Slide 1: ASX announcement cover note
For personal use only 16 February 2012 Manager Manager Company Announcements Office Market Information Services Section Australian Securities Exchange New Zealand Stock Exchange Level 4, 20 Bridge Street Level 2, NZX Centre, 11 Cable Street Sydney NSW 2000 Wellington New Zealand Announcement No: 04/
Slide 2: 2011 full year results
For personal use only 2011 full year results 16 February 2012 Craig Dunn Chief Executive Officer Colin Storrie Chief Financial Officer
Slide 3: Executive summary
Executive summary For personal use only Successful – Underlying profit of A$909m, up 20% on FY 10, with nine months contribution from AXA; net profit of A$688m, execution of down 11% on FY 10, reflecting impact of markets and costs of AXA merger strategy – AXA integration on track – business momentu
Slide 4: Group overview
For personal use only Group overview Section 2
Slide 5: Group overview – key performance measures
Group overview – key performance measures For personal use only FY 11 FY 10 Final dividend of 1 Underlying profit A$909m A$760m 14 cps, 50% Growth measures franked; full year payout ratio 84% AFS net cashflows2 (A$581m) A$225m of underlying Total retail on AMP platforms A$727m A$747m profit Total Au
Slide 6: Group overview – FY profit summary
Group overview – FY 11 profit summary A$m FY 11 FY 10 For personal use only AFS Contemporary Wealth Management 322 303 AFS Contemporary Wealth Protection 215 138 FY 11 results AFS Mature 153 140 include nine AFS New Zealand 76 58 months of merged AMP Capital 83 87 AXA businesses – BU operating earni
Slide 7: Group overview – drivers of underlying profit
Group overview – drivers of underlying profit For personal use only Good business Group underlying profit of A$909m, 20% up on FY 10, reflects results in risk – nine months contribution from Australian and NZ businesses of AXA insurance and – growing risk insurance business, though with poorer claim
Slide 8: Group overview – pro forma KPIs
Group overview – pro forma KPIs For personal use only FY 11¹ FY 10¹ % change Group Management estimates of key Controllable costs (A$m) 1,375 1,355 +1.5% performance AUM (A$b) 159 165 -3.6% indicators for AFS merged AFS net cashflows (A$m) (581) 225 organisation on a AFS persistency 87.9% 88.7% -0.8
Slide 9: The new AMP – powerful competitive position
The new AMP – powerful competitive position For personal use only Scale and cost – Low cost manufacturer Merged efficiency – Integration creating new scale benefits and efficiency opportunities organisation Leading market share – Leading independent wealth management company in Australia and NZ driv
Slide 10: The new AFS – a formidable competitor
The new AFS – a formidable competitor For personal use only AMPFP FAN (AXA FP, Hillross ipac/Tynan SMSF IFAs NZ aligned Mortgage Employers More ways to Charter, Genesys, Mackenzie advice network brokers reach more Jigsaw) Launched 1,653 planners 1,274 advisers 318 advisers 182 advisers in Q3 704 adv
Slide 11: The new AMP Capital – international capability and presence
The new AMP Capital – international capability and presence For personal use only Using investment Property Infrastructure Multi Asset Group Fixed income Equities Investment capability and Top tier manager across International footprint Innovative new Consistent, outstanding Strengthening capability
Slide 12: Business lines
For personal use only Business lines Section 3
Slide 13: AMP Financial Services – overview
AMP Financial Services – overview For personal use only Merger with AXA Operating earnings (A$m) FY 111 FY 10 has reset the Australian contemporary wealth management 322 303 clock on capacity Australian contemporary wealth protection 215 138 to improve Australian mature 153 140 efficiencies and New
Slide 14: AFS – snapshot of CWM net cashflows
AFS – snapshot of CWM net cashflows For personal use only Contemporary Net cashflows summary (A$m)1 FY 11 FY 10 products and AMP Flexible Super 3,000 1,348 platforms North 716 416 attracting strong Multiport 202 114 flows in 2 More traditional products and platforms (3,191) (1,131) challenging Total
Slide 15: AFS – strong and growing adviser force
1.0 AFS – strong and growing adviser force For personal use only Change June to 3% overall growth Dec-11 Jun-11 Dec-10 Dec 2011 in adviser AMP Financial Planning 1,653 1,566 1,526 87 numbers since Hillross 318 277 282 41 June AMP Financial Planners 1,971 1,843 1,808 128 AXA Financial Planning 282 34
