TIDMSL.
RNS Number : 6015G
Standard Life plc
09 August 2016
Standard Life plc
Half year results 2016
Part 4 of 4
5. Supplementary information
5.1 Alternative performance measures
We assess our performance using a variety of measures that are
not defined under IFRS and are therefore termed alternative
performance measures (APMs). The APMs that we use may not be
directly comparable with similarly named measures used by other
companies.
We have presented below reconciliations from these APMs to the
most appropriate measure prepared in accordance with IFRS.
Full definitions for APMs are included in the Glossary
Operating profit
Operating profit is a key APM used by our management to evaluate
performance.
Operating profit reporting provides further analysis of the
results reported under IFRS and the Directors believe it helps to
give shareholders a fuller understanding of the performance of the
business by identifying and analysing non-operating items.
Operating profit is a key performance indicator, and is consistent
with the way that financial performance is measured by management
and reported to the Board and strategic executive committee.
Full
6 months 6 months year
2016 2015 2015
GBPm GBPm GBPm
------------------------------------ --------- --------- --------
Fee based revenue 794 761 1,579
Spread/risk margin 63 40 145
------------------------------------- --------- --------- --------
Total operating income 857 801 1,724
Total operating expenses (566) (542) (1,124)
Capital management 13 1 9
Share of associates' and joint
ventures' profit before tax 37 30 56
------------------------------------- --------- --------- --------
Operating profit before tax
from continuing operations 341 290 665
------------------------------------- --------- --------- --------
Tax on operating profit (69) (37) (114)
Share of associates' and joint
ventures' tax expense (5) (5) (13)
------------------------------------- --------- --------- --------
Operating profit after tax from
continuing operations 267 248 538
------------------------------------- --------- --------- --------
Singapore included in discontinued
operations segment - (40) (42)
Total non-operating items (61) (158) (257)
Tax on non-operating items 20 19 37
------------------------------------- --------- --------- --------
IFRS profit from continuing
operations 226 69 276
IFRS profit from discontinued
operations - 1,142 1,147
------------------------------------- --------- --------- --------
Total IFRS profit attributable
to equity holders of Standard
Life plc 226 1,211 1,423
------------------------------------- --------- --------- --------
Operating profit excludes impacts arising from short-term
fluctuations in investment return and economic assumption changes.
Operating profit also excludes restructuring and corporate
transaction costs, amortisation and impairment of intangibles
acquired in business combinations, and certain one-off items.
Further details on operating profit and non-operating items are
included in Notes 4.3(b)(i) and 4.7 of the IFRS condensed
consolidated financial information section of this report.
As set out in the table above, the key components of operating
profit before tax are total operating income (which is broken down
into fee based revenue and spread/risk margin), total operating
expenses and share of associates' and joint ventures' profit before
tax. These components provide a meaningful analysis of our
operating results. A reconciliation of total operating income and
total operating expenses from continuing operations (as presented
in the analysis of operating profit above) to total revenue and
total expenses respectively (as presented in the IFRS consolidated
income statement) is included in Note 4.3(b)(ii) of the IFRS
condensed consolidated financial information section of this
report.
Underlying performance
Underlying performance is calculated as operating profit before
tax after excluding the impact of spread/risk operating actuarial
assumption changes and specific management actions in the reporting
period. It therefore removes certain volatile items from operating
profit and supports an understanding of the underlying operating
performance of the business.
Full
6 months 6 months year
2016 2015 2015
GBPm GBPm GBPm
---------------------------------- --------- --------- ------
Operating profit before tax
from continuing operations 341 290 665
Underlying adjustments
Operating assumption changes - - (44)
Shareholder support to the
German with profits business - 9 9
----------------------------------- --------- --------- ------
Underlying performance from
continuing operations 341 299 630
----------------------------------- --------- --------- ------
Underlying cash generation
This is an APM which presents a shareholder view of underlying
cash earnings. Underlying cash generation adjusts underlying
performance from continuing operations for certain non-cash items
as set out below. It provides insight into our ability to generate
cash that supports further investment in the business and the
payment of dividends to shareholders. The IFRS consolidated
statement of cash flows includes policyholder cash flows, and
therefore does not present a shareholder view, and does not exclude
underlying adjustments and non-operating items.
Restated
Restated Full
6 months 6 months year
2016 2015 2015
GBPm GBPm GBPm
--------------------------------------- ----- --------- ---------- ---------
Operating profit before tax
from continuing operations 341 290 665
Underlying adjustments - 9 (35)
---------------------------------------------- --------- ---------- ---------
Underlying performance from
continuing operations 341 299 630
Associates and JVs adjustment (a) (29) (23) (44)
Current tax on underlying performance (b) (53) (33) (114)
DAC/DIR adjustment (c) (3) (3) 5
Fixed and intangible assets
adjustment (d) (2) (10) (18)
--------------------------------------- ----- --------- ---------- ---------
Underlying cash generation 254 230 459
---------------------------------------------- --------- ---------- ---------
Further details on the reconciling items between underlying
performance and underlying cash generation are included below.
(a) Associates and Joint Ventures (JVs) adjustment
The calculation of underlying cash generation has been changed
during H1 2016. Underlying cash generation now includes dividends
received from associates and joint ventures, previously no
contribution was included from these businesses. The revised
approach reflects more closely the underlying cash generated given
the regular receipt of dividends in recent years from our Indian
associates HDFC Life and HDFC Asset Management. Comparatives have
been restated.
Restated
Restated Full
6 months 6 months year
2016 2015 2015
GBPm GBPm GBPm
------------------------------------ --------- ---------- ---------
Exclude share of associates'
and joint ventures' profit before
tax (37) (30) (56)
Dividends received from associates
and joint ventures 8 7 12
Associates and JVs adjustment (29) (23) (44)
------------------------------------- --------- ---------- ---------
(b) Current tax on underlying performance
Current tax on underlying performance excludes tax on
non-operating and underlying adjustments, excludes current tax
attributable to policyholders, and excludes deferred tax
charges/credits.
