Legal & General Group Plc

Good morning, and a warm welcome, both to those of you in the room and to those joining online. I'm Michelle Moore, Group Strategy and Investor Relations Director. To start, a few housekeeping points. To those of you in the room, please make sure you've turned your devices to silent. And in the event the fire alarm sounds, colleagues will guide you to the nearest exit, and the normal forward-looking statements apply. So our running order for today will be as follows. Antonio will open with a summary of our first half results and an update on the progress we are making in delivering against our strategy. Jeff will cover the financial results in more detail, and then Antonio will make closing comments before opening to Q&A, at which point he will be joined on stage by Jeff and the CEOs of our free businesses to take your questions. Antonio, over to you.

Thank you, Michelle. Good morning. So welcome, everyone. It's great to have you here with us. We've had a great first half of the year with strong, good earnings and growth and continued momentum in the execution of our strategy. So let me first take you through the headline numbers. Our core operating EPS is up 9%. That's at the top end of our 6% to 9% range. Our core operating profit is up 6% at £859 million. Our OSG is up 3% to £279 million. And we continue to have a very strong balance sheet with a solvency to coverage ratio of 217%. We are delivering more to shareholders with a 2% increase in our interim dividend per share, and our 500 million share buyback is now nearly complete. Look, these are great numbers, but the progress on our strategy is even more encouraging. Last year, we outlined a strategy to be a growing, simpler, better connected LNG, which becomes more capital light over time. We've been busy executing that strategy to deliver sustainable growth across our three businesses, sharper strategic focus, and enhanced returns for shareholders. I'm particularly positive about the growth potential for each of our businesses. Last December, Andrew Cahill presented a deep dive on our largest business, institutional retirement. A month and a half ago, Eric Adler presented his vision to grow our asset management business. And today, we are announcing that our next deep dive into retail with Laura Mason will be on the 23rd of October. So now looking at the past six months, here are the highlights. First, sustainable growth. In institutional retirement, we have had good volumes at low strain and we have a very good pipeline. In asset management, we have seen a step change with positive revenue momentum and a further increase in our average revenue margin. In retail, we've had strong workplace DC flows, up more than 20% compared to last year. Then we have a sharper strategic focus with the sale of the U.S. protection business and partnership with Meiji Asuda. And we're getting on with the disposals in our corporate investments units. We have announced, as you've seen, the acquisition of Proprium Capital Partners and a new partnership with Blackstone. And earlier this year, Katie Worgen joined us as the group COO, and she's already driving operational improvements and cost discipline across the group. And finally, we are on track to deliver our three-year targets and return more than $5 billion to shareholders through a combination of dividends and share buybacks. So now let me give you a bit more detail on each one of the businesses, starting with institutional retirement. As you can see, PRT continues to grow strongly with over 5 billion written in the first half of the year. You can see there the 5.2 billion. Here in the UK, we have written new business at attractive margins with a new business strain of 1%, continuing basically the capital light investment strategy that we deployed last year. Our international business is down on the prior year, given a slower start to the US market. But in any case, this business tends to be weighted towards the second half. Actually, in fact, since the 30th of June, we have won three US PRT deals, including a $285 million transaction, which we won just last night, and which, therefore, is not included on the $5.2 billion. So well done, Andrew and the US team. Looking forward, I'm extremely optimistic about the prospects for our PRT business. Client demand remains high with 42 billion of an active pipeline here in the UK and you can see they're including nine schemes that are over 1 billion pounds. So now thinking of the markets, look, we continue to see significant interest as you've seen in the sector, which for me validates its attractiveness. PRT will continue to be a key driver of our growth and deliver reliable earnings for many decades to come. You can see on the chart, but from now to 2028, we are confident we can write volumes in line with the guidance that we gave you. If you remember, that was 10 to 13 billion per year, or basically 50 to 65 billion over five years. I said that this can be lumpy, and we will continue to be disciplined on pricing and profitability. And then beyond 2028, the market will continue to grow with more than 500 billion of inflows over the following 15 years as the percentage of