Quilter Plc · LSE:QLT
Quilter — H1 2022 Earnings Presentation
35 slides from Quilter's earnings presentation, Aug 10, 2022
Slide 1: 2022 Interim Results
Quilter Basic rBand Guidelines Our b rand a ssets 1 2022 Interim Results 10 August 2022
Slide 2: Disclaimer
Disclaimer This presentation should be read in conjunction with the announcement published by Quilter plc on 10 August 2022. This presentation may contain certain forward-looking statements with respect to certain Quilter plc’s plans and its current goals and expectations relating to its future fina
Slide 3: Presentation agenda
Presentation agenda Business review Paul Feeney Financial review Mark Satchel Strategic outlook Paul Feeney Q&A 3
Slide 4: H1 2022 summary: resilient performance in a challenging environment
H1 2022 summary: resilient performance in a challenging environment Financial momentum Operational improvement Strategic progress ➢ Robust gross flows and improved ➢ Optimisation initiatives complete, ➢ Number 1 for Platform industry persistency resulting in: delivering c.£65m cost saves Retail Advi
Slide 5: Affluent: strategic advances and improving profitability
Affluent: strategic advances and improving profitability H1 2022 highlights ➢ Resilient flows through tax year-end ➢ Strategic delivery: ➢ RFP back-books moving to the Platform ➢ Positive feedback to launch of enhanced WealthSelect IFA¹ ➢ Beneficiary of Simplification programme savings £59bn Revenue
Slide 6: High Net Worth: investment for growth bearing fruit
High Net Worth: investment for growth bearing fruit IFA¹ H1 2022 highlights £23bn ➢ 8 new Investment Manager hires y-o-y £25bn £25bn Advice Assets under management and Administered and ➢ Building out advice capabilities in Dublin and recruiting financial administration Managed planners in UK Quilter
Slide 7: Flow performance
Flow performance H1 21 Persistency H1 22 Persistency Gross flows Net flows Affluent 90% Affluent 91% £bn £bn High Net Worth 92% High Net Worth 94% Total 91% Total 92% 7.0 14% 2.5 5% 6.0 12% 2.0 4% 5.0 10% 1.5 3% 4.0 8% 3.0 6% 1.0 2% 2.0 4% 0.5 1% 1.0 2% 0.0 0% 0.0 0% H1 20 H2 20 H1 21 H2 21 H1 22 H1
Slide 8: Focusing on the core operations: £1.6bn net Platform inflows
Focusing on the core operations: £1.6bn net Platform inflows Platform gross flows Platform net inflows £bn £bn H1 19 Persistency H1 20 Persistency H1 21 Persistency H1 22 Persistency Platform 90% Platform 93% Platform 92% Platform 93% 2.5 H1 2019 H1 2020 H1 2021 H1 2022 £0.4bn £0.9bn £1.8bn £1.6bn 1
Slide 9: Platform flows: growing market share, performing well against peers
Platform flows: growing market share, performing well against peers Retail Advised platform gross flow market share¹ £bn 13% Platform 25 migrations completed 12% 20 11% ➢ Marked improvement in gross and net flows post-PTP completion 10% 15 ➢ Ranked first in industry gross flows, according to Fundsca
Slide 10: Focusing on the core operations: £0.5bn net High Net Worth inflows
Focusing on the core operations: £0.5bn net High Net Worth inflows High Net Worth gross flows High Net Worth net inflows £bn £bn H1 19 Persistency H1 20 Persistency H1 21 Persistency H1 22 Persistency HNW 86% HNW 92% HNW 92% HNW 94% H1 2019 H1 2020 H1 2021 H1 2022 0.8 (£0.4bn) £0.2bn £0.4bn £0.5bn 0
Slide 11: Quilter Financial Planning: focused on growing RFPs and driving productivity
Quilter Financial Planning: focused on growing RFPs and driving productivity Quilter advisers (RFPs)¹ ➢ Resilient adviser productivity: Quilter channel adviser flows onto Platform up 10% y-o-y to £954m 1,623 1,567 ➢ Adviser attrition back to normalised levels 2021 H1 22 ➢ Modest YTD net reduction in
