Slide 1: Half year financial results
8 August 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 AMP Limited (ASX/NZX: AMP) Half year financial results RESULTS
Slide 2: AMP 2018 half year results
amps 2018 half year results Mike Wilkins, Acting Chief Executive Officer Gordon Lefevre, Chief Financial Officer 8 August 2018
Slide 3: AMP – helping people own tomorrow
AMP – helping people own tomorrow Notes 1. Adviser numbers: ASIC Financial Adviser Register, June 2018. 2. All data relates to 1H 18. 2 Section 1, AMP 2018 half year results
Slide 4: Executive summary
Executive summary Business performance – 1H 18 underlying profit of A$495m (1H 17: A$533m) and net profit of A$115m (1H 17: A$445m) – Overall resilient performance despite Royal Commission impact – Actions underway to reset business, prioritise customers and strengthen risk management systems and co
Slide 5: 1H 18 profit summary
1H 18 profit summary A$m 1H 18 1H 17 % Australian wealth management 204 193 5.7 AMP Capital¹ 94 92 2.2 AMP Bank 78 65 20.0 Australian wealth protection 1 52 (98.1) New Zealand financial services 56 65 (13.8) Australian mature 70 75 (6.7) BU operating earnings 503 542 (7.2) Group Office costs (29) (3
Slide 6: 1H 18 movement in underlying profit
1H 18 movement in underlying profit A$m 13 11 2 4 2 (51) (9) (5) (5) 533 495 1H 17 Australian AMP Capital AMP Bank Australian New Zealand Australian Group office Underlying Interest 1H 18 underlying wealth operating operating wealth operating mature costs investment expense underlying profit managem
Slide 7: Actions taken to reset business – July 2018
Actions taken to reset business – 27 July 2018 Action Detail Financial impacts Accelerate advice remediation – Accelerate program of advice remediation in response to – A$290m (post-tax) provision for potential advice ASIC Reports 499 and 515 remediation – Addresses employed and aligned adviser netw
Slide 8: DRAFT NUMBERS; UNAUDITED; SUBJECT TO CHANGE
DRAFT NUMBERS; UNAUDITED; SUBJECT TO CHANGE
Slide 9: Wealth management – overview
Wealth management – overview Resilient Key performance measures 1H 18 1H 17 performance; Investment related revenue (A$m)1 619 630 ongoing cost focus Other revenue (A$m) 57 51 Operating earnings (A$m) 204 193 Controllable costs (A$m) (223) (246) Total retail and corporate super net cashflows on AMP
Slide 10: Wealth management – net cashflows
Wealth management – net cashflows Cashflows Net cashflows summary (A$m) 1H 18 1H 17 subdued North¹ 2,473 2,879 versus AMP Flexible Super¹ (745) (129) elevated 1H 17 levels Other products and platforms¹ (1,749) (1,535) Total retail on AMP platforms (21) 1,215 SignatureSuper and Flexible Super (employ
Slide 11: AMP Capital – overview
AMP Capital – overview Growth reflects Key performance measures 1H 18 1H 17 strength in real assets; continued Operating earnings (A$m)1 94 92 investment in Fee income (A$m) 360 348 international Controllable costs (A$m) (215) (198) expansion Cost to income ratio 58.3% 56.6% Total external net cashf
Slide 12: AMP Capital – net cashflows and investment performance
AMP Capital – net cashflows and investment performance Real assets drive External net cashflows (A$m) 1H 18 1H 17 Net cashflows (A$m) 1H 18 1H 17 solid external flows China (CLAMP)¹ 157 737 Internal (3,121) (1,413) Japan (172) 113 International 1,064 405 External 1,591 2,439 Domestic 542 1,184 Total
Slide 13: AMP Bank – overview
AMP Bank – overview Strong growth; Key performance measures 1H 18 1H 17 ongoing investment in capability and Operating profit (A$m) 78 65 technology Controllable costs (A$m) (45) (38) Cost to income ratio 28.7% 29.0% Net interest margin 1.72% 1.67% Residential mortgage book (A$m) 19,680 18,194 Depos
Slide 14: Wealth protection – overview
Wealth protection – overview Performance Key performance measures 1H 18 1H 17 impacted by higher Profit margins (A$m) 46 49 than expected claims activity and Experience profits / (losses) (A$m) (16) - capitalised losses Capitalised (losses) and other one-off experience (A$m) (29) 3 Operating earning
Slide 15: New Zealand and Mature – key performance measures
New Zealand and Mature – key performance measures Performance New Zealand 1H 18 1H 17 Mature 1H 18 1H 17 broadly in line with expectations Profit margins (A$m) 54 57 Operating earnings (A$m) 70 75 Experience profits / (losses) (A$m) 2 8 AUM (A$b) 20.2 21.1 Operating earnings (A$m) 56 65 Persistency
Slide 16: DRAFT NUMBERS; UNAUDITED; SUBJECT TO CHANGE
