Slide 1: ASX Announcement March 2006
ASX Announcement 27 March 2006 Manager ; Manager Company Announcements Office Market Information Services Section Australian Stock Exchange New Zealand Stock Exchange Level 4, 20 Bridge Stree Level 9, ASB Tower, 2 Hunter Street Sydney NSW 2000 Wellington New Zealand Announcement No: 14/06 Presentati
Slide 2: AMP — Investor discussion pack
AMP — Investor discussion pack Andrew Mohl Chief Executive Officer PaulLeaming = Chief Financial Officer March / April 2006
Slide 3: Outline
Outline # 2005 full year financial results > Group > AMP Financial Services (AFS) > AMP Capital Investors (AMPCI) > Cobalt / Gordian >» Value metrics and value sensitivities # Capital management « Market and company dynamics * Strategic overview and outlook
Slide 4: 2005 full year results summary
2005 full year results summary « Strong growth in earnings >» Underlying contribution up 24% to A$801m « Encouraging results in all key performance indicators Underlying return on equity up from 21.2% to 25.0% AFS value of new business up 11%; AFS embedded value up 28%, before transfers Operating ma
Slide 5: Growth in double digits
Growth in double digits AUM «= Group AUM up 16% to A$104b «= AMPCI AUM up 13% to A$91b « AFS AUM up 16% to A$67b Net cashflows # AFS net cashflows up A$1.1b to A$2.3b «= AMPCI net cashflows (A$0.4b) — A$2.2b net external cashflows offset by internal net outflows Risk premiums # (Individual risk annu
Slide 6: Group cost ratio down to 40.6%
Group cost ratio down to 40.6% 3,500 3,131 80 3,000 + 10 2,595 2,500 60 2,000 F | 50 Ara 45.1% 45.5% » y 40 1,560 40.6% 30 1,000 843 833 805 20 500 4 40 A$Sm 0 woo i 0% FY 01% FY 024 FY 03* FY 06 Controllable costs suo Cost to income ratio * AMP group including previously owned HHG entities * Demerg
Slide 7: Group underlying contribution up 24%
Group underlying contribution up 24% 46 (3) 801 ot A 645 L AG$500m FY 04 AFS AFS mature AFS NZ AMPCH Cobalt / Transitional Lower interest Underlying FY 05 underlying contemporary = margins margins margins Gordian tax relief expense on — investment underlying contribution margins margins and other* G
Slide 8: Robust growth in open book is being achieved
Robust growth in open book is being achieved while maintaining mature book profit streams 500 4 400 4 300 4 200 4 100 5 A$m 064 Open business operating margins Closed business operating margins {AFS contemporary, NZ and AMP Capital) {AFS mature, Cobalt/Gordian) —B FY 02 FY 63 FY 04 FY 05 All numbers
Slide 9: Group underlying return on equity up to 25%
Group underlying return on equity up to 25% 30 4 % 9 . 7" . . FY 01° FY 02° FY 03* FY 04 FY 05 * AMP group including previously owned HHG entities * Demerged AMP
Slide 10: Good progress on goal to double the value of an investment in AMP
Good progress on 5 year goal to double the value of an investment in AMP by mid 2010 16% change in six months over opening value 17 13.5 = 11.6 0.2 Portree aes “VERS Ee Ce awedaaae aa A$b Opening value - June 05 Dividend - 2H 05 Change in median Value at Dec 05 using median analysts‘ valuation analy
Slide 11: AMP Financial Services
ee
Slide 12: AMP Financial Services (AFS) — summary
AMP Financial Services (AFS) — summary # Further improvement in all Business Unit KPIs >» Operating margins » Costs and cost ratio » Cashflows and persistency >» Value of New Business (VNB) and Embedded Value (EV) >» Return on Business Unit Equity (RoBUE) # Business transformation continues apace >»
Slide 13: AFS — operating margins up 24%
AFS — operating margins up 24% 17 (12) 13 515 415 : seeee eis s A$256m FY 04 Growth in Market Repricing Persistency Mortality / Lower Expected Other FY 05 operating business movements morbidity controtiabie mature operating margins volumes and costs run-off margins AUM
Slide 14: AFS — volumes and profit margins growing
AFS — volumes and profit margins growing 70 120 60.9 60 100 50 80 40 60 30 4 40 20 40 20 ASb 04 0% FY 01 FY 03 FY 04 FY 05 Average AUM in period (excl capital) “*" Operating margin after tax - basis points Ali numbers restated to exclude transitional tax relief. FY 03 and FY 02 numbers are on a pre-
Slide 15: AFS — costs falling for five years
AFS — costs falling for five years 700 664 70 600 - 60 500 + +50 400 40 300 % a 30 200 20 100 7 10 A$m 0 0% FY 01 FY 02 FY 03 FY 04 FY 05 Controllable costs tes Cost to income ratio AFS cost numbers restated for ali previous periods to include AMP Banking and exclude transitional tax relief. FY 03,
Slide 16: AFS — net retail cashflows vs. major competitors
AFS — net retail cashflows vs. major competitors Total retail managed funds (exci CMTs) quarterly net cashflows ($m) of six largest participants by FUM — distributor view 4,092 252 252 290 216 238 (168) AMP Group AXA Australia BT/Westpac Commonwealth/ ING Australia National Australia Group Group Col
