Slide 1: abrdn plc Half year results 2023
abrdn plc Half year results 2023 8 August 2023
Slide 2: Building a stronger abrdn
Building a stronger abrdn Stephen Bird, CEO abrdn plc 2 | abrdn plc
Slide 3: Welcome
Welcome • Building a stronger abrdn – Stephen Bird, CEO abrdn plc • Refocusing Investments, capitalising on areas of strength – René Buehlmann, CEO Investments • Strong earnings in challenging market conditions – Noel Butwell, CEO Adviser • Scaling up our leading UK savings and wealth businesses - R
Slide 4: Building a stronger abrdn
Building a stronger abrdn Refocusing Investments, Creating a stronger business model capitalising on areas of strength Adjusted Cost savings Total funds Net operating achieved, on track merged/closed +4% +10% operating £30m 101 revenue for net £75m out of expanded profit target target of c140 Scalin
Slide 5: Benefits of a stronger business model
Benefits of a stronger business model Diversifying revenue and flows… to improve margin mix… and create a stronger model Net operating revenue movement CIR abrdn £25m abrdn 82% 1ppt £26m better Personal1 £94m £11m Adviser £61m £127m2 Investments (£80m) Personal 60% ii 42% Net flows (ex liquidity) as
Slide 6: Moving at pace to build foundations for change and growth
Moving at pace to build foundations for change and growth Strategic progress YTD Enhanced leading closed-end fund franchise through acquisitions HDFC Announced Announced sale Announced Life/AMC final sale of of DFM business planned launch stake sales non-core Restructure of Adviser for £140m of abrd
Slide 7: Refocusing Investments, capitalising on areas of strength
Refocusing Investments, capitalising on areas of strength René Buehlmann, CEO Investments 7 | abrdn plc
Slide 8: Investments – defending our position in a challenging environment
Investments – defending our position in a challenging environment Investments flows (ex LBG & liquidity) Challenging macro (1.6%) Investments (£200bn) (1.1%) (0.7%) (1.3%) (2.2%) (1.6%) environment with net outflows Global active net active outflows (ex liquidity) outflows across continuing across /
Slide 9: Investments – focusing on areas of strength
Investments – focusing on areas of strength AUM Revenue Our capabilities Evidence of strengths Opportunities & outlook (£bn)1 (£m)1 77% AUM outperforming over 3Y Expect continued strong gross flows into Credit Global Fixed Income 125 81 1st quartile: EM Debt, Euro High Yield & Climate Strong pipelin
Slide 10: Investments - building a profitable specialist asset manager
Investments - building a profitable specialist asset manager Refocused capabilities in areas of strength Delivering competitive performance Simplifying our operating model Non-core exits Leadership in place Reduced FTE1 (9%) US private equity business Sole Investments CEO 2,340 Australian oper
Slide 11: Strong earnings in challenging market conditions
Strong earnings in challenging market conditions Noel Butwell, CEO Adviser 11 | abrdn plc
Slide 12: Adviser – strong earnings in challenging market conditions
Adviser – strong earnings in challenging market conditions Financial performance Net flows impacted by Established the foundations market conditions for future growth Net operating revenue £103m £4.6bn £4.5bn Completed significant technology upgrade £4.0bn +12% £3.2bn £3.1bn £2.9bn 1.66 wrappers per
Slide 13: Scaling up our leading UK savings and wealth businesses
Scaling up our leading UK savings and wealth businesses Richard Wilson, CEO Personal 13 | abrdn plc
Slide 14: Personal - scaling up our leading UK savings and wealth businesses
Personal - scaling up our leading UK savings and wealth businesses Financial performance Transforming Levers for growth the Personal vector Personal1 (vs H1 2022 proforma including six months ii) New Financial Planning – restructuring to DFM sale and Financial Planning restructure – Net operating re
Slide 15: interactive investor – business model delivering quality growth
interactive investor – business model delivering quality growth Resilient business model Diversified revenue streams KPIs and drivers delivering quality growth ii ii Total customer numbers H1 20231 H1 20231 Subscription fees 399k % growth ex. run off from acquisitions2 +1% 15.1k new customers Revenu
