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Schroders 2014 Q3 results
Data Pack November 2014
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Schroders
Contents
1 2014 Q3 Results | 6 November 2014
Page
Assets under management (AUM) 2
Regional diversification of AUM 3
Gross sales and net flows 4-5
Currency profile of AUM 6
AUM diversification 7-9
Asset Management AUM – detailed asset class analysis 10-12
Asset Management business flows 13-14
Net revenue and margins – Asset Management 15
Cost and return metrics for the Group 16
Key performance indicators 17-18
Total costs and headcount 19-20
Income statement progression 21-23
Movement in capital 24
Group capital allocation 25
Forward-looking statements 26
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Schroders
Assets under management (AUM) £276.2 billion at 30 September 2014
£bn Institutional Intermediary Asset Management Wealth Management Total
31 December 2013 144.3 88.5 232.8 30.1 262.9
Net flows 1.5 5.1 6.6 0.4 7.0
Investment returns, foreign
exchange and other 5.3 1.0 6.3 - 6.3
30 September 2014 151.1 94.6 245.7 30.5 276.2
2 2014 Q3 Results | 6 November 2014
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Schroders
Regional diversification of AUM 61% of 2014 net revenues outside UK
3 2014 Q3 Results | 6 November 2014
North America
£34.1bn
South America
£7.1bn
Continental Europe
£50.2bn
UK
£108.4bn
Asia Pacific
£68.3bn
Middle East
£8.1bn
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Gross sales
4 2014 Q3 Results | 6 November 2014
£bn
18.9
17.5
19.2 19.7
18.3
19.6
0.0
5.0
10.0
15.0
20.0
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Equities Fixed Income Multi-asset EMD, Commodities & Property Wealth Management
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Net flows
5 2014 Q3 Results | 6 November 2014
£bn
(1.1) 1.0
2.4
3.8
1.0 2.2
(5.0)
(2.5)
0.0
2.5
5.0
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Equities Fixed Income Multi-asset EMD, Commodities & Property Wealth Management
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Schroders
Currency profile of AUM Assets under management £276.2 billion
6 2014 Q3 Results | 6 November 2014
* Includes the following currencies which individually constitute 1% of AUM: IDR, BRL, SGD, INR, CAD, THB, MXN
30%
25% 11%
7%
4%
4%
3%
2%
2% 2%
10%
GBP USD EUR AUD JPY CNY HKD CHF KRW TWD Other*
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55% 34%
11%
Institutional
Intermediary
Wealth Management
By channel By region* By product
Total AUM by channel, region and product Assets under management £276.2 billion
7 2014 Q3 Results | 6 November 2014
* By client domicile
** Includes Middle East
39%
21%
25%
15%
UK
Continental Europe**
Asia Pacific
Americas
45%
17%
21%
6%
11%
Equities
Fixed Income
Multi-asset
EMD, Commodities & Property
Wealth Management
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Institutional AUM £151.1bn Intermediary AUM £94.6bn
Asset Management AUM by channel and product
8 2014 Q3 Results | 6 November 2014
46%
19%
26%
9%
Equities Fixed Income
56%
19%
21%
4%
Multi-asset EMD, Commodities & Property
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Schroders
Institutional AUM £151.1bn Intermediary AUM £94.6bn
Asset Management AUM by channel and region*
9 2014 Q3 Results | 6 November 2014
* By client domicile
** Includes Middle East
37%
16%
28%
19%
UK Continental Europe**
30%
30%
27%
13%
Asia Pacific Americas
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EMD, Commodities and
Property £16.5bn Multi-asset £59.2bn Equities £123.0bn Fixed Income £47.0bn
Asset Management AUM – detailed asset class analysis Assets under management £245.7 billion
10 2014 Q3 Results | 6 November 2014
Asia Pacific 17%
Australia 6%
Emerging markets 14%
Europe 10%
Global 12%
Japan 4%
Quantitative equities 17%
UK 14%
US 4%
Multi-manager 2%
Americas 29%
Asia Pacific 7%
Australia 8%
Convertibles 3%
Europe 20%
Global 22%
Insurance-linked 1%
UK 10%
Americas 12%
Asia Pacific 19%
Australia 8%
Europe 6%
GAIA range 4%
LDI 19%
Multi-manager 3%
UK 29%
Agriculture and commodities 19%
Emerging market debt 13%
Private equity 5%
Property 63%
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Equities £70.0bn EMD, Commodities and
Property £12.8bn Multi-asset £39.7bn Fixed Income £28.6bn
Asia Pacific 14%
Australia 7%
Emerging markets 16%
Europe 6%
Global 17%
Japan 1%
Quantitative equities 27%
UK 9%
US 3%
