Slide 1: Investor strategy day
Investor strategy day 25 May 2017
Slide 2: Agenda
Agenda 9.00 am AMP strategy Craig Meller, CEO 9.20 am China President Su, China Life Beng Neoh, MD North Asia, AMP Capital 10.00 am Australian Wealth Management Jack Regan, Group Executive, Advice Paul Sainsbury, Group Executive, Wealth Solutions and Customer 11.25 am Morning tea (webcast paused) 11
Slide 3: Our purpose: Helping people own tomorrow
Our purpose Helping people own tomorrow Investor strategy day 2017 | 2
Slide 4: AMP strategy
AMP strategy Trends: Demographic, social, behavioural, regulatory and technology Portfolio priorities Strategic priorities – Tilt to higher growth, capital – Large and growing markets light businesses – Rational competition – Complete customer transformation – Distinctive competitive advantage – Exp
Slide 5: AMP tomorrow
AMP tomorrow Strong foundation for growth: #1 Super | #1 Advice | #1 SMSF | #2 Retirement income Domestic growth International growth – Continued leadership of Australian – Europe and North America: via higher margin wealth management: infrastructure and real estate assets – New revenue streams (adv
Slide 6: AMP Strategy 2017 – 2022
AMP Strategy 2017 – 2022 AMP Strategy 2017 – 2022 Challenges Strong underlying thematics Emerging opportunities – Global scale in insurance – Ageing population (doubling of 60+ by 2050) – Structural search for yield due to ageing demographics Environment – Intensifying competition – Mandated doublin
Slide 7: China
China President Su, China Life Pension Company Beng Neoh, Managing Director North Asia, AMP Capital Investor strategy day 2017 | 6
Slide 8: Our strategy in China
Our strategy in China – Presence in China since 1997 – Adopted long-term, capital-light strategy – Activities have closely followed China’s China financial services liberalisation – Strategic partnership with China Life Group brings strong brand and distribution presence Investor strategy day 2017 |
Slide 9: Why China Life?
Why China Life? – Largest financial services company in China outside the big 4 banks – the 5th pillar – 200 million customers, national coverage, with distribution force of 2 million people – Manages over RMB 5 trillion in assets – World’s largest listed life insurance company by market capitalisat
Slide 10: China Life Group
China Life Group China Life Insurance Life insurance China Life Asset Management Listed asset management China Life General Insurance General insurance China Life Pension Company (CLPC) Superannuation (Pensions) China Life Group E-China Life E-commerce China Life Insurance Overseas HK Overseas insur
Slide 11: China Life Pension Company (CLPC)
China Life Pension Company (CLPC) Trustee, investment management and account admin services in pensions President Su, China Life Pension Company Investor strategy day 2017 | 10
Slide 12: CLPC overview
CLPC overview 377 – Established in 2007, now the largest pension insurance 301 company in China – AMP purchased 19.99% strategic stake in January 2015 222 for AUD$237 million – Competes for pension (superannuation) business across all of China’s 3-pillar system – Continuing to invest to capture futu
Slide 13: CLPC is growing well above system
CLPC is growing well above system 25 million 100,000 EA1 market EA1 market 8.7% CAGR 5.9% CAGR CLPC has grown above average 12.5 million 50,000 system rates over CLPC the past 5 years 7.9% CAGR CLPC 14.3% CAGR 0 0 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Growth in new members Growth in new
Slide 14: A pension system to respond to a rapidly ageing population
A pension system to respond to a rapidly ageing population 2017 By 2030 – China’s pension system facing Population 1.38 1.45 significant structural issues billion billion – Population ageing with very low pension balances Median age 36 43 – China’s evolving pension market is following similar reform
Slide 15: China's pension industry
China’s pension industry Pillar 1 Pillar 2 Pillar 3 Compulsory Basic Enterprise Occupational Individual Pension Pension Annuities (EA) Pensions (OP) Product (IPP) Compulsory/voluntary Compulsory Voluntary Compulsory Voluntary Applicable to Chinese citizens Corporate staff Civil servants Individuals
