Investec plc · LSE:INVP
Investec — FY2015 Earnings Presentation
33 slides from Investec's earnings presentation, Mar 31, 2015
Slide 1: Results Presentation for the year to 31 March 2015
• • ••••• ••• •• •••••••••• ••••••••• s / ••• •• RESULTS PRESENTATION For the year to 31 March 2015
Slide 2: Snapshot
Unless otherwise stated, all information on this slide relates to the ongoing business Snapshot … The past year focused largely on the EXECUTION of our strategy • Completed the reshaping of the Specialist Bank with the – Sales of part of the Australian business, the UK Kensington business and the St
Slide 3: As a result … statutory operating profit showed steady growth
Unless otherwise stated, all information on this slide relates to the ongoing business As a result … Statutory operating profit showed steady growth • Statutory results showed steady growth, despite Rand depreciation of 10.5% % change on neutral Mar-15 Mar-14 % change currency basis Operating profit
Slide 4: Favourable operating environment
Unless otherwise stated, all information on this slide relates to the ongoing business Favourable operating environment Results impacted by strength of sterling against other operating currencies Exchange rates 140 Closing rate Average rates 130 % change % change 120 Rebased to 100 £ / Euro +14.1% £
Slide 5: Diversified business model
Unless otherwise stated, all information on this slide relates to the ongoing business Diversified business model Geographic diversity Revenue diversity Operating profit* % contribution to group by geography Operating profit* % contribution to group by business 100% 100% 90% 90% 80% UK and 80% Other
Slide 6: Continued growth in key earnings drivers
Unless otherwise stated, all information on this slide relates to the ongoing business Continued growth in key earnings drivers Third party assets under management^ Customer accounts (deposits) and loans ^ Asset Management Customer accounts Wealth & Investment Core loans and advances to customers £’
Slide 7: Supporting growth in operating income
Unless otherwise stated, all information on this slide relates to the ongoing business Supporting growth in operating income Total operating income^ £’mn 2000 1500 1000 500 0 Mar-10 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 ^The trends in these graphs are done on a currency neutral basis using the Rand:Pou
Slide 8: Impairments continue downward trend
Unless otherwise stated, all information on this slide relates to the ongoing business Impairments continue downward trend Down 61% since the peak in 2012 Total impairment analysis by geography £’mn 350 300 Legacy and Sales 250 South Africa 200 150 UK and Other 100 50 0 Mar-10 Mar-11 Mar-12 Mar-13 M
Slide 9: Fixed costs marginally up
Unless otherwise stated, all information on this slide relates to the ongoing business Fixed costs marginally up Jaws ratio for the group Asset Management operating margin Operating costs Operating income £’mn Mar-13 Mar-14 Mar-15 D 6.2% D 5.3% % 2,000 40 34.5 34.7 34.2 Operating costs (excluding de
Slide 10: Resulting in a solid group performance
Unless otherwise stated, all information on this slide relates to the ongoing business Resulting in a solid group performance % change currency POUND EARNINGS Mar-15 Mar-14 % change neutral basis Operating profit* before tax (£’000) 580 703 504 891 15.0% 22.7% Attributable earnings**^ (£’000) 409 91
Slide 11: Progress made on our financial targets
Unless otherwise stated, all information on this slide relates to the ongoing business Progress made on our financial targets Ongoing Statutory Target Mar-15 Mar-14 Mar-15 Mar-14 ROE (post tax) 12%-16% over a rolling 5-yr 13.8% 13.1% 10.6% 10.0% period Adjusted* EPS growth Target: 10% > UKPRI 10.2%
Slide 12: Stable capital position
Unless otherwise stated, all information on this slide relates to the ongoing business Stable capital position As at 31 March 2015 Capital adequacy Tier 1 Investec Bank Investec Bank 15.4% 11.4% Limited Limited Investec Limited 14.7% As Investec Limited 11.3% As reported reported Investec Bank plc 1
Slide 13: Divisional highlights
Out of the Ordinary ® e -$- I n ve s t e c Divider page heading / Divisional highlights Sub-heading goes here 13
Slide 14: Asset management - overview
Unless otherwise stated, all information on this slide relates to the ongoing business Asset management - overview Overview of performance Financial summary • Net inflows of £3.1bn over the year Mar-15 Mar-14 % change • Assets under management of £77.5bn Operating profit* (£’mn) 149.0 143.8 3.6% • R
Slide 15: Asset Management – key drivers
Unless otherwise stated, all information on this slide relates to the ongoing business Asset Management – key drivers Key drivers (besides market performance) Net inflows Average income as a % of AUM Operating margin £’bn % % 8 1.0 40 0.8 6 30 0.6 4 20 0.4 2 10 0.2 - 0.0 0 Mar-10 Mar-11 Mar-12 Mar-1
Slide 16: Wealth & Investment - overview
Unless otherwise stated, all information on this slide relates to the ongoing business Wealth & Investment - overview Overview of performance Financial summary Overall % • Higher average funds under management Mar-15 Mar-14 change • Total funds under management of £46.1bn Operating profit* (£’mn) 78
Slide 17: Wealth & Investment – key drivers
