Slide 1: 2017 half year results
amp 2017 half year results Craig Meller, Chief Executive Officer Gordon Lefevre, Chief Financial Officer 10 August 2017
Slide 2: AMP – Australia's leading wealth manager
AMP – Australia’s leading wealth manager Notes 1. Fund Market Overview Retail – Marketer, Strategic Insight (Plan For Life), March 2017. 2. Planner Numbers, Money Management Top 100 Dealer Groups, October 2016. 3. Insurance claims paid to customers in Australia in 1H 17. 2 Section 1, AMP 2017 half y
Slide 3: Executive summary
Executive summary Financial performance – 1H 17 underlying profit of A$533m (1H 16: A$513m) and net profit of A$445m (1H 16: A$523m) – Strong earnings momentum in AMP Capital and AMP Bank – Resilient Australian wealth management performance with growth in revenue from Advice and SMSF to accelerate f
Slide 4: 1H 17 profit summary
1H 17 profit summary A$m 1H 17 1H 16 % Australian wealth management 193 195 (1.0) AMP Capital¹ 92 83 10.8 AMP Bank 65 59 10.2 Australian wealth protection 52 47 10.6 New Zealand financial services 65 62 4.8 Australian mature 75 69 8.7 BU operating earnings 542 515 5.2 Group Office costs (33) (30) (1
Slide 5: 1H 17 movement in underlying profit
1H 17 movement in underlying profit Strong 1H 17 A$m operating performance 3 6 5 7 6 (3) 9 (11) (2) 533 513 1H 16 Australian AMP Capital AMP Bank Australian New Zealand Australian Group office Underlying Interest 1H 17 underlying wealth operating operating wealth operating mature costs investment ex
Slide 6: Business unit results
Business unit results Section 2
Slide 7: Wealth management – overview
Wealth management – overview Solid performance Key performance measures 1H 17 1H 16 in final MySuper Investment related revenue (A$m) 1 630 613 transition period Other revenue (A$m) 51 52 Operating earnings (A$m) 193 195 Controllable costs (A$m) (246) (245) Total retail and corporate super net cashf
Slide 8: Wealth management – net cashflows
Wealth management – net cashflows Flows driven by Net cashflows summary (A$m) 1H 17 1H 16 discretionary contributions North¹ 2,879 2,664 and corporate AMP Flexible Super¹ (129) 220 super mandate wins Other products and platforms¹ (1,535) (1,913) Total retail on AMP platforms 1,215 971 SignatureSuper
Slide 9: AMP Capital – overview
AMP Capital – overview Continued Key performance measures 1H 17 1H 16 momentum driven by growth Operating earnings (A$m)1 92 83 in real assets Fee income (A$m) 348 322 Controllable costs (A$m) (198) (192) Cost to income ratio 56.6% 57.9% Total external net cashflows (A$m) 2,439 (153) Average AUM (A$
Slide 10: AMP Capital – net cashflows and investment performance
AMP Capital – net cashflows and investment performance Strong turnaround External net cashflows (A$m) 1H 17 1H 16 Net cashflows (A$m) 1H 17 1H 16 in external flows; momentum in real China (CLAMP)¹ 737 (298) Internal (1,413) (2,458) assets continues Japan 113 (111) International 405 734 External 2,43
Slide 11: AMP Bank – overview
AMP Bank – overview Strong growth in Key performance measures 1H 17 1H 16 1H 17; maintaining conservative lending Operating profit (A$m) 65 59 approach Controllable costs (A$m) (38) (34) Cost to income ratio 29.0% 28.5% Net interest margin 1.67% 1.71% Residential mortgage book (A$m) 18,194 15,439 De
Slide 12: Wealth protection – overview
Wealth protection – overview Delivering on Key performance measures 1H 17 1H 16 strategy – strategic Profit margins (A$m) 49 90 reinsurance program reduces Capitalised (losses) / reversals (A$m) 3 (1) earnings volatility Experience profits / (losses) (A$m) 0 (42) Operating earnings (A$m) 52 47 Indiv
Slide 13: New Zealand and Mature – key performance measures
New Zealand and Mature – key performance measures Solid NZ New Zealand 1H 17 1H 16 Mature 1H 17 1H 16 performance highlights success Profit margins (A$m) 57 57 Operating earnings (A$m) 75 69 of ongoing manage Experience profits / (losses) (A$m) 8 5 AUM (A$b) 21.1 21.5 for value strategy Operating ea
Slide 14: Financial overview
Financial overview 5 ection 3
Slide 15: Financial overview – key items outside business unit results
Financial overview – key items outside business unit results A$m 1H 17 1H 16 % Change Underlying profit 533 513 3.9 Other items (9) (6) (50.0) Business efficiency program costs 0 (12) n/a Amortisation of acquired intangible assets¹ (43) (39) (10.3) Profit before market adjustments and accounting mis
