Quilter PLC · LSE:QLT
Quilter — Investor Presentation (2024)
34 slides from Quilter's investor presentation, Oct 5, 2024
Slide 1: Investor introduction Autumn 2024
Investor introduction Autumn 2024 2024
Slide 2: Business overview
Business overview Quilter
Slide 3: A transformed investment case: Quilter now vs at Listing
A transformed investment case: Quilter now vs at Listing June 2018 Autumn 2024 Sold in Quilter International 2021 for c.£1.3bn¹ returned to shareholders £481m Sold in Quilter Life Assurance Market cap £2.7bn 2020 for £425m Sold in Single Strategy business 2018 for £583m Core business Core business M
Slide 4: Quilter's core business: two segments – Affluent and High Net Worth
Quilter’s core business: two segments – ‘Affluent’ and ‘High Net Worth’ High Net Worth Affluent Key competitors High Net Worth Integrated Advice Key competitors • Brewin Dolphin Discretionary investment Advice, platform administration High Net Worth management and advice and investment solutions Qui
Slide 5: How we make money
How we make money Quilter
Slide 6: How we make money: segments
How we make money: segments High Net Worth Affluent Asset management & advice Asset administration, asset management & advice H1 2024 H1 2024 revenues earned revenues earned £112m +4% £206m +6% Y-o-Y Y-o-Y 71bps DFM fee 25bps Platform fee £94m £98m £28bn £77bn 37bps management fee £53m Share of fees
Slide 7: Investment income
Plus investment return on shareholder funds A 50% decline in interest rates would be offset by a 5% increase in AuMA Investment income Head Office/ Group Capital sensitivity to interest rates £m 80 70 60 Investment income 50 40 £37m 30 £28m 20 10 0 1 2 3 4 5 H1 2023 H1 2024 Quilter achieved interest
Slide 8: Financials: H1 2024 – strong year-on-year growth
Financials: H1 2024 – strong year-on-year growth High Net Worth Affluent Group Revenues Adjusted profit Revenues before tax¹ £112m £206m 25 +9% Y-o-Y Expenses Expenses £97m £87m £134m +33% Y-o-Y Profit before tax Profit before tax 72 Operating margin Operating margin £25m 22% +1ppt Y-o-Y £72m 35% +7
Slide 9: Key areas of strategic focus: Building Distribution
Key areas of strategic focus Flows Building Enhancing Distribution Propositions 9
Slide 10: Where do flows come from?
Where do flows come from? Two strong distribution channels: IFAs and Quilter RFPs – delivering a strong flow funnel Independent Financial Advisers (IFAs) Quilter Restricted Financial Planners (RFPs) Strategy: Grow, broaden, deepen Strategy: Grow number & improve productivity 2,000 important relation
Slide 11: Gross flows in H1 2024
Gross flows in H1 2024 IFA channel Quilter channel +50% y-o-y +16% y-o-y £3.8bn +30% y-o-y £2.1bn £1.1bn +45% y-o-y £0.4bn HNW Affluent HNW Affluent 11
Slide 12: A closer look at Affluent: administered vs managed AuMA in H1 2024
A closer look at Affluent: administered vs managed AuMA in H1 2024 Platform Investment solutions £79bn¹ assets under administration £15bn £28bn¹ assets under management £64bn £14bn £14bn IFAs Quilter advisers IFAs Quilter advisers Note: Numbers may not cast dues to rounding. 1. Excludes non-core ass
Slide 13: Managed Portfolio solutions
Principal solutions Revenue margins Growth dynamic Cirilium Active c.£4bn (31)% y-o-y c.65bps Declining Fund of funds solutions Cirilium c.£7bn +20% y-o-y c.25-45bps Growing Blend/Passive WealthSelect Managed Portfolio c.£9bn +23% y-o-y c.30bps Growing Active solutions WealthSelect c.25bps Growing c
Slide 14: Key areas of strategic focus: Efficiency
Key areas of strategic focus Efficiency Driving Efficiency 14
Slide 15: Transformation: building a scalable and efficient operating model
Transformation: building a scalable and efficient operating model Three key initiatives to deliver a 30% operating margin Advice Transformation Programme High Net Worth evolution Organisational simplification Transforming our advice technology and Evolving our commercial proposition and Continuing o
Slide 16: How we have performed
How we have performed Quilter
Slide 17: How we have performed: continued improvement in IFA market share
How we have performed: continued improvement in IFA market share Quilter Platform market share¹: gross flows and assets Quilter Platform IFA channel net transfer trends by source of funds² % H1 2023 vs H1 2024 15% H1 2023 H1 2024 Total share of gross flows Total share of stock 14% 13% 12% 11% 10% 9%
Slide 18: How we have performed since completing strategic reshaping
How we have performed since completing strategic reshaping Driving continuous efficiency and profitability improvements Operating expenses £m Operating margin (6%) +11 ppts 29% 30% 248 242 236 232 24% 20% 18% H1 2021 H1 2022 H1 2023 H1 2024 Medium- H1 2021 H1 2022 H1 2023 H1 2024 term target Adjuste
Slide 19: Efficient capital and balance sheet management
Efficient capital and balance sheet management 1 ➢ Group capital requirements (regulatory capital and stress buffers) On-going ➢ Current year dividend cash needs ➢ Working capital and interest Solvency II Ratio 2 268% Investing ➢ Growth investment organically ➢ Simplification programme Capital inves
Slide 20: Strategic positioning and investment case
Strategic positioning and investment case 20
Slide 21: What differentiates Quilter?
