Ninety One PLC

Good morning, ladies and gentlemen. Welcome to the 91 interim results presentation for the half year to 30 September 2025. I will highlight the key numbers before moving to the business review. Kim McFarland, our finance director, will then present the financial review. I will then update you on recent developments and conclude before we take questions. Those of you participating through the webcast can submit questions during the presentations via the chat function at the bottom of your screen. Assets under management rose more than 19% over the past year. Flows turned around strongly. We recorded net inflows of 4.3 billion for this half year, resulting in adjusted earnings per share growing by 15%. This net inflow number consists of 2.4 billion of organic inflows and 1.9 billion that came from the Sunlum UK transaction. The dividend per share increased to 6p per share, and operating margins expanded to 32.1%. Staff shareholding grew to 32.7%. The people of 91 are fully aligned with all our other shareholders. I'm delighted to report that our business is growing again in terms of revenues, earnings, and assets under management. This is supported by investment returns and a significant turnaround in net inflows. We are sticking to our core strategy and investing in our existing growth drivers while selectively backing new growth initiatives across our ecosystem. Investment performance remains competitive. The Sunlom relationship is delivering. and 91 is poised for further growth. We always show the long-term track record of 91 to remind everyone that we are about growth over time and not growth all the time. The business has been built over many years in a patient and predominantly organic way. Markets have been supportive of late, but we are clear that sustaining growth over time takes focus, rigorous execution, discipline, and belief. We remain committed to our people-centric, capital-light, and technology and AI-enabled business model. Market conditions have improved over the reporting period. The panic that followed Liberation Day is now history, and animal spirits are back, supporting overall equity market levels. More interestingly, we are observing a new openness to diversification of institutional portfolios, which includes interest in emerging markets. This interest seems to be driven by the desire to diversify geographically as well as a recovery in relative returns. Given the high concentration levels in indices, we are also witnessing a renewed interest in active strategies. A little over one year ago, I reported to you in a world in which active long only and emerging markets across the capital structure were deeply out of favor. Therefore, 91 was experiencing a third consecutive year of hostile business conditions. I'm delighted to report that these conditions have improved substantially over the past year. Despite the strong performance from emerging markets and the rise in financial asset prices generally, we are some way off historic levels of demand at this stage. As mentioned at the end of the previous reporting period, our industry continues to be extremely competitive. Clients are setting high standards and continue to be price sensitive. Fee pressure remains a challenge. It goes without saying that 91 is exposed to market levels and how financial assets are priced. A sharp decline in markets will affect revenue generation and new business volumes. More generally, the internet era is being replaced by the AI era. This touches every industry, including our own. At 91, we are embracing this and look forward to reporting progress in more detail in due course. In summary, conditions have improved while competition remains relentless in this industry. Equity markets have done well over the past three years, with headline indices close to doubling. Over the past six months, our clients continued to benefit from strong performance. Emerging markets in general have outperformed developed markets, and the strength in South Africa further contributed to our assets under management growth. and driving these through the thresholds of £150 billion and $200 billion, respectively. In fixed income, we have also seen positive returns, even though developed market bonds have had a tough time. Ironically, this is where most of the inflows in our industry have been over the past few years. Emerging market bonds are doing much better and we expect demand to grow in this space. This is an area in which 91 is one of the market leaders. Since our listing, investors showed little interest in emerging markets. We're now seeing a decline in the active outflows in equities and an improvement in the environment for specifically active equities. For the second half year in a row, we're seeing positive active fixed income inflows. But as you can see, we are still well below the long-term demand levels for emerging markets. Judged by recent client engagements, we expect demand to pick up in due course. This assumes a world in which risk assets remain attractive. The outflows that have been with us from 2022 have started to reverse in the second half of the 2025 financial year. And inflows have now accelerated into the first half of the 2026 financial year. In addition, we have added 1.9 billion of Sunlum UK assets with the completion of the acquisition of Sunlum UK. We also benefited from the strongest year since 2020 in terms of market and portfolio growth. We are mindful of the fact that markets do not usually go up in a straight line and we remain vigilant on the cost front. These slides show organic net flows excluding the Sunlump take-on. We had substantial equity inflows largely in our competitive global equity offerings and positive flow in all asset classes except multi-asset. This related to our own performance and general client demand. We have addressed the situation by bringing in new leadership and renewed focus on the multi-asset part of our business. The majority of our client groups were positive for the half year given the pipeline. And given the pipeline, I'm hopeful that UK will show positive results for the full year and that South Africa will return to positive net flows for the second half as well. Investment performance has been solid over the period and we can compete in the areas where we need to compete for net inflows. As always, a few strategies have done outstandingly well while there are also laggards. Overall, we have a competitive offering which has the potential to generate ongoing net inflows and meet the high standards of our clients. I now hand over to Kim McFarland, our finance director, to take you through the financial results. Thanks, Kim.

