Prudential plc 2015 Half Year Results 11 August 2015 1 2015 HALF YEAR RESULTS
This document may contain ‘forward-looking statements’ with respect to certain of Prudential's plans and its goals and expectations relating to its future financial condition, performance, results, strategy and objectives. Statements that are not historical facts, including statements about Prudential’s beliefs and expectations and including, without limitation, statements containing the words “may”, “will”, “should”, “continue”, “aims”, “estimates”, “projects”, “believes”, “intends”, “expects”, “plans”, “seeks” and “anticipates”, and words of similar meaning, are forward-looking statements. These statements are based on plans, estimates and projections as at the time they are made, and therefore undue reliance should not be placed on them. By their nature, all forward-looking statements involve risk and uncertainty. A number of important factors could cause Prudential's actual future financial condition or performance or other indicated results to differ materially from those indicated in any forward-looking statement. Such factors include, but are not limited to, future market conditions, including fluctuations in interest rates and exchange rates and the potential for a sustained low-interest rate environment, and the performance of financial markets generally; the policies and actions of regulatory authorities, including, for example, new government initiatives and the effect of the European Union's ‘Solvency II’ requirements on Prudential's capital maintenance requirements; the impact of designation as a global systemically important insurer; the impact of competition, economic uncertainty, inflation, and deflation; experience in particular with regard to mortality and morbidity trends, lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; the impact of changes in capital, solvency standards, accounting standards or relevant regulatory frameworks, and tax and other legislation and regulations in the jurisdictions in which Prudential and its affiliates operate; and the impact of legal actions and disputes. These and other important factors may for example result in changes to assumptions used for determining results of operations or re-estimations of reserves for future policy benefits. Further discussion of these and other important factors that could cause Prudential's actual future financial condition or performance or other indicated results to differ, possibly materially, from those anticipated in Prudential's forward-looking statements can be found under the ‘Risk Factors’ found in the preliminary document. Any forward-looking statements contained in this document speak only as of the date on which they are made. Prudential expressly disclaims any obligation to update any of the forward-looking statements contained in this document or any other forward-looking statements it may make, whether as a result of future events, new information or otherwise except as required pursuant to the UK Prospectus Rules, the UK Listing Rules, the UK Disclosure and Transparency Rules, the Hong Kong Listing Rules, the SGX-ST listing rules or other applicable laws and regulations. 2 2015 HALF YEAR RESULTS
Prudential plc 2015 half year results Agenda Mike Wells Business Review Nic Nicandrou Financial Review Mike Wells Outlook 3 2015 HALF YEAR RESULTS
Group Profitable growth IFRS operating profit 1 , £m New Business Profit 1,2 , £m Free surplus generation 1 , £m 1,881 +12% +17% 1,418 +12% 1,190 1,601 1,269 1,063 HY 2014 HY 2015 HY 2014 HY 2015 HY 2014 HY 2015 1 Comparatives have been stated on a constant exchange rate basis 2 HY14 results have been restated to exclude contributions from Prudential’s 25% equity stake in PruHealth / PruProtect, which was sold in November 2014 4 2015 HALF YEAR RESULTS
Group Delivering cash Cash remittances 1 , £m Interim dividend, pence per share 1,068 +10% 12.31 +10% 11.19 974 HY 2014 HY 2015 HY 2014 HY 2015 1 HY 2015 includes £42 million of proceeds from the sale of Japan 5 2015 HALF YEAR RESULTS