Slide 16: Licensing introduced for Pillar 2 providers
Licensing introduced for Pillar 2 providers – CLPC business focused on Pillar 2 market Regime Participants Minimum pricing – In 2004 China introduced licensing for service requirements to compete in the Pillar 2 market (4 licences) Trustee licence 11 – 10 bps – CLPC licensed across the three most In
Slide 17: CLPC performance
CLPC performance Pillar 1 Pillar 2 Pillar 2 Pillar 3 Compulsory Basic Pension Enterprise Annuities Occupational Pensions Individual Pension Product – At end of 2016, one of first few – #1 in trustee services – Competing to win business – Closed-end product sales selected investment managers with 31%
Slide 18: Outlook for Pillar 2 pension system
Outlook for Pillar 2 pension system – Shift of workers from rural to urban continues – Urban population grew 18% in the last 3 years – Pillar 2 not currently compulsory, current penetration of Pillar 2 solution ~6% – Upcoming implementation of Occupational Pensions (OP) is the first sign of compulsi
Slide 19: China Life AMP Asset Management
China Life AMP Asset Management Mutual fund products and separately managed accounts Investor strategy day 2017 | 18
Slide 20: CLAMP overview
CLAMP overview 115 – Established October 2013, CLAMP is the fastest growing new funds management company in China – AMP founding partner with 14.97% stake for 49 AUD$14 million – Distributes and manages investment solutions 20 for retail and institutional clients 2014 2015 2016 – CLAMP now a Top 30
Slide 21: CLAMP performance
CLAMP performance – Launched more than 60 Public Mutual Fund Separately Managed Accounts (SMAs) funds since inception – Over 1 million retail Market size: RMB 9.2 trillion as at December 2016 Market size: RMB 4 trillion as at December 2015 investors – 3,000 wholesale/ – Raised RMB 11.9 billion durin
Slide 22: Future outlook
Future outlook Investor strategy day 2017 | 21
Slide 23: Strong growth outlook for our business in China
Strong growth outlook for our business in China Core business areas Drivers of future outlook CLPC Offers pension – Retail pension: current penetration is negligible solutions for corporate, – Retirement age reforms institutional and – Demographics – the one-child policy has created ‘4-2-1’ families
Slide 24: Future outlook for our business in China
Future outlook for our business in China Inbound Outbound Domestic Strategy – A trusted investment partner – A preferred manager for Chinese – A trusted strategic partner for to invest internationally offshore investments China Life sourced capital in China Drivers of – Increasing demand for Chinese
Slide 25: Future outlook
Future outlook – China pension industry set for rapid growth due to an ageing demographic – China extremely focused on broadening and deepening its financial services industry, increasing customer share of wallet – Outlook very positive for AMP’s two businesses CLPC and CLAMP – CLPC business expecte
Slide 26: Australian wealth management
Australian wealth management Craig Meller, CEO Investor strategy day 2017 | 25
Slide 27: Driving new economics in wealth management
Driving new economics in wealth management Growth as % of average AUM Investment markets +8% Customer fees -1% Margin compression -4% Net cashflow +2% Advice and SMSF contribution 2% Other revenue 0% Growth 5% @ 45% cost to income1 x 1.8 Annual operating earnings growth 9% Figures reflect back-teste
Slide 28: Driving wealth management performance
Driving wealth management performance Improve Drive new productivity revenue of our model streams Investor strategy day 2017 | 27
Slide 29: AMP Advice and channel strategy
AMP Advice and channel strategy Jack Regan, Group Executive, Advice and New Zealand Investor strategy day 2017 | 28
Slide 30: More advice to more Australians more often
Mortgage More advice to more Australians more often Need for advice has never been greater... ... but the role of face-to-face advisers is changing Population growth Rising financial Positive impact Debt in older age brackets complexity of advice2 Superannuation Superannuation Population growth1 (%)
