Amp Limited · ASX:AMP

Amp — Non-Deal Roadshow (October 2007)

64 slides from Amp's roadshow presentation, Oct 29, 2007

1. Slide 1: Asian Investor Roadshow ASX Announcement

   ASX Announcement For personal use only 29 October 2007 Manager Manager Company Announcements Office Market Information Services Section Australian Stock Exchange New Zealand Stock Exchange Level 4, 20 Bridge Street Level 2, NZX Centre, 11 Cable Street Sydney NSW 2000 Wellington New Zealand Announcem

2. Slide 2: AMP – Investor discussion pack

   For personal use only AMP – Investor discussion pack Craig Meller Managing Director, AMP Financial Services Stephen Dunne Managing Director, AMP Capital Investors Jill Craig Director, Investor Relations October 2007

3. Slide 3: Outline

   Outline For personal use only ƒ Market dynamics ƒ AMP market position ƒ AMP business model ƒ Group performance overview ƒ Group performance – first half 2007 ƒ Business line performance – first half 2007 ƒ Capital management ƒ Summary 2

4. Slide 4: Market dynamics

   For personal use only Market dynamics

5. Slide 5: Australian private pension market predicted to triple

   Australian private pension market predicted to triple by 2015 For personal use only ƒ Australian private pension market set to reach around US$2 trillion by 2015 ƒ Superannuation is the flagship product of the Australian financial services system US$1,908.7b ƒ Well entrenched system, in place for ov

6. Slide 6: Legislative changes highly supportive of superannuation

   Legislative changes highly supportive of superannuation For personal use only ƒ Successive governments have shaped superannuation as the preferred retirement savings vehicle. ƒ Major reforms during the past two years have cemented this positioning: ¾ 2005: removal of surcharge levy (incentive for hi

7. Slide 7: Robust growth outlook for key market sectors

   Robust growth outlook for key market sectors For personal use only Retirement savings projections to 2016 800 Post retirement - CAGR: 18.2% 700 Retail - CAGR: 9.4% 600 SMSF - CAGR: 9.5% 500 Industry funds - CAGR: 12.3% $billion 400 300 200 100 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 P

8. Slide 8: AMP market position

   For personal use only AMP market position

9. Slide 9: AMP has leading positions in key super channels

   AMP has leading positions in 2 of 3 key super channels: employers, planners and accountants For personal use only Superannuation market by channel Accountants / solicitors / stockbrokers / other 23% Financial planners 46% Employers 31% Source: AMP analysis and estimates based on Plan for Life Retail

10. Slide 10: AMP has built a strong position in employer channel

    AMP has built a strong position in employer channel – highest growth, market leadership For personal use only AMP fastest growing employer super provider 5.0 Employer sponsored products by assets under management Net cashflow growth ($b) Dec 2002 to Dec 2006 4.5 AMP (total) 4.0 3.5 Mercer AMP Signat

11. Slide 11: AMP's aligned planner model has scale and is highly productive

    AMP’s aligned planner model has scale and is highly productive For personal use only 1,600 1,400 PIS AMP Financial 1,200 Planning Planner numbers 1,000 Count 800 Commonwealth FP 600 Millennium 3 Westpac FP NAB FP 400 Genesys ABN Amro Morgans MLC FP / Garvan FP Hillross 200 Bridges RetireInvest Lonsd

12. Slide 12: AMP business model

    For personal use only AMP business model

13. Slide 13: AMP today – a simple, scaleable model in a high growth industry

    AMP today – a simple, scaleable model in a high growth industry focused on operational excellence For personal use only ƒ Australasian wealth management group ƒ Integrated business model ƒ High growth industry ƒ Highly scaleable business ƒ Low cost manufacturing platform ƒ Reducing capital intensity

14. Slide 14: Key drivers and enablers of AMP business model

    Key drivers and enablers of AMP business model For personal use only Six drivers Products & Cost Asset Brand Distribution Packaging Platforms Efficiency Management Pre-eminent Large, scaleable Largest planner Cost to income Broadly based Rapidly growing brand in contemporary force in Australia / rat

15. Slide 15: Model generates margins across the industry value chain

    Model generates margins across the industry value chain For personal use only Products & Distribution – Products & Platforms Asset Dealer groups / planners platforms management Pricing - typical industry range for balanced 75 – 115 bps 40 – 95 bps 20 – 40 bps growth fund AMP retail platform with AMP

