INTERIM RESULTSJuly 2012

Agenda

Business UpdateDAVID BELLAMY

FinancialsANDREW CROFT

Outlook DAVID BELLAMY

Q&A

Total new business by quarterAPE (Annual premiums plus 10% of single premiums)

2009 over 2008

-5% -10% +3% +38%

2010 over 2009

+42% +46% +30% +15%

2011 over 2010

+18% +12% +13% +0%

2012 over 2011

-3% +13%

Single investment by quarter

2009 over 2008

-6% -8% +12% +51%

2010 over 2009

+57% +54% +32% +16%

2011 over 2010

+16% +13% +14% -4%

2012 over 2011

-2% +4%

Pensions new business by quarterAPE (Annual premiums plus 10% of single premiums)

2009 over 2008 +7% -9% -14% +16%

2010 over 2009 +19% +31% +32% +18%

2011 over 2010

+16% +22% +21% +19%

2012 over 2011

+15% +28%

Strong retention of funds

• Retention 95%• Net inflows + £1.51 bn

Funds under management

-6%+34%

+20%+29%

+25%+18%

-10%

+31%

+26%

+8%+6%

£30.9bn

June

Growth in number of Partner numbers

+8%+7%

+9%+6%

+3.2%+6%

Partner Qualification

• 91% Partners qualified• 6% require one or two exams

Highlights

• APE growth +5% (Q2 +13%)• New Single Investments - £2.76 bn• Net inflows - £1.51 bn• FUM up £2.4 bn to £30.9 bn• Partner numbers up to 1,702• Dividend increase +33%

ANDREW CROFTChief Financial Officer

Introduction

• Challenging market during first six months of the year

• Strong operating performance in all financial measures

• Of particular note is the continuing growth in the cash emergence of the business

• Resulting in a 33% increase in the interim dividend

• Capital and solvency position remains strong

Analysis of EEV operating profit

£’m H1 2012 H1 2011New business contribution 120.6 127.7Profits from existing business– expected 48.9 59.1– experience variance 3.7 2.8– operating assumption

changes - -Investment income 1.4 2.2Life & unit trust operating profit 174.6 191.8Distribution 2.0 -Other (8.8) (8.2)Operating profit 167.8 183.6

New business margin

H1 2012 H1 2011

PVNBP 4.3% 4.4%

Manufactured APE 40.1% 41.1%

Total APE 34.1% 38.1%

Non – manufactured business

• Manufactured proportion 85% compared with 93% in 2011

• In 2nd quarter one large £21 million APE group pension case

• Excluding this case manufactured proportion would be 90%

• This is a one-off nice to have but distorts the total margin

• This is most definitely not a trend or anything to be concerned about

Analysis of EEV operating profit

£’m H1 2012 H1 2011New business contribution 120.6 127.7Profits from existing business– expected 48.9 59.1– experience variance 3.7 2.8– operating assumption

changes - -Investment income 1.4 2.2Life & unit trust operating profit 174.6 191.8Distribution 2.0 -Other (8.8) (8.2)Operating profit 167.8 183.6

Analysis of EEV pre-tax result

£’m H1 2012 H1 2011Operating profit 167.8 183.6Investment variance 54.9 0.9Economic assumption change (2.2) (1.9)Pre-tax result 220.5 182.6

Analysis of funds under management

£’bn 30 June 2012

UK equities 9.4European equities

3.5North American equities

4.3Asia & Pacific equities

3.6Property 0.8Fixed Interest 4.4Alternative Investments 1.1Cash

2.5Other

1.3Total 30.9

Analysis of EEV pre-tax result

£’m H1 2012 H1 2011Operating profit 167.8 183.6Investment variance 54.9 0.9Economic assumption change (2.2) (1.9)Pre-tax result 220.5 182.6

EEV net asset value per share

pence H1 2012 H1 2011

Net asset value per share 414.6 379.6

IFRS profit before shareholder tax

£’m H1 2012 H1 2011

Life 52.6 49.1Unit trust 13.1 14.4

65.7 63.5Distribution 2.0 -

Other (8.8) (8.2)Profit before shareholder tax 58.9 55.3

Pre- tax IFRS profit

£’m H1 2012 H1 2011

Pre-tax profit 58.9 55.3

Shareholder tax (12.8) (7.7)Post- tax profit 46.1 47.6

Effective tax rate 21.7%

13.9%

£’m H1 2012 H1 2011

Expected 13.7 15.0

Market related impacts 3.1 (2.5)Other (0.3) (1.0)Change in corporation tax rate (3.7) (3.8)Total tax charge 12.8 7.7

