Slide 1: Delivering Diversified and Sustainable Growth
Full year results 2016 analyst and investor presentation DELIVERING DIVERSIFIED AND SUSTAINABLE GROWTH
Slide 2: Forward-looking statements disclaimer
This presentation may contain certain “forward-looking statements” with respect to Standard Life’s plans and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. For example, statements containing words such as “may”, “will”, “
Slide 3: Delivering Diversified and Sustainable Growth
DELIVERING DIVERSIFIED AND SUSTAINABLE GROWTH Keith Skeoch
Slide 4: Increasing the pace of strategic delivery
Introduction Full year results 2016 CEO update Questions and answers Appendix 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 relat
Slide 5: Delivering across all elements of our simple business model
Introduction Full year results 2016 CEO update Questions and answers Appendix Delivering across all elements of our simple business model Increasing assets Growing revenue Driving profit AUA Fee based revenue Cost/income ratio Operating profit up 16% up 5% down 1% point to before tax to £357.1bn to
Slide 6: Full Year Results 2016
FULL YEAR RESULTS 2016 Luke Savage
Slide 7: Delivering profitable growth
Introduction Full year results 2016 CEO update Questions and answers Appendix Delivering profitable growth Driving profit Operating profit before tax 2016 2015 £m £m Fee based revenue 1,651 1,579 Spread/risk margin 92 101 Total income 1,743 1,680 Total expenses (1,159) (1,115) Capital management 21
Slide 8: Non-operating items
Introduction Full year results 2016 CEO update Questions and answers Appendix Nonoperating items Driving profit Total non-operating items 2016 2015 £m £m One-off Acceleration of DAC amortisation in Hong Kong - (46) Impairment of intangible assets (19) (7) Defined benefit pension scheme restructuring
Slide 9: Continuing growth in assets in volatile markets
Introduction Full year results 2016 CEO update Questions and answers Appendix Continuing growth in assets in volatile markets Increasing assets £41.2bn £357.1bn +16% £11.1bn £4.1bn (£6.2bn) (£0.5bn) £307.4bn 2015 Growth Acquisition Mature Other1 Market/other 2016 AUA channels of Elevate fee books ne
Slide 10: Diversified flows across our growth channels
Introduction Full year results 2016 CEO update Questions and answers Appendix Diversified flows across our growth channels … Increasing assets Growth channels gross and net flows Gross inflows Net flows £bn £bn Institutional 15.6 1.1 Wholesale 12.1 (1.7) Workplace 4.1 1.7 Retail 8.1 3.7 39.9 4.8 Oth
Slide 11: Continuing growth in Institutional and Wholesale assets
Introduction Full year results 2016 CEO update Questions and answers Appendix Continuing growth in Institutional and Wholesale assets Increasing assets Growth in Institutional and Wholesale AUM • Institutional and Wholesale AUM up 11%1 £15.0bn £12.6bn Institutional to £137.1bn £3.3bn Wholesale £9.3b
Slide 12: Investment in our capabilities and global distribution
Introduction Full year results 2016 CEO update Questions and answers Appendix Investment in our capabilities and global distribution … Increasing assets Institutional and Wholesale flows (ex. GARS) • GARS net outflows of £4.3bn, including £3.9bn in £20bn Wholesale and £0.4bn in Institutional £17.5bn
Slide 13: Continuing growth in Workplace and Retail assets
Introduction Full year results 2016 CEO update Questions and answers Appendix Continuing growth in Workplace and Retail assets Increasing assets Workplace and Retail attracting steady and resilient flows • Workplace and Retail AUA up 33% (18% excluding Elevate) to over £100bn £15.0bn Workplace Retai
Slide 14: Growth in assets driving increase in fee revenue
Introduction Full year results 2016 CEO update Questions and answers Appendix Growth in assets driving increase in fee revenue Growing revenue £109m1 £1,651m £1,579m (£37m) Mature books Mature £446m books (-8%) £483m Growth Growth channels channels £1,205m £1,096m +10% 2015 Increase in Decrease in 2
Slide 15: Fee revenue yield
Introduction Full year results 2016 CEO update Questions and answers Appendix With revenue margins stabilising across key growth channels Growing revenue Revenue driven by growth channels Revenue margins stabilising £2,000m 80bps £1,651m £1,579m £446m £483m £1,429m -8% £445m Fee revenue yield £1,254
