Jupiter Fund Management Plc · LSE:JUP
Jupiter Fund Management — FY2022 Earnings Presentation
51 slides from Jupiter Fund Management's earnings presentation, Feb 24, 2023
Slide 1: Full Year Results 2022
JUPITER FUND MANAGEMENT PLC FULL YEAR RESULTS 2022
Slide 2: Matthew Beesley, Chief Executive Officer
Jupiter fund management plc MATTHEW BEESLEY CHIEF EXECUTIVE OFFICER Marketing Communication for professional and institutional investors only. Not for retail investors.
Slide 3: A challenging year
A challenging year £397.3m Net revenue (2021: £568.6m) 51% Investment outperformance1 (2021: 58%) Underlying profit before tax £77.6m (2021: £216.7m) Underlying EPS 11.3p (2021: 31.7p) £(3.5)bn Net outflows (2021: outflows of £(3.8)bn) Assets under management £50.2bn (2021: £60.5bn) Cost:income rati
Slide 4: Focused on improving performance
Focused on improving performance Three-year mutual fund performance 18% 49% over 1 year (2021: 80%) 40% 31% 53% over 5 years (2021: 68%) 11% 1st quartile 2nd quartile 3rd quartile 4th quartile Source: Morningstar and Jupiter internal, as at 31 December 2022. Figures show mutual fund AUM outperforman
Slide 5: Consistently strong gross sales
Consistently strong gross sales Gross flows (£bn) 20 £15.1bn 15 10 5 £(3.8)b n 0 2019 2020 2021 2022 Retail, Wholesale & Inv. Trusts Institutional ● Continued robust gross sales, despite weaker retail environment ● Record institutional gross flows of over £3bn 4
Slide 6: Consistently strong gross sales, and an improving net picture
Consistently strong gross sales, and an improving net picture Gross flows (£bn) Net flows (£bn) £(3.5)bn 20 2 £15.1bn 15 0 10 -2 5 -4 0 -6 2019 2020 2021 2022 2019 2020 2021 2022 Retail, Wholesale & Inv. Trusts Institutional Retail, Wholesale & Inv. Trusts Institutional ● Continued robust gross sale
Slide 7: Improving net sales picture through the year
Improving net sales picture through the year Gross flows (£bn) Net flows (£bn) +£0.1bn 4 2 £(3.6)bn 1 3 0 2 -1 1 -2 0 -3 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Retail, Wholesale & Inv. Trusts Institutional Retail, Wholesale & Inv. Trusts Institutional ● Consistent gross flows from retail clients ● Improving net fl
Slide 8: Challenged areas remain in outflow
Challenged areas remain in outflow…. Net flows from challenged areas 0 -2 -3 -5 -6 UK Equities European Merlin Systematic Growth 2019 2020 2021 2022 7
Slide 9: Challenged areas remain in outflow but newer strategies generating net sales
Challenged areas remain in outflow….but newer strategies generating net sales Net flows from challenged areas Recently launched strategies 0 4.0 3.5 3.0 -2 3.0 2.5 2.0 -3 2.0 1.5 1.0 -5 1.0 0.5 0.0 0.0 -6 FY 18 FY 19 FY 20 FY 21 FY 22 UK Equities European Merlin Systematic Growth 2019 2020 2021 2022
Slide 10: Aligning multi-regional strategies to address client needs
Aligning multi-regional strategies to address client needs Equities Alternatives Fixed Income Gold & Global Corporate GSE NZS Value GEAR Silver SARB Unconstrained credit EMD AUM £0.8bn £1.1bn £9.2bn £1.3bn £0.7bn £0.6bn £9.9bn £0.2bn £0.5bn Flows1 £0.2bn £0.5bn £1.1bn £0.01bn £(0.2)bn £0.4bn £(1.7)b
Slide 11: Strategic progress since Q3 update
Strategic progress since Q3 update Explore new Simplify our Rationalise our Deliver Return 70% investment structure fund range efficiencies earnings capabilities Thematic 8.4p & 15% 25% £20m £26m range reduction in fewer funds cost savings to be launched total dividend and planned headcount by H1 20
Slide 12: Where Jupiter is today
Where Jupiter is today ROBUST FOUNDATIONS STRONG & MATURE TALENTED & COMMITTED CORE UK BUSINESS EMPLOYEES FOCUS ON ACTIVE GROWING EXPERTISE ACROSS INVESTMENT EXCELLENCE INSTITUTIONAL BUSINESS SUSTAINABILITY 11
Slide 13: Increase scale, decrease undue complexity, broaden appeal, deepen relationships
INCREASE DECREASE BROADEN DEEPEN SCALE UNDUE OUR APPEAL RELATIONSHIPS COMPLEXITY TO CLIENTS WITH ALL STAKEHOLDERS …in select geographies …with costs managed …with a curated product …with purpose and and channels carefully through a offering, while also sustainability embedded relentless pursuit expl
