mgplc full year 2025 results qa transcript

Our commitment to investors is clear

Yield and growth and our capital allocation in 2025 closely aligned with our stated framework.

More than half of operating capital was distributed to shareholders as dividends. This was complemented by simplification and growth investments targeting double-digit IRRs. This included £90 million for the acquisition of P Capital Partners, and £163 million to support Life new business.

Going forward, we will maintain this disciplined capital allocation, underpinning long-term growth and attractive progressive dividends.

Now let’s turn to our financial targets.

Slide 15 – Update on our financial targets

Here, our commitment remains unchanged: to be highly capital generative, improve the efficiency of our business, and deliver sustainable earnings growth.

Over the course of 2025, we have moved forward on our targets, but more work is needed.

The £928 million of capital generated before new business strain is a good start to our three-year ambition. I am also pleased by the progress on our transformation programme, as we once again beat our cost target by delivering cumulative savings of £250 million – A great result.

But progress on the Cost-to-Income ratio and Group profit was marginal. Here, I expect a significant improvement, supported by the strong momentum I see across the Group.

Over the last 12 months we have invested for growth, adding distribution and investment capabilities and now, we will realise the benefits of these investments.

We remain firmly committed to delivering profit growth of at least 5% on average between 2025 and 2027.

Therefore, you should expect a meaningful acceleration in our operating profit for 2026 and beyond.

Profitability will improve in Asset Management, where we will achieve a Cost-to-Income ratio of 70% by 2027.

We are confident that we will meet this target thanks to strong top-line growth and cost control that Kathryn will cover in more detail.

By generating capital, being disciplined on costs, and growing profits, we have set in motion a positive cycle.

This means we can invest in the business, secure its long-term success, and deliver attractive returns.

With that, I will hand over to Kathryn, who will take you through the financial results.

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M&G plc 2025 Full Year Results 12 March 2026

Financial Review

Kathryn McLeland, Group Chief Financial Officer

Slide 16 – Financial review

Thanks Andrea, and good morning, everyone.

I will now take you through our results, which highlight steady momentum across the Group and disciplined execution.

Slide 17 – Growing net flows, resilient Operating Profit, strong balance sheet

Covering first the key highlights.

We delivered £7.8 billion of net flows from open business, reflecting the strength of our Asset Management performance, the progress we continue to make on our international expansion, and improved sales in Life.

Group Adjusted Operating Profit of £838 million highlights the resilience and balance of our business model.

In Asset Management, fee‑related earnings increased by 12% year-on-year, while in Life, higher contributions from PruFund and Traditional With‑Profits more than offset lower earnings in Annuities, leading to a 2% increase in profits.

The corporate centre result deteriorated by £8 million, impacted by lower investment income. Operating

Capital Generation of £765 million reflected the higher strain from our strong BPA volumes. Excluding new business strain, capital generation was £928 million, in line with our £2.7 billion target.

Supported by this strong operating performance, the Solvency II ratio reached 242%.

So, let’s now turn to our flows.

Slide 18 – £7.8bn Net flows from open business, almost £10bn higher YoY

Closing AUMA stood at £376 billion. This reflects the £7.8 billion of net inflows from open business which improved by nearly £10 billion year-on-year, favourable markets movements and the acquisition of P Capital

Partners.

You’ve heard from Andrea about our very pleasing Asset Management flows, with our Institutional franchise recording net inflows of £4 billion, supported by ongoing international expansion and easing headwinds here in the UK.

The Wholesale franchise also contributed meaningfully, delivering £3 billion of net inflows, underpinned by excellent investment performance.

Importantly, the continued growth in our international AUM further improves our diversification and resilience.

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M&G plc 2025 Full Year Results 12 March 2026

Life open business also made a positive contribution of £0.8 billion. This reflects strong execution in the BPA market where we recorded the first net inflows since 2016, when the business was closed.

We also saw improved momentum in PruFund, with gross inflows in the second half up nearly 28% vs the first half at £3.6 billion, with £400 million of net inflows.

Moving on now to profits.

Slide 19 – Stable Operating Profit of £838m, 73% from capital-light sources

At £838 million, operating profit was stable year-on-year, with the key features being:

• First, higher revenues and improving operating leverage in Asset Management, continuing to support a gradual reduction in the cost-income ratio.

• Second, an increase of 2% in Life profits to £764 million, with a stronger contribution from both PruFund and Traditional With-Profits offsetting a £25 million reduction in Annuities due to lower returns on excess assets, which we previously flagged.

• Finally, the corporate centre outcome was impacted by lower investment income, which was down by £17 million, more than offsetting a reduction in debt interest costs of £12 million, following our 2024 deleveraging actions.

One important feature of our results is the quality of our earnings. Today, 73% of operating profit comes from capital-light businesses, and this proportion will continue to rise over time. You will hear from Andrea shortly, on how we also expect to grow the proportion of Fee Related Earnings across the Group.

Finally, it is important to note that in 2025 we delivered after a tax profit of £314 million, compared to a £347 million loss in 2024.

So let us now look at each of our businesses, starting with Asset Management.

