Slide 1: Schroders 2016 Full Year Results
Schroders 2016 Full Year Results 2 March 2017 Peter Harrison | Group Chief Executive
Slide 2: Full year 2016 results
Full year 2016 results Strong results in challenging conditions 7% increase in dividend to 93 pence Positive net new business Acquisitions and partnerships in line with strategic growth drivers – Institutional – North America 2015 2016 % change Net income (£m) 1,658.5 1,793.1 8% Pre-exceptio
Slide 3: Strong investment performance
Strong investment performance % 90 Strong, and improving, investment performance 85% across asset classes: 80 – Fixed Income 75% 76% 74% 72% – Multi-asset 70 – Real Estate – Emerging Market Debt 60 53% – Equities 50 40 1 year 3 years 5 years 2015 2016 2 2016 Full Year Results | March 2017
Slide 4: Net new business by channel
Net new business by channel Flows led by Institutional demand £bn 18 Continued inflows in Institutional – North America 13 – UK 8 Intermediary sentiment affected by macro uncertainty 3 Small outflows in Wealth Management -2 -7 2011 2012 2013 2014* 2015 2016 Institutional Intermediary Wealth Ma
Slide 5: Net new business by region
Net new business by region Global diversification proves resilient £bn 18 Strong new business in Europe and North America 13 Mixed picture in Asia Pacific – Japan net inflows 8 – Australia net outflows 3 Net inflows in UK Institutional -2 -7 2011 2012 2013 2014* 2015 2016 UK Europe Asia Pacifi
Slide 6: Net new business by asset class
Net new business by asset class Macro concerns subdue risk appetite £bn 18 Risk-off environment driven by macro uncertainty 13 Continued demand for Fixed Income 8 Strong sales in Multi-asset 3 Equity outflows – but with exceptions -2 -7 -12 2011 2012 2013 2014* 2015 2016 Equities Fixed Incom
Slide 7: A diversified and stable business
A diversified and stable business With increasing asset class diversification £bn 450 400 350 300 250 200 150 100 50 0 2011 2012 2013 2014 2015 2016 Equities Fixed Income Multi-asset EMD, Commodities and Real Estate Wealth Management 6 2016 Full Year Results | March 2017
Slide 8: A diversified and stable business
A diversified and stable business Leading But a year-on-year to a declineincrease in net operating in pre-exceptional revenue margins profits bps £m 60 450 700 400 600 55 350 500 300 50 250 400 200 300 45 150 200 100 40 100 50 35 0 0 2011 2012 2013 2014 2015 2016 Equities Net operating Fixed Income
Slide 9: Schroders 2016 Full Year Results
Schroders 2016 Full Year Results 2 March 2017 Richard Keers | Chief Financial Officer
Slide 10: Profit before tax and exceptional items
Profit before tax and exceptional items Profit before tax and exceptional items up 6% to £644.7m £m Compensation Net income costs 134.6 (57.6) Profit before tax Other costs Profit before tax (42.0) and exceptional and exceptional items Tax items 644.7 (132.4) 609.7 Wealth Profit after tax and Wealth
Slide 11: Assets under management and administration (AUMA)
Assets under management and administration (AUMA) AUMA up 27% to £397.1bn £bn Markets Net new business AUMA 22 1 397bn FX 42 AUA Acquisitions of AUA 11 Acquisitions Wealth AUM 11 Management 7 314bn 40 Wealth Management 32 Institutional 226 Institutional 181 Intermediary Intermediary 120 101 2015 201
Slide 12: Net income
Net income Net income up 8% to £1,793m £m Net gains on financial FX Performance fees instruments and other income Net income 122 5 22 1,793 Net income Acquisitions Wealth 10 Markets and re-pricing Net new business 1,659 Management (14) (11) Wealth 224 Management 207 Net operating revenue up £112m As
Slide 13: Institutional net operating revenue
Institutional net operating revenue £m 800 Average AUM up £27 billion from FY 2015 692.5 700 27.2 628.7 600 571.7 26.2 27.8 500 Net operating revenue margin excluding performance fees 32bps (FY 2015: 34bps) 400 665.3 300 602.5 543.9 200 Closing AUM at record high of £226.3 billion 100 0 2014 2
Slide 14: Intermediary net operating revenue
