Ashmore Group plc · LSE:ASHM
Ashmore — FY2008 Earnings Presentation
34 slides from Ashmore's earnings presentation, Sep 16, 2008
Slide 1: Ashmore Group plc Preliminary Results – 12 months to 30 June 2008
Ashmore Group plc Preliminary Results – 12 months to 30 June 2008 16 September 2008
Slide 2: Presentation team
Presentation team Mark Coombs, Chief Executive Officer Graeme Dell, Group Finance Director 2
Slide 3: Contents
Contents Key highlights AuM, Performance and Themes Update Financial results Emerging markets opportunities and outlook Appendices 3
Slide 4: Financial highlights
Financial highlights Final AuM of US$37.5 billion (US$31.6 billion at 30 June 2007) up 19% Net management fees(1) up by 44% to £182.0 million Performance fees of £44.7 million (FY 2007: £20.4 million) Operating margin of 76% (FY2007: 76%) Profit before tax growth of 49% to £196.2 million (
Slide 5: Assets under Management
Assets under Management Overview Key Highlights AuM Growth (US$bn) AuM increased by US$5.9bn (19%) in the year 37.5 Significant subscriptions in local currency and special situations 31.6 New fund and theme launches CAGR: 63% Good investment performance 20.1 11.0 5.9 Jun-04 Jun-05 Jun-06 Jun
Slide 6: Assets under Management: 2008 AuM Development
Assets under Management Overview 2008 AuM Development 3.0 40 2.9 2.4 0.6 30 US$bn 20 37.5 31.6 10 0 AuM at June 2007 Net subscriptions - Net subscriptions - Performance AuM at June 2008 existing funds new funds 2008 Subscriptions and Redemptions (1) Redemptions as a % of Average AuM 21% 20% 12 18% 1
Slide 7: Investment Performance
Investment Performance Volatility (Annualised Standard Performance Deviation 3 Year AuM Performance Launch Annualised Return Since Volatility Theme Fund Date US$M (1) 1 month (2) YTD (2) 1 Year (2) 3 Year (2) 5 Year (2) (since Launch) (2) Launch) (Annualised) EMLIP Oct-1992 5,436.8 -1.09% 2.72% 11.9
Slide 8: Update on themes: Dollar debt
Update on themes Dollar debt Theme description and highlights Management and performance fees (£m) Comprises Dollar and other hard currency denominated 91.0 instruments, principally in sovereign bonds 71.9 Many funds are also permitted to invest into other themes: Local Currency, Special Situati
Slide 9: Update on themes: Local currency
Update on themes Local currency Theme description and highlights Management and performance fees (£m) Comprises local currency and local currency denominated debt 38.8 instruments None of the funds have highwater marks 21.4 17.2 Some funds may use borrowing (maximum is 75%) 3.1 FY 2007 FY 2008
Slide 10: Update on themes: Special situations
Update on themes Special situations Theme description and highlights Management and performance fees (£m) Invests in debt and/or equity or other instruments focusing on 42.6 specialist corporate investments and/or projects through distressed debt and/or private equity approach 25.9 GSSF funds ha
Slide 11: Update on themes: Equity
Update on themes Equity Theme description and highlights Management and performance fees (£m) The instruments invested by the funds can include Emerging 9.6 Market equity, convertibles, warrants, and equity derivatives 7.2 None of the funds have highwater marks 4.0 3.2 The majority of the fund
Slide 12: Update on themes: Corporate high yield and Ashmore Global Opportunities
Update on themes Corporate high yield and Ashmore Global Opportunities Limited Corporate high yield New theme launched October 2007 Long term growth opportunity AEMCHY fund AuM of US$0.5bn as at 30 June 2008 Ashmore Global Opportunities Limited Permanent capital vehicle listed on LSE Decembe
Slide 13: Fund diversification
Fund diversification Classification and crossover Classification by number of funds Classification by AuM (1) 50 Structured products 4% (6%) 41 7 White label/ dual branded 8 16 9% (10%) 14 3 3 Ashmore 24 Segregated sponsored 16 accounts funds 31% (32%) 56% (52%) 2007 2008 Ashmore sponsored funds Str
Slide 14: Investor analysis
Investor analysis Investor type, geography and concentration Investor Breakdown by investor type (1) Investor Breakdown by geography (1) HNWI/retail Other 1% 12% (15%) (2%) Permanent Middle East capital 2%(-) Corporate 13% (11%) pension Other(2) plan 4%(3%) 16% (16%) Fund/Sub advisor Asia 5% (5%) 16
Slide 15: Financial results: Income statement
Financial results Income statement Year ended Year ended Variance 30 June 30 June 2008 2007 As reported £m £m £m % Net revenue 240.0 159.8 80.2 50 Total operating expenses (58.8) (38.1) (20.7) 54 Operating profit 181.2 121.7 59.5 49 Net interest 15.0 9.7 5.3 55 Profit before tax 196.2 131.4 64.8 49
Slide 16: Financial results: Net revenue
Financial results Net revenue Year ended Year ended Variance 30 June 30 June 2008 2007 As reported £m £m £m % Management fees 186.7 130.2 56.5 43 Less: Distribution costs (4.7) (3.8) (0.9) (24) Net management fees 182.0 126.4 55.6 44 Performance fees 44.7 20.4 24.3 119 Other revenue 13.3 13.0 0.3 2
Slide 17: Financial results: Net management fees by theme
