Slide 1: 2016 full year results
amps 2OI6 tull year results Craig Meller, Chief Executive Officer Gordon Lefevre, Chief Financial Officer 9 February 2017
Slide 2: FY 16 overview
FY 16 overview Net loss: A$344m Controllable costs: A$1,393m Underlying profit: A$486m – Disciplined cost management – Profit results reflect actions to stabilise wealth protection business – Successful completion of the 3-year business efficiency program – Wealth protection business now rebased, wi
Slide 3: FY 16 profit summary
FY 16 profit summary A$m FY 16 FY 15 % Australian wealth management 401 410 (2.2) AMP Capital¹ 144 138 4.3 Australian wealth protection (415) 185 n/a AMP Bank 120 104 15.4 New Zealand financial services 126 120 5.0 Australian mature 151 158 (4.4) BU operating earnings 527 1,115 (52.7) Group Office c
Slide 4: Business unit results
Business unit results Section 2
Slide 5: Wealth management – overview
Wealth management – overview Stable Key performance measures FY 16 FY 15 performance with early signs of Operating earnings (A$m) 401 410 recovery in Controllable costs (A$m) (485) (498) discretionary contributions Total retail and corporate super net cashflows on AMP platforms (A$m) 1,778 3,784 Tot
Slide 6: Wealth management – net cashflows
Wealth management – net cashflows Reduced inflows Net cashflows summary (A$m) FY 16 FY 15 as uncertainty hit North¹ 4,981 4,494 discretionary AMP Flexible Super¹ 92 1,451 contributions Other products and platforms¹ (3,576) (2,764) Total retail on AMP platforms 1,497 3,181 SignatureSuper and Flexible
Slide 7: Early signs of recovery in discretionary contributions
Early signs of recovery in discretionary contributions Sentiment Quarterly member discretionary cash inflows variance 2016 to 2015 improving with 100 market certainty following passage of revised 50 Cash inflows variance A$m super legislation in Q4 - Q1 Q2 Q3 Q4 -50 -100 -150 -200 -250 7 Section 2,
Slide 8: AMP Capital – overview
AMP Capital – overview Sustained Key performance measures FY 16 FY 15 earnings growth in volatile markets Operating earnings (A$m)1 144 138 from diversified Fee income (A$m) 614 583 approach Controllable costs (A$m) (392) (362) Cost to income ratio 62.1% 61.1% Total external net cashflows (A$m) 967
Slide 9: AMP Capital – net cashflows and investment performance
AMP Capital – net cashflows and investment performance Lower net External net cashflows (A$m) FY 16 FY 15 Net cashflows (A$m) FY 16 FY 15 cashflows reflect markets and loss China (CLAMP)¹ 1,262 1,688 Internal (3,900) (3,168) of low margin Japan (158) 239 External 967 4,434 mandates, partly offset by
Slide 10: Wealth protection – overview
Wealth protection – overview Stabilised earnings Key performance measures FY 16 2H 16 1H 16 FY 15 and reducing Profit margins (A$m) 175 85 90 196 capital intensity in rebased business Capitalised losses and other one-off items (A$m) (485) (484) (1) - Experience profits / (losses) (A$m) (105) (63) (4
Slide 11: AMP Bank – overview
AMP Bank – overview Bank continues to Key performance measures FY 16 FY 15 perform strongly while delivering Operating profit (A$m) 120 104 efficiencies and Controllable costs (A$m) (69) (66) investing to support future growth Cost to income ratio 28.5% 30.6% Net interest margin 1.67% 1.59% Resident
Slide 12: New Zealand and Mature – key performance measures
New Zealand and Mature – key performance measures NZ driving growth New Zealand FY 16 FY 15 Mature FY 16 FY 15 in wealth management while Profit margins (A$m) 112 98 Operating earnings (A$m) 151 158 controlling costs Transitional tax relief (A$m)¹ - 9 AUM (A$b) 21.2 21.9 Experience profits / (losses
Slide 13: Financial overview
Financial overview Section 3
Slide 14: Financial overview – key items outside business unit results
Financial overview – key items outside business unit results A$m FY 16 FY 15 % Change Underlying profit 486 1,120 (56.6) Other items (9) (3) n/a Business efficiency program costs (19) (66) 71.2 Amortisation of AXA acquired intangible assets¹ (77) (80) 3.8 Goodwill impairment (668) - n/a Profit/(loss
Slide 15: Financial overview – balance sheet and regulatory capital
Financial overview – balance sheet and regulatory capital A$m FY 16 FY 15 Change Shareholder equity 7,489 8,623 (1,134) Total corporate subordinated debt 951 1,551 (600) Total corporate senior debt 611 250 361 Total capital resources¹ 9,051 10,424 (1,373) Level 3 Eligible Capital 3,603 3,844 (241) L
