Slide 1: Half-year results 2018
Half-year results 2018 Presentation 26 July 2018 Peter Harrison Group Chief Executive
Slide 2: Delivering growth across the cycle
Delivering growth across the cycle Revenue growth against a challenging backdrop Peter Harrison Group Chief Executive Evolution of Growth in key areas business model to of strategic investment meet client demand Delivering strategy through Strong gross flows and diversified business model positive n
Slide 3: H1 2018 key financials
H1 2018 H1 2017 Change Net income1 £1,086.1m £974.4m 11% Ratio of total costs to net income1 63% 63% – Profit before tax1 £397.1m £361.5m 10% AUMA2 £449.4bn £417.5bn 8% Net new business £1.2bn £0.8bn – Basic EPS1 114.0p 103.5p 10% Dividend per share 1Before exceptional items. 35p 34p 3% 2 Assets und
Slide 4: Net flows by channel
Net flows by channel £bn 15 10 5 0 -5 2013 2014¹ 2015 2016 2017 H1 2018 Institutional Intermediary Wealth Management 1Excludes Friends Life mandate win of £12bn in December 2014. Industry headwinds impacting client demand £1.2bn Strong client Net inflows in Institutional demand in offset by redempti
Slide 5: Net flows by asset class
Net flows by asset class £bn Demand for outcome- Continued strong oriented products Multi-asset demand 15 £5.0bn and uncorrelated returns 10 net inflows 5 0 -5 Encouraging growth Equity outflows -10 in Private Assets & driven by client 2013 2014¹ 2015 2016 2017 H1 2018 Alternatives restructuring Equ
Slide 6: Net flows by region
Net flows by region £bn 15 10 Positive net new £3.9bn NNB across North business in most regions and Latin America 5 0 Positive UK -5 net inflows, Asia Pacific flat, 2013 2014¹ 2015 2016 2017 H1 2018 despite outflows due to Australian from large UK redemptions insurance client UK EMEA Asia Pacific Am
Slide 7: Richard Keers, Chief Financial Officer
Richard Keers Chief Financial Officer
Slide 8: Profit before tax and exceptional items
Profit before tax and exceptional items £m Compensation Profit before tax Net income costs Non-compensation and exceptional Profit before tax and exceptional (43.7) costs items Profit after tax and items 111.7 397.1 Tax (32.4) before exceptional 361.5 Wealth items 48.7 (81.4) 45.5 Wealth Management
Slide 9: Net income
Net income £m Net operating revenue +£111m Markets and FX Acquisitions +£20m +£49m Other operating Carried Performance Other Net new revenue interest fees income Net income Net income Markets FX business 20 2 1 1,086 29 974 50 (30) 40 Wealth 144 Management 134 Wealth Management Asset Asset Managemen
Slide 10: Institutional net operating revenue
Institutional net operating revenue Annualised revenue on net new business £m £m 500 15 441.2 432.5 11.5 19.6 400 372.8 44.4 10 15.8 13.2 5.0 5.3 300 5 200 396.8 397.1 0 359.6 (0.7) (0.7) (0.6) (1.6) 100 -5 (3.5) 0 -10 H1 2017 H2 2017 H1 2018 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2016 2017 2017 2017 2017 201
Slide 11: Intermediary net operating revenue
Intermediary net operating revenue Annualised revenue on net new business £m £m 492.8 19.9 18.6 500 478.6 20 436.5 19.9 12.8 400 10 6.6 300 1.4 478.6 0 472.9 436.5 200 (1.8) -10 100 (8.9) (13.3) 0 -20 H1 2017 H2 2017 H1 2018 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2016 2016 2017 2017 2017 2017 2018 2018 2016 2017 2
Slide 12: Wealth Management net operating revenue
Wealth Management net operating revenue £m £m Annualised revenue on net new business 139.9 5.0 140 136.1 0.3 5.0 130.8 0.3 0.6 10.8 12.8 3.7 10.6 120 20.6 2.7 19.8 21.0 2.5 100 1.6 1.4 80 0.1 0.0 60 105.2 106.2 (0.5) 98.6 (1.1) 40 -2.5 20 0 -5.0 H1 2017 H2 2017 H1 2018 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Manage
Slide 13: Operating expenses
Operating expenses Annual Results 2017 63% £m Ratio of total 700 706.6 17.6 costs to net 629.2 16.3 income H1 2017: 63% 600 217.0 184.6 500 400 300 612.9 689.0 472.0 200 428.3 Total compensation ratio 43.5% H1 2017: 44.0% 100 0 H1 2017 H1 2018 Compensation costs Non-compensation costs Exceptional it
Slide 14: Group Capital
Group Capital £m £m 4,000 4,000 3,471 3,522 3,471 3,522 3,000 917 3,000 1,165 1,139 1,090 96 580 Working capital – Other Capital surplus 216 392 2,000 2,000 976 565 Working capital – Seed 944 696 and co-investment Dividend¹ 149 147 Investment capital – Liquid 1,000 1,000 Overall regulatory 1,311 1,3
Slide 15: Summary: a growing business delivering on strategy
Summary Net income up A growing business delivering on strategy 11% to £1,086.1m £m [ 974.4 1,086.1 Ratio of total costs to net income 63% Profit before tax and exceptional items up 10% to £397.1m 397.1 361.5 Basic EPS up 10% to 114.0p H1 2017 H1 2018 H1 2017 H1 2018 Interim dividend up Net income A
Slide 16: Peter Harrison, Group Chief Executive
Peter Harrison Group Chief Executive
Slide 17: Key areas of strategic growth
Key areas of strategic growth Investing in future growth drivers Product Fixed North Asia Technology Private Wealth innovation Income and America Pacific Assets & Management and Solutions Multi-asset Alternatives 16 Half-year results 2018
Slide 18: Continued momentum in North America
Continued momentum in North America Strong client demand in key strategic area £bn £2.8bn £2.4bn 6.0 4.0 of net new business net inflows from Institutional clients 2.0 0.0 -2.0 Hartford range £5.1bn £0.6bn -4.0 -6.0 2012 2013 2014 2015 2016 2017 H1 2018 AUM net inflows from Canada Institutional Inte
Slide 19: Growth in Private Assets & Alternatives
Growth in Private Assets & Alternatives £35.8bn Expanding Client demand in first half of investment assets under management £0.8bn expertise 18 Half-year results 2018
Slide 20: Wealth Management
Wealth Management Continued organic growth Strong financial Diversified client Reinforced performance base driving management net inflows team 19 Half-year results 2018
Slide 21: Outlook
Outlook Growth through investment in key opportunities Continued evolution of business towards areas of client demand Driving revenue growth through investment in key strategic areas Delivering strategy through diversified business model
Slide 22: Thank you
Thank you 21 Half-year results 2018
Slide 23: Forward looking statements
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 the