Schroders Plc · LSE:SDR

Schroders — FY2013 Earnings Presentation

26 slides from Schroders's earnings presentation, Mar 6, 2014

  1. Slide 1: Schroders 2013 Results

    Schroders 2013 Results 6 March 2014 Michael Dobson Chief Executive

  2. Slide 2: 2013: Record results

    2013: Record results Organic growth and strategic acquisitions  Net revenue up 24% to £1,407.6m (2012: £1,134.9m)  Profit before tax and exceptional items up 41% to £507.8m (2012: £360.0m)  Full year dividend up 35% to 58.0 pence per share (2012: 43.0 pence per share)  Net new business £7.9bn 

  3. Slide 3: Asset Management

    Asset Management Strong levels of new business 2013 net flows – by channel £bn 6  Gross inflows £70.3bn (2012: £53.6bn) 4  Net inflows £9.4bn 2  Stable revenue margins 0  Diversified by channel, region -2 Q1 Q2 Q3 Q4  68% of funds outperforming over 3 years Institutional Intermediary 2013 net f

  4. Slide 4: Institutional

    Institutional Assets under management: £144.3bn (2012: £123.7bn) 2013 net inflows by asset class £bn  Net inflows £4.6bn 3  Multi-asset, equities, fixed income, alternatives 2  Strong performance in Australia, UK  70% of Institutional funds outperforming over 1 year 1  Performance fees £35.1m 0

  5. Slide 5: Intermediary

    Intermediary Assets under management: £88.5bn (2012: £72.0bn) 2013 net inflows by asset class £bn  Net inflows £4.8bn 5  Net inflows in all regions, multi-asset and equities 4  New product launches 3  Cazenove Capital strengthens UK Intermediary: UK equities, European equities, multi-manager, fi

  6. Slide 6: Equities

    Equities Assets under management: £119.6bn (2012: £96.3bn)  Net inflows £2.8bn: Asian, emerging market, Japanese, global, European  70% of funds outperforming over 3 years  Diversified range of strategies: global, regional, quant, growth, value, income, small and mid cap  Integration of Cazenove

  7. Slide 7: Multi-asset investments and portfolio solutions

    Multi-asset investments and portfolio solutions Assets under management: £52.3bn (2012: £42.8bn)  £21.3bn of net new business since 2010  £6.9bn in 2013  Organised across investment outcomes: wealth preservation risk controlled growth income inflation protection risk mitigation  Growth opportuni

  8. Slide 8: Fixed Income

    Fixed Income Assets under management: £43.4bn (2012: £37.6bn)  Strong performance: 78% of AUM outperforming over 1 year, 70% over 3 years  Consultant upgrades and new business opportunities in: unconstrained absolute return long duration global/European credit  STW integration on track, investmen

  9. Slide 9: Wealth Management

    Wealth Management Assets under management: £30.1bn (2012: £16.3bn)  Net revenues up 59% to £150.0m (2012: £94.4m)  Profit before tax and exceptional items up 191% to £34.3m (2012: £11.8m)  Exceptional items: Cazenove Capital amortisation and integration costs, US DoJ programme provision  Net out

  10. Slide 10: Schroders 2013 Annual Results

    Schroders 2013 Annual Results 6 March 2014 Richard Keers Chief Financial Officer

  11. Slide 11: Financial highlights – record results deliver 35% increase in dividend

    Financial highlights – record results deliver 35% increase in dividend Net revenue, including performance fees (£m) Profit before tax and exceptional items (£m) Exceptional items (£m) 1600 600 1,408 1400 81 507.8 1200 1,156 1,153 1,135 500 60.3 73 38 29 1000 400 800 300 600 400 200 200 1,083 1,115 1

  12. Slide 12: Net revenue – driven by investment returns, organic growth and acquisitions

    Net revenue – driven by investment returns, organic growth and acquisitions Increase of £273m £m Cazenove Capital and STW Other revenue Net revenue Investment Returns Performance fees 80 4 1,408 96 52 Net new business Group revenue Wealth Management Net revenue 56 (15) 1,135 150 Wealth Management 94

  13. Slide 13: Asset Management net revenues (1) – good core business growth in Institutional

    Asset Management net revenues (1) – good core business growth in Institutional £m 800 700 600 557 489 35 500 454 24 27 400 300 522 427 465 200 100 0 2011 2012 2013 Institutional Performance fees 12 2013 Annual Results | March 2014