Slide 17: AFS — ranking first in net retail annual cashflows
AFS — ranking first in net retail annual cashflows since 3Q 04 AMP net cashflows AMP rolling 12 month net retail cashflows (excl CMTs), AMP ranking % Of industry ASm and AMP net cashflows as % of industry total ~ distributor view ofa 3,500 7 r 16% 3,000 4 r 14% L Cy 2.500 12% r 10% 2,000 + 1 8% 1,50
Slide 18: Australian contemporary — diversified, high growth, high return business
Australian contemporary — diversified, high growth, high return business Contemporary Change H 2005 | 2004 Operating margins A$294m A$203m + 45% Controllable costs’ A$405m H A$427m - 5% Cost to income ratio 44.8% 54.8% ~ 10 percentage points Net cashflows A$3,626m A$2,624m + 38% Risk annual premium
Slide 19: Australian mature — slowly declining, large scale, outstanding return business
Australian mature — slowly declining, large scale, outstanding return business Mature Change i 2005 2004 Operating margins AS17im A$172m -0.6% Controllable costs AS66m i ASB9M ~ 4% Controllable costs/AUM! 0.36% H 0.36% Net cashflows {A$1,279m) (A$1,393m) + 8% Persistency? 87.3% 86.7% + 0.6 percentag
Slide 20: New Zealand — risk insurance driven, high return business
New Zealand — risk insurance driven, high return business New Zealand Change 2005 | 2004 Operating margins A$s0m | A$40m + 25% t Controllable costs A$S7m A$60m - 5% Cost to income ratio 41.4% | 45.8% - 4.4 percentage points H Net cashflows {A$44m) | {A$S5m) + 20% Risk annual premium income A$84m A$7
Slide 21: AMP Capital Investors
AMP Capital Investors ee
Slide 22: AMP Capital Investors (AMPCI) — summary
AMP Capital Investors (AMPCI) — summary « Operating margins up 26% to A$92m « Cost ratio down 5.5 percentage points on FY 04 to 57.8% » 79% of Australian assets under management (AUM) meeting or exceeding benchmarks in year to 31 December » External net cashflows steady at A$2.2b «» AUM up 13% on FY
Slide 23: AMPCI — operating margins up 26%
AMPCI —- operating margins up 26% 10 (1) (1) 92 , AER oo eee ee a ee a one cee na 14 73 Agm FY 04 operating Higher internal Higher external Lower Higher operating FY 05 operating margins management fees managementfees performance & costs margins transaction fees
Slide 24: AMPCI — volumes and profit margins growing
AMPCI — volumes and profit margins growing 90 15 80 70 12 60 9 50 4 40 6 30 4 20 3 10 A$b 0 o Basis points FY 04 FY 02* FY 03*4 FY 04“ FY 05 Average AUM in period === Operating margins after tax - basis points "FY 01, FY 02 and FY 03 exclude Listed Property Trusts AUM and profit margins as these bus
Slide 25: AMPCI — investment performance again strong
AMPCI — investment performance again strong Australian AUM 99% 100% 91% 87% 86% | 79% Target — 75% I 4 5 iC Listed assets Private capital Property Future Directions Funds HB Dec-05 % indicates assets under management meeting or exceeding benchmarks Dec-04 79% 86% Total
Slide 26: AMPCI — Balanced Growth fund ranks highly
AMPCI — Balanced Growth fund ranks highly AMP Capital Balanced Growth Rates of Comparison with the Mercer Pooled Fund Survey - Balanced Funds Universe retum (%) Performance after tax and after fees for periods ended December 2005 17 & | 9t—S OA ee 060eE00 9 oo oe 5 4 4 Year (%) 3 Years (%) & Years (
Slide 27: AMPCI — AUM up 13% to A$91b
AMPCI — AUM up 13% to A$91b Opening AUM A$80.3b' Australian external market flows 1.7 Japan / Asia distribution channel 0.7 Australian contemporary internal flows 1.7 Australian mature internal flows (2.2) AMP group (1.7) NZ external market flows (0.2) NZ internal market flows (0.3) Investment retur
Slide 28: Cobalt/Gordian
Cobalt/Gordian ee
Slide 29: Cobalt/Gordian — operating margins up 45%
Cobalt/Gordian — operating margins up 45% 103 74 58 51 | , ASm . - 7 : - FY 01 FY 02 FY 03 FY 04 FY 05
Slide 30: Cobalt/Gordian — surplus capital continues to build
Cobalt/Gordian — surplus capital continues to build ASm t . T FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 @ Minimum capital requirement Surplus capital
Slide 31: Value metrics
Value metrics ee
Slide 32: AFS traditional embedded value (EV) up 28%
AFS traditional embedded value (EV) up 28% Traditional EV@ 3% risk discount margin Return on embedded value 28% 25% 65 6,740 (785) 114 217 §,955 \$4,500m FY 04 EV Expected FY O05new Investment& Expense Persistency Product Other FYOSEV Nettransfer FY 05 EV restated* return business bond yields assump
Slide 33: AFS market consistent EV by line of business
AFS market consistent EV by line of business FY 05 FY 05 FY 04 Aon No agency costs RoEV! RoEV! AFS 6,207 28% 24% Contemporary 4,027 31% 28% Mature 1,561 24% 18% NZ 619 20% 31% ' Return on embedded vatue (RoEV) is the percentage change before net transfers of capital.
