Standard Life Plc · LSE:SDLF
Standard Life — Phoenix Group Holdings — KBW European Financials Conference 2020
25 slides from Standard Life's conference presentation, May 13, 2020
Slide 1: Cash, Resilience, Growth
CASH RESILIENCE GROWTH KBW Conference 13 May 2020 1
Slide 2: Driving consistent outperformance through time
Driving consistent outperformance through time Total shareholder return over the last 3 years % (rebased to 100) 160 140 120 +11% 100 -7% 80 -21% 60 40 27 Apr 17 27 Jul 17 27 Oct 17 27 Jan 18 27 Apr 18 27 Jul 18 27 Oct 18 27 Jan 19 27 Apr 19 27 Jul 19 27 Oct 19 27 Jan 20 27 Apr 20 Phoenix FTSE 100 F
Slide 3: Phoenix's business model is resilient to COVID-19
Phoenix’s business model is resilient to COVID-19 A CLEAR STRATEGY A SIMPLE FRAMEWORK Manage in-force business for cash and “Cash is King” and the sustainability of the Heritage resilience and deliver customer dividend is paramount outcomes Complete value accretive M&A, M&A and Underpinned by a st
Slide 4: Protecting customers, colleagues and our communities
Protecting customers, colleagues and our communities Customers • Customer satisfaction remains above 90% • Initiatives to promote digital access resulted in 70% more log-ins in March • Priority contact service established for NHS workers Colleagues • No state aid taken and employees are receiving fu
Slide 5: Phoenix's resilience supports payment of the 2019 final dividend
Phoenix’s resilience supports payment of the 2019 final dividend Dividend per share(1) • The protection of policyholders remains our priority 50% increase in the dividend over 10 years • Despite the prevailing market volatility, the Group’s solvency position remains robust and well above its target
Slide 6: On track to complete acquisition of ReAssure Group plc in July 2020
On track to complete acquisition of ReAssure Group plc in July 2020 ReAssure acquisition is strategically compelling 6 Dec Transaction announced 2019 • Upon completion of the acquisition, Phoenix will be the UK’s 31 Dec ReAssure completes OMW acquisition largest life and pensions provider with over
Slide 7: Cash
PHOENIX GROUP.
Slide 8: £19 billion of predictable long-term cash generation from Combined Group
£19 billion of predictable long-term cash generation from Combined Group Illustrative future cash generation from Combined Group in-force business Cash generation (3) Combined Phoenix ReAssure £19.0 billion guidance over life of business guidance Group £13.1bn Cash generation £3.2bn +£2.7bn £5.9bn (
Slide 9: Additional cash generation from ReAssure acquisition supports growth options
Additional cash generation from ReAssure acquisition supports growth options Combined Group: Illustrative uses of cash from 2020 - 2023 £5.9bn £(0.1)bn £(0.4)bn £(0.4)bn £(0.5)bn £(0.5)bn £2.7bn £(0.9)bn £(0.6)bn £(1.3)bn £(1.9)bn £(0.4)bn £(0.8)bn £1.7bn £3.2bn £(1.2)bn £1.2bn £0.3bn £0.5bn FY19 ho
Slide 10: Phoenix's dividend sustainability is enhanced by the ReAssure acquisition
Phoenix’s dividend sustainability is enhanced by the ReAssure acquisition Combined Group: Illustrative uses of cash from 2024 onward Key messages £13.1bn £(1.8)bn £3.7 billion of additional holding £4.3bn company cash enhances £(1.7)bn £11.3bn dividend sustainability £(3.5)bn £3.7bn £8.8bn Excludes
Slide 11: Resilience
PHOENIX GROUP.
