Aberdeen Group Plc · LSE:ABDN
Aberdeen — Standard Life Aberdeen — H1 2018 Earnings Presentation
41 slides from Aberdeen's earnings presentation, Aug 7, 2018
Slide 1: Half year results 2018
Standard Life Aberdeen plc Half year results 2018 7 August 2018
Slide 2: Strong business with a clear focus on our areas of strength and long-term growth
Strong business with a clear focus on our areas of strength and long-term growth Transforming our business to achieve success in a changing market landscape A tough market and an industry in transition Well positioned to respond to and capitalise on these trends • Growth of passive investing and ETF
Slide 3: Financial highlights
Financial highlights H1 2017 H2 2017 H1 2018 Adjusted profit before tax (£m) 521 518 478 Adjusted diluted earnings per share (p) 15.3 13.6 12.8 Interim dividend Continuing per share (p) operations: 7.00 N/A 7.30 Continuing operations: Adjusted profit before tax (£m) 355 305 311 Adjusted diluted earn
Slide 4: Assets under management and administration
Assets under management and administration Net flows remain a challenge in difficult market conditions • ASI net outflows reflect movement on long Assets under management and administration established products and natural run-off from insurance business: Net outflows: (£16.6bn) ASI net flows £626.5
Slide 5: Diverse gross inflows well balanced across all asset classes
Diverse gross inflows well balanced across all asset classes Redemptions focused in specific strategies and insurance client books in natural run-off H1 2018 annualised net outflows of 5.3% of opening AUMA Gross inflows returning to pre-merger levels £60bn £55bn £40bn £38.0bn £38.0bn £36.0bn £20bn £
Slide 6: Sustained growth in retail platforms and financial advice capability
Sustained growth in retail platforms and financial advice capability Highly scalable through operational leverage and a clear path to growing profitability Strong growth in AUA and flows Retail platform profitability (Wrap, Elevate and Parmenion) £80bn H1 20171 H1 20181 Change £61.4bn1 £58.4bn1 Fee
Slide 7: Half year results 2018
Standard Life Aberdeen Half year results 2018
Slide 8: Adjusted profit from continuing operations up on H2 2017
Adjusted profit from continuing operations up on H2 2017 Lower revenues more than offset by reduction in expenses and growth from associates and JV Adjusted profit before tax FY 2017 H1 2017 H2 2017 H1 2018 £m £m £m £m Adjusted operating income 2,099 1,041 1,058 966 Adjusted operating expenses (1,55
Slide 9: Adjusted profit after tax and adjusted EPS
Adjusted profit after tax and adjusted EPS Future EPS will benefit from share of profit from Phoenix and impact of capital return FY 2017 H1 2017 H2 2017 H1 2018 £m £m £m £m Total adjusted profit before tax 1,039 521 518 478 Total tax on adjusted profit (175) (63) (112) (95) Total adjusted profit af
Slide 10: Analysis of adjusted operating income and revenue margins
Analysis of adjusted operating income and revenue margins Total adjusted Growth flows operating income and revenue margins • Modest reduction in revenue margins H1 H2 H1 H1 H2 H1 principally because of mix effects 2017 2017 2018 2017 2017 2018 £m £m £m bps1 bps1 bps1 • Stable margins across the stra
Slide 11: Adjusted operating expenses
Adjusted operating expenses Driving down the cost/income ratio to 60% over the medium term • Improvement in cost/income ratio to 69.4% (FY 2017: 70.6%) • Annualised cost efficiencies of at least £350m1 to be achieved by end of 2020: • £135m already implemented • H1 2018 has benefited by c£40m (i.e.
Slide 12: Interim dividend up 4.3% to 7.30p
Interim dividend up 4.3% to 7.30p Unbroken track record of delivering progressive dividends Dividend per share (p) Final dividend Interim dividend 25p 21.30 19.82 14.30 18.36 13.35 17.03 12.34 15.80 14.70 11.43 13.80 10.58 13.00 9.80 11.77 12.24 9.20 11.50 8.65 10.80 8.09 7.70 7.70 7.20 7.00 7.30 6.
