Slide 1: Interim results 2005
Interim results 2005 Andrew Mohl Chief Executive Officer 18 August 2005
Slide 2: Summary
Summary *» Encouraging growth in earnings and value > Underlying contribution up 24% >» AFS embedded value up 11% in half-year = Good progress on key performance indicators > Underlying return on equity up to 22.4% >» AFS value of new business up 13% > Operating margins up 21% >» Controllable costs
Slide 3: Outline
Outline « Group overview Capital management » Business Unit review Outlook
Slide 4: Overview — 2005 first half profit summary
Overview — 2005 first half profit summary Agm 41H 05 Restated’ 1H 04 % change AMP Financial Services 250 210 +419% AMP Capital investors 42 35 +20% Cobait/Gordian 21 19 +11% BU operating margins 313 264 +19% Discontinued businesses? 4 (1) Group office costs (17) (18) Total operating margins 297 245
Slide 5: Overview — underlying contribution up 24%
Overview — underlying contribution up 24% 309 A$200m. 1H 04 AFS margins AMPCI Cobalt! Transitional Group office Discontinued Lower Underlying 1H 05 underlying margins Gordian tax relief costs businesses interest investment underlying contribution* margins expense on income contribution Group debt #
Slide 6: Overview — earnings and dividend per share
Overview — earnings and dividend per share Average shares on issue 1,862m 1,849m Earnings per share (underlying) A$0.21 A$0.17 Dividend per share A$0.14 A$0.13 Franking 75% 75% Payout ratio 68%! 77% Capital return? A$0.40 - 1 The payout ratio of 68% was below the 75% policy guideline as directors to
Slide 7: Overview — group cost ratio down to 42%
Overview — group cost ratio down to 42% 450 60 400 398 400 350 300 250 200 150 100 50 A$m 0 1H 03* Restated 1H 04* 1H 05 Controllable costs =" Cost to income ratio “Demerged basis, excluding UK costs and not restated for AIFRS ‘Restated to reflect AIFRS Alf numbers restated to exclude transitional t
Slide 8: Overview — underlying return on equity rising
Overview — underlying return on equity rising 30 4 26 4 22.4 FY 00% FY 014 FY 02* FY 03* Restated 1H OS FY 04? ii Underlying return on equity * AMP group including previously owned HHG entities * Demerged AMP, not restated for AIFRS *Restated to reflect AIFRS
Slide 9: Capital management
Capital management
Slide 10: Group shareholder capital resources December 2004
Group shareholder capital resources 31 December 2004 Restated for AIFRS Notional allocation at 30 June 2005 Agm SiC AMP Financial Services 468 1,617 450 2,067 509 1,603 450 2,053 AMP Life 354 4,460 450 1,910 382 1,448 450 1,898 AMP Banking 114 187 - 157 127 155 155 AMP Capital Investors. 42 187 78 2
Slide 11: Significant improvement in credit rating metrics
Significant improvement in credit rating metrics 12.0 30 June 2005 10.0 be o > 3° 1s) 4B 8.0 2 eg 31 Dec 2003 = Wg 31 Dec 2004? => a = 60 ty 2 “a 30 June 2004! 5 in ao] “ty FS “tn > 40 Np 30 June 2003 2.0 0.0 60% 50% 40% 30% 20% 10% 0% S&P gearing ‘ S&P gearing restated to reflect AIFRS. Interest co
Slide 12: Group office capital exceeded A$1.5b at June
Group office capital exceeded A$1.5b at June 30 2,140 (265) 1,534 ASOm Group office AMP income Capital Dividends Transfers Movements Group office Group office capitaiat1 Securities return paid less from BUs in Cobait/ Netearnings capital at 30 Jan 05 repayment dividends Gordian loan June 05 reinvest
Slide 13: Capital management — initiatives and next steps
Capital management — initiatives and next steps A$1 billion capital reduction initiative completed in 1H 05 > A$265m in outstanding Income Securities redeemed in May > A$746m capital returned to shareholders in mid-June * Credit rating upgraded one notch to ‘A’ in July * Ordinary dividend policy in
Slide 14: Business Unit review
Business Unit review
Slide 15: AMP Financial Services (AFS) — summary
AMP Financial Services (AFS) — summary = Further improvement in all Business Unit KPIs >» Operating margins >» Costs >» Cashflows > EV and VNB >» Return on Business Unit Equity (RoBUE) « Business transformation continues apace >» AMPFP >» Corporate Super >» Risk » Process review » Finance change pro
Slide 16: AFS — operating margins up 19%
AFS — operating margins up 19% (5) 4 250 210 A$100m Restated 1H Growth in Lower Repricing Mortality/ Lowerbond Mature run- Other 1HO5 04 operating business conirollabie morbidity yields on risk off operating margins* volume costs business margins # Restated to reflect AIFRS and exciude transitional
Slide 17: AFS — volumes and profit margins expanding
AFS — volumes and profit margins expanding 605 100 + 90 50 4 + 80 40 4 sg 60 30 5 = 50 “40 20 4 39 40 4 20 10 A$Sb o4 0 FY 03 FY 04 Basis points Average AUM in period eum Operating margin after tax - basis points All numbers restated to excfude transitional tax relief. FY 04 numbers reflect AIFRS. F
Slide 18: AFS — costs fall for fifth successive year
AFS — costs fall for fifth successive year 500 469 100 450 90 400 80 350 70 300 274 60 250 50 200 40 180 30 100 20 50 10 A$m 0 0 % 1H 02 41H 04* 1H 05 Controllable costs sme" Cost to income ratio AFS cost numbers restated for alf previous periods to include AMP Banking and exclude transitional tax r
Slide 19: AFS — strong growth in cashflows
AFS — strong growth in cashflows * Cash inflows up 13% to A$5.0b > AMP Financial Planning up A$300m (12%) > Corporate Super Direct Sales up A$450m (194%) * Risk Annual Premium Income up 12.5% to A$440m » Annual lapse rate of 9.8% in Australia vs 2004 industry average of 13% > Annual lapse rate of 6.
