Slide 1: ASX Announcement: Full Year Financial Results
ASX Announcement For personal use only 13 February 2020 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 AMP Limited (ASX/NZX:
Slide 2: 2019 full year results and strategy update
13 February 2020 2019 full year results For personal use only and strategy update Francesco De Ferrari, Chief Executive Officer James Georgeson, Chief Financial Officer 1
Slide 3: FY 19 – a year of fundamental reset
FY 19 – a year of fundamental reset For personal use only Key challenges Full year results impacted by substantial impairment (predominantly non-cash) taken in 1H 19 to address legacy issues and position AMP for the future Increasing regulatory and compliance costs, significant legislative and regul
Slide 4: Supporting clients, the community and our colleagues
Supporting clients, the community and our colleagues For personal use only Clients Community Colleagues Improved client outcomes; fee reductions to A$100 million donated by AMP Foundation since Around 50% of AMP employees took part in approximately 585,000 existing clients2 inception Employee Volunt
Slide 5: Agenda
For personal use only Agenda Section one FY 19 results Section two Progress on Reinventing AMP Section three Outlook Section four Appendix 4
Slide 6: Section one: FY Results
For personal use only Section one FY 19 Results 5
Slide 7: FY profit summary
FY 19 profit summary For personal use only A$m FY 191 FY 18 % Australian wealth management 182 363 (49.9) AMP Bank 141 148 (4.7) 2 AMP Capital 198 167 18.6 New Zealand wealth management 44 53 (17.0) Retained businesses operating earnings 565 731 (22.7) 3 AMP Life operating earnings (21) (3) n/a Busi
Slide 8: FY business unit highlights
FY 19 business unit highlights For personal use only Real assets drive record profit AMP Capital – 19% increase in earnings driven by growth in AUM and strong real assets performance Op. earnings: A$198m – Average AUM increase driven by investment of real asset committed capital and positive externa
Slide 9: Controllable costs
Controllable costs A$m First steps in saving to reinvest in For personal use only Structural increase in cost of doing business transformation and growth 122 1,035 (27) (19) 28 1,017 Benefit from capitalised 913 FY 18 project cost write-off in 1H 19 FY 19 cost out achieved Project costs and transfor
Slide 10: Items reported below underlying profit
Items reported below underlying profit For personal use only A$m FY 19 FY 18 Client remediation and related costs (153) (469) Royal Commission - (32) Portfolio Review - (29) Separation costs (183) (19) Risk management, governance and controls (33) (8) Transformation (28) - Other items 22 (74) Impair
Slide 11: Client remediation – program on track to complete in 2021
Client remediation – program on track to complete in 2021 For personal use only Program A$m Pre-tax Closing provision balance at 1H 19 672 expected to be Less payments made during 2H 191 (190) 80% complete Additional provision primarily for inactive advisers 150 by end FY 20 Additional lost earnings
Slide 12: Summary of FY impairments
Summary of FY 19 impairments For personal use only FY 19 2H 19 A$m Post-tax Post-tax Goodwill − Australian wealth management 1,509 - − AMP Life 459 - Prior capitalised project costs 211 - Advice related assets 228 55 Total impairment recognised 2,407 55 Approximate capital impact 190 51 – Predominan
Slide 13: Capital adequacy, funding and liquidity
Capital adequacy, funding and liquidity For personal use only A$m FY 19 FY 18 Shareholder equity 4,910 6,683 Less: intangibles and other regulatory adjustments (1,078) (3,606) Level 3 eligible capital 3,832 3,077 Minimum Regulatory Requirements (MRR) 1,353 1,426 Level 3 eligible capital above MRR 2,
Slide 14: Proforma capital position – AMP Life agreement
Proforma capital position – AMP Life agreement For personal use only AMP Life Sale 31 Dec 2019 Proforma A$m 31 Dec 2019 reported capital impacts (adjusted for AMP Life sale) Level 3 eligible capital 3,832 (550) 3,282 Less: Minimum regulatory capital requirements (MRR) 1,353 (600) 753 Level 3 eligibl
Slide 15: Section two: Progress on Reinventing AMP
For personal use only Section two Progress on Reinventing AMP 14
Slide 16: Focused, higher growth and higher return AMP
Focused, higher growth and higher return AMP Future portfolio For personal use only AMP Life1 AWM AMP Bank AMP Capital NZ WM – Structural challenges of – Traditional advice licensee – Unique opportunity for bank – Shift to passive and – Competitive advantage operating in life insurance model require
Slide 17: Reinventing AMP – strategic priorities
Reinventing AMP – strategic priorities For personal use only 1 Divest AMP Life Simplify portfolio 2 Divest New Zealand 3 Reinvent advice Reinvent wealth 4 Build best-in-class super business management in Australia 5 Grow successful platform business 6 Maintain growth momentum in bank Continue to gro
Slide 18: Simplify portfolio
For personal use only Simplify portfolio 17
Slide 19: Divestment of AMP Life and New Zealand
Divestment of AMP Life and New Zealand Strategic objectives Progress in 2H 19 2020 focus For personal use only Sale of AMP Life – On track for completion – Complete by 30 June 2020, simplifying portfolio – AMP Life operating as standalone business – AMP anticipates that any capital in excess of targ
