Slide 1: Half year results 2016
Half year results 2016 Diversification delivers growth in challenging markets
Slide 2: Forward-looking statements
This presentation may contain certain “forward-looking statements” with respect to certain of Standard Life's plans and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements containing the words “believes”, “intends”,
Slide 3: Building a world-class investment company
Building a world-class investment company Keith Skeoch Standard Life
Slide 4: Diversification delivers growth in challenging markets
Diversification delivers growth in challenging markets • Continuing to diversify our business by product, geography and client type • Strengthening our positioning in pensions and savings through acquisition1 of Elevate and continued build of our advice business 1825 • Diversifying sources of growth
Slide 5: Half year results 2016
Half year results 2016 Diversification delivers growth in challenging markets Luke Savage
Slide 6: Continuing to deliver across our simple business model
Continuing to deliver across our simple business model Increasing assets Maximising revenue Driving profit AUA Fee based revenue Cost/income ratio Underlying performance up 7% to £328.0bn up 4% to £794m down 1% point to 62% up 14% to £341m (FY 2015: £307.4bn) (H1 2015: £761m) (FY 2015: 63%) (H1 2015
Slide 7: Delivering profitable growth
Delivering profitable growth Operating profit before tax H1 2016 H1 2015 £m £m Fee based revenue 794 761 Spread/risk margin 63 40 Total operating income 857 801 Total operating expenses (566) (533) Capital management 13 1 Share of associates’ and JVs’ profit before tax 37 30 Underlying performance 3
Slide 8: Lower level of non-operating items
Lower level of non-operating items Total non-operating items H1 2016 H1 2015 £m £m One-off Acceleration of DAC amortisation in Hong Kong - (47) Defined benefit pension scheme restructuring costs (5) (20) Other Short-term fluctuations in investment return and economic assumption changes (17) (42) Res
Slide 9: Continuing growth in assets in volatile markets
Continuing growth in assets in volatile markets … Increasing assets +£19.7bn £328.0bn +£4.1bn £307.4bn (£2.9bn) (£0.3bn) FY 2015 Growth Mature Other1 Market/other H1 2016 channels fee books movements Growth channels net inflows and market movements driving increase in assets 1. Includes net inflows
Slide 10: Institutional and Wholesale net inflows
… with Institutional and Wholesale channels Increasing assets benefiting from diversification … Benefits of diversification with Institutional growth • Institutional benefiting from increasingly £8.0bn £7.1bn £1.8bn global presence with net inflows of £2.0bn representing annualised 6% of opening AUM
Slide 11: Steady net inflows in Workplace and Retail
… and steady net inflows in Workplace and Retail Increasing assets Workplace and Retail attracting steady flows • Workplace and Retail channels continuing to £8.0bn attract steady flows: • Regular contributions into workplace pensions up 4% to £1.5bn Net inflows Workplace • Retail net inflows benefi
Slide 12: Growth in assets driving increase in fee revenue
Growth in assets driving increase in fee revenue Maximising revenue £42m1 £794m £761m (£9m) Mature Mature books books £217m £226m Growth Growth channels channels £577m £535m +8% H1 2015 Increase in Decrease in H1 2016 growth channels mature books fee revenue fee revenue Growth channels fee revenue u
Slide 13: Spread/risk margin includes benefit from change to scheme of demutualisation
Spread/risk margin includes benefit from change to Maximising revenue scheme of demutualisation £22m £63m • Higher than expected contribution from asset (£9m) £10m ALM £16m liability management NB £1m £40m ALM £6m • Existing business contribution includes NB £4m Existing benefit of £22m from changes
Slide 14: Maintaining financial discipline
Maintaining financial discipline Lowering unit costs £26m £566m +£33m 70% £7m £533m +6% Cost/income ratio1 64% 63% 63% 62% 60% H1 2015 Increase in Increase H1 2016 2013 2014 2015 H1 2016 operating in expenses expenses from (excl. 1825) 1825 • Cost/income ratio down 1% point to 62% • Integration of I
Slide 15: Growing fee revenue enables investment in scalability and growth
Growing fee revenue enables investment in Driving profit scalability and growth +7% £63m £341m £299m £33m £7m £278m £12m £259m (£26m) (£40m) (£7m) H1 2015 H1 2015 Increase in Increase in Increase in Increase in Increase in H1 2016 H1 2016 underlying spread/risk fee based operating operating capital
