D E L I V E R I N G 2015 Half Year Results
2015 HALF YEAR RESULTS 1 Highlights Executing our strategy Improved investment performance Continued organic flow growth from core mutual fund franchise 1.4bn of net mutual fund flows in H1 AUM increased to 34.3bn Diversifying by product, client type and geography Attracting new talent Increased profits and maintained operating margins above 50% Interim dividend increased to 4.0p
2015 HALF YEAR RESULTS 2 Strategy 1 2 3 Deliver outperformance after fees to our clients Sell this expertise through products suited to our distribution strengths Deliver attractive returns to shareholders
2015 HALF YEAR RESULTS 3 Deliver outperformance after fees to our clients
2015 HALF YEAR RESULTS 4 Performance numbers Generating value for our clients Three year mutual fund performance Commentary Long-term track record maintained 27% 25% Excellent segregated mandate and investment trust performance 22% 26% 26% 26% 15% 33% 1st Quartile 2nd Quartile 3rd Quartile 4th Quartile Source: Financial Express: pie chart in centre = performance weighted by number of funds; ring around pie chart = performance weighted by AUM
2015 HALF YEAR RESULTS 5 Performance numbers on key funds Three year investment performance in funds over 1bn AUM at Jun 14 AUM at Dec 14 AUM at Jun 15 4 th quartile 3 rd quartile 2 nd quartile 1 st quartile Merlin Income 4,630m 4,432m 4,184m Dynamic Bond* 1,556m 2,130m 3,189m European 2,475m 2,591m 3,040m Strategic Bond 2,180m 2,499m 2,615m Income Trust 1,953m 2,021m 1,963m Merlin Growth 1,900m 1,934m 1,929m Merlin Balanced 1,616m 1,629m 1,571m UK Growth 1,105m 1,312m 1,544m UK Special Sits 1,264m 1,323m 1,348m European Growth* 602m 798m 1,299m European Special Sits 861m 927m 1,039m Performance data source: FE; graph shows position within the sector on a percentile basis, performance stated after all fees Equities Fixed Income Multi Asset * = SICAV
2015 HALF YEAR RESULTS 6 Significant opportunity for high-alpha active managers Well-positioned ahead of market trends International market 2012 2014 net sales UK market 2012 2014 net sales 430bn Outcome-orientated active strategies 1 69bn Outcome-orientated active strategies 1 ( 12bn) Traditional style box 2 ( 33bn) Traditional style box 2 182bn ETF / Index Funds 17bn ETF / Index Funds Source: Simfund to end Dec 2014 1. High conviction long only, flexible allocation, absolute return and target return / volatility 2. Traditional long only equity / fixed income
Sector size ( bn) 2015 HALF YEAR RESULTS 7 Significant opportunity for high-alpha active managers Seeking areas where outperformance matters and growth is available Performance opportunity 1 (per cent.) Growth opportunity Global equity UK equity Europe equity Asia ex Japan equity China equity US equity Japan equity EM equity Flexible allocation Alternative Cautious allocation Aggressive allocation Moderate allocation EM debt Euro fixed income Convertibles High Yield Global fixed income US fixed income UK gilts 3 6 6 9 8 21 18 16 15 12 11 11 10 12 11 11 10 10 11 15 260 240 220 200 180 160 140 120 100 80 60 40 20 0 Global equity Europe equity UK equity Euro fixed income High yield Moderate allocation US equity Global fixed income EM equity Aggressive allocation Flexible allocation US fixed income EM debt Alternative Asia ex Japan equity Japan equity Convertibles China equity UK gilts 0 3 6 9 12 15 18 21 Sector performance dispersion (%) Source: Data sourced from Morningstar Direct. Performance data is for 3 years to end of December 2013. 1. Dispersion between the 75 th and 25 th percentile sector performance over three years
2015 HALF YEAR RESULTS 8 Retaining and attracting talent Performance culture High levels of engagement Entrepreneurial environment Low levels of unwanted turnover
2015 HALF YEAR RESULTS 9 Sell this expertise through products suited to our distribution strengths
2015 HALF YEAR RESULTS 10 Domestic retail opportunity UK is an attractive mutual fund market UK: net retail sales by asset class ( billion) Commentary 35 30 25 20 15 10 5 0-5 Equities Mixed Asset Bonds Property Other 2008 2009 2010 2011 2012 2013 2014 2015 YTD 1 trillion of mutual fund AUM Consistent positive inflows Strong equity culture Independent intermediaries dominate distribution Substantial tax breaks for savings Mutual fund penetration per capita c. 50% of US levels Most attractive demographics in Europe Supportive political backdrop Short-term trading has been more difficult, property and absolute return most popular Source: Investment Association; data to 31 May 2015
