Ashmore Group plc · LSE:ASHM
Ashmore — H1 FY2010 Earnings Presentation
35 slides from Ashmore's earnings presentation, Feb 25, 2010
Slide 1: Ashmore Group plc Interim Results
Ashmore Group plc Interim Results 6 months to 31 December 2009 25 February 2010
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 diversification • Financial results • Strategy and outlook • Appendices 2
Slide 4: Highlights
Highlights • Assets under management (“AuM”) of US$31.6 billion at 31 December 2009, an increase of US$6.7 billion (27%) from 30 June 2009 • Total net revenue up 42% to £148.8 million (2008: £104.5 million) − Net management fees(1) down 13% to £88.4 million (2008: £101.9 million) − Performance fees
Slide 5: Assets under management Overview
Assets under management Overview Key highlights • AuM increased by US$6.7bn to US$31.6bn (27%) from 30 June 2009 …good overall AuM growth 4
Slide 6: Subscriptions and redemptions
Assets under management Subscriptions and redemptions …early cycle subscriptions and marked reduction in redemptions 5
Slide 7: Investment performance - public funds
Assets under management Investment performance - public funds Annualised Performance Since Theme Fund Launch Date AuM US$M (1) 1m (2) 6m (2) 1 Year (2) 3 Year (2) 5 Year (2) Launch (2) EMLIP Oct-1992 3,079.0 3.1% 18.7% 35.7% 5.0% 10.7% 21.8% Benchmark (EMBI GD) 0.4% 12.2% 29.8% 6.6% 8.0% 12.1% AEMDF
Slide 8: Investment performance
Assets under management Investment performance Funds outperforming vs. benchmark – 1 year (1) (5) Net (2) Gross (3) Funds outperforming vs. benchmark – 3 years (1) (5) Net (2) Gross (4) Source: Ashmore (un-audited). Source benchmarks: Bloomberg, HSBC, JP Morgan and Morgan Stanley (1) All open-ended
Slide 9: External debt
Update on themes External debt Theme premise • Ashmore’s longest established and largest theme • Principally US Dollar and other hard currency denominated instruments, which may include derivatives, investing in mainly sovereign bonds Facts • Launched 1992 • Management fees(1) £37.5m (2008: £42.7m)
Slide 10: Local currency
Update on themes Local currency Theme premise • Local currency and local currency denominated debt instruments, which may include derivatives, investing in FX and mainly sovereign bonds Facts • Launched 1997 • Management fees(1) £15.3m (2008: 22.4m) • Average mgmt fee margin: 96 bps (2008: 117 bps)
Slide 11: Special situations
Update on themes Special situations Theme premise • Investments in both distressed debt (principally for control) and / or private equity Facts • Launched 2000 • Management fees(1) £21.2m (2008: £21.4m) • Average mgmt fee margin: 215 bps (2008: 185 bps) • Performance fees: £4.5m (2008: £16.2m) 31 DE
Slide 12: Equity
Update on themes Equity Theme premise • Public equity and equity-related securities • Can include equities, convertibles, warrants and equity derivatives Facts • Launched 2000 • Management fees(1) £0.8m (2008: £0.9m) • Average mgmt fee margin: 186 bps (2008: 112 bps) • Performance fees: £2.4m (2008:
Slide 13: Corporate high yield
Update on themes Corporate high yield Theme premise • Investments in corporate debt within emerging markets Facts • Launched 2007 • Management fees(1) £3.4m (2008: £2.6m) • Average mgmt fee margin: 173 bps (2008: 192 bps) • Performance fees: £0.1m (2008: nil) • 1 public fund 31 DEC 2009 Current mark
Slide 14: Multi-strategy
Update on themes Multi-strategy Theme premise • Supplements the core product range, investing into the 5 core themes and any new themes where appropriate • Includes Ashmore Global Opportunities Limited, a permanent capital vehicle, which listed on the LSE on 12 December 2007 Facts • Launched 2003 •
Slide 15: Other
Update on themes Other Theme premise • New themes developed in line with strategy to diversify capabilities and investor base Facts Existing • Fund of third party funds • Liquidity management • Overlay/hedging strategies • Real estate 31 DEC In development 2009 • Infrastructure Current markets / opp
Slide 16: Theme positioning
Update on themes Theme positioning AuM at 31 December 2009 Theme US$bn Positioning External debt 17.6 World order changes emphasise value of Ashmore’s sovereign debt experience Local currency 5.7 Increased investor interest supports long term growth outlook Special situations 3.1 Some realisations a
Slide 17: New funds and classification