Slide 16: AFS – continuing to manage margins tightly
AFS – continuing to manage margins tightly For personal use only 120 Nine month impact of incorporating AXA into CWM portfolio Movements in 113 (2) (3) 1 4 (3) 106 line with 100 (8) 102 management expectations1 80 60 40 20 FY 10 Lower Business mix & AMP Flexible Lower AMP (excl. AXA) Mix impact of M
Slide 17: AMP Capital – overview
AMP Capital – overview For personal use only 1 Key performance measures (A$m) FY 11 FY 10 Merger Operating earnings 83 87 enhancing Performance and transaction fees 32 45 domestic scale, Fee income 426 398 providing strong base for Controllable costs (318) (281) international AUM (A$b) 123 98 expans
Slide 18: Financial overview
For personal use only Financial overview Section 4
Slide 19: Financial overview – key points on P&L
Financial overview – key points on P&L For personal use only A$m FY 11¹ FY 10 Underlying profit Underlying profit 909 760 compared to net Market adjustment – investment income (50) (5) profit largely Market adjustment – annuity fair value 13 22 impacted by Market adjustment – risk products 53 (7) ma
Slide 20: Financial overview – acquisition accounting
Financial overview – acquisition accounting For personal use only Provisional balance Final balance Acquisition Purchase consideration 30 Jun 2011 31 Dec 2011 Change accounting (Cash A$0.5b and scrip A$3.8b) A$4.3b A$4.3b Steady changes primarily Less: AXA net tangible assets on acquisition A$1.3b A
Slide 21: Financial overview – balance sheet
Financial overview – balance sheet For personal use only FY 11 FY 10 Maturities A$m A$m Strong balance Shareholder equity 7,014 3,046 FY 11 sheet with little Subordinated debt S&P gearing 11% change to gearing Subordinated bonds 10+ years 83 83 Interest cover 12.1 times and interest AMP Notes 2 - 5
Slide 22: Financial overview – capital position
Financial overview – capital position For personal use only A$m FY 11 FY 10 Excess capital Total capital resources 8,550 3,932 above MRR of Intangibles (3,841) (730) A$1.5b at Tangible capital resources 4,709 3,202 31 December 2011 Non-allowable hybrid instruments - - Senior debt (657) (607) Other d
Slide 23: Financial overview – capital management framework
Financial overview – capital management framework For personal use only AMP continues to AMP has a dynamic capital management framework to protect its regulatory capital position under various actively manage scenarios, using both strategic and tactical methodologies its capital position Consistent
Slide 24: Financial overview – regulatory capital update
Financial overview – regulatory capital update For personal use only Taking a prudent AMP is maintaining a strong capital position ahead of regulatory capital reviews approach until APRA review of life and general insurance capital standards (LAGIC) regulatory position – In December 2011 APRA releas
Slide 25: Financial overview – dividend
Financial overview – dividend For personal use only AMP Capital and dividends shareholders will – 14 cents per share final dividend, 50% franked receive a 14cps – FY 11 dividend payout ratio to 84% of underlying profit dividend, 50% – AMP is reducing its target range from 75-85% of underlying profit
Slide 26: AXA integration
For personal use only AXA integration Section 5
Slide 27: Synergies emerging faster than anticipated
Synergies emerging faster than anticipated For personal use only Good progress on integration objectives: Integration on 1. Maintaining business momentum while bringing the two companies together track, accelerating – All key business stability indicators, including planner retention, within expecte
Slide 28: Integration financials tracking well
Integration financials tracking well For personal use only 2012 synergies – FY 11 run-rate performance better than expected, although the majority of benefits were captured late in the year embedded in – Total synergy target of A$140m post-tax remains unchanged, although FY 12 run rate forecast incr
Slide 29: Integration program established – well into program execution
Integration program established – well into program execution For personal use only 2011 Program establishment 2012 Program execution 2014 COMPLETION Current stage Progress as expected during 2H 11: Major initiatives in 1H 12 delivering: –✔ Integration roadmap – completed organisation structure – im