Slide 20 – Asset Management: 12% growth in fee-related earnings

Our Asset Management business delivered a 12% or £27 million growth in fee-related earnings, driven by higher average assets and resilient margins. Looking ahead, the £23 million of net new revenues delivered last year will provide a solid underpin to topline growth.

At £345 billion, assets under management ended the year up by £30 billion, supported by strong net inflows and favourable markets. Our average fee margin remained resilient at 33 basis points, as we continue to prioritise high-value solutions for our clients. Higher average assets and stable margins resulted in revenue growth of 6%.

On costs, we continued to exercise discipline while making targeted investments to support long-term growth.

Most of the 4% increase in cost was driven by a broader perimeter of our Asset Management operations.

In fact, £28 million of the £31 million increase relate to the acquisitions of BauMont and PCP, together with the reclassification of our Direct book from Life which we previously highlighted.

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M&G plc 2025 Full Year Results 12 March 2026

PCP and BauMont bring new capabilities to the Group, further improving the quality of our earnings. Our cost transformation programme facilitated these and other targeted investments, strengthened our operational efficiency, and helped us lower the cost-income ratio to 75%.

The operating profit was down £9 million year-on-year, due to lower performance fees and investment income.

Before moving on to Life, I want to address our cost-income ratio target.

Over the past three years, we have reshaped the cost base, demonstrating that we can continue to invest for growth, while improving our fee-related earnings. This gives us confidence that further progress is achievable, as revenues scale.

We are absolutely committed to our 70% cost-income ratio target. And achieving this does not depend on a single initiative or assumption, but on continued execution across a number of levers that we are already acting on.

Our focus is firmly on delivery, and on demonstrating steady, repeatable improvement over time.

Let us now turn to our Life business, starting with PruFund.

Slide 21 – Life: PruFund profits +17% and Traditional With-Profits +16% YoY

Here operating profit increased by 17% to £265 million, reinforcing its role as a growth engine within the

Group, supported by a higher opening CSM and slightly higher amortisation rates.

Profits from our Traditional With‑Profits business of £258m were up 16% year on year, reflecting the same positive dynamics. We are encouraged by this performance, particularly as it was achieved against the backdrop of lower expected returns and risk‑free rates, which we previously highlighted.

Both PruFund and Traditional With‑Profits continue to provide resilient earnings for the Group, underpinning the sustainability of our profits.

Let us now turn to Shareholder Annuities.

Slide 22 – Life: Shareholder Annuities -8% YoY and deterioration in Other Life

Our Annuities profits were down 8% year-on-year to £283 million, which reflected the guidance we gave last

March. Specifically, the combination of a smaller pool of surplus assets and lower expected returns of 5.2%, down from 5.6%. These headwinds were partly offset by a higher CSM release, supported by the large longevity benefit we recognised in 2024, and a modest increase in the amortisation rate.

Turning to Other Life, the loss of £42 million was primarily driven by a £26 million provision in relation to our

Polish business, which we do not expect to repeat.

Before moving on to Capital Generation, I would highlight the strength of our CSM, the details of which you can find in the appendix.

Total CSM ended the year at £6.6 billion, representing a meaningful store of future value, and benefitting from

£144m of new business generated from PruFund and Annuities.

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M&G plc 2025 Full Year Results 12 March 2026

I’ll now cover capital generation, which supports the strong outcomes we deliver to our shareholders.

Slide 23 – Operating Capital Generation before new business strain of £928m

Our operating capital generation excluding new business strain was £928 million. This represents a solid start towards our cumulative £2.7 billion target by 2027.

The Underlying result was £529 million, £115 million lower than last year, which largely reflects capital deployment to support the strong growth in our BPA volumes.

Asset Management contributed £14 million more year-on-year, supported by stronger fee-related earnings together with a small SCR reduction, driven by lower market risk requirements.

In Life, both PruFund and Traditional With-Profits benefited from a higher opening PVST which partly offset the anticipated impact of lower expected returns.

As noted earlier, the Annuities contribution declined due to the £134 million we deployed to support the £1.5 billion of new BPAs, and due to the lower return on surplus assets in the in‑force book.

The corporate centre benefited from a £12 million SCR release, largely driven by reduced Treasury lending activities.

Management actions totalled £236 million, just above our recurring long-term target of £100 to £200 million per annum.

Slide 24 – Strong Operating Capital Generation lifts SII ratio to 242%

Thanks to our strong performance, the Solvency II ratio closed the year at 242% and our surplus increased to

£5 billion.

Own Funds remained stable at £8.5 billion, including £4.6 billion attributable to the With‑Profits PVST.

The SCR improved largely due to management actions, including model and data enhancements, and a higher level of deferred tax loss‑absorbency capital reflecting more favourable stress outcomes.

After refining our estimates, we expect only a modest impact of less than 3% on our solvency ratio from the

Government’s proposed changes to Ground Rents. This reflects the benefit of our prudent reserving approach.

You can find further details on this in the appendix and in our Annual Report.

