Slide 1: Interim results 2006
interim results 2006 Andrew Mohl Chief Executive Officer 24 August 2006
Slide 2: Highlights
Highlights » Encouraging progress on all five key performance indicators >» Underlying return on equity up from 22.9% to 26.6% > AFS value of new business’ up 22%; AFS embedded value' up 12% in 1H 06 >» Operating earnings up 15% to A$342m > Cost ratio down from 41.9% to 40.1%; costs up 5% in 1H 06 >
Slide 3: Outline
Outline « Group overview « Capital management » Business unit review « People and culture » Outlook and summary |
Slide 4: Overview — 2006 first half profit summary
Overview — 2006 first half profit summary A$m 1H 06 1H 05 % change AMP Financial Services 290 250 + 16% AMP Capital Investors 55 42 +31% Cobait/Gordian 15 21 ~ 29% BU operating earnings 360 343 + 15% Discontinued businesses! - 1 - Group office costs (18) (47) -6% Total operating earnings 342 297 + 1
Slide 5: Overview — underlying profit up 7%
Overview — underlying profit up 7% 420 392 (31) 40 a ee eneee AS250m 4H 05 Loss of Loss of CobaitiGordian AFS Underlying AMPCI Cobalt/Gordian Other 1H 06 underlying transitional investment fair value earnings investment earnings earnings underlying profit tax relief income from provision income prof
Slide 6: Overview — earnings and dividend per share
Overview — earnings and dividend per share Average shares on issue 1,873m 1,862m Earnings per share (underlying) 22.4 cents 21.1 cents Dividend per share 19 cents 14 cents Payout ratio 85% 67%! Franking 85% 75% Capital return? 40 cents 40 cents ‘The payout ratio of 67% was below the then 75% policy
Slide 7: Overview — growth remains robust
Overview — growth remains robust Assets under management # Group up 15% on 1H 05 to A$110b # AMPCI up 14% on 1H 05 to A$96b « AFS up 17% on 1H 05 to A$71b Net cashflows « AFS up from A$0.9b in 1HO5 to A$2.8b » AMPCI net external cashflows A$1.1b in both 1H 05 and 1H 06 Risk premium income « Australi
Slide 8: Overview — group cost ratio down to 40.1%
Overview — group cost ratio down to 40.1% 600 46.5% 50 iS 43.9% ‘ 41.9% 45 500 ns 40 397 399 35 400 30 300 % 25 20 200 15 10 100 5 A$m 0 # r0 % 1H 04" 1H 05* Controllable costs sGm= Cost to income ratio * Some minor restatements to reflect a change in the definition of controllable costs
Slide 9: Overview — underlying return on equity up to 26.6%
Overview — underlying return on equity up to 26.6% and set to exceed 30% in 2007 35 CO cc v wee 32% 25 4 204 164 104 §4 VA 0 1H 03” 1H 04 1H 05 1H 06 1H 06 modelling full impact of 2006 capital return *Pre-demerger mii Underlying return on equity
Slide 10: Major progress on goal to double the value of an investment
Major progress on 5 year goal to double the value of an investment in AMP from mid 2005 to mid 2010 40% change in 12 months from mid 2005 3.4 16.2 0.7 0.8 11.6 A$b Opening value — June 06 Dividends Capital return — Change in median Closing value* — median analysts’ (2H 05 + 1H 06) iH 06 analysts’ va
Slide 11: a
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Slide 12: Group shareholder capital resources
Group shareholder capital resources Notional allocation at 30 June 2006 31 December 2005 “ a a _ ASm (io | | iil vcore Hh ii es AMP Financial Services 630 1,431 450 1,884 668 41,551 450 2,001 ANP Life 488 1,260 450 1,710 540 1,393 450 1,843 AMP Banking 142 174 - 171 128 458 - 168 AMP Capital investo
Slide 13: Group office capital A$1.5b at June 30, 2006
Group office capital A$1.5b at June 30, 2006 1,954 (750) 547 58 5) 1814 Agm Group office Capital return Dividends paid Transfers from Movementsin Group officeloss Group office capital at less dividends BUs Cobait / Gordian capital at 4 Jan 06 reinvested loan 30 June 06
Slide 14: Capital management strategy
Capital management strategy « Capital efficiency has been pursued by: > > > > leveraging the strong share market performance since early 2003 growing the contemporary and asset management businesses that are relatively low in capital intensity running off the more capital intensive mature life and C
Slide 15: Capital management initiatives and next steps
Capital management initiatives and next steps « First capital return of A$750m in June 2005 « Second capital return of A$750m in June 2006 * Third initiative - ordinary dividend payout ratio policy increased to 85% of underlying profit this year and franking rate also lifted to 85% = Balance sheet c
