Jupiter Fund Management Plc · LSE:JUP
Jupiter Fund Management — FY2014 Earnings Presentation
27 slides from Jupiter Fund Management's earnings presentation, 2015
Slide 1: Delivering: 2014 Full Year Results
DELIVERING 2014 Full Year Results
Slide 2: Highlights
2014 FULL YEAR RESULTS 2 Highlights A busy and successful year ■ Continued organic flow growth from core mutual fund franchise ■ Diversifying our product and channel growth prospects ■ Improved infrastructure and organisational capabilities ■ Increased profits and maintained operating margins above
Slide 3: Financials
2014 FULL YEAR RESULTS 3 Financials Philip Johnson Chief Financial Officer ■ Highlights ■ Revenues ■ Net management fee margins ■ Costs ■ EBITDA and underlying EPS ■ Sustainable balance sheet ■ Dividends JUPITERAM.COM
Slide 4: Highlights
2014 FULL YEAR RESULTS 4 Highlights Measure 2013 2014 Change Net revenues £288.5m £303.0m 5% Net revenue margins 90bps 88bps EBITDA £151.5m £155.6m 3% EBITDA margin 53% 51% Underlying EPS 25.2p 26.4p 5% Ordinary dividend 12.6p 13.2p 5% Total dividend 12.6p 24.7p 96% JUPITERAM.COM
Slide 5: Revenues
2014 FULL YEAR RESULTS 5 Revenues Net revenue Net management fees (£ million) Net management fees Net mgt fee margin £ million 2013 2014 % +/- Net management fees 267.1 285.0 +7% 97 285 Net initial charges 15.7 13.1 267 Performance fees 5.7 4.9 88 Net revenue 288.5 303.0 +5% 226 226 Net management f
Slide 6: Net management fee margins
2014 FULL YEAR RESULTS 6 Net management fee margins Key drivers remain growth of fixed income and higher SICAV assets Business mix Commentary 17% H2 H1 H2 H1 H2 97 bps 12 13 13 14 14 Net mgt fee margin 93.4 91.6 89.6 87.2 89.2 13% Long-term rate of decline at 2bp end of Listing 88 guidance of 2-3
Slide 7: Fixed costs
2014 FULL YEAR RESULTS 7 Fixed costs Fixed costs Fixed costs (£ million) £ million 2013 2014 % +/- 47 48 45 Fixed staff costs 43.0 46.3 41 42 40 Other expenses 43.9 49.1 Fixed costs 86.9 95.4 +10% Drivers of increase: International distribution and marketing Hiring front office talent Improv
Slide 8: Variable costs
2014 FULL YEAR RESULTS 8 Variable costs Ratio at low end of guidance range due to equity-settled accounting in period of profit growth Fixed costs Variable costs Variable costs (£ million) and compensation ratio* (£ million) 2013 2014 26 Cash bonus 33.9 36.2 21 17 Deferred bonus 8.5 8.9 17 LTIP, SAY
Slide 9: Earnings progression
2014 FULL YEAR RESULTS 9 Earnings progression Margin maintained above 50% EBITDA1 and margins Underlying earnings per share2 (p) EBITDA (£ million) EBITDA margin (per cent) 54 54 53 CAGR 51 51 11% 26.4 25.2 156 152 135 19.1 19.0 17.6 125 124 2010 2011 2012 2013 2014 2010 2011 2012 2013 2014 1) EBITD
Slide 10: Underlying EPS
2014 FULL YEAR RESULTS 10 Underlying EPS1 Calculation Commentary Amortisation of acquired contracts ended in June £ million 2013 2014 % +/- 2014 Statutory profit before tax 114.1 160.0 +40% Contracts and brand amortisation 38.7 19.2 Amortisation of brand name will be £2m p.a. going forward Optio
Slide 11: Sustainable balance sheet
2014 FULL YEAR RESULTS 11 Sustainable balance sheet Robust post-dividend liquidity and regulatory capital positions Liquidity (£ million) Regulatory capital (£ million) Dividends £ million 2014 Compensation round Ordinary shareholder funds 586 Office fit-out Undeployed seed capital* 96 Less: goodwil
Slide 12: Dividends
2014 FULL YEAR RESULTS 12 Dividends Rewarding our stakeholders Split of available profit1 Dividend progression (pence per share) £21m Ordinary Total: 24.7p Special £11m 10% £53m Return of private client proceeds 4.9 5% 26% 6.6p 14% 6.6 16% £33m 12.6 13.2 29% 7.8 8.8 13.2p 4.7 Staff incentives Corpor
Slide 13: Diversification and growth
2014 FULL YEAR RESULTS 13 Diversification and growth Maarten Slendebroek Chief Executive Officer ■ Strategy ■ Investment performance ■ Net flows ■ Focused mutual fund provider ■ Diversifying by product and channel ■ Scalable business model ■ Delivering value to clients and shareholders JUPITERAM.COM
Slide 14: Strategy
2014 FULL YEAR RESULTS 14 Strategy Diversifying and growing our core mutual fund franchise 1 Deliver outperformance after fees to our clients 2 Sell this expertise through products suited to our distribution strengths 3 Deliver attractive returns to shareholders JUPITERAM.COM
