Amp Limited · ASX:AMP
Amp — Non-Deal Roadshow (March 2009)
33 slides from Amp's roadshow presentation, Mar 9, 2009
Slide 1: ASX Announcement: Investor Roadshow Materials
ASX Announcement 9 March 2009 For personal use only Manager Manager Company Announcements Office Market Information Services Section Australian Stock Exchange New Zealand Stock Exchange Level 4, 20 Bridge Street Level 2, NZX Centre, 11 Cable Street Sydney NSW 2000 Wellington New Zealand Announcement
Slide 2: AMP – financial strength and resilience in tough times
For personal use only AMP – financial strength and resilience in tough times Craig Dunn Chief Executive Officer March 2009
Slide 3: Executive summary
Executive summary Solid 2008 financial result underscores strength of For personal use only AMP Diverse earnings streams proving resilient in challenging markets, with significant earnings leverage to market recovery Managing company tightly through current environment, while investing in its
Slide 4: Outline
Outline AMP overview For personal use only Business performance Capital management Outlook & strategy Summary 3
Slide 5: AMP overview
For personal use only AMP overview 4
Slide 6: AMP is a leading Australasian wealth manager with selective investments in Asia
AMP is a leading Australasian wealth manager with For personal use only selective investments in Asia Contemporary wealth management company with resilient business model built on ¾ Pre-eminent brand ¾ Low cost, scaleable manufacturing platform ¾ Large aligned financial planning channel ¾ Broad-ba
Slide 7: AMP is financially strong
AMP is financially strong Sound 2008 financial result in tough market For personal use only ¾ Underlying profit of A$810m, with good profit growth in non-AUM businesses ¾ Controllable cost growth kept to 1% ¾ Contemporary wealth management net cashflows over A$2b Proactive management of both cap
Slide 8: Business performance – Group
For personal use only Business performance – Group 7
Slide 9: 2008 full year performance
2008 full year performance Key performance measures mixed For personal use only Underlying return on equity increased 1.0 percentage point to 38.9% Total operating earnings of A$737m, down 4% Cost ratio up to 41.3% from 39.7% in FY 07 Growth measures: ¾ Net cashflows in AMP Financial Service
Slide 10: Group assets under management
Group assets under management For personal use only 140 129 121 120 18.5 104 18.9 1.8 105 100 2.3 90 18.3 16.2 1.5 3.1 80 18.9 3.4 60 108.8 100.2 82.3 87.1 40 67.3 20 A$b 0 FY 04 FY 05 FY 06 FY 07 FY 08 Open business Group Closed business AFS Mature business only. With sale of Cobalt/Gordian(CG) in
Slide 11: Group cost performance
Group cost performance 900 871 879 For personal use only 812 800 782 780 94bps 81bps 700 45.8% 75bps 72bps 68bps 600 41.7% 39.6% 41.3% 39.7% 500 400 FY 04 FY 05 FY 06 FY 07 FY 08 Controllable costs Cost to income ratio Controllable costs to AUM All prior period numbers have been restated to remove C
Slide 12: Business line contribution to FY earnings
Business line contribution to FY 08 earnings For personal use only In-force annual premium A$112m and AUM A$5bn In-force annual AUM A$16bn premium A$702m and AUM A$2bn AFS NZ $56m (7%) AFS Mature External AUM A$36bn AFS Contemporary Wealth Protection $161m (21%) Internal AUM A$56bn $154m (20%) AFS C
Slide 13: Business performance - business lines
For personal use only Business performance - business lines 12
Slide 14: AMP Financial Services – FY highlights
AMP Financial Services – FY 08 highlights Diversified business delivered solid results in difficult For personal use only environment, with operating earnings of A$637m, down 4% on FY 07, despite 19% fall in AUM Contemporary Wealth Management’s operating earnings down 13% to A$266m reflecting im
Slide 15: AFS cashflow performance
AFS cashflow performance Resilient business model and strong mandated super position drove For personal use only relative outperformance in cashflows, despite fall in member contributions Total net cashflows of A$1.4b compared with A$2.9b in FY 07 ¾ $2b in contemporary wealth management net cash
Slide 16: AFS Australian contemporary wealth management
AFS Australian contemporary wealth management Contemporary Change For personal use only wealth management FY 08 FY 07 Operating earnings A$266m A$306m - 13% Controllable costs1 A$354m A$352m1 + 1% Cost to income ratio1 46.5% 42.7%1 + 3.8 percentage points Net cashflows A$2,077m A$4,086m - 49% Operat
Slide 17: AFS Australian contemporary wealth protection
AFS Australian contemporary wealth protection Contemporary For personal use only wealth protection Change FY 08 FY 07 Profit margins A$135m A$115m + 17% Experience profits A$19m A$4m + A$15m Operating earnings A$154m A$119m + 29% Operating earnings / API1 23.9% 20.7% + 3.2 percentage points Controll