Slide 16: Underlying performance by business unit
Underlying performance by business unit H1 2016 H1 2015 £m £m Standard Life Investments 176 154 UK spread/risk margin 55 38 UK excluding spread/risk margin 96 103 UK Pensions and Savings 151 141 Europe Pensions and Savings 18 15 Hong Kong (2) 6 Share of associates’ and JVs’ profit before tax 21 15 I
Slide 17: Institutional and Wholesale driving profit in SLI
Institutional and Wholesale driving profit in SLI Standard Life Investments underlying performance Total AUM £29m £253.2bn £269.0bn £1m £176m FY 2015 H1 2016 (£8m) +14% Growth channels AUM £154m £130.5bn £137.7bn FY 2015 H1 2016 Growth channels revenue bps 52bps 53bps H1 2015 Increase in Increase in
Slide 18: Benefiting from diversified asset mix
Benefiting from diversified asset mix … Total assets under management 12% 12% 2016 total assets under management volatility 10.5% 9.4% 8.6% 7.1% Volatility Volatility 6.5% 4.7% 4.7% 0% 0% 1999 2006 2016 Diversification benefits Volatility … reducing volatility of AUM, revenue and profits Standard Li
Slide 19: Workplace and Retail driving fee revenue growth
Workplace and Retail driving fee revenue growth UK Pensions and Savings underlying performance Total fee AUA £109.6bn £113.3bn £55m £151m £141m FY 2015 H1 2016 £15m £103m (£8m) £5m Workplace & Retail (£38m) £96m net inflows (£19m) £2.9bn £2.8bn H1 2015 H1 2016 Fee revenue bps H1 2015 H1 2015 Increas
Slide 20: Solvency position remains strong
Solvency position remains strong 154% 200% Investor view1 surplus: £6.3bn £6.0bn (FY 2015: £5.5bn) Surplus (FY 2015: £6.0bn) £0.8bn (FY 2015: £1.2bn) £3.0bn (FY 2015: £3.3bn) entity level capital £2.2bn Surplus Investor view1 solvency ratio: (FY 2015: £2.1bn) £3.0bn Group Solvency II Entity level ca
Slide 21: Stable regulatory surplus
Stable regulatory surplus Regulatory capital not recognised in £1.0bn £0.7bn £0.8bn £0.8bn Group position £0.6bn £0.9bn £0.8bn Stable regulatory £2.2bn Group surplus £2.2bn £2.2bn £2.1bn £2.3bn £2.1bn £2.3bn Up 20% Down 20% Up 1.0% Down 1.0% Up 0.5% Down 0.5% Equities Interest rates1,2 Credit spread
Slide 22: Continuing to grow underlying cash generation
Continuing to grow underlying cash generation Underlying cash generation up 10% Continued focus on SL plc liquid resources £500m £459m £1.5bn £425m £1.1bn and liquid resources £357m £1.0bn cash generation1 £308m £0.9bn £0.8bn Underlying SL plc cash £254m £0.7bn £230m £207m +10% £165m £0m £0bn 2010 2
Slide 23: Interim dividend up 7.5% to 6.47p
Interim dividend up 7.5% to 6.47p 20p Final dividend (pence) 18.36 Interim dividend (pence) 17.03 12.34 15.80 11.43 14.70 10.58 13.80 13.00 9.80 Dividend per share 12.24 9.20 11.50 11.77 8.65 10.80 7.70 8.09 7.70 7.20 6.02 6.47 5.22 5.22 5.60 4.60 4.90 4.07 4.15 4.35 3.60 3.80 0p 20061 2007 2008 200
Slide 24: Building a world-class investment company
Building a world-class investment company Keith Skeoch Standard Life
Slide 25: Building a world-class investment company
Building a world-class investment company • Delivering for our clients and customers • Trusted to look after client and customer assets for the long term • Business that people aspire to work for and be associated with • Common values built on teamwork, respect and commitment to excellence in all th
Slide 26: Major global trends shaping the savings and investments landscape
Major global trends shaping the savings and investments landscape reinforced by increased uncertainty Democratisation of Rebuilding trust in Slow growth, low inflation, Innovation, technology financial risk financial services compressed return and digitalisation environment • Public sector debts and
Slide 27: Increasing the pace of strategic delivery
Increasing the pace of strategic delivery DIVERSIFICATION EFFICIENCY Targeted investment in Sharpening focus on cost diversification to meet changing efficiency aided by greater client and customer needs channel transparency and accountability Driving shareholder value through focus on diversificati
Slide 28: Well performing and diversified growth channels
Well performing and diversified growth channels Key growth channels Total growth channels1 Institutional Wholesale Workplace Retail H1 2016 H1 2015 Gross inflows £8.4bn £6.5bn £2.0bn £4.1bn £20.6bn £20.5bn Net inflows 6% (2%) 5% 9% 4% 8% (annualised % of opening AUA) AUA £78.1bn £47.3bn £34.0bn £45.
