Hello, everyone, and welcome to the M&G plc 2021 full year results. My name is Nadia, and I'll be coordinating the call today. If you would like to ask a question at the end of the presentation, please press star followed by one on your telephone keypad. If you have joined via the webcast, please press the questions box. I will now hand over to our host, John Foley, Chief Executive Officer. To begin, John, please go ahead. Morning, everybody. Thanks for coming. It's really good to have the office open again, so we can invite you into the auditorium, and it's really good to see so many of you have made it this morning. Thanks for coming. We've done a little bit different this year. In keeping with the previous couple of years under COVID, we've recorded the presentations, which is good from our perspective. It means you don't have to do them up here live, but also gives you a bit more time to look at the information. Hopefully there's some answers to your questions in there. It also gives you the opportunity to think about what other questions you might want to pose to the management team that I actually have on the front row here. If we get stuck, we've got them to ask the questions. Couple of things to say before we get started is that I'm delighted to say that we are joined today by our new chair, who joins us March the something. Edward, can you stand up and take a quick bow? That's a job ticked. Thank you for that. Most importantly, thank you to Fiona for stepping up into that role for the last year, a very long time and done a great job. Thank you for doing that. I'd also like to thank Paul, who many of you may or may not know has stepped up to the CFO role as we move Claire into a new position. We wish Paul the best with his new adventures sometime later in the year. I want to also thank the management team. You may know that we had a reorganization back in the autumn, and everybody's role changed in some way or another. People had expanded roles or they took on a new role. I'd like to thank them for the gusto with which they've got on with the job. Most important, I want to take this opportunity to thank everybody in the company for the really hard work that they've put in to not only achieving these results, but since we became independent. It's testimony to everybody's contribution that we are where we are today. I really want to thank everybody. With that, where's Luca? Over here. Come play. Shall I go? Go. I guess we'll open to questions for people in the room, for analysts in the room. I'll remind you of two things. First one, take out the microphone from the seats and ask the question in the microphone, otherwise the people online will not be able to hear anything. Secondly, please keep it to two questions maximum, this way we can give all of you a chance to speak. Then obviously if we have time at the end of the session, we can go back to whoever has got any additional questions that have not been answered in the meantime. With that, no further instructions, I see a few hands raised. I did promise the first question to Nasib. Do you want to go first and maybe introduce yourself, the firm that you're working for, and then ask the questions? Thank you. You need to press the button, I think. The red light come on. I need to give a press, right? Yeah, I think so. Okay, cool. Thanks. Yeah, Nasib Ahmed from UBS. So yeah, thanks for the presentation. Thanks for the results. Just three questions. First on your targeted acquisition. Two questions. Oh, is it two? Oops. Okay, sorry. Okay, I'll keep it to two. On the targeted acquisition, you've done some good acquisitions in wealth management and asset management. Are there any other areas where you think that you can enhance your capabilities? And just compared to peers, where do you stand with regards to those capabilities? And then just secondly, on the solvency ratio, I saw that you're focusing more on asset management and wealth and reducing focus on life. But as a ratio, if I project the solvency ratio forward, we know asset management and wealth management is less capital-intensive than life. The ratio tends to kind of go up over time. It seems like there's more sort of potential capital returns coming if you're at the 190% now and the ratio tends to go up. Thanks. No third one. Keeping to Luca's instruction. On the acquisitions, look, what we've done there is that we've talked to, since we became independent about how we think about the business, how we're gonna grow the business, what the strategy is. What you've seen us do is actually either acquire by inorganic means, capabilities that we frankly didn't have. Whether it's in the wealth space or in the asset management space, the acquisitions we've made, whether it be the investment in Moneyfarm or the Ascentric platform, or Sandringham, this will provide us with the building blocks to take the M&G Wealth proposition forward at pace. Okay? It's our job to integrate these propositions and to scale them. On the asset management side, we know that sustainability, despite all the questions that are going around in the market today about different aspects of sustainability, we know it's here to stay, we know it's going to grow, and buying responsAbility as we have will augment our capabilities, both in terms of sustainability as an investment proposition, because these guys have been doing it for over 20 years, don't forget. But also opens up the opportunity for us to scale that business and with a different distribution network based in Zurich. You know, with that acquisition, we get a scalable proposition in impact investing in the areas that we really want to grow as an organization. That's both in terms of private assets, and sustainability, obviously, but also gives us a new hub in Zurich, both from a distribution perspective, and also an asset management perspective. All of that augments what we're doing from a strategic perspective. What you can expect us doing in the future, and we've said before that we're not really interested in scale deals because they generally speaking, don't work. There's lots of evidence for that. But what we will do is where we see the opportunity to accelerate our strategy by doing more of the sorts of things we've just done, we'll do them. That's what you can expect to see us doing in