9th August 2007
Schroders
2007 Interim Results
Interim Results
H1 2007: strong results
Pre-tax profit up 40% to £185.6 million
Dividend up 20% to 9.0p
Gross margins up 5bps to 60bps
Net outflows £0.3 billion (H1 2006: £2.0 billion)
Good investment performance
1
Interim Results
Retail: diversified growth
Funds under management £48.7 billion (end 2006: £42.5 billion)
Net sales £3.6 billion (H1 2006: £2.3 billion)
Net inflows in UK, Europe, Asia Pacific, Americas
Established funds and new products
€44 billion Luxembourg platform
2
Interim Results
Institutional: growing revenues
Funds under management £79.6 billion (end 2006: £77.4 billion)
Outflows in UK, Japan
Revenues up 15%
Gross sales up 35% to £5.7 billion
–
high alpha quant equities
–
multi-asset
–
alternatives
3
Interim Results
Private Banking: well positioned for growth
Pre-tax profit up 42% to £15.9 million
Further efficiency gains
Focus on new business and revenue growth
4
Interim Results
Alternatives: 12% of total funds under management
Funds under management £14.9 billion (end 2006: £12.5 billion)
Aareal integrated to create £9.5 billion pan European property
business
$1.1 billion flows into commodities and agriculture funds
NFC performing well  funds under management $4.5 billion

net new business $0.8 billion
5
Interim Results
A global business: 67% of revenues from outside UK
UK
£56.9bn
Continental
Europe
£31.7bn
North
America
£13.6bn
Middle
East
£3.0bn
South
America
£2.9bn
£1.9bn
Asia
Pacific
£15.2bn
£13.3bn
Japan
£10.7bn
Australia
£5.5bn
Managed FUM
Joint Venture FUM
Source: Schroders
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Interim Results
Investment performance: improving long term record
Retail
Institutional
29% (32%)
33% (40%)
71% (68%)
67% (60%)
Above benchmark 3 years to end June 2007 (end 2006)
Below benchmark
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9th August 2007
Schroders
2007 Interim Results
Stephen Brooks
Chief Financial Officer
Interim Results
Agenda
 Financial overview
 Asset Management
 Private Banking
 Private Equity and Group
9
Interim Results
Continued growth across our business
Profit before tax £185.6 million
(H1 2006: £132.3 million)
▲40%
Asset Management profit before tax £123.2 million
(H1 2006: £96.8 million)
▲ 27%
Private Banking profit before tax £15.9 million
(H1 2006: £11.2 million)
▲42%
Private Equity profit before tax £36.2 million
(H1 2006: £17.7 million)
▲105%
Funds under management £137.6 billion
(31 December 2006: £128.5 billion)
▲7%
10
Interim Results
Record half year profits and continued revenue
growth
£mn
£mn
250
185.6
200
150
132.3
103.1
100
50
72.6
20.5
27.2
H1
2002
H1
2003
0
PBT
H1
2004
H1
2005
Income
H1
2006
590
540
490
440
390
340
290
240
190
Total revenue
of £471.5mn ▲ 20%
Costs of
£285.9mn
▲ 10%
H1
2007
Costs
Figures 2002-2003 based on UK GAAP, figures from 2004 onwards based on IFRS
H1 2005 uses underlying profit adjusted for £20.4mn gain on discontinued outsourcing project
11
Interim Results
Underpinned by continued strong financial
performance across a range of measures
Margins (bps)
H1 2005
H1 2006
H1 2007
51
H1 2005
55
68%
H1 2006
60
Margin up 5 bps from
H1 2006
Compensation costs:
operating revenues
Cost: income ratio
H1 2007
66%
61%
Group cost: income
ratio declining
H1 2005
H1 2006
H1 2007
52%
48%
47%
Trending down
H1 2005 uses underlying figures adjusted for £20.4mn gain on discontinued outsourcing project
12
Interim Results
Agenda
 Financial overview
 Asset Management
 Private Banking
 Private Equity and Group
13
Interim Results
Our core Asset Management business continues to
grow rapidly
£mn
£mn
140
123.2
120
400
96.8
100
350
79.7
80
250
23.8
200
24.8
20
150
0
100
H1
2002
PBT
H1
2003
H1
2004
H1
2005
Income
Total revenue
of £363.7mn ▲ 19%
300
55.3
60
40
450
H1
2006
Costs of
£240.5mn
▲ 15%
H1