2015 HALF YEAR RESULTS 11 International retail opportunity Potential for growth in Europe Europe: net retail sales by asset class ( billion) Commentary 500 400 300 200 100 0-100 -200-300 -400 Equities Balanced Bonds 2008 2009 2010 2011 2012 2013 2014 2015 YTD 8.9 trillion of UCITS AUM More pro-cyclical flow environment Greater propensity to hold bonds Each country has individual flow characteristics Banks control deep retail distribution Benefits of UCITS passporting Effective penetration of local markets by foreign managers European equities sold into Southern Europe has been the best place to be over the last 18m Flexible bond products popular in H1 Source: EFAMA; data to 31 May 2015
2015 HALF YEAR RESULTS 12 International distribution strategy: follow our clients
2015 HALF YEAR RESULTS 13 Diversification and growth from International Increased SICAV activity levels Average number of accounts buying units 12 Number of purchase transactions per month 2 100 90 Monthly average Rolling 12m average 4,000 3,500 Number Rolling 12m average 80 70 3,000 60 2,500 50 2,000 40 1,500 30 20 1,000 10 500 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 1) Monthly average number of accounts buying units each day in the SICAVs 2) Excludes sales, conversions, reinvestments, switches and transfers
2015 HALF YEAR RESULTS 14 Turning performance into flows 2015 net flows and AUM Movement in AUM ( billion) 35 34 1.0 34.3 AUM up to 34.3bn, driven by healthy underlying organic flow growth 33 1.4 (0.1) 32 31.9 31 30 29 28 Dec-14 Mutual funds Seg mandate Inv't trusts Markets Jun-15
2015 HALF YEAR RESULTS 15 Turning performance into flows Diversification and growth from International Mutual fund gross flows ( billion) Jupiter s SICAV AUM ( billion) Unit trusts SICAV Equities Fixed Income 8.0 6.0 4.7 5.2 6.2 5.2 4.3 3.0 1.9 1.1 2011 2012 2013 2014 H1 15 2011 2012 2013 2014 Jun-15
2015 HALF YEAR RESULTS 16 Outcome Conscious diversification by product, client type and geography AUM by client geography Gross flows by product AUM by strategy UK Europe Asia RoW Unit trust Segregated SICAV Other Multi-asset UK equities Euro equities Fixed Income Other 2009 2010 2011 2012 2013 2014H1 15 2010 2011 2012 2013 2014 H1 15 2009 2010 2011 2012 2013 2014H1 15
2015 HALF YEAR RESULTS 17 Deliver attractive returns to shareholders
2015 HALF YEAR RESULTS 18 Half year highlights Turning growth into profit Measure H1 2014 H1 2015 Change Net revenues 148.5m 169.4m 14% Net management fee margins 88bps 88bps EBITDA 76.3m 86.8m 14% EBITDA margin 51% 51% Underlying EPS 12.9p 14.9p 16% Interim dividend 3.7p 4.0p 8%
2015 HALF YEAR RESULTS 19 Revenues Organic growth before private clients (ex performance fees) of 11% Net revenue Net revenue ( million) million H1 14 H1 15 % +/- Net management fees 141.0 149.2 +6% Net management fees Net initial Performance fees 169 Net initial charges 6.8 7.4 13 Performance fees 0.7 12.8 Net revenue 148.5 169.4 +14% 140 149 7 7 Net management fee margin 118 9 H1 14 H1 15 % +/- Net management fees 141.0 149.2 +6% 8 131 141 149 Average AUM ( billion) 1 32.3 34.1 +5% 109 Net mgt fee margin (bps) 87 88 H1 12 H1 13 H1 14 H1 15 1) Average AUM stated on a 7 point month end basis, adjusted for number of days in period
2015 HALF YEAR RESULTS 20 Net management fee margins Key drivers remain growth of fixed income and higher SICAV assets Business mix Net management fee margin 94 20% 17% bps H2 12 H1 13 H2 13 H1 14 H2 14 H1 15 Margin* 93.0 92.3 88.9 87.2 88.4 88.1 Pricing strategy remains unchanged 8% 7% 88 Progression distorted by: Loss of large segregated mandate Fund closures Effects of private client transaction H1 12 H2 12 H1 13 H2 13 H1 14 H2 14 H1 15 SICAV vs total mutual funds* Fixed Income vs total mutual funds* Net mgt fee margin Underlying rate in 2014 was 90bps; H1 decline within guidance range Guidance decline of 2-3 bps per annum unchanged * Based on average assets in each period using a 7 point basis, adjusted for number of days in period
