OCTOBER 2014
1
Strategy 2
PART ONE – BUSINESS MODEL
PART TWO – FINANCIAL RESULTS
The Partnership 16
Investment Management 25
Our Clients 37
Our Market 43
Cash & Dividend Profile 64
Our Shareholders 74
Analyst following 76
Business Model
PART ONE
2
Strategy
3
St. James’s Place: Overview
• Leading UK Wealth Management Company - Established 1991
- UK listed with market cap of c.£3.5 billion - £49.1 billion in funds under management - Target market £50k to £5 million free investable assets
• Differentiated business model - ‘‘Vertically integrated’’
- Own dedicated distribution – the Partnership - Distinct investment management approach
• Well positioned to benefit from long-term market growth - Favourable demographic trends
- Increasing tax burden
4
Global Investment Management Expertise
S. W. M i tc h e l l C a p i ta l l l p
33 funds
59 lead fund managers
30 fund houses
8 asset classes/
strategies
14 exclusive to UK retail investors
14 cities
Whole of Market approachWe take responsibility for the due diligence on all the products and companies we make available to our clients.
5
SIP SERVICES
6
Our products and services
• Comprehensive range - of pension, investment and savings ‘‘wrappers’’
- of investment funds managed by global Investment Managers - access to ‘‘whole of market’’ for third party products and services e.g. Protection and Annuities
• Whilst avoiding - capital intensive products
- guarantees and options - overly complex, fashionable or high risk structures
7
The Growth Model
NEW BUSINESS
PRODUCTIVITYCAPACITYNumber of Partners New Business per Partner
8
Growing number of Partners
Num
ber
500
1,000
1,500
2,000
02004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
30 June
1% 2% 1%8%
7%9%
6%6%
8%9.5%
2,007
2.5%
7% p.a. compound growth over the last 5 years and 6% p.a. over the last 10 years
9
Productivity (single investment per Partner)£
mil
lio
n
0.5
1.00
1.50
2.00
2.50
3.00
4.00
4.50
3.50
0.02009
+2%
2010
+26%
2011 2012 2013 2014 30 June*
2.00
+3% +2%+11%
+13%
*Year on year
10
Partnership, including Advisers
500
1,000
1,500
2,000
2,500
02004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
30 June
10% -4%10%
9%8%
6%7%
10%
13%2,688
5%
9% p.a. compound growth over the last 5 years and 7% p.a. over the last 10 years
Num
ber
11
Productivity (single investment per Adviser)£
mil
lio
n
0.5
1.00
1.50
2.00
2.50
3.00
3.50
0.02009 2010
+27%
2011 2012 2013 2014 30 June*
1.5
+3% +1%+9%
+9%
*Year on year
12
New single investments
£ bi
llio
n
1
2
3
4
5
6
7
02004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
30 Sept
£1.2 bn£1.6 bn
£2.5 bn
£3.1 bn£2.9 bn
£3.3 bn
£4.6 bn£4.9 bn
£5.4 bn
£6.6 bn
£5.8 bn
Consistent net inflow of funds under management
£ bi
llio
n
4.0
5.0
3.0
2.0
1.0
020102009200720062005 2008 2011 2012 2013 2014
30 Sept*
+30%
+31%+34%
+60%-8%
+10% +4%
+28%
+23%
3.7bn
*Year on year 13
14
Fund flow information
£ billion 30 Sept 2014 30 Sept 2013
Funds under management at start 44.3 34.8New money invested 5.8 4.9Investment return 1.1 4.0
51.2 43.7
Regular income withdrawals/maturities (0.7) (0.5)Surrenders/part surrenders (1.4) (1.4)
Funds under management at close 49.1 41.8
Net inflow of funds under management 3.7 3.0
Implied surrender rate as % of average funds 4.1% 4.7%under management
9 months ended 9 months ended
Funds under management19% p.a. compound growth over the last 5 years and 19% p.a. over last 10 years (at Sept 2014)
