Slide 1: Schroders 2014 Results
Schroders 2014 Results 5 March 2015 Michael Dobson Chief Executive
Slide 2: 2014: record results
2014: record results Continued progress in line with strategic goals Net revenue up 9% to £1,531.2m (2013: £1,407.6m) Profit before tax and exceptional items up 11% to £565.2m (2013: £507.8m) Earnings per share up 17% to 152.7 pence (2013: 130.6 pence) Full year dividend up 34% to 78 pence p
Slide 3: Asset Management
Asset Management Higher gross and net flows Net flows by channel £bn 25 Gross inflows £85.1bn (2013: £70.2bn) 20 Net inflows £24.3bn (2013: £9.4bn) 15 10 Strong results across channels and regions 5 Growth driven by Multi-asset, Fixed Income and Equities 0 2013 2014 Institutional Intermediar
Slide 4: Institutional
Institutional Assets under management: £171.1bn (2013: £144.3bn) Net flows by asset class £bn Net inflows £17.6bn (2013: £4.6bn) 20 of which Friends Life £12.0bn 16 Diversified across Multi-asset, Equities, Fixed Income 12 Strong results in UK, Asia Pacific, Europe 8 4 0 (4) 2013 2014 Equities
Slide 5: Intermediary
Intermediary Assets under management: £97.8bn (2013: £88.5bn) Net flows by asset class £bn 8 Net inflows £6.7bn (2013: £4.8bn) 7 87% in branded funds 6 Strong flows in continental Europe and Asia Pacific 5 Income theme in Multi-asset, Fixed Income, Equities 4 3 2 1 0 (1) (2) 2013 2014 Equiti
Slide 6: Equities
Equities Assets under management: £129.6bn (2013: £119.6bn) Net inflows £4.5bn Emerging markets, Asia, Japan, Dividend Maximiser 76% of AUM outperforming over 3 years Good pipeline of new products Strengthened capability in Global and International 5 2014 Annual Results | March 2015
Slide 7: Multi-asset
Multi-asset Assets under management: £72.0bn (2013: £52.3bn) Net inflows £16.9bn Validates focus on investment outcomes/solutions: income de-risking risk controlled growth 88% of AUM outperforming over 3 years New initiatives in wealth preservation, emerging markets, liquid alternatives 6 20
Slide 8: Fixed Income
Fixed Income Assets under management: £51.1bn (2013: £43.4bn) Net inflows £4.7bn (2013: £0.1bn) Strong flows in euro corporates, global multi-sector 83% of AUM outperforming over 3 years STW fully integrated and maintained top performance track record Key product areas reaching 3-year trac
Slide 9: Wealth Management
Wealth Management Assets under management: £31.1bn (2013: £30.1bn) Net revenues up 42% to £213.5m (2013: £150.0m) performance fees and release of loan loss provision: £9.0m Profit before tax and exceptional items up 80% to £61.7m (2013: £34.3m) Full year from Cazenove Capital Integration com
Slide 10: Schroders 2014 Results - Chief Financial Officer
Schroders 2014 Results 5 March 2015 Richard Keers Chief Financial Officer
Slide 11: Financial highlights
Financial highlights Net revenue, including performance fees (£m) Profit before tax (£m) Exceptional items (£m) 1,600 1,531 1,408 37 600 565.2 1,400 81 507.8 1,153 500 48.1 1,135 60.3 1,200 38 29 1,000 400 800 300 600 200 400 200 100 1,115 1,106 1,327 1,494 407.3 360.0 447.5 517.1 0 0 2011 2012 2013
Slide 12: Net revenue
Net revenue Increase of £123m £m Markets and FX Performance fees Net new business 33 (44) Other revenue* Net revenue Exceptional 57 11 1,531 items Net revenue 1,408 123 3 Wealth New business from acquisitions Management 66 213 Wealth Management 150 Asset Asset Management Management 1,247 1,304 Group
Slide 13: Asset Management net revenues (1)