Slide 20: Reinvent wealth management in Australia
Reinvent wealth For personal use only management in Australia 19
Slide 21: Reinvent advice
Reinvent advice Strategic objectives Progress in 2H 19 2020 focus For personal use only Reshape aligned – Reset commercial terms to more appropriate market based – Continue to reshape network, retaining professional, productive network multiples and compliant advisers – Mitigation of BOLR risk, with
Slide 22: Build best-in-class retail super business
Build best-in-class retail super business Strategic objectives Progress in 2H 19 2020 focus For personal use only Simplify – Simplification program underway in parallel with completion of – Complete phase one of product and platform simplification products and AMP Life transaction Simpler governance
Slide 23: Grow successful platform business
Grow successful platform business Strategic objectives Progress in 2H 19 2020 focus For personal use only Accelerate – Maintained North growth momentum; North AUM up 26% to – Maintain strong growth trajectory with: growth of North A$47.6b – Continued investment in platform features and capability pl
Slide 24: Maintain growth momentum in bank
Maintain growth momentum in bank Strategic objectives Progress in 2H 19 2020 focus For personal use only Scale through – Bank platform modernisation on track – Bank platform modernisation to complete by FY 20, improving re-platforming, – Deposit portfolio automation and automatic credit efficiency,
Slide 25: Continue to grow successful asset management franchise
Continue to grow For personal use only successful asset management franchise 24
Slide 26: Growing AMP Capital through differentiated capabilities
Growing AMP Capital through differentiated capabilities Strategic objectives Progress in 2H 19 2020 focus For personal use only Accelerate – Significant growth in infrastructure and real estate – Continue momentum in market leading real assets capabilities growth in real – A$3.9b of real assets capi
Slide 27: Growing through differentiated capabilities in real assets
Growing through differentiated capabilities in real assets Diverse and expanding investor base Infrastructure Real estate For personal use only 56 new direct international institutional investors Significant growth in infrastructure strategies; Well placed to maintain prominent position in introduce
Slide 28: Growing through differentiated capabilities in public markets
Growing through differentiated capabilities in public markets For personal use only Global Listed Infrastructure – AMP Capital Global Infrastructure Securities Fund (hedged) ranked #1 by Mercer and Morningstar for 1 year performance; Total AUM A$2.6b delivered 37.8% in 2019 against benchmark return
Slide 29: Create a simpler, leaner business
Create a simpler, For personal use only leaner business 28
Slide 30: Create a simpler, leaner operating model
Create a simpler, leaner operating model Strategic objectives Progress in 2H 19 2020 focus For personal use only Establish end to – AMP Life and New Zealand wealth management established – Simplify operating model to better align operations with legal end businesses as end-to-end businesses entities
Slide 31: Strengthen risk management and transform culture
Strengthen risk management and transform culture Strategic objectives Progress in 2H 19 2020 focus For personal use only Strengthen risk – Risk management embedded in performance management – On track to complete A$100m (pre-tax) investment to further management, framework strengthen risk management
Slide 32: Reinventing AMP: 2020 objectives
Reinventing AMP: 2020 objectives Towards a client-led, simpler, growth-oriented business For personal use only 1 Complete sale of AMP Life by 30 June 2020 Simplify portfolio 2 Update on New Zealand wealth management divestment process at or before 1H 20 results Reinvent advice 3 Continued focus on r
Slide 33: Section three: Outlook
For personal use only Section three Outlook 32
Slide 34: Investing to build the new AMP
Investing to build the new AMP Business units Investment spend For personal use only AWM AMP Bank AMP Capital FY20 2H 19-FY 22 Notes – Digitally enabled propositions – Bank core system and – Operating platform A$150-200m A$350-450m – Included in – Advice network reshape operations capacity investmen
Slide 35: FY 20 controllable cost outlook
FY 20 controllable cost outlook A$m For personal use only 1,017 ~50 ~810 (170) (90) FY 19 Removal of Additional CPI, rebase variable FY 20 cost controllable AMP Life controllable cost remuneration and guidance costs (ex AMPC) savings to be reinvestment in strategy (ex AMPC) delivered in FY 20 Sectio
Slide 36: FY 20 outlook
FY 20 outlook For personal use only Business units Controllable costs FY 20 controllable costs (ex AMP Capital) expected to be approximately A$810m Adjusting for the sale of AMP Life, FY 20 underlying profit expected to be reflecting: removal of AMP Life (A$170m), cost reductions (~A$90m), partly br
Slide 37: Creating a higher growth and higher return AMP
