Slide 1: 2018 full year results
amp 2018 full year results Francesco De Ferrari, Chief Executive Officer Gordon Lefevre, Chief Financial Officer % yi, f 14 February 2019
Slide 2: AMP – helping people own tomorrow
AMP – helping people own tomorrow Notes 1. All data relates to FY 18 2
Slide 3: Agenda
Agenda 1. FY 18 results 2. FY 18 earnings rebase 3. AMP of tomorrow and 2019 priorities
Slide 4: Draft numbers; unaudited; subject to change
DRAFT NUMBERS; UNAUDITED; SUBJECT TO CHANGE
Slide 5: FY 18 profit summary
FY 18 profit summary A$m FY 18 FY 17 % Australian wealth management¹ 363 391 (7.2) AMP Capital2 167 156 7.1 AMP Bank 148 140 5.7 New Zealand wealth management¹ 53 54 (1.9) Retained business operating earnings 731 741 (1.3) Australian wealth protection (176) 110 n/a New Zealand wealth protection and
Slide 6: Australian wealth management
Australian wealth management Cash outflows Key performance measures FY 18 FY 17 during challenging Investment-related revenue (A$m)1 1,213 1,263 period; earnings resilient Other revenue (A$m) 96 108 Operating earnings (A$m) 2 363 391 Controllable costs (A$m) (462) (490) Average AUM (A$b)3,4 130.1 12
Slide 7: New Zealand wealth management
New Zealand wealth management Stable New Zealand FY 18 FY 17 performance; strong earnings Operating earnings (A$m) 1 53 54 growth from the Controllable costs (A$m) (33) (32) advice channel Average AUM (A$b)2 11.1 10.5 Total net cashflows (A$m) 83 220 Operating earnings to AUM (bps)2 48 52 Cost to in
Slide 8: AMP Bank
AMP Bank Solid performance Key performance measures FY 18 FY 17 in slower housing market Operating profit (A$m) 148 140 Controllable costs (A$m) (95) (80) Cost to income ratio 31.0% 28.6% Net interest margin 1.70% 1.70% Residential mortgage book (A$m) 19,460 18,870 90+ day mortgage arrears 0.47% 0.3
Slide 9: AMP Capital
AMP Capital Strength in real Key performance measures FY 18 FY 17 assets; continued investment in Operating earnings (A$m)1 167 156 international Fee income (A$m) 708 659 growth Controllable costs (A$m) (453) (412) Cost to income ratio 62.3% 61.5% Total net cashflows (A$m) (2,772) 2,886 Total extern
Slide 10: Sold businesses – overview
Sold businesses1 – overview Deterioration of Key performance measures FY 182 FY 17 wealth protection Notes 1. Businesses subject to a claims experience in Profit margins (A$m) 269 303 sale agreement with Resolution Life (“sold a challenging market Experience profits / (losses) (A$m) (63) 21 business
Slide 11: Controllable costs
Controllable costs A$m – FY 18 controllable costs (ex AMP Capital) below guidance. Investment in – Stranded costs of approximately A$40m (after tax), A$57m (pre-tax) AMP Bank offset by cost reductions including: relating to sold businesses; costs to be removed by the end of the first full − Business
Slide 12: Key financial items outside business unit results
Key financial items outside business unit results A$m FY 18 FY 17 Underlying profit 680 1,040 Advice remediation and related costs (469) - Royal Commission (32) - Portfolio review and related costs (48) (24) Risk management, governance and controls (8) - Other items (74) (21) Amortisation of acquire
Slide 13: Capital adequacy, funding and liquidity
Capital adequacy, funding and liquidity A$m FY 18 FY 17 Shareholder equity 6,683 7,276 Less: goodwill and other intangibles (3,560) (3,475) Less: other deductions (129) (173) Plus: subordinated bonds eligible as level 3 capital 83 83 Level 3 eligible capital 3,077 3,711 Minimum Regulatory Requiremen
Slide 14: Capital position
Capital position A$m 154 680 2,338 (469) (155) (188) 1,651 (651) 1,534 (58) (117) – Active capital management continued; New Zealand reinsurance – FY 18 Level 3 capital in excess of MRR (A$1.5b post final dividend) is tranche executed in Q4 18 releasing A$154m in line with Board limits for target ca
Slide 15: FY 18 earnings rebase
FY 18 earnings rebase Section 2
Slide 16: FY 18 earnings rebase
FY 18 earnings rebase FY 18 Sold businesses Proforma Other FY 18 10 A$m reported earnings adjustments adjustments rebased Australian wealth management 363 (85) 2 (75)5,6 203 AMP Capital 167 167 AMP Bank 148 (10) 6 138 New Zealand wealth management 53 (12) 2 41 Retained business operating earnings 73
Slide 17: AMP of tomorrow and 2019 priorities
