Ashmore Group plc · LSE:ASHM
Ashmore — FY2013 Earnings Presentation
33 slides from Ashmore's earnings presentation, Sep 10, 2013
Slide 1: Preliminary results 10 September 2013
Ashmore Group plc Preliminary results 10 September 2013 12 months to 30 June 2013
Slide 2: Highlights
Highlights •Assets under management US$77.4 billion at 30 June 2013 (+22% YoY) - Record gross subscriptions of $27.2 billion (FY2011/12: US$13.0 billion) - Net subscriptions $13.4 billion (FY2011/12: US$1.3 billion) •Net revenue £355.5 million (+7%) - Net management fees £311.2 million (+4%) - Perfo
Slide 3: Assets under Management Overview
Assets under Management Overview Subscriptions drive AuM growth Assets under management (US$bn) • AuM increased by US$13.7bn (22%) from 90 30 June 2012 77.4 • Average AuM increased by 13% to 80 US$72.2bn 70 65.8 63.7 • Net subscriptions US$13.4bn - H1: +US$1.6bn 60 - H2: +US$11.8bn 50 • Investment p
Slide 4: Subscriptions and redemptions
Assets under Management Subscriptions and redemptions Record gross subscriptions AuM development (US$bn) • Strong demand for fixed income from a 27.2 (13.8) diverse range of clients - Local currency, Corporate debt and Blended debt • Equities achieved gross subscriptions in 0.9 (0.6) every quarter -
Slide 5: Investment performance
Assets under Management Investment performance Funds outperforming versus Funds outperforming versus Funds outperforming versus benchmark – Gross 1 Year1 benchmark – Gross 3 Years1 benchmark – Gross 5 Years1 100% 100% 100% 80% 80% 80% 60% 60% 60% 40% 40% 40% 20% 20% 20% 0% 0% 0% External Local Corpo
Slide 6: Statutory income statement
Financial Results Statutory income statement Year ended Year ended 30 June 2013 30 June 2012 Variance £m £m £m % Net revenue 355.5 333.3 22.2 7 Investment securities & third-party interests in funds 3.7 (0.8) 4.5 - Personnel expenses (82.3) (73.0) 9.3 13 Other operating expenses (24.7) (23.3) 1.4 6
Slide 7: Net revenue
Financial Results Net revenue Year ended Year ended 30 June 2013 30 June 2012 Variance £m £m £m % Management fees 316.0 302.6 13.4 4 Less: distribution costs (4.8) (3.7) 1.1 - Net management fees 311.2 298.9 12.3 4 Performance fees 33.4 25.4 8.0 31 Other revenue 6.2 6.2 - - Foreign exchange 4.7 2.8
Slide 8: Revenue margins
Financial Results Revenue margins Mix and size effects are the key drivers Average net management fee margins (bps) • Headline theme mix 300 • Large mandate wins in fixed income - e.g. local currency had a number of segregated 250 240 mandate wins in excess of US$500m FY11 FY12 FY13 - Profitable lon
Slide 9: Revenue quality and EBITDA margin
Financial Results Revenue quality and EBITDA margin 600 80% 70% 500 60% 400 50% Net fees (US$m) 300 40% 30% 200 20% 100 10% 0 0% FY2007/08 FY2008/09 FY2009/10 FY2010/11 FY2011/12 FY2012/13 Management fees Performance fees EBITDA margin (RHS) Performance fees % of revenue (RHS) …high-quality profits
Slide 10: Expenses
Financial Results Expenses Year ended Year ended 30 June 2013 30 June 2012 Variance £m £m £m % Personnel expenses 25.1 23.6 1.5 6 Variable compensation 57.2 49.4 7.8 16 Other operating expenses 24.7 23.3 1.4 6 Depreciation 2.4 1.6 0.8 - Amortisation 17.8 9.5 8.3 - Total operating expenses 127.2 107.
Slide 11: Employee costs
Financial Results Employee costs • Recruitment in selected areas Year end headcount - Local fund management development (+11) FY 2012/13 240 51 291 - Growth in operational support reflecting industry trends and 96 45 150 enhancing platform scalability (+16) FY 2011/12 217 40 91 41 125 257 - Distribu
Slide 12: Adjusted profits
Financial Results Adjusted profits FY2012/13 Acquisition- FY2012/13 FY2011/12 Variance £ millions Statutory Seed capital-related items related items Adjusted Adjusted % Consolidated Other seed funds capital items Net revenue 355.5 355.5 333.3 7 Inv. secs. & third-party interests in funds 3.7 (3.7) -
Slide 13: Earnings
Financial Results Earnings Year ended Year ended 30 June 2013 30 June 2012 Variance £m £m £m % Profit before tax 257.6 243.2 14.4 6 Tax (56.0) (57.5) (1.5) 3 Profit after tax 201.6 185.7 15.9 9 Profit attributable to non-controlling interests 0.6 (4.2) 4.8 - Profit attributable to equity holders of
Slide 14: Balance sheet and cash flow items
Financial Results Balance sheet and cash flow items Key balance sheet items Cash flow (1) • Cash and cash equivalents (1) £393.9m 59.4 (FY2011/12: £344.1m) 280.9 110.9 - Proposed final dividend £81.2m 30.8 • Tangible shareholders’ equity £545.0m 19.1 17.6 2.5 4.2 (FY2011/12: £439.2m) 393.9 344.1 • S
Slide 15: Seed capital
Investing for Growth Seed capital • Rationale for seeding funds Cash and seed capital (£m) - Provide initial scale to funds to establish new 600 markets or distribution channels - Establish investment track record 500 - Support local fund management platforms 400 • Risk management defines strict 300
Slide 16: Three Phase Strategy
Three Phase Strategy …consistent and compelling 16