£ b
illi
on
10
20
30
40
50
020052004 2006 2007 2008 2009 2010 2011 2012 2013 2014
30 Sept
+29%
+20%
+25%+18%
-10%
+31%
+26%+6%
+22%
+27%
+11%
49.1
15
16
The Partnership
Dedicated distribution – the Partnership
• High quality self-employed team of c.2,000 Partners - Average age is 48 - Above average productivity - 90%+ per annum retention rate
• Aim to grow Partner number by 5% to 7% per annum
• Aim to increase productivity each year
17
18
Geographic Distribution30 June 2014
Partners
4%
5%
2%
17%
23%
13%4% 4%
23%9%
Clients
23%
14%4%3%
22%Overseas Clients: 2%
4%
6%
2%
13%
24%
14%3% 4%
22%10%
19
Partners by age band30 June 2014
Existing Partners New Partners
65+ 3%
<35 8%
35-45 32%
45-55 39%
55-65 18%
65+ 1%
<35 27%
35-45 38%
45-55 26%
55-65 8%
Total Adviser numbers down 18%
ADVISER NUMBERS
TYPE OF ADVISER
Financial advisers
Bank advisers
Discretionary fund managers/stockbrokers
Total number of Advisers
FSA FIGURES 31 DEC 2012
20,453
4,809
3,718
28,980
FCA FIGURES 31 DEC 2013
21,881
3,556
5,783
31,220
FSA ESTIMATES 31 DEC 2011
25,616
8,658
4,043
38,317
20
21
22
The Academy
• Over 80 new students in 2014
• Will achieve over 50 graduates in 2014
• First Manchester intake commenced in September
• Planning for first Midlands based intake in 2015
• 5th Next Generation Academy intake to commence in October – will have enrolled over 70 individuals through this programme to date
• Should exceed 100 new students in 2015
23
Asia
The Opportunity
• Offices in Singapore, Hong Kong and Shanghai
• The Henley Group has 50 advisers with 4,000 clients and £430 million assets under advice
• Estimated 120,000 UK ex-pats with £12 billion of investible wealth (£100k each) – projected to grow to over £20 billion by 2020
• Our global investment proposition and relationship based approach is well suited to this market
24
Partner Survey 2013 - Source of new business/markets
• 81% existing clients and referrals
• 7% Introducers
• 12% new clients from other sources
• 27% of Partners experienced less competition in 2013
• 39% acquired new clients due to decline of high street advice (banks)
25
Investment Management
26
Our approach to investment management
Appoints the Fund Managers
Sets performance objectives
Risk management and strategy
Decisions: Change firm?
Change manager?No change?
‘MANAGES THE MANAGERS’
Peter Dunscombe
Davina Curling
Win Robbins
Steven Daniels
‘INDEPENDENT EXPERTISE’ THE INVESTMENT COMMITTEE STAMFORD
ASSOCIATES
27
Stamford AssociatesIndependent Investment Consultancy
Research FundManager Market
Access toWhole Market
Monitor Managersand Portfolios
Qualitative andQuantitative
Advise InvestmentCommittee
Focus on FutureOutperformance
• Analyse & identify talented managers
• Gather intelligence
• Number crunching
• Behavioural psychology• Monitor activity
• Workplace analysis
Recommend:
• New managers• Potential changes
28
Global Investment Management Expertise
S. W. M i tc h e l l C a p i ta l l l p
33 funds
59 lead fund managers
30 fund houses
8 asset classes/
strategies
14 exclusive to UK retail investors
14 cities
29
Growth PortfoliosBALANCED PORTFOLIO
Medium risk
• Aims to provide growth for investments of at least five years
• Diversified across asset classes to reduce risk, but fluctuations in value may be significant
• Wide variety of assets, including some holdings in emerging economies
• Medium risk
Alternatives 12.0%
Cash7.4%
Property8.4%
UKEquities 12.7%
