Schroders Plc · LSE:SDR
Schroders — Q3 2014 Earnings Presentation
27 slides from Schroders's earnings presentation, Nov 6, 2014
Slide 1: Schroders 2014 Q3 results Data Pack
Schroders 2014 Q3 results Data Pack November 2014
Slide 2: Contents
Contents Page Assets under management (AUM) 2 Regional diversification of AUM 3 Gross sales and net flows 4-5 Currency profile of AUM 6 AUM diversification 7-9 Asset Management AUM – detailed asset class analysis 10-12 Asset Management business flows 13-14 Net revenue and margins – Asset Management
Slide 3: Assets under management (AUM)
Assets under management (AUM) £276.2 billion at 30 September 2014 £bn Institutional Intermediary Asset Management Wealth Management Total 31 December 2013 144.3 88.5 232.8 30.1 262.9 Net flows 1.5 5.1 6.6 0.4 7.0 Investment returns, foreign 5.3 1.0 6.3 - 6.3 exchange and other 30 September 2014 151.
Slide 4: Regional diversification of AUM
Regional diversification of AUM 61% of 2014 net revenues outside UK UK £108.4bn Continental Europe £50.2bn North America Asia Pacific £34.1bn £68.3bn Middle East £8.1bn South America £7.1bn 3 Schroders 2014 Q3 Results | 6 November 2014
Slide 5: Gross sales
Gross sales £bn 19.7 19.6 20.0 19.2 18.9 18.3 17.5 15.0 10.0 5.0 0.0 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Equities Fixed Income Multi-asset EMD, Commodities & Property Wealth Management 4 Schroders 2014 Q3 Results | 6 November 2014
Slide 6: Net flows
Net flows £bn 5.0 3.8 2.4 2.2 1.0 2.5 (1.1) 1.0 0.0 (2.5) (5.0) Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Equities Fixed Income Multi-asset EMD, Commodities & Property Wealth Management 5 Schroders 2014 Q3 Results | 6 November 2014
Slide 7: Currency profile of AUM
Currency profile of AUM Assets under management £276.2 billion 10% 2% 2% 2% 30% 3% 4% 4% 7% 11% 25% GBP USD EUR AUD JPY CNY HKD CHF KRW TWD Other* * Includes the following currencies which individually constitute 1% of AUM: IDR, BRL, SGD, INR, CAD, THB, MXN 6 Schroders 2014 Q3 Results | 6 November 2
Slide 8: Total AUM by channel, region and product
Total AUM by channel, region and product Assets under management £276.2 billion By channel By region* By product 11% 15% 11% 6% 39% 55% 45% 34% 25% 21% 21% 17% UK Equities Institutional Fixed Income Continental Europe** Intermediary Multi-asset Asia Pacific EMD, Commodities & Property Wealth Managem
Slide 9: Asset Management AUM by channel and product
Asset Management AUM by channel and product Institutional AUM £151.1bn Intermediary AUM £94.6bn 9% 4% 21% 26% 46% 56% 19% 19% Equities Fixed Income Multi-asset EMD, Commodities & Property 8 Schroders 2014 Q3 Results | 6 November 2014
Slide 10: Asset Management AUM by channel and region
Asset Management AUM by channel and region* Institutional AUM £151.1bn Intermediary AUM £94.6bn 13% 19% 30% 37% 27% 28% 16% 30% UK Continental Europe** Asia Pacific Americas * By client domicile ** Includes Middle East 9 Schroders 2014 Q3 Results | 6 November 2014
Slide 11: Asset Management AUM – detailed asset class analysis
Asset Management AUM – detailed asset class analysis Assets under management £245.7 billion EMD, Commodities and Equities £123.0bn Fixed Income £47.0bn Multi-asset £59.2bn Property £16.5bn Asia Pacific 17% Americas 29% Americas 12% Agriculture and commodities 19% Australia 6% Asia Pacific 7% Asia Pa
Slide 12: Institutional AUM – detailed asset class analysis
Institutional AUM – detailed asset class analysis Assets under management £151.1 billion EMD, Commodities and Equities £70.0bn Fixed Income £28.6bn Multi-asset £39.7bn Property £12.8bn Asia Pacific 14% Americas 42% Americas 3% Agriculture and commodities 18% Australia 7% Asia Pacific 6% Asia Pacific
Slide 13: Intermediary AUM – detailed asset class analysis
Intermediary AUM – detailed asset class analysis Assets under management £94.6 billion EMD, Commodities and Equities £53.0bn Fixed Income £18.4bn Multi-asset £19.5bn Property £3.7bn Asia Pacific 21% Americas 8% Americas 30% Agriculture and commodities 19% Australia 5% Asia Pacific 10% Asia Pacific 3
Slide 14: Institutional
