Ninety One Plc · LSE:N91
Ninety One — FY2023 Earnings Presentation
39 slides from Ninety One's earnings presentation, May 17, 2023
Slide 1: Full-year Results 2023
Full-year Results 2023 Presentation 17 May 2023
Slide 2: Business Review
Full-year Results 2023 Business Review
Slide 3: FY 2023 key messages
FY 2023 key messages – Solid financial performance, cost discipline – Significant headwinds, risk-off environment – Extensive client engagement – Competitive investment performance – Consistent strategy, aligned with structural opportunities – Committed and motivated people Long-term business buildi
Slide 4: Long-term track record
Long-term track record Domestic growth Internationalisation Scaling post crisis Growing in a world of change 1992-1998 1998-2009 2009-2020 2020-2023 AUM CAGR +93% +19% +12% +8% 140bn £220,000 120bn £129.3bn 100bn £165,000 80bn £110,000 60bn 40bn £55,000 20bn 0bn £0 Assets under management (AUM) Prof
Slide 5: Business model and differentiators
Business model and differentiators Business model Differentiators – Specialist active investment manager – Track record – People centric, capital light – Owner culture – Organic – EM heritage – Client focused – Superior reach, given scale – Technology enabled Performance driven 5
Slide 6: Our purpose
Our purpose Better Better Better firm investing world Investing for a better tomorrow 6
Slide 7: FY 2023 results
FY 2023 results FY 2023 FY 2022 Change % Assets under management (AUM) £129.3bn £143.9bn (10) Average AUM £134.9bn £138.6bn (3) Net flows (£10.6bn) £5.0bn n.m. 1-year firm-wide outperformance 57% 50% 3-year firm-wide outperformance 71% 68% Adjusted operating profit £206.9m £230.4m (10) Adjusted oper
Slide 8: Market and business conditions
Market and business conditions – Challenging market conditions – Persistent high inflation – Dramatic rise in interest rates – UK LDI shock – Bank failures – Disruptive geopolitics – Risk-off environment – Growing regulatory burden Resilient business, positioned for the long term 8
Slide 9: AUM and flows
AUM and flows 5 year AUM CAGR of 4% 5.9% 5.4% (0.2%) 3.8% (7.4%) 8.0 (3.2) (8.4) 5.0 27.7 (7.4) 4.4 143.9 £ billion 1.4 6.0 (14.0) 6.1 129.3 74 62 (0.2) 61 59 103.9 41 34 33 FY 18 FY 19 FY 20 FY 21 FY 22 H1 23 FY 23 Net inflows Net outflows Portfolio growth Annual torque ratio 9
Slide 10: Net flows by asset class (£'m)
Net flows by asset class (£’m) FY 2022 FY 2023 7,000 500 5,000 284 215 3,000 1,572 1,000 2,445 330 42 (1,000) (2,942) (3,000) (5,000) (6,912) (7,000) (9,000) (1,166) (11,000) FY 2022 FY 2023 Fixed income Equities Multi-asset Alternatives SA fund platform 10
Slide 11: Net flows by Client Group (£'m)
Net flows by Client Group (£’m) FY 2022 FY 2023 7,000 500 5,000 1,555 3,000 782 1,000 1,801 378 (1,000) (2,283) (3,000) (1,170) (1,521) (5,000) (954) (7,000) (4,720) (9,000) (11,000) FY 2022 FY 2023 United Kingdom Africa Europe Americas Asia Pacific 1 Note: 1. Asia Pacific includes Middle East. 11
Slide 12: Net flows by client type (£'m)
Net flows by client type (£’m) FY 2022 FY 2023 6,100 5,500 4,900 4,300 3,700 2,532 3,100 2,500 1,900 1,300 700 2,484 100 (500) (239) (1,100) (1,700) (2,300) (2,900) (3,500) (4,100) (4,700) (5,300) (5,900) (10,409) (6,500) (7,100) (7,700) (8,300) (8,900) (9,500) (10,100) (10,700) (11,300) (11,900) FY
Slide 13: Firm-wide investment performance
Firm-wide investment performance 31 March 2022 31 March 2023 Since Since 78% 22% inception 75% 25% inception 10 year 86% 14% 10 year 81% 19% 5 year 80% 20% 5 year 76% 24% 3 year 68% 32% 3 year 71% 29% 1 year 50% 50% 1 year 57% 43% Outperformance Underperformance 13
Slide 14: Mutual funds investment performance
Mutual funds investment performance 31 March 2022 31 March 2023 10 year 32% 38% 23% 7% 10 year 53% 14% 28% 5% 5 year 21% 36% 32% 10% 5 year 38% 38% 19% 5% 3 year 16% 33% 33% 18% 3 year 27% 12% 38% 23% 1 year 26% 10% 36% 28% 1 year 49% 23% 19% 8% 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile No
Slide 15: Sustainability with substance
Sustainability with substance – Advocating for a fair transition, inclusive of emerging economies – Working with industry groups to develop frameworks to support decarbonisation – Growing our portfolio of sustainable strategies – Implemented the Ninety One transition plan by focusing on the transiti
Slide 16: Progress on our transition plan
Progress on our transition plan Transition to net zero by 2050 or sooner Transitioning our investments Transitioning our operations Our continued activity Advocate Disclose 46% Reduction in Scope 1 and 2 Build 50% have science-based of financed missions to SBTi aligned1 Targets emissions by 20302 fo
Slide 17: People and culture
People and culture – Committed and motivated staff – Deliberately building an intergenerational business – Headcount discipline – Compensation aligned with outcomes – Growing staff ownership People centric, talent friendly, owner culture 17
Slide 18: Financial Review
Full-year Results 2023 Financial Review
Slide 19: Financial results
Financial results £ million FY 2023 FY 2022 Change % Adjusted operating revenue 633.0 663.9 (5) Adjusted operating expenses (426.1) (433.5) (2) Adjusted operating profit 206.9 230.4 (10) Adjusted net interest income 9.4 3.7 n.m Share scheme (3.7) 18.1 n.m Silica disposal - 14.9 n.m Profit before tax
