St. James's Place Plc · LSE:STJ
St. James's Place — H1 2023 Earnings Presentation
46 slides from St. James's Place's earnings presentation, Jul 27, 2023
Slide 1: Investor Pack
S! Jamess Place VES NEL
Slide 2: Contents
Contents Overview: Our business Our new Our financial Appendix Business in detail business performance model and performance strategy 2
Slide 3: Overview: business model & strategy
O iew: busi © model & 5/2299 N \ J Sf y \ SJP
Slide 4: St. James's Place overview
St. James's Place overview We’re a leading UK financial We’ve got a differentiated We’re well positioned to advice business advice-led business model benefit from long-term Established 1991 Providing holistic financial market growth Listed in the UK and part planning and wealth Favourable demographi
Slide 5: The market opportunity: rising retail wealth
The market opportunity: rising retail wealth UK aggregate wealth by age cohort 30% 13.1 million 28% 25% 24% ‘mass affluent’ 20% and high net worth 20% individuals… …controlling £2.6tn 15% of liquid assets 10% 10% 10% Source: GlobalData 5% 4% 3% 1% 0% 16 - 24 25 - 34 35 - 44 45 - 54 55 - 64 65 - 74 7
Slide 6: The value of advice
The value of advice Financial Investment Client net planning returns outcomes Trusted personal relationship 6
Slide 7: The market opportunity: rising demand for advice
The market opportunity: rising demand for advice Flexibility + Tax complexity Intergenerational complexity via ‘pension wealth freedom’ transfer Perfect environment for client-focused Decline of Growing UK advice business DB pensions savings gap 7
Slide 8: The market opportunity: undersupply of advice
The market opportunity: undersupply of advice Number of retail investment advisers 45,000 The UK advice gap is large 27,651 40,000 25,616 13.1 million UK mass affluent 35,000 27,839 27,557 27,501 26,677 individuals controlling £2.6 trillion 26,311 23,787 25,611 21,684 30,000 of investable assets 21,
Slide 9: Our business model
Our business model Benefits Advice Our clients: an end-to-end, connected proposition focused on great long-term outcomes Platform & Vertical Administration Our Partnership: superior support integration to build a great business over the long-term Investments Our shareholders: long-term, sustainable
Slide 10: Our 2025 strategy
Our 2025 strategy Where we’re going Our vision Our 2025 goals ‘To support the UK's leading financial c.10% 95% Significant annual growth annual retention growth in cash advisers with the best in gross inflows of client FUM* result and technology, best shareholder operations and best proposition for
Slide 11: Our business priorities
Our business priorities Delivering value Our culture and Building to advisers and clients being a leading community through our investment responsible proposition business Building and Being easier protecting Continued to do business our brand and financial strength with reputation 11
Slide 12: Our business in detail
Our business ily Tai / SJP
Slide 13: The Partnership: fundamental to our business model
The Partnership: fundamental to our business model Clients 941,000+ Supporting clients The Partnership Building great 2,622 4,766 Financial businesses Partner businesses advisers Proposition £157.5 billion FUM Technology Data as at 30 June 2023 13
Slide 14: The Partnership: why do advisers join and stay with SJP?