Intermediary net operating revenue £m 1000 Average AUM up £7 billion from FY 2015 900 764.7 797.0 800 11.6 716.4 9.5 700 6.4 Net operating revenue margin excluding performance 600 fees 73bps (FY 2015: 74bps) 500 400 755.2 785.4 710.0 300 200 Closing AUM at record high of £120.1 billion 100 0 2
Slide 15: Wealth Management net operating revenue
Wealth Management net operating revenue £m Net banking interest up £5.1 million 240 223.3 220 206.8 207.3 2.4 2.9 0.6 20.6 200 14.6 15.5 180 38.8 34.5 36.0 160 Net operating revenue margin excluding performance 140 fees 65bps (FY 2015: 65bps) 120 100 80 154.8 155.2 161.5 60 40 Closing AUM at r
Slide 16: Operating expenses
Operating expenses Costs in line with projections 2016 AM £m 2015 & Group WM Total Compensation costs 734.0 688.5 103.1 791.6 Non-compensation costs 314.8 302.3 54.5 356.8 Operating expenses (excluding 1,048.8 990.8 157.6 1,148.4 exceptional items) Exceptional expenses 18.5 13.1 10.1 23.2 Operating
Slide 17: Analysis of Group Capital
Analysis of Group Capital Increase of £357m as at 31 December 2016 £m 2015 2016 Strong capital position Regulatory capital 653 814 Other operating capital 253 65 Continued investment in seed capital Investment capital* 942 1,059 Seed capital* 229 325 Other items** 719 890 Statutory Group capital
Slide 18: Summary
Summary Strong results in challenging conditions 2015 2016 % change Net income (£m) 1,658.5 1,793.1 8% Pre-exceptional PBT (£m) 609.7 644.7 6% AUMA (£bn) 313.5 397.1 27% EPS* (p) 176.9 186.3 5% DPS (p) 87.0 93.0 7% - 3 year outperformance 72% 74% * Basic earnings per share before exceptional items 1
Slide 19: Schroders 2016 Full Year Results
Schroders 2016 Full Year Results 2 March 2017 Peter Harrison | Group Chief Executive
Slide 20: A changing industry
A changing industry A number of well-publicised headwinds Headwinds Tailwinds High market valuations with low interest rates Wealth accumulation in Asia Pacific Pricing pressures Derisking opportunity Regulatory scrutiny Technological advances Growth of passives Growth of savings in
Slide 21: Opportunities for growth are plentiful
Opportunities for growth are plentiful Directly addressing structural headwinds Product Fixed North Innovation Income and America and Solutions Multi-asset New product Securitised Hartford division credit Funds Independent solutions team 20 2016 Full Year Results | March 2017
Slide 22: North America
North America Positive developments in 2016 Strategic partnership with Hartford Funds Securitised credit team Institutional derisking opportunities 21 2016 Full Year Results | March 2017
Slide 23: Opportunities for growth are plentiful
Opportunities for growth are plentiful Directly addressing structural headwinds Product Fixed North Asia Wealth Innovation Income and Technology America Pacific Management and Solutions Multi-asset New product Securitised Hartford Japanese Investment C. Hoare division credit Funds growth platform &
Slide 24: Wealth Management
Wealth Management Benchmark Capital – Best in class technology – High quality, competitively priced Multi-asset funds – Significantly enhance service offering C. Hoare & Co – c.1,800 clients with £2.3bn AUM Assets under management £39.6bn Assets under administration £11.1bn 23 2016 Full Year
Slide 25: Opportunities for growth are plentiful
Opportunities for growth are plentiful Directly addressing structural headwinds Product Fixed North Asia Wealth Private Innovation Income and Technology America Pacific Management Assets and Solutions Multi-asset New product Securitised Hartford Japanese Investment C. Hoare Infrastructure division c
Slide 26: Summary and outlook
Summary and outlook Identify and focus on core franchises Market uncertainty and industry challenges are set to continue Well placed to build on success – Highly diversified business – Strong financial position – Willingness to invest for future growth Organic and inorganic opportunities C
Slide 27: Forward looking statement
Forward looking statement 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