Standard Life Plc · LSE:SDLF
Standard Life — Phoenix Group Holdings — FY2024 Earnings Presentation
61 slides from Standard Life's earnings presentation, Mar 17, 2025
Slide 1: Full year 2024 results
Full year 2024 results Phoenix Group Holdings plc 17 March 2025
Slide 2: Agenda
Agenda Executing on our 3-year strategy 1 Andy Briggs, Group Chief Executive Officer Delivering on our financial framework 2 Nicolaos Nicandrou, Group Chief Financial Officer Looking ahead 3 Andy Briggs, Group Chief Executive Officer 2
Slide 3: Executing on our 3-year strategy
Executing on our 3-year strategy Andy Briggs Group Chief Executive Officer
Slide 4: 2024 financial performance driving upgrades to 3-year targets
2024 financial performance driving upgrades to 3-year targets FY24 progress Our 3-year targets • Achieved OCG target 2 years early – expected to grow at £1,403 million Operating Cash Generation ‘OCG’ mid-single digit % going forward Cash £1,779 million Total cash generation ‘TCG’ Upgraded • 2024-202
Slide 5: Achieved our 2026 Operating Cash Generation target early
Achieved our 2026 £1.4bn Operating Cash Generation target two years early Sustainable and growing OCG more than covers recurring uses… …building financial strength and flexibility +22% £1.4bn Excess cash £1.1bn Progressive and sustainable dividend well covered and secure(4) Dividend OCG c.£300m p.a.
Slide 6: Our vision is to become the UK's leading retirement savings and income business
Our vision is to become the UK’s leading retirement savings and income business Digital customer interface with personalised data, guidance and advice Innovative retirement Pensions and Savings Retirement Solutions income solutions Asset and fund performance optimised by Phoenix Asset Management Eff
Slide 7: Helping people secure a life of possibilities is a huge market opportunity
Helping people secure a life of possibilities is a huge market opportunity Pensions and Savings Retirement Solutions Our customer Workplace pensions Retail Annuities solutions Direct Intermediated Individual annuities Bulk Purchase Annuities Annual £70-80bn(5) £100-120bn(6) £7-9bn(7) £40-60bn(8) mar
Slide 8: Pensions and Savings propositions help customers journey through retirement
Our Pensions and Savings propositions help customers journey to and £187bn AUA through retirement Our capital-light fee-based Pensions and Savings business Workplace – £67bn AUA Strong financial performance Why we win What enables this • Award-winning Master Trust Leading employer proposition • Sust
Slide 9: Retirement Solutions help customers secure income certainty
Our Retirement Solutions help customers secure income certainty £40bn AUA in retirement Our capital-utilising spread-based Retirement Solutions business BPA Strong financial performance Why we win What enables this • Deep customer engagement across several channels Excellent member experience • Digi
Slide 10: Phoenix Asset Management drives value through recurring management actions
Phoenix Asset Management drives value through recurring management actions and better outcomes for customers Invested in building strong in-house expertise… …to support delivery across the business Pensions and Savings >400 FTE in 2024 from <50 FTE in 2020 • Innovative investment propositions for cu
Slide 11: Successfully executing on our 3-year strategy
Successfully executing on our 3-year strategy We are delivering We are on track to deliver We are deleveraging and profitable growth through upgraded 2026 targets will grow our balance sheet Pensions and Savings and across our financial over time Retirement Solutions framework of cash, capital and e
Slide 12: Delivering on our financial framework
Delivering on our financial framework Nicolaos Nicandrou Group Chief Financial Officer
Slide 13: Uplift in financial performance in 2024
Uplift in financial performance in 2024 Cash Capital Earnings Cash Capital Earnings Operating Cash Generation Shareholder Capital IFRS adjusted Coverage Ratio(1,2) operating profit £1,403m 172% £825m FY23: £1,146m FY23: 176% FY23: £629m(11) Total cash generation Solvency II leverage ratio(3) IFRS lo