I am very pleased with the continued strength of our balance sheet, underpinned by disciplined risk management in what remains a volatile and uncertain geopolitical and macroeconomic environment.

I will now briefly cover the successful delivery of our cost transformation programme.

Slide 25 – £250m of cost savings delivered, exceeding upgraded target of £230m

This slide shows the tangible progress we have made in delivering strategic operational efficiencies, while continuing to invest for growth. Since 2022, we have delivered £250 million of cost capacity, exceeding our upgraded target of £230 million.

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M&G plc 2025 Full Year Results 12 March 2026

You can see here an update on the types of savings, together with the targeted growth investments they have enabled, while holding the cost base stable over time and materially improving the scalability of the Group.

As we look ahead, we see significant opportunities to create more capacity, led by our new Chief

Transformation Officer. For example, with further refinement of our organisational structure, including greater integration of our recent acquisitions, more functional centralisation, and optimising our partnerships with outsourced suppliers. We are also continuing to refine our location strategy, while driving AI adoption.

A few words on our AI strategy, which is focused on three primary objectives:

• Firstly, enhancing our engagement with clients;

• Secondly, improving our productivity;

• And, thirdly, transforming our end-to-end processes.

By increasing AI adoption, we are giving our colleagues more time to focus on what really matters: our clients.

Examples of where we see AI driving a step change in efficiency include across our research teams, our financial advisors, and the staff of our contact centres.

Thanks to AI tooling, almost 40% of our code is now generated by AI, meaningfully increasing the productivity of our engineering team.

I want to reiterate that we are firmly focused on maintaining a disciplined approach to operating efficiency, and on achieving the 70% cost-income ratio target for the asset manager.

Looking ahead now to 2026.

Slide 26 – 2026 guidance

Whilst of course we remain mindful of the volatile external environment, our focus for 2026 remains consistent. Delivering strong outcomes for our clients, executing our plans with discipline, and sustaining the growth momentum, we have established.

Asset Management is set to deliver a meaningful improvement in its operating leverage, underpinned by a robust £30 billion increase in opening AUMA, resilient fee margins, and our unwavering commitment to cost efficiency. These factors combine to give us confidence in achieving a step-change in our cost-income ratio and in unlocking further profitability.

Life is similarly well-positioned, with a substantial 10% uplift in our opening CSM balance which will drive improved operating profits, more than offsetting lower expected investment returns.

These strong foundations, taken together with disciplined cost management, mean we are confident of achieving strong profit growth in 2026 and an average growth over 2025 to 2027, of at least 5%.

And finally, on Capital Generation, here we expect to deliver an improving Underlying result, new business strain of up to £150 million, and management actions returning to our usual long-term range of £100 million to £200 million per year.

This means we are well on track to deliver on our £2.7 billion cumulative target by 2027, as we support new business growth while maintaining a strong balance sheet. These strong tailwinds, supported by the strategic building blocks we have put in place, give us the confidence that we are well positioned to deliver sustainable value to our shareholders.

With that, I will now hand back to Andrea. Thank you.

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M&G plc 2025 Full Year Results 12 March 2026

Investment Case

Andrea Rossi, Group Chief Executive

Slide 28 – M&G investment case: Europe’s leading integrated asset manager

Thank you Kathryn.

Before concluding, I want to summarise the key elements of M&G’s investment case.

Today, we are a growing a diversified savings and investment business.

• We leverage our unique With Profits Fund to gather insurance assets in a capital-light way;

• And we grow in Asset Management by externalising funds that we seed with internal capital.

This combination gives us scale and resilience.

We operate in markets supported by strong client demand and are well placed to capitalise on this growth thanks to the strength of our franchises. The way they work together, our synergistic business model, sits at the core of our ‘right to win’ and the outcome is strong financial returns.

Life underpins our attractive dividend, and we are driving growth in fee-related earnings across Asset

Management and With-Profits. By combining an attractive yield, growth and improving quality of earnings, we deliver consistent returns to our shareholders.

Slide 29 – Operating in growing markets with clear competitive strengths

And we will continue to do so, as we unlock opportunities across several attractive markets.

We have an £81 billion private markets business and have raised £107 billion from international clients. In both these areas we have grown at double-digit rates.

In the UK, PruFund has now reached £70 billion, and we continue to scale in the BPA market, with sales increasing by 65% year-on-year. This scale matters, as it drives relevance with clients and improves our operating leverage.

Our businesses work together and will grow together.

Over 80% of our Life assets are managed in-house with around 30% of new business being allocated to private markets. And we attract this new business deploying surplus capital from the With-Profits Fund.

We also have the partnership with Dai-ichi Life, which supports our continued expansion in Europe and Asia

This integrated model gives us greater control, stronger economics, and a more resilient earnings profile.

Slide 30 – Delivering strong financial outcomes

Since listing in 2019, M&G has delivered annual shareholder returns of over 15%, a remarkable achievement; with £4.2 billion returned to investors through dividends, buybacks and deleveraging. We have achieved double-digit returns through a mix of yield, growth and quality.

