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30 July 2020
Peter Harrison
Group Chief Executive
Schroders
2020 Half-year Results
1Before exceptional items.
Resilient results in a challenging period
H1 2020 H1 2019 Change
Net income1 £1,003.9m £1,032.6m (3)%
Ratio of total costs to net income 70% 67% –
Profit before tax1 £306.2m £340.4m (10)%
AUM £525.8bn £444.4bn 18%
Net new business £38.1bn £(1.2)bn –
Basic EPS1 85.8p 98.6p (13)%
Total dividend per share 35p 35p –
Diversified business model performing well
Over £38bn net inflows, led by Solutions and Wealth Management
Productivity high through transition to remote working
Actively supporting companies and communities
2
65.745.3
175.2
94.1
145.5
0
50
100
150
200
£bn
Wealth Management
Private Assets & Alternatives
Solutions Mutual Funds Institutional
Strategically-aligned view of the business
3
Asse
ts u
nder
man
agem
ent(
£bn)
65.745.3
175.2
94.1
145.5
0
50
100
150
200
£bn
Wealth Management
Private Assets & Alternatives
Solutions Mutual Funds Institutional
54% of total AUM
Growth in business areas of strategic focus
4
£bn
(5)
0
5
10
15
2016 2017 2018 2019 H1 2020
Historic net new business
0 0.2 0.4 0.6 0.8 1
Schroders Personal Wealth
Benchmark Capital
Cazenove Capital
H1 2020 net new business
£bn
Continued strong momentum in Wealth Management
Strong investment performance£1.3bn of net inflows, led by Cazenove and Benchmark
5
Offset by outflows in liquid alternatives: EMD absolute return, GAIA range
Inflows in Private Assets: Real Estate, Private Equity, Infrastructure
Good progress on fund raisings, despite challenging backdrop
Real Estate strengthened by acquisition of Pamfleet
£bn
(1)
0
1
2
3
2016 2017 2018 2019 H1 2020
Historic net new business
Private Assets & Alternatives
6
First half saw remainder of Scottish Widows and large US mandate funded
Continued client demand for risk controlled growth and LDI strategies
Now one third of group AUM
(5)
0
5
10
15
20
25
30
35
40
45
2016 2017 2018 2019 H1 2020
Historic net new business
£bn
Ongoing demand for Solutions strategies
7
£bn
(6)
(4)
(2)
0
2
4
6
8
2016 2017 2018 2019 H1 2020
£bn
(16)(14)(12)(10)
(8)(6)(4)(2)
0
2016 2017 2018 2019 H1 2020
Mutual Funds historic net new business Institutional historic net new business
Mutual Funds and Institutional
Challenging backdrop for raising assets in ‘traditional’ business areas
8
£bn
– Inflows into Private Assets (Real Estate, Private Equity, Infrastructure)
– Outflows from more liquid alternatives
Private Assets
– ‘Risk off’ across investment desks
– Partially offset by £1.7bn into Global equitiesEquities
– Continued momentum into Solutions
– Demand for risk-controlled growth and LDI mandates
Multi-asset
– Rotation into Fixed Income
– Institutional demand for US & Global bonds, retail flows into European credit
Fixed Income
Net flows by asset class
(10) 0 10 20 30 40 50
Equities
Private Assets & Alternatives
Fixed Income
Multi-asset
9
Strong investment performance in equity and fixed income
£bn (10) 0 10 20 30 40
Asia Pacific
EMEA
Americas
UK
– ‘Risk off’ across region
– Outflows led by outflows from Australia, partly offset by positive inflows in China
Asia Pacific
– ‘Risk off’ across region for mutual funds
– Most countries in net outflows, Iberia the exception
EMEA
– Flows driven by Solutions
– Private Assets and Institutional business areas also net positive
UK
– Strong flows driven by Solutions mandate
– £0.5bn net inflows into Latin America
Americas
Net flows by region
10
– Continued strong performance
– Highly successful fund raising activity
– Net new business of £9.1bn, AUM now almost £70bn
Joint Ventures & Associates
BoComSchroders
Axis Asset Management
11
SchrodersPersonal Wealth
– Growing market share, now c.5.6%
– Net new business of £2.1bn, AUM over £15bn
– AUM ranking now 8th
overall, 4th in equities
– Challenging period for raising new assets through lockdown
– Process to replatformclients on schedule
– Strong long-term outlook
30 July 2020
Richard Keers
Chief Financial Officer
Schroders
2020 Half-year Results
H1 2019 H1 2020
Profit before tax and
exceptional items 340.4
£m
H1 2020
Profit before tax and after
exceptional items 280.1
Net income(28.7)
Compensationcosts3.2
Non-compensation costs(8.7)
Exceptionalitems(26.1)
Profit aftertax
222.7
Profit before tax and exceptional items -10% to £306.2m
Profit before tax and exceptional items
Profit before tax and exceptional
items306.2
Profit before tax and exceptional items
13
Net income -3% to £1,004m
Profit before tax and exceptional itemsNet income
H1 2019 H1 2020 H1 2020Group Asset Management Wealth Management
Group net income
1,004
SPW Adjustment
(25)
Segmentalnet income
1,029
Segmental net income
1,033
Associates and
Joint ventures*6
Markets, FX and mix
(25)
Net new business
20Acquisitions
20
187
£m
144
Performance fees and net carried
interest(8)
Other income
(17)
865 836
*Excludes SPW, which is proportionally consolidated.