Full
6 months 6 months year
2016 2015 2015
GBPm GBPm GBPm
--------------------------------------- --------- --------- ------
Total current tax attributable
to continuing operations (205) (94) (222)
Current tax expense attributable
to policyholders' returns 156 94 168
Current tax credit relating
to non-operating profit items (4) (33) (68)
Current tax expense attributable
to underlying adjustments - - 8
---------------------------------------- --------- --------- ------
Current tax on underlying performance (53) (33) (114)
---------------------------------------- --------- --------- ------
(c) Deferred acquisition costs (DAC)/ Deferred income reserve (DIR) adjustment
The DAC/DIR non-cash adjustment adds back existing business
DAC/DIR amortisation included in underlying performance for the
period and deducts the equivalent new business DAC/DIR additions
for the period. The following table reconciles DAC/DIR movements in
the IFRS financial statements to the DAC/DIR adjustment.
Full
6 months 6 months year
2016 2015 2015
GBPm GBPm GBPm
-------------------------------------- --------- --------- ------
Amortisation of deferred acquisition
costs 50 64 124
Acquisition costs deferred during
the period (32) (51) (83)
Amortisation of deferred income (30) (31) (63)
Fee income deferred during the
period 8 13 25
Adjustments for HWPF and GWPF
DAC/DIR not included in shareholder
view 1 2 2
--------------------------------------- --------- --------- ------
DAC/DIR adjustment included
in underlying cash generation (3) (3) 5
--------------------------------------- --------- --------- ------
(d) Fixed and intangible assets adjustment
The fixed and intangible assets adjustment adds back
depreciation and amortisation that is included within underlying
performance for the period and deducts additions for the period
where the depreciation or amortisation of those additions will be
included within underlying performance. The following table
reconciles equipment and intangible asset movements in the IFRS
financial statements to the fixed and intangible asset
adjustment.
Full
6 months 6 months year
2016 2015 2015
GBPm GBPm GBPm
-------------------------------------- --------- --------- ------
Depreciation of equipment 7 7 16
Amortisation of intangible assets(1) 23 13 31
Additions of equipment(1) (6) (3) (7)
Additions of intangible assets(1) (26) (27) (58)
Fixed and intangible assets
adjustment (2) (10) (18)
--------------------------------------- --------- --------- ------
(1) Excludes equipment and intangible assets acquired through
business combinations.
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
EBITDA is an APM reported by Standard Life Investments, which is
commonly used by asset management businesses to measure
profitability and therefore provides useful information on
operating performance. EBITDA for Standard Life Investments adjusts
operating profit by removing net interest expense, depreciation and
amortisation.
Full
6 months 6 months year
2016 2015 2015
Standard Life Investments GBPm GBPm GBPm
----------------------------------------- --------- --------- ------
EBITDA 182 161 352
Interest, depreciation and amortisation (6) (7) (10)
------------------------------------------ --------- --------- ------
Operating profit before tax
from continuing operations 176 154 342
Share of associates' and joint
ventures' tax expense (5) (5) (11)
Total non-operating items (16) (24) (53)
Total tax expense (32) (24) (53)
------------------------------------------ --------- --------- ------
Total IFRS profit attributable
to equity holders of Standard
Life plc 123 101 225
------------------------------------------ --------- --------- ------
5.2 Financial ratios
We also use a number of financial ratios to help assess our
performance and these are also not defined under IFRS. Details of
our main financial ratios and how they are calculated are presented
below.
Operating return on equity
Operating return on equity is a measure that highlights our
ability to generate operating profit relative to our shareholder
capital. Operating return on equity represents the annualised
post-tax operating profit expressed as a percentage of the opening
IFRS equity, adjusted for time apportioned dividends paid to equity
holders.
Full
6 months 6 months year
2016 2015 2015
Operating profit after tax (GBPm) 267 251 541
Opening IFRS equity attributable
to equity holders of Standard
Life plc (GBPm) 4,002 4,672 4,672
External final dividend payment
- time apportioned (GBPm) (142) (131) (131)
External interim dividend payment
- time apportioned (GBPm) - - (20)
Canada: Sale proceeds less return
of value - time apportioned (GBPm) - 397 397
Canada: Remove net asset value
at point of sale - time apportioned
(GBPm) - (1,106) (1,106)
--------------------------------------- --------- --------- --------
Adjusted IFRS equity (GBPm) 3,860 3,832 3,812
--------------------------------------- --------- --------- --------
Operating return on equity (%) 13.8 12.9 14.2
--------------------------------------- --------- --------- --------
Cost/income ratio
Cost/income ratio is a measure that highlights our efficiency
and is calculated as operating expenses divided by operating income
on a rolling 12 month basis, and includes the share of associates'
and joint ventures' profit before tax.
12 months
to Full Full
30 June year year
2016 2015 2014
Operating expenses from continuing
operations (GBPm) (1,148) (1,124) (1,045)
Fee based revenue (GBPm) 1,612 1,579 1,429
Spread/risk margin (GBPm) 168 145 183
Share of associates' and joint
ventures' profit before tax 63 56 39
Total operating income and
share of associates' and joint
ventures' profit before tax
from continuing operations
(GBPm) 1,843 1,780 1,651
-------------------------------------- ---------- -------- --------
Cost/income ratio (%) 62 63 63
-------------------------------------- ---------- -------- --------
Fee revenue yield (bps)
The average revenue yield on fee based business is a measure
which illustrates the average margin earned on the assets that we
administer. It is calculated as a rolling 12 months fee based
revenue divided by a rolling 12 months monthly average AUA.