Thank you, Hendrik. I'm here to present a set of strong financial results for the period ended 30 September 2025. I would like to highlight that our core operating business has again produced a solid outcome. Management fees and adjusted operating expenses both increased by 3%, resulting in the core business recurring results increasing by 2% on the prior period to £82 million. Management fees were at £290.7 million. This is as a result of the increase in average AUM from £126.7 billion to £139.7 billion, alongside a decline in the average management fee rate to 41.5 bps. More on this later, but worth noting that the increased closing AUM positions 91's revenues well for the next six months. Adjusted operating expenses of £208.7 million includes the interest expense on the lease liabilities for our office premises and the full bonus accruals. it does exclude non-operating costs. The business produced an adjusted operating profit of £98.8 million, up 12% from the prior period. This increase is presumably as a result of higher performance fees of £4 million. Other income is negligible and is mainly a number of fair value adjustments on seed investments. There were FX losses as a result of the stronger GBP to USD in the period. So the adjusted operating profit margin increased from 30.5% to 32.1%. And at the finals for 2025, we reported an adjusted operating profit margin of 31.2%. So let me explain further the decline in the average management fee rate. This is calculated as a monthly average, and over the six-month period has shown a slow decline. However, there was a market fall at the end of H1 2026, which we have analyzed. During the period, daily average AUM, upon which the management fees are generated, consistently lagged monthly average AUM, upon which the average management fee rate is calculated, due to the manner in which markets moved markedly during the period. And this effectively overstated the average management fee rate decline by an estimate 0.8 BIPs. Calculating on a daily averaging basis, the actual daily average rate is closer to 42.3 BIPs. So closer to a fall in one BIP over the six-month period, which is higher than our historic guidance. There were further factors that impacted on the fee rate in the period, which were A significant AUM increase in lower than average fee rate clients. The Sunlum UK take-on being an example, although this impact was small. However, the take-on of large mandates at lower than average fee rates has and will have material impact on our management fee rate. An AUM decrease for higher than average fee rate clients. the UK OIC being an example, and this would have had an estimate 0.5 BIP negative impact. And at the same time, there were some downward fee adjustments for existing clients who generally compensated with additional assets. 91's profit before tax, after considering the list of non-operating adjustments, adjusted net interest income, the small share scheme, net expense, corporate-related professional fees, and now the amortisation of the intangible asset as a result of the UK Sunlamp transaction increased by 10% to £102.2 million. At the interim, the share scheme is generally a net expense. This is largely reflecting the amortisation impact from prior year credits where staff bonuses were allocated to 91 shares. At the year end, we have a better understanding of the share scheme and the allocation of annual staff bonuses to 91 shares. Remember, we fully expense the bonus payments within adjusted operating expenses, irrespective of how settled. IFRS requires the amortisation of bonus-related share awards over four years, which is then included in the share scheme expense. The effective tax rate for the year was 25%, down from 26.3% in the prior period. And this was driven by higher earnings in lower tax jurisdictions. And in the prior period, there were a larger number of non-deductible expenses. So the above factors resulted in a profit after tax of 76.7 million pounds, up 11% from the prior period. And our adjusted EPS shows a 15% increase to 8.4p, more than the increase of adjusted operating profit of 12% due to the lower effective tax rates on the adjusted operating profit and a lower number of ordinary shares for the calculation of adjusted EPS. So this analysis summarises the absolute movement in adjusted operating profit from H1 2025 to H1 2026. It clearly shows that management fees, performance fees, and other income increased. These increases were partially offset by the increase in employee remuneration, but noting business expenses were actually lower by 2.7 million than the prior period. This is the analysis of the movement in adjusted operating expenses. Adjusted operating expenses increased by 3% to 208.7 million pounds. Employee remuneration represented 64% of the total expense base. In the prior period, it was 62%, and increased by £9.5 million to £134.1 million. This was driven by an increase in fixed remuneration, consistent with the increase in headcount and annual inflation increases, as well as an increase in variable remuneration in line with increased adjusted operating profit. Over 50% of employee remuneration remains variable, and the resulting compensation ratio was 43.6%, up from 42.9% in the prior period. Business expenses decreased by 3% to £74.6 million. We've again analysed the cost changes, and at a high level we've broken the movement down as follows. Inflation-linked increases of 1.4 million for those costs that are impacted by inflation. FX-linked impact was negative 2 million pounds. And there's been a pickup in technology spend of 1.7 million pounds, with other costs then decreasing by 2.8 million pounds. Technology now is the largest business expense. Previously, it was third-party administration. Looking ahead, we're expecting business expenses to be impacted by inflation, ongoing technology spend, and the move into the new offices in Cape Town planned for January 2026. Post the Sunlum integration in South Africa, there will be a cost impact which will be predominantly headcount driven. So increases to employee remuneration as well as the resulting general operating costs. This is showing the business expenses and total expenses as a percentage of average AUM in basis points over a five and a half year period. The adjusted operating profit margin over the period is also reflected here. Irrespective of the movement in AUM, business expenses have marginally decreased over the period, even noting the continual investment in our core technology system. Total expenses as a percentage of average AUM have in fact declined aided by the growth in the denominator. The adjusted operating profit margin has remained in the range of 31% to 35%, reflecting ongoing cost management with the underlying AUM growth. 