Amp Limited · ASX:AMP
Amp — Investor Presentation (February 2024)
39 slides from Amp's investor presentation, Feb 14, 2024
Slide 1: FY 23 Results
FY 23 Results 14 February 2024 Alexis George, CEO | Blair Vernon, CFO
Slide 2: Agenda
Agenda 1. FY 23 overview 2. Financial results and business unit performance 3. Costs 4. Capital 5. Summary 6. Q&A
Slide 3: FY 23 overview
FY 23 overview Alexis George, CEO
Slide 4: Overview
Overview • Major transactions completed to further the Group underlying NPAT Reduced controllable costs simplification of portfolio • Significant legacy legal matters resolved +6.5% $744m $196m Guidance was $745-755m • Delivered on cost-out program for FY 23 • Remain committed to cost-out target of
Slide 5: Streamlined business portfolio
Streamlined business portfolio OPERATING BUSINESS UNITS AUSTRALIA NEW ZEALAND AMP Bank Platforms Advice Master Trust Wealth Management A digital-focused challenger A leading provider of super, A professional services Superannuation and A standalone wealth bank supporting customers retirement and inv
Slide 6: Australian market landscape
Australian market landscape AMP well-positioned to benefit from the long-term trends in banking and wealth in Australia Super landscape Demographic trends Household wealth Compulsory Growing retirement- High levels of average superannuation system, age population driving household wealth, with with
Slide 7: Strategy
Strategy Helping people create their tomorrow o Bank: Address NIM compression, reduce costs and improve ROC Drive business line o Platforms: Invest in technology, product and distribution; embed market leading profitability and positive retirement solutions customer experience o Advice: Achieve brea
Slide 8: FY 23 financial results
FY 23 financial results Blair Vernon, CFO
Slide 9: FY 23 results
FY 23 results $m FY 23 2H 23 1H 23 FY 22 % FY 23/ Underlying NPAT up 6.5% to $196m FY 22 AUM based revenue 751 377 374 794 (5.4) Revenue: Net interest income (NII) 373 173 200 382 (2.4) • AUM revenue reflects further product simplification and outflows Strategic partnerships1 58 23 35 89 (34.8) • Re
Slide 10: Statutory NPAT reconciliation
Statutory NPAT reconciliation $m FY 23 2H 23 1H 23 FY 22 % FY 23/ Key movements FY 22 NPAT (underlying) 196 84 112 184 6.5 • Litigation and remediation related costs of $99m: • Settlement of the Buyer of Last Resort (BOLR) Litigation and remediation related costs (99) (60) (39) (25) (296.0) • Shareh
Slide 11: FY 23 business unit overview
FY 23 business unit overview % FY 23/ Cost to NPAT (underlying) $m FY 23 2H 23 1H 23 FY 22 FY 22 income • Focus on lower growth in AMP Bank residential mortgage AMP Bank 93 36 57 103 (9.7) 48.7% book, managing margins and costs • Focus of investment spend to drive growth in Platforms Platforms 90 46
Slide 12: NPAT (underlying) movement by driver
NPAT (underlying) movement by driver Improved costs, North Guarantee movement and higher investment income offsetting strategic partnership reduction ($m) +6.5% 20 11 9 22 (7) (16) (27) PCCP: ($18) FY 23 +$8m China: ($9) FY 22 ($14m) 196 184 FY 22 NPAT Strategic North Guarantee2 Net Interest Net inv
Slide 13: Total AUM: drivers of revenue
Total AUM: drivers of revenue FY 23 closing total AUM grew 2.9% to $133.8b while margins in line with guidance 160 Scale of AUM remains strong, margin 140 11.2 $133.8b management remains critical $130.0b 1.4 10.8 Platforms 10.5 (6.4) 120 (0.2) (2.2) • Closing AUM grew 8.5% to $71.1b driven by positi
Slide 14: Business unit performance
Business unit performance AMP
Slide 15: AMP Bank
AMP Bank % FY 23/ Key performance measures FY 23 2H 23 1H 23 FY 22 FY 22 • Underlying NPAT of $93m reflects previously flagged NIM Net interest income ($m) 373 173 200 382 (2.4) compression in 2H 23 Fee and other income ($m)1 16 7 9 15 6.7 • Deliberate decision to lower residential mortgage book Var
Slide 16: AMP Bank: Net interest margin
AMP Bank : Net interest margin 1H 23 loan 1H growth of 1.1x system 2H 22 Variable rate Fixed rate Asset mix Call and term Funding mix 1H 23 loans loans deposits / Treasury 2H 23 loan growth of 0.02x system 2H Variable rate Fixed rate Asset mix Call and term Funding mix 1H 23 2H 23 loans loans deposi
Slide 17: AMP Bank
AMP Bank Common Equity Tier 1 (%) AMP Bank’s 30+ and 90+ days mortgage arrears AMP 30+ days AMP 90+ days 15 Regional peers avg.1 1.29 11.8 10.7 10.4 10.5 10.8 10 5 0.62 0 FY 19 FY 20 FY 21 FY 22 FY 23 Dec-21 Jun-22 Dec-22 Jun-23 Dec-23 Return on capital (%)2 Cost-to-income ratio versus peer group1 (
Slide 18: Platforms
Platforms Key performance measures FY 23 2H 23 1H 23 FY 22 % FY 23/ • Underlying NPAT up 38.5% reflecting: FY 22 • Positive North Guarantee movement from favourable AUM based revenue ($m)1 320 162 158 319 0.3 market conditions Other revenue & investment income 27 15 12 (17) n/a • Higher investment i
Slide 19: Platforms NPAT movement by driver
