Schroders
2008 Interim Results
trusted heritage
advanced thinking
Data Pack
Contents
Funds under management
FUM by client domicile
Asset Management business flows
Challenging market conditions for Retail
Focus on high margin products
Income and cost metrics for the Group
Gross profits and margins – Asset Management
Total income
Total costs
Compensation costs: operating revenues
Cost: income ratio
Headcount
Income statement progression
Funds under management diversification
Balance sheet
Movement in capital
Private Equity interests
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Funds under management
£130.2 billion at end June 2008
Funds under management (£bn)
139.1
130.2
Dec 07
6% decrease due to market
movements and net outflows
Jun 08
Dec 07
2
51.2
Jun 08
Net outflows of £1.1bn and
market movements
73.2
67.6
Dec 07
Retail FUM (£bn)
56.2
Institutional FUM (£bn)
Jun 08
Private Banking FUM (£bn)
Net outflows of £0.2bn and
market movements
11.4
9.7
Dec 07
Jun 08
Inflows of £0.2bn
Funds under management
£130.2 billion at end June 2008
£bn
Institutional
Retail
Private Banking
Total
31 December 2007
73.2
56.2
9.7
139.1
Net flows
(1.1)
(0.2)
0.2
(1.1)
0.9
-
0.3
1.2
Market movements & other
(5.4)
(4.8)
1.2*
(9.0)
30 June 2008
67.6
51.2
11.4
130.2
Acquisition adjustments
Institutional net outflows
– Reduced level of outflows at £1.1 billion (H1 2007: £4.1 billion) as Institutional business is successfully
repositioned
Retail net outflows
– Outflows of £0.2 billion in line with industry experience given challenging market conditions and
negative investor sentiment (H1 2007: £3.6 billion inflows)
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*Includes custody related assets in line with industry best practice
FUM by client domicile
• £79.6 billion funds under management outside the UK
UK
£50.6bn
North
America
£12.8bn
South
America
£3.3bn
Continental
Europe
£28.4bn
Middle
East
£2.4bn
£3.3bn 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
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Asia
Pacific
£32.7bn
Asset Management business flows
Inflows
H1 2007
Outflows
Net
Institutional
5.7
(9.8)
Retail
8.1
Total Asset
Management
13.8
£bn
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Inflows
H2 2007
Outflows
Inflows
H1 2008
Outflows
Net
Net
(4.1)
5.9
(12.4)
(6.5)
7.3
(8.4)
(1.1)
(4.5)
3.6
12.3
(7.1)
5.2
7.6
(7.8)
(0.2)
(14.3)
(0.5)
18.2
(19.5)
(1.3)
14.9
(16.2)
(1.3)
Challenging market conditions for Retail
Diversity of Product Range
Private Banking
9%
Multi-asset
15%
Equities
51%
Alternatives
14%
Fixed Income
11%
FUM Data: 30 June 2008, Schroders
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UK equities
European equities
Global equities
BRIC
Asian equities
Pacific equities
Asia pacific bonds
US equities
Quantitiative equities
Asia Pacific bonds
European bonds
Global bonds
UK bonds
US bonds
Commodities
Emerging market debt
Hedge funds
Property
Multi-asset
Private Banking
Focus on high margin products
Asset Management
funds under management and margins
•
Asset Management margins up 33%
since 2005
FUM (£bn)
(bps)
140
•
70
Channel diversity
120
•
New products in Institutional
60
100
•
Alternatives
80
•
50
Performance fees
60
40
40
20
30
H1 2005
H1 2006
Institutional (lhs)
7
H1 2007
Retail (lhs)
H1 2008
margin (rhs)
Income and cost metrics for the Group
H1-07 H1-08
Compensation costs : operating revenues
8
47%
45%
– Compensation costs : operating revenues = total
Group compensation costs divided by gross profits
for the Asset Management and Private Banking
business segments
Group cost : income ratio
61%
70%
– Group cost : income ratio = total Group costs divided
by total Group income
Group cost : gross profit
64%
75%
– Group cost : gross profit = total Group costs divided
by total Group gross profits
Return on average capital (pre-tax)
25%
16%
– Return on average capital (pre-tax) = total Group
profit before tax divided by average capital
Return on average capital (post-tax)
19%
12%
– Return on average capital (post-tax) = total Group
profit after tax divided by average capital
Gross profit margins – Asset Management
Asset Management gross profit £395.5 million
(H1 2007: £353.3 million)