Slide 16: Half year 2023 Financial results
Half year 2023 Financial results Ian Jenkins, Interim CFO 16 | abrdn plc
Slide 17: H1 2023 results summary
Possibly move H1 2023 results summary forward in deck H1 2022 H1 2023 Change • Net operating revenue up 4%. Excluding ii, net operating revenue was Net operating revenue £696m £721m 4% 11% lower largely due to lower average AUM within Investments Adjusted operating • Adjusted operating expenses up 2
Slide 18: AUMA
AUMA Movement in Group AUMA • AUMA down £4.3bn in H1 2023 and down £12.7bn since June 2022 driven by net outflows in Investments £508.4bn £4.5bn • Net outflows for Group of £4.4bn ex liquidity improved on H2 2022 (£6.5bn) and broadly in line with H1 2022 (£3.8bn) (£6.5bn) £500.0bn • Net outflows for
Slide 19: Revenue
Revenue Movement in Group revenue • Net operating revenue up 4%, reflecting: £102m £721m • Benefit of £102m from the full six months of ii in H1 2023 £696m • Impact from net outflows of (4%) and adverse yield movements (2%) (£29m) (£15m) • Lower average AUMA compared with H1 2022 impacted £5m revenu
Slide 20: Operating expenses
Operating expenses Adjusted operating expenses trend £612m • Operating expenses excluding ii have reduced by 8% over the £595m £597m £594m last two years £581m £40m £7m • Adjusted operating expenses in H1 2023 increased 2% vs H1 2022, £48m mainly due to the inclusion of £48m of ii expenses for the f
Slide 21: Investments
Possibly move Investments forward in deck H1 2022 H1 2023 Change • Net operating revenue 15% lower than H1 2022 largely due to net outflows Net operating revenue1 £546m £466m (15%) and lower market performance impacting average AUM, and changes to the asset mix Adjusted operating (£470m) (£440m) (6%
Slide 22: Adviser
Possibly move Adviser forward in deck H1 2022 H1 20231 Change • Net operating revenue up 12% at £103m, comprising £84m Platform Net operating revenue £92m £103m 12% charges, £15m net interest margin and £4m other Adjusted operating • Average margin earned on client cash balances of c215bps in H1 202
Slide 23: Personal
Possibly move Personal forward in deck H1 2022 H1 20231 Change • Adjusted operating profit up £54m reflects the inclusion of £67m for the full Net operating revenue £58m £152m >100% six month result for ii, compared to only one month in H1 2022 ii revenue £13m £115m >100% • ii revenue continues to b
Slide 24: Capital
Capital • Indicative surplus regulatory capital up c£300m Movement in capital to £1,017m Development Sources of surplus regulatory Uses capital • Adjusted capital generation of £142m up 33%, of capital of capital dividend coverage of 1.04 times • Disposal of our remaining HDFC Life and HDFC AMC stak
Slide 25: Building a stronger abrdn
Building a stronger abrdn Stephen Bird, CEO abrdn plc 25 | abrdn plc
Slide 26: Clear approach to capital generation and allocation
Clear approach to capital generation and allocation As at H1 2023 Adjusted capital Surplus regulatory capital Value of listed stake generation £1,017m £554m1 £142m Allocation of total capital resources Returns for Non-core shareholders disposal proceeds Inorganic bolt- £576m Management on opportunit
Slide 27: Building a stronger abrdn
Building a stronger abrdn Creating a stronger Refocusing Investments, business model capitalising on areas of strength Scaling up our leading UK savings Redeployment and distribution and wealth businesses of capital generated Creating a sustainable growth trajectory 27 | abrdn plc
Slide 28: Q&A
Q&A 28 | abrdn plc
Slide 29: Forward-looking statements
Forward-looking statements This document may contain certain ‘forward-looking statements’ with respect to the financial outsourced); natural or man-made catastrophic events; the impact of pandemics, such as the condition, performance, results, strategies, targets, objectives, plans, goals and expect
Slide 30: abrdn plc registered office
abrdn plc is registered in Scotland (SC286832) at 1 George Street, Edinburgh, EH2 2LL www.abrdn.com © 2023 abrdn. All rights reserved. 30 | abrdn plc