Schroders2010 Interim Results

Michael DobsonChief Executive

5 August 2010

trusted heritageadvanced thinking

H1 2010 overview

• Net new business £16.1bn (H1 2009: £1.8bn)

• Funds under management £164.0bn (31 Dec 2009: £148.4bn)

• Profit before tax £188.2m (H1 2009: £76.9m*)

• Earnings per share 49.4p (H1 2009: 7.0p)

• Dividend 11.0p per share (H1 2009: 10.0p)

* Before exceptional items

H1 2010

• Client led

• Broad product range

• Strong distribution capability

• International diversification

• Financial strength

Net inflows: £16.1bn

26%

74%

Above benchmark or peer groupBelow benchmark or peer group

Delivering for clients 3 year1 yearQuartile rankings 30 June 2010

Source: Schroders. Performance relative to benchmark or peer group to 30 June 2010

37%

63%

Outperformanceover 1 year

over 3 years

11Euro Bond

14Euro Corporate Bond

21Japan Equity Alpha

11US Small & Mid Cap12European Alpha Plus

12European Special Situations

11UK Alpha Plus

11UK Income

11UK Income Maximiser

12Global Corporate Bond

11QEP Global Active Value

24Emerging Market Equities

12Global Equity Alpha11Emerging Market Debt

13Commodities

Broad product rangeNet sales by asset class: H1 2010

Equities Fixed IncomeAlternatives Multi-asset

Institutional Intermediary

42%

24%

20%

14% 9%

60%

24%

7%

Asset Management - £bn

* Gross flows before netting

Strong distribution capabilityIncreasing gross sales

0

10

20

30

40

H1 2007 H2 2007 H1 2008 H2 2008 H1 2009 H2 2009 H1 2010

Equities Fixed IncomeAlternatives Multi-asset

£5.1bn China joint venture

* China joint venture funds under management are not reported within Group funds under management

NorthAmerica£16.8bn

South America£4.6bn

ContinentalEurope£39.9bn

UK£57.4bn Asia

Pacific £47.3bn*

MiddleEast

£3.1bn

FUM by client domicile

International diversification69% of revenues outside UK

InstitutionalFunds under management £87.3bn

9.8

16.3

11.6 11.7

18.5

-6.5

-22.2

-15.5-13.6

4.9

-3.8

-10.6

-25

-20

-15

-10

-5

0

5

10

15

20

2007 2008 2009 H1 2010

Gross sales Gross outflows Net inflows

£bn

• Significant increase in new business

• Traditional and new products

• Progress with official institutions and insurance companies

• Increasing client longevity

21.1

41.0

23.3

29.0

-16.0

-32.2-29.5

-19.4

5.19.6

-6.2

8.8

-40

-30

-20

-10

0

10

20

30

40

50

2007 2008 2009 H1 2010

Gross sales Gross outflows Net inflows

IntermediaryFunds under management £62.7bn

£bn

• All-weather product range

• Developing absolute return and income products

• Over 1,800 distributor relationships

• Building out US Intermediary business

IntermediaryFunds under management £62.7bn

3.3 1.810.810.3

41.0

23.3

29.0

-9.0-7.0

-32.2-29.5

-19.4

9.6

-6.2

8.8

-40

-30

-20

-10

0

10

20

30

40

50

2007 2008 2009 Q1 2010 Q2 2010

Gross sales Gross outflows Net inflows

£bn

• All-weather product range

• Developing absolute return and income products

• Over 1,800 distributor relationships

• Building out US Intermediary business

Private BankingFunds under management £14.0bn

• Net new business £1.2bn

• 27% increase in management fee income

• Decline in interest income

• Higher operating costs

– recruitment

– doubtful debt provision

• Underlying momentum

Schroders2010 Interim Results

Kevin ParryChief Financial Officer

5 August 2010

9.0 10.0 10.0 11.0

Interim dividend per share (pence)

Key figures

4745

4846

Compensation costs: operating revenues ratio (%)

49.0

35.8

7.0

49.4Basic earnings per share (pence)

185.6 173.3

76.9

188.2Profit before tax* (£m)