Bonds 24.5%
International Equities 35.0%
Onshore Portfolio asset mix:
Fund mix: Onshore Offshore
Alternative Assets
Global Equity
Global Managed (Global)
International Corporate Bond
Investment Grade Corporate Bond
Multi Asset
Property
UK & General Progressive
Worldwide Managed (Worldwide Opportunities)
Emerging Markets Equity
Far East
11%10%
11%10%
11%10%
11%10%
11%10%
11%10%
0%10%
11%
11%
6%
6%
10%
10%
5%
5%
DEFENSIVE PORTFOLIOLow risk
• Aims to provide a positive return after charges over a rolling five-year period
• Invests primarily in bonds, alternative assets and equities
• Offers resilience to significant macroeconomic and market events
• Lower-medium risk
Alternatives 33.0%
Cash1.8%
Property0.8%
UK Equities
0.7%Bonds 48.8%
InternationalEquities 15.3%
Portfolio asset mix:
Fund mix:Multi Asset
UK Absolute Return
Alternative Assets
Gilts (UK Gilts)
Index Linked Gilts
International Corporate Bond
Worldwide Managed (Worldwide Opportunities)
40%
15%
10%
10%
10%
10%
5%
CONSERVATIVE PORTFOLIOLow to medium risk
• Aims to provide steady growth for investments of at least five years
• Aims to avoid large fluctuations in value, although fluctuations in value will occur
• Predominantly invests in bonds, equities and alternative assets
• Lower-medium risk
Alternatives 27.0%
Cash4.0%
Property0.8%
UK Equities 2.7%Bonds
38.9%
InternationalEquities 26.6%
Portfolio asset mix:
Fund mix:Global Equity
Multi Asset
Alternative Assets
Index Linked Gilts
International Corporate Bond
International Equity
Investment Grade Corporate Bond
UK Absolute Return
Worldwide Managed (Worldwide Opportunities)
Corporate Bond
15%
15%
10%
10%
10%
10%
10%
10%5%
5%
30
Growth Portfolios (cont.)
MANAGED FUNDS PORTFOLIOMedium risk
• Aims to provide capital growth for investments of at least five years
• Diversified across managers with different investment styles
• Fluctuations in value may be significant; the value of this Portfolio will typically fluctuate more than that of the Balanced Portfolio
• Invests in global equities, inluding emerging economies, and bonds
• Medium risk
Fund mix:AXA Framlington Managed (Balanced Managed)
Global Equity
Multi Asset
Schroder Managed (Managed Growth)
Strategic Managed
Worldwide Managed (Worldwide Opportunities)
Global Managed (Global)
15%
15%
15%
15%
15%
15%
10%
Cash10.0%
UK Equities 21.9%
Bonds 11.7% Alternatives 6.0%
Portfolio asset mix:
International Equities 50.4%
ADVENTUROUS PORTFOLIOMedium to high risk
• Aims to provide higher levels of capital growth for investments of at least ten years
• The value of the Portfolio may go up and down sharply
• Predominantly invests in global equities, including emerging economies
• Some holdings in bonds• Upper-medium risk
Fund mix:Emerging Markets Equity
Far East
Greater European (Greater European Progressive)
High Octane
North American
UK & General Progressive
Corporate Bond
15%
15%
15%
15%
15%
15%
10%
Cash4.4%
UK Equities 20.3% Bonds 9.0%
Portfolio asset mix:
International Equities 66.3%
31
Income PortfoliosIMMEDIATE INCOME PORTFOLIO
Low to medium risk• Aims to generate a consistent level of income with
some potential for capital growth• Aims to avoid large fluctuations in value, although
fluctuations will occur• Predominantly invests in bonds, mostly in the UK,
and commercial property• Some holdings in equities• Lower-medium risk
Cash7.9%Property
15.2% UK Equities 13.5%
Bonds 48.3%
InternationalEquities 15.1%
