Jupiter Fund Management Plc · LSE:JUP
Jupiter Fund Management — H1 2013 Earnings Presentation
27 slides from Jupiter Fund Management's earnings presentation, Aug 1, 2013
Slide 1: Jupiter Fund Management plc Interim Results: 1 August 2013
Jupiter Fund Management plc Interim Results: 1 August 2013
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: Highlights
Highlights 3 Consistent Capturing Scalable Sharing the investment commercial operating rewards of outperformance alpha via flows model growth Delivering value to clients and shareholders
Slide 4: Financials
! Financials yofirer
Slide 5: Highlights
Highlights 5 Measure H1 12 H1 13 Change Net revenues £117.7m £140.3m 19% EBITDA £60.3m £75.3m 25% EBITDA margin 51% 54% Underlying EPS 9.0p 12.4p 38% Net cash £1m £113m £112m Interim dividend 2.5p 3.5p 40%
Slide 6: Revenues
Revenues 6 Net revenues Net management fees (£ million) (£ million) H1 12 H1 13 % +/- CAGR Net management fees 109.4 131.0 20% 10% p.a. 131 Net initial charge 7.7 8.8 114 Performance fees 0.6 0.5 109 100 Net revenues 117.7 140.3 19% Net management fee margin H1 12 H1 13 % +/- Average FTSE 5691
Slide 7: Administrative expenses (fixed)
Administrative expenses (fixed) 7 Fixed costs Fixed costs (£ million) (£ million) H1 12 H1 13 % +/- CAGR Fixed staff costs 19.5 21.2 5% p.a. 42 20.4 20.4 40 Other expenses 37 36 Fixed costs 39.9 41.6 +4% Continued investment in our talent, platform and distribution capabilities Exercising co
Slide 8: Administrative expenses (variable)
Administrative expenses (variable) 8 Variable costs Variable costs (£ million) and compensation ratio1 (£ million) H1 12 H1 13 24 Cash bonus 13.4 16.5 23 23 Deferred bonus 2.6 3.8 7 2 LTIP, SAYE and SIP 1.7 3.6 4 Pre-IPO deferral scheme 0.2 - Variable costs 17.9 23.9 18 17 Variable compensation
Slide 9: EBITDA
EBITDA1 9 High margin operating model Progression (£ million) EBITDA (£ million) EBITDA margin (per cent) 1.7 0.8 1.7 54 55 54 51 6.0 0.2 21.6 71.0 75.3 60.3 60.3 75.3 60.3 Net mgt Other 2012 2013 profits Fixed Variable Front end costs Box comp H1 10 H1 11 H1 12 H1 13 fees fees 1) Earnings before
Slide 10: Underlying EPS
Underlying EPS1 10 Calculation Progression (p) £ million H1 12 H1 13 % +/- Statutory profit before tax 31.2 59.1 CAGR 12.4 14% p.a. Amortisation of acquired contracts and brand 19.4 19.4 10.0 Charge for options over pre-Listing shares 4.0 2.4 9.0 8.3 P&L movement in value of AFS2 assets - (6.7)
Slide 11: Balance sheet
Balance sheet 11 Progression (£ million) Highlights Gross cash Gross bank loan Net (debt) / cash Dec-12 Jun-13 Net cash £69m £113m £44m Bank loan outstanding £78m £42m £36m 178 167 155 111 Debt facility paid down by a further £36 million during H1 from cash arising from operations and Cofunds sa
Slide 12: Dividends
Dividends 12 Progression (p) Highlights Interim Final 2012 2013 Interim dividend 2.5p 3.5p +40% Board consider the dividend on a total basis, while looking to maintain an appropriate balance between interim and final 6.3 5.3 Progressive dividend policy sharing the rewards of growth within a su
Slide 13: Sharing the rewards of growth
Sharing the rewards of growth 13 Illustrative model 9% Available profit to stakeholders Net revenues less fixed costs 27% Staff incentives Variable compensation ratio; mid-to-high 20%’s guidance 21% Corporation tax Current UK statutory rate of 23.25% Available profit to stakeholders Paid out to sh
Slide 14: Strategy, performance and flows
Strategy, performance and flows
Slide 15: Strategy
Strategy 15 A distinct investment culture, focused on generating value for our clients Sell our expertise through products suited to our distribution strengths Deliver attractive returns to shareholders
Slide 16: Generating value for our clients
