Amp Limited · ASX:AMP
Amp — Non-Deal Roadshow (November 2010)
52 slides from Amp's roadshow presentation, Nov 1, 2010
Slide 1: ASX Announcement: Investor Roadshow Materials
ASX Announcement 1 November 2010 Manager Manager For personal use only Company Announcements Office Market Information Services Section Australian Securities Exchange New Zealand Stock Exchange Level 4, 20 Bridge Street Level 2, NZX Centre, 11 Cable Street Sydney NSW 2000 Wellington New Zealand Anno
Slide 2: Investor discussion pack, November 2010
For personal use only Investor discussion pack November 2010
Slide 3: AMP today
For personal use only AMP today 2
Slide 4: AMP today
AMP today For personal use only AMP is a 160-year-old wealth management company operating in Australia and New Zealand, with selected investment management activities in Asia One of the largest superannuation providers in the Australian market A leading investment manager in the region, with $
Slide 5: AMP Financial Services and AMP Capital Investors
AMP Financial Services AMP Capital Investors For personal use only AMP Financial Services (AFS) provides AMP Capital Investors (AMPCI) financial planning and advice to is a diversified investment manager customers in Australia and NZ, in the Asia Pacific region primarily through network of 2,000
Slide 6: AMP's structure
AMP’s structure For personal use only AMP AMP Financial Services AMP Capital Investors An Australian and New Zealand asset manager, with a growing footprint in Asia, investing across various asset classes. AUM Contemporary Wealth Management sourced from internal and external clients, Unit-linked ret
Slide 7: AMP's competitive advantages
AMP’s competitive advantages For personal use only Products & Cost Asset Brand Distribution Packaging platforms efficiency management Large Large, Pre-eminent footprints in scaleable Cost to Broadly Growing brand in planner and contemporary income ratio based AUM AUM retirement 2 2 3 corporate platf
Slide 8: Business line contribution to 1H earnings
Business line contribution to 1H 10 earnings For personal use only In-force annual premium A$120m and AUM A$5bn AUM A$17.6bn In-force annual premium A$616m AUM A$95bn (externally and internally sourced) AFS NZ AFS A$32m (9%) AFS Mature Contemporary A$68m (18%) Wealth Protection A$73m (20%) AFS Conte
Slide 9: Strengthened earnings profile
Strengthened earnings profile For personal use only AFS Contemporary Wealth Management AMP Capital Investors operating AFS Mature operating earnings operating earnings earnings 150 92 95 89 145 142 78 78 129 72 116 68 55 43 44 A$m A$m A$m 1H 06 1H 07 1H 08 1H 09 1H 10 1H 06 1H 07 1H 08 1H 09 1H 10 1
Slide 10: Total AMP assets under management
Total AMP assets under management For personal use only AMPCI managed (41%) Multi-manager (FDF) (29%) 50 CWM Externally managed (27%) AMP Banking (3%) 37 AMPCI external AMPCI managed (94%) Multi-manager (FDF) (6%) 17 Mature AMPCI managed (100%) 5 NZ AMPCI managed (75%) Externally managed (25%) 2 Gro
Slide 11: 2010 half-year financial results
For personal use only 2010 half-year financial results 10
Slide 12: Executive summary
Executive summary For personal use only Delivered solid half-year result in ongoing volatile markets Disciplined cost control enabled continued investment in growth initiatives and regulatory change program Prudent capital and balance sheet management delivered stable investment income on shar
Slide 13: Key performance measures
Key performance measures Underlying return on equity 27.4%, down from 31.6% in For personal use only 1H 09, reflecting prudent approach to capital management Underlying profit A$383m, up 4% on 1H 09 Growth measures: Net cashflows in AMP Financial Services A$584m, down from A$865m; AMP Capita
Slide 14: Overview – 1H profit summary
Overview – 1H 10 profit summary A$m 1H 10 1H 09 1H/1H For personal use only % change AFS Contemporary Wealth Management 150 129 +16% AFS Contemporary Wealth Protection 73 83 -12% AFS Mature 68 72 -6% AFS New Zealand1 32 23 +39% AMP Capital Investors 44 43 +2% BU operating earnings 367 350 +5% Group
Slide 15: Value measures
For personal use only Value measures 14
Slide 16: Balance sheet strength
Balance sheet strength For personal use only Balance sheet metric 30 June 2010 31 December 2009 Capital surplus above MRR Group A$1,413m A$1,242m Life Statutory Funds A$1,039m A$1,125m Group cash A$759m A$622m Undrawn bank facilities A$700m A$700m S&P gearing 15% 13% Interest cover ratio (underl
Slide 17: Strong relative ROE
