Aberdeen Group Plc

Hello and welcome to the Aberdeen first half results for 2021. Today marks the next stage in the development of a company with a near 200 year history. I'm going to give an update on our progress against our strategic priorities that we shared with you in March and Stephanie Bruce, our Chief Financial Officer, will take you through the financial results. I'll wrap up with how we're investing to grow the business. Then we'll be joined by Chris, Rene and Noel for the Q&A and we'll be delighted to take your questions. At our full year results in March, we outlined our strategy to return the business to growth. This strategy is about developing a more balanced business that's less pro-cyclical and is a client-led strategy focused on the three vectors of our business, investments, advisor and personal. I described the growth journey and how it would look for you, and in particular, I said that in the near term, we would arrest the decline in revenue and improve our operating efficiency before creating a medium-term pattern of high single-digit revenue growth and further positive operating leverage. We have made a strong start in delivering those objectives against the background of supportive markets and a recovery from last year's early COVID challenges. We have delivered the highest rates of revenue and earnings growth since the merger, with fee-based revenue 7% higher, adjusted operating profit 52% higher, and adjusted diluted EPS more than doubling. We also set the goal of becoming a more efficient company and we targeted a cost income ratio of around 70% as we exit 2023. Likewise, we have made a solid start with a full 6% improvement, recording a first half of 79%. We are at the start of our growth journey and we're working hard to create momentum, And there is now clear evidence that our three-vector model has sharpened our focus and improved our execution. And you'll see later, our investment performance remains solid. And I'm pleased to report that we completed our technology conversion onto a single fund management platform. Whilst a huge achievement in itself and a great simplification of our investment processes, it does not signal the end of improvement, but rather the beginning of a relentless drive to continuously improve our investment processes, improve our use of data, and improve the consistency of our client outcomes. Whilst not yet recording asset growth at a group level, we have got very close, with net outflows of just 1.9 billion ex-liquidity, compared to 6.8 billion in the same period last year. And this now has a negligible impact on our revenues. Here you can see the details of each vector. Institutional and wholesale is our largest business, and excluding liquidity, we further improved by 89%, from outflows of $7.5 billion in H1 last year to just $0.8 billion this period. This is the best performance since the merger and is a solid position from which to further improve. The levels of outflows in insurance reflect normal deaccumulation activity. Of course, our clients' market strategies, which we are working with them on, will, through time, begin to offset the normal pattern of deaccumulation. In the period, the low level of activity in bulk purchase annuities means we're not yet growing the insurance category. Advisor has recorded the highest net flows in three years and the first half of 2021 is equal to all of last year. Personal too had a significant milestone with a record first half and net flow is greater than the cumulative performance since the merger. In March, I shared our growth strategy and I outlined our priorities, the foundation of which is having the right talent in place across the entire company. The first six months of the financial year has seen the build-out of the new management team tasked with driving growth and executing cleanly against these strategic priorities. Our new operational structure creates clear lines of responsibility and accountability. aligned to the priorities of each growth vector. Caroline Connellan is joining us in November as the CEO of Personal Wealth. Noel Butwell is the CEO of Advisor. In the investments vector, we've moved to a more regional model with global connectivity. Rennie Buhlmann started in March in Leading Asia, and he will talk to you about that. Chris Dimitrio has started in his new role as CEO of UK, EMEA and Americas. I'm now going to provide short updates on four of these priority areas, starting with our ambitions to grow in Asia. As you know, I have invested a lot of my career in Asia. It's a part of the world I have extensive knowledge about and a passion for. The opportunity in Asia is significant as the economic centre of gravity of the world continues to move east. Already, more than half of the world's population live in Asia, and it will become home to half of the world's middle class. Investment assets are predicted to grow at around 12% per annum over the next five years, reaching 20% of global assets in 2025. Building on our expertise in the region is a major focus for us and it starts with having the right leader. Reni Bullman joined us in March to lead the Asia-Pacific business. We are well known and have a good footprint in Asia with locally managed assets of £46 billion and we're managing £18 billion of assets for our Asian clients. We expect demand for our global capabilities to grow as individual investors and savings institutions in Asia expand their investment horizons beyond their own markets. Through our own regional presence and through distribution partnerships, we are aiming to significantly grow our Asian business. Let me hand to Reni, who will explain how he is leading our very strong team to growth in Asia.

Hello from Asia. As many of you know, we have a very strong heritage out here in the region. Our business operates currently across nine domestic locations with 500 staff and investors on the ground in each of these countries. We are re-energizing for growth, which is why we have exited earlier this year our Indonesian domestic operations. Our revamped Asian strategy is basically based on three pillars. First, we want to accelerate the regional distribution of all of our global products, in particular in the wholesale channel. As a great example serves our new partnership with Citibank, where Aberdeen products will be available on Citi's digital banking and investment platform Citi Plus, which opens up the wholesale distribution of our products to Citi's regional retail clients. For investors, China is still one of the biggest alpha generating markets. We have a very strong Asian and China investment franchise with over 46 billion in AUM. We will strengthen our team further and combine it with our deep global sustainability capabilities to become a leader in Asian sustainability. This will benefit both our regional and our global clients who are still underinvested in China. To support this further, we have also just launched our Aberdeen Sustainability Institute in the region and thereby also support the transition to net zero here in the region. Lastly, we want to leverage our strong digital and platform capabilities in the UK to establish strong strategic partnerships with banks and platforms here out in Asia. As a great example serves our partnership with HOP24 in Australia, where we are in the process of developing a new digital investment platform for financial advisors.

Thank you very much, Reni. A great leader with a great team and they're getting good results now. Now let me turn to private markets. Private and alternative assets are an important part of our growth strategy. We're investing in areas of high exogenous growth and have organised our business in the way that clients invest. Real assets, private credit, private equity and alternatives. In the first half, we saw £3.2 billion of deal flow. That's a 10 times increase on the prior year, bringing us to AUMs of £71 billion. We're committed to improving our investment capabilities and the acquisition of Tritax is a great example of 21st century ambitions in real assets, bringing with it exposure and expertise in the fast-growing, future-looking logistics real estate market. They are the UK's largest investor in large-scale logistics warehouses, where occupier demand is strong and supply is constrained. They are meeting the needs of their e-commerce tenants by investing in modern national and regional distribution centres, ideally located to allow late-night orders and next-day delivery. and they have 9.1 million square feet of consented land available to deliver new units for e-com retailers. Tritac's big box, the listed REIT, last week announced their strongest half-year performance, with EPS up 23.6% and portfolio value up 10.9% to £4.89 billion. Within alternatives, our U.S. precious metals ETF franchise has seen strong growth since we bought into the market three years ago, with AUM now almost trebling to $7 billion. ETFs are, of course, a high growth area, and we are now expanding our suite of products in the U.S. and internationalizing into Europe, including a new industrial metals fund aligned to the global electrification theme. I highlighted in March that the advisor platform is a real gem, holding the number one position in the UK advisor market for AUA and for gross flows. We are focused on both defending and growing our leadership position in this market as the market grows and consolidates. Our advisor and personal vectors are gateways for increasing AUM into our ecosystem. And in the first half, our advice business contributed £200 million of flows into our discretionary fund management business. Now, let me hand over to Noel, who is going to update you on our activity in the advisor vector.