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Ashmore Group plc
September 2018
www.ashmoregroup.com
Investor presentation
2
A specialist active manager of Emerging Markets assets
EMERGING MARKETS FUNDAMENTALS UNDERPIN LONG-TERM GROWTH
• EM accounts for majority of world’s population (85%), FX reserves (66%), GDP (59%)
• High growth potential: social, political and economic convergence trends with DM
• Large, liquid, diverse investment universe
• Investors are underweight, typically <10% allocations vs 10%-20% EM weight in global indices ASHMORE CHARACTERISTICS
• AuM of USD 73.9bn diversified across
eight investment themes
• Strong investment performance, 94% of
AuM outperforming benchmarks over
three years
• High EBITDA margin (66%)
• Well-capitalised, liquid balance sheet with
£480m of excess capital
• Alignment of interests between clients,
employees and shareholders; employees
own ~46% of equity
• Progressive dividend policy, £1bn
returned to shareholders since IPO
LONG-STANDING INVESTMENT APPROACH DELIVERS OUTPERFORMANCE
• Deep understanding of EM underpins an active, value-based investment philosophy
• Inefficient markets mean volatile prices, but significant alpha opportunities
• Investment committees, not a star culture
• Performance track record extends over more than 25 years
DISTINCTIVE STRATEGY & EFFECTIVE BUSINESS MODEL
• Three phase strategy to capture value from long-term EM growth trends
• Remuneration philosophy aligns interests and provides flexibility through profit cycles
• Disciplined cost control delivers a high profit margin
• High conversion of operating profits to cash (109% since IPO)
• Scalable operating platform, 253 employees in 10 countries
• Network of local EM fund management platforms
• Strong balance sheet supports commercial and strategic initiatives, e.g. seed capital
DIVERSIFIED CLIENT BASE
• Global client base diversified by type and location
• Retail markets accessed through intermediaries
• 1/3rd of AuM sourced from EM-domiciled clients
Emerging Markets
Current views
• Emerging nations had the ability and willingness to respond to the
market environment of 2013-2015
˗ significant macro adjustments
˗ very few defaults, demonstrating resilience
˗ leading to positive economic trends
• EM fundamentals are strong and in better shape than in 2013
˗ EM FX is more competitive
˗ Central banks raised rates and successfully targeted inflation
˗ External balances are stronger
˗ Reforms e.g. China, India, Indonesia and across Latin America
˗ Capital markets have continued to grow and to diversify
˗ GDP growth is accelerating YoY and versus developed markets
˗ Higher US interest rates are priced in to markets
˗ Elections typically increase volatility but provide opportunities
˗ Active managers have significant investment firepower
Emerging Markets fundamentals are positive…
4
Emerging Markets fundamentals continue to improve
2018 2013
GDP growth +5.1% +5.1%
Inflation +4.6% +5.5%
Current account (GBI-EM countries, % GDP) 0% -3%
Share of world GDP 59% 56%
LC bonds outstanding (US$trn) 21.1 12.3
- % of total EM bonds 87% 85%
Real LC yield 3% 1%
ED spread over US Treasuries 3.6% 2.8%
EMBI GD countries 67 57
GBI-EM GD countries 18 16
• Profit-taking after strong Emerging Markets returns in 2016 & 2017
e.g. local currency bonds +26%, equities +53%
• Markets affected by Developed Markets events (e.g. Italian politics)
and strong USD, the drivers of which are likely to be temporary
˗ New Fed chair Powell establishing credibility
˗ Unfunded tax cut boosted GDP growth
˗ Protectionism / tariffs
˗ USD was weak vs EUR since end-2016
• Emerging Markets sentiment influenced by small number of countries
with particular issues e.g. Turkey, Argentina
• Valuations reset to end-2016 levels, immediately after US election
˗ e.g. local currency bonds real yield of ~3%, high in absolute terms,
relative to history and relative to DM sovereign bonds of equivalent
quality & duration
• Elections eg Brazil typically increase volatility but provide