Asset Management net revenues (1) £m 600 583 557 28 35 489 500 24 400 300 555 522 465 200 100 0 2012 2013 2014 Institutional Performance fees 12 2014 Annual Results | March 2015
Slide 14: Asset Management net revenues (2)
Asset Management net revenues (2) Net revenue margins, excluding performance fees, at 52 bps £m 800 721 690 6 700 45 600 583 557 526 28 489 4 35 500 24 400 715 645 300 522 522 555 465 200 100 0 2012 2013 2014 Institutional Intermediary Performance fees 13 2014 Annual Results | March 2015
Slide 15: Wealth Management net revenues
Wealth Management net revenues Net revenue margins, excluding performance fees, 67 bps* (2013: 64 bps) £m 240 213.5 9.0 14.6 190 35.1 150.0 140 13.6 26.7 94.4 90 13.8 19.8 154.8 109.7 40 68.7 (10) (7.9) 2012 2013 2014 Management fees Transaction fees Net banking interest income Loan loss (provisions
Slide 16: Profit before tax and exceptional items
Profit before tax and exceptional items Increase of £57m £m Net revenue 120 Net finance income/JVs and Profit before tax associates and exceptional items Profit before tax 1 565 Compensation costs and exceptional items Other costs Wealth (35) 508 (29) Management Wealth 62 Management 34 Asset Managem
Slide 17: Operating expenses
Operating expenses Before exceptional items 2014 Asset Management & Wealth £m 2013 Group Management Total 2014 versus 2013 Compensation costs 652.5 592.9 94.9 687.8 +5% Other costs 254.7 224.6 55.9 280.5 +10% Depreciation and amortisation 12.5 15.0 1.0 16.0 +28% Total 919.7 832.5 151.8 984.3 +7% Hea
Slide 18: Exceptional items
Exceptional items 2014 Wealth £m Asset Management Management Group Total Integration and restructuring costs (3.7) (8.3) - (12.0) Amortisation of acquired intangible assets (13.9) (9.2) - (23.1) Deferred compensation arising from acquisitions - - (12.9) (12.9) Other items - (2.9) 2.8 (0.1) Total (17
Slide 19: Group segment before exceptional items
Group segment before exceptional items £m 2013 2014 £m 2013 2014 Net revenue 10.4 11.4 Investment capital return 16.3 20.9 Seed capital return 2.6 2.5 Operating expenses (19.1) (23.5) Other returns 4.0 7.0 Net finance income 12.1 11.6 Total returns 22.9 30.4 Share of profit of associates 1.5 4.7 Ope
Slide 20: Tax charge
Tax charge 2013 2014 Change 2014 v 2013 Before After Before After before Exceptional Exceptional exceptional exceptional exceptional exceptional exceptional items items items items items items items Profit before tax – £m 507.8 (60.3) 447.5 565.2 (48.1) 517.1 +57.4 +11% Tax – £m (103.0) 8.2 (94.8) (
Slide 21: Movement in Group capital
Movement in Group capital Increase of £269m as at 31 December 2014 £m Other Dividends Defined benefit pension (3) (178) scheme surpluses 37 Profit after tax and exceptional items 413 Group capital Group capital 2013 2014 £2,269m £2,538m 1 January 2014 31 December 2014 20 2014 Annual Results | March
Slide 22: Group capital allocation
Group capital allocation Increase of £269m as at 31 December 2014 December December £m 2013 2014 Investment capital breakdown (%) Regulatory capital 603 673 Fixed income: cash and government bonds Other operating capital 311 284 9% Fixed income: corporate 6% 24% investment grade Fixed income: corpor
Slide 23: 2014 Annual Results | March 2015
22 2014 Annual Results | March 2015
Slide 24: Forward-Looking Statements
Forward-Looking Statements This presentation may contain forward-looking statements with respect to the financial condition, performance and position, strategy, results of operations and businesses of the Schroders Group. Such statements and forecasts involve risk and uncertainty because they are ba