Slide 16: Business unit review
Business unit review a
Slide 17: AMP Financial Services (AFS) — operating earnings up 16%
AMP Financial Services (AFS) — operating earnings up 16% 18 (3) 5 een 2): Soe (6) (6) 1) 44 ssaneg (1) 290 seseeued i 250 A$150m yo 1H 05 Growth in Market Persistency Higher Expected Foreign Other 1H 06 operating business movements controllable mature run- currency operating earnings volumes and cos
Slide 18: AFS — cost ratio falls to 36.1%
AFS — cost ratio falls to 36.1% 44.5% 400 > 41.9% 45 mel 38.6% e 35 300 281 274 250 4 200 150 4 100 4 504 ASm 04 1H 03* 1H 04* 4H 05* 1H 06 Controllable costs safio= Cost to income ratio *Some minor restatements to reflect a change in the definition of controllable costs
Slide 19: AFS — exceptional growth in cashflows
AFS — exceptional growth in cashflows = Cash inflows up 52% to A$7.7b > AMP Financial Planning up 25% to A$3.5b >» Corporate Super Direct Sales up from A$0.7b to A$2.2b = Cash outflows up 17% to A$4.9b >» Persistency down by 0.5 percentage points to 84.7%; allowing for impact of ‘over 65s’ project,
Slide 20: AFS — net retail cashflows and industry share
AFS — net retail cashflows and industry share AMP cashflows AMP rolling 12 month net cashflows (excl CMTs), AMP ranking 5.000 - and AMP cashflows as % of industry [ 16% 4,500 5 | 44% 4,000 5 + 12% 3,500 4 L 2, 3,000 54 10% 2,500 4 + 8% 2,000 ~ + 6% 1,500 r 4% 1,000 5 | 99 500 5 2% 07 0% Mar- Jun- Se
Slide 21: AFS — cashflow growth by channel
AFS — cashflow growth by channel 1H 06 1H 05 inflows inflows 1H 06 net cashflows 1H 05 net cashflows AMP Financial Planning 3,524 2,810 +25% 873 606 + 44% Hillross 967 704 +37% «=. 354 206 = +72% Corporate Super direct sales 2,195 686 +220% 1,865 466 + 300% force Customer care centre & other 426 376
Slide 22: AFS — drivers of cashflows
AFS — drivers of cashflows Highly rated products Strong fund performance Strong brand | % rating a lot onsome va
Slide 23: AFS — net cashflows in 1H
AFS — net cashflows in 1H 06 19c to AMP Capital Investors funds AS$1 2 1c to external net cashflow funds 15c to AMP Capital Investors funds 45c to external funds ‘ Analysis of 1H 06 AFS cashflows, excluding NZ, risk and some mature products 2 FDF are a range of multi-manager funds jointly managed by
Slide 24: Australian contemporary wealth management — a high growth, high return business
Australian contemporary wealth management — a high growth, high return business Contemporary wealth management 1H 06 1H 05 Operating earnings A$116m A$89m + 30% Controllable costs‘ A$175m A$172m + 2% Cost to income ratio 48.5% 54.4% - 5.9 percentage points Net cashflows A$3,309m A$1,496m + 121% Pers
Slide 25: Australian contemporary wealth protection — a solid growth, high return business
Australian contemporary wealth protection — a solid growth, high return business Contempora P y Change wealth protection 1H 06 41H 05 Operating earnings A$59m i A$55m +7% Controllabie costs A$3im A$33m -6% Cost to income ratio 22.2% 25.1% - 2.9 percentage points Individual risk annual A$403m $363m 1
Slide 26: Australian mature — a slowly declining, large scale, outstanding return business
Australian mature — a slowly declining, large scale, outstanding return business Mature Change 1H 06 1H 05 Operating earnings A$92m | A$83m +11% Controllabie costs A$30m | A$31m - 3% Controllable costs/AUM' 0.32% | 0.33% nla Net cashflows (A$564m) | (A$614m) + 8% Persistency 87.7% | 87.6% + 0.1 perc
Slide 27: New Zealand — a life risk-driven, high return business
New Zealand — a life risk-driven, high return business New Zealand Change 1H 06 | 1H 05 Operating earnings AS$23m | A$23m Steady Controllable costs AS3im | A$26m + 19% Cost to income ratio 44.4% | 40.7% + 3.7 percentage points Net cashflows AS10m (A$53m) nla Risk annual premium . income AS7TSm A$77m
Slide 28: Value metrics — traditional embedded value and value of new business
Value metrics — traditional embedded value (EV) and value of new business (VNB) @ 2% ik lcount mari a Te AFS 12% 22% Contemporary wealth management 13% 20% Contemporary wealth protection 14% 29% Mature 15% 31% NZ (5%) 25% | Growth in EV is the return on embedded value (RoEV) before net transfers of
