Slide 1: Capital raising
8 August 2019 Capital raising Francesco De Ferrari, Chief Executive Officer Gordon Lefevre, Chief Financial Officer Not for distribution or release in the United States NOT FOR DISTRIBUTION OR RELEASE IN THE UNITED STATES
Slide 2: Capital raising rationale
Capital raising rationale Summary – Capital raising of A$650 million via a fully underwritten Placement (“Placement”) to institutional investors, and a separate non-underwritten Share Purchase Plan (“SPP”) for eligible shareholders in Australia and New Zealand – AMP intends to use the proceeds from
Slide 3: Proforma capital position
Proforma capital position Impact from 30 June 2019 Proforma Proceeds from Capital A$m 30 June 2019 reported completion of sale of post capital raise and Raise AMP Life AMP Life sale Level 3 eligible capital 3,040 650 (350) 3,340 Less: Minimum regulatory capital requirements (MRR) 1,346 - (630) 716 L
Slide 4: Use of proceeds - investing to build the new AMP
Use of proceeds - investing to build the new AMP AMP intends to utilise the proceeds of the capital raising to commence the implementation of its new strategy immediately. The balance of the strategic investment will be funded through organic growth and the AMP Life sale net proceeds Australian weal
Slide 5: Offer overview
Offer overview Placement size – A$650 million fully underwritten Placement – Approximately 433.3 million fully paid ordinary shares (“New Shares”) to be issued at the Floor Price (defined below) (equivalent to approximately 14.7% of existing shares on issue) Placement price – The final Placement iss
Slide 6: Key offer dates
Key offer dates Dates are subject to change without notice Date1 Record Date for the Share Purchase Plan 7.00pm AEST, Wednesday, 7 August 2019 Trading halt and Placement announced Thursday, 8 August 2019 Placement bookbuild Thursday, 8 August 2019 Placement completion announcement Friday, 9 August 2
Slide 7: Appendix Section A
Appendix Section A
Slide 8: Key risks
Key risks This section describes key risks of investing in AMP together with the risks relating to participation in the Offer which may affect the value of AMP shares. It does not describe all the risks of an investment. Investors should consult their own professional, financial, legal and tax advis
Slide 9: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP 1.1 Strategic risks AMP Life, wealth – On 25 October 2018, AMP announced the proposed sale of its wealth protection and mature business (“AMP Life”) to Resolution Life Australia Pty Ltd (a wholly owned subsidiary of Resolution protection
Slide 10: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.1 Strategic risks (cont’d) AMP Life, wealth – If the Life Sale does proceed, the risks of the retained businesses (eg risks associated with seed and sponsor capital of AMP Capital) will form a larger relative proportion of the
Slide 11: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.2 Legislative, regulatory and capital risks Industry and – AMP is subject to regulatory investigations, reviews and other compliance queries from regulators from time to time. These matters are not disclosed unless a material
Slide 12: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.2 Legislative, regulatory and capital risks (cont’d) Royal Commission into – On 14 December 2017 the government established a Royal Commission into Misconduct in the Banking, Superannuation and Financial Services Industry (“Ro
Slide 13: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.2 Legislative, regulatory and capital risks (cont’d) Financial Advice – FASEA, the Financial Adviser Standards and Ethics Authority, has implemented a new professional standards framework for the financial planning profession
Slide 14: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.2 Legislative, regulatory and capital risks (cont’d) Customer remediation AMP has developed a process for customer review and remediation within a reasonable timeframe, which on current estimates is expected to finish mid-2021
Slide 15: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.2 Legislative, regulatory and capital risks (cont’d) Design and Distribution – The Treasury Laws Amendment (Design and Distribution Obligations and Product Intervention Powers) Act 2019 (Cth) was passed in April 2019. This leg
Slide 16: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.2 Legislative, regulatory and capital risks (cont’d) Life Insurance reforms - Recent legislative and regulatory scrutiny of life risk insurance products will affect AMP’s insurance and financial advice business and is likely t
Slide 17: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.2 Legislative, regulatory and capital risks (cont’d) Other legislative, Other foreign jurisdictions regulatory and - AMP Capital also operates in a number of other overseas jurisdictions. Its businesses are affected by changes
Slide 18: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.3 Business and industry risks (cont’d) Purchase of financial - AMP is also exposed to the value of these purchased advice businesses and registers of clients through AMP Bank which provides practice finance loans to some AMP f
Slide 19: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.3 Business and industry risks (cont’d) Claims and persistency - To partly mitigate these risks, AMP has entered into various reinsurance arrangements. This includes three significant tranches of reinsurance two on the Australi
Slide 20: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.3 Business and industry risks (cont’d) Non investment-linked - Holders of certain life insurance policies issued by AMP Life may surrender their policy in return for a lump sum payment. AMP holds assets to meet the policy liab