terms of acquisitions. On the solvency ratio, well, that 160-190 range that we've talked about, that's the first time I think we've talked to the market about that range. That's why when we de-merged from Prudential, we were at 170, and that's why we've consistently said that we're comfortable with 170, because that's within the range, 160-190. This isn't new to us. This is how we think about capital management. That's why we've shown more details about our capital management framework, which is really important that the market understands as we do the first share buyback, which is a very interesting opportunity, I think for us and for shareholders. We thought it was appropriate to share with the market how we think about capital management, the capital framework, what goes into it, what might be the issues around it. As you can see, it's not clear-cut. There are very many aspects to how we think about the capital framework and capital management generally. The result of all those machinations is that we're doing a 500 million pound buyback over the course of this year, with from what I've read so far, people seem to be quite happy about. Sure. Andy Sinclair. Thanks. It's Andy from BofA. Two from me. First, just on the debt redemption, I thought it was generally a cracking update today, but perhaps the one area I just wanted to push a little bit was just on the debt redemption. Why not commit to reducing debt sooner? You don't seem to have explicitly stated a timeframe for that. I think people are wondering if that's just waiting for calls. Is there any ability, desire, willingness to push to redeem debt earlier? Mm. Rather than waiting for maturities? That's question one. Secondly, again, just looking at the capital generation and scope for more capital returns, GBP 2.5 billion target. It looks to me like after dividend costs, you're gonna have comfortably over GBP 300 million extra a year that's gonna be generated over the next three years. How do you think about that, and what could be the priorities for deploying that excess? Thanks. Yeah. Thanks. On the debt question, the way we think about that is that we won't be doing any transactions that are uneconomic for shareholders. When debt is trading at a premium to where we issue, there seems little point in buying back the debt at said premium because that's not an economic transaction as far as shareholders are concerned. We have decided to earmark, as you rightly point out, the GBP 300 million for the first call date on the GBP 300 million bonds. Yeah. That's still July 2024. We're not gonna do anything ahead of that unless markets change, rates move sufficiently that we can exercise an earlier call on that. Not that there is a formal call, but we could get into a conversation with bondholders around redeeming early. These are torturous discussions, if you've ever been involved in them. We've done them as part of a previous life, and they end up costing you a lot of money. For the optics, which is all it would be really, it seems just you're trading off the optics for the economics, and we won't. We'd have no plans to make that trade. In terms of the capital generation question and any excess, we live in a volatile world, Andy. You've already planned out the GBP 300 million excess, which we hope happens. Look, what we've tried to do today is give you a lot of the inputs. We've given you the framework. We've given you the growth strategy of the organization. We've talked a bit about the types of acquisition that we want to make. As we've always said, we have absolutely no desire to keep excess capital that we're not gonna use in the business. As we have today, we've given GBP 500 million through a share buyback to shareholders, which will probably take us the best part of this year to execute that. I don't know what the share price today is probably about 10%-11% of the market cap that we're buying back. The share buyback is around that. It's significant. Don't expect me to make any comment about that subject at the half year. That's the way we think about it. You've got pretty much all of the inputs to the capital, the way we think about the capital framework. Sorry, just to follow up on the debt. I realize the debt's trading above par, but if I look at, say, some of your longer duration coupons or tranches are out there, when you think about the coupons are gonna be paid, it's certainly still trading below the nominal plus the coupons that will be paid over that time. Would there still not be any willingness to look for some of those longer duration tranches and perhaps tender to take some of that off the table, even rather than the full tranche? Yeah. We could. I mean, the answer is the spends calculations around this are always tricky. Frankly, we'd rather not get into those sort of protracted negotiations with bondholders when we really don't feel the need to. You know, we've got this first call date coming up, albeit 2024. And we've set aside some capital to call that. You know, in the probably unlikely event, but you never know, that rates move such that that becomes an economic thing to call it early. Well, we'll enter those conversations, but they'll be conversations with bondholders, right? You just can't automatically do these things. I think, Andrew from Citi had their hand up for a while. Great. Thanks for taking my questions. The first one's on the 2.5 capital generation. That compares to, I think it was the 2.6 for 2021-2023 that you mentioned at the half year. I know that had the loss, say Part VII in, so really flat if you exclude that. Is that the way to be thinking about OCG going forward, or are there sort of growth angles in runoff? I guess, how do we think about growth on a medium-term basis there? Secondly, just on the restructuring expenses, they were GBP 146 million for the year. I can see some of that was Ascentric, other transformation, as well as the building and things like that. How should we think about those restructuring expenses going forward for a sort of a run rate? Thank you. Thank you. Yeah. Firstly, on the capital generation target, you're right. The difference between the 2.6% and the 2.5% is indeed the Rothesay perspective. I think what we're able to demonstrate for the past two years is just the capital generative nature of the business. I