Earnings per share. Full year dividend. Return on equity p p 19.6%

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Transcription:

Earnings per share 22.20p Return on equity 19.6% Full year dividend 14.35p

Who New Position Background

Net release from operations 1,411m Adjusted operating profit 1,628m Profit after tax 1,265m Earnings per share 1 22.20p IFRS return on equity 2 19.6% Full year dividend 14.35p

2012 2013 2014 2015 2016 NET RELEASE FROM OPERATIONS ( m) 846 865 1,002 1,104 1,256 1,411 DIVIDEND ( m) 375 452 550 668 797 854 NET RELEASE FROM OPERATIONS RETAINED ( m) 471 413 452 436 459 557 DIVIDEND COVERAGE 2.26 1.91 1.82 1.65 1.58 1.65 DIVIDEND PER SHARE (p) 6.40 7.65 9.30 11.25 13.40 14.35 RETURN ON EQUITY (%) 14.9 15.4 16.1 16.9 17.7 1 19.6 2 EARNINGS PER SHARE (p) 12.42 13.84 15.20 16.70 18.58 1 22.20 2 BOOK VALUE PER SHARE (p) 86 92 94 100 106 116

Growth drivers Ageing demographics Globalisation of asset markets 2016 achievements Creating real assets Welfare reforms Technological innovation Today s capital

Growing net release from operations ( m) Consistent earnings per share growth 1 (p) 865 1,002 1,104 1,256 1,411 13.84 15.20 16.70 18.58 22.20 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Increasing dividend per share (p) Increasing return on equity 1 (%) 7.65 9.30 11.25 13.40 14.35 15.4 16.1 16.9 17.7 19.6 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

Net release from operations 1,411m Operating profit 1,628m Profit before tax 1,582m

2016 2015 YoY (%) ASSETS & PREMIUMS CASH & EARNINGS CAPITAL

Operating profit from divisions ( m) 1,277 1,329 1,483 1,702 1,902 17% 13% 3% 5% LGR 43% LGIM LGC LGI General Insurance 2012 2013 2014 2015 2016 19% Savings DIVISION 2016 2015 YoY (%) Legal & General Retirement (LGR) 811 641 27 Legal & General Investment Management (LGIM) 366 355 3 Legal & General Capital (LGC) 257 233 10 Legal & General Insurance (LGI) 317 315 1 General Insurance (GI) 52 51 2 Savings 99 107 (7) Operating profit from divisions 1,902 1,702 12

LGIM AUM growth ( bn) LGR assets growth ( bn) 543 612 694 746 894 32.2 34.4 44.2 43.4 54.4 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 UK & US Insurance premium growth ( bn) Direct Investments ( bn) 2.7 10.0 2.2 2.4 2.5 2.6 1.3 2.7 5.7 7.2 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

DIVIDEND 13.40p 14.35p 11.25p 9.30p 7.65p 6.40p 4.74p 5.69p 6.90p 8.35p 9.95p 10.35p 1.66p 1.96p 2.40p 2.90p 3.45p 4.00p 2011 2012 2013 2014 2015 2016

FINANCIAL HIGHLIGHTS 2016 2015

FINANCIAL HIGHLIGHTS 2016 2015

FINANCIAL HIGHLIGHTS 2016 2015 LGI US dividend ($m) $63m $69m $76m $83m $91m $100m

FINANCIAL HIGHLIGHTS 2016 2015

FINANCIAL HIGHLIGHTS 2016 2015

Ratio 230% 235% 230% 176% 163% 171% Coverage CAPITAL POSITION 14bn 12bn 13.5bn 14.0bn 14.6bn 12.8bn 13.6bn 13.6bn 8.3bn 7.6bn 8.1bn 5.5bn 5.3bn 5.7bn 10bn 8bn 6bn 4bn 5.9bn 5.9bn 6.3bn 7.3bn 8.3bn 7.9bn 2bn 0bn YE 2015 H1 2016 YE 2016 YE 2015 H1 2016 YE 2016 Economic Capital Solvency II

2016 bn Comments Operational surplus generation 1.2 New business strain (0.1) Net Surplus Generation 1.1 Dividends paid (0.8) Operating variances 0.2 Market movements (0.3) Total Surplus over year 0.2

FY 2016 PVNBP Contribution from New Business Margin % 6,661 693 10.4 1,466 153 10.4 1,255 139 11.1 211 14 6.6 631 78 12.4 8,758 924 10.6

