Slide 1: Investor introduction Autumn 2023
Quilter Basic rBand Guidelines Our brand a ssets 1 Investor introduction Autumn 2023
Slide 2: Disclaimer
Disclaimer 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 financial condition, performance and results. By their nature, all forward-looking statements involve risk and uncerta
Slide 3: Industry overview and Quilter's journey to date
Industry overview and Quilter’s journey to date
Slide 4: UK Wealth: a secular growth opportunity
UK Wealth: a secular growth opportunity UK wealth management market growth and forecast¹ AuA, £tn c.2.2-2.5 CAGR +6 to 10% ➢ The UK wealth management market is the c.1.8 fifth largest in the world4 ➢ Strong market growth as flows consolidate CAGR 0.7 Retail Advised² onto Platforms +13% Our ➢ Retail
Slide 5: Industry context – secular growth with cyclical challenges
Industry context – secular growth with cyclical challenges UK Wealth market has strong secular growth potential Cyclical equity and bond market headwinds in 2022 Economic downturn, higher interest rates, cost-of-living challenges impacting flows Adviser consolidation causing market disruption 5
Slide 6: Industry dynamics: Retirement demographics continuing advice demand
Industry dynamics: Retirement demographics continuing advice demand UK England & Wales Population¹ (‘000 by age year, 2018) Turned 60 in 2019 1,000 – potentially requiring retirement advice 925 900 Baby boomers born in 1947 800 787 700 600 700k+ people turned 65 and 925k+ turned 50 in 2019 – potenti
Slide 7: Industry dynamics: regulatory and fiscal changes driving disruption
Industry dynamics: regulatory and fiscal changes driving disruption ➢ Provides customers with opportunity for consolidation and flexibility to manage retirement assets Pension reform ➢ Demand and complexity driving need for advice ➢ Increased longevity of client relationships for wealth managers ver
Slide 8: Industry dynamics: fiscal changes driving complexity and need for advice
Industry dynamics: fiscal changes driving complexity, changing client behaviour and need for advice Annual pension allowance £’000 Allowance tapered for over CAGR 255 £150k earners 235 245 -13% 50 50 50 40 40 40 40 40 40 40 40 2008/9 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 2015/16 2016/17 20
Slide 9: Industry dynamics: continued strong demand for Advice as cost of delivery increases
Industry dynamics: continued strong demand for Advice as cost of delivery increases ➢ Adviser trend to serve fewer active clients continues: Market total revenue from adviser charges¹ Revenues on investment advice and related charges ➢ Compensation model from commission to fees £5.6bn £5.5bn £6.2bn
Slide 10: Industry dynamics: Business models adapted to changing regulation
Industry dynamics: Business models adapted to changing regulation and evolving value chain Typical older / Pre-RDR Insurance Modern Wealth Manager models Customers • Product driven sales, ‘pushed’ • Customer driven solutions through incentive driven distribution channels • Commission models driving
Slide 11: Quilter: our story and achievements since Listing in 2018
Quilter: our story and achievements since Listing in 2018 2018 2019 2020 2021 2022 Design, build and migration onto new Platform Successful re-platforming Sold Quilter Sold Single Strategy International Sold Quilter Life Business simplification Asset management Assurance business Resegmentation – Af
Slide 12: Business reshaped towards a UK centric focus since Listing
Business reshaped towards a UK centric focus since Listing Refocused on High Net Worth and Affluent segments Market leading platform built on robust technology Two scale distribution channels Capital discipline Significant cost reduction programmes c.£1bn returned to shareholders since Listing 12
Slide 13: 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 Quality assured choice segment Affluent Advice Quilter Breadth and strategic control of distribution IFA channel² channel¹ Platform Platform Scale and operating leverage Investment