think if you look at the sort of management actions, we've been very pleased with what we've been able to produce over the past two years. That's about GBP 1.4 billion. I think, you know, there's sort of two drivers on a prospective basis of that target. There's one which is we'll continue to look for management actions. You know, if you look at the realms of longevity, asset trading, hedging, those are all areas we've been pleased with, along with some of the non-recurring aspects of those management actions. I think the other aspect is just around those management actions. We can't always tell sort of the timing or quantum of them, so that does come into the picture around that sort of the target of GBP 2.5 billion. Some's within our control, other aspects are without our control. For example, sort of regulatory approval might be a component. The other aspect, and what you'll see right throughout the presentation, is the underlying capital generation, and we've really been focused on that from both an organic means and an inorganic means. I think the actions that we've taken have really sort of helped underpin, and that's where our focus will be to drive out the underlying capital generation from the GBP 145 cost savings. Should I pick that up? Yeah. On the GBP 145 cost saving, I think that's something that we've been really proud of. We finished that one year early, similar to the capital generation that we've mentioned. I think within that, we've been able to absorb inflation for four years as well. I think it's a good. It shows that we're very focused on cost control and cost management. One of the things that we'll continue to do is focus on efficiencies on a prospective basis and really look at reinvesting the efficiencies we've gained into growing the business. I mentioned it's sort of complementary to driving the underlying capital generation nature of the business. That's something we'll do. Just as a reminder, I know we've made this point in the past, but that 145 program wasn't just about getting efficiencies out of the business. It was also about improving the control environment, modernizing the business, but also really ensuring that the customer experience and the customer journey is being improved along the digital lines. We covered a bit of that in the half year. There's sort of a broader aspect to that program, and I think you can expect more of that going forward. I was actually referring to the restructuring expenses below the line of GBP 146 from Ascentric and what you've done in the building and just how to think about that going forward. Will that be elevated going forward, or are those one-time only? The aspects of it are very similar. The themes are very much how can we identify efficiencies? That's one aspect. The other one is we all know, and John mentioned right at the start, that we've got a different way of working. It's great to see people in the room today, but we've spent some money on the hybrid working and looking at how we configure our office space as another below-the-line investment. That's done. If you look prospectively, the other aspect is that we've spent some money on integrating the businesses that we've acquired. Andrew Crean from Autonomous Research. It's Andrew Crean with Autonomous Research. Two questions. At the IPO, you set some tramlines, not targets, for PruFund sales of between GBP 5 billion and GBP 15 billion. You're hovering just below, I think, the bottom end of that. Can you give us a sense over the next two years? I mean, you've got the recovery in the U.K., which you talked a little bit about, and you've also got the entry into Europe. Can you give us a sense as to where that might go over that time? Secondly, the annuity business. Now that the High Court has agreed with you and you're actually allowed to transfer assets to somebody else, is this business still core, or should we view it as an asset which you will be able to determine the right time to take action on it? Thank you for those. So let me take the second one first because it's probably the quickest answer. We've been consistent with our explanation around the annuity business. I don't think we've ever said that it's core. But it is something that we manage very well. We do know our way around that business. It does generate capital, and it does give us opportunities as we talk about one M&G as between the asset owner and the asset manager. However, what we've always said around that business is that we keep our options open. You're quite right to mention, Andrew, that the way we think about that is that if we were to determine that, it's not part of our operation or is not valid to our operation anymore, we are probably in as good a position as anybody else to determine when that right time is and what we do about it. That's not at the moment. Just a follow-up. Claire, off the top of your head. It's difficult to say, Andrew, because of the diversification impacts of it. I think we show in the capital analysis, in terms of the split between the elements, between the PruFund and the annuity book, that give you a sense of the amount. Page 31 in the presentation. What? Page 31 in the presentation gives you a little bit of an idea. Great. Do you want me to take the PruFund one while I'm stood up? Well, why not? Given that you're standing already, Claire. A couple of things. I'll come back to the comment around what we disclosed beforehand, Andrew. A couple of things I would say is, firstly, the team at the moment is massively enthusiastic about the PruFund. The performance of the fund over the last 18 months has been phenomenal, and it's absolutely doing what you'd expect it to do, and you can see it from the graph in terms of the pack. From that perspective, it's a great proposition and it's doing exactly what it said. Certainly the pandemic has had its challenges. What we've seen is a shift towards a lot more digital platform, and that's been the big driver in terms of the acquisition of Ascentric. What we are currently doing is basically integrating that, putting the digital front end onto it and putting PruFund onto that platform. We would expect over time to basically see those flows sort of gradually improve. I think the one thing that I would say is, for me, I'm very focused on the three elements of