Slide 1: 2017 full year results
amps 2017 full year PFeEsulls Craig Meller, Chief Executive Officer Gordon Lefevre, Chief Financial Officer 8 February 2018
Slide 2: AMP – helping people own tomorrow
AMP – helping people own tomorrow Notes 1. Fund Market Overview Retail – Marketer, Strategic Insight (Plan For Life), September 2017. Planner Numbers, Money Management Top 100 Dealer Groups, 2017. 2. All data relates to FY 17. 2 Section 1, AMP 2017 full year results
Slide 3: Executive summary
Executive summary Business performance – FY 17 underlying profit of A$1,040m (FY 16: A$486m) and net profit of A$848m (FY 16: -A$344m) – Business recovery reflects stabilisation of wealth protection business and solid broader performance: – Growth momentum in AMP Capital and AMP Bank – Resilient per
Slide 4: FY 17 profit summary
FY 17 profit summary A$m FY 17 FY 16 % Australian wealth management 391 401 (2.5) AMP Capital¹ 156 144 8.3 AMP Bank 140 120 16.7 Australian wealth protection 110 (415) n/a New Zealand financial services 125 126 (0.8) Australian mature 150 151 (0.7) BU operating earnings 1,072 527 103.4 Group Office
Slide 5: FY 17 movement in underlying profit
FY 17 movement in underlying profit Strong recovery; solid operating A$m performance across the 525 * 30 6 business (1) (1) (27) 12 20 1,040 (10) 486 FY 16 Australian AMP Capital AMP Bank Australian New Zealand Australian Group office Underlying Interest FY 17 underlying wealth operating operating w
Slide 6: Delivering on strategy in 2017
Delivering on strategy in 2017 2017 objective Delivered in 2017 3% controllable cost reduction (ex AMP Capital) – Group controllable costs ex AMP Capital reduced 3% in FY 17 Grow new sources of revenue in Australian wealth management via Advice – Other revenue grew 10% to A$108m and SMSF – Invested
Slide 7: Business unit results
Business unit results Section 2
Slide 8: Wealth management – overview
Wealth management – overview Key performance measures FY 17 FY 16 Resilient Investment related revenue (A$m) 1 1,263 1,244 performance; strong Other revenue (A$m) 108 98 underlying Operating earnings (A$m) 391 401 growth trajectory Controllable costs (A$m) (490) (485) Total retail and corporate supe
Slide 9: Wealth management – net cashflows
Wealth management – net cashflows North and Net cashflows summary (A$m) FY 17 FY 16 corporate super North¹ 5,680 4,981 driving stronger AMP Flexible Super¹ (681) 92 cashflow performance Other products and platforms¹ (3,313) (3,576) Total retail on AMP platforms 1,686 1,497 SignatureSuper and Flexibl
Slide 10: Wealth management – disciplined management of margin compression
Wealth management – disciplined management of margin compression Disciplined Wealth management margin 2017 2016 2015 2014 2013 2012 compression of year ending management during elevated Investment related revenue to AUM 101 107 112 117 121 125 margin compression Annual compression % -5.6% -4.5% -4.3
Slide 11: AMP Capital – overview
AMP Capital – overview Strength in real Key performance measures FY 17 FY 16 assets underpins continued growth Operating earnings (A$m)1 156 144 Fee income (A$m) 659 614 Controllable costs (A$m) (412) (392) Cost to income ratio 61.5% 62.1% Total external net cashflows (A$m) 5,477 967 Average AUM (A$
Slide 12: AMP Capital – net cashflows and investment performance
AMP Capital – net cashflows and investment performance Real assets and External net cashflows (A$m) FY 17 FY 16 Net cashflows (A$m) FY 17 FY 16 Asian distribution China (CLAMP)¹ 1,868 1,262 strategy delivering Internal (2,591) (3,900) strong flows Japan (94) (158) International 1,887 1,315 External
Slide 13: AMP Bank – overview
AMP Bank – overview Delivering double Key performance measures FY 17 FY 16 digit growth in competitive market Operating profit (A$m) 140 120 Controllable costs (A$m) (80) (69) Cost to income ratio 28.6% 28.5% Net interest margin 1.70% 1.67% Residential mortgage book (A$m) 18,870 16,539 Deposits (A$m
Slide 14: Wealth protection – overview
Wealth protection – overview Business stabilised Key performance measures FY 17 FY 16 and performing in Profit margins (A$m) 99 175 line with expectations Experience profits / (losses) (A$m) 4 (105) Capitalised (losses) / reversals (A$m) 7 (485) Operating earnings (A$m) 110 (415) Individual risk API
Slide 15: New Zealand and Mature – key performance measures
New Zealand and Mature – key performance measures Manage for value New Zealand FY 17 FY 16 Mature FY 17 FY 16 strategy delivers Profit margins (A$m) 115 112 Operating earnings (A$m) 150 151 stable earnings stream Experience profits / (losses) (A$m) 10 14 AUM (A$b) 20.7 21.2 Operating earnings (A$m)
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Slide 17: Financial overview – key items outside business unit results
Financial overview – key items outside business unit results A$m FY 17 FY 16 % change Underlying profit 1,040 486 114.0 Other items (21) (9) (133.3) Portfolio review and related costs (24) - n/a Business efficiency program costs - (19) n/a Amortisation of AXA acquired intangible assets¹ (80) (77) (3
Slide 18: Financial overview – balance sheet and regulatory capital