Slide 14: Targeted geographies
1 Targeted geographies 15bps Combined 2 contribution margin for Italy & Germany INCREASE Institutional client channel SCALE 3 £ 6.8bn …in select geographies New and emerging franchises and channels AUM from institutional clients 13
Slide 15: Disciplined cost management
1 Disciplined cost management 15% Reduction in 2 planned headcount DECREASE Automation and technology UNDUE COMPLEXITY 3 £20m …with costs managed Supplier outsourcing and carefully through a consolidation relentless pursuit of efficiency Cost savings in 2023 14
Slide 16: Contemporary product offering
1 Contemporary product offering 0.3% with active investment excellence Attrition rate of group AUM from 2 fund closures to date Partnerships and new BROADEN methods of delivery OUR APPEAL TO CLIENTS 3 £ 0.5bn …with a curated product Sharing knowledge and data offering, while also exploring additiona
Slide 17: Positive impact on society
1 Positive impact on society 71% Employee 2 engagement Diverse and talented DEEPEN RELATIONSHIPS workforce WITH ALL STAKEHOLDERS 3 AAA …with purpose and Shareholder returns sustainability embedded and relationships in all we do MSCI sustainability rating 16
Slide 18: Wayne Mepham, Chief Financial Officer
WAYNE MEPHAM CHIEF FINANCIAL OFFICER Marketing Communication for professional and institutional investors only. Not for retail investors.
Slide 19: Financial performance in a challenging environment
Financial performance in a challenging environment Net revenue £397.3m (2021: £568.6m) 11.3p Underlying EPS (2021: 31.7p) Underlying profit before tax £77.6m 8.4p (2021: £216.7m) Ordinary dividend (2021: Ordinary dividend of 17.1p) Exceptional items £19.6m (2021: £33.0m) Statutory profit before tax
Slide 20: Underlying profit before tax
Underlying profit before tax… 52.1 (68.6) 164.6 10.4 (5.2) (23.6) 101.2 (19.6) 77.6 58.0 2021 Revenue Costs Losses & 2022 underlying 2022 2022 Exceptional costs 2022 statutory underlying PBT other 1 PBT performance underlying PBT PBT (ex pfees) fee impact 1Other includes net finance cost and amortis
Slide 21: Movement in AUM
Movement in AUM… …December 2022 closing AUM of £50.2bn 5.6 (3.5 ) (3.8 ) (6.8 ) 58.7 60.5 50.2 2021 Net flows Markets 2021 Net flows Markets 2022 opening AUM closing AUM closing AUM £59.7bn 2021 average AUM £52.4bn 2022 average AUM Average AUM is calculated using a 13-point basis. 20
Slide 22: Net revenues excluding performance fees of £387m
Net revenues excluding performance fees of £387m (39.9) (49.7) 21.0 455.6 387.0 2021revenue Net flows 2021 markets 2022 markets 2022 revenue (ex-pfees) (ex-pfees) 74bps FY 2022 Net man. fee margin (2021: 76bps) £10m Performance fees (2021: £113m) 21
Slide 23: Net revenues excluding performance fees of £387m
Net revenues excluding performance fees of £387m Total net revenue of £397m (39.9) (49.7) 10.3 21.0 455.6 387.0 397.3 2021revenue Net flows 2021 markets 2022 markets 2022 revenue 2022 2022 revenue (ex-pfees) (ex-pfees) performance fees 74bps FY 2022 Net man. fee margin (2021: 76bps) £10m Performance
Slide 24: Investing for growth while maintaining cost discipline
Investing for growth while maintaining cost discipline Cost management despite headwinds Expenses Compensation mix (excluding performance fees) Fixed staff costs Variable staff costs (£m) 2022 2021 Fixed staff costs 82.4 73.0 Variable staff costs 104.5 140.0 – performance fee related 33.9 60.9 43% 4
Slide 25: Investing for growth while maintaining cost discipline
Investing for growth while maintaining cost discipline Cost management despite headwinds Expenses Compensation mix (excluding performance fees) Fixed staff costs Variable staff costs (£m) 2022 2021 Fixed staff costs 82.4 73.0 Variable staff costs 104.5 140.0 – performance fee related 33.9 60.9 43% 4
Slide 26: Investing for growth while maintaining cost discipline
