Schroders 200 Interim Results trusted heritage advanced thinking Michael Dobson Chief Executive 5 August 200
H 200 overview Net new business 6.bn (H 2009:.8bn) Funds under management 64.0bn (3 Dec 2009: 48.4bn) Profit before tax 88.2m (H 2009: 76.9m*) Earnings per share 49.4p (H 2009: 7.0p) Dividend.0p per share (H 2009: 0.0p) * Before exceptional items
H 200 Client led Broad product range Net inflows: 6.bn Strong distribution capability International diversification Financial strength
Delivering for clients Quartile rankings 30 June 200 year 3 year Outperformance over year Euro Corporate Bond Euro Bond 4 37% Global Corporate Bond UK Alpha Plus 2 63% UK Income UK Income Maximiser European Special Situations 2 European Alpha Plus 2 over 3 years US Small & Mid Cap Japan Equity Alpha 2 26% Emerging Market Equities QEP Global Active Value 4 2 Global Equity Alpha 2 74% Emerging Market Debt Commodities 3 Above benchmark or peer group Below benchmark or peer group Source: Schroders. Performance relative to benchmark or peer group to 30 June 200
Broad product range Net sales by asset class: H 200 Institutional Intermediary 4% 7% 9% 20% 42% 24% 24% 60% Equities Alternatives Fixed Income Multi-asset
Strong distribution capability Increasing gross sales Asset Management - bn 40 30 20 0 0 H 2007 H2 2007 H 2008 H2 2008 H 2009 H2 2009 H 200 * Gross flows before netting Equities Alternatives Fixed Income Multi-asset
International diversification 69% of revenues outside UK North America 6.8bn South America 4.6bn UK 57.4bn Continental Europe 39.9bn Middle East 3.bn Asia Pacific 47.3bn* 5.bn China joint venture * China joint venture funds under management are not reported within Group funds under management FUM by client domicile
Institutional Funds under management 87.3bn Significant increase in new business 20 5 8.5 6.3 bn Traditional and new products 0 5.6.7 4.9 9.8 Progress with official institutions and insurance companies Increasing client longevity 0-5 -0-5 -0.6-5.5-3.8-3.6-6.5-20 -25-22.2 2007 2008 2009 H 200 Gross sales Gross outflows Net inflows
Intermediary Funds under management 62.7bn All-weather product range Developing absolute return and income products Over,800 distributor relationships 50 40 30 20 0 4.0 8.8 23.3 29.0 9.6 2. 5. bn Building out US Intermediary business 0-0 -20-6.2-9.4-6.0-30 -32.2-29.5-40 2007 2008 2009 H 200 Gross sales Gross outflows Net inflows
Intermediary Funds under management 62.7bn All-weather product range Developing absolute return and income products Over,800 distributor relationships Building out US Intermediary business 50 40 30 20 0 0-0 4.0 8.8 23.3-6.2 29.0 9.6 0.3-7.0 3.3 0.8-9.0 bn.8-20 -9.4-30 -32.2-29.5-40 2007 2008 2009 Q 200 Q2 200 Gross sales Gross outflows Net inflows
Private Banking Funds under management 4.0bn Net new business.2bn 27% increase in management fee income Decline in interest income Higher operating costs recruitment doubtful debt provision Underlying momentum
Schroders 200 Interim Results Kevin Parry Chief Financial Officer 5 August 200
Key figures Profit before tax* ( m) 85.6 73.3 76.9 88.2 Compensation costs: operating revenues ratio (%) 48 47 46 45 H 2007 H 2008 H 2009 H 200 H 2007 H 2008 H 2009 H 200 Basic earnings per share (pence) 49.0 49.4 Interim dividend per share (pence) 35.8 9.0 0.0 0.0.0 7.0 H 2007 H 2008 H 2009 H 200 H 2007 H 2008 H 2009 H 200 * Before exceptional items Group segment PBT before exceptional items
Profit before tax Significant increase in net revenue m 300 250 200 Net revenue 205m 50 00 50 0 PBT H 2009 36m Exceptional items 4m PBT H 2009 77m PBT H 200 88m
Significant increase in net revenue m 600 500 400 300 Markets & FX 73m Margin 3m Net new business 83m Performance fees 30m Group 6m Net revenue H 200 200 Net revenue H 2009 537m 00 332m 0 Before exceptional items
Profit before tax Cost control continues m 300 250 200 50 Net revenue 205m Comp. Costs 82m Other Costs 3m Net finance Income 4m JVs and Associates 5m 00 50 0 PBT H 2009 77m Compensation costs:operating revenue reduced from 49% (FY09) to 46% (H 0) PBT H 200 88m Before exceptional items
Institutional and Intermediary net revenues m 272 Asset Management net revenue margins excluding performance fees 228 205 57bps 60bps 60bps 65 74 2 H 2009 H2 2009 H 200 Institutional Intermediary H 2009 H2 2009 H 200 Performance fees
Private Banking segment m - net revenue m - costs 49.2 48.5 49.9 42.9 43.3.5 3.6 7.8 2. 7.6.8 34.7 3.4 3.6 3.8 2.0 4.7 24. 28.6 30.5 4.3 7.0 27.3 24.8 H 2009 H2 2009 H 200 H 2009 H2 2009 H 200 Management fees Net interest income Compensation costs Other costs Transaction fees Doubtful debt provisions
Operating expenses before exceptional items m H-0 H-09 H2-09 H 0 vs H 09 Staff costs 242.4 60.7 230.0 +5% Other costs.0 99.8 07.6 +% Depreciation and amortisation 0.3 8.3 8.7 +24% Total 363.7 268.8 346.3 +35% Compensation cost: operating revenue ratio 46% 48% 50% -2% Cost:income ratio 66% 78% 74% -2%
Tax charge and earnings per share Benefit of higher profitability H 2009 m H 200 Before exceptional items Exceptional items Total Profit before tax 88.2 76.9 (40.6) 36.3 Tax (47.5) (20.7) 3. (7.6) Effective tax rate(%) 25% 27% 8% 48% Profit after tax 40.7 56.2 (37.5) 8.7 Basic earnings per share 49.4p 20.3p (3.3)p 7.0p
Group capital allocation m June 200 June 2009 Dec 2009 Investment capital: Cash investments 352 504 808 Private Equity 92 68 90 Other investments 263 63 20 Sub-total 707 635 98 Seed capital 60 36 4 Group capital 867 77,059 Asset Management & Private Banking operational capital 727 726 590 Statutory Group capital,594,497,649
Movement in Group cash balances 900 800 700 600 Dividend 58m Share Purchases 43m Pension Contribution 58m 500 400 300 200 00 Group cash Dec 09 808m Re-allocation of Investment capital 94m Other 3m Group cash Jun 0 352m 0
Outlook Michael Dobson Chief Executive
Outlook Institutional well positioned potential reduction in revenue margins offset by increased longevity Intermediary dependent on investor demand broadly diversified Private Banking new business momentum Range of long term growth opportunities
Forward-Looking Statements These presentation slides may contain forward-looking statements with respect to the financial condition and results of the operations and 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. 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 profit forecast