the value chain. The advice, the help and the support, and you can see the acquisition of Moneyfarm. The Sandringham acquisition has been critical, and we've seen a lot of consolidation in the advice market, and that's something we're very much playing in, partly 'cause it links to our strategy, but partly also defensive in terms of ownership of the customer. The scale point in terms of administration, if you look at our off-platform capability, one of the best in the market. The platform piece was the gap. That was the acquisition of Ascentric. Again, we're very much at the scale side of that. As John said, not looking to do a lot to just buy scale in terms of administration. The investment proposition is fundamental and obviously plays in terms of the asset manager, asset owner. We're one of the few in the market who has got a top quartile investment capability, and that for us is what we want to basically play on from a wealth perspective. That was partly the reason for the acquisition of TCF. The discretionary fund management capability, building that out, moving us from mass market into more like mass affluent in terms of where we go. Also leveraging the investment capabilities across the business. We leverage our footprint and scale in terms of using third parties to basically give that broad proposition. From our perspective, we're very much in a place where we're building out that capability in terms of where we go, broadening out PruFund, recognizing PruFund's a really strong proposition. I'm very optimistic, but don't necessarily expect that everything's gonna turn around tomorrow 'cause there's quite a lot of structural aspects that need to happen. Just to point out on your tramlines, those GBP 5 billion, GBP 10 billion and GBP 15 billion, they were just scenarios. They were not tramlines or targets in terms of what we said. Thank you. Thank you, Claire. Dominic O'Mahony. You had almost given up hope, but, carrying on. Hello. Is that working? Great. Dominic O'Mahony, BNP Paribas. I'd like to take some questions. I'll just try to stick to two. Just on Future +, really exciting to see that rolling out. I wonder if you could spell out in a little bit more detail the structures. I think in your presentation you say that it's economics are more like an asset management product. Maybe could it. I assume it's 100-0 rather than 90-10, but maybe you could spell it out. And in particular, could you explain how the distribution arrangement works and how the costs work? So is there sort of an upfront load versus a stream? I realize this is small right now, but I guess it's the model for future rollout. Second question, just on the dividend, technical point. I mean, you say stable or increasing ordinary dividends. Is that a per share commitment or a cash spend commitment? Thank you. It's a cash spend. If we keep the cash spend stable with the buyback, you'll see that the DPS will inevitably rise. Depending on what price we buy the shares back at, it's likely they'll then rise. In terms of Future +, obviously we can't give away any commercial arrangements that we have with the distributors. We think of it as an institutional product. I mean, Claire has talked about that in the past. We don't own the end customer. Clearly, you know, the reason we started in Italy, for example, is that there's, you know, way over EUR 1 trillion of cash on deposits with banks. They're not making any money on it, right? This is a first step into investments, and it's a really important one, and as we know from a track record perspective, it's a really good one. We believe the traction that product will get will be very strong. It's early days. We only received approval, regulatory approval towards the end of December. First sales in January or the end of January. We're yet to see the proof of the pudding. Then, you know, we'll roll that out. Probably on different commercial terms as dictated by the different markets. We'll probably elaborate on that this time next year when we see what's happening with the proposition. KBW. Hi, Charlie Reith, KBW. It's encouraging to see continued positive momentum within retail asset management in the period with a significant reduction in net outflows. Are you expecting to see positive flows this year, and what might derail that? Just to follow up on capital. It does seem like you've increased the level of Solvency II comfort from 170%, which I believe you did mention at the demerger. Sorry, Charlie, I didn't get that last bit. Can you? It seems like you've increased the level of Solvency II comfort up from 170%. Yeah. You mentioned at demerger up to the 190% mentioned now. Could you just discuss the reasons for this? If so, would this be subject to change over time, for example, back to the 170% level? Okay. Thank you. In the asset management business, yeah, we've explained the medicine that we've been taking in retail asset management. The overall flow position in the business is strong. As you've seen, we've been in net inflows this year. That is a very good position. The institutional business continues to do a great job and had another great year. On the retail side, we've launched new propositions. We have cut our fees, so we are more competitive. We have sought to review how the fund's performing in slightly different ways. We've talked in the past about taking risk deep dives into the funds and having a more team-based approach and so on. Which is not surprising given the success of the With Profits fund, which is how they manage that fund. All of that. There's no one particular thing. All of that has, I think, culminated in this position. The momentum is strong. So far this year, we're in positive territory, which is good. You know, with the macroeconomic and geopolitical environment as it is at the moment, you wouldn't expect me to predict where that might go. The one thing I will say, though, is that we honestly truly believe, because we've worked hard on this, have the right propositions for customers. People want what we are now delivering to them, and so that has made a big difference. If the momentum in the business, the morale in the business is palpably stronger than hitherto. Jack, was there anything you'd add to that? I'll just add a couple of things. Thanks, John. I think we laid out six months ago, 