Annual Results 2004

1

• Annual Results 2004

2
Forward-looking Statements

• These presentation slides contain forward-looking
  statements and forecasts with respect to the
  financial condition, results of operations and
  businesses of Schroders plc and its subsidiaries
• These statements and forecasts involve risk and
  uncertainty because they relate to events and
  depend upon circumstances that will occur in the
  future
• There are a number of factors that could cause
  actual results or developments to differ
  materially from those expressed or implied by
  those forward-looking statements and forecasts.
  Nothing in this announcement should be construed
  as a profit forecast

3
Overview

• Asset management profit before exceptional items
  120.8 million (2003 60.5 million)
• Private equity profit 83.6million (2003
  16.8million)
• Profit before tax 191.0 million (2003 65.0
  million)
• Funds under management 105.6 billion (31st
  December 2003 98.9 billion)
• Total dividend for the year of 20.0 pence per
  share (2003 18.5 pence per share)

Restated under UITF Abstract 38 Restatement
of assets predominantly due to the inclusion of
the additional Private Banking funds previously
omitted
4
Profit Before Tax
Reconciliation 2003 to 2004
mn
191.0
65.0
Restated under UITF Abstract 38
5
Profit Before Tax
Reconciliation 2003 to 2004
mn
191.0
65.0
78.7
Asset management incomemn
Net revenues before exceptional items Gains on
current asset investments Net interest and other
income
Restated under UITF Abstract 38
6
Change on Major Indices
change on major indices over 2003 and 2004
7
Profit Before Tax
Reconciliation 2003 to 2004
mn
191.0
(18.0)
65.0
78.7
2003
Asset management costsmn
2004
Difference
Costs Goodwill
(368.7) (10.3) (379.0)
(387.1) (9.9) (397.0)
(18.4) 0.4 (18.0)
Restated under UITF Abstract 38
8
Profit Before Tax
Reconciliation 2003 to 2004
mn
191.0
(18.0)
0.2
65.0
78.7
Sale of business/subsidiaries mn
2003
2004
Difference
Profit on sale of business/subsidiaries
2.4
2.6
0.2
Restated under UITF Abstract 38
9
Profit Before Tax
Reconciliation 2003 to 2004
mn
191.0
(18.0)
0.2
60.9
65.0
78.7
2003
2004
Difference
Asset management profit mn
Asset management profit before tax
52.6
113.5
60.9
Restated under UITF Abstract 38
10
Profit Before Tax
Reconciliation 2003 to 2004
mn
191.0
(18.0)
0.2
65.0
78.7
Restated under UITF Abstract 38
11
Profit Before Tax
Reconciliation 2003 to 2004
mn
191.0
(18.0)
66.8
0.2
65.0
78.7
Private equitymn
2003
2004
Difference
IFP exceptional item Other Includes 15.4mn
minority interests
- 16.8 16.8
47.8 35.8 83.6
47.8 19.0 66.8
Restated under UITF Abstract 38
12
Profit Before Tax
Reconciliation 2003 to 2004
mn
191.0
(1.7)
66.8
(18.0)
0.2
65.0
78.7
Group net costs mn
2003
2004
Difference
Group net costs
(4.4)
(6.1)
(1.7)
Restated under UITF Abstract 38
13
Profit Before Tax
Reconciliation 2003 to 2004
mn
191.0
(1.7)
66.8
(18.0)
0.2
65.0
78.7
Restated under UITF Abstract 38
14
Headcount
2,473
2,371
2,246
Adjusted for known future redundancies and
short term temporary staff
15
Net Revenues
Asset management






Includes 0.6bn FUM adjustment predominantly
to Private Banking
16
Net Revenues
Asset management





Includes 0.6bn FUM adjustment predominantly
to Private Banking
17
Operating Margins
Asset management
2003
2004
Overall Asset management
49bp 38bp 79 100.6bn
Net revenues on average FUM Costs on average
FUM Costs net revenues ratio Average FUM
46bp 41bp 88 90.7bn





Before exceptional items and net interest All
figures have been restated to include projects
and redundancies 2003 Includes 0.6bn FUM
adjustment to predominantly Private Banking
18
Capital Allocation Year End
208 149 357 11 (39) 329 356 123 164 107 9 759 1,08
8 15 1,103
Regulatory Other Asset management capital Group
Proposed dividend Operating capital Liquid
funds Third party hedge funds Private
equity Other Schroder funds Leasing Surplus
capital Goodwill Total capital
212 130 342 18 (38) 322 458 15 119 58 32 682 1,004
25 1,029


Restated under UITF Abstract 38 Includes 34mn
from IFP awaiting distribution
19
IFRS Conversion Communication Timeline
Q1 trading update under IFRS with IFRS
comparatives
Release of 2004 UK GAAP results
Early indication of the impact under IFRS and
discussions with investors/analysts
Interim results under IFRS with IFRS
comparatives and reconciliation to UK GAAP
2004 results under IFRS and discussions with
investors/analysts
31/12/04
30/06/05
14/12/04
1/3
mid/8
mid/5
Quarter 2
20
Investment

• Investment performance
• Performance fees
• Portfolio management team
• Product innovation
• Capacity management

21
Investment Performance
of institutional and retail assets above and
below benchmark
3 years to 31st December 2004
Institutional above benchmark
Institutional below benchmark
Retail above benchmark
Retail below benchmark
22
Distribution

• Changing book of business
• Growth in retail branded and white label
• Outflows in UK balanced, US
• Specialist institutional wins
• Opportunities in Multi-asset
• Increasing margins