opportunities
…so recent price moves creates attractive opportunities
5
Attractive local currency real yields
-
1.00
2.00
3.00
4.00
5.00
6.00
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Local curr
ency b
onds r
eal yie
ld (
%)
Asset classes: valuations
6
Equities
External debt
Index: 67 countries, 152 issuers, 667 bonds
Local currency
Index: 19 countries, 19 issuers, 214 bonds
Corporate debt
Index: 50 countries, 642 issuers, 1,416 bonds
0
100
200
300
400
500
600
700
800
900
1000
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
EMBI GD spread over UST, bps
0
200
400
600
800
1000
1200
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
CEMBI BD spread over UST, bps
0.00%
1.00%
2.00%
3.00%
4.00%
5.00%
6.00%
7.00%
0.0%
2.0%
4.0%
6.0%
8.0%
10.0%
12.0%
2003 2005 2007 2009 2011 2013 2015 2017
Yie
ld (
%)
JPM GBI Global (lhs) JPM GBI-EM GD (lhs) Yield difference: GBI-EM vs GBI Global (rhs)
40
50
60
70
80
90
100
110
1.5
2.0
2.5
3.0
3.5
4.0
4.5
5.0
2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020
EM vs DM growth premium (IMF, %, lhs) MSCI EM vs DM total return (Dec2010=100, rhs)
• Active management can exploit value created by
volatile prices in inefficient markets
• Significant alpha can be generated versus
passive (index) exposure
• Bond yields provide substantial reward for risk
taken, based on actual defaults
Volatility risk
7
EMBI yield and defaults
Strategy AlphaActive
returns
Passive
returns
History
(years)
Fixed Income 3.0% 11% 8%
External Debt (EMBI GD) 2.3% 12% 9% 24
Corporate Debt (CEMBI BD) 3.0% 10% 7% 16
Local Currency Bonds (GBI EM GD) 2.5% 10% 8% 15
Stocks 2.5% 7% 5%
Equities (MSCI EM) 3.8% 7% 4% 24
EM Small Cap (MXEFSC Index) 5.0% 9% 4% 24
Frontier Equities (MXFM Index) -1.3% 5% 6% 16
12m alpha when entering markets during +10pts VIX spikes
0
200
400
600
800
1,000
1,200
1,400
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Yield net of defaults (bps)
Estimated loss from default in EMBI GD (bps)
Active versus passive investing in Emerging Markets
8
• EM fixed income and equity markets are inefficient
Benchmark indices are unrepresentative of the
investment opportunity
Active management is critical
• Structural developments, e.g. removal of capital
controls, will increase index representation over the
long term
• Based on JP Morgan data, EM ETFs represent:
11% of fixed income mutual funds; only 2% of index
market cap and 0.2% of total universe
26% of equity mutual funds; only 6% of index
market cap and 1.1% of total universe
Large investment universe, low index representation
Source: BIS, JP Morgan, Bloomberg
Wide range of returns available (12m to June 2018)
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
Externalsovereign
Externalcorporate
Localsovereign
Localcorporate
Fixed income Equities
US
$ trilli
on
Mkt cap included in benchmark Mkt cap not included in benchmark
US$1.2trn
46%
US$2.0trn
23%
US$10.3trn
9%
US$10.9trn
2%
US$24.3trn
9%
US$28.9trn
19%
-39%
+11%
EMBI GD
index -1.6%
Ashmore Group plc
Consistent three-phase strategy to capitalise on Emerging
Markets growth trends
10
• Ashmore is recognised as an established specialist Emerging Markets manager,
and is therefore well positioned to capture investors’ rising allocations to the asset
classes
• Ashmore is diversifying its revenue mix to provide greater revenue stability
through the cycle. There is particular focus on growing intermediary, equity
and alternatives AuM
• Ashmore’s growth will be enhanced by accessing rapidly growing pools of
investable capital in Emerging Markets
1. Establish Emerging Markets asset class
2. Diversify developed world capital sources and themes
3. Mobilise Emerging Markets capital
• Investor allocations to Emerging Markets are increasing, and
Ashmore’s AuM grew 26% in FY2017/18 with record gross
and net subscriptions
• Ashmore continues to develop products and capabilities
within its eight investment themes. Retail AuM increased by
47% in FY2017/18 and represents 14% of total AuM