2007
Costs
Figures 2002-2003 based on UK GAAP, figures from 2004 onwards based on IFRS
H1 2005 uses underlying profit adjusted for £20.1mn gain on discontinued outsourcing project
In 2002-2003, Private Banking was not separately disclosed
14
Interim Results
Margins and revenues are growing in all channels…
Margins
Revenues
bps
83
£mn
89
87
206.8
169.3
156.9
33
34
39
135.5
135.9
118.2
H1 2005
H1 2006
H1 2007
Institutional
H1 2005
H1 2006
H1 2007
Retail
Retail and Institutional new business pushing total Asset Management margins up 6bps
H1 2005 uses underlying revenues adjusted for £20.1mn gain on discontinued outsourcing project
15
Interim Results
…and all geographies
UK
Margins
Revenues
bps
47
£mn
125.0
106.0
41
89.1
38
H1 2005
H1 2006
H1 2007
Continental Europe
Margins
bps
H1 2006
H1 2007
Revenues
82
74
H1 2005
£mn
120.0
92.6
73
80.4
H1 2005
H1 2006
H1 2007
H1 2005
H1 2006
H1 2007
H1 2005 uses underlying revenues adjusted for £20.1mn gain on discontinued outsourcing project
16
Interim Results
…and all geographies
Asia Pacific
Margins
Revenues
bps
£mn
87.3
60
78.7
58
56
H1 2005
66.0
H1 2006
H1 2005
H1 2007
Americas
Margins
H1 2006
H1 2007
Revenues
bps
39
£mn
31.4
37
27.9
31
18.2
H1 2005
H1 2006
H1 2007
H1 2005
H1 2006
H1 2007
H1 2005 uses underlying revenues adjusted for £20.1mn gain on discontinued outsourcing project
17
Interim Results
Growth supported by controlled cost increases
£mn
Staff costs
Non-staff costs
Total Asset Management costs
Asset Management cost: income ratio
H1 2006
H1 2007
143.0
162.2
65.4
78.3
208.4
240.5
68%
66%
Key drivers
• Investment in infrastructure
• Increased marketing and brand expenditure
• Continued control of overall staff costs
18
Interim Results
Funds under management have grown by 7%
£bn
150
8.1
140
(15.7)
130
15.4
1.3
120
110
137.6
128.5
100
90
31 Dec 2006
Outflows
Aareal
acquisition
Inflows
Investment
returns
30 June 2007
19
Interim Results
Agenda
 Financial overview
 Asset Management
 Private Banking
 Private Equity and Group
20
Interim Results
Private Banking turnaround
£mn
18
16
14
12
10
8
6
4
2
0
£mn
15.9
60
55
50
11.2
45
40
35
2.0
1.9
30
Revenues of
£47.5mn
▲ 5%
Costs of
£31.6mn
▼ 7%
25
H1 2004
PBT
H1 2005
H1 2006
Income
H1 2007
Costs
H1 2005 uses underlying profit adjusted for £0.3mn gain on discontinued outsourcing project
21
Interim Results
Agenda
 Financial overview
 Asset Management
 Private Banking
 Private Equity and Group
22
Interim Results
Private Equity continues to generate significant
returns
H1 2005
H1 2006
H1 2007
Revenues
19.4
19.3
38.4
Unrealised profit within
reserves*
76.1
74.4
96.6
171.2
154.9
161.7
Total Private Equity
investments
* Unrealised profit represents reserve on Private Equity Investments classified under IFRS as available for sale
23
Interim Results
Private Equity continues to generate significant
returns
Profit before tax
36.2
£mn
12.0
18.0
17.7
H1
2005
H1
2006
13.9
3.7
H1
2002
H1
2003
H1
2004
H1
2007
Figures 2002-2003 based on UK GAAP, figures from 2004 onwards based on IFRS
24
Interim Results
The interim dividend is increasing to 9 pence
2006
2005
Pence
per share
Interim
Final
H1 basic earnings per share
H1 diluted earnings per share
7.0
14.5
21.5
£mn
20.3
42.0
62.3
30.8p
30.6p
Pence
per share
7.5
17.5
25.0
2007 Interim
£mn
21.4
49.5
70.9
33.7p
33.2p
Pence
per share
£mn
9.0
25.8
49.0p
48.2p
25
Interim Results
Summary
Profit before tax £185.6 million
(H1 2006: £132.3 million)
▲40%
Asset Management profit before tax £123.2 million
(H1 2006: £96.8 million)
▲ 27%
Private Banking profit before tax £15.9 million
(H1 2006: £11.2 million)
▲42%
Private Equity profit before tax £36.2 million
(H1 2006: £17.7 million)
▲105%
Funds under management £137.6 billion
(31 December 2006: £128.5 billion)
▲7%
26
Interim Results
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
27