Slide 16: Spread/risk margin includes benefit from change to scheme of demutualisation
Introduction Full year results 2016 CEO update Questions and answers Appendix Spread/risk margin includes benefit from change to Growing revenue scheme of demutualisation … Underlying spread/risk margin • Lower contribution from asset liability management (ALM) in line with expectations £22m (£5m) •
Slide 17: Maintaining financial discipline to drive down unit costs
Introduction Full year results 2016 CEO update Questions and answers Appendix Lowering Maintaining financial discipline to drive down unit costs unit costs Driving down the cost/income ratio Tight control of underlying expenses 70% +2% +£33m £23m £1,159m £21m +6% £1,115m Cost/income ratio1 64% 63% 6
Slide 18: Growing fee revenue enables investment in scalability and growth
Introduction Full year results 2016 CEO update Questions and answers Appendix Growing fee revenue enables investment in scalability and growth Driving profit +11% £85m £681m £630m £64m £20m £596m £12m (£24m) £537m (£13m) (£93m) 2015 2015 Increase in Increase in Change in Increase in Increase in 2016
Slide 19: Growth channels driving increase in revenue and profit
Introduction Full year results 2016 CEO update Questions and answers Appendix Growth channels driving increase in revenue and profit … Driving profit Underlying income Underlying performance £2,000m £1,000m £1,743m Underlying performance £92m £446m Underlying income £681m £85m £1,126m £93m £1,205m £
Slide 20: Underlying performance by business unit
Introduction Full year results 2016 CEO update Questions and answers Appendix Underlying performance by business unit 2016 2015 £m £m Standard Life Investments 383 342 UK spread/risk1 74 92 UK excluding spread/risk 207 199 UK Pensions and Savings 281 291 Europe Pensions and Savings 39 31 Hong Kong (
Slide 21: Institutional and Wholesale driving profit in SLI
Introduction Full year results 2016 CEO update Questions and answers Appendix Institutional and Wholesale driving profit in SLI Standard Life Investments underlying performance Total AUM £42m £4m £383m £253.2bn £277.9bn (£5m) +12% 2015 2016 £342m Growth channels AUM £130.5bn £143.9bn 2015 2016 Growt
Slide 22: Workplace and Retail driving increase in revenue from growth channels in UK
Introduction Full year results 2016 CEO update Questions and answers Appendix Workplace and Retail driving 9%1 increase in revenue from growth channels in UK Pensions and Savings UK Pensions and Savings underlying performance Total fee AUA £291m £109.6bn £135.2bn £74m £281m 2015 2016 £25m £199m £8m
Slide 23: Solvency position remains strong and stable
Introduction Full year results 2016 CEO update Questions and answers Appendix Solvency position remains strong and stable Investor view Investor view1 surplus: £0.2bn 214% £6.2bn £3.3bn (2015: £3.3bn) (2015: £6.0bn) (2015: £1.2bn) entity level capital Investor view1 solvency ratio: not recognised at
Slide 24: Stable investor view surplus
Introduction Full year results 2016 CEO update Questions and answers Appendix Stable investor view surplus Stable £3.3bn investor view £3.5bn £3.1bn £3.2bn £3.3bn £3.3bn £3.3bn £3.5bn £3.1bn £3.2bn surplus Up 20% Down 20% Up 1.0% Down 1.0% Up 0.5% Down 0.5% Up 5.0% Down 5.0%3 10% one-off Equities Fi
Slide 25: Continuing growth in cash generation supporting progressive dividend
Introduction Full year results 2016 CEO update Questions and answers Appendix Continuing growth in cash generation supporting progressive dividend Underlying cash generation up 9% Continued focus on SL plc liquid resources £600m £1.5bn £502m £459m £1.1bn and liquid resources £426m +9% £1.0bn cash ge
Slide 26: Full year dividend up 8.0% to 19.82p
Introduction Full year results 2016 CEO update Questions and answers Appendix Full year dividend up 8.0% to 19.82p 19.82 20p 18.36 +8.0% 17.03 +7.8% 15.80 14.70 +7.8% 13.80 +7.5% 13.00 Dividend per share 12.24 +6.5% 11.50 11.77 +6.2% 10.80 +6.2% +2.3% +4.0% +6.5% 0p 20061 2007 2008 2009 2010 2011 20
Slide 27: Creating a World-Class Investment Company
CREATING A WORLD-CLASS INVESTMENT COMPANY Keith Skeoch
Slide 28: Well positioned to benefit from global trends shaping savings and investments
Introduction Full year results 2016 CEO update Questions and answers Appendix Well positioned to benefit from global trends shaping the savings and investments landscape Democratisation of Rebuilding trust in Slow growth, low inflation, Innovation, technology financial risk financial services compre
