Slide 1: Full Year Financial Results announcement cover letter
For personal use only 8 February 2018 Manager Client and Market Services Team ASX Market Announcements NZX Limited Australian Securities Exchange Level 1, NZX Centre, 11 Cable Street Level 4, 20 Bridge Street PO Box 2959 Sydney NSW 2000 Wellington, New Zealand Announcement No: 02/2018 AMP Limited (A
Slide 2: 2017 full year results
amps SS 2017 full year resu Craig Meller, Chief Executive Officer Gordon Lefevre, Chief Financial Officer For personal use onl 8 February 2018 5
Slide 3: AMP – helping people own tomorrow
AMP – helping people own tomorrow For personal use only Notes 1. Fund Market Overview Retail – Marketer, Strategic Insight (Plan For Life), September 2017. Planner Numbers, Money Management Top 100 Dealer Groups, 2017. 2. All data relates to FY 17. 2 Section 1, AMP 2017 full year results
Slide 4: Executive summary
Executive summary For personal use only Business performance – FY 17 underlying profit of A$1,040m (FY 16: A$486m) and net profit of A$848m (FY 16: -A$344m) – Business recovery reflects stabilisation of wealth protection business and solid broader performance: – Growth momentum in AMP Capital and AM
Slide 5: FY profit summary
FY 17 profit summary For personal use only A$m FY 17 FY 16 % Australian wealth management 391 401 (2.5) AMP Capital¹ 156 144 8.3 AMP Bank 140 120 16.7 Australian wealth protection 110 (415) n/a New Zealand financial services 125 126 (0.8) Australian mature 150 151 (0.7) BU operating earnings 1,072 5
Slide 6: FY movement in underlying profit
FY 17 movement in underlying profit For personal use only Strong recovery; solid operating A$m performance across the 525 * 30 6 business (1) (1) (27) 12 20 1,040 (10) 486 FY 16 Australian AMP Capital AMP Bank Australian New Zealand Australian Group office Underlying Interest FY 17 underlying wealth
Slide 7: Delivering on strategy in 2017
Delivering on strategy in 2017 For personal use only 2017 objective Delivered in 2017 3% controllable cost reduction (ex AMP Capital) – Group controllable costs ex AMP Capital reduced 3% in FY 17 Grow new sources of revenue in Australian wealth management via Advice – Other revenue grew 10% to A$108
Slide 8: Business unit results
Business unit results Section 2
Slide 9: Wealth management – overview
Wealth management – overview For personal use only Key performance measures FY 17 FY 16 Resilient Investment related revenue (A$m) 1 1,263 1,244 performance; strong Other revenue (A$m) 108 98 underlying Operating earnings (A$m) 391 401 growth trajectory Controllable costs (A$m) (490) (485) Total ret
Slide 10: Wealth management – net cashflows
Wealth management – net cashflows For personal use only North and Net cashflows summary (A$m) FY 17 FY 16 corporate super North¹ 5,680 4,981 driving stronger AMP Flexible Super¹ (681) 92 cashflow performance Other products and platforms¹ (3,313) (3,576) Total retail on AMP platforms 1,686 1,497 Sign
Slide 11: Wealth management – disciplined management of margin compression
Wealth management – disciplined management of margin compression For personal use only Disciplined Wealth management margin 2017 2016 2015 2014 2013 2012 compression of year ending management during elevated Investment related revenue to AUM 101 107 112 117 121 125 margin compression Annual compress
Slide 12: AMP Capital – overview
AMP Capital – overview For personal use only Strength in real Key performance measures FY 17 FY 16 assets underpins continued growth Operating earnings (A$m)1 156 144 Fee income (A$m) 659 614 Controllable costs (A$m) (412) (392) Cost to income ratio 61.5% 62.1% Total external net cashflows (A$m) 5,4
Slide 13: AMP Capital – net cashflows and investment performance
AMP Capital – net cashflows and investment performance For personal use only Real assets and External net cashflows (A$m) FY 17 FY 16 Net cashflows (A$m) FY 17 FY 16 Asian distribution China (CLAMP)¹ 1,868 1,262 strategy delivering Internal (2,591) (3,900) strong flows Japan (94) (158) International
Slide 14: AMP Bank – overview
AMP Bank – overview For personal use only Delivering double Key performance measures FY 17 FY 16 digit growth in competitive market Operating profit (A$m) 140 120 Controllable costs (A$m) (80) (69) Cost to income ratio 28.6% 28.5% Net interest margin 1.70% 1.67% Residential mortgage book (A$m) 18,87
Slide 15: Wealth protection – overview
Wealth protection – overview For personal use only Business stabilised Key performance measures FY 17 FY 16 and performing in Profit margins (A$m) 99 175 line with expectations Experience profits / (losses) (A$m) 4 (105) Capitalised (losses) / reversals (A$m) 7 (485) Operating earnings (A$m) 110 (41
Slide 16: New Zealand and Mature – key performance measures
New Zealand and Mature – key performance measures For personal use only Manage for value New Zealand FY 17 FY 16 Mature FY 17 FY 16 strategy delivers Profit margins (A$m) 115 112 Operating earnings (A$m) 150 151 stable earnings stream Experience profits / (losses) (A$m) 10 14 AUM (A$b) 20.7 21.2 Ope
Slide 17: For personal use only
For personal use only
Slide 18: Financial overview – key items outside business unit results
Financial overview – key items outside business unit results For personal use only A$m FY 17 FY 16 % change Underlying profit 1,040 486 114.0 Other items (21) (9) (133.3) Portfolio review and related costs (24) - n/a Business efficiency program costs - (19) n/a Amortisation of AXA acquired intangibl
