Schroders (SDR) H2 2023 earnings summary

Executive summary

• Strategic growth areas reached 56% of AUM, up from 35% at strategy inception; 2023 AUM was £750.6bn.

• Net new business excluding JVs and associates was £9.7bn, versus £1.6bn of net outflows in 2022; strategic growth areas generated £23.4bn of NNB.

• Operating profit was £661.0m, with results affected by FX and lower profit contributions from associates and JVs.

Financial highlights

• Net operating revenue was £2,334.4m versus £2,361.4m in 2022; net operating income was £2,419.0m versus £2,475.5m.

• Operating expenses were £1,758.0m versus £1,752.5m; profit before restructuring costs was £573.8m versus £586.9m.

• Profit before tax was £487.6m after £86.2m of restructuring costs; 2022 profit before tax was £586.9m.

• Basic operating EPS was 32.5p versus 37.4p; basic EPS was 24.6p versus 30.4p. Final proposed dividend was unchanged at 15.0p per share.

Outlook and guidance

• Strategic growth areas represented 56% of AUM; strategy execution supported net inflows and growth despite industry headwinds.

• Cost-efficiency initiatives are intended to strengthen operating leverage and support future growth; the diversified business model is positioned to serve clients and shareholders over the long term.

• Schroders Personal Wealth targets total EBITDA of £80m in 2025, with a £40m share of target profits.