Slide 29: With a strategy to achieve our world-class ambitions
Introduction Full year results 2016 CEO update Questions and answers Appendix With a strategy to achieve our worldclass ambitions Standard Life | Full year results 2016 | February 2017 29
Slide 30: Range of proven investment solutions to drive sustainable long-term growth
Introduction Full year results 2016 CEO update Questions and answers Appendix Range of proven investment solutions to drive sustainable longterm growth Investment capabilities 2009-2016 Institutional and Wholesale flows (ex. GARS) £20bn £17.5bn Gross and net flows £13.5bn £12.2bn £8.1bn £7.0bn Equit
Slide 31: Track record of client co-development and commercialising innovation
Introduction Full year results 2016 CEO update Questions and answers Appendix Track record of client codevelopment and commercialising innovation in higher margin “new active” propositions Years Years Years Years since since since since launch AUM1 launch AUM1 launch AUM1 launch AUM1 Global Japan My
Slide 32: Sharpening focus on efficiency to drive down unit costs
Introduction Full year results 2016 CEO update Questions and answers Appendix Sharpening focus on efficiency to drive down unit costs and unlock operational leverage Sharpening focus on efficiency • Established track record of operational 69% improvement 70% • SLI has now delivered over £50m of annu
Slide 33: Commitment to teamwork and excellence in everything we do
Introduction Full year results 2016 CEO update Questions and answers Appendix Commitment to teamwork and excellence in everything we do Team culture that encourages collaboration Developing and nurturing talent • Increasing collaboration across whole of Standard Life • Extensive range of development
Slide 34: Providing long-term value, investment performance and client service
Introduction Full year results 2016 CEO update Questions and answers Appendix Providing longterm value, investment performance and client service Growing client demand across our capabilities Growing our global Institutional and Wholesale client base • Increase in pitch opportunities with growth in
Slide 35: Providing real long-term value, investment performance and customer service
Introduction Full year results 2016 CEO update Questions and answers Appendix Providing real longterm value, investment performance and customer service Advised platform and DC pension markets expected to Meeting the needs of Pensions and Savings customers grow strongly • Our Wrap and Elevate platfo
Slide 36: Well performing and diversified growth channels
Introduction Full year results 2016 CEO update Questions and answers Appendix Well performing and diversified growth channels Key growth channels Total growth channels1 Institutional Wholesale Workplace Retail 2016 2015 Gross inflows £15.6bn £12.1bn £4.1bn £8.1bn £38.6bn £40.8bn Net flows +2% -4% +5
Slide 37: Delivering well balanced and diversified growth in revenue and profit
Introduction Full year results 2016 CEO update Questions and answers Appendix Delivering well balanced and diversified growth in revenue and profit Fee revenue driven by our diversified growth channels Growth channel revenue margins stabilising £2,000m 80bps £1,743m £92m £446m Underlying income Fee
Slide 38: Driving further shareholder value from our associates and joint ventures
Introduction Full year results 2016 CEO update Questions and answers Appendix Driving further shareholder value from our associates and joint ventures Growing importance of associates and JVs Creating India’s leading private life insurer Combined £80m £76m Proforma Share of associates’ and joint Emp
Slide 39: Delivering across all elements of our simple business model
Introduction Full year results 2016 CEO update Questions and answers Appendix Delivering across all elements of our simple business model Increasing assets Growing revenue Lowering unit costs Driving profit £400bn £2bn 70% £750m Underlying performance Cost/income ratio Fee revenue AUA £0bn £0bn 60%
Slide 40: Creating a world-class investment company
Introduction Full year results 2016 CEO update Questions and answers Appendix Creating a worldclass investment company Focus on strategic delivery Targeted investment in diversification and growth Focusing on driving greater cost efficiencies Strengthening long-term relationships with clients and cu
