Jupiter Fund Management Plc · LSE:JUP
Jupiter Fund Management — H1 2017 Earnings Presentation
25 slides from Jupiter Fund Management's earnings presentation, 2017
Slide 1: Delivering Growth: 2017 Half Year Results
DELIVERING GROWTH 2017 Half Year Results
Slide 2: 2017 so far
2017 HALF YEAR RESULTS 1 2017 so far Delivering growth through investment outperformance Client focus: delivering value through investment performance and transparency Delivered outperformance after fees Improved 3 year investment performance to Performance 81% (YE 2016: 75%) Strong business
Slide 3: Financial highlights
2017 HALF YEAR RESULTS 2 Financial highlights Strong financial performance from successful asset gathering Measure H1 2016 H1 2017 Change Net management fees £156.5m £186.5m +19% Net revenue £170.0m £195.4m +15% Net management fees margin 88bps 86bps Underlying profit before tax* £82.5m £94.8m +15%
Slide 4: Revenues
2017 HALF YEAR RESULTS 3 Revenues Organic growth in net management fees of 19% Net revenue Net revenue (£ million) £ million H1 16 H1 17 % +/- Net management fees Net initial charges Performance fees 195 Net management fees 156.5 186.5 +19% 8 Net initial charges 7.8 8.1 181 169 170 7 Of which box pr
Slide 5: Net management fee margins
2017 HALF YEAR RESULTS 4 Net management fee margins Key driver remains growth of fixed income business Business mix bps H1 14 H2 14 H1 15 H2 15 H1 16 H2 16 H1 17 Margin* 87.2 88.4 88.1 87.0 87.6 87.3 85.9 ■ Net management fee margin in the first half of the year is in line with guidance ■ H1 17 decr
Slide 6: Fixed costs
2017 HALF YEAR RESULTS 5 Fixed costs Investing alongside growth Fixed costs Fixed costs (£ million) and % of net management fees £ million H1 16 H1 17 % +/- H2 16 35% 35% 35% 34% Fixed staff costs 23.3 26.9 25.0 33% 30% Other expenses 31.1 36.4 36.0 31% 11 13 Fixed costs 54.4 63.3 +16% 61.0 25% 10 6
Slide 7: Fixed costs
2017 HALF YEAR RESULTS 6 Fixed costs Progression in fixed costs driven by business activity; continued focus on cost discipline Fixed cost progression from H2 2016 to H1 2017 (£ million) 65.0 0.7 0.1 62.5 1.5 60.0 57.5 63.3 61.0 55.0 52.5 50.0 H2 2016 Transaction costs Investment for Other H1 2017 l
Slide 8: Variable staff costs
2017 HALF YEAR RESULTS 7 Variable staff costs In line with guidance Variable staff costs Variable staff costs (£ million) and comp ratio* £ million H1 16 H1 17 30 29 29 Cash bonus 21.1 22.7 28 26 Deferred bonus 5.2 7.5 11 LTIP, SAYE and SIP 5.7 7.8 15 13 11 Variable staff costs 32.0 38.0 10 Variable
Slide 9: Earnings
2017 HALF YEAR RESULTS 8 Earnings Operating margins maintained and healthy returns to shareholders Growth in earnings Dividend progression (pence per share) Underlying PBT (£ million) Return of private client proceeds 95 Special Final 4.9 12.5 86 10.9 85 Interim 82 83 6.6 10.6 10.2 9.1 9.5 6.8 3.5 3
Slide 10: Resilient balance sheet
2017 HALF YEAR RESULTS 9 Resilient balance sheet Robust post-dividend liquidity and regulatory capital positions Liquidity (£ million) Regulatory capital (£ million) Dividends Compensation round 'Core' cash £ million H1 17 Ordinary shareholder funds 583 Less: goodwill and illiquid assets* (372) 98 1
Slide 11: Delivering growth through investment excellence
2017 HALF YEAR RESULTS 10 Delivering growth through investment excellence 1 2 3 Sell this expertise Deliver through products Deliver attractive outperformance suited to our returns to after fees to our distribution shareholders clients strengths JUPITERAM.COM
Slide 12: Highlights
2017 HALF YEAR RESULTS 11 Highlights Delivering growth through investment excellence Investment Net Net Underlying Performance Sales Management Earnings per Fees Share 3 year mutual fund performance Up 6% Up £3.0bn Up 19% Up 16% to 81% to £3.6bn to £186.5m to 16.7p (Dec 2016: 75%*) (2016 H1: £0.6bn)
Slide 13: Performance numbers