Investing for growth while maintaining cost discipline Cost management despite headwinds Expenses Compensation mix (excluding performance fees) Fixed staff costs Variable staff costs (£m) 2022 2021 Fixed staff costs 82.4 73.0 Variable staff costs 104.5 140.0 – performance fee related 33.9 60.9 43% 4
Slide 27: Investing for growth while maintaining cost discipline
Investing for growth while maintaining cost discipline Cost management despite headwinds Expenses Compensation mix (excluding performance fees) Fixed staff costs Variable staff costs (£m) 2022 2021 Fixed staff costs 82.4 73.0 Variable staff costs 104.5 140.0 – performance fee related 33.9 60.9 43% 4
Slide 28: Investing for growth while maintaining cost discipline
Investing for growth while maintaining cost discipline Cost management despite headwinds Expenses Compensation mix (excluding performance fees) Fixed staff costs Variable staff costs (£m) 2022 2021 Fixed staff costs 82.4 73.0 Variable staff costs 104.5 140.0 – performance fee related 33.9 60.9 43% 4
Slide 29: Investing for growth while maintaining cost discipline
Investing for growth while maintaining cost discipline Cost management despite headwinds Expenses Compensation mix (excluding performance fees) Fixed staff costs Variable staff costs (£m) 2022 2021 Fixed staff costs 82.4 73.0 Variable staff costs 104.5 140.0 – performance fee related 33.9 60.9 43% 4
Slide 30: Cost discipline driving reduction in compensation costs
Cost discipline driving reduction in compensation costs Creating scope to invest for future growth (60.9) 6.0 2.2 33.9 213.0 3.1 (10.4) 186.9 152.1 153.0 2021 2021 2021 comp Inflationary Restructuring Other Reduced 2022 comp 2022 2022 compensation performance costs ex. pfees pay rises costs variable
Slide 31: Lower non-compensation costs against ongoing headwinds
Lower non-compensation costs against ongoing headwinds Creating scope to invest for future growth (11.7) 125.9 (2.9) 3.3 114.6 2021 AUM related One-off items Other 2022 25
Slide 32: Balancing strong cost discipline whilst investing for scale
Balancing strong cost discipline whilst investing for scale Cost base Variable 58% Fixed 42% 2022 cost base 26
Slide 33: Balancing strong cost discipline whilst investing for scale
Balancing strong cost discipline whilst investing for scale Cost base 18% Investing for growth Variable Investing for growth Fixed 2022 cost base 26
Slide 34: Balancing strong cost discipline whilst investing for scale
Balancing strong cost discipline whilst investing for scale Cost base 18% Investing for growth Variable 31% Fixed staff Fixed staff Fixed 2022 cost base 26
Slide 35: Balancing strong cost discipline whilst investing for scale
Balancing strong cost discipline whilst investing for scale Cost base 18% Investing for growth Variable AUM-related 31% Fixed staff Fixed 22% AUM-related 2022 cost base 26
Slide 36: Maintaining a strong capital position
Maintaining a strong capital position Enabling additional return of capital to shareholders Regulatory capital IFPR regime (£m) 31 Dec 2022 31 Dec 20211 Available capital resources 236.0 238.8 Regulatory requirement (121.8) (121.8) Expected capital surplus 114.2 117.0 ● 0.5p final dividend, 8.4p ful
Slide 37: Maintaining a strong capital position
Maintaining a strong capital position Enabling additional return of capital to shareholders Regulatory capital Seed capital IFPR regime (£m) 31 Dec 2022 31 Dec 20211 £123m £24m reinvested Dec ‘21 Available capital resources 236.0 238.8 Regulatory requirement (121.8) (121.8) £74m £127m disinvested ca
Slide 38: Resilient performance despite headwinds
Resilient performance despite headwinds Financial results impacted by challenging market 1 conditions 2 Focus on areas we can control 3 Healthy capital base 4 Targeted investment for growth 28
Slide 39: Matthew Beesley, Chief Executive Officer
Jupiter fund management plc MATTHEW BEESLEY CHIEF EXECUTIVE OFFICER Marketing Communication for professional and institutional investors only. Not for retail investors.
