REG - abrdn PLC - Final Results - Part 8 of 8

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01/03/2022 07:15

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RNS Number : 1210D  abrdn PLC  01 March 2022

abrdn plc

Full Year Results 2021

Part 8 of 8

10. Glossary

Adjusted net financing costs and investment return

Adjusted net financing costs and investment return (previously named Capital
management) is a component of adjusted 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.

Adjusted operating expenses

Adjusted operating expenses is a component of adjusted operating profit and
relates to the day-to-day expenses of managing our business.

Adjusted operating profit

Adjusted operating profit before tax is the Group's key APM. Adjusted
operating profit includes the results of the Group three growth vectors:
Investments, Adviser and Personal, along with Corporate/Strategic .

It excludes the Group's adjusted net financing costs and investment return,
and discontinued operations.

Adjusted operating profit also excludes the impact of the following items:

-    Restructuring costs and corporate transaction expenses. Restructuring
includes the impact of major regulatory change.

-    Amortisation and impairment of intangible assets acquired in business
combinations and through the purchase of customer contracts.

-    Profit or loss arising on the disposal of a subsidiary, joint venture
or equity accounted associate.

-    Change in fair value of/dividends from significant listed investments.

-    Share of profit or loss from associates and joint ventures.

-    Impairment loss/reversal of impairment loss recognised on investments
in associates and joint ventures accounted for using the equity method.

-    Fair value movements in contingent consideration.

-    Items which are one-off and, due to their size or nature, are not
indicative of the long-term operating performance of the Group.

Adjusted profit before tax

In addition to the results included in adjusted operating profit above,
adjusted profit before tax includes adjusted net financing costs and
investment return.

Assets under management and administration (AUMA)

AUMA is a measure of the total assets we manage, administer or advise on
behalf of our clients. It includes assets under management (AUM), assets under
administration (AUA) and assets under advice (AUAdv). AUMA does not include
assets for associates and joint ventures.

AUM is a measure of the total assets that we manage on behalf of individual
and institutional clients. AUM also includes assets managed for corporate
purposes.

AUA is a measure of the total assets we administer for clients through our
Platforms. AUAdv is a measure of the total assets we advise our clients on,
for which there is an ongoing charge.

Board

The Board of Directors of the Company.

Carbon intensity

Weighted-Average Carbon Intensity (WACI) is calculated by summing the product
of each company's weight in the portfolio or loan book with that company's
carbon-to-revenue intensity. Carbon-to-revenue intensity is calculated by
dividing the sum of all apportioned emissions, with the sum of all apportioned
revenues across an investment portfolio or loan book. This metric gives an
indication of how efficient companies in a portfolio or loan book are at
generating revenues per tonne of carbon emitted.

Carbon neutral

Being carbon neutral means that carbon released through our operational
emissions is balanced by an equivalent amount being removed through carbon
offsetting. For the purposes of offsetting, we include Scope 1, 2 and 3
emissions within our operational emissions.

Carbon offsetting

Carbon offsetting is an internationally recognised way to take responsibility
for unavoidable carbon emissions. Carbon offsetting means that for every one
tonne of offsets there will be one less tonne of carbon dioxide in the
atmosphere than there would otherwise have been. To offset emissions we
purchase the equivalent volume of carbon credits (independently verified
emissions reductions) equal to our carbon emissions to compensate for them.
The payments we make to purchase these carbon credits (carbon finance) is what
makes the emissions reductions projects which created them, financially viable
and sustainable. We work with ClimateCare to offset our operational greenhouse
gas emissions. We offset via two verified voluntary projects: The first is a
Gold Standard wind turbine project in India. The second project is a Verified
Carbon Standard Climate, Carbon and Community rainforest protection project in
Gola. We chose offsets that we knew were verifiable and correctly accounted
for and have a low risk of non-additionality, reversal, and creating negative
unintended consequences for people and the environment. ClimateCare helped
create the voluntary carbon market and pioneered carbon finance for community
development projects.

Chief Operating Decision Maker

The executive leadership team.

Company

abrdn plc.

Cost/income ratio

This is an efficiency measure that is calculated as adjusted operating
expenses divided by fee based revenue.

CRD IV

CRD IV is the European regulatory capital regime (comprising the Capital
Requirements Directive and Capital Requirements Regulation) that applied to
investment firms up to and including 31 December 2021. The new IFPR regime
came into force on 1 January 2022.

Director

A director of the Company.

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, such as share options
awarded to employees.

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.