Slide 41: Questions and Answers
QUESTIONS AND ANSWERS Standard Life
Slide 42: Appendix
APPENDIX Standard Life
Slide 43: Operating profit by business unit
Introduction Full year results 2016 CEO update Questions and answers Appendix Operating profit by business unit Standard Life UK Europe India and China Other Eliminations Total Investments 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 2016 2015 £m £m £m £m £m £m £m £m £m £m £m £m £m £m
Slide 44: Growth and mature channels supplementary information
Introduction Full year results 2016 CEO update Questions and answers Appendix Growth and mature channels supplementary information Fee revenue Gross inflows Net flows AUA Fee based revenue yield 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 2015
Slide 45: UK profit contribution
Introduction Full year results 2016 CEO update Questions and answers Appendix UK profit contribution 2012 2013 2014 2015 2016 £m £m £m £m £m Workplace and Retail (ex cash margin) 127 149 165 182 195 Revenue from cash balances 15 16 16 5 6 Workplace and Retail contribution 142 165 181 187 201 Mature
Slide 46: Ongoing growth in fee AUA in Europe
Introduction Full year results 2016 CEO update Questions and answers Appendix Ongoing growth in fee AUA in Europe Europe Pensions and Savings underlying performance • Increased fee AUA by 18% to £21.3bn (2015: £18.0bn) driven by favourable market movements and net inflows of £0.4bn: £50m • German un
Slide 47: Continued progress in India and China associate and joint venture life businesses
Introduction Full year results 2016 CEO update Questions and answers Appendix 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 £
Slide 48: Continued innovation and client co-creation broadening investment capabilities
Introduction Full year results 2016 CEO update Questions and answers Appendix Continued innovation and client cocreation broadening and deepening our investment capabilities Building our private Taking existing expertise Targeting growth in Launched Integrated markets capability to new markets manag
Slide 49: GARS: Well established track record of delivering long-term investment performance
Introduction Full year results 2016 CEO update Questions and answers Appendix GARS: Well established track record of delivering longterm investment performance Delivering returns with managed volatility over the last 10 years • Continuing to deliver against volatility objectives 210 190 • Not the fi
Slide 50: Solvency II: Reconciliation of investor view to regulatory view
Introduction Full year results 2016 CEO update Questions and answers Appendix Solvency II: Reconciliation of investor view to regulatory view Investor view Regulatory view 176% £7.2bn 214% (2015: £5.5bn) £6.2bn £0.2bn (2015: £6.0bn) (2015: £1.2bn) entity level capital Surplus £3.1bn Surplus (2015: £
Slide 51: Solvency II: £6.7bn out of £7.2bn regulatory capital is tier 1
Introduction Full year results 2016 CEO update Questions and answers Appendix Solvency II: £6.7bn out of £7.2bn regulatory capital is tier 1 Regulatory view Tier 2 7% £0.5bn Capital from subordinated debt £1.1bn Capital from subordinated debt Tier 1 93% £5.6bn Excess of assets over liabilities High
Slide 52: Solvency II: Capital requirements reflect focus on fee business
Introduction Full year results 2016 CEO update Questions and answers Appendix Solvency II: Capital requirements reflect focus on fee business and our strong pension scheme and with profits funds Investor view Regulatory view Other2 Spread business Other1 22% 14% 20% Spread business (£10bn of 30% lia
Slide 53: Solvency II: Regulatory capital landscape
Introduction Full year results 2016 CEO update Questions and answers Appendix Solvency II: Regulatory capital landscape Regulatory framework Entity level Contribution to Group SII position Standard Life Investments BIPRU BIPRU SLAL: SII internal model SLAL: SII internal model UK and Europe Pensions
Slide 54: www.standardlife.com
www.standardlife.com Read our latest financial results Our financial results are available online and on our iPad app at standardlife.com/results Standard Life plc is registered in Scotland (SC286832) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH. www.standardlife.com © 2017 Standard Li