M&G (MNG) H2 2024 earnings summary

Executive summary

• Delivered strong financial performance in 2024, with group operating profit up 5% year-over-year to £837 million, driven by nearly 20% growth in Asset Management and stable Life contributions.

• Exceeded upgraded capital generation target, producing over £900 million of capital in 2024 and surpassing the three-year £2.7 billion target.

• Announced a shift to a progressive dividend policy, with a 2% increase in DPS for 2024 to 20.1p, marking the first absolute cash dividend increase since listing in 2019.

• Transformation programme delivered £188 million in cost savings to date, with the cost savings target upgraded to £230 million by end-2025 and Asset Management cost-to-income ratio improved from 79% to 76%.

• Reopened the annuity book, launched innovative products, and completed bolt-on acquisitions in real estate and private credit, turning Life from a run-off to a growth engine.

Financial highlights

• Group operating profit reached £837 million, up 5% year-over-year, with Asset Management profit up 19% to £289 million and Life down 1%.

• Operating capital generation was £933 million in 2024, with a three-year total of £2,749 million, exceeding the upgraded target.

• Solvency II coverage ratio increased to 223%, with a solvency surplus of £4.7 billion and leverage ratio reduced to 33%.

• Net client outflows of £1.9 billion, mainly from UK Institutional Asset Management and PruFund, but international net inflows remained strong and asset base increased 1% to £346 billion.

• Private markets franchise reached £74 billion in assets, generating £418 million in revenues (41% of total), with 59% from third-party capital.

Outlook and guidance

• Refreshed three-year guidance to deliver £2.7 billion of operating capital by 2027, with long-term sustainable underlying capital generation of £100–200 million per annum.

• Management actions expected to contribute £100–200 million per annum going forward.

• Committed to further cost discipline and simplification beyond 2025.

• Expecting improved momentum on flows, especially internationally and in the BPA market, with up to £150 million available to invest in Life new business.

• Added a new explicit target for operating profit growth, aiming for sustainable, profitable expansion.