• 33% of Group AuM has been sourced from clients domiciled
in the Emerging Markets and AuM managed by local
platforms increased 26% in FY2017/18 to US$4.9 billion
Recent developments
• Structural growth opportunity as nations develop
• Emerging Markets increasingly viewed as mainstream asset
classes
• Diversification is important: not a single asset class
• Wide range of risk & return profiles across fixed income,
currencies, equities and illiquid assets
• Institutional allocations are underweight
Typically low/mid single digit % allocation to Emerging
Markets
JP Morgan GBI-Agg Diversified index has 22% EM weight
GDP per capita (indexed 1980 = 100)
11
Strategy phase 1:
Establish Emerging Markets asset classes
Significant growth opportunity from higher allocations (%) 2
3.6
5.4
6.4
7.5
2.0
3.8 4.2
2005 2010 2015 2017
Equity Fixed income
n/aSource:
(1) JP Morgan
(2) Ashmore, annual reports of representative European and US
pension funds collectively responsible for more than US$750 billion
of assets
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
2010
2012
2014
2016
2018f
2020f
2022f
Emerging Markets Developed Markets
1980
EM = US$1,500
2017
EM = US$11,800
DM = US$49,100
AuM development (USD bn)
Strategy phase 2:
Diversify assets under management
12
Data as at 30 Jun 2018
• Broad distribution capabilities deliver AuM diversified by
investment theme, client type and client location
• Strategic ambition to increase representation of:
US-based clients
Retail (third-party intermediaries)
Equities
AuM by client type
AuM by client location
0
10
20
30
40
50
60
70
80
90
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
2018
External debt Local currency Corporate debt Blended debt Equities Alternatives Multi-asset Overlay/liquidity
Strategy phase 3:
Mobilise Emerging Markets capital (local network)
13
• Investable capital pools in Emerging Markets are growing 3x
faster than in Developed Markets (+11% CAGR over past
decade)
• Ashmore’s local offices participate in this growth trend and
provide further diversification
• Business model and ownership structure tailored to each market
opportunity but with some common features
seek local employees/partners with cultural fit and alignment of
interests through equity
include independent investment committees and appropriate
distribution and middle office/support functions
benefit from the support & resources of a global firm, e.g.
common IT and seed capital, while providing competitive
advantages through local knowledge
make a positive and growing contribution to Group profits, with
significant operating leverage as AuM increase
• Ashmore’s global clients access the local investment
management capabilities with dedicated single-country mandates
Broad network of local asset management platforms
Local asset management platform
Distribution office
Ashmore Group, 30 Jun 2018 Local Global
AuM (USD billion) 4.9 69.0
Countries 7 4
Employees 73 180
Global asset management platform
14
Ashmore has a robust and flexible business model
Structural growth
opportunities
Distinctive business model
characteristics
Delivering value through
the cycle
Eight Emerging Markets investment themes, numerous
constantly evolving sub-themes
15
External Debt
(USD 14.5bn)
Local Currency
(USD 17.0bn)
Corporate Debt
(USD 9.8bn)
Equities
(USD 4.2bn)
Alternatives
(USD 1.5bn)
Overlay/
Liquidity
(USD 6.2bn)
Global Emerging
Markets
Sub-themes
• Broad
• Sovereign
• Sovereign,
investment grade
• Short duration
• Bonds
• Bonds (Broad)
• FX+
• Investment grade
• Broad
• High yield
• Investment grade
• Local currency
• Private Debt
• Short duration
• Global EM Equity
• Active Equity
• Global Small Cap
• Global Frontier
• Private Equity
• Healthcare
• Infrastructure
• Special Situations
• Distressed Debt
• Real Estate
• Overlay
• Hedging
• Cash Management
Blended Debt
(USD 19.7bn)
• Investment grade • Blended • Absolute return
Regional / Country
focused
Sub-themes
• Indonesia • Indonesia • Asia
• Latin America
