Legal & General UCITS ETF ICAV - L&G Digital Payments UCITS ETF Accum Shs USD · XETR:DPGA
Legal & General UCITS ETF ICAV - L&G Digital Payments UCITS ETF Accum Shs USD — Legal & General Group — Goldman Sachs conference 2018
31 slides from Legal & General UCITS ETF ICAV - L&G Digital Payments UCITS ETF Accum Shs USD's conference presentation, Jun 6, 2018
Slide 1: Legal & General supporting inclusive capitalism and the intergenerational contract
“| Hope | Die Before | Get Old” Legal & General supporting inclusive capitalism and the intergenerational contract THE WHO, “MY GENERATION” 1965 LEGAL & GENERAL GROUP PLC
Slide 2: Forward looking statements
Forward looking statements This document may contain certain forward-looking statements relating to Legal & General, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature, forward-looking statements involve uncertainty becau
Slide 3: Strategy has delivered consistently strong results for shareholders
Operating profit (£m) Strategy has delivered consistently strong results for shareholders Dividend per share 15.35p 14.35p 13.40p 11.25p 9.30p 7.65p 5.97p 6.40p 2020
Slide 4: Risks Direction Impact on Legal & General
Risks Direction Impact on Legal & General +++ Rate rises will be the “new normal” - Ben Broadbent Rates rise • Higher rates reduce our liabilities Economic uncertainty may cause credit spreads to widen ++ • Higher spreads reduce our liabilities because our assets are Credit spreads widen held to mat
Slide 5: Impact on 31 December 2017 Solvency II surplus
Impact 31 December 2017 Surplus Coverage Detail £bn ratio1 % • As at 5 March 2018, ratio estimated at 196% 6.9 189 • Movement due to increasing yields and operational surplus generation • Significant positive for L&G’s balance sheet • As interest rates increase, pension liabilities +0.8 +20 decrease
Slide 6: Mortality reserve releases
Mortality reserve releases £m 2017 2018 2019 2020 estimated estimated estimated 332 330* 330* ** 274 250 • • • • •
Slide 7: Group business areas: LGR, LGIM, Insurance
Investing & Annuities Investment Management Insurance LGR AUA LGIM AUM LGI & GI GWP £58.2bn £983bn £2.9bn
Slide 8: Reshaping the group has increased focus
Reshaping the group has increased focus ES (a IndiaFirst Life (H1 2018) Sale agreed £79m Mature Savings (H2 2017) Sale agreed £650m Insurance: Netherlands business (H1 2017) Sold €161m Savings: Cofunds (H1 2017) Sold £147.5m Legal & General Germany (H2 2016) Sold - Disposals, Savings: Suffolk Life G
Slide 9: Reinvesting disposals in profitable, socially useful investments
Reinvesting disposals in profitable, socially useful investments Mature Savings disposal Disposal date: Sale price: Expected completion date: Approx. profit on disposal: Cala acquisition December 2018 Acquisition date: March 2018 £650m Purchase price: £315m Acquisition amount: 52.1% Mid-2019 (total
Slide 10: Businesses aligned to capitalize on growth drivers
Businesses aligned to capitalize on growth drivers Three focused business areas: 2017 Op Profit (£m) won | INVESTING & 9 icrR ANNUITIES * Address under investment in UK Infrastructure 272 and Housing * Deliver financial security for UK retirees * Continue to build a world class international INVESTM
Slide 11: Growth drivers, L&G actions, broader economic potential
Growth drivers Legal & General’s Actions Broader Economic Potential Ageing • demographics • • Globalisation of • asset markets • • Creating real assets • • • Welfare reforms • • • Technological innovation • • • Today’s capital • • •
Slide 12: Growth drivers, 2017 achievements, leading the way
Growth drivers 2017 Achievements Leading the way Ageing • demographics • • Globalisation of • asset markets • • Creating real assets • • • • Welfare reforms • • • Technological innovation • • • Today’s capital • •
Slide 13: Investing & Annuities, Investment Management, Insurance
Investing & Annuities Investment Management Insurance #1 2.7m 7
Slide 14: Typical pensioner incomes and demographic shifts
1 Typical pensioner incomes are now actually higher than working-age incomes 3.3m Last Time Buyers (‘LTB’) looking to downsize with £820bn LTB housing wealth locked 2 up in homes no longer fit for purpose 3 Millennials are half as likely to own a home at age 30 as baby boomers were 4 4 in 10 millenn
Slide 15: Individual Annuities and Lifetime Mortgages markets
1 c1m Individual Annuities people retire in the £0.7trn UK each individual year retirement market £11.9bn £6.9bn £4.2bn £4.3bn £4.4bn DC Workplace pensions DC Pensions - SIPPs/PPs Drawdown 2013 2014 2015 2016 2017 Source: Preliminary analysis by Spence Johnson, ABI £5bn+ of annual Lifetime Mortgages
Slide 16: UK and US Pension Risk Transfer