Financial results Net management fees by theme Year ended Year ended Variance 30 June 30 June 2008 2007 As reported £m £m £m % Dollar debt 91.0 71.9 19.1 27 Local currency 38.8 21.4 17.4 81 Special situations 42.6 25.9 16.7 64 Equity 9.6 7.2 2.4 33 Net management fees 182.0 126.4 55.6 44 …Particular
Slide 18: Financial results: Revenue margins
Financial results Revenue margins (basis points) 180 Margin (bps) 135 117 120 93 103 Total net revenue 60 25 15 margins 0 FY 2007 FY 2008 Total net revenue Net management fee Performance fee 200 171 184 Margin (bps) 160 119 119 Net 120 108 100 management 76 82 80 fee margins 40 FY 2007 FY 2008 Dolla
Slide 19: Financial Results: Performance Fees
Financial Results Performance Fees AuM Breakdown by Performance Fee Characteristics (1), (2) Performance Fees by Theme (3) Equity 7% Special Do not earn Situations performance fees Earned 35% Dollar Debt 16% 35% 38% Local Currency Rebated / 38% Deferred / None earned 30% Potential Performance Fee Ea
Slide 20: Financial results: Expenses
Financial results Expenses Year ended Year ended Variance 30 June 30 June 2008 2007 As reported £m £m £m % Personnel expenses 7.4 5.2 2.2 42 Other operating expenses 11.1 5.5 5.6 102 Variable compensation 40.3 27.4 12.9 47 Total operating expenses 58.8 38.1 20.7 54 Operating profit margin 76% 76% …O
Slide 21: Financial results: Personnel and operating expenses
Financial results Personnel and operating expenses 5.3 5 4 3.8 3 £m 2.5 2.2 2 1.7 1.6 1.4 1.2 1.0 1.0 1.0 1 0.6 0.7 0.7 0.5 0.3 0.2 0.0 0 2007/2008 Staff costs Travel Professional fees IT & communciations Premises Insurance Auditors' remuneration DAC Other …Continued investment for future 21
Slide 22: Financial results: Earnings
Financial results Earnings Year ended Year ended Variance 30 June 30 June 2008 2007 £m £m % Profit before tax 196.2 131.4 49 Tax (55.2) (39.9) Profit after tax 141.0 91.5 54 Attributable: Equity holders of the parent 140.8 91.4 Minority interest 0.2 0.1 Earnings per share - basic 21.0p 13.7p 53 Earn
Slide 23: Financial Results: Cash flow
Financial Results Cash flow Year ended Year ended 30 June 30 June 2008 2007 £m £m Cash generated from operations 195.5 132.3 Deferred acquisition costs (14.6) - Purchase of non-current assets held for sale (15.1) - Dividends (70.1) (15.5) Taxation (46.5) (39.2) Interest 15.4 9.5 FX and other (3.4) (
Slide 24: Financial results: Balance sheet
Financial results Balance sheet As at As at 30 June 30 June 2008 2007 £m £m Non-current assets 7.4 4.4 Non current assets held for sale 16.4 - Deferred tax asset 13.8 14.4 Deferred acquisition costs 13.4 - Cash and cash equivalents 279.2 218.0 Other current assets 35.9 27.7 Total assets 366.1 264.5
Slide 25: Emerging markets opportunity: Executing a clearly defined strategic plan
Emerging markets opportunity Executing a clearly defined strategic plan Phase 1 Phase 2 Phase 3 Developed Î Emerging Emerging Î Emerging Establish Establish Diversify Diversify Mobilise Mobilise EM EM Capital Capital Enhance understanding of EM debt Add investment themes Mobilise EM capital to
Slide 26: Emerging markets opportunities: Local currency
Emerging markets opportunities Local currency Market Opportunity Ashmore Differentiation 7,000 One of the longest track records in managing dedicated 6,000 local currency funds 5,000 — Commenced theme in 1996 as an element of a broader debt mandate EM Local Currency Debt Outstanding (US$bn) 4,000
Slide 27: Emerging markets opportunities: Special Situations
Emerging markets opportunities Special Situations Market Opportunity Ashmore Differentiation Ashmore’s team has been involved in Emerging Markets 120 Special Situations since 1983 Proceeds From Privatisation Transactions (US$bn) 100 80 GSSF fund performance at 38% over life of fund 60 40 Dedic
Slide 28: Summary and outlook
Summary and outlook A leading dedicated specialist in emerging markets asset management Strong long-term track record Executing a clearly defined strategic plan Continued investment in infrastructure Highly profitable business Well positioned for significant emerging market opportunity —
Slide 29: Appendices
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Slide 30: Appendix 1 – AuM/product information
Appendix 1 – AuM/product information AuM by theme and fund/account classification US$bn 30-Jun-2004 30-Jun-2005 30-Jun-2006 30-Jun-2007 30-Jun-2008 Investment theme(1) Dollar debt 4.7 8.4 15.2 21.2 22.7 Local currency 0.6 1.2 3.0 5.0 8.5 Special situations 0.5 1.2 1.3 3.4 5.5 Equity 0.1 0.2 0.6 2.0
Slide 31: Appendix 1 – AuM/product information: fees by theme
Appendix 1 – AuM/product information Management and performance fees by theme UK GAAP IFRS Year ended Year ended Year ended Year ended Year ended £ millions 30 Jun 2004 30 Jun 2005 30 Jun 2006 30 Jun 2007 30 Jun 2008 Net management fees less distribution costs Dollar debt 17.8 27.1 52.2 71.9 91.0 Lo
Slide 32: Appendix 2 – US Dollar
Appendix 2 – US Dollar Revenue is predominantly US dollar based/costs sterling based Overall net impact of movements in US$/£ exchange rate movements on profit before tax increase of £64.8 million is £4.1 million(1) Current hedging position: — 67% of 08 / 09 net management fee revenue covered
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
Slide 34: Ashmore
Ashmore