Slide 19: Financial overview – balance sheet and regulatory capital
Financial overview – balance sheet and regulatory capital For personal use only A$m FY 17 FY 16 Change Shareholder equity1 7,276 7,489 (213) Total corporate subordinated debt2 951 951 - Total corporate senior debt2 730 611 119 Total capital resources 8,957 9,051 (94) Level 3 eligible capital 3,711 3
Slide 20: Financial overview – capital position
Financial overview – capital position For personal use only A$m Maintaining 1,040 strong capital 548 position 145 (118) (837) (75) (112) (200) (248) 2,195 2,340 2,338 – Eligible capital above MRR of A$2.3b reflects capital released from – Potential for capital management initiatives will be consider
Slide 21: Financial overview – final 2017 dividend
Financial overview – final 2017 dividend For personal use only Final 2017 dividend of 14.5 cents a share, franked to 90% Returning profits to shareholders; Full year dividend of 29 cents a share, 3.6% up year on year, within target 70%-90% payout range gross dividends Dividend Reinvestment Plan
Slide 22: Financial overview – taking cost out while still investing to grow
Financial overview – taking cost out while still investing to grow For personal use only A$m 3% reduction Cost discipline maintained in FY 17 Medium-term productivity initiatives to drive ongoing efficiency and delivery of flat costs target, whilst supporting future investment - Delivered FY 17 guid
Slide 23: Financial overview – disciplined cost management
Financial overview – disciplined cost management For personal use only A$m 983 984 967 981 Sustained focus 949 on tight cost management; 10 per cent nominal reduction in operating costs 901 870 851 858 812 114 116 123 137 82 1 2013 2014 2015 2016 2017 Project costs, ex. AMP Capital Operating costs,
Slide 24: Strategy update
Strategy update Section 4
Slide 25: AMP strategy
AMP strategy For personal use only 24 Section 4, AMP 2017 full year results
Slide 26: Delivering on strategy – Goals-based advice
Delivering on strategy – Goals-based advice For personal use only 25 Section 4, AMP 2017 full year results
Slide 27: Delivering on strategy – Goals-based advice
Delivering on strategy – Goals-based advice For personal use only 26 Section 4, AMP 2017 full year results
Slide 28: Delivering on strategy – Goals-based advice
Delivering on strategy – Goals-based advice For personal use only 27 Section 4, AMP 2017 full year results
Slide 29: Delivering on strategy – key initiatives
Delivering on strategy – key initiatives For personal use only Strategic Tilt investment to Customer-centred Expand internationally Manage costs objectives higher growth transformation of across the group business core Australian businesses Portfolio – Manage for value and capital – Invest to grow –
Slide 30: Summary
Summary For personal use only Business performance – FY 17 underlying profit of A$1,040m (FY 16: A$486m) and net profit of A$848m (FY 16: -A$344m) – Business recovery reflects stabilisation of wealth protection business and solid broader performance: – Growth momentum in AMP Capital and AMP Bank – R
Slide 31: For personal use only
For personal use only
Slide 32: Guidance summary
Guidance summary For personal use only Wealth management Costs – Margin compression expected to trend back to longer-term average of – Controllable costs for FY 18 (ex AMP Capital) not to exceed A$950m around 3% but may be volatile from period to period – AMP Capital targeting cost to income ratio o
Slide 33: AMP's advice network
AMP’s advice network For personal use only Mortgage Total AUM AUM per As at December 2017 Target market Advisers consultants1 ($bn) adviser ($m) AMP Advice Goals-based 221 24 10 44 AMP Financial Planning2 1,442 445 64 45 Core licensee Charter Financial Planning 712 40 23 32 offer Hillross 317 23 15
Slide 34: Driving revenue growth in wealth management – Advice and SMSF
Driving revenue growth in wealth management – Advice and SMSF For personal use only Wealth management - Targeting 5% revenue growth through the cycle from 2018 in normal markets Other revenue1 growth - Other revenue grew by 10% in 2017 as Advice and SMSF strategies delivered additional revenue growt
Slide 35: Driving revenue growth in wealth management – Advice
Driving revenue growth in wealth management – Advice For personal use only Delivering advice margin to wealth management and improving productivity Client register purchases Equity investment in advice practices Strategy Buy and retain client registers within AMP Strategy Strategic equity investment
Slide 36: AMP Capital – international growth
AMP Capital – international growth For personal use only Global Partnerships China Life AMP Asset Management (CLAMP)¹ AUM grew 59% in local currency terms to RMB 183.3b (A$36.0b) Launched 25 new products year-to-date including separately managed accounts, diversified, equity and fixed income fun
Slide 37: Regulatory environment
Regulatory environment For personal use only Proposed regulatory reform AMP position Superannuation reforms − AMP supports some aspects of the Bills but is seeking changes on other proposals if the Government chooses - Two Bills relating to superannuation member outcomes, to seek passage of the Bill
Slide 38: Important disclaimer
Important disclaimer For personal use only 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 ma