Financial overview – balance sheet and regulatory capital A$m FY 17 FY 16 Change Shareholder equity1 7,276 7,489 (213) Total corporate subordinated debt2 951 951 - Total corporate senior debt2 730 611 119 Total capital resources 8,957 9,051 (94) Level 3 eligible capital 3,711 3,603 108 Level 3 eligi
Slide 19: Financial overview – capital position
Financial overview – capital position A$m Maintaining 1,040 strong capital 548 position 145 (118) (837) (75) (112) (200) (248) 2,195 2,340 2,338 – Eligible capital above MRR of A$2.3b reflects capital released from – Potential for capital management initiatives will be considered at reinsurance prog
Slide 20: Financial overview – final 2017 dividend
Financial overview – final 2017 dividend Final 2017 dividend of 14.5 cents a share, franked to 90% Returning profits to shareholders; Full year dividend of 29 cents a share, 3.6% up year on year, within target 70%-90% payout range gross dividends Dividend Reinvestment Plan (DRP) remains in place
Slide 21: Financial overview – taking cost out while still investing to grow
Financial overview – taking cost out while still investing to grow A$m 3% reduction Cost discipline maintained in FY 17 Medium-term productivity initiatives to drive ongoing efficiency and delivery of flat costs target, whilst supporting future investment - Delivered FY 17 guidance of 3% cost reduct
Slide 22: Financial overview – disciplined cost management
Financial overview – disciplined cost management A$m 983 984 967 981 Sustained focus 949 on tight cost management; 10 per cent nominal reduction in operating costs 901 870 851 858 812 114 116 123 137 82 1 2013 2014 2015 2016 2017 Project costs, ex. AMP Capital Operating costs, ex. AMP Capital – Oper
Slide 23: Strategy update
Strategy update Section 4
Slide 24: AMP strategy
AMP strategy 24 Section 4, AMP 2017 full year results
Slide 25: Delivering on strategy – Goals-based advice
Delivering on strategy – Goals-based advice 25 Section 4, AMP 2017 full year results
Slide 26: Delivering on strategy – Goals-based advice
Delivering on strategy – Goals-based advice 26 Section 4, AMP 2017 full year results
Slide 27: Delivering on strategy – Goals-based advice
Delivering on strategy – Goals-based advice 27 Section 4, AMP 2017 full year results
Slide 28: Delivering on strategy – key initiatives
Delivering on strategy – key initiatives Strategic Tilt investment to Customer-centred Expand internationally Manage costs objectives higher growth transformation of across the group business core Australian businesses Portfolio – Manage for value and capital – Invest to grow – Leverage – Tight focu
Slide 29: Summary
Summary Business performance – FY 17 underlying profit of A$1,040m (FY 16: A$486m) and net profit of A$848m (FY 16: -A$344m) – Business recovery reflects stabilisation of wealth protection business and solid broader performance: – Growth momentum in AMP Capital and AMP Bank – Resilient performance i
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Slide 31: Guidance summary
Guidance summary Wealth management Costs – Margin compression expected to trend back to longer-term average of – Controllable costs for FY 18 (ex AMP Capital) not to exceed A$950m around 3% but may be volatile from period to period – AMP Capital targeting cost to income ratio of 60%-65%; aiming for
Slide 32: AMP’s advice network
AMP’s advice network Mortgage Total AUM AUM per As at December 2017 Target market Advisers consultants1 ($bn) adviser ($m) AMP Advice Goals-based 221 24 10 44 AMP Financial Planning2 1,442 445 64 45 Core licensee Charter Financial Planning 712 40 23 32 offer Hillross 317 23 15 46 Total (core license
Slide 33: Driving revenue growth in wealth management – Advice and SMSF
Driving revenue growth in wealth management – Advice and SMSF Wealth management - Targeting 5% revenue growth through the cycle from 2018 in normal markets Other revenue1 growth - Other revenue grew by 10% in 2017 as Advice and SMSF strategies delivered additional revenue growth - Advice and SMSF bu
Slide 34: Driving revenue growth in wealth management – Advice
Driving revenue growth in wealth management – Advice Delivering advice margin to wealth management and improving productivity Client register purchases Equity investment in advice practices Strategy Buy and retain client registers within AMP Strategy Strategic equity investments (typically 20-49%) i
Slide 35: AMP Capital – international growth
AMP Capital – international growth Global Partnerships China Life AMP Asset Management (CLAMP)¹ AUM grew 59% in local currency terms to RMB 183.3b (A$36.0b) Launched 25 new products year-to-date including separately managed accounts, diversified, equity and fixed income funds Fastest growing n
Slide 36: Regulatory environment
Regulatory environment Proposed regulatory reform AMP position Superannuation reforms − AMP supports some aspects of the Bills but is seeking changes on other proposals if the Government chooses - Two Bills relating to superannuation member outcomes, to seek passage of the Bills in 2018 transparency
Slide 37: 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