Platforms NPAT movement by driver ($m) 9 22 Investment in the Platforms proposition, including technology, product and distribution Improvement relative to FY 22 from favourable financial market conditions because of higher equity markets and stabilising interest rates. FY 23 +$8m FY 22 ($14m) FY 22
Slide 20: Platforms
Platforms Assets Under Management ($m) Net cashflows: Super v Investment ($m) 2,639 2,532 14,274 2,154 Super & 20% 2,034 pension net 26,705 1,565 cashflows 1,401 38% Superannuation Investment net cashflows Pension Net cashflows 30,081 Investment 42% (107) (633) (589) FY21 FY22 FY23 North inflows fro
Slide 21: Advice
Advice % FY 23/ • Continued progress towards breakeven and exploring Key performance measures FY 23 2H 23 1H 23 FY 22 FY 22 alternative structures for Advice Advice revenue ($m) 50 25 25 56 (10.7) • Agreement to settle Buyer of Last Resort (BOLR) class Variable costs ($m)1 (2) (1) (1) (18) 88.9 acti
Slide 22: Advice
Advice Adviser network composition AMP aligned practices have higher annual revenue – compared to industry 700 100% 1,600 > $2.5m > $2.5m $1.5m - $2.5m 30% 500 80% 1,200 21 85 51% $1m - $1.5m $1.5m - $2.5m 112 105 112 300 800 60% $1m - $1.5m $500k - $1m 1,097 1,058 924 905 866 100 400 40% 433 379 36
Slide 23: Master Trust
Master Trust % FY 23/ • AUM based revenue declined 10.4% due to simplification fee changes and the Key performance measures FY 23 2H 23 1H 23 FY 22 previously announced mandate loss of $4.3bn AUM (4 August 2023) FY 22 AUM based revenue ($m)1 343 171 172 383 (10.4) • Costs associated with lost mandat
Slide 24: New Zealand Wealth Management
New Zealand Wealth Management Key performance measures FY 23 2H 23 1H 23 FY 22 % FY 23/ • KiwiSaver experienced a challenging 2H 23, reflective of FY 22 current economic environment, delivered $70m in net AUM based revenue ($m) 88 44 44 92 (4.3) cashflow • Sale of legacy products drives simplificati
Slide 25: Group
Group % FY 23/ • Strategic partnerships down 34.8%, due to lower PCCP $m FY 23 2H 23 1H 23 FY 22 sponsor valuations impacted by US real estate and China FY 22 partnership earnings due to regulatory changes relative to China partnerships 39 14 25 49 (20.4) FY 225 Other partnerships 19 9 10 40 (52.5)
Slide 26: Group: Strategic partnerships
Group: Strategic partnerships China Life AMP Asset Management China Life Pension Company (CLPC) PCCP JV & Sponsor Investment Company (CLAMP) • 19.99% ownership ($461m AMP’s FY 23 carrying value) • 14.97% ownership ($88m AMP’s FY 23 carrying value) Combined ~$240m AMP’s FY 23 carrying value • Expecte
Slide 27: Costs
Costs AMP
Slide 28: FY 23 controllable costs
FY 23 controllable costs • Controllable costs in FY 23 reduced by 1.7% to $744m offsetting significant inflation pressure $m • Targeted segments for improvement of Advice and Master Trust delivered solid momentum $757m • Platforms uplift reflects investment for44growth as $744m planned • Group cost
Slide 29: FY 24 controllable cost outlook
FY 24 controllable cost outlook • Advice: Direct cost reduction flowing from FTE savings and reduced overhead Committed to achieving costs from simplification controllable costs of • Master Trust: Anticipate reduced spend as a result of simplification programs ~$690m for FY 24 • Rationalisation of s
Slide 30: Capital
Capital AMP
Slide 31: Capital position
Capital position ($m) 2,988 923 2,526 2,526 565 Surplus Surplus $265m Statutory NPAT capital capital 565 565 (53) Surplus Surplus capital capital 699 Target Board 536 Board buffer Board Board capital 1 buffer buffer buffer level Minimum regulatory requirements (MRR) Board buffer 1,425 1,366 Increase
Slide 32: Capital and liquidity position
Capital and liquidity position % FY 23 Capital return program summary $m FY 23 1H 23 FY 22 / FY 22 Tranche 1: $350m on-market share buyback completed March 2023 Total capital resources 4,535 5,007 5,155 (12.0) Tranche 2: $400m capital return completed October 2023 Total corporate subordinated debt (
Slide 33: FY 24 guidance
FY 24 guidance AMP
Slide 34: 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% ~$690 million o Platforms: FY 24 AUM based revenue o FY 24 simplification spend of $60 - $75 margins expected to be broadly in million pre-tax line with
Slide 35: Summary
Summary Alexis George, CEO AMP
Slide 36: 1H 24 focus
1H 24 focus Drive business line Efficient capital and cost Create new revenue profitability and positive management sources and lasting customer experience points of differentiation • Bank: lower loan growth, • Ongoing focus on optimise deposits and • Progress digital business reduce costs achieving
Slide 37: Making progress against our commitments
Making progress against our • $750m of capital returned since August 2022 • Completed AMP Capital and SuperConcepts sales commitments • Net debt reduction of $337m in FY 23 • Simplified portfolio positioned for the future Positioned to address • Disciplined cost management with trajectory for headwi
Slide 38: 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 39: AMP-
AMP-