AMP LIMITED — Annual Report 2008

Mar 8, 2009

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ASX Announcement
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9 March 2009

Manager Company Announcements Office Australian Stock Exchange Level 4, 20 Bridge Street Sydney NSW 2000

Manager Market Information Services Section New Zealand Stock Exchange Level 2, NZX Centre, 11 Cable Street Wellington New Zealand

Announcement No: 07/09

Investor Roadshow Materials

Please find attached support materials for the offshore Investor Roadshow, which is being held from Monday 9 March 2009 – Friday 13 March 2009.

ABN 49 079 354 519

AMP Limited (AMP) ASX Announcement AMP Limited Level 24, 33 Alfred Street Sydney NSW 2000 Australia

AMP – financial strength and resilience in tough times

Craig Dunn

Chief Executive Officer

Executive summary

• Solid 2008 financial result underscores strength of AMP

• Diverse earnings streams proving resilient in challenging markets, with significant earnings leverage to market recovery

• Managing company tightly through current environment, while investing in its growth for the medium to longer term

• Aiming to deliver first quartile TSR performance over

Outline

• AMP overview

� Business performance

• Capital management

• Outlook & strategy

• Summary

AMP overview

AMP is a leading Australasian wealth manager with selective investments in Asia

• Contemporary wealth management company with resilient business model built on

• Pre-eminent brand

• Low cost, scaleable manufacturing platform

• Large aligned financial planning channel

• Broad-based asset management and packaging business

• Cost and capital efficiency

• Market leader in

• Superannuation ranked #1[¹]

• Retirement incomes ranked #2[¹]

AMP is financially strong

• Sound 2008 financial result in tough market

• Underlying profit of A$810m, with good profit growth in non-AUM businesses

• Controllable cost growth kept to 1%

• Contemporary wealth management net cashflows over A$2b

• Proactive management of both capital and funding requirements have enhanced AMP’s financial strength, despite ongoing volatility

• Capital resources exceed minimum regulatory

Business performance – Group

2008 full year performance

• Key performance measures mixed � Underlying return on equity increased 1.0 percentage point to 38.9%

• Total operating earnings of A$737m, down 4%

• Cost ratio up to 41.3% from 39.7% in FY 07

• Growth measures:

• Net cashflows in AMP Financial Services of A$1.4b, down from A$2.9b in FY 07; AMP Capital Investors external net cashflows A$(804m) down from A$1.7b

• � Value of risk new business[1 ] up 41% to A$114m

• 63% of AUM met or exceeded benchmark over five years to 31

Group assets under management

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140
129
121
120 18.5
18.9
104 1.8 105
2.3
100
90 16.2
18.3
1.5
3.1
80 18.9
3.4
60
108.8
100.2
87.1
40 82.3
67.3
20
A$b 0
FY 04 FY 05 FY 06 FY 07 FY 08
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Group cost performance

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900 871 879
812
800 782 780
94bps
81bps
700 45.8%
75bps
72bps
68bps
41.7%
600 39.6%
41.3%
39.7%
500
400
FY 04 FY 05 FY 06 FY 07 FY 08
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Business line contribution to FY 08 earnings

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In-force annual premium
A$112m and AUM A$5bn
In-force annual
AUM A$16bn
premium A$702m and AUM
A$2bn
AFS NZ
$56m (7%) AFS Mature
External AUM A$36bn
AFS Contemporary
Wealth Protection $161m (21%) Internal AUM A$56bn
$154m (20%)
AFS Contemporary Wealth
Management
AMP Capital Investors
$266m (34%)
$136m
(18%)
AUM A$43bn
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Business performance - business lines

AMP Financial Services – FY 08 highlights

• Diversified business delivered solid results in difficult environment, with operating earnings of A$637m, down 4% on FY 07, despite 19% fall in AUM

• Contemporary Wealth Management’s operating earnings down 13% to A$266m reflecting impact of market turbulence

• Contemporary Wealth Protection’s earnings up 29% as a result of strong new business growth and better claims experience

• Operating earnings for the New Zealand business up 17% driven by risk growth, improved claims experience, cost control and success in KiwiSaver

AFS cashflow performance

• Resilient business model and strong mandated super position drove relative outperformance in cashflows, despite fall in member contributions

• Total net cashflows of A$1.4b compared with A$2.9b in FY 07

• $2b in contemporary wealth management net cashflows

• Corporate super net cashflows ex-mandate wins up 57% to A$554m, largely driven by solid employer contributions