Standard Life UK Pensions
Investments Growth and Savings
channels
12 months
12 months Full to Full
to year 30 June year
30 June 2016 2015 2016 2015
---------------------------------- ------------------- ------- -------------- --------
Fee based revenue (GBPm) 657 624 638 631
Average fee based assets
under administration (GBPbn)(1) 123.1 119.0 107.9 106.2
---------------------------------- ------------------- ------- -------------- --------
Fee revenue yield (bps) 53 52 59 59
---------------------------------- ------------------- ------- -------------- --------
(1) Excludes AUA from conventional with profits for the UK
pensions and savings business and HDFC Asset Management for
Standard Life Investments.
EBITDA margin
EBITDA margin is a measure reported by Standard Life Investments
and is commonly used by asset management businesses to measure
profit in relation to revenue. It is calculated as EBITDA divided
by fee based revenue.
Full
6 months 6 months year
Standard Life Investments 2016 2015 2015
EBITDA (GBPm) 182 161 352
Fee based revenue (GBPm) 431 402 843
---------------------------- --------- --------- ------
EBITDA margin (%) 42 40 42
---------------------------- --------- --------- ------
5.3 Assets under administration and net flows
Assets under administration (AUA) is a measure of the total
assets administered on behalf of individual customers and
institutional clients. It includes those assets for which we
provide investment management services, as well as those assets we
administer where the customer has made a choice to select an
external third party investment manager. As an investment company,
AUA and net flows are key drivers of shareholder value.
Assets under administration (summary)
6 months ended 30 June 2016
Opening Market Closing
AUA at Gross Net and other AUA at
1 Jan 2016 flows Redemptions flows movements 30 Jun 2016
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
------------------- ------------------- ------------ ------- ------------ ------- ----------- -------------
Total Growth
Channels 198.3 20.6 (16.5) 4.1 6.5 208.9
Total Mature Books
fee 82.0 0.7 (3.6) (2.9) 7.8 86.9
Total Mature Books
spread/risk 14.9 0.1 (0.6) (0.5) 1.7 16.1
Total Other 12.2 0.4 (0.2) 0.2 3.7 16.1
------------------- ------------------- ------------ ------- ------------ ------- ----------- -------------
Total AUA 307.4 21.8 (20.9) 0.9 19.7 328.0
------------------- ------------------- ------------ ------- ------------ ------- ----------- -------------
Growth Channels Institutional 67.0 8.4 (6.4) 2.0 9.1 78.1
------------------
Wholesale 45.9 6.5 (6.9) (0.4) 1.8 47.3
Wealth 6.5 0.5 (0.3) 0.2 - 6.7
Ignis(1) 11.1 0.3 (0.4) (0.1) (5.4) 5.6
Standard Life
Investments 130.5 15.7 (14.0) 1.7 5.5 137.7
-------------------- ------------ ------- ------------ ------- ----------- -------------
Workplace 33.0 2.0 (1.2) 0.8 0.2 34.0
Retail(2) 42.6 4.1 (2.1) 2.0 1.1 45.7
UK Pensions and
Savings 75.6 6.1 (3.3) 2.8 1.3 79.7
-------------------- ------------ ------- ------------ ------- ----------- -------------
Europe Growth(2) 9.6 0.7 (0.4) 0.3 0.5 10.4
Pensions and
Savings 85.2 6.8 (3.7) 3.1 1.8 90.1
-------------------- ------------ ------- ------------ ------- ----------- -------------
Hong Kong 0.5 - - - 0.1 0.6
Eliminations(3) (17.9) (1.9) 1.2 (0.7) (0.9) (19.5)
-------------------- ------------ ------- ------------ ------- ----------- -------------
Total Growth
Channels 198.3 20.6 (16.5) 4.1 6.5 208.9
-------------------- ------------ ------- ------------ ------- ----------- -------------
Mature Books UK Mature Retail 32.7 0.4 (1.6) (1.2) 1.1 32.6
------------------
Europe Mature fee 8.4 0.3 (0.2) 0.1 1.8 10.3
Third party
strategic partner
life business 39.6 - (1.4) (1.4) 4.8 43.0
Other fee including
CWP 1.3 - (0.4) (0.4) 0.1 1.0
-------------------- ------------ ------- ------------ ------- ----------- -------------
Total Mature Books
fee 82.0 0.7 (3.6) (2.9) 7.8 86.9
-------------------- ------------ ------- ------------ ------- ----------- -------------
Spread/risk 14.9 0.1 (0.6) (0.5) 1.7 16.1
Total Mature Books 96.9 0.8 (4.2) (3.4) 9.5 103.0
-------------------- ------------ ------- ------------ ------- ----------- -------------
Associate and joint
venture life
businesses(4) 2.3 0.4 (0.2) 0.2 1.0 3.5
Other(5) 10.4 - - - 2.8 13.2
Other
Eliminations(3) (0.5) - - - (0.1) (0.6)
-------------------- ------------------ ------------ ------- ------------ ------- ----------- -------------
Total 307.4 21.8 (20.9) 0.9 19.7 328.0
-------------------- ------------------ ------------ ------- ------------ ------- ----------- -------------
(1) In H1 2016 a number of Ignis funds were merged with other
SLI funds, resulting in a decrease in reported Ignis AUM of
GBP5.6bn. These assets are now included in Institutional (GBP4.0bn)
and Wholesale (GBP1.6bn) with the transfers shown in Market and
other movements.
(2) Wrap AUA is reported predominantly within Retail: GBP25.8bn,
(FY 2015: GBP23.4bn). International bond AUA is reported within
Europe growth fee business: GBP2.2bn
(FY 2015: GBP2.1bn).