Slide 13: Half year results 2018
Standard Life Aberdeen Half year results 2018
Slide 14: The record outperformance of 'Growth' vs. 'Value'
The record outperformance of ‘Growth’ vs. ‘Value’ ‘Growth’ has outperformed ‘Value’ for 11.5 years since December 2006 MSCI World Value vs. Growth 185 170 155 140 125 110 95 World Value vs. Growth Growth outperforming 14
Slide 15: Robust investment performance across most asset classes
Robust investment performance across most asset classes Focused on improving performance in GARS, EM and Global Equities 1 year 3 years 5 years Robust Alternatives; UK, Japanese and Smaller Companies performance equities; Quantitative; Credit, EMD and Government AUM above benchmark1 61% 53% 66% acro
Slide 16: Positioned to benefit from global demand for 'new active' capabilities
Positioned to benefit from global demand for “new active” investment capabilities Through existing strength in “new active” capabilities and ongoing investment in innovation 2016-2020 Global estimated net flows1 Positioned to benefit from strong demand for “new active” investment capabilities 19% Al
Slide 17: A track record of innovation in 'new active' investment solutions
A track record of innovation in “new active” investment solutions Designed to deliver specific client outcomes Total AUM Accumulation Preservation Income Selected examples Selected examples Selected examples Private Equity Diversified GTAA Listed Private <1 year Strategies Equity Impact Capital Fund
Slide 18: Transforming our business
Transforming our business Focus on financial discipline to deliver £350m of annual cost efficiencies • Merger integration progressing well: • Investment professionals and distribution teams now fully integrated and focused on client outcomes and increasing distribution activity • All of our people n
Slide 19: Ensuring efficient allocation of capital with acceleration of share buyback programme
Ensuring efficient allocation of capital with acceleration of share buyback programme Track record of reshaping our balance sheet and returning capital to shareholders Sale1 of insurance business completes transformation to a capital light investment company allowing return1 of up to £1.75bn of capi
Slide 20: One of the strongest balance sheets in the industry
One of the strongest balance sheets in the industry With substantial listed investments and strong net cash resources • Future strategic listed investment in Phoenix worth £1.0bn1: • c19.99% stake • Source of earnings and dividends as well as current and future AUM • Indian listed investments worth
Slide 21: Strong business with a clear focus on our areas of strength and long-term growth
Strong business with a clear focus on our areas of strength and long-term growth Continued progress towards achieving our world-class ambitions • Completed integration across our client and consultant facing investment and distribution teams – now one of the largest in the industry and building mome
Slide 22: Questions
Standard Life Aberdeen Questions
Slide 23: Forward-looking statements
This presentation may contain certain “forward-looking statements” with respect to the financial condition, performance, results, strategy, objectives, plans, goals and expectations of Standard Life Aberdeen plc (“Standard Life Aberdeen”) and its affiliates. These forward-looking statements can be i
Slide 24: Appendix
Standard Life Aberdeen Appendix
Slide 25: Analysis of profit by business unit
Analysis of profit by business unit Aberdeen Standard Life Total India and Discontinued Standard Pensions and Other continuing Eliminations Total China life operations Investments Savings operations H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 201
Slide 26: Adjusted profit before tax
Adjusted profit before tax Supported by cost control and initial benefits of merger synergies Adjusted profit before tax £22m £355m (£5m) £6m £305m £100m £311m (£2m) (£73m) (£66m) (£26m) H1 Recurring Performance Higher Other H2 Recurring Performance Lower Other H1 2017 revenues fees operating 2017 r
Slide 27: Total adjusting items
Total adjusting items H1 2017 H1 2018 £m £m (Reported basis) Restructuring and corporate transaction expenses (57) (59) Amortisation and impairment of intangible assets acquired in business combinations (10) (108) and through the purchase of customer contracts Other (24) 1 Total adjusting items (91)
Slide 28: Standard Life Pensions and Savings adjusted profit before tax analysis
Standard Life Pensions and Savings adjusted profit before tax analysis Platforms Advice Other Total H1 2017 H1 2018 H1 2017 H1 2018 H1 2017 H1 2018 H1 2017 H1 2018 £m £m £m £m £m £m £m £m Total adjusted operating income1 62 70 16 18 6 11 84 891 Total adjusted operating expenses (51) (56) (18) (19) (