• Africa
• India
• Indonesia
• Latin America
• Middle East
• Saudi Arabia
• Andean
• Middle East (GCC)
Multi-Asset
(USD 1.0bn)
• Global
• EMLIP launched in October 1992
Annualised net return +13.5%
Substantial outperformance versus
benchmark (EMBI +10.0% annualised) and
S&P (+9.8% annualised)
• EMLIP’s long-term track record delivered by:
Deep knowledge of diverse, inefficient
Emerging Markets asset classes
Specialist, active investment processes
Value-based philosophy and rigorous
credit/company analysis
Over 25 years of successful investing in Emerging Markets
16
Superior long-term performance
100
600
1,100
1,600
2,100
2,600
3,100
1992
1993
1994
1995
1996
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
2010
2011
2012
2013
2014
2015
2016
2017
Index 1
992=
100
EMLIP net EMBI GD S&P 500
Ashmore fixed income investment committee process
17
Market exposure: add vs reduce Long-term and tactical views
Global macro overview Risk call
Country / corporate updates
Country and corporate credit review Impact on credit risk, FX and interest rates ESG integration
Updated credit views
Theme relative value
Risks and opportunities across themes: External vs local currency Corporate vs sovereign
Theme allocation
Portfolio construction
Changes in target exposures (credits, FX, duration) across model portfolios
Revision of theme allocation, cash and leverage where appropriate
Changes to model portfolios
Instrument selection
Buy and sell decisions on specific assets
Investment decisions
Execution process
Timely execution (within 24 hours of IC meeting) with review in subsequent IC meeting
Execution
Investment
Committee
(IC)
Sub-committee
meetings
Trading / execution
• Local Currency
• External Debt
• Corporate Debt
• Blended Debt
• Multi-asset
• Long investment track
record: consistent process
since 1992
• Weekly meeting to
implement the investment
philosophy
• Six IC members
- Chairman
- Deputy Chairman
- Theme desk heads
- Head of research
- Head of multi-asset
• All fixed income investment
team members can
participate (31 in total)
• Collective responsibility, not
a ‘star culture’
• Significant involvement of
local office teams (21
investment professionals)
Delivering long-term investment performance for clients
18
% External debt Local currency Corporate debt Blended debt
2005 8.6 4.8 - 9.8
2006 7.3 4.9 - 4.5
2007 3.7 3.7 - 1.2
2008 (5.0) (11.3) (8.3) (7.6)
2009 4.1 12.0 18.2 12.3
2010 4.4 2.8 17.8 5.6
2011 (0.7) 1.9 (3.8) 3.3
2012 3.6 6.3 9.3 3.9
2013 0.6 (1.2) 1.2 (0.7)
2014 (6.5) 0.9 (6.7) (0.6)
2015 0.7 0.5 (4.5) 3.8
2016 10.2 4.0 10.4 8.5
2017 1.0 2.2 6.6 0.8
2018 YTD (0.7) 0.3 (0.4) (0.5)
Investment theme alpha through cycles
Long-term investment performance
AuM-weighted Investment performance relative to benchmarks is
gross of fees, annualised for periods greater than one year, as at
30 June 2018
2018YTD is to 31 August
One year Three years Five years
73%
0%
20%
40%
60%
80%
100%
Exte
rna
l
Lo
cal
Corp
ora
te
Ble
nd
ed
Eq
uitie
s
Multi-
asse
t
Gro
up
94%
0%
20%
40%
60%
80%
100%
Exte
rna
l
Lo
cal
Corp
ora
te
Ble
nd
ed
Eq
uitie
s
Multi-
asse
t
Gro
up
89%
0%
20%
40%
60%
80%
100%
Exte
rna
l
Lo
cal
Corp
ora
te
Ble
nd
ed
Eq
uitie
s
Multi-
asse
t
Gro
up
Investment performance
19
1yr 3yr 5yr
30 June 2018 Ashmore Benchmark Ashmore Benchmark Ashmore Benchmark
External debt
Broad -2.3% -1.6% 7.1% 4.6% 5.8% 5.2%
Sovereign -2.0% -1.6% 6.2% 4.6% 5.8% 5.2%
Sovereign IG 0.6% -0.5% 4.1% 3.4% 4.5% 4.4%
Local currency
Bonds -1.6% -2.3% 3.3% 2.0% -0.6% -1.4%
Corporate debt
Broad 2.9% -0.1% 6.1% 3.9% 5.3% 4.7%
HY 5.2% 0.2% 6.1% 5.5% 4.7% 5.5%
IG 0.2% -0.3% 3.5% 3.0% 4.5% 4.2%
Blended debt
Blended -0.9% -1.2% 5.9% 3.2% 3.3% 2.0%
Equities
Global EM equities 12.7% 8.2% 11.1% 5.6% 7.0% 5.0%
Global EM small cap 5.9% 5.6% 6.1% 2.6% 6.7% 4.3%
Frontier markets -0.3% 1.7% 7.3% 2.2% 7.4% 4.6%
• Comprehensive coverage of a diversified
client base
Global teams in London, New York and
Singapore hubs
Local distribution
Sales office in Tokyo