(3) Certain products are included in both Pensions and Savings
growth AUA and Standard Life Investments growth AUM. Therefore, at
a Group level an elimination adjustment is required to remove any
duplication, in addition to other necessary consolidation
adjustments. Comprises GBP19.5bn (FY 2015: GBP17.9bn) related to
growth channel business eliminations and GBP0.6bn (FY 2015:
GBP0.5bn) related to other consolidation/eliminations.
(4) Market and other movements includes GBP0.8bn relating to
stake increase in HDFC Life in April 2016.
(5) Other comprises Assets not backing products of GBP10.5bn (FY
2015: GBP7.7bn) and Other corporate assets of GBP2.7bn (FY 2015:
GBP2.7bn).
Assets under administration (summary)
6 months ended 30 June 2015
Opening Market Closing
AUA at Gross Net and other AUA at
1 Jan 2015 flows Redemptions flows movements 30 Jun 2015
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
------------------- ------------------- ------------ ------- ------------ ------- ----------- -------------
Total Growth
Channels 180.7 20.5 (13.1) 7.4 2.2 190.3
Total Mature Books
fee 87.9 0.8 (4.4) (3.6) 0.8 85.1
Total Mature Books
spread/risk 16.1 0.1 (0.6) (0.5) (0.2) 15.4
Total Other 11.9 0.3 (0.2) 0.1 (0.7) 11.3
------------------- ------------------- ------------ ------- ------------ ------- ----------- -------------
Total AUA 296.6 21.7 (18.3) 3.4 2.1 302.1
------------------- ------------------- ------------ ------- ------------ ------- ----------- -------------
Growth Channels Institutional 61.4 5.4 (3.6) 1.8 1.4 64.6
------------------
Wholesale 35.5 8.9 (3.6) 5.3 (0.2) 40.6
Wealth 6.1 0.4 (0.4) - 0.2 6.3
Ignis 14.5 1.3 (3.2) (1.9) 0.3 12.9
Standard Life
Investments 117.5 16.0 (10.8) 5.2 1.7 124.4
-------------------- ------------ ------- ------------ ------- ----------- -------------
Workplace 32.0 2.1 (1.0) 1.1 0.1 33.2
Retail(1) 37.3 3.6 (1.8) 1.8 1.3 40.4
UK Pensions and
Savings 69.3 5.7 (2.8) 2.9 1.4 73.6
-------------------- ------------ ------- ------------ ------- ----------- -------------
Europe Growth(1) 8.7 0.7 (0.4) 0.3 - 9.0
Pensions and
Savings 78.0 6.4 (3.2) 3.2 1.4 82.6
-------------------- ------------ ------- ------------ ------- ----------- -------------
Hong Kong 0.4 - - - - 0.4
Eliminations(2) (15.2) (1.9) 0.9 (1.0) (0.9) (17.1)
-------------------- ------------ ------- ------------ ------- ----------- -------------
Total Growth
Channels 180.7 20.5 (13.1) 7.4 2.2 190.3
-------------------- ------------ ------- ------------ ------- ----------- -------------
Mature Books UK Mature Retail 33.5 0.4 (1.6) (1.2) 1.1 33.4
------------------
Europe Mature fee 8.5 0.4 (0.2) 0.2 (0.8) 7.9
Third party
strategic partner
life business 43.8 - (2.2) (2.2) 0.5 42.1
Other fee including
CWP 2.1 - (0.4) (0.4) - 1.7
-------------------- ------------ ------- ------------ ------- ----------- -------------
Total Mature Books
fee 87.9 0.8 (4.4) (3.6) 0.8 85.1
-------------------- ------------ ------- ------------ ------- ----------- -------------
Spread/risk 16.1 0.1 (0.6) (0.5) (0.2) 15.4
Total Mature Books 104.0 0.9 (5.0) (4.1) 0.6 100.5
-------------------- ------------ ------- ------------ ------- ----------- -------------
Associate and joint
venture life
businesses 2.1 0.3 (0.2) 0.1 - 2.2
Other(3) 10.2 - - - (0.7) 9.5
Other
Eliminations(2) (0.4) - - - - (0.4)
-------------------- ------------------ ------------ ------- ------------ ------- ----------- -------------
Total 296.6 21.7 (18.3) 3.4 2.1 302.1
-------------------- ------------------ ------------ ------- ------------ ------- ----------- -------------
(1) Wrap AUA is reported predominantly within Retail: GBP21.4bn.
International bond AUA is reported within Europe fee business:
GBP1.9bn.
(2) Certain products are included in both Pensions and Savings
growth AUA and Standard Life Investments growth AUM. Therefore, at
a Group level an elimination adjustment is required to remove any
duplication, in addition to other necessary consolidation
adjustments. Comprises (GBP17.1bn) related to growth channel
business eliminations and (GBP0.4bn) related to other
consolidation/eliminations.
(3) Other comprises Assets not backing products of GBP6.8bn and
Other corporate assets of GBP2.7bn.
