Jupiter Fund Management Plc · LSE:JUP
Jupiter Fund Management — H1 2019 Earnings Presentation
30 slides from Jupiter Fund Management's earnings presentation, 2019
Slide 1: Interim Results
INTERIM RESULTS ~ JUPITER
Slide 2: Maintaining shareholder returns
Maintaining shareholder returns Delivering growth through investment excellence Investment 72% 3 year mutual fund outperformance* performance £45.9bn (Dec 2018: 77%) Net Outflows of £1.1bn AUM sales (H1 18: outflows of £2.3bn) (Dec 18: £42.7bn) 7.9p Net management Down 8% to £182.9m (H1 18: £199.2m)
Slide 3: Interim Results 2019 - Charlotte Jones
Charlotte Jones I N T E R I M R E S U LT S 2019
Slide 4: Financial highlights
Financial highlights Solid financial performance H1 18 H1 19 Change Net management fees £199.2m £182.9m -8% Net revenue £214.8m £190.8m -11% Underlying profit before tax* £97.2m £88.8m -9% Profit before tax £96.5m £81.4m -16% Underlying EPS 17.2p 15.7p -9% Statutory EPS 17.3p 15.1p -13% Interim divi
Slide 5: 2019 AUM progression
2019 AUM progression AUM up 8% to £45.9bn Movement in AUM (£bn) 4.3 (1.1) (0.5) 0.5 (0.0) 45.9 42.7 Dec-18 Mutual Funds Segregated Mandates Investment Trusts Markets / Investment Jun-19 Alpha ● Mutual fund net outflows of £1.6bn, this includes a one-off transfer of assets to a segregated mandate of
Slide 6: Net flows by asset class for all products
Net flows by asset class for all products Fixed Income flows turned positive but offset by outflows in Equities (£bn) 5 ● Net outflows for H1 19 have reduced to £1.1bn 4 ● Fixed Income flows have returned to a positive position in H1 19 following the prior year of outflows 3 ● Redemption rates in Mu
Slide 7: Earnings
Earnings Progression in earnings (£m) (0.7) (16.3) 7.7 (7.4) 3.5 (6.8) 4.2 97.2 88.8 81.4 H1 18 Box profits Net management Performance Operating Variable Gains/losses on H1 19 Exceptional H1 19 Underlying PBT fees fees expenses compensation* investments and Underlying PBT variable staff Statutory PB
Slide 8: Revenues
Revenues Lower average assets leading to reduced revenues; revenue margin stable Net revenue Revenue (£m) (£m) H1 18 H1 19 % +/- 214 215 Net management fees 199.2 182.9 -8% 7 14 Performance fees 14.1 7.3 198 195 191 213.3 190.2 -11% 8 7 Net initial charges 1.5 0.6 Of which box profits 0.7 - Net reve
Slide 9: Net management fee margin
Net management fee margin Key driver remains changing business mix Bps H1 17 H2 17 H1 18 H2 18 H1 19 Margin* 85.9 83.9 82.7 83.8 83.8 ● Net management fee margin has remained stable versus prior periods due to a number of offsetting business mix effects ● Guidance that ongoing margins are expected t
Slide 10: Operating expenses
Operating expenses Investing to support growth ambitions Operating expenses* Operating expenses (£m) and % of net management fees (£m) H1 18 H1 19 % +/- 40% 38% Fixed staff costs 29.5 29.6 37% 34% 33% 2 Other expenses 43.9 39.6 -10% 3 11 3 12 12 Operating expenses 73.4 69.2 -6% 11 11 Operating margi
Slide 11: Operating expenses
Operating expenses Progression driven by continued investment; cost discipline to reduce run rate costs Full-year cost expectations remain in place Operating expenses development from H2 18 to H1 19 (£m) 0.1 1.7 0.4 (2.2) (8.2) (1.7) 79.1 69.2 H2 2018 Operating platform Investment for Other Non-repe
Slide 12: Variable staff costs
Variable staff costs Variable staff costs Variable staff costs(£m)/variable compensation ratio (£m) H1 18 H1 19 % +/- Cash bonus 22.2 11.9 130% 29.8% 31.2% 30.0 26.4% Other variable compensation* 19.2 26.0 110% £83m £69m 25.0 £38m Variable staff costs 41.4 37.9 -8% 90% Exceptional items: variable 20
Slide 13: Proactive seeding portfolio
Proactive seeding portfolio Dynamic use of our balance sheet to support future growth Seed investment – at cost (£m) ● We continue to deploy our balance sheet into seed investment supporting new and existing funds ● Seed was used to assist 15 funds between 2016 and 2018 (73) ● In H1 19 seed has been
Slide 14: Strong capital position
Strong capital position Our overall capital management policy remains unchanged Regulatory capital Ordinary dividend maintained (pence per share) (£m) H1 18 H2 18 H1 19* Ordinary shareholder funds 596 624 596 Less: Goodwill and intangible assets -347 -347 -347 15.5 Illiquid assets** 11.4 -24 n/a n/a
