Slide 1: Full year results 2018
Standard Life Aberdeen plc Full year results 2018 Resilient performance in challenging markets with strong positioning for long-term growth 13 March 2019
Slide 2: Resilient performance in 2018 against a challenging industry backdrop
Resilient performance in 2018 against a challenging industry backdrop Strategic progress in achieving our world-class ambitions Delivering for clients and customers Maximising value and shareholder returns • Improving investment performance in key areas • Gross inflows up 4% to £75.2bn • Leading cus
Slide 3: Full year results 2018
Full year results 2018 Resilient performance in challenging markets
Slide 4: Creating a world-class investment company
Creating a world-class investment company Well positioned to drive sustainable long-term growth Global Diversified Close to clients Strong balance sheet Shareholder value Providing resilience Close to customers – Focused on efficiency, Global investment Breadth of investment and funding investment u
Slide 5: Strong platform to compete globally
Strong platform to compete globally Global investment coverage and proximity to clients Glasgow Sheffield Ayr Leeds Aberdeen Trondheim Bishop Auckland Edinburgh Bergen Cheadle Hume Stockholm Crewe Helsinki Birmingham Oslo Leamington Spa Seoul Aarhus Toronto Bristol Shanghai Copenhagen Boston Reading
Slide 6: Challenging year for the industry
Challenging year for the industry With market conditions deteriorating during 2018 Global mutual fund industry quarterly net flows1 400 300 200 Net flows ($bn) 100 0 (100) (200) (300) (400) Q1 2017 Q2 2017 Q3 2017 Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 1. Source: Morningstar, mutual fund net flows
Slide 7: Seismic shifts creating challenges across our industry
Seismic shifts creating challenges across our industry Exacerbated by weak investor sentiment in 2018 • Growth in passive investing accelerated by the global financial crisis Shift to passives • Exerting downward pressure on fees Growth in • High demand for solutions, active specialities, private ma
Slide 8: Net outflows continued but were concentrated in a small number of strategies
Net outflows continued but were concentrated in a small number of strategies Broad demand for our wider product suite with gross inflows returning to pre-merger levels Net outflows 6.7% of opening AUMA Gross inflows 2017 2018 £90bn £bn £bn Absolute return, EM, APAC and Global equities (19.2) (32.7)
Slide 9: Sustained growth in retail platforms and financial advice capability
Sustained growth in retail platforms and financial advice capability Market-leading platforms are a source of asset management flows and diversification Continued growth in platform AUA – now serving 0.5m customers Retail platform profitability (Wrap, Elevate and Parmenion) £80bn 2017 2018 Change Fe
Slide 10: Financial update
Full year results 2018 Financial update
Slide 11: Financial highlights
Financial highlights 2017 2018 Continuing operations: Adjusted profit before tax (£m) 660 650 Adjusted diluted earnings per share (p) 17.2 17.8 Assets under management and administration (£bn) 608.1 551.5 Gross inflows (£bn) 72.4 75.2 Net flows (£bn) (32.9) (40.9) Net flows as a percentage of openin
Slide 12: Adjusted profit before tax from continuing operations
Adjusted profit before tax from continuing operations Impact of lower revenue largely offset by share of Phoenix profit and reduction in expenses Adjusted profit before tax 2017 2018 £m £m Fee based revenue 2,099 1,868 Adjusted operating expenses (1,551) (1,395) Adjusted operating profit 548 473 Cap
Slide 13: Analysis of fee revenue margins
Analysis of fee revenue margins Modest reduction in fee revenue margins largely driven by mix effects Fee revenue margins FY 2017 H1 2018 FY 2018 bps1 bps1 bps1 Institutional/Wholesale2 50.93 48.7 48.1 Strategic insurance partners 13.7 13.5 13.1 Retail – Wrap and Elevate 26.2 25.5 25.6 Group fee rev
Slide 14: Total adjusting items
Total adjusting items 2017 2018 £m £m (Reported basis) Restructuring and corporate transaction expenses (162) (239) Amortisation and impairment of intangible assets acquired in business combinations and through the (138) (1,155) purchase of customer contracts Profit on disposal of interest in associ
Slide 15: Expense saving run rate of £175m ahead of schedule
Expense saving run rate of £175m ahead of schedule Financial discipline driving a further reduction in expenses of £56m Reduced operating expenses • Improvement in cost/income ratio to 67.9% (2017: 70.6%) • Integration now c75% complete with annualised cost efficiencies of £12m £8m at least £350m1 t