2017 HALF YEAR RESULTS 12 Performance numbers Delivering performance after fees for our clients is at the core of what we do Three year mutual fund performance Commentary Long-term track record maintained 6% 81% of AUM in mutual funds above median over three years (YE 2016: 75%*) 13% Excellent
Slide 14: Two more funds exceeding the £1bn mark
2017 HALF YEAR RESULTS 13 Two more funds exceeding the £1bn mark Three year investment performance in key funds AUM at AUM at AUM at 4th quartile 3rd quartile 2nd quartile 1st quartile Jun 16 Dec 16 Jun 17 Dynamic Bond* £4,957m £6,209m £9,090m European £3,726m £3,780m £4,306m Strategic Bond £2,910m
Slide 15: Further growth opportunities
2017 HALF YEAR RESULTS 14 Further growth opportunities Developing products to drive future growth Distribution unit trust (AUM in £ million) UK Smaller Companies (AUM in £ million) 150 1,000 125 750 100 500 75 50 250 25 0 0 Jun 14 Jun 15 Jun 16 Jun 17 Jun 14 Jun 15 Jun 16 Jun 17 GEM Equity Strategy
Slide 16: Diversification by client and geography
2017 HALF YEAR RESULTS 15 Diversification by client and geography International diversification into Italy and Iberia already delivering growth Italy office Iberia office Milan Madrid Opened June 2016 Opened September 2016 3 local employees 3 local employees AUM: £1.3bn AUM: £1.3bn JUPITERAM.COM
Slide 17: Key fund progression over the past years
2017 HALF YEAR RESULTS 16 Key fund progression over the past 5 years (funds over £1bn AUM) Successful strategy of diversification June 6 funds £11.0bn 43% of over £1bn gross AUM total AUM 2012 June 12 funds £33.4bn 68% of over £1bn gross AUM total AUM 2017 JUPITERAM.COM
Slide 18: Mutual fund focus
2017 HALF YEAR RESULTS 17 Mutual fund focus Consistent organic flow growth Cumulative net mutual fund flows (£bn) Focused mutual fund provider, with a track record of 11.0 generating consistent net 10.0 inflows across the cycle 9.0 £10.2bn cumulative mutual 8.0 fund inflows over past five 7.0 ye
Slide 19: Growth in AUM since 2012
2017 HALF YEAR RESULTS 18 Growth in AUM since 2012 Benefits of our focus on outperformance Movement in AUM (£ billion) AUM up 78% to £46.9bn, with 50 healthy underlying organic flow growth 40 13.5 (0.4) 0.2 (2.1) Mutual fund net inflows of 9.4 £9.4bn across a range of 30 markets; significant 46.
Slide 20: Diversification of our product range
2017 HALF YEAR RESULTS 19 Diversification of our product range Increase in fixed income and European equities within our broader growth Split of AUM by asset class Over 5 years, evolution and diversification are constant themes as we continually adapt to £46.9bn investor needs Demand for unconst
Slide 21: Continued diversification across our capabilities
2017 HALF YEAR RESULTS 20 Continued diversification across our capabilities Maximise our future growth potential Managing our capabilities Build and develop our Build & Fixed Outcome- Equity capability in multi-asset, develop oriented Alternatives specialties income multi-asset specialties alterna
Slide 22: Change in the regulatory and political landscape
2017 HALF YEAR RESULTS 21 Change in the regulatory and political landscape Navigating our way through continuous change Current list of drivers Our response FCA Market Study Removal of box profits in 2018 UCITS V Bringing research costs onto the P&L MiFID II MiFID II implementation on tr
Slide 23: In summary
2017 HALF YEAR RESULTS 22 In summary Delivering growth through investment excellence ■ Both our scale and our breadth of capabilities have increased substantially in the last five years ■ Increased business resilience from continued diversification through product, client type and geography ■ Clear
Slide 24: Q&A
2017 HALF YEAR RESULTS 23 Q&A JUPITERAM.COM
Slide 25: Forward-looking statements
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 (Jupiter) and its current go
Jupiter Fund Management — H1 2017 Earnings Presentation on 6ix