Executive leadership team

Our executive leadership team (ELT) leads the business across our growth
vectors and supporting functions globallyand is responsible for executing and
monitoring progress on the delivery of our business plans. The ELT also
ensures we meet our obligations to our clients, people, shareholders,
regulators and partners.

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.

FCA

Financial Conduct Authority of the United Kingdom.

Fee based revenue

Fee based revenue is a component of adjusted operating profit and includes
revenue we generate from asset management charges (AMCs), platform charges and
other transactional charges. AMCs are earned on products such as mutual funds,
and are calculated as a percentage fee based on the assets held. Investment
risk on these products rests principally with the client, with our major
indirect exposure to rising or falling markets coming from higher or lower
AMCs. Fee based revenue is shown net of fees, costs of sale, commissions and
similar charges. Costs of sale include revenue from fund platforms which is
passed to the product provider.

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 under management, administration
or advice. It is calculated as annualised fee based revenue (excluding
performance fees and revenue for which there are no attributable assets)
divided by monthly average fee based assets.

Greenhouse gases

Greenhouse gases are those gaseous constituents of the atmosphere, both
natural and anthropogenic, that absorb and emit radiation at specific
wavelengths within the spectrum of thermal infrared radiation emitted by the
earth's surface, the atmosphere itself, and by clouds. This property causes
the greenhouse effect. Water vapour (H2O), carbon dioxide (CO2), nitrous oxide
(N2O), methane (CH4) and ozone (O3) are the primary greenhouse gases in the
earth's atmosphere. Moreover, there are a number of entirely human-made
greenhouse gases in the atmosphere, such as halocarbons and other chlorine-
and bromine-containing substances, dealt with under the Montreal Protocol.
Beside CO2, N2O and CH4, the Kyoto Protocol deals with the greenhouse gases
sulphur hexafluoride (SF6), hydrofluorocarbons (HFCs) and perfluorocarbons
(PFCs).

Group or abrdn

Relates to the Company and its subsidiaries.

Growth vectors

We provide services across three growth vectors:

-    Investments: Asset management investment solutions for institutional,
wholesale and insurance clients.

-    Adviser: Our Wrap and Elevate adviser platforms.

-    Personal: Comprises our financial planning business and our
direct-to-consumer services.

ICAAP

Internal Capital Adequacy Assessment Process. The ICAAP is the means by which
the Group assesses the level of capital that adequately supports all of the
relevant current and future risks in its business.

International Financial Reporting Standards (IFRS)

International Financial Reporting Standards are accounting standards issued by
the International Accounting Standards Board (IASB).

Investment Firms Prudential Regime (IFPR)

The Investment Firms Prudential Regime is the FCA's new prudential regime for
MiFID investment firms. The regime came into force on 1 January 2022.

Investment performance

Investment performance has been aggregated using a money weighted average of
our assets under management which are outperforming their respective
benchmark. Calculations for investment performance are made gross of fees with
the exception of those for which the stated comparator is net of fees.
Benchmarks differ by fund and are defined in the investment management
agreement or prospectus, as appropriate. The investment performance
calculation covers all funds that aim to outperform a benchmark, with certain
assets excluded where this measure of performance is not appropriate or
expected, such as private equity and execution only mandates, as well as
replication tracker funds which aim to perform in line with a given index.

LBG tranche withdrawals

On 24 July 2019, the Group announced that it had agreed a final settlement in
relation to the arbitration proceedings between the parties concerning LBG's
attempt to terminate investment management arrangements under which assets
were managed by members of the Group for LBG entities. In its decision of
March 2019, the arbitral tribunal found that LBG was not entitled to terminate
these investment management contracts. The Group had continued to manage
approximately £104bn (as at

30 June 2019) of assets under management (AUM) for LBG entities during the
period of the dispute. Approximately two thirds of the total AUM (the
transferring AUM) will be transferred to third party managers appointed by LBG
through a series of planned tranches from 24 July 2019. During this period,
the Group will continue to be remunerated for its services in relation to the
transferring AUM.

Net flows

Net flows represent gross inflows less gross outflows or redemptions. Gross
inflows are new funds from clients. Gross outflows or redemptions is the money
withdrawn by clients during the period.

Net zero

Net zero is the target of completely negating the amount of greenhouse gases
produced by human activity, to be achieved by reducing emissions to the lowest
possible amount and offsetting (see carbon offsetting) only the remainder as a
last resort.

