Preliminary Results 2011 Increased operating profit and cash flow delivered in challenging market conditions
This presentation may contain certain “forward-looking statements” with respect to certain of Standard Life's plans and its current goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements containing the words “believes”, “intends”, “expects”, “plans”, “seeks” and “anticipates”, and words of similar meaning, are forward-looking. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances which are beyond Standard Life's control including among other things, UK domestic and global economic and business conditions, market related risks such as fluctuations in interest rates and exchange rates, and the performance of financial markets generally; the policies and actions of regulatory authorities, the impact of competition, inflation, and deflation; experience in particular with regard to mortality and morbidity trends, lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; and the impact of changes in capital, solvency or accounting standards, and tax and other legislation and regulations in the jurisdictions in which Standard Life and its affiliates operate. This may for example result in changes to assumptions used for determining results of operations or re-estimations of reserves for future policy benefits. As a result, Standard Life’s actual future financial condition, performance and results may differ materially from the plans, goals, and expectations set forth in the forward-looking statements. Standard Life undertakes no obligation to update the forward- looking statements contained in this presentation or any other forward-looking statements it may make. 2 Preliminary Results 2011 | March 2012
Well on track to transform our performance Setting up for future strategic success Execution and delivery Step-up in performance 2010 2011 2012 3 Preliminary Results 2011 | March 2012
Preliminary Results 2011 Increased operating profit and cash flow delivered in challenging market conditions Jackie Hunt Chief Financial Officer
Group financial results - highlights Financial highlights 2011 2010 2010 2010 2010 Operating profit £544m £425m Assets under administration £192.9bn 1 £198.4bn Standard Life Investments third party AUM £67.7bn 1 £71.8bn Long-term savings net flows £4.0bn £4.7bn Investment management third party net flows £4.3bn £6.2bn EEV operating profit before tax £989m £787m EEV operating capital and cash generation £438m £287m Dividend 13.80p 13.00p 1 Excluding the impact of the external transfer of UK money market funds 5 Preliminary Results 2011 | March 2012
2010 Group 2010 Group 2010 Group 2010 Group operating profit operating profit operating profit operating profit Group operating profit up 28% £425m £ £ £ 2010 UK staff pension 2010 UK staff pension 2010 UK staff pension 2010 UK staff pension 425m 425m 425m scheme release scheme release scheme release scheme release (£59m) Preliminary Results 2011 | March 2012 £ £ £ £366m 366m 366m 366m Increase in fee Increase in fee Increase in fee Increase in fee based revenue based revenue based revenue based revenue Increase in acquisition, Increase in acquisition, Increase in acquisition, Increase in acquisition, £92m maintenance and maintenance and maintenance and maintenance and GCC costs GCC costs GCC costs GCC costs Fee business Fee business Fee business Fee business Decrease in investment for Decrease in investment for Decrease in investment for Decrease in investment for transformation and growth transformation and growth transformation and growth transformation and growth (£48m) + + + +£ £ £ £56m 56m 56m 56m £12m spread/risk margin spread/risk margin spread/risk margin spread/risk margin Lower UK Lower UK Lower UK Lower UK (£73m) Spread/risk Spread/risk Spread/risk Spread/risk Improved Canada Improved Canada Improved Canada Improved Canada ( (£ ( ( spread/risk margin spread/risk margin spread/risk margin spread/risk margin £14m) £ £ 14m) 14m) 14m) Progress in our insurance Progress in our insurance Progress in our insurance Progress in our insurance £59m Joint Ventures Joint Ventures Joint Ventures Joint Ventures £25m Increased capital Increased capital Increased capital Increased capital management result management result management result management result £47m £480m £ £ £ 480m 480m 480m 2011 UK staff pension 2011 UK staff pension 2011 UK staff pension 2011 UK staff pension scheme release scheme release scheme release scheme release £64m 2011 Group 2011 Group 2011 Group 2011 Group operating profit operating profit operating profit operating profit £544m £ £ £ 544m 544m 544m 6
