Slide 1: 1H 24 Results
1H 24 Results 8 August 2024 Alexis George, CEO | Blair Vernon, CFO
Slide 2: Agenda
Agenda 1. 1H 24 overview 2. Strategic partnership for AMP Advice 3. Financial results and business unit performance 4. Costs 5. Capital 6. Summary 7. Q&A
Slide 3: 1H 24 overview
1H 24 overview Alexis George, CEO
Slide 4: Overview
Overview Reduced controllable • Delivering on focused strategic initiatives, driving Group underlying NPAT costs growth in wealth businesses and strengthening +5.4% -6.4% market position of Bank and NZ to $118m to $339m • Controllable costs down 6.4%, on track for FY 24 guidance, momentum for 2H 24
Slide 5: 1H 24 progress
1H 24 progress Helping people create their tomorrow Drive business line Efficient capital, cost and Create new revenue profitability and positive balance sheet sources customer experience management o Bank: Managing volumes, on track to o Address corporate centre costs: o Diversifying revenue and bu
Slide 6: A strategic partnership for AMP Advice
A strategic partnership for AMP Advice
Slide 7: A strategic partnership for AMP Advice
A strategic partnership for AMP Advice A new strategic partnership and ownership structure with Entireti and AZ NGA that will create a sustainable business model for AMP Advice Entireti will acquire AMP’s financial advice licensees: Charter, Hillross and AMP Financial Planning, as well as its Jigsaw
Slide 8: Entireti partnership model
Entireti partnership model • AMP Advice will combine forces with Entireti to AMP Entireti deliver this scaled model. This will ensure comprehensive licensing and services for AMP’s advice network and self-licensed 70% 30% licensee practices, as well as Entireti’s existing licensees licensee ownershi
Slide 9: Strategic partners
Strategic partners • Entireti is the parent company of Fortnum Private Wealth and • AZ NGA invests in Financial Advisory and Accounting SMEs PFS (Personal Financial Services) and is an experienced, and focuses on growth and succession collaborative and well-resourced provider of licensing and • 92 p
Slide 10: Key partnership considerations
Key partnership considerations Together, AMP with Entireti and AZ NGA will deliver a model with economies of scale, capital to support practice growth and succession, and dedicated services and technology Together AMP, Entireti and AZ NGA bring: Commitment to advisers: • Scale: Through this partners
Slide 11: 1H 24 financial results
1H 24 financial results Blair Vernon, CFO
Slide 12: 1H 24 results
1H 24 results % 1H 24/ Underlying NPAT up 5.4% to $118m (1H 23: $112m) $m 1H 24 2H 23 1H 23 1H 23 Total Revenue was down 4%, driven mostly by lower Net Total revenue 641 640 668 ▼ 4.0 Interest Income. AUM based revenue was flat and Strategic Partnerships rose 5.7% Variable costs (149) (161) (159) ▼
Slide 13: Statutory NPAT reconciliation
Statutory NPAT reconciliation $m 1H 24 2H 23 1H 23 % 1H 24/ Key movements 1H 23 • Business simplification of $13m ($19m pre-tax) reflects NPAT (underlying)1 118 84 112 ▲ 5.4 6 month spend of the $120-$150m business Litigation and remediation related (2) (60) (39) ▼ 94.9 simplification program costs
Slide 14: 1H 24 business unit overview
1H 24 business unit overview Superannuation AMP Bank Platforms & Investments Advice New Zealand Group1 NPAT v $35m 38.6% $54m 22.7% $34m 21.4% -$15m loss improved 40% $17m stable -$7m loss improved 22% 1H 23 (30% of NPAT) (46% of NPAT) (29% of NPAT) (-13% of NPAT) (14% NPAT) (-6% of NPAT
Slide 15: NPAT (underlying) movement by driver
NPAT (underlying) movement by driver Strong cost management offsetting the challenging banking environment +5.4% ($m) Margin/mix: $8m Volumes: $6m NIM: ($23m) Volumes: ($2m) 1H 23 NPAT Bank Other variable Other revenue Investment Platforms/S&I Controllable 1H 24 NPAT (underlying) costs income/ inter
Slide 16: Total AUM: drivers of revenue
Total AUM: drivers of revenue 1H 24 closing total AUM grew 4.5% to $139.8b while margins are broadly in line with guidance Scale of AUM remains strong, margin management remains critical +4.5% $139.8b Platforms $133.8b • Closing AUM grew 5.1% to $74.7b driven by 11.1 10.8 positive net cashflows and
Slide 17: Business unit performance
Business unit performance AMP
Slide 18: AMP Bank
AMP Bank Key performance measures 1H 24 2H 23 1H 23 % 1H 24/ Growth tactically reduced to protect margin 1H 23 Net interest income ($m) 163 173 200 ▼ 18.5 • Underlying NPAT of $35m reflects previously Fee and other income ($m) 1 3 7 9 ▼ 66.7 flagged margin compression and lower volumes, partially of