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M&G plc 2025 Full Year Results 12 March 2026

Looking ahead, we will extend this track-record:

• The stable and predictable contribution from Life underpins our attractive yield;

• Asset Management and fee-related With-Profits will drive the Group’s growth;

• And, the quality of our profit mix will improve, as we shift to a greater share of fee-related earnings.

So, our message to investors is simple.

• We are operating in growing markets;

• We have the right business model to win; and

• We will deliver attractive returns.

Slide 31 – Key messages

To conclude, 2025 was a strong year for M&G as we laid the foundations for profitable growth.

New business momentum was fantastic, we continued to expand internationally, and we are now focused on translating this growth into higher operating profits in 2026. And as we deliver profitable growth, we also shift

Life new business to an innovative fee-based model.

Finally, we will achieve our Capital Generation target and remain disciplined as we invest in the business.

We have started 2026 with good momentum, we are in the right markets, investing in the right asset classes, with industry-leading investment performance.

I am energised by our strong performance and want to thank all our colleagues for their hard work and I am confident that we will continue to deliver, generating value for our clients and shareholders.

Thank you.

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M&G plc 2025 Full Year Results 12 March 2026

Q&A hosted by Luca Gagliardi, Group Director of Strategy and IR with

Andrea Rossi, Group Chief Executive

Kathryn McLeland, Group Chief Financial Officer

Joseph Pinto, CEO Asset Management & Clive Bolton, CEO Life

Larissa van Deventer, Barclays: Two questions, please, from my side.

The first one, you mentioned the already very strong capital position that you have for growth. Kathryn also mentioned that you would like to focus your earnings on capital-light businesses. Can you give us a little bit more colour on which areas you would like to grow in, so if there are any areas within M&G that you believe would benefit from enhancements?

The second one, Ground Rents, I appreciate that it is a sensitive topic, but are you able to give any more colour on the direction of thinking? And could you please help us understand what is included in your provision and what remains? Thank you.

Andrea Rossi

Obviously, you have seen in 2025, we have been investing for growth. We have invested both in the Asset Management business in distribution and investment capabilities, and hence also, I would say, the good momentum that we saw in terms of net new money and net new revenue. Same thing, of course, in the Life business where we invested in order to support that growth, both on the corporate side, because we strengthen our team, propositions, pricing and origination for writing BPAs, but also to support PruFund.

Obviously, we are going to put PruFund on third-party platforms in the second quarter of this year, given that we have integrated with FNZ Technology, we are very, very pleased with that.

But more importantly, we also have supported PruFund in terms of marketing. Let us not forget that

PruFund, during the Liberation Day month in April, performed as it was supposed to perform. We smoothed the volatility. Clients, unfortunately, they took out their money and then they came back, of course, afterwards. They should just have trusted us more. So clearly, we want to continue to make sure that we support all the capital-light business, in particular, on the Asset Management side. I remember when I arrived three years ago, our investment performance was still very, very strong. And I said, the way we are going to grow the Asset Management business is by investing in distribution capabilities. That is what we have done. And that is why you see the stellar net new money that we have delivered. I mean, delivering

4.5% of external net new money over opening assets under management - I’ve been in the industry for decades, that's a stellar achievement. And that's not money market. That's not passive. This is true, active asset management. I mean, I look at peers, this is top decile, if not top percentile. So, we will continue to support the capital-light businesses moving forward, but I would say most of the investment has been done already in 2025.

Kathryn McLeland

And I think there is going to be some more spend as we continue on the simplification program as well as these capabilities that Andrea talked about.

On ground rents, the announcement by the government came out at the end of January. And you saw the

RNS that we put out on the morning of it. Now, clearly, there's a lot that needs to happen as it goes through committee stages and through the whole legislative process. And that's still quite uncertain and will take the next couple of quarters.

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M&G plc 2025 Full Year Results 12 March 2026

I think the most important thing is you see an update today. It's in the appendix (slide 55) and it gives an update of all the numbers, which are very much aligned to what you saw at the end of January. This is also in the annual accounts, and you can get a bit more detail. But I mentioned that on the solvency ratio is up to a

3% impact. You see the day one IFRS impact and the own funds impact, which obviously impacts leverage.

And so, we guided also in the RNS that the AOP impact is a very modest £10 - £15 million in 2028.

Luca Gagliardi

And on the provision side, these numbers are net of the provision. So, after you take into account the provision that was already in the balance sheet, this is the residual impact.

And on your question on capabilities, Andrea, do you want to talk from an asset class perspective after

BauMont, PCP? Do we feel that we are in the right places?

Andrea Rossi

Well, when we're looking at investment capabilities, and I said this already in our previous full-year results, we want to expand our private assets franchise. We see significant demand, of course, in

Europe in private assets. And by doing both BauMont and PCP, we strengthen an already very strong franchise, both on the private credit side, where we have a £27 billion franchise, but also on the real estate side, where we have a £34 billion franchise. So, we think we're well placed there. But I think there's going to be another asset class where there is going to be a lot of demand in Europe in the coming years, given also what is happening in the Middle East. I think Europe is going to have to rely a bit less, maybe, on fossil fuel and accelerate on renewable energy. And therefore, there's going to be more infrastructure projects in this sense. So, there will be more interest here.

