Schroders PLC · LSE:SDR
Schroders — H1 2012 Earnings Presentation
31 slides from Schroders's earnings presentation, Aug 2, 2012
Slide 1: Schroders 2012 Half-Year Results
Schroders 2012 Half-Year Results Michael Dobson Chief Executive 2 August 2012
Slide 2: H1 2012 Resilient performance and continued investment in the business
H1 2012 Resilient performance and continued investment in the business Net new business £2.7bn 66% of funds outperforming over 3 years Assets under management £194.6bn (31 December 2011: £187.3bn) Profit before tax £177.4m (H1 2011: £215.7m) Interim dividend 13.0 pence per share (interim d
Slide 3: Net sales by channel
Net sales by channel £2.7 billion of net inflows in difficult market conditions £bn 18 16.1 13.2 12 11.0 6 5.1 1.8 2.7 (1.9) 0 -6 H1 2009 H2 2009 H1 2010 H2 2010 H1 2011 H2 2011 H1 2012 Institutional Intermediary Private Banking Schroders 2012 Half-Year Results | 2 August 2012 2
Slide 4: Geographic diversity
Geographic diversity International strength drives net sales performance North America £1.6bn Asia South UK Continental Pacific America £0.4bn Europe £0.4bn £0.5bn £(0.2)bn Schroders 2012 Half-Year Results | 2 August 2012 3
Slide 5: Institutional
Institutional Assets under management: £113.3bn (end 2011: £108.4bn) Net inflows £1.9bn Net inflows in Institutional in 12 out of last 13 quarters Pipeline of net notified business Net inflows in Multi-asset, Equities, Property Net revenue margins on new business 45 bps Longevity improve
Slide 6: Intermediary
Intermediary Assets under management: £65.3bn (end 2011: £62.9bn) Net inflows £1.0bn Principally in Multi-asset £1.4bn net inflows in US Intermediary Resilient performance in UK: net sales £0.5bn Outflows in Europe and Asia Schroders 2012 Half-Year Results | 2 August 2012 5
Slide 7: New product launches 2012
New product launches 2012 Meeting future investor demand Outcome-orientated Secure-Distribution Fund 2032 Managed Monthly High Income fund European Total Return Equities Multi-asset Strategic Beta Fund Global Multi-asset Income Equities QEP Global Emerging Markets Emerging Markets Small Cap Di
Slide 8: Private Banking
Private Banking Assets under management: £16.0bn (end 2011: £16.0bn) Net outflows £0.2bn risk averse European client base limited new investment activity Revenues down 9% at £52.6m (H1 2011: £58.0m) decline in net revenue margins continued move towards defensive strategies lower transaction volu
Slide 9: Kevin Parry, Chief Financial Officer
Schroders 2012 Half-Year Results Kevin Parry Chief Financial Officer 2 August 2012
Slide 10: Key figures
Key figures Profit before tax (£m) Costs: net revenue ratio (%) 215.7 188.2 68 69 177.4 65 H1 2010 H1 2011 H1 2012 H1 2010 H1 2011 H1 2012 Earnings per share (pence) Dividend per share (pence) 60.7 13 13 49.4 50.7 11 H1 2010 H1 2011 H1 2012 H1 2010 H1 2011 H1 2012 Schroders 2012 Half-year results |
Slide 11: Profit before tax
Profit before tax H1 2011 vs. H1 2012: Decrease of £49m £m Net revenue 49 PBT 216 H1 2011 Schroders 2012 Half-year results | August 2012 10
Slide 12: Net revenue
Net revenue Decrease of £49m £m Net revenue 593 Net revenue Private Banking 544 58 Net new business Private Banking 9 Markets and FX Performance fees Group segment 53 35 5 0 Asset Management Asset 535 Management 491 Group Segment Group Segment 0 0 H1 2011 H1 2012 Schroders 2012 Half-year results | A
Slide 13: Profit before tax
Profit before tax Decrease of £39m £m Private Banking PBT 13 216 Private Banking PBT 10 177 Net finance income Net revenue Compensation costs Other costs 2 49 1 11 Asset Management Asset 203 Management 175 Group Segment Group Segment 0 -8 H1 2011 H1 2012 Schroders 2012 Half-year results | August 201
Slide 14: Institutional net revenues
Institutional net revenues £7m increase in total net revenue Analysis of £10m increase in fees on H1 2011 (ex-performance fees) £m £m H1 2011 228 233 Management 226 fees 213 10 13 14 2011 NNB 8 2012 NNB 3 213 214 223 Markets/FX 1 H1 2012 Management fees 223 H1 2011 H2 2011 H1 2012 Management fees Pe
Slide 15: Intermediary net revenues
Intermediary net revenues £51m decline in total net revenue Analysis of £50m decrease in fees on H1 2011 (ex-performance fees) £m £m 309 H1 2011 1 Management 279 fees 308 9 258 2011 NNB 18 2012 NNB 308 3 270 258 Markets/FX 29 H1 2012 Management fees 258 H1 2011 H2 2011 H1 2012 Management fees Perfor
