0

Interim Results for the half year ended 30 March 2014

1

Agenda

1. Today’s key messages David Nicol

2. Results Andrew Westenberger

3. Strategy recap & delivery update Stephen Ford

4. Technology and strategy update David Nicol

5. Outlook David Nicol

6. Q&A

David Nicol

Andrew Westenberger

Stephen Ford

2

3

Today’s key messages

Strong results show business strength and delivery of strategy

Strategy recap and H1 delivery update

Technology – the right strategy

Confident on delivering 25% margin

4

Business strength and benefits of strategy delivery driving strong results

Growth Growth EfficiencyEfficiency Shareholder ValueShareholder Value

22.7

20.4

+11%

H1 2013 H1 2014

Discretionary funds under management (£bn)

29.7

H1 2013

+25%

H1 2014

23.7

Adjusted profit before tax (£m)

H1 2014

20.3%3.2

17.1%

H1 2013

Operating margin (%)

+21%8.6

H1 2013 H1 2014

7.1

Adjusted1 Diluted EPS

H1 2014

3.65p

H1 2013

3.55p

Interim dividend per share (pence)

1 These figures have been adjusted to exclude redundancy costs, additional FSCS levy, onerous contracts provision and amortisation of client relationships.

5

Progressing against key performance indicators

Strategic Priority KPI FY 2012 FY 2013 H1 2014 Target

Revenue Growth

Discretionary FUM inflows (%) 6 6 6 5

Discretionary service yield (bps) 91 96 96 95

Managed advisory service yield (bps) 46 56 61 75

Revenue growth (%) 2 9 5 n/a

Improved Efficiency

Adjusted PBT margin (%) 16.5 18.5 20.3 25+

Discretionary income per CF30 (£'000) 283 370 422 490

% of managed FUM in Discretionary service 70 76 79 80

Discretionary FUM per CF30 (£m) 33 41 44.5 50

Support staff to CF30 ratio n/a 2.5 : 1 2.4 : 1 2.0 : 1

Average client portfolio (£'000) n/a 443 467 500

Capital Sufficiency Solvency ratio (%) 123 226 209 Min 150

Dividend Growth

Dividend pay out (%) 57 58 n/a 60 - 80

Adjusted EPS growth (%) - diluted 6.8 19.2 21.1 n/a

Dividend growth (%) 1 20 n/a n/a

6

7

H1 Results agenda

Profitability – summary results

Profitability – growth drivers

Income – overall growth from core

Core income – key drivers

FUM Growth – importance of discretionary

Pricing – progressing to targets

Costs – control over fixed cost base

Profitability – positive scale benefit is driving margin

Cash generation – earnings growth and capex discipline driving cash

generation

Balance Sheet – strength underpinned by growing cash generation

8

Profitability

* Excluding redundancy costs, additional FSCS levy, onerous contracts provisions and amortisation of client relationships

Strong growth in adjusted PBT and margin – lower exceptional costs driving strong PBT growth

H1 2014 H1 2013 Change 

£’m £’m %

Total income 146.3 139.0 5%

Staff costs (51.3) (53.4) (4)%

Non‐staff costs (40.4) (42.1) (4)%

Total fixed operating costs (91.7) (95.5) (4)%

Adjusted* profit before variable staff costs 54.6 43.5 26%

Variable staff costs (25.1) (20.1) 25%

Adjusted* operating profit 29.5 23.4 26%

Net interest 0.2 0.3

Adjusted* profit before tax 29.7 23.7 25%

Operating margin 20.3% 17.1%

Amortisation of client relationships (6.3) (6.5) (3)%

Exceptionals (2.0) (10.4) (81)%

Profit before tax 21.4 6.8 215%

9

Profitability

15.8

Centralstaffcosts

1.1

Branchstaffcosts

Interest

(3.5)

Trail

(6.1)

HY 2013

1.6

Non-staff costs

HY 2014Profit share

Core income

(5.0)

Financial planning

1.1

1.023.7 29.7

£m

Adjusted PBT Growth – Income growth, operating leverage

10

Income

Core income growth more than offsetting expected decline in other income

H1 2014 H1 2013 YoY£m £m %

Discretionary 107.7 91.9 17%Advisory 17.7 17.7 ‐Total managed/advised 125.4 109.6 14%Execution only 9.0 9.0 ‐Core income 134.4 118.6 13%

Financial planning 6.1 5.0Trail 2.5 8.6Interest 3.3 6.8

Other income 11.9 20.4 (42)%

Total income 146.3 139.0 5%

11

Core income growth +13% driven by discretionary inflows and investment performance

Income

44

29

(2.7)