Slide 31: Our advice distribution environment
Our advice distribution environment Headwinds Success factors of the future Opportunities from disruption Regulatory scrutiny Conduct Capability Professionalism Public perception Increasing financial of advice complexity Scale Value chain Automation disruption post FOFA and analytics Competition and
Slide 32: Advice strategy: balancing today and tomorrow
Advice strategy: balancing today and tomorrow Scale Conduct Capability Business systems Value – Profitable – Strengthened – Nurture – Leverage – Additional advice Today growth of our governance professionalism investments margin delivering market-leading and compliance and broaden in AMP Advice valu
Slide 33: Delivering on the key success factors today
Delivering on the key success factors today Scale Conduct Capability Business systems Value – #1 adviser numbers1 – First to introduce – One of first to – Current focus area – Actively advised – #1 advised AUM independent move on higher for investment customers have and inforce premium2 oversight of
Slide 34: Broad market offering with value concentrated in our core licensees
Broad market offering with value concentrated in our core licensees Target Mortgage Total AUM AUM per adviser As at Dec 2016 market Advisers consultants1 (billion) (million) AMP Advice Goals-based 203 13 $9bn $46m AMP Financial Planning 1,516 482 $57bn $38m Core Charter Financial Planning licensee 7
Slide 35: Driving performance today: grow our market-leading licensee businesses
Driving performance today Grow our market-leading licensee businesses Scale Conduct Capability Business systems Value Strengthened governance Professionalism and Productivity underpinned Participate in advice Profitable growth and compliance broader advice offer by technology value chain – Breadth o
Slide 36: Partnering with Salesforce to reimagine advice practice management
Driving performance today: business systems Partnering with Salesforce to reimagine advice practice management Advice practice functions Single practice management solution Client information Document Ongoing client Practice and client Marketing and Practice and product management account communicat
Slide 37: AMP is the natural home for advice
AMP is the natural home for advice Our aspiration More advice to more Australians more often Scale Conduct Capability Business systems Value Profitable growth Strengthened Nurture Leverage Additional advice Strategy of our market-leading governance professionalism and investments margin delivering v
Slide 38: Platform strategy
Platform strategy Paul Sainsbury, Group Executive, Wealth Solutions and Customer Investor strategy day 2017 | 37
Slide 39: Highly competitive, comprehensive platform and product offering
Highly competitive, comprehensive platform and product offering Category Target segment Market position Industry recognition Self managed High net worth Admin $22.5 billion Core Data Awards (2016) Mass affluent Rank #1 Winner Administrator of the Year (Member) Software $22.4 billion Finalist in 4 ot
Slide 40: Product and platform rationalisation drives efficiency
Product and platform rationalisation drives efficiency – investment drives growth Category Systems Products/Platforms Channels Enhancements (in progress) From To From To From To Self directed 8 1 – Adviser – Adviser – Product marketplace – Accountant – Accountant – Portfolio services – Direct – Enha
Slide 41: Unbundling 'mega platforms' provides flexibility and agility
Unbundling ‘mega platforms’ provides flexibility and agility Web portals Mobile Contact centre Advice Customer experience and servicing – Whole of wealth approach – Salesforce and Adobe delivery layers Customer and adviser Business process relationship management management Identity and data Analyti
Slide 42: New SMSF platform creates opportunity for revenue growth
New SMSF platform creates opportunity for revenue growth Professional administration Revenue model: Admin fee per trust Accounting system Revenue model: License fee per trust Product marketplace Portfolio services Revenue model: Revenue model: Online portal AUM/premium based Margin on consumption In