1 UK Pension Risk Transfer NPS £15bn+ +62 of premium >£2trn DB expected in 20181 pensions, c.7%2 transferred to £13.2bn £12.3bn £12.0bn insurers £10.4bn £7.5bn Private pension sector 2013 2014 2015 2016 2017 Transferred to insurers 1. LCP forecast 2017 volume based data published as at 18 December 2
Slide 17: Different Family Structures
1 At Retirement Balance Sheet Extended Increased reliance on home as a source of value, but challenges accessing the value Lone- Nuclear (£k) parent State Pension: 230 Different Private Pension: 85 Family Structures Other Savings: 10 Reconstituted and Nomadic Arrangements Benefits: 15 Healthcare etc
Slide 18: Inadequate housing for aging population
2 3 4 House building Inadequate lagging 50% Rise of housing for behind the ‘Generation aging required target Rent’ population of 250,000 new homes per year
Slide 19: L&G Housing Ecosystem
Affordable Ind. Protection: Modular Market size c.£0.7bn APE Smart Expected growth c.2% pa Quote L&G market share c.25% L&G Homes Land banks Home Insurance Market size c.£6.4bn GWP Expected growth c.2% pa L&G market share c.6% CALA Protection 80,000 House building Homes we are Build to Rent involved
Slide 20: Lifetime mortgage market forecasts and market share
2 • LTM market forecasts £5.0bn • • £1.1bn £1.4bn £1.6bn £2.1bn £3.1bn 2013 2014 2015 2016 2017 2018e 2019e 2020e L&G response: Entered LTM market in 2015 Leading the market in quality and customer-focus £4,500m 35% Award Organiser Best Equity Release/Lifetime Mortgage Strategy Awards £4,000m Lender
Slide 21: LGRR: Lifetime Mortgages making a difference
~ LGRR: Lifetime Mortgages making a difference Our market leading customer proposition Diversified and risk-balanced book * Wide range and competitively priced product offering * Average LTV (loan advanced) of 27% * Fair lending framework: unique approach which includes » Average customer age of 71
Slide 22: Significant market opportunity
2 Significant • market • opportunity • • • Strong • strategic fit for L&G Group • • • • • • • Targeted • implementation •
Slide 23: Affordable Homes, Modular Homes, CALA
3 Legal & • General Affordable • Homes • Modular • Homes • • • CALA • • •
Slide 24: The story so far: Build to Rent
lan ® LGC: Build to Rent Fund: £10bn opportunity Collaboration between LGC and LGIM launched £600m open-ended BTR fund. Now over £1bn investment capability and growing. Using long term capital to address the chronic long term lack of housing supply and meet the increasing demand for affordable, qual
Slide 25: Salford investment phases 1 to 10
5 LGC investment in Salford has provided multiple profitable investment opportunities for Sourcing new institutional LGR and new institutional capital managed by LGIM capital funding • 125,000 sq.ft, “matching adjustment” compliant, 25 year RPI- • Forward funded by LGR for Phase 1 linked lease to Sa
Slide 26: Personal lending with repayments taken from salaries
5 • • Personal lending with repayments taken directly from salaries • 250,000 people added to the platform since L&G investment in September • From application to having the money in the bank account can take as little as 7 minutes • Partners with many major employers in the United Kingdom • • Yorks
Slide 27: LGIM: Providing DC pension solutions and investments
LGIM: Providing DC pension solutions and investments for the future world Defined Contribution (DC) pensions — Largest UK manager of DC assets, with £68.2bn assets, up 19% - 2.7 million UK DC customers in over 13,000 schemes Different Interests A high percentage of millennials and womenfsay they are
Slide 28: LGIM Europe ex-UK AUM growth
LGIM Europe ex-UK AUM growth (£bn) European net flows up 4.8x 44 to £12.6bn (2016: £2.6bn) +30% CAGR £228bn of AUM from International clients (+29% yoy) 12 Preparing for the future €300bn+ 2012 2017 European infrastructure £2.4bn deficit
Slide 29: ETF capability and SME Finance Investment (Pemberton)
The Canvas acquisition provides LGIM with ‘out of the box’ ETF capability (a blank canvas) as a platform for growth for LGIM’s index and distribution capabilities ETF AUM (£2.2bn) By the end of FY19, we will have launched a core range of LGIM ETFs to target a portion of the c.£1.5trn of ETF flows in
Slide 30: Strategic ambitions
• Achieve global leadership in pensions de-risking and provide a suite of products to maximise retirement income • Help people achieve security affordably through insurance and workplace pensions • Use our existing skills and expertise to build a world class international asset management business •
Slide 31: Ambition to replicate 10% EPS growth out to 2020
Between 2011 – 2015 we achieved a 10% growth in EPS Our ambition is to replicate this performance out to 2020 Earnings per share (p) +50%
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