14
0
20
40
60
80
100
0
2
4
6
8
10
12
14
Q1 Q2 Q3 Q4 Q1 Q2
Net new businessAnnualised net new revenue 2019 - 2020
109.3130.3
149.9
18.3
19.3
21.4
12.7
11.3
8.6
0.1
0.80.5
140.4
161.7*
0
40
80
120
160
200
H1 2019 H2 2019 H1 2020Management fees Transaction feesNet banking interest income Performance fees
Wealth Management net operating revenue
180.4*
Wealth Management net operating revenue
1Excluding performance fees.*Includes £28.7m H1 2020 (£12.8m H2 2019) relating to the proportional consolidation of SPW.
ANNR£m
NNB£bn
£m
Net operating revenue Net new business and annualised net new revenue(NNB and ANNR)
2019 2020
15
Net operating revenue margin1
57bpsH1 2019: 60bps
Average AUM
£63.4bnH1 2019: £46.9bn
(100)
(75)
(50)
(25)
0
25
50
75
100
(40)
(30)
(20)
(10)
0
10
20
30
40
Q1 Q2 Q3 Q4 Q1 Q2
Net new businessAnnualised net new revenue 2019 - 2020
825.6 865.3 801.5
27.3 44.918.4
0
200
400
600
800
1,000
H1 2019 H2 2019 H1 2020
Performance fees and net carried interest
852.9 819.9
Closing AUM
£460.1bnH1 2019: £393.7bn
Asset Managementnet operating revenue
910.2
Asset Management net operating revenue
ANNR£m
NNB£bn
£m
Net operating revenue Net new business and annualised net new revenue(NNB and ANNR)
2019 2020
Net new business
£36.8bnH1 2019: outflows of £2.1bn
16
(12)
(6)
0
6
12
18
24
30
(2)
(1)
0
1
2
3
4
5
Q1 Q2 Q3 Q4 Q1 Q2
Net new businessAnnualised net new revenue 2019 - 2020
5.6
13.8
0.225.4
3.91.4
148.3 151.9141.6
0
40
80
120
160
H1 2019 H2 2019 H1 2020
Performance fees and net carried interestReal estate transaction fees
140.4117.3
1Excluding performance fees, net carried interest and real estate transaction fees.
Net operating revenue margin1
63bpsH1 2019: 63bps
Average AUM
£44.3bnH1 2019: £37.6bn
Private Assets & Alternatives net operating revenue
134.1
Private Assets & Alternatives net operating revenue
ANNR£m
NNB£bn
£m
Net operating revenue Net new business and annualised net new revenue(NNB and ANNR)
2019 2020
17
(10)
0
10
20
30
40
(10)
0
10
20
30
40
Q1 Q2 Q3 Q4 Q1 Q2
Net new businessAnnualised net new revenue 2019 - 2020
2019 2020
ANNR£m
NNB£bn
109.9116.2
121.0
0
20
40
60
80
100
120
140
H1 2019 H2 2019 H1 2020
£mNet operating revenue margin
15bpsH1 2019: 22bps
Average AUM
£162.1bnH1 2019: £100.2bn
SolutionsSolutions
Net operating revenue Net new business and annualised net new revenue(NNB and ANNR)
18
(60)
(40)
(20)
0
20
40
60
(6)
(4)
(2)
0
2
4
6
Q1 Q2 Q3 Q4 Q1 Q2
Net new businessAnnualised net new revenue 2019 - 2020
NNB£bn
ANNR£m
InstitutionalNet new business and annualised net new revenue(NNB and ANNR)
(70)
(50)
(30)
(10)
10
30
50
70
(6)
(4)
(2)
0
2
4
6
Q1 Q2 Q3 Q4 Q1 Q2
Net new businessAnnualised net new revenue 2019 - 2020
2019 2020
NNB£bn
ANNR£m
Mutual FundsNet new business and annualised net new revenue(NNB and ANNR)Mutual Funds
Net operating revenue margin1
71bpsH1 2019: 74bps
InstitutionalNet operating revenue margin1
31bpsH1 2019: 33bps
1Excluding performance fees.
