Schroders (SDR) H2 2025 earnings summary

Executive summary

• Delivered strong results in the first year of a transformation program, with operating profit up 25% and EPS up 29% year-over-year.

• Announced a recommended all-cash acquisition offer by Nuveen, valuing shares at up to GBP 6.12 (612p), a 34% premium to the prior close and 61% to the 12-month VWAP.

• The combination with Nuveen will create a global asset and wealth management powerhouse with over $1.8 trillion (£1.8tn) in AUM, diversified across public and private markets.

• Transformation efforts have simplified the business, exited non-core markets, and strengthened core capabilities.

• The transaction is supported by principal shareholders representing 41% of issued capital, with completion expected in Q4 2025/2026 pending regulatory approvals.

Financial highlights

• Assets under management (AUM) reached a record GBP 824 billion (£823.7bn), up 6% year-over-year.

• Adjusted operating profit rose 25% year-over-year to £756.6m, with net operating revenue up 6% to £2,504.3m.

• Net inflows totaled GBP 11.2 billion, with growth inflows up 9% to GBP 142 billion.

• Net new business (NNB) totaled £4.1bn, the highest since 2021, with strong intermediary flows and improved demand across UK, EMEA, and Asia Pacific.

• Cost-to-income ratio improved to 71%, supported by £75m in net cost savings.

Outlook and guidance

• Expect continued reduction in cost-to-income ratio, aiming for below 70% by 2027.

• Transformation program targets GBP 150 million in net annualized savings by 2027.

• Focus for 2026 includes activating sales teams, expanding ETF offerings, investing in technology and people, and a further £25m net operating expense reduction.

• Continued platform simplification with data and AI investment.