So, if we had to look at additional capabilities, probably that's where we would look to expand. But overall, you look at our private assets franchise, it's doing extremely well, £3.9 billion of net inflows in 2025. A lot of that was private credit and structured credit. Private credit continues to be a very strong asset class in

Europe, where there is a strong demand. I'm sure I'm going to talk about private credit in general, but

Europe still remains very much in demand on private credit.

Michael Huttner, Berenberg: Just two questions.

You said there is more growth. I'm particularly interested in PruFund, the new platform and what that could bring. But also on the growth, if I'm right, the new business strain last year was £160m and you're saying

£150m. So that doesn't sound like more growth, but I'm asking this.

And the other question is you're leveraging your With-Profits surplus. Presumably, that has a cost of capital.

But I'd be interested to understand what the benefit is. Is there a number here you could say, well, we're paying them 5% or 2% or nothing, just to get a feel for it? Thank you.

Andrea Rossi

I'm passionate about PruFund and very pleased that it has become a £70 billion franchise here in the UK. We had positive net inflows in the last seven months in 2025, and you should continue to see positive net inflows in 2026. I mean, the product is delivering what it should. We see demand here in the UK on it. And more importantly, as I anticipated before, we are going to put it on a third-party platform in Q2.

And that's just going to be the first one, so by having done the integration with FNZ technology, we are covering roughly 40% of the £700 billion digital platform market size here in the UK. So, we will put it on more platforms before the end of the year and that will, of course, increase flows coming in. So very, very pleased with what we do in the UK.

Let's not forget also that we have international as well. And you saw that we finally signed an agreement with Zurich Group in the UAE. So, this is sort of a blueprint where we are the default option for the DC scheme there, where Zurich is managing it. And that will also bring flows and potentially also other clients.

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M&G plc 2025 Full Year Results 12 March 2026

We see PruFund being one of our main growth engines going forward. And let's not forget, it's not only about access, but it's also about expanding the product offering. We launched a fixed-term annuity in 2025, and we will launch a lifetime annuity this year as well. So more to come from PruFund, but you should expect positive net inflows in PruFund moving forward.

Kathryn McLeland

And so, covering capital and how we see the cost to capital and hurdle rates for the

With-Profits Fund. So yes, it was £163 million of strain across all products last year, £134 million for BPAs.

The key thing for us is always looking at hitting our cost to capital. So double-digit IRRs is what really matters for us. And I think, as you also all know, we've not re-insured longevity on these deals and we look at everything on a case-by-case basis.

Now, the exciting opportunities for us that you've heard us talk about today with the £7.1 billion surplus is that we can essentially grow Life with the diversification of these new products that we are talking about today. And this is also in the interest of the With-Profits Fund. We have a very strict With-Profits committee.

We know all the requirements and rules that they need to follow. And it is a different cost to capital, but they absolutely have to do profitable, good-quality business for current and future policyholders. So, it is very exciting for us to be able to do BPAs and these other products using With-Profits Fund capital. We have the two fee streams that you see coming into the Life and into the asset manager, which will build over time.

So, it is really exciting for us to have the With-Profits Fund to be able to be the main insurance writer of risk going forward. And so yes, they have slightly different hurdle rates, but for the shareholder balance sheet we've remained very focused on double digits.

Luca Gagliardi

And while the capital strain that we've indicated is up to £150 million from a shareholder balance sheet, the idea is that the more you do With-Profits, the more you can leverage up the volumes while keeping that same level of capital deployed.

Andrea Rossi

And to be clear, we are committed to write £3-4 billion of BPA by 2027. We have not changed our targets, so that gives you some sort of growth trajectory.

David Pych, RBC Capital Markets: Two questions.

The first one on the £27 billion structured and private credit AUM, can you tell me what proportion is open to retail investors? And are you expecting taking any actions to the risk of assets within those portfolios?

Second, on the new business CSM profit, it was only £23 million from £1.5 billion of annuities to the margins of 2%. How should we think about it in the context of ultimate profit margin? And will you return on capital for those deals? As a follow-up, what is M&G doing with reinsuring the risk? If all new deals were longevity reinsured, would this have a meaningful impact on own funds and therefore the leverage?

Lastly, on the private capital queue deployment, can you tell us how it will be deployed between private equity, structured credit, and infrastructure? And more broadly, what are the characteristics of the fundraising and deployment environment in 2026 so far?

Luca Gagliardi

So, we've got four in there let's split them between two in Asset Management and two in

Life. So, Asset Management was around the retail exposure in our private credit franchise and the capital queue. While in Life, we've got the new business CSM margin and the use of reinsurance.

Andrea Rossi

Joseph, do you want to take both? First one is ELTIF, I guess.

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M&G plc 2025 Full Year Results 12 March 2026

Joseph Pinto

So effectively, the exposure we have in private credit, we have less than £1 billion in ELTIF, which is the European long-term investment fund. It's a private credit strategy.

