Jupiter Fund Management Plc · LSE:JUP
Jupiter Fund Management — FY2018 Earnings Presentation
28 slides from Jupiter Fund Management's earnings presentation, 2019
Slide 1: 2018 Full Year Results
JUPITER 2018 Full Year Results
Slide 2: Maintaining shareholder returns
1 Maintaining shareholder returns Delivering growth through investment excellence Net Management Underlying Net Investment Fees Earnings per Sales Performance Share 3 year mutual fund outperformance* Up 1% Down 7% Outflows To £395.7m to 31.7p of £4.6bn 77% (2017: £392.4m) (2017: 34.2p) (2017: Inflow
Slide 3: A straightforward active asset management strategy
2 A straightforward active asset management strategy Delivering growth through investment excellence 1 2 3 Deliver Sell this expertise Deliver attractive outperformance through products returns to after fees to our suited to our shareholders clients distribution strengths Introduction JUPITERAM.COM
Slide 4: Competitive advantage
3 Competitive advantage Delivering performance after fees for our clients is what we do Three year mutual fund performance • Long-term performance record maintained over three years AUM weighted • 77% of AUM* in mutual funds above median 12% • 46% of AUM* in segregated mandates and investment trusts
Slide 5: Largest funds performing well
4 Largest funds performing well 10 funds over £1bn representing over 62% of invested assets* AUM at AUM at AUM at 4th quartile 3rd quartile 2nd quartile 1st quartile Dec 2017 Jun 2018 Dec 2018 Dynamic Bond ** £9,710m £7,122m £5,391m European £4,948m £5,562m £5,076m Strategic Bond £3,906m £3,891m £3,
Slide 6: 2018 AUM progression
5 2018 AUM progression AUM down 15% to £42.7bn Mutual fund net outflows of £4.4bn were centred on a single product Movement in AUM (£bn) 7.4 5.4 Net outflows = £4.1bn 8.4 (8.7) 3.4 (4.4) 1.4 2.7 (6.8) (0.6) £4.4bn net outflows (2.6) 50.2 (0.2) (4.6) (2.9) Gross flows excl. Redemptions excl. Gross fl
Slide 7: Successful diversification of our product range and geography
6 Successful diversification of our product range and geography Changing asset base over the last five years Split of AUM by asset class (£bn) Split of AUM by client geography (£bn) 42.7 42.7 29.4 29.4 Dec-13 Dec-18 Dec-13 Dec-18 Equities Fixed Income Multi Asset Alternatives UK Europe Asia RoW Flow
Slide 8: Jupiter continued to invest in 2018
7 Jupiter continued to invest in 2018 Committed to investment in organic growth whilst maintaining an efficient operating platform 6 new fund launches in the year • Multi Asset: Flexible Income / Merlin Real Return • Alternatives: US Equity Long Short New products • Equities: Global Value / Jupiter
Slide 9: 2018 Full Year Results - Charlotte Jones, CFO
JUPITER 2018 Full Year Results Charlotte Jones Chief Financial Officer JUPITERAM.COM
Slide 10: Financial highlights
9 Financial highlights Solid financial performance 2017 2018 Change Net management fees £392.4m £395.7m +1% Net revenue £409.5m £412.7m +1% Net management fee margin 85.0bps 83.3bps Underlying profit before tax* £193.6m £179.2m -7% Underlying EPS 34.2p 31.7p -7% Total dividend 32.6p 28.5p -13% Adjus
Slide 11: Earnings
10 Earnings Good underlying growth in earnings Like for like earnings in 2017 were £175.7m 193.6 17.9 (17.9) 13.0 (15.4) 10.1 (7.5) 3.3 Underlying PBT 179.2 175.7 2017 Research costs and Net management Performance Operating expenses Variable Losses on 2018 box profits fees fees excl. research compen
Slide 12: Revenues
11 Revenues Continued growth in net revenues Net revenue £m 2017 2018 % +/- Revenue (£m) 410 413 Net management fees 392.4 395.7 +1% 15 15 Performance fees 1.9 14.9 351 394.3 410.6 +4% 329 15 303 15 Net initial charges 15.2 2.1 14 13 Of which box profits 13.6 0.7 Net revenue 409.5 412.7 +1% 392 396
Slide 13: Net management fee margin
12 Net management fee margin Key driver remains changing business mix Bps 2014 2015 2016 2017 2018 Margin* 88.3 87.5 87.3 85.0 83.3 • Net management fee margin has declined from 85.0bps to 83.3bps in the year due to a continued change in business mix • Net management fee margin for H1 18 was 82.7bps
Slide 14: Operating expenses
13 Operating expenses Investing to support growth ambitions Operating expenses* Operating expenses (£m) and % of net management fees 200 45% £m 2017 2018 % +/- 180 39% 40% Fixed staff costs 54.3 61.5 +13% 34% 160 35% Other expenses 77.8 91.0 +17% 35% 5 140 33% 32% 23 30% Operating expenses 132.1 152