91's qualifying capital was £316.3 million at the end of September 2025. In line with our dividend policy, the Board has proposed an interim dividend of 6p. This is an increase of 11%. After this dividend payment, there will be an estimated capital surplus of £155.3 million. This will result in a capital coverage of 245%. During the period, we continued with our buybacks, and this resulted in another return of capital of £20.4 million and a reduction of 14.1 million shares. We did, however, issue 13.7 million of PLC shares for the UK Summerland transaction in the period. In line with our capital light model, since listing over five and a half years ago, we have returned close to 60% of our initial market capitalization to shareholders. So a few updates regarding the Sunlum transaction. All regulatory approvals have now been secured. The UK transaction completed on the 16th of June 2025 with a result of 1.9 billion of AUM onboarded. and 91 PLC issuing 13.7 million shares. It's planned for the SA transaction to be completed by the end of the financial year, which will result in the expected total onboarded AUM of circa 17 billion pounds and revenue in line with what we previously reported. An additional 112 million shares will be issued when the SA transaction closes. Now reviewing the position for H1 2026. The adjusted EPS and operating margin were accretive. There was a slight dilution on the average fee rate, which I mentioned earlier. And also as previously mentioned, we will be weighting the shares issued to Sunlum for the determination of the adjusted EPS for the interim and then for the final 2026 results. For the interims, this looks as follows. So shares in issue excluding Sunlum UK is $882.7 million. Weighting of shares issued for the Sunlum UK is $13.7 million times by 107, that's a day since the transaction in the period, divided by 183, which are the days in the total period, which gives you 8 million shares. So shares in issue for adjusted EPS calculation is $890.7 million. The actual number of shares in issue at SIP end of September, 30 September 2025, was $896.4 million. The intangible asset arising on the balance sheet for the Sunlum transaction will be amortised over 15 years. To note, this is tax deductible in the UK, but not in South Africa. And so, on that final technical point, I will now hand you back to Hendrik.

Thank you, Kim. At 91, we think long term, and our commitment to our strategic pillars do not preclude us from constant improvement and development of our firm. Over the period, we've continued to invest in talent, we've broadened the top leadership team, and devolved accountability throughout our firm. We ensured that our three core opportunities, international public markets, Southern Africa and private markets are adequately resourced to compete effectively as market-facing units, supported by our three pillars of investments, client group and operations. And so, as we go into the second half of the year, we have formed a dedicated international public markets team which can focus on the commercial opportunity for a recovery in demand for active investment management, especially in international and emerging market strategies. We have a focused and strong Southern African team to take a market-leading business to an entirely new level. Finally, we've reinforced our private markets team with fresh talent and additional senior leadership and asked them to accelerate progress in this growth market. We are backing new growth opportunities out of the recently established 91 Foundry. These include in region presence and partnerships in key emerging markets, allowing us to become domestic competitors in certain regions and deepen our investment insight in these fast-evolving markets. For example, we opened two offices in the Middle East in the previous reporting period. We have now put additional resources in, and we are building an on-the-ground domestic business in the Kingdom of Saudi Arabia, which includes a strong investment presence. In Asia, we're developing an exciting joint venture with a Singapore-based alternative investment firm with deep experience and relationships in the region and in particularly China. This will strengthen our investment capabilities in the region as well as positioning us to compete more effectively for capital flowing out of the region. We have established a digital finance unit with dedicated leadership to provide clients in certain markets with a far better experience than they traditionally have received from asset management firms. We've committed substantial resources to AI-related innovation, which we will update you on further at the end of the year. I must stress that these developments are fully expensed through the cost line and are not consuming significant additional capital. Over the reporting period, we've made meaningful progress on the technology front, which includes a major systems migration. Now that this has been fully completed, significant resources have been freed up for further enhancements and innovation. These are the additional three areas of growth we're pursuing, which we believe will impact the way we run our business in years to come. What we're really trying to do is from strong foundations, build the active investment manager of the future. To become the active manager of the future, AI is key. At 91, we approach AI on three levels. Advocate, equip, and use. So this is how we rate ourselves. We see quite high levels of adoption. We see reasonable levels of experimentation given the widely available AI tools to all our staff members, sort of six out of 10. Then our people have embraced it and we are working hard to get our proprietary data organized for the effective deployment of AI across the firm. The proof of the pudding is in the transformational impact of AI. We have much to do on this front. The business is stronger than it was in the previous reporting period. supported by better business conditions and recovering demand. We plan to improve and modernize our business through disciplined investments in and adjacent to our core activities and markets. Emerging markets and the search for diversification are coming back into favor, which supports us. Active investing has a role to play in this world, particularly within emerging markets and in the global equity opportunity set. The strategic clarity and simplicity of our business model enables us to seize the opportunity with pace and strength. In short, we see renewed opportunity for growth. Thank you very much. We can now move on to Q&A. We will take questions in the room first, and then we'll take questions from webcast viewers. And just to remind those of you participating through the webcast that you can submit questions via the chat function at the bottom of your screen. If asking a question online, please state your name and the company. And if you have a problem, I've got my mobile phone. Just call us and we'll respond accordingly. I think Angeliki, you had the hand up right in the beginning.