Jupiter Fund Management Plc · LSE:JUP
Jupiter Fund Management — H1 2014 Earnings Presentation
31 slides from Jupiter Fund Management's earnings presentation, Jul 30, 2014
Slide 1: Jupiter Fund Management plc Interim Results: 30 July 2014
Jupiter Fund Management plc Interim Results: 30 July 2014
Slide 2: Forward-looking statements
Forward-looking statements 2 This presentation may contain certain “forward-looking statements” with respect to certain plans of Jupiter Fund Management plc (Jupiter) and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. S
Slide 3: Implementing our strategy
Implementing our strategy
Slide 4: Highlights: Delivery against our key strategic goals
Highlights 4 Delivery against our key strategic goals Long-term investment performance maintained Net flows of £1.3bn and AUM increased to £33.1bn Investing for growth whilst maintaining operating margins above 50% Underlying EPS up 4% to 12.9p Announced the sale of private clients con
Slide 5: Strategy
Strategy 5 Deliver outperformance after fees to our clients Sell this expertise through products suited to our distribution strengths Deliver attractive returns to shareholders
Slide 6: Implementing our strategy
Implementing our strategy 6 Investment Distribution Infrastructure management Outperformance Diversification Focus Resilience Product Clients Support Growth Risk Servicing Technology Scale Brand Scalability Profitability Focus Pricing Efficiency
Slide 7: Generating value for our clients
Generating value for our clients 7 Three year mutual fund investment performance Distribution channels focused on three 7% year performance numbers Strong long-term track record 18% 33% maintained 18% 24% 75% of assets above median over last 25% three years 33% 42% 1st Quartile 2nd Quartil
Slide 8: Focus on solving investors problems
Focus on solving investors problems 8 Industry net flows in UK mutual funds from 2012 to 2014 Commentary Existing product set largely aligned with top segment £50 billion • Outcome-orientated active strategies1 Areas of focus for future product development: Global • Traditional ‘style box’ m
Slide 9: Evolving the investment management platform
Evolving the investment management platform 9 Build Investment Re-design management Teamwork platform Innovate
Slide 10: Implementing our strategy
Implementing our strategy 10 Investment Distribution Infrastructure management Outperformance Diversification Focus Resilience Product Clients Support Growth Risk Servicing Technology Scale Brand Scalability Profitability Focus Pricing Efficiency
Slide 11: Continued net inflows and asset growth
Continued net inflows and asset growth 11 AUM and net new business (£bn) Highlights AUM Mutual funds AUM up 5% to £33.1bn on back of total net inflows of £1.3bn Investment trusts Seg mandates Healthy net mutual fund inflows of £875m 0.2 0.2 Strongest contribution from fixed income 0.2 Quie
Slide 12: Evolving the distribution platform
Evolving the distribution platform 12 Hire of Revised GSA1 head Asia team2 Heads of marketing office moved increased GSA and structure in from Munich from 1 to 8 Asia London to Frankfurt European Separate New brand team2 wealth mgt Head of images increased team Austria hired from 4 to 15 establish
Slide 13: New brand images
New brand images 13 Do your investments go with it or anticipate it? JUPITER
Slide 14: Investment in international delivering returns
Investment in international delivering returns 14 Jupiter’s SICAV AUM (£ billion) Plans and prospects Fixed Income AUM Extend the ‘follow our clients’ approach Equities AUM % age of overall mutual fund assets (RHS) 4.0 14% Make products available in forms that suit our clients 3.5 12% Deepen
Slide 15: Implementing our strategy
Implementing our strategy 15 Investment Distribution Infrastructure management Outperformance Diversification Focus Resilience Product Clients Support Growth Risk Servicing Technology Scale Brand Scalability Profitability Focus Pricing Efficiency
Slide 16: Infrastructure