Slide 16: Optimising the balance sheet following the sale of the insurance business
Optimising the balance sheet following the sale of the insurance business Returning capital while retaining a strong balance sheet Optimising the balance sheet Strong balance sheet £2.5bn £2.3bn CRD IV Group regulatory capital position 2018 2020 6.546% £0.3bn £bn Principal value of debt 2027 6.75% £
Slide 17: One of the strongest balance sheets in the industry
One of the strongest balance sheets in the industry With substantial listed investments and strong net cash resources • Strong capital position and £1.2bn1 of net cash/liquid resources to support investment in the business • Strategic listed investment in Phoenix worth £1.0bn2: • 19.9% stake • Sourc
Slide 18: Final dividend unchanged
Final dividend unchanged Intend to maintain the dividend per share at the 2018 level during the period of transformation Dividend per share Dividend supported by: 25p • Strong business well positioned for long-term 21.30 21.60 19.82 14.30 14.30 growth 18.36 13.35 Dividend per share (p) 17.03 12.34 1
Slide 19: Strongly positioned for long-term growth
Full year results 2018 Strongly positioned for long-term growth
Slide 20: Creating a world-class investment company
Creating a world-class investment company Well positioned to drive sustainable long-term growth Global Diversified Close to clients Strong balance sheet Shareholder value Providing resilience Close to customers – Focused on efficiency, Global investment Breadth of investment and funding investment u
Slide 21: Competitive investment performance supporting gross flows
Competitive investment performance supporting gross flows Signs of improving performance Resilient Alternatives; Asia Pacific and Smaller Companies performance Improving equities; Quantitative; Credit, EMD and Government Emerging Market Equities; Global Equities and GARS across most performance fixe
Slide 22: 2018 – a year of almost universal negative asset class returns
2018 – a year of almost universal negative asset class returns across the market In stark contrast to 2017 where only 1% of assets suffered negative returns 2018 total return indices (rebased) 2019 YTD total return indices (rebased) 115 115 110 110 105 105 100 100 95 95 90 90 85 85 80 80 Dec 17 Feb
Slide 23: Positioned to benefit from global demand for 'new active' capabilities
Positioned to benefit from global demand for ‘new active’ investment capabilities ‘New active’ set to capture majority of global AUM and revenue growth 2017-20221 ALTERNATIVES / PRIVATE MARKETS SOLUTIONS Private Markets2 Real Estate2 Insurance Clients Multi-asset2 £31bn £40bn £255bn £71bn Top 10 in
Slide 24: ESG factors embedded into all investment decisions
ESG factors embedded into all investment decisions Enhancing the value of active management to invest for a better future Long-established track record in ESG to capitalise on its growing Winning new mandates across asset classes and the world importance to institutional and retail investors • Activ
Slide 25: A track record of innovation in 'new active' investment solutions
A track record of innovation in ‘new active’ investment solutions Increased pace of innovation with 32 new fund launches (22 in 2017) and more to come c25% (£63bn) of Institutional/Wholesale AUM from products launched since 2010 – selected examples below: ALTERNATIVES / PRIVATE MARKETS SOLUTIONS Alt
Slide 26: Assets are shifting from institutions to individuals
Assets are shifting from institutions to individuals Creating opportunities for those that can build close connections to end customers Retail asset growth outpacing institutional demand Democratisation of financial risk driving demand from retail investors £10tn • Global trend – individuals taking
Slide 27: Capitalising on growth in individual savings through UK savings eco-system
Capitalising on growth in individual savings through our UK savings eco-system Leveraging the strength of our brands, leading platforms and strategic partnerships Market-leading platforms and advice with potential to reach 30% of UK savers Connecting • Working with around 5,000 UK adviser firms and
Slide 28: Strong business well positioned for long-term growth
Strong business well positioned for long-term growth Continued progress towards achieving our world-class ambitions Delivering for clients and customers Maximising value and shareholder returns Well positioned for the themes shaping our industry with Remaining buyback programme and breadth of ‘new a
Slide 29: Questions
Standard Life Aberdeen
Slide 30: Forward-looking statements
