Ninety One Plc · LSE:N91
Ninety One — H1 2024 Earnings Presentation
41 slides from Ninety One's earnings presentation, Nov 15, 2023
Slide 1: Interim Results 2024
Interim Results 2024 15 November 2023
Slide 2: Agenda
Agenda 1 Highlights 2 Business Review 3 Financial Review 4 Outlook 5 Q&A
Slide 3: H1 2024 highlights
H1 2024 highlights H1 2024 H1 2023 Change % FY 2023 Assets under management (AUM) £123.1bn £132.3bn (7) £129.3bn Net flows (£4.3bn) (£3.2bn) n.m. (£10.6bn) Basic earnings per share (EPS) 8.9p 9.4p (5) 18.2p Adjusted EPS 8.2p 9.0p (9) 17.3p Dividend per share 5.9p 6.5p (9) 13.2p Adjusted operating pr
Slide 4: Business Review
Nin j + i ety Business Review
Slide 5: Business model and differentiators
Business model and differentiators Business model Differentiators — Client focused — Organically developed track record — People centric — Emerging market heritage — Capital light — Global reach — Technology enabled — Owner culture Specialist active investment manager 5
Slide 6: Our purpose
Our purpose Better Better Better firm investing world Investing for a better tomorrow 6
Slide 7: Long-term track record
Long-term track record Domestic growth Internationalisation Scaling post crisis Seeking growth in a 1992-1998 1998-2009 2009-2020 world of change 2020-H1 2024 AUM CAGR +93% +19% +12% +5% 140bn £220,000 120bn 100bn £165,000 80bn £123.1bn £110,000 60bn 40bn £55,000 20bn 0bn £0 AUM Profit before tax an
Slide 8: H1 2024 key messages
H1 2024 key messages — Market and business conditions remain challenging — Low investor appetite for “risk-on” strategies — Sharpened focus in select areas — Growth mindset with cost discipline — Staff committed and motivated, with increasing shareholding Confident in our ability to regain growth mo
Slide 9: Market and business conditions
Market and business conditions — Challenging market conditions — Interest rates — Inflation — Disruptive geopolitics — Narrow equity market performance — Persistent outflows in EM debt and active equities — Risk-off stance limiting inflows Resilient business, positioned for the long term 9
Slide 10: Fastest interest rate increase in decades
Fastest interest rate increase in decades 7% 10% 430bps hike in 24 months 520bps hike in 15 months 5.25x rate increase trough-to-peak 22x rate increase trough-to-peak 6% 8% 5% 6% 4% 4% 3% 2% 2% 0% 1% (2%) 0% (4%) Fed Funds Target Rate (LHS) 10-year US Treasury Yield (LHS) US CPI YoY Change (RHS) Sou
Slide 11: Index performance – Fixed Income
Index performance – Fixed Income 9 months (31 December 2022 – 30 September 2023) GBP USD 4% 3% 2% 1% (1%) (2%) (3%) (4%) 6 months (31 March 2023 – 30 September 2023) 2% 0% (1%) (2%) (3%) (4%) (5%) (6%) Citi US GBI FTSE WGBI JPM GBI-EM Global Diversified BofA Global Investment Grade Hedged Source: Bl
Slide 12: Index performance – Equities
Index performance – Equities 9 months (31 December 2022 – 30 September 2023) GBP USD 12% 13% 9% 10% 5% 6% 1% 2% (9%) (8%) (9%) (8%) 6 months (31 March 2023 – 30 September 2023) 6% 5% 4% 2% 3% 1% (1%) (2%) (8%) (9%) (11%) (12%) S&P 500 FTSE 100 MSCI ACWI FTSE/JSE All Share MSCI EM MSCI China All Shar
Slide 13: Narrow equity market performance
Narrow equity market performance 9 months (31 December 2022 – 30 September 2023) 88% 13% 10% 4% 2% Magnificent 7 Average S&P 500 S&P 500 ex-M7 MSCI ACWI MSCI ACWI ex-M7 Source: Bloomberg. Note: All indices show total unhedged return in US dollars. Magnificent Seven (“M7”) consists of: Apple Inc., Mi
Slide 14: Emerging markets decidedly out of favour