What differentiates Quilter? Balanced business mix covering the entire waterfront of UK wealth Channel agnostic: strong market positions in IFA and restricted channels Open, unbundled business model with transparent pricing All products/ services available to our advisers and IFAs – ensures they are
Slide 22: Building the UK's best-in-class wealth manager
Building the UK’s best-in-class wealth manager Delivering our strategy of efficiency and faster growth UK-wide recognised Grow Quilter adviser wealth manager and IM numbers Support access to advice: through adviser Advice and productivity and solutions technology investment Customer Delivering focus
Slide 23: Summary: Quilter is a high quality, scaled and diversified business
Summary: Quilter is a high quality, scaled and diversified business Structural growth in a large fragmented UK wealth management market Scaled and integrated dual distribution, full-service model Clear success from strategic transformation driving total shareholder returns 23
Slide 24: Appendix
Appendix Quilter
Slide 25: Client pricing: open, unbundled, with choice at the heart
Client pricing: open, unbundled, with choice at the heart Average fees example, reflecting current predominant choice by clients & their advisers % of investment Total Upfront Ongoing p.a. Equivalent p.a. Total Financial p.a/ Wrapper / Investment Total Advice Total Advice A+B Advice 10 Years Admin M
Slide 26: H1 2024 flows: Group perspective – strong YoY growth
H1 2024 flows: Group perspective – strong YoY growth Quilter plc reported Quilter plc reported – long-term flow trend £bn £bn Gross flows Net flows 8.0 YoY growth: +34% +669% 6.0 4.0 2.0 0.0 Net/opening¹: 3.6 3.8 3% -2.0 -4.0 -6.0 0.7 0.8 -8.0 H1'22 H2'22 H1'23 H2'23 H1'24 Q1'24 Q2'24 Q1'24 Q2'24 Gr
Slide 27: H1 2024 flows: High Net Worth – consistent strong new business momentum
H1 2024 flows: High Net Worth – consistent strong new business momentum High Net Worth High Net Worth flows by channel £bn £bn Gross flows Net flows 2.0 YoY Growth: +33% +98% 1.5 0.8 0.8 1.0 0.5 Net/opening¹: 0.0 0.6 0.6 1% -0.5 0.0 -1.0 0.1 0.2 0.2 -1.5 0.1 0.2 0.0 -2.0 (0.2) H1'22 H2'22 H1'23 H2'2
Slide 28: H1 2024 flows: Affluent – strong momentum increasing into Q2
H1 2024 flows: Affluent – strong momentum increasing into Q2 Affluent: Quilter Platform Affluent: including funds on third-party platforms £bn £bn Gross flows Net flows Gross flows Net flows YoY Growth: +41% +114% +36% +158% 2.9 2.7 Net/opening¹: 6% Net/opening¹: 1.8 2.0 5% 3.1 3.0 1.2 1.1 0.4 0.5 0
Slide 29: Affluent: Step change in IFA net Platform flows
Affluent: Step change in IFA net Platform flows Initiatives driving year-on-year improvement • Refocused sales incentives on deepening relationships with existing advisers on Platform • Reviewed sales segmentation model • Changes to leadership and sales team structures Cumulative Platform weekly net
Slide 30: Affluent: Faster growth in higher margin, longer duration assets
Affluent: Faster growth in higher margin, longer duration assets Quilter Platform net flows by relationship Quilter Platform net flows by product £bn £bn % opening Pension Investment bond ISA Unwrapped AuMA/AuA £2.2bn +6% £2.2bn Y-o-Y growth +106% 1.1 +11% % opening AuMA/AuA +3% £1.0bn £1.0bn +91% A
Slide 31: Industry insight: advised Platform outflows as a percentage of AuM
Industry insight: advised Platform outflows as a percentage of AuM 0.0% 0.5% 1.0% 1.5% 2.0% 2.5% 3.0% 3.5% 4.0% 4.5% Morningstar Wealth Platform 4.5% Wealthtime 4.3% Aegon Retirement Choices 3.8% Aegon Platform 3.7% SS&C Hubwise 3.6% M&G Wealth Platform 3.4% abrdn 3.3% Parmenion 3.2% 7IM 3.1% Fideli
Slide 32: Industry insight: advised Platform sales trends
Industry insight: advised Platform sales trends Source: The Lang Cat 32
Slide 33: Industry insight: scale = flows
Industry insight: scale = flows Source: The Lang Cat, as at Q1 2024 33
Slide 34: Disclaimer
Disclaimer This presentation may contain forward-looking statements with respect to certain Quilter plc’s plans and its current goals and expectations relating to its future financial condition, performance and results. By their nature, all forward-looking statements involve risk and uncertainty bec