M&g Plc · LSE:MNG
M&g — FY2024 Earnings Presentation
66 slides from M&g's earnings presentation, Mar 19, 2025
Slide 1: 2024 Full Year Results
Financial strength Simplification Growth 2024 Full Year Results 19 March 2025
Slide 2: Forward looking statement
M&G plc 2024 Full Year Results Forward looking statement This document may contain certain ‘forward-looking statements’ with respect to M&G plc (M&G) and its affiliates (the Group), its plans, its current goals and expectations relating to future financial condition, performance, results, operating
Slide 3: Strategic review
Strategic review Andrea Rossi, Group Chief Executive
Slide 4: Continued progress in 2024
Continued progress in 2024 1 2 3 Financial strength Simplification Growth Upgraded and then beat Delivered £188m savings, Operating Profits +5% YoY the £2.7bn operating capital upgraded transformation to £837m, thanks to a +19% generation target cost target to £230m higher Asset Mgmt. result Reduced
Slide 5: M&G's journey: From fixing to growing the business
M&G’s journey: From fixing to growing the business Fix the basics Deliver growth 1 Strengthened balance-sheet Maintain financial discipline Financial strength and reduced leverage across key metrics 2 Simplified operating model Continue to tackle costs Simplification to support scalable growth and i
Slide 6: Strong investment capabilities
Strong investment capabilities Long-term capital and seed funds a £315bn Asset Manager… a £185bn Life business… Supported with … and with a successful With the UK’s largest … and only £156bn from the £159bn third-party £128bn open £15bn ‘on-balance Life business… franchise With-Profits Fund… sheet’
Slide 7: A synergistic business model
A synergistic business model Our focus A large scale the Asset Manager with long- internal client… term assets and underpin earnings …with strong appetite seed new investment capabilities for private assets… through long-term capital and funding … and a ring-fenced gather assets adding limited risk
Slide 8: Well positioned to address client needs
Well positioned to address client needs Key trends M&G’s advantage Internal client with strong appetite Internal client Shift towards private markets for private assets, providing long-term allocating c. €850m capital to seed new propositions to BauMont and PCP1 Differentiated offering that combines
Slide 9: Asset Management
Asset Management Joseph Pinto, Chief Executive Asset Management
Slide 10: Our priorities
Our ambition Deliver strong performance, 1 across our public and private markets capabilities Be the go-to asset manager in Europe, with a leading private markets franchise supported by internal long-term capital Our Scale international franchise, priorities 2 while protecting the presence in our ho
Slide 11: Deliver strong performance, across Institutional and Wholesale
Deliver strong performance, across Institutional and Wholesale Investment performance Leadership Institutional funds Mutual funds as % of AUMA1, YE2024 UBS total fund performance score2, 2019-2024 Fabiana Fedeli CIO Equities, 45 Multi-Assets and 40 Sustainability 35 30 Andrew 76 Outperforming 79 25
Slide 12: Scale international franchise, continuing to build on strong momentum
Scale international franchise, continuing to build on strong momentum Expanding our international client base… … as well as our offering International third-party • Completed the set-up of our Global AUMA in £bn Credit platform with the launch of a 3 Americas APAC Global Corporate Bond fund MEA2 14
Slide 13: Protect our home market, broadening our UK proposition and client base
Protect our home market, broadening our UK proposition and client base £70bn 3rd party Structural trends Opportunities M&G’s focus UK assets £30bn DB Pension Long-term decline but Potential policy stimulus to Developing run-on offer leveraging AUM Schemes emergence of ‘run-on’ option support surplus
Slide 14: Expand private markets capabilities, both organically and inorganically
Expand private markets capabilities, both organically and inorganically AUMA % external Revenues Fee £bn assets £m margin Total private markets £74bn 59% £418m 58bps Real Estate £34bn 54% £159m 48bps Private and Structured Credit £20bn 84% £95m 48bps Impact and Private Equity £15bn 26% £115m 86bps I