16. Slide 16: Comparative advantage of AMP in planner distribution

    Comparative advantage of AMP in planner distribution – scale, quality and tenure For personal use only Number of Australian financial planners June 2007 1800 1600 Compared to industry 1501* 1400 1316 1315 medians, AMP’s 1200 1123 planner groups have: 1000 842 ƒ lower planner 800 turnover 600 540 400

17. Slide 17: AMP's cultural profile is increasingly constructive

    AMP’s cultural profile is increasingly constructive, more so than industry average For personal use only Financial services industry comparison Base profile = AMP 2006 Source: Human Synergistics International Overlay = Finance industry Copyright © 2005. All rights reserved 16

18. Slide 18: Group performance overview

    For personal use only Group performance overview

19. Slide 19: Earnings from contemporary businesses almost tripled in four years

    Earnings from contemporary businesses have almost tripled in past four years For personal use only 306 253 209 156 103 173 116 107 104 107 A$m 1H 03* 1H 04 1H 05 1H 06 1H 07 Cobalt/Gordian and AFS Mature AMP Capital Investors, AFS Contemporary (businesses in run-off) Wealth Management, AFS Contempor

20. Slide 20: Operating earnings over five times underlying investment income

    Operating earnings now over five times underlying investment income For personal use only 460 342 297 245 234 124 94 101 99 90 A$m 1H 03 1H 04 1H 05 1H 06 1H 07 Total operating earnings Underlying investment income 19

21. Slide 21: Underlying EPS trend before and after capital returns

    Underlying EPS trend before and after impact of $2.25b of capital returns* For personal use only (*AMP conducted a $750m return of capital in June 2005, $750m in June 2006 and $750m in June 2007) 70 61.2 59.5 60 54.3 55.0 50.6 50 47.7 43.9 43.9 43.0 43.9 Cents per share 40 34.8 34.8 30 20 10 0 2003

22. Slide 22: Growing AUM coupled with increasing capital efficiency

    Growing AUM coupled with increasing capital efficiency For personal use only 14 140 130 12 11.5 120 110 10 96 100 83 78 8 80 6 60 4.6 4.1 3.8 4 3.2 40 2 20 A$b 0 A$b 0 1H 03* 1H 04 1H 05 1H 06 1H 07 1H 03 1H 04 1H 05 1H 06 1H 07 Total capital resources AUM *1H 03 total capital resources not restated

23. Slide 23: Strong AUM growth coupled with strong cost discipline

    Strong AUM growth coupled with strong cost discipline For personal use only 450 439 140 130 412 397 399 400 392 120 110 350 96 100 300 83 78 250 80 200 60 150 40 100 50 20 A$m 0 A$b 0 1H 03* 1H 04 1H 05 1H 06 1H 07 1H 03 1H 04 1H 05 1H 06 1H 07 Controllable costs AUM *1H03 not restated for AIFRS 22

24. Slide 24: Evergreen goal to deliver 15% pa growth in value

    Evergreen goal to deliver 15% pa growth in value over each five year cycle For personal use only ƒ Cornerstone assumptions underpinning goal: ¾ Equity markets growing at 6% pa plus dividends ¾ AUM growth > 10% pa ¾ Revenue margin contraction in CWM of 2-3% pa ¾ Group costs growth around cost of livi

25. Slide 25: Group performance – first half 2007

    For personal use only Group performance – first half 2007

26. Slide 26: Focused strategy is driving shareholder value

    Focused strategy is driving shareholder value For personal use only ƒ Strategic focus is “to run the business better than it’s ever been run before” ƒ Key performance measures tracking well ¾ Underlying return on equity up from 26.6% to 38.7% ¾ Operating earnings up 35% to A$460m ¾ Cost ratio down f

27. Slide 27: Focused strategy is driving shareholder value (continued)

    Focused strategy is driving shareholder value For personal use only ƒ Powerful platform for growth ¾ Record retail net cashflows – up 62% to A$2.1b ¾ Group assets under management up 18% to A$130b ¾ Revenue growth easily outstripping costs driving operating leverage • AFS Contemporary Wealth Managem

28. Slide 28: Group cost ratios

    Group cost ratios For personal use only 439 412 397 399 392 50 46.5% 120 43.9% 45 41.9% 40.1% 100 40 101bps 101bps 36.5% 35 84bps 80 30 77bps 70bps 25 60 20 40 15 10 20 5 A$m % 0 0 bps 1H 03 1H 04 1H 05 1H 06 1H 07 1H 03 1H 04 1H 05 1H 06 1H 07 Controllable costs Cost to income ratio Cost to AUM rat