5.4 Standard Life Investments assets under management and net
flows
6 months ended 30 June Opening Closing
2016 AUM Market AUM
at and at
1 Jan Gross Net other 30 Jun
2016 flows Redemptions flows movements 2016
--------------------------------------
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
------------ ------------------------ -------- ------- ------------ ------- ----------- --------
Growth AUM UK 83.2 8.6 (7.5) 1.1 7.0 91.3
------------
Europe 14.2 2.5 (3.1) (0.6) 2.7 16.3
North America 11.7 3.0 (2.5) 0.5 0.3 12.5
Asia Pacific 3.3 0.5 (0.5) - 0.4 3.7
India 7.0 0.8 - 0.8 0.5 8.3
Ignis(1) 11.1 0.3 (0.4) (0.1) (5.4) 5.6
------------------------------------- -------- ------- ------------ ------- ----------- --------
By geography of client 130.5 15.7 (14.0) 1.7 5.5 137.7
------------------------------------- -------- ------- ------------ ------- ----------- --------
Equities 16.9 1.6 (2.2) (0.6) (0.6) 15.7
Fixed income 21.8 2.8 (2.5) 0.3 3.1 25.2
Multi-asset(2) 50.3 6.5 (5.9) 0.6 1.1 52.0
Real estate 8.6 0.6 (0.7) (0.1) 2.3 10.8
MyFolio 8.1 1.2 (0.5) 0.7 0.1 8.9
Other(3) 13.7 2.7 (1.8) 0.9 4.9 19.5
Ignis(1) 11.1 0.3 (0.4) (0.1) (5.4) 5.6
------------------------------------- -------- ------- ------------ ------- ----------- --------
By asset class 130.5 15.7 (14.0) 1.7 5.5 137.7
------------------------------------- -------- ------- ------------ ------- ----------- --------
Institutional 67.0 8.4 (6.4) 2.0 9.1 78.1
Wholesale 45.9 6.5 (6.9) (0.4) 1.8 47.3
Wealth 6.5 0.5 (0.3) 0.2 - 6.7
Ignis(1) 11.1 0.3 (0.4) (0.1) (5.4) 5.6
------------------------------------- -------- ------- ------------ ------- ----------- --------
By channel 130.5 15.7 (14.0) 1.7 5.5 137.7
------------------------------------- -------- ------- ------------ ------- ----------- --------
Standard Life Group 83.1 1.9 (2.7) (0.8) 6.0 88.3
Phoenix Group 39.6 - (1.4) (1.4) 4.8 43.0
-------------------------------------- -------- ------- ------------ ------- ----------- --------
Strategic partner life
business AUM 122.7 1.9 (4.1) (2.2) 10.8 131.3
-------------------------------------- -------- ------- ------------ ------- ----------- --------
Standard Life Investments
AUM 253.2 17.6 (18.1) (0.5) 16.3 269.0
-------------------------------------- -------- ------- ------------ ------- ----------- --------
6 months ended 30 June Opening Closing
2015 AUM Market AUM
at and at
1 Jan Gross Net other 30 Jun
2015 flows Redemptions flows movements 2015
--------------------------------------
GBPbn GBPbn GBPbn GBPbn GBPbn GBPbn
------------ ------------------------ -------- ------- ------------ ------- ----------- --------
Growth AUM UK 75.5 7.7 (5.6) 2.1 2.5 80.1
------------
Europe 11.3 3.1 (0.9) 2.2 (1.0) 12.5
North America 8.1 2.3 (0.8) 1.5 0.1 9.7
Asia Pacific 2.0 1.1 (0.3) 0.8 0.1 2.9
India 6.1 0.5 - 0.5 (0.3) 6.3
Ignis 14.5 1.3 (3.2) (1.9) 0.3 12.9
------------------------------------- -------- ------- ------------ ------- ----------- --------
By geography of client 117.5 16.0 (10.8) 5.2 1.7 124.4
------------------------------------- -------- ------- ------------ ------- ----------- --------
Equities 15.5 1.3 (1.4) (0.1) 0.9 16.3
Fixed income 22.0 1.9 (1.5) 0.4 (1.2) 21.2
Multi-asset(2) 38.6 8.9 (3.3) 5.6 1.7 45.9
Real estate 7.4 0.5 (0.3) 0.2 0.4 8.0
MyFolio 5.9 1.3 (0.4) 0.9 0.1 6.9
Other(3) 13.6 0.8 (0.7) 0.1 (0.5) 13.2
Ignis 14.5 1.3 (3.2) (1.9) 0.3 12.9
------------------------------------- -------- ------- ------------ ------- ----------- --------
By asset class 117.5 16.0 (10.8) 5.2 1.7 124.4
------------------------------------- -------- ------- ------------ ------- ----------- --------
Institutional 61.4 5.4 (3.6) 1.8 1.4 64.6
Wholesale 35.5 8.9 (3.6) 5.3 (0.2) 40.6
Wealth 6.1 0.4 (0.4) - 0.2 6.3
Ignis 14.5 1.3 (3.2) (1.9) 0.3 12.9
------------------------------------- -------- ------- ------------ ------- ----------- --------
By channel 117.5 16.0 (10.8) 5.2 1.7 124.4
------------------------------------- -------- ------- ------------ ------- ----------- --------
Standard Life Group 84.6 2.3 (3.5) (1.2) 0.1 83.5
Phoenix Group 43.8 - (2.2) (2.2) 0.5 42.1
-------------------------------------- -------- ------- ------------ ------- ----------- --------
Strategic partner life
business AUM 128.4 2.3 (5.7) (3.4) 0.6 125.6
-------------------------------------- -------- ------- ------------ ------- ----------- --------
Standard Life Investments
AUM 245.9 18.3 (16.5) 1.8 2.3 250.0
-------------------------------------- -------- ------- ------------ ------- ----------- --------
(1) Ignis fund mergers in H1 2016 transferred GBP5.6bn AUM,
shown in Market and other movements, into the following categories
- By geography: UK (GBP5.6bn), By asset class: Real estate
(GBP1.6bn) and Other (GBP4.0bn), By channel: Institutional
(GBP4.0bn) and Wholesale (GBP1.6bn).
(2) Comprises absolute return strategies, enhanced
diversification strategies, risk-based portfolios and traditional
balanced portfolios.
(3) Comprises cash, private equity, liquidity funds and Wealth.
Net inflows from India cash funds GBP0.5bn (H1 2015: net inflow
GBP0.2bn), net inflows from liquidity funds of GBPnil (H1 2015: net
inflows GBP0.7bn).
