Adjusted profit before tax from continuing operations of £650m (2017: £660m) reflects lower revenue largely offset by a reduction in operating expenses as well as the inclusion of our share of Phoenix adjusted profits from 1 September 2018.

Fee based revenue of £1,868m (2017: £2,099m) reflects the impact of lower AUMA combined with a modest reduction in overall revenue margin to 30.8bps (2017: 33.0bps⁶) reflecting the mix effect of outflows from higher margin products including GARS and equities.

Operating expenses reduced by 10% to £1,395m (2017: £1,551m). This included continued delivery against previously announced targeted annual cost savings of at least £350m (by the end of 2020) as well as a further reduction in expenses of £56m arising from our general focus on cost control. The targeted cost savings reflect merger synergies and the benefits from simplifying our operating model following the sale of the UK and European insurance business. To date, with the integration progressing ahead of the original schedule, we have undertaken actions to deliver £175m of the targeted annual cost savings. These actions have benefited 2018 adjusted operating expenses by c£120m with further benefits still to come. Our focus on efficiency together with the inclusion of our share of Phoenix profits from 1 September 2018, has helped us to improve the cost/income ratio to 68% (2017: 71%).

IFRS profit attributable to equity holders increased by 19% to £830m (2017: £699m) mainly as a result of the £1,780m gain on sale of the UK and European insurance business and the inclusion of full year adjusted profit from Aberdeen (2017 result only included Aberdeen profit from 14 August 2017) which was partly offset by the amortisation and impairment of intangible assets acquired in business combinations which increased to £1,155m (2017: £138m).

This included an £880m impairment of the Aberdeen Standard Investments goodwill which reflects an appraisal of the asset based on the prevailing market conditions at 31 December 2018 and excludes future merger synergy benefits.  Impairments also included £228m in respect of our investment in Phoenix reflecting the lower market value of Phoenix as at 31 December 2018 which has subsequently recovered post year end.

Generating cash and delivering returns to shareholders

Adjusted cash generation after tax of £453m (2017: £505m) remained strong with 88% of adjusted profit after tax being converted to cash. The Board has proposed a final dividend of 14.3p per share, making a total of 21.6p (2017: 21.3p), an increase of 1.4%.

Our progressive dividend policy is to grow the annual dividend per share at a sustainable rate over the medium term. It is the Board's current intention that the total annual dividend per share will be held at the 2018 level while the business is transformed, cost synergies are delivered and future financial performance confirms the sustainability of this level of distribution and provides line of sight to its future growth.

The General Meeting on 25 June 2018 approved the return of up to £1.75bn in aggregate to shareholders. This included a return of capital of £1.0bn via a B Share Scheme with an ordinary share consolidation, which took place in October 2018, and a return of up to £750m through a share buyback programme. As at 11 March 2019, we have bought back £358m of shares through the ongoing buyback programme.

Transition to CRD IV capital regime with a strong capital position

Following completion of the sale of our UK and European insurance business to Phoenix, we are now regulated under the CRD IV regime for group-level prudential regulatory capital purposes.

We remain strongly capitalised with a CRD IV Group regulatory surplus of £0.6bn. The CRD IV Group capital position is stated after a deduction to allow for the proposed 2018 final dividend of £345m, the first two tranches of the share buyback programme of £375m and a proportion of SLAL separation costs of £0.1bn.

Outlook

Our resilient business and the actions we are taking, allow us to deal with market conditions which remain challenging, as macroeconomic and political uncertainties continue to affect investor sentiment. These uncertainties as well as the trends shaping our investment industry are driving investors to look for innovative and outcome orientated 'new active' investment solutions and these will continue to grow in importance in meeting the needs of institutional and increasingly retail customers. With our broad and diverse range of capabilities, Standard Life Aberdeen is well placed to take advantage of the opportunities and to deal with the challenges that these trends present.

As we look ahead we will maintain our focus on the things we can control. This includes delivering for our clients and customers by focusing on our investment performance and continuing to innovate in areas of market growth. We will also remain focused on driving operational efficiency and cost control as we move closer to completing the integration and the implementation of our simplified global operating model. This combined with our strong balance sheet will allow us to invest for growth, delivering on our strategy of creating a world-class investment company that maximises value and generates sustainable dividends and returns for shareholders.

For a PDF version of the full Annual report and accounts, please click here: http://www.rns-pdf.londonstockexchange.com/rns/6733S_1-2019-3-13.pdf

For further information please contact:

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Media

A conference call for the media will take place on Wednesday 13 March at 7.45am (UK time). Participants should dial +44 (0)203 009 5710 followed by the pass code 6979408. A replay facility will be available for seven days after the event. To access the replay please dial +44 (0) 333 300 9785 followed by the pass code 6979408.

Investors and analysts

The full year results 2018 analyst and investor presentation will take place on Wednesday 13 March at 9.30am (UK time). The presentation will take place at Standard Life Aberdeen plc, Bow Bells House, 1 Bread Street, London, EC4M 9HH. There will also be a live webcast starting at 9.30am. To access the webcast visit www.standardlifeaberdeen.com.

Notes to editors

1.  Assuming full subscription in the offer and based on the floor price of Rs 357.5 per share.

2.  Pro forma results are prepared as if Standard Life plc and Aberdeen Asset Management PLC had always been merged.

3.  In accordance with IAS 33, earnings per share have not been restated following the share consolidation as there was an overall corresponding change in resources. As a result of the share consolidation and share buyback, earnings per share from continuing operations for the year ended 31 December 2018 is not directly comparable with the prior year. Refer to Note 11 of the Group financial statements for information relating to the calculation of diluted earnings per share.

4.  2018 corporate actions include bolt-on acquisitions in private markets, closed ended funds and ETF capabilities in the US.        

5.  Share of associates' and joint ventures' profit before tax comprises the Group's share of results of HDFC Life, HDFC AMC, Phoenix and Heng An Standard Life Insurance Company Limited.

6.  Adjusted to exclude non-recurring impact from deferred revenue of £7m received in 2017.

Inside Information

This announcement contains inside information which is disclosed in accordance with the Market Abuse Regulation.

Standard Life Aberdeen plc's LEI Code is 0TMBS544NMO7GLCE7H90

Standard Life Aberdeen plc is registered in Scotland (SC286832) at 1 George Street, Edinburgh, EH2 2LL.
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