Slide 15: Selective inorganic investments to add private markets capabilities
Selective inorganic investments to add private markets capabilities Real Estate Private Credit Building on strong Existing £34bn franchise Existing £20bn franchise foundations… core strategies: Core, Living and Debt core strategies: CLO, ABS, SRT, specialty finance … to expand acquired BauMont, €1.5
Slide 16: Life insurance
Life insurance Clive Bolton, Chief Executive Life
Slide 17: Our priorities
Our ambition Broaden offering, leveraging 1 solutions backed by the With-Profits Fund Turn a legacy franchise into a growth engine for the Group, underpinning earnings and flows into the Asset Manager Our Improve earnings profile, priorities 2 shifting With-Profits products to a fee-based model Our
Slide 18: Broaden offering, leveraging solutions backed by the With-Profits Fund
Broaden offering, leveraging solutions backed by the With-Profits Fund With-Profits solutions Existing products Recent launches Design phase Corporate Traditional BPA Value Share BPA With-Profits BPA Individual PruFund Fixed-Term annuity Lifetime annuity Future+ Guaranteed Other international Intern
Slide 19: In focus: The With-Profits fund
In focus: The With-Profits fund a unique engine for growth, and our key writer of insurance business What it is… Long-term track-record Benefits to M&G established in 1848 a pooled investment vehicle, that leverages its well Improves earning mix… capitalised and ringfenced Uniquely by participating
Slide 20: Improve earnings profile, shifting With-Profits products to a fee-based model
Improve earnings profile, shifting With-Profits products to a fee-based model Provides admin, execution, distribution capabilities, operational risk management and shares insurance risk Life Existing Participates in WP returns (90:10), With-Profits Operating products c. £450m contribution to operati
Slide 21: Support long-term growth, targeting the UK Pension Risk Transfer market
Support long-term growth, targeting the UK Pension Risk Transfer market 2023 2024 2027 Reopen Innovate Achieve scale Milestones: Bulk Purchase Annuity Value Share BPA Support long-term growth completed first BPA launched a ‘first of its Launch a With- by deploying shareholder deals since 2016 kind’
Slide 22: In focus: Value Share BPA
In focus: Value Share BPA an innovative solution that generates Fee-Related Earnings Whom this is for How it works operationally... … and financially Sponsors of well DB scheme enters DB sponsor receives surplus DB pension M&G funded Defined into a traditional BPA releases from reinsurer as scheme L
Slide 23: Financial review
Financial review Kathryn McLeland, Chief Financial Officer
Slide 24: Strong Operating Profit and Capital Generation
Strong Operating Profit and Capital Generation Financial highlights Net flows from Adjusted Operating Shareholder SII open business1 Operating Profit Capital Generation coverage ratio £(1.9)bn £837m £933m 223% Improving trend in H2 5% higher year-on-year Three-year total of £2,749m Up 20 ppts on YE
Slide 25: Asset base up by 1% as positive markets offset outflows
Asset base up by 1% as positive markets offset outflows AUMA and net flows Movement in AUMA (£bn) Net flows from open business (£bn) 344 11.91 346 2023 2024 Change (0.9) (8.6) Wholesale 55 63 Asset Mgmt. Wholesale AM 1.5 0.0 (1.5) 98 Mostly run-off Institutional businesses, e.g. 96 Institutional AM
Slide 26: Flows gradually improving in H2 2024
Flows gradually improving in H2 2024 Net flows by sub-segment Asset Management net flows by half year (in £bn) Life net flows by half year (in £bn) 2021 2022 2023 2024 2021 2022 2023 2024 0.3 3.8 3.1 2.9 3.2 3.2 2.6 3.4 Institutional 2.8 2.8 PruFund 3.7 2.4 1.9 2.1 2.1 International 1.2 £96bn AUMA 1
Slide 27: Operating Profit of £837m, +5% higher year-on-year
Operating Profit of £837m, +5% higher year-on-year Adjusted Operating Profit by source (£m) 2023 2024 Change • Asset Management operating profits up by nearly 20% year-on-year, Asset Management 242 289 19% benefitting from widening operating jaws • Revenues up by c. 1% due to higher average AUM in t
Slide 28: Asset Management: 19% growth in AOP reflecting positive operating jaws
