Ninety One Plc · LSE:N91
Ninety One — FY2024 Earnings Presentation
35 slides from Ninety One's earnings presentation, Jun 5, 2024
Slide 1: Full-year Results 2024
5 June 2024 Full-year Results 2024 Presentation
Slide 2: FY 2024 results
FY 2024 results FY 2024 FY 2023 Change % Assets under management (AUM) £126.0bn £129.3bn (3) Net flows (£9.4bn) (£10.6bn) 11 Basic earnings per share (EPS) 18.4p 18.2p 1 Adjusted EPS 15.9p 17.3p (8) Full-year dividend per share 12.3p 13.2p (7) Adjusted operating profit margin 32.0% 32.7% n.m. 2
Slide 3: Business Review
Full-year Results 2024 Business Review
Slide 4: FY 2024 key messages
FY 2024 key messages — Market and business conditions remained challenging — Low investor appetite for “risk-on” public strategies — Solid financial performance with cost discipline — Growth mindset and sharpened focus — Staff committed and motivated, with increasing shareholding Confident in our ab
Slide 5: Long-term track record
Long-term track record Domestic growth Internationalisation Scaling post crisis Seeking growth in a world of change 1992-1998 1998-2009 2009-2020 2020-2024 AUM CAGR +93% +19% +12% +5% 140bn £220,000 120bn 100bn £126 bn £165,000 80bn £110,000 60bn 40bn £55,000 20bn 0bn £0 1992 1994 1996 1998 2000 200
Slide 6: Business model and differentiators
Business model and differentiators Business model Differentiators – Client focused – Organically developed track record – People centric – Emerging market heritage – Capital light – Global reach – Technology enabled – Owner culture Specialist active investment manager 6
Slide 7: Our purpose
Our purpose Better Better Better firm investing world Investing for a better tomorrow 7
Slide 8: Market and business conditions
Market and business conditions — Interest rates higher for longer — Disruptive geopolitics — Narrow equity market performance, but broadening — Persistent outflows in DM active equities and EM 8
Slide 9: Developed markets active fund flows (£bn)
Developed markets active fund flows (£bn) 300 200 100 0 (100) (200) (300) (400) Q1/2024 Q2/2020 Q2/2021 Q2/2022 Q2/2023 Q2/2012 Q2/2013 Q2/2014 Q2/2015 Q2/2016 Q2/2017 Q2/2018 Q2/2019 DM active fixed income DM active equity Total net flow Source: Broadridge (funds data only). 9
Slide 10: Developed markets passive fund flows (£bn)
Developed markets passive fund flows (£bn) 250 200 150 100 50 0 (50) (100) Q1/2024 Q2/2020 Q2/2021 Q2/2022 Q2/2023 Q2/2012 Q2/2013 Q2/2014 Q2/2015 Q2/2016 Q2/2017 Q2/2018 Q2/2019 DM passive fixed fixedincome income DM passive equity Total net flow Source: Broadridge (funds data only). 10
Slide 11: Emerging markets active fund flows (£bn)
Emerging markets active fund flows (£bn) 40 30 20 10 0 (10) (20) (30) Q1/2024 Q2/2020 Q2/2021 Q2/2022 Q2/2023 Q2/2012 Q2/2013 Q2/2014 Q2/2015 Q2/2016 Q2/2017 Q2/2018 Q2/2019 EM active fixed fixed income income EM active equity Total net flow Source: Broadridge (funds data only). 11
Slide 12: Assets under management (£bn)
Assets under management (£bn) 5.4% (0.2%) 3.8% (7.4%) (7.3%) 144 131 129 (9.4) 6.1 126 111 74 61 103 59 56 41 33 FY 19 FY 20 FY 21 FY 22 FY 23 FY 24 Net flows Portfolio growth Annual torque ratio 12
Slide 13: Net flows by asset class (£m)
Net flows by asset class (£m) FY 2022 FY 2023 FY 2024 7,000 500 5,000 284 215 3,000 1,572 1,000 2,445 330 304 295 42 (1,000) (1,923) (2,942) (3,000) (5,000) (6,861) (6,912) (7,000) (9,000) (1,231) (1,166) (11,000) FY 2022 FY 2023 FY 2024 Fixed income Equities Multi-asset Alternatives SA fund platfor
Slide 14: Net flows by client group (£m)
Net flows by client group (£m) FY 2022 FY 2023 FY 2024 7,000 500 5,000 1,555 3,000 782 1,000 1,801 378 10 (1,000) (2,283) (2,832) (3,000) (1,170) (1,740) (1,521) (5,000) (954) (2,810) (7,000) (4,720) (2,044) (9,000) (11,000) FY 2022 FY 2023 FY 2024 United Kingdom Africa Europe Americas Asia Pacific
Slide 15: Firm-wide investment performance
Firm-wide investment performance 30 September 2023 31 March 2024 Since Since inception 68% 32% 73% 27% inception 10 year 80% 20% 10 year 76% 24% 5 year 71% 29% 5 year 64% 36% 3 year 52% 48% 3 year 43% 57% 1 year 50% 50% 1 year 46% 54% Outperformance Underperformance 15
Slide 16: People and culture
People and culture – Compensation aligned with outcomes – Headcount discipline – Deliberately building an intergenerational business – Growing staff ownership (30.6%) – Committed and motivated staff People centric, talent friendly, owner culture 16
Slide 17: Financial Review
Full-year Results 2024 Financial Review
Slide 18: Financial results
