Jupiter Fund Management Plc · LSE:JUP
Jupiter Fund Management — H1 2018 Earnings Presentation
30 slides from Jupiter Fund Management's earnings presentation, 2018
Slide 1: 2018 Interim Results
JUPITER 2018 Interim Results
Slide 2: Maintaining shareholder returns
1 Maintaining shareholder returns Delivering growth through investment excellence Net Management Underlying Net Investment Fees Earnings per Sales Performance Share 3 year mutual fund outperformance* Outflows Up 7% Up 2% of £2.3bn 80% to £199.2m to 17.1p (H1 17: Inflows of £3.6bn) (Dec 2017: 81%) (H
Slide 3: A straightforward active asset management strategy
2 A straightforward active asset management strategy Client focus: delivering value through investment performance and transparency 1 2 3 Deliver Sell this expertise Deliver attractive outperformance through products returns to after fees to our suited to our shareholders clients distribution streng
Slide 4: Competitive advantage
3 Competitive advantage Delivering performance after fees for our clients is what we do Three year mutual fund performance AUM weighted 8% • Long-term performance record maintained over three years 12% • 80% of AUM in mutual funds above median • 52% of AUM in segregated mandates above 24% benchmark
Slide 5: Largest funds performing well
4 Largest funds performing well 11 funds over £1bn representing over 65% of invested assets AUM at AUM at AUM at 4th quartile 3rd quartile 2nd quartile 1st quartile Jun 2017 Dec 2017 Jun 2018 Dynamic Bond * £9,090m £9,710m £7,122m European £4,306m £4,948m £5,562m Strategic Bond £3,708m £3,906m £3,89
Slide 6: 2018 AUM progression
5 2018 AUM progression AUM down 4% to £48.2bn Analysis of £1.9bn mutual fund net outflows 5.0 Movement in AUM (£ billion) 4.0 3.0 4.4 (4.0) 2.0 1.0 1.8 (4.1) (1.0) (1.9) £1.9bn net (2.0) outflows (3.0) 50.2 Gross flows excl. Redemptions excl. Gross flows Redemptions Dynamic Bond Dynamic Bond Dynamic
Slide 7: 2018 net flows by region
6 2018 net flows by region Outflows centred around a single product Net flows, H1 2016 – H1 2018 (£ billion) 4 • In 2017, Dynamic Bond was popular in the cross-border markets contributing £3.5bn in net positive flows 3 • During 2018 the trend reversed with Dynamic Bond 2 losing £2.3bn across the sam
Slide 8: Successful diversification of our product range
7 Successful diversification of our product range Changing asset base over the last five years Split of AUM by asset class (£ billion) 48.2 • We continually adapt our product range as client needs evolve and change • Since the start of the year we have: • Launched three new products in the UK market
Slide 9: Maintaining a consistent business model
8 Maintaining a consistent business model Sustainable organic flow growth across the cycle Cumulative net mutual fund flows (£ billion) 11.0 10.0 • Track record of generating consistent net inflows across the 9.0 cycle 8.0 • £8.3bn cumulative mutual fund inflows over past five years 7.0 6.0 • Organi
Slide 10: AUM by distribution partner
9 AUM by distribution partner Our assets reach us through a number of different channels AUM (£ billion) • The majority of our assets come through our distribution 50.2 48.2 partners and their associated intermediary channels rather than directly from our clients 5 5 • Discretionary AUM has fallen d
Slide 11: Regional focus: UK book
10 Regional focus UK book continues to be a cornerstone of our business UK AUM (£ billion) 35 35 Over the last three years our UK offering has: 1 1 31 1 • Continued to experience strong gross sales, increasing our 26 9 8 overall UK asset base whilst diversifying the product base 9 5 5 • Maintained s
Slide 12: 2018 Interim Results - Charlotte Jones, CFO
JUPITER 2018 Interim Results Charlotte Jones Chief Financial Officer JUPITERAM.COM
Slide 13: Financial highlights
12 Financial highlights Solid financial performance H1 2017 H1 2018 Change Net management fees £186.5m £199.2m +7% Net revenue £195.4m £214.8m +10% Net management fee margin 85.9bps 82.7bps Underlying profit before tax* £94.6m £96.5m +2% Underlying EPS 16.7p 17.1p +2% Interim dividend 6.8p 7.9p +16%
Slide 14: Earnings
13 Earnings Good underlying growth in earnings Like for like earnings in H1 2016 and 2017 (7.2) are £73.8m and 13.3 £85.3m respectively (3.9) (3.7) 94.6 Underlying PBT 12.7 9.3 (9.3) 82.5 8.7 96.5 85.3 73.8 H1 2016 H1 2017 Research costs Net management Performance Operating Variable Other* H1 2018 a
Slide 15: Revenues
14 Revenues Continued growth in net revenues Net revenue £ million H1 17 H1 18 % +/- Revenue (£ million) 214 215 Net management fees 186.5 199.2 +7% 7 14 Performance fees 0.8 14.1 195 187.3 213.3 +14% 181 8 Net initial charges 8.1 1.5 170 7 6 Of which box profits 7.2 0.7 8 Net revenue 195.4 214.8 +1