Strong relative ROE For personal use only 45 Underlying return on equity 40.5% 40 38.0% 35 31.6% % 30 27.4% 26.6% 25 20 0 1H 06 1H 07 1H 08 1H 09 1H 10 • Underlying RoE remains high at 27.4%, with the reduction from 1H 09 driven by decision to hold higher capital in response to market volatility and
Slide 18: Compares well to global insurance stocks ROEs
Compares well to global insurance stocks ROEs Source: Goldman Sachs Research For personal use only % 35 30 AMP 25 20 2009-10 Ping An ROE Zurich Financial 15 Prudential ING China Life Allianz Travelers Standard Life AXA 10 Munich Re MetLife Swiss Re 5 0 % 0 5 10 15 20 25 30 35 2010-11 estimated ROE 1
Slide 19: Strong dividend payments and yield
Strong dividend payments and yield For personal use only 1H 10 interim dividend payment of 15cps represents a payout ratio of 81% (14cps in 1H 09) 9.6% 7.2% 6.0% 5.4% 5.4% 46 40 2 40 2 30 21 22 16 16 40 40 19 22 22 14 15 Cents 2006 2007 2008 2009 1H 10 per share 85% franked 85% franked 85% franked 5
Slide 20: AMP's forward PE ratio
AMP’s forward PE ratio For personal use only 23.0 21.0 19.0 17.0 15.0 13.0 11.0 9.0 Jun-05 Dec-05 Jun-06 Dec-06 Jun-07 Dec-07 Jun-08 Dec-08 Jun-09 Dec-09 Jun-10 AMP PE ASX 200 PE 19
Slide 21: Market environment
For personal use only Market environment 20
Slide 22: Australian superannuation & pension market
Australian superannuation & pension market (A$1.3 trillion) For personal use only Government Asia 6% Public sector Mainly distributed 14% by accountants, solicitors and financial planners Small managed super funds (SMSFs) 32% Retail funds 28% Mainly distributed by financial planners Industry funds a
Slide 23: Retail superannuation providers market share
Retail superannuation providers market share (market size A$244b) For personal use only Other AMP 12% 17% IOOF 5% Mercer AXA 6% 6% WBC/BT/SGB 10% NAB/Aviva 21% CBA ANZ/ING 13% 10% Source: Plan for Life Retail & Wholesale QDS, March 2010 - based on AUM. 22
Slide 24: One of the fastest-growing wealth management markets
One of the fastest-growing wealth management markets For personal use only Australian superannuation market - A$b (Assets under management) 1,400 1,200 CAGR 1,000 13% Market forecast to 800 grow at a CAGR of 600 10% over the next 400 10 years 200 0 2004 2005 2006 2007 2008 2009 2010 Australian lif
Slide 25: Highly supportive superannuation environment
Highly supportive superannuation environment For personal use only Australia has world’s 13th largest economy, with 5th largest private pension market One of the world’s fastest growing private pension markets, underpinned by government mandate All employed Australians must contribute 9% of th
Slide 26: AMP ahead of industry change curve
AMP ahead of industry change curve Proposed industry reform AMP action/impact For personal use only Industry reforms • FSC (formerly IFSA) - All members to remove in- • Already removed built-in commissions on super, built super, pension and investment product pension and investment new business from
Slide 27: AMP ahead of industry change curve
AMP ahead of industry change curve Proposed industry reform AMP action/impact For personal use only Govt’s superannuation reforms in response to Cooper Review • To introduce MySuper from 1 July 2013 • Already launched AMP Flexible Super – a simple, Simple, low cost default super product flexible,
Slide 28: Role of M&A in driving AMP's growth
Role of M&A in driving AMP’s growth Significant organic opportunities exist to drive growth For personal use only Current environment could also provide attractive inorganic opportunities, but not a ‘must-do’ Clear criteria: Strategic – must accelerate delivery of one or more key growth init
Slide 29: AMP Financial Services
For personal use only AMP Financial Services 28
Slide 30: AMP Financial Services: scaleable, flexible wealth management business
AMP Financial Services is a scaleable, flexible leading wealth management business For personal use only AMP Financial Services is a scaleable wealth management business, strongly positioned in superannuation in Australia and New Zealand Strong competitive distribution advantage, with the larges
Slide 31: AFS holds leading market positions in Australia
AFS holds leading market positions in Australia For personal use only March 2010 March 2009 Market share - Australia Total Market Market share Total Market Market market size position % market position share % A$b (rank) size A$b (rank) Funds under management¹ Superannuation including rollovers 243.