Slide 20: Adjusted operating revenue
Adjusted operating revenue £ million FY 2023 FY 2022 Change % Management fees 607.7 632.8 (4) Performance fees 19.4 31.1 (38) Net revenue 627.1 663.9 (6) Share of profit from associates 1.4 0.4 n.m. Other income/(loss) 4.5 (0.4) n.m. Adjusted operating revenue 633.0 663.9 (5) Average AUM Average fee
Slide 21: Adjusted operating expenses
Adjusted operating expenses Employee remuneration Business expenses £ million Note: Impacts are estimated based on prevailing inflation and exchange rates. 21
Slide 22: Business and total expenses
Business and total expenses Total expenses remained static relative to average AUM 160 40 35.5 34.1 34.1 33.7 139 140 33.1 135 35 118 120 120 31.6 30 108 31.3 100 100 25 87 80 20 60 11.8 15 11.5 11.6 11.2 10.5 10.5 10.0 40 10 20 5 0 0 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23 Average AUM (£'bn) Busi
Slide 23: Adjusted operating profit analysis
Adjusted operating profit analysis £ million FY 2022 Management Performance Other Employee Business FY 2023 fees fees income items remuneration expenses 23
Slide 24: Capital and dividend
Capital and dividend £ million 31 March 2023 31 March 2022 Equity 349.9 341.6 Non-qualifying assets (35.3) (27.6) Qualifying capital 314.6 314.0 Dividends proposed (61.7) (71.0) Estimated regulatory requirement (115.7) (114.2) Estimated capital surplus 137.2 128.8 Full-year dividend Capital coverage
Slide 25: Conclusions and Outlook
Full-year Results 2023 Conclusions and Outlook
Slide 26: Access to significant growth opportunities
Access to significant growth opportunities – Global and international equity – EM equity – EM fixed income (including specialist credit) – Sustainability and impact Well-recognised in our markets 26
Slide 27: A granular look at the major growth opportunities
A granular look at the major growth opportunities c.£7tr AUM Thematic Equities Global International Global EM Global EM Fixed (incl. Sustainable) Equities Equities Equities Income addressable market within £2.2tr £2.2tr £1.4tr £0.7tr £0.4tr our core investment competencies 0.04% - 2.66% our current
Slide 28: Concluding remarks
Concluding remarks – Market conditions have not been supportive to our offering – Skill sets with client relevance over the long term – Competitive investment performance – Deep client relationships and global reach – Highly motivated, invested and committed people Multi-decade track record of succe
Slide 29: Outlook
Outlook – Market conditions remain challenging and may remain so for some time – Signs of improving demand – Focus on execution, avoid distractions – We are confident in our ability to regain growth momentum Resilience is core to Ninety One 29
Slide 30: Marcus Aurelius quote
“You have power over your mind – not outside events. Realise this, and you will find strength.” Marcus Aurelius 30
Slide 31: Q&A
Q&A
Slide 32: Glossary and definitions
Glossary and definitions Adjusted EPS is adjusted earnings attributable to shareholders, divided by the number of ordinary shares in issue at the end of the period. Slide 7, 19 Adjusted net interest income is calculated as net interest income or expense adjusted to exclude interest expense on lease
Slide 33: Our offering
Our offering £59.8bn £33.0bn £22.6bn £4.0bn Core asset class offerings1,2 FY22: £68.0bn FY22: £36.7bn FY22: £25.2bn FY22: £4.1bn Equities Fixed income Multi-asset Alternatives Client demand Our offering provides active specialist and outcomes based strategies Notes: 1. Figures shown as at 31 March 2
Slide 34: Global reach
Global reach 21 Offices worldwide 5 Primary investment centres 5 Regionally defined Client Groups: Americas United Kingdom Teams in each office: Europe Client Group Africa Operations Asia Pacific Investment team Note: As at 31 March 2023. 34
Slide 35: AUM split
AUM split By asset class By Client Group By client type 8% 3% 16% 19% 36% 17% 46% 13% 64% 12% 26% 40% Equities United Kingdom Advisor Fixed income Africa Institutional Multi-asset Europe Alternatives Americas SA fund platform Asia Pacific 1 Notes: Breakdown of AUM as at 31 March 2023. 1. Asia Pacifi
Slide 36: AUM by strategy
AUM by strategy Equities Fixed income Multi-asset Alternatives £59.8bn £33.0bn £22.6bn £4.0bn Global Global Absolute Return Growth SA and Africa credit Income Credit Regional Emerging markets (EM) EM sovereign and currency EM inc. Africa / SA Private credit Asia (inc. China) Africa (inc. SA) fixed i
Slide 37: AUM by client type
AUM by client type Institutional AUM by client type Advisor 7% 16% 19% 32% 45% 64% £82.8bn £129.3bn 36% 21% £46.5bn 30% 31% Pension funds Advisor Private banks / wealth managers / FOF 2 Corporates / insurance / other 1 Institutional Retail banks / insurance / IFA 3 Public authorities / official inst
Slide 38: AUM by emerging/developed markets
AUM by emerging/developed markets By client location By investment strategy 43% Emerging markets 50% 50% Developed markets 57% Note: AUM as at 31 March 2023. 38
Slide 39: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared by Ninety One plc and Ninety One Limited (together, “Ninety One” and, together with their subsidiaries from time to time, the “Group”). This Presentation is provided on a strictly private and confidential basis for information purpo