Slide 16: Net management fee margin
15 Net management fee margin Key driver remains changing business mix bps H1 16 H2 16 H1 17 H2 17 H1 18 Margin* 87.6 87.3 85.9 83.9 82.7 • Net management fee margin has declined from 84bp to 83bps in the first half of the year due to a continued change in business mix • Guidance that ongoing margins
Slide 17: Operating expenses
16 Operating expenses Investing to support growth ambitions Operating expenses* Operating expenses (£m) and % of net management fees 100 40% £ million H1 17 H1 18 % +/- 37% 90 35% 35% Fixed staff costs 26.9 29.5 +10% 35% 80 35% 34% 33% Other expenses 36.4 43.9 +21% 30% 70 3 Operating expenses 63.3 7
Slide 18: Operating expenses
17 Operating expenses Progression driven by business volumes and investment; cost discipline focus Operating expenses progression from H2 2017 to H1 2018 (£ million) 73.4 2.7 2.7 1.7 (1.7) Operating expenses 1.8 0.1 Investment= £3.5m 70.7 68.8 H2 2017 Volume driven Investment for Operating platform/
Slide 19: Variable staff costs
18 Variable staff costs Compensation ratios in line within guidance Variable staff costs Variable staff costs (£m) and compensation ratio* 28.2% 29.8% 29.8% £ million H1 17 H1 18 % +/- Cash bonus 22.7 22.2 Other variable compensation** 15.5 19.9 Variable staff costs 38.2 42.1 +10% 26 20 Variable com
Slide 20: Proactive seeding portfolio
19 Proactive seeding portfolio Supporting future growth Seed investment – at cost (£ million) • Approach introduced in 2017 is already delivering benefits (31) 11 • We actively recycle seed capital 70 (19) • As at 30 June 2018 only £16m remains out of the £49m 2016 portfolio 57 • Since 2016 £81m has
Slide 21: Consistent approach to capital management
20 Consistent approach to capital management Managing the deployment of capital Regulatory capital (£ million) £ million H1 17* H1 18** % +/- • Our earnings generate both healthy free cash flow and additional capital Ordinary shareholder funds 583 596 Less: goodwill and illiquid assets*** (369) (371
Slide 22: Considered distribution of earnings
21 Consistent approach to capital management Considered distribution of earnings 16% increase in interim dividend Return of private client proceeds Special • Interim dividend increased by 16% to 7.9p Final • Our overall capital management policy remains Interim unchanged with special dividend used t
Slide 23: 2018 Interim Results - Maarten Slendebroek, CEO
JUPITER 2018 Interim Results Maarten Slendebroek Chief Executive Officer JUPITERAM.COM
Slide 24: Jupiter's active management offering
23 Jupiter’s active management offering We remain committed to alpha generation Capabilities Key Characteristics AUM • Multi Asset • Equity • Targeted returns • Absolute Return • Unconstrained 34% Outcome Orientated • Fund of Funds • Fixed Income • Equity • Unconstrained • Fixed Income • Concentrate
Slide 25: Maintaining our high performance culture
24 Maintaining our high performance culture Our unique culture allows us to retain, attract and develop talent • Independence of thought: no house view • Unconstrained and conviction led approach to active People investing • Open and informal communication as part of a collaborative culture • Indivi
Slide 26: Continued growth opportunities
25 Continued growth opportunities Our capabilities continue to develop and evolve over time to meet changes in client demand Ready to go Develop Maximise growth Manage maturity European Growth Merlin Flexible Bonds UK Value Absolute Return India Convertibles GEM Equities Asian Income Global Value EM
Slide 27: Wider industry trends
26 Wider industry trends Our business model and strategy enable us to respond to challenges and opportunities Relevant themes Jupiter response • Fee pressure • Outperformance after all fees • Continued cost pressure • Disciplined investment in technology Headwind trends • Rising interest rates/ end
Slide 28: In summary
27 In summary Execution of our consistent strategy • Continued diversification by product, client type and geography Performance Flows • Clear focus on investment outperformance • Fostering the development and growth of our talent • Continue to develop our capabilities to meet the needs of our expan
Slide 29: Q&A
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Slide 30: Forward looking statements
29 Forward looking statements This presentation may contain certain “forward-looking combinations within relevant industries; and the impact of statements” with respect to certain plans of Jupiter Fund changes in capital, solvency or accounting standards, and tax and Management plc (Jupiter) and its
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