Onshore Portfolio asset mix:
Fund mix: Onshore Offshore
Property
Global Equity Income
UK & International Income
Corporate Bond
Gilts (UK Gilts)
Index Linked Gilts
International Corporate Bond
Equity IncomeInvestment Grade Corporate Bond
UK Growth
0%20%
15%15%
15%15%
10%10%
10%10%
10%10%
10%10%
10%0%10%10%
10%0%
BALANCED INCOME PORTFOLIOMedium risk
• Aims to generate an attractive level of income with the potential to rise over time
• Some potential for capital growth• Fluctuations in value may be significant• Predominantly invests in equities, mainly in the UK• Some holdings in commercial property, bonds and
alternative assets• Medium risk
Alternatives 10.0%
Cash 7.5%
Property11.4%
UK Equities 36.3%Bonds
24.1%
International Equities 10.7%
Onshore Portfolio asset mix:
Fund mix: Onshore Offshore
Property
Diversified Income (Allshare Income)
Equity Income
International Corporate Bond
Investment Grade Corporate Bond
Global Equity Income
UK & International Income
UK Equity (Income Distribution/UK High Income)
Multi Asset
Corporate Bond
0%15%
12%10%
12%10%
12%10%
12%10%
12%10%
12%10%
12%
10%
6%
10%
10%
5%
DEFERRED INCOME PORTFOLIOMedium risk
• Aims to generate a rising level of income• Potential for capital growth over the medium to
long term• Fluctuations in value may be significant; the vlue of
this Portfolio will typically fluctuate more than that of the Balanced Income Portfolio
• Predominantly invests in UK and International equities
• Some holdings in bonds• Medium risk
Fund mix:Equity Income
Global Equity Income
UK & International Income
UK Equity (Income Distribution/UK High Income)
UK Income
International Corporate BondCorporate Bond
Alternative Assets
15%
15%
15%
15%
15%
10%10%
5%
Portfolio asset mix:
Cash6.2%
Property0.4% Alternatives
1.0%
UK Equities 54.4%
Bonds 21.3% International
Equities 16.7%
32
Funds under management19% p.a. compound growth over the last 5 years and 19% p.a. over last 10 years (at Sept 2014)
£ b
illi
on
10
20
30
40
50
020052004 2006 2007 2008 2009 2010 2011 2012 2013 2014
30 Sept
+29%
+20%
+25%+18%
-10%
+31%
+26%+6%
+22%
+27%
+11%
49.1
33
Client Experience Over 3 and 5 years the client outcomes profiles align with our medium risk portfolio results.
Growth and Income portfolio returns include some backtested data prior to January 2011.
3 YEARS (per annum)
5 YEARS (per annum)
Source: FE and SJP. Total Return. Data to 30 September 2014
Defensive –
Balanced Balanced Income Median8.9% 10.1% 10.5%
Adventurous 11.6%
Conservative Immediate Income Lower quartile6.3% 8.6% 8.9%
Managed Deferred Income Upper quartile12.8% 13.6% 12.2%
GROWTH PORTFOLIOS INCOME PORTFOLIOS ACTUAL CLIENT OUTCOME
Defensive 4.9%
Balanced Balanced Income Median7.6% 8.2% 6.8%
Adventurous 8.8%
Conservative Immediate Income Lower quartile6.2% 6.9% 5.8%
Managed Deferred Income Upper quartile9.4% 9.3% 7.8%
GROWTH PORTFOLIOS INCOME PORTFOLIOS ACTUAL CLIENT OUTCOME
Net of charges.
34
Portfolio Relative Performance & Consistency Ratio
Fund average, not weighted by fund size
Relative to ARC Private Client Indices Equity Funds
Deferred Inc.
Balanced Inc.
Immediate Inc.
Adventurous
Managed
Balanced
Conservative
Defensive
-2%
1 month 1 year Since launch
-0.9%
0.0%
0.5%
0.8%
2.3%
2.3%
3.2%3 years 61.9% 60.1% 61.5%
Sept 14 chg chgSept 13 Sept 12
5 years 63.3% 63.0% 68.9%
10 years 78.6% 80.7% 81.5%3.6%
1% 2% 3% 4%-1% 0%
3 years, 62%5 years, 64%
10 years, 79%
Net of charges.
