Standard Life Plc · LSE:SDLF
Standard Life — H1 2017 Earnings Presentation
45 slides from Standard Life's earnings presentation, August 2017
Slide 1: Creating a Diversified World-Class Investment Company
Half year results 2017 analyst and investor presentation CREATING A DIVERSIFIED WORLD-CLASS INVESTMENT COMPANY
Slide 2: Not for release, publication or distribution
NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, IN WHOLE OR IN PART, IN OR INTO ANY RESTRICTED JURISDICTION WHERE TO DO SO WOULD CONSTITUTE A VIOLATION OF THE RELEVANT LAWS OF SUCH JURISDICTION This presentation is for information purposes only and does not constitute or form part of any offer to sell
Slide 3: Creating a Diversified World-Class Investment Company
CREATING A DIVERSIFIED WORLD-CLASS INVESTMENT COMPANY Keith Skeoch
Slide 4: Delivering returns to shareholders
Introduction Half year results 2017 CEO update Questions and answers Appendix Delivering returns to shareholders Total shareholder return from demutualisation to 4 August 2017 250% Standard Life 11.5% annualised Indexed Total Return 150% FTSE 100 6.1% annualised 50% (50)% Jul 2006 Jul 2007 Jul 2008
Slide 5: Creating a diversified world-class investment company
Introduction Half year results 2017 CEO update Questions and answers Appendix Creating a diversified worldclass investment company Focus on strategic delivery Targeted investment in diversification and growth Maintaining financial discipline Strengthening long-term relationships with clients and cus
Slide 6: Delivering across our simple business model
Introduction Half year results 2017 CEO update Questions and answers Appendix Delivering across our simple business model Increasing assets Growing revenue Driving profit AUA Fee based revenue Cost/income ratio Operating profit up 1% up 5% maintained at before tax to £361.9bn to £836m 62% up 6% to £
Slide 7: Half Year Results 2017
HALF YEAR RESULTS 2017 Luke Savage
Slide 8: Delivering profitable growth
Introduction Half year results 2017 CEO update Questions and answers Appendix Delivering profitable growth Driving profit Operating profit before tax H1 2017 H1 2016 £m £m Fee based revenue 836 794 Spread/risk margin 49 63 Total operating income 885 857 Total operating expenses (581) (566) Capital m
Slide 9: Non-operating items
Introduction Half year results 2017 CEO update Questions and answers Appendix Nonoperating items Driving profit Total non-operating items H1 2017 H1 2016 £m £m One-off Defined benefit pension scheme restructuring costs - (5) Proposed merger transaction expenses (35) - Impairment resulting from propo
Slide 10: Stable assets benefiting from investment performance
Introduction Half year results 2017 CEO update Questions and answers Appendix Stable assets benefiting from investment performance … Increasing assets Growth channels net flows (£0.6bn) £19.3bn £8.5bn £361.9bn £357.1bn +1% (£19.9bn) (£2.9bn) (£0.2bn) FY 2016 Growth Growth Mature Other1 Market/other
Slide 11: Diversification enhanced by investment company business model
Introduction Half year results 2017 CEO update Questions and answers Appendix Diversification enhanced by investment company business model Increasing assets Growth channels gross flows Growth channels net flows H1 2017 H1 2016 H1 2017 H1 2016 £bn £bn £bn £bn Institutional 5.1 8.52 Institutional (3.
Slide 12: Institutional and Wholesale outflows impacted by GARS
Introduction Half year results 2017 CEO update Questions and answers Appendix Institutional and Wholesale outflows impacted by GARS Increasing assets Institutional and Wholesale net flows H1 2017 net flows GARS Ex. GARS Total £bn £bn £bn Institutional (£3.2bn) (£0.6bn) (£3.8bn) £5.0bn Institutional
Slide 13: Continuing growth in Workplace and Retail assets
Introduction Half year results 2017 CEO update Questions and answers Appendix Continuing growth in Workplace and Retail assets Increasing assets Growing Workplace and Retail flows • Workplace and Retail AUA up 8% to £108.5bn (36%1 year-on-year) £5.0bn £4.2bn Workplace £0.8bn Retail • Steady Workplac
Slide 14: Strong adviser demand for our award-winning platforms