Slide 20: AFS — net retail cashflows vs. major competitors
AFS — net retail cashflows vs. major competitors Total retail managed funds (excl CMTs) - quarterly net cashflows (A$m) of six largest Australian participants by AUM 66) (61) (224) AXA BT/ Westpac Commonwealth/ ING Australia National Australia / Australia Colonial Group Group MLC Group RetalAUM — 4$
Slide 21: AFS — net retail cashflows and industry share
AFS — net retail cashflows and industry share AMP rolling 12 month Australian net retail cashflows (exci CMTs), AMP ranking and AMP net cashflows as % of industry total AMP net cashflows % of industry total A$m 3,500 5 - 18% 9 3,000 4 pr *4% | 42% 2,500 4 | 10% 2,000 + | 8% 1,500 4 a “lL 6% 1,000 4
Slide 22: Australian contemporary — a diversified, high growth, high return business
Australian contemporary — a diversified, high growth, high return business Contemporary Change 1H 05 1H 04 Operating margins‘ A$144m A$104m +38% Controllable costs? A$199m i A$211m -6% Cost to income ratio 45% 53% -8 percentage points Net cashflows AS$1,560m A$1,199m +30% Risk annual prernium income
Slide 23: Australian mature — a slowly declining, large scale, outstanding return business
Australian mature — a slowly declining, large scale, outstanding return business Mature Change 41H 05 1H 04 Operating margins‘ A$83m AS88m 6% Controllable costs A$31m | AS35m -11% Controllable costs/AUM? 0.33% | 0.36% 8% Net cashflows {A$612m) | (A$646m) +5% Persistency 89% | 88% +1 percentage point
Slide 24: New Zealand — a low growth, life risk-driven, high return business
New Zealand — a low growth, life risk-driven, high return business New Zealand Change 1H 05 1H 04 Operating margins‘ A$23m A$18m +28% Controllable costs A$26m | A$28m -7% Cost to income ratio A1% 47% -6 percentage points Net cashflows (A$53m) | (A$13m) -308% Risk annual premium income AS$77m A$63m +
Slide 25: Traditional embedded value (EV) up 11% in 1H
Traditional embedded value (EV) up 11% in 1H 05 Traditional EV@ 3% discount margin Return on embedded value 11% 25% 28 6,044 (382) §,662 eeue 5,439 A$4,500m FY 04 Expected 1HO5new investment& Pricing Mortality & Mortality & Other 1H 05 EV Net 1H 05 (after restated return business bond yields changes
Slide 26: Market consistent EV by line of business
Market consistent EV by line of business 1H 05 1H 05 FY 04 Asm No agency costs RoEV! RoEV! AFS 5,919 12% 24% Contemporary 3,781 14% 28% Mature 1,506 9% 18% NZ 632 6% 31% 1 Return on embedded value (RoEV) is the percentage change before net transfers of capital
Slide 27: Traditional value of new business up 13% on 1H
Traditional value of new business up 13% on 1H 04 Traditional VNB@ 3% discount margin Growth rates 43% 19% 126 A$100m 14H 04VNB Bondyields Unit costs, Pricing Persistency & Other 1H 05 VNB volume & mix changes mortality assumptions
Slide 28: Market consistent VNB by line of business
Market consistent VNB by line of business 1H 05 1H 04 1H 05 FY 04 Agm No agency costs No agency costs % change ‘% change AFS 161 141 14% 18% Contemporary 129 106 22% 26% Mature 19 23 (17%) (20%) NZ 13 12 8% 16%
Slide 29: AMP Capital Investors (AMPCI) — summary
AMP Capital Investors (AMPCI) — summary” Operating margins up 20% to A$42m = Cost ratio down 3 percentage points to 58% = 83% of Australian AUM meeting or exceeding benchmarks in year to June =» External net cashflows of A$1b * AUM up 7% in half year to A$84b * Uniess otherwise stated, percentage ch
Slide 30: AMPCI — operating margins up 20%
AMPCI — operating margins up 20% 42 A$om 1H 04 operating Higher AUM based Higher Higher 1H 05 operating margins mgt fees performance expenses margins & transaction fees
Slide 31: AMPCI — volumes and profit margins expanding
