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09 March 2021

M&G plc full year 2020 results

2021

Strong and resilient performance in a challenging environment, foundations laid for future growth, pivot to sustainable investing

John Foley, Chief Executive, said: “In our first year as an independent company, we have delivered a strong and resilient performance in one of the most challenging operating environments ever.

“This demonstrates the value of our diversified and integrated business model, both to customers and clients, and to shareholders.

“We laid the foundations for M&G’s return to growth, including actions to fix Retail Asset Management and the creation of M&G Wealth following the acquisition of Ascentric.

“As responsible stewards of £367.2 billion in Assets Under Management and Administration (AUMA), we are also pivoting the entire company to sustainable investing - a shift which we believe will benefit customers, clients and shareholders, as well as wider society and the planet.

“Our balance sheet has remained robust throughout the COVID-19 pandemic and capital generation was strong at £995 million for the year.

“We remain committed to our ambitious three-year £2.2 billion target for total capital generation to the end of 2022 and to our current policy of a stable or increasing dividend.

“I want to thank all my colleagues for their resolve and commitment in the face of the pandemic, as they continue to serve our customers and clients from the safety of their homes.”

Financial highlights

  • Adjusted operating profit before tax of £788 million, now reflecting the first full year of listed infrastructure costs
  • IFRS profit after tax up to £1,142 million
  • Total capital generation of £995 million
  • Shareholder Solvency II coverage ratio strengthens to 182%, its highest level since independence
  • Ordinary dividend of 12.23p per share, in line with our policy of a stable or increasing dividend

Operational highlights

  • AUMA up to £367.2 billion, principally reflecting the acquisition of Ascentric in September
  • Net outflows of £6.6 billion in Savings and Asset Management. Institutional Asset Management inflows of £5.1bn were offset by outflows in Retail Asset Management driven by weak investment performance
  • Improvement in the investment performance of the retail fund range in the second half with 66%i of AUMA above median over six months
  • Continued strong investment performance from the £143.2 billion With-Profits Fund at 6.6% p.a.ii over the past five years
  • On track to achieve annual run-rate shareholder cost savings of £145 million through business transformation and modernisation in 2022

Outlook

  • Strong balance sheet of the Heritage business underpins capital generation and dividend policy
  • Launch of new sustainable private assets capability, opening up further opportunities for growth
  • Strong pipeline of new propositions, including PruFund Planet, a sustainable version of market-leading PruFund
Performance highlights 2020 2019
Adjusted operating profit before tax (£m) 788 1,149
IFRS profit after tax (£m) 1,142 1,065
Assets under management and administration (£bn) 367.2 351.5
Savings and Asset Management net client flows (£bn) (6.6) (1.3)
Total capital generation (£m) 995 1,509
Shareholder Solvency II coverage ratio (%) 182 176

i. As at December 2020

ii. Based on the main life fund (OBMG) return for the 5 years to end of 2020. The return is net of 30bps p.a. approximate deduction for fees. Note that the actual return for the fund will be slightly different post hypothecation.

Media enquiries

Investors/Analysts

Luca Gagliardi

Director of Investor Relations

Notes to editors

Open1.
The results in this preliminary announcement are prepared in accordance with International Financial Reporting Standards (IFRS) as adopted by the EU and are based on the consolidated financial statements of M&G plc.
Open2.

All key performance measures relate to continuing operations

Continuing operations in 2019 excluded our Asia insurance operations and treasury services provided to Prudential plc which are presented as discontinued operations.