Slide 30: Maintaining tight control of cost base
Maintaining tight control of cost base For personal use only Focus on Merger supporting opportunities to remove costs from business and achieve scale benefits delivering scale – Pro forma¹ controllable costs for merged group grew 1.5% in FY 11², including synergies benefits from – With continuing ti
Slide 31: AMP's growth strategy: sharpening competitive edge
For personal use only AMP’s growth strategy: Section 6 sharpening competitive edge
Slide 32: Executing our strategy
Executing our strategy For personal use only Delivering outstanding growth in business value through: Strategy gaining Goal Progress traction and Quality services and products that – AMP Flexible Super AUM tripled in FY 11 to A$4.3b; 106,500 customer accounts – A$2.2b in AUM in AXA North; almost A$1
Slide 33: Positioning the business for the future
Positioning the business for the future For personal use only AMP has Since AFS moved to fee for advice business model in July 2010: reinforced and – AMPFP and Hillross have attracted and retained an annual average of 127 new advisers a year through Horizons Academy and BAU recruiting evolved its –
Slide 34: Growing opportunities offshore
Growing opportunities offshore For personal use only Key element of Partnering with prominent local distributors to take investment capabilities into new markets, strategy is linking replicating successful Australian model, and intermediating growing capital flows from west to east large savings Sub
Slide 35: Summary
Summary For personal use only Post-merger, AMP – Business well set for future: adapting early and effectively to changing market conditions, including regulation is a stronger – Extensive range of products, platforms and planner and adviser options performing well at a low point in the competitor –
Slide 36: Appendix
For personal use only Appendix Section 7
Slide 37: Pro forma controllable costs – AFS and Group
Pro forma controllable costs – AFS and Group 3.9% increase on pro forma basis For personal use only 433 101 AFS organic cost 1,000 25 984 (31) 947 growth of 3.9% in 800 858 FY 11 600 – pro forma 400 545 analysis includes 200 AXA costs and excludes FY 10 AFS FY 10 AXA FY 10 FY 10 pro forma FY 11 AFS
Slide 38: AMP Flexible Super – performing as designed
AMP Flexible Super – performing as designed For personal use only – AUM of A$4.3b, with AUM more than tripling in FY 11 – 106,500 customers, up from 70,000 in June 2011, and up from 21,000 in December 2010 – FY 11 net cash flows A$3.0b; superannuation account A$1.3b, pension account A$1.7b – Strong
Slide 39: AXA North – now a market-leading wrap platform
AXA North – now a market-leading wrap platform For personal use only Development of award-winning, full wrap capability has generated strong cashflows on North platform – Originally launched in late 2007 as a guarantee product on a basic platform, North progressively upgraded to reach full wrap capa
Slide 40: AMP Bank – capturing value from shifting customer preferences
AMP Bank – capturing value from shifting customer preferences For personal use only AMP Bank is a – FY 11 operating earnings of A$61m (A$42m in FY 10) driven by higher net interest margin (up 16 bps on FY 10) major contributor – Return on capital of 16.5% in FY 11, up from 14.0% in FY 10 to Contempo
Slide 41: Movement in FY regulatory capital resources above MRR
Movement in FY 11 regulatory capital resources above MRR For personal use only 6,000 600 3,803 5,000 4,000 688 3,000 (449) (71) 2,963 (3,090) 2,000 (923) (422) (75) 1,482 1,543 1,000 Regulatory AXA equity Subordinated Acquired FY 11 Dividend Other Regulatory AXA MRR Movement in Movements Regulatory
Slide 42: Moving ahead of the regulatory curve
Moving ahead of the regulatory curve For personal use only AMP supports regulatory change that delivers better outcomes for consumers and increased confidence in the financial planning profession; we want to ensure more Australians have access to affordable financial advice AMP has proactively Propo
Slide 43: Regulatory outlook – MySuper and FoFA
Regulatory outlook – MySuper and FoFA For personal use only MySuper is a new MySuper low-cost, simple – Legislating simple, low-cost default superannuation product and auto-consolidation of low-value superannuation default (balances less than A$1,000) – From 1 October 2013, default superannuation co