12 weeks ago, what we were doing around the retail asset management business. John's covered a number of the things. There were about four things that we were focused on. One was the value for money points, and we reduced the fees. We managed to reduce those fees and also maintain that top-line revenue within the asset management business. I'm pleased about that. The feedback we get from clients now is that the price is not an issue on the retail side anymore. That's very positive. Secondly, was around proposition and relevance of proposition. What we're seeing is that some of our existing funds that are floating rate in nature or inflation linked are getting some good flows as we see rates go up and inflation becoming an issue. Some of the funds we've launched three years ago, Positive Impact, Global Listed Infrastructure, some good three-year numbers coming through, so we're getting some good traction there. We're launching a new range of products around sustainability. Climate Solutions, Better Health, diversity and inclusion, and they're getting a lot of interest from some of our intermediary clients. Third area was performance. We've seen an improvement there. Still more to do. Performance is a bit volatile, particularly in some of our older and larger funds, but some of the newer funds coming through, performance is much better. Finally, working with our intermediary clients on what we call solutions, which is not necessarily distributing funds through their network, but working with them on more bespoke arrangements, developing strategies that they want and they know that their clients want. That's important because you tend to see less volatility in flows in those solution products, and the pipeline there looks good. I think that's the other thing. Pipeline does look pretty strong at the moment, and you can see the capital queue on the institutional side that's in the deck. On the wholesale retail side, we're also seeing a decent pipeline. Thanks, Jake. On the Solvency II question, look, we are a capital generative business, as we've clearly demonstrated today. We like to think we're good custodians of shareholder capital. We want to be in today's environment with the geopolitical macro uncertainties that there are, I think being at the top end of that range is a good position to be in. We don't manage to those exact percentages either. We don't take action at the point of 191% or 159%. It does trigger a debate and we may take de-risking actions below 160%. We may not. It depends on the market environment. What we try to do is just give you the context that we think about it. The Solvency II range, the thought process that goes behind the strategic acquisitions that we make, balanced against the returns to shareholders and how we think about share buybacks and so on. I reiterate the point that if we haven't got any interesting acquisition opportunities, then we'll return excess capital to shareholders. That obviously will depend on the macro environment and it's a little uncertain at the moment. We're very happy to be doing the GBP 500 million buyback. As I say, that will take the best part of the year, we think. Does that answer your question, Charlie? Is it- Yes. Although I'm still not totally clear whether that Yes. Sorry. To be clear, we would prefer to be operating within the range. In a normal, whatever normal, market environment looks like, we haven't had a normal market environment for a while. When we ever get back to one, we would expect to be operating within the range. You know, the last three years, two and a half years, we've had some interesting macro things to worry about. We prefer to be at the top end of the range for reasons that I think are obvious. That said, you know, notwithstanding operating at the top end of the range, we are. We're still delivering for shareholders, keeping the dividend level and, you know, giving back a further GBP 500 million, as well as setting aside GBP 300 million for the call on the bonds. Maybe, Charlie, the only thing to add there is that you said we increased the level of comfort from 170 to 190. The 160-190 framework has always been in place internally since we've emerged. We haven't changed anything. We have simply given that transparency externally, and we were comfortable at 170, as John said, because exactly because it's within that range. Nothing has changed in a way. It's simply a different transparency that we are providing to you guys today. Morning, everyone. Mandeep Jagpal, RBC Capital Markets. Two questions from me, please. In the absence of Gordon, they're both on mortality. First one is you announced GBP 125 million release today, which is around 20% of the operating profit. Sorry, I don't know if the others are getting this. I find it hard to hear you. Yeah. You announced GBP 125 million of longevity released today, which is a significant proportion of operating profit this year. Please could you let us know the split between base table releases and longevity improvement assumptions this year? Secondly, I noted in the press release that that it states future improvements in the assumptions will be a key focus in 2022, and alternative approaches in determining portfolio-specific assumptions will be considered. I assume the alternative approaches are required as the CMI is ignoring 2020 and 2021 data. Could you just give us any insight into the approaches that M&G will be taking when setting these assumptions and the direction life expectancy is looking like it's going in your book? Thank you for those questions. I'll take that. If you look at longevity, really essentially, the move from CMI 2018 to CMI 2019 that influenced our results was broadly neutral. This year. Then if you look at sort of CMI 2020, we don't expect significant changes from adopting that either. I think that's principally, if you look at sort of the COVID environment, we've not taken sort of any benefit in terms of changing assumptions from that perspective. I think that's sort of partly what we were referring to. I think that's pretty consistent with the sector from that perspective. Now, from the more sort of specifics around the company, you would know that in 2020, we had quite a meaningful longevity release. As Claire mentioned before me in previous results presentations, a lot of