2015 HALF YEAR RESULTS 21 Fixed costs Fixed costs Fixed costs ( million) million H1 14 H1 15 % +/- Fixed staff costs 23.5 21.3 Other expenses 23.8 24.3 40 41 42 45 47 48 46 Fixed costs 47.3 45.6 (4%) Savings from private clients being reinvested through 2015 Drivers: Hiring front office talent International distribution and marketing Improving our organisational scalability Ongoing office move impact will be 5m p.a. from 2016 H1 12 H2 12 H1 13 H2 13 H1 14 H2 14 H1 15 Fixed staff costs Non-staff costs
2015 HALF YEAR RESULTS 22 Variable costs Variable costs Variable costs ( million) and comp ratio* million H1 14 H1 15 Cash bonus 16.9 26.3 30 27 Deferred bonus 4.5 5.6 LTIP, SAYE and SIP 4.0 5.6 21 8 Variable costs 25.4 37.5 Variable compensation ratio * 25% 30% Variable compensation ratio (ex perf fee) 27% 4 7 9 11 Cash bonus up due to performance fee impact 13 17 17 19 DBP and LTIP increased as new grants larger than vested grants given profit has increased over time H1 12 H1 13 H1 14 H1 15 Perf fee impact DBP, LTIP, SIP & SAYE Cash bonus Comp ratio (%) Comp ratio ex perf (%) * Variable costs divided by operating earnings before variable staff costs and charge over pre-listing options (2014: 0.6m; 2015: 0.4m)
2015 HALF YEAR RESULTS 23 Earnings Maintaining operating margins and high drop-through rate Scalable platform Drop-through: underlying EPS (pence) EBITDA ( million) EBITDA margin (per cent) 51 54 51 51 86.8 0.8 0.3 0.7 14.9 75.3 76.3 1.4 60.3 12.9 H1 12 H1 13 H1 14 H1 15 H1 14 Mgt fee Other income Net perf fee Fixed cost Var'ble Cost Tax & other H1 15 * EBITDA = Earnings before Interest, Tax, Depreciation and Amortisation, a non-statutory measure which the Group uses to assess its performance
2015 HALF YEAR RESULTS 24 Scalable platform Benefits of focus and discipline Operational efficiency Headcount efficiency 97 Average AUM ( billion) Net mgt fee margin (bps) Fixed costs vs average AUM (bps) EBITDA* margin (bps) 34.1 88 496 Investment Operations Mgt fees per capita 474 444 409 Distribution Private clients 455 459 432 717k 416 54 51 337k 21.1 35 27 2010 2011 2012 2013 2014 H1 15 2008 2009 2010 2011 2012 2013 2014 H1 15 * EBITDA = Earnings before Interest, Tax, Depreciation and Amortisation, a non-statutory measure which the Group uses to assess its performance
2015 HALF YEAR RESULTS 25 Dividends Turning growth into capital returns Dividend progression (pence per share) Return of private client proceeds Special Final Interim 4.9 6.6 Continued execution of our capital returns model Ordinary and special dividends will be paid at year end in line with previously communicated approach Performance fee component will be addressed at year end, likely to be rolled into special 6.3 9.1 9.5 2.5 3.5 3.7 4.0 2012 2013 2014 2015
2015 HALF YEAR RESULTS 26 Conclusion 1 Good progress on executing our strategy 2 Delivering outperformance after fees 3 Turning performance into flows 4 Turning growth into profits and capital returns 5 Diversifying by product, client and geography
2015 HALF YEAR RESULTS 27 Q&A
Forward-looking statements This presentation may contain certain forward-looking statements with respect to certain plans of Jupiter Fund Management plc (Jupiter) and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements containing the words believes, intends, expects, plans, seeks and anticipates, and words of similar meaning, are forward looking. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Jupiter s control including, among other things, UK domestic and global economic and business conditions; market-related risks such as fluctuations in interest rates and exchange rates, and the performance of financial markets generally; the policies and actions of regulatory authorities; the impact of competition, inflation and deflation; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; and the impact of changes in capital, solvency or accounting standards, and tax and other legislation and regulations in the jurisdictions in which Jupiter and its affiliates operate. As a result, Jupiter s actual future financial condition, performance and results may differ materially from the plans, goals and expectations set forth in Jupiter s forward-looking statements. Jupiter undertakes no obligation to update the forward-looking statements contained in this presentation or any other forward-looking statements it may make. Nothing in this presentation should be considered as a profit forecast.