Asia Consistent delivery Sales 1,2 , £m Relative performance – sales 3 , £m +31% 706 675 691 601 573 529 530 512 489 469 467 451 424 405 400 401 371 350 343 330 326 313 PCA Co A Co B Co A Co B PCA Co C Co D Co C Co D Co E Co E Q1 2015 Q2 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2010 2011 2012 2013 2014 2015 91% Regular premium average 1 Comparatives have been stated on a constant exchange rate basis 2 PCA averaging 17 per cent year on year quarterly growth over 23 consecutive quarters from Q4 2009 to Q2 2015 3 Reported APE or equivalent (Ex Japan). Source; Competitors’ results release; local insurance regulator and association and Prudential estimates 6 2015 HALF YEAR RESULTS
Asia Broad based performance • IFRS operating profit up 23% Agency APE 1 , £m Hong Kong 1 • #1 agency sales force +32% • H&P sales up 67% 805 • Regular premium (95% of APE) up 88% 609 • APE up 44%; H&P sales up 90% China 1 • Agency activity up 34% • Increasing CITIC Bank penetration HY 2014 HY 2015 • Operating in 58 cities, 3 rd largest PCA business 2 • IFRS operating profits up 21% Bancassurance APE 1 , £m Indonesia 1 • Growing agency scale • SCB exclusivity delivering results +16% 409 • #1 ranked with 24% market share 3 353 • APE up 18% Malaysia 1 • Market leader in bancassurance • Largest Bumi agency sales force HY 2014 HY 2015 • #1 ranked with 28% market share 3 1 Comparatives have been stated on a constant exchange rate basis 2 3 rd largest business unit calculated on a 100% APE basis 3 Ranking based on New Business (APE or WFYP depending on availability of data) 7 2015 HALF YEAR RESULTS
Asia Eastspring Funds under management 1 , £bn Largest retail fund manager – FUM 2 , US$bn 85.3 +28% 66.8 Eastspring Co A Co B Co C Co D Co E HY 2014 HY 2015 3 rd party % 38% 42% 1st 1 Comparatives have been stated on a constant exchange rate basis 2 Based on assets sourced from the region. Excluding Japan, Australia and New Zealand as at Jun 2014. Source Asia Asset Management September 2014 (Ranked according to participating regional players only) 8 2015 HALF YEAR RESULTS
Asia Profitable growth Free surplus generation 1 , £m IFRS operating profit 1 , £m 356 +17% 632 +16% 308 540 Eastspring Eastspring Life Life HY 2014 HY 2015 HY 2014 HY 2015 1 Comparatives have been stated on a constant exchange rate basis . 9 2015 HALF YEAR RESULTS
US Disciplined execution VA sales, $bn 10.0 9.0 8.0 7.0 6.0 5.0 VA ex Elite Access 1 4.0 3.0 2.0 Elite Access 1.0 0.0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 2012 2013 2014 2015 2012 2013 2014 2015 VA ex Elite Access 1 $18.4bn $16.9bn $18.0bn Elite Access $1.3bn $4.0bn $5.1bn 1 VA ex Elite Access sales includes VA with living benefit and VA without living benefit 10 2015 HALF YEAR RESULTS
US Delivering value Separate account FUM, $bn Life IFRS operating profit 1 , £m 1.8x 2.3x 135.2 +11% 834 +11% 122.2 751 Cumulative 33.0 appreciation Cumulative 43.4 in-flows 457 58.8 58.8 2011 HY 2014 HY 2015 HY 2012 HY 2014 HY 2015 Cumulative cash remittances $3.2bn 2008 – HY 2015 1 Comparatives have been stated on a constant exchange rate basis 11 2015 HALF YEAR RESULTS
UK Strong progress Retail sales APE 1 , £m UK Insurance +25% • Successfully transitioning into ‘Pensions freedoms’ 55 landscape 58 (35) 393 • Maintaining selective approach to bulks 315 +£113m • Well positioned for the future HY14 Annuities Existing New products 3 HY15 2 products M&G FUM, £m M&G +1% • Exceptional financial performance history 256 254 174 • Multi-asset and institutional strength offset by retail External outflows Internal • Proven capabilities and track record 2009 HY 2014 HY 2015 1 HY14 results have been restated to exclude contributions from Prudential’s 25% equity stake in PruHealth / PruProtect, which was sold in November 2014 2 Existing products includes bonds, corporate pension, individual pension, income drawdown and other 3 New products includes sales from Flexible Drawdown, PruFund ISA and Platform Bonds 12 2015 HALF YEAR RESULTS
UK Strong progress IFRS operating profit, £m UK Insurance • Successfully transitioning into ‘Pensions freedoms’ landscape • Maintaining selective approach to bulks +16% 704 605 • Well positioned for the future M&G 251 +11% 227 M&G +20% 453 UK Insurance 1 • Exceptional financial performance history 378 • Multi-asset and institutional strength offset by retail 2 outflows HY 2014 HY 2015 • Proven capabilities and track record 1 HY2015 UK Insurance includes GI business of £17m (1H14; £12m) and £61m benefit from longevity reinsurance. 2 HY2014 results have been restated to exclude contributions from Prudential’s 25% equity stake in PruHealth / PruProtect, which was sold in November 2014 13 2015 HALF YEAR RESULTS
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