Slide 14: Target upgrades driven by outperformance and increased confidence in delivery
Target upgrades driven by outperformance and increased confidence in delivery Cash Capital Earnings Operating Cash Generation Total cash generation IFRS adjusted operating profit Upgraded £1.4bn £4.4bn £5.1bn £900m c.£1.1bn targets Achieved 2026 target in FY24 Prior target across New target across P
Slide 15: Operating Cash Generation target achieved ahead of plan
£1.4bn Operating Cash Generation target achieved ahead of plan Cash Capital Earnings +22% £1.4bn • 22% increase in OCG, supported by business momentum and growth in £1.1bn £0.5bn recurring management actions Recurring management £0.3bn • Expect mid-single digit % growth in OCG actions going forward
Slide 16: Recurring management actions delivered ahead of plan
£537m recurring management actions delivered ahead of plan Cash Capital Earnings Annuity portfolio Capital improvements Fund simplification re-optimisation What we do • Evolve our annuity backing assets whilst • Improve our capital and balance sheet • Increase efficiency of fund management staying c
Slide 17: Operating Cash Generation creates excess cash
£1.4bn Operating Cash Generation creates c.£0.3bn of excess cash Cash Capital Earnings £1.4bn • Business model set to deliver excess OCG c.£0.3bn after: • c.£0.7bn to service dividend and debt c.£0.2bn interest costs c.£0.1bn • c.£0.2bn p.a. allocation to annuities c.£0.2bn • Excess to be deployed i
Slide 18: Higher annual Operating Cash Generation drives target upgrade
Higher annual Operating Cash Generation drives £700m upgrade in 3-year total cash generation target Cash Capital Earnings Delivered TCG ahead of our FY24 target… …supporting our upgraded 2024-2026 TCG target +£700m £1.8bn £5.1bn Non-operating Non-operating £1.4-1.5bn £0.4bn £0.7bn cash generation ca
Slide 19: Total cash generation gives flexibility to address leverage
£5.1bn total cash generation gives substantial flexibility to address leverage over 2024-2026 period Cash Capital Earnings £5.1bn TCG 2024-2026 sources c.£0.7bn £4.4bn OCG c.£0.7bn Investment in strategic priorities c.£2.7bn 2024-2026 Dividend, operating costs and debt interest uses c.£0.6bn £1.1bn
Slide 20: Positive recurring capital generation with deleveraging focus
Positive recurring capital generation with utilisation focused on deleveraging Cash Capital Earnings +5% SCCR (4)% SCCR 176%(2) 177% 172%(1,2) £0.5bn • Contribution from recurring items: £(0.9)bn £0.2bn £0.8bn • Surplus: £0.2bn £3.9bn £3.8bn £(0.2)bn £(0.2)bn £3.5bn • Own Funds: £0.3bn £(0.3)bn £(0.
Slide 21: Increased flexibility to achieve leverage target
Increased flexibility to achieve c.30% Solvency II leverage ratio target Cash Capital Earnings SII leverage ratio unchanged Illustrative path to c.30% SII leverage ratio(3) target by the end of 2026 despite £250m debt repayment 36% 2%pts 36% FY23 FY24 (2)%pts SII leverage 36% 36% 1%pts c.29% (6)%pts
Slide 22: Hedging protects cash and Solvency II surplus
Hedging protects cash and Solvency II Surplus which protects dividend payments Cash Capital Earnings Protects SII surplus and therefore Hedge unrewarded market risks Reduced SCR on SII balance sheet cash generation What we do Low SII surplus sensitivities SII undiversified shareholder SCR† Hedged ri
Slide 23: 31% growth in IFRS adjusted operating profit
31% growth in IFRS adjusted operating profit Cash Capital Earnings FY23(11) FY24 % growth • Growth in Group AUA supported by business trading performance Pensions and Savings £190m £316m +66% • Higher CSM release and further value added by Phoenix Retirement Solutions £378m £474m +25% Asset Manageme
Slide 24: Clear plan to deliver cost savings and phased investment
Clear plan to deliver £250m run-rate cost savings by end of 2026 and phased investment spend Cash Capital Earnings Path to £250m annual cost savings by 2026, net of inflation Phasing of c.£700m post-tax planned investment in strategic priorities £1.20bn Total c.£700m £63m c.£62m c.£350m c.£125m c.£0
