Slide 1: Schroders plc 2012 Annual Results
Schroders plc 2012 Annual Results Michael Dobson Chief Executive 7 March 2013
Slide 2: Performance 2012
Performance 2012 Investing for long-term growth Profit before tax £360.0m (2011: £407.3m) Earnings per share 104.7p (2011: 115.9p) Dividend increased 10% to 43.0p (2011: 39.0p) Investment performance: 71% outperforming over three years Net new business: £9.4bn (2011: £3.2bn) Assets under
Slide 3: Investing for growth
Investing for growth £bn £m 230 1,400 210 1,200 190 1,000 170 150 800 130 212 600 197 187 110 148 400 90 110 200 70 50 0 2008 2009 2010 2011 2012 Assets under management Net revenue Costs Source: Schroders as at 31 December Schroders 2012 Annual Results | March 2013 2
Slide 4: Investing for growth
Investing for growth £bn bps 250 70 65 200 60 55 150 50 100 45 40 50 35 0 30 2008 2009 2010 2011 2012 Equities Fixed Income Multi-asset Alternatives Private Banking net revenue margin (Asset Management) Source: Schroders at 31 December Schroders 2012 Annual Results | March 2013 3
Slide 5: Investment performance
Investment performance Strong across asset classes Institutional AUM outperforming Intermediary AUM outperforming Asset class 1 year 3 years Asset class 1 year 3 years Equities 80% 65% Equities 77% 72% Fixed Income 74% 54% Fixed Income 84% 62% Property 60% 52% Total 79% 73% Total 80% 70% Multi-asset
Slide 6: Diversified by channel, region and asset class
Diversified by channel, region and asset class Net new business £9.4bn £bn By channel By region By asset class 5 6 5 5 4 4 4 3 3 3 2 2 2 1 1 1 0 0 0 -1 -1 -1 -2 -2 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 UK Europe Equities Multi-Asset Institutional Intermediary Fixed Income Alternatives Private Banking
Slide 7: Institutional
Institutional Assets under management: £123.7bn (2011: £108.4bn) Net inflows £6.4bn: Asia, Europe and Latin America Small outflows in UK Net inflows: £4.2bn in Equities £1.2bn in Multi-asset Strong growth in Sovereign Wealth Funds Net revenue margins ex. performance fees stable at 40bps (2
Slide 8: Intermediary
Intermediary Assets under management: £72.0bn (2011: £62.9bn) Four quarters of net inflows – £3.3bn for the year overall Good performance in US sub-advisory Turnaround in Europe Significant inflows in Multi-asset – Positive flows in Equities since Q3 Net revenue margins ex. performance fee
Slide 9: Private Banking
Private Banking Assets under management: £16.3bn (2011: £16.0bn) Underlying revenues down 10% to £102.3m (2011: £114.3m) Underlying costs down 12% to £79.4m (2011: £90.5m) Underlying profit down 4% to £22.9m (2011: £23.8m) Provisions: £7.9m loan losses principally commercial property £3.2m p
Slide 10: Private Banking
Private Banking Priorities Streamline management structure Leverage competitive investment performance, strong client proposition Strengthen business development Complete repositioning of Swiss business Achieve 70% cost income ratio Source: Schroders Schroders 2012 Annual Results | March 2
Slide 11: Schroders plc 2012 Annual Results
Schroders plc 2012 Annual Results Kevin Parry Chief Financial Officer 7 March 2013
Slide 12: Key figures
Key figures Profit before tax (£m) Cost:net revenue ratio (%) 78* 406.9 407.3 70 360.0 67 66 200.2* 2009 2010 2011 2012 2009 2010 2011 2012 Earnings per share (pence) Dividend per share (pence) 43 37 39 111.8 115.9 31 104.7 54.0* 2009 2010 2011 2012 2009 2010 2011 2012 *Excluding exceptional charges
Slide 13: Profit before tax
Profit before tax £m Net revenue 18 PBT 407 2011 Schroders 2012 Annual Results | March 2013 12
Slide 14: Net revenue
Net revenue Decrease of £18m £m Group Segment 26 Net revenue Net revenue 1,153 1,135 Private Banking 114 Net new Private Banking business Markets and FX Transactional Performance 94 Group revenue 17 6 15 fees 29 9 Asset Asset Management Management 1,042 1,015 Group Segment -3 2011 2012 Schroders 201
Slide 15: Profit before tax
Profit before tax Decrease of £47m £m Total PBT 407 Total PBT Net revenue 360 18 Compensation Other costs Net finance Joint ventures costs 17 income and associates 46 3 3 Private Banking 24 Private Banking Asset 12 Management Asset Asset 389 Management Management 348 389 Group Segment Group Segment
Slide 16: Institutional net revenues
Institutional net revenues Analysis of £38m increase in fees on 2011 (ex-performance fees) £m 489 £m 454 24 2011 27 Management fees 427 2011 NNB 9 2012 NNB 10 465 427 Markets/FX 14 Transactional 5 2012 Management fees 465 2011 2012 Management fees Performance fees Schroders 2012 Annual Results | Mar
Slide 17: Intermediary net revenues
Intermediary net revenues Analysis of £56m decrease in fees on 2011 (ex-performance fees) £m £m 588 10 2011 526 Management 4 fees 578 2011 NNB 28 2012 NNB 7 578 522 Markets/FX 15 Transactional 6 2012 Management fees 522 2011 2012 Management fees Performance fees Schroders 2012 Annual Results | March
Slide 18: MSCI World Index
