Slide 1: ASX announcement: Full Year Financial Results
For personal use only 20 February 2014 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: 05/2014 AMP Limited (
Slide 2: 2013 full year results
amps 2018 full year results 20 February 2014 Craig Meller Chief Executive Officer Colin Storrie Chief Financial Officer
Slide 3: Executive summary
Executive summary For personal use only – FY 13 net profit of A$672m (FY 12: A$689m) and underlying profit of A$849m (FY 12: A$950m) Strong underlying earnings growth in wealth management, Bank, mature and NZ businesses Stable earnings from AMP Capital, with good traction in strategy execution,
Slide 4: Group overview
For personal use only Group overview Section 2
Slide 5: Group overview – key performance measures
Group overview – key performance measures For personal use only FY 13 FY 12 Underlying profit (A$m) 849 950¹ Cost to income ratio 49.4% 47.3%¹ Growth measures AFS net cashflows (A$m) 1,319 3082 Total retail on AMP platforms (A$m) 2,470 7392 Total Australian wealth management (A$m) 2,166 821 AMP Capi
Slide 6: Group overview – FY profit summary
Group overview – FY 13 profit summary A$m FY 13 FY 12 For personal use only Australian wealth management 330 285¹ AMP Bank 83 62 Australian wealth protection 64 190 Australian mature 178 167 New Zealand 97 73 AMP Capital 99 99 BU operating earnings 851 876 Group office costs (62) (66)² Total operati
Slide 7: Group overview – major drivers of underlying profit
Group overview – major drivers of underlying profit For personal use only 4 24 11 (20) 21 45 (38) A$m 950 (80) 870 (68) 849 Wealth Protection FY12 Underlying FY12 profit Australian AMP Australian New Group Australian Australian Australian FY13 underlying investment rebased Wealth Bank Mature Zealand
Slide 8: Business lines
For personal use only Business lines Section 3
Slide 9: Wealth management – overview
Wealth management – overview For personal use only Key performance measures FY 13 FY 12 Earnings growth Operating earnings excluding Bank (A$m) 330 285 driven by strong Controllable costs (A$m) (510) (509) business from new and existing Investment-related revenue to AUM (bps) 121 125 customers, as O
Slide 10: Wealth management – cashflows and adviser network
Wealth management – cashflows and adviser network For personal use only Net cashflows Net cashflows summary (A$m) FY 13 FY 12 on retail AMP AMP Flexible Super 1,958 2,338 platforms more North 4,125 2,188 than tripled to Other products and platforms¹ (3,613) (3,787) A$2.5b Total retail on AMP platfor
Slide 11: AMP Bank - overview
AMP Bank - overview For personal use only Key performance measures FY 13 FY 12 Operating earnings (A$m) 83 62 Controllable costs (A$m) (50) (47) Cost to income ratio 29.6% 34.9% Net interest margin 1.39% 1.23% Residential mortgage book (A$b) 12.8 12.0 Deposits (A$b) 8.7 8.6 Return on invested capita
Slide 12: Wealth protection - overview
Wealth protection - overview Key performance measures For personal use only (A$m) FY 13 2H 13 1H 13 FY 12 2H 12 1H 12 FY 13 operating Profit margins 199 102 97 219 110 109 earnings hit by Capitalised (losses)/reversals (48) (48) - 20 - 20 increased levels Experience profits/(losses) (87) (54) (33) (
Slide 13: Wealth protection profit improvement program
Wealth protection profit improvement program Progress and outcomes since FY 13 implementation For personal use only Pricing and claims Claims Lapses management most Increased claims Repriced IP Improving claims Increased Tactical customer Reviewed immediate levers; Immediate team sizes to business t
Slide 14: Wealth protection – next steps
Wealth protection – next steps − Actions and tools to drive improved profit in wealth protection will include: For personal use only new processes, frameworks and systems for implementation from 2014 new data analytics tools and technology, to better monitor and manage claims and lapses, includi
Slide 15: Mature and New Zealand
Mature New Zealand For personal use only Key performance measures FY 13 FY 12 Key performance measures FY 13 FY 12 Operating earnings (A$m) 178 167 Profit margins (A$m)¹ 98 81 Assets under management Experience profits/(losses) (A$m) (1) (8) 22.5 23.0 (A$b) Operating earnings (A$m)² 97 73 Persistenc
Slide 16: AMP Capital – overview
AMP Capital – overview For personal use only Key performance measures FY 13 FY 12 Operating earnings after minority interests (A$m) 99 99 Operating earnings incl minority interests¹ (A$m) 117 114 Fee income (A$m) 473 462 Performance and transaction fees (A$m) 33 49 Controllable costs (A$m) (318) (32
Slide 17: AMP Capital – cashflows and investment performance
AMP Capital – cashflows and investment performance For personal use only External AUM and Cashflows cashflows (A$m) FY 13 AUM 2H 13 1H 13 Australian equities 4,602 97 361 International equities 7,393 (71) (987) Fixed interest 10,458 148 (1,255) Infrastructure 4,704 768 215 Direct investments 19 (2)
Slide 18: Financial overview
For personal use only Financial overview Section 4
Slide 19: Financial overview – key points on P&L
Financial overview – key points on P&L For personal use only A$m FY 13 FY 12¹ Underlying profit 849 950 Other items (2) 21 AXA integration costs (57) (128) Business efficiency program (39) - Amortisation of AXA acquired intangible assets (91) (99) Profit before market adjustments and accounting 660
Slide 20: Financial overview – maintaining cost control
Financial overview – maintaining cost control 1,370 For personal use only 1,350 1,330 A$m 1,310 10 1,336 7 1,290 6 3 (59) 1,301 1,270 (2) 1,250 FY 12 Integration Business ACB Cavendish Stronger NZ Underlying cost FY 13 controllable synergies efficiency exchange rate growth controllable costs (pre ta