Unless otherwise stated, all information on this slide relates to the ongoing business Wealth & Investment – key drivers Key drivers Operating margin Net inflows Average income as a % of AUM % £’bn % 30 3 0.8 2 0.6 20 1 0.4 0 10 0.2 -1 0 -2 0.0 Mar-11 Mar-12 Mar-13 Mar-14 Mar-15 Mar-11 Mar-12 Mar-13
Slide 18: Specialist Banking - overview
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking - overview Overview of performance Financial summary SA Mar-15 Mar-14 % change • Up 36.8% in rand terms Operating profit* (£’mn) 392.3 331.4 18.4% • All businesses performed well largely as a re
Slide 19: Specialist Banking – mix of income
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking – mix of income Analysis of income^ £’mn 1200 Investment • Customer flow improved due to increased corporate activity and trading 1000 • Lower return generated on the Hong Kong investment income
Slide 20: Specialist Banking – key drivers
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking – key drivers Key drivers % Cost to income ratio % Credit loss ratio on core loans % Growth in net core loans (Currency neutral) (Currency neutral) 80 1.5 15 60 10 1.0 40 5 0.5 20 0 0 0.0 -5 Mar
Slide 21: Specialist Banking: accelerated reduction of UK legacy business
Unless otherwise stated, all information on this slide relates to the ongoing business Specialist Banking Accelerated reducing the UK Legacy Business • Legacy portfolio reduced to £0.7bn from £3.4bn a £'mn Mar-15 Mar-14 year ago largely as a result of: Total income (2.6) 15.5 ‒ Strategic sales Total
Slide 22: Strategy and positioning
Out of the Ordinary ® e -$- I n ve s t e c Divider page heading / Strategy and positioning Sub-heading goes here 22
Slide 23: Reflecting on our strategic priorities: Asset Management
Unless otherwise stated, all information on this slide relates to the ongoing business Reflecting on our strategic priorities Organically growing the Asset Management business What have we achieved? Outlook and future performance • Momentum is positive but the business remains strategically • Organi
Slide 24: Reflecting on our strategic priorities: Wealth & Investment
Unless otherwise stated, all information on this slide relates to the ongoing business Reflecting on our strategic priorities To internationalise the Wealth & Investment business What have we achieved? Outlook and future performance • Built via acquisition and integration of businesses • Servicing o
Slide 25: Reflecting on our strategic priorities: Specialist Bank
Unless otherwise stated, all information on this slide relates to the ongoing business Reflecting on our strategic priorities To simplify and grow the Specialist Bank What have we achieved? Outlook and future performance • We’ve built a full service Specialist Bank offering a high • The focus has no
Slide 26: Reflecting on our strategic priorities: South African Specialist Bank
Unless otherwise stated, all information on this slide relates to the ongoing business Reflecting on our strategic priorities To GROW the South African Specialist Bank What have we achieved? Outlook and future performance • Leading Private Bank over many years • The South African business has had a
Slide 27: Reflecting on our strategic priorities: UK Specialist Bank
Unless otherwise stated, all information on this slide relates to the ongoing business Reflecting on our strategic priorities To GROW the UK Specialist Bank What have we achieved? Outlook and future performance • 12th largest bank* in the UK • The current environment is favourable with good levels o
Slide 28: Reflecting on our strategic priorities: client franchise businesses
Unless otherwise stated, all information on this slide relates to the ongoing business Reflecting on our strategic priorities To build client franchise businesses CLIENT FRANCHISE BUSINESSES + SPECIALIST ACTIVITIES PRIVATE EQUITY Supporting our entrepreneurial endeavours and providing appropriate RE
Slide 29: Reflecting on our strategic priorities: capital light revenue
Unless otherwise stated, all information on this slide relates to the ongoing business Reflecting on our strategic priorities To grow capital light revenue Business model £’mn Third party assets and Net interest, investment 1,200 advisory and trading income £1 103mn 1,000 £784mn 800 Net annuity fees
Slide 30: Reflecting on our strategic priorities: digital strategy
Unless otherwise stated, all information on this slide relates to the ongoing business Reflecting on our strategic priorities To focus on our digital strategy • The overall aim of the digital strategy is to: ‒ Create something that differentiates Investec: Out of the Ordinary ‒ Ensure it enhances th
Slide 31: Strategic priorities for 2016
Unless otherwise stated, all information on this slide relates to the ongoing business Strategic priorities for 2016 Focus is on GROWTH • Maintain momentum in Asset Management by focusing on investment performance • Continue exploring opportunities to achieve a greater international reach in the Wea
Slide 32: Closing
Out of the Ordinary ® e -$- I n ve s t e c Divider page heading / Closing Sub-heading goes here 32
Slide 33: Outlook
Unless otherwise stated, all information on this slide relates to the ongoing business Outlook • Investec has successfully executed on its key strategic initiatives embarked upon over the past two years. The resultant simplification enables the group to enhance the operational focus to grow and deve