Slide 25: Pensions and Savings AUA movements and operating profit
66% IFRS adjusted operating profit increase in capital-light, fee-based Pensions and Savings Cash Capital Earnings £(3.7)bn +7% • Workplace: growing net fund inflows Flows: £(3.4)bn AUA: +11% † demonstrate leading market position £9.3bn £186.5bn £174.4bn AUA movements Workplace £8.5bn £14.4bn £12.3b
Slide 26: Retirement Solutions operating profit increase
25% IFRS adjusted operating profit increase in capital-utilising, spread-based Retirement Solutions Cash Capital Earnings £3.3bn 0% • BPA: Disciplined market participation, Flows: £2.4bn AUA: Top 5 player(10) £40.4bn £40.3bn AUA movements BPA £6.2bn £5.1bn • Individual annuities: Strong YoY growth i
Slide 27: Contractual Service Margin growth
14% Contractual Service Margin growth, a store of future profits Cash Capital Earnings +14% £3,538m £158m £(281)m • CSM total up 14% driven by: £3,257m £212m £67m • New annuity business £2,853m £248m • Positive assumption changes • +17% YoY increase in total CSM release of £281m, equivalent to 8% of
Slide 28: Upgrading 2026 IFRS adjusted operating profit target
Upgrading 2026 IFRS adjusted operating profit target to c.£1.1bn Cash Capital Earnings c.£1,100m • c.£1.1bn target to be underpinned by: +31% £900m • Growth in the underlying businesses £825m • Ongoing value creation by Phoenix Asset Management £629m • Achievement of £250m run-rate cost savings in 2
Slide 29: IFRS adjusted operating profit covers recurring uses
IFRS adjusted operating profit will more than cover recurring uses Cash Capital Earnings c.£1.1bn c.£0.1bn • At c.£1.1bn we create sufficient IFRS adjusted operating profit to more than cover recurring uses c.£0.3bn • Deleveraging will reduce debt interest from current levels. Amortisation will cont
Slide 30: Decline in shareholders' equity under IFRS 17
Decline in shareholders’ equity a known consequence of hedge-related volatility under IFRS 17 Cash Capital Earnings Sum of recurring sources and uses FY24: £(182)m (FY23: £(408)m) £3,643m £3,656m £3,567m £3,567m £(533)m £825m £3,034m Decline in shareholders’ equity £(204)m £2,830m £2,742m due to adv
Slide 31: Difference between Solvency II and IFRS balance sheet
Difference between Solvency II and IFRS balance sheet causes volatility in IFRS shareholders’ equity from hedging Cash Capital Earnings FY24 IFRS shareholders’ equity to shareholder SII bridge Higher FY24 sensitivity in IFRS SH equity than SII surplus Impact of hedging in FY24 (post-tax) £(0.9)bn† +
Slide 32: Ample headroom to pay progressive and sustainable dividend
Ample headroom to pay progressive and sustainable dividend on a Cash, Capital and Earnings basis Cash Capital Earnings Cash Capital Earnings Shareholder Capital Distributable reserves of Operating Cash Generation Coverage Ratio(1,2) parent company £1.4bn 172% £5.6bn Mid-single digit % growth 140-180
Slide 33: Operating momentum will underpin financial progress
Operating momentum will underpin our financial progress Cash Capital Earnings Cash Capital Earnings Upgraded OCG delivering excess cash Excess cash generation supports Upgraded IFRS adjusted operating every year deleveraging target (3) profit target covers recurring uses £1.4bn 36% c.£1.1bn Excess p
Slide 34: Looking ahead
Looking ahead Andy Briggs Group Chief Executive Officer
Slide 35: Delivering our vision through our strategic priorities
Delivering our vision through our strategic priorities Grow Optimise Enhance Priority: Meeting more of our existing customer needs Optimising our in-force business and balance Transforming our operating model and culture and acquiring new customers sheet Key delivery: Develop innovative Retail propo
Slide 36: Q&A
Q&A ail Phoenix
Slide 37: Appendices
Appendices ail Phoenix
Slide 38: Appendices
Appendices 1. Group cash flow analysis 16. Shareholder credit portfolio 2. 3-year total cash generation targets across 2022-2026 17. Diversification of illiquid asset portfolio as at 31 December 2024 3. Debt maturity profile and leverage ratios as at 31 December 2024 18. ESG ratings and collaboratio