6. Glossary
Annuity
A periodic payment made for an agreed period of time (usually up
to the death of the recipient) in return for a cash sum. The cash
sum can be paid as one amount or as a series of premiums. If the
annuity commences immediately after the payment of the sum, it is
called an immediate annuity. If it commences at some future date,
it is called a deferred annuity.
Assets under administration (AUA)
A measure of the total assets administered on behalf of
individual customers and institutional clients. It includes those
assets for which we provide investment management services, as well
as those assets we administer where the customer has made a choice
to select an external third party investment manager. AUA includes
third party assets administered by us which are not included on the
consolidated statement of financial position.
Assets under management (AUM)
A measure of the total assets that Standard Life Investments
manages on behalf of individual customers and institutional
clients, for which it receives a fee.
Auto enrolment
The UK Government introduced auto enrolment to help people save
for their retirement. Employers have to automatically enrol
eligible employees into a qualifying workplace pension scheme
(QWPS). This pension scheme needs to meet the standards set by the
Pensions Regulator.
Board
The Board of Directors of the Company.
Capital management
Capital management is a component of operating profit and
relates to the return from the net assets of the shareholder
business, net of costs of financing. This includes the net assets
in defined benefit staff pension plans and net assets relating to
the financing of subordinated liabilities. The measure excludes
short-term fluctuations in investment return.
Capital surplus
This is a regulatory measure of our financial strength. From 1
January 2016 our capital surplus is measured on a Solvency II
basis. Prior to 1 January 2016, our capital surplus was measured in
accordance with the Insurance Groups Directive.
Chief Operating Decision Maker
The strategic executive committee.
Company
Standard Life plc.
Cost/income ratio
This is an efficiency measure that is calculated as operating
expenses divided by operating income on a rolling 12 months basis,
and includes the share of associates' and joint ventures' profit
before tax.
Deferred acquisition costs (DAC)
The method of accounting whereby acquisition costs on long-term
business are deferred on the consolidated statement of financial
position as an asset and amortised over the life of those
contracts. This leads to a smoothed recognition of up front
expenses instead of the full cost in the year of sale.
Deferred income reserve (DIR)
The method of accounting whereby front end fees that relate to
services to be provided in future periods are deferred on the
consolidated statement of financial position as a liability and
amortised over the life of those contracts. This leads to a
smoothed recognition of up front income instead of the full income
in the year of sale.
Director
A director of the Company.
Discounting
The reduction to present value at a given date of a future cash
transaction at an assumed rate, using a discount factor reflecting
the time value of money. The choice of a discount rate will usually
greatly influence the value of insurance provisions, and may give
indications on the conservatism of provisioning methods.
Drawdown (flexible income)
Drawdown, also known as flexible income, allows the policyholder
to withdraw pension income as and when they request it. The
remainder of the pension fund remains invested, giving it the
potential for growth.
Earnings before interest, tax, depreciation and amortisation
(EBITDA)
EBITDA is defined as earnings before interest, taxation,
depreciation, amortisation, restructuring costs, other
non-operating items and non-controlling interests.
Earnings per share (EPS)
EPS is a commonly used financial metric which can be used to
measure the profitability and strength of a company over time. EPS
is calculated by dividing profit by the number of ordinary shares.
Basic EPS uses the weighted average number of ordinary shares
outstanding during the year. Diluted EPS adjusts the weighted
average number of ordinary shares outstanding to assume conversion
of all dilutive potential ordinary shares, for example share awards
and share options awarded to employees.
EBITDA margin
This is an industry measure of performance for investment
management companies. It is calculated as EBITDA divided by fee
based revenue.
Effective tax rate
Tax expense/(credit) attributable to equity holders' profit
divided by profit before tax attributable to equity holders'
profits expressed as a percentage.
Fair value through profit or loss (FVTPL)
FVTPL is an IFRS measurement basis permitted for assets and
liabilities which meet certain criteria. Gains or losses on assets
or liabilities measured at FVTPL are recognised directly in the
income statement.
Fee based business/revenue
Fee based business is a component of operating profit and is
made up of products where we generate revenue primarily from asset
management charges (AMCs), premium based charges and transactional
charges. AMCs are earned on products such as SIPP, corporate
pensions and mutual funds, and are calculated as a percentage fee
based on the assets held. Investment risk on these products rests
principally with the customer, with our major indirect exposure to
rising or falling markets coming from higher or lower AMCs.
Fee revenue yield (bps)
The average revenue yield on fee based business is a measure
that illustrates the average margin being earned on the assets that
we administer. It is calculated as a rolling 12 months fee based
revenue divided by a rolling 12 months monthly average AUA.
Global absolute return strategies (GARS)
A discretionary multi-asset fund provided under several
regulated pooled and segregated structures globally by Standard
Life Investments. The investment objective is to target a level of
return over a rolling 3 year period equivalent to cash plus 5% a
year (gross of fees), and to do so with as little risk as
possible.
Group, Standard Life Group or Standard Life
Prior to demutualisation on 10 July 2006, SLAC and its
subsidiaries and, from demutualisation on 10 July 2006, the Company
and its subsidiaries.
Growth channels
We aim to drive the increase in our assets, revenue and profit
via our growth channels. This comprises Standard Life Investments
Institutional and Wholesale, UK Workplace and Retail, Europe
(excluding Germany with profits), Hong Kong, Standard Life Wealth
and Ignis.
Heritage With Profits Fund (HWPF)
The Heritage With Profits Fund contains all business - both with
profits and non-profit - written before demutualisation in the UK,
Irish or German branches, with the exception of the classes of
business which the Scheme of Demutualisation allocated to funds
outside the HWPF. The HWPF also contains increments to this
business.