Operating profit 811m New business sales 8.5bn AUA 54.4bn

FINANCIAL HIGHLIGHTS 2016 2015

Back book for cash and capital Back book acquisitions UK capital efficient front book Longevity Insurance US pension risk transfer Global reinsurance hub Individual retirement Lifetime mortgage

1,277m 591m 327m 378m Internal External 2013 2014 2015 2016

Sales m Market share % 800 50 600 400 200 0 Q1 15 Q2 15 Q3 15 Q4 15 Q1 16 Q2 16 Q3 16 Q4 16 L&G Others L&G Market Share 29% in 2016 40 30 20 10 0

INCREASING PROPORTION OF DIRECT INVESTMENTS.. WHILST MAINTAINING OVERALL CREDIT QUALITY & HIGH SECTORAL DIVERSIFICATION BB or below 2016 by Credit Rating 2016 by Sector

New direct investments ( m) AUA ( bn) 620 54 1,211 1,668 201 1,140 1,531 32 34 44 43 590 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016 Annuity single premium ( m) Profit Before Tax ( m) 591 3,323 1 719 847 1,277 5,987 327 1,320 2,812 2,417 3,685 1,019 2012 2013 2014 2015 2016 495 373 239 2012 2013 2014 2015 2016

AUM 894bn Total net flows 31.2bn Operating profit 366m

REVENUE GROWTH WITH A STEADY MARGIN 800 600 744m 70 65 60 400 378m 49% 55 50 200 46% 45 40 35 0 2010 2011 2012 2013 2014 2015 2016 Revenue Expenses C:I Ratio 30 FINANCIAL HIGHLIGHTS 2016 2015

Solutions AUM ( bn) AFI AUM 1 ( bn) Index AUM ( bn) Real Assets AUM 2 ( bn) 232.5 293.3 338.2 411.9 88.7 102.9 106.8 134.8 269.8 274.8 274.3 319.8 12.0 14.5 18.3 19.6 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016 2013 2014 2015 2016

UK DB PENSION SOLUTIONS JOURNEY Funding level 63% Equities DGFs Smart Beta DGFs Buy and Maintain Credit Buy-out c. 2.1trn buy-out liabilities Credit Multi-Strat Credit Real Assets Gilts LDI LDI Time MARKET BENCHMARK OUTCOME ORIENTATED SELF SUFFICIENCY INSURANCE

DC AUM and AUA growth ( bn) DC client growth Retail AUM ( bn) DC AUM 57 46 41 34 28 21 15 8 11 6 2012 2013 2014 2015 2016 9,493 2,153 2,241 473 2012 2013 2014 2015 2016 24 20 17 18 13 2012 2013 2014 2015 2016 2012 2013 2014 2015 2016

250 200 150 100 50 0 International AUM Growth ( bn) 46 43bn 2012 2013 2014 2015 2016 252 Other International Assets US Assets US Clients International Net Flows ( bn) 177bn 14.5bn 280 260 240 220 200 180 160 140 120 100 80 60 40 20 0-20 -40-60 -80-100 8bn 2012 2013 2014 2015 2016 Other International Flows US Flows

Operating profit 257m DI Profit before tax 94m Total assets 6,193m

FINANCIAL HIGHLIGHTS 2016 2015

What we do Maximise risk adjusted returns How we achieve this Create new asset classes and business models Provide investment opportunities for the Group Internal Acquire Develop Sell External

Acquire Develop Sell

Operating Profit LGC total ( m) Total Assets - Direct Investments ( m) 179 257 351 1,137 2013 2016 2013 2016 Operating Profit Direct Investments ( m) Net portfolio return Direct Investments (%) 23 121 2013 2016 4.7% 9.0% 2013 2016

Sector Macro theme Scaling up businesses Developing new businesses Housing Infrastructure SME Finance

Earnings per share 22.20p Return on equity 19.6% Full year dividend 14.35p

What we are doing 2016 2017 onwards Robotics Big Data Platforms Cloud Artificial Intelligence Blockchain

Earnings per share (p) 12.42 13.84 15.20 16.70 18.58 22.20 2011 2012 2013 2014 2015 2016 2020 Net release from operations ( m) 846 865 1,002 1,104 1,256 1,411 2011 2012 2013 2014 2015 2016 2020