Slide 29: AMP Capital Investors (AMPCI) — summary
AMP Capital Investors (AMPCI) — summary = Operating earnings up 31% to A$55m « Cost ratio down 3 percentage points to 55.2% » 84% of Australian AUM meeting or exceeding benchmarks in year to June «» External net cashflows of A$1.1b «= AUM up 14% on 1H 05 to A$96b » Return on equity’ up 14 percentage
Slide 30: AMPCI — operating earnings up 31%
AMPCI — operating earnings up 31% 7 (8) 41 55 @ 3 42 Agm 1H 06 operating Higher internal Higher external Higher Higher 1H 06 operating earnings management fees managementfees performance & controllable costs earnings transaction fees
Slide 31: AMPCI — volumes and margins expanding
AMPCI — volumes and margins expanding 100 14 90 12 80 70 10 60 8 §6 Ly Z 6 40 g a Z 30 y 4 Z 20 a by @ 2 10 g Basis ASb oO: points FY 03*4 Fy 04* FY 05 1H 06 Average AUM in period ude Operating earnings after tax - basis points * FY 03 excludes Listed Property Trusts AUM and profit earnings as these
Slide 32: AMPCI — out-performance against benchmarks across all asset classes
AMPCI — out-performance against benchmarks across all asset classes Australian AUM 944 944 90% 89% oe % 91% 83% 86% 84% 79% 78% 73% | 79% Target ence ate en cee eee 78% _ y : sh : ec Listed assets Infrastructure Private equity Property Future Total Directions Funds @ Jun-06 Gi Dec-05 % indicates ass
Slide 33: AMPCI — Balanced Growth fund achieving top quartile performance
AMPCI — Balanced Growth fund achieving top quartile performance over 1 and 3 years Excess total return & quartile ranking (vs median competitor) SF2 - Balanced Growth Option 1.00% 0.50% 0.00% Ferereri -0.50% FR Monthly excess return over median % -1.00% 0% Dec-O2 Mar-O3S Jun-O03 Sep-O03 Dec-03 Mar-0
Slide 34: AMPCI — strong value added to Life No Fund
AMPCI —- strong value added to Life No 1 Fund 409 403 ASm FY 03 FY 04 FY 05 4H 06 Fund size 22.7 23.5 22.7 22.9 A$b
Slide 35: AMPCI — AUM up 6% to $96b in first half
AMPCI — AUM up 6% to $96b in first half Opening AUM at 1 January 2006 A$91.1b Australian external market flows 1.1 Japan / Asia distribution channel 0.3 Australian contemporary internal flows 2.1 Australian run-off businesses (1.6) AMP group (0.8) NZ market flows (0.4) Investment returns 46 Assets u
Slide 36: Cobalt/Gordian — lower operating earnings
Cobalt/Gordian — lower operating earnings 74 58 51 = Agm FY 03 FY 04 FY 05 1H 06
Slide 37: Cobalt/Gordian — surplus capital begins to be released
Cobalt/Gordian — surplus capital begins to be released , / 7 237 125 : ae | §69 | ' ji | Up | ie Ag$m FY 03* FY 04* FY 05* 1H 06* | Minimum capital requirement Surplus capital held in licensed insurers | Capital to be released in 2H 06 } Loans to Group office * Excludes capital heid in non-licensed
Slide 38: People and culture
People and culture a
Slide 39: Overview - 2006 culture survey
Overview - 2006 culture survey « Acconstructive culture is a key long term driver of high performing companies » One of the tools AMP has been using to measure culture since 1996 is the Organisational Culture Inventory (OCI) tool » OCI identifies an organisation’s culture as having one of three domi
Slide 40: AMP culture — increasingly constructive
AMP culture — increasingly constructive + ORENTATY os Ov noun ng03-7 [ak OREENTATH _—_ OX Source: Human Synergistics NZ Limited 4 human as Copyright © 2005. Ail rights reserved 44% synergistics’ iwTtewarsonag
Slide 41: AMP culture — more constructive than finance industry as a whole
AMP culture — more constructive than finance industry as a whole ATISFACTION NEEps. Financial services — industry comparison SING fing, SK ORIENTATY __* ON “—~Wonayayo g088- ee AVOIDANCE 2 ‘ 8 Base profile = AMP 2006 — Overlay = Finance industry — secuairy neevS Copyright © 2005. All rights reserved
Slide 42: Outlook and summary
Outlook and summary
Slide 43: Medium term positioning of AMP is attractive
Medium term positioning of AMP is attractive « Retirement savings industry set to grow by over 10% pa in next decade* « AMP holds top three positions in key product segments of this market > Retail superannuation >» Retirement incomes >» Corporate superannuation » Individual risk « AMP has strong co
Slide 44: Robust growth in open book is being achieved