• Product management aligned with asset
classes
Sovereign fixed income
Corporate debt
Equities
• Long-term, direct relationships
• Scalable team and infrastructure
Global distribution team structure
Global distribution model
20
Institutional Intermediary Marketing Product
management
Total
Headcount 21 8 6 4 39
Increasing tenure of AuM
AuM managed in segregated accounts or white label products
As at December
0%
10%
20%
30%
40%
50%
60%
<3yrs 3yrs-7yrs >7yrs
2014 2015 2016 2017
• Strong growth in retail AuM sourced through intermediaries, consistent with
Ashmore’s diversification strategy
Total retail AuM of ~US$10bn increased 47% in FY2017/18
Strong net inflows of +US$3.7 billion
• Scalable mutual fund platforms
˗ 26 SICAV funds in Europe with US$12.1bn AuM
˗ 40-Act platform in US has eight funds with AuM of US$2.0bn
Diversified intermediary AuM
21
Strong retail AuM growth, now 14% of Group AuM
Diversified intermediary AuMUS Europe Asia
Intermediaries • Wirehouses
• Private banks
• RIAs
• Trusts
• Sub-advisers
• Private banks
• Platforms
• Wealth
managers
• Fund of funds
• Sub-advisers
• Private banks
• Wealth
managers
Product demand • Blended debt
• Specialist equities
• Short duration
• Short duration
• Blended debt
• Local currency
• Fixed duration
• Multi-asset
0%
2%
4%
6%
8%
10%
12%
14%
16%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2015 2016 2017 Jun 2018
% o
f G
roup A
uM
US
$ b
illio
n
Retail AuM (lhs) Retail AuM as % Group (rhs)
Americas36%
Asia Pacific17%
Europe (ex UK)25%
UK22%
• Principal features:
salaries capped to minimise fixed costs
single profit-based VC pool, capped at 25% of pre-bonus profit
mandatory equity component with ability to increase equity
exposure by voluntarily commuting cash
further alignment through significant deferral: five-year cliff
vest, with ordinary dividend eligibility
Employee Benefit Trust (EBT) purchases shares to mitigate
dilution
• Average length of senior employee service in Global businesses
is 10 years
* Earnings before variable compensation, interest and tax
Variable compensation as % of EBVCIT*
18%
14%
18%19%
18%20% 20%
18.5%20%
21% 21.5%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Equity incentivisation (based on VC of £100)
Simple, distinctive and effective remuneration philosophy
delivering retention and alignment of interests
22
£30
£60
£40
£40
£60
0 50 100 150
Switch & match
Initial Cash
Restricted shares
Bonus and matchingshares fromcommuted cash
£100
£130
Strong link between performance and variable remuneration
-60%
-40%
-20%
0%
20%
40%
60%
80%
100%
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Revenues YoY Bonus pool YoY
• Revenues driven by recurring diversified management
fee income, representing >90% of fee income
• Adjusted EBITDA margin increased to 66% in
FY2017/18
High-quality revenues and increase in profitability
Business model delivers through market cycles
23
Figures stated on an adjusted basis, excluding FX translation and seed
capital-related items
50%
55%
60%
65%
70%
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
2014 2015 2016 2017 2018
Fe
es a
s %
tota
l fe
es
Net management fees (lhs) Performance fees (lhs) Adj EBITDA margin (rhs)
• Business model converts operating profits to cash (110%
cumulative conversion since IPO)
• Cash balance has been broadly stable, average balance
of £375 million over past nine years
• Principal uses of cash flow are:
ordinary dividends to shareholders
share purchases to satisfy employee equity awards
taxation
seed capital investments
M&A
• Progressive dividend policy
since 2007, £1.1 billion returned to shareholders
through ordinary dividends
equivalent to 68% of attributable profits over the period
Progressive capital distribution via ordinary dividends
Strong cash generation
24
Consistent conservative balance sheet structure
0
100
200
300
400
500
600
700
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Cash excluding consolidated funds (£m) Seed capital (market value, £m)
0
200
400
600
800
1,000