Slide 16: Financial overview – dividends and share buy-back
Financial overview – dividends and share buy-back On-market share buy-back up to A$500m to begin in Q1 17 – Capital released from reinsurance provides the capacity for capital to be returned to shareholders – On-market share buy-back has been determined as the optimal way to execute a capital return
Slide 17: Financial overview – disciplined cost management
Financial overview – disciplined cost management A$m Cost growth in line 5% with guidance, 60 before impact of 3% 1,393 restructure costs 30 and lower variable 1,372 remuneration 26 (40) 1,329 3 (16) FY15 controllable Business AMP Bank SuperConcepts AMP Capital FY16 normalised Lower variable Restruc
Slide 18: Financial overview – taking cost out while still investing for growth
Financial overview – taking cost out while still investing for growth 3% cost out A$m target for FY 17 3% - (392) 1,001 (20) 981 19 950 (50) FY16 controllable AMP Capital FY16 controllable Restructure costs FY16 normalised Business Increased FY17 controllable costs costs, ex AMP less variable contro
Slide 19: Strategy update
Strategy update Section 4
Slide 20: Strategy capitalises on significant global shifts to deliver long term value
Strategy capitalises on significant global shifts to deliver long term value Strategic direction Strategy capitalises on positive longer terms trends while mitigating potential threats unchanged; re-balancing short – Mandated growth of superannuation system, with industry expected to double by 2026¹
Slide 21: Integrated portfolio with growth opportunities across multiple time horizons
Integrated portfolio with growth opportunities across multiple time horizons Invest to grow Manage for value and capital efficiency Wealth Management Bank AMP Capital Wealth Protection NZ Mature Short term Drive cashflows by: Continue to activate adviser Continue tapping global investor Stabilise ea
Slide 22: Combining capabilities and operational excellence to maximise shareholder returns
Combining capabilities and operational excellence to maximise shareholder returns AMP Key value drivers Shareholder value – Leading wealth manager with brand and – Great customer experience and outcomes – Shift capital to higher return, scale advantage asset-light businesses – New goals-based operat
Slide 23: Summary
Summary Business performance and strategy – Decisive actions taken to stabilise Australian wealth protection business – Australian wealth management managed tightly through turbulent 2016; other business lines performed strongly – Entering 2017 with improving operating conditions; more positive cash
Slide 24: Appendix
Appendix Section 5
Slide 25: Guidance summary
Guidance summary Costs Wealth protection – FY 17 controllable costs, ex AMP Capital, expected to be 3% lower than – Best estimate assumptions expected to deliver neutral experience normalised FY16 – 2017 reduction in profit margins from assumption changes will be in the order of – AMP Capital target
Slide 26: Growing internationally
Growing internationally Build partnerships with national champions China Life AMP Asset Management (CLAMP)¹ − AUM grew 65% to RMB 115.1b (A$22.9b) in 2016 − Launched 30 new products in FY 16 including separately managed accounts, equity and fixed income funds − Fastest growing new fund management co
Slide 27: Regulatory environment
Regulatory environment Proposed regulatory reform AMP position Taxation of superannuation − AMP supports the view that any changes to superannuation, including tax, must provide − Government initiatives including changes to non-concessional certainty and benefits to superannuation members contributi
Slide 28: Business efficiency program completed
Business efficiency program completed All benefits of A$m Pre-tax 200 program delivered 200 150 175 150 39 125 100 60 33 75 138 50 17 69 25 1 18 2 19 0 (27) -25 (56) -50 (94) -75 (143) -100 -125 -150 FY 13 FY 14 FY 15 FY 16 actual actual actual actual Implementation Controllable cost benefit to P&L
Slide 29: Important disclaimer
Important disclaimer Forward-looking statements in this presentation are based on AMP’s current views and assumptions and involve known and unknown risks and uncertainties, many of which are beyond AMP’s control and could cause actual results, performance or events to differ materially from those ex