The Partnership: why do advisers join and stay with SJP? Strong Great client Strong products outcomes commercial and proposition Attraction and relationship retention Flexible business Comprehensive development corporate support 14
Slide 15: The Partnership: sustaining long-term growth
The Partnership: sustaining long-term growth Strong adviser retention Value of A sustainable long-term Mix of Academy pipeline for and recruitment Partnerships channels growth in the Partnership Average age 46 (lower than market) Data as at 30 June 2023 15
Slide 16: The Partnership: securing tomorrow through our Academy
The Partnership: securing tomorrow through our Academy 35 1,198 26% 63% c. 350 13%+ 61% Average age Partners and Female Partners from new advisers of new client referred advisers and advisers non-financial in training at investments by the delivered backgrounds mid-2023 in 2022 Partnership Data as a
Slide 17: The Partnership: advisers by age band
The Partnership: advisers by age band Existing advisers New advisers 4% 2% 10% 19% <35 <35 21% 35-45 35-45 21% 40% 45-55 45-55 55-65 55-65 65+ 65+ 25% 31% 27% Data as at 30 June 2023 17
Slide 18: The Partnership: driving productivity
The Partnership: driving productivity Targeted growth and development support Great client outcomes drive Business strong productivity consultancy c.40% of new business Coaching and through referrals and leadership introductions development 18
Slide 19: The Partnership: investing in our future
The Partnership: investing in our future New and Utilisation of improved Partner lending to systems support business and tech development Targeted, data-led More shared field management servicing team support of clients 19
Slide 20: Our clients: snapshot
Our clients: snapshot 941,000+ 56 3% 6% Clients Average age Overseas clients 1% 54%/46% No ‘typical’ client - all want trusted, personal advice 13% Male/female split 3% 4% 14% 25% 10% Data as at 30 June 2023 20
Slide 21: Our clients: by age band
Our clients: by age band Existing clients New clients 8% 7% 15% 23% 6% <30 <30 16% 30-40 30-40 14% 40-50 40-50 50-60 16% 50-60 60-70 60-70 70+ 70+ 23% 26% 26% 20% Data as at 30 June 2023 21
Slide 22: Our investment proposition
Our investment proposition 17 Funds where at least 50% of the strategy is exclusive to St. James’s Place clients 25 750 Investment Fund manager Committee meetings monitoring meetings held during 2022 conducted in 2022 £157.5 billion Invested around the world 12,700+ Net zero Different Committed to s
Slide 23: Our investment proposition: recipe for success
Our investment proposition: recipe for success People & Team Our recipe Investment beliefs Data, Tech for long-term & Insights performance Investor Governance 23
Slide 24: Our investment proposition: our seven beliefs
Our investment proposition: our seven beliefs 1. Great client 2. Asset 3. Diversification 4. Active outcomes collection management 5. Understand 6. Disciplined 7. Responsible the risk research investment 24
Slide 25: Responsible Business Framework
Responsible Business Enable financial wellbeing for our clients, our people and our Framework communities Financial wellbeing Lead the conversation on investing responsibly Vision Purpose Culture Investing Climate responsibly change Take action on climate change Strategic enablers Community People G
Slide 26: Leading the conversation on investing responsibly
Leading the conversation on investing responsibly Responsible investment as standard − All our managers are UN PRI signatories − RI key to selection and monitoring process across all funds and strategies − Focus on stewardship and engagement Tailored and bespoke RI solutions also available for clien
Slide 27: Technology at SJP
Technology at SJP Bluedoor Enabling scalability and Delivering efficiency within SJP Scalability growth Next Generation Salesforce Client Experience (NGCX) Hyper-personalised service Efficiency Resilience delivery and efficiency Data &AI Reduce Reduce Leading to a data and complexity operational ris
Slide 28: Our new business performance
SJP Our new business BerporMmance
Slide 29: The Partnership
The Partnership The Partnership added a net 6,000 73 advisers in the first half of 2023 5,000 to a total of 4,766 advisers Strong pipeline for Academy enrolment 4,000 and experienced recruitment 3,000 c.350 new advisers in training in the Academy at HY 2023 2,000 1,000 0 2016 2017 2018 2019 2020 202
