Summary of AMP's Wealth and Retirement Business Units Conference Call Company Overview - **Company**: AMP (AMP) - **Date**: July 21, 2025 - **Focus**: Wealth and Retirement Business Units Key Points and Arguments Strategic Direction - AMP has simplified its portfolio, reduced costs, and strengthened its balance sheet, positioning itself as a specialist in retirement solutions [6][7] - The company aims to approach growth with a challenger brand mindset, embracing technology and agility while maintaining its legacy of safety and security [7] Financial Performance - In 2024, AMP reported an operating profit of $236 million, with $174 million (approximately 75%) coming from its wealth management businesses [8] - The North platform is the third-largest WRAP platform for superannuation and pensions in Australia, managing approximately $80 billion [10] Retirement Solutions - AMP has introduced innovative retirement solutions, including the North Guaranty and lifetime superannuation options, which are unique in the market [11][12] - The company launched the Citro Lifestyle app to address the social aspects of retirement, enhancing customer engagement [12] Market Opportunity - By 2031, 33% of Australia's population will be in retirement, with $750 billion in assets expected to transition into the retirement phase over the next six years [14] - Despite significant wealth, 80% of Australian retirees struggle to enjoy a comfortable retirement due to a lack of financial literacy and access to advice [16][17] Challenges in the Retirement Sector - 50% of Australians are concerned about not having enough money in retirement, leading to a tendency to underspend [18] - There is a shortage of independent financial advisers, which complicates access to quality advice for the general population [19] Innovative Features - AMP's lifetime solutions combine the benefits of account-based pensions and annuities, providing clients with higher income in retirement [29][32] - The company has developed a unique approach to mitigate market and longevity risks through pooled solutions and market-linked income streams [41][44] Age Pension Insights - 63% of Australians are eligible for some form of Centrelink support in retirement, with the asset test favoring those using AMP's lifetime super functionality [45][48] - AMP's analysis shows that 94% of its members could benefit from increased eligibility for the age pension through lifetime super features [49] Growth and Market Position - The platform market is growing at approximately 10% per year, with AMP's North platform positioned to capture a larger share of the addressable market estimated at $2.4 trillion [70] - Only 10% of Australians currently receive financial advice, indicating a significant opportunity for AMP to expand its advisory services [71] Technology and Efficiency - AMP is investing in in-house technology and AI to enhance adviser efficiency and client engagement, aiming to increase the number of clients served by each adviser [75][84] - The North platform has seen significant growth in managed portfolios, now totaling $21.8 billion, reflecting strong adviser and client adoption [83] Conclusion - AMP is well-positioned to capitalize on the growing retirement market through innovative solutions, a focus on financial advice accessibility, and leveraging technology to enhance adviser-client relationships [76][92]

AMP's Financial Performance and Strategy - AMP's FY24 NPAT was $107 million[16] - Platforms FY24 NPAT reached $72 million[18] - Super & Investments FY24 NPAT was $67 million[21] - AMP is focusing on wealth management after simplifying its portfolio[15, 11] - AMP is adopting a challenger brand mindset to drive performance in wealth businesses[9, 12] Retirement Solutions and Market Opportunity - Australia's superannuation savings pool is the world's fifth largest, worth $4.1 trillion and expected to reach $10 trillion by 2040[37] - Only 1% of post-retirement assets are in lifetime products, representing a $28 billion market opportunity[31] - Platforms market has grown 10% in the last 12 months to $760 billion[102] - AMP Super has $58 billion in total assets[137] - 94% of AMP's 580,000 members would benefit from Lifetime Super[68] North Platform Performance - North's total funds under administration are $83.2 billion[99] - North has $21.8 billion in Managed Portfolios funds under management[99, 120] - MyNorth Lifetime has over 2,000 members[99]