1,200
1,400
1,600
1,800
2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018
Cum
ula
tive, £m
Attributable profit Dividends paid
• Strong, liquid balance sheet benefits clients and shareholders
through the cycle
no debt
high-quality financial resources
liquid assets represent 79% of total balance sheet
capacity to invest in seed capital for future growth
confers strategic flexibility, e.g. to consider M&A
progressive dividend policy
Regulatory capital
• Ashmore is supervised on a consolidated basis under a P3
licence
the Group’s two principal FCA-regulated entities are both
limited licence BIPRU €50k firms
• Regulatory capital requirement is determined annually
through the ICAAP
Ashmore assesses how much regulatory capital it requires
Pillar 3 disclosures provide detailed information
Substantial financial resources
Balance sheet strength
25
Source: Pillar 3 disclosures and Group consolidated financial statements
Market risk
Credit risk
Operational risk
65.6 87.0 72.9 94.4 99.9 111.1 119.5
306.8
371.1 383.9400.9 406.4
448.3479.7
0
100
200
300
400
500
600
700
2012 2013 2014 2015 2016 2017 2018
Total Pillar 2 requirement (£m) Excess capital (£m)
• Active seeding supports Ashmore’s strategy through:
˗ Creating a marketable investment track record
˗ Establishing new distribution conduits
˗ Providing additional scale to an existing fund to enhance
its marketability
˗ Supporting initial development of local asset
management platforms
• Substantial balance sheet resources committed to seed
capital investments over past nine years:
˗ £640 million invested
˗ £455 million successfully recycled to date (71% of
invested cost)
˗ 14% of Group AuM (US$10 billion) in funds that have
been seeded, e.g. short duration strategies have
delivered significant AuM growth and represent 5% of
Group AuM
˗ £103 million contribution to profits before tax over past
nine years
Active seed capital programme creating value
26
Active management of seed capital investments
Short duration strategies
Jun
-09
Dec-0
9
Jun
-10
Dec-1
0
Jun
-11
Dec-1
1
Jun
-12
Dec-1
2
Jun
-13
Dec-1
3
Jun
-14
Dec-1
4
Jun
-15
Dec-1
5
Jun
-16
Dec-1
6
Jun
-17
Dec-1
7
Jun
-18
Seed capital outstanding Cumulative seed redeemed Cumulative seed invested
£640m
£455m
£228m
0
500
1,000
1,500
2,000
2,500
3,000
3,500
4,000
4,500
5,000
Jun-14 Dec-14 Jun-15 Dec-15 Jun-16 Dec-16 Jun-17 Dec-17 Jun-18
Assets
under
managem
ent (U
S$m
)
USD
20m
USD
40m
USD
2m
USD
8.5m
USD
60m
Seed
investments:
US$60m
Successful
redemptions:
US$70.5m
• AuM +26% over the year
Record net flows +US$16.9 billion, investment
performance -US$1.4 billion
• Operating revenues +11% to £278.3 million
Net management fees +13% to £250.5 million driven by
diversified AuM growth
Performance fees of £21.9 million generated across a
range of investment themes
• Maintained focus on cost efficiency
• Adjusted EBITDA +14%, margin increased to 66%
• Strong cash generation
Operating cash flow of £210.1 million, equivalent to
114% of adjusted EBITDA
• Profit before tax -7%
Impacted by lower contribution from seed capital and FX
translation
• Proposed final dividend 16.65p
Recent financial performance
27
FY2017/18
£m
FY2016/17
£m YoY %
AuM (US$bn) 73.9 58.7 26
Operating revenues 278.3 249.8 11
Adjusted operating costs (99.7) (94.2) 6
Adjusted EBITDA 183.6 161.1 14
- margin 66% 65% -
EBITDA 181.5 172.3 5
Seed capital gains 10.1 41.0 (75)
Profit before tax 191.3 206.2 (7)
Diluted EPS (p) 21.3 23.7 (10)
DPS (p) 16.65 16.65 -
Figures stated on an adjusted basis exclude FX translation and seed
capital-related items; see Appendix 1
Appendix
FY2017/18 financial results
• Global distribution team delivering flows diversified by
investment theme, client type and client geography
• Strategic initiatives delivering strong AuM growth
Retail
Intermediary relationships established and strengthened
Net inflows of US$3.7 billion with demand for short
duration, blended debt and specialist equities, driven
principally by Europe and Asia