that was to do with really examining the base mortality model and getting comfortable with refinements to the data and getting basically more, let's say more comfort around that. That triggered the release in 2020. We've seen more of that come through in 2021, which is the 125, but just not to the same extent as 2020. Then prospectively, we'd expect to gain some release, but nowhere near the sort of size of the 2020, 2021 outlook. I think sort of going back to the sort of general view around the balance sheet, we still are pretty prudent from that perspective. Alan? Thanks. Alan Devlin from Goldman Sachs. A couple of questions. One on the acquisition of responsAbility. Is that gonna be kinda managed as a boutique using your distribution, or would that be kind of incorporated into the wider M&G strategy? If it is a boutique, we expect kind of further similar type acquisitions. The second one, just on capital and following up from the last question, what is, you know, the outlook for kinda management actions and asset trading in 2022, particularly in this volatile environment? Does that make it any tougher or actually give you opportunities? Thanks. Sure. Thanks, Alan. You take the second one, I'll take the first one. In terms of responsAbility, it's got a great brand in Europe, and it's got a really strong reputation. Our strategy there is to actually distribute more product through it both ways. Any of these acquisitions that we make, it's about what they can do for us and what we can do for them. We have a bigger distribution network, for example, so we will be able to scale that proposition more, won't we, Jack? That's the point of buying it. Would we do more to accelerate the strategy? Absolutely. People have said, you know, "You're quite acquisitive," because we've bought four or five different businesses. We've looked at a whole lot more since independence and you could understand the reason why. We identify what our gaps are, and we want to fill them. We want to fill them quickly because we wanna get on with it. So you may see some more of those types of. They don't really move the needle in terms of earnings. That's why they're small, and that's why we, you know, we give you the aggregate number. But they are really important in terms of building blocks for what we're doing and how we see this business growing over time. I can also see us acquiring more teams and integrating those into the business. We haven't done anything in that regard since we did the Port Meadow team back in the end of 2019. We're always on the lookout. I think the proposition that is M&G today with the power of the seeding from the asset owner to the asset manager is a very strong proposition for people who wanna get on and do new things, apropos the Catalyst team that we put together. I mean, you know, that is a fantastic. Not only is it a fantastic proposition, it's also to be working in that group of people, 25 people globally, looking at these sorts of opportunities, not a lot you know, there's not a lot of people out there who can do that. It's I wouldn't say it's unique, but it's quite a strategic imperative for us. It shows you where we're going. Naturally we get questions around the mutual fund business, which is very important for us, there's no doubt about it. In terms of where we're growing, where we want to accelerate the growth, it's in the areas that are interesting and frankly, where you can charge more by way of fees. Paul. Yeah, capital and management action. I think it's similar to the earlier point I made. That, you know, if you start out and look back on the past two years, you know, GBP 1.4 billion of management actions is pretty substantial and something we are pleased with. If you go back further to sort of pre-public phase, we have got a good track record of delivering on management actions. I think that should give a degree of comfort around that GBP 2.5 billion target that we've set out today. I think if you look at the nature of them, certainly it goes back to sort of what I said. We do focus around, you know, longevity, asset trading, hedging. We've covered off, longevity in the earlier question. Certainly to your point around volatility, we say, we see that could provide potential opportunities for greater levels of asset trading on a prospective basis. I think the last point is I go back to what we've laid out today in terms of investment and building the business really is sort of not only to focus on the management actions, which we do have that track record of, but also to build out the underlying and generate that and grow that. Stephen? Thank you. Steven Haywood from HSBC. Two questions, please. In the presentation webcast, I believe, Paul, you said there was GBP 10 billion underlying cash in the Heritage portfolios. Can you just say, is that discounted or undiscounted? And can you split that between the With Profits and the annuities business? And then secondly, quickly on the PruFund. Year to date, has there been any negative BPAs? Thank you. You go first. On the PruFund plan? On the PruFund. PruFund question. On the BPAs. On the big funds, there's been no negative BPAs. We launched PruFund Planet at the end of last year, and those funds are in the process of basically investing fully in all of the different asset classes. In a number of places they've had they've been invested in public assets, whereas we buy out the private assets, that has caused some volatility in those early periods. Those are in very small funds in terms of impact. Yeah, sort of, the point I made in the script is if you look in the back, really all that we were highlighting is, and in the appendix, you'll see a point about the annuity capital generation that's thrown off. Really, that should give a degree of comfort around both, you know, the sort of, I guess, the capital generation on a prospective basis, but also the ability to sort of underpin the dividend. It goes beyond that though. You know, there's a number of other things like, you know, asset management and the capital that's thrown off by that is also another component. Steven, for your specific question, the cash is not the present value of the cash. It's just how much cash will be going through the times. The chart shows you the in-force book. It's annuities, traditional with profit