Introduction Half year results 2017 CEO update Questions and answers Appendix Strong adviser demand for our awardwinning platforms … Increasing assets Consistently strong growth in platform AUA Record net inflows in H1 2017 £49.2bn £50bn £5bn £44.2bn £12.1bn £4.4bn £4.2bn £11.3bn £2.3bn £2.1bn Platf
Slide 15: Growth channels driving increase in fee revenue
Introduction Half year results 2017 CEO update Questions and answers Appendix Growth channels driving increase in fee revenue Growing revenue Revenue driven by growth channels Product mix rather than pricing driving revenue margins 80bps £39m £3m £836m £794m Mature Mature books books £220m Fee reven
Slide 16: Spread/risk margin continues to benefit from asset liability management
Introduction Half year results 2017 CEO update Questions and answers Appendix Spread/risk margin continues to benefit from Growing revenue asset liability management … Spread/risk margin • H1 2016 included benefit of £22m from changes £63m to the scheme of demutualisation following transition to Sol
Slide 17: Maintaining financial discipline to drive down unit costs
Introduction Half year results 2017 CEO update Questions and answers Appendix Lowering Maintaining financial discipline to drive down unit costs unit costs Tight control of operating expenses Continuing focus on financial discipline +£33m 70% £29m £581m +6% 64% £566m (£14m) Cost/income ratio1 63% 63
Slide 18: Growth in fee revenue and financial discipline driving profit
Introduction Half year results 2017 CEO update Questions and answers Appendix Growth in fee revenue and financial discipline driving profit Driving profit +13% £45m £362m £341m £60m £15m £16m £317m £16m £281m (£3m) (£8m) H1 2016 H1 2016 Increase in Decrease in Change in Decrease in Increase in H1 20
Slide 19: Operating profit by business unit
Introduction Half year results 2017 CEO update Questions and answers Appendix Operating profit by business unit H1 2017 H1 2016 £m £m Standard Life Investments 190 176 UK spread/risk1 47 52 UK excluding spread/risk 107 99 UK Pensions and Savings 154 151 Europe Pensions and Savings 13 18 Hong Kong -
Slide 20: Financial discipline driving profit in Standard Life Investments
Introduction Half year results 2017 CEO update Questions and answers Appendix Financial discipline driving profit in Standard Life Investments Standard StandardLife LifeInvestments Investmentsoperating underlying profit performance before tax Total AUM £277.9bn £275.2bn FY 2016 H1 2017 £4m £190m £12
Slide 21: Workplace and Retail driving increase in UK Pensions and Savings
Introduction Half year results 2017 CEO update Questions and answers Appendix Workplace and Retail driving increase in revenue and profit in UK Pensions and Savings UK Pensions and Savings operating profit before tax Total fee AUA £151m £52m £47m £154m £135.2bn £143.6bn FY 2016 H1 2017 £21m +7% (£4m
Slide 22: Recognising the value of our Indian associates
Introduction Half year results 2017 CEO update Questions and answers Appendix Recognising the value of our Indian associates HDFC Life – a leading private Indian life insurer HDFC AMC – a profitable and fast growing business 35% 40% stake stake £50m 17.2% 20% £50m 20% 15.8% 15.8% 16.4% 13.7% 13.6% p
Slide 23: Solvency position remains strong and stable
Introduction Half year results 2017 CEO update Questions and answers Appendix Solvency position remains strong and stable Investor view Investor view1 surplus: £0.5bn 220% £6.4bn (FY 2016: £6.2bn) £3.5bn (FY 2016: £3.3bn) (FY 2016: £0.2bn) entity level capital Investor view1 solvency ratio: not reco
Slide 24: Cash generation supports our progressive dividend
Introduction Half year results 2017 CEO update Questions and answers Appendix Cash generation supports our progressive dividend Growing underlying cash generation £600m £502m £459m £426m cash generation Underlying £358m £308m £254m £256m £207m +1% £0m 2011 2012 2013 2014 2015 2016 H1 2016 H1 2017 •
Slide 25: Interim dividend up 8.2% to 7.00p
Introduction Half year results 2017 CEO update Questions and answers Appendix Interim dividend up 8.2% to 7.00p 19.82 20p Final dividend (pence) 18.36 13.35 Interim dividend (pence) 17.03 12.34 15.80 11.43 14.70 10.58 13.80 9.80 13.00 Dividend per share 12.24 9.20 11.50 11.77 8.65 10.80 8.09 7.70 7.
