Slide 1: Half Year Financial Results announcement cover letter
For personal use only 18 August 2016 Manager Client and Market Services Team ASX Market Announcements NZX Limited Australian Securities Exchange Level 1, NZX Centre, 11 Cable Street Level 4, 20 Bridge Street PO Box 2959 Sydney NSW 2000 Wellington, New Zealand Announcement No: 20/2016 AMP Limited (AS
Slide 2: 2016 half year results
For personal use only = : 2OI6 halt year results Craig Meller, Chief Executive Officer Gordon Lefevre, Chief Financial Officer 18 August 2016
Slide 3: Executive summary
Executive summary For personal use only Financial performance – 1H 16 net profit of A$523m (1H 15: A$507m) and underlying profit of A$513m (1H 15: A$570m) – Wealth management business resilient despite market volatility and regulatory uncertainty in 1H 16 – Continued earnings momentum in AMP Capital
Slide 4: 1H profit summary
1H 16 profit summary For personal use only A$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) Gr
Slide 5: 1H movement in underlying profit
1H 16 movement in underlying profit For personal use only Underlying profit impacted by wealth protection experience 4 Section 1, AMP 2016 half year results
Slide 6: Business unit results
Business unit results Section 2
Slide 7: Wealth management – overview
Wealth management – overview For personal use only 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$m) 1,225 1,926 Total net cashflow
Slide 8: Wealth management – net cashflows
Wealth management – net cashflows For personal use only Subdued Net cashflows summary (A$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
Slide 9: AMP Capital – overview
AMP Capital – overview For personal use only 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$m) (192) (173) Cost to income ratio 57.9% 58.7% Total ext
Slide 10: AMP Capital – net cashflows and investment performance
AMP Capital – net cashflows and investment performance For personal use only Strong cashflows External net cashflows (A$m) 1H 16 1H 15 Net cashflows (A$m) 1H 16 1H 15 to higher margin asset classes China (CLAMP)¹ (298) 682 Internal (2,458) (1,885) against Japan (111) 387 challenging listed market co
Slide 11: Wealth protection – overview
Wealth protection – overview For personal use only Key performance measures 1H 16 2H 15 1H 15 2H 14 1H 14 Performance impacted by poor Profit margins (A$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 Inc
Slide 12: Wealth protection – improvement plan update
Wealth protection – improvement plan update For personal use only 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.
Slide 13: AMP Bank – overview
AMP Bank – overview For personal use only 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
Slide 14: New Zealand and Mature – key performance measures
New Zealand and Mature – key performance measures For personal use only 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 c
Slide 15: Financial overview
Financial overview Section 3
Slide 16: Financial overview – key points on P&L
Financial overview – key points on P&L For personal use only A$m 1H 16 1H 15 % Change Underlying profit 513 570 (10.0) Other items (6) (2) Business efficiency program costs (12) (33) Amortisation of acquired intangible assets¹ (39) (42) Profit before market adjustments and accounting 456 493 (7.5) m
Slide 17: Financial overview – balance sheet and regulatory capital
Financial overview – balance sheet and regulatory capital For personal use only Strong balance A$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
Slide 18: Financial overview – interim 2016 dividend
Financial overview – interim 2016 dividend For personal use only 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 a
Slide 19: Financial overview – maintaining cost control
Financial overview – maintaining cost control For personal use only Benefits from A$m 1 13 business efficiency program allow continued investment in 8 future growth 663 657 3 6 641 (25) 1H15 controllable Business efficiency AMP Capital cost AMP Bank cost 1H16 controllable AMP Capital SuperConcepts c
Slide 20: Financial overview – business efficiency program
Financial overview – business efficiency program For personal use only A$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
Slide 21: Strategy update
Strategy update Section 4
Slide 22: Clear strategy to deliver long-term growth
Clear strategy to deliver long-term growth For personal use only 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 expect
Slide 23: Leverage AMP strengths and market-leading positions
Leverage AMP strengths and market-leading positions For personal use only 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 launc
Slide 24: Transform our business to centre on the customer
Transform our business to centre on the customer For personal use only 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 enga
Slide 25: Maintain market-leading efficiency
Maintain market-leading efficiency For personal use only 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 •
Slide 26: Invest selectively in international growth
Invest selectively in international growth For personal use only 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
Slide 27: Summary
Summary For personal use only 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 effic
Slide 28: For personal use only
B O = OU O, O, KX Section 5
Slide 29: Guidance summary
Guidance summary For personal use only 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 imp
Slide 30: Regulatory environment
Regulatory environment For personal use only 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 membe
Slide 31: Important disclaimer
Important disclaimer For personal use only 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 ma