Slide 32: Corporate superannuation market share
Corporate superannuation market share (by AUM) For personal use only 25% 21.1% 20.4% 21.0% 20% 17.1% 15% 14.8%14.4% 14.1% 13.1% 10.0% 10.1% 10% 6.1% 6.2% 5% 0% AMP ANZ Mercer NAB WBC CBA March 2010 March 2009 Source: Plan for Life Masterfunds Report, March 2010. 2009 numbers have been restated to re
Slide 33: Employer contributions represent significant proportion of AFS inflows
Employer contributions represent a significant proportion of AFS superannuation inflows For personal use only Contemporary Wealth Management cash inflows (A$m) 1H 10 1H 09 1H 08 Member contributions 580 600 830 Employer contributions 1,619 1,675 1,715 Total contributions 2,199 2,275 2,545 Transfers
Slide 34: Australian financial planners
Australian financial planners AMP 10% For personal use only ANZ/ING 12% Other 48% AXA 7% CBA 7% WBC/SGB 6% NAB/MLC/Aviva 10% AMP Financial Planning ranked as largest dealer group in Australia, with above-system growth rate of 5.6% for 12 months to March 2010 Average age of an AMPFP planner is 45
Slide 35: Dealer group view: FUA per planner
Dealer group view: AMP FP and Hillross both with above average FUA per planner For personal use only Planner numbers and reported FUA ($m) FUA ($m) 50 FUA per Planner > Industry average .5 AMP = 23 er 45 la nn erp Ap FU 40 ge Macquarie vera tr ya CBA dus 35 In NAB 30 WBC/SGB AXA ANZ 25 20 PIS RBS Mo
Slide 36: CWM – AUM by product type
CWM – AUM by product type For personal use only Retail Corporate External Total* on AMP on AMP platform A$b platform platform Superannuation 17.4 16.5 1.7 35.6 Allocated pension/annuities 7.1 0.2 2.1 9.4 Managed investments 2.1 - 3.0 5.1 Total* 26.6 16.7 6.8 50.1 Over 70% of CWM AUM is in superann
Slide 37: AFS track record of managing margin contraction
AFS has strong track record of managing margin contraction over time For personal use only 250 200 199 201 195 187 186 186 190 182 183 184 Choice of Fund 180 150 introduced bps AMP Flexible Lehman Super APRA licensing 100 collapses launches changes introduced 50 54 54 53 55 52 54 52 51 51 51 45 0 1H
Slide 38: Renovating core product set: AMP Flexible Super
Renovating core product set: AMP Flexible Super For personal use only Modular, simple, all-in-one superannuation and retirement solution Full solution launched in May 2010 – AUM of c$330m by 19 August Three modules, with prices and features to suit most Australians Core - simple investment c
Slide 39: AFS – disciplined cost control
AFS – disciplined cost control For personal use only 300 278 270 264 263 261 79bps 77bps 200 71bps 69bps 68bps A$m 100 35.7% 35.0% 34.0% 34.0% 33.6% 0 1H 06 1H 07 1H 08 1H 09 1H 10 Controllable costs Cost to income ratio Controllable costs to AUM 38
Slide 40: CWM – platform and asset manager split
CWM – platform and asset manager split For personal use only 51% of AUM sit on AMP’s platform and are managed by AMPCI 32% of AUM sit on AMP’s platform and are managed by external fund managers 3% of AUM sit on AMP’s platform and are invested with AMP Banking 86% of assets under management sit on AM
Slide 41: CWM – platform and asset manager split
CWM – platform and asset manager split For personal use only 3% AMP Banking 14% Asgard and other 25% platforms AMPCI Retail managed super, 6% AMPCI pension managed 70% and FLI AMP 17% Multi- platform manager (FLS + 56% (FDF)1 External FLI) 11% fund 11% External manager AFS fund contemporary manager