  14. Slide 14: Asset Management net revenues (2) – significant rise in Intermediary

    Asset Management net revenues (2) – significant rise in Intermediary Net revenue margins, excluding performance fees, at 53 bps £m 800 690 700 45 588 557 600 10 526 489 4 35 500 454 24 27 400 645 300 578 522 522 427 465 200 100 0 2011 2012 2013 Institutional Intermediary Performance fees 13 2013 Ann

  15. Slide 15: Wealth Management net revenues – up 59% supported by Cazenove acquisition

    Wealth Management net revenues – up 59% supported by Cazenove acquisition Net revenue margins 64 bps (2012: 63 bps*) £m 0 170 150.0 150 13.6 130 114.3 26.7 94.4 110 14.4 13.8 90 24.9 19.8 70 109.7 50 75.0 68.7 30 10 (7.9) -10 2011 2012 2013 Management fees Transaction fees Net banking interest incom

  16. Slide 16: Profit before tax and exceptional items – a good picture with record profits

    Profit before tax and exceptional items – a good picture with record profits Increase of £148m £m Profit before tax and exceptional items 508 Wealth Compensation costs Other costs Net finance income/JVs Management Profit before tax (107) (22) and associates 34 360 4 Wealth Management 12 Net revenue

  17. Slide 17: Operating expenses – ratios in line with long-term target

    Operating expenses – ratios in line with long-term target Before exceptional items 2013 Asset Management & Wealth £m 2012 Group Management Total 2013 versus 2012 Compensation costs 545.7 583.4 69.1 652.5 +20% Other costs 233.5 208.8 45.9 254.7 +9% Depreciation 12.0 11.8 0.7 12.5 +4% Total 791.2 804.

  18. Slide 18: Exceptional items

    Exceptional items 2013 Wealth £m Asset Management Management Group Total Acquisition costs - - 4.2 4.2 Integration costs 4.0 7.2 - 11.2 Amortisation of acquired intangible assets – Cazenove and 6.3 5.2 - 11.5 STW Amortisation of acquired intangible assets – other 3.2 0.8 - 4.0 Deferred compensation

  19. Slide 19: Group segment before exceptional items – investment capital returns targeted to cover costs

    Group segment before exceptional items – investment capital returns targeted to cover costs Segment disclosure (£m) 2012 2013 Net revenue 25.7 10.4 Operating expenses (37.2) (19.1) Net finance income 11.7 12.1 Share of JVs and associates (0.5) 1.5 Group segment (loss)/profit before exceptional items

  20. Slide 20: Tax charge – unchanged and in line with guidance

    Tax charge – unchanged and in line with guidance Change 2013 2013 v 2012 Before before Exceptional items Total 2012 exceptional items exceptional items Profit before tax – £m 360.0 507.8 (60.3) 447.5 +147.8 +41% Tax – £m (76.8) (103.0) 8.2 (94.8) +26.2 +34% Profit after tax – £m 283.2 404.8 (52.1) 3

  21. Slide 21: Movement in Group capital

    Movement in Group capital Increase of £199m as at 31 December 2013 £m Share purchases (142) Dividends Exchange Other Profit after tax and (124) differences 131 exceptional items (19) 353 Group capital Group capital 2013 2012 £2,269m £2,070m 1 January 2013 31 December 2013 20 2013 Annual Results | Ma

  22. Slide 22: Group capital allocation – continued strong financial position

    Group capital allocation – continued strong financial position Increase of £199m as at 31 December 2013 December June December £m 2012 2013 2013 Investment capital breakdown (%) Asset Management Government guaranteed bonds and Wealth Management 957 879 1,071 operational capital 5% 2% Seed capital 15

  23. Slide 23: Strong financial position

    Strong financial position  Record profitability in 2013  Good cost control  Strong cash generation  Significant increase in returns to shareholders 22

  24. Slide 24: Schroders 2013 Results

    Schroders 2013 Results 6 March 2014 Michael Dobson Chief Executive

  25. Slide 25: Outlook and future priorities

    Outlook and future priorities Focus on organic growth  Positive start to 2014  Complete integration of Cazenove Capital and STW  Repositioned capability and contribution from Wealth Management  Growth opportunities in most asset classes and regions  Operational efficiencies  Long-term focus 24

  26. Slide 26: Forward-Looking Statements

    Forward-Looking Statements These presentation slides may contain forward-looking statements with respect to the financial condition, results of operations, strategy and businesses of the Schroders Group. Such statements and forecasts involve risk and uncertainty because they are based on current exp

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