Institutional Assets under management: £151.1 billion (30 June 2014: £148.0 billion) £bn 10.0 7.5 7.0 7.0 6.0 5.4 5.7 5.0 1.6 0.9 1.0 0.8 0.0 (0.2) (0.3) (5.0) (5.4) (5.0) (4.9) (6.1) (5.7) (7.7) (10.0) Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Gross inflows Gross outflows Net flows 13 Schrode
Slide 15: Intermediary
Intermediary Assets under management: £94.6 billion (30 June 2014: £92.8 billion) £bn 15.0 12.1 11.2 11.8 10.3 10.4 10.0 9.0 5.0 2.8 2.0 1.0 1.3 0.1 0.0 (0.8) (5.0) (10.0) (8.9) (8.4) (9.3) (10.2) (10.5) (11.1) (15.0) Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Gross inflows Gross outflows Net f
Slide 16: Net revenue and margins – Asset Management
Net revenue and margins – Asset Management Asset Management net revenue £329.5 million (Q3 2013: £315.0 million) Q3 2013 Q3 2014 Performance fees – £m 17.5 3.4 Performance fees on average AUM 3 bps 1 bps Net revenue – £m 315.0 329.5 Net revenue on average AUM 55 bps 53 bps Costs* – £m 206.3 211.6 Co
Slide 17: Cost and return metrics for the Group
Cost and return metrics for the Group Q3 2013 Q3 2014 ► Compensation cost: operating revenue ratio YTD YTD = total Group compensation costs divided by Asset Compensation cost: 48% 47% Management and Wealth Management net revenues** operating revenue ratio* Bonus: ► Bonus: pre-bonus operating profit
Slide 18: Key performance indicators
Key performance indicators Compensation cost: operating revenue ratio 100% 80% 60% 49% 47% 40% 44% 46% 20% 0% FY 2011 FY 2012 FY 2013* Q3 2014 YTD* Total Group compensation costs divided by Asset Management and Wealth Management net revenues (adjusted by the Remuneration Committee for allowable and
Slide 19: Key performance indicators
Key performance indicators Cost: net revenue ratio 100% 80% 70% 60% 66% 65% 65% 40% 20% 0% FY 2011 FY 2012 FY 2013* Q3 2014 YTD* Total Group costs divided by net revenue * FY 2013 and Q3 2014 YTD exclude exceptional items 18 Schroders 2014 Q3 Results | 6 November 2014
Slide 20: Total costs
Total costs £m 300.0 249.2 244.1 244.6 255.7 250.0 233.5 212.9 71.8 74.3 74.9 72.2 200.0 65.0 60.1 150.0 100.0 177.4 169.2 168.5 172.4 181.4 152.8 50.0 0.0 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Staff costs* Non-staff costs* * Excludes exceptional costs 19 Schroders 2014 Q3 Results | 6 Nove
Slide 21: Headcount
Headcount 4,000 3,500 3,533 3,528 3,513 3,540 3,574 3,000 3,140 2,500 2,000 1,500 1,000 500 0 Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 20 Schroders 2014 Q3 Results | 6 November 2014
Slide 22: Income statement progression
Income statement progression Asset Management profit before tax £m Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Institutional 138.4 129.9 152.1 136.4 137.4 143.9 Intermediary 157.5 185.1 194.4 169.8 177.4 185.6 Net revenue 295.9 315.0 346.5 306.2 314.8 329.5 Costs* (189.4) (206.3) (202.6) (191.7)
Slide 23: Income statement progression
Income statement progression Wealth Management profit/(loss) before tax £m Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Net revenue 27.0 47.0 49.5 50.3 50.2 61.7 Costs* (21.3) (36.6) (36.2) (37.0) (37.2) (38.8) Wealth Management 5.7 10.4 13.3 13.3 13.0 22.9 profit* Exceptional items** – (2.6) (28
Slide 24: Income statement progression
Income statement progression Group segment (loss)/profit before tax £m Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014 Net revenue (0.8) 4.0 0.5 2.3 4.8 2.4 Costs* (2.2) (6.3) (5.3) (4.8) (7.9) (5.3) Associates - 1.4 0.6 0.4 - 0.1 Net finance income 3.4 2.5 2.2 2.5 2.8 3.1 Group profit/(loss)* 0.4 1
Slide 25: Movement in capital
Movement in capital £m 2014 1 January 2014 2,268.6 Profit before tax and exceptional items 404.4 Exceptional items (40.2) Exchange differences on translation of foreign operations after hedging (8.4) Net fair value movement arising from AFS financial assets 0.7 Actuarial loss on defined benefit pens
Slide 26: Group capital allocation
Group capital allocation Increase of £105 million as at 30 September 2014 FY H1 Q3 £m 2013 2014 2014 Investment capital breakdown (%) Regulatory capital 603 617 655 Cash and cash equivalents 4% 7% 6% Other operating capital 306 275 169 Government bonds 10% Investment capital* 495 573 684 30% Corpora
Slide 27: Forward-looking statements
Forward-looking statements This presentation may contain certain 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