Asset Management: 19% growth in AOP reflecting positive operating jaws Cost Income Ratio improved from 79% to 76% End of period AUM (£bn) Fee margins1 (bps) Revenues and costs (£m) Performance 56 30 35 fees 314 315 314 Investment income 303 311 305 (24) 8 20 Average 58 58 and minorities2 of period 5
Slide 29: Life: With-Profits
Life: With-Profits Lower CSM amortisation rate reduced 2024 AOP but will support ongoing CSM growth With-Profits: PruFund With-Profits: Traditional AOP (£m) CSM amortisation AOP (£m) CSM amortisation rate reduced from rate reduced from 2023 2024 11.6% to 10.8% 2023 2024 14.0% to 12.8% CSM release an
Slide 30: Life: Shareholder Annuities and Other Life
Life: Shareholder Annuities and Other Life Lower expected return on excess assets in Annuities, much improved costs in Other Shareholder Annuities Other Life AOP (£m) YoY increase due to higher CSM from change in longevity AOP (£m) assumptions, amortisation 2023 2024 rate roughly stable at c. 7.6% 2
Slide 31: CSM up 10% to £6bn supported by operating change in CSM
CSM up 10% to £6bn supported by operating change in CSM of £294m Significantly growing discounted future value of insurance operations CSM movements CSM movements by product line Total (£m) Op. change £m YE 2023 A B C D in CSM E YE 2024 100 107 636 256 6,033 Total 5,483 636 100 107 (549) 294 256 6,0
Slide 32: Underlying Capital Generation of £644m
Underlying Capital Generation of £644m Life contribution impacted by lower expected returns on annuity surplus assets Underlying Capital Generation (£m) 2023 2024 • Broadly in line with the AOP result after Asset excluding investment income which is classified 246 261 as other operating capital gene
Slide 33: Operating Capital Generation of £933m
Operating Capital Generation of £933m 2022-24 cumulative result of £2.75bn beats target upgraded in September Operating Capital Generation (£m) 2023 2024 Underlying Capital Generation 752 644 Optimisation, asset • Mostly driven by reduced With-Profits equity trading and hedging 153 53 exposure and a
Slide 34: Strong OCG result and removal of capital restrictions lift SII ratio to 223%
Strong OCG result and removal of capital restrictions lift SII ratio to 223% Improved solvency and surplus even after c. £0.9bn of dividend and deleveraging actions 6% 5% 8% 28% (3%) (24%) Solvency II ratio1 203% 223% (%) Includes £450m cash spend for the deleveraging actions announced in June 0.9 0
Slide 35: Costs base down 2% thanks to simplification efforts
Costs base down 2% thanks to simplification efforts Capacity creation offsetting inflation and freeing up resources to support growth M&G managed cost base Transformation programme 2023 vs. 20241 delivering steady progress2 Upgrade at H1-2024 Further To be delivered -2% Results Sourcing & Optimised
Slide 36: Outlook and guidance
Outlook and guidance Flows Asset Management UK headwinds abating, international growth continuing PruFund Momentum slowly improving as savers start to move out of cash Annuities Expect to gradually increase volumes and deal size Operating Asset Management Improving core earnings due to positive oper
Slide 37: Capital management and targets
Capital management and targets Andrea Rossi, Group Chief Executive
Slide 38: Continued progress across all targets
Continued progress across all targets Target YE 2023 YE 2024 Update 1 new 2025-27 £2.7bn OCG Financial strength over 2022-24 £1.82bn £2.75bn target before grading newto £2.7bn target business strain1 Solvency II reduced debt 35% 33% leverage < 30% by £461m 2 £220m upgrading Simplification cost savin
Slide 39: Targets underpin confidence in shift to progressive dividend policy
Targets underpin confidence in shift to progressive dividend policy £2.7bn cumulative OCG Primary driver of 1 Financial strength over 2025-2027, before new business strain1 ongoing financial resilience Moving to a progressive 70% Asset Mgmt. CIR2 Continue to tackle dividend policy, 2 Simplification
Slide 40: Capital management framework: Focus on business and dividend growth
Capital management framework: Focus on business and dividend growth Maintaining financial discipline: • Solvency II coverage ratio of 160-190% Financial Moving to a progressive long-term target operating range Attractive dividend policy, • Solvency II leverage ratio <30% strength and starting with a
Slide 41: Expected capital deployment for 2025-2027: Delivering yield and growth
