Schroders
2015 Half-Year Results
30 July 2015
Michael Dobson Chief Executive
29/07/2015 20:19:13
H1 2015

Net revenue £806.2m (H1 2014: £728.6m)

Profit before tax and exceptional items £305.7m (H1 2014: £261.5m)

Net inflows £8.8bn (H1 2014: £4.8bn)

Assets under management £309.9bn (30 June 2014: £271.5bn)

Interim dividend 29 pence per share (interim dividend 2014: 24.0 pence)
1
2015 Half-Year Results | July 2015
29/07/2015 20:19:13
Asset Management
Diversified growth
£bn

Net revenue £694.3m (H1 2014: £621.0m)

Profit before tax and exceptional items
£271.0m (H1 2014: £235.1m)

77% of assets outperforming over three years

Net inflows £8.4bn (H1 2014: £4.5bn)
12
10
8
6
4
2

Significant growth in Asia
0

Strong inflows in European Intermediary
-2

Building scale in Fixed Income and Multi-asset
-4
H1 2015
2
H1 2015
2015 Half-Year Results | July 2015
H1 2015
29/07/2015 20:19:13
Institutional
Assets under management £175.5bn (30 June 2014: £148.0bn)
£bn

£16.7bn of new mandates (H1 2014: £11.4bn)

Net inflows £3.6bn (H1 2014: £0.7bn)
5
4
3

Strong performance in Japan, China
2

Net inflows in Global and US fixed income,
multi-asset strategies, Japanese equities
1
0

Outflows in Commodities, Global equities
-1
-2
H1 2015
3
H1 2015
2015 Half-Year Results | July 2015
29/07/2015 20:19:13
Intermediary
Assets under management £102.4bn (30 June 2014: £92.8bn)
£bn

Gross sales £28.6bn (H1 2014: £23.3bn)
7
6

Net inflows £4.8bn (H1 2014: £3.8bn)

Significant inflows in Asia and Europe
5
4
3

Outflows in UK

Diversified flows across European bonds,
Global, Japanese and European equities,
Asian multi-asset
2
1
0
-1
-2
H1 2015
4
H1 2015
2015 Half-Year Results | July 2015
29/07/2015 20:19:13
Wealth Management
Assets under management: £32.0bn (30 June 2014: £30.7bn)
AUM by client size

Net revenue £105.5m (H1 2014: £100.5m)

Profit before tax and exceptional items £30.0m
(H1 2014: £26.3m)

Net inflows £0.4bn

Differentiated proposition for UK market

Repositioning international business
5
2015 Half-Year Results | July 2015
Schroders
2015 Half-Year Results
30 July 2015
Richard Keers Chief Financial Officer
Financial highlights
Net revenue, including performance fees (£m)
900
800
700
600
500
400
300
200
100
0
806.2
728.6
645.1
8.4
Profit before tax (£m)
5.9
305.7
300
250
11.8
Exceptional items (£m)
350
27.6
6.3
200
15.4
261.5
228.0
150
100
633.3
720.2
800.3
50
221.7
233.9
290.3
H1 2013
H1 2014
H1 2015
0
H1 2013
H1 2014
H1 2015
Basic and diluted earnings per share before
exceptional items (pence)
90
Dividend per share (pence)
30
25
80
20
15
70
10
60
50
66.3 64.1
H1 2013
7
77.1 74.5
H1 2014
Basic
Diluted
88.5 86.1
H1 2015
5
0
16
24
29
H1 2013
H1 2014
H1 2015
2015 Half-Year Results | July 2015
Net revenue – driven by investment returns and organic growth
Net revenue up 11% to £806m
£m
Net revenue
728.6
Net new business
40
Wealth Management
101
Markets & FX
44
Performance fees
(2)
Other
(4)
Wealth Management
106
Asset
Management
694
Asset
Management
621
H1 2014
8
Net revenue
806.2
Group segment
7
Group segment
6
2015 Half-Year Results | July 2015
H1 2015
Asset Management net revenues
Net revenue margins, excluding performance fees, at 49 bps
£m
450
383.9
400
373.5
347.2
350
300
250
2.0
273.8
6.3
5.6
383.6
369.1
345.2
150
310.4
309.0
21.5
200
0.3
4.4
304.8
287.5
267.5
100
50
0
H1 2014
H2 2014
Institutional
9
Intermediary
H1 2015
Performance fees
2015 Half-Year Results | July 2015
Wealth Management net revenues
Net revenue margins at 66 bps
£m
120
100
80
100.5
6.5
113.0
9.0
8.1
105.5
17.0
18.1
20.0
77.0
77.8
78.1
H1 2014
H2 2014
H1 2015
7.4
60
40
20
0
Management fees
10
Transaction fees
Net banking interest income
Net loan loss recoveries and performance fees
2015 Half-Year Results | July 2015
Operating expenses
Cost control in line with projections
H1 2015
H1 2014
H2 2014
AM
& Group
Compensation costs
340.9
346.9
317.2
48.7
365.9
+7%
Non-compensation costs
137.2
159.3
128.0
26.8
154.8
+13%
Operating expenses (excl.
exceptional items)
478.1
506.2
445.2
75.5
520.7
+9%
Exceptional items
26.5
22.3
10.3
4.0
14.3
-46%
Operating expenses (incl.
exceptional items)
504.6
528.5
455.5
79.5
535.0
+6%
Headcount
3,540
3,556
3,074
611
3,685
+4%
H1 2014
FY 2014
H1 2015
Compensation cost:net
revenue ratio
47%
45%
45%
Cost:net revenue ratio
66%
64%
65%
£m
11
WM
Total
H1 2015 versus
H1 2014
2015 Half-Year Results | July 2015
Profit before tax and exceptional items
Up 17% to £305.7m reflecting strong business performance
£m
Net revenue
78
Compensation
costs
(25)
Profit before tax
and exceptional
items
261.5
Other costs
(18)
Net finance
income and
associates
9
Profit before tax
and exceptional
items
305.7
Tax
(64)
Wealth Management
30.0
Profit before
exceptional
items
241.6
Wealth Management
26.3
Asset
Management
271.0
Asset
Management
235.1
H1 2014
12
Group segment
0.1
Group segment
4.7
H1 2015
2015 Half-Year Results | July 2015
Movement in Group capital
Increase of £72m since 31 December 2014
£m
Profit after tax
229
Dividends
(147)
Foreign exchange
(12)
Other
2
Group
Capital
H2 2014
2,538
Group
Capital
H1 2015
2,610
31 December 2014
30 June 2015
13
2015 Half-Year Results | July 2015
Analysis of Group Capital
Increase of £72m since 31 December 2014
£m
H1
2014
H2
2014
H1
2015
Regulatory capital
617
673
695
Other operating capital
437
284
116
Investment capital*
573
725
957
Seed capital*
182
163
154
Other items**
514
693
688
2,323
2,538
2,610
Statutory Group capital
** Not included in AUM
** Comprises goodwill, intangible assets, pension scheme surpluses, other associates and joint ventures, and deferred tax
14
2015 Half-Year Results | July 2015
Outlook

Solid pipeline of new business in Institutional

Uncertainties around eurozone, China and US interest rates affecting investor demand

Building scale and improving efficiencies to offset declining fee margins

Investing in organic growth

Diversified business model provides long-term growth opportunities
15
2015 Half-Year Results | July 2015
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’, ‘will have’, ‘will be’, ‘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 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.
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2015 Half-Year Results | July 2015