MSCI World Index Volatility Index 1,000 950 900 850 800 Dec-11 Jan-12 Feb-12 Mar-12 Apr-12 May-12 Jun-12 Jul-12 Aug-12 Sep-12 Oct-12 Nov-12 Dec-12 Channel 2012 Increase Decrease Institutional: Month end 8 4 Intermediary: Working days 138 228 Schroders 2012 Annual Results | March 2013 17
Slide 19: Intermediary net revenues
Intermediary net revenues Analysis of £56m decrease in fees on 2011 (ex-performance fees) £m 588 £m 10 2011 526 Management 4 fees 578 2011 NNB 28 2012 NNB 578 7 522 Markets/FX 15 Transactional 6 2012 Management fees 522 2011 2012 Management fees Performance fees Schroders 2012 Annual Results | March
Slide 20: Institutional and Intermediary net revenues
Institutional and Intermediary net revenues Margin reduction £588m £10m AM net revenue margins £526m Sales channel mix £4m £489m Asset class mix £24m £454m £27m 58bps 2bps 55bps 1bps £578m £522m £465m 56bps £427m 54bps 2011 2012 2011 2012 Performance fees Institutional management fees Management fee
Slide 21: Private Banking segment
Private Banking segment £m – Net revenue £m – Costs 114.3 14.4 94.4* 13.8 90.5 24.9 82.6 19.8 35.4 32.9 75.0 68.7 55.1 49.7 -7.9 2,011.00 2,012.00 2011 2012 2011 2012 Net banking interest income Other costs Transaction fees Compensation cost Management fees Doubtful debt charges *In 2012, loan adjus
Slide 22: Group segment
Group segment Investment capital, governance, management and other 2011 2012 Segment disclosure £m £m Net revenue (3.2) 25.7 Operating expenses (12.8) (37.2) Net finance income 14.8 11.7 Share of losses of associates and JVs (4.7) (0.5) Group segment loss (5.9) (0.3) Other comprehensive income (17.0
Slide 23: Group segment
Group segment Governance, management and other 2011 2012 Economic view £m £m Deferred remuneration mark to market and FX (3.0) (0.9) Pension fund credits 16.0 1.2 Provisions (0.2) (11.9) Variable items 12.8 (11.6) Costs (28.3) (29.7) Total (15.5) (41.3) Schroders 2012 Annual Results | March 2013 22
Slide 24: Group segment
Group segment Investment capital, governance, management and other 2011 2012 Segment disclosure £m £m Net revenue (3.2) 25.7 Operating expenses (12.8) (37.2) Net finance income 14.8 11.7 Share of losses of associates and JVs (4.7) (0.5) Group segment loss (5.9) (0.3) Other comprehensive income (17.0
Slide 25: Group segment
Group segment Investment capital returns 2011 Annualised 2012 Annualised £m return £m return Actively managed portfolio 11.1 14.0 of surplus capital 0.5% 1.7% Seed capital (6.3) 5.9 Legacy PE, property (12.2) 12.1 and associate Total return (7.4) 32.0 Schroders 2012 Annual Results | March 2013 24
Slide 26: Group segment
Group segment Investment capital, governance, management and other 2011 2012 Segment disclosure £m £m Net revenue (3.2) 25.7 Operating expenses (12.8) (37.2) Net finance income 14.8 11.7 Share of losses of associates and JVs (4.7) (0.5) Group segment loss (5.9) (0.3) Other comprehensive income (17.0
Slide 27: Operating expenses
Operating expenses 2012 £m 2011 2012 VS 2011 Staff costs 499.8 545.7 45.9 Other costs 247.9 233.5 (14.4) Depreciation and amortisation 14.1 12.0 (2.1) Total 761.8 791.2 29.4 Compensation cost: 44% 49% 5% operating revenue ratio Cost: net revenue ratio 66% 70% 4% Schroders 2012 Annual Results | March
Slide 28: Tax charge and earnings per share
Tax charge and earnings per share 2011 2012 Change Profit before tax £407.3m £360.0m £(47.3)m Tax £(91.5)m £(76.8)m £14.7m Effective tax rate(%) 22.5% 21.3% (1.2)% Profit after tax £315.8m £283.2m £(32.6)m Basic earnings per share 115.9p 104.7p (11.2)p Dividend 39.0p 43.0p 4.0p Schroders 2012 Annual
Slide 29: Movement in Group capital
Movement in Group capital £m Net share Profit purchases after tax 39 283 Share-based FX Other Dividends 28 payments 11 104 45 Group Group capital capital Group 2,070 2,070 capital 1,902 2011 2012 Schroders 2012 Annual Results | March 2013 28
Slide 30: Group capital allocation
Group capital allocation Investment capital breakdown (%) 1% £m 2011 2012 5% Asset Management & Private Banking 884 957 17% 27% operational capital Investment capital* 837 926 9% Other 20% 181 187 21% (intangibles etc.) Statutory Group capital 1,902 2,070 Cash deposits, CDs and commercial paper Fixe
Slide 31: Schroders plc 2012 Annual Results
Schroders plc 2012 Annual Results Michael Dobson Chief Executive 7 March 2013
Slide 32: Priorities 2013
Priorities 2013 Leverage our competitive position – performance – product range – distribution strengths – global footprint Improve performance in Private Banking Source: Schroders Schroders 2012 Annual Results | March 2013 31
Slide 33: Outlook
Outlook Buoyant equity markets Increasing investor demand Strong flows in Intermediary Continuing positive in Institutional Outflows in Private Banking Good long-term growth opportunities Source: Schroders Schroders 2012 Annual Results | March 2013 32
Slide 34: Forward-Looking Statements
Forward-Looking Statements These presentation slides may contain forward-looking statements with respect to the financial condition and results of the operations and businesses of Schroders plc. These statements and forecasts involve risk and uncertainty because they relate to events and depend upon