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9 Mar 2021 07:05
Standard Life Aberdeen plc
CHANGES TO FINANCIAL METRICS AND SEGMENTS USED IN EXTERNAL REPORTING
Standard Life Aberdeen plc (SLA) is today setting out details of changes to financial metrics and segments used in its external reporting. The business is now operating under three growth vectors of Investments, Adviser and Personal and accordingly we are changing the way we report the performance of our business.
Key aspects:
• Three growth vectors and a small corporate centre
• Recognition that associate status has changed for HDFC Life and Phoenix
• Adjusted profit will now not include the associates and joint ventures
• Adjusted operating profit will be the key performance indicator
• Adjusted EPS will continue to be based on adjusted profit, and therefore will be rebased to reflect the change in associates status and exclusion of the share of associates and joint ventures profit
• Adjusted capital generation remains unchanged
The table below sets out the impact of the revised basis:
2020 | Adjusted operating profit | Adjusted profit before tax | Adjusted capital generation | IFRS profit before tax | |
As reported | £219m | £487m | £262m | £838m | |
Revised basis | £219m | £240m | £262m | £838m | |
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2020 | Adjusted diluted EPS | Diluted EPS | Adjusted diluted capital generationper share |
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As reported | 18.1p | 37.9p | 11.7p1 |
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Revised basis | 8.8p | 37.9p | 11.7p |
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1 Not previously reported.
Segmental reporting
Previously, we reported our results under two segments (under IFRS 8):
· 'Asset management, platforms and wealth' comprising all wholly owned business, HDFC Asset Management our Indian asset management associate, and the Virgin Money joint venture; and
· 'Insurance associates and joint ventures' comprising our life assurance associates and joint ventures - HDFC Life, Phoenix and HASL.
Further information on this segment reporting is set out on page 129 of the Annual report and accounts 2020.
Going forwards, from half year 2021 onwards, we will report our results under the following four segments which reflect how the business is now managed and reported:
· 'Investments' - Our global asset management business which provides investment solutions for Institutional, Wholesale and Insurance clients
· 'Adviser' - Our market-leading UK financial adviser business which provides services through the Wrap and Elevate platforms to wealth managers and advisers
· 'Personal' - Our Personal business combines our financial planning business 1825, our digital direct-to-consumer services and discretionary fund management services provided by Aberdeen Standard Capital
· 'Corporate/Strategic ' - This segment mainly comprises certain corporate costs (c£15m in 2020) and businesses held for sale (Parmenion which is expected to be sold in 2021 and SL Asia which was sold in June 2020)
Set out below is the new presentation of our reportable segments and adjusted profit metric. The segments are reported to the level of adjusted operating profit in line with management reporting. The reconciliation between the current and revised basis can be found in Appendix A.
9 March 2021
Reportable segments from continuing operations
Investments | Adviser | Personal | Corporate/ strategic | Total | |
31 December 2020 | £m | £m | £m | £m | £m |
Fee based revenue | 1,176 | 137 | 80 | 32 | 1,425 |
Adjusted operating expenses | (990) | (89) | (85) | (42) | (1,206) |
Adjusted operating profit | 186 | 48 | (5) | (10) | 219 |
Adjusted net financing costs and investment return1 | 21 | ||||
Adjusted profit before tax | 240 | ||||
Tax on adjusted profit | (38) | ||||
Adjusted profit after tax | 202 | ||||
Adjusted for the following items | |||||
Restructuring and corporate transaction expenses | (316) | ||||
Amortisation and impairment of intangible assets acquired in business combinations and through the purchase of customer contracts | (1,180) | ||||
Profit on disposal of interests in associates | 1,858 | ||||
Change in fair value of significant listed investments | 65 | ||||
Other | 22 | ||||
Total adjusting items | 449 | ||||
Dividends from significant listed investments | - | ||||
Share of profit from associates and joint ventures | 194 | ||||
Impairment of joint ventures | (45) | ||||
Tax on adjusting items | 53 | ||||
Profit attributable to non-controlling interests (preference shares) | (5) | ||||
Profit for the year attributable to equity shareholders of Standard Life Aberdeen plc | 848 | ||||
Profit attributable to non-controlling interests | |||||
Preference shares | 5 | ||||
Profit for the year | 853 |
1 'Capital Management' has been renamed 'Adjusted net financing costs and investment return'.
Enquiries:
Institutional Investors Catherine Nash Helen Rennardson |
+44 (0) 7798 518 657 +44 (0) 7554 010 422 |
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Media Katy Hetherington |
+44 (0) 7841 344 374
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Group Secretariat Paul McKenna |
+44 (0)131 372 0703 |
Standard Life Aberdeen plc's LEI Code is 0TMBS544NMO7GLCE7H90
Appendix A - Reconciliation between current and revised basis
Current basis | Asset management associates and joint ventures | Insurance associates and joint ventures |
Revised basis | ||
£m | £m | £m | £m | ||
Fee based revenue | 1,425 | - | - | 1,425 | Fee based revenue |
Adjusted operating expenses | (1,206) | - | - | (1,206) | Adjusted operating expenses |
Adjusted operating profit | 219 | - | - | 219 | Adjusted operating profit |
Capital management | 21 | - | - | 21 | Adjusted net financing costs and investment return |
Share of associates' and joint ventures' profit before tax | 247 | (44) | (203) | - | N/A |
Adjusted profit before tax | 487 | (44) | (203) | 240 | Adjusted profit before tax |
Tax on adjusted profit | (38) | - | - | (38) | Tax on adjusted profit |
Share of associates' and joint ventures' tax expense | (38) | 12 | 26 | - | N/A |
Adjusted profit after tax | 411 | (32) | (177) | 202 | Adjusted profit after tax |
Adjusted for the following items | Adjusted for the following items | ||||
Restructuring and corporate transaction expenses | (355) | 10 | 29 | (316) | Restructuring and corporate transaction expenses |
Amortisation and impairment of intangible assets acquired in business combinations and through the purchase of customer contracts | (1,287) | - | 107 | (1,180) | Amortisation and impairment of intangible assets acquired in business combinations and through the purchase of customer contracts |
Profit on disposal of interests in associates | 1,858 | - | - | 1,858 | Profit on disposal of interests in associates |
Impairment of associates and joint ventures | (45) | 45 | - | - | N/A |
Change in fair value of significant listed investments | 65 | - | - | 65 | Change in fair value of significant listed investments |
Investment return variances and economic assumption changes | 46 | - | (46) | - | N/A |
Other | 86 | - | (64) | 22 | Other |
Total adjusting items | 368 | 55 | 26 | 449 | Total adjusting items |
N/A | - | - | - | - | Dividends from significant listed investments |
N/A | - | 42 | 152 | 194 | Share of profit from associates and joint ventures |
N/A | - | (45) | - | (45) | Impairment of joint ventures |
Tax on adjusting items | 53 | - | - | 53 | Tax on adjusting items |
Share of associates' and joint ventures' tax expense on adjusting items | 21 | (20) | (1) | - | N/A |
Profit attributable to non-controlling interests (preference shares) | (5) | - | - | (5) | Profit attributable to non-controlling interests (preference shares) |
Profit for the year attributable to equity shareholders of Standard Life Aberdeen plc | 848 | - | - | 848 | Profit for the year attributable to equity shareholders of Standard Life Aberdeen plc |
Profit attributable to non-controlling interests |
| Profit attributable to non-controlling interests | |||
Preference shares | 5 | - | - | 5 | Preference shares |
Profit for the year | 853 | - | - | 853 | Profit for the year |
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