Schroders
2008 Annual Results
trusted heritage
advanced thinking
Data Pack
Contents
Funds under management
Asset Management business flows
Income and cost metrics for the Group
Gross profits and margins – Asset Management
Income
Total costs
Compensation costs: operating revenues
2008 exceptional costs by quarter
Cost: income ratio
Headcount
Income statement progression
Balance sheet
Movement in capital
Private Equity interests
1
2
5
6
7
8
9
10
11
12
13
14
15
16
17
Funds under management
£110.2 billion at end December 2008
£bn
Institutional
Intermediary
Private Banking
Total
31 December 2007
73.2
56.2
9.7
139.1
Net flows
(3.8)
(6.2)
0.4
(9.6)
0.9
0.1
0.3
1.3
(10.7)
(11.2)
1.3*
(20.6)
59.6
38.9
11.7
110.2
Acquisition adjustments
Market movements, foreign
exchange impact & other
31 December 2008
3
*Includes custody related assets in line with industry best practice
FUM by client domicile
• £66.2 billion funds under management outside the UK
UK
£44.0bn
North
America
£11.0bn
South
America
£2.0bn
Continental
Europe
£24.6bn
Middle
East
£2.5bn
£4.9bn China joint venture
2008 funds under management: Investment by client domicile
China joint venture funds under management are not reported within Group funds under management
4
Asia
Pacific
£26.1bn
FUM by currency
Funds under management £110.2 billion
11%
5%
36%
5%
21%
22%
GBP
15
EUR
USD
JPY
CHF
Other
Focus on high margin products
Asset Management
funds under management and margins
•
Asset Management margins up 29%
since 2005
FUM (£bn)
(bps)
140
•
70
Channel diversity
120
•
New products in Institutional
60
100
•
Performance fees
80
50
60
40
40
20
30
2005
Institutional (lhs)
6
2006
2007
Intermediary (lhs)
2008
margin (rhs)
Income and cost metrics for the Group
Compensation costs : operating revenues
2008
46%
45%
Group cost : income ratio
61%
68%
– Group cost : income ratio = total Group costs divided
by total Group income
Group cost : gross profit
64%
72%
– Group cost : gross profit = total Group costs divided
by total Group gross profits
Return on average capital (pre-tax)
25%
7%*
– Return on average capital (pre-tax) = total Group
profit before tax divided by average capital
Return on average capital (post-tax)
19%
4%*
– Return on average capital (post-tax) = total Group
profit after tax divided by average capital
Before exceptional items, except for *
7
2007
– Compensation costs : operating revenues = total
Group compensation costs divided by gross profits
for the Asset Management and Private Banking
business segments
Gross profit margins – Asset Management
Asset Management gross profit £753.0 million
(2007: £764.1 million)
8
2006
2007
2008
AM gross profit on average AM FUM
55bps
60bps
66bps
Of which: performance fees
4bps
3bps
4bps
AM costs on average AM FUM
37bps
41bps
46bps
AM operating profit on average AM FUM
18bps
19bps
18bps
Total income
Institutional
Intermediary
Private Banking
Group and Private Equity
£mn
£318.7 million
£454.0 million
£111.3 million
£33.9 million
1006.0
917.9
832.3
714.6
572.4
471.2
2003
2004
2005
2006
Income is the sum of gross profit; net finance income; and share of profit of associates and joint ventures
Figures for 2003 based on UK GAAP, figures from 2004 onwards based on IFRS
2005 uses underlying income adjusted for £20.4mn gain on discontinued outsourcing project
2004 & 2008 figure quoted before exceptional items
9
2007
2008
Total costs
£mn
613.5
627.4
208.7
250.7
403.1
387
2007
2008
542.3
484.3
406.2
408.6
197.1
174.5
173.1
153.2
233.1
255.4
2003
2004
309.8
345.2
2005
2006
Staff Costs
Non-staff costs
Figures for 2003 based on UK GAAP, figures from 2004 onwards based on IFRS.