35
Funds Under Management: Shown by Asset Class and Region
30 September 2014
UK 30%
Fixed Interest 12%
Cash 9% Other Assets 4%
European 11%
Far East 9%
Property 3%
US 19%
Alternatives 3%
36
Benefits of investment management approach
• No in-house managers, so no conflict of interest
• Benefit from Investment Committee experience & expertise
• Ability to appoint the best fund managers with wholesale purchasing power
• Continuous monitoring plus quarterly reviews
• Easy to change manager – reduced churn
• Free switching for clients
• Significantly improved retention of funds
37
Our Clients
38
Geographic Distribution of Our Clients30 June 2014
Clients
4%
6%
1%
14%
24%
14%3% 4%
22%10%Overseas Clients: 2%
443,000 clients
Male 53%Female 47%Average age 54
39
Clients and FUM Clients by Value Band30 June 2014
All Clients
£1m+ 1%
£500k- £1m 2%
£250k- £500k
7%
£50k- £250k 36%
<£50k 54%
All Clients - FUM
£1m+ 16%£500k-
£1m 16%
£250k- £500k 21%
£50k- £250k 38%
<£50k 9%
40
New and Retained Clients by Age Band30 June 2014
New Clients by Age BandExisting Clients by Age Band
<30 3%
30-40 8%
40-50 25%
50-55 13%
55-60 11%
60-65 10%
65-70 10%
70+ 20%
<30 9% 30-40
10%
40-50 20%
50-55 13%
55-60 13%
60-65 11%
65-70 11%
70+ 13%
41
What our clients think
• 84%* of clients highly satisfied with their relationship with St. James’s Place – nearly a third scoring us 10 out of 10
• 88%** of clients ‘value’ a face-to-face relationship with their Partner
• 86%* of clients agreed that we provide excellent service
• 80%* of clients highly satisfied in the way in which we communicate with them
• 96%** of clients were likely to recommend St. James’s Place to others
• 79%* of clients would definitely invest with St. James’s Place again if making that decision today
*Ledbury Research – November/December 2013.*Scoring 8 or more out of 10.
The key findings were:
**Wealth Account Survey, January 2014.
42
Award winning in 2013/2014
Best Private Client Asset Manager UK
AWARDS 2014
43
Our Market
44
Our Market
• The market is big
• Favourable demographics
• The tax burden is increasing
• UK high net worth individuals want face-to-face advice
• Limited access to advice as adviser numbers have reduced
45
The SJP MarketplaceUK individuals with between £50k and £5m of liquid assets
Source: Datamonitor, 23 January 2014
Year
Num
ber
of I
ndiv
idua
ls
(mil
lion
)
2
4
6
8
10
12
02014
9,108,800
2015
9,482,400
2016 2017 2018
9,927,00010,345,700 10,743,472
46
The SJP MarketplaceAmount of liquid assets held by UK individuals with between £50k and £5m
Source: Datamonitor, 23 January 2014
Year
£ bi
llio
n
500
1,000
1,500
2,000
2,500
02014
£1,717bn
2015
£1,797bn
2016 2017 2018
£1,885bn £1,982bn£2,082bn
47
UK Funds under managementFunds £billion
The City UK Fund management report 2012 – figures relate to 31 December 2011.Insurance & Corporate Pensions relate to institutional clients.