Slide 12: Affluent Managed performance
Affluent Managed performance Strong investment performance from largest product ➢ WealthSelect (£10bn) ➢ MPS with strong and consistent track record ➢ Positive feedback from launch of Responsible, Sustainable and £26bn Passive portfolios £25bn £23bn £22bn ➢ Cirilium Active (£7bn) £19bn ➢ 10-year tra
Slide 13: Quilter actions to navigate through market volatility
Quilter actions to navigate through market volatility Advisers and investment managers remaining front and centre with clients Connecting with RFPs through recruitment and retention programmes Adding IFAs to the Platform and IMs in High Net Worth Maintaining cost management focus Remaining well capi
Slide 14: Financial review
Financial review Mark Satchel 10 August 2022
Slide 15: H1 2022 results: summary
H1 2022 results: summary ➢ Robust gross flows and improved persistency Key financials H1 H1 Continuing operations 2022 2021 ∆ Net flows / opening AuMA % 3 4 (1ppt) ➢ Revenue margins in line with guidance Adjusted profit before tax £m 61 56 +9% IFRS profit/(loss) after tax £m 151 (13) – ➢ Cost discip
Slide 16: Stable revenue and cost discipline driving increase in adjusted profit
Stable revenue and cost discipline driving increase in adjusted profit Net inflows Average AuMA Revenue £bn £bn £m Revenue +4% 48 47 margin (bps) (30%) (–%) 105.3 2.0 101.7 304 303 62 58 Other revenue 1.4 242 245 Net management fee H1 2021 H1 2022 H1 2021 H1 2022 H1 2021 H1 2022 Expenses Adjusted pr
Slide 17: AuMA: 2022 average converging with 2021 levels
AuMA: 2022 average converging with 2021 levels 2021 2022 2021 YTD cumulative average 2022 YTD cumulative average 115 115 110 110 Average AuMA (rolling YTD) (£bn) 105 105 Month-end AuMA (£bn) 100 100 95 95 90 90 85 85 80 80 75 75 1 Jan 2 Feb 3 Mar 4 Apr 5 May 6 Jun 7 Jul 8 Aug 9 Sep 10 Oct 11 Nov 12
Slide 18: Revenue margin progression in line with long-standing guidance
Revenue margin progression in line with long-standing guidance Revenue margin bps Quilter Cheviot Quilter Investment Platform Quilter Investors Affluent Managed Assets Quilter plc 80 70 60 50 40 30 20 Jun-19 Sep-19 Dec-19 Mar-20 Jun-20 Sep-20 Dec-20 Mar-21 Jun-21 Sep-21 Dec-21 Mar-22 Jun-22 Note: Qu
Slide 19: Expense discipline
Expense discipline Cost analysis As a percentage H1 2022 expense progression (£m) of revenues £m H1 H1 H1 H1 2022 2021 2022 2021 (7) 13 Support staff costs 58 63 10 (10) Operations 9 13 (12) Technology 14 16 Property 16 15 Other base costs¹ 15 13 Sub-total base costs 112 120 37% 39% Revenue-generati
Slide 20: Continued strong solvency and holding company cash position
Continued strong solvency and holding company cash position Solvency II ratio 275% (56%) 5% 219% (3%) (2%) ➢ Pro forma Solvency II ratio remains strong after completion of capital return programmes ➢ Decision on Tier 2 Bond to be finalised – call date in early 2023 T2 bond: 35% Solvency Quilter Inte
Slide 21: H1 2022 dividend and capital returns
H1 2022 dividend and capital returns Dividend Return of Quilter International proceeds ➢ Board declared 2022 interim dividend of 1.2p, unchanged on a ➢ £328m capital return via ‘B’ share mechanism and share consolidation continuing basis ➢ ‘B’ shares issued on a 1:1 basis with each ‘B’ share redeeme
Slide 22: Capital Markets Day targets
Capital Markets Day targets ➢ Target net inflow growth of at least 6% of opening AuMA per annum over medium-term, with a higher percentage growth rate from the Net flows Affluent segment ➢ High Net Worth managed assets (Quilter Cheviot) broadly stable around 70bps Revenue margins ➢ Affluent managed