Slide 40: Jupiter 2030
Jupiter Jupiter 2030 2030 Scaled and Lean, efficient and Trusted partner to Play a positive role diversified across technology- clients, offering a in society and select channels, enabled with focus cohesive and create a better geographies and on value-adding differentiated future for our investment
Slide 41: Q&A
Q&A Marketing Communication for professional and institutional investors only. Not for retail investors.
Slide 42: Appendix
APPENDIX Marketing Communication for professional and institutional investors only. Not for retail investors.
Slide 43: Largest mutual funds performing well
Largest mutual funds performing well A more diversified, less concentrated business 3-year performance: Equities Fixed Income Multi-Asset Alternatives 5-year performance: Equities Fixed Income Multi-Asset Alternatives AUM at AUM at 4th 3rd 2nd 1st Dec 20221 Dec 20211 Quartile Quartile Quartile Quart
Slide 44: Funds with performance fees
Funds with performance fees Driven by strong investment performance Illustrative example AUM of all share classes with Performance Funds with performance fee Share class High Water Performance performance fee potential Share class vs. Benchmark/ Benchmark/Hurdle potential NAV Mark fee rate (£m) Hurd
Slide 45: Long-term incentive compensation
Long-term incentive compensation Estimated future long-term incentive compensation amortisation Amount remaining £m to expense 2023 2024 2025 2026 In relation to 2020 performance fees 2.0 1.7 0.3 - - In relation to 2021 performance fees 4.5 2.8 1.4 0.3 - In relation to 2022 performance fees 2.0 1.0
Slide 46: Non-compensation costs
Non-compensation costs (£m) 2022 2021 AUM-related costs 58 70 Infrastructure 36 33 Other 21 23 Total non-compensation costs 115 126 36
Slide 47: Management expectations for 2023
Management expectations for 2023 2023 Net management fee margin 70 bps Performance fees c.£5m – £10m Fixed staff costs £77m Total compensation ratio (excluding performance fees) 41% Non compensation costs £116m 1 Total pay-out ratio 50% 1. Excluding the impact of all performance fees 2. Please note
Slide 48: Proactive seeding portfolio
Proactive seeding portfolio Focused use of our balance sheet to support organic growth Seed size and length of investment GEM Focus LP Global Ecology Bond 100% Global Sustainable Equities SICAV Merlin Real Return 80% Global Sustainable % of fund held Equities LP European Growth feeder fund 60% Europ
Slide 49: AUM by distribution channel
AUM by distribution channel Our assets reach us through a number of different channels AUM (£bn) ● The majority of our assets come through our distribution Advisory Discretionary Direct partners and their associated intermediary channels Other Institutional Investment Trust rather than directly from
Slide 50: Forward looking statements
Forward looking statements This presentation may contain certain “forward-looking statements” with respect to certain plans of Jupiter Fund Management plc (Jupiter) and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. State
Slide 51: Jupiter Fund Management plc
Jupiter Fund Management plc The Zig Zag Building, 70 Victoria Street London, SW1E 6SQ, United Kingdom T: +44 (0)20 3817 1000 F: +44 (0)20 3817 1820 @jupiterAM_UK Jupiter Asset Management Jupiteram.com Marketing Communication for professional and institutional investors only. Not for retail investors
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