Slide 1: Schroders 2017 Half-year results
Schroders 2017 Half-year results Peter Harrison – Group Chief Executive 27 July 2017
Slide 2: Revenue growth with cost discipline
Revenue growth with cost discipline Leading to increased profits Pre-exceptional profit up 23% Total cost ratio improved to 63% Positive net new business Interim dividend of 34.0 pence H1 2017 H1 2016 % change Net income (£m) 974.4 834.0 17% Pre-exceptional PBT (£m) 361.5 293.7 23% AUMA (£bn) 418.2
Slide 3: Net new business by channel
Net new business by channel Flows led by Institutional demand £bn 14 Continued Institutional demand 12 10 Positive flows in Wealth Management 8 6 Intermediary outflows 4 2 - (2) (4) (6) 2012 2013 2014* 2015 2016 H1 2017 Institutional Intermediary Wealth Management * Excludes Friends Life mandate win
Slide 4: Net new business by channel
Net new business by channel Flows led by Institutional and branded funds £bn 10 Strong branded fund flows 8 Significant redemption of US 6 Multi-asset sub-advised mandate 4 2 Improvement in Wealth Management flows 0 (2) (4) (6) H1 2015 H2 2015 H1 2016 H2 2016 H1 2017 Institutional Intermediary brand
Slide 5: Net new business by asset class
Net new business by asset class Continued Fixed Income demand £bn 20 Continued demand for Fixed Income across both channels 15 Multi-asset £4.3bn NNB excluding sub- 10 advised 5 Return for Intermediary equity demand 0 (5) (10) 2012 2013 2014* 2015 2016 H1 2017 Equities Fixed Income Multi-asset EMD,
Slide 6: Net new business by region
Net new business by region Global diversification proves resilient £bn 20 Strong UK performance 15 Continued mixed picture in Asia Pacific 10 - Japan net inflows - Australia net outflows 5 Strong European Intermediary 0 (5) (10) 2012 2013 2014* 2015 2016 H1 2017 UK Europe Asia Pacific Americas * Exc
Slide 7: North America
North America Underlying momentum in area of strategic importance £bn 4 Turnaround in underlying flows 3 2 Continued Institutional growth 1 0 Momentum with Hartford Schroder (1) range in Intermediary Branded (2) (3) (4) (5) (6) 2012 2013 2014 2015 2016 H1 2017 Institutional Intermediary branded Inte
Slide 8: North America
North America Strong inflows in Institutional and Intermediary Branded £bn 1.4 £2.0bn of net new business (excluding 1.2 sub-advised outflow) 1.0 Institutional inflows diversified by asset 0.8 class 0.6 0.4 Equity demand in Intermediary 0.2 0.0 (0.2) Institutional Intermediary Branded Equities Fixed
Slide 9: Building out Private Assets
Building out Private Assets Including strategic Adveq acquisition New head of Private Assets $20bn in Private Assets Adveq acquisition: Specialises in Global SME buyouts High quality client base Good fee margins and longevity Commitments of over $7bn Expected to complete in the near future 8 2017 Ha
Slide 10: Richard Keers – Chief Financial Officer
Richard Keers – Chief Financial Officer 27 July 2017
Slide 11: Profit before tax and exceptional items
Profit before tax and exceptional items Profit before tax and exceptional items up 23% to £361.5m £m Compensation Net income costs 140.4 (53.5) Non-compensation Profit before tax costs and exceptional (19.1) items Tax 361.5 (76.0) Profit before tax Profit after tax and exceptional Wealth and before
Slide 12: Net income
Net income Net income up 17% to £974m £m £m Markets and FX Performance fees Net income 131 6 974 Wealth Net income Acquisitions Net new business Other income Management 834 17 (9) (5) 134 Wealth Management 107 Net operating revenue + £145m Asset Asset Management Management 820 709 Group segment Grou
Slide 13: Institutional net operating revenue
Institutional net operating revenue £m 500 Average AUM up £45 billion from H1 2016 450 400 Net operating revenue margin excluding 376.4 372.8 21.1 13.2 performance fees 31bps (FY 2016: 32bps) 350 316.1 6.1 300 Closing AUM at record high of £238.6 billion 250 200 355.3 359.6 150 310.0 100 50 0 H1 - 1
Slide 14: Intermediary net operating revenue
Intermediary net operating revenue £m 500 Average AUM up £23 billion from H1 2016 450 436.5 425.3 400 11.3 Net operating revenue margin excluding 371.7 0.3 performance fees 71bps (FY 2016: 73bps) 350 300 Closing AUM at record high of £124.7 billion 250 436.5 200 414.0 371.4 150 100 50 0 H1 - 16 H2 -
Slide 15: Wealth Management net operating revenue
Wealth Management net operating revenue £m 140 Net banking interest up 7% from H1 2016 130.8 0.6 116.2 10.6 120 107.1 0.5 Net operating revenue margin excluding 10.7 21.0 100 9.9 1.9 performance fees 62bps (FY 2016: 65bps) 20.3 18.5 80 Closing AUM at record high of £43.6 billion 60 98.6 40 84.7 76.8
Slide 16: Operating expenses
Operating expenses Total cost ratio 63% £m 629.2 600 16.3 550.3 10.0 184.6 500 165.5 400 Exceptional items 300 612.9 Non-compensation costs 540.3 200 428.3 Compensation costs 374.8 100 0 H1 2016 H1 2017 Total compensation ratio 45% 44% Total cost ratio 65% 63% 15 2017 Half-year results | July 2017
Slide 17: Group Capital
Group Capital Increase of £57m as at 30 June 2017 £m £m 3,500 3,500 3,210 3,210 3,153 3,153 3,000 3,000 820 1,087 915 2,500 1,245 2,500 151 144 Capital Surplus 93 409 Investment Capital - Liquid 2,000 2,000 213 325 Interim Dividend 204 Investment Capital - Illiquid* Capital Buffer 1,500 1,500 850 86
Slide 18: Summary
Summary Strong results reflecting good cost discipline £m 974.4 Net income up 17% to £974m 834.0 Total cost ratio down to 63% Profit before tax and exceptional items up 23% to £361.5m 361.5 EPS up 22% to 103.5 pence 293.7 Interim dividend up 17% to 34 pence H1 -116 H1 -217 3 H1 -416 H1 5- 17 Net inc
Slide 19: Peter Harrison – Group Chief Executive
Peter Harrison – Group Chief Executive 27 July 2017
Slide 20: Schroders investor day
Schroders investor day Tuesday 3rd October Deep dive into areas of strategic future growth Presentations from wider senior management team 19 2017 Half-year results | July 2017
Slide 21: Outlook
Outlook Industry headwinds, but opportunities for growth Demonstrating ability and willingness to invest Maintaining strong cost discipline 20 2017 Half-year results | July 2017
Slide 22: Forward looking statement
Forward looking statement 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 Schroders Group. Such statements and forecasts involve risk and uncertainty because they