Robust growth in open book is being achieved while maintaining mature book profit streams 350 300 250 200 Steady 150 > 102 108 103 104 107 100 , 50 Agm o¢ Open business operating earnings Closed business operating earnings (AFS contemporary wealth management and {AFS mature, Cobalt/Gordian) wealth p
Slide 45: Strategic focus centred on core business
Strategic focus centred on core business « Focus on “running the business better than it’s ever been run before” to drive shareholder value is working >» Capturing scale benefits from volume and market growth >» Sustaining lowest unit cost position in the industry >» Pursuing strong growth in our co
Slide 46: Conclusion
Conclusion » Encouraging results in all key performance indicators * Sound platform for future growth » Good industry, good operating environment, good business model « Sharp focus on the basics of our business » The better we get at running the business, the more opportunities we find to improve «
Slide 47: Appendix
Appendix a
Slide 48: AMP's financial strength metrics
AMP’s financial strength metrics 16.0 - 440 30 June 2006 o * é “w 31 Dec 2005 Oo % 12.0 g 40.0 30 June 2005 4 < . ao & 2 807 31 Dec 2003 2 ®* 31 Dec 2004 5 6.0 : ‘ eee se eeerce ce 30 June 2004 4.0 30 June 2003 2.0 0.0 60% 50% 40% 30% 20% 10% 0% S&P gearing _. S&P indicative A range
Slide 49: AFS — net retail cashflows vs. major competitors
AFS — net retail cashflows vs. major competitors Total retail managed funds (excl CMTs) quarterly net cashflows ($m) of six largest participants by FUM — distributor view 2,583* 467 AMP Group AXA Australia Group BT/Westpac Group Commonwealth/ ING Australia Group = National Austrafia / Colonial Group
Slide 50: Traditional embedded value (EV) up 12% in 1H 06, before transfers
Traditional embedded value (EV) up 12% in 1H 06, before transfers @ 3% risk discount margin Return on embedded value 12% 11% 6,733 (497) 6,236 69 6,024 5,995 ASS0Om FYOSEV Restatement FYOSEV Expected tHO6new investment & Unitcost Persistency Pricing Other 4HOGEV Nettransfer 1H 06 (after restated ret
Slide 51: Traditional EV by line of business
Traditional EV by line of business 1H 06 1H 06 FY 05 @ 3% risk discount margin, after transfers Agm RoEV' RoEV! AFS 6,236 12% 28% Contemporary wealth management 2,583 13% 33% Contemporary wealth protection 1,461 14% Mature 1,634 15% 23% NZ 558 (5%) 18% 1 Return on embedded value (RoEV) is the percen
Slide 52: Traditional value of new business (VNB) up 22%
Traditional value of new business (VNB) up 22% @ 3% risk discount margin Growth rates 22% 13% : ” () 164 5 2 nansee 18 141 (7) 134 ee nee A$100m 1H 05 VNB Restatement 4H 05 VNB Volurne & Future Expense Persistency Product NZ exchange 1H 06 VNB. restated mix econemic / assumptions & claim changes rat
Slide 53: Traditional VNB by line of business
Traditional VNB by line of business 1H 06 1H 05 FYO05 @ 3% risk discount margin Agm % change % change AFS 164 22% 11% Contemporary wealth management 110 20% 11% Contemporary wealth protection 22 29% Mature 17 31% (4%) NZ 15 25% 20%
Slide 54: Future Directions Balanced Fund - Major fund managers, June 2006
Future Directions Balanced Fund - Major fund managers, June 2006 p ] litt thi
Slide 55: Organisational culture inventory (OCI) — measuring behaviour styles
Organisational culture inventory (OCI) — measuring 12 behaviour styles ACHIEVEMENT SELF- ACTUALISING HUMANISTIC- ENCOURAGING AFEFILIATIVE Members are expected to set challenging but realistic goals and solve problems effectively Members are expected to gain enjoyment from their work and produce high
Slide 56: AMPFP enforceable undertaking
AMPFP enforceable undertaking On 27 July 2006, AMPFP offered an enforceable undertaking to ASIC The EU included four areas of undertakings by AMPFP: «= Amendment of procedures and disclosures re super switching advice — section 7 « Offer of rectification for customers who switched superannuation pro
Slide 57: AMP's position on major industry issues
AMP's position on major industry issues » Consumer choice is paramount and needs to be supported with good disclosure » Middle Australia needs access to affordable advice « Good advice is good advice no matter how it’s paid for = Trend to fees over commissions will continue =» Commissions and fee fo