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11th December 2013
Prudential investors hear continuing theme of "Growth and Cash" with new objectives outlined
Prudential yesterday held a conference for investors and analysts in London.
Group Chief Executive Tidjane Thiam opened the conference under the continuing theme of ‘Growth and Cash’. His presentation outlined three new objectives:
-Asia Underlying Free Surplus Generation of £0.9-1.1bn in 2017 (2012: £484m)
-Asia life and asset management pre-tax IFRS operating profit to grow at a compound annual rate of at least 15% over the period 2012 to 2017(2012: £924m)
-Cumulative Group Underlying Free Surplus Generation of at least £10bn over the four-year period from 2014 to end-2017.
Thiam added "Prudential is in the final year of its 2013 ‘Growth and Cash’ objectives set in December 2010. I am pleased to announce today that we have also now achieved the UK cash remittance objective. With this, we have now met five of our six 2013 objectives. We are on track to achieve the remaining objective of doubling 2009 Asia new business profits by 2013. The progress we have made towards achieving these objectives in spite of the financial crisis demonstrates that Prudential can both grow profitably and generate solid cash flows from all four business units.
Our strategy is unchanged. The fundamental drivers of our long-term success in Asia remain intact. Our exposure to fast-growing sweet-spot markets, increasing demand for savings and protection products from a rapidly emerging and increasingly wealthy middle class, and our track record of execution underpin our two new 2017 objectives in Asia. In the more developed markets of the US and the UK, we are focused on delivering earnings and cash by meeting the savings and retirement needs of the ‘baby-boomers’ in the US and of the ageing population in the UK. The consistency of our strategy and the quality of our execution underpin our aim to generate at least £10bn of cash across the Group, equivalent to a third of our current market capitalisation, over the next four years.
Looking beyond 2017, we are building the Group’s long-term future by selectively investing in markets that share many of the positive characteristics that we find in our existing Asian markets, namely fast-growing GDP, a young population and low insurance penetration. Over the last two years, we have invested in four new markets—Cambodia, Myanmar, Poland and most recently Ghana–and are exploring a fifth in Saudi Arabia. These initiatives will provide us with access to a combined population of 175m and GDP worth $1.4tr. Our overall scale and the core skills we have developed in Asia enable us to develop new markets at low opportunity cost.
We will remain focused on serving our customers and growing profitably. We will continue to invest in the medium to long-term future of the Group and are well positioned to deliver compelling returns to shareholders.”