Slide 14: 1H23 results overview: strong first half performance
1H23 results overview: strong first half performance Highlights H1 2023: Improved Business Strong profit Adjusted diluted operating transformation Dividend performance earnings per share margin in progress £76m 24% £33m¹ 4.3p 1.5p +25% y-o-y +4ppts y-o-y Simplification +34% y-o-y +25% y-o-y 1Annuali
Slide 15: H1 2023 AuMA and flows: good Quilter channel performance
H1 2023 AuMA and flows: good Quilter channel performance Gross Net Net / opening AuMA flows flows % (annualised) Quilter Channel £2.6bn £0.3bn £0.2bn 17% High Net Worth IFA/Direct Channel £23.3bn £0.9bn £(0.1)bn (1)% Quilter Channel £15.9bn £1.8bn £0.9bn 11% Affluent IFA Channel £55.8bn £2.6bn £0.0b
Slide 16: Quilter: strategically well positioned across the UK wealth industry
Quilter: strategically well positioned across the UK wealth industry Three broadly equal revenue streams from our three core franchises High Net Worth Affluent c.£200m c.£400m Strategic focus Distribution: High Net Worth Integrated Advice Discretionary investment Advice, platform administration ➢ Gr
Slide 17: Focus areas to drive business improvement
Focus areas to drive business improvement Building Distribution Grow relationships with larger IFA firms Increase alignment/retention in Quilter Financial Planning Add Investment Managers and Advisers in High Net Worth/QPCA Enhancing Proposition Driving Efficiency Refresh our investment solutions to
Slide 18: Group flow expectations – driving incremental improvement
Group flow expectations – driving incremental improvement Advice Platform Net flow / Opening AuMA % Targets AuMA 2022 Weighted contribution to Expectation Group net flow (%) High Net Quilter Cheviot Worth £25bn HNW 4-5% c.1-11Τ2 % £26bn 2%+ in 2023, building to £50bn 1-2% in 2023, building to c.1% i
Slide 19: Corporate Activity: Continuing our efficiency journey
Continuing our efficiency journey 2019 2020 2021 2022 2023 2024 2025 • Sale of Quilter International to Utmost (TSA until end 2023) Corporate Activity • Sale of QLA to ReAssure • Revised operating model, moving from 5 businesses to 2 segments • Creation of Shared function centres of excellence • Dec
Slide 20: Building a responsible wealth manager
Building a responsible wealth manager Targets ➢ Every client ESG profiled as part of advice process ➢ ESG preferences embedded in advice process ➢ ESG and carbon-rating tools Our offering to clients ➢ Platform provides visibility across ESG metrics available on Platform ➢ Solutions aligned to ESG va
Slide 21: Business Segments
Business Segments Quilter
Slide 22: Simpler business, organised around two core client segments
Simpler business, organised around two core client segments Two client reporting segments High Net Worth Benefits and synergies from the new segmentation Affluent From £250k investable ➢ Client-centric approach £50-£500k investable assets assets ➢ Improved customer experience ➢ Simpler operating mod
Slide 23: Our solutions strategy to meet client needs
Our solutions strategy to meet client needs Advice Platform Investment Fee to client Higher Potential 1. Premium product growth Discretionary portfolio Cirilium Active service 2. Price/value trade-off WealthSelect Managed 3. Value-based Cirilium Blend portfolio solutions service WealthSelect Income
Slide 24: High Net Worth
High Net Worth Quilter
Slide 25: High Net Worth – bringing the proposition together
High Net Worth – bringing the proposition together: aligning expertise, resources and services Discretionary Fund Management Quilter High Net Worth segment Advice Managing the financial needs of clients through a tailored approach ➢ Seamless combination offering investment management, ➢ Better clien
Slide 26: High Net Worth: Integrating in-house advice capability to drive growth