and PruFund sold to date. Just to be clear, it's only underlying capital generation. It excludes management actions and so on and so forth. We do not provide in this deck the split between traditional with profit and annuities. We did in September 2019, when we'd emerged, we had a chart that provided you the shape for the underlying development for the annuity book, and there's no reason to believe that it would have fundamentally and massively changed. Obviously, there are always movements here and there, but that gives you a good idea. Larissa. You're right at the back there, Larissa. Can't hear a word you're saying. Need to press the button on the microphone. There we go. Better. Larissa van Deventer from Barclays. Thank you, Luca. Just two quick ones. You mentioned a 30% leverage target. Is that an IFRS or a Solvency II basis, or otherwise, on what calculation basis should we use? Can't hear you. The second one is, you mentioned efficiencies on costs going forward. Shall we think about cost growth then being inflation related, or should we add a buffer for growth? On the first question, it's very much Solvency II basis. You know, on demerger we were at 34, and we've already said that we look to reduce that. I think the steps taken bring us to 28%. Then, as John mentioned, we've earmarked the additional GBP 300 million. I think from a cost perspective, you know, again, what I mentioned earlier, and one of the things we've been pleased about, is the ability to absorb inflation over the past four years, and we've demonstrated that. I think the general aspect is we remain, you know, very much focused on cost. It's a high priority for management. One of the things that we will be doing is looking, as I said, to reinvest the efficiency savings we get back into the business from a growth perspective. You'll know, you know, looking around the room, we are very much a people business, so that's a great proportion of our cost base. You know, I'm perfectly willing to and happy to invest in people, either from a retention perspective or from a talent perspective, to acquire them to grow the business further. Thank you very much, Paul. I think Rhea's been patiently waiting, so apologies for getting to you so late. Thanks, Luca. Just two questions from me. The first is going back into this investing into the business idea. How would that be split? Not looking at reinvesting the efficiencies, but in terms of the excess cash that you're generating, how would that be split between organic investment into the business and then inorganic bolt-ons and M&A? The second question is, a lot of the Solvency II gain in 2021 came from market gains. Now that's being crystallized into cash, how is your attitude towards Solvency II investment risk changing? Would you look to reduce your market sensitivities? Thanks. Take the second one, Paul. How do we think about organic versus inorganic and which areas of the business? Look, predominantly, as you've seen, the M&G Wealth proposition is potentially a fantastic proposition. We've got the end-to-end building blocks for all manner of different distribution to our customers in the U.K. Whether that's robo-advice or whether it's direct or whatever. It's important to actually consolidate that and then build on it, and we will continue to do that. You'll see, hopefully you'll see more of that going on. In terms of the asset management side of the business, it is about sustainability. It is about making sure that we've got the right propositions in private assets and solutions. Jack's talked about that. Earlier, it's something we've always done, but it's a real growth area for us. It's, you know, the market would dearly love some of the capabilities that we have in this space. We are attractive as an employer to people who have these capabilities because we already do it, so they bounce ideas off one another and make the proposition that much more compelling from a corporate perspective. That's what you can expect from us going forward on the acquisition trail. Inorganically, yeah, absolutely. I mean, I think the Catalyst team is entirely inorganic, fair to say, and organic, I should say. Putting... You know, there aren't many firms that could get the GBP 5 billion allocation of funds, and then build a 25-person team globally to actually execute on the proposition, where they've already achieved one point 1.3. GBP 1.3 billion. They've already deployed GBP 1.3 billion into different strategies. We're talking about private assets here. These capabilities are going to be in demand for third-party clients, which is the whole proposition of what we're about within, with M&G, is seeding new propositions that benefit the internal client that we then sell to third parties. But you know that. Okay. Yeah. On the second question, I mean, directly from a sort of sensitivity perspective that we've put out in the appendix, you can see the sort of risk sensitivities we're exposed to, and we're very comfortable with that. What I'd say more broadly, though, is we've got a strong investment team that's constantly looking at the strategic asset allocation and the classes of investment we might want to either go into or increase or decrease. That's on a dynamic basis. It's not just a case of looking at the great gains we've got from a market perspective in 2021, but you'll know that, and John referenced it, we've been through pretty volatile periods over the past, well, certainly since the merger. As a consequence of that team is constantly looking at, you know, call it optimizing, the strategic asset allocation and the returns within a risk appetite so defined. We're very comfortable with where we are now. I mean, there are two things that we are very focused on as a team. One is costs. You know, we've tried to demonstrate that with the acceleration of the target that we talked about before. But I can assure you that is a focus of ours. The other is on capital generation and management actions in particular. I think I said in my remarks, if you read them, that you know, in the five years I've been in this job, we've generated GBP 6.7 billion of capital, GBP 3 billion of which has been management actions. It's a very strong focus for us, and will continuously be. It won't be the same every year, obviously, and it won't increase