Slide 39: Group cash flow analysis
Appendix 1: Group cash flow analysis FY24 • Strong total cash generation of £1,779m in the period funds our uses of cash Cash and cash equivalents at 1 January 2024 £1,012m • Non-operating net cash outflows of £314m (FY23: £111m) include: Total cash generation(1) £1,779m Uses of cash: o £(354)m of i
Slide 40: 3-year total cash generation targets
Appendix 2: 3-year total cash generation targets across 2022-2026 2022-2024 total cash generation 2023-2025 total cash generation 2024-2026 total cash generation £5.3bn Likely to £5.1bn outperform £4.5bn £1.3bn £0.7bn Upgrade over-delivery Balance £0.4bn Upgrade 2024 £1.8bn £0.7bn £4.0bn remaining B
Slide 41: Debt maturity profile and leverage ratios
Appendix 3: Debt maturity profile and leverage ratios as at 31 December 2024 Leverage ratios £500m FY23 FY24 SII leverage(4,7) 36% 36% £250m $500m(1,2) Fitch basis(5,7,8) 23% 23% £500m (1) £500m $500m (2) €500m (2) £350m (1) $350m (1,2) IFRS basis(6,7,8) 46% 52% $250m (1,2,3) £197m 1H25 2H25 1H26 2H
Slide 42: Additional Solvency II disclosures
Appendix 4: Additional Solvency II disclosures PGH SII Regulatory Coverage Ratio PGH SCCR(1,2) FY24 PGH Own Funds by capital tier £8.4bn 154% 152% 176% 172% Tier 3 Tier 2 Surplus Surplus Surplus Surplus £4.9bn £3.9bn £3.9bn £3.5bn £3.5bn £11.1bn £10.3bn £8.9bn £8.4bn Tier 1 £7.2bn £6.8bn £5.0bn £4.9
Slide 43: Change in Life Company Free Surplus
Appendix 5: Change in Life Company Free Surplus £0.3bn £0.5bn £(1.8)bn £0.9bn £2.2bn £(0.2)bn £0.2bn £(0.2)bn £1.9bn OCG Free surplus Surplus generation Recurring Other Cash remittances New business Cash remittances from Economics and other Free surplus as at FY23 and release of management managemen
Slide 44: Movement in assets under administration
Appendix 6: Movement in assets under administration Movement in AUA from 1 January 2024 to 31 December 2024 Split by segment £23.9bn £13.9bn £292.0bn £282.5bn £29.0bn £(28.3)bn £36.2bn £(4.4)bn Group net fund flows £292.0bn £40.3bn £186.5bn Opening AUA Gross Gross Market movements Closing FY24 inflo
Slide 45: Movement in assets under administration by segment
Appendix 7: Movement in assets under administration by segment Retirement Solutions With-Profits Europe and Other FY23 AUA £40.4bn FY23 AUA £28.6bn FY23 AUA £39.1bn Gross inflows Gross inflows - new £5.7bn - new £2.0bn Gross inflows £0.2bn - existing Gross inflows Net flows of Net flows of Gross inf
Slide 46: Pensions and Savings movement in AUA
Appendix 8: Movement in assets under administration by segment (Pensions and Savings) Pensions and Savings – total AUA Pensions and Savings – Workplace Pensions and Savings – Retail FY23 AUA £57.5bn FY23 AUA £116.9bn c.10% Gross inflows Gross inflows £4.3bn £2.7bn - new - new Gross inflows Net flows
Slide 47: PGH Solvency II Shareholder Capital Coverage Ratio sensitivities
Appendix 9: PGH Solvency II Shareholder Capital Coverage Ratio sensitivities Unrewarded market risks(14) Demographic risks(14) Rewarded market risks(14) Base position Equities Long-term Long-term Long-term Currency Currency Lapse Longevity Property† Credit Credit†† 20% fall in rates rates inflation
Slide 48: IFRS sensitivities
Appendix 10: IFRS sensitivities IFRS Shareholders’ equity Post-tax P&L impact CSM impact Equities -10% £250m Equities -10% £250m Equities -10% £(50)m Equities +10% £(245)m Equities +10% £(245)m Equities +10% £44m Long-term Long-term Long-term £403m £558m £(12)m rates -100bps rates -100bps rates -100
Slide 49: IFRS shareholders' equity to intrinsic value walk
Appendix 11: IFRS shareholders’ equity, to SII Own Funds, to intrinsic value walk IFRS shareholders’ equity to SII Own Funds (excl. debt) Illustrative view of sources of future value (not to scale) £(1.4)bn £4.6bn £3.6bn £(1.3)bn £2.5bn £1.2bn Shareholders’ CSM (net IFRS Investment Other SII Own Con
Slide 50: 2024 IFRS adjusted operating profit drivers