Generating value for our clients 16 Three year mutual fund investment performance Distribution channels focused on three year performance numbers 20% Strong long-term track record 32% maintained 23% 25% Excellent institutional performance with 13% 90% of segregated mandates above 25% 27% b
Slide 17: Talent management; a continual process
Talent management; a continual process 17 Promoting Launching from the bench appropriate products >£6bn of Managing under mutual fund Hiring new talent performance AUM* Attractive culture to Succession planning minimise leavers * Assets under management as at 30 June 2013 in mutual funds either la
Slide 18: Market net flows by asset class
Market net flows by asset class 18 UK: net retail sales by asset class (£ billion) Europe: net UCITS sales by asset class (€ billion) Equities Balanced Bonds Absolute return Other Equities Balanced Bonds 3 60 2 40 1 20 0 0 -1 -20 -2 -40 Jan-12 Mar May Jul Sep Nov Jan-13 Mar May Jan-12 Mar May Jul
Slide 19: Jupiter net flows
Jupiter net flows 19 Net new business by product (£m) Highlights Segregated mandates Investment trusts Healthy net mutual fund inflows of £426m Private clients Good contribution from fixed income, Merlin and top-performing Mutual funds equity funds UK quieter due to RDR effects 130 Interna
Slide 20: Commercial alpha
Commercial alpha 20 AUM and net flows (£ billion) Outperformance versus markets 30 Underlying EPS Net mgt fees Average FTSE 29.0 160 150 +14% p.a. 5.0 25 140 0.4 0.2 130 +10% p.a. 0.1 4.4 120 +6% p.a. 20 110 19.5 100 90 15 80 H1 10 H1 11 H1 12 H1 13 Source: Jupiter; Yahoo Finance
Slide 21: Strategic growth opportunity
Strategic growth opportunity 21 Key trends Conclusions Population (m)1 Dependency ratio2 UK is attractive home market with 2012 2025 2050 2010 2050 positive growth dynamics UK 63 71 80 51 68 Significant market opportunity with AUM France 64 67 72 54 71 of $17.5tn4 already in Europe as a whole
Slide 22: UK distribution
UK distribution 22 Unit trust AUM since the peak of the FTSE Approach Scale player in domestic market 25.0 High quality UK distribution franchise built around a long-term performance culture 20.0 CAGR 13% p.a. Jupiter’s UK strategy: 15.0 Deliver investment outperformance Maintain brand s
Slide 23: International distribution
International distribution 23 SICAV AUM (£ billion) Approach AUM* (LHS) % age of overall mutual fund assets (RHS) Strong growth in AUM and increasingly important 2.5 10% contributor to Group’s distribution capabilities 9% Key hires made in Hong Kong and Germany 2.0 8% 7% Jupiter’s internatio
Slide 24: UK: regulatory change
UK: regulatory change 24 As expected Too early to say Independent Financial Adviser (IFA) flows steady, but Who will be the distributor and platform winners not spectacular given the otherwise positive market environment What level total client charges will settle at (or how this value chain
Slide 25: Delivering value to clients and shareholders
Delivering value to clients and shareholders 25 1st quartile investment performance Net mutual fund inflows 32% +£426m Dividends to shareholders +40% Net cash balance sheet High margin operating model £113m 54%
Slide 26: Strategic priorities
Strategic priorities 26 Develop and Deliver Extend Invest in the Increase cash enhance our outperformance distribution platform returns talent after fees capabilities Deliver value to clients and shareholders
Slide 27: Q&A
Q&A 27 | Where.there are clouds; we know there are silverinings. However gloomy the economic outlook, there are always investment opportunities if you know where to look For more information: Call 0500 0500 98, contact your IFA or search online for INVESTMENT SILVER LININGS. J Past performance is no
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