insured DB assets continues to increase. I showed you that chart before where more and more of the total DB assets in the market continue to, the percentage continues to come to insurance companies and increase. What does that mean for us? This means that our profits will continue to grow for more than two decades as the volume that we write outpaces annuity outflows, and importantly, we have greater capacity for portfolio optimization. And this picture here is only the UK. We anticipate even higher volumes in the US and potentially further opportunities in new PRT markets like Japan. And finally, as the DC market matures and the demand for guaranteed retirement income increases, the retail annuities market will continue to grow for decades and decades. So that's a healthy market. Why do we win in this market? Here are the five competitive advantages that we have in this business. By the way, this is the same slide that Andrew presented last December at our institutional retirement investor deep dive. There are five key areas. First, our scale and origination capabilities allow us to price competitively. And we do this in two ways, through our own asset management capabilities and also through partnerships like the one we announced with Blackstone. Second, we have a strong brand and a track record built over 35 years of writing PRT. Third, we have the strength of our asset management relationships as the largest asset manager in the UK. Over 80% of our PRT volumes come from our own asset management clients. Fourth, we offer bespoke solutions for the whole market, both large clients and small schemes. And lastly, we support these clients through high-quality service. There are a series of live deals right now where the trustees are visiting our client service teams in Hove to see this in action. So over more than three decades, we have experienced major swings in the global economy and market changes, but we have consistently written PRT business and made money in all market conditions. So I'm confident we will continue to be a leader in this space. In asset management, this last six months were a clear turning point with real revenue momentum. Our annualized net new revenue, you can see it there, at 15 million is really encouraging and higher than what we have generated over the past two years combined. This is consistent, by the way, with the run rate required for our 100 to 150 million cumulative four-year target. One particular highlight for me is the growth of UKDC. For the first time, our UKDC revenue generates more revenues than our UKDB business. So UKDC is now bigger than UKDB from an asset management perspective. We have continued to grow our average revenue margin, if you remember what I've said to you before, now from eight to nine basis points, which is now close to double digits, which we announced, our target we announced just in June. An important part of that margin improvement in the six months is the growth in private markets, now at 65 billion pounds and on track to exceed 85 billion by 2028. This growth is on the back of good fundraising in private markets. One year on, our private markets access fund has grown to 1.6 billion pounds. And we've also had a series of other private market launches you can see there. I'm actually particularly excited of the last, the one before last, bullet point there, which is our new digital infrastructure fund. So good growth, we've turned a corner. How are we doing this? This growth is the result of deliberate investments that we've made in the business. As Eric said at the Asset Management Deep Dive, we are doing this in one of three ways. Either we build or we buy or we partner. You can see the specific examples of that momentum on the slide. So in terms of build, we have been growing our active fixed income and climate transition strategies organically in addition to the digital infrastructure fund I had just mentioned. In terms of buy, over there in the middle, our investments in Taurus and Proprium Capital Partners complement our existing UK real estate capabilities. In the space of just 12 months, we've gone from a primarily UK real estate manager to having now a global real estate platform that we can grow and leverage. And finally, we are partnering with Blackstone to create public and private hybrid products. It's worth actually spending a minute more on Blackstone because this is a broader relationship. It cuts across all of LNG, not just asset management. Before I do that, I'd like to say that our thoughts are with the Blackstone team following the devastating news that one of their partners was killed last week, as you saw in their New York office. I spoke to both Steve Schwarzman and John Gray, and I know this was the darkest day in their history. We've got to know the Blackstone team really well over this last year and have really enjoyed the interactions that led to the announcement. We are extremely positive about the potential for the partnership, which covers two main areas which you can see on the slide. So on the left hand side, first in asset management, as I've just mentioned, we will create hybrid products for our clients, bringing together LNG's active