Corporate Pensions £1,597
Insurance Companies £994
Retail Clients £760
Private Clients £483
Private Equity £112
Property £142
Hedge £217
Source: 2014 PAM Directory
Company2013 Rank
2012 Rank
AUM end 2013(£bn)
Change v 2012 (£bn)
Share (of top 40)
49.6
48.1
44.3*
31.9
31.3
28.7
28.2
24.7
24.0
19.5
9.5
4.9
330.3
563.1
-2.1 (-4%)
-2.1 (-4%)
9.5 (27%)*
0.5 (2%)
4.3 (16%)
-1.3 (-4%)
2.2 (8%)
-1.1 (-4%)
11.2 (87%)
2.8 (17%)
8.8 (8%)
0.1 (3%)
23.9 (8%)
49.1 (10%)
8.8%
8.5%
7.9%*
5.7%
5.6%
5.1%
5.0%
4.4%
4.3%
3.5%
3.3%
0.9%
59%
-
1st
2nd
3rd
4th
5th
9th
6th
10th
7th
20th
8th
28th
1st
2nd
3rd
4th
6th
13th
5th
9th
7th
20th
8th
31st
Coutts & Co
Barclays Wealth
St. James’s Place Wealth Management
Goldman Sachs International
UBS Wealth Management
Investec Wealth & Investment
HSBC
Rathbones
Brewin Dolphin
Close Brothers
Top 10 Companies
Hargreaves Lansdown
Towry
Top 40 Companies
Private Asset & Wealth ManagersTop 10 and selected others
48*31/12/2013
49
The SJP Opportunity
• ISAs - Cash £228 bn (Aug 2014 - HMRC)
- Stocks & shares £241 bn (Aug 2014 - HMRC)
• Building Society (Mutual Lender) deposits £258 bn (Nov 2013 - Building Societies Association)
• National Savings and Investment £105 bn (Nov 2013 - Building Societies Association)
(NS&I) deposits
• Bank deposits £864 bn (Nov 2013 - Building Societies Association)
• Mutual funds £763 bn (Nov 2013 - IMA)
50
The advice market... transparent?The fees a client may have to consider when trying to compare advice and products based on publicly available information for a variety of firms and providers.
Advice
Initial advice fee% of initial investment
ORHourly rate (£) Rate may depend on seniority of adviser
Rate may depend on seniority of adviser
Amount may depend on activity
Tiered fee based on transaction size
Tiered fee based on amount invested + VAT
Tiered fee based on fund value
Amount based on fund value
Amount per transaction
Amount based on fund value
Amount will depend on insurance company
Amount based on value of funds under management
Amount based on value of funds under management
% of Funds Under ManagementOR
Hourly rate (£)
% of Funds Under ManagementOR
Prescribed fees (£)
% of Funds Under ManagementOR
Prescribed fees (£)
Tiered fee based on fund value
Amount will depend on platform providerAccount fee (£)Platform/Admin
Ongoing advice fee
Transaction charges
Insurance Company
Administration fee
Wrapper charges
Administration fee
Fund Management
Annual charge (%)
Annual management charges (£)
Additional miscellaneous costs
Source: Numis
Total Investment £85kUT/ISA £35k Pension £50k
Advisory/Discretionay Managers Total bps
210
219
195
226
231
278
305
312
322
330
349
350
362
Hargreaves PMS
St. James’s Place (6yr holding period)
St. James’s Place (20yr holding period)
Raymond James
Brewin Dolphin Discretionary (fee only)
Rathbones Discretionary
Barclays Wealth (3yr holding period)
Towry (6yr holding period)
Towry (3yr holding period)
Coutts (20yr holding period)
St. James’s Place (3yr holding period)
Investec PMS
Coutts (6yr holding period)
Total Advisory/Discretionary Charge Comparison
51
Source: Numis
Total Investment £212kUT £100k ISA £12k
Pension £100k
Advisory/Discretionay Managers Total bps180
195
203
210
229
231
235
247
263
275
275
282/299
Raymond James
St. James’s Place (20yr holding period)
Rathbones Discretionary
Hargreaves PMS
Coutts (6yr holding period)
St. James’s Place (6yr holding period)
Coutts (20yr holding period)
Brewin Dolphin Discretionary (fee only)
Investec PMS
Towry (6 & 20yr holding period)
Coutts (3yr holding period)
Barclays Wealth (20yr holding period)
Total Advisory/Discretionary Charge Comparison
52
53
Summary
• Established and respected business
• Experienced and stable management team
• Experienced and stable advisory team – ‘The Partnership’
• Proven track record of growth
• Resilient in tough markets
• Favourable demographics
• Award winning performance
Financial Results
PART TWO
54
SJP new business by quarterAPE (Annual premiums plus 10% of single investments)
160
200
220
240
180
2011 over 2010
2011
+16% +17% +13% -5%2012 over 20112013 over 20122014 over 2013
2012
2013
2014
-5%+25%+20%
-2%+24%+19%
+4%+24%+18%
+43%+9%
£m
140
120
100
80
134.4143.9
136.7
170.6
203.3205.4
242.5
212.6
179.9
209.1
163.7
144.6
192.2
167.1
138.5
Q1 Q2 Q3 Q4
55
Q3 New business
Funds under management
• Total single investments of £5.75 billion – up 21% YTD• SJP new business on an APE basis of £660.5 million – up 19% YTD• Our own business represents 89% of the total
• Net inflow of funds under management of £3.7 billion – up 23% YTD• Continue to retain 95% year on year• Funds under management of £49.1 billion – up 11% since
beginning of year; up 17% over last 12 months
Other financials• EEV net asset value of 620.0 pence per share – up 15%
As at 30 September 2014.
