Key performance indicators
We use a number of key
performance indicators
to measure our performance.
Our objective:
How we performed:
Long-term performance:
Three-year investment performance was
strong in 2015 and has been above our
target over the last five years.
2011
2012
2013
2014
2015
1. Investment performance*
We target at least 60 per cent. of assets
under management to outperform
benchmark or peer group over rolling
three‑year periods.
One-year investment performance fell
to 53 per cent. due to challenging
market conditions.
%
70
71
68
78
72
2. Net new business
We seek to generate positive net new
business in Institutional, Intermediary
and Wealth Management.
We generated net new business in 2015
of £13.0 billion, £8.8 billion in Institutional,
£4.3 billion in Intermediary and small
outflows of £0.1 billion in Wealth
Management.
£bn
2011
2012
2013
2014
2015
3.2
9.4
7.9
24.8
13.0
2011
2012
2013
2014
2015
187.3
212.0
262.9
300.0
313.5
Inflows in 2014 included one £12 billion
mandate.
3. Assets under management
(at 31 December)
An important influence on assets under
management is the level of markets, but we
aim to grow assets under management over
time in excess of market growth, through
positive investment performance and net
new business.
Despite market conditions, assets under
management increased by 5 per cent.
through 2015 due to positive investment
returns and net inflows.
£bn
4. Net operating revenue margins†
(excluding performance fees)
As a key driver of revenue, we focus on
net operating revenue margins by product
and by channel. As Institutional, Multi-asset
and Fixed Income have grown, net operating
revenue margins have declined but we benefit
from the greater diversity of our business.
In 2015, net operating revenue margins
declined to 51 basis points, in line with
our expectations.
In the future, net operating revenue margins
may continue to decline, reflecting changes
to the business mix and pressure on fees.
* See Glossary.
12
Schroders | Annual Report and Accounts 2015
basis points
2011
2012
2013
2014
2015
57
54
53
53
51
Strategic report Strategy & Business review
Our objective:
How we performed:
Long-term performance:
In 2015 this ratio was better than our target.
2011
2012
2013
2014
2015
5. Cost:net revenue ratio†
We target a 65 per cent. cost:net revenue
ratio, recognising that in weaker markets
the ratio may be higher than our long
term target.
†
%*
65*
69*
64†
64†
63†
Before exceptional items
6. C
ompensation cost:net revenue ratio†
By targeting a compensation cost:net
revenue ratio over a market cycle we align
the interests of shareholders and employees.
This ratio was better than our target range
in 2015.
%*
43*
48*
45†
44†
44†
2011
2012
2013
2014
2015
We aim for a compensation cost:net revenue
ratio of between 45 and 49 per cent.
depending on market conditions.
†
Before exceptional items
7. Basic earnings per share
We aim to grow earnings per share
consistently, recognising the potential
impact of market volatility on results
in the short term.
pence per share
In 2015, earnings per share increased
by 12 per cent.
2011
2012
2013
2014
2015
‡
115.9
104.7
130.6‡
152.7‡
171.1‡
After exceptional items
8. Dividend per share
(in respect of the year)
Our policy is to increase the dividend
progressively, in line with the trend in
profitability. We target a dividend payout
ratio of 45 to 50 per cent. For more
information, see page 96.
The Board is recommending a final dividend
of 58.0 pence per share, bringing the total
dividend for the year to 87.0 pence per share,
an increase of 12 per cent. This represents
a payout ratio of 49 per cent.
pence per share
2011
2012
2013
2014
2015
39
43
58
78
87
Information has been re-presented to reflect a new definition of net revenue and the introduction of net
operating revenue, see Glossary.
†
Schroders | Annual Report and Accounts 2015
13