year on year. We are very focused on this because it is a source of good income for shareholders. Andrew. Sorry, I'm gonna cheat and ask two more questions. Firstly, if you believe John Glen is gonna allow you to reduce your capital base by 10%-15%, that's gonna push you back into the 190. Are you prepared to take the politically unedifying decision of handing that back to ill-gotten gains back to shareholders? Secondly, I'm clear that you can dodge this question if you want. IFRS 17 in broad construct, you don't write annuity in new business. With- profits business under IFRS 4 is very, very conservatively accounted for. Can IFRS 17 be broadly neutral to you? To the first question, we'll see. I mean, I was at a function recently where the debate, it seems to me, is still raging. We've heard the bank be very clear that overall, they don't expect any windfall capital gains by any changes that might happen as a result of Solvency II. On the one hand, you've got the politicians, and on the other hand, you've got the regulators. I don't know where this will end up, but we will definitely tell you how we're thinking about it when it's resolved. On IFRS 17. You know, we've got a program running. It's you know well underway, making good progress. I think to your point, though, and to the question, the sort of majority of the business that's growing is completely unaffected by IFRS 17 from a growth perspective. And then if you look really about how we run our business, it's completely off of a Solvency II basis. You know, the dividend capital generation, the solvency levels are all Solvency II. More to come in IFRS 17 when we adopt it in 2023. We didn't dodge it, did we, really? Don. Hi, Dominic O'Mahony, BNP Paribas Exane again. Two more questions, if that's okay. In the presentation, you mentioned that you're distributing GBP 1.5 billion from the With-Profits estate. Can you just help us understand how that's gonna impact shareholder capital and cash? So is it remittable, the portion of that that it contributes to the shareholder? And indeed, is this fully 2022 or 2021? So is it already in the numbers or is it new? And then a second question, you've been relatively acquisitive, lots of very exciting capabilities that you've already been speaking about. I wonder if you could give us a little bit of a sense of the economics of the business cases. For those acquisitions, it sounds like from the way you described them, you see significant synergies mainly on the revenue side, from say, you know, cross-selling products and the like. What sort of IRRs are you expecting on some of those deals? Thank you. Yeah. The first one in the GBP 1.5 billion, you know, it shows the strength of the With-Profits Fund. In essence, the way that comes through is, you know, it gets apportioned out to the policyholders and then basically as they cash in, we get up to or around the 1/9 for, in terms of the shareholder transfer. That will come through in the future as, you know, claims are made. Can you repeat the sort of second question, sorry? It was- Around the IRRs and the acquisitions. How do we think. I mean, the acquisitions are, you know, they're pretty small in terms of cost, and we're not breaking down the numbers as we've discussed earlier. Clearly, this is about acquiring capability. We've given you the overall cost of these acquisitions so you can better apportion the capital generation to the different elements as we show on slide 12, I believe. But I could be wrong. He's the show-off with regards to slides. We don't think. I mean, any large scale acquisition, of course, you talk you think about in those terms. But, you know, we are a capital light business, so we are expecting to push through product or push product through these. As I said, both ways. The important thing here is both ways. It's about putting product through those capabilities and also taking their products and pushing it through ours. You're seeing that. I give you a very clear example of just that, which is that when we talk about PruFund in Europe or as we call it, Future Plus, we are using the asset manager distribution network to put the proposition into Europe. I mean, this is what we've been talking about for the last three years. Now I think you can see that we've got this inflection point where it's all coming together. Cool. Thank you. I'm not sure if there's any other question in the room. There was only one submitted online by Farooq from J.P. Morgan. It's probably more Paul material. So he's asking about model changes that contributed to management action in full year 2021 and future scope for such changes. Then the second question is around cash remittances. How should we think about cash remittances going forward, and how linked will it be to operating capital or total capital generation? From the model change, you know, in the nomenclature, we call it major model change, but that's what sort of the application is when we put it into the PRA. We've got a benefit this year. It was less than GBP 100 million in terms of capital generation. I think it goes to the points that John made earlier just around, you know, including the suite of management actions. Looking at refining and improving our internal model is one of those tools available to us. We'll look to continue to refine that on a prospective basis. Clearly, sort of, you know, that is dependent very much on regulatory approval before we can take the benefit of that, and I'm pleased that we got the approval for that major model change at the back end of last year that enabled us to take credit for it. I think from a remittances basis, you'll see that, you know, the general principle is we've got some very strong operating subsidiaries that generate strong capital. We distribute that and remit it up to Holdco. What you'll see is we like to have at least one year of outgoings at the Holdco level. Essentially, what dictates the pace and quantum of how much we'll distribute up is really conditional upon the economic returns that are available within the subsidiary versus those that are available at Holdco and the demands of that cash. That's what will dictate the remittances. Perfect. Good. I think there are no more questions, so we can close it there. Thank you very much for joining us today. Yeah. Thank you. Bye-bye.