The regulation in Europe is extremely strict. No leverage is allowed, which is extremely different from what you can read in the press on what's going on in the US. So indeed, we are probably on a much safer side in

Europe than what is happening in the US. I think that's a massive difference. And we've been extremely cautious when it comes to private credit.

You didn't ask the question, but I want also to add that when you look at what we are reading in the press in private credit, the default rate, some expect the default rate to increase. Our default rate has been significantly below the average of the market, which is already at 2%. We are way below that level. We are extremely cautious.

Only I mentioned across asset classes, the quality of research, we know how to deal with those deals. We are extremely selective and we don't leverage. And we have a high quality of selection, ultimately, that helps us have a very low level of default compared to the industry. And again, I invite you to always make a difference between Europe and US in that private credit segment.

Luca Gagliardi

And the second question was around the capital queue of £8.2 billion, how it grew since half year, how do we think about deployment, and in what asset classes is it focused.

Joseph Pinto

So, it has grown pretty much everywhere in private credit, including structured credit. In real estate, I just want to call out real estate because this is an asset class that was probably on a negative side across the industry two years ago. We've been rebounding extremely well. We've won a lot of business in that space with our flagship fund, the European Real Estate Fund, but also with Asian strategies and Asian clients, mandates, and also here in the UK. Very pleased to see how international clients are now interested more and more into UK real estate.

Also, I remind you that at the end of June, we were not integrating the capital queue of PCP and BauMont.

That has also brought about £1 billion of capital queue into it. We are extremely disciplined in deploying that money. We are very well organised into it. Each investment team has a specific team to work on deployment, but we are cautious on how we want to deploy it. Because at the end of the day, clients matter first. We want to deliver the best performance. That's why we are very diligent in terms of deployment.

Luca Gagliardi

And the other point on the ELTIF and retail exposure, where we have less than £1 billion of assets there, a large proportion comes from our internal client. Actually, the majority, which is a very, very stable investor, 87%. So, I think while it is a vehicle that is open also to retail investors, nearly 90% is our internal client. So, it gives great stability to that vehicle as well, on top of all the good things that Joseph mentioned.

Kathryn McLeland

Just a couple of comments around last year’s CSM margin.

First of all, as we said, we're delighted to have done £1.5 billion and a really pleasing end to last year. We have invested meaningfully to get that platform reopened, and we've got all the capabilities to compete.

We've got a lot of conversations happening at the moment. So obviously, as we scale, we become more profitable. I called out the cost in one of the slides around how the whole purpose of this simplification program is to invest and supporting that BPA business is one of them.

And secondly, we haven't reinsured longevity. That obviously means we also have a higher risk margin, which clearly will flow into profits over time, but it will also affect the actual CSM margin that we deliver. So, there is a real meaningful element coming from our decision.

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M&G plc 2025 Full Year Results 12 March 2026

And obviously, we're lucky on longevity that we can be very selective, we can be very disciplined. We've got capital, we're also using the With-Profits balance sheet in the future.

So, we have deployed it in the past as a management action, and it will be very thoughtful. And it's lucky that we've got the options around longevity reinsurance. And it could be one of those management actions that we use to deliver the £100-200 million to support operating capital generation.

And so, in terms of the impact of longevity, obviously, the relationship between the shareholder and With-

Profits Fund changes with these new fee-related products. Again, how we use the respective balance sheets will be determined on a case-by-case basis. And we have always, as we said, got the flexibility of longevity.

Now, I don't think of any meaningful impact on own funds or on leverage. Obviously, you've seen our leverage ratio today and the progress we've made over the last couple of years. So, it's more a question of delivering the strong IRRs. And importantly, now improving our profitability, we've given clear guidance around 2026 and building over time these fee-related earnings.

Dominic O'Mahony, BNP Paribas Exane: So as per usual, three questions.

Thank you for the colour on the private asset side. I guess just more broadly, it's been an interesting sort of three months in the markets. What is the mood amongst capital allocators? What are your conversations like?

And more broadly, do you think you can deliver the stellar level of flows you saw in 2025 again in 2026?

Second sort of related question, just on the Asset Management revenue margins. The revenue margins are going up. Clearly, the mix is in your favour coming into next year. How much can revenue margins go up in

2026 in Asset Management?

And then the third sort of technical point, I think the CSM amortisation rate improved in all three of your major Life segments. Can you just walk us through why the amortisation rates increased? Is that assumption change? You've seen different customer behaviours? Anything going on?

Andrea Rossi

I'll take the first two, so capital allocator, what's the mood of our clients? Obviously, we've only been 10 days into the Middle East crisis, but overall, if you look at the beginning of the year and the strong momentum we had in 2025, we continue with strong momentum in 2026. Let's not forget the strong capital queue that Joseph talked about.

More importantly, Dai-ichi Life continues to be a very strong partner with us. We did £400 million in 2025, and we're continuing strong momentum with them as well. And then, I think, it's really a question about, institutions are looking to diversify a bit out of the US, and therefore Europe and Asia are where they're looking. And obviously, we are strong in both on the public side. I showed the amazing numbers on equities.

