Schroders Plc · LSE:SDR
Schroders — H1 2022 Earnings Presentation
31 slides from Schroders's earnings presentation, Jul 28, 2022
Slide 1: Half Year Results 2022
HALF YEAR RESULTS 2022 28 July 2022 Peter Harrison Group Chief Executive Schroders Half Year Results 2022
Slide 2: Wealth Management, Private Assets and Solutions generating positive net new business growth
Net operating income (£m) 1,240.3 1,209.5 Operating profit (£m) 406.9 399.6 Wealth Management, Private Assets and AUM (£bn) 773.4 734.11 Solutions generating positive net new Net new business (£bn) 8.4 18.7 business growth Basic EPS (pence) 92.3 107.7 Total dividend per share (pence) 37.0 37.0 2 1Re
Slide 3: AUM development
Driven by S&P -20.6%, MSCI Europe ex UK -19.4% and negative bond markets AUM development £bn 800 Significant negative 750 52.0 market effect of 8.4 (87.9) £87.9bn 700 34.2 AUM growth supported 650 773.4 by positive NNB and FX 766.7 600 Acquisitions added 550 £52.0bn 500 FY 2021 Markets FX Net flows
Slide 4: Net new business by business area
Net new business by business area £bn 25.0 18.6 £8.4bn of NNB 18.7 8.4 20.0 15.0 £14.9bn of NNB into 10.0 strategic growth areas 5.0 0.0 77% outperforming over 3 years (5.0) (10.0) 79% outperforming (15.0) over 5 years H1 2021 H2 2021 H1 2022 Wealth Management Private Assets and Alternatives Solutio
Slide 5: Asset management NNB by asset class and region
Asset management NNB by asset class, excl. JVs and associates Asset management NNB by region, excl. JVs and associates £bn £bn Multi Asset 4.5 UK 10.3 Latin America 0.2 Private Assets and Alternatives 4.8 APAC (3.8) Equities (2.6) North America (3.3) Fixed Income (6.1) EMEA ex UK (2.8) Multi Asset a
Slide 6: Mutual Funds and Institutional net new business by region
Mutual Funds net new business by region Institutional net new business by region £bn £bn 1.0 0.6 1.0 0.3 0.1 0.0 0.0 (0.2) (1.0) (0.3) (1.0) (0.4) (0.7) (2.0) (2.0) (3.0) (2.8) (3.0) (4.0) (3.0) (4.1) (4.0) (5.0) UK EMEA APAC North Latin America UK EMEA APAC North Latin America America America Mutua
Slide 7: For our clients, for our business
For our clients For our business 5th Published our Signatory to the in NMG’s global path to Net Zero Natural Capital sustainability brand ranking for our business and for our investments Investment Alliance MSCI ESG Rating of Largest asset manager Acquired 75% of Partnered with Greencoat Capital Con
Slide 8: Acquisitions completed: R&M solutions, Greencoat Capital, Cairn Real Estate
River and Mercantile’s Greencoat Capital Cairn Real Estate solutions business − Leading fiduciary − Leading European renewable − Dutch Real Estate manager management business infrastructure manager − Completed January 2022 in the UK − Completed Q2 2022 − Completed January 2022 − £43.1bn of AUM onboa
Slide 9: Private Assets and Alternatives: AUM £69.4bn
Net new business2 AUM diversification £bn Dry powder not £bn yet invested/ 8.0 recognised as NNB 8.1 4.4 7.0 3.4 3.0 Continued momentum 6.0 in fund raising 1.8 AUM 11.5 5.0 £69.4bn (excl. dry Won £1.8bn of 4.0 2.8 6.9 25.6 powder) commitments not yet 3.0 recognised as NNB 4.8 10.6 2.0 2.6 2.8 Nearly
Slide 10: Solutions: average of 1.5 mandate wins per week since closing
