Slide 1: 2016 half year results
AMP-= 2OI6 halt year results Craig Meller, Chief Executive Officer Gordon Lefevre, Chief Financial Officer 18 August 2016
Slide 2: Executive summary
Executive summary Financial performance – 1H 16 net profit of A$523m (1H 15: A$507m) and underlying profit of A$513m (1H 15: A$570m) – Wealth management business resilient despite market volatility and regulatory uncertainty in 1H 16 – Continued earnings momentum in AMP Capital, AMP Bank and New Zea
Slide 3: 1H 16 profit summary
1H 16 profit summary A$m 1H 16 1H 15 % Australian wealth management 195 207 (5.8) AMP Capital¹ 83 72 15.3 Australian wealth protection 47 99 (52.5) AMP Bank 59 50 18.0 New Zealand financial services 62 61 1.6 Australian mature 69 80 (13.8) BU operating earnings 515 569 (9.5) Group Office costs (30)
Slide 4: 1H 16 movement in underlying profit
1H 16 movement in underlying profit Underlying profit impacted by wealth protection experience 4 Section 1, AMP 2016 half year results
Slide 5: Business unit results
Business unit results Section 2
Slide 6: Wealth management – overview
Wealth management – overview Resilient Key performance measures 1H 16 1H 15 performance in volatile markets Operating earnings (A$m) 195 207 Controllable costs (A$m) (245) (250) Total retail and corporate super net cashflows on AMP platforms (A$m) 1,225 1,926 Total net cashflows (A$m)1 582 1,152 Inv
Slide 7: Wealth management – net cashflows
Wealth management – net cashflows Subdued Net cashflows summary (A$m) 1H 16 1H 15 cashflows reflect North¹ 2,664 2,268 market volatility and regulatory AMP Flexible Super¹ 220 861 uncertainty Other products and platforms¹ (1,913) (1,334) Total retail on AMP platforms 971 1,795 SignatureSuper and Fle
Slide 8: AMP Capital – overview
AMP Capital – overview Strategy delivery Key performance measures 1H 16 1H 15 continues to drive growth and Operating earnings (A$m)1 83 72 deliver more Fee income (A$m) 322 290 attractive asset mix Controllable costs (A$m) (192) (173) Cost to income ratio 57.9% 58.7% Total external net cashflows (A
Slide 9: AMP Capital – net cashflows and investment performance
AMP Capital – net cashflows and investment performance Strong cashflows External net cashflows (A$m) 1H 16 1H 15 Net cashflows (A$m) 1H 16 1H 15 to higher margin asset classes China (CLAMP)¹ (298) 682 Internal (2,458) (1,885) against Japan (111) 387 challenging listed market conditions International
Slide 10: Wealth protection – overview
Wealth protection – overview Key performance measures 1H 16 2H 15 1H 15 2H 14 1H 14 Performance impacted by poor Profit margins (A$m) 90 100 96 99 88 claims experience Capitalised (losses) / reversals (A$m) (1) (1) 1 2 0 Experience profits / (losses) (A$m) (42) (13) 2 (4) 3 Income protection (IP) cl
Slide 11: Wealth protection – improvement plan update
Wealth protection – improvement plan update 1H 16 progress Medium-term guidance Focus on Intensified focus on business recovery. Accelerated – Best estimate assumptions expected to deliver neutral delivering more activity across all initiatives: experience capital efficient, 1. Fix claims and lapse
Slide 12: AMP Bank – overview
AMP Bank – overview Strong growth Key performance measures 1H 16 1H 15 momentum continues Operating profit (A$m) 59 50 Controllable costs (A$m) (34) (31) Cost to income ratio 28.5% 30.0% Net interest margin 1.71% 1.53% Residential mortgage book (A$m) 15,439 14,587 Deposits (A$m) 10,713 8,794 Return
Slide 13: New Zealand and Mature – key performance measures
New Zealand and Mature – key performance measures Strong NZ New Zealand 1H 16 1H 15 Mature 1H 16 1H 15 performance reflects good Profit margins (A$m) 57 48 Operating earnings (A$m) 69 80 experience profits Transitional tax relief (A$m)¹ - 9 AUM (A$b) 21.5 22.6 and disciplined cost control Experience
Slide 14: Financial overview
Financial overview Section 3
Slide 15: Financial overview – key points on P&L
Financial overview – key points on P&L A$m 1H 16 1H 15 % Change Underlying profit 513 570 (10.0) Other items (6) (2) Business efficiency program costs (12) (33) Amortisation of acquired intangible assets¹ (39) (42) Profit before market adjustments and accounting 456 493 (7.5) mismatches Market adjus
Slide 16: Financial overview – balance sheet and regulatory capital
