Slide 1: Half Year Financial Results announcement cover note
For personal use only 21 August 2014 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: 24/2014 AMP Limited (AS
Slide 2: 2014 half year results
For personal use only 2014 half year results 21 August 2014 Craig Meller Chief Executive Officer Gordon Lefevre Chief Financial Officer
Slide 3: Executive summary
Executive summary For personal use only Financial performance – 1H 14 net profit of A$382m (1H 13: A$393m) and underlying profit of A$510m (1H 13: A$440m) – 16% lift in underlying profit with double digit growth from all contemporary businesses – Solid net cashflows in Wealth Management and mortgage
Slide 4: 1H profit summary
1H 14 profit summary For personal use only A$m 1H 14 1H 13 % Australian wealth management 183 158 16% AMP Bank 42 38 11% Australian wealth protection 91 64 42% Australian mature 87 85 2% New Zealand financial services 55 46 20% AMP Capital¹ 57 51 12% BU operating earnings 515 442 17% Group Office co
Slide 5: 1H business performance
1H 14 business performance For personal use only A$m 17% uplift in business operating earnings with 6 improvement 9 across the board 27 2 25 4 515 442 Wealth Protection 1H 13 Business Unit Australian wealth AMP Bank operating Australian wealth Australian mature New Zealand AMP Capital 1H 14 Business
Slide 6: Business unit results
For personal use only Business unit results Section 2
Slide 7: Wealth management – overview
Wealth management – overview For personal use only Continued growth in Key performance measures 1H 14 1H 13 operating earnings Operating earnings (A$m) 183 158 despite revenue margin compression Controllable costs (A$m) (256) (251) Net retail cashflows on AMP platforms (A$m) 1,625 1,172 Total net ca
Slide 8: Wealth management – cashflows
Wealth management – cashflows For personal use only Net cashflows summary (A$m) 1H 14 1H 13 Robust AMP platform net flows AMP Flexible Super¹ 945 969 offset by external North¹ 2,359 1,864 platform outflows Other products and platforms¹ (1,679) (1,661) Total retail on AMP platforms 1,625 1,172 Signat
Slide 9: AMP Bank – overview
AMP Bank – overview For personal use only Growing Key performance measures 1H 14 1H 13 contribution to group Operating earnings (A$m) 42 38 despite period of intense price Controllable costs (A$m) (26) (25) competition Cost to income ratio 30.6% 31.5% Net interest margin 1.35% 1.39% Residential mort
Slide 10: Wealth protection – overview
Wealth protection – overview For personal use only Management Key performance measures 1H 14 2H 13 1H 13 2H 12 1H 12 (A$m) actions gaining traction – more work Profit margins 88 102 97 110 109 still to do Capitalised (losses)/reversals - (48) - - 20 Experience profits/(losses) 3 (54) (33) (54) 5 Inc
Slide 11: Wealth protection – improvement plan
Wealth protection – improvement plan For personal use only Focus now on 1H 14 results reflect success of management Guidance actions, including: embedding – 2H 14 profit margins expected to increase › improved claims management processes slightly relative to 1H 14 improvements in for in-force claims
Slide 12: New Zealand and Mature – key performance measures
New Zealand and Mature – key performance measures For personal use only New Zealand New Zealand 1H 14 1H 13 Mature 1H 14 1H 13 performing well in a Profit margins (A$m) 46 36 Operating earnings (A$m) 87 85 challenging market Experience profits/(losses) (A$m) (1) 1 Assets under management (A$b) 22.5
Slide 13: AMP Capital – overview
AMP Capital – overview For personal use only Strong offshore Key performance measures 1H 14 1H 13 partnerships with Operating earnings (A$m) 57 51 national champions and focus on high Fee income (A$m) 250 229 value add Performance and transaction fees (A$m) 22 16 investment products delivering resul
Slide 14: AMP Capital – cashflows and investment performance
AMP Capital – cashflows and investment performance For personal use only A$3.7b turnaround External net cashflows (A$m) 1H 14 1H 13 Net cashflows (A$m) 1H 14 1H 13 in external Japan 743 (1,365) Internal (1,598) (1,715) cashflows driven by partnerships, China¹ 557 - high value add External 1,642 (2,0
Slide 15: Financial overview
For personal use only Financial overview Section 3
Slide 16: Financial overview – key points on P&L
Financial overview – key points on P&L For personal use only Main accounting A$m 1H 14 1H 13 % mismatch relates to Underlying profit 510 440 16% adverse impact from treasury shares due Other items¹,² (3) (5) to higher AMP share AXA integration costs (11) (31) price Business efficiency program (49) -