H1 2008 H1 2009 H1 2010H1 2007 H1 2008 H1 2009 H1 2010H1 2007

H1 2008 H1 2009 H1 2010H1 2007 H1 2008 H1 2009 H1 2010H1 2007

* Before exceptional items Group segment PBT before exceptional items

Profit before tax (£m)

0

50

100

150

200

250

300

Profit before taxSignificant increase in net revenue

PBT H1 2010£188m

Netrevenue£205m

£m

PBTH1 2009£36m PBT

H1 2009£77m

Exceptional items£41m

0

100

200

300

400

500

600

Significant increase in net revenue

Netrevenue H1 2009

£332m

NetrevenueH1 2010

£537m

Net newbusiness

£83m

Performancefees £30m

Group £6m

£m

Before exceptional items

Markets & FX£73m

Margin£13m

0

50

100

150

200

250

300

Profit before taxCost control continues

PBT H1 2009

£77m

PBTH1 2010£188m

Netrevenue£205m

OtherCosts£13m

Net financeIncome

£4m

JVs andAssociates

£5m

£m

Comp.Costs£82m

Compensation costs:operating revenue reduced from 49% (FY09)

to 46% (H1 10)

Before exceptional items

£m

205

112

174165

272

228

H1 2009 H2 2009 H1 2010

Institutional and Intermediary net revenues

Institutional Intermediary

60bps60bps57bps

H1 2009 H2 2009 H1 2010

Asset Management net revenue marginsexcluding performance fees

Performance fees

Private Banking segment£m - net revenue

13.612.1 11.8

28.6

24.1

30.5

7.8 7.611.5

H1 2009 H2 2009 H1 2010

Management fees Net interest income

49.2 48.5 49.9

Transaction fees

£m - costs

17.0

27.3 24.8

4.3

2.0 4.713.4

13.6 13.8

H1 2009 H2 2009 H1 2010

Compensation costs Other costs Doubtful debt provisions

34.7

42.9 43.3

66%

46%

363.7

10.3

111.0

242.4

H1-10

-2%50%48%Compensation cost: operating revenue ratio

-12%74%78%Cost:income ratio

+35%

+24%

+11%

+51%

H1 10 vs H1 09

346.3

8.7

107.6

230.0

H2-09

99.8Other costs

8.3Depreciation and amortisation

268.8

160.7

H1-09£m

Staff costs

Total

Operating expenses before exceptional items

49.4p

140.7

25%

(47.5)

188.2

H1 2010

H1 2009

(17.6)3.1(20.7)Tax

48%8%27%Effective tax rate(%)

18.7(37.5)56.2Profit after tax

7.0p(13.3)p20.3pBasic earnings per share

36.3(40.6)76.9Profit before tax

Exceptional items

Before exceptional

items Total

£m

Tax charge and earnings per shareBenefit of higher profitability

918635707Sub-total

1,059771867Group capital

141136160Seed capital

1,6491,4971,594Statutory Group capital

590726727Asset Management & Private Banking operational capital

2063263Other investments

92

352

June 2010

90

808

Dec 2009

504Cash investments

68

June 2009£m

Investment capital:

Private Equity

Group capital allocation

0

100

200

300

400

500

600

700

800

900

Movement in Group cash balances

Groupcash

Dec ’09

£808m

Dividend£58m

SharePurchases

£143mPension

Contribution£58m

Re-allocation of

Investmentcapital£194m

Other£3m

Groupcash

Jun’10

£352m

Outlook

Michael DobsonChief Executive

Outlook

• Institutional well positioned

– potential reduction in revenue margins offset by increased longevity

• Intermediary dependent on investor demand

– broadly diversified

• Private Banking new business momentum

• Range of long term growth opportunities

Forward-Looking Statements

These presentation slides may contain forward-looking statements with respect to the financial condition and results of the operations and businesses of Schroders plc

These statements and forecasts involve risk and uncertainty because they relate to events and depend upon circumstances that may 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. Forward-looking statements and forecasts are based on the Directors’ current view and information known to them at the date of this presentation. The Directors do not make any undertaking to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Nothing in this presentation should be construed as a profit forecast