29. Slide 29: Group assets under management

    Group assets under management For personal use only 130 110 96 83 78 A$b 1H 03 1H 04 1H 05 1H 06 1H 07 28

30. Slide 30: Underlying return on equity

    Underlying return on equity For personal use only 50 48.4% 40 38.7% 30 21.0% 26.6% 20 22.9% 10 6.9% % 0 1H 03* 1H 04 1H 05 1H 06 1H 07 1H 07 assuming capital return on 1 Jan 07 * Pre-demerger Underlying return on equity 29

31. Slide 31: Growth in shareholder value

    Growth in shareholder value For personal use only Value of an investment* in AMP has grown 85% from June 2005 to June 2007 (81% in TSR terms based on actual share price) 25 23.2 2.4 21.4 0.7 20 17.9 0.4 16.2 15 13.5 A$b 11.6 10 5 0 Opening Opening Opening Opening Dividends Capital Valuation Closing

32. Slide 32: Business line performance – first half 2007

    For personal use only Business line performance – first half 2007

33. Slide 33: AMP's earnings by business lines

    AMP’s earnings by business lines For personal use only AFS Contemporary Wealth AMP Capital Investors AFS Mature operating earnings Management operating 145 operating earnings earnings 116 89 92 95 89 88 83 78 62 55 42 34 35 25 A$m A$m A$m 1H 03* 1H 04* 1H 05 1H 06 1H 07 1H 03 1H 04 1H 05 1H 06 1H 07

34. Slide 34: AFS Australian contemporary wealth management

    AFS Australian contemporary wealth management For personal use only Contemporary Change wealth management 1H 07 1H 06 Operating earnings A$145m A$116m + 25% Controllable costs A$178m A$175m + 2% Cost to income ratio 43.8% 48.5% - 4.7 percentage points Retail net cashflows A$2,100m A$1,294m + 62% Cor

35. Slide 35: AFS contemporary wealth management – significant operational leverage

    AFS contemporary wealth management – significant operational leverage For personal use only 400 383 360 341 350 325 299 300 250 200 185 184 178 172 175 150 100 50 A$m 0 1H 05 2H 05 1H 06 2H 06 1H 07 Revenue less variable costs Controllable costs 34

36. Slide 36: AFS Australian contemporary wealth protection

    For personal use only AFS Australian contemporary wealth protection Contemporary Change wealth protection 1H 07 1H 06 Profit margins A$57m A$49m + 16% Experience profits A$2m A$10m - 80% Operating earnings A$59m A$59m steady Operating earnings / API1 20.9% 22.6% - 1.7 percentage points Controllable

37. Slide 37: AFS Australian contemporary wealth protection

    For personal use only AFS Australian contemporary wealth protection ƒ 1H 07 earnings impacted by: ¾ fall in experience profits due to less favourable claims experience ¾ lower API growth due to price reduction coupled with lower than expected sales as planners focused on superannuation opportunities

38. Slide 38: AFS Australian mature

    For personal use only AFS Australian mature Mature Change 1H 07 1H 06 Operating earnings A$95m A$92m + 3% Controllable costs A$33m A$30m + 10% Controllable costs/AUM1 35bps 32bps + 3bps Net cashflows (A$615m) (A$564m) - 9% Persistency 87.6% 87.7% - 0.1 percentage point AUM (pre capital) A$18.9b A$18

39. Slide 39: AFS New Zealand

    For personal use only AFS New Zealand New Zealand Change 1H 07 1H 06 Profit margins A$26m A$22m + 18% Experience profits (A$2m) A$1m - Operating earnings A$24m A$23m + 4% Controllable costs A$29m A$31m - 6% Cost to income ratio 42.5% 44.4% - 1.9 percentage points Individual risk annual premium incom

40. Slide 40: AFS cost efficiency

    AFS cost efficiency For personal use only 282 45 42.1% 140 41.8% 274 267 274 38.6% 262 40 36.1% 120 34.3% 35 116bps 100 30 104bps 25 89bps 80 78bps 20 69bps 60 15 40 10 20 5 A$m % 0 0 bps 1H 03 1H 04 1H 05 1H 06 1H 07 1H 03 1H 04 1H 05 1H 06 1H 07 Controllable costs Cost to income ratio Cost to AUM

