and scale
Simplification and scale Meagen Burnett
Slide 43: Maximise use of infrastructure and leverage new technologies
Maximise use of infrastructure and operating platform Leverage new technologies Improve productivity through better use of industry-leading components Enhance access for clients QEP: competitively priced alpha at limited marginal cost Leverage buying power and brand with strategic partners 43
Slide 44: European active ETFs
Maximise use of infrastructure and operating platform Enhance access for clients European active ETFs Create Once, Publish Everywhere Leverage buying power and brand with strategic partners 44
Slide 45: Better outcomes at a lower price point
Maximise use of infrastructure and operating platform Enhance access for clients Leverage buying power and brand with strategic partners Better outcomes at a lower price point 45
Slide 46: Adjusted cost:income ratio
Savings Transformation Cost to deliver Immediate actions taken Payback period Simplify and scale business processes Adjusted cost:income ratio1,2 76% 75% 74% 74% 74% Leverage our buying power and partnerships 72% <70% 70% 68% Total annualised cost saving by 2027 66% 2022 2023 2024 2027 and beyond 1T
Slide 47: Technology and operating platform
Technology and operating platform Mature and modernised platform enables us to scale and respond to Transfer Agency processes Fund accounting Aladdin is used across all asset increasing client needs with HSBC arrangements with J.P.Morgan classes in Public Markets Wealth Management operating model Sa
Slide 48: Dividend held at current level
Organic growth Acquisitions Dividends The Board intends to hold the dividend at its current level as we bring the payout ratio back towards 50% 48
Slide 49: Embedding operating leverage at scale
Embedding operating leverage at scale Rigorous and selective capital deployment Building muscle to deliver at pace 49
Slide 50: Business deep dive
Business deep dive Richard Oldfield
Slide 51: Public Markets
Public Markets
Slide 52: Public Markets capabilities
Equities Fixed income Multi-asset and Solutions AUM £202bn Note: Global equities includes QEP and thematic. 52
Slide 53: St James's Place Sustainable and Responsible Equity Fund
£5.2 billion St James’s Place Sustainable and Responsible Equity Fund A diversified, high active share global equity portfolio meeting the requirements of the FCA’s new SDR Sustainability Focus label Bespoke solution blending our market leading Global Sustainable Growth and Global Sustainable Value
Slide 54: Active AUM and active revenues
Active AUM Active revenues US$tn US$bn 80 240 6% 72 208 6% 70 200 57 20 60 164 160 84 50 16 66 40 120 32 30 25 71 80 56 20 40 10 20 53 16 42 0 0 2023 2027E 2023 2027E ¹ Passive as 23% 25% 5% 5% % of total Multi-asset and Solutions Active fixed income Active equity Source: BCG Global Asset Management
Slide 55: Regional and product diversification
Regional diversification1 NNB by asset class £bn 17% 20 UK 10 £464.9bn 46% APAC 0 17% AUM EMEA -10 20% Americas -20 2022 2023 2024 Equities Fixed income Multi-asset Product diversification Net operating revenue margin2 (bps) 18% 2022 2023 2024 Equities Equities 49 48 46 41% £464.9bn Multi-asset AUM
Slide 56: Stabilise revenues: focus on leading capabilities
Stabilise revenues1 1 Focus on leading capabilities Align resources around our nine market-leading capabilities 80% of sales effort 2 Increase client access Focused innovation 3 Enhance operating platform 1Subject to normal market conditions. 56
Slide 57: Stabilise revenues: increase client access
Stabilise revenues1 1 Focus on leading capabilities Launch European active ETFs Launch equity solutions 2 Increase client access 3 Enhance operating platform 1Subject to normal market conditions. 57
Slide 58: Stabilise revenues: enhance operating platform
Stabilise revenues1 1 Focus on leading capabilities Product range rationalisation Front to back platform alignment 2 Increase client access Streamline research 3 Enhance operating platform 1Subject to normal market conditions. 58
Slide 59: Schroders Capital
Schroders Capital
Slide 60: Schroders Capital private markets platforms
Private Equity Private Debt and Real Estate AUM £13bn Credit Alternatives AUM £22bn AUM £24bn EMEA asset management Operating Hotels Small and mid-cap buyouts Structured Credit Industrial / logistics Real asset debt Infrastructure Specialty finance Energy transition 60
Slide 61: Ireland Strategic Investment Fund (ISIF)
Ireland Strategic Investment Fund (ISIF) Enable the Irish government to meet its net zero ambitions while supporting the economy Focused dialogue and collaboration led to the development and launch of Schroders Greencoat Europe, meeting ISIF’s objectives and enabling them to cornerstone the fund 61
