Ninety One Plc · LSE:N91
Ninety One — FY2022 Earnings Presentation
41 slides from Ninety One's earnings presentation, May 18, 2022
Slide 1: FY 2022 Full-year Results
FY 2022 Full-year Results 18 May 2022
Slide 2: Agenda
Agenda 1 Business review 2 Financial review 3 Outlook and Q&A 4 Appendices
Slide 3: Our purpose
Our purpose Better Better Better firm investing world Investing for a better tomorrow 3
Slide 4: Long-term track record
Long-term track record Resilient and well-diversified business with relevant product offering Growing in a Domestic growth Internationalisation Scaling post crisis world of change 1992-1998 1998-2009 2009-2020 2020-2022 AUM CAGR +93% +19% +12% +18% 140bn £220,000 £143.9bn 120bn £ million of profit 1
Slide 5: FY 2022 key messages
FY 2022 key messages Record earnings and AUM, positive business momentum despite worsening market conditions Net inflows, supported by intensive client engagement Competitive investment performance (despite challenging final quarter) Sustainability at the core of our business Increased staff shareho
Slide 6: Strong performance
Strong performance FY 2022 FY 2021 Change Assets under management £143.9bn £130.9bn 10% Net flows £5.0bn (£0.2bn) Investment outperformance 1-year 50% 80% Investment outperformance 3-years 68% 82% Adjusted operating profit £230.4m £206.2m 12% Basic EPS 22.6p 16.9p 34% Adjusted EPS 19.2p 17.0p 13% Di
Slide 7: Market conditions
Market conditions — The industry benefited from relatively benign market conditions for the majority of the financial year — This changed in the final quarter: → Market dislocation and worsening of geopolitical environment → Rising interest rates and inflation — Change accelerated by: → evolving ass
Slide 8: Assets under management and flows
Assets under management and flows 5 year AUM 8.0 143.9 CAGR 9% 5.0 3.8% 27.7 6.0 1.4 (14.0) £ billion 6.1 5.4% (0.2) 3.2 5.9% (0.2%) 5.4 5.6% 95.3 FY17 FY18 FY19 FY20 FY21 FY22 Net flows Torque ratio Portfolio growth 8
Slide 9: Net flows by asset class (£ million)
Net flows by asset class (£ million) Positive flows across all asset classes FY 2021 FY 2022 500 284 215 269 1,572 3,586 2,445 (3,225) (674) (153) Fixed income FY 2021 Equities Multi-asset Alternatives SA fund platform FY 2022 9
Slide 10: Net flows by Client Group (£ million)
Net flows by Client Group (£ million) Net inflows across all Client Groups FY 2021 FY 2022 500 1,555 782 403 1,801 1,707 378 (1,484) (170) (653) FY 2021 FY 2022 United Kingdom Africa Europe Americas Asia Pacific Note: 1. Asia Pacific includes Middle East. 10
Slide 11: Net flows by client type (£ million)
Net flows by client type (£ million) Strong inflows from institutional and advisor channels FY 2021 FY 2022 2,532 2,484 1,522 (1,719) FY 2021 Advisor Institutional FY 2022 11
Slide 12: Firm-wide investment performance
Firm-wide investment performance Competitive long-term performance, difficult fourth quarter FY 2021 FY 2022 Since Since inception 85% 15% inception 77% 23% 10 year 89% 11% 10 year 86% 14% 5 year 83% 17% 5 year 80% 20% 3 year 82% 18% 3 year 68% 32% 1 year 80% 20% 1 year 50% 50% Outperformance Underp
Slide 13: Mutual fund investment performance
Mutual fund investment performance Competitive long-term performance, difficult fourth quarter FY 2021 FY 2022 10 year 45% 14% 36% 5% 10 year 32% 38% 23% 7% 5 year 22% 28% 26% 23% 5 year 21% 36% 32% 10% 3 year 29% 22% 24% 24% 3 year 16% 33% 33% 18% 1 year 23% 20% 18% 39% 1 year 26% 10% 36% 28% 1st Q
Slide 14: The impact of innovation
The impact of innovation 3 4 2 3 1 4,817 13 new strategies over £ million 2,314 5 years 523 7 233 FY18 FY19 FY20 FY21 FY22 Launched 2022 Launched 2021 Launched 2020 Number of newly Launched 2019 Launched 2018 Net flows launched strategies Note: Reflects new strategies launched April 2017 – March 202