Slide 16: New reinsurance arrangements – deal structure
New reinsurance arrangements – deal structure Delivers capital Existing Munich Re arrangement on the AMP Life Australian retail book increased from 50% to 60% quota release from AMP share Life and assists New open-ended 60% quota share arrangement with Gen Re1 on the NMLA Australian retail book
Slide 17: Financial overview – balance sheet and regulatory capital
Financial overview – balance sheet and regulatory capital A$m 1H 17 FY 16 Change Shareholder equity1 7,296 7,489 (193) Total corporate subordinated debt1 951 951 0 Total corporate senior debt1 668 611 57 Total capital resources 8,915 9,051 (136) Level 3 eligible capital 3,358 3,603 (272) Level 3 eli
Slide 18: Financial overview – interim 2017 dividend
Financial overview – interim 2017 dividend Interim 2017 dividend of 14.5 cents a share, 4% up year-on-year Dividend within 70%-90% payout range Franked to 90% Dividend Reinvestment Plan (DRP) remains in place for eligible shareholders No discount will apply to the DRP allocation price. AMP i
Slide 19: Financial overview – flat cost profile, improving cost to income
Financial overview – flat cost profile, improving cost to income A$m 8 473 471 (6) 1H16 controllable costs, (ex AMP Capital) Business efficiencies (net of CPI growth) Increased investment in growth 1H17 controllable costs, (ex AMP Capital) Cost discipline maintained in 1H 17 Medium-term strategic co
Slide 20: Strategy update
Strategy update oection 4
Slide 21: AMP strategy
AMP strategy 21 Section 4, AMP 2017 half year results
Slide 22: Growth ambitions
Growth ambitions AMP group – 15% RoE in FY 18 – 3% cost reduction in FY 17 (ex AMP Capital) – Flat costs (ex AMP Capital) in FY 18 Wealth Management – Targeting 5% revenue growth through the cycle including new growth contribution from Advice and SMSF AMP Capital – Double-digit earnings growth over
Slide 23: Delivering on strategy
Delivering on strategy Tilt investment to higher growth, less capital – Comprehensive program of reinsurance delivering significant capital release; retail book will be intensive businesses effectively 65% reinsured for claims incurred from 1 November 2017 – Remain open-minded on best ways to emerge
Slide 24: Driving revenue growth in wealth management – Advice and SMSF
Driving revenue growth in wealth management – Advice and SMSF Wealth management - Targeting 5% revenue growth through the cycle from 2018 in normal markets Other revenue1 growth - Other revenue to grow by 10% in 2017 as Advice and SMSF strategies deliver additional revenue growth - Advice and SMSF b
Slide 25: Summary
Summary Business performance - Improved operating results across business - Strong growth momentum continues in AMP Capital and AMP Bank - Resilient Australian wealth management performance with effective management of margin compression - Stabilised wealth protection business performing in line wit
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Slide 27: Guidance summary
Guidance summary Costs Mature – On track for FY 17 controllable cost outcome of A$950m (ex AMP Capital) – Expected to run off at around 6% per annum; in volatile investment markets – Controllable costs for FY 18 (ex AMP Capital) not to exceed A$950m this run-off rate can vary substantially – AMP Cap
Slide 28: AMP's advice network
AMP’s advice network Mortgage Total AUM AUM per As at June 2017 Target market Advisers consultants1 ($bn) adviser ($m) AMP Advice Goals-based 227 20 9 42 AMP Financial Planning2 1,465 431 64 43 Core licensee Charter Financial Planning 760 39 22 29 offer Hillross 319 22 14 44 Total (core licensees) -
Slide 29: Leverage strengths to drive new growth
Leverage strengths to drive new growth Global Partnerships China Life AMP Asset Management (CLAMP)¹ AUM grew 22% to RMB 141b (A$27.1b) in 1H17 Launched 9 new products in 1H 17 including separately managed accounts, equity and fixed income funds Fastest growing new funds management company in C
Slide 30: Regulatory environment
Regulatory environment Proposed regulatory reform AMP position Objectives of superannuation − AMP believes that the purpose of superannuation is to lift as many Australians as possible off the safety - Draft legislation before Parliament welfare net of the age pension − We do not agree that it is to
Slide 31: 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