Net new business Assets under management £bn £bn 50.0 250 225.7 45.0 43.4 AUM growth supported 40.0 192.3 198.1 by £43.1bn R&M 200 34.5 acquisition 35.0 30.0 150 142.8 Two strategic client 25.0 wins: Centrica and 20.0 Lloyds of London 95.9 100 15.0 Average of 1.5 mandate 10.0 wins per week since 6.3
Slide 11: Wealth Management net new business and AUM
Net new business Advised £3.0bn Assets under management £bn Platform £0.5bn £bn Managed £0.3bn 5 120 Updated AUM 4.1 21bps 40bps methodology reflects 100 4 3.8 the revenue streams of 3.2 15bps 19.7 the services we offer 80 3 53bps 17.2 Most relevant for 60 2.1 Benchmark’s Aspect 8, 2 96.0 Best Pract
Slide 12: Joint ventures and associates: AUM and NNB
Net new business Assets under management £bn £bn 14.0 137 13.0 135.9 136 Axis’ market share 12.0 now 6.8% 135 10.0 134 BOCOM FMC JV 8.0 133 AUM up despite 7.1 a hard lockdown 6.0 132 131.1 4.0 131 SPW generated NNB 4.0 of £0.2bn 130 2.0 129 0.0 128 H1 2021 H2 2021 H1 2022 FY 2021 H1 2022 12 1Joint v
Slide 13: Half Year Results 2022 – Richard Keers, CFO
HALF YEAR RESULTS 2022 28 July 2022 Richard Keers Chief Financial Officer Schroders Half Year Results 2022
Slide 14: Wealth Management and Solutions services AUM reporting
Providing multiple services to the same client Opening AUM 81.2 Restatement 20.4 14.7 Services are subject to separate contracts Restated opening 61.4 18.7 21.5 101.6 14.7 and generate incremental revenue Net new business 3.0 0.5 0.3 3.8 0.2 Acquisitions 0.1 0.1 - Additional granularity and transpar
Slide 15: Operating profit and profit before tax
£m H1 2022 H1 2021 Change Average AUM1 Net operating income 1,240.3 1,209.5 3% +7% to £646.2bn Operating expenses (833.4) (809.9) (3%) Operating profit 406.9 399.6 2% Operating profit +2% H1 2021: £399.6m Profit before tax 312.8 373.9 (16%) 15 1Excluding associates and joint ventures. Schroders Half
Slide 16: Net operating income bridge
£m Real estate Markets and Performance Banking transaction 1 H1 2021 Mix FX NNB Acquisitions fees and carry interest fees Other income YTD 2022 1,400 1,209.5 37.2 (25.1) 7.6 6.8 5.7 1,240.3 (71.6) 24.0 46.2 1,200 185.8 202.5 1,000 (47.6) 800 600 1,023.7 1,037.8 400 200 0 H1 2021 H1 2022 Asset Manage
Slide 17: Net operating revenue, NNB and margin (Mutual Funds)
Net operating revenue Net new business (NNB) and annualised net new revenue (ANNR) £m 194.0 193.2 NNB ANNR Net operating 200 5.6 £bn £m revenue margin1 29.9 9.1 7 60 160 156.7 14.1 8.8 6 50 62bps 2.3 5 FY 2021: 62bps 40 120 4 30 3 80 178.5 20 155.3 2 140.3 1 10 Average AUM 40 0 Q1 Q2 Q3 Q4 Q1 Q2 0 £
Slide 18: Net operating revenue, NNB and margin (Institutional)
Net operating revenue Net new business (NNB) and annualised net new revenue (ANNR) £m NNB ANNR Net operating 160 £bn £m 144.8 147.4 revenue margin1 3.3 10 10 131.6 13bps 120 5 5 FY 2021: 14bps 80 0 0 144.8 144.1 131.6 (5) (5) 40 Average AUM (10) Q1 Q2 Q3 Q4 Q1 Q2 (10) £222.7bn 0 H1 2021: £191.7bn H1
Slide 19: Net operating revenue, NNB and margin (Solutions)
Net operating revenue Net new business (NNB) and annualised net new revenue (ANNR) £m NNB ANNR Net operating £bn £m 401.9 413.1 3.0 revenue margin1 400 0.4 379.7 6 0.3 60 70bps 4 FY 2021: 72bps 300 40 2 200 379.4 20 410.1 401.5 0 0 100 Average AUM (2) Q1 Q2 Q3 Q4 Q1 Q2 (20) £109.0bn 0 H1 2021: £109.
