Schroders
2015 Results
3 March 2016
Michael Dobson Chief Executive
2015: overview
Strong results in a challenging market
 Net revenue £1,658.5m (2014: £1,549.5m)
 Profit before tax and exceptional items £609.7m (2014: £565.2m)
 Profit before tax £589.0m (2014: £517.1m)
 Full year dividend up 12% to 87.0 pence per share (2014: 78.0 pence per share)
 72% of assets under management outperforming over three years
 Net new business £13.0bn (2014: £24.8bn)
 Assets under management £313.5bn (2014: £300.0bn)
 Board and senior management succession
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2015 Annual Results | March 2016
Institutional
Assets under management: £181.0bn (2014: £171.1bn)
 £32.0bn of new mandates
 Net inflows £8.8bn
 Strong performance in Asia Pacific, UK
 Year of transition in US
 Significant new business in Fixed Income and Multi-asset
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2015 Annual Results | March 2016
Intermediary
Assets under management: £100.9bn (2014: £97.8bn)
 Strong flows in H1, challenging markets in H2
 Net inflows £4.3bn
 Significant flows in Asia Pacific, continental Europe
 Diversified across Fixed Income, Multi-asset, Equities
 Active management of product range:
47 fund launches
40 fund closures
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2015 Annual Results | March 2016
Equities
Assets under management: £129.9bn (2014: £129.6bn)
 £1.7bn of net inflows in core equities
 Strong flows in Japanese and European equities
 Small inflows in Emerging Markets
 Outflows in UK equities
 £2.5bn of outflows in £20.4bn Quant business
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2015 Annual Results | March 2016
Multi-asset
Assets under management: £78.1bn (2014: £72.0bn)
 Net new business £6.2bn
 Diversified across
Risk Mitigation
Risk Controlled Growth
Income
Inflation Protection
 New initiatives in liquid alternatives
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2015 Annual Results | March 2016
Fixed Income
Assets under management: £60.3bn (2014: £51.1bn)
 Net new business £9.1bn
 Major flows in
US/European Bond Beta
Global Multi-Sector
UK and European Credit
EMD Relative Return
Asian Bonds
 New fund launches
 Infrastructure Debt capability
 Exploring initiatives in ABS/MBS, loans
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2015 Annual Results | March 2016
Wealth Management
Assets under management: £31.6bn (2014: £31.1bn)
 Net revenues £207.2m (2014: £213.5m)
2014 included £9.0m of one off revenues
 Profit before tax and exceptional items £61.3m (2014: £61.7m)
 70% cost income ratio
 Net inflows in UK £0.2bn
slowdown in H2
private clients and charities drawing down on investment returns
 Outflows in Switzerland
reshaping business
 Growth opportunities in UK, overseas
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2015 Annual Results | March 2016
Associates, joint ventures and partnerships
Good progress in 2015
 Strategy of building businesses with high quality partners
 To enter new markets
China: Bank of Communications Schroders
India: Axis Asset Management Company
 To complement existing presence
Japan: Nippon Life
 To extend investment capabilities
Insurance linked securities: Secquaero
Convertibles
Loans
 As investment opportunity
RWC
Nutmeg
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2015 Annual Results | March 2016
Schroders
2015 Annual Results
3 March 2016
Richard Keers Chief Financial Officer
Financial highlights
Net revenue, including performance fees (£m)
1,800
1,600
1,400
1,200
1,000
800
600
400
200
0
1,658.5
1,549.5
1,427.5
1,151.2
Performance fees
37.1
80.6
28.5
1,122.7
1,346.9
1,512.4
1,622.2
2012
2013
2014
2015
Basic and diluted earnings per share before exceptional items
(pence)
200
150
100
50
0
104.7 101.3
149.9 144.6
2012
2013
Basic