DRAFT NUMBERS; UNAUDITED; SUBJECT TO CHANGE
Slide 17: Financial overview – key items outside business unit results
Financial overview – key items outside business unit results A$m 1H 18 1H 17 % change Underlying profit 495 533 (7.1) Advice remediation and related costs (312) - n/a Royal Commission (13) - n/a Portfolio review and related costs (19) - n/a Other items (41) (9) n/a Amortisation of acquired intangibl
Slide 18: Financial overview – balance sheet and regulatory capital
Financial overview – balance sheet and regulatory capital A$m 1H 18 FY 17 Change Shareholder equity1 6,956 7,276 (320) Total corporate subordinated debt2 951 951 - Total corporate senior debt2 1,044 730 314 Total capital resources 8,951 8,957 (6) Level 3 eligible capital 3,238 3,711 (473) Level 3 el
Slide 19: Financial overview – capital position
Financial overview – capital position Level 3 eligible capital above MRR (A$m) 495 15 (423) (100) (312) (93) (110) 2,338 1,810 FY 17 Underlying profit Dividends Business growth Market impacts Advice WP best estimate Other 1H 18 remediation assumptions – Level 3 eligible capital of A$1.8b above MRR –
Slide 20: Financial overview – interim 2018 dividend
Financial overview – interim 2018 dividend Interim 2018 dividend of 10 cents a share, franked to 50% − AMP is targeting a total FY 18 dividend payout at the lower end of the 70%-90% of underlying profit guidance range. To retain capital and strategic flexibility over the coming period, the interim d
Slide 21: Financial overview – controllable cost discipline maintained
Financial overview – controllable cost discipline maintained A$m 473 427 – 1H 18 controllable costs (ex AMP Capital) reflect: – AMP Bank cost growth reflects ongoing investment in technology and operating capability to support mortgage growth and customer service improvements – Run rate benefits fro
Slide 22: DRAFT NUMBERS; UNAUDITED; SUBJECT TO CHANGE
DRAFT NUMBERS; UNAUDITED; SUBJECT TO CHANGE
Slide 23: Clear 2H 18 priorities
Clear 2H 18 priorities Priority 2H 18 activity Prioritise customers and restore − Improve price competitiveness of MySuper offering - better value to approximately 700,000 customers confidence − Accelerate advice remediation: putting things right for impacted customers − Deliver consistent service a
Slide 24: Summary
Summary Business performance – 1H 18 underlying profit of A$495m (1H 17: A$533m) and net profit of A$115m (1H 17: A$445m) – Overall resilient performance despite Royal Commission impact – Actions underway to reset business, prioritise customers and strengthen risk management systems and controls – S
Slide 25: DRAFT NUMBERS; UNAUDITED; SUBJECT TO CHANGE
DRAFT NUMBERS; UNAUDITED; SUBJECT TO CHANGE
Slide 26: Guidance summary
Guidance summary Wealth management Wealth protection – MySuper fee reductions expected to reduce Australian wealth management – 2H 18 profit margins expected to reduce to A$35m due to changes to best (AWM) investment related revenue (IRR) by A$12m in 2H 18; and by an estimate assumptions and loss of
Slide 27: AMP’s advice network
AMP’s advice network Mortgage Total AUM AUM per As at June 2018 Target market Advisers consultants1 ($bn) 4 adviser ($m) AMP Advice Goals-based 210 13 9.3 44.2 AMP Financial Planning2 1,377 486 65.7 47.7 Core licensee Charter Financial Planning 670 35 22.6 33.7 offer Hillross 309 25 14.9 48.4 Total
Slide 28: AMP Capital – international growth
AMP Capital – international growth Global Partnerships China Life AMP Asset Management (CLAMP)¹ − AUM grew 2.6% (from FY 17) in local currency terms to RMB 188.1b (A$38.4b) − Launched 12 new products year-to-date including separately managed accounts, diversified and equity funds China Life Pension
Slide 29: 2013-2017 – disciplined controllable cost management
2013-2017 – disciplined controllable cost management A$m Strong track 983 984 967 981 949 record of cost control 901 870 851 858 812 114 116 123 137 82 1 2013 2014 2015 2016 2017 Project costs, ex. AMP Capital Operating costs, ex. AMP Capital – Operating costs reduced by 10% from 2013-2017, recyclin
Slide 30: Regulatory environment
Regulatory environment Proposed regulatory reform AMP position Financial Services Royal Commission − AMP is fully cooperating with the Royal Commission Royal Commission into Misconduct in the Banking, Superannuation − We will respond to the Interim Report (due September 18) and the Final Report (due
Slide 31: 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