High Net Worth: Integrating in-house advice capability to drive growth The High Net Worth Proposition Focus areas since transition ➢ A strong established multi-channel business ➢ Engagement and cultural alignment of advisers and investment managers, supported by joint business ➢ Responsible for Quil
Slide 27: Embedding ESG throughout our processes
Embedding ESG throughout our processes ➢ Active ownership agenda ➢ Tailored ESG screening for discretionary portfolios ESG ➢ 2020 Stewardship Code Stewardship signatory Solutions ➢ Positive Change Strategy ➢ Engagement record ➢ Climate Assets Fund ESG Integration & Screening ➢ Focus on core investme
Slide 28: High Net Worth: resilient performance in 1H23
High Net Worth: resilient performance in 1H23 Gross flows Net flows £bn £bn 1.3 1.2 0.2 1.0 0.3 0.5 0.2 0.4 0.2 1.1 0.2 Quilter channel 0.1 Quilter channel 0.8 0.9 IFA incl. Direct channel IFA incl. Direct channel 0.3 0.2 0.2 H1 2022 H2 2022 H1 2023 (0.1) H1 2022 H2 2022 H1 2023 Financials £m Revenu
Slide 29: Affluent
Affluent Quilter
Slide 30: Affluent: bringing the proposition together
Affluent: bringing the proposition together: a customer-centric, integrated approach Advice Helping Helping advisers Platform Services customers feel Quilter to run a more more secure Affluent Segment successful about their future advice business Investment Solutions ➢ Simple and clear ➢ All solutio
Slide 31: Quilter Platform: a best in class proposition for advisers
Quilter Platform: a best in class proposition for advisers Tools and solutions to help adviser firms grow Cost effective and scalable Delivering a differentiated intuitive user experience and ease of use proposition for adviser firms Support advisers to deliver Exceptional client service 31
Slide 32: Building distribution
Building distribution Adviser numbers: QFP & PCA Backbook transfers year-to-date £m Gross flows 350 2.4 2.3 2.4 2.3 2.7 (annualised) per adviser 300 1,701 1,623 250 1,567 1,511 1,502 +9 200 150 100 50 0 H1 2021 FY 2021 H1 2022 FY 2022 H1 2023 Jan-23 Feb-23 Mar-23 Apr-23 May-23 Jun-23 Platform market
Slide 33: Advice: unique breadth of proposition and distribution
Advice: unique breadth of proposition and distribution Quilter Platform AuMA c.£70bn 30% 80% IFA Channel Quilter Channel National 100% c.£2bn Network Additional Percentage of flows in Quilter solutions c.£10bn c.£6bn on 3rd party platforms IFA Channel: ➢ Increase primary platform Strategic partners
Slide 34: Affluent: strong 1H23 profit performance, stable Quilter channel flows
Affluent: strong 1H23 profit performance, stable Quilter channel flows Investment Gross flows Net flows £bn – Core business £bn – Core business 2.9 2.6 2.1 1.7 1.8 1.5 0.9 0.8 0.9 0.6 0.1 0.1 0.1 0.0 H1 2022 H2 2022 H1 2023 Quilter channel IFA channel on Quilter platform Funds via third party platfo
Slide 35: ESG: progress towards vision of embedding across the customer journey
ESG: progress towards vision of embedding across the customer journey ➢ Interactive adviser/client tools ➢ Platform includes ESG ratings ➢ Integration into advice process Advice Platform ➢ Portfolio carbon-rating tools ➢ ESG advice training Investment ➢ WealthSelect+ to include ESG filters ➢ ESG cor
Slide 36: Performance
Performance Quilter
Slide 37: H1 2023 results: summary
H1 2023 results: summary Key financials H1 2023 H1 2022 ∆ Continuing operations Net flows / Opening AuMA - % 1 3 (2) ppts Core business ➢ Persistency on a reported basis of 89% Net flows / Opening AuMA - % 0 3 (3) ppts (H1 2022: 92%) Reported basis Adjusted profit before tax £m 76 61 +25% ➢ Revenue
Slide 38: H1 2023 results: adjusted profit contribution
H1 2023 results: adjusted profit contribution Adjusted Profit before tax H1 2023 £54m £23m £(1)m Year on year movement 0 8 7 £247m Net Management fees £242m £53m Other revenue £42m 76 61 £3m Investment revenue £28m £(242)m Operating expenses £(236)m H1 2022 Affluent High Net worth Head Office H1 202