International Financial Reporting Standards (IFRS)
International Financial Reporting Standards are accounting
standards issued by the International Accounting Standards Board
(IASB). The Group's consolidated financial statements are required
to be prepared in accordance with IFRS.
Investor view
The investor view of Solvency II adjusts the regulatory position
for the impact from unrecognised capital and with profit funds /
defined benefit pension schemes.
Key performance indicators (KPI)
A measure by reference to which the development, performance or
position of the business can be measured effectively.
Liability aware
Liability aware is a framework for proactively managing the
various liability risks and requirements that are faced by defined
benefit pension schemes and insurance companies.
Mature book/business
Mature books are expected to provide a stable and consistent
contribution to our profit. This includes UK mature Retail,
Standard Life Investments Strategic Partner Life books and
spread/risk based business. It also includes the with profits
business in Germany which closed to new business in April 2015.
Net flows
Net flows represent gross inflows less gross outflows or
redemptions. For long-term savings business, gross inflows are
premiums and deposits recognised in the period on a regulatory
basis (excluding any switches between funds). Gross outflows or
redemptions are claims and annuity payments (excluding any
reinsurance transactions and switches between funds).
Operating expenses
Operating expenses is a component of operating profit and
relates to the day-to-day expenses of managing our business.
Operating income
Operating income is a component of operating profit and consists
of spread/risk margin and fee based revenue.
Operating profit
Operating profit is the Group's key alternative performance
measure. Operating profit excludes impacts arising from short-term
fluctuations in investment return and economic assumption changes.
It is calculated based on expected returns on investments backing
equity holder funds, with consistent allowance for the
corresponding expected movements in equity holder liabilities.
Impacts arising from the difference between the expected return and
actual return on investments, and the corresponding impact on
equity holder liabilities except where they are directly related to
a significant management action, are excluded from operating profit
and are presented within profit before tax. The impact of certain
changes in economic assumptions is also excluded from operating
profit and is presented within profit before tax.
Operating profit also excludes the impact of the following
items:
-- Restructuring costs and significant corporate transaction
expenses. Restructuring includes the impact of major regulatory
change.
-- Impairment of intangible assets acquired in business combinations
-- Profit or loss arising on the disposal of a subsidiary, joint venture or associate
-- Amortisation of intangibles acquired in business combinations
and fair value movements in contingent consideration
-- Items which are one-off in nature and which, due to their
size or nature, are not indicative of the long-term operating
performance of the business
Operating return on equity (RoE)
The annualised post-tax operating profit expressed as a
percentage of the opening IFRS equity, adjusted for time
apportioned dividends paid to equity holders.
Own funds
Under Solvency II, the capital resources available to meet
solvency capital requirements are called own funds.
Regular premium
A regular premium contract (as opposed to a single premium
contract), is one where the policyholder agrees at inception to
make regular payments throughout the term of the contract.
Scheme of demutualisation
The scheme pursuant to Part VII of, and Schedule 12 to, the
Financial Services and Markets Act 2000, under which substantially
all of the long-term business of SLAC was transferred to Standard
Life Assurance Limited on 10 July 2006.
SICAV
A SICAV (société d'investissement à capital variable) is an
open-ended collective investment scheme common in Western Europe.
SICAVs can be cross-border marketed in the EU under the
Undertakings for Collective Investment in Transferable Securities
(UCITS) directive.
Single premium
A single premium contract (as opposed to a regular premium
contract), involves the payment of one premium at inception with no
obligation for the policyholder to make subsequent additional
payments.
SIPP
A self invested personal pension which provides the policyholder
with greater choice and flexibility as to the range of investments
made, how those investments are managed, the administration of
those assets and how retirement benefits are taken.
SLAC
The Standard Life Assurance Company (renamed The Standard Life
Assurance Company 2006 on 10 July 2006).
SLAL
Standard Life Assurance Limited.
Solvency II
Solvency II is an EU-wide initiative that brings consistency to
how EU insurers manage capital and risk. Solvency II was
implemented on 1 January 2016.
Solvency capital requirement
Under Solvency II, insurers are required to identify their key
risks - for example that equity markets fall - and hold sufficient
capital to withstand adverse outcomes from those risks. This amount
of capital is referred to as the Solvency capital requirement or
SCR.
Spread/risk based business
Spread/risk based business mainly comprises products where we
provide a guaranteed level of income for our customers in return
for an investment, for example, annuities. The 'spread' referred to
in the title primarily relates to the difference between the
guaranteed amount we pay to customers and the actual return on the
assets over the period of the contract.
Spread/risk margin
Spread/risk margin is a component of operating profit and
reflects the margin earned on spread/risk business. This includes
net earned premiums, claims and benefits paid, net investment
return using long-term assumptions and reserving changes.
Standard Life Investments Institutional
Standard Life Investments institutional business sell to
institutions (including corporates, pension schemes, local
authorities, government agencies and insurance companies) either
directly or through intermediaries.
Standard Life Investments Wholesale
Standard Life Investments wholesale sell retail products through
wholesale distributors including third party fund supermarkets,
global financial institutions and private banks.
Strategic executive committee
Responsible for the day-to-day running of the business and
comprises; Chief Executive, Chief Executive - UK and Europe, Chief
Financial Officer, Chief Investment Officer, Chief Operating
Officer, Chief People Officer, Chief Risk Officer and the Global
Client Director.
Strategic partner life business
A measure of the assets that Standard Life Investments manages
on behalf of Standard Life Group companies and under other
long-term life book partnership agreements, such as Phoenix
Group.
Subordinated liabilities
Subordinated liabilities are debts of a company which, in the
event of liquidation, rank below its other debts but above share
capital.