Slide 16: Intermediary net revenues
Intermediary net revenues MSCI World Index - volatility 1000 H1-11 H1-12 950 900 850 800 750 Source: Thomson Reuters Datastream Schroders 2012 Half-year results | August 2012 15
Slide 17: Intermediary net revenues
Intermediary net revenues £51m decline in total net revenue Analysis of £50m decrease in fees on H1 2011 (ex-performance fees) £m £m 309 H1 2011 1 Management 279 fees 308 9 258 2011 NNB 18 2012 NNB 308 3 270 258 Markets/FX 29 H1 2012 Management fees 258 H1 2011 H2 2011 H1 2012 Management fees Perfor
Slide 18: Institutional and Intermediary net revenues
Margin reduction Institutional and Intermediary net revenues 56 to 54 AM net revenue margins £1m Sales channel mix £9m Asset class mix Transaction fees £14m £10m 58bp 58bp £13m 1bp 2bp 55bp 1bp £308m £270m £258m £213m £214m £223m 57bp 56bp 54bp H1 2011 H2 2011 H1 2012 H1 2011 H2 2011 H1 2012 Perform
Slide 19: Private Banking segment
Private Banking segment £m – Net revenue £m – Costs 58.0 56.3 7.2 52.6 7.2 45.7 44.8 7.1 42.2 12.7 12.2 10.8 18.3 17.1 16.2 1.8 38.1 36.9 34.7 27.4 27.7 24.2 H1 2011 H2 2011 H1 2012 H1 2011 H2 2011 H1 2012 Management fees Transaction fees Compensation costs Doubtful debt charges Net banking interest
Slide 20: Group segment
Group segment Investment capital, governance, management and other Segment disclosure H1 2011 H1 2012 £m £m Net revenue 0.6 0.4 Operating expenses (7.5) (14.4) Net finance income 9.0 6.3 Share of associates and JVs (1.8) (0.5) Group segment profit/(loss) 0.3 (8.2) Other comprehensive income 1.7 7.3
Slide 21: Group segment
Group segment Governance, management and other Economic view H1 2011 H1 2012 £m £m Deferred remuneration mark to market and FX (0.3) (0.5) Pension fund credits 12.1 0.2 Property and other provisions (2.0) - Variable items 9.8 (0.3) Costs (15.9) (14.4) Total (6.1) (14.7) Schroders 2012 Half-year Resu
Slide 22: Group segment
Group segment Investment capital, governance, management and other Segment disclosure H1 2011 H1 2012 £m £m Net revenue 0.6 0.4 Operating expenses (7.5) (14.4) Net finance income 9.0 6.3 Share of associates and JVs (1.8) (0.5) Group segment profit/(loss) 0.3 (8.2) Other comprehensive income 1.7 7.3
Slide 23: Group segment
Group segment Investment capital returns H1 2011 Annualised H1 2012 Annualised £m return £m return Actively managed portfolio 6.1 1.9 of surplus capital 2.2% 0.8% Seed capital 1.1 1.3 Legacy PE, property 0.9 10.6 and associate Total return 8.1 13.8 Schroders 2012 Half-year results | August 2012 22
Slide 24: Operating expenses
Operating expenses H1 2012 H1 H2 H1 £m VS 2011 2011 2012 H1 2011 Staff costs 257.8 242.0 256.4 (1.4) Other costs 123.4 124.5 112.9 (10.5) Depreciation and amortisation 7.2 6.9 6.3 (0.9) Total 388.4 373.4 375.6 (12.8) Compensation cost: 44%* 44% 47% 3% operating revenue ratio Cost: net revenue ratio
Slide 25: Tax charge and earnings per share
Tax charge and earnings per share H1 2011 H1 2012 Change Profit before tax - £m 215.7 177.4 (38.3) Tax - £m (50.0) (40.3) 9.7 Profit after tax - £m 165.7 137.1 (28.6) Effective tax rate 23.2% 22.7% (0.5)% Basic earnings per share 60.7p 50.7p (10.0)p Dividend 13.0p 13.0p - Schroders 2012 Half-year re
Slide 26: Movement in Group capital
Movement in Group capital Increase of £37m £m Profit after tax 137 Share purchases 40 Dividends Other 69 9 Group capital Group capital H1 2012 H2 2011 1,939 1,902 31 December 2011 30 June 2012 Schroders 2012 Half-year results | August 2012 25
Slide 27: Group capital allocation
Group capital allocation Investment capital breakdown (%) H1 H2 H1 8% 1% 11% £m 2011 2011 2012 9% Asset Management & Private Banking 850 884 864 operational capital 8% 22% 7% Investment capital* 807 837 908 3% 15% Other 16% 188 181 167 (intangibles etc.) Cash and cash equivalents Government guarante
Slide 28: Michael Dobson, Chief Executive
Schroders 2012 Half-Year Results Michael Dobson Chief Executive 2 August 2012
Slide 29: Outlook
Outlook Financial market and investor uncertainty to persist Resilient performance on the back of diversified business model Range of new products to meet future demand Opportunity to invest in organic growth talent infrastructure new markets Schroders 2012 Half-Year Results | 2 August 2012
Slide 30: Awards
Awards Schroders 2012 Half-Year Results | 2 August 2012 26
Slide 31: 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