• NZ net cashflows increased to A$126m from A$73m in FY 07

• Outflows down 18% to A$13b from $16b

• Persistency strengthened across the board improving to 90.3% from

AFS Australian contemporary wealth management

			Contemporary wealth management		Change
			FY 08 FY 07
	Operating earnings		A$266m A$306m		- 13%
	Controllable costs1		A$352m1 A$354m		+ 1%
	Cost to income ratio1		42.7%1 46.5%		+ 3.8 percentage points
	Net cashflows		A$2,077m A$4,086m		- 49%
	Operating earnings to AUM2		48bps 54bps		- 6 basis points
	Persistency		88.5% 90.3%		+ 1.8 percentage points
	AUM (pre capital)		A$43.4b A$56.5b		- 23%
	Return on equity		46.5% 54.1%		- 7.6 percentage points

AFS Australian contemporary wealth protection

			Contemporary	Contemporary	Contemporary	Contemporary
			wealth	protection				Change
			FY 08			FY 07
	Profit margins		A$135m			A$115m		+ 17%
	Experience profits		A$19m			A$4m		+ A$15m
	Operating earnings		A$154m			A$119m		+ 29%
	Operating earnings / API1		23.9%			20.7%		+ 3.2 percentage points
	Controllable costs		A$78m			A$73m		+ 7%
	Individual risk API		A$547m			A$469m		+ 17%
	Individual risk lapse rate		10.8%			10.6%		+ 0.2 percentage points
	RoEV pre transfers @ 3% discount margin		22.9%			8.2%		+ 14.7 percentage points
	VNB @ 3% discount margin²		A$90m			A$65m		+ 39%
	Return on equity		31.5%			28.9%		+ 2.6 percentage points

AFS Australian mature

			Mature	Mature	Mature		Change
			FY 08		FY 07
	Operating earnings		A$161m		A$190m		- 15%
	Controllable costs		A$64m		A$64m		Steady
	Controllable costs/AUM1		37bps		34bps		+ 3 basis points
	Net cashflows		(A$1,036m)		(A$1,433m)		+ 28%
	Persistency		89.7%		87.0%		+ 2.7 percentage points
	AUM (pre-capital)		A$16.1b		A$18.4b		- 13%
	RoEV pre transfers @ 3% discount margin		(19.6%)		18.9%		- 38.5 percentage points
	VNB @ 3% discount margin²		A$21m		A$32m		- 34%
	Return on equity		158.2%		193.3%		- 35.1 percentage points

AFS New Zealand

			New Zealand	New Zealand	New Zealand		Change
			FY 08		FY 07
	Profit margins		A$50m		A$47m		+ 6%
	Experience profits		A$6m		A$1m		+ A$5m
	Operating earnings		A$56m		A$48m		+ 17%
	Controllable costs		A$64m		A$64m		steady
	Cost to income ratio		41.4%		44.3%		- 2.9 percentage points
	Individual risk API¹		A$112m		A$104m		+ 8%
	Lapse rates		8.2%		7.1%		+ 1.1 percentage points
	Net cashflows		A$126m		A$73m		+ A$53m
	AUM (pre capital)		A$4.5b		A$4.7b		- 4%
	RoEV pre transfers @ 3% discount margin²		16.5%		11.7%		+ 4.8 percentage points
	VNB @ 3% discount margin3,4 Return on equity		A$26m 27.2%		A$20m 27.6%		+ 30% - 0.4 percentage points

AFS cost performance

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600
560
553
546
533 535
500
100bps
87bps
42.8%
400 76bps
75bps
69bps
300 38.5%
35.2% 35.4%
200
34.2%
100
0
FY 04 FY 05 FY 06 FY 07 FY 08
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AMP Capital Investors – FY 08 highlights

• Solid performance with operating earnings down 9% on FY 07 to A$136m

• Total management fees increased 3% to A$387m from A$375m, reflecting a change in product mix and growth in non-AUM sourced income

• Performance and transaction fees of A$86m, down from A$94m

• AUM fell 17% to A$92b from A$111b in FY 07, driven by falling investment markets

• Tight cost control and lower staff remuneration held costs to 4% increase over FY 07

• 63% of AUM met or exceeded benchmark over five years to 31 December 2008, impacted by extraordinary markets in 2008, when 17% of AUM met or exceeded benchmark

