Slide 1: Prudential plc BOAML CEO Conference
Prudential plc BOAML CEO Conference 28 September 2016 1 BOAML CEO CONFERENCE
Slide 2: Forward-looking statements
This document may contain ‘forward-looking statements’ with respect to certain of Prudential's plans and its goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements that are not historical facts, including statements about Prudenti
Slide 3: Group Strategy
Group Strategy 3 BOAML CEO CONFERENCE
Slide 4: Footprint aligned to long-term trends
Group Footprint aligned to long-term trends Asia growing working population1,2, m Increasing global wealth4, $tn Ageing population1,5, % + 178m 2030 Growth 2014 from 2015 2015 Footprint 2030 Footprint $34tn 32% +4ppt +4ppt Asia insurance penetration3, % ROW 40% 2.4% 2019 1 United Nations Department
Slide 5: Premium franchises
Group Premium franchises Asia US UK Premier retirement income Well recognised brands with strong track Leading pan regional franchise player record In Asia since 1923 168 years of providing financial Founded in 1961 security 14m life customers 4m life customers 6m life customers Top 3 position in 8
Slide 6: Well positioned to deliver across cycles
Group Well positioned to deliver across cycles IFRS income by revenue source1, HY16 % IFRS profit by business2 & currency3,4,5, HY16 % Other M&G Other 8% 10% Spread income Insurance margin 26% Asia 16% 32% UK 21% GBP USD linked 76% USD Life Fee income Asset Mgt Fee income 28% 22% US 37% 1 Income by
Slide 7: HY16 results underline intrinsic potential of our businesses
Group HY16 results underline intrinsic potential of our businesses IFRS operating profit1 £ 2,059 m Strong performance in a volatile environment (+6%) Asia delivering double digit growth in earnings and cash Free surplus generation1 £ 1,609 m (+10%) Disciplined execution to offset known headwi
Slide 8: 2017 financial objectives
2017 financial objectives Delivery remains on track Asia underlying free surplus1, £m Asia IFRS operating profit2, £m Free surplus of £0.9bn to £1.1bn At least 15% CAGR from 2012-17 > £1,858 £1.1bn +18% 1,468 765 £0.9bn 1,260 662 +15% 1,075 +15% 573 901 471 453 787 484 592 673 419 924 1,140 1,324 74
Slide 9: Asia: Multiple growth drivers
Asia Multiple growth drivers APE sales by country1, £m 52% 52% 52% 49% 48% 45% 45% 2,853 41% 42% NBP 39% margin 2,267 1,959 1,714 1,491 1,250 1,332 1,177 1,161 902 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Hong Kong Indonesia Singapore Malaysia China Korea India Taiwan Other 2 1. Comparative
Slide 10: Asia: Growing earnings base
Asia Growing earnings base Life weighted premium income1,2, £bn CER 10.0 8.5 HY16 7.3 growth4 MSCI Asia 6.2 7.2 5.9 +20% ex Japan3 5.6 4.9 6.3 4.9 4.2 5.4 3.8 3.3 4.6 4.3 +20% 4.1 3.6 3.6 2.6 3.0 2.1 2.8 1.9 2.2 +19% 1.1 1.2 1.1 1.3 1.4 1.6 1.4 1.7 2007 2008 2009 2010 2011 2012 2013 2014 2015 HY15 H
Slide 11: Asia: Hong Kong
Asia Hong Kong APE and IFRS operating profit1, £m 400 1,400 Moving towards natural portfolio weight 350 • 23% of PCA footprint GDP per capita 1,200 • 12% of PCA FY15 life earnings 1,213 300 1,000 Multi-channel distribution 250 • >15,900 agents (3x since beginning of 2012) 800 • 78 SCB branches 2
Slide 12: Asia: Indonesia
Asia Indonesia APE and IFRS operating profit1, £m Structural growth intact 400 1,400 • Market penetration2 1.1% 350 • 40m new Consuming Class3 2010 - 2020 1,200 356 300 Market leader 1,000 • 18% market share 295 250 800 Customer acquisition 233 200 600 • >140k new customers added in HY16 188 1
