Slide 1: 2014 Half-Year Results
Schroders 2014 Half-Year Results 31 July 2014 Michael Dobson Chief Executive
Slide 2: H1 2014 Record results
H1 2014 Record results Profit before tax and exceptional items £261.5m (H1 2013: £228.0m) 72% of funds outperforming over 3 years Net inflows £4.8bn (H1 2013: £4.5bn) Assets under management £271.5bn (30 June 2013: £235.7bn) Interim dividend 24.0 pence per share (interim dividend 2013: 16.
Slide 3: Net inflows £4.8bn
Net inflows £4.8bn Diversified by channel, region and asset class £bn £bn Channel Region Asset class 6.0 6.0 5.0 5.0 4.0 4.0 3.0 3.0 2.0 1.0 2.0 0.0 1.0 (1.0) 0.0 (2.0) H1 2013 H2 2013 H1 2014 H1 2014 H1 2014 H1 2014 Wealth Management Asia Pacific Wealth Management Net new business Fixed Income Inte
Slide 4: Institutional
Institutional Assets under management: £148.0bn (end 2013: £144.3bn) By asset class £bn 2.0 Slowdown in funding of new mandates at £11.4bn Outflows in Commodities, Global Equities Strong performance in Multi-asset, Emerging Market 1.0 Equities Net inflows £0.7bn 0.0 Significant pipeline of
Slide 5: Intermediary
Intermediary Assets under management: £92.8bn (end 2013: £88.5bn) By asset class £bn 4.0 High level of gross sales at £23.3bn Net inflows £3.8bn 3.0 Predominantly in branded funds Net inflows in Multi-asset, Equities and Fixed Income 2.0 Strong performance in continental Europe Positive
Slide 6: Wealth Management
Wealth Management Assets under management: £30.7bn (end 2013: £30.1bn) Net revenues £100.5m (H1 2013: £53.5m) Profit before tax £26.3m (H1 2013: £10.6m) Q2 net inflows £0.3bn Cazenove Capital integration plan on track Transformed market position and contribution in UK 5 2014 Half-Year Resu
Slide 7: 2014 Half-Year Results
Schroders 2014 Half-Year Results 31 July 2014 Richard Keers Chief Financial Officer
Slide 8: Financial highlights – 50% increase in interim dividend
Financial highlights – 50% increase in interim dividend Net revenue, including performance fees (£m) Profit before tax and exceptional items (£m) 800 300 728.6 261.5 8.4 645.1 11.8 250 544.0 228.0 27.6 600 6.3 10.1 200 400 150 100 200 50 533.9 633.3 720.2 177.4 221.7 233.9 0 0 H1 2012 H1 2013 H1 201
Slide 9: Net revenue – driven by investment returns, organic growth and acquisitions
Net revenue – driven by investment returns, organic growth and acquisitions Increase of £84m £m Net new business Markets & FX Other Net revenue 25 3 (7) 729 Net revenue Performance fees 645 91 (3) New business from Wealth Management acquisitions 66 101 Wealth Management 53 Asset Asset Management Man
Slide 10: Asset Management net revenues – continued growth
Asset Management net revenues – continued growth Net revenue margins, excluding performance fees, at 52 bps (FY 2013: 53 bps) £m 400 379.5 44.9 347.2 350 2.0 310.5 0.2 300 275.2 282.0 273.8 11.6 23.5 6.3 250 200 334.6 345.2 150 310.3 263.6 258.5 267.5 100 50 0 H1 2013 H2 2013 H1 2014 Institutional I
Slide 11: Wealth Management net revenues – up 88% supported by Cazenove Capital acquisition
Wealth Management net revenues – up 88% supported by Cazenove Capital acquisition Net revenue margins 66bps (FY 2013: 64 bps) £m 120 96.5 100.5 100 6.5 7.4 17.0 80 15.3 60 53.5 6.2 40 11.4 73.8 77.0 20 35.9 0 H1 2013 H2 2013 H1 2014 Management fees Transaction fees Net banking interest income 10 201
Slide 12: Profit before tax and exceptional items – 15% increase
Profit before tax and exceptional items – 15% increase reflecting strong business performance Increase of £34m £m 350 Net revenue 84 Profit before tax and 300 exceptional items Profit before tax and 261.5 exceptional items Compensation costs 250 Other costs Net finance income/ Wealth 228.0 (35) Weal
Slide 13: Operating expenses – key ratios in line with guidance
Operating expenses – key ratios in line with guidance H1 2014 Asset Management & Wealth £m H1 2013 H2 2013 Group Management Total H1 2014 versus H1 2013 Compensation costs 305.9 346.6 294.7 46.2 340.9 +11% Other costs 114.2 140.5 102.1 27.5 129.6 +13% Depreciation 6.3 6.2 7.1 0.5 7.6 +21% Total 426.
Slide 14: Exceptional items
Exceptional items H1 2014 Wealth £m Asset Management Management Group Total Integration costs 1.0 3.8 - 4.8 Amortisation of acquired intangible assets – Cazenove and 5.9 5.1 - 11.0 STW Amortisation of acquired intangible assets – other 1.1 - - 1.1 Deferred compensation arising directly from acquisit
Slide 15: Group segment before exceptional items
Group segment before exceptional items H1 2013 H1 2014 Segment disclosure £m £m Net revenue 5.9 7.1 Operating expenses (7.5) (12.7) Net finance income 7.4 5.3 Share of (loss)/profit of associate (0.5) 0.4 Group segment profit before exceptional items 5.3 0.1 Other comprehensive income (2.1) 1.8 3.2
Slide 16: Tax charge and earnings per share
Tax charge and earnings per share Change H1 2014 H1 2013 H1 2014 v H1 2013 Before Before before Exceptional items Total exceptional items exceptional items exceptional items Profit before tax – £m 228.0 261.5 (27.6) 233.9 33.5 +15% Tax – £m (48.0) (53.5) 5.8 (47.7) (5.5) +11% Profit after tax – £m 1
Slide 17: Movement in Group capital
Movement in Group capital Increase of £54m as at 30 June 2014 £m Billions Profit after tax 186 Share purchases (45) Dividends Foreign exchange Other (113) (15) 41 Group capital Group capital H1 2014 H2 2013 £2,323m £2,269m 31 December 2013 30 June 2014 16 2014 Half-Year Results | July 2014
Slide 18: Group capital allocation – Strong capital position maintained
Group capital allocation – Strong capital position maintained Increase of £54m as at 30 June 2014 H1 H2 H1 £m 2013 2013 2014 Investment capital breakdown (%) Regulatory capital 554 603 617 Government-guaranteed bonds Surplus operating capital 325 468 437 31% 30% Multi-asset Seed capital* 201 182 182
Slide 19: 2014 Half-Year Results
Schroders 2014 Half-Year Results 31 July 2014 Michael Dobson Chief Executive
Slide 20: Outlook
Outlook Good levels of net inflows in July in Intermediary and Institutional Uncertainty around retail investor demand in short term Significant Institutional pipeline Seeking efficiencies to offset fee pressures and costs of regulatory change Opportunities for long-term growth 19 2014 Hal
Slide 21: Forward-Looking Statements
Forward-Looking Statements These presentation slides may contain forward-looking statements with respect to the financial condition, performance and position, strategy, results of operations and businesses of the Group. Such statements and forecasts involve risk and uncertainty because they are base