Slide 39: Continued expense discipline driving operating margin improvement
Continued expense discipline driving operating margin improvement As a H1 2023 expense progression Cost analysis £m percentage of (£m) revenues H1 H1 H1 H1 2023 2022 2023 2022 Support staff costs 54 58 Operations 8 9 Technology 12 14 2 4 12 Property 15 16 12 Other base costs¹ 16 15 242 Sub-total bas
Slide 40: Cash and capital
Cash and capital Quilter
Slide 41: Strong solvency ratio and cash position
Strong solvency ratio and cash position Solvency II ratio 240% 230% 6% (3%) (3%) 10% ➢ Strong Solvency II ratio ➢ January: issue of £200 million of 8⅝% Fixed Rate Reset Subordinated Notes due April 2033, with a call option in January 2028 T2 T2 bond: bond: 32% 32% Solvency at Transformation costs Ma
Slide 42: Interim dividend and Odd-Lot Offer
Interim dividend and Odd-Lot Offer Interim dividend Odd-lot offer ➢ Board declared 2023 interim dividend of 1.5p, up 25% from ➢ Odd-lot Offer was approved by shareholder at the Company’s H1 2023 2023 Annual General Meeting ➢ Improved dividend pay-out ratio of 61% versus (H1 2022 55%) ➢ Entails Quilt
Slide 43: Capital management philosophy
Capital management philosophy ➢ Current year dividend On-going cash needs ➢ Group capital requirements ➢ Working capital & interest Investing ➢ Investing in the growth of the business organically ➢ Optimisation programme Capital allocation ➢ To accelerate growth through bolt-on acquisitions Investin
Slide 44: Investment case
Investment case Quilter
Slide 45: Delivering faster growth, more efficiently: our investment case
Delivering faster growth, more efficiently: our investment case Revenues: focusing on improving net flows and front office productivity Costs: enhancing efficiency further through Simplification II Investing for growth: recycling bad costs into good Shareholder returns: moving up dividend pay-out ra
Slide 46: Operating environment: maintaining our focus on delivery
Operating environment: maintaining our focus on delivery ➢ Inflation and interest rates peak in late 2023 Management ➢ Interest rates to remain stable for an extended period expectations before starting to decline ➢ Flows and market levels pick up as inflation declines client revenue Likely flows ou
Slide 47: Group targets and 2023 guidance
Group targets and 2023 guidance FY 2022 Guided Group Targets Group target ➢ c.4-5% of opening AuMA per annum as markets normalise, and Net flows ➢ Unchanged aspire to build momentum further ➢ High Net Worth managed assets (Quilter Cheviot) stable around 70 bps Revenue ➢ Affluent managed asset mix de
Slide 48: Appendix
Appendix Quilter
Slide 49: Key historic financials: Quilter plc continuing business
Key historic financials: Quilter plc continuing business Total continuing business FY19 FY20 FY21 FY22 Total revenues (£m) FY19 FY20 FY21 FY22 Net management fees (£m) 469 446 500 483 Affluent segment 388 370 406 387 Other revenues (£m) 118 118 118 123 High Net Worth segment 196 193 212 212 Total re
Slide 50: 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 2023 YTD gross flows, net flows & AuMA (£bn), unaudited 2022 flows* (£m) Flows* (£m) 2023 2023 AFFLUENT SEGMENT Quilter channel 15.4 1,775 863 15.9 12.2 IFA channel on Qui
Slide 51: Quilter Investors: investment performance
Quilter Investors: investment performance As at 30 June 2023 June- Since Fund vs IA Sector comparator 3Y 5Y 10Y 1 YTD inception Cirilium Conservative Portfolio 3 2 3 1 1 Investment performance Cirilium Balanced Portfolio 2 2 3 2 1 Cirilium Active Cirilium Moderate Portfolio 3 3 4 3 1 ➢ Continued to
Slide 52: High Net Worth: investment performance
High Net Worth: investment performance Investment Performance Highlights 30 June 2023 Absolute Performance 1 Year 3 Year 5 Year ➢ Our Growth oriented DPS continued to modestly outperform its benchmark over 1, 3 and 5 years Quilter Cheviot DPS Client 5.3% 14.5% 18.4% Growth Composite ➢ Balanced DPS w