Slide 20: Net operating revenue, NNB and margin (Private Assets and Alternatives)
Net operating revenue Net new business (NNB) and annualised net new revenue (ANNR) £m NNB ANNR Net operating 350 £bn £m 317.0 revenue margin1 6 25 300 284.0 28.8 49.9 263.1 11.9 32bps 250 15 3 FY 2021: 31bps 200 5 0 150 (5) 267.1 251.2 255.2 (3) 100 (15) Average AUM 50 (6) Q1 Q2 Q3 Q4 Q1 Q2 (25) £15
Slide 21: Net operating revenue (Wealth Management)
Net operating revenue H1 2022 £m £bn Advised Platform Managed Net operating 200 194.6 revenue margin1 184.5 Average AUM 60.1 18.0 21.0 175.5 5.3 15.3 5.8 21.3 12.9 Net operating 40bps 21.3 159.3 13.3 22.0 revenue 150 FY 2021: 38bps Margin1 53bps 15bps 21bps 100 H1 2021 163.4 148.9 160.4 50 £bn Advis
Slide 22: Joint ventures and associates results
H1 2022 SPW Axis BoCom Other Total Total revenue (£m) 63.2 46.6 173.1 42.1 325.0 AUM Profit after tax (£m) 6.4 19.6 99.7 15.8 141.5 £135.9bn Group's share of profit (£m)1 3.2 4.9 29.9 3.6 41.6 Contribution to Group’s PAT 16% H1 2021: £112.2bn3 Revenue margin2 40bps AUM (£bn) 135.9 H1 2021 SPW Axis B
Slide 23: Operating expenses and central costs
Operating expenses and central costs Compensation and non-compensation costs £m £m Operating expenses to net operating 1000 1000 income ratio 837.0 856.6 837.0 856.6 800 27.1 23.2 800 67% 264.8 308.2 H1 2021: 67% 600 600 400 809.9 833.4 400 572.2 548.4 200 200 Cloud migration programme 0 0 on track
Slide 24: Operating profit to profit before tax
£m H1 2022 H1 2021 Change Operating profit 406.9 399.6 2% Central costs (23.2) (27.1) Net (loss)/gain on financial instruments and other income (35.2) 32.6 Interest income/(expense) 1.4 (1.1) Acquisition related costs (13.2) (8.9) Amortisation of acquired intangible assets (23.9) (21.2) Profit befor
Slide 25: Capital base and capital allocation
Capital base Capital allocation £m £m 4,426 4,336 4,426 4,336 4,000 622 4,000 1,454 101 1,403 1,450 3,000 1,359 3,000 233 666 526 47 2,000 1,220 780 59 2,000 58 1,000 2,254 2,254 1,000 1,519 1,519 0 0 31-Dec-2021 30-Jun-2022 31-Dec-21 30-Jun-22 Capital surplus Dividend1 Working capital – regulatory
Slide 26: Profit, basic EPS and interim dividend
Operating profit Profit after tax £m £m 500 399.6 406.9 304.6 258.4 250 0 H1 2021 H1 2022 H1 2021 H1 2022 Basic EPS Interim dividend remains at -14% to 92.3p 37p 26 Schroders Half Year Results 2022
Slide 27: Outlook
OUTLOOK Peter Harrison Group Chief Executive Schroders Half Year Results 2022
Slide 28: Outlook: economic and market backdrop
We anticipate the Implement growth Deliver against our Our diversified economic and plans for our newly NNB targets in business model and market backdrop acquired businesses Wealth Management robust balance will remain difficult and Private Assets sheet will enable us and Alternatives to benefit fro
Slide 29: Questions
QUESTIONS Schroders Half Year Results 2022
Slide 30: Thank you
THANK YOU Schroders Half Year Results 2022
Slide 31: Forward-looking statements
These presentation slides 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 based on current expe