56
Partnership*
• Partnership numbers 2,007 – up 2.5%• Total Advisers 2,688 – up 4.6%
Profits*
Other financials*
• EEV new business profit £181.3 million – up 19%• EEV operating profit £260.7 million – up 12%• IFRS operating profit before shareholder tax (excluding one-off items)
£82.4 million – up 1%
• Underlying cash result of £78.5 million – up 17%• Interim dividend of 8.93 pence – up 40%
*As at 30 June 2014.
57
Record EEV new business profit£
mil
lion
150
200
250
300
350
100
50
02009
+26%
2010 2011 2012 2013 2014 30 June*
+40%+13%
+13%
+16%
+19%
327.2
181.3
*Year on year
58
Analysis of EEV life, pension & unit trust pre-tax operating profit
30 Jun 2014 30 Jun 2013
New business contribution 181.3 152.4Profits from existing business- expected 91.6 56.5- experience variance 9.0 39.3- operating assumption changes – –
Investment income 3.4 1.7
Operating profit 285.3 249.9
£ million
59
Pre-tax EEV profit
£ million 30 Jun 2014 30 Jun 2013
Life, pension & unit trust 285.3 249.9Distribution (8.8) (2.1)
Other operations (15.8) (14.2)
Total operating profit 260.7 233.6
Investment variance 13.0 209.5Economic changes (3.1) 1.5
Pre-tax result 270.6 444.6
60
2013 EEV operating profit£
mil
lion 300
400
500
200
100
02009
+12%
2010 2011 2012 2013 2014 30 June*
+45%+12% -2%
+26%
+12%
260.7
*Year on year
61
Pre-tax IFRS profit before shareholder tax
£ million 30 Jun 2014 30 Jun 2013
Underlying 82.4 81.2
One-off reinsurance treaty – 8.9
Profit before shareholder tax 82.4 90.1
62
Capital position as at 30 June 2014
£ million Life Regulated Other Total Other
Solvency position
Solvency net assets 233.6 48.1 233.7 515.4
Solvency requirement 48.8 16.5
Solvency ratio 479% 292%
63
Group expenses£ million 30 Jun 2014 30 Jun 2013
Paid from policy marginsPartner remuneration 215.9 177.7Investment expenses 58.7 49.5Third party administration 18.0 17.7 292.6 244.9Direct expensesOther new business related costs 40.9 32.4Establishment expenses 63.5 54.7Academy costs 1.8 1.3Other development costs 6.5 3.9Back office infrastructure costs 4.7 –Regulatory fees 3.1 3.0 FSCS Levy 6.9 2.4Regulatory change costs – 1.4Contribution from third party product sales (11.0) (8.8) 116.4 90.3 409.0 335.2
Cash & Dividend Profile
64
65
Underlying post-tax cash arising from inforce business£
mil
lion
20
40
60
80
100
120
140
160
180
200
02009 2010
-3%
2011 2012 2013 2014 30 June*
188.2
114.9
144.5125.4
102.3
+15%+23%
+15%
+30%
+25%
88.8
*Year on year
66
Return on inforce
• Where product structures use early withdrawal the business is cash neutral in first six years
• This relates to £14.2 billion of new business added in last six years which is not yet generating positive cash earnings*
• This amounts to £109 million of post-tax cash earnings per annum in future*