Mutual Funds and InstitutionalMutual Funds and Institutional
2019 2020
19
Net income -3% to £1,004m
Profit before tax and exceptional itemsNet income
H1 2019 H1 2020 H1 2020Group Asset Management Wealth Management
Group net income
1,004
SPW Adjustment
(25)
Segmentalnet income
1,029
Segmental net income
1,033
Associates and joint ventures*
6Markets, FX and
mix(25)
Net new business
20
Acquisitions20
187
£m
144
Performance fees and
net carried interest
(8)
Other income
(17)
865 836
*Excludes SPW, which is proportionally consolidated.
20
H1 2020 H1 2019
SPW1 BoCom Axis Other Total Total
Group's share of profit (£m)2 7.2 16.9 2.6 0.9 27.6 14.1
NNB (£bn) 9.1 2.1 0.1 11.3 1.3
AUM (£bn) 68.7 15.3 1.0 85.0 63.4
Share of profit of associates and joint ventures2
+96%to
£27.6m
Associates and Joint VenturesAssociates and Joint Ventures
1SPW’s AUM is managed by the Group and included in the Group’s AUM.2Before exceptional items.
21
H1 2020 H1 2019 % Movement
Profit (£m) 56.3 33.7
Group's share of profit (£m) 16.9 10.1 +67%
NNB (£bn) 9.1 (1.0)
Margin 28.8 21.8
AUM (£bn) 68.7 51.1 +3%
2020 Record net inflows of
+£9bn
Associates and Joint VentJVsBoCom Schroders joint venture
Share of profit
+150%Since H1 2015
22
Net income -3% to £1,004m
Profit before tax and exceptional itemsNet income
H1 2019 H1 2020 H1 2020Group Asset Management Wealth Management
Group net income
1,004
SPW Adjustment
(25)
Segmentalnet income
1,029
Segmental net income
1,033
Associates and joint
ventures*6
Markets, FX and mix(25)
Net new business
20Acquisitions
20
187
£m
144
Performance fees and
net carried interest
(8)
Other income
(17)
865 836
*Excludes SPW, which is proportionally consolidated.
23
307.7346.6
410.8 433.1 441.8
10.2
10.3
9.4
10.611.2
9
10
11
12
2015 2016 2017 2018 2019 H1 2020Annualised
0
100
200
300
400
500
600
Average AUM Non-Compensation costs as bps of average AUM
501.2
£bn bps
Non-compensation costsOperating expenses
Total compensation ratio 45% H1 2019: 44% Ratio of total cost to net income 70% H1 2019: 67%
453.4 450.2
238.8 247.5
0
200
400
600
800
H1 2019 H1 2020
722.9
£m
19.1
Compensation costs Non-compensation costs
25.2711.3
Exceptional items
24
9.9
1Final 2019 dividend/proposed 2020 interim dividend.2Comprises items that are inadmissible for regulatory purposes, principally goodwill, intangible assets and pension scheme surplus.
Composition of Group Capital
1,498 1,525
148 97 408 318 578 621
1,216 1,363
0
1,000
2,000
3,000
4,000
31 December 2019 30 June 2020
3,848 3,924
Working capital – regulatory and other Working capital – seed and co-investment
Investment capital – liquid Investment capital – illiquid Other items2
1,498 1,525
1,127 1,100
216 96
1,007 1,203
0
1,000
2,000
3,000
4,000
31 December 2019 30 June 2020
3,9243,848
£m
Overall regulatory capital requirement Other items2Dividend1Capital surplus
Capital base Capital allocation
25
1Before exceptional items.
Summary
1,032.6 1,003.9
340.4 306.2
Profit before tax1Net income1
H1 2019 H1 2020H1 2019 H1 2020
£mProfit after tax
- 13% to £222.7m
Ratio of total coststo net income1
70%
Basic EPS1
- 13% to 85.8p
Interim dividend
unchanged at 35.0p
26
First half dominated by social and economic impacts of Covid, considerable uncertainty remains
Retain focus on repositioning business towards high quality,high longevity areas
Focused strategy, global footprint and diversified business model to deliver long-term value for clients and shareholders
Continue to invest forlong-term growth of the business
Diversified business model proving resilient
Outlook for H2 2020 and beyond
27
Forward looking statement
These presentation slides may contain forward-looking statements with respect to the financial condition, performance and position, strategy, results of operations and businesses of the Schroders Group. Such statements and forecasts involve risk and uncertainty because they are based on current expectations and assumptions but relate to events and depend upon circumstances in the future and you should not place reliance on them. Without limitation, any statements preceded or followed by or that include the words ‘targets’, ‘plans’, ‘sees’, ‘believes’, ‘expects’, ‘aims’, ‘confident’, ‘will have’, ‘will be’, ‘will ensure’, ‘likely’, ‘estimates’ or ‘anticipates’ or the negative of these terms or other similar terms are intended to identify such forward-looking statements. There are a number of factors that could cause actual results or developments to differ materially from those expressed or implied by forward-looking statements and forecasts. Forward-looking statements and forecasts are based on the Directors’ current view and information known to them at the date of this statement. The Directors do not make any undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Nothing in these presentation slides should be construed as a forecast, estimate or projection of future financial performance.