Slide 34: AFS traditional value of new business (VNB) up 11%
AFS traditional value of new business (VNB) up 11% Traditional VNB@ 3% risk discount margin Growth rates 11% 19% 1 6 12 = wen enenewuedl 286 A$240m FY 04 VNB Volume & mix Expense Persistency & Product changes FY 05 VNB restated* assumptions claim assumptions * Restated due to a change in expense all
Slide 35: AFS market consistent VNB by line of business
AFS market consistent VNB by line of business FY 05 FY 04 os change No agency costs No agency costs Asm AFS 371 326 14% Contemporary 296 258 15% Mature 34 35 (3%) NZ 41 33 24%
Slide 36: Value sensitivities
Value sensitivities ee
Slide 37: Conservative underlying assumptions
Conservative underlying assumptions Value metrics are an important tool to assist investors in analysing company performance but it is important to understand that: » EV and VNB valuations are the outcomes of actuarial modeling based on a complex set of assumptions » They are not management projecti
Slide 38: EV as a multiple of operating margins is relatively low for AMP
EV as a multiple of operating margins is relatively low for AMP 20 17.4 = a Mm 13.4 11.9 11.9 9.9 = Qo 5 = Multiple of opening EV to operating margins ai i see AMP FY 04 AMP FY 05 AXA FY 05 NAB / MLC FY 05 Tower FY 05 Source: investor reports of each company Methodology: Multiple of opening EV to op
Slide 39: EV and VNB sensitivities using alternative assumptions — preliminary analysis
EV and VNB sensitivities using alternative assumptions — preliminary analysis Key assumptions Dec 05 EV at 3% dm FY 05 VNB at 3% dm Corporate Super* ~ 2.5% pa over 10 years Baseline Existing methodology for EV and VNB A$5,955m A$317m Baseline plus EV and VNB also include future Scenario A for recurr
Slide 40: Capital management
ee
Slide 41: Group shareholder capital resources
Group shareholder capital resources Notional allocation at 31 December 2005 31 December 2004 nn 1.0000 NN ee TTT Ut hud I ni i) Asm hi aN) ee Oi AMP Financial Services 668 1,551 450 2,001 509 1,603 450 2,053 AMP Life 540 1,393 450 4,843 382 1,448 450 1,898 AMP Banking 128 158 - 158 127 155 - 165 AMP
Slide 42: Group office capital A$1.95b at end 2005
Group office capital A$1.95b at end 2005 2,140 (265) 940 [ A$me - . ane Group office AMP Income Capital Dividends Transfers Movements Group office Group office capital at Securities return paid less from BUs in Cobalt/ netearnings capital at 41 Jan 05 repayment dividends Gordian loan 31 Dec 05 reinv
Slide 43: AMP Financial Services — profit and capital releases
AMP Financial Services — profit and capital releases AFS AFS underlying Investment Additional Cash transfer operating investment income market transfers®”) from AFS (°°) margins") income!) adjustment('?) 2000 322 258 243 176 999 2004 311 234 (94) (271) 180 2002 272 224 (258) 736 971 2003 368 169 42
Slide 44: Continued improvement in credit rating metrics
Continued improvement in credit rating metrics 14.0 31 Dec 2005 12.0 30 June 2005 10.0 8.0 31 Dec 2003 314 Dec 2004 6.0 30 June 2004 Underlying interest cover 4.0 30 June 2003 2.0 0.0 60% 50% 40% 30% 20% 10% 0% S&P gearing __ S&P indicative A range
Slide 45: Risk capital requirements substantially lower
Risk capital requirements’ substantially lower 20 4 18.4 18 4 16 4 14 9 12.6 412 4 10 4 yu a oo i A$b 0 As at 30/6/2002 As at 30/6/2003 As at 30/6/2005 a Australia UK 1 Risk capital is the amount of shareholder capital AMP's internal risk assessment determines is required, at a target confidence lev
Slide 46: Capital management — initiatives and next steps
Capital management — initiatives and next steps Capital return of A$750m >» Proposal to May 18 AGM >» Subject to shareholder approval, payment of A$0.40 a share in June > Subject to ATO ruling that capital return is a reduction in shareholder cost base and not a taxable dividend (ruling in progress)
