Ashmore Group plc · LSE:ASHM
Ashmore — FY2021 Earnings Presentation
33 slides from Ashmore's earnings presentation, Sep 3, 2021
Slide 1: Results for year ending 30 June 2021
Ashmore Group plc Results for year ending 30 June 2021 3 September 2021 www.ashmoregroup.com
Slide 2: Overview
Overview • Performance reflects ongoing recovery ˗ Strong one and five years relative performance across all themes, three years performance significantly improved ˗ Delivered AuM growth of 13% to US$94.4 billion, including net flows of +US$1.2 billion ˗ Statutory PBT increased by 28% to £282.5 mill
Slide 3: Investment performance
Investment performance One year: 96% outperforming Three years: 57% outperforming Five years: 79% outperforming 100% 100% 100% 90% 90% 90% 80% 80% 80% 70% 70% 70% 60% 60% 60% 50% 50% 50% 40% 40% 40% 30% 30% 30% 20% 20% 20% 10% 10% 10% 0% 0% 0% Jun’20: 9% Jun’20: 17% Jun’20: 74% Outperforming Underpe
Slide 4: Strategy is delivering growth and asset class diversification
Good momentum in equities • Strong performance delivering AuM growth Strong relative performance ˗ Outperformance across global strategies over one, three and Alpha1 One year Three years Five years five years ˗ AuM increased +US$2.8 billion (+61% YoY) to US$7.4 billion EM All Cap +18.0% +10.5% - ˗ 8
Slide 5: ESG has always been important to Ashmore's active management in Emerging Markets
Sustainability & ESG integrated into investment processes • Able to meet client demand for ‘pure’ ESG or broad portfolios Recognition of Ashmore’s sustainability credentials ˗ Integrated ESG factors across all asset classes UNPRI scores Current (previous) ˗ Dedicated ESG SICAV & 40-Act funds Strateg
Slide 6: Financial performance overview
Financial performance overview • AuM +13% YoY, average AuM flat YoY FY2020/21 FY2019/20 £m £m YoY % Net flows +US$1.2 billion and positive investment performance +US$9.6 billion AuM (US$bn) 94.4 83.6 13 Adjusted net revenue 296.6 325.0 (9) • Adjusted net revenue -9% Net management fees -14% Adju
Slide 7: Net inflows driven by institutional allocations
Assets under management • Strong markets and investment outperformance AuM development (US$bn) added US$9.6 billion • Subscriptions of US$17.6 billion, 21% of opening 9.6 4.1 (2.9) AuM (FY2019/20: US$24.3 billion) Broad-based demand across all fixed income and equity themes New clients active in
Slide 8: Revised AuM disclosure
Revised AuM disclosure Summary of revised investment themes & asset classes • Group reporting will adopt the new format from Sep 2021 (i.e. Q1 2022) Old theme AuM New theme / AuM US$bn asset class US$bn External debt 18.2 External debt 18.7 • In line with client reporting Local currency 19.6 Local c
Slide 9: Local asset management: delivering strong growth and diversification
Local asset management Established network of six local offices • Local asset management operations contributing significantly to strategic objectives ˗ +44% YoY growth in AuM to US$7.2bn, 8% of Group ˗ Diversification with new clients, ESG capabilities, growth in equities and alternatives marketing
Slide 10: Revenues affected by FX translation and mix effects
Financial results Revenues • Adjusted net revenue fell by 9% (3% at constant currency) Adjusted net revenue bridge (£m) 325.0 (44.6) • Net management fees -14% (-8% at constant currency) 8.2 296.6 8.0 Broadly flat average AuM (US$90.0bn) 4bps decline in net management fee margin Higher average
Slide 11: Continued focus on operating cost control