* Ignores stock net movements and outflows
Year £ Billion2008 0.72009 1.62010 2.12011 2.22012 2.42013 3.5 2014 (Half year) 1.7
Total 14.2*
67
New single investments
£ bi
llio
n
1
2
3
4
5
6
7
02004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014
30 Sept
£1.2 bn£1.6 bn
£2.5 bn
£3.1 bn £2.9 bn
£3.3 bn
£4.6 bn£4.9 bn
£5.4 bn
£6.6 bn
£5.8 bn
New investments with early withdrawal charge
68
Underlying post-tax cash result
Investment in new business
£ m
illi
on
20
40
60
80
100
120
140
160
180
200
220
02009 2010 2011 2012 2013 2014
30 June
65.3 61.4 62.4 60.5 48.3 36.4
69
Investment in new business
Post-tax new business cost (£m)
Post-tax EEV new business profit (£m)
Margin (% of APE)
IRR (net of tax)
Cash payback period
As % of gross inflows of FUM
(36.4)
145.3
40.5%
28.3%
4 Years
1.0%
(25.0)
121.7
40.8%
28.3%
4 Years
0.8%
30 Jun 2013 30 Jun 2014
70
Underlying post-tax cash result
Investment in new business
£ m
illi
on
20
40
60
80
100
120
140
160
180
200
220
02009 2010 2011 2012 2013 2014
30 June*
40.923.5
63.0
139.9
78.5
84.0
+67%
+17%
*Year on year
71
Underlying cash earnings per sharePe
nce
10
5
15
20
25
30
020072006
5.564.84
2008 2009
5.09
2010
4.92
2011 2012 2013 201430 June
8.49
12.92
16.88
27.46
15.30
72
Continual dividend growth
Pen
ce
2
4
8
6
10
12
14
16
0200779%
200677%
+18%+16%
200887%
200992%
+2%
201071%
+2.5%
201163%
201264%
201359%
2014c65%
30 JunePayout Ratio
15.96
8.93+33%
+33%
+33%
+50%
+40%*
73
Outlook
• Familiar and well respected brand/business
• Loyal client base (Partners and investors)
• Consistent strong recruitment
• Resilient Investment Management Approach
• Strong solvency position
• Strong market for advice
• Favourable market place
• Uniquely placed business
Our Shareholders
74
75
Our Shareholders
1. Baillie Gifford 5.71%2. Threadneedle 5.66%3. Fidelity (FMR) 5.44%4. Legal & General 4.13%5. M&G 4.00%6. Kames Capital 3.39%7. AXA Framlington 3.33%8. Old Mutual 2.98%9. BlackRock (BGI) 2.86%10. Allianz 2.48%
As at 30 September 2014
Analyst following
76
77
Analyst following
• Lance Burbridge - Autonomous• Alan Devlin - Barclays Capital• Matthew Preston - Berenberg• Andrew Sinclair - Boa Merrill Lynch• Haley Tam - Citi• Chris Esson - Credit Suisse• Oliver Steel - Deutsche Bank• Ravi Tanna - Goldman Sachs• Ashik Musaddi - JP Morgan Cazenove• Greig Paterson - KBW
• Neil Welch - Macquarie• Jon Hocking - Morgan Stanley• Ben Bathurst - Nomura• David McCann - Numis• Marcus Barnard - Oriel Securities• Barrie Cornes - Panmure Gordon• Stuart Duncan - Peel Hunt• Paul De’ath - RBC Capital Markets• Edward Houghton - Sanford C Bernstein• Eamonn Flanagan - Shore Capital
30 October 2014
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