Jupiter Fund Management Plc · LSE:JUP
Jupiter Fund Management — H1 2015 Earnings Presentation
29 slides from Jupiter Fund Management's earnings presentation, 2015
Slide 1: Delivering: 2015 Half Year Results
DELIVERING 2015 Half Year Results JUPITER FUND MANAGEMENT PLC
Slide 2: Highlights
2015 HALF YEAR RESULTS 1 Highlights Executing our strategy ■ Improved investment performance ■ Continued organic flow growth from core mutual fund franchise ■ £1.4bn of net mutual fund flows in H1 ■ AUM increased to £34.3bn ■ Diversifying by product, client type and geography ■ Attracting new talent
Slide 3: Strategy
2015 HALF YEAR RESULTS 2 Strategy 1 2 3 Sell this expertise Deliver through products Deliver attractive outperformance suited to our returns to after fees to our distribution shareholders clients strengths JUPITER FUND MANAGEMENT PLC
Slide 4: Deliver outperformance after fees to our clients
2015 HALF YEAR RESULTS 3 Deliver outperformance after fees to our clients JUPITER FUND MANAGEMENT PLC
Slide 5: Performance numbers
2015 HALF YEAR RESULTS 4 Performance numbers Generating value for our clients Three year mutual fund performance Commentary Long-term track record maintained Excellent segregated mandate and investment 27% 25% trust performance 22% 26% 26% 26% 15% 33% 1st Quartile 2nd Quartile 3rd Quartile 4th Q
Slide 6: Performance numbers on key funds
2015 HALF YEAR RESULTS 5 Performance numbers on key funds Three year investment performance in funds over £1bn AUM at AUM at AUM at 4th 3rd 2nd 1st Jun 14 Dec 14 Jun 15 quartile quartile quartile quartile Merlin Income £4,630m £4,432m £4,184m Dynamic Bond* £1,556m £2,130m £3,189m European £2,475m £2
Slide 7: Significant opportunity for high-alpha active managers
2015 HALF YEAR RESULTS 6 Significant opportunity for high-alpha active managers Well-positioned ahead of market trends International market 2012 – 2014 net sales UK market 2012 – 2014 net sales Outcome-orientated active Outcome-orientated active £430bn strategies1 £69bn strategies1 (£12bn) Tradition
Slide 8: Significant opportunity for high-alpha active managers
2015 HALF YEAR RESULTS 7 Significant opportunity for high-alpha active managers Seeking areas where outperformance matters and growth is available Performance opportunity1 (per cent.) Growth opportunity Global equity Global equity 21 UK equity 18 260 Europe equity Europe equity 16 240 UK equity Asia
Slide 9: Retaining and attracting talent
2015 HALF YEAR RESULTS 8 Retaining and attracting talent Performance culture High levels of engagement Entrepreneurial environment Low levels of unwanted turnover JUPITER FUND MANAGEMENT PLC
Slide 10: Sell this expertise through products suited to our distribution strengths
2015 HALF YEAR RESULTS 9 Sell this expertise through products suited to our distribution strengths JUPITER FUND MANAGEMENT PLC
Slide 11: Domestic retail opportunity
2015 HALF YEAR RESULTS 10 Domestic retail opportunity UK is an attractive mutual fund market UK: net retail sales by asset class (£ billion) Commentary £1 trillion of mutual fund AUM Equities Mixed Asset Bonds Property Other 35 Consistent positive inflows 30 Strong equity culture 25 Independ
Slide 12: International retail opportunity
2015 HALF YEAR RESULTS 11 International retail opportunity Potential for growth in Europe Europe: net retail sales by asset class (€ billion) Commentary €8.9 trillion of UCITS AUM Equities Balanced Bonds 500 More pro-cyclical flow environment 400 Greater propensity to hold bonds 300 200 Each
Slide 13: International distribution strategy: follow our clients
2015 HALF YEAR RESULTS 12 International distribution strategy: follow our clients JUPITER FUND MANAGEMENT PLC
Slide 14: Diversification and growth from International
2015 HALF YEAR RESULTS 13 Diversification and growth from International Increased SICAV activity levels Average number of accounts buying units12 Number of purchase transactions per month2 100 4,000 Monthly average Rolling 12m average Number Rolling 12m average 90 3,500 80 3,000 70 2,500 60 50 2,000
Slide 15: Turning performance into flows
2015 HALF YEAR RESULTS 14 Turning performance into flows 2015 net flows and AUM Movement in AUM (£ billion) AUM up to £34.3bn, driven by 35 healthy underlying organic flow growth 34 34.3 1.0 33 (0.1) 1.4 32 31.9 31 30 29 28 Dec-14 Mutual funds Seg mandate Inv't trusts Markets Jun-15 JUPITER FUND M