Expected capital deployment for 2025-2027: Delivering yield and growth Dividend Tax in line with Any capital new progressive Asset Mgmt. growth dividend policy generated above Selected bolt-on acquisitions to expand private asset £2.7bn origination capabilities £2.7bn target to 2025-2027 cumulative
Slide 42: Key messages
Key messages: 1 Financial Strength: Strongest Solvency II coverage ratio since listing, leverage under control 2 Simplification: Meaningful progress on the transformation programme and cost take-out 3 Growth: Positioning the Group for growth across both Asset Management and Life 4 Targets: New £2.7b
Slide 43: Appendix
Appendix Additional financial information
Slide 44: Adjusted Operating Profit
Adjusted Operating Profit From Adjusted Operating Profits to IFRS Profit After Tax (£m) 2023 2024 Revenues 995 1008 Management Cost (791) (774) Asset Performance fees 30 35 Investment income and minority interest1 8 20 Total Asset Management 242 289 With-Profits: PruFund 236 226 With-Profits: Tradit
Slide 45: Adjusted Operating Profit
Adjusted Operating Profit Additional details (£m) 2023 2024 Asset Management 2023 2024 Revenues 995 1008 Investment income 24 36 Costs (791) (774) Minority interest1 (16) (16) Total 8 20 Performance fees 30 35 Investment income and minority interest1 8 20 Total Asset Management AOP 242 289 Life 2023
Slide 46: Adjusted Operating Profit: Asset Management result by asset class
Adjusted Operating Profit Asset Management result by asset class End of period AUM (£bn) Fee margins1 (bps) Revenues and costs (£m) Performance 56 30 35 fees 314 315 314 Investment income 303 311 305 (24) 8 20 Average 58 and minorities2 57 of period 55 74 CIR with/without 73 AUM 73% / 77% 77% / 79%
Slide 47: Key drivers of CSM movements
Key drivers of CSM movements PruFund, Traditional With-Profits, and Annuities Shareholder With-Profits: With-Profits: With-Profits: Other1 Annuities PruFund Traditional Policyholder 2022 2023 2024 2022 2023 2024 2022 2023 2024 2022 2023 2024 2022 2023 2024 Opening CSM 1,171 1,206 1,221 1,394 1,757 1
Slide 48: Operating Capital Generation
Operating Capital Generation 2023 2024 (£m) Own Funds SCR Total Own Funds SCR Total Asset Management 215 31 246 254 7 261 With-Profits: PruFund 337 (97) 240 292 (53) 239 In-force 247 14 261 217 47 264 New business 90 (111) (21) 75 (100) (25) With-Profits: Traditional 165 17 182 158 32 190 Shareholde
Slide 49: Assets Under Management and Administration
Assets Under Management and Administration Our asset base as an Asset Owner and an Asset Manager More details on the following page Group View: £346bn AUMA Asset Owner view3 Asset Manager view 2bn - Corporate Assets1 2bn - Corporate Assets1 31 Other Group Assets 44 Other £315bn With-Profits Fund Ass
Slide 50: Assets Under Management and Administration
Assets Under Management and Administration Asset Management view split by asset class, client, and geography Diversified capabilities A successful external franchise Established footprint3 strong scale in private assets and a supportive internal client with opportunity to grow Impact and Private Equ
Slide 51: Group wide flows, market and other movements
Assets Under Management and Administration Group wide flows, market and other movements – YE 2021 to YE 2024 Market / Market / Market / (£bn) YE 2021 Inflows Outflows Net flows Other YE 2022 Inflows Outflows Net flows Other YE 2023 Inflows Outflows Net flows Other YE 2024 Institutional 103.1 13.1 (1
Slide 52: Wholesale Asset Management: Mutual funds performance
Wholesale Asset Management Mutual funds performance Mutual funds performance as of YE 2022, YE 2023 and YE 2024 (as % of AUMA) 31 39 43 42 45 46 48 45 56 22 21 6 16 21 22 18 20 13 18 15 16 32 7 15 26 32 31 29 25 25 26 22 17 5 4 1 YE-22 YE-23 YE-24 YE-22 YE-23 YE-24 YE-22 YE-23 YE-24 5-year 3-year 1-
Slide 53: Largest SICAV and OEIC mutual funds
Wholesale Asset Management Largest SICAV and OEIC mutual funds AUMA and Flows (£bn) RANK MARKET/ PRODUCT ASSET CLASS FUND YE 2023 SALE REDEMPTION NET FLOWS YE 2024 by AUMA OTHER 1 OEIC + SICAV Bonds Optimal Income 9.69 2.67 (2.94) (0.28) (0.34) 9.08 2 OEIC + SICAV Equities Global Dividend 4.69 0.73
Slide 54: Largest SICAV mutual funds