Slide 30: Net inflows: long-term track record
Net inflows: long-term track record £bn Challenging macroeconomic 3.5 and geopolitical environment 3.0 in the first half of 2023, but our business was very resilient: 2.5 − Gross inflows of £8.0 billion 2.0 − Net inflows of £3.4 billion 1.5 − Retention remained strong at 95.6% excluding regular 1.0
Slide 31: Funds under management
Funds under management £bn >10% p.a. compound growth over the last 5, 10 and 15 years 160 140 120 100 80 60 40 20 0 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 HY 2023 31
Slide 32: Our financial performance
Our financia Penton ance SJP
Slide 33: Strong 2023 HY financials
Strong 2023 HY financials £207.1m £16.28 15.83p £55.7m Underlying EEV NAV per share, Interim dividend EEV profit after tax cash result, down 2% since per share, up c.2% up 4% on 31 December 2022 on HY 2022 HY 2022 Robust Solvency II position 33
Slide 34: Underlying post-tax cash result
Underlying post-tax cash result Underlying post-tax cash result up 4% on £m 250 H1 2022, despite increase in corporation +4% tax rate. Growth driven by: 200 − Rise in average mature FUM in 2023 leading 198.8 207.1 to growth in net income from FUM − Maturing FUM contributing in excess of 150 £20 mill
Slide 35: FUM in gestation
FUM in gestation Contribution of gestation FUM to the Cash result Gestation balance now stands at £m 400 £47.2 billion 350 This will contribute c.£370 million per annum to the Cash result from 300 2029 when it all matures 250 − Using simple modelling which assumes for example that FUM values remain
Slide 36: EEV NAV per share
EEV NAV per share EEV NAV per share of £16.28, down 2% £ 18 since 31 December 2022 16 Excludes additional c.£290 million (or c.53 pence per share) value 14 of pensions business falling outside 12 of current contract boundaries 10 8 6 4 2 0 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Slide 37: Dividends
Dividends Interim dividends set in line with policy at 30% of the prior full year dividend Interim dividend of 15.83 pence per share, growth of c.2% 37
Slide 38: Longer-term outlook
Longer-term outlook We expect demand for trusted face-to-face financial advice will continue to grow St. James’s Place ideally placed − Academy − Proven investment approach − Modern and scalable infrastructure − Unique culture and refreshed brand Remain confident in our 2025 ambitions and continuing
Slide 39: Appendix
Appendix SJP
Slide 40: Our net zero commitments
Our net zero commitments #1 #2 #3 #4 Climate Net zero Support our Net zero in positive in our throughout our Partnership our investments operations supply chain becoming by 2050 by 2025 by 2035 Net zero by 2035 40
Slide 41: SJP Asia: the market opportunity
SJP Asia: the market opportunity Singapore and Hong Kong 4.6m 300,000 People with People with US $100,000 US $1m – US $1m to invest – US $30m to invest = US $2tn Total asset pool 41
Slide 42: SJP Asia: our proposition
SJP Asia: our proposition Who? What? Why SJP? International family Trusted brand, long-term wealth structuring relationships and great client outcomes Expats and Wealth extraction high net worth for entrepreneurial Joint UK/Asia focus Singaporean and families and expertise Hong Kong Nationals Long-t
Slide 43: SJP Asia: the 30-year-old disruptor
SJP Asia: the 30-year-old disruptor A clear plan to create long-term value Positioned to target expats and HNW individuals Building 100 great Asia Partner businesses Long-term, advice-led proposition Delivering cash break-even by 2025 43
Slide 44: Analyst following
Analyst following Autonomous Andrew Crean JPMorgan Enrico Bolzoni Barclays Larissa van Deventer Mediobanca Fahad Changazi Bank of America Andrew Sinclair Morgan Stanley Ashik Musaddi Berenberg Peter Richardson Numis David McCann Citi Andrew Baker Panmure Gordon Rae Maile Deutsche Bank Rhea Shah Peel
Slide 45: Costs of a full advice service: SJP v UK wealth management peers
Costs of a full advice service: SJP v UK wealth management peers The results to the assessment at 31 March 2023: 3.2% 2.2% 1.2% The firm represented by the first bar (Reduction in Yield of 1.3% each year) does not offer an ongoing advice service. The figures shown have been produced by Ernst & Young
Slide 46: Investor relations
Investor relations Craig Gentle Hugh Taylor Chief Financial Officer Investor Relations Director Email: craig.gentle@sjp.co.uk Email: hugh.taylor@sjp.co.uk www.sjp.co.uk/shareholders