Slide 19: AMP Bank: Net Interest Margin
AMP Bank: Net Interest Margin Fixed rate loans Lower margin rollover to higher margin Predominantly loans maturing Variable rate call deposits and new settlements with loans higher margins • Continued management of margins held NIM broadly steady at 1.14% • Tactical reduction in new loans written re
Slide 20: AMP Bank
AMP Bank Mortgage customers ahead on repayments (% of current portfolio) AMP Bank’s 30+ and 90+ days mortgage arrears 31-Dec-23 30-Jun-24 90+ days arrears (%) 30+ days arrears (%) 1.72 0.45 1.85 0.40 1.60 1.31 0.35 1.29 0.30 1.35 0.25 0.88 1.10 43% 40% 0.78 0.80 0.70 0.20 0.85 0.62 0.15 0.50 0.55 26
Slide 21: Platforms
Platforms % 1H 24/ Stable margins, higher inflows and disciplined cost Key performance measures 1H 24 2H 23 1H 23 management 1H 23 AUM based revenue ($m)1 168 162 158 ▲ 6.3 • NPAT up 22.7% driven by stronger market conditions Other revenue & investment income and cost discipline 14 15 12 ▲ 16.7 ($m)
Slide 22: Platforms NPAT movement by driver
Platforms NPAT movement by driver +22.7% ($m) 7 Product mix changes Continued investment Improved market conditions and stronger cashflows Small positive impact from North Guarantee 22
Slide 23: Platforms
Platforms 1H 24 Platforms AUM by segment • Margins vary by segment, and also vary within individual segments due to tiered fee structures AMP Managed Funds and fee caps AMP Managed Portfolio Cash account • 53% of Platforms AUM is managed by AMP Investments Other – direct holdings in shares, managed
Slide 24: Net cashflow composition
Platforms Net cashflow composition (excl pension payments): Super v Investment ($m) Assets Under Management ($b) 1,341 1,396 1,288 1,298 1,244 1,178 1,160 14.8, 20% Superannuation 856 Super & 741 660 pension net cashflows 28.7, 38% Pension Investment net cashflows Investment Net cashflows 31.2, 42%
Slide 25: Superannuation & Investments
Superannuation & Investments Formerly ‘Master Trust’ % 1H 24/ Stable margins, ongoing improvement to outflows, with Key performance measures 1H 24 2H 23 1H 23 1H 23 disciplined cost management AUM based revenue ($m)1 168 171 172 ▼ 2.3 • NPAT of $34m is up 21.4%, driven by improved outflows, stronger
Slide 26: Superannuation & Investments
Superannuation & Investments Net cashflow composition ($m) Net cashflows (excl pension payments) ($m) - Focused on member retention and new member - Previously flagged mandate loss impacted flows in 2H 23 acquisition, via employers and direct to consumer - Continued improvement in outflows over time
Slide 27: Advice
Advice Key performance measures 1H 24 2H 23 1H 23 % 1H 24/ Continued disciplined cost management reducing 1H 23 losses from $25m to $15m Advice revenue ($m) 29 25 25 ▲ 16.0 • Revenue benefiting from fair value gains on the Variable costs ($m) 1 (1) (1) (1) - equity portfolio Controllable costs ($m)
Slide 28: Advice
Advice Adviser network composition: Adviser sentiment: • Revenue per adviser continues to increase • Sentiment steadily improving, with growing engagement • Attracting and retaining practices to the aligned and Jigsaw from the network2 network, partially offsetting exits during the period • Positive
Slide 29: New Zealand Wealth Management
New Zealand Wealth Management Stable earnings with positive investment markets offsetting margin mix % 1H 24/ Key performance measures 1H 24 2H 23 1H 23 changes from growth in KiwiSaver 1H 23 • AUM based revenue steady, with positive market returns in retained AUM based revenue ($m) 44 44 44 - book
Slide 30: Group
Group % 1H 24/ Strong Strategic Partnership contribution $m 1H 24 2H 23 1H 23 1H 23 • China partnerships reflects CLPC earnings normalising China partnerships 20 14 25 ▼ 20.0 following regulatory changes impacting 2H 23 Other partnerships 17 9 10 ▲ 70.0 • Other partnerships reflects US real estate v
Slide 31: Costs
Costs AMP
Slide 32: 1H controllable costs
1H 24 controllable costs ($m) • Controllable costs in 1H 24 reduced by 6.4% to $339m offsetting inflation pressure and the impact of previously announced stranded costs 44 339 • Employment costs down reflecting a 13% reduction in FTE with benefits emerging across all business areas through simplific
Slide 33: FY 24 controllable cost outlook