Slide 26: Creating a Diversified World-Class Investment Company
CREATING A DIVERSIFIED WORLD-CLASS INVESTMENT COMPANY Keith Skeoch
Slide 27: Well placed for the next phase of transformation
Introduction Half year results 2017 CEO update Questions and answers Appendix Standard Life is well placed for the next phase of its transformation to a worldclass investment company Focus on strategic delivery Targeted investment in diversification and growth Maintaining financial discipline Streng
Slide 28: Merger on track for effective date of 14 August 2017
Introduction Half year results 2017 CEO update Questions and answers Appendix Merger on track for effective date of 14 August 2017 • All regulatory and competition conditions met – final Court approval expected on 11 August 2017 • Combined leadership teams announced and working well together on Day
Slide 29: Creating a well diversified business with scale
Introduction Half year results 2017 CEO update Questions and answers Appendix Creating a well diversified business with scale Private Markets Americas and Hedge Funds 11% Real Estate 5% DM equities APAC Quant. 6% 10% 5% AUM by asset class AUM by geography 4% EM and APAC ME&A Standard Life Wealth equ
Slide 30: Enhanced by leading positioning in UK pensions and savings market
Introduction Half year results 2017 CEO update Questions and answers Appendix Enhanced by our leading positioning in UK pensions and savings market Advised platform and DC pension market Workplace and Retail attracting steady and resilient flows expected to grow strongly £1tn £125bn 10% +9% £109bn £
Slide 31: Truly global footprint with enhanced proximity to clients
Introduction Half year results 2017 CEO update Questions and answers Appendix Truly global footprint with enhanced proximity to clients Brussels Aberdeen Amsterdam Oslo Edinburgh Luxembourg Stockholm Leeds Helsinki Birmingham Copenhagen London Potsdam Toronto Bristol Beijing Frankfurt Boston Seoul D
Slide 32: Highly complementary investment capabilities
Introduction Half year results 2017 CEO update Questions and answers Appendix Highly complementary investment capabilities with aligned investment philosophies and processes Overview of combined capabilities: Combined AUM of £583bn1 (AUA of £670bn) 120 Aberdeen Standard Life 103 100 Combined AUM (£b
Slide 33: Recognition across institutional and mutual funds
Introduction Half year results 2017 CEO update Questions and answers Appendix With recognition across institutional and mutual funds Consultant Recommendations1,2 £67bn in Morningstar 4/5 Star Rated Funds1,3 Private Equity ILPS Asia Ex-Japan Equity Aggressive Allocation UK Credit UK Equity Core Real
Slide 34: Leveraging the strength of existing client relationships
Introduction Half year results 2017 CEO update Questions and answers Appendix Clear opportunity to leverage the strength of existing client relationships TOP 50 4 TOP 50 CLIENTS Overlap CLIENTS Opportunity to leverage complementary distribution strengths: • Sovereign wealth funds and private banks •
Slide 35: Merger accelerates transformation to a diversified world-class investment company
Introduction Half year results 2017 CEO update Questions and answers Appendix Merger accelerates transformation to a diversified worldclass investment company Delivering for clients, our people and shareholders Highly complementary with improved choice and service to clients Positioned to meet globa
Slide 36: Questions and Answers
QUESTIONS AND ANSWERS Standard Life
Slide 37: Appendix
APPENDIX Standard Life
Slide 38: Operating profit by business unit
Introduction Half year results 2017 CEO update Questions and answers Appendix Operating profit by business unit Standard Life UK Pensions Europe Pensions India and China Other Eliminations Total Investments & Savings & Savings H1 2017 H1 2016 H1 2017 H1 2016 H1 2017 H1 2016 H1 2017 H1 2016 H1 2017 H
Slide 39: Growth and mature channels supplementary information
Introduction Half year results 2017 CEO update Questions and answers Appendix Growth and mature channels supplementary information Fee revenue Gross flows Net flows AUA Fee based revenue yield H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 H1 FY H1 2014 2015 2016 2017 2014 2015 2016 2017 2014 2015 201
Slide 40: UK Pensions and Savings profit contribution
Introduction Half year results 2017 CEO update Questions and answers Appendix UK Pensions and Savings profit contribution H1 2013 H1 2014 H1 2015 H1 2016 H1 2017 £m £m £m £m £m Workplace and Retail (ex. cash margin) 69 75 85 91 104 Revenue from cash balances 8 8 2 3 3 Workplace and Retail contributi
Slide 41: Ongoing growth in fee AUA in Europe
Introduction Half year results 2017 CEO update Questions and answers Appendix Ongoing growth in fee AUA in Europe Europe Pensions and Savings operating profit before tax • Lower operating profit reflects H1 2016 spread/risk benefit of £4m from changes to the £25m scheme of demutualisation following
Slide 42: Continued progress in India and China associate and JV life businesses
Introduction Half year results 2017 CEO update Questions and answers Appendix Continued progress in India and China associate and joint venture life businesses India and China operating profit before tax • Proposed IPO of HDFC Life with offer for sale of up to 15% of the paid up equity share capital
Slide 43: GARS: track record of delivering long-term investment performance
Introduction Half year results 2017 CEO update Questions and answers Appendix GARS: Well established track record of delivering longterm investment performance Delivering returns with managed volatility over the last 11 years • Continuing to deliver against volatility objectives 230 • Improved short
Slide 44: Stable investor view surplus
Introduction Half year results 2017 CEO update Questions and answers Appendix Stable investor view surplus Stable £3.5bn investor view £3.7bn £3.3bn £3.5bn £3.5bn £3.5bn £3.5bn £3.7bn £3.3bn £3.4bn surplus Up 20% Down 20% Up 1.0% Down 1.0% Up 0.5% Down 0.5% Up 5.0% Down 5.0%3 10% one-off Equities Fi
Slide 45: www.standardlife.com
www.standardlife.com Read our latest financial results Our financial results are available online and on our iPad app at standardlife.com/results Standard Life plc is registered in Scotland (SC286832) at Standard Life House, 30 Lothian Road, Edinburgh EH1 2DH. www.standardlife.com © 2017 Standard Li