10
166.8 161.5
2014
Diluted
176.9 172.2
2015
36.3
Profit before tax (£m)
700
600
500
400
300
200
100
0
Exceptional items
507.8
48.1
60.3
360.0
609.7
565.2
360.0
447.5
517.1
589.0
2012
2013
2014
2015
Dividend per share (pence)
90
80
70
60
50
40
30
20
10
0
43
58
78
87
2012
2013
2014
2015
20.7
Net revenue – driven by organic growth
Net revenue up 7% to £1,659m
£m
Net revenue
(old basis)
1,528
Net finance income
11
Net revenue
(new basis)
1,550
Wealth
Management
213
Wealth
Management
214
Asset
Management
1,304
Asset
Management
1,308
2014
11
Associates
and JVs
11
Group segment
11
2014
Net new business
68
Markets and FX
38
Associates
and JVs
11
Other
(8)
Net revenue
(new basis)
1,659
Wealth
Management
207
Asset
Management
1,413
Group segment
28
Group segment
39
2015
Asset Management net operating revenues
Asset Management net operating revenue margins, excluding performance fees, at 49 bps
£m
800
687.8
45.1
700
600
716.4
571.7
550.9
35.1
9.5
6.4
764.7
628.7
26.2
27.8
500
400
300
755.2
710.0
642.7
602.5
543.9
515.8
200
100
0
2013
2014
Institutional
12
Intermediary
2015
Performance fees
Wealth Management net operating revenues
Wealth Management net operating revenue margins, excluding performance fees, at 65 bps
£m
250
206.8
200
150
14.6
149.6
13.6
2.9
207.3
15.5
34.5
36.0
154.8
155.2
2014
2015
0.4
25.9
100
50
109.7
0
2013
Management fees
13
Transaction fees
Net banking interest income
Performance fees
0.6
Operating expenses
Cost control in line with projections
2015
£m
2014
AM
& Group
WM
Total
2015 versus 2014
Compensation costs
687.8
637.2
96.8
734.0
+7%
Non-compensation costs
296.5
265.7
49.1
314.8
+6%
Operating expenses (excluding
exceptional items)
984.3
902.9
145.9
1,048.8
+7%
Exceptional expenses
48.8
17.7
0.8
18.5
-62%
1,033.1
920.6
146.7
1,067.3
+3%
3,556
3,158
626
3,784
+6%
2014
2015
Compensation cost:net revenue ratio
44%
44%
Cost:net revenue ratio
64%
63%
Operating expenses (including
exceptional items)
Headcount
14
Profit before tax and exceptional items
Up 8% to £609.7m reflecting strong business performance
£m
Profit before tax
and exceptional
items
565.2
Net revenue
109.0
Wealth
Management
61.7
Compensation
costs
(46.2)
Other costs
(18.3)
15
Profit after tax and
before exceptional items
483.4
Exceptional items
(16.0)
Asset
Management
540.5
Group segment
4.2
Tax
(126.3)
Wealth
Management
61.3
Asset
Management
499.3
2014
Profit before tax
and exceptional
items
609.7
Group segment
7.9
2015
Profit after tax and
exceptional items
467.4
2015
Analysis of Group Capital
Increase of £258m during 2015 to £2,796m
£m
2014
2015
Regulatory capital
673
653
Other operating capital
284
253
Investment capital*
725
942
Seed capital
163
229
Other items**
693
719
2,538
2,796
Statutory Group capital
** Includes RWC Partners Limited and Schroder Ventures Investments Limited associates
** Comprises goodwill, intangible assets, pension scheme surpluses, other associates and joint ventures and deferred tax
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Schroders
2015 Results
3 March 2016
Michael Dobson Chief Executive
Outlook
Resilience through a globally diversified business
 Good new business flows in Institutional
 Market volatility reducing retail investor demand
 Many long-term growth opportunities
 Continuity and stability through succession plans
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2015 Annual Results | March 2016
Forward-looking statement
This presentation 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’, ‘confident’, ‘aims’, ‘will have’, ‘will be’, ‘will
ensure’, ‘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 presentation. The Directors do not make any undertaking to update or revise any forwardlooking 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.
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