AMPCI overview

			AMPCI	AMPCI	AMPCI			Change
			FY 08			FY 07
	Operating earnings		A$136m			A$150m	- 9%
	Internal management fees		A$176m			A$170m	+ 4%
	External management fees		A$211m			A$205m	+ 3%
	Total performance & transaction fees 1		A$86m			A$94m	- 9%
	Controllable costs		A$268m			A$257m	+ 4%
	Cost to income ratio		56.3%			53.1%	+ 3.2	percentage points
	External net cashflows		(A$804m)			A$1.71b
	Return on equity		59.9%			64.2%	- 4.3 percentage points

AMPCI volumes and profit margins

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120 13.6 13.4
11.7 41.5
100
10.8
39.2
35.7
9.7
80
28.8
23.6
60
51.0 56.0 62.1 69.0 62.4
40
20
0
FY 04 FY 05 FY 06 FY 07 FY 08
$Ab
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Capital management

Capital management – strength & strategy

• AMP remains strongly capitalised, with A$898m in excess capital above minimum regulatory requirements (MRR) at 31 Dec 2008, reflecting disciplined and dynamic capital management approach

• Current debt security offer expected to raise A$300m; will take excess above MRR to A$1.2b (2.4 times) on pro forma basis as at 31 Dec 2008

• Assuming A$300m raised, group gearing will remain low on a pro forma basis at 17% on an S&P basis, while underlying interest cover will be high at 9.2 times on pro forma basis

• Capital management strategy aims to deliver:

• strong balance sheet in a challenging market, with focus on capital preservation

• business flexibility for growth

• optimised capital mix through Tier 2 raising

Capital management – actions

• Proactive management of both capital and funding requirements have enhanced AMP’s financial strength, despite ongoing volatility

• Improving efficiency of capital mix and strengthening capital base through current offer of debt securities – expect to raise A$300m (offer closes 7 April)

• Raised A$559m in equity in Nov/Dec through over-subscribed institutional and retail raisings

• Raised A$350m in senior debt in May, as part of ongoing program of refinancing corporate debt maturities well ahead of time

• Range of other capital management initiatives to limit market impacts on capital requirements

• Final dividend of 16cps takes FY 08 dividend to 38cps – a payout ratio of 89% of underlying profit

• Future dividend payout likely to be in range of 75%-85% of underlying profits, targeting 85% franking

Outlook & strategy

Short term outlook

• Continued market volatility means more challenging outlook for 2009

• Prudently managing costs, liquidity and capital to protect our financial position in the short term

• AFS costs expected to be around 3% lower in FY 09 on FY 08, as continued investment in growth initiatives is offset by cost efficiencies

• AMPCI costs will be managed closely, contingent on market opportunities and conditions, and variables such as staff remuneration and increased technology spend

• Group office costs expected to remain flat

Short term strategic priorities

• Acting on opportunities to sustain and improve revenues in current market, by

• Growing revenues in non AUM-based businesses

  • eg banking and risk insurance

• Improving investment performance

• Focusing strongly on customer retention

• Continuing investment to increase scale and productivity of our distribution footprint

• Renewing core superannuation product to improve tailoring opportunities for customers and cost efficiencies

  • New modular offering to suit all customer profiles, from simple, low-cost needs to complex, sophisticated needs, with appropriate pricing

Medium to long term outlook

• Longer-term growth outlook for wealth management sectors in Australia, New Zealand and selected :

• Asian markets remains strong underpinned by

• Ageing demographics

• Bi-partisan party support for mandatory superannuation regime in Australia – super now tax free after age 60

• KiwiSaver and PIE initiatives in New Zealand

• Economic, social and political development in selected Asian markets, opening up new sources of funds and

Growth goal

• Over-arching goal to deliver top quartile TSR performance to shareholders

• Aim to be in top 25% of the top 50 listed Australian industrials in terms of total shareholder returns over every five-year cycle

• Strong alignment between shareholder goal and long term incentive (LTI) for executives

• Requires prudent and pragmatic management of costs, capital and liquidity in current market, while maintaining investment in critical growth initiatives for

Strategic response

Continuing to invest today in improving distribution and enhancing products and services to drive strong value growth over the longer term by:

1. Growing planner capacity and broadening distribution

2. Expanding to Asia through AMP Capital Investors

3. Growing customers in high-value segments

4. Reshaping AMP Capital Investors into a high value-add investment manager

Summary

• Sound FY 08 results in testing environment demonstrates fundamental resilience of AMP’s business model, planner base and brand

• Managing AMP tightly through short-term volatility while investing to set company up for stronger growth over the medium to longer term

• Capital preservation and balance sheet strength a key priority, to enable company to withstand market volatility and provide strong base for future growth

• Remain confident of long-term prospects for wealth management sectors in Australia, NZ and selected Asian