Slide 16: Turning performance into flows
2015 HALF YEAR RESULTS 15 Turning performance into flows Diversification and growth from International Mutual fund gross flows (£ billion) Jupiter’s SICAV AUM (£ billion) Unit trusts SICAV Equities Fixed Income 8.0 6.0 6.2 4.3 5.2 5.2 4.7 3.0 1.9 1.1 2011 2012 2013 2014 H1 15 2011 2012 2013 2014 Jun
Slide 17: Outcome
2015 HALF YEAR RESULTS 16 Outcome Conscious diversification by product, client type and geography AUM by client geography Gross flows by product AUM by strategy UK Europe Asia RoW Unit trust SICAV Multi-asset UK equities Euro equities Fixed Income Segregated Other Other 2009 2010 2011 2012 2013 2014
Slide 18: Deliver attractive returns to shareholders
2015 HALF YEAR RESULTS 17 Deliver attractive returns to shareholders JUPITER FUND MANAGEMENT PLC
Slide 19: Half year highlights
2015 HALF YEAR RESULTS 18 Half year highlights Turning growth into profit Measure H1 2014 H1 2015 Change Net revenues £148.5m £169.4m 14% Net management fee margins 88bps 88bps EBITDA £76.3m £86.8m 14% EBITDA margin 51% 51% Underlying EPS 12.9p 14.9p 16% Interim dividend 3.7p 4.0p 8% JUPITER FUND MA
Slide 20: Revenues
2015 HALF YEAR RESULTS 19 Revenues Organic growth before private clients (ex performance fees) of 11% Net revenue Net revenue (£ million) £ million H1 14 H1 15 % +/- Net management fees Net initial Performance fees Net management fees 141.0 149.2 +6% 169 Net initial charges 6.8 7.4 13 Performance fe
Slide 21: Net management fee margins
2015 HALF YEAR RESULTS 20 Net management fee margins Key drivers remain growth of fixed income and higher SICAV assets Business mix Net management fee margin 20% bps H2 12 H1 13 H2 13 H1 14 H2 14 H1 15 Margin* 93.0 92.3 88.9 87.2 88.4 88.1 17% 94 ■ Pricing strategy remains unchanged 88 ■ Progression
Slide 22: Fixed costs
2015 HALF YEAR RESULTS 21 Fixed costs Fixed costs Fixed costs (£ million) £ million H1 14 H1 15 % +/- 47 48 Fixed staff costs 23.5 21.3 45 46 41 42 Other expenses 23.8 24.3 40 Fixed costs 47.3 45.6 (4%) ■ Savings from private clients being reinvested through 2015 ■ Drivers: ■ Hiring front office tal
Slide 23: Variable costs
2015 HALF YEAR RESULTS 22 Variable costs Variable costs Variable costs (£ million) and comp ratio* £ million H1 14 H1 15 30 Cash bonus 16.9 26.3 27 Deferred bonus 4.5 5.6 8 21 LTIP, SAYE and SIP 4.0 5.6 Variable costs 25.4 37.5 11 7 9 Variable compensation ratio* 25% 30% 4 Variable compensation rati
Slide 24: Earnings
2015 HALF YEAR RESULTS 23 Earnings Maintaining operating margins and high drop-through rate Scalable platform Drop-through: underlying EPS (pence) EBITDA (£ million) EBITDA margin (per cent) 54 0.3 0.7 51 51 51 0.8 14.9 86.8 75.3 76.3 1.4 60.3 12.9 H1 12 H1 13 H1 14 H1 15 H1 14 Mgt fee Other Net Fix
Slide 25: Scalable platform
2015 HALF YEAR RESULTS 24 Scalable platform Benefits of focus and discipline Operational efficiency Headcount efficiency Investment Distribution Average AUM (£ billion) Operations Private clients Net mgt fee margin (bps) 34.1 Mgt fees per capita Fixed costs vs average AUM (bps) £717k 496 EBITDA* mar
Slide 26: Dividends
2015 HALF YEAR RESULTS 25 Dividends Turning growth into capital returns Dividend progression (pence per share) ■ Continued execution of our capital returns model Return of private client proceeds Special ■ Ordinary and special dividends will be paid at year end in line with previously communicated F
Slide 27: Conclusion
2015 HALF YEAR RESULTS 26 Conclusion 1 Good progress on executing our strategy 2 Delivering outperformance after fees 3 Turning performance into flows 4 Turning growth into profits and capital returns 5 Diversifying by product, client and geography JUPITER FUND MANAGEMENT PLC
Slide 28: Q&A
2015 HALF YEAR RESULTS 27 Q&A JUPITER FUND MANAGEMENT PLC
Slide 29: Forward-looking statements
Forward-looking statements This presentation may contain certain “forward-looking the impact of changes in capital, solvency or accounting statements” with respect to certain plans of Jupiter Fund standards, and tax and other legislation and regulations in Management plc (Jupiter) and its current go
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