41. Slide 41: AFS 1H cashflows

    AFS 1H 07 cashflows For personal use only ƒ Total retail net cashflows up 62% to A$2.1b ¾ Retail superannuation and annuities/pensions net cashflows up 75% to A$1.63b ¾ External platforms net cashflows up 44% to A$0.55b ƒ Total corporate super net cashflows down 57% to A$0.9b ¾ Net cashflows in corp

42. Slide 42: AFS net cashflows by major channel on rolling 12 month basis

    For personal use only 300 800 0 1,300 1,800 2,300 (200) 500 1,000 1,500 2,000 2,500 3,000 3,500 Q4 02 Q4 02 (A$m) Q1 03 Q1 03 Q2 03 Q2 03 Q3 03 Q3 03 Q4 03 Q4 03 Q1 04 Q1 04 Q2 04 Q2 04 Q3 04 Q3 04 Q4 04 Q4 04 Q1 05 Q1 05 Q2 05 Hillross Q2 05 Q3 05 Q3 05 12 month basis Q4 05 Q4 05 Excludes cashflows

43. Slide 43: AFS net cashflows by wealth management product line

    AFS net cashflows by wealth management product line on rolling 12 month basis For personal use only (A$m) 1 2 Corporate Super AMP-manufactured retail products Corporate Super Direct incl SignatureSuper mandate wins 2,500 3,500 Corporate Super Direct excl SignatureSuper mandate wins 2,000 3,000 1,500

44. Slide 44: Super contribution pattern in first half 2007

    Super contribution pattern in first half 2007 consistent with AMP market positioning For personal use only 1,200 FLS, Corporate Super*, external platforms 1,000 Total super contributions – 800 600 400 200 A$m 0 $0 - $1000 $1000 - $100K $100K - $250K $250K - $450K $450K - $1M $1M+ Super contribution

45. Slide 45: Strong growth in allocated pensions / annuities net cashflows

    Strong growth in allocated pensions / annuities net cashflows For personal use only 450 400 350 300 250 200 150 100 50 A$m 0 (50) 1H04 2H04 1H05 2H05 1H06 2H06 1H07 44

46. Slide 46: AMP Capital Investors (AMPCI)

    AMP Capital Investors (AMPCI) For personal use only AMPCI Change 1H 07 1H 06 Operating earnings A$78m A$55m + 42% Internal management fees A$91m A$80m +14% External management fees A$93m A$67m +39% Total performance & A$48m A$34m +41% transaction fees Controllable costs A$124m A$104m + 19% Cost to i

47. Slide 47: AMPCI – volumes and profit margins

    AMPCI – volumes and profit margins For personal use only 120 20 109.1 18 100 94.5 16 81.3 14 80 70 70.4 13.9bps 12 11.6bps 60 10 10.3bps 9.9bps 9.7bps 8 40 6 4 20 2 A$b 0 0 Basis points pa 1H 03 1H 04 1H 05 1H 06 1H 07 Average AUM in period Operating earnings after tax – basis points pa before net s

48. Slide 48: AMPCI – out performance against benchmarks

    For personal use only AMPCI – out performance against benchmarks Weighted AUM % at or above benchmark June-07 Dec-06 99% 95% 96% 93% 86% 83% 78% 76% 76% Target 74% 71% 75% 64% Listed assets Infrastructure Private equity Property Future Directions Total funds AUM at June 07 A$72.9b A$3.8b A$1.1b A$17

49. Slide 49: AMPCI – out performance in diversified funds

    For personal use only AMPCI – out performance in diversified funds AMP Capital Balanced Growth Fund AMP Capital Conservative Fund Return Ranking Return Ranking Year 1 17.5% 1 Year 1 10.6% 1 Year 3 16.9% 1 Year 3 10.3% 1 Year 5 12.7% 1 Year 5 8.7% 1 Source: Mercer Pooled Fund Survey of institutional

50. Slide 50: Cobalt/Gordian – operating earnings

    Cobalt/Gordian – operating earnings For personal use only 74 67 58 51 53 31 52 78 32 27 19 21 15 A$m FY 03 FY 04 FY 05 FY 06 1H 07 1H 2H 49

51. Slide 51: Cobalt/Gordian – capital position

    For personal use only Cobalt/Gordian – capital position 237 125 511 615 349 492 484 585 423 499 309 255 224 159 137 A$m FY 03 FY 04 FY 05 FY 06 1H 07 Minimum capital requirement Surplus capital held in licensed insurers } Loans to Group office * Excludes capital held in non-licensed entities and cap

