AMP Limited · ASX:AMP
AMP — H1 2015 Earnings Presentation
30 slides from AMP's earnings presentation, Aug 20, 2015
Slide 1: 2015 half year results
=) 20 August 2015 AMP 2015 halt year results Craig Meller, Chief Executive Officer Gordon Lefevre, Chief Financial Officer
Slide 2: Executive summary
Executive summary Financial performance – 1H 15 net profit of A$507m (1H 14: A$382m) and underlying profit of A$570m (1H 14: A$510m) – 12% lift in underlying profit with solid growth in all contemporary businesses – Good momentum in wealth management and AMP Capital external net cashflows – Wealth p
Slide 3: 1H 15 profit summary
1H 15 profit summary A$m 1H 15 1H 14 % Australian wealth management 207 183 13.1 AMP Capital¹ 72 57 26.3 Australian wealth protection 99 91 8.8 AMP Bank 50 42 19.0 New Zealand financial services 61 55 10.9 Australian mature 80 87 (8.0) BU operating earnings 569 515 10.5 Group Office costs (31) (32)
Slide 4: 1H 15 movement in underlying profit
1H 15 movement in underlying profit A$m Continued momentum in 14 6 1 contemporary 8 (7) 8 businesses 15 (9) delivered 12% 24 uplift in underlying profit 570 510 Wealth Protection 1H 14 Australian AMP Capital Australian AMP Bank New Zealand Group office Interest Australian Underlying 1H 15 underlying
Slide 5: Business unit results
Business unit results Section 2
Slide 6: Wealth management – overview
Wealth management – overview Underlying earnings Key performance measures 1H 15 1H 14 growth reflects Operating earnings (A$m) 207 183 strong AUM increase and good Controllable costs (A$m) (250) (256) cost control Net retail cashflows on AMP platforms (A$m) 1,795 1,625 Total net cashflows (A$m) 1,15
Slide 7: Wealth management – cashflows
Wealth management – cashflows Net cashflows summary (A$m) 1H 15 1H 14 Solid net cashflows on AMP platforms AMP Flexible Super¹ 861 945 North¹ 2,268 2,359 Other products and platforms¹ (1,334) (1,679) Total retail on AMP platforms 1,795 1,625 SignatureSuper and Flexible Super (employer) 423 349 Other
Slide 8: AMP Capital – overview
AMP Capital – overview Strong uplift in Key performance measures 1H 15 1H 14 earnings reflecting Operating earnings (A$m)¹ 72 57 AUM growth and income from Fee income (A$m) 290 250 performance fees Controllable costs (A$m) (173) (160) Cost to income ratio 58.7% 62.4% Total external net cashflows (A$
Slide 9: AMP Capital – cashflows and investment performance
AMP Capital – cashflows and investment performance Strong growth External net cashflows (A$m) 1H 15 1H 14 Net cashflows (A$m) 1H 15 1H 14 momentum Japan 387 743 Internal (1,885) (1,598) reflecting continued delivery against China 682 557 strategy External 3,025 1,642 Domestic and other international
Slide 10: Wealth protection – overview
Wealth protection – overview 9% uplift in Key performance measures (A$m) 1H 15 2H 14 1H 14 2H 13 1H 13 operating earnings; Profit margins 96 99 88 102 97 management Capitalised (losses)/reversals 1 2 0 (48) 0 actions on track with Experience profits/(losses) 2 (4) 3 (54) (33) more to do Income prote
Slide 11: Wealth protection – improvement plan update
Wealth protection – improvement plan update Encouraging results 1H 15 progress and key deliverables Guidance from management Tracking well 18 months into business recovery – 2H 15 profit margins expected to remain program. Encouraging results from management subdued by ongoing investment and constra
Slide 12: AMP Bank – overview
AMP Bank – overview Continued strong Key performance measures 1H 15 1H 14 growth in profits. Operating earnings (A$m) 50 42 Conservative credit and liquidity Controllable costs (A$m) (31) (26) approach to Cost to income ratio 30.0% 30.6% prudential changes Net interest margin 1.53% 1.35% Residential
Slide 13: New Zealand and Mature – key performance measures
New Zealand and Mature – key performance measures Good cost control in New Zealand 1H 15 1H 14 Mature 1H 15 1H 14 NZ and Mature. Profit margins (A$m) 48 46 Operating earnings (A$m) 80 87 Strong experience profits in NZ Transitional tax relief (A$m)¹ 9 10 AUM (A$b) 22.6 22.5 Experience profits/(losse
Slide 14: Financial overview
Financial overview Section 3
Slide 15: Financial overview – key points on P&L
Financial overview – key points on P&L A$m 1H 15 1H 14 % Underlying profit 570 510 11.8 Other items (2) (3) AXA integration costs 0 (11) Business efficiency program costs (33) (49) Amortisation of AXA acquired intangible assets¹ (42) (44) Profit before market adjustments and accounting 493 403 22.3
Slide 16: Financial overview – balance sheet and regulatory capital
Financial overview – balance sheet and regulatory capital A$m 1H 15 FY 14 Change Strong balance sheet with Shareholder equity 8,475 8,346 129 conservative ratios Total corporate subordinated debt¹ 1,283 1,008 275 and regulatory Total corporate senior debt¹ 250 450 (200) capital surplus above minimum
Slide 17: Financial overview – interim 2015 dividend
Financial overview – interim 2015 dividend 12% increase in Interim 2015 dividend of 14 cents per share, franked to 85%, representing a first half payout ratio of 73% of underlying profit interim dividend – AMP Limited target dividend payout ratio of 70% to 80% of underlying profit – DRP will remain
Slide 18: Financial overview – maintaining cost control
Financial overview – maintaining cost control A$m Business efficiency 5 program benefits 5 offset underlying cost growth and 5 increased project 4 investment in 657 growth initiatives 650 (12) 647 1H 14 Business AMP Capital AMP Bank 1H 15 Currency AMP Capital 1H 15 controllable costs efficiency cost
Slide 19: Financial overview – business efficiency program
Financial overview – business efficiency program A$m Pre-tax 1H 15 200 Efficiency program 200 actual benefits (cumulative) 175 benefits on track to 25 150 150 39 deliver A$200m pre 42 125 tax run rate savings 100 by end 2016 33 75 60 138 50 1 17 69 25 18 2 19 0 (23) -25 (56) -50 (98) -75 (143) -100
Slide 20: Financial overview – business efficiency program
Financial overview – business efficiency program Program well into FY 15 focus areas FY 15 progress execution with many Continue to improve service efficiencies and test Simplified operating model and channel core initiatives on new ways of delivering advice to lift advice rationalisation to reduce
Slide 21: Strategy update
Strategy update Section 4
Slide 22: Charting a path to stronger growth
Charting a path to stronger growth Continued Strategic priorities momentum on 1. Prioritise investment in A$2.6tr¹ Australian wealth management market by building on leading strategy market positions to capture growth as superannuation industry doubles in size by 2025² implementation 2. Transform co
Slide 23: Creating a contemporary, customer centric business
Creating a contemporary, customer centric business Progress against 2015 priorities Building wealth management model Transform face-to-face advice model of the future − Strong customer and adviser feedback to new advice pilots to date; testing continues − Emergence of opportunities to improve advice
Slide 24: Investing selectively in offshore growth
Investing selectively in offshore growth International profile Building partnerships with national champions Targeting pension funds globally of business Deepening relationships with Chinese and Japanese Capitalising on international investor interest in continues to grow partners to drive cashflows
Slide 25: Summary
Summary Strong financial – Strong result with all contemporary businesses continuing to deliver growth performance and – Recovery of wealth protection business on track with more still to do progress on long- – Strategy execution creating potential for long-term growth term strategy, › Improving cus
Slide 26: Appendix
Appendix Section 5
Slide 27: Guidance summary
Guidance summary Costs Bank – FY 15 total controllable costs expected to reflect underlying controllable cost – Targeting lending growth at or above system subject to funding availability and growth of 2.5% - 3% before forecast business efficiency program benefits of return on capital hurdles and cr
Slide 28: Advice update
Advice update Continue to Market leader in financial advice across Australia advocate for the – Largest network of financial advisers in Australia - 1H 15 adviser numbers steady at 3,762¹ value of financial – Firmly believe in the value of quality financial advice advice – Strategic intent to help m
Slide 29: Regulatory environment
Regulatory environment Development Impacts / Issues AMP position Future of Financial Advice reforms − Opt-in statements for customers − Support FOFA reforms − Fee disclosure statements − Providing ongoing training and monitoring of advisers to ensure compliance Life insurance remuneration reform − S
Slide 30: 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