Net Zero Direct Investing

Net Zero Directed Investing means moving towards the goal of net zero in the
real world - not just in specific investment portfolios. At abrdn we seek to
achieve this goal through a holistic set of actions, including rigorous
research into net-zero trajectories, developing net-zero-directed investment
solutions and active ownership to influence corporates and policy makers.

Operational emissions

Operational emissions are the greenhouse gas emissions related to the
operations of our business. They are categorised into three groups or
'scopes'. Scope 1 covers direct emissions from owned or controlled sources.
Scope 2 covers indirect emissions from the generation of purchased
electricity, steam, heating and cooling consumed by the reporting company.
Scope 3 includes all other indirect emissions that occur in a company's value
chain. At abrdn we report Scope 1, Scope 2, and Scope 3 emissions, which
includes our working from home emissions.

Paris alignment

'Paris alignment' refers to the alignment of public and private financial
flows with the objectives of the Paris Agreement on climate change. Article
2.1c of the Paris Agreement defines this alignment as making finance flows
consistent with a pathway towards low greenhouse gas emissions and
climate-resilient development. Alignment in this way will help to scale up the
financial flows needed to strengthen the global response to the threat of
climate change.

Phoenix or Phoenix Group

Phoenix Group Holdings plc or Phoenix Group Holdings plc and its subsidiaries.

Pillar 1

Under CRD IV, Pillar 1 focuses on fixed overhead requirements and the Group's
exposure to credit and market risks in respect of risk-weighted assets, and
sets a minimum requirement for capital based on these measures.

Pillar 2

The requirement for companies to assess the level of additional capital held
against risks not covered in Pillar 1.

Pillar 3

This complements Pillar 1 and Pillar 2 with the aim of improving market
discipline by requiring companies to publish certain details of their risks,
capital and risk management. The latest available Group's Pillar 3 disclosures
are published at www.abrdn.com/annualreport

Significant listed investments

Relates to our investments in HDFC Asset Management, HDFC Life and Phoenix.
Fair value movements and dividend income relating to these investments are
treated as adjusting items for the purpose of determining the Group's adjusted
profit.

Subordinated liabilities

Subordinated liabilities are debts of a company which, in the event of
liquidation, rank below its other debts but above share capital.

11. Shareholder information

 

Registered office

1 George Street

Edinburgh

EH2 2LL

Scotland

Company registration number: SC286832

For shareholder services call:  0371 384 2464*

* Calls are monitored/recorded to meet regulatory obligations and for training
and quality purposes. Call charges will vary.

Secretary:  Kenneth A Gilmour
Registrar: Equiniti
Auditors: KPMG 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, Equiniti, who manage this service for us. Their
details can be found on the inside back cover.

-    Visit our share portal at www.abrdnshares.com

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.abrdnshares.com
     (http://www.abrdnshares.com)

Preventing unsolicited mail

By law, the Company has to make certain details from its share register
publicly available. As a result it is possible that some registered
shareholders could receive unsolicited mail, emails or phone calls. You could
also be targeted by fraudulent 'investment specialists', clone firms or
scammers posing as government bodies e.g. HMRC, FCA. Frauds are becoming much
more sophisticated and may use real company branding, the names of real
employees or email addresses that appear to come from the company. If you get
a social or email message and you're unsure if it is from us, you can send it
to emailscams@abrdn.com (mailto:emailscams@abrdn.com)  and we'll let you
know.

You can also check the FCA warning list and warning from overseas regulators,
however, please note that this is not an exhaustive list and do not assume
that a firm is legitimate just because it does not appear on the list as
fraudsters frequently change their name and it may not have been reported yet.

www.fca.org.uk/consumers/unauthorised-firms-individuals

www.iosco.org/investor_protection/?subsection=investor_alerts_portal
(http://www.iosco.org/investor_protection/?subsection=investor_alerts_portal)
 

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 abrdn Share Account - by contacting Equiniti, 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
 Full year results 2021                                1 March
 General Meeting - London                              15 March
 Ex-dividend date for 2021 final dividend              7 April
 Record date for 2021 final dividend                   8 April
 Last date for DRIP elections for 2021 final dividend  4 May
 Annual General Meeting - Edinburgh                    18 May
 Dividend payment date for 2021 final dividend         24 May
 Half year results 2022                                9 August
 Ex-dividend date for 2022 interim dividend            18 August
 Record date for 2022 interim dividend                 19 August
 Last date for DRIP elections for 2022                 7 September

interim dividend
 Dividend payment date for 2022 interim dividend       27 September

Analysis of registered shareholdings at 31 December 2021
 Range of shares  Number of holders  % of total holders  Number of shares  % of total shares
 1-1,000          60,076             64.94               24,459,705        1.12
 1,001-5,000      27,550             29.78               56,631,157        2.60
 5,001-10,000     2,769              2.99                18,497,090        0.85
 10,001-100,000   1,574              1.70                38,775,420        1.78
 (#)100,001+      538                0.59                2,042,361,414     93.65
 Total            92,507             100.00              2,180,724,786     100.00

#   These figures include the Company-sponsored nominee - the abrdn Share
Account - which had 942,539 participants holding 642,153,852 shares.

