Aberdeen Group Plc · LSE:ABDN
Aberdeen — H1 2022 Earnings Presentation
28 slides from Aberdeen's earnings presentation, Aug 9, 2022
Slide 1: abrdn plc Half year results 2022
abrdn plc Half year results 2022 9 August 2022 1 | abrdn.com
Slide 2: Welcome
Welcome • Benefit of our strategy • Vector performance in these challenging markets • Disciplined management of capital for shareholders Stephen Bird Stephanie Bruce Chief Executive Officer Chief Financial Officer 2 | abrdn.com
Slide 3: Building a more resilient model
Building a more resilient model Adjusted operating profit H1 2022 Personal inc. ii £160m Revenue £696m (8%) £4m +75% 26% £37m contribution Adjusted operating profit £115m (28%) £115m Adviser £7m 4ppts 39% Cost/income ratio 83% £38m contribution +3% higher £126m Investments AUMA £508bn (6%)1 £76m (40
Slide 4: Investments vector faced headwinds
Investments vector faced headwinds H1 2022 Institutional & Wholesale Trend in gross flows, redemptions and £3.3bn net outflow in H1 2022 driven Fee based revenue £546m (11%) net flows (ex. liquidity) by equities and fixed income £20.0bn £18.1bn £16.5bn Adjusted operating profit £76m (40%) £15.3bn £0
Slide 5: Resilient net flows in a challenging environment
Resilient net flows in a challenging environment Institutional & Wholesale net flows (ex. liquidity) by region Net flows1 (% of relevant (1%) (1%) (3%) 0% (1%) opening AUMA) £2bn £0bn H1 2021 H1 2022 (£2bn) (£4bn) Global UK EMEA Americas Asia • I&W outflows (ex. • Important progress in • Outflows co
Slide 6: Impact of market downturn varies across asset classes
Impact of market downturn varies across asset classes % of AUM ahead of benchmark 3 years1 FY 2021 H1 2022 1 year Real assets 52% 75% Strong performance delivered in real assets 53% Highlights Fixed income remains positive Fixed income 82% 63% despite the near term impact of rates 3 years 63% Sharp
Slide 7: Focused Investments aligned to megatrends
Focused Investments aligned to megatrends Focus Global megatrends Global fixed • Asia & EM • Sustainability income • Global Credit Buy & Maintain Asia and EM • Focus • Asia & EM Urbanisation and infrastructure Specialist • Sustainability active equities • Small / Mid Cap development • Income • Globa
Slide 8: Key programmes of work to deliver focused business
Key programmes of work to deliver focused business Investment performance Improve flows Management of cost base Technology New business activity wholly aligned Net cost1 savings of c£75m to our focus areas by end 2024 Investing in our technology based tools to support improvements to investment deci
Slide 9: Solid performance from leading Adviser platforms
Solid performance from leading Adviser platforms Delivering revenue growth in Flows remain above pre-COVID Adviser Experience Programme - driving tough markets levels despite environment growth through content and experience 6% £4.6bn £4.5bn ✓ Junior ISA £92m Delivered ✓ New contact centre so far £9
Slide 10: interactive investor's robust operating model delivering growth
interactive investor’s robust operating model delivering growth vs FY 2021 Continued growth Trading remained above pre- H1 20221 run rate2 COVID levels amid volatility Revenue £75m +17% 408k Total customer numbers 30.0 24.9k New customers added 25.0 Adjusted operating £33m +c19k in H1 2022 20.2k +47
Slide 11: ii delivering strategic growth
ii delivering strategic growth Clear strategic roadmap to add significant scale Strategic levers: Platform, Pricing, Customer Base Platform Fully capturing significant opportunity within fast-growing and attractive UK D2C market Fully invested and scalable digital operating platform Secure data arch
Slide 12: Half year 2022 Financial results
Half year 2022 Financial results Stephanie Bruce, CFO 12 ||abrdn.com abrdn.com
Slide 13: Markets impacting profitability while diversification drives benefits
Markets impacting profitability while diversification drives benefits abrdn Investments Adviser Personal interactive investor1 (inc. one month of ii) (six months to 30 June 2022) Fee based revenue £696m £546m £92m £58m £75m (8%) (11%) +6% +41% +17% Adjusted operating £115m £76m £38m £7m £33m profit
Slide 14: Asset base benefits from diversification
Asset base benefits from diversification Total movement Institutional & Wholesale AUM (ex. liquidity) Impact on 10% (10%) (6%) (1%) (6%) opening AUMA £229bn £55bn £216bn £542bn LBG (£24bn) £14bn £508bn (£52bn) 35% £81bn 43% 17% £76bn (£32bn) £66bn (£4bn) £93bn of AUM showing 26% £68bn growth 86% £46
