Schroders PLC · LSE:SDR
Schroders — H1 2009 Earnings Presentation
21 slides from Schroders's earnings presentation, Aug 6, 2009
Slide 1: Schroders 2009 Interim Results
Schroders 2009 Interim Results Chief Executive Michael Dobson 6 August 2009
Slide 2: Priorities for 2009
Priorities for 2009 • Aligning the business to the environment ¾ Costs down £49.8m • Capitalising on investment performance ¾ 80% of funds outperforming • Growing assets under management ¾ Q2 inflows £3.9bn • Leveraging our financial strength ¾ Balancing cost reductions vs. growth opportunities 1
Slide 3: Investment performance
Investment performance • Competitive performance across equities, 3 year investment performance fixed income and alternatives Quartile rankings SISF range 1 year 3 year Euro Corporate Bond 1 1 23% Euro Short-term Bond 1 1 Euro Short-term Bond 1 2 Global Corporate Bond 1 2 Emerging Market Debt Ab. Rt
Slide 4: Anticipating investor demand
Anticipating investor demand GOVERNMENT BONDS CORPORATE CREDIT HYBRID EQUITY European, UK, US, Asian, Emerging Equity Markets, Thematic Global European Yield and Dividend Max Yield / Dividend Global Yield and Dividend Max Structured or European Defensive, Step Invest, Protected Equity CPPI Global Co
Slide 5: Asset Management gross sales
Asset Management gross sales £bn Funds under management £113.3bn Not including China JV FUM £5.6bn 24 10% 20 16 17% 47% 12 8 4 13% 0 H1 2008 H2 2008 H1 2009 13% Equities Fixed Income Alternatives Multi-asset Private Banking * Gross flows before netting 4
Slide 6: Intermediary
Intermediary H1 2009: net inflows £2.5bn £bn – sales flows 15 • Recovery in gross sales • Lower redemptions 10 12.3 5.2 • Top 5 in cross border sales - 5 3.6 8.1 UK, Europe, Asia 7.5 6.2 2.5 3.5 0 • Capitalising on strong demand (0.3) (3.7) (4.5) in Europe (7.1) (7.8) -5 (9.5) (6.0) -10 -15 H1 2007
Slide 7: Institutional
Institutional H1 2009: net outflows £0.8bn £bn – sales flows 15 • Q2 net inflows £1.6bn • Strong performance 10 • Consultant upgrades 5 7.3 6.4 5.7 5.9 4.4 • Inflows across range of products 0 (1.1) (0.8) • Strong pipeline of new business ( (7.1) (2.7) (7.2) (8.4) -5 (9.8) (4.1) opportunities (12.4)
Slide 8: Private Banking
Private Banking • Assets under management £11.2bn (end 2008: £11.7bn) • New clients slower to fund • Existing clients withdrawing funds from liquid investment strategies • New business opportunities Investment performance Client service Brand strength 7
Slide 9: Schroders 2009 Interim Results - Chief Financial Officer
Schroders 2009 Interim Results Kevin Parry Chief Financial Officer 6 August 2009
Slide 10: 2009 Interim Results
2009 Interim Results Asset Management and Private Banking profit before tax and exceptional items: £81.2 million (H1 2008: £160.4 million) Group segment loss before tax and exceptional items: £4.3 million (H1 2008: profit £12.9 million) Total profit before tax before exceptional items: £76.9 million
Slide 11: Profit before tax and exceptional items
Profit before tax and exceptional items £ million 200 Net revenues £129.0m 150 100 PBT H1 2008 £173.3m 50 0 10
Slide 12: Net revenues
Net revenues £m 500 Markets £148m 450 400 Net new FX business Performance £66m 350 £30m fees 300 £17m 250 Net revenues 200 H1 2008 Net revenues 150 £461m H1 2009 100 £332m 50 0 11
Slide 13: Profit before tax and exceptional items
Profit before tax and exceptional items £ million 200 Net revenues £129.0m 150 Other Net interest Compensation costs Income JVs & costs £6.8m £11.2m Associates 100 PBT £43.0m £6.0m H1 2008 £173.3m 50 PBT H1 2009 £76.9m 0 12
Slide 14: Institutional and Intermediary net revenues
Institutional and Intermediary net revenues £m Net revenue margins 65bps 67bps 246 58bps 195 160 165 148 112 H1 2008 H2 2008 H1 2009 H1 2008 H2 2008 H1 2009 Institutional Intermediary 13
Slide 15: Private Banking net revenues
Private Banking net revenues £m Net revenue margins 102bps 98bps 56.2 55.1 86bps 49.2 13.0 14.4 11.4 43.2 40.7 37.8 H1 2008 H2 2008 H1 2009 H1 2008 H2 2008 H1 2009 Fees Interest income 14
Slide 16: Operating expenses before exceptionals
Operating expenses before exceptionals £mn H1-08 H2-08 H1-09 H1 09 vs H1 08 Staff costs 203.7 169.7 160.7 -21% Other costs 108.1 130.8 99.8 -8% Depreciation and amortisation 6.8 8.3 8.3 +22% Total 318.6 308.8 268.8 -16% No of employees (period-end) 2,998 2,834 2,626 -12% 15
Slide 17: Exceptional items
Exceptional items Q1 Q2 H1-09 ABS/MBS (6.3) 1.5 (4.8) Third party hedge funds 0.6 0.8 1.4 Private Equity (1.7) 1.1 (0.6) Seed capital (5.8) (6.7) (12.5) Property 0.4 (7.5) (7.1) Within Revenue: (12.8) (10.8) (23.6) Redundancy costs (4.5) (1.7) (6.2) Office rationalisation and other costs (3.6) (0.5)
Slide 18: Group Capital allocation
Group Capital allocation £mn June 2008 Dec 2008 June 2009 Investment Capital: Cash and liquid debt securities 172 428 504 Mortgage and asset backed securities 151 105 1 Third party hedge funds 173 53 32 Seed capital 248 214 136 Private equity 126 58 68 Property and other investments 46 41 30 Total I
Slide 19: Outlook
Outlook #8 Schroders
Slide 20: Outlook
Outlook • Priorities remain unchanged • Capitalising on investment performance • Growing assets under management • Balancing cost reductions vs. growth opportunities • Significant pipeline • Focus on organic growth 19
Slide 21: Forward-Looking Statements
Forward-Looking Statements These presentation slides may contain certain 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 depe