We actually see institutional mandates on equities where we are very, very strong, in European, Asian, emerging markets, etc.

And then of course, on the private asset side, real estate is very much in demand again. But private credit, and this is an important point, continues to be attractive in Europe, and we see appetite to invest in private credit in Europe. This is not the situation in the US. Let me be very clear here, because I get this question very often. It’s a very different market, Europe versus US. US has a much larger market, much more in the hands of capital markets, less so in banks, therefore much more mature, more competitive, overcrowded, more exposure to software. Europe is a very different place, the key point here is, we've been in this market over 25 years. We have a £27 billion private credit franchise.

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M&G plc 2025 Full Year Results 12 March 2026

It's not that we started five years ago, so we know how to underwrite. We're extremely vigilant, have strong guidance, strong risk management, very low default rates. So, we see strong momentum here and a lot of clients want to invest alongside ourselves.

Let's not forget, we have Prudential Assurance Company, our own balance sheet, very often investing in our strategy. Now, we also have another balance sheet, the £390 billion Dai-ichi Life balance sheet. And of course, big institutions want to be together with those two balance sheets.

So, we continue to see strong momentum for the first half of this year, but obviously, it's only been 10 days into the crisis and, I mean, you all have seen the volatility. I mean, no one can predict, is it going to be a week? Is it going to be two months? This can all have different consequences. What I can tell you is we have a strong diversified business model. I mean, obviously the Life business providing strong underpin for the dividends and of course the With-Profits, which is growing. And with Asset Management, all this is capital- light and well diversified. So, I'm relatively confident in the future for us.

Luca Gagliardi

And 30 seconds on the Asset Management fee margins.

Andrea Rossi

That's a very simple one. I wish every year we had margins going up like that. You correctly said, of course, it can be mixed. But the reality is with fee pressures out there, most of our peers it goes down. I think, from sort of guidance, you should see it more like resilience. I mean, I don't expect it to go up.

Already at 33 bps, I think it's a very good number.

Kathryn McLeland

And so, on amortisation rates, I think they were up by 20 to 30 basis points, so very modest. We've not guided to anything changing in 2026. We gave some other guidance; it was about opening CSM. There weren't any methodology changes it was just more the book. There have been some changes to what we're using for expected returns. I remember you asked about the shape of the curve in 1 year and 10 years. We've made a few refinements to that, but that's also reflected in the guidance we've given today.

Thomas Bateman, Mediobanca: At slide 30, illustrative profits from the With-Profits fees, and I think you said there was £50 billion that you're targeting in assets there. What is the fee margin that you're expecting on that £50 billion? And it really would be great if you could give a cost of equity for the With-Profits. You're saying it's the main risk carrier going forward, so that is important.

Just a second question, I think you've had another positive tax impact on the capital generation. Can you just explain what's happening there? How likely is that to reoccur? Thank you.

Kathryn McLeland

So, what you see here is our expectations over the years to 2030 around these new fee- related earnings that we're going to be delivering from this year. And obviously, you still have the bulk of Life earnings with the £6.6 billion of CSM supporting the confidence in our AOP for 2026, obviously with the strong- performing Asset Management also contributing. So, these numbers are guidance for you. We've given a 10 to 15 basis points of profit for these new products, so that's profit. And we've given the £50 billion, and that's essentially if you think about the rough volumes that we're doing on a gross basis of about £6 billion in

PruFund, £4 billion in BPAs maybe by the end of 2027. So that's ballpark, we've also got our plan to 2030, but that can tell you why that £50 billion number makes sense. And so, it's 10 to 15 basis points on profit, plus the fees that the asset manager gets, which we've given a guidance to what we're currently seeing of around 20 basis points. And we've said also before, 30- 40% obviously goes into private markets. Now, really importantly, you asked about cost of capital, but this is very, very, very little capital. So, the quality of these, it's not just very transparent, very high quality, very recurring, but it is on very limited capital.

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M&G plc 2025 Full Year Results 12 March 2026

Luca Gagliardi

I think the cost of capital was more the cost of capital for the With-Profits fund.

Kathryn McLeland

We have not given an exact number. It's not the double-digit shareholder cost of capital that we need to deliver for all of the business that we're writing. It is lower, there's no precise number. Clive's here, and he has a lot of conversations with the With-Profits committee. It's really important that all of these products have got very robust governance, and they have to deliver good, profitable business, but it will be at a lower cost to capital.

Luca Gagliardi

The way to think about it, which is always I find both fascinating and interesting, is that the

With-Profits fund has got two objectives

serve clients as well as you can and deliver the greatest value that you can, and if you want to deliver great value, you want to bring down your price towards the clients to give them a better outcome. But at the same time, the other objective is that you want to survive forever. And if the With-Profits fund is a business, you want to make profits. Otherwise, you're not going exist in 200 years.

So that's why there is a cost to capital. It needs to be a positive number. Before, someone half-jokingly said, is it zero. It's definitely not zero. It needs to be a profit. But you take down that the profit from the double-digit rates that a publicly listed company like us would require to a rate that is more amenable to your end clients, effectively.