Slide 23: Outlook and financial summary
Outlook and financial summary Outlook ➢ Improving productivity and driving flow momentum ➢ Expense discipline maintained – focused efficiency and profit growth Earnings Expenses Balance sheet ➢ Adjusted profit +9% to £61m ➢ Prudently capitalised liquid balance ➢ Cost discipline credentials maintaine
Slide 24: Concluding remarks
Concluding remarks Paul Feeney 10 August 2022
Slide 25: Our 2022 priorities remain true in a challenging environment
Our 2022 priorities remain true in a challenging environment Revenues: target improving net flows and higher proportion of Quilter-managed flows Costs: enhancing efficiency through strong cost management and Simplification Operating leverage: from growing Platform and investment solutions Moving up
Slide 26: Q&A
Q&A Quilter
Slide 27: Appendix
Appendix 10 August 2022 Quilter
Slide 28: Quilter: a differentiated model with clear benefits to clients and shareholders
Quilter: a differentiated model with clear benefits to clients and shareholders Model Benefits Customer High Net Worth segment Quality assured choice Affluent Advice Quilter Breadth and strategic control of distribution IFA channel² channel¹ Platform Platform Scale and operating leverage Investment
Slide 29: Quilter: a value-adding integrated model
Quilter: a value-adding integrated model (7%) y-o-y What we do? (4%) y-o-y IFA¹ £82bn ➢ Originate client assets: £99bn total assets £99bn £41bn Advice Assets under management and Administered and administration Managed² ➢ Administer client assets: £75bn under administration Quilter £17bn ➢ Manage cl
Slide 30: Movement in assets and flows
Movement in assets and flows Of which managed by AuMA* AuMA* Quilter as at 31 as at 30 AuM as at December Gross Net June 30 June 2022 YTD gross flows, net flows & AuMA (£bn), unaudited 2021 flows* (£m) Flows* (£m) 2022 2022 AFFLUENT SEGMENT Quilter channel 11.7 1,323 954 10.8 7.4 IFA channel 60.0 2,
Slide 31: Quilter Investors: investment performance
Quilter Investors: investment performance June-22 Since Fund vs IA sector benchmark 3Y 5Y 10Y YTD inception1 Cirilium Active Conservative Portfolio 3 3 4 1 1 Cirilium Blend Conservative Portfolio 1 1 Conservative WealthSelect Managed Active 3 1 1 1 1 WealthSelect Managed Blend 3 1 1 1 1 Cirilium Act
Slide 32: Organising Affluent's proposition to better serve clients
Organising Affluent’s proposition to better serve clients WealthSelect Moving to Platform management c.£10bn c.£10bn c.£10bn c.£10bn External funds External c.£2bn funds Quilter Quilter Platform Quilter Platform Quilter Investors c.£8bn Investors MPS charge Fund administration Fund management Admini
Slide 33: High Net Worth: solid investment performance
High Net Worth: solid investment performance Solid investment performance Quilter Cheviot performance vs. ARC Sterling PCI Index, at 31 March 2022 Relative % vs ARC PCI Balanced Steady Growth Equity Risk 3 year Quilter Cheviot 14.5% 20.3% 23.7% ARC PCI 15.3% 19.3% 23.5% Relative (0.8%) +1.0% +0.2% R
Slide 34: Environmental, Social & Governance credentials
Environmental, Social & Governance credentials Quilter’s management of ESG issues set out in our Responsible Wealth Manager framework By acting and investing responsibly… …we can deliver against our … measured against targets and KPIs: environmental and social priorities… (Additional responsible inv
Slide 35: Quilter Basic r B and Guidelines Our b rand a
Quilter Basic rBand Guidelines Our b rand a ssets 1