Financial Data and Key Metrics Changes - Adjusted earnings per share for Q1 2025 was $2.23, down from $2.38 in Q1 2024 but up from $2.12 in Q4 2024 [21] - Q1 2025 adjusted net revenue was $1.8 billion, a slight increase from Q1 2024 but down 3.6% from Q4 2024 [23] - Net outflows for the quarter were $8.6 billion, primarily driven by U.S. equities and rebalancing activity [21] Business Line Data and Key Metrics Changes - Target date franchise saw net inflows of $6.3 billion, led by blend products [22] - Fixed income had strong net inflows of $5.4 billion, mainly from institutional clients [22] - ETF business achieved net inflows of $3.26 billion, with eight ETFs each receiving over $100 million in inflows [22] Market Data and Key Metrics Changes - 99% of target date assets outperformed their peer group over three, five, and ten-year periods [10] - 60% of funds beat their peer groups across one, three, five, and ten-year timeframes [8] - Mixed results were observed in alternative portfolios, with private lending strategies generating the strongest gains [12] Company Strategy and Development Direction - The company is expanding its retirement solutions internationally, including partnerships in Japan and Korea [12][13] - Focus on enhancing ETF offerings and integrating strong equity research with hedging strategies [14] - Continued emphasis on managing expenses while investing in strategic initiatives [19] Management's Comments on Operating Environment and Future Outlook - Management acknowledged policy-driven market volatility affecting assets under management and revenues [7] - The outlook for 2025 remains largely unchanged, with expectations for improved flows relative to 2024 [58] - Management is optimistic about the growth potential in ETFs and private market alternatives [35][53] Other Important Information - The company maintains a strong balance sheet with $3.3 billion in cash and discretionary investments [19] - A quarterly dividend of $1.27 was announced, marking the 39th consecutive year of increases [19] - The company is recognized for its workplace culture and investment performance, receiving multiple accolades [16][17] Q&A Session Summary Question: ETF business growth and future opportunities - Management expressed excitement about the ETF business, highlighting strong performance and plans for future offerings [30][31] Question: Update on private lending and O Credit - Management noted $20 billion in private market alternatives, with O Credit seeing slower growth but potential for improvement [42][44] Question: Access to private market alternatives in retirement plans - Management indicated that private market alternatives will eventually gain access to defined contribution plans, but the timing is uncertain [48][53] Question: Flows and sales momentum outlook - Management reported that the flow outlook for the year is largely unchanged, with expectations for improvement in 2025 [58][61] Question: Fee rate dynamics - Management explained that the decrease in effective fee rate was driven by structural shifts towards lower-cost vehicles [65] Question: Expansion of retirement solutions outside the U.S. - Management detailed various international partnerships and the tailored approach to retirement solutions in different markets [72][75]

Financial Data and Key Metrics Changes - Adjusted earnings per share for Q1 2025 was $2.23, down from $2.38 in Q1 2024 but up from $2.12 in Q4 2024 [18] - Q1 2025 net outflows were $8.6 billion, primarily driven by U.S. equities and rebalancing activity [18] - Adjusted net revenue for Q1 2025 was $1.8 billion, marginally increasing from Q1 2024 but down 3.6% from Q4 2024 [20] - Adjusted operating expenses for Q1 2025 totaled $1.1 billion, a 7.4% increase from Q1 2024 [22] Business Line Data and Key Metrics Changes - Target date franchise had net inflows of $6.3 billion, led by blend products [19] - Fixed income saw strong net inflows of $5.4 billion, primarily from institutional clients [19] - ETF business achieved net inflows of $3.26 billion, with eight ETFs each having inflows over $100 million [20] Market Data and Key Metrics Changes - The effective fee rate for Q1 2025 was 40 basis points, declining from the prior quarter and Q1 2024 due to a mix shift in assets [21] - Equity assets under management decreased from 52% to 49% of total AUM, while fixed income and multi-asset increased [63] Company Strategy and Development Direction - The company is expanding its retirement strategies beyond the U.S., including partnerships in Japan and Korea [10][11] - Focus on enhancing ETF offerings and building a robust pipeline of new products [12][36] - The company aims to leverage its capabilities in private market alternatives to meet growing client demand [49][85] Management's Comments on Operating Environment and Future Outlook - Management acknowledged policy-driven market volatility impacting assets under management and revenues [6] - The outlook for 2025 remains largely unchanged, with expectations for improved flows relative to 2024 [55] - Management is cautious about the competitive landscape in private lending and alternative investments [40][46] Other Important Information - The company maintains a strong balance sheet with $3.3 billion in cash and discretionary investments [16] - A quarterly dividend of $1.27 was announced, marking the 39th consecutive year of increases [16] - The company is being thoughtful about controllable expenses while investing in strategic initiatives [16] Q&A Session Summary Question: Steps to drive ETF success and future opportunities - Management highlighted strong performance, scaling products, and investment in sales capabilities as keys to ETF success [28][30] Question: Update on private lending and investor appetite - Private market alternatives total approximately $20 billion, with OHA seeing $54 million in flows for the quarter [40] Question: Potential for alternative investments in U.S. retirement channels - Management believes there will eventually be access to private market alternatives in defined contribution plans [45] Question: Flows and sales momentum outlook - The flow outlook for the year is largely unchanged, with expectations for improvement relative to 2024 [55] Question: Fee rate dynamics and future expectations - The decrease in effective fee rate was driven by structural shifts towards lower-cost vehicles [62] Question: Capital allocation and inorganic growth opportunities - The company is considering share buybacks and M&A opportunities, particularly in private market alternatives [81][85]