23
New Client Business 2004
25.9 billion
Clients
2003 bn
Products
2004 bn
2003 bn
2004 bn
Institutional
9.2
Equities
8.5
10.1
14.7
Retail
11.1
Fixed income
15.3
10.1
9.0
Private banking
1.1
Alternative investments
2.1
1.2
2.2
24
Funds Under Management
2003 Includes 0.6bn FUM adjustment
predominantly to Private Banking
25
Private Banking

• Net business inflows
• Revenues up
• Profitable
• Good performance in banking and structured
  products
• Continued progress in Switzerland

26
Outlook

• Lower private equity profits
• Higher nominal cost base
• Profit growth requires
• Increasing revenue margins business mix
• higher value products
• pricing discipline
• Economies of scale new business
• markets

27
Outlook

• Innovation products
• channels
• Continuity cost management
• investment in growth
• use of surplus funds
• Stability in a time of uncertainty

28

• Appendices

29
Profit Loss Account Progression
Group
Profit before tax
2004
2003
mn
Asset management income 429.2 507.9
Asset management costs (368.7) (387.1)
Asset management profit before exceptional
items 60.5 120.8
Exceptional items 2.4 2.6
Asset management profit 62.9 123.4
Private equity 16.8 83.6
Group net income/(costs) (4.4) (6.1)
Profit before goodwill 75.3 200.9
Goodwill amortisation (10.3) (9.9)
Profit before tax 65.0 191.0
Restated under UITF abstract 38
30
Balance Sheet
mn
31st Dec 2004
31st Dec 2003
141.9 742.2 1,369.3 444.2 2,555.7 (1,386.3) 1,169
.4 1,311.3 (170.0) (27.2) 1,114.1
Fixed assets Debtors Investments Cash and
balances with banks Creditors - amounts
falling due within one year Net current
assets Total assets less current
liabilities Creditors - amounts falling due
after more than one year Provisions for
liabilities and charges Net assets/total
shareholders funds
151.2 766.1 1,245.0 462.9 2,474.0 (1,350.6) 1,123
.4 1,274.6 (213.0) (32.4) 1,029.2
Restated under UITF Abstract 38
31
Movements in Funds Under Management
bn
Institutional
Retail
PrivateBanking
Total
31st December 2003 Transfers and adjustments 31st
December 2003 restated Clients gained Clients
lost Existing client movements in Existing client
movements out Net asset gains/(losses) Disposals T
ransfers Market movement 31st December 2004
71.2 0.2 71.4 2.9 (9.5) 5.6 (7.4) (8.4) (0.3) (0.5
) 6.9 69.1
22.1 - 22.1 14.0 (8.3) 1.3 (1.1) 5.9 - 0.3 1.9 30.
2
5.0 0.4 5.4 0.8 (0.2) 1.3 (1.2) 0.7 - 0.2 - 6.3
98.3 0.6 98.9 17.7 (18.0) 8.2 (9.7) (1.8) (0.3) -
8.8 105.6
32
Net Change in Business
bn
2004
2003
In
Out
Net
In
Out
Net
Institutional Retail Private Banking Total
8.5 15.3 2.1 25.9
(16.9) (9.4) (1.4) (27.7)
(8.4) 5.9 0.7 (1.8)
9.2 11.1 1.1 21.4
(13.5) (6.9) (1.5) (21.9)
(4.3) 4.2 (0.4) (0.5)
33
Private Equity Interests
Schroders plc
Investments
Carried Interest
(Total 164 mn)
SVG Capital plc
Permira
38 mn
Quoted Investment Trust
Funds I II
SVIL
Other SV funds
55 mn
Co-investment vehicle
US, Canada, Japan, Life Sciences, Asia Pacific
GP LP Interests
22 mn
Permira and other funds
IFP
35 mn
Stand-alone portfolio
Other
14 mn
Share of carry between 7½ and 25
34
Funds Under Management
By asset type
By geographical investment of assets
2003 Includes 0.6bn FUM adjustment
predominantly to Private Banking
35
Funds Under Management
Fixed income
Equities
2003 Includes 0.6bn FUM adjustment
predominantly to Private Banking
36
Net Revenues
Asset management
mn
2004
2003
219 213 59 491 9 8 508
45 43 12 100
Institutional Retail Private Banking Net revenues
before exceptional items Gains on current asset
investments Net interest and other income Asset
management income
51 37 12 100
212 156 50 418 5 6 429


2003 restated under new basis
37
Comparison of Costs
Total Group
mn
FY 2004
FY 2003
Staff costs Other costs Surplus space
provisions Total administrative
expenses Depreciation Goodwill Total operating
costs
284.9 127.6 2.7 415.2 4.6 9.9 429.7
244.4 141.0 2.2 387.6 8.3 10.3 406.2

38
Comparison of Costs
Asset management
FY 2004
mn
FY 2003
H1 2004
H1 2003
263.4 119.6 383.0 4.1 387.1 9.9 397.0
Staff costs Other costs Total administrative
expenses Depreciation Asset management costs
before goodwill Goodwill Total
223.2 137.4 360.6 8.1 368.7 10.3 379.0
124.2 56.8 181.0 2.0 183.0 5.0 188.0
108.5 67.1 175.6 5.0 180.6 5.2 185.8
39
Headcount
Total staff at 1st January 2004
Net joiners / leavers Total staff at 1st January
2005
2,246 125 2,371