Slide 15: Revenue movement dominated by declining markets
Revenue movement dominated by declining markets Total movement Parmenion, £755m Bonaccord, ii , Tritax, Nordics real Finimze (8%) estate (£7m) (£6m) Group (£23m) (£12m) £696m £26m fee based revenue (£19m) (£30m) H1 2021 Net flows Yield Markets Performance fees Disposals Acquisitions H1 2022 (ex. LBG
Slide 16: Flows reflecting market activity
Flows reflecting market activity I&W net flows now mirroring sector levels Insurance flows reflect client activity Institutional & Wholesale (ex. liquidity) Insurance (ex. LBG2) Net flows 25 (% of relevant opening AUMA) 15 5 (£1.3bn) (£1.7bn) (£1.9bn) -5 (£5.2bn) (£1.4bn) (£0.8bn) (£1.3bn) (£3.3bn)
Slide 17: Cost management key to fund investment for growth
Cost management key to fund investment for growth Movement in adjusted operating expenses 1% reduction1 2% reduction2 £1,206m £1,192m Disposals Acquisitions 3% Growth from (3%) acquisitions: ii Staff cost Continuing and Tritax Staff cost inflation cost actions (7%) 6% savings 1% Ongoing (3%) Staff c
Slide 18: Delivering an efficient Investments business model
Delivering an efficient Investments business model Targeting c£150m gross cost1 savings in Investments vector by end 2024 Rationalisation Simplification Streamlining Equity and multi-asset Single middle office Fund rationalisation Non-core disposals Management de-layering solutions transformation op
Slide 19: Financial discipline over our strong balance sheet
Financial discipline over our strong balance sheet Movement in capital Sources Uses of capital of capital £4.1bn Continue to invest in growing the business Value £300m shareholder return programme commenced3 of listed investments1 c£2.3bn £2.3bn £0.3bn £0.1bn Capital resources cover dividend cost Va
Slide 20: abrdn Investments Adviser Personal
abrdn Investments Adviser Personal Current global market environment creates opportunities Taking actions to refocus and diversify our business and reduce costs Re-pacing of growth and efficiency ambitions due to current market environment Strong capital position allows us to maintain returns to sha
Slide 21: Appendix
Appendix 21 ||abrdn.com abrdn.com
Slide 22: Half year 2022 results
Half year 2022 results Fee Adj. Adj. Fee based Adj. capital revenue operating operating CIR revenue generation yield expenses profit 83% £696m £107m 26.9bps £581m £115m 2% 4ppts (8%) (0.7bps) (28%) (39%) lower higher Net flows Net flows ex. LBG & ex. LBG1 liquidity AUMA £508bn (£11.5bn) (£3.8bn) (£5
Slide 23: Investments
Investments Fee Adj. Fee based revenue CIR operating revenue yield 86% profit £546m 25.3bps £76m 7ppts (11%) (1.0bps) (40%) higher Net flows Gross flows ex. LBG and AUM ex. liquidity liquidity £386bn £22.3bn (£5.2bn) (£6.8bn) (£0.6bn) (17%)1 (23%) (13%) 23 | abrdn.com 1 Comparative as at 31 December
Slide 24: Adviser
Adviser Fee Adj. Fee based revenue CIR operating revenue yield 59% profit £92m 25.5bps £38m 2ppts +6% +0.2bps +3% higher Gross flows Net flows AUA £4.0bn £1.4bn £68bn (£0.6bn) (£0.6bn) (10%)1 (13%) (30%) 24 | abrdn.com 1 Comparative as at 31 December 2021
Slide 25: Personal
Personal Fee Adj. Fee based revenue CIR operating revenue yield1 88% profit £58m 60.0bps £7m 2ppts +41% +4.1bps +75% better Gross flows Net flows AUMA £1.4bn £0.3bn £66bn +£0.4bn (£0.2bn) +£52bn2 +40% (40%) 25 | abrdn.com 1 Fee revenue yield excludes interactive investor 2 Comparative as at 31 Decem
Slide 26: Personal
Personal Personal Wealth interactive investor2 (six months to 30 June 2022) Adj. Adj. Fee based Fee based CIR operating CIR operating revenue revenue 98% profit 56% profit £45m £75m £1m £33m 8ppts +10% (75%) higher Gross flows Net flows AUMA Net flows AUA £0.8bn £0.1bn £13bn £2.2bn £52bn (£0.2bn) (£
Slide 27: Forward-looking statements
Forward-looking statements This document may contain certain ‘forward-looking statements’ with respect to the financial COVID-19 (coronavirus) outbreak; climate change and a transition to a low carbon economy condition, performance, results, strategies, targets, objectives, plans, goals and expectat
Slide 28: abrdn plc is registered in Scotland
abrdn plc is registered in Scotland (SC286832) at 1 George Street, Edinburgh, EH2 2LL www.abrdn.com © 2022 abrdn. All rights reserved. 28 | abrdn.com