2007 & 2008 figure quoted before exceptional items
10
Compensation costs: operating revenues
56%
51%
51%
47%
2003
2004
2005
2006
46%
2007
Total Group compensation costs divided by gross profits for the Asset Management and Private Banking
business segments
Figures for 2003 based on UK GAAP, figures from 2004 onwards based on IFRS
11
45%
2008
Exceptional items by quarter
Realised losses and mark to market losses
Impairments
Q1
2008
Q2
2008
H1
2008
Q3
2008
Q4
2008
H2
2008
Total
£mn
£mn
£mn
£mn
£mn
£mn
£mn
(22.1)
(10.8)
(32.9)
8.4
(41.4)
(33.0)
(65.9)
-
(3.3)
(3.3)
(0.3)
(77.7)
(78.0)
(81.3)
(22.1)
(14.1)
(36.2)
8.1 (119.1) (111.0) (147.2)
Cost: income ratio
86%
66%
68%
68%
65%
61%
2003
2004
2005
2006
Total Group costs divided by total Group income
Figures for 2003 based on UK GAAP, figures from 2004 onwards based on IFRS
2005 uses underlying profit adjusted for £20.4mn gain on discontinued outsourcing project
12
2007
2008
Headcount
2,891
2,834
2,675
31 Dec 06
13
31 Dec 07
31 Dec 08
Income statement progression
Profit before tax
£mn
Q3
2007
Q4
2007
Q1
2008
Q2
2008
Q3
2008
Q4
2008
Asset Management income
198.8
222.9
197.1
208.9
188.3
178.4
(131.6)
(146.8)
(131.5)
(137.8)
(129.2)
(124.4)
-
-
-
-
-
(18.7)
Asset Management profit
67.2
76.1
65.6
71.1
59.1
35.3
Private Banking profit
11.3
14.1
10.9
11.4
11.6
4.3
Private Equity profit
20.2
2.1
2.4
5.0
(1.7)
(25.1)
Group profit
(0.6)
16.5
(36.7)
6.0
9.0
(105.1)
Profit before tax
98.1
108.8
42.2
93.5
78.0
(90.6)
Asset Management costs
Asset Management
exceptionals
14
Balance sheet
£mn
31 Dec 07
31 Dec 2008
Intangible assets including goodwill
120.3
163.5
Other non-current assets
727.3
704.5
3,263.8
3,489.1
37.5
2.0
Assets backing unit-linked liabilities
2,727.8
3,234.7
Total assets
6,876.7
7,593.8
Total equity*
1,696.2
1,632.2
332.2
316.9
Current liabilities
2,120.5
2,410.0
Unit-linked liabilities
2,727.8
3,234.7
Total equity and liabilities
6,876.7
7,593.8
Current assets
Non-current assets held for sale
Non-current liabilities
* Includes minority interests (Dec 2008: £0.3mn; Dec 2007: £0.5mn)
18
Movement in capital
2008
Opening balance
1,695.7
Profit before tax
123.1
Tax and minority interests
(46.4)
Dividends
(86.7)
Other transactions with equity holders
(89.7)
Net decrease in AFS reserve
(82.5)
Net actuarial losses on defined benefit pension schemes
(29.6)
Exchange differences
153.4
Other
(5.4)
Closing balance
19
£mn
1,631.9
Private Equity interests
Schroders plc
Investments
Carried interest
(Total £44mn)
(Total £14mn)
SVG Capital plc
£6mn
Funds I + II
Quoted Investment Trust
SVIL
£11mn
Co-investment vehicle
GP & LP Interests
£5mn
Permira and other funds
Fund of Funds I, II, III, IV
£18mn
Stand-alone portfolio
Other
20
Permira
£4mn
Other SV funds
US, Canada, Japan, Sapphire
Life Sciences, Asia Pacific
Forward-Looking Statements
These presentation slides contain certain forward-looking statements and forecasts with
respect to the financial condition, results of operations and businesses of Schroders plc.
Such statements and forecasts involve risk and uncertainty because they relate to events
and depend upon circumstances 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’ 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