AuM +47% YoY, and now 14% of Group
Local platforms
AuM +26% YoY to US$4.9 billion, 7% of Group
Significant diversification benefits, through domestic
client base and differentiated asset classes
Alternatives
Acquired majority stake in Colombian real estate
manager in July 2018, with ~US$300 million AuM
Client flows and products
29
External debt
Local currency
Corporate debt
Blended debt
Equities
Multi-asset
Overlay/liquidity
Asia Pacific
Americas
UK
Europe (ex UK)
Middle East & Africa
Pension plans
Governments
Third-party intermediaries
Corporates/financial institutions
Sovereign wealth funds
Central banks
Fund/sub-advisersFoundations
-1.0
1.0
3.0
5.0
7.0
9.0
11.0
13.0
15.0
17.0
Net flows (US$bn)
Growth in retail AuM
0%
2%
4%
6%
8%
10%
12%
14%
16%
0.0
2.0
4.0
6.0
8.0
10.0
12.0
2015 2016 2017 Jun 2018
% o
f G
roup A
uM
US
$ b
illio
n
Retail AuM (lhs) Retail AuM as % Group (rhs)
• Net management fees +13%, driven by AuM growth
6% headwind from higher average GBP:USD rate
• Net management fee margin 49bps
3 bps lower YoY attributable to growth in large
segregated accounts
Retail AuM growth (+0.5bps) offset other effects
including competition
• Performance fees delivered across investment themes
˗ Estimated performance fees from August year-end
funds are not significant (August 2017: £1.4 million)
Higher net management fee income
Financial results
Revenues
30
FY2017/18
£m
FY2016/17
£m
YoY
%
Net management fees 250.5 221.6 13
Performance fees 21.9 28.3 (23)
Other revenue 4.1 2.7 52
FX: hedges 1.8 (2.8) nm
Operating revenues 278.3 249.8 11Figures stated on an adjusted basis, excluding FX translation and seed
capital-related items; see Appendix 1
221.6
250.5
60.3
3.0
17.7
3.0 13.7
FY2016/17 AuM growth Largemandates
Retail Other FX FY2017/18
• Consistent operating model
˗ Ongoing focus on fixed operating costs
˗ Variable compensation provides strong alignment
of client/shareholder/employee interests through
the cycle
• Stable Group headcount
˗ Local employees increased 16% YoY, now 29% of
Group
• VC at 21.5% of EBVCIT (FY2016/17: 21%)
Non-VC operating costs reduced by 4%
Financial results
Operating costs
31
FY2017/18
£m
FY2016/17
£m YoY %
Fixed staff costs (24.2) (24.8) 2
Other operating costs (21.5) (22.5) 4
Depreciation & amortisation (5.0) (5.5) 9
Operating costs before VC (50.7) (52.8) 4
Variable compensation (48.6) (43.0) (13)
- adjustment for FX translation (0.4) 1.6 nm
Adjusted operating costs (99.7) (94.2) (6)Figures stated on an adjusted basis, excluding FX translation and seed
capital-related items; see Appendix 1
52.8 50.7
0.6 1.5
FY2016/17 Fixed staff costs Other operating costs FY2017/18
Adjusted profits reconciliation
32
Adjusted
FY2017/18
£m
Adjusted
FY2016/17
£m YoY %
Net revenue 276.3 257.6 7
FX translation 2.0 (7.8) nm
Operating revenues 278.3 249.8 11
Operating costs ex consolidated funds (94.3) (90.3) (4)
VC on FX translation (0.4) 1.6 nm
Adjusted operating costs (94.7) (88.7) (7)
Adjusted EBITDA 183.6 161.1 14
EBITDA margin 66% 65%
Depreciation and amortisation (5.0) (5.5) 9
Total adjusted operating costs (99.7) (94.2) (6)
Net finance income 4.6 2.6 77
Associates and joint ventures (0.4) 0.8 nm
Seed capital-related items 10.1 41.0 (75)
Foreign exchange translation net of VC (1.6) 6.2 nm
Profit before tax 191.3 206.2 (7)
• Market value £228.3 million (30 June 2017: £210.2 million)
Undrawn commitments of £32.5 million
• Profit contribution of £10.1 million, of which £5.0 million realised
Investment return of £14.0 million
Mark-to-market FX loss of £3.9 million as Sterling
strengthened
• New investments of £65.0 million, with investments made in
alternatives and global equity products to support growth
initiatives
• Successful realisations of £55.8 million, from reaching product
scale in frontier equity strategies (SICAV and 40-Act) and local
mutual funds in Indonesia
˗ Frontier AuM US$0.2 billion (+33% YoY)
˗ Indonesia AUM US$1.6 billion (+52% YoY)
Financial results
Seed capital
33
Diversified across themes (% of market value)