Expected effective tax rate 23.3% 27.0%

Analysis of shareholder tax charge

IFRS net asset value per share

pence H1 2012 H1 2011

Net asset value per share 141.7 127.4

Analysis of post tax cash result

£’m H1 2012 H1 2011Arising on in force business 75.7 62.0 +22%

Arising from new business (33.8)

(34.0) +0%

Underlying cash result 41.9

28.0 +50%

Variances 3.0 2.8Post tax cash result 44.9 30.8 +46%

£’m H1 2012 H1 2011Estimated business not yet generating positive cash (£’bn)*

10.6 9.5

Associated annual post tax cash (£’m)* c80.0 66.3

* Ignores stock market movements and outflows since the date of the original client investment

Analysis of EEV pre-tax result

Analysis of post tax cash result

£’m H1 2012 H1 2011Arising on in force business 75.7 62.0 +22%

Arising from new business (33.8)

(34.0) +0%

Underlying cash result 41.9

28.0 +50%

Variances 3.0 2.8Post tax cash result 44.9 30.8 +46%

Return on the investment in new business

£’m H1 2012 H1 2011

Cost of investment (£’m) 33.8 34.0Post tax EEV profit (£’m) 94.8 96.9Cash payback period (yrs) 5 4

IRR (net of tax) 21.0% 23.6%As a % of gross inflows 1.3% 1.3%

Analysis of post tax cash result

£’m H1 2012 H1 2011Arising on in force business 75.7 62.0 +22%

Arising from new business (33.8)

(34.0) +0%

Underlying cash result 41.9

28.0 +50%

Variances 3.0 2.8Post tax cash result 44.9 30.8 +46%

Post-tax cash result

34%

Double Half Year*Investment in new business

* For illustration purposes

£’m 2012 2008

Average closing daily FTSE 100

5,691 5,933 (4%)

Cash result for first six months (£’m) 44.9

12.2 x3.68

Growth in cash result

Unbroken dividend growth

+16%

+18%

+2%

+33%

+2.5%

+33%

+33%

* Plus special dividend of 6.35 pence

Interim

Expenses

• Establishment expense growth for the half year was 4.2%

• We will maintain pressure on these costs but will continue to invest in the business where appropriate (eg Partner recruitment)

• Development costs were £4.0 million in the first six months and we anticipate a similar spend in the second half of the year

• Our full year contribution to the FSCS levy to be some £6-7 million (double last year)

Capital position

• Total group solvency assets at 30 June 2012 were £368.2 million

• Solvency remains strong• Holding a £35.0 million dividend reserve• Investment policy for solvency assets

continues to be prudent

• Solvency II

DAVID BELLAMYChief Executive

‘Trust’ in financial services at an all time low

• Scandal surrounding LIBOR fixing• Product failures

– Key Data; Arch Cru; MF Global etc.• Regulatory sanctions• Increasing FSCS levies• Corporate culture & trust – never more

important

Business momentum

Driven by:-•Dedicated team•Focused on delivering good outcomes for clients•Partner development•Quality of new recruits•New funds & fund managers

Predictability

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Partner Numbers

Total new Investments

2010 +6% £4.7 bn

2011 +6% £5.2 bn

2012 – Year to date +3% £2.7 bn

(Straight line projection) (+6%) (£5.4 bn)

USP’s

• The Partnership• Our Investment approach• Our Culture

‘Relationship based business’

39

2012 Awards

40

Annual Company meeting

41

Foundation Fund Raising

Target

Growth in Partner numbers

+8%+7%

+9%+6%

+3.2%+6%

Advice marketplace

Adviser Community

• Over 400 Advisers

45

New Advisers

Adviser Community

• Over 400 Advisers• Average experience 10yrs• Average age 44• 156 Partners formerly advisers• 30 ‘second generation’

47

Academy

• Two intakes• Average earnings c£100,000• Average age 39• Second generation later this year

48

Professional Qualifications

• 91% qualified• 6% - 2 exams or less• Over 2,000 qualified individuals• 100 Chartered Planners – many more to

come

49

SRA

50

51

Dr Mohamed El-Elrian

Dr Vineer Bhansali

Curtis Mewbourne

52

Kenneth Buntrock

Global Equity Income Fund

53

Paul Boyne Doug McGraw

Diversified Portfolios

Diversified Portfolios

58

Resilient & Predictable Results

Growth in Partner numbers

Growth in new business

Growth in FUM

Growth in shareholder value

Summary

• APE growth +5%• New single investments of £2.76bn• New inflows of £1.51bn• FUM £30.9bn• Partnership growth of 3.2% to 1,702• EEV operating profit £167.8 million• IFRS profit £58.9 million• Interim dividend up 33%

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