Wholesale Asset Management Largest SICAV mutual funds AUMA and Flows (£bn) RANK MARKET/ PRODUCT ASSET CLASS FUND YE 2023 SALE REDEMPTION NET FLOWS YE 2024 by AUMA OTHER 1 SICAV Bonds Optimal Income 8.29 2.29 (2.52) (0.22) (0.35) 7.72 2 SICAV Equities Global Dividend 2.59 0.41 (0.65) (0.24) 0.40 2.76
Slide 55: Largest OEIC mutual funds
Wholesale Asset Management Largest OEIC mutual funds AUMA and Flows (£bn) RANK MARKET/ PRODUCT ASSET CLASS FUND YE 2023 SALE REDEMPTION NET FLOWS YE 2024 by AUMA OTHER 1 OEIC Equities Japan 2.28 1.86 (0.80) 1.06 0.27 3.61 2 OEIC Equities Global Themes 2.31 0.06 (0.27) (0.21) 0.08 2.18 3 OEIC Equitie
Slide 56: With-Profits Fund: Strategic Asset Allocation
With-Profits Fund Strategic Asset Allocation Asset allocation evolution between 2013 and YE 2024 Asset allocation as of 31 December 2024 100% 90% 80% 70% 60% 50% 40% 30% 20% 10% 0% 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Equities Real Estate Alternatives Fixed Income LEGEND UK As
Slide 57: With-Profits Fund: Historical returns
With-Profits Fund Historical returns Annualised 5-year rolling returns1 PruFund Growth returns vs. peers PruFund Growth returns after charges 150% 25% (% returns above capital invested)2 Cash SONIA Cumulative Rate 20% UK RPI Cumulative Rate PruFund Growth Fund 96% ABI Mixed Investment 20-60% shares
Slide 58: Solvency II: M&G Group position
Solvency II M&G Group position YE 2024 (£bn) Shareholder view With-Profits Fund view Regulatory view 11.6 3.1 Surplus = 4.7bn 6.9 Surplus = 4.7bn Surplus = 5.8bn 3.1 8.5 8.9 8.5 3.8 3.1 3.8 Own Funds SCR Own Funds SCR Own Funds SCR Solvency ratio 223% Solvency ratio 284% Solvency ratio 168% Note: Al
Slide 59: Solvency II: Sensitivities
Solvency II Sensitivities and estimated impact on % ratio and surplus Shareholder Solvency II market sensitivities With-Profits Solvency II market sensitivities YE 2024 YE 2024 Solvency ratio Surplus Solvency ratio Surplus (%) (£bn) (%) (£bn) Base Shareholder position 223 4.7 Base With-Profits posit
Slide 60: Solvency II: Breakdown of Shareholder SCR by risk type
Solvency II Breakdown of the Shareholder SCR by risk type YE 2024 (£bn) 9.0 0.5 Sectoral Operational & 2.1 expense 0.5 Lapse Longevity 1.0 1.0 Currency 3.8 Credit 1.3 (5.2) 0.3 Interest rate Property 0.7 1.6 Equity Undiversified SCR Diversification, SCR deferred tax, and other 60
Slide 61: Solvency II coverage and leverage ratio
Solvency II coverage and leverage ratio Leverage shown also on an IFRS basis Solvency II coverage ratio Leverage Solvency II IFRS YE 2024, alternative views YE 2024 10.3 Nominal 8.5 8.5 8.5 value of 2.8 0.9 debt £4.7bn surplus 4.2 27% 223% 33% CSM net 4.2 of tax1 3.8 6.8 0.2 3.8 Corporate 0.5 Sector
Slide 62: Credit quality of the Shareholder Annuity book remains very strong
Credit quality of the Shareholder Annuity book remains very strong 99% of Shareholder Annuity assets are investment grade Breakdown by rating Breakdown by capital ranking Outer circle shows YE-24, inner YE-23 Outer circle shows YE-24, inner YE-23 • Our diversified and actively managed Annuity portfo
Slide 63: Financial debt structure
Financial debt structure Subordinated debt (all Tier 2) ISIN Currency Nominal Coupon Issue Date Maturity Date Call Date XS1888930150 USD 500 6.500% 2018 2048 2028 XS1888920276 GBP 750 5.625% 2018 2051 2031 XS1243995302 GBP 439 5.560% 2015 2055 2035 XS1003373047 GBP 700 6.340% 2013 2063 2043 XS188892
Slide 64: Parent company liquidity
Parent company liquidity Cash and liquid assets at £0.73bn Parent company cash and liquid assets YE 2024 (£bn) 0.91 (0.24) 0.98 (0.47) 0.73 (0.45) FY 2023 Cash remittances from Corporate costs and other Cash dividends and shares Debt repurchase and FY 2024 subsidiaries movements 1 purchased by EBT 2
Slide 65: Our international footprint
Our international footprint 2 Corporate Assets £346bn AUMA 27 UK 43 £250bn 39 locations 7 178 28 Europe 27 markets 33 £68bn 4 10 1 Middle East Asia-Pac & Africa £14bn 2 £11bn Americas £3bn 3 8 Life Wholesale Asset Management Distribution, operations Institutional Asset Management and investment cent
Slide 66: Investor Relations contacts
Investor Relations contacts Luca Gagliardi Maria Baines Director of Investor Relations Investor Relations Event Manager +44 (0)20 8162 7301 +44 (0)20 8162 6122 +44 (0)752 559 7694 +44 (0)781 020 3731 luca.gagliardi@mandg.com maria.baines@mandg.com Simran Parmar Head of Investor Relations - Equity +4