Slide 18: AFS Australian mature
AFS Australian mature Mature Change For personal use only FY 08 FY 07 Operating earnings A$161m A$190m - 15% Controllable costs A$64m A$64m Steady Controllable costs/AUM1 37bps 34bps + 3 basis points Net cashflows (A$1,036m) (A$1,433m) + 28% Persistency 89.7% 87.0% + 2.7 percentage points AUM (pre-c
Slide 19: AFS New Zealand
AFS New Zealand New Zealand Change For personal use only FY 08 FY 07 Profit margins A$50m A$47m + 6% Experience profits A$6m A$1m + A$5m Operating earnings A$56m A$48m + 17% Controllable costs A$64m A$64m steady Cost to income ratio 41.4% 44.3% - 2.9 percentage points Individual risk API¹ A$112m A$1
Slide 20: AFS cost performance
AFS cost performance For personal use only 600 560 546 553 533 535 500 100bps 87bps 42.8% 400 76bps 75bps 69bps 300 38.5% 35.2% 35.4% 200 34.2% 100 0 FY 04 FY 05 FY 06 FY 07 FY 08 Controllable costs Cost to income ratio Controllable costs to AUM Planner related variable costs previously included in
Slide 21: AMP Capital Investors – FY highlights
AMP Capital Investors – FY 08 highlights Solid performance with operating earnings down 9% on FY 07 to For personal use only A$136m ¾ Total management fees increased 3% to A$387m from A$375m, reflecting a change in product mix and growth in non-AUM sourced income ¾ Performance and transaction fees
Slide 22: AMPCI overview
AMPCI overview For personal use only AMPCI Change FY 08 FY 07 Operating earnings A$136m A$150m - 9% Internal management fees A$176m A$170m + 4% External management fees A$211m A$205m + 3% Total performance & 1 A$86m A$94m - 9% transaction fees Controllable costs A$268m A$257m + 4% Cost to income rat
Slide 23: AMPCI volumes and profit margins
AMPCI volumes and profit margins For personal use only 120 13.6 13.4 11.7 41.5 100 10.8 39.2 9.7 35.7 80 28.8 23.6 60 51.0 56.0 62.1 69.0 62.4 40 20 $Ab 0 FY 04 FY 05 FY 06 FY 07 FY 08 Average external AUM Average internal AUM Operating earnings after tax to average AUM (bps) 22
Slide 24: Capital management
For personal use only Capital management 23
Slide 25: Capital management – strength & strategy
Capital management – strength & strategy AMP remains strongly capitalised, with A$898m in excess capital For personal use only above minimum regulatory requirements (MRR) at 31 Dec 2008, reflecting disciplined and dynamic capital management approach Current debt security offer expected to raise
Slide 26: Capital management – actions
Capital management – actions Proactive management of both capital and funding requirements For personal use only have enhanced AMP’s financial strength, despite ongoing volatility ¾ Improving efficiency of capital mix and strengthening capital base through current offer of debt securities – expect
Slide 27: Outlook & strategy
For personal use only Outlook & strategy 26
Slide 28: Short term outlook
Short term outlook Continued market volatility means more challenging For personal use only outlook for 2009 Prudently managing costs, liquidity and capital to protect our financial position in the short term ¾ AFS costs expected to be around 3% lower in FY 09 on FY 08, as continued investment i
Slide 29: Short term strategic priorities
Short term strategic priorities Acting on opportunities to sustain and improve revenues For personal use only in current market, by ¾ Growing revenues in non AUM-based businesses - eg banking and risk insurance ¾ Improving investment performance ¾ Focusing strongly on customer retention ¾ Continui
Slide 30: Medium to long term outlook
Medium to long term outlook Longer-term growth outlook for wealth management For personal use only sectors in Australia, New Zealand and selected Asian markets remains strong underpinned by: ¾ Ageing demographics ¾ Bi-partisan party support for mandatory superannuation regime in Australia – super
Slide 31: Growth goal
Growth goal Over-arching goal to deliver top quartile TSR For personal use only performance to shareholders ¾ Aim to be in top 25% of the top 50 listed Australian industrials in terms of total shareholder returns over every five-year cycle ¾ Strong alignment between shareholder goal and long term
Slide 32: Strategic response
Strategic response Continuing to invest today in improving distribution and For personal use only enhancing products and services to drive strong value growth over the longer term by: 1. Growing planner capacity and broadening distribution 2. Expanding to Asia through AMP Capital Investors 3. Growin
Slide 33: Summary
Summary Sound FY 08 results in testing environment For personal use only demonstrates fundamental resilience of AMP’s business model, planner base and brand Managing AMP tightly through short-term volatility while investing to set company up for stronger growth over the medium to longer term C