Slide 1: 2013 Half-Year Results
Schroders 2013 Half-Year Results 8 August 2013 Michael Dobson Chief Executive
Slide 2: H1 2013: Volatile background, strong results
H1 2013 Volatile background, strong results Profit before tax and exceptional items up 29% to £228.0m (H1 2012: £177.4m) Interim dividend up 23% to 16.0 pence per share (interim dividend 2012: 13.0 pence) 67% of funds outperforming over 3 years Net inflows up 67% to £4.5bn (H1 2012: £2.7bn)
Slide 3: Acquisition of Cazenove Capital
Acquisition of Cazenove Capital Scale in Wealth Management, complementary strategies in Investment Funds £20.1bn AUM £13.2bn Wealth Management £6.9bn Investment Funds £1.6bn net inflows in H1 2013 £0.4bn Wealth Management £1.2bn Investment Funds In Private Banking Adds scale in UK
Slide 4: Cazenove Capital H1 2013: Strong revenue growth
Cazenove Capital H1 2013 Strong revenue growth Net revenues (£m) and net revenue margins (bps) 66 bps 70 +21% 60 65 bps 50 +10% 40 68 bps 30 61.6 +53% 50.7 20 41.4 37.5 10 20.2 13.2 0 Investment Funds Wealth Management Total H1 2012 H1 2013 3 2013 Half-Year Results | August 2013
Slide 5: Diversified sources of new business
Diversified sources of new business H1 2013: net new business £4.5bn By channel By region By asset class £bn 8 8 8 7 7 7 6 6 6 5 5 5 4 4 4 3 3 3 2 2 1 2 1 0 1 0 -1 0 -1 -2 -1 -2 -3 H1 2012 H2 2012 H1 2013 H1 2012 H2 2012 H1 2013 H1 2012 H2 2012 H1 2013 Equities Multi-asset Institutional Intermediary
Slide 6: Institutional
Institutional Assets under management: £139.6bn (end 2012: £123.7bn) By asset class £bn 5 £14.2bn of new business in H1 H1 net inflows £2.1bn 4 H1: £2.1bn Asia-Pacific, UK Multi-asset, Equities, Fixed Income 3 Pick up in outflows in Q2 2 Asset allocation US client diversifying 1 STW
Slide 7: Intermediary
Intermediary Assets under management: £79.2bn (end 2012: £72.0bn) By asset class £bn 5 £22.6bn of gross sales in H1 H1: £2.7bn Sales slowed, redemptions picked up in Q2 4 UK alpha products 3 Net inflows £2.7bn Continued success of Multi-asset 2 Strong result in Asia-Pacific, Europe, US
Slide 8: Private Banking
Private Banking Assets under management: £16.9bn (end 2012: £16.3bn) Marginal increase in revenues and costs Profit before tax £10.6m (H1 2012: £10.4m) Net outflows £0.3bn Withdrawals from continuing client relationships Net new/lost clients positive New leadership in London and Switzerl
Slide 9: 2013 Half-Year Results: Richard Keers, CFO
Schroders 2013 Half-Year Results 8 August 2013 Richard Keers Chief Financial Officer
Slide 10: Financial highlights
Financial highlights Net revenue, including performance fees (£m) Profit before tax and exceptional items (£m) 800 250 228.0 645.1 6.3 593.2 11.8 200 600 544.0 14.6 10.1 150 400 100 200 50 578.6 533.9 633.3 215.7 177.4 221.7 0 0 H1 2011 H1 2012 H1 2013 H1 2011 H1 2012 H1 2013 Diluted earnings per sh
Slide 11: Net revenue
Net revenue Increase of £101m £m Net revenue 645 Private Banking Performance fees STW, Group segment 53 Net revenue 2 and other 544 Net new business 13 Private Banking 25 53 Markets and FX 61 Asset Management Asset 586 Management 491 Group Segment 0 Group Segment 6 H1 2012 H1 2013 10 2013 Half-Year
Slide 12: Asset Management net revenues
Asset Management net revenues Net revenue margins, excluding performance fees, unchanged at 54 bps £m 350 300 256.3 275.2 14.4 11.6 250 233.0 10.0 200 150 241.9 263.6 223.0 100 50 0 H1 2012 H2 2012 H1 2013 Institutional Performance fees 11 2013 Half-Year Results | August 2013
Slide 13: Asset Management net revenues