Slide 42: Capital efficiency of AMP businesses
Capital efficiency of AMP businesses For personal use only Business Capital 30 June 2010 Comment requirements tangible capital CWM Low A$746m Capital requirements increase as unit-linked superannuation and retirement products increase AMP Bank (part of CWM) Medium A$279m Capital requirements linked
Slide 43: Mature capital requirements
Mature capital requirements For personal use only Market cycle Capital requirements Comment Level of tactical equity protection Bull market Low Strength of policyholder assets Low backing guarantees in liabilities results in a surplus of policyholder assets providing capital support Very little shar
Slide 44: AMP Capital Investors
For personal use only AMP Capital Investors 43
Slide 45: AMP Capital Investors is a leading specialist investment manager
AMP Capital Investors is a leading specialist investment manager For personal use only AMP Capital Investors is a significant diversified investment manager in the Asia Pacific region with A$95bn* in assets under management Specialist investment manager focused on Asia Pacific equities, credit,
Slide 46: External v internal average AUM and management fees
External v internal average AUM and AUM- based management fees (bps) For personal use only 44.6 100 43.3 43.1 42.3 24.3 24.5 23.8 80 22.9 Average AUM A$b 59.7 60 58.7 57.9 53.9 92% 90% other other 90% 91% other other 40 38.4 35.5 35.8 56% 34.8 Other = other 57% 56% equities, fixed 53% other other in
Slide 47: AMPCI – non AUM-based management fee income
AMPCI – non AUM-based management fee income For personal use only 60 A$m 40 A$35m A$29m A$27m 20 0 1H 08 1H 09 1H 10 Non-AUM based income includes property asset management, property development and property leasing fees and bond lending fees 1H 10 non-AUM based management fee income is lower th
Slide 48: AMPCI – controllable costs and cost to income ratio
AMPCI – controllable costs and cost to income ratio reflect ongoing growth investments For personal use only 71.5% at 30 Sept 2010 170 67.7% 65.3% 160 Medium-term cost 55.2% to income ratio target 150 51.4% 53.6% Controllable costs A$m 140 130 138 136 120 124 123 110 100 104 90 80 70 1H 06 1H 07 1H
Slide 49: AMPCI – performance against benchmarks
AMPCI – performance against benchmarks For personal use only 70% of AUM met or exceeded benchmark over five years 45% over three years 64% over one year AMPCI-managed1 Multi-manager and Multi-asset Group 100 100 100 90 91 89 85 80 77 75 Target 75% 65 60 62 57 49 45 43 43 29 31 6 9 8 0 % 2 Australasi
Slide 50: AMPCI – diversified asset base
AMPCI – diversified asset base For personal use only Direct investment 1% Alternative assets 1% Infrastructure 6% Australian equities 22% Property 17% International equities 18% Fixed interest 35% Based on assets under management at 30 June 2010. 49
Slide 51: AMPCI – AUM by source
AMPCI – AUM by source For personal use only Rest of the world 1% AUM sourced from Asia up from 5% in Asia 7% 1H 09 to 7% in 1H 10 New Zealand 10% Australia 82% Based on assets under management at 30 June 2010. 50
Slide 52: AMPCI market share by asset class
AMPCI market share by asset class For personal use only 12% #2 #3 8% Rank # 2 #4 6.5% - total AUM market share #7 # 11 4% 0% Total AMPCI Property Australian Australian International International fixed interest equities equities fixed interest Source: Rainmaker Roundup – Sep 2009. 51