12. Forward-looking statements

This document may contain certain 'forward-looking statements' with respect to
the financial condition, performance, results, strategy, targets, objectives,
plans, goals and expectations of the Company and its affiliates. These
forward-looking statements can be identified by the fact that they do not
relate only to historical or current facts.

Forward-looking statements are prospective in nature and are not based on
historical or current facts, but rather on current expectations, assumptions
and projections of management of the abrdn Group about future events, and are
therefore subject to risks and uncertainties which could cause actual results
to differ materially from the future results expressed or implied by the
forward-looking statements.

For example but without limitation, statements containing words such as 'may',
'will', 'should', 'could', 'continue', 'aims', 'estimates', 'projects',
'believes', 'intends', 'expects', 'hopes', 'plans', 'pursues', 'ensure',
'seeks', 'targets' and 'anticipates', and words of similar meaning (including
the negative of these terms), may be forward-looking. These statements are
based on assumptions and assessments made by the Company in light of its
experience and its perception of historical trends, current conditions, future
developments and other factors it believes appropriate. Each forward-looking
statement speaks only as of the date of particular statement and the events
discussed herein may not occur.

By their nature, all forward-looking statements involve risk and uncertainty
because they are based on information available at the time they are made,
including current expectations and assumptions, and relate to future events
and/or depend on circumstances which may be or are beyond the Group's control,
including among other things: the direct and indirect impacts and implications
of the COVID-19 (coronavirus) outbreak on the economy, nationally and
internationally, and on the Group, its operations and prospects; UK domestic
and global political, economic and business conditions, competitive, market
and regulatory forces (such as the UK's exit from the EU); market related
risks such as fluctuations in interest rates and exchange rates, and the
performance of financial markets generally; the impact of inflation and
deflation; the impact of competition; the timing, impact and other
uncertainties associated with future acquisitions, disposals or combinations
undertaken by the Company or its affiliates and/or within relevant industries;
experience in particular with regard to mortality and morbidity trends, lapse
rates and policy renewal rates; the value of and earnings from the Group's
strategic investments and ongoing commercial relationships; default by
counterparties; information technology or data security breaches (including
the Group being subject to cyberattacks); operational information technology
risks, including the Group's operations being highly dependent on its
information technology systems (both internal and outsourced); natural or
man-made catastrophic events; the impact of  pandemics, including the
COVID-19 (coronavirus) outbreak; climate change and a transition to a
low-carbon economy (including the risk that the Group may not achieve its
targets); exposure to third party risks including as a result of outsourcing;
the failure to attract or retain necessary key personnel; the policies and
actions of regulatory authorities (including changes in response to the
COVID-19 (coronavirus) outbreak and its impact on the economy); and the impact
of changes in capital, solvency or accounting standards, and tax and other
legislation and regulations (including changes to the regulatory capital
requirements that the Group is subject to or changes in connection with the
COVID-19 (coronavirus) outbreak) in the jurisdictions in which the Company and
its affiliates operate. As a result, the Group's actual future financial
condition, performance and results may differ materially from the plans,
goals, objectives and expectations set forth in the forward looking
statements.

The Company, nor any of its associates, directors, officers or advisers,
provides any representation, assurance or guarantee that the occurrence of the
events expressed or implied in any forward-looking statements in this document
will actually occur. Persons receiving this document should not place reliance
on forward-looking statements. All forward-looking statements contained in
this document are expressly qualified in their entirety by the cautionary
statements contained or referred to in this section. Each forward-looking
statement speaks only as at the date of the particular statement. Neither the
Company nor its affiliates assume any obligation to update or correct any of
the forward-looking statements contained in this document or any other
forward-looking statements it or they may make (whether as a result of new
information, future events or otherwise), except as required by law. Past
performance is not an indicator of future results and the results of the
Company and its affiliates in this document may not be indicative of, and are
not an estimate, forecast or projection of, the Company's or its affiliates'
future result

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