Institutional AUM – detailed asset class analysis Assets under management £151.1 billion
11 2014 Q3 Results | 6 November 2014
Americas 3%
Asia Pacific 13%
Australia 9%
Europe 4%
LDI 28%
UK 43%
Agriculture and commodities 18%
Emerging market debt 6%
Private equity 7%
Property 69%
Americas 42%
Asia Pacific 6%
Australia 7%
Convertibles 1%
Europe 11%
Global 18%
Insurance-linked 1%
UK 14%
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Equities £53.0bn EMD, Commodities and
Property £3.7bn Multi-asset £19.5bn Fixed Income £18.4bn
Intermediary AUM – detailed asset class analysis Assets under management £94.6 billion
12 2014 Q3 Results | 6 November 2014
Asia Pacific 21%
Australia 5%
Emerging markets 10%
Europe 16%
Global 5%
Japan 7%
Quantitative equities 4%
UK 22%
US 6%
Multi-manager 4%
Americas 30%
Asia Pacific 33%
Australia 5%
Europe 10%
GAIA range 13%
UK 1%
Multi-manager 8%
Agriculture and commodities 19%
Emerging market debt 37%
Private equity 2%
Property 42%
Americas 8%
Asia Pacific 10%
Australia 10%
Convertibles 5%
Europe 33%
Global 28%
Insurance-linked 2%
UK 4%
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Institutional Assets under management: £151.1 billion (30 June 2014: £148.0 billion)
13 2014 Q3 Results | 6 November 2014
£bn
7.5 7.0 7.0
6.0 5.4 5.7
(7.7)
(5.4) (6.1)
(5.0) (5.7)
(4.9)
(0.2)
1.6 0.9 1.0
(0.3)
0.8
(10.0)
(5.0)
0.0
5.0
10.0
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Gross inflows Gross outflows Net flows
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Intermediary Assets under management: £94.6 billion (30 June 2014: £92.8 billion)
14 2014 Q3 Results | 6 November 2014
£bn
10.3 9.0
10.4 12.1
11.2 11.8
(11.1)
(8.9) (8.4) (9.3) (10.2) (10.5)
(0.8)
0.1
2.0 2.8
1.0 1.3
(15.0)
(10.0)
(5.0)
0.0
5.0
10.0
15.0
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Gross inflows Gross outflows Net flows
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Asset Management net revenue £329.5 million (Q3 2013: £315.0 million)
Net revenue and margins – Asset Management
15 2014 Q3 Results | 6 November 2014
* Excludes exceptional items
Q3 2013 Q3 2014
Performance fees – £m 17.5 3.4
Performance fees on average AUM 3 bps 1 bps
Net revenue – £m 315.0 329.5
Net revenue on average AUM 55 bps 53 bps
Costs* – £m 206.3 211.6
Costs* on average AUM 36 bps 34 bps
Operating profit* – £m 108.7 117.9
Operating profit* on average AUM 19 bps 19 bps
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Cost and return metrics for the Group
16 2014 Q3 Results | 6 November 2014
* Excludes exceptional items
** Adjusted by the Remuneration Committee for allowable and disallowable costs and revenues
Q3 2013
YTD
Q3 2014
YTD
Compensation cost:
operating revenue ratio* 48% 47%
Bonus:
pre-bonus operating
profit*
41% 40%
Headcount 3,533 3,574
Total costs* 675.6 733.8
Cost:
net revenue ratio* 67% 65%
Return on average
capital
(pre-tax)*
22% 23%
Return on average
capital
(post-tax)*
17% 18%
► Compensation cost: operating revenue ratio
= total Group compensation costs divided by Asset
Management and Wealth Management net revenues**
► Bonus: pre-bonus operating profit
= total Group bonus divided by pre-bonus Asset
Management and Wealth Management profit before tax**
► Cost: net revenue ratio
= total Group costs divided by net revenue
► Return on average capital (pre-tax)
= total Group profit before tax divided by average capital
► Return on average capital (post-tax)
= total Group profit after tax divided by average capital
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44% 49%
46% 47%
0%
20%
40%
60%
80%
100%
FY 2011 FY 2012 FY 2013* Q3 2014 YTD*
Key performance indicators Compensation cost: operating revenue ratio
17 2014 Q3 Results | 6 November 2014
Total Group compensation costs divided by Asset Management and Wealth Management net revenues (adjusted by the Remuneration Committee for allowable and disallowable costs and revenues)
* FY 2013 and Q3 2014 YTD exclude exceptional items
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66% 70%
65% 65%
0%
20%
40%
60%
80%
100%
FY 2011 FY 2012 FY 2013* Q3 2014 YTD*
Key performance indicators Cost: net revenue ratio
18 2014 Q3 Results | 6 November 2014
Total Group costs divided by net revenue
* FY 2013 and Q3 2014 YTD exclude exceptional items
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Total costs
19 2014 Q3 Results | 6 November 2014
* Excludes exceptional costs
£m
152.8 177.4 169.2 168.5 172.4 181.4