AMPCI —- volumes and profit margins expanding 90 49 iS 80 4 704 = 12 60 4 co 9 50 4 40 4 Co 6 30 4 205 3 104 ASD O48 0 FY 02* FY 03°" FY 04" 1H 05 Basis points Average AUM in period =m Operating margins after tax - basis points * FY 02 and FY 03 exclude Listed Property Trusts AUM and profit margins
Slide 32: AMPCI — investment performance remains strong
AMPCI — investment performance remains strong Australian AUM 99% 100% Listed assets Private capital Property Future Directions Total Funds | Dec-04 0 Jun-05 % indicates assets under management meeting or exceeding benchmarks
Slide 33: AMPCI — Balanced Growth fund in top quartile
AMPCI — Balanced Growth fund in top quartile over 1, 3 and 10 years AMP Capital Balanced Growth Comparison with the Mercer Pooled Fund Survey - Balanced Funds Universe Rates of return(%) Performance after tax and after fees for periods ended June 2005 16 = 12 nen ------8____-] Cn 4 Qo 1 Year (%) 3 Y
Slide 34: AMPCI — drivers of 7% growth in AUM in 1H
AMPCI —- drivers of 7% growth in AUM in 1H 05 Opening AUM A$78.9b Australian external market flows 0.7 Japan / Asia distribution channel 0.4 Australian contemporary internal flows 0.6 Australian mature internal flows (0.6) AMP Group (0.8) NZ market flows (0.2) Property funds’ debt gross up* 1.5 Mark
Slide 35: Cobalt/Gordian — business run-off continues, operating margins stable
Cobalt/Gordian — business run-off continues, operating margins stable (113) 1H 00 1H 01 1H 02 1H 03 1H 04 1H 05
Slide 36: Outlook
Slide 37: 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 market-leading AUM positions in fastest growing segments of this market > Superannuation >» Retirement incomes = AMP has strong competitive advantage in two key distribut
Slide 38: Superannuation to grow strongly through key distribution channels
Superannuation to grow strongly through key distribution channels of planners and employer sponsored master trusts Market growth - contemporary super * Market share “ CAGR 2004-2014 1,600,000 ~ June 2004 June 2014 ili A$1.5 trillion 4,400,000 A$550 billion 4,200,000 ie 1,000,000 800,006 | 600,000 |
Slide 39: Comparative advantage of AMP in planner distribution
Comparative advantage of AMP in planner distribution — scale, quality, age and tenure Number of Australian financial planners June 2005 4600, 1582 1,346 504 AMP NAB CBA WBC ANZANG* AXA EBumber of Certified Financial Planners Source: Money Management 2005 Planner age profile Average age 46 AMP Averag
Slide 40: 'Downstream' value of AMP corporate super
‘Downstream’ value of AMP corporate super Job change | Risk Prod ucts “ai
Slide 41: AMP Capital Investors focusing on core capabilities, local and Asian markets, and talent
AMP Capital Investors focusing on core capabilities, local and Asian markets, and talent = Strengthen core capabilities > Australian Equities > Property > Diversified > Australian Fixed Interest > Infrastructure » Deepen domestic market penetration > AFS > External retail > Institutional > DIY = Exp
Slide 42: Group strategic priorities are unchanged
Group strategic priorities are unchanged # Positioning AMP as the leading provider of: > Quality advice > Simple, value for money products > Superior investment performance ® Focusing on operational excellence to drive shareholder value >» Capturing scale benefits from volume and market growth » Red
Slide 43: Guidance and medium term outlook
Guidance and medium term outlook FY 05 results are tracking well and better than expected at start of year >» Operating margins in AFS and AMPCI are now expected to grow by at least 15% in FY 05 « Sound basis in place for strong value creation for shareholders in 2005 and beyond, consistent with med