Slide 1: ASX Announcement: Presentation by AMP CEO Craig Dunn
ASX Announcement 6 May 2009 For personal use only Manager Manager Company Announcements Office Market Information Services Section Australian Stock Exchange New Zealand Stock Exchange Level 4, 20 Bridge Street Level 2, NZX Centre, 11 Cable Street Sydney NSW 2000 Wellington New Zealand AMP Limited (A
Slide 2: AMP – managing for the short and long term
For personal use only AMP – managing for the short and long term Craig Dunn Chief Executive Officer 6 May 2009
Slide 3: Executive summary
Executive summary For personal use only First quarter cashflows and capital position demonstrate ongoing business resilience We are managing business for success over both short and long-term Short-term focus on capital strength and liquidity, cost management and revenue growth Key part of l
Slide 4: Outline
Outline For personal use only Current position Managing for short-term success Managing for medium and long-term growth Summary 3
Slide 5: Current position
For personal use only Current position 4
Slide 6: Positive cashflow results demonstrate business resilience
Positive cashflow results demonstrate business resilience For personal use only Total Q1 09 net cashflows up A$81m to A$210m compared to $129m in Q1 08 Strong mandated superannuation position reflected in corporate superannuation net cashflow results ¾ Corporate superannuation net cashflows up t
Slide 7: Robust capital position
Robust capital position For personal use only AMP remains strongly capitalised with A$923m in excess capital above minimum regulatory requirements (MRR) at 31 March 2009, compared to A$898m at 31 Dec 2008 Excess above MRR of A$923m includes Q1 09 impacts of ¾ market movements in equities, bonds
Slide 8: Continuing to manage capital position dynamically
Continuing to manage capital position dynamically For personal use only Equity position in AMP Life SF1 reflects ¾ A$1b of protected equities which provides both upside exposure and downside protection and is unchanged from 31 Dec 2008 ¾ A$1.7b of sold futures, up A$700m from 31 Dec 2008 ¾ Exposed
Slide 9: Updated capital sensitivities
Updated capital sensitivities These sensitivities are a point in time view of the impact of movements in equity markets, bond yields and property values on the 31 March 2009 capital position For personal use only AMP’s dynamic capital management framework includes market-related trigger points a
Slide 10: Commercial property update
Commercial property update For personal use only More than 80% of AMP Life SF1’s A$2.3b Australian property portfolio independently valued in Q1 09 ¾ 8% decline in office property values ¾ 5% decline in retail property values SF1 Australian weighted average capitalisation rate increased by 85bps
Slide 11: Managing for short-term success
For personal use only Managing for short-term success 10
Slide 12: AMP growing market share in core markets
AMP growing market share in core markets For personal use only Dec 2008 Dec 2007 Market share - Australia Total market Market Market Total market Market Market size A$b position share % size A$b position share % (rank) (rank) Funds under management¹ Superannuation including rollovers 203.0 1 17.6 26
Slide 13: Managing business for short-term success
Managing business for short-term success For personal use only Short-term outlook remains volatile so tight focus remains on ¾ Capital strength and liquidity ¾ Cost management ¾ Revenue growth 12
Slide 14: Continuing to manage costs tightly
Continuing to manage costs tightly For personal use only AFS costs expected to be around 3% lower in FY 09 on FY 08 ¾ continued investment in growth initiatives to be offset by cost efficiencies AMPCI costs will be managed closely ¾ contingent on market opportunities and conditions, and variable
Slide 15: Significant unit cost reductions in AMP Financial Services over past 6 years
Significant unit cost reductions in AMP Financial Services over past 6 years For personal use only 600 574 553 560 546 533 535 500 111bps 100bps 87bps 400 69bps 42.8% 76bps 75bps 300 40.8% 38.5% 200 34.2% 35.4% 100 35.2% A$m 0 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 Controllable costs Cost to income rat
Slide 16: Capturing opportunities to sustain and improve revenues
Capturing opportunities to sustain and improve revenues For personal use only Currently growing revenues in primarily non AUM- based businesses ¾ AMP Bank: deposits grew by A$490m in Q1 09 ¾ Contemporary wealth protection: individual risk API up 17% to A$554m on Q1 08 Continuing investment to in
Slide 17: Capturing opportunities to sustain and improve revenues
Capturing opportunities to sustain and improve revenues For personal use only Focusing strongly on customer retention ¾ Q1 09 persistency steady at 90.7% ¾ Ramp up of new and existing marketing and client retention activities across AMP - eg, lapse management campaign and direct marketing and rete
Slide 18: Managing for medium and long-term growth
For personal use only Managing for medium and long-term growth 17
Slide 19: Australian economy better placed than most advanced economies
Australian economy better placed than most advanced economies For personal use only IMF forecasts for 2009 real GDP growth ¾ Advanced economies -3.8% ¾ Australia -1.4% Australia is better placed than most comparable countries ¾ Low inventories ¾ Shortage of housing (compared to US) ¾ Reasonable
Slide 20: Medium to long-term outlook for wealth management sectors strong
Medium to long-term outlook for wealth management sectors strong For personal use only Growth for Australian, New Zealand and selected Asian wealth management markets underpinned by: ¾ Ageing demographics ¾ Bi-partisan party support for mandatory superannuation regime in Australia – super now tax
Slide 21: Growth strategy aims to capitalise on medium to long-term outlook
Growth strategy aims to capitalise on medium to long-term outlook For personal use only Continuing to invest today in improving distribution and enhancing products and services to drive strong value growth over the longer term by: 1. Growing planner capacity and broadening distribution 2. Expanding
Slide 22: Wealth management industry facing significant change
Wealth management industry facing significant change For personal use only Consumer preferences evolving ¾ Trend toward simpler, more transparent products and services Financial services regulation under review ¾ Global level, eg through G20 ¾ Local level, eg in Australia, Ken Henry tax review,
Slide 23: Key responses to changing operational environment
Key responses to changing operational environment For personal use only Maintain market-leading cost efficiency Ongoing focus on employer-sponsored superannuation channel and product offer Accelerate productivity of financial planners Optimise business mix at company and planner levels Inc
Slide 24: Key responses to changing operational environment
Key responses to changing operational environment For personal use only Accelerate productivity of financial planners ¾ Technology: eg, continued investment in systems and platforms; roll out of Coin to financial planning network ¾ Services: eg, using scale to drive lower cost services for financi
Slide 25: Summary
For personal use only Summary 24
Slide 26: Summary
Summary For personal use only First quarter cashflows and capital position highlight resilience of AMP business model Managing the business for success over the short-term and growth over the long-term Proactively evolving business for changing operating environment AMP well positioned for m