FY 24 controllable cost outlook: Post-divestment reset to $660m • Post-divestment controllable cost guidance reset to $660m from $690m to reflect the removal of AMP Advice direct cost base Committed to achieving • Stranded costs of ~$45m expected to emerge post completion and to be addressed control
Slide 34: Financial implications of Advice transaction
Financial implications of Advice transaction To be treated as discontinued as at 31 Dec 24: Previous FY 24 guidance: Revised FY 24 • Total consideration for AMP Advice business of ~$92 million. $690m guidance: FY 25 $660m • Anticipate an accounting loss on sale of the AMP Advice business of guidance
Slide 35: Capital
Capital AMP
Slide 36: Capital and liquidity position
Capital and liquidity position % 1H 24 Liquidity update $m 1H 24 FY 23 1H 23 / 1H 23 • $963m of capital returned since August 2022: Total capital resources 4,168 4,535 5,007 ▼ 16.8 • 3.266bn shares on issue as at August 2022, reduced to 2.597bn as at June 2024, reduced by 20% Total corporate subordi
Slide 37: Capital position
Capital position ($m) 2,526 2,568 Surplus capital $103m Statutory NPAT 565 676 Surplus Surplus capital capital 536 Board Target Board 522 Board 1 2 buffer Board capital buffer buffer level buffer Minimum regulatory requirements (MRR) Board buffer 1,425 1,370 Decrease by $55m from FY 23 Decreased by
Slide 38: FY 24 guidance
FY 24 guidance AMP
Slide 39: FY 24 guidance
FY 24 guidance Subject to market conditions o AMP Bank: FY 24 NIM expected to be o FY 24 controllable costs expected to be between 1.10% and 1.15% ~$660 million, down from $690 million reflecting the removal of the Advice direct cost base o Platforms: FY 24 AUM based revenue margins expected to be b
Slide 40: 2H 24 priorities
2H 24 priorities Alexis George, CEO
Slide 41: Small business and consumer bank
Small business and consumer bank On track to launch in 1Q 2025 Digital bank division for Addressing structural small business and challenges for AMP Bank • Key milestones hit: consumers • On time and on budget • Expected to provide revenue • Customer onboarding, • Targeting an under-served diversifi
Slide 42: 2H priorities: Platforms
2H 24 priorities: Platforms • Invest further in North functionality and distribution capabilities • Continue to build IFA relationships • Leverage managed portfolio offer with advisers and IFAs • Build on innovative retirement solutions MyNorth Lifetime solution gaining traction 16.00 North Managed
Slide 43: 2H priorities: Super & Investments
2H 24 priorities: Super & Investments • Continue to deliver on three key factors to create a • Drive retention and acquisition initiatives compelling value proposition: performance, insurance • Enhance D2C distribution channel opportunities offer and competitive fees. • Average AMP MySuper total fee
Slide 44: 2H priorities: Advice
2H 24 priorities: Advice • Focus on completion of Advice transaction by end of calendar year 2024 • Work closely with advisers, Entireti and AZ NGA to maintain business as usual for clients and deliver seamless transition for advice practices • Deliver change management program to support AMP Advice
Slide 45: 2H priorities: New Zealand
2H 24 priorities: New Zealand • Maintain performance despite macro-economic headwinds 1-Year Returns for KiwiSaver Balanced Funds in AMP • Leverage retention initiatives, including new term deposit Peer Group as at 30 June 2024 product, to improve cashflows 12.00% • Extend Enable.me offer by increas
Slide 46: Strategic partnerships with China Life
Strategic partnerships with China Life China Life: 800 million customers, with a distribution force of over 700,000 people. Largest financial services company in China outside the big four banks. China Life Pension Company (CLPC) China Life AMP Asset Management Company (CLAMP) 19.99% ownership ($469
Slide 47: Executing on strategic initiatives
Addressing differing dynamics across the business units: Executing on strategic • Stabilised margins and strategy to address funding initiatives diversification in AMP Bank • Stabilised margins and driving flows in Platforms and S&I • Strategic partnership for Advice announced today • Delivering on
Slide 48: Important information
Important information This presentation has been prepared by AMP Limited (ABN 49 079 354 519) (“AMP") and is general background information about AMP and its activities current at the date of this presentation, which may be subject to change. It is information in summary form and does not purport to
Slide 49: AMP-
AMP-