Ashmore Group plc · LSE:ASHM
Ashmore — H1 2011/12 Earnings Presentation
33 slides from Ashmore's earnings presentation, Feb 23, 2012
Slide 1: Ashmore Group plc Interim Results
Ashmore Group plc Interim Results 6 months to 31 December 2011 23 February 2012
Slide 2: Presentation team
Presentation team • Mark Coombs, Chief Executive Officer • Graeme Dell, Group Finance Director 1
Slide 3: Contents
Contents • Highlights • AuM, update on themes, fund and investor analysis • AshmoreEMM acquisition update • Financial results • Strategy and outlook • Appendices 2
Slide 4: Highlights
Highlights • Assets under management (“AuM”) of US$60.4 billion at 31 December 2011, a decrease of US$5.4 billion (8%) from 30 June 2011 with net inflows maintained across the period • Total net revenue up 4% to £181.0 million (H1 2010/11: £173.7 million) • Net management fees(1) up to £151.4 millio
Slide 5: Assets under management Overview
Assets under management Overview Key highlights Assets under Management (US$bn) 65.8 • AuM decreased by US$5.4bn (8%) to 60.4 US$60.4bn from 30 June 2011 • Q1 net inflows of US$0.2bn; adverse performance US$7.1bn reduced AuM to US$58.9bn 37.5 • Q2 net inflows of US$0.5bn; positive 35.3 performance U
Slide 6: Assets under management Subscriptions and redemptions
Assets under management Subscriptions and redemptions H1 2011/12 AuM Development (US$bn) Redemptions as a % Average AuM by Year 6.7 H1 2012 10% H2 2011 9% H1 2011 7% 0.2 H2 2010 6% 65.8 (6.0) H1 2010 6% H2 2009 14% H1 2009 26% H2 2008 13% 60.4 H1 2008 7% (6.3) H2 2007 5% AuM at June Subscriptions Re
Slide 7: Assets under management Investment performance
Assets under management Investment performance Funds Outperforming vs Benchmark – Gross 1 Year1,2 Funds Outperforming vs Benchmark – Gross 3 Years1,2 100% 100% 80% 80% 60% 60% 40% 40% 20% 20% 0% 0% External Local Corporate Blended Equities Tot al Ext ernal Local Corporate Blended Equit ies Total deb
Slide 8: Assets under management Investment performance
Assets under management Investment performance Ashmore EM External Debt (Broad) Composite Ashmore EM External Debt (Sovereign) Composite 30 30 25 25 20 20 Return (%) Return (%) 15 15 10 10 5 5 0 0 1 yr 3 yrs 5 yrs 10 yrs 1 yr 3 yrs 5 yrs 7 yrs Ashmore EM Local Currency (Broad) Composite Ashmore EM C
Slide 9: Assets under management Investment performance
Assets under management Investment performance Ashmore EM Blended Debt Composite Ashmore EM Global Equity Composite 25 30 20 20 10 Return (%) Return (%) 15 0 10 -10 5 -20 0 -30 1 yr 3 yrs 5 yrs 7 yrs 1 yr 3 yrs 5 yrs 10 yrs Ashmore EM Small Cap Equity Composite Ashmore Latin American Small Cap 30 45
Slide 10: Update on themes: AuM development
Update on themes AuM development AuM as Classified by AuM as Invested in Underlying Asset Mandate (%) Class (%) Overlay/ Overlay/ liquidity liquidity 13% 13% External debt External debt 23% Alternatives 31% 7% Multi-strategy 10% Blended, multi-strategy & crossover investment Alternatives 4% Equities
Slide 11: Update on themes Investment themes
Update on themes Investment themes 10
Slide 12: Update on themes: Theme positioning
Update on themes Theme positioning Theme Outlook EM sovereign debt spreads to narrow with better relative and absolute credit quality offering prospect of strong performance in 2012. External debt Properly priced and risk understood compared to developed world bonds where significant political uncer
Slide 13: Fund diversification: Funds and accounts
Fund diversification Funds and accounts • 3 Ashmore sponsored funds launched: • A new 40-Act small cap equities mutual fund Fund Classification by Number of Funds • Two new SICAV sub funds focused on 135 133 equities and small cap equities 12 12 • Some sponsored accounts were restructured or closed
Slide 14: Investor analysis: Investor type and geography
Investor analysis Investor type and geography AuM by Investor Type AuM by Investor Geography Permanent capital Corporate HNWI/ retail Custodian/ UK Asia administrator Government Pacific Fund of funds Foundation/ endowment Europe Insurance Bank Public pension plan ME and Americas Africa Corporate pen
Slide 15: AshmoreEMM acquisition update
AshmoreEMM acquisition update • Integration on target • Ongoing focus on investment performance • Core portfolio management and fund accounting migrations will be completed to plan • Full equities theme responsibility transferred to AshmoreEMM team • Some accounts and funds closed/restructured to ra
Slide 16: Financial results: Income statement
Financial results Income statement Six months ended Six months ended Variance X31 December 2011 X31 December 2010 As reported £m £m £m % Net revenue 181.0 173.7 7.3 4 Consolidated seed capital (0.8) - (0.8) investments Operating expenses (53.8) (46.2) (7.6) EBITDA 126.4 127.5 (1.1) (1) Depreciation
Slide 17: Financial results: Net revenue
Financial results Net revenue Six months ended Six months ended Variance XXX31 December 2011 XX31 December 2010 As reported £m £m £m % Management fees 152.8 117.2 35.6 30 Less: distribution costs (1.4) (1.1) (0.3) (27) Net management fees 151.4 116.1 35.3 30 Performance fees 23.0 60.1 (37.1) (62) Ot