Slide 47: Market and company dynamics
Market and company dynamics ee
Slide 48: Major market dynamics driving growth of Australian pension market
Major market dynamics driving growth of Australian pension market # Compulsory superannuation framework > Contribution rate currently mandated at 9%, with coverage extending to 90% of Australian workforce* * Ageing population” >» Almost half of Australians will be older than 50 by 2051 >» Working-ag
Slide 49: Australia pension market to triple in years
Australia pension market to triple in 10 years Projected pension assets under management in private sector 2015 market Net increase 2004 share to 2015 Australia 527.5 1,908.7 51.0 1,381.1 Japan 761.1 896.6 23.9 135.5 South Korea 31.4 275.0 7.3 243.6 India 4.9 162.2 43 157.3 China 8.2 134.7 3.6 126.4
Slide 50: AMP operates across the value chain
AMP operates across the value chain Distribution - dealer groups Distribution - planners Products & platforms Investment management AMP and AMP Financial AMP Financial AMP Capital aligned planners Services - Advice Services - Product Investors Based Distribution Manufacturing AMP’s positioning is st
Slide 51: AMP captures margin across the value chain
AMP captures margin across the value chain Pricing Typical industry range for retail super Net cashflow Investment Platform margin Dealer cut mot margins AMP platform with AMPCI investment Aen we i... ...__ew”razws@zw.ésN AMPCI investment Non-AMP platform Third party products cr Advice only Co
Slide 52: Medium term growth opportunities
Medium term growth opportunities «= Australian retirement savings industry set to grow by over 10% pa in next decade* = AMP holds market-leading AUM positions in fastest growing segments of the market — significant opportunities at point of delinking >» Superannuation » Retirement incomes » AMP has
Slide 53: Superannuation to grow strongly through key distribution channels
Superannuation to grow strongly through key distribution channels of planners and employer sponsored master trusts Market growth - contemporary super * Market share oT CAGR 2004-2014 41,600,000 - June 2004 June 2014 illi A$1.5 trillion 4,400,000 A$550 billion 17% gy 4,200,000 0 9 11% 4,000,000 f ye
Slide 54: Comparative advantage of AMP in planner distribution
Comparative advantage of AMP in planner distribution — scale, quality, age and tenure Number of Australian financial planners June 2005 1,552 1,346 1,022 954 0 T ¥ : NAB cBA* WBC BaNumber of Certified Financial Planners Source: Money Management, June 2005 ANZ/ING* AXA AMP Average of competitors surv
Slide 55: 'Downstream' value of AMP corporate super
‘Downstream’ value of AMP corporate super Pers i ILI _ Beneficia
Slide 56: Strategic overview and outlook
Strategic overview and outlook ee
Slide 57: Strategic focus centred on core business
Strategic focus centred on core business « Focus on “running the business better than it’s ever been run before” to drive shareholder value is working >» Capturing scale benefits from volume and market growth » Reducing costs to drive efficiency and provide additional business opportunities >» Drivi
Slide 58: Medium term outlook
Medium term outlook = Strategic focus on operational excellence unchanged = Medium term goal to double the value of an investment in AMP implies 15% average growth pa (inc dividends and capital returns + increases in enterprise value’) « Sound basis in place for strong value creation for shareholder
Slide 59: Appendices
Appendices ee
Slide 60: Performance of ASX200 equity indices
Performance of ASX200 equity indices 180 4 1704 * Resource - a o = 100 1404 index: 31 Dec 2004 Industrials Dec-04 Feb-05 Apr-05 Jun-05 Aug-05 Oct-05 Dec-05 Feb-06
Slide 61: Australian shares trading in line with global shares
Australian shares trading in line with global shares 30 9 Forward PE Lag World Australi Source: Thomson Financial, AMP Capital Investors