fixed income, multi-asset and UK private credit capabilities with the best in class market capabilities of Blackstone. So we bring all of this together and we will then distribute this hybrid products to our existing clients, but also target new geographies and new segments like wealth. then on the right hand side for our annuity businesses, this partnership gives us access to Blackstone scale and therefore to an attractive pipeline of matching adjustment eligible assets predominantly in US private credit. These assets complement our own existing asset origination capabilities and basically they increase our price competitiveness and profitability. If you put the two opportunities together, we have an ambition to generate $20 billion of business, and I'm looking forward to what we will deliver for many years to come, starting in the second half of this year. And finally, retail. Jeff will cover the performance of our different retail businesses shortly. But I wanted to focus particularly on workplace, which, as you know, is one of the most exciting growth areas in the market and of our strategy. We now have more than 100 billion pounds of assets under administration. This was driven by 4 billion, you can see in the slide, 4 billion of net flows in the first half, which is a 21% increase compared to 2024. Overall, this means that we have close to 200 billion of DC assets. This is across asset management and retail, not just the part that you see here, but across both businesses. And that's circa 25% of the total DC market in the UK. As you also know, the DC market is projected to grow. It will be $1.4 trillion by 2033. And we are really well positioned to take advantage of that growth. We were one of the first to provide access to private markets as part of our DC default funds, and we were the first provider early in the year to connect to the government's pension dashboard, which is a tool that increases transparency for DC members and therefore improves engagement with the members. I'm very positive about this, and we will tell you more about the prospects for this business and its profitability at the investor deep dive on the 23rd of October. So stepping back, all of this means that we are on track to return more than £5 billion to shareholders through a combination of dividends and share buybacks. Here are the different components on the slide. First, our dividend, which is growing at 2%, accounts for £3.6 billion of the total over the next three years. Second, the 500 million share buyback I announced back in March at our full year results is now 90% complete. And third, after the major student transaction completes, we intend to return 1 billion of the 1.8 billion pounds of proceeds. If you add all of that together, you get to 5.1 billion. And then on top of that, you have the ongoing buybacks, which is that last little box. So overall, we are doing exactly what we said we would do, which is to return more to shareholders. I will now hand over to Jeff. We'll walk you through the financial highlights. And then I'll come back for some closing remarks and to answer your questions. Jeff.

Thank you, Antonio, and good morning, everyone. Our businesses continue to grow and deliver increased earnings and enhanced value creation for shareholders. Core operating profit is up 6% to £859, driven by the predictable release from our growing store of future profit and the benefit of increased back book optimization on our annuity portfolio. Growth in core operating EPS is 9%. And as Antonio mentioned earlier, this is at the top end of our three-year target range. And capital generation is up 3% against the prior year, with the expectation of higher growth for the full year. The solvency coverage ratio of 217% remains strong and reflects the impact of the dividends and buyback in the first half of the year. So now moving on to the performance of our businesses. Institutional retirement operating profit is up 11% to £618 million. Our growing and maturing annuity book is driving a larger release from the CSM and risk adjustment, resulting in increasing and predictable profits. Back book optimisation has generated over £150 million of profit across our annuity portfolio, which we believe is sustainable level for the medium term. This reflects greater capacity to rotate into direct investments as we continue to write new business using a gilt-based investment strategy, as well as taking advantage of volatility in the market to switch out of those gilts. Investment variance largely reflects modeling improvements and an action to optimize our reinsurance. This has added 139 million pounds to our store of future profits, but generated day one adverse investment variance in the same way as longevity releases. This effect will unwind as the CSM and risk adjustment release into profit over time. As Antonio mentioned earlier, we have made a strong start to the year, with 3.4 billion pounds of total new business completed and a further 1.7 billion in exclusivity. In the UK, we continue to optimize pricing with new business investment strategies that adapt to current market conditions, delivering a high return on capital deployed and a new business