Slide 18: Financial results: Revenue margins
Financial results Revenue margins Fund Classification by AuM (%) Net Management Fee Margins (bps) H1 2011/12: 76bps 71 14 11 77 18 116 51 H1 2011/12 70 240 49 55 46 127 17 1 1 1 FY 2010/11: 86bps 75 90 35 36 33 169 47 FY 2010/11 102 Dec-10 Jun-11 Dec-11 217 129 Ashmore sponsored Structured product 1
Slide 19: Financial results: Performance fees
Financial results Performance fees 6 months 6 months Year ended Performance Fees by Theme (%) XXXended XXXended 30 June 31 Dec 2011 31 Dec 2010 2011 £m £m £m Alternatives 10% External debt 16.6 55.3 60.2 Equities 2% Local currency 3.6 0.8 1.8 Corporate debt - 0.3 4.9 Blended debt - 1.0 1.0 Local Equ
Slide 20: Financial results: Expenses
Financial results Expenses Six months ended Six months ended 31 December 2011 XX31 December 2010 Variance £m £m £m % Personnel expenses 11.7 7.1 4.6 65 Operating expenses 11.5 7.7 3.8 49 Recurring expenses 23.2 14.8 8.4 57 Variable compensation 30.6 31.4 (0.8) (3) EBITDA operating expenses 53.8 46.2
Slide 21: Financial results: Earnings
Financial results Earnings Six months to 31 December Six months to 31 Year ended 30 2011 December 2010 June 2011 £m £m £m Profit before tax 129.8 127.6 245.9 Tax (33.7) (31.6) (55.7) Profit after tax 96.1 96.0 190.2 Net other comprehensive income (2.2) 8.0 6.7 Total comprehensive income 93.9 104.0 1
Slide 22: Financial results: Cash flow & balance sheet
Financial results Cash flow & balance sheet Six months Six months Year Six months Six months to 31 to 31 ended to 31 to 31 Year December December 30 June December December ended 30 2011 2010 2011 2011 2010 June 2011 £m £m £m £m £m £m Cash from operations 114.0 103.9 253.4 Total assets 630.0 582.1 67
Slide 23: Strategy: H1 2011/12 Update
Strategy and outlook Strategy: H1 2011/12 Update 8% Real GDP Growth Rate 5.9% 6% 5.4% 4% 1.9% 2% 1.2% 0% Emerging Markets Developed markets 2012E 2013E Recent Developments: • Launch of further 40-Act funds and SICAV sub-funds • European regulatory changes driving demand for new investment structures
Slide 24: Investment theme developments: Investment grade debt
Strategy and outlook Investment theme developments: Investment grade debt Highlights Improving Credit Quality – JPM EMBI+ Index % of constituents rated investment grade 60% • EM External Debt is increasingly seen as a diversification from G10 sovereign bonds 40% – Continued developed world sovereign
Slide 25: Investment theme developments: Local currency corporate debt
Strategy and outlook Investment theme developments: Local currency corporate debt Highlights Size of Corporate Debt Market • Dedicated EM corporate debt theme established in 2007 5,368 – JP Morgan Corporate Emerging Markets Bond Index 5,000 4,727 Value of total outstanding (US$bn) (CEMBI) introduced
Slide 26: Strategy and outlook: Outlook
Strategy and outlook Outlook • Market backdrop • Global growth underpinned by emerging markets growth given US and Eurozone growth forecasts • US deleveraging continues and a “permanent Eurozone solution” is likely to remain elusive • These growth characteristics and structural issues give investors
Slide 27: Appendices
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Slide 28: Appendix 1a – GBP / USD revenues (GBP)
Appendix 1a – GBP / USD revenues Management and performance fees by theme (GBP) Year ended Year ended Year ended Year ended 6m ended £ millions 30 June 2008 30 June 2009 30 June 2010 30 June 2011 31-Dec-11 Net management fees less distribution costs External debt 85.1 74.5 79.4 External debt 62.5 30
Slide 29: Appendix 1b – GBP / USD revenues (USD)
Appendix 1b – GBP / USD revenues Management and performance fees by theme (USD) Year ended Year ended Year ended Year ended 6m ended US$ millions 30 June 2008 30 June 2009 30 June 2010 30 June 2011 31-Dec-11 Net management fees less distribution costs External debt 171.1 120.9 124.3 External debt 99
Slide 30: Appendix 2 – AuM / product information
Appendix 2 – AuM / product information AuM by theme and fund account/classification Year ended Year ended Year ended Year ended Year ended 6m ended US$ billions 30 June 2008 30 June 2009 30 June 2010 30 June 2010 30 June 2011 31-Dec-11 Investment theme External debt 20.9 14.7 19.4 External debt 12.3
Slide 31: Appendix 3 - Investment performance - public funds
Appendix 3 - Assets under management Investment performance - public funds Annualised Annualised 3 Annualised Performance Since Launch Year Launch Since Standard Standard Theme Fund Date AuM US$M (1) Launch (2) 1 Year (2) 3 Year (2) 5 Year (2) Deviation Deviation EMLIP Oct-1992 3,244.7 21.1% 9.7% 22
Slide 32: Disclaimer
Disclaimer IMPORTANT INFORMATION This document does not constitute an offer to sell or an invitation to buy shares in Ashmore Group plc or any other invitation or inducement to engage in investment activities. Certain statements, beliefs and opinions in this document are forward-looking, which refle
Slide 33: Ashmore
Ashmore