Slide 17: Investing for Growth: Progress update
Investing for Growth Progress update • Distribution progress Segregated accounts an increasing % of AuM - Diversified client base - Resilience through institutional allocators to EM and long- 100% 90% established relationships 80% - Scale in intermediary fund structures (US$8.2bn vs US$6.8bn 70% Jun
Slide 18: A consistent rationale for investing in Emerging Markets
A consistent rationale for investing in Emerging Markets •Strong economic fundamentals 5-6% GDP growth, GDP per capita 3-5x faster than DM US$7k, equivalent to DM in 1980 •Stability from greater political and fiscal accountability Stable inflation (~4%) and low 49% of global real interest rates GDP
Slide 19: Outlook
Outlook •Emerging Markets: not a single homogeneous asset class Diverse and growing investment universe 0 20 40 60 80 100 - Diverse range of securities across more than 65 countries 1992 •Emerging Markets’ growth premium intact 2002 - Cyclical adjustment in certain countries, not a structural trend
Slide 20: Summary
Summary •Record gross subscriptions demonstrate impact of distribution investment •Institutional AuM resilient •Profit growth at a high margin •Strong investment track record •Strong balance sheet and continued cash generation enables continued investment •Emerging Markets fundamentals sound and int
Slide 21: Appendices
Ashmore Appendices
Slide 22: Management and performance fees by theme (GBP)
Appendix 1a Management and performance fees by theme (GBP) £ millions FY11 FY12 FY13 External debt 62.5 64.9 65.6 Local currency 38.5 45.4 53.8 Corporate debt 12.5 13.0 21.4 Blended debt 28.0 37.7 55.1 Equities 5.1 33.6 27.8 Alternatives 46.8 41.9 38.8 Multi-strategy 50.6 53.9 38.7 Overlay / liquidi
Slide 23: Management and performance fees by theme (USD)
Appendix 1b Management and performance fees by theme (USD) US$ millions FY11 FY12 FY13 External debt 99.5 103.1 100.8 Local currency 61.5 72.1 85.0 Corporate debt 20.0 20.7 34.7 Blended debt 44.7 59.9 87.2 Equities 8.2 54.0 43.9 Alternatives 74.6 66.4 61.8 Multi-strategy 81.1 85.6 58.7 Overlay / liq
Slide 24: AuM by theme and fund account / classification
Appendix 2a AuM by theme and fund account / classification US$ billions FY11 FY12 FY13 External debt 14.3 15.9 14.5 Local currency 9.4 10.0 17.6 Corporate debt 1.3 2.4 6.1 Blended debt 10.9 12.4 17.6 Equities 10.1 6.2 5.5 Alternatives 2.8 2.6 2.7 Multi-strategy 8.4 5.6 3.7 Overlay / liquidity 8.6 8.
Slide 25: AuM / product information
Appendix 2b AuM / product information AuM by theme (US$bn) AuM as invested (US$bn) External 9.7 14.5 9.8 External Local 20.4 3.7 3.3 Local 2.7 Corporate Blended 6.5 Corporate 5.5 Equities Equities 17.6 Alternatives Alternatives 14.4 17.6 Multi-strategy Overlay/liquidity 6.1 23.1 Overlay/liquidity Au
Slide 26: AuM movements by investment theme
Appendix 2c AuM movements by investment theme Net mgt fee AuM Gross Gross AuM margins US$ billions 30-Jun-12 Performance subscriptions redemptions Net flows Reclassification 30-Jun-13 (bps) External debt 15.9 0.1 4.1 (4.5) (0.4) (1.1) 14.5 65 Local currency 10.0 (0.4) 9.5 (1.5) 8.0 17.6 60 Corporate
Slide 27: AuM movements by investment theme (half-on-half)
Appendix 2d AuM movements by investment theme (half-on-half) AuM AuM AuM US$ billions 30-Jun-12 Performance Net flows Reclass. 31-Dec-12 Performance Net flows Reclass. 30-Jun-13 External debt 15.9 1.4 (1.0) (1.0) 15.3 (1.3) 0.6 (0.1) 14.5 Local currency 10.0 1.1 2.1 13.2 (1.5) 5.9 17.6 Corporate deb
Slide 28: Statutory to Adjusted profits reconciliation FY2011/12
Appendix 3a Statutory to Adjusted profits reconciliation FY2011/12 FY2011/12 Acquisition- FY2011/12 £ millions Statutory Seed capital-related items related items Adjusted Consolidated Other seed capital funds items Net revenue 333.3 333.3 Inv. secs. & third-party interests in funds (0.8) 0.8 - Perso
Slide 29: Seed capital and acquisition-related items
Appendix 3b Seed capital and acquisition-related items £ millions FY13 FY12 Operating expenses (0.7) - Gains/(losses) on investment securities 4.9 (0.4) Change in third-party interests (1.2) (0.4) Finance income 1.6 1.3 Other gains on seed capital investments 12.6 1.2 Total seed capital-related item
Slide 30: Cash flows and consolidated funds
Appendix 3c Cash flows and consolidated funds Year ended 30 June 2013 Year ended 30 June 2012 £m £m As Consolidated Group ex Consolidated Group ex reported funds funds As reported funds funds £m £m £m £m £m £m Cash from operations 280.2 (0.7) 280.9 238.8 (0.2) 239.0 Taxation (59.4) (59.4) (58.2) (58
Slide 31: Investment performance – public funds
Appendix 4 Investment performance – public funds Source: Ashmore (un-audited), JP Morgan, Morgan Stanley. Data as at 30 June 2013. Returns gross of fees, dividends reinvested. (1) Annualised performance shown for periods greater than one year. (2) Composite benchmark: 50% JPM EMBI GD; 25% JPM ELMI+;
Slide 32: 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
Slide 33: Ashmore
Ashmore