Forward-looking statements This presentation may contain certain “forward-looking statements” with respect to the financial condition, performance, results, strategy, objectives, plans, goals and expectations of Standard Life Aberdeen plc (“Standard Life Aberdeen”) and its affiliates. These forward-
Slide 31: Appendix
Standard Life Aberdeen
Slide 32: Analysis of profit by segment
Analysis of profit by segment Asset Insurance Total Discontinued management associates and continuing Eliminations Total operations and platforms joint ventures operations 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 £m £m £m £m £m £m £m £m £m £m £m £m Adjusted operating income 2,099
Slide 33: Adjusted profit before tax
Adjusted profit before tax Benefiting from cost control, initial benefits of merger synergies and share of profits from Phoenix Adjusted profit before tax £660m £86m £650m £56m £1m (£22m) £120m (£209m) (£22m) (£12m) (£8m) 2017 Recurring Performance Additional Additional Targeted Additional Increased
Slide 34: Assets, flows and fee revenue yield
Assets, flows and fee revenue yield Fee based Fee revenue Gross inflows Net flows AUMA revenue yield1 2017 2018 2017 2018 2017 2018 2017 2018 2017 2018 £bn £bn £bn £bn £bn £bn £m £m bps bps Equities 14.2 11.8 (10.2) (17.6) 97.5 72.9 666 578 67.9 66.9 Fixed income 8.6 6.0 (3.1) (2.8) 48.0 46.7 144 13
Slide 35: Assets under management flows analysis
Assets under management flows analysis Gross inflows Redemptions Net flows 2017 2018 2017 2018 2017 2018 £bn £bn £bn £bn £bn £bn Absolute return, EM, APAC and Global equities 17.6 12.1 (36.8) (44.8) (19.2) (32.7) Natural run-off from strategic insurance clients 15.6 28.6 (30.8) (34.1) (15.2) (5.5) 3
Slide 36: Flows by channel analysis
Flows by channel analysis Gross inflows Redemptions Net flows 2017 2018 2017 2018 2017 2018 £bn £bn £bn £bn £bn £bn Institutional 24.3 19.3 (44.0) (47.0) (19.7) (27.7) Wholesale 22.1 18.4 (27.7) (30.5) (5.6) (12.1) Wealth/Digital 2.4 2.7 (1.3) (2.3) 1.1 0.4 Asset management (excl. Strategic insuranc
Slide 37: Quarterly net flows analysis
Quarterly net flows analysis Q4 2017 Q1 2018 Q2 2018 Q3 2018 Q4 2018 £bn £bn £bn £bn £bn Equities (3.5) (3.7) (3.9) (4.3) (5.7) Fixed income (0.5) (1.2) (0.9) (0.3) (0.4) Multi-asset (1.3) (1.5) (2.9) (4.6) (6.7) Private markets (0.1) (0.5) (0.2) (0.9) 0.3 Alternatives - 0.2 (0.4) 0.4 (0.6) Real est
Slide 38: Detailed asset class analysis
Detailed asset class analysis Opening AUM as at Gross Market and Corporate Closing AUM as at 1 Jan 2018 inflows Redemptions Net flows other movements actions 31 Dec 2018 £bn £bn £bn £bn £bn £bn £bn Developed Markets equities 16.3 2.2 (3.6) (1.4) (2.0) - 12.9 Emerging Markets equities 37.0 4.2 (13.4)
Slide 39: Calculation of fee revenue yield
Calculation of fee revenue yield Average AUMA Fee based revenue Fee revenue yield1 2017 2018 2017 2018 2017 2018 £bn £bn £m £m bps bps Equities 98.1 86.3 666 578 67.9 66.9 Fixed income 49.0 46.9 144 130 29.4 27.7 Multi-asset 74.7 65.4 432 350 57.7 53.6 2 Private markets 16.7 15.8 84 68 46.1 43.1 Alt
Slide 40: Signs of improvement in equity investment performance
Signs of improvement in equity investment performance Absolute return performance stabilising with stronger recent short-term momentum Improving performance in Long Term Quality equities1 GARS performance improving after a difficult 2018 H1 2018 FY 2018 115 ppts ppts MSCI World + 1.13% MSCI World -
Slide 41: Insurance associates and joint ventures
Insurance associates and joint ventures Share of insurance associates and JVs adjusted profit before tax • Lower profit from HDFC Life reflects reduced stake following IPO in November 2017 and movements in FX 2017 2018 • Growth in sales and premium income in our joint venture £m £m in China driving
Slide 42: HDFC Life – a leading private Indian life insurer
HDFC Life – a leading private Indian life insurer A fast growing business leveraging one of India’s most valuable brands1 Consistently ranked in top 3 private life insurers in India2 35% increase in share price since IPO in November 2017 INR250bn 19.1%3 20% INR400 R391 Share of private life insuranc
Slide 43: HDFC AMC – India's leading asset manager
HDFC AMC – India’s leading asset manager A fast growing business leveraging one of India’s most valuable brands1 AUM of £37.0bn with CAGR of 26% over the last 5 years2 Successful IPO of HDFC AMC completed in August 2018 INR3,500bn INR2,000 R3,291bn Assets under management3 R2,920bn R1,497 R2,306bn R
Slide 44: Standard Life Aberdeen plc registered office
Standard Life Aberdeen plc is registered in Scotland (SC286832) at 1 George Street, Edinburgh, EH2 2LL. www.standardlifeaberdeen.com © 2019 Standard Life Aberdeen. All rights reserved.