Schroders 2015 Half-Year Results 30 July 2015 Michael Dobson Chief - PowerPoint PPT Presentation

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 12  Net revenue £694.3m (H1 2014: £621.0m) 10  Profit before tax and exceptional items £271.0m (H1 2014: £235.1m) 8 6  77% of assets outperforming over three years 4  Net inflows £8.4bn (H1 2014: £4.5bn) 2  Significant growth in Asia 0  Strong inflows in European Intermediary -2  Building scale in Fixed Income and Multi-asset -4 H1 2015 H1 2015 H1 2015 2 2015 Half-Year Results | July 2015

29/07/2015 20:19:13 Institutional Assets under management £175.5bn (30 June 2014: £148.0bn) £bn 5  £16.7bn of new mandates (H1 2014: £11.4bn) 4  Net inflows £3.6bn (H1 2014: £0.7bn) 3  Strong performance in Japan, China 2  Net inflows in Global and US fixed income, 1 multi-asset strategies, Japanese equities 0  Outflows in Commodities, Global equities -1 -2 H1 2015 H1 2015 3 2015 Half-Year Results | July 2015

29/07/2015 20:19:13 Intermediary Assets under management £102.4bn (30 June 2014: £92.8bn) £bn 7  Gross sales £28.6bn (H1 2014: £23.3bn) 6  Net inflows £4.8bn (H1 2014: £3.8bn) 5 4  Significant inflows in Asia and Europe 3  Outflows in UK 2 1  Diversified flows across European bonds, Global, Japanese and European equities, 0 Asian multi-asset -1 -2 H1 2015 H1 2015 4 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) Profit before tax (£m) Exceptional items (£m) 350 900 806.2 305.7 5.9 800 300 728.6 8.4 15.4 645.1 261.5 700 228.0 250 11.8 600 27.6 6.3 200 500 400 150 300 100 200 50 100 633.3 720.2 800.3 221.7 233.9 290.3 0 0 H1 2013 H1 2014 H1 2015 H1 2013 H1 2014 H1 2015 Dividend per share (pence) Basic and diluted earnings per share before exceptional items (pence) 30 90 25 80 20 15 70 10 60 5 16 24 29 66.3 64.1 77.1 74.5 88.5 86.1 0 50 H1 2013 H1 2014 H1 2015 H1 2013 H1 2014 H1 2015 Basic Diluted 7 2015 Half-Year Results | July 2015

Net revenue – driven by investment returns and organic growth Net revenue up 11% to £806m £m Performance fees Other Markets & FX Net revenue Net new business (2) 44 (4) 806.2 40 Net revenue 728.6 Wealth Management 106 Wealth Management 101 Asset Asset Management Management 694 621 Group segment Group segment 6 7 H1 2014 H1 2015 8 2015 Half-Year Results | July 2015

Asset Management net revenues Net revenue margins, excluding performance fees, at 49 bps £m 450 383.9 400 373.5 0.3 4.4 347.2 350 2.0 310.4 309.0 5.6 300 21.5 273.8 6.3 250 200 383.6 383.6 369.1 369.1 345.2 345.2 304.8 150 287.5 267.5 100 50 0 H1 2014 H2 2014 H1 2015 Institutional Intermediary Performance fees 9 2015 Half-Year Results | July 2015

Wealth Management net revenues Net revenue margins at 66 bps £m 120 113.0 105.5 9.0 100.5 7.4 100 8.1 6.5 20.0 18.1 17.0 80 60 40 77.8 78.1 77.0 20 0 H1 2014 H2 2014 H1 2015 Management fees Transaction fees Net banking interest income Net loan loss recoveries and performance fees 10 2015 Half-Year Results | July 2015

Operating expenses Cost control in line with projections H1 2015 AM H1 2015 versus £m H1 2014 H2 2014 & Group WM Total H1 2014 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. 478.1 506.2 445.2 75.5 520.7 +9% exceptional items) Exceptional items 26.5 22.3 10.3 4.0 14.3 -46% Operating expenses (incl. 504.6 528.5 455.5 79.5 535.0 +6% exceptional items) Headcount 3,540 3,556 3,074 611 3,685 +4% H1 2014 FY 2014 H1 2015 Compensation cost:net 47% 45% 45% revenue ratio Cost:net revenue ratio 66% 64% 65% 11 2015 Half-Year Results | July 2015

Profit before tax and exceptional items Up 17% to £305.7m reflecting strong business performance £m Compensation costs Net revenue Net finance Profit before tax (25) 78 income and Other costs and exceptional associates items Tax (18) Profit before tax 9 305.7 (64) Profit before and exceptional exceptional items Wealth Management items 261.5 30.0 241.6 Wealth Management 26.3 Asset Management Asset 271.0 Management 235.1 Group segment Group segment 0.1 4.7 H1 2014 H1 2015 12 2015 Half-Year Results | July 2015

Movement in Group capital Increase of £72m since 31 December 2014 £m Profit after tax Dividends 229 (147) Foreign exchange Other (12) 2 Group Group Capital Capital H2 2014 H1 2015 2,538 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 H1 H2 H1 £m 2014 2014 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 Statutory Group capital 2,323 2,538 2,610 ** 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. 16 2015 Half-Year Results | July 2015