Download 2009 q1 interim management statement presentation

Schroders
2009 Interim Results
Chief Executive
Michael Dobson
6 August 2009
Priorities for 2009
•
Aligning the business to the environment
¾ Costs down £49.8m
•
Capitalising on investment performance
¾ 80% of funds outperforming
•
Growing assets under management
¾ Q2 inflows £3.9bn
•
Leveraging our financial strength
¾ Balancing cost reductions vs. growth
opportunities
1
Investment performance
• Competitive performance across equities,
fixed income and alternatives
1 year
3 year
Euro Corporate Bond
1
1
Euro Short-term Bond
1
1
Euro Short-term Bond
1
2
Global Corporate Bond
1
2
Emerging Market Debt Ab. Rt.
1
1
Euro Liquidity
1
1
European Equity
2
2
European Special Situations
1
1
US Small & Mid
1
1
Emerging Market Equity
2
1
Commodities
2
1
Quartile rankings SISF range
3 year investment performance
23%
77%
Above benchmark or peer group
Below benchmark or peer group
Best Larger Fixed-Interest House
2
Anticipating investor demand
GOVERNMENT BONDS
CORPORATE CREDIT
HYBRID
EQUITY
Equity
Yield / Dividend
Structured or
Protected Equity
Global Convertible, Asian
Convertible
Corporate Bond
Short-term Govt
Bond
Liquidity
Dynamic multi-asset
3
RISK APPETITE
credit
European Yield and Dividend Max
Global Yield and Dividend Max
European Defensive, Step Invest,
CPPI
Convertibles
Multi strategy
European, UK, US, Asian, Emerging
Markets, Thematic Global
EMD Absolute Return,
Strategic Bond, Global High Yield
Euro Bond, Euro Corporate Bond,
Global Bond, Euro Short Term
Bond, European Bond,
Global Inflation Linked
Euro Government Bond,
Euro Government Liquidity
Euro Liquidity, US Dollar Liquidity
Asset Management gross sales
Funds under management £113.3bn
£bn
Not including China JV FUM £5.6bn
24
10%
20
17%
16
47%
12
8
13%
4
0
H1 2008
H2 2008
H1 2009
Equities
Alternatives
4
* Gross flows before netting
13%
Fixed Income
Multi-asset
Private Banking
Intermediary
H1 2009: net inflows £2.5bn
£bn – sales flows
• Recovery in gross sales
15
• Lower redemptions
10
• Top 5 in cross border sales UK, Europe, Asia
5
5.2
12.3
3.6
8.1
7.5
2.5
6.2
3.5
• Capitalising on strong demand
in Europe
0
(0.3)
(4.5)
(7.1)
-5
(7.8)
(3.7)
(9.5)
(6.0)
-10
-15
H1 2007
H2 2007
Gross sales
5
H1 2008
Gross outflows
H2 2008
H1 2009
Net sales
Institutional
H1 2009: net outflows £0.8bn
£bn – sales flows
• Q2 net inflows £1.6bn
• Strong performance
• Consultant upgrades
15
10
5
• Inflows across range of products
7.3
5.9
5.7
6.4
4.4
0
(0.8)
(1.1)
• Strong pipeline of new business
(
-5
opportunities
(8.4)
(9.8) (4.1)
(7.1) (2.7)
(7.2)
(12.4)
(6.5)
-10
-15
H1 2007
H2 2007
Gross sales
6
H1 2008
Gross outflows
H2 2008
H1 2009
Net sales
Private Banking
• Assets under management £11.2bn (end 2008: £11.7bn)
• New clients slower to fund
• Existing clients withdrawing funds from liquid investment strategies
• New business opportunities
Investment performance
Client service
Brand strength
7
Schroders
2009 Interim Results
Kevin Parry
Chief Financial Officer
6 August 2009
2009 Interim Results
Asset Management and Private Banking profit before tax and exceptional items: £81.2 million
(H1 2008: £160.4 million)
Group segment loss before tax and exceptional items: £4.3 million
(H1 2008: profit £12.9 million)
Total profit before tax before exceptional items: £76.9 million
(H1 2008: £173.3 million)
Exceptional items: £40.6 million
(H1 2008: £37.6 million)