Financial overview – balance sheet and regulatory capital Strong balance A$m 1H 16 FY 15 Change sheet with Shareholder equity 8,678 8,623 Level 3 eligible capital surplus Total corporate subordinated debt¹ 951 1,551 well above Total corporate senior debt¹ 638 250 minimum Total capital resources² 10,
Slide 17: Financial overview – interim 2016 dividend
Financial overview – interim 2016 dividend Interim 2016 dividend of 14 cents a share, franked to 90% – Dividend payout ratio 81% - within 70%-90% payout range – Dividend Reinvestment Plan (DRP) will remain in place for eligible shareholders – No discount will apply to the DRP allocation price. AMP i
Slide 18: Financial overview – maintaining cost control
Financial overview – maintaining cost control Benefits from A$m 1 13 business efficiency program allow continued investment in 8 future growth 663 657 3 6 641 (25) 1H15 controllable Business efficiency AMP Capital cost AMP Bank cost 1H16 controllable AMP Capital SuperConcepts cost Currency impacts 1
Slide 19: Financial overview – business efficiency program
Financial overview – business efficiency program A$m Pre-tax 200 Business 200 efficiency 150 175 1H 16 program largely 150 39 actual benefits (cumulative) complete – 125 36 delivering 100 105 60 A$200m pre-tax 75 33 138 run rate savings 50 17 69 by FY 16 25 1 18 2 19 0 (27) -25 (56) -50 (94) -75 (14
Slide 20: Strategy update
Strategy update Section 4
Slide 21: Clear strategy to deliver long-term growth
Clear strategy to deliver long-term growth Strategy AMP well positioned to take advantage of positive long-term trends designed to – Ageing population, with number of people over age 60 expected to double by 2050¹ – Mandated growth of superannuation system, with industry expected to double by 20262
Slide 22: Leverage AMP strengths and market-leading positions
Leverage AMP strengths and market-leading positions Drive growth in Australia wealth management − Completed transition to new regulatory environment; increased focus on efficiency and productivity in current advice network − Increased competitiveness of product suite with launch of expanded North of
Slide 23: Transform our business to centre on the customer
Transform our business to centre on the customer Differentiate − Goals-based approach designed to proactively engage existing customers and activate unadvised AMP customer base via integrated − New customer lifetime management approach leverages data and analytics to drive engagement end-to-end goal
Slide 24: Maintain market-leading efficiency
Maintain market-leading efficiency Proven track − Successful delivery of business efficiency program delivering A$200m in pre tax run rate savings by end 2016 record in driving − Continuous change program focused on sustaining business efficiency benefits through: efficiency • more effective process
Slide 25: Invest selectively in international growth
Invest selectively in international growth Build partnerships China Life AMP Asset Management (CLAMP)¹ with national − AUM grew 106% to RMB 79b (A$15.9b) on 1H 15 (13% on FY 15) champions − Launched 19 new mutual funds in 1H 16, including separately managed accounts, equity and fixed income funds −
Slide 26: Summary
Summary Business performance – Continued momentum in AMP Capital, AMP Bank and New Zealand – Resilient performance from wealth management business – Intensified focus on wealth protection business recovery; accelerated key capital management initiatives to improve capital efficiency and reduce volat
Slide 27: Appendix
Appendix Section 5
Slide 28: Guidance summary
Guidance summary Costs Wealth protection - Medium-term guidance – FY 16 controllable costs expected to grow at approx 3.0% incorporating: – Medium term: best estimate assumptions expected to deliver neutral • 2.5%-3.0% underlying cost growth experience • approximately A$30m impact from consolidation
Slide 29: Regulatory environment
Regulatory environment Proposed regulatory reform AMP position Taxation of superannuation − Any changes to superannuation – including tax – must provide certainty and benefits to − Government proposed significant reforms to superannuation tax in the Federal superannuation members Budget on 3 May 201
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