Schroders (SDR) H2 2025 earnings summary

Executive summary

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

• Assets under management (AUM) reached a record GBP 824 billion, up 6%, driven by positive net inflows and strong investment performance.

• Announced a recommended all-cash acquisition offer from 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 manager with over £1.8 trillion in AUM, diversified across public and private markets, and enhanced geographic reach.

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

Financial highlights

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

• Statutory profit before tax increased 21% to £673.8m; adjusted basic operating EPS up 29% to 36.6p.

• Record group AUM reached £823.7bn, with gross inflows up 9% to £142.0bn and organic growth rate at 1%.

• Net inflows totaled GBP 11.2 billion, with net new business (NNB) at £4.1bn, the highest since 2021, and strong intermediary flows in UK, EMEA, and Asia Pacific.

• Cost-to-income ratio improved to 71%, supported by £75m in net cost savings, with further reduction targeted for 2026.

Outlook and guidance

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

• Transformation program targets GBP 150 million net annualized savings by 2027, with GBP 100 million already annualized.

• FY 2026 target includes a further £25m net operating expense reduction and continued platform simplification with data and AI investment.

• Anticipate further innovation and product launches, especially in ETFs and Evergreen products.

• Positive momentum in flows carried into January 2026, with focus on accelerating deployment in private markets.