Seed capital movement (£m)
210.2
228.3
65.0
8.9
55.8
30 June 2017 Investments Realisations Market movement 30 June 2018
3%4%4%
19%
30%
32%
8% External debt
Local currency
Corporate debt
Blended debt
Equities
Alternatives
Multi-asset
• Sterling strengthened against the US dollar over the six month
period
Period-end rate moved from 1.2946 to 1.3513
Average rate 1.3259 vs 1.2809 in H1 2016/17
• P&L FX effects in H1 2017/18:
Translation of net management fees -£4.4 million
Translation of non-Sterling balance sheet items -£2.3 million
Net FX hedges +£0.3 million
Seed capital -£3.0 million
FX sensitivity:
• ~£6.0 million PBT for 5c movement in GBP:USD rate
£5.0 million for cash deposits (in ‘foreign exchange’)
£1.0 million for seed capital (in ‘finance income’)
Foreign exchange
34
(1) Excludes consolidated funds
Currency exposure of cash(1)
31 December 2017
£m
% 30 June 2017
£m
%
US dollar 285.3 80 241.6 57
Sterling 51.7 14 149.7 36
Other 20.5 6 28.8 7
Total 357.5 420.1
Currency exposure of seed capital
31 December 2017
£m
% 30 June 2017
£m
%
US dollar 205.7 91 188.3 90
Colombian peso 12.4 5 9.6 4
Other 8.2 4 12.3 6
Total 226.3 210.2
Appendix 2b
Management fee margins
35
Fixed income: 48bps
(FY2016/17: 50bps)
52 50
41
62
53
90
132
80
15
49 46
42
59
49
81
131
74
17
Group External debt Localcurrency
Corporatedebt
Blended debt Equities Alternatives Multi-asset Overlay
FY2016/17 FY2017/18
Source: Ashmore (un-audited), JP Morgan, Morgan Stanley
- Returns gross of fees, dividends reinvested.
- Annualised performance shown for periods greater than one year.
- Within each investment theme category, all relevant Ashmore Group managed funds globally that have a benchmark reference point have been included.
Benchmarks
External debt Broad JPM EMBI GD
External debt Sovereign JPM EMBI GD
External debt Sovereign IG JPM EMBI GD IG
Local currency Bonds JPM GBI-EM GD
Blended debt 50% EMBI GD, 25% GBI-EM GD. 25% ELMI+
Corporate debt Broad JPM CEMBI BD
Corporate debt HY JPM CEMBI BD NIG
Corporate debt IG JPM CEMBI BD IG
Global EM equities MSCI EM net
Global EM small cap MSCI EM Small Cap net
Frontier markets MSCI Frontier net
Disclosures
36
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Page 19:
- Gross performance is shown, weighted by fund AuM, to provide a representative view to analysts and shareholders of Ashmore’s investment performance over relevant time periods
- Only funds at 30 June 2018 and with a performance benchmark are included, which specifically excludes funds in the alternatives and overlay/liquidity investment themes
- 83% of Group AuM at 31 December 2017 is in such funds with a one year track record; 74% with three years; and 55% with five years
- Reporting of investment performance to existing and prospective fund investors is specific to the fund and the investor’s circumstances and objectives and may, for example, include net
as well as gross performance
Disclaimer
IMPORTANT INFORMATION
This document does not constitute an offer to sell or an invitation to buy shares in Ashmore Group plc or any other invitation or inducement to engage in investment activities. Certain statements, beliefs and opinions in this document are forward-looking, which reflect the Company's current expectations and projections about future events. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions that could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements.
Forward-looking statements contained in this document regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. The value of investments, and the income from them, may go down as well as up, and is not guaranteed. Past performance cannot be relied on as a guide to future performance. Exchange rate changes may cause the value of overseas investments or investments denominated in different currencies to rise and fall. The Company does not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on any forward-looking statements, which speak only as of the date of this document.
37