Slide 21: Financial overview – balance sheet and regulatory capital
Financial overview – balance sheet and regulatory capital A$m FY 13 FY 12 Change For personal use only Maintained low Shareholder equity 8,154 7,744 410 corporate Total corporate subordinated debt¹ 1,274 879 395 gearing and increased Total corporate senior debt 700 700 - regulatory Total capital res
Slide 22: Financial overview – final 2013 dividend
Financial overview – final 2013 dividend For personal use only Final 2013 dividend of 11.5 cents per share, franked to 70%, representing a full year payout ratio of 80% of underlying profits – AMP Limited target dividend payout ratio of 70% to 80% of underlying profit – In determining the final 2013
Slide 23: Delivering AMP's promise
For personal use only Delivering AMP’s promise Section 5
Slide 24: Charting a path to stronger growth
Charting a path to stronger growth For personal use only Growth strategy framed by four key decisions: Build on current 1. Prioritise investment in A$2.2t1 Australian wealth management market strengths, – Build on leading market positions to capture growth as industry doubles in size2 to 2022 re-ori
Slide 25: Why pursuing a customer-led strategy creates value
Why pursuing a customer-led strategy creates value For personal use only Transformation lever Links to value creation Provide multi channel access and services, • Improved accessibility will enable solutions for unmet needs; Customers including digital platforms holding 5 or more products/services p
Slide 26: Reduce costs to maintain market leading efficiency and reinvest
Reduce costs to maintain market leading efficiency and reinvest in better customer solutions For personal use only Ahead of plan to Indicative costs and benefits profile (pre tax) achieve A$200m 200 200 run rate savings 175 150 177 150 3 39 by end 2016 125 1 102 100 2 60 75 33 138 50 17 A$m 37 25 18
Slide 27: Reduce costs to maintain market leading efficiency and reinvest
Reduce costs to maintain market leading efficiency and reinvest in better customer solutions For personal use only Planning and – FY 13 business efficiency program delivered: foundations set in 2013; focus on detailed design of future organisation execution in 2014 phase one of multi-asset fund
Slide 28: Invest selectively in offshore growth
Invest selectively in offshore growth For personal use only Build partnerships with national champions in core Asian markets Gaining traction Strong distribution partnerships in China and Japan built on Australian business model experience with strategy to – A$2.2bn raised for inaugural mutual fund
Slide 29: Summary
Summary For personal use only – Growth momentum in wealth management, bank and New Zealand, improving investment performance and tight cost control delivering strong underlying earnings growth in these business lines – Actively addressing challenges in life insurance, with some encouraging early sig
Slide 30: Appendix
For personal use only Appendix Section 6
Slide 31: Guidance
Guidance – Controllable costs FY 14 Group-wide controllable costs expected to rise by around 1.5% from FY 13 For personal use only ‒ Underlying controllable costs expected to remain flat in 2014, as benefits of business efficiency program offset CPI and wage cost growth. Any outperformance in busi
Slide 32: Advice overview – strong and growing adviser force
Advice overview – strong and growing adviser force Change For personal use only Dec 12 to Dec 13 Jun 13 Dec 12 Dec 13 AMP Financial Planning 1,706 1,662 1,616 90 Hillross 367 359 337 30 Horizons Practice and 142 122 120 22 Academy SMSF Advice 57 16 17 40 AMP Direct 30 38 40 (10) Charter Financial Pl
Slide 33: Financial overview: impact of AMP Notes
Financial overview: impact of AMP Notes 2 Impacts For personal use only FY 13 AMP AMP Loan to life Transition FY 13 A$m (prior to AMP Notes 2 Notes companies arrangements Notes 2) issued reinvested1 Total capital resources 9,833 325 (30) - - 10,128 Intangibles (3,857) - - - - (3,857) Tangible capita
Slide 34: Financial overview – sources and use of capital since 1H 11
Financial overview – sources and use of capital since 1H 11 For personal use only A$5.2b A$5.2b Other 0.1 0.2 Capitalised costs1 AMP Notes 2 0.3 0.3 Integration and business efficiency costs2 MUTB strategic alliance 0.4 0.7 Growth in regulatory requirements3 Dividend reinvestment plan 0.6 1.9 Divide
Slide 35: Regulatory update
Regulatory update MySuper – Launched MySuper offers to meet the different retirement needs of our customers For personal use only – More than half a million AMP superannuation customers have a MySuper investment option from 1 January 2014 FOFA (Future of Financial Advice) – Series of legislated refo
Slide 36: Australian wealth management historical information
Australian wealth management historical information A$m FY 13 2H 13 1H 13 FY 12 2H 12 1H 12 FY 111 2H 11 1H 111 For personal use only Profit and loss Revenue Investment related 1,127 581 546 1,026 524 502 956 504 452 Other 106 55 51 101 57 44 104 55 49 Total revenue 1,233 636 597 1,127 581 546 1,060
Slide 37: AMP Bank historical information
AMP Bank historical information For personal use only A$m FY 13 2H 13 1H 13 FY 12 2H 12 1H 12 FY 11 2H 11 1H 11 Profit and loss Net interest income 209 108 101 175 92 83 168 85 83 Fee and other income 10 6 4 10 5 5 10 5 5 Total revenue 219 114 105 185 97 88 178 90 88 Bank variable costs (51) (25) (2
Slide 38: 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