Slide 43: Clear platform strategy to drive growth
Clear platform strategy to drive growth – Scale in platforms – highly competitive, comprehensive offering – Platform simplification drives efficiency – Funded investment to maintain market-leading features and functionality – Revenue growth equivalent to 1%+ of AUM from SMSF Investor strategy day 20
Slide 44: Building the wealth manager of the future
Building the wealth manager of the future Investor strategy day 2017 | 43
Slide 45: Why goals – the benefits
Why goals – the benefits Practical Emotional Provides Significant Provides Gives life Certainty a sense of emotional structure meaning motivation payoff Investor strategy day 2017 | 44
Slide 46: Customer goals
Customer goals Provide the best Be debt free Buy a home Career gap year Career restart education Further my Save for Retirement living Create an inheritance Fix my cashflow Gap year Pursue a passion Retire right education something big options Give them the Spend my kids Start accessing Start my own
Slide 47: AMP goals-based wealth operating system
AMP goals-based wealth operating system explore plan track realise Make an Define and prioritise Understand current situation, Agree brief Review and plan next Check in, reflect AMP Advice appointment goals with coach goals and trade-offs with adviser and pay steps with adviser and celebrate MyAMP G
Slide 48: Customer engagement supported by market-leading technology suite
Customer engagement supported by market-leading technology suite Capabilities Tools – Contemporary technology model Marketing automation and customer experience decisioning – Cutting edge plug and play capabilities delivered via the cloud Data analytics and visualisation – Flexibility to upgrade Str
Slide 49: Data aggregation supports our customers' most immediate needs
Data aggregation supports our customers’ most immediate needs Source: Investor strategy day 2017 | 48
Slide 50: AMP Goals Explorer blends technology and human 'coaching'
AMP Goals Explorer blends technology and human ‘coaching’ Investor strategy day 2017 | 49
Slide 51: Modelling engine transforms the delivery of goals-based advice
Modelling engine transforms the delivery of goals-based advice Goal principles – Achievability of customers’ goals is the benchmark for advice success – Goals modelling enables decisions to be based on goal achievability Whole of wealth projections Intuitive, visualised advice decisions Innovative g
Slide 52: Deep understanding of customer enables innovative product design
Deep understanding of customer enables innovative product design Bett3r – Manages money in Pay, Save and Spend buckets – Digital online account opening – Visualisation and in-app help change behaviour Investor strategy day 2017 | 51
Slide 53: Ongoing engagement tools help track progress against goals
Ongoing engagement tools help track progress against goals Source: Investor strategy day 2017 | 52
Slide 54: Advice transformation substantially completed by end 2017
Advice transformation substantially completed by end 2017 AMP Goals 360 explore plan track realise Make an Define and prioritise Understand current situation, Agree brief Review and plan next Check in, reflect AMP Advice appointment goals with coach goals and trade-offs with adviser and pay steps wi
Slide 55: Building the wealth manager of the future
Building the wealth manager of the future – Differentiated, highly engaging goals-based customer experience – One system for customers, advisers and AMP – True omni-channel experience – broadening customer channel choice (F2F, digital and direct) – Optimal blend of human interaction and best-of-bree
Slide 56: AMP Bank
AMP Bank Sally Bruce, Group Executive, AMP Bank Investor strategy day 2017 | 55
Slide 57: AMP Bank today – a bank within a wealth manager
AMP Bank today – a bank within a wealth manager Strong profit growth/ Established distribution Growing market Strong balance sheet momentum capability and risk position – FY16 $120 million OPAT – Largest adviser – Credit growth 7% – Deposit to loan á15% YOY network in Australia – Less than 1% ratio
Slide 58: Three key strategic questions