Fund diversification New funds and classification • 3 public funds launched: − Ashmore Institutional Multi Strategy Fund − SICAV Emerging Markets Equity Select Fund − Ashmore Russian Real Estate Recovery Fund • 2 dual branded funds launched: − US based fund focussing on local currency − Brazil local
Slide 18: Investor type and geography
Investor analysis Investor type and geography Institutional (1) 31 DEC 31 DEC 92% (91%) 2009 2009 …emerging market capital strongest source of AuM growth (1) Prior period parenthesised. 17
Slide 19: Investor concentration by AuM and total revenue
Investor analysis Investor concentration by AuM and total revenue (1) (1) …positive concentration dynamic driven by client mix effects (1) By AuM / total revenue as at 31 December 2009 (as at 30 June 2009). 18
Slide 20: Income statement
Financial results Income statement Six months ended Six months ended Variance 31 December 2009 31 December 2008 As reported £m £m £m % Net revenue 148.8 104.5 44.3 42 Total operating expenses (42.1) (31.3) (10.8) (35) Operating profit 106.7 73.2 33.5 46 Finance income 5.7 7.1 (1.4) (20) Profit befor
Slide 21: Net revenue
Financial results Net revenue Six months ended 31 Six months ended 31 Variance December 2009 December 2008 As reported £m £m £m % Management fees 89.4 104.6 (15.2) (15) Less: distribution costs (1.0) (2.7) 1.7 63 Net management fees 88.4 101.9 (13.5) (13) Performance fees 53.3 48.9 4.4 9 Other reven
Slide 22: Revenue margins
Financial results Revenue margins • Principal component remains management fees • Performance fees diversified and provide upside opportunity …client mix changes through further segregated mandate wins 21
Slide 23: Performance fees
Financial results Performance fees Six months Six months ended 31 ended 31 December 2009 December 2008 £m £m External debt 33.5 17.4 31 DEC Local currency 12.8 14.9 2009 Special situations(1) 4.5 16.2 Equity 2.4 0.1 Corporate high yield 0.1 - Multi-strategy - 0.3 Other - - Total performance fees 53.
Slide 24: Expenses
Financial results Expenses Six months ended Six months ended 31 31 December 2009 December 2008 Variance £m £m £m % Personnel expenses 6.2 4.9 1.3 27 Variable compensation 26.7 18.3 8.4 46 Other operating expenses 9.2 8.1 0.9 11 Total operating expenses 42.1 31.3 10.8 35 Operating profit margin 71.7%
Slide 25: Operating expenses
Financial results Operating expenses …well controlled cost structure 24
Slide 26: Earnings
Financial results Earnings Six months to Six months to 31 December 31 December Year ended 2009 2008 30 June 2009 £m £m £m Profit before tax 112.4 80.3 159.8 Tax (28.1) (23.3) (44.3) Profit after tax 84.3 57.0 115.5 Net other comprehensive income 1.6 1.3 2.8 Total comprehensive income 85.9 58.3 118.3
Slide 27: Cash flow & balance sheet
Financial results Cash flow & balance sheet Six months Six months Year Six months Six months Year to 31 to 31 ended to 31 to 31 ended 30 December December 30 June December December June 2009 2008 2009 2009 2008 2009 £m £m £m £m £m £m Cash from operations 73.4 108.1 150.9 Total assets 520.1 383.4 399
Slide 28: Our strategy
Strategy and outlook Our strategy …capitalising on increasing investor allocations into, and between, emerging markets 27
Slide 29: Outlook
Strategy and outlook Outlook • Consistent view of the opportunity − Increased importance of emerging markets in global order − Investors allocations to emerging markets increasing − Emerging markets capital will become our largest source in the long term • Ashmore well positioned to benefit − Invest
Slide 30: Appendices
Appendices
Slide 31: Management and performance fees by theme (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 Jun 2006 30 Jun 2007 30 Jun 2008 30 Jun 2009 31 Dec 2009 Net management fees less distribution costs External debt 52.2 71.9 85.1 74.5 37.5 Local currenc
Slide 32: Management and performance fees by theme (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 Jun 2006 30 Jun 2007 30 Jun 2008 30 Jun 2009 31 Dec 2009 Net management fees less distribution costs External debt 92.9 140.2 171.1 120.9 61.2 Local cu
Slide 33: AuM by theme and fund account/classification
Appendix 2 – AuM / product information AuM by theme and fund account/classification US$bn 30-Jun-2006 30-Jun-2007 30-Jun-2008 30-Jun-2009 31-Dec-2009 Investment theme(1) External debt 15.0 20.5 20.9 14.7 17.6 Local currency 2.9 4.0 7.2 4.2 5.7 Special situations 1.2 3.1 4.6 3.3 3.1 Equity 0.4 1.3 0.
Slide 34: 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 35: Ashmore
Ashmore