Slide 15: Interim Results 2019 - Andrew Formica
Andrew Formica I N T E R I M R E S U LT S 2019
Slide 16: Jupiter – an independent, active fund manager
Jupiter – an independent, active fund manager Core strengths Active funds management is in our DNA Provide an optimum environment for talented, high conviction managers Client centred approach embedded in all we do Our long standing success in UK retail channel showcases our abilities Ability to exp
Slide 17: Competitive advantage
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 ● 72% of AUM* (Dec 18: 77%) in mutual funds above median 12% ● 43% of AUM* (Dec 18: 46%) in segregated mandates and inve
Slide 18: Largest funds performing well
Largest funds performing well 11 funds over £1bn representing over 64% of invested assets* AUM at AUM at AUM at 4th 3rd 2nd 1st Jun 2018 Dec 2018 Jun 2019 Quartile Quartile Quartile Quartile Dynamic Bond** £7,122m £5,391m £6,475m European £5,562m £5,076m £5,832m Strategic Bond £3,891m £3,635m £3,956
Slide 19: Continued growth opportunities
Growth High Yield Flexible Macro Equities European Smaller Pending launch Multi Asset Income Real Return Global Equities Develop Sustainability Fixed Income EM Debt Global Value Asian Income Time GEM Equities Continued growth opportunities India Multi Asset Japan Convertibles Maintain growth Absolut
Slide 20: Delivering growth through investment excellence
‘Delivering growth through investment excellence’ WHY CULTURE GOALS BY 2024 We exist to help our clients achieve their long-term investment objectives Our clients come first A passionate focus on serving our clients and a commitment to delivering superior performance after fees is central to why we
Slide 21: Our beliefs
Our beliefs ‘We exist to help our clients achieve their long-term investment objectives’ “High conviction, active fund management delivers superior investment returns after fees” CLIENTS “Our clients require both superior performance and service for us to become a trusted partner” “Embracing and inv
Slide 22: Our priorities for 2019 and beyond
Our priorities for 2019 and beyond Delivering growth through investment excellence Clients Investment Strategies Innovation & Technology Operating Environment Capital Management 21
Slide 23: Executive Committee
Executive Committee Chief Investment Officer Global Head of Distribution Stephen Pearson Phil Wagstaff Joined 2001 Joined June 2019 Chief Operating Officer Chief Executive Officer Chief Financial Officer Paula Moore Andrew Formica Wayne Mepham Joined 1997 Joined March 2019 Joins September 2019 HR Di
Slide 24: Q&A
Q&A JUPITER eset Management
Slide 25: Forward looking statements
Forward looking statements This presentation may contain certain “forward-looking timing, impact and other uncertainties of future acquisitions or statements” with respect to certain plans of Jupiter Fund combinations within relevant industries; and the impact of Management plc (Jupiter) and its cur
Slide 26: Appendix
Appendix
Slide 27: AUM by distribution partner
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 partners and their associated intermediary channels rather 48.2 than directly from our clients 45.9 ● Discretionary AUM has fallen due to 2018 o
Slide 28: Successful diversification
Successful diversification Changing asset base over the last five years Split of AUM by asset class (£bn) Split of AUM by client geography (£bn) 45.9 45.9 30.8 30.8 Jun 14 Jun 19 Jun 14 Jun 19 Equities Fixed Income Multi Asset Alternatives UK Europe Asia RoW 27
Slide 29: Net flows by region
Net flows by region Outflows centred around a single product Net flows (£bn) 4 ● 2019 has seen Dynamic Bond return to positive flows in Asia and RoW following outflows in 2018 ● Gross sales continue to be strong with inflows of £6.5bn across 3 all products ● In the UK, outflows for H1 19 are concent
Slide 30: Jupiter’s active management offering
Jupiter’s active management offering We remain committed to alpha generation Capabilities Key Characteristics AUM ● Multi-Asset ● Equity ● Targeted returns ● Absolute Return ● Unconstrained 32% ● Fund of Funds Outcome Orientated ● Fixed Income ● Equity ● Unconstrained ● Fixed Income Unconstrained/Fl
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