Slide 29: AUMA and flows supplementary information
AUMA and flows supplementary information Adjusted operating Gross inflows Net flows AUMA Fee revenue yield1 income H1 H2 H1 H1 H2 H1 H1 H2 H1 H1 H2 H1 H1 H2 H1 2017 2017 2018 2017 2017 2018 2017 2017 2018 2017 2017 2018 2017 2017 2018 £bn £bn £bn £bn £bn £bn £bn £bn £bn £m £m £m bps bps bps Equities
Slide 30: Aberdeen Standard Investments flows analysis
Aberdeen Standard Investments flows analysis Gross inflows Redemptions Net flows H1 2017 H2 2017 H1 2018 H1 2017 H2 2017 H1 2018 H1 2017 H2 2017 H1 2018 £bn £bn £bn £bn £bn £bn £bn £bn £bn Absolute return, EM, APAC and Global equities 10.1 9.5 7.2 (18.1) (18.7) (19.7) (8.0) (9.2) (12.5) Natural run-
Slide 31: Flows by channel analysis
Flows by channel analysis Gross inflows Redemptions Net flows H1 2017 H2 2017 H1 2018 H1 2017 H2 2017 H1 2018 H1 2017 H2 2017 H1 2018 £bn £bn £bn £bn £bn £bn £bn £bn £bn Institutional 13.1 11.2 10.9 (20.6) (23.4) (21.5) (7.5) (12.2) (10.6) Wholesale 12.3 11.9 10.5 (14.2) (13.5) (13.8) (1.9) (1.6) (3
Slide 32: Quarterly net flows analysis
Quarterly net flows analysis Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 £bn £bn £bn £bn £bn Equities (1.9) (1.9) (2.9) (3.7) (3.9) Fixed income (1.4) (1.1) (0.6) (1.2) (0.9) Multi-asset (1.8) (1.8) (1.3) (1.5) (2.9) Private markets and Alternatives (0.3) (0.2) (0.1) (0.3) (0.6) Real estate (0.6) (0.2)
Slide 33: Aberdeen Standard Investments asset class analysis
Aberdeen Standard Investments asset class analysis Opening AUM as at Gross Markets and Corporate Closing AUM as at 1 Jan 2018 inflows Redemptions Net flows performance actions 30 Jun 2018 £bn £bn £bn £bn £bn £bn £bn Developed Markets equities 16.3 1.0 (1.3) (0.3) - - 16.0 Emerging Markets equities 3
Slide 34: Calculation of Aberdeen Standard Investments fee revenue yield
Calculation of Aberdeen Standard Investments fee revenue yield Average AUM Fee based revenue Fee revenue yield1 (ex. HDFC AMC) (ex. performance fees) H1 2017 H2 2017 H1 2018 H1 2017 H2 2017 H1 2018 H1 2017 H2 2017 H1 2018 £bn £bn £bn £m £m £m bps bps bps Equities 97.9 98.1 92.6 327 339 311 66.7 69.1
Slide 35: India and China life
India and China life India and China life adjusted profit before tax • Positive operating performance from our wholly-owned business in Hong Kong H1 2017 H1 2018 £m £m • Lower profit from HDFC Life reflects reduced stake Hong Kong adjusted operating income 7 6 following IPO and an adverse movement i
Slide 36: HDFC Life – a leading private Indian life insurer
HDFC Life – a leading private Indian life insurer A fast growing business leveraging one of India’s most valuable brands1 Consistently ranked in top 3 private life insurers in India2 Successful IPO of HDFC Life completed INR250bn 19.1% 20% INR500 R484 Share of private life insurance market3 17.2% 15
Slide 37: HDFC AMC – India's leading asset manager
HDFC AMC – India’s leading asset manager A fast growing business leveraging one of India’s most valuable brands1 AUM of £31.9bn with CAGR of 26% over the last 5 years2 Successful IPO of HDFC AMC completed INR3,000bn INR2,000 R1,815 R2,920bn Assets under management3,4 R2,306bn R1,100 Market cap5: R1,
Slide 38: Significantly strengthened holding company liquid resources
Significantly strengthened holding company liquid resources Significant liquid resources over and above ongoing requirements to invest for growth Holding company liquidity £0.8bn £3.5bn (£0.3bn) £2.0bn +£2.5bn £1.0bn Pre-transaction Cash Repayment of Estimated Post-transaction liquid proceeds downst
Slide 39: Reducing leverage reflecting transformation to a fully fee based business
Reducing leverage reflecting transformation to a fully fee based business Further opportunities to optimise debt structure over time in line with asset management peers Outstanding debt Impact of transition to CRD IV2: • All existing SII debt will lose regulatory credit under CRD IV2 £1.9bn • More l
Slide 40: Building a strong platform to compete globally
Building a strong platform to compete globally Capitalising on global opportunities Aberdeen Brussels Amsterdam Oslo Edinburgh Stockholm Leeds Luxembourg Helsinki Birmingham Toronto Copenhagen Beijing London Boston Frankfurt Seoul Bristol Stamford Tokyo New York Dublin Shanghai Los Angeles Jersey Bu
Slide 41: Standard Life Aberdeen plc is registered in Scotland (SC286832) at Standard Life House, 30
Standard Life Aberdeen plc is registered in Scotland (SC286832) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH. www.standardlifeaberdeen.com © 2018 Standard Life Aberdeen, images reproduced under licence. All rights reserved.
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