Technical provisions
The best estimate market consistent value of our policyholder
liabilities is referred to as technical provisions. The calculation
is discounted to recognise the time value of money and includes a
risk margin, calculated in accordance with Solvency II
regulations.
Third party (excluding strategic partner life business)
A measure of the assets that Standard Life Investments manages
on behalf of individual customers and institutional clients, for
which it receives a fee. This measure excludes the assets that are
managed on behalf of strategic partners in life assurance
books.
Transitional relief
Solvency II regulations allow insurers to smooth the
introduction of new rules for calculating policyholder liabilities.
This relief includes a deduction from the amount of Solvency II
technical provisions, based on the difference between technical
provisions under the previous regulatory framework and Solvency II.
The deduction decreases over the course of 16 years from 1 January
2016.
UK Retail
This relates to business where we have a relationship with the
customer either directly or through an independent financial
adviser. We analyse this type of business into growth and mature
categories. Retail growth includes the products, platforms,
investment solutions and services of our UK Retail business that we
continue to market actively to our customers. Retail mature
includes business that was predominantly written before
demutualisation.
UK Workplace
UK Workplace pensions, savings and benefits to UK employers and
employees. These are sold through corporate benefit consultants,
independent financial advisers, or directly to employers.
Underlying cash generation
This presents a shareholder view of underlying cash earnings.
The IFRS Consolidated statement of cash flows includes policyholder
cashflows, and does not exclude underlying adjustments and
non-operating items.
Underlying cash generation adjusts underlying performance for
certain non-cash items. Adjustments are made for deferred
acquisition costs/deferred income reserve, fixed/intangible assets
and the Asian joint ventures and associates. Depreciation/
amortisation that would normally be included in operating profit is
replaced with the cash movement in the period. The measure is
stated net of current (cash) tax on underlying performance. A
reconciliation of underlying performance to underlying cash
generation is included in the Management report. Reconciliations
between underlying performance, operating profit and profitability
on an IFRS basis are also included in this report.
Underlying performance
Underlying performance is operating profit before tax after
excluding the impact of spread/risk operating actuarial assumption
changes and specific management actions in the reporting
period.
Unit linked policy
A policy where the benefits are determined by reference to the
investment performance of a specified pool of assets referred to as
the unit linked fund.
Wrap platform
An investment platform which is essentially a trading platform
enabling investment funds, pensions, direct equity holdings and
some life assurance contracts to be held in the same administrative
account rather than as separate holdings.
7. Shareholder information
Registered office
Standard Life House
30 Lothian Road
Edinburgh
EH1 2DH
Scotland
Company registration number: SC286832
Phone: 0800 634 7474* or
0131 225 2552*
For shareholder services call:
0345 113 0045*
Secretary
Kenneth A Gilmour
Registrar
Capita Registrars Limited
Auditors
PricewaterhouseCoopers LLP
Solicitors
Slaughter and May
Brokers
JP Morgan Cazenove
Goldman Sachs
Shareholder services
We offer a wide range of shareholder services. For more
information, please:
-- Contact our registrar, Capita, on 0345 113 0045* if calling
from the UK. International numbers can be found on the back cover
of this report
-- Visit our share portal at www.standardlifeshareportal.com
* Calls may be monitored and/or recorded to protect both you and
us and help with our training. Call charges will vary.
Sign up for Ecommunications
Signing up means:
-- You'll receive an email when documents like the Annual report
and accounts, Half year results and AGM guide are available on our
website
-- Voting instructions for the Annual General Meeting will be sent to you electronically
Set up a share portal account
Having a share portal account means you can:
-- Manage your account at a time that suits you
-- Download your documents when you need them
To find out how to sign up, visit
www.standardlifeshareportal.com
Preventing unsolicited mail
By law, the Company has to make certain details from its share
register publicly available. Because of this, it is possible that
some registered shareholders could receive unsolicited mail or
phone calls. You could also be targeted by fraudulent 'investment
specialists'. Remember, if it sounds too good to be true, it
probably is.
You can find more information about share scams at the Financial
Conduct Authority website www.fca.org.uk/consumers/scams
If you are a certificated shareholder, your name and address may
appear on a public register. Using a nominee company to hold your
shares can help protect your privacy. You can transfer your shares
into the Company-sponsored nominee - the Standard Life Share
Account - by contacting Capita, or you could get in touch with your
broker to find out about their nominee services.
If you want to limit the amount of unsolicited mail you receive
generally, please visit www.mpsonline.org.uk
Financial calendar
Half year results 2016 9 August
Ex-dividend date for 2016 interim 8 September
dividend
Record date for 2016 interim dividend 9 September
Last date for DRIP elections for 28 September
2016 interim dividend
Dividend payment date for 2016 interim 19 October
dividend
Analysis of registered shareholdings at 30 June 2016
----------------------------------------------------------------------
Number of % of total Number of % of total
Range of shares holders holders shares shares
---------------- ---------- ----------- -------------- -----------
1-1,000 63,742 60.77 27,404,652 1.39
1,001-5,000 36,085 34.40 74,000,601 3.75
5,001-10,000 2,968 2.83 20,247,565 1.03
10,001-100,000 1,637 1.56 37,284,428 1.89
#100,001+ 460 0.44 1,816,530,221 91.94
---------------- ---------- ----------- -------------- -----------
Total 104,892 100 1,975,467,467 100
---------------- ---------- ----------- -------------- -----------
# These figures include the Company-sponsored nominee - the
Standard Life Share Account - which had1,068,001 participants
holding 750,379,030 shares, and the Unclaimed Asset Trust, which
held 13,750,053 shares on behalf of eligible claimants at 30 June
2016.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR FMGGRGRVGVZZ
(END) Dow Jones Newswires
August 09, 2016 02:02 ET (06:02 GMT)
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