H1 2013 Investment performance

H1 2014

9.2

FUM inflows

5.7

Pricing

0.9

Pricing/market

2.7

Net outflows

118.6 134.4

Advisory

Discretionary£m

Increase in WMA Balanced Portfolio Index H1 2013 to 2014

12

FUM – Focus on discretionary growth paying off

Sep 2013 Net flow Market movement

Mar 2014 FY2013

HY2014

FY2014 

Guidance

£bn £bn £bn £bn Annualised net flow(%)

Discretionary 21.3 0.6 0.8 22.7 6% 6% 5%

AdvisoryManaged 4.8 (0.4) 0.1 4.5 (12)% (16)% (12)%Dealing 2.1 (0.6) ‐ 1.5 (32)% (57)% (57)%Total Advisory 6.9 (1.0) 0.1 6.0

Total Managed/Advised 28.2 (0.4) 0.9 28.7

Execution Only 6.7 0.6 0.1 7.4 17% 18% 5%

Total Funds 34.9 0.2 1.0 36.1 2% 1% 2%

13

Pricing – progressing to long term targets

Series

16

96

Sep-13

16

96

Mar-13

15

95

56 6156Series

Mar-14

61

Sep-13

56

Mar-13

56

757373Series

Mar-14Sep-13

73

Mar-13

73

Discretionary service yield

(bps)

Advisory Managedservice yield

(bps)

Overall Fundsservice yield

(bps)

FY 2014 guidance 98LT target 95

LT target 75FY 2014 guidance 65

Slower progress in H1 but still aiming for reaching LT target end 2014

14

Costs

Central headcount reduction from 2013 Reduced CF30 headcount from branch

consolidation Short term dip from staff turnover in central

functions pre-upgrading

Consolidating branch network Tighter controls on discretionary Lower capex – lower depreciation

and amortisation

6

8

H2 2013H1 2013 H1 2014

H1 2014H2 2013H1 2013

(4%)

51.3

Staff costs£m

Non-staff costs£m

51.953.4

40.442.142.1

NC

(3%)(1%)

End 2013 pay rises – though limited Dealing with extended system

implementation issues - Stocktrade Building/upgrading key resource capability –

front and back

Client facing system investments Legal fees Dual running system costs

Full year guidance 2014

H1 – savings have outweighed upward pressures; likely tilt back to full year guidance level in H2

15

Bra

nch

staf

f cos

ts

Cen

tral

sta

ff co

sts

Oth

er s

taff

rela

ted

cost

s

Prop

erty

/ In

fras

truc

ture

Ope

ratio

nal

Oth

er

Prof

essi

onal

/ m

arke

ting

Hig

her v

aria

ble

staf

f pay

out

rate52.9

30.3

83.2

(0.3)

82.9

52.2

27.6

79.8

(0.1)

79.7

Staff cost/income

Non-staff cost/income

Interest

Cost/Income ratio

Operating leverage driving margin progression30

24

17

1.4

1.5

1.9

4.70.2

0.6(2.7)0.6

(0.3)

17.1 20.3

5.9% savings

17.1 20.3 25+

Margin %

H1 2013 H1 2014

16

Material free cash flow growth from earnings growth and lower capex

Series

Series

2012

25

31.1

(6.4)

2011

4

17.4

(13.9)

21.1

6.5

7

21

10

25

(13.4)

(1.7)

LabelLabel Label Label

9.624.74

Series

2011

3.5

-5

Series (4.6)H1 2013

H1 2014

Capex

Final dividend

Dilution management

H1 –ve seasonal working capital

Statutory operating

profit

Free cash flow Movement in cash/working

capital

Movement in cash

Cash from operations

£m

17

Balance sheet – Continued strengthening from internal profit and lower intangible capex

101 109 109

150% target

Intangible assets

Regulatory capital

H2 £32m impairment

charge£m

43

349

39

Profit retentionFY 2013 Other equity reserves

H1 2014Net intangible capex

Total Capital 236

Less shares to be issued (15)

Net assets 221

109

101

8

10

109

127119

126

245

(14)