Financial results Operating costs • Non-VC operating costs reduced by 6% (2% at Adjusted operating costs (£m) constant currency) 105.9 -1% +1% -2% 103.7 ˗ Flat average headcount, lower travel and office- related expenses ˗ Charitable contribution: 0.5% of profits* paid to Ashmore Foundation and othe
Slide 12: Seed capital: programme drives AuM scale
Financial results Seed capital Seed capital movement (market value, £m) 134.6 • Total seed capital exposure of ~£345 million 106.0 69.8 336.8 market value £336.8 million (30 June 2020: £238.4 million) undrawn commitments of £8.9 million 238.4 • Net P&L gain of £92.5 million (FY2019/20: £7.6 mill
Slide 13: Dividend balances statutory and adjusted profits
Financial results Statutory earnings FY2020/21 FY2019/20 YoY £m £m % Profit before tax 282.5 221.5 28 Tax (40.7) (36.8) (11) Profit after tax 241.8 184.7 31 Profit attributable to non-controlling interests (1.7) (2.6) 35 Profit attributable to equity holders of the parent 240.1 182.1 32 Earnings per
Slide 14: Cash flow: business model delivers strong operating cash flows
Financial results Cash flow • Consistently high conversion of profits Cash flow (£m) (1) to cash flow Operating cash flow of £213.1 million (1) represents 109% of 213.1 64.3 adjusted EBITDA (FY2019/20: 121.2 116%) 23.3 6.8 2.2 490.1 485.4 39.7 445.7 • Cash flow provides for: ˗ Corporation tax ˗ Or
Slide 15: Well-capitalised, liquid balance sheet
Financial results Balance sheet • Capital resources of £765.1 million (1) Consistent balance sheet structure 900 ˗ Excess regulatory capital of £609.2 million, 800 equivalent to 85p/share 700 600 • Pillar II regulatory capital requirement of 500 £155.9 million 400 300 ˗ Increased 6% due to higher ma
Slide 16: Supportive environment for continued EM performance
Emerging Markets outlook • Vaccination programmes support economic and social recovery Attractive valuations: lower equity PERs and higher real yields ˗ Significant acceleration in EM, in aggregate, over past six 28 60% months 26 50% 24 22 40% • Emerging countries are in stronger post-pandemic posit
Slide 17: Summary
Summary • Performance reflects ongoing recovery • Continued strategic progress • Favourable outlook for Emerging Markets 17
Slide 18: Q&A
Ashmore Q&A
Slide 19: Appendices
Ashmore Appendices eee
Slide 20: Adjusted profits reconciliation
Appendix 1a Adjusted profits reconciliation Adjusted Adjusted FY2020/21 FY2019/20 £m £m YoY % Net revenue 291.7 330.5 (12) FX translation 4.9 (5.5) nm Adjusted net revenue 296.6 325.0 (9) Operating costs ex consolidated funds (99.8) (103.6) 4 VC on FX translation (1.1) 1.1 nm Adjusted operating cost
Slide 21: Seed capital
Appendix 1b Seed capital • Consolidated funds: FY2020/21 FY2019/20 £m £m Line-by-line consolidation in financial statements Gains/(losses) on investment securities 123.5 (19.1) FX taken to reserves Change in third-party interests in consolidated funds (52.6) 7.5 PBT contribution of £72.5 milli
Slide 22: Net management and performance fees by theme
Appendix 2a Net management and performance fees by theme FY2020/21 FY2019/20 FY2020/21 FY2019/20 £m £m US$m US$m External debt 51.9 59.4 70.4 75.1 Local currency 50.7 60.2 68.6 76.1 Corporate debt 34.6 51.3 46.8 64.8 Blended debt 82.7 94.6 112.0 119.4 Equities 26.5 23.0 36.1 29.1 Alternatives 12.3 1
Slide 23: Management fee margins & revised AuM disclosure