Slide 29: We have significant growth opportunities
We have significant growth opportunities Institutional and Wholesale • Increasing international reach • Continue to innovate and diversify our investment products – ILPS and private markets • Expanding the range of clients we serve – insurers, sovereign wealth funds Diversification • Collaboration w
Slide 30: Capitalising on opportunities for our two valuable businesses in India
Capitalising on opportunities for our two valuable businesses in India HDFC Life – a leading private Indian life insurer HDFC AMC – a leading Indian private asset manager HDFC Life share of private life insurance premiums1,2 HDFC AMC AUM INR bn 1,924 1,667 15.8% 15.8% 16.0% 1,506 14.4% 13.7% 13.0% 1
Slide 31: Track record of improving operational efficiency
Track record of improving operational efficiency Diversification and Growth 70% 69% 64% 63% 63% Cost/income ratio1 62% Efficiency 50% Transparency 2012 2013 2014 2015 H1 2016 Sharpening focus on cost efficiency 1. On a rolling 12 months basis, operating expenses divided by operating income (includin
Slide 32: Driving greater cost efficiencies and financial discipline
Driving greater cost efficiencies and financial discipline Diversification and Growth We have made a good start … … but can do much more Three programmes across the business: Integration of Ignis 1. Driving shorter-term operating efficiencies Pension and savings 2. Closer collaboration and co-operat
Slide 33: Enhanced approach to managing our mature insured books
Enhanced approach to managing our mature insured books Diversification and Growth Mature insured books Mature Workplace Annuities Retail (With Profits) Efficiency • Management team focused on traditional UK mature insured books • Creating opportunities to: • Improve efficiency and variability of cos
Slide 34: Building a world-class investment company
Building a world-class investment company … • Increasing the pace of strategic delivery • Targeted investment in diversification and growth • Focusing on driving greater cost efficiencies • Enhanced approach to managing our mature insured books • Strengthening long-term relationships with clients an
Slide 35: Questions and answers
Questions and answers Standard Life
Slide 36: Appendix
Appendix Standard Life
Slide 37: Operating profit by business unit
Operating profit by business unit Standard Life UK Europe India and China Other Eliminations Total Investments H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 £m £m £m £m £m £m £m £m £m £m £m £m £m £m Fee based revenue 431 402 321 314 8
Slide 38: Growth and mature channels supplementary information
Growth and mature channels supplementary information Gross flows Net flows AUA Fee based revenue Fee revenue yield H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 H1 2015 H1 2016 £bn £bn £bn £bn £bn £bn £m £m bps Institutional 8.4 5.4 2.0 1.8 78.1 64.6 178 157 49 Wholesale 6.5 8.9 (0.4) 5.3
Slide 39: UK Pensions and Savings profit contribution
UK Pensions and Savings profit contribution H1 2012 H1 2013 H1 2014 H1 2015 H1 2016 £m £m £m £m £m Workplace and retail (ex cash margin) 58 69 75 85 91 Revenue from cash balances 7 8 8 2 3 Workplace and retail contribution 65 77 83 87 94 Mature Retail 90 91 95 94 90 Fee based business contribution1
Slide 40: Ongoing growth in fee AUA in Europe
Ongoing growth in fee AUA in Europe Europe Pensions and Savings underlying performance • Increased fee AUA by 15% to £20.7bn (FY 2015: £18.0bn) driven by favourable foreign exchange movements and net £25m inflows of £0.4bn £18m • German unit-linked net inflows now represent c33% of Germany £15m net
Slide 41: Continued progress in India and China associate and joint venture life businesses
Continued progress in India and China associate and joint venture life businesses India and China underlying performance • Creating shareholder value in India: • Increased our stake in HDFC Life from 26% to 35% for £179m £25m £21m £19m • HDFC Life has agreed terms that, subject to approvals, will se