Asset Management net revenues Net revenue margins, excluding performance fees, unchanged at 54 bps £m 350 310.5 0.2 300 256.3 267.5 275.2 258.0 14.4 3.9 11.6 0.1 250 233.0 10.0 200 150 310.3 257.9 241.9 263.6 263.6 223.0 100 50 0 H1 2012 H2 2012 H1 2013 Institutional Intermediary Performance fees 12
Slide 14: Private Banking net revenues
Private Banking net revenues Net revenue margins 63bps (H1 2012: 65 bps) 0 £m 70 60 52.6 53.5 41.8 50 7.1 6.2 6.7 11.4 40 10.8 9.0 30 20 34.7 34.0 35.9 10 0 (7.9) -10 H1 2012 H2 2012 H1 2013 Management fees Transaction fees Net banking interest income Loan loss provisions H2 2012 fair value movement
Slide 15: Profit before tax and exceptional items
Profit before tax and exceptional items Increase of £51m £m Profit before tax and exceptional items 228 Private Net finance income/ Banking Compensation costs Other costs Profit before tax (50) (1) JVs & associates 11 177 1 Private Banking Net revenue 101 10 Asset Management Asset 212 Management 175
Slide 16: Operating expenses
Operating expenses H1 2013 Asset Management & Private £m H1 2012 H2 2012 Group Banking Total H1 2013 versus H1 2012 Compensation costs 256.4 289.3 279.4 26.5 305.9 49.5 +19% Other costs 112.9 120.6 98.0 16.2 114.2 1.3 +1% Depreciation and amortisation 6.3 5.7 6.1 0.2 6.3 - Total 375.6 415.6 383.5 42
Slide 17: Exceptional items
Exceptional items STW and Cazenove Capital H1 2013 £m Asset Management Group Total Acquisition costs - 4.0 4.0 Integration costs - 1.5 1.5 Amortisation of acquired client relationships 0.3 - 0.3 Deferred compensation arising from acquisitions - 0.5 0.5 Total 0.3 6.0 6.3 STW: completed on 2 April 201
Slide 18: Group segment before exceptional items
Group segment before exceptional items Investment capital, governance, management and other H1 2012 H1 2013 Segment disclosure (£m) (£m) Net revenue 0.4 5.9 Operating expenses (14.4) (7.5) Net finance income 6.3 7.4 Share of JVs and associates (0.5) (0.5) Group segment (loss)/profit before exception
Slide 19: Tax charge and earnings per share
Tax charge and earnings per share Change H1 2013 H1 2013 v H1 2012 Before before Exceptional items Total H1 2012 exceptional items exceptional items Profit before tax – £m 177.4 228.0 (6.3) 221.7 50.6 +29% Tax – £m (40.3) (48.0) 0.5 (47.5) 7.7 +19% Profit after tax – £m 137.1 180.0 (5.8) 174.2 42.9
Slide 20: Movement in Group capital
Movement in Group capital Increase of £115m as at 30 June 2013 £m Profit after tax 174 Share purchases (36) Other Dividends Exchange differences £30m (80) £27m Group capital Group capital H1 2013 H2 2012 £2,185m £2,070m 31 December 2012 30 June 2013 19 2013 Half-Year Results | August 2013
Slide 21: Group capital allocation
Group capital allocation Increase of £115m as at 30 June 2013 H1 H2 H1 £m 2012 2012 2013 Investment capital breakdown (%) Asset Management Government guaranteed bonds and Private Banking 864 957 879 operational capital 5% 3% 19% Seed capital: Alpha exposures Investment capital* 908 926 1,077 Cash de
Slide 22: 2013 Half-Year Results: Michael Dobson, CEO
Schroders 2013 Half-Year Results 8 August 2013 Michael Dobson Chief Executive
Slide 23: Outlook and future priorities
Outlook and future priorities Focus on organic growth/leveraging acquisitions Financial market volatility and investor uncertainty will continue Competitive advantage of: Talent Performance Breadth of product range Distribution strengths Global footprint Scale Integration of Cazeno
Slide 24: Forward-Looking Statements
Forward-Looking Statements These presentation slides may contain forward-looking statements with respect to the financial condition, results of operations, strategy and businesses of the Schroders Group. Such statements and forecasts involve risk and uncertainty because they are based on current exp