strain of around 1%. New business margins remain attractive at 7.1%. And the greater capacity for back book optimization increases the future upside potential, as we've already demonstrated this year. In asset management, fee revenues were up 2% in the year, despite lower average AUM, as our conscious shift to higher revenue margin business takes effect. The 15 million pounds of annualized net new revenue demonstrates the significant progress we have made. Total asset management operating profit includes 79 million from our balance sheet investments. This is broadly flat on the prior year. A lower valuation uplift on Pemberton is offset by higher returns from a growing portfolio, as we warehouse assets to support future growth strategies and seed commitments to catalyse new funding. Over the past five years, on average, valuation uplifts on Pemberton have contributed less than £50 million per annum to operating profit, and Pemberton currently makes up less than 30% of the £1.4 billion portfolio. Around 50% of the £124 million investment variance reflect unrealised mark-to-market impacts versus the expected return in operating profit. The remainder is from exceptional items related to organisational restructuring and the write-down of a small number of assets which did not meet the criteria to continue funding. Across the group, we're taking a disciplined approach to both cost management and investment, and this can be seen in asset management. We continue to keep underlying growth below inflation, demonstrating cost control. In turn, we are considered about our investment spend as we focus on opportunities that we are confident can generate higher revenues and support our growth strategy. Our cost-income ratio has marginally increased from 74% as at the end of last year to 75%, as we have chosen to deploy £13 million of incremental investment spend despite market volatility. We remain confident that, with continued cost discipline and revenue growth from the investment we are making, we can reduce our cost-income ratio to below 70% by 2028. And now in retail, operating profit increased by 3% to 237 million pounds, with predictable earnings from our store of future profit and the benefit of back book optimization. Lower volumes in retail annuities follow exceptional performance in 2024, where we materially increased our market share, resulting in record volumes. However, we do expect continued growth and we are confident in our ability to maintain a leading market share. Protection gross written premiums are up 4%, driven by a particularly strong first half for our group protection business. And our retail protection margins continue to grow. Our workplace DC net flows are up 21% to 4 billion pounds. And as Antonio said, our total assets have now passed 100 billion pounds, generating revenue in both retail and asset management. we will continue to invest in our DC proposition to ensure we maintain our competitive position and gain operational leverage as we scale. The compounding effect of winning DC New Business today will be a sustainable source of future growth. Our Solvency II coverage ratio remains strong, with surplus of 8 billion pounds. Notwithstanding the payments of the largest part of the full dividend and allowing for the 500 million pound buyback, The coverage ratio of 217% excludes 6% in respect of temporary impacts from non-retained US business that will unwind when the transaction with Meiji Yasuda completes. This is predominantly new business strain on US protection and US dollar hedges on the proceeds of the transaction. The transaction remains on track to close in 2025. And as a reminder, when we announced the sale back in February, we said we would generate a further 1.2 billion of capital, and it would increase the solvency ratio by around 7 percentage points after the anticipated share buyback. This is on top of today's 217%. Now, this slide looks at OSG in a bit more detail. In the first half, we generated £729 million, growing by 3%. We anticipate this growth to be higher for the full year, reflecting the timing of some items in 2024 being more weighted to the first half. This includes management actions of greater than £300 million, which are sustainable in the medium term, following increased confidence in back book optimisation. In 2025, we expect full year OSG to broadly cover the cost of the dividend and new business strain. At the same time, the OSG per share will be growing at greater than 5%, creating headroom over the 2% DPS growth. This will be further enhanced by the additional buyback we intend to complete next year. This buyback would increase OSG per share by over 9%, and in absolute terms, reduce the cost of the dividend by around £100 million. As our core businesses continue to grow and we execute our management actions, this gap will widen further, providing greater capacity for investment for future growth or greater returns to shareholders. Our strong balance sheet and growing surplus generation makes us well positioned to capitalize on the opportunities in each of our core markets as we move into what we expect will be a busy second half. I will now hand back to Antonio for closing comments.