Slide 17: Financial overview – balance sheet and regulatory capital
Financial overview – balance sheet and regulatory capital For personal use only A$m 1H 14 FY 13 Change Maintained low corporate gearing Shareholder equity 8,190 8,154 36 and appropriately Total corporate subordinated debt 1,008 1,274 (266) conservative Total corporate senior debt 700 700 - regulator
Slide 18: Financial overview – interim 2014 dividend
Financial overview – interim 2014 dividend For personal use only 9% increase in Interim 2014 dividend of 12.5 cents per share, franked to 70%, representing a first half payout ratio of 73% of underlying profits interim dividend – AMP Limited target dividend payout ratio of 70% to 80% of underlying p
Slide 19: Financial overview – maintaining cost control
Financial overview – maintaining cost control For personal use only A$m 9 1 5 9 (13) 646 (7) 650 1H 13 controllable Incremental Incremental Removal of R&D Stronger NZ Your SMSF Underlying cost 1H 14 controllable costs (pre tax) integration business efficiency credit exchange rate acquisition growth
Slide 20: Financial overview – business efficiency program
Financial overview – business efficiency program For personal use only A$m 200 Benefits on track 200 to achieve 175 150 39 A$200m pre tax 150 1H 14 125 run rate savings actual benefits (cumulative) 100 by end 2016 8 33 75 60 9 138 50 1 17 69 25 18 2 19 0 (28) -25 (57) -50 (90) -75 (145) -100 -125 -1
Slide 21: Financial overview – business efficiency program
Financial overview – business efficiency program For personal use only Program fully FY 14 focus areas 1H 14 achievements mobilised and Full implementation of organisation design, Majority of changes completed. Now focused on increasing spans of control and reducing bedding down customer focused ope
Slide 22: Delivering AMP's promise
For personal use only Delivering AMP’s promise Section 4
Slide 23: Charting a path to stronger growth
Charting a path to stronger growth For personal use only Consistent, focused Growth strategy framed by four key decisions: strategy builds on 1. Prioritise investment in A$2.3t¹ Australian wealth management market by building on leading current strengths to market positions to capture growth as indu
Slide 24: Transformation of core Australian business underway
Transformation of core Australian business underway For personal use only Foundation for 1H 14 outcomes 2H 14 planned activities growth in place – Digital platform launched – market leading – New content management system to enable smartphone and tablet applications for personalised customer content
Slide 25: Investing selectively in offshore growth
Investing selectively in offshore growth For personal use only Strategy to expand Building partnerships with national Targeting pension funds globally champions meaningfully – A$11b in AUM currently sourced from – China Life AMP Asset Management joint international investors offshore progressing ven
Slide 26: Summary
Summary For personal use only Momentum building – Growth in all contemporary businesses underpinning significant increase in underlying profits across the business – Substantial progress on strategy execution as strategy gains › Wealth Protection business stabilising traction › Business efficiency p
Slide 27: Appendix
For personal use only Appendix Section 5
Slide 28: Guidance summary
Guidance summary For personal use only Controllable costs – Continue to anticipate aggregate FY 14 claims will be broadly in line with FY 13 experience, with gradual improvements from FY 14 from the expected impact – FY 14 controllable costs expected to rise by around 1.5% from FY 13 of management a
Slide 29: Advice overview – adviser numbers
Advice overview – adviser numbers For personal use only Change 1H 14 FY 13 1H 13 Dec 13 to Jun 14 AMP Financial Planning 1,716 1,706 1,662 10 Charter Financial Planning & Futuro 917 934 890 (17) Hillross 373 367 359 6 Jigsaw Support Services 251 171 183 80 Genesys Wealth Advisers 214 219 237 (5) ipa
Slide 30: Regulatory environment
Regulatory environment For personal use only Development Impact/issues AMP position Future of Financial Advice Improved mobility of financial advisers in Expecting some shifts among advisers as restrictions on mobility lifted amendments gazetted 27 industry AMP well positioned to benefit from more a
Slide 31: 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