Financial results £ million FY 2024 FY 2023 Change % Adjusted operating revenue 595.8 633.0 (6) Adjusted operating expenses (405.3) (426.1) (5) Adjusted operating profit 190.5 206.9 (8) Adjusted net interest income 17.7 9.4 n.m. Share scheme 8.6 (3.7) n.m. Profit before tax 216.8 212.6 2 Tax (52.9)
Slide 19: Adjusted operating revenue
Adjusted operating revenue £ million FY 2024 FY 2023 Change % Management fees 557.9 607.7 (8) Performance fees 30.6 19.4 58 Net revenue 588.5 627.1 (6) Other income 7.3 5.9 24 Adjusted operating revenue 595.8 633.0 (6) Average AUM Average fee rate £123.9bn 45.0bps FY 2023: £134.9bn FY 2023: 45.0bps
Slide 20: Adjusted operating expenses
Adjusted operating expenses £ million Employee remuneration Business expenses Note: Impacts are estimated based on prevailing inflation and exchange rates. 20
Slide 21: Business and total expenses
Business and total expenses 34.1 33.7 33.1 32.7 31.3 31.6 139 135 120 124 118 108 11.6 11.8 11.2 11.7 10.5 10.0 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Average AUM (£bn) Business expenses in bps of average AUM Total expenses in bps of average AUM 21
Slide 22: Adjusted operating profit analysis
Adjusted operating profit analysis £ million 22
Slide 23: Capital and dividend
Capital and dividend £ million 31 March 2024 31 March 2023 Equity 367.6 349.9 Non-qualifying assets (43.9) (35.3) Qualifying capital 323.7 314.6 Dividend proposed (58.2) (61.7) Estimated regulatory requirement (112.2) (115.7) Estimated capital surplus 153.3 137.2 Full-year dividend Capital coverage1
Slide 24: Conclusions and Outlook
Full-year Results 2024 Conclusions and Outlook
Slide 25: Our focus areas
Our focus areas – Global and international equity – EM equity – EM fixed income (including specialist credit) – Sustainability and impact Well-recognised competitor in these markets 25
Slide 26: A granular look at growth opportunities
A granular look at growth opportunities c.£10tr AUM Thematic Equities Global Equities International Global EM Global Liquid Global EM Fixed Private (incl. Sustainable) Equities Equities Credit Debt £2.5tr Income addressable market within our £2.5tr £1.4tr £0.7tr £1.5tr £0.5tr £0.9tr core investment
Slide 27: Outlook
Outlook What we said at H1 Now — Market conditions likely to Yes, but gradually remain challenging improving — Low appetite for risk-on Risk appetite is returning; strategies EM demand remains low — Revenue pressure calls for No change ongoing cost discipline More competition for smaller flows 27
Slide 28: Concluding remarks
Concluding remarks — We are confident in our ability to regain growth momentum — Our model requires: — Highly motivated, invested and committed people — A clear, focused strategy — Competitive investment performance — Deep client relationships Multi-decade track record of successful business buildin
Slide 29: Q&A
Q&A
Slide 30: Glossary and definitions
Glossary and definitions Adjusted EPS is adjusted earnings attributable to shareholders divided by the number of ordinary shares in issue at the end of the period. Adjusted net interest income is calculated as net interest income or expense adjusted to exclude interest expense on lease liabilities f
Slide 31: AUM split
AUM split By asset class By client group By client type 9% 12% 3% 12% 36% 16% 41% 46% 16% 64% 25% 19% Equities Africa Institutional Fixed income United Kingdom Advisor Multi-asset Asia Pacific 1 Alternatives Americas SA fund platform Europe Notes: Breakdown of AUM as at 31 March 2024. Percentages ma
Slide 32: AUM by strategy
AUM by strategy Equities Fixed income Multi-asset Alternatives £58.4bn £31.9bn £20.4bn £4.3bn Global Global Absolute return Growth SA and Africa credit Income Credit Regional Emerging markets (EM) EM sovereign and currency EM inc. Africa / SA Private credit Asia (inc. China) Africa (inc. SA) fixed i
Slide 33: AUM by client type
AUM by client type Institutional AUM by client type Advisor 6% 15% 19% 32% £80.5bn 46% 64% £126.0bn £45.5bn 36% 23% 30% 30% Pension funds Advisor Private banks / wealth managers / FOF 2 Corporates / insurance / other 1 Institutional Retail banks / insurance / IFA 3 Public authorities / official inst
Slide 34: AUM by EM / DM
AUM by EM / DM By client location By investment strategy 42% Emerging markets ("EM") 49% 51% Developed markets ("DM") 58% Note: AUM as at 31 March 2024. 34
Slide 35: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared by Ninety One plc and Ninety One Limited (together, “Ninety One” and, together with their subsidiaries from time to time, the “Group”). This Presentation is provided on a strictly private and confidential basis for information purpo