Creating a higher growth and higher return AMP Simplify portfolio For personal use only Reinvent wealth management in Australia and maintain growth momentum in AMP Bank Continue to grow successful asset management franchise Create a simpler, leaner business FY 19 3-5 year outlook NZ AMP Life AMP Cap
Slide 38: Section four: Appendix
For personal use only Section four Appendix Capital position Business unit overview; results, key metrics and growth 37
Slide 39: Capital position
Capital position A$m 771 For personal use only (113) 389 2,479 464 (190) (96) (397) 1,651 FY 18 Underlying profit Dividend Equity raised Net business Advice related Below the Other capital FY 19 paid (net of usage impairments line costs movements DRP) – As at 31 December 2019, Level 3 eligible capit
Slide 40: AMP Australia: Australian wealth management
AMP Australia: Australian wealth management For personal use only Key performance measures FY 19 FY 18 % FY Investment-related revenue (A$m)1 1,070 1,213 (11.8) Prioritising client Other revenue (A$m) 25 96 (74.0) outcomes in Controllable costs (A$m) (517) (462) (11.9) challenging Operating earnings
Slide 41: AMP Australia: Australian wealth management
AMP Australia: Australian wealth management Continued growth in flagship North platform, AUM and key products resilient For personal use only More conservative allocation bias to match clients’ Continued growth in AMP’s flagship risk profile and retirement needs North platform 22.9% CAGR AWM AUM (A$
Slide 42: AMP Australia: clientHUB
AMP Australia: clientHUB For personal use only A holistic, comprehensive, practice management solution Onscreen Launched in Q4 19, clientHUB provides an end-to-end advice training XTOOLS & XTOOLS+ experience for practices, advisers and clients on one platform, with Financial roll-out to AMP’s networ
Slide 43: AMP Australia: AMP Bank
AMP Australia: AMP Bank For personal use only Key performance measures FY 19 FY 18 % FY Operating earnings (A$m) 141 148 (4.7) Mortgage Controllable costs (A$m) (114) (95) (20.0) and deposit Residential mortgage book (A$m) 20,207 19,460 3.8 growth underpins Deposits (A$m) 14,414 13,304 8.3 resilient
Slide 44: AMP Australia: AMP Bank
AMP Australia: AMP Bank A well capitalised bank delivering an attractive return on capital For personal use only AMP Bank has consistently delivered higher returns AMP Bank remains well capitalised compared to on capital than its peer group peers and regulatory requirements Regional Peers Avg. 1 12%
Slide 45: AMP Australia: AMP Bank
AMP Australia: AMP Bank A low cost bank with below industry arrears and favourable geographic exposure For personal use only AMP Bank has a leading cost to income ratio versus peer group AMP Bank mortgage arrears remain lower than Cost to Income (FY19) industry on 30+ day and 90+ day metrics AMP mor
Slide 46: AMP Capital
AMP Capital For personal use only Key performance measures FY 19 FY 18 % FY Performance and transaction fees (A$m) 84 69 21.7 Real assets Fee income (A$m) 800 708 13.0 drive record Controllable costs (A$m) (527) (453) (16.3) profit Operating earnings (A$m)1 198 167 18.6 Average AUM (A$b)2 198 190 4.
Slide 47: AMP Capital: external clients
AMP Capital: external clients Growth driven by external AUM and higher margin real assets business For personal use only External AUM driven by Real Estate, Infrastructure External AUM continues to grow, and Fixed Income now 38% of total AUM External AUM Composition (FY19) 9.8% CAGR 90 77.4 Real Est
Slide 48: AMP Capital - Infrastructure Equity
AMP Capital - Infrastructure Equity For personal use only Overview GIF platform Significant growth over the last five years underpinned by strong track record Raised US$3.4b for GIF II, exceeding target and drawing significant co- and investor support for Global Infrastructure Fund (GIF) series inve
Slide 49: AMP Capital - Infrastructure Debt
AMP Capital - Infrastructure Debt For personal use only Overview IDF platform Maintained position as market-leading provider of infrastructure mezzanine Raised US$6.2b from investors for AMP Capital's fourth infrastructure debt debt solutions strategy – the largest of its type in the world − Total i
Slide 50: AMP Capital - Real Estate
AMP Capital - Real Estate For personal use only Overview Development pipeline and capability Real Estate growth driven by strong development pipeline, investor support Well placed to maintain prominent position in Australian core real estate for the core real estate business in Australia and 24.9% s
Slide 51: New Zealand wealth management
New Zealand wealth management For personal use only Key performance measures FY 19 FY 18 % FY Controllable costs (A$m) (34) (33) (3.0) Strong Operating earnings (A$m) 44 53 (17.0) underlying Operating earnings (restated) (A$m)1 44 41 7.3 performance Average AUM (A$b)2 12.0 11.1 7.4 in competitive To
Slide 52: AMP Life
AMP Life1 For personal use only Impact of Key performance measures FY 19 FY 18 % FY Profit margins (A$m) 222 269 (17.5) PYS ongoing Experience and capitalised losses and (243) (272) 10.7 as structural other one-off items (A$m) Operating earnings (A$m)2 (21) (3) n/a industry Operating earnings restat
Slide 53: Important notice
Important notice 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 materi
Slide 54: Thank you
For personal use only Thank you 53