Slide 15: Executing our strategy
Executing our strategy – Sticking to our strategy of organic growth within current strategic parameters – Building out thematic (sustainability) and credit platforms for future growth – Continuing to bolster our current investment, client and operational platforms – Expansion in the Americas and UK,
Slide 16: Solid platform for growth
Solid platform for growth — Strong brand momentum — Evidence of scaling: → 2022: 35 strategies > £1 billion → 2017: 21 strategies > £1 billion — Access to top talent — Growth opportunities in big markets — Thematic and credit platforms 16
Slide 17: Strategy: challenges ahead
Strategy: challenges ahead – Financial market conditions – Investor appetite for emerging markets – Impact of SA exchange controls relaxation – Realising our China ambitions 17
Slide 18: Sustainability with substance
Sustainability with substance Clear framework established for Sustainability 3.0 Initiatives we are proud to be part of – Climate mitigation is the immediate priority – Real world decarbonisation in line with net zero objective – Focus on inclusive transition, not portfolio decarbonisation – Working
Slide 19: Our net zero targets and transition plan
Our net zero targets and transition plan Transition to net zero by 2050 or sooner Our Targets - SBTi aligned* Our Approach Transitioning our investments 50% of financed emissions to — Prioritise heavy emitters — Assess transition plans using own framework have science-based transition — Engagement o
Slide 20: People
People People centric, talent friendly, owner culture – Intensified in-person engagement with our people – Global initiative to align and reinforce our culture – Continued focus on talent density and diversity – Deliberately building an intergenerational business – Employee ownership increased to 25
Slide 21: Summary of FY 2022
Summary of FY 2022 Record earnings and AUM, positive business momentum despite worsening market conditions Net inflows, supported by intensive client engagement Competitive investment performance (despite challenging final quarter) Sustainability at the core of our business Increased staff sharehold
Slide 22: Financial review
FY 2022 Full-Year Results Financial review
Slide 23: Financial results
Financial results £ million FY 2022 FY 2021 Change Adjusted operating revenue 663.9 603.5 10% Adjusted operating expenses (433.5) (397.3) 9% Adjusted operating profit 230.4 206.2 12% Adjusted net interest income 3.7 2.2 68% Share scheme net credit 18.1 - n.m. Silica profit - 1.7 n.m. Profit before t
Slide 24: Exceptional items and tax
Exceptional items and tax £ million FY 2022 FY 2021 Change Profit before tax and exceptional items 252.2 210.1 20% Exceptional items 14.9 (6.0) n.m. Profit before tax 267.1 204.1 31% Tax expense (61.8) (49.5) 25% Profit after tax 205.3 154.6 33% 24
Slide 25: Adjusted operating revenue
Adjusted operating revenue £ million FY 2022 FY 2021 Change Management fees 632.8 561.0 13% Performance fees 31.1 45.4 (31%) Foreign exchange gain/(loss) 1.2 (6.3) n.m. Other (loss)/income (1.2) 3.4 n.m. Adjusted operating revenue 663.9 603.5 10% Average AUM Average fee rate £138.6bn 45.7bps FY 2021
Slide 26: Adjusted operating expenses
Adjusted operating expenses 433.5 £ million 397.3 % of employee remuneration Other expenses increase 68% 6% FY 2021: 68% FY 2021: (2)% Note: 1. Excludes Silica net expenses; however, includes Silica as a non-consolidated third-party provider within client and retail fund administration. 26
Slide 27: Business and total expenses
