Legal & General Group Plc · LSE:LGEN
Legal & General — FY2024 Earnings Presentation
37 slides from Legal & General's earnings presentation, Mar 12, 2025
Slide 1: 2024 Full Year Results
Legal & General 2024 Full Year Results
Slide 2: Forward looking statements
Forward looking statements This document may contain certain forward-looking statements relating to L&G, its plans and its current goals and expectations relating to future financial condition, performance and results. By their nature, forward-looking statements involve uncertainty because they rela
Slide 3: Agenda
Highly Confidential Agenda 1. FY24 Performance and Strategic Execution António Simões, Group CEO 2. Financial performance Jeff Davies, Group CFO 3. Q&A with Business CEOs Andrew Kail, Institutional Retirement CEO Eric Adler, Asset Management CEO Laura Mason, Retail CEO 3
Slide 4: Full Year 2024 Performance and Strategic Execution
Full Year 2024 Performance and Strategic Execution António Simões, Group CEO 4
Slide 5: Strong Financial Performance in 2024
Highly Confidential Strong Financial Performance in 2024 Consistent Profit £1.6bn £1.8bn and Capital Capital generation Core Operating profit generation up 6% Balance Sheet £14.8bn 232% strength Store of future profit Solvency II coverage ratio Increased returns 21.36p £500m to shareholders Dividend
Slide 6: A growing, simpler, better-connected L&G
Highly Confidential A growing, simpler, better-connected L&G Sharper Simpler, more focused model with a Focus rigorous approach to execution Asset Management Well-positioned businesses with = Sustainable competitive advantages aligned to Growth structural trends Institutional Retail Retirement Diffe
Slide 7: Strong progress and momentum
Highly Confidential Strong progress and momentum • Creation of Corporate Investments portfolio and disposal of CALA for £1.35bn1 Sharper • Disposal of US Protection for £1.8bn2 and new strategic partnership with Meiji Yasuda Focus • Creation of a single global public and private asset manager • Inst
Slide 8: Reallocating capital for strategic growth
Highly Confidential Reallocating capital for strategic growth Financial performance INSTITUTIONAL RETIREMENT CORPORATE INVESTMENTS Investment above our 14% return RETAIL on cash and capital hurdle US Protection + CALA ASSET AND / OR MANAGEMENT Disposal proceeds >£3bn Returned to shareholders via Str
Slide 9: Accretive transaction to drive long-term growth
Highly Confidential Accretive transaction to drive long-term growth £1.8bn of proceeds Strengthened growth ambitions £0.4bn + for US PRT + £1.8bn of sales proceeds = Redeploying proceeds for strategic £0.4bn growth at a 14% hurdle rate Attractive multiples Strategic partnership + Incremental capital
Slide 10: Institutional Retirement: Capital efficient UK PRT
Highly Confidential Institutional Retirement: Capital efficient UK PRT 2024 Execution Market leadership in UK PRT – deal volumes (£bn) Strong 2025 outlook £1.2bn £8.4bn 12.0 Completed YTD 10.1 UK PRT Volumes £8.4bn 12 8.4 8.4 7.2 7.2 £1bn+ deals in c. 1% 5.3 2025 pipeline 3.3 3.4 £40bn+ New business
Slide 11: Record volumes in North America
Highly Confidential Record volumes in North America New partnership with Meiji 2024 Execution Strong growth momentum in North American PRT Yasuda to scale US PRT $2.9bn 2.9 $2.9bn Two strong balance sheets 2.6 committed to the business 2.1 International PRT volumes1 1.6 Plans to accelerate our curre
Slide 12: Asset Management: executing against our strategy
Highly Confidential Asset Management: executing against our strategy Our commitments from CME Success milestones in 2024 • New leadership team established under Eric Adler Creation of a global public and £1.1tn • Combination of LGIM and LGC now complete private markets asset manager • Investing in a
Slide 13: Investing for growth in Asset Management
Highly Confidential Investing for growth in Asset Management Costs (£m) % Cost to income ratio +7% 711 658 +1% +£48m (£50-100m p.a. guidance) Investments in new Cost discipline below growth areas, key 71% inflation, supported by 74% capabilities and efficiency actions operational scalability Underly
Slide 14: Retail: Strong performance in 2024
Highly Confidential Retail: Strong performance in 2024 2024 Execution 12.3m Customer • Growing UK Retail customer base (+0.5m in 2024) UK Policyholders & centricity • Customer satisfaction score: Retail UK Net Promoter Score 2 +50 workplace members • Workplace AUA up 17% to £94bn with net flows of £
Slide 15: Expect to return > £5bn over the next three years
Highly Confidential Expect to return > £5bn over the next three years 2025-2027 SHAREHOLDER RETURNS1 Share buybacks Dividends Total 2025 share buyback of £500m £5.1bn+ £1bn £100m £200m ≈ 40% £200m market cap2 £3.6bn Ongoing buyback Capital release Capital efficiency in Sale of US Ongoing buybacks To
Slide 16: Financial Performance
Financial Performance Jeff Davies, Group CFO 16
Slide 17: Performance in 2024
Highly Confidential Performance in 2024 Metric 2024 2023 Core Operating Profit 1,616 1,531 Corporate Investment Unit 95 136 Operating Profit 1,711 1,667 Investment variance from Core businesses (incl. minority interests) (991) (1,228) Investment variance from Corporate Investments (388) (363) Profit
Slide 18: Institutional Retirement
Highly Confidential Institutional Retirement Predictable and reliable growth in operating profit: Financial Highlights (£m) 2024 2023 CSM Release 650 591 • Operating profit up 7% to £1,105m. Risk Adjustment Release 141 119 • Release of CSM into profits has increased to 7.0%, reflecting the maturing
Slide 19: Capital light UK PRT
Highly Confidential Capital light UK PRT We adapted quickly to new market environments: FY 2024 FY 2023 • £8.4bn of capital efficient new business with a c.1% strain in the UK. SII Capital • c. £200m lower capital deployed than in 2023 on £81m £278m writing similar volumes post funded reinsurance. d
Slide 20: Asset Management
Highly Confidential Asset Management We grew fee revenue despite lower average AUM: Financial Highlights (£m) 2024 2023 • Up 4% to £967m as we pivot towards higher margin business. Asset management revenue 967 926 • Positive flows in DC, Private Markets and Wholesale were offset by outflows in lower
Slide 21: Retail
Highly Confidential Retail Financial Highlights (£m) 2024 2023 Retail operating profit is up 12% to £504m driven by: CSM Release 469 446 • CSM and RA release up 6% to £553m driven by profitable Risk Adjustment Release 84 74 new business written in 2023. Expected Investment margin 106 122 • 9.1% of C
Slide 22: US protection sale, US PRT partnership and future growth
Highly Confidential US protection sale, US PRT partnership and future growth Near-term impacts Future growth drivers US protection operating profit of £73m Earnings EPS accretive post share buyback ✓ Two strong balance sheets committed to >£1bn of IFRS profit US PRT business ✓ ¥150 bn3 committed co-
Slide 23: Solvency II
Highly Confidential Solvency II Solvency II Balance Sheet (£bn) 232% 224% 15.9 9.0 16.6 9.2 232% Coverage ratio £9.0bn Solvency II surplus 7.4 £12.5bn Tier 1 Own funds (i.e. 79%) 6.8 FY 2024 FY 2023 Own Funds Capital Requirement Surplus 23
Slide 24: Confident in meeting our new financial targets
Highly Confidential Confident in meeting our new financial targets 2025-2027 Targets Core Operating EPS 6-9% CAGR Operating RoE At least 20% Cumulative capital generation £5-6bn 24
Slide 25: Closing remarks
Closing remarks António Simões, Group CEO 25
Slide 26: Closing remarks
Highly Confidential Closing remarks • Creation of Corporate Investments portfolio and disposal of CALA for £1.35bn1 Sharper • Disposal of US Protection for £1.8bn and new strategic partnership with Meiji Yasuda Focus • Creation of a single global public and private asset manager • Institutional Reti
Slide 27: A growing, simpler, better-connected L&G
Highly Confidential A growing, simpler, better-connected L&G Sharper Simpler, more focused model with a Focus rigorous approach to execution Asset Management Well-positioned businesses with = Sustainable competitive advantages aligned to Growth structural trends Institutional Retail Retirement Diffe
Slide 28: Thank you
Lee Thank you
Slide 29: Q&A
Q&A António Simões, Group CEO Jeff Davies, Group CFO Laura Mason, CEO Retail Eric Adler, CEO Asset Management Andrew Kail, CEO Institutional Retirement 29
Slide 30: Appendix
Appendix ie Lec
Slide 31: Our Asset Portfolio
Lee Our Asset Portfolio
Slide 32: Annuity assets: A well-diversified bond and DI portfolio
Highly Confidential Annuity assets: A well-diversified bond and DI portfolio1 Annuity Bond Portfolio: £81.8bn Annuity DI portfolio: £27.4bn2, 30% of total assets FY 2024 AAA, 3% (£2.7bn) • Defensively positioned, high quality portfolio 16% Social Infrastructure • 69% A-rated or better. Only c.4.5% i
Slide 33: We have a high quality, diversified investment grade book
Highly Confidential We have a high quality, diversified investment grade book Bond portfolio by rating Bond portfolio by geography Bond portfolio by asset type Bond portfolio by sector £81.8bn £81.8bn £81.8bn £81.8bn AAA 3% UK 48% Traded credit 66% Sovereign-like assets 21% AA 34% USA 34% Direct inv
Slide 34: Our UK exposure is diversified
Highly Confidential Our UK exposure is diversified Annuity Bond portfolio UK Domiciled bond portfolio UK domiciled Traded Credit by geography by asset type portfolio by sector £33.9bn1 £8.4bn £81.8bn UK Traded Credit UK Domiciled (excl. FTSE 100) UK 48% FTSE 100 exposure 10% Utilities 34% USA 34% Go
Slide 35: Direct property exposure in annuity portfolio is limited
Highly Confidential Direct property exposure in annuity portfolio is limited Annuity Property Annuity property exposure comprises1: • c.£2bn of RVNs. This is the present value estimate of the future vacant possession 35% Residual Value Note (RVN) value of the property (i.e. the value at the end of t
Slide 36: Our Traded Credit BBB exposure is to high quality names
Highly Confidential Our Traded Credit BBB exposure is to high quality names Annuity Portfolio backing UK Annuities: Top 10 traded credit BBB exposure Investment Value Ultimate Parent Sector Country of Risk (£m) 1 Deutsche Telekom AG Communications & Technology USA, Germany 234 2 CK Hutchison Holding
Slide 37: Our Direct Investments are with high quality counterparties
Highly Confidential Our Direct Investments are with high quality counterparties Annuity Portfolio: Top 15 Direct Investments1 by exposure Rental Income Counterparty Sector Year of Investment Note (£m) 1 UK Government Government 2011-2019 1,805 2 UK Corporate Media Media 2017 427 3 Student Accommodat