231

Other regulatory capital

Net current assets1

1 excludes shares to be issued and provisions

18

19

Strategy Update

Growth OrganicAcquired

Harness the brand

New clear pricing Opportunities post RDR

Fill in regional gaps

Efficiency

PricingTransfer to national rate card / phase out trail to ensure RDR compliant

Discretionary Fund Management mix

Focus on discretionary business

Lower operational costs

Cost discipline

Rebase operational cost through new technology

March 2013Objectives defined

March 2013Objectives defined

Sept 2013Delivered through management action

Sept 2013Delivered through management action

What we’ve said we’re doing – key initiatives driving Growth and Efficiency

Standard pricing

Enhance service model

Building organic growth channels

Cost discipline

Restructuring of centre

Branch consolidation

Simplify and streamline

New client technology

20

Key Initiatives – Standardise, Refocus & Grow

Strategic PriorityStrategic Priority

National pricingCost discipline

Review branch network

To be the leading Discretionary Wealth Manager in the UK

InitiativesInitiatives

Modular system developmentEnhanced service model

Build organic growth “pipes”Business to business-B2B

People and culture

Direct to client-D2CHigh net worth

Phase 1 ~ 2012/13Standardise rates

&Simplify services

Phase 2 ~ 2013/14 Refocus on primary services

& efficient delivery.Refine operating model

Phase 3 ~ 2014 Capitalise on the brand

&Expand offering

Improve market competitiveness and drive organic growth

Improve market competitiveness and drive organic growth

Achieve operational excellence to improve quality and lower costs

Achieve operational excellence to improve quality and lower costs

Complete

In progress

Explore & evaluate

21

H1 Delivery Progress

Clear, focused & relevant propositions

Direct Clients

Business to Business

• New website launched

• Strong growth in financial planning income +22%

• New CRM system trialed in pilot stage

• Intermediary sales +27%

• MFS sales showing further growth +£156m (2013: £74m)

22

23

Strategy Update

20.318.5

H2 2013 H1 2014H1 2013

17.1

H2 2012

16.5

H1 2012

14.9

Adjusted PBT margin (%)

Strategy is improving margin through a series of initiatives

Pricing

Cost discipline

Standardising operating model

Preserving organic FUM/income growth

Initiatives

24

Management actions driving strategy delivery

Taking tough decisions to achieve strategic aims

• Centrally led repricing• Removal of ancillary

services• Centrally managed portfolios

for managed accounts• Branch consolidation

• Upgrading key management roles

• Strengthening corporate functions

• Defining values/culture• Robust management of key

projects• IT vendor engagement

Key initiatives

Pricing

Cost discipline

Standardising operating model

Preserving organic FUM/income growth

Getting operating model in the right shape

Right operational processes

Right people

Right culture

Right technology

25

Decision was about getting right future cost/benefit payoff

Issues with functionality and robustness of software continue to take additional time and resource to address

Tipping point reached on future margin impact – had to assess +ve or -ve

Tough decision, but right one

Impairment charge of £32m (spent over the past 3 years) to be taken in H2: this sum would have been written down over the next decade

No impact on capital position or solvency

Engaged in negotiations to vary and settle an amount which may be payable under the original contracts

Technology – the right strategy

Fixing the basics: business operations too complex and lack standardisation

IT is an enabler: focused investment in infrastructure will continue to support existing margin targets

Modular future development will minimise impact on CF30s

Project approval based on embedding risk appetite into a cost / benefit analysis

Investing for the future

Decision to terminate new software rollout

Engine

Front Office

CRM

Simplify

Upgrade

New

IT enabled

Simplifying the business

26

Margin ahead of plan – confident on delivering 25% in 2016

8.6p

Adjusted PBT margin

1616

18.5%

17.1%

2014

20.3%

Target 25%

2013 2015 2016

We are confident that continued marginal gains in efficiency will deliver 25% target in 2016

Previous target 20%

Current and planned initiatives driving margin and growth to deliver against strategic priorities

Re-focus

Simplify

New services

Technology-enabled

Growth-orientated

ScalableH1 H1H2

2016

27

28

Outlook

Process of streamlining the business and improving efficiency is on track

Committed to continued investing in technology to improve client experience

Significant progress made towards 25% adjusted PBT margin with H1 2014 margin 20.3%

Improve competitiveness by investing in our services, technology and people

29

30

31

Funds Under Management - Continuing shift to discretionary

Focus on discretionary service driving increased FUM Continued organic growth in execution only service Service review / de-risking driving advisory decline

65% 70% 76% 79%

21% 19% 17% 16%

11%14%7%

2013

30

2012

45

2011

23

KPI

80

H1 2014

100

5%

DiscretionaryManaged dealingManaged advisory

Series

2013

6.7

7.4

H1 20142012

5.4

2011

4.4

80%

Execution Only% £bn

32

Offices merged or closed

• Review of smaller offices completed with three offices merged

• Truro merged with Plymouth• Guernsey merged with Jersey• Chester merged with Manchester

Number of branches:

201242

201335

2014 YTD32

33

Standardise & Simplify - Primary Vs. Ancillary Services

Mar 2013 Sept 2013

Primary

Mar 2014

34

£bn Inflows OutflowsService 

Switching Net Inflows OutflowsService 

Switching Net

Discretionary 1.0 (0.6) 0.2 0.6 2.1 (1.0) 0.0 1.1

Advisory Managed 0.1 (0.2) (0.3) (0.4) 0.1 (0.5) (0.2) (0.6)Advisory Dealing 0.0 (0.2) (0.4) (0.6) 0.1 (0.4) (0.5) (0.9)

Total Advisory 0.1 (0.4) (0.7) (1.0) 0.2 (1.0) (0.7) (1.5)

Total Managed/Advised 1.1 (1.0) (0.5) (0.4) 2.3 (2.0) (0.7) (0.4)

Execution Only 0.5 (0.4) 0.5 0.6 0.9 (0.7) 0.7 0.9

Total Funds 1.6 (1.4) 0.0 0.2 3.2 (2.7) 0.0 0.5

£bn Inflows OutflowsService 

Switching Net Inflows OutflowsService 

Switching Net

Discretionary 9% -6% 2% 6% 12% -5% 0% 6%

Advisory Managed 4% ‐8% ‐13% ‐16% 2% ‐10% ‐4% ‐12%

Advisory Deal ing 0% ‐19% ‐38% ‐57% 4% ‐14% ‐18% ‐32%

Total Advisory 3% -12% -20% -29% 3% -13% -9% -19%

Total Managed/Advised 8% ‐7% ‐4% ‐3% 9% ‐8% ‐3% ‐2%

Execution Only 15% ‐12% 15% 18% 17% ‐13% 13% 17%

Total Funds 9% -8% 0% 1% 10% -9% 0% 2%

2014 H1 2013 FY

Detailed inflows/outflows

35

Core Income

H1 2014 H1 2013 FY 2013Average 

FUM IncomeAverage 

YieldAverage 

FUM IncomeAverage 

YieldAverage 

FUM IncomeAverage 

Yield£bn £m bps £bn £m bps £bn £m bps

Discretionary 22.2  107.7  96 19.1  91.9  95 20.0  192.7  96

16% 17%

AdvisoryManaged 4.6  14.1  61 5.0  13.9  56 5.0  27.5  56

Dealing 1.8  3.6  39 2.7  3.8  28 2.5  7.2  29

Total Managed 28.6  125.4  87 26.8  109.6  82 27.5  227.4  83

7% 14%

Execution Only 7.0  9.0  25 5.7  9.0  31 6.0  18.1  30

Total 35.6  134.4  75 32.5  118.6  73 33.5  245.5  73

YoY change 10% 13%

36

Disclaimer

The information contained in these slides has been prepared by Brewin Dolphin Holdings PLC (the "Company"). No representation or warranty, express orimplied, is or will be made as to, or in relation to, and no responsibility or liability is or will be accepted by the Company or by any of its affiliates or agents as to orin relation to, the accuracy or completeness of these slides or any other written or oral information made available to or publicly available to any interested partyor its advisers, and any liability therefor is expressly disclaimed. Notwithstanding the aforesaid, nothing in this paragraph shall exclude liability for anyundertaking, representation, warranty or other assurance made fraudulently.

These slides do not constitute or form part of any offer for sale or solicitation of any offer to buy or subscribe for any securities nor shall they or any part of themform the basis of or be relied on in connection with, or act as any inducement to enter into, any contract or commitment whatsoever. No reliance may be placedfor any purpose whatsoever on the information or opinions contained in these slides or the presentation or on the completeness, accuracy or fairness.

Certain statements in these slides are forward-looking statements which are based on the Company's expectations, intentions and projections regarding itsfuture performance, anticipated events or trends and other matters that are not historical facts. These forward-looking statements, which may use words such as"aim", "anticipates", "believe", "intend", "estimate", "expect" and words of similar meaning, include all matters that are not historical facts. These forward-looking statements involve risks and uncertainties that could cause the actual results of operations, financial condition, liquidity, dividend policy and thedevelopment of the industry in which the Company's business operates to differ materially from the impression created by the forward-looking statements. Thesestatements are not guarantees of future performance and are subject to known and unknown risks, uncertainties and other factors that could cause actual resultsto differ materially from those expressed or implied by such forward-looking statements. Given these risks and uncertainties, prospective investors are cautionednot to place undue reliance on forward-looking statements. Forward-looking statements speak only as of the date of such statements and, except as required bythe FCA, the London Stock Exchange or applicable law, the Company undertakes no obligation to update or revise publicly any forward-looking statements,whether as a result of new information, future events or otherwise.

Neither the content of the Company's website (or any other website) nor the content of any website accessible from hyperlinks on the Company's website (or anyother website) is incorporated into, or forms part of, these slides.

27th May 2014

37