60.1
71.8 74.9 65.0 72.2
74.3 212.9
249.2 244.1
233.5
244.6 255.7
0.0
50.0
100.0
150.0
200.0
250.0
300.0
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Staff costs* Non-staff costs*
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Headcount
20 2014 Q3 Results | 6 November 2014
3,140
3,533 3,528 3,513 3,540 3,574
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
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Income statement progression Asset Management profit before tax
21 2014 Q3 Results | 6 November 2014
* Excludes exceptional items
** During Q4 2013 exceptional items of £4.0m were transferred from the Group segment into Asset Management
£m Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Institutional 138.4 129.9 152.1 136.4 137.4 143.9
Intermediary 157.5 185.1 194.4 169.8 177.4 185.6
Net revenue 295.9 315.0 346.5 306.2 314.8 329.5
Costs* (189.4) (206.3) (202.6) (191.7) (199.5) (211.6)
JVs and associates 0.7 1.2 3.1 2.6 3.1 2.2
Net finance charge (0.3) (0.3) (0.1) (0.1) (0.3) (0.4)
Asset Management
profit* 106.9 109.6 146.9 117.0 118.1 119.7
Exceptional items** (0.3) (2.8) (10.4) (3.6) (6.0) (3.6)
Asset Management
profit after exceptional
items
106.6 106.8 136.5 113.4 112.1 116.1
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Income statement progression Wealth Management profit/(loss) before tax
22 2014 Q3 Results | 6 November 2014
* Excludes exceptional items
** During Q4 2013 exceptional items of £7.2m were transferred from the Group segment into Wealth Management
£m Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Net revenue 27.0 47.0 49.5 50.3 50.2 61.7
Costs* (21.3) (36.6) (36.2) (37.0) (37.2) (38.8)
Wealth Management
profit* 5.7 10.4 13.3 13.3 13.0 22.9
Exceptional items** – (2.6) (28.3) (3.6) (5.3) (6.7)
Wealth Management
profit/(loss) after
exceptional items
5.7 7.8 (15.0) 9.7 7.7 16.2
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Income statement progression Group segment (loss)/profit before tax
23 2014 Q3 Results | 6 November 2014
* Excludes exceptional items
** During Q4 2013 exceptional items of £4.0m and £7.2m were transferred from the Group segment into the Asset Management and Wealth Management segments respectively
£m Q2 2013 Q3 2013 Q4 2013 Q1 2014 Q2 2014 Q3 2014
Net revenue (0.8) 4.0 0.5 2.3 4.8 2.4
Costs* (2.2) (6.3) (5.3) (4.8) (7.9) (5.3)
Associates - 1.4 0.6 0.4 - 0.1
Net finance income 3.4 2.5 2.2 2.5 2.8 3.1
Group profit/(loss)* 0.4 1.6 (2.0) 0.4 (0.3) 0.3
Exceptional items** (6.0) (10.0) 0.1 (4.6) (4.5) (2.3)
Group (loss)/profit after
exceptional items (5.6) (8.4) (1.9) (4.2) (4.8) (2.0)
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Movement in capital
24 2014 Q3 Results | 6 November 2014
£m 2014
1 January 2014 2,268.6
Profit before tax and exceptional items 404.4
Exceptional items (40.2)
Exchange differences on translation of foreign operations after hedging (8.4)
Net fair value movement arising from AFS financial assets 0.7
Actuarial loss on defined benefit pension schemes (0.7)
Share-based payments 49.0
Own shares purchased (49.9)
Tax (72.2)
Dividends (177.7)
30 September 2014 2,373.6
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Group capital allocation Increase of £105 million as at 30 September 2014
25 2014 Q3 Results | 6 November 2014
* Not included in AUM
** Restated to include software, associates, joint ventures and deferred tax
£m
FY
2013
H1
2014
Q3
2014
Regulatory capital 603 617 655
Other operating capital 306 275 169
Investment capital* 495 573 684
Seed capital* 182 182 193
Other
(intangibles etc.)** 683 676 673
Statutory Group capital 2,269 2,323 2,374
Investment capital breakdown (%)
7%
30%
43%
10%
6% 4%
Cash and cash equivalents
Government bonds
Corporate fixed income
Equities
Private equity
Other alternatives and property
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This presentation may contain certain 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 expectations and assumptions but they 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’, ‘believes’, ‘expects’, ‘aims’, ‘estimates’ or ‘anticipates’ or the negative of these terms and 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 presentation. 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 this presentation should be construed as a forecast, estimate or projection of future financial performance.
Forward-looking statements
26 2014 Q3 Results | 6 November 2014