Appendix 12: 2024 IFRS adjusted operating profit drivers Operating profit Expected Non-financial Risk adjustment Total operating CSM release on investment investment experience Other†† release profit contracts margin variances Pensions and Savings £33m £12m £349m - £9m £(87)m £316m Retirement Soluti
Slide 51: Pensions and Savings IFRS adjusted operating profit analysis
Appendix 13: Pensions and Savings IFRS adjusted operating profit analysis 2024 2023(11) • Insurance result benefits from H124 H224 2024 H123 H223 2023 higher CSM release due to positive market performance CSM & RA release £18m £27m £45m £7m £26m £33m Other insurance items £(2)m £11m £9m £(23)m £(5)m
Slide 52: Retirement Solutions IFRS adjusted operating profit analysis
Appendix 14: Retirement Solutions IFRS adjusted operating profit analysis 2024 2023(11) • Increase in CSM release driven by H124 H224 2024 H123 H223 2023 new business CSM release £73m £77m £150m £66m £63m £129m • Expected investment margin RA release £10m £14m £24m £9m £10m £19m increased from highe
Slide 53: Movement in Group Contractual Service Margin
Appendix 15: Movement in Group Contractual Service Margin, including segmental split Movement of the Group CSM from 1 January 2024 to 31 December 2024 +14% £3,538m £158m (£281m) £3,257m £212m £67m £2,853 £248m £(814)m £2,443m Total CSM New business Interest Assumption Other, incl. one- Total CSM CSM
Slide 54: Shareholder credit portfolio
Appendix 16: Shareholder credit portfolio Prudently positioned shareholder credit portfolio Credit rating AAA AA A BBB 12% 38% 31% 18% 1% 33% BB & below 42% £38.4bn Shareholder credit assets are a small proportion of our c.£292bn balance sheet (c.13%) 12% Our prudent portfolio is c.99% investment gr
Slide 55: Diversification of illiquid asset portfolio
Appendix 17: Diversification of illiquid asset portfolio as at 31 December 2024 Equity Release Mortgages Housing Associations £4.8 billion with AA rating £1.2 billion with A rating £0.9bn • Broad regional spread with average LTV of 32% £0.7bn • 100% of portfolio is secured on assets £1.0bn • Average
Slide 56: ESG ratings and collaborations
Appendix 18: ESG ratings and collaborations Strong ESG ratings Collaborations and Commitments Ratings agency FY23 FY24 Change MSCI AA AAA Sustainalytics 20.3 / medium risk 18.5 / low risk CDP A- A- S&P Global ESG 61 63 ISS ESG corporate rating C prime C+ prime ESG ratings may vary among ESG rating a
Slide 57: 2025 sustainability commitments
Appendix 19: 2025 sustainability commitments ESG Theme: Planet ESG Theme: People We want to help shape a better future. This means delivering good We want to help people live better longer lives. This means tackling the outcomes for our customers, playing a key role in delivering a net zero pensions
Slide 58: Footnotes
Appendix 20: Footnotes 1. 31 December 2024 Solvency II capital position is an estimated position. 2. The Shareholder Capital Coverage Ratio excludes Solvency II Own Funds and Solvency Capital Requirements of unsupported With-Profit funds and unsupported pension schemes. 3. Solvency II leverage ratio
Slide 59: Footnotes continued
Appendix 20: Footnotes (continued) 11. The Group identified material corrections to previously reported results, leading to the restatement of 2023 adjusted operating profit from £617 million reported to £629 million, the 2023 loss after tax from £88 million as reported to a profit of £84 million, a
Slide 60: Footnotes continued
Appendix 20: Footnotes (continued) 21. Credit stress varies by rating and term and is equivalent to an average 127bps spread widening. It assumes the impact of a mechanical recalculation of transitionals and makes no allowance for the cost of defaults/downgrades. 22. Impact of an immediate full lett
Slide 61: Legal disclaimer
Legal disclaimer This presentation in relation to Phoenix Group Holdings plc and its subsidiaries (the ‘Group’) contains, and the Group may make other statements (verbal or otherwise) containing, forward-looking statements and other financial and/or statistical data about the Group’s current plans,
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