Appendix 2b Management fee margins & revised AuM disclosure FY2019/20 FY2020/21 FY2020/21 AuM Margin AuM Margin AuM Margin Old theme US$bn (bps) US$bn (bps) New theme / asset class US$bn (bps) External debt 17.1 41 18.2 39 External debt 18.7 38 Local currency 18.7 38 19.6 35 Local currency1 31.9 29
Slide 24: Assets under management
Appendix 3a Assets under management AuM by theme (US$bn) AuM as invested (US$bn) External debt 0.3 12.8 18.2 12.8 Local currency External debt 1.4 1.3 Corporate debt 30.4 Local currency 7.4 7.7 Blended debt Corporate debt Equities Equities 19.6 Alternatives 18.1 Alternatives 23.4 Multi-asset Overlay
Slide 25: Investment themes
Appendix 3b Investment themes Overlay/ External Debt Local Currency Corporate Debt Equities Alternatives Liquidity (USD 18.2bn) (USD 19.6bn) (USD 11.3bn) (USD 7.4bn) (USD 1.4bn) (USD 12.8bn) Global Emerging • Broad • Bonds • Broad • EM Active • Private Equity • Overlay Markets • Sovereign • Bonds (B
Slide 26: Quarterly net flows
Appendix 3c Quarterly net flows +8.0 +6.0 +4.0 +2.0 US$ billion +0.0 -2.0 -4.0 -6.0 -8.0 FY08 FY09 FY10 FY11 FY12 FY13 FY14 FY15 FY16 FY17 FY18 FY19 FY20 FY21 26
Slide 27: AuM movements by theme and fund classification
Appendix 4 AuM movements by theme and fund classification AuM Gross Gross AuM US$bn 30 June 2020 Performance subscriptions redemptions Net flows 30 June 2021 External debt 17.1 1.6 1.9 (2.4) (0.5) 18.2 Local currency 18.7 1.9 2.4 (3.4) (1.0) 19.6 Corporate debt 10.6 1.6 2.1 (3.0) (0.9) 11.3 Blended
Slide 28: Foreign exchange
Appendix 5 Foreign exchange • Sterling strengthened against the US dollar over the period Currency exposure of cash(1) Period-end rate moved from 1.2356 to 1.3815 30 June 2021 % 30 June 2020 % £m £m Average rate 1.3472 vs 1.2637 in FY2019/20 US dollar 341.3 77 380.5 78 Sterling 76.0 17 66.0 13 •
Slide 29: Cash flows and consolidated funds FY2020/21
Appendix 6 Cash flows and consolidated funds FY2020/21 £m As reported Consolidated funds Group ex funds Cash from operations 213.5 0.4 213.1 Taxation (64.3) - (64.3) Interest received 2.8 2.7 0.1 Seeding activities (9.5) (2.7) (6.8) Dividends paid (121.2) - (121.2) EBT purchases (23.3) - (23.3) Othe
Slide 30: Investment performance
Appendix 7 Investment performance 1yr 3yr 5yr 30th June 2021 Ashmore Benchmark Ashmore Benchmark Ashmore Benchmark External debt Broad 13.8% 7.5% 5.9% 6.7% 5.2% 4.9% Sovereign 10.1% 7.5% 5.5% 6.7% 4.4% 4.9% Sovereign IG 5.0% 3.0% 6.8% 7.9% 4.8% 5.1% Local currency Bonds 9.3% 6.6% 4.4% 4.1% 4.0% 3.2%
Slide 31: Historical valuations relative to Developed Markets
Appendix 8 Historical valuations relative to Developed Markets External debt Local currency Index: 72 countries, 170 issuers, 947 bonds Index: 20 countries, 20 issuers, 286 bonds 800 8.0% 6.00% 7.0% 700 5.50% 6.0% 600 5.00% 5.0% Yield (%) 500 4.0% 4.50% 3.0% 400 4.00% 2.0% 300 3.50% 1.0% 0.0% 3.00%
Slide 32: Disclosures
Appendix 9 Disclosures Page 3: - Gross performance is shown, weighted by fund AuM, to provide a representative view to analysts and shareholders of Ashmore’s investment performance over relevant time periods - Only funds at 30 June 2021 and with a performance benchmark are included, which specifical
Slide 33: Disclaimer
Disclaimer IMPORTANT INFORMATION This document does not constitute an offer to sell or an invitation to buy shares in Ashmore Group plc or any other invitation or inducement to engage in investment activities. Certain statements, beliefs and opinions in this document are forward-looking, which refle