Emerging markets decidedly out of favour Net flows into emerging markets active funds 8 6 4 2 £ billion - (2) (4) (6) (8) Jan 2023 Feb 2023 Mar 2023 Apr 2023 May 2023 Jun 2023 Jul 2023 Aug 2023 Sep 2023 Fixed Income Equities Total Source: Broadridge. 14
Slide 15: AUM and flows
AUM and flows 5.4% (0.2%) 3.8% (7.4%) (3.3%) 1 8.0 (10.6) 5.0 (4.3) (4.0) 27.7 (1.9) 6.0 (14.0) (0.2) £ billion 123.1 111.4 FY19 FY20 FY21 FY22 FY23 H1 2024 Net flows Portfolio growth Torque ratio Note: 1. H1 2024 torque ratio not annualised. 15
Slide 16: Net flows by asset class (£m)
Net flows by asset class (£m) H1 2023 H1 2024 5 87 192 93 (2,229) (3,041) (346) (825) (928) (462) South African Fund Platform Alternatives Equities Fixed Income Multi-asset 16
Slide 17: Net flows by Client Group (£m)
Net flows by Client Group (£m) H1 2023 H1 2024 27 158 (827) (1,137) (1,923) (1,064) (533) (111) (369) (1,675) Africa Americas Asia Pacific1 Europe United Kingdom Note: 1. Asia Pacific includes Middle East. 17
Slide 18: Net flows by client type (£m)
Net flows by client type (£m) H1 2023 H1 2024 149 (864) (3,352) (3,387) Advisor Institutional 18
Slide 19: Firm-wide investment performance
Firm-wide investment performance 31 March 2023 30 September 2023 Since Since inception 75% 25% 68% 32% inception 10 year 81% 19% 10 year 80% 20% 5 year 76% 24% 5 year 71% 29% 3 year 71% 29% 3 year 52% 48% 1 year 57% 43% 1 year 50% 50% Outperformance Underperformance 19
Slide 20: Mutual fund investment performance
Mutual fund investment performance 31 March 2023 30 September 2023 10 year 53% 14% 28% 5% 10 year 51% 39% 5%4% 5 year 38% 38% 19% 5% 5 year 31% 51% 14% 4% 3 year 27% 12% 38% 23% 3 year 27% 27% 34% 13% 1 year 49% 23% 19% 8% 1 year 31% 18% 28% 23% 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile No
Slide 21: What gives us conviction?
What gives us conviction? — Strategic clarity — Demand pressures are cyclical — Business model can navigate headwinds — Commitment drives success in active management This is no time to chase current momentum 21
Slide 22: How we approach the future
How we approach the future Addressable market 1 Within our core investment — Narrow and sharpen client focus competencies — Commit to our key platforms: — Specialist equity c. £9trn — Specialist fixed income and credit — Sustainability and impact Specialist Equity (incl. Thematic, Global, Internatio
Slide 23: Financial Review
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Slide 24: Financial results
Financial results £ million H1 2024 H1 2023 Change % Adjusted operating revenue 299.6 330.9 (9) Adjusted operating expenses (201.7) (223.0) (10) Adjusted operating profit 97.9 107.9 (9) Adjusted net interest income 8.3 2.7 n.m. Share scheme net expense (2.2) - n.m. Profit before tax 104.0 110.6 (6)
Slide 25: Adjusted operating revenue
Adjusted operating revenue £ million H1 2024 H1 2023 Change % Management fees 282.2 312.8 (10) Performance fees 12.1 11.0 10 Net revenue 294.3 323.8 (9) Other income 5.3 7.1 (25) Adjusted operating revenue 299.6 330.9 (9) Average AUM Average fee rate £125.3bn 45.0bps H1 2023: £138.2bn H1 2023: 45.2b
Slide 26: Adjusted operating expenses
Adjusted operating expenses Employee Business remuneration expenses 223.0 £ million 2.1 £ million (17.0) 201.7 (6.1) (0.3) H1 2023 Remuneration Inflation-linked FX-linked Other H1 2024 expenses impact impact expenses 26
Slide 27: Business and total expenses