Slide 62: Private Markets AUM and revenues
Private Markets AUM Private Markets revenues US$tn US$bn 30 280 27 246 11% 11% 240 8 25 2 20 3 28 200 20 18 164 6 2 160 6 12 15 2 24 120 4 10 190 80 16 122 5 10 40 0 0 2023 2027E 2023 2027E As % of 16% 17% 46% 50% total Private Equity Real Estate Private Debt Infrastructure Source: BCG Global Asset
Slide 63: AUM, fundraising and revenues
AUM and gross fundraising Revenues and revenue margin £bn £m 80 450 15% 16% 70 70 66 400 35 64 55 350 19 60 300 53 50 47 40 250 10 40 200 391 30 351 368 150 287 20 261 100 10 50 0 0 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 14% 25% 33% 15% 16% 61 61 60 57 57 Gross fundraising Revenue margin,
Slide 64: Generate cumulative net new business of £20bn
Generate cumulative net new business of £20bn 1 Scale differentiated propositions Invest in and scale higher- returning, specialist capabilities Support with £500m of seed and 2 Establish specialist sales team co-investment Access wealth segment and Stop investment in 3 partnerships undifferentiated
Slide 65: Establish specialist sales team
Generate cumulative net new business of £20bn 1 Scale differentiated propositions 40 dedicated specialist resources Target sales effort on differentiated propositions 2 Establish specialist sales team Access wealth segment and 3 partnerships 65
Slide 66: Access wealth segment and partnerships
Generate cumulative net new business of £20bn 1 Scale differentiated propositions Leverage existing access to Wealth platform Explore external partnerships to 2 Establish specialist sales team attract long-term sustainable capital flow Access wealth segment and 3 partnerships 66
Slide 67: Wealth Management
Wealth Management
Slide 68: Client need and business
Client need Business Family Office / UHNW Estate planning, philanthropy HNW Liquidity and exit advice Charities and endowments Sustainability Affluent Model portfolio services Platform services Adviser 68
Slide 69: Client Case Study Video
Hold slide Client Case Study Video 69
Slide 70: UK wealth management assets and HNW market concentration
UK wealth management assets UK HNW market concentration £tn 7.8 8.0 7.1 2% 0.8 4% 7.0 0.7 24% 6.0 1.8 3% 1.6 5.0 1.2 3% 4.0 1.1 11% 3.0 65% 2.0 3.9 1% 3.6 1.0 0.0 2023 2027E Mass Affluent Affluent HNW UHNW Participants 1-5 Participants 6-10 Others participants Source: BCG. PAM, Schroders estimates.
Slide 71: Wealth Management AUM, revenue and operating profit
Assets under management Net operating revenue Operating profit £bn £m £m 160 600 180 3 9% 143 12% 10 140 11% 125 500 479 150 12 120 116 423 8 2 111 103 394 400 360 120 8 16 3 100 312 13 80 14 300 90 160 60 137 200 60 119 40 99 89 100 30 20 0 0 0 2020 2021 2022 2023 2024 2020 2021 2022 2023 2024 2020
Slide 72: Achieve NNB rate of 5–7%: grow senior client team
Achieve net new business rate of 5–7% per annum 1 Grow senior client team Expand Cazenove Capital’s senior portfolio manager team Continue to grow Benchmark 2 Make bolt-on acquisitions adviser network 3 Upgrade technology platform 72
Slide 73: Achieve NNB rate of 5–7%: bolt-on acquisitions
Achieve net new business rate of 5–7% per annum 1 Grow senior client team Continue to make targeted, culturally aligned acquisitions 2 Make bolt-on acquisitions 3 Upgrade technology platform 73
Slide 74: Achieve NNB rate of 5–7%: upgrade technology platform
Achieve net new business rate of 5–7% per annum 1 Grow senior client team Re-platform and scale core Cazenove Capital operating model Continue improvement in SPW 2 Make bolt-on acquisitions operating model 3 Upgrade technology platform 74
Slide 75: JVs and associates
JVs and associates
Slide 76: China and India joint ventures
China India £30bn AUM 30% ownership stake 25% ownership stake Strong distribution channel 8th largest asset through BOCOM management company China is second largest asset Strong distribution channel supported management market globally by Axis Bank 25% CAGR market growth 76
Slide 77: JVs and associates AUM
JVs and associates AUM £bn 131 140 1 121 117 2 108 120 102 15 3 13 2 1 16 100 25 14 14 24 80 30 19 25 60 90 40 82 68 67 68 20 0 2020 2021 2022 2023 2024 BOCOM (FMC) Axis SPW Other 77
Slide 78: Strategy summary: stabilise revenues and achieve NNB targets
Stabilise revenues1 Generate £20bn cumulative NNB Achieve NNB rate of 5–7% per annum 1 Focus on leading capabilities 1 Scale differentiated propositions 1 Grow senior client team 2 Increase client access 2 Establish specialist sales team 2 Make further selective acquisitions 3 Enhance operating plat
Slide 79: Q&A
Q&A
Slide 80: Concluding remarks
Concluding remarks
Slide 81: Thank you
Thank you
Slide 82: Forward-looking statements disclaimer
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 expe