Slide 1: abrdn plc Half year results 2024
abrdn plc Half year results 2024 06 August 2024
Slide 2: Delivering better performance
Delivering better performance Jason Windsor
Slide 3: Agenda
Agenda: Jason Windsor • Initial observations and our key priorities • Update on group performance Ian Jenkins • H1 2024 financial highlights Q&A session 3 | abrdn plc
Slide 4: Initial observations and our key priorities
Initial observations and our key priorities • Strong scale positions in attractive markets Initial observations • Significant headroom in each of our three core businesses • Opportunity to achieve a step-change in performance • Deliver a significant uplift in efficiency and profitability in Investme
Slide 5: Realising the potential of our businesses
Realising the potential of our businesses Improve profitability and return to growth by focusing Investments on where we can win Our focus Realise the value from our major investment Adviser areas programme to return to net inflows interactive Drive strong organic growth by broadening proposition in
Slide 6: Stable performance in Investments, with Adviser and ii continuing to contribute significantly
Stable performance in Investments, with Adviser and ii continuing to contribute significantly Adjusted operating profit H1 2024 adjusted operating profit £127m £128m £122m £55m £65m £34m £(26)m H1 2023 H2 2023 H1 2024 Investments Adviser ii Other Adjusted capital generation of £144m (H1 2023: £142m)
Slide 7: Investments – focus on flows and performance
Investments – focus on flows and performance Net flows H1 2024 H2 2023 H1 2023 Investment performance1 3-year 1-year £bn £bn £bn Equities (4.0) (4.1) (3.1) Equities 14% 23% Fixed income 1.2 (2.6) (1.4) Fixed income 79% 89% Multi-asset (0.8) (1.7) (1.5) Multi-asset 27% 65% Real assets 42% 40% Private
Slide 8: Investments – improve profitability and return to growth
Investments – improve profitability and return to growth H1 2024 Highlights Key priorities £0.4bn Net flows in I&RW Further sharpen investment specialisms Focus +£7.1bn Specialist player, targeting where we can win Leverage strategic partnerships, including collaboration with Adviser and ii, to driv
Slide 9: Adviser – focus on return to net inflows
Adviser – focus on return to net inflows H1 2024 Highlights Key priorities Customers Cash solutions launched in July 408k % YTD change Service and proposition (3)% enhancements to drive sustainable growth Roadmap of further proposition enhancements including on-platform SIPP AUA market share 11% % Y
Slide 10: interactive investor – driving profitable organic growth
interactive investor – driving profitable organic growth H1 2024 Highlights Key priorities Total customer numbers1 Launched Managed ISA with upcoming 422k launch of Managed SIPP % YTD growth Enhance our proposition +4% Meet evolving needs of a broader range of customers ii360 and ii advice to come (
Slide 11: Talent & culture – creating foundations to sustain future success
Talent & culture – creating foundations to sustain future success Our priorities and key principles Target outcomes Consistent framework and principles Faster decision-making and delivery group-wide for clients Local delivery based on client needs Improved efficiency, prioritising automation with le
Slide 12: Performance benefiting from continued cost focus
Performance benefiting from continued cost focus Ian Jenkins
Slide 13: Improved profitability driven by cost efficiencies
Improved profitability driven by cost efficiencies Change H1 2024 H2 2023 H1 2023 (H1 2024 vs. H1 2023) Net operating revenue £667m £677m £721m (7)% Adjusted operating profit benefits from progress in achieving efficiency savings Adjusted operating expenses £(539)m £(555)m £(594)m 9% Adjusted operat
Slide 14: Increased AUMA benefiting from positive markets
Increased AUMA benefiting from positive markets Movement in group AUMA 1 1 £506bn £495bn £17.2bn £488bn £2.4bn £(7.0)bn £73bn £66bn £(1.6)bn Positive market movements benefiting all three businesses Total net inflows £75bn £74bn £0.8bn Positive flows in interactive investor, £367bn £369bn Fixed inco
Slide 15: Revenue impacted by net outflows and corporate actions
Revenue impacted by net outflows and corporate actions Movement in group net operating revenue Net operating revenue margin (bps) trend £721m 32.3 £5m 31.4 £22m £17m £11m £667m £(38)m £5m 28.8 £(21)m £(22)m £(1)m Adviser £130m abrdn plc £137m 25.7 Investments 24.6 24.4 24.0 £103m 22.4 22.0 £119m £46
Slide 16: 9% reduction in costs, principally benefiting Investments
9% reduction in costs, principally benefiting Investments Movement in group adjusted operating expenses £594m £22m £24m £20m £539m £71m £(53)m £(17)m £(9)m £31m Continued progress on transforming our cost base £82m £54m £427m Increased investment in interactive £54m investor to drive organic growth
Slide 17: Performance benefiting from continued cost focus
Performance benefiting from continued cost focus Investments Investments Adviser1 interactive investor2 Net operating revenue Net operating revenue Net operating revenue £119m £137m £130m £103m £461m £65m £406m +33% £59m (7)% £49m £55m £34m stable £34m £(372)m £(71)m £(82)m £(427)m £(54)m £(54)m Adj
Slide 18: Transformation – creating a more efficient and client-centric business
Transformation – creating a more efficient and client-centric business Identified sources of savings Movement in group adjusted operating expenses >£150m of annualised cost savings by the end of 2025 Process Simplication Contract (Not to scale) Negotiation and £1,149m Right size Third Party teams &
Slide 19: Improving our net capital generation is a priority
Improving our net capital generation is a priority Movement in CET1 capital resources Adjusted capital generation up 1% driven by £99m higher adjusted profit after tax £144m £5m £1,544m £(40)m £1,466m £(130)m Restructuring costs primarily relate to transformation programme and platform enhancements
Slide 20: Strong balance sheet reinforces resilience
Strong balance sheet reinforces resilience Assets Capital Cash and liquid resources £1.8bn CET1 capital resources £1,544m Seed capital and co-investment £0.4bn CET1 capital coverage 146% (CET1 resources/Total regulatory capital requirement) Other assets AT1 and Tier 2 debt £471m (£690m of debt befor
Slide 21: Outlook and financial guidance
Outlook and financial guidance Broadly stable rate environment in 2024 Outlook Market conditions to remain challenging for active asset managers Long-term structural growth in UK savings and wealth Revenue margins to continue to reflect changes to asset mix in 2024 Investments – expect below 22bps f
Slide 22: Delivering better performance
Delivering better performance Jason Windsor
Slide 23: Key messages
Key messages • Significant headroom in each of our three core businesses • Transformation programme on track, positioning group for sustainable profitability and delivering improved outcomes for clients and colleagues • Strong balance sheet supporting investment in our businesses to improve sustaina
Slide 24: Q&A
Q&A
Slide 25: Forward-looking statements
Forward-looking statements This document may contain certain ‘forward-looking statements’ with respect to the financial operational information technology risks, including the Group’s operations being highly dependent on condition, performance, results, strategies, targets (including ESG targets), o
Slide 26: Appendix
Appendix
Slide 27: Analysis of profit
Analysis of profit H1 2024 H1 2023 Change £m £m Net operating revenue 667 721 (7)% Adjusted operating expenses (539) (594) 9% Adjusted operating profit 128 127 1% Adjusted net financing costs and investment return 42 24 75% Adjusted profit before tax 170 151 13% Restructuring and corporate transacti
Slide 28: abrdn plc registered office and website
abrdn plc is registered in Scotland (SC286832) at 1 George Street, Edinburgh, EH2 2LL www.abrdn.com © 2024 abrdn. All rights reserved. 28 | abrdn plc