Infrastructure 16 Scalable platform Approach Net management fees (£m) Fixed costs (£m) Organic growth strategy delivering across the cycle EBITDA* margin (bps) Capturing scale benefits as we grow 54 51 141 Investing to support growth, whilst mindful of delivering 131 shareholder returns 114
Slide 17: Private clients: Divestment
Private clients 17 Divestment Sale of private clients contracts to Rathbones announced on 1 April: Transaction expected to complete towards end of 3rd quarter Strategic rather than financial rationale Sub-scale business requiring significant investment Reduces regulatory risk Reduces
Slide 18: Financials
! Financials yeRirer
Slide 19: Highlights
Highlights 19 Measure H1 13 H1 14 Change Net revenues £140.3m £148.5m 6% Net revenue margins 92bps 87bps EBITDA £75.3m £76.3m 1% EBITDA margin 54% 51% Underlying EPS 12.4p 12.9p 4% Interim dividend 3.5p 3.7p 6%
Slide 20: Revenues
Revenues 20 Net revenues Net management fees (£ million) (£ million) H1 13 H1 14 % +/- 4% Net management fees 131.0 141.0 8% 4% 141 Net initial charge 8.8 6.8 136 131 Performance fees 0.5 0.7 116 Net revenues 140.3 148.5 6% 109 Net management fee margin H1 13 H1 14 % +/- Net management fees 13
Slide 21: Net management fee margins
Net management fee margins 21 Key drivers: business mix Progression 16% 15% bps H2 12 H1 13 H2 13 H1 14 14% Net management fee margin 93.4 91.6 89.6 87.2 12% 12% 11% Key drivers remain: Successful growth of fixed income range 10% Higher SICAV assets 9% 8% 8% 8% Segregated mandate loss impa
Slide 22: Administrative expenses (fixed)
Administrative expenses (fixed) 22 Fixed costs Fixed costs (£ million) (£ million) H1 13 H1 14 % +/- Fixed staff costs 21.2 23.5 4% 9% 47 45 Other expenses 20.4 23.8 42 40 41 Fixed costs 41.6 47.3 +14% Drivers of increase: Distribution headcount Marketing and brand spend IT Infrastructur
Slide 23: Administrative expenses (variable)
Administrative expenses (variable) 23 Variable costs Variable costs (£ million) and compensation ratio1 (£ million) H1 13 H1 14 24 25 Cash bonus 16.5 16.9 23 Deferred bonus 3.8 4.5 9 7 LTIP, SAYE and SIP 3.6 4.0 4 Variable costs 23.9 25.4 Variable compensation ratio1 24% 25% 17 17 13 Modest in
Slide 24: Earnings progression
Earnings progression 24 EBITDA1 and margins Underlying earnings per share2 (p) EBITDA (£ million) EBITDA margin (per cent) 54 55 54 CAGR 51 51 12% 12.9 12.4 75 76 71 10.0 60 60 9.0 8.3 H1 10 H1 11 H1 12 H1 13 H1 14 H1 10 H1 11 H1 12 H1 13 H1 14 1) EBITDA = Earnings before Interest, Tax, Depreciati
Slide 25: Underlying EPS
Underlying EPS1 25 Calculation Commentary £ million H1 13 H1 14 % +/- Amortisation of acquired contracts has now Statutory profit before tax 59.1 48.4 ended; amortisation of brand name will be £2m p.a. going forward Amortisation of acquired contracts and brand 19.4 18.2 Charge for options over
Slide 26: Private clients: Financial impact
Private clients 26 Financial impact Impact on ongoing financials: £2.2 billion of AUM; c. 30% of this will be reallocated into collective products managed by Jupiter Revenues will drop £12m p.a. Profits will drop c. £2m p.a. Proceeds: Gross proceeds of £32 – 43m Net proceeds after
Slide 27: Positioned for capital returns
Positioned for capital returns 27 Illustrative model for 2014 Looking forward Strong operating cash flow supported by attractive 10% operating margins 5% 25% Sustainable balance sheet from cash and capital perspective Sensible, progressive ordinary dividend policy: Board targeting 50% ordi
Slide 28: Interim dividend
Interim dividend 28 Dividend progression (p) Application at 2014 interims Interim Final Payout ratio 2013 2014 Interim dividend 3.5p 3.7p +6% 50% 2014 interim dividend follows this outlined approach 40% Increased with earnings, mindful of desire for 50% 9.1 payout ratio across the year Poten
Slide 29: Conclusion
Conclusion
Slide 30: Delivering against our key goals
Delivering against our key goals 30 1 Good progress at implementing our strategy 2 Delivering outperformance after fees 3 Diversifying product and distribution capabilities 4 Investing for growth 5 Increasing cash returns to shareholders
Slide 31: Jupiter: On the planet to perform
La JUPITER On the planet to perform JUPITER
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