Increase in UK fee business profitability Operating profit • Fee business AUA of £100.6bn 2011 2011 2011 2011 2010 2010 2010 2010 (2010: £98.9bn) £ £m £ £ m m m £ £ £m £ m m m • Fee based revenue 89% of total Fee based revenue 625 593 income (2010: 80%) Spread/risk margin 75 148 • Spread/risk margin: Total income Total income Total income Total income 700 700 700 700 741 741 741 741 Acquisition expenses (169) (172) • Net £13m reduction due to Maintenance expenses (332) (312) operating assumption and reserving changes Investment for transformation and growth (53) (61) Capital management 10 (21) • £30m reserve release in prior year Total Total Total Total excluding UK staff pension scheme release excluding UK staff pension scheme release excluding UK staff pension scheme release excluding UK staff pension scheme release 156 156 156 156 175 175 175 175 • Fee business revenue bps decreased UK staff pension scheme release 64 59 due to change in business mix Total Total Total Total 220 220 220 220 234 234 234 234 Fee business net flows 1 1 1 1 Fee business net flows Fee business net flows Fee business net flows Fee business bps Fee business bps Fee business bps Fee business bps + 37% + 37% + 37% + 37% 77 77 77 77 bps bps bps bps 75 75 75 75 73 73 73 73 £2.1bn £ £ £ 2.1bn 2.1bn 2.1bn £ £2.9bn £ £ 2.9bn 2.9bn 2.9bn 2009 2009 2009 2009 2010 2010 2010 2010 2011 2011 2011 2011 2010 2010 2010 2010 2011 2011 2011 2011 1 Excluding institutional pensions and conventional with profits 7 Preliminary Results 2011 | March 2012
Standard Life Investments operating profit up 21% Operating profit • Eight consecutive years of positive net flows 2011 2011 2011 2011 2010 2010 2010 2010 in third party business £ £ £m £ m m m £ £ £ £m m m m • Year end third party assets of £71.8bn Fee based revenue 383 1 331 (2010: £67.7bn 2 ) Maintenance expenses (227) (194) • Higher revenue yield on new business Investment for transformation and (31) (34) • Maintenance expenses reflect higher FTEs to growth support growth Total Total Total Total 125 125 125 125 103 103 103 103 • Indian associate, HDFC Asset Management, now the largest mutual fund company in India with AUM of £9.8bn EBIT margin EBIT margin EBIT margin EBIT margin Third party fee business bps 2 2 2 2 Third party net flows Third party net flows Third party net flows Third party net flows Third party fee business bps Third party fee business bps Third party fee business bps - - - -£ £1.9bn £ £ 1.9bn 1.9bn 1.9bn + 2bps + 2bps + 2bps + 2bps +1% point +1% point +1% point +1% point £6.2bn £ £ £ 6.2bn 6.2bn 6.2bn £ £ £ £4.3bn 4.3bn 4.3bn 4.3bn 35bps 35bps 35bps 35bps 37bps 37bps 37bps 37bps 33% 33% 33% 33% 34% 34% 34% 34% 2010 2010 2010 2010 2011 2011 2011 2011 2010 2010 2010 2010 2011 2011 2011 2011 2010 2010 2010 2010 2011 2011 2011 2011 1 Revenue includes proceeds from transfer of UK money market funds 2 Excluding impact of external transfer of UK money market funds 8 Preliminary Results 2011 | March 2012
70% increase in Canada operating profit Operating profit • AUA up 3% to £26.1bn 2011 2011 2011 2011 2010 2010 2010 2010 • 11% increase in fee based revenue £ £ £m £ m m m £ £ £ £m m m m Fee based revenue 166 150 • Spread/risk margin: Spread/risk margin 281 222 • Enhanced investment yield on Total income Total income 447 447 372 372 Total income Total income 447 447 372 372 assets contributing £88m Acquisition expenses (61) (64) (2010: £32m) Maintenance expenses (201) (193) • Strengthened mortality Investment for transformation and growth (36) (35) assumptions net of new investment Capital management 38 30 allocations reduced profit by £57m (2010: £13m) Total Total Total Total 187 187 187 187 110 110 110 110 • Net flows in Group savings fee business up 26% Net flows Net flows Fee business bps Fee business bps Net flows Net flows Fee business bps Fee business bps x4 x4 x4 x4 - - - -1bps 1bps 1bps 1bps £63m £ £ £ 63m 63m 63m £ £ £ £253m 253m 253m 253m 118bps 118bps 118bps 118bps 117bps 117bps 117bps 117bps 2010 2010 2010 2010 2011 2011 2011 2011 2010 2010 2010 2010 2011 2011 2011 2011 9 Preliminary Results 2011 | March 2012
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