Slide 15: Operating expenses progression
14 Operating expenses Progression driven by continued investment; costs actions taken to reduce run rate costs Operating expenses progression from 2017 to 2018 (£m) 152.5 Like for like operating expenses incl (1.2 ) 5.0 5.0 research costs in 2017 were £137.1m 2.5 2.2 6.0 137.1 Operating expenses 5.0
Slide 16: Variable staff costs
15 Variable staff costs Compensation ratios in line within guidance Variable staff costs Variable staff costs (£m) and compensation ratio* 100 £m 2017 2018 % +/- 30. 0 90 29.8% Cash bonus 41.5 27.1 25.6% 28.4% 28.2% 27.9% 25. 0 80 Other variable compensation** 41.2 45.5 70 Variable staff costs 82.7
Slide 17: Proactive seeding portfolio
16 Proactive seeding portfolio Using our balance sheet to support future growth Seed investment – at cost (£m) • Dynamic approach continues to support and develop product launches (42) • Since 2016 £167m has been deployed in support of new launches and catalyst funding 97 • In 2018 the most signific
Slide 18: Robust capital position
17 Robust capital position Managing the deployment of capital Regulatory capital £m 2017* 2018** • Our earnings generate both healthy free cash flow and additional capital Ordinary shareholder funds 640 624 Less: Goodwill and intangible assets (347) (347) • This ensures both a robust liquidity posit
Slide 19: Consistent approach to capital management
18 Consistent approach to capital management Pay out ratio of 90% in 2018 Ordinary dividend maintained Return of private client proceeds Special • Ordinary dividend maintained at 17.1p 32.6 Ordinary 28.5 pence per • Continued rebalancing approach to the interim payment 24.7 25.5 27.2 share • Our ove
Slide 20: Q&A
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Slide 21: Forward looking statements
20 Forward looking statements This presentation may contain certain “forward-looking combinations within relevant industries; and the impact of statements” with respect to certain plans of Jupiter Fund changes in capital, solvency or accounting standards, and tax and Management plc (Jupiter) and its
Slide 22: Appendix
JUPITER Appendix JUPITERAM.COM
Slide 23: AUM by distribution partner
22 AUM by distribution partner Our assets reach us through a number of different channels AUM (£bn) • The majority of our assets come through our distribution 50.2 partners and their associated intermediary channels 42.7 5 rather than directly from our clients • Discretionary AUM has fallen due to t
Slide 24: 2018 net flows by region
23 2018 net flows by region Outflows centred around a single product Net flows, 2014 – 2018 (£bn) • In 2017, Dynamic Bond was popular in the cross-border 6 markets contributing £3.5bn in net positive flows 4 • During 2018 the trend reversed with Dynamic Bond losing £4.1bn across the same markets 2 •
Slide 25: Jupiter's active management offering
24 Jupiter’s active management offering We remain committed to alpha generation Capabilities Key Characteristics AUM 2018 • Multi Asset • Equity • Targeted returns • Absolute Return • Unconstrained 34% Outcome Orientated • Fund of Funds • Fixed Income • Equity • Unconstrained • Fixed Income • Concen
Slide 26: Maintaining our high performance culture
25 Maintaining our high performance culture Our unique culture allows us to retain, attract and develop talent • Independence of thought: no house view • Unconstrained and conviction led approach to active People investing • Open and informal communication as part of a collaborative culture • Indivi
Slide 27: Continued growth opportunities
26 Continued growth opportunities Our capabilities continue to develop and evolve over time to meet changes in client demand Ready to go Develop Maintain growth Manage maturity European Growth Merlin Flexible Bonds UK Value Absolute Return India Convertibles GEM Equities Asian Income Global Value EM
Slide 28: 2018 has seen consistent execution of our strategy
27 2018 has seen consistent execution of our strategy • Continued diversification by product, client type and geography Performance Flows • Clear focus on investment outperformance • Fostering the development and growth of our talent • Continue to develop our capabilities to meet the needs of our ex
Jupiter Fund Management — FY2018 Earnings Presentation on 6ix