52. Slide 52: Capital management

    For personal use only Capital management

53. Slide 53: AMP Financial Services – profit and capital releases

    AMP Financial Services – profit and capital releases For personal use only AFS AFS underlying Investment Additional Cash transfer A$m operating investment income market transfers(3,4) from AFS (5) earnings(1) income(1,2) adjustment(1,2) 2000 322 258 243 176 999 2001 311 234 (94) (271) 180 2002 272 2

54. Slide 54: Financial strength metrics

    Financial strength metrics For personal use only 20 30 June 2007 18 16 Underlying interest cover 30 June 2006 31 Dec 2006 14 31 Dec 2005 12 30 June 2005 10 8 31 Dec 2003 31 Dec 2004 6 30 June 2004 4 30 June 2003 2 0 60% 50% 40% 30% 20% 10% 0% S&P gearing S&P indicative A range Notes: • AMP’s A credi

55. Slide 55: Capital management

    Capital management For personal use only ƒ Capital management strategy since 2004 has driven: ¾ Significant increase in dividends per share ¾ A$2,250m in capital returns to shareholders ¾ A$500m reduction in group debt ƒ Capital management strategy going forward: ¾ AMP’s surplus regulatory capital p

56. Slide 56: Dividends and capital returns since first half 2003

    For personal use only Dividends and capital returns since first half 2003 40 40 40 22 19 13 14 Cents 7 per share 1H 03 1H 04 1H 05 1H 06 1H 07 15% franked 75% franked 75% franked 85% franked 85% franked Interim dividend Capital return 55

57. Slide 57: Summary

    For personal use only Summary

58. Slide 58: Summary

    Summary For personal use only ƒ Powerful platform for growth ¾ Industry growth high, buoyed by Simpler Super reforms ¾ Flexible, robust and scaleable business model ƒ Sharp focus on core business ¾ The better we get at running the business, the more opportunities we find to improve ƒ Broad basis to

59. Slide 59: Appendix

    For personal use only Appendix

60. Slide 60: Two distinct planner groups create powerful presence in market

    Two distinct planner groups create powerful presence in market For personal use only AMP Financial Planning (AMPFP) Hillross (including Arrive and Magnify) ƒ 1,216 self-employed planners; 754 ƒ 285 self-employed planners; 109 practices1 practices1 ƒ 150 Certified Financial Planners1 ƒ 495 Certified

61. Slide 61: Pre-tax operating earnings relative to FUM

    Pre-tax operating earnings relative to FUM For personal use only Wealth management operating earnings per dollar of retail FUM – indexed to AMP 1.2 1.00 1.0 0.96 0.86 0.8 0.76 Index 0.6 0.48 0.45 0.39 0.4 0.2 0.14 0.0 AMP CBA NAB WBC ANZ / ING SGB MBL AXA Source: Based on internal analysis by AMP, u

62. Slide 62: AFS embedded value

    AFS embedded value For personal use only RoEV Traditional basis, @ 3% discount margin 1H 03 5.8% 47 8,178 (456) 115 1H 04 9.3% 176 17 4 1H 05 11.1% 1H 06 11.2% 215 7,722 1H 07 12.4% 327 759 7,277 6,518 A$6,000m FY 06 EV Restatement* FY 06 EV Expected return 1H 07 new Investment & Unit cost Persisten

63. Slide 63: AFS value of new business

    AFS value of new business For personal use only VNB Traditional basis, @ 3% discount margin 1H 03 $100m 1 215 1H 04 $125m 4 9 1H 05 $134m 42 (8) 1H 06 $165m 2 1H 07 $215m 164 1 165 A$120m 1H 06 VNB Restatement* 1H 06 VNB Volume & Future Expense Persistency Pricing NZ exchange 1H 07 VNB restated mix

64. Slide 64: Organisational culture inventory (OCI) – measuring behaviour styles

    Organisational culture inventory (OCI) – measuring 12 behaviour styles For personal use only SELF- HUMANISTIC- AFFILIATIVE ACHIEVEMENT ACTUALISING ENCOURAGING Members are Members are Members are Members are expected to set expected to gain expected to be expected to be challenging but supportive, fr

AMP — Non-Deal Roadshow (October 2007) on 6ix