Funds under management: £113.3 billion
(31 December 2008: £110.2 billion)
Interim dividend: 10.0 pence per share
(H1 2008: 10.0 pence per share)
9
Profit before tax and exceptional items
£ million
Net
revenues
£129.0m
200
150
100
PBT
H1 2008
£173.3m
50
0
10
Net revenues
£m
Markets
£148m
500
450
400
Net new
business
£30m
350
300
200
Net
revenues
H1 2008
150
£461m
250
100
50
0
11
Performance
fees
£17m
FX
£66m
Net
revenues
H1 2009
£332m
Profit before tax and exceptional items
£ million
Net
revenues
£129.0m
200
150
100
PBT
H1 2008
Compensation
costs
£43.0m
Other
costs
£6.8m
Net interest
Income
£11.2m
JVs &
Associates
£6.0m
£173.3m
50
PBT
H1 2009
£76.9m
0
12
Institutional and Intermediary net revenues
Net revenue margins
£m
65bps
67bps
246
58bps
195
165
160
148
112
H1 2008
H2 2008
Institutional
13
H1 2009
Intermediary
H1 2008
H2 2008
H1 2009
Private Banking net revenues
Net revenue margins
£m
102bps
56.2
98bps
55.1
86bps
49.2
13.0
14.4
11.4
43.2
40.7
37.8
H1 2008
H2 2008
H1 2009
Fees
14
Interest income
H1 2008
H2 2008
H1 2009
Operating expenses before exceptionals
£mn
H1-08
H2-08
H1-09
H1 09 vs H1 08
Staff costs
203.7
169.7
160.7
-21%
Other costs
108.1
130.8
99.8
-8%
6.8
8.3
8.3
+22%
Total
318.6
308.8
268.8
-16%
No of employees (period-end)
2,998
2,834
2,626
-12%
Depreciation and amortisation
15
Exceptional items
Q1
Q2
H1-09
(6.3)
1.5
(4.8)
0.6
0.8
1.4
Private Equity
(1.7)
1.1
(0.6)
Seed capital
(5.8)
(6.7)
(12.5)
0.4
(7.5)
(7.1)
Within Revenue:
(12.8)
(10.8)
(23.6)
Redundancy costs
(4.5)
(1.7)
(6.2)
Office rationalisation and other costs
(3.6)
(0.5)
(4.1)
Surplus space provision
(3.0)
-
(3.0)
-
(3.7)
(3.7)
Within operating expenses:
(11.1)
(5.9)
(17.0)
Total exceptional items
(23.9)
(16.7)
(40.6)
ABS/MBS
Third party hedge funds
Property
Impairment of acquired intangible assets and JVs
16
Group Capital allocation
£mn
Investment Capital:
Cash and liquid debt securities
Mortgage and asset backed securities
Third party hedge funds
Seed capital
Private equity
Property and other investments
Total Investment Capital
Private Banking:
Cash and cash equivalents
Other net liabilities
Total Private Banking
Other Operational Entities:
Cash and cash equivalents
Liquid debt securities
Other net assets
Total Other Operational Entities
Total Group Capital
17
Liquid debt securities represent bank CDs, investments in liquidity funds etc.
June 2008
Dec 2008
June 2009
172
151
173
248
126
46
916
428
105
53
214
58
41
899
504
1
32
136
68
30
771
311
(90)
221
662
(395)
267
841
(611)
230
304
28
148
480
1,617
95
235
136
466
1,632
261
75
160
496
1,497
Outlook
Outlook
•
Priorities remain unchanged
• Capitalising on investment performance
• Growing assets under management
• Balancing cost reductions vs. growth opportunities
19
•
Significant pipeline
•
Focus on organic growth
Forward-Looking Statements
These presentation slides may contain certain forward-looking statements with respect to
the financial condition and results of the operations and businesses of Schroders plc
These statements and forecasts involve risk and uncertainty because they relate to events
and depend upon circumstances that may occur in the future
There are a number of factors that could cause actual results or developments to differ
materially from those expressed or implied by those forward-looking statements and
forecasts. The 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 profit forecast
20