Three key strategic questions 2. Are you comfortable with 1. Can you grow this 3. What is your competitive your level of risk against business faster? advantage? your high growth? – Balancing strong growth with – Doubled contribution while – To be the intermediated bank scale infrastructure build ou
Slide 59: Using competitive advantage to become the intermediary bank of choice
Using competitive advantage to become the intermediary bank of choice Customer Diversified Channel Goals lifecycle AMP revenues – +50% of all home – Aligned with AMP – Opportunity to – Amplifies AMP lending activity goals philosophy engage early investment in the via brokers network and goals – Majo
Slide 60: Role of AMP Bank in goals
Role of AMP Bank in goals Provide the best Be debt free Buy a home Career gap year Career restart education Further my Save for Retirement living Create an inheritance Fix my cashflow Gap year Pursue a passion Retire right education something big options Give them the Spend my kids Start accessing m
Slide 61: Role of AMP Bank in goals
Role of AMP Bank in goals Provide the best Be debt free Buy a home Career gap year Career restart education Further my Save for Retirement living Create an inheritance Fix my cashflow Gap year Pursue a passion Retire right education something big options Give them the Spend my kids Start accessing m
Slide 62: AMP Bank: early engagement in the customer life cycle
AMP Bank: early engagement in the customer life cycle Getting ready Stop for retirement work Property Graduate for the kids Child’s Travel and Retirement Higher Move out wedding community living options of home Home Downsize work education Aged renovations Invest in Start a care First property busin
Slide 63: AMP Capital growth strategy
AMP Capital growth strategy Adam Tindall, Chief Executive Officer, AMP Capital Sean Henaghan, CIO and Director, Multi-asset Group, AMP Capital Carmel Hourigan, Global Head of Real Estate, AMP Capital Investor strategy day 2017 | 62
Slide 64: To be a pre-eminent global investment manager
Our vision To be a pre-eminent global investment manager Investor strategy day 2017 | 63
Slide 65: AMP Capital investment capabilities
AMP Capital investment capabilities Infrastructure Real estate Multi-asset Equities Fixed income AUM $12 billion $22 billion $84 billion1 $24 billion $60 billion Investment 67 62 32 42 41 professionals 1 $40 billion managed by AMP Capital Equities and Fixed Income Investor strategy day 2017 | 64
Slide 66: AMP Capital business potential
AMP Capital business potential Strong Deep double digit relationships 400+ international clients growth contribution with partners Suite of market leading 5 key hubs Potential with 25% employees investment solutions for inorganic acceleration based internationally targeting deep global pools Investo
Slide 67: AMP Capital clients and partners – Australia and New Zealand
AMP Capital clients and partners – Australia and New Zealand – $110 billion managed on behalf of AMP customers – 112 institutional clients investing $22.2 billion Investor strategy day 2017 | 66
Slide 68: Multi-Asset Group
Multi-Asset Group Investor strategy day 2017 | 67
Slide 69: Goals-based investing
Goals-based investing – Full spectrum of return sources – Flexible approach to management $1.1 $1.8 $1.7 $14 Future MyNorth billion billion billion Cash Flow Retirement billion Multi Asset Income Dynamic Range Fund (2016) (2016) MySuper Fund Generation Market Fund (2016) (2010) (2010) (2011) Investo
Slide 70: International growth
International growth Investor strategy day 2017 | 69
Slide 71: AMP Capital clients and partners – China
AMP Capital clients and partners – China – Beijing office opened 1997 – China Life AMP Asset Management Company Limited fastest growing new funds management company in China – First foreign company to acquire stake in Chinese pension company, China Life Pensions Company – Total combined AUM RMB 452
Slide 72: AMP Capital clients and partners – Japan
AMP Capital clients and partners – Japan Mitsubishi UFJ Trust and MUFG Mitsubishi UFJ Trust and Banking MUFG – Japan presence since 2001 – 2012 strategic alliance agreement – 2017 enhanced business alliance agreement – $1.5 billion managed on behalf of MUTB Investor strategy day 2017 | 71