Business and total expenses Business expenses have remained static relative to average AUM 35.5 34.1 34.1 33.7 33.1 31.3 Average AUM (£bn) Basis points 11.5 11.6 11.8 10.5 10.5 10.0 87.0 99.6 108.0 118.3 119.9 138.6 2017 FY17 2018 FY18 2019 FY19 2020 FY20 2021 FY21 2022 FY22 Average AUM Business exp
Slide 28: Profit analysis
Profit analysis 267.1 252.2 £ million 210.1 FY21 PBT and Management Performance Employee Business Other FY22 PBT and Exceptional FY22 PBT exceptional fees fees remuneration expenses items exceptional items items items 28
Slide 29: Capital and dividend
Capital and dividend 31 March 2022 31 March 2022 31 March 2021 £ million IFPR regime BIPRU regime BIPRU regime Equity 341.6 341.6 253.3 Non-qualifying assets (27.6) (11.6) (13.3) Qualifying capital 314.0 330.0 240.0 Dividends proposed (71.0) (71.0) (61.7) Estimated regulatory requirement (114.2) (10
Slide 30: Outlook
Outlook Challenges Sustainability Substantial growth Confident ahead is key opportunities about the future 30
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Slide 32: Appendices
FY 2022 Full-Year Results Appendices
Slide 33: Our offering
Our offering Organically-built and diversified £68.0bn £36.7bn £25.2bn £4.1bn Core asset class offerings1,2 2021: £62.7bn 2021: £34.0bn 2021: £22.4bn 2021: £3.5bn Equities Fixed income Multi-asset Alternatives Distinct skillsets 4Factor Quality Value Multi-asset Fixed income Alternatives Client dema
Slide 34: Firm-wide investment performance
Firm-wide investment performance Our performance at the end of 2021 was exceptional 31 December 2021 Since inception 84% 16% 10 year 93% 7% 5 year 87% 13% 3 year 89% 11% 1 year 72% 28% Outperformance Underperformance 34
Slide 35: Global reach
Global reach 21 Offices worldwide 5 Primary investment centres 5 Regionally defined Client Groups: Americas United Kingdom Teams in each office: Europe Client Group Africa Operations Asia Pacific Investment team 35
Slide 36: AUM by asset class, Client Group and client type
AUM by asset class, Client Group and client type AUM by asset class AUM by Client Group AUM by client type 7% 3% 18% 19% 34% 17% 47% 12% 66% 12% 26% 39% Equities United Kingdom Advisor Fixed income Africa Institutional Multi-asset Europe SA fund platform Americas Alternatives Asia Pacific 1 Notes: B
Slide 37: AUM by strategy
AUM by strategy Equities Fixed income Multi-asset Alternatives £68.0bn £36.7bn £25.2bn £4.1bn Global Global Absolute Return Growth SA and Africa credit Income Credit Regional Emerging markets (EM) EM Sovereign and currency EM inc Africa / SA Asia (inc. China) Africa (inc. SA) fixed income Africa (in
Slide 38: AUM by client type
AUM by client type Institutional AUM by client type Advisor 6% 12% 23% 34% 42% 21% £95.7bn 66% £143.9bn 34% £48.2bn 29% 34% Pension funds Advisor Private banks / wealth managers / FOF 2 Corporates / insurance / other 1 Institutional Retail banks / insurance / IFA3 Public authorities / official insti
Slide 39: AUM by emerging/developed markets
AUM by emerging/developed markets AUM by 42% AUM by 48% Emerging markets client 52% investment location strategy 58% Developed markets Note: AUM as at 31 March 2022. 39
Slide 40: Glossary and definitions
Glossary and definitions Adjusted operating expenses exclude share scheme net credit of £18.1 million (2021: nil), deferred employee benefit scheme movements of £3.4 million (2021: £14.2 million), but include interest expense on lease liabilities of £3.8 million (2021 : £3.7 million) and subletting
Slide 41: Disclaimer
Disclaimer This presentation (the “Presentation”) has been prepared by Ninety One plc and Ninety One Limited (together, “Ninety One” and, together with their subsidiaries from time to time, the “Group”). This Presentation is provided on a strictly private and confidential basis for information purpo