Slide 15: Generating value for our clients
2014 FULL YEAR RESULTS 15 Generating value for our clients Distribution channels focused on three year performance numbers Three year mutual fund performance Commentary Long-term track record maintained 12% Excellent institutional performance with 97% of 21% segregated mandate and investment tru
Slide 16: Investment performance
2014 FULL YEAR RESULTS 16 Investment performance Strong performance in our single strategy funds Three year investment performance Three year performance (excluding Merlin) 100% 100% 90% 90% 80% 80% 70% 70% 67% 60% 60% 51% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4Q 2Q 4
Slide 17: Investment performance in largest ten mutual funds
2014 FULL YEAR RESULTS 17 Investment performance in largest ten mutual funds AUM1 3 year 4th 3rd 2nd 1st performance quartile quartile quartile quartile European £2,591m +61% Income Trust £2,021m +39% Equities UK Special Sits £1,323m +53% UK Growth £1,312m +88% European Special Sits £927m +46% Incom
Slide 18: 2014 net flows and AUM
2014 FULL YEAR RESULTS 18 2014 net flows and AUM Movement in AUM (£ billion) AUM up slightly to £31.9bn, Organic flows Strategic choices Markets driven by healthy underlying 34 organic flow growth 33.5 Mutual funds flows = 7% of 33 1.6 opening AUM 1.5 Continued flow diversification by 32 0.3 p
Slide 19: Mutual fund focus driving consistent flow growth
2014 FULL YEAR RESULTS 19 Mutual fund focus driving consistent flow growth Cumulative net flows (£bn) Focused mutual fund provider, writing consistent net inflows 9.0 across the cycle Mutual funds Institutional Investment trust 8.0 £8.3bn cumulative mutual fund inflows over past six years 7.0
Slide 20: Diversification by product
2014 FULL YEAR RESULTS 20 Diversification by product AUM by asset class (% of total) Evolution and diversification are constant themes as we continually adapt to investor needs Multi-asset UK equities European equities UK equities used to dominate AUM Fixed Income Other Rise of Merlin and, mor
Slide 21: UK distribution
2014 FULL YEAR RESULTS 21 UK distribution Unit trust gross flows (£bn) Merlin UK equities European equities Fixed Income Other 5.2 4.7 Increasing volume of gross sales 4.2 3.9 Product diversification away from Merlin Leading market position with Strategic Bond Growth from UK and European equ
Slide 22: Improved UK client segmentation
2014 FULL YEAR RESULTS 22 Improved UK client segmentation Reshaped and refocused sales structure Broken up one size-fits-all focus on UK IFAs New focused wealth channel team Improved client segmentation Wealth Revitalised marketing efforts New brand Retail Data intelligence opportunity
Slide 23: Diversification and growth from International
2014 FULL YEAR RESULTS 23 Diversification and growth from International Developing global relationships Mutual fund gross flows (£ billion) Jupiter’s SICAV AUM (£ billion) Unit trusts SICAV Fixed Income AUM 8.0 15% Equities AUM 4.3 % age of total mutual fund AUM 6.2 3.0 5.2 4.7 1.9 6% 1.1 2011 2012
Slide 24: Delivering value to shareholders
2014 FULL YEAR RESULTS 24 Delivering value to shareholders Benefits of focus Scalable platform Diversification strategy delivering consistent net Net management fees (£m) inflows Fixed costs (£m) EBITDA* margin (bps) Business mix effect reduces net management fee 285 54 margins but grows revenue
Slide 25: Delivering against our key goals
25 Delivering against our key goals 1 Good progress on implementing our strategy 2 Delivering outperformance after fees 3 Diversifying product and distribution capabilities 4 Increasing cash returns to shareholders 5 Attractive growth prospects JUPITERAM.COM
Slide 26: Q&A
2014 FULL YEAR RESULTS 26 Q&A JUPITERAM.COM
Slide 27: Forward-looking statements
2014 FULL YEAR RESULTS 27 Forward-looking statements This presentation may contain certain “forward-looking the impact of changes in capital, solvency or accounting statements” with respect to certain plans of Jupiter Fund standards, and tax and other legislation and regulations in Management plc (J
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