Slide 73: AMP Capital clients and partners – international institutional clients
AMP Capital clients and partners – international institutional clients – Over 200 clients investing $18 billion FUM – Client numbers doubled in 3 years – 130 employees in 11 international offices Investor strategy day 2017 | 72
Slide 74: Creating value for clients and shareholders in real assets
Creating value for clients and shareholders in real assets 2016 Growth in funds 2015 under management $36 billion 2014 $33 billion 2013 $29 billion 2012 $25 billion $23 billion – Best people – Quality assets – Active management and development – Global platform Investor strategy day 2017 | 73
Slide 75: AMP Capital global infrastructure equity
AMP Capital global infrastructure equity Top 10 infrastructure business $10 Landmark 88 #1 US$2.4 billion transactions international infrastructure billion and strong clients fund in AUM deal flow for ESG Global Infrastructure Fund Investor strategy day 2017 | 74
Slide 76: Global infrastructure equity: track record of innovative transactions
Global infrastructure equity Track record of innovative transactions Sold Thames Water Port Headland Royal North Eastern Sold GIF acquisition international Shore Hospital Goldfields Duquesne of APAC airport Prison PPP Feb Mar May Aug Sep Oct Nov Jan Feb Mar Apr May Atalaya AquaSure (Spanish Adven (N
Slide 77: Infrastructure debt funds (IDF)
Infrastructure debt funds (IDF) 136 clients investing $3.5 billion Target $2 billion Notable deals $1.5 billion – Invenergy Thermal (Oct 2015) – Carlsbad Desalination Plant (Apr 2016) – Solør Bioenergi (Apr 2017) $675 million IDF I IDF II IDF III (2012) (2014) (2017) Investor strategy day 2017 | 76
Slide 78: Real estate
Real estate Investor strategy day 2017 | 77
Slide 79: AMP Capital real estate
AMP Capital real estate Over 60 years creating exceptional experience $23 billion 27 $3 billion $5 billion in shopping developments development AUM centres completed pipeline One of the 450+ 56 +2.9 million largest real estate office and sqm of professionals industrial assets lettable area direct re
Slide 80: Integrated real estate management model
Peopl tio n e an ina dc rig ty mana geme ul t p er O o nt ur Pr e D ev Marketing Integrated real estate elo p m e nt an d Customers management model ment Asset m and clients ag e an an as s ag m m en d e n et g t Fu in cr at as io Le e n S u s t a i n a b i l i ty Investor strategy day 2017 | 79
Slide 81: Real estate assets under management: a five year journey of growth
Real estate assets under management A five year journey of growth $0.3b $23b2 $0.5b $1.5b $0.9b $1.4b 50% growth in $1.3b funds under $1.8b management $15.3b1 2011 AWOF ASCF WAPF ADPF ACRT SA1 SA2 2016 Closing Closing FUM Core funds Separate accounts FUM 1 Includes 47 external institutional investor
Slide 82: Real estate investment highlights 2016 – 2017
Real estate investment highlights 2016 – 2017 Creating value for our clients Total capital raised Over 85% of FUM $1 billion $2 billion exceeded $1.3 billion in investment capital raised transactions client goals in 2016 YTD in 2017 Leveraging our Over 10 new $3 billion $5 billion global institution
Slide 83: Delivering on our clients' development pipeline
Delivering on our clients’ development pipeline 200 George Street Pacific Fair Macquarie Centre – $400 million value on completion – $670 million value on completion – $450 million redevelopment – 24.8% total return (Project IRR) – Largest centre in Queensland, – Largest centre in Sydney and NSW – 6
Slide 84: Quay Quarter Tower
Quay Quarter Tower Artists impression Investor strategy day 2017 | 83
Slide 85: Investing for growth
Investing for growth Investor strategy day 2017 | 84
Slide 86: AMP tomorrow
AMP tomorrow Strong foundation for growth: #1 Super | #1 Advice | #1 SMSF | #2 Retirement income Domestic growth International growth – Continued leadership of Australian – Europe and North America: via higher margin wealth management: infrastructure and real estate assets – New revenue streams (adv