tomorrow and 2019 priorities Section 3
Slide 18: Transforming AMP
Transforming AMP Board renewal Executive change Consequence management – David Murray AO appointed Chairman – New CEO appointed – Clear remuneration consequences AMP Limited – New CEO Australian wealth management – Forfeiture of short and long-term incentives – Three highly-experienced financial ser
Slide 19: Unique opportunity to redefine AMP
Unique opportunity to redefine AMP Australian wealth New Zealand wealth AMP Bank AMP Capital management management Strengths – Largest financial advice – Strong advice network – Competitive core offering – Recognised as a leader network1 – Leading KiwiSaver provider – Low-cost banking model in real
Slide 20: 2019 priorities
2019 priorities Position to win across core Towards structural transformation operating businesses Separate Australia and New Zealand wealth protection and mature Transform Australian wealth management – Drive legal separation for end Q3 19 – Reshape advice network and improve economics – Streamline
Slide 21: Slide 21
Slide 22: Section
Be G © A KG Section 4
Slide 23: Guidance summary
Guidance summary Australian wealth management Investments – Including the MySuper repricing, and subject to any further regulatory impacts and – Economic interest in mature business expected to deliver future earnings of management initiatives, underlying margin compression is expected to be up to a
Slide 24: Resolution Life transaction: financial impacts and timing
Resolution Life transaction: financial impacts and timing As announced on 25 October 2018, Resolution Life assumes the risks and profit impacts of the Australian and New Zealand wealth protection and mature businesses from 1 July 2018, subject to AMP’s share of risks and AMP’s retained economic inte
Slide 25: AMP's advice network – Australia
AMP’s advice network – Australia Target Advisers Total AUM ($m)5 AUM per adviser ($m) Channel Analysis market Dec 18 Dec 17 Dec 18 Dec 17 Dec 18 Dec 17 AMP Advice1 Goals-based 233 226 13,788 15,302 59.2 67.7 AMP Financial Planning2 1,334 1,437 56,774 59,427 42.6 41.4 Core Charter Financial Planning3
Slide 26: North AUM – five year summary
North AUM – five year summary 24% compound annual growth rate in North platform AUM 37.9 34.9 27.1 20.9 16.0 FY14 FY15 FY16 FY17 FY18 AUM (A$b) 26 Section 4, AMP 2018 full year results
Slide 27: AMP Bank residential mortgage growth – five year summary
AMP Bank residential mortgage growth – five year summary 9% compound annual growth rate in residential mortgages 19.5 18.9 16.5 14.0 14.6 FY14 FY15 FY16 FY17 FY18 Residential mortgages (A$b) 27 Section 4, AMP 2018 full year results
Slide 28: AMP Capital real assets external AUM – five year summary
AMP Capital real assets external AUM – five year summary 20% compound annual growth rate in real assets external AUM 43.6 35.2 29.2 25.9 25.1 21.3 22.9 19.5 17.0 15.6 17.8 12.3 8.1 9.7 5.7 FY14 FY15 FY16 FY17 FY18 Infrastructure Real estate (A$b) 28 Section 4, AMP 2018 full year results
Slide 29: AMP Capital – international growth
AMP Capital – international growth Global Partnerships China Life AMP Asset Management (CLAMP)¹ − AUM grew 10.1% (from FY 17) in local currency terms to RMB 201.7b (A$41.7b) − Launched 17 new products year-to-date including separately managed accounts, diversified, equity and bond funds China Life P
Slide 30: AMP Group Leadership Team
AMP Group Leadership Team New GLT structure effective 4 March 2019 30 Section 4, AMP 2018 full year results
Slide 31: Key Royal Commission recommendations relevant to AMP
Key Royal Commission recommendations relevant to AMP – AMP has embraced the need for change and has already taken significant – AMP will work constructively with the government, regulators, advisers, action to improve culture, governance, accountability and processes across trustees and other bodies
Slide 32: Legislative and regulatory environment
Legislative and regulatory environment Proposed reform AMP position Royal Commission into misconduct in the Banking, − AMP will work constructively with government and other stakeholders to ensure that, as the recommendations Superannuation and Financial Services industry move into definitive legisl
Slide 33: 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