Business and total expenses 35.5 34.1 34.1 33.7 33.1 32.2 31.3 31.6 118.3 119.9 108.0 138.6 134.9 125.3 99.6 87.1 11.5 11.6 11.8 11.2 11.4 10.5 10.5 10.0 FY17 FY18 FY19 FY20 FY21 FY22 FY23 H1 2024 Average AUM (£bn) Business expenses in bps of average AUM Total expenses in bps of average AUM Note: H1
Slide 28: Adjusted operating profit analysis
Adjusted operating profit analysis 107.9 4.3 97.9 17.0 £ million 1.1 (30.6) (1.8) H1 2023 Management Performance Other Employee Business H1 2024 fees fees income items remuneration expenses 28
Slide 29: Capital and dividend
Capital and dividend £ million 30 September 31 March 30 September 2023 2023 2022 Equity 337.8 349.9 338.6 Non-qualifying assets (37.1) (35.3) (30.7) Qualifying capital 300.7 314.6 307.9 Dividend (53.7) (61.7) (59.9) Estimated regulatory requirement (114.8) (115.7) (111.3) Estimated capital surplus 1
Slide 30: Outlook
| Nin sori Outlook
Slide 31: Near-term outlook
Near-term outlook — Market conditions likely to remain challenging — Low appetite for risk-on strategies — Revenue pressure calls for ongoing cost discipline Testing times for active managers 31
Slide 32: Concluding remarks
Concluding remarks — Despite the external environment, we are confident in our ability to regain growth momentum — Our model requires: — Highly motivated, invested and committed people — A clear strategy — Competitive investment performance — Deep client relationships Multi-decade track record of su
Slide 33: Q&A
Q&A
Slide 34: Appendix
Interim Results 2024 Appendix
Slide 35: Our strategy
Our strategy Organically developed investment capabilities over time Continuously invest in our Develop Ensure Capture the growth Focus on growth in people; differentiated strategies, sustainability inherent in our professionally build an anticipating is at the core current capability set intermedia
Slide 36: AUM split
AUM split By asset class By Client Group By Client type 3% 12% 8% 13% 36% 17% 40% 46% 16% 64% 26% 19% Equities Africa Institutional Fixed Income UK Advisor Multi-Asset Asia Pacific 1 Administration Americas Alternatives Europe Notes: Breakdown of AUM as at 30 September 2023. 1. Asia Pacific includes
Slide 37: AUM by strategy
AUM by strategy Equities Fixed Income Multi-asset Alternatives £56.2bn £31.9bn £20.9bn £4.2bn Global Absolute Return Growth SA & Africa Credit Asia (inc. China) & Emerging Markets EM Sovereign & Currency Income Credit Thematic Equities Africa (inc. SA) EM inc Africa / SA Private credit Africa (inc.
Slide 38: AUM by client type
AUM by client type Institutional AUM by client type Advisor 6% 16% 19% 36% 32% 45% £78.6bn £123.1bn £44.5bn 22% 64% 30% 30% 2 Pension funds Private banks / wealth managers / FOF Advisor Institutional 3 Corporates / insurance / other 1 Retail banks / insurance / IFA Public authorities / official inst
Slide 39: AUM by emerging/developed markets
AUM by emerging/developed markets By client location By investment strategy 42% 49% 51% 58% Developed markets Emerging markets Note: AUM as at 30 September 2023. 39
Slide 40: Glossary and definitions
Glossary and definitions Adjusted EPS is adjusted earnings attributable to shareholders, divided by the number of ordinary shares in issue at the end of the period. Slide 3, 24 Adjusted net interest income is calculated as net interest income or expense adjusted to exclude interest expense on lease
Slide 41: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared by Ninety One plc and Ninety One Limited (together, “Ninety One” and, together with their subsidiaries from time to time, the “Group”). This Presentation is provided on a strictly private and confidential basis for information purpo