Open3.
The shareholder view and regulatory view of the Solvency II coverage ratio as at 31 December 2020 assumes transitional measures on technical provisions which have been recalculated using management’s estimate of the impact of operating and market conditions at the valuation date.
Open4.
Total number of M&G plc shares in issue as at 31 December 2020 was 2,599,906,866.
Open5.
A Q&A webcast will be hosted by John Foley (CEO) and Clare Bousfield (CFO) on Tuesday 9 March at 08:45 GMT. You can register for the Q&A and view the investor presentation here (the presentation will be available from 07:00 GMT):
https://mngresults.connectid.cloud/register.
Dial in: UK freephone 0800 640 6441/ All other locations +44 203 936 2999
Participant code: 595189
Ex-dividend date  March 18, 2021 
Record date  March 19, 2021 
Payment of dividend  April 28, 2021 
M&G plc is a leading international savings and investments business, managing money for both individual savers and institutional investors in 28 markets. As at 31 December 2020, we have £367.2 billion of AUMA, around 5.3 million retail customers and more than 800 institutional clients. With a heritage dating back more than 170 years, M&G plc has a long history of innovation in savings and investments, combining asset management and insurance expertise to offer a wide range of solutions. We serve our savings and insurance customers under the Prudential brand in the UK and Europe and for asset management in South Africa, and under the M&G Investments brand for asset management clients globally.
M&G plc, a company incorporated in the United Kingdom, is the direct parent company of The Prudential Assurance Company Limited. The Prudential Assurance Company Limited is not affiliated in any manner with Prudential Financial, Inc., a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in the United Kingdom.
This announcement may contain certain ‘forward-looking statements’ with respect to M&G plc and its affiliates (the “M&G Group”), its plans, its current goals and expectations relating to its future financial condition, performance, results, operating environment, strategy and objectives. Statements that are not historical facts, including statements about M&G plc’s beliefs and expectations and including, without limitation, statements containing the words ‘may’, ‘will’, ‘should’, ‘continue’, ‘aims’, ‘estimates’, ‘projects’, ‘believes’, ‘intends’, ‘expects’, ‘plans’, ‘seeks’, ‘outlook’ 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 persons reading this announcement are cautioned against placing undue reliance on forward-looking statements.
By their nature, all forward-looking statements involve inherent assumptions, risk and uncertainty, as they generally relate to future events and circumstances that may be beyond the M&G Group’s control. A number of important factors could cause M&G plc’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, UK domestic and global economic and business conditions (including the political, legal and economic effects of the UK’s decision to leave the European Union); market-related conditions and risk, including fluctuations in interest rates and exchange rates, the potential for a sustained low-interest rate environment, corporate liquidity risk and the future trading value of the shares of M&G plc; investment portfolio-related risks, such as the performance of financial markets generally; the policies and actions of regulatory authorities, including, for example, new government initiatives; the impact of competition, economic uncertainty, inflation and deflation; the effect on M&G plc's business and results from, in particular, mortality and morbidity trends, longevity assumptions, lapse rates and policy renewal rates; the timing, impact and other uncertainties of future acquisitions or combinations within relevant industries; the impact of internal projects and other strategic actions, such as transformation programmes, failing to meet their objectives; the impact of operational risks, including risk associated with third party arrangements, reliance on third party distribution channels and disruption to the availability, confidentiality or integrity of M&G plc's IT systems (or those of its suppliers); 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 the M&G Group operates; and the impact of legal and regulatory actions, investigations 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.
Any forward-looking statements contained in this document speak only as of the date on which they are made. M&G plc 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, or other applicable laws and regulations. Nothing in this announcement shall be construed as a profit forecast, or an offer to sell or the solicitation of an offer to buy any securities.
LEI: 254900TWUJUQ44TQJY84 Classification: 3.1 Additional regulated information required to be disclosed under the laws of a Member State
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M&G plc is a company incorporated and with its principal place of business in England, and its affiliated companies constitute a leading savings and investments business. M&G plc is the direct parent company of The Prudential Assurance Company Limited. The Prudential Assurance Company Limited is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in England and Wales.

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M&G plc, incorporated and registered in England and Wales. Registered office: 10 Fenchurch Avenue, London EC3M 5AG. Registered number 11444019. M&G plc is a holding company, some of whose subsidiaries are authorised and regulated, as applicable, by the Prudential Regulation Authority and the Financial Conduct Authority.

M&G plc is a company incorporated and with its principal place of business in England, and its affiliated companies constitute a leading savings and investments business. M&G plc is the direct parent company of The Prudential Assurance Company Limited. The Prudential Assurance Company Limited is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in England and Wales.

M&G plc は、イングランド及びウェールズで設立・登録。本社登録地は10 Fenchurch Avenue, London EC3M 5AG。登録番号11444019。M&G plcは持ち株会社で、その子会社の一部はPRA(健全性監督機構)及びFCA(金融行為規制機構) に認可され、それらの規制対象となっています。

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M&G plc, incorporated and registered in England and Wales. Registered office: 10 Fenchurch Avenue, London EC3M 5AG. Registered number 11444019. M&G plc is a holding company, some of whose subsidiaries are authorised and regulated, as applicable, by the Prudential Regulation Authority and the Financial Conduct Authority.

M&G plc is a company incorporated and with its principal place of business in England, and its affiliated companies constitute a leading savings and investments business. M&G plc is the direct parent company of The Prudential Assurance Company Limited. The Prudential Assurance Company Limited is not affiliated in any manner with Prudential Financial, Inc, a company whose principal place of business is in the United States of America or Prudential plc, an international group incorporated in England and Wales.