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H1 2007
FY 2007
H1 2008
AM gross profit on average AM FUM
57bps
60bps
65bps
Of which: performance fees
2bps
3bps
3bps
AM costs on average AM FUM
39bps
41bps
44bps
AM operating profit on average AM FUM
18bps
19bps
21bps
Total income
£mn
471.5
454.6
391.6
326.9
263.8
227.2
H1 2003
H1 2004
H1 2005
H1 2006
H1 2007
Income is the sum of gross profit; net finance income; and share of profit of associates and joint ventures
Figures 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
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H1 2008
Total costs
£mn
318.9
200.0
191.2
H1 2003
H1 2004
223.8
H1 2005
H1 2006
Staff Costs
Non-staff costs
Figures 2003 based on UK GAAP, figures from 2004 onwards based on IFRS
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259.3
285.9
H1 2007
H1 2008
Compensation costs: operating revenues
56%
51%
52%
48%
47%
45%
H1 2003
H1 2004
H1 2005
H1 2006
H1 2007
Total Group compensation costs divided by gross profits for the Asset Management and Private Banking
business segments
Figures 2003 based on UK GAAP, figures from 2004 onwards based on IFRS
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H1 2008
Cost: income ratio
88%
72%
68%
70%
66%
61%
H1 2003
H1 2004
H1 2005
H1 2006
Total Group costs divided by total Group income
Figures 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
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H1 2007
H1 2008
Headcount
2,998
2,891
2,782
2,637
30 Jun 06
14
2,675
31 Dec 06
30 Jun 07
31 Dec 07
30 Jun 08
Income statement progression
Profit before tax
15
£mn
Q1
2007
Q2
2007
Q3
2007
Q4
2007
Q1
2008
Q2
2008
Asset Management income
177.3
186.4
198.8
222.9
197.1
208.9
Asset Management costs
(114.8)
(125.7)
(131.6)
(146.8)
(131.5)
(137.8)
Asset Management profit
62.5
60.7
67.2
76.1
65.6
71.1
Private Banking profit
7.5
8.4
11.3
14.1
10.9
11.4
Private Equity profit
19.9
16.3
20.2
2.1
2.4
5.0
Group profit
3.3
7.0
(0.6)
16.5
(36.7)
6.0
Profit before tax
93.2
92.4
98.1
108.8
42.2
93.5
Funds under management diversity by channel
Funds under management £130.2 billion
30 Jun 2008
31 Dec 2007
7%
9%
52%
53%
40%
39%
Institutional
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Retail
Private Banking
Funds under management diversity by geography
Funds under management £130.2 billion
30 Jun 2008
31 Dec 2007
12%
12%
38%
39%
25%
26%
24%
24%
UK
Asia Pacific
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Continental Europe
Americas
Balance sheet
£mn
30 Jun 2007
31 Dec 07
30 Jun 2008
Intangible assets including goodwill
96.3
120.3
155.1
Other non-current assets
795.1
727.3
755.3
2,745.6
3,263.8
3,494.0
65.3
37.5
17.4
Assets backing insurance unit-linked
liabilities
2,230.8
2,727.8
3,063.8
Total assets
5,933.1
6,876.7
7,485.6
Total equity*
1,576.0
1,696.2
1,619.4
329.6
332.2
330.0
Current liabilities
1,796.7
2,120.5
2,472.4
Insurance unit-linked liabilities
2,230.8
2,727.8
3,063.8
Total equity and liabilities
5,933.1
6,876.7
7,485.6
Current assets
Non-current assets held for sale
Non-current liabilities
* Includes minority interests (Jun 2008: £2.1mn; Dec 2007: £0.5mn; Jun 2007: £0.4mn)
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Movement in capital
£mn
Opening balance
1,695.7
Profit before tax
135.7
Tax and minority interests
(35.0)
Dividends
(59.4)
Other transactions with equity holders
(89.9)
Net decrease in AFS reserve
(26.3)
Net actuarial losses on defined benefit pension schemes
(24.3)
Other
Closing balance
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H1-08
20.8
1,617.3
Private Equity interests
Schroders plc
Investments
Carried interest
(Total £104mn)
(Total £22mn)
SVG Capital plc
£47mn
Funds I + II
Quoted Investment Trust
SVIL
£19mn
Co-investment vehicle
GP & LP Interests
£13mn
Permira and other funds
Fund of Funds I, II, III, IV
£19mn
Stand-alone portfolio
Other
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Permira
£6mn
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 and results of the 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. Nothing in this presentation should
be construed as a profit forecast
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