Slide 21: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.4 Financial risks Investment returns - A proportion of AMP's profits are derived from investment returns (both income and net realised and unrealised capital gains or losses) in the non investment-linked statutory funds of AMP
Slide 22: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.4 Financial risks (cont’d) Funding, liquidity and - AMP currently has $1 billion of undrawn bilateral debt facilities which support the Group’s liquidity position. $750 million of this total is due for refinancing on 31 Decemb
Slide 23: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.5 Operational, legal & compliance risks Managing conflicts of - As part of being an Australian financial services licensee, AMP has obligations to manage conflicts of interest. This includes managing conflicts of interest in r
Slide 24: Key risks (cont’d)
Key risks (cont’d) 1. Risks associated with the Issuer and AMP (cont’d) 1.5 Operational, legal & compliance risks (cont’d) Technology risk - Technology plays an increasingly important role in the delivery of financial services to customers in a cost-effective and compliant manner. AMP’s ability to c
Slide 25: Key risks (cont’d)
Key risks (cont’d) 2. Risks associated with the Offer Underwriting risk – AMP has entered into an underwriting agreement (“UWA”) under which Credit Suisse (Australia) Limited and UBS AG, Australia Branch (“Joint Lead Managers”) have agreed to underwrite the Placement fully, subject to the terms and
Slide 26: Key risks (cont’d)
Key risks (cont’d) 2. Risks associated with the Offer (cont’d) Risk of dilution – Existing shareholders who do not participate in the Placement or the SPP will have their percentage shareholding in the Issuer diluted. Depending on the size of a shareholder’s existing holding, a participating shareho
Slide 27: Appendix Section B
Appendix Section B
Slide 28: International offer restrictions
International offer restrictions This document does not constitute an offer of new ordinary shares ("New Shares") of AMP in any jurisdiction in which it would be unlawful. In particular, this document may not be distributed to any person, and the New Shares may not be offered or sold, in any country
Slide 29: International offer restrictions (cont’d)
International offer restrictions (cont’d) Canada (British Columbia, Ontario and Quebec provinces)(cont’d) The following is a summary of the statutory rights of rescission or to damages, or both, available to purchasers in Ontario. In Ontario, every purchaser of the New Shares purchased pursuant to t
Slide 30: International offer restrictions (cont’d)
International offer restrictions (cont’d) European Economic Area - Denmark, Germany and the Netherlands (Cont’d) – to any legal entity that is authorized or regulated to operate in the financial markets or whose main business is to invest in financial instruments unless such entity has requested to
Slide 31: International offer restrictions (cont’d)
International offer restrictions (cont’d) Ireland The information in this document does not constitute a prospectus under any Irish laws or regulations and this document has not been filed with or approved by any Irish regulatory authority as the information has not been prepared in the context of a
Slide 32: International offer restrictions (cont’d)
International offer restrictions (cont’d) Norway This document has not been approved by, or registered with, any Norwegian securities regulator under the Norwegian Securities Trading Act of 29 June 2007. Accordingly, this document shall not be deemed to constitute an offer to the public in Norway wi
Slide 33: International offer restrictions (cont’d)
International offer restrictions (cont’d) United Arab Emirates Neither this document nor the New Shares have been approved, disapproved or passed on in any way by the Emirates Securities and Commodities Authority ("ESCA") or any other governmental authority in the United Arab Emirates. AMP has not r
Slide 34: International offer restrictions (cont’d)
International offer restrictions (cont’d) United States This document may not be distributed or released in the United States or to any person acting for the account or benefit of a person in the United States. This document does not constitute an offer to sell, or the solicitation of an offer to bu
Slide 35: Appendix Section C
Appendix Section C
Slide 36: Important notice and disclaimer
Important notice and disclaimer Summary information This presentation has been prepared by AMP Limited (ABN 49 079 354 519) (“AMP"). It is a presentation of general background information about AMP’s activities current at the date of this presentation, which may be subject to change. The information
Slide 37: Important notice and disclaimer (cont’d)
Important notice and disclaimer (cont’d) Financial data Investors should note that this presentation contains proforma historical financial information. The proforma financial information provided in this presentation is for illustrative purposes only and is not represented as being indicative of AM
Slide 38: Important notice and disclaimer (cont’d)
Important notice and disclaimer (cont’d) Not for release or distribution in the United States This presentation may not be distributed or released in the United States or to any person acting for the account or benefit of a person in the United States. This presentation does not constitute an offer
Slide 39: Important notice and disclaimer (cont’d)
Important notice and disclaimer (cont’d) • any obligations or undertaking to release any updates or revisions to the information in this presentation to reflect any change in expectations or assumptions; and • all liabilities in respect of, and make no representation or warranty, express or implied,