Slide 12: Phoenix maintains a strong capital position with a £4.0 billion Solvency II surplus
Phoenix maintains a strong capital position with a £4.0 billion Solvency II surplus Estimated PGH Shareholder capital position Analysis of change £bn SCCR 161% 172% SCCR SCCR(9) PGH Solvency II surplus as at 31 Dec 19(8) 3.1 161% Surplus emerging and release of capital 0.1 2% requirements Debt raise
Slide 13: Phoenix has a high quality credit portfolio
Phoenix has a high quality credit portfolio Sector analysis Credit analysis Downgrade experience at 31 March 2020 31 March 2020 2% • 98% of £20 billion shareholder debt 12% portfolio is investment grade and only 15% is BBB 39% 15% • Limited exposure to sectors most at £20bn £20bn risk from COVID-19,
Slide 14: ReAssure's portfolio is well diversified across sector and geography
ReAssure’s portfolio is well diversified across sector and geography Sector analysis Credit analysis Geographic analysis at 31 December 2019 at 31 December 2019 at 31 December 2019 9% 5% 13% 31% 26% £17bn £17bn Include £17bn 17% key messages around experience to date 65% 34% Financials Resources AAA
Slide 15: Phoenix's capital position illustrates resilience to risk events
Phoenix’s capital position illustrates resilience to risk events PGH Solvency II Shareholder Capital Coverage Ratio sensitivities(14) Impact on Target range Solvency II surplus Solvency II SCCR as at 24-Apr-20 172% £4.0bn Equities: 20% fall in markets 175% £0.1bn Property: 12% fall in values(15) 167
Slide 16: Phoenix's resilience to market risks is strong relative to peers
Phoenix’s resilience to market risks is strong relative to peers FY19 Phoenix Shareholder Capital Coverage Ratio (SCCR) sensitivities relative to Life peers(19) Impact on SII ratio 40% 30% 20% 10% 0% -10% -20% -30% Phoenix Peer A Peer B Peer C Peer D Peer E Peer F Peer G United Kingdom Europe Equity
Slide 17: Growth
PHOENIX GROUP.
Slide 18: The Wedge illustrates the range of growth opportunities
The “Wedge” illustrates the range of growth opportunities available to bring sustainability to cash generation Key messages M&A Heritage business generates predictable long-term cash generation to pay dividends and fund growth Management Actions Cash generation BPA delivers dependable growth Open BP
Slide 19: In 2019 we refilled the well of cash generation
In 2019 we “refilled the well” of cash generation Future cash generation from in-force business Key messages Cash generation of £0.7 billion in £0.3bn £(0.2)bn £0.1bn 2019 £(0.7)bn £0.5bn “Well” of long-term cash generation therefore expected to be £11.3 billion £12.0bn £12.0bn Refilled the “well” w
Slide 20: Phoenix is well placed to take advantage of the industry drivers of change
Phoenix is well placed to take advantage of the industry drivers of change Insurers are consolidating Corporates are de-risking Strong DC pension growth • Trapped capital • De-risking strategies well • Auto-enrolment Drivers of • Cost inefficiencies advanced • Shift from DB • Legacy systems • Buy in
Slide 21: Outlook
PHOENIX GROUP.
Slide 22: Phoenix has a clear set of strategic priorities for 2020
Phoenix has a clear set of strategic priorities for 2020 Deliver the 2020 cash generation target of £800-£900 million, underpinned by a Financial targets strong solvency position and investment grade rating Transition Standard Life Complete Phase 2 and progress Phase 3 of the transition programme to
Slide 23: Footnotes
Footnotes PHOENIX GROUP.
Slide 24: Footnotes
Footnotes (1) Dividends rebased to take into account the bonus element of rights issues. 2020e and 2021e reflect expected dividend based on application of proposed 3% increase announced for ReAssure transaction. (2) The Solvency II capital position as at 24 April 2020 has been based on the estimated
Slide 25: Disclaimer and other information
Disclaimer and other information • This presentation in relation to Phoenix Group Holdings plc and its subsidiaries (the ‘Group’) contains, and we may make other statements (verbal or otherwise) containing, forward-looking statements and other financial and/or statistical data about the Group’s curr
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