Kathryn McLeland

The second question was you saw that it was a very similar number to last year, you probably noticed, around the loss-absorbency capacity of our deferred tax assets. And this obviously came from the statutory losses when rates backed up massively in 2022, so we created a number of DTAs. And essentially, what we've seen, and it is an interesting condition of the balance sheet and profit at year-end 2024 and year-end 2025, that we've been able to use more of this in the solvency stress due to higher future profits and also some movements in the SCR. We really wouldn't expect anything to repeat of this scale. It will depend a little bit on this time next year, but you should treat these as largely one-offs impacted by that original DTA that we put on back in 2022 and 2023.

Andrew Crean, Autonomous: A couple of questions.

So on that sort of £50 billion of With-Profits, going through 100-0, can you tell us what the counterfactual is i.e. your With-Profits funds 90/10 are now in run-off. What rate of shrinkage in profitability would you anticipate over the next five years as that goes into a run-off situation?

And then secondly, I know it's been asked before, the PruFund opportunity within the platform market with

FNZ. Clearly, I think you said in the second quarter, you do your first position. Can you give us an idea longer term as to how big this opportunity is? How much do you expect PruFund to be able to sell through the platform market when you're fully up and running?

Andrea Rossi

Shall we pass the second question to Clive as I want my CEO to speak.

Clive Bolton

Hello, Clive Bolton, CEO of the Life Business. So, what we're doing is following the trend of clients and their advisors wanting to transact on technology, which we call platforms, and therefore we're moving it and making it available. I see it as the equivalent of making sure that our brand is in all the supermarkets and probably the platform in this example is the biggest version of the supermarkets. I think specifically what that will allow us to do is move further into the affluent market for investors. We're very strong on the mass market side, and we're actually surprisingly strong in the high net worth wealth preservation market where people enjoy the stable returns. So it will enable us to push more strongly into that mass affluent market, which is probably the core market for the advised market. As we say, at the moment, PruFund remains an advised proposition. They'll be a gradual shift, we think, into the platform market. I don't have a number for you today on the precise one.

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M&G plc 2025 Full Year Results 12 March 2026

Andrea Rossi

We can say obviously that market is a £700 billion market with roughly 10% of gross flows a year so £70 billion. We will cover with FNZ technology roughly 50% of those gross flows. Of course, you need to be on the different platforms. First platform in Q2 and more to come by the end of the year. I mean, it should be accretive for us, there's no doubt about it. But obviously we cannot give you more guidance than that.

Clive Bolton

We are talking to almost all the main platforms. Though we talk about the first one, but the first one's very important. We have some experience of that because of our own IFDL platform is already PruFund enabled from that perspective. It's a strength of the PruFund franchise that we distribute to those advisors already, but they go through our own proprietary platform rather than their platform of which they built their business around. We think it'll be, from that basis, a significant uplift in the amount of PruFund we will sell.

Kathryn McLeland

Covering the direction around the CSM and the impact on profits. As we've given the guidance around the AOP margin of 10 to 15 basis points for the £50 odd billion to 2030, and clearly what we have is confidence in hitting the AOP growth target. Whilst we are seeing fees that will contribute to profit will build meaningfully over time, we have already got the 6.6billion higher CSM, which will grow with interest accretion and expected returns. There'll be a small element of new business contribution, but the CSM really does underpin a large part, clearly majority of our earnings and our confidence in hitting 2026. Obviously, we want to grow CSM and have a strong contribution in 2027, which will deliver the 5% on average. It's really important. It will take time for these fee-related earnings to build, but they will still deliver meaningful AOP growth. We will still hit our 5% AOP target. Over time, you saw the sort of shaded bar, and know what our fee- related earnings are now. They will move up quite meaningfully by 2030 because we have the additional fees generated into the asset manager as well. We're confident clearly that this will build over time, and we've already got the real stock of £6.6 billion supporting profits this year and the next few years.

Luca Gagliardi

In terms of run-off, I think it's important to underline how slow the run-off is and how valuable this book is for an extremely long period of time. If you take the traditional With-Profits book, which has been closed to new business for, I don't know, 10 years, 15 years, a long time, the contribution to profit in 2023 was

£263 million, and this year was £258 million. Only £5 million lower. In percentage terms is 2% lower over two years. It's just that because there's that big expected returns in PruFund and traditional With-Profits. In annuities, you would have the interest accretion piece. So that's really something that extends the life of the product for a really long period of time.

Andrew Baker, Goldman Sachs: The first one just on flows. Are you able to just be a bit more explicit on your

2026 BPA expectations and then the mix between traditional and With-Profits? I guess also your Dai-ichi Life flow expectations in 2026. Just curious, no mention of Future+ anywhere today. Any update there?

Second one on ratings migration, so I think the appendix shows 4.5% ratings migration, which is a little, probably a little higher than I would have thought. It looks like some of it's related to ground rents. Curious why that came in 2025? Just, is there anything we should be thinking about in 2026 related to ratings migration?

Thirdly, just a quick one. M&A