Slide 13: Asia: Consistent delivery
Asia Consistent delivery IFRS operating profit1, £m 2x3 2017 objective2 1,324 1,140 1,075 2x 975 774 2x 591 482 278 743 213 632 184 512 525 435 291 359 233 102 81 104 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 1H 2H 1. Comparatives have been stated on an actual exchange rate. 2012 i
Slide 14: US: Well positioned for DOL
US Well positioned for DOL Jackson attributes well aligned to DOL requirements Fund choice1 93 eligible funds (Next peer 57) Fee based VA launched 19th September Fund performance2 9 x more funds with 3 year returns >10% Clarity on top distributors’ DOL positioning Distribution3 >50 % more whol
Slide 15: US: Disciplined financial and risk management
US Disciplined financial and risk management In-the-moneyness Unhedged GMWB cash flows RBC ratio % of VA in-force, 31 August 2016 PV of guarantee fees less benefits1 % 30 June 2016 6% Base case $7.7 bn 472% Rates down 100bps $7.6 bn 400% S&P down 40% $(2.4) bn Hedge gains expected to result in
Slide 16: UK Life: Navigating change
UK Life Navigating change UK Retail Growth Sales1, £m 2.5x +69% PF2 RDR 657 481 401 338 264 277 284 285 FY10 FY11 FY12 FY13 FY14 FY15 HY15 HY16 1. Relates to APE sales from bonds, individual pensions, drawdown, PruFund ISA. Excludes corporate pensions, individual annuities and bulk annuities 2. PF =
Slide 17: M&G: Managing the cycle
M&G Managing the cycle M&G external funds under management M&G external net flows £bn monthly run-rate £m 133.4 2H16 129.7 131.9 1H15 2H15 1H16 to end Aug 126.4 (396) (486) (772) 30 Jun 31 Dec 30 Jun 31 Aug (1,161) 2015 2015 2016 2016 17 BOAML CEO CONFERENCE
Slide 18: Long-term track record
Group Long-term track record IFRS operating profit1,2,3, £m New business profit1,2, £m Free surplus generation1,2,3, £m 3.5x 3.8x 3.7x 2,059 1,609 1,260 1,881 1,190 CAGR CAGR 1,418 CAGR +15% +16% +16% 1,009 1,219 1,521 1,152 1,415 913 1,091 818 1,031 756 921 1,157 1,022 630 817 488 609 693 402 503 6
Slide 19: Growing value at consistent returns
Group Growing value at consistent returns Shareholders equity (EEV), £bn 35.0 32.4 29.2 24.9 22.4 19.6 18.2 14.6 15.0 15.3 2007 2008 2009 2010 2011 2012 2013 2014 2015 HY 16 Return on Embedded Value1, 15% 14% 15% 18% 16% 16% 19% 16% 17% 14% % 1 Return on embedded value is based on EEV post-tax opera
Slide 20: Low capital intensity, high capital velocity
Group Low capital intensity, high capital velocity Free surplus and dividend, FY15 £m Asia US UK Free surplus 1,086 1,433 1,276 3,795 16% growth3 generation New business investment (745) 20% reinvestment rate Net free surplus 3,050 generation Surplus • Funding growth (256) Net central (994) (445) ou
Slide 21: Investing for growth: 2016 update
Group Investing for growth: 2016 update Indonesia distribution expansion: >400 Digitising offices Operationalised UK and M&G new markets – Laos offerings Recruited over Fee based Variable Added nearly 1 million 100,000 new agents Annuity launched in 3Q new Asian customers in Asia Investing in best o
Slide 22: Summary
Group Summary Strong performance in a volatile and uncertain environment Asia centricity and structural drivers underpin future prospects Diversity, scale and discipline smooths the cycle Strong, defensive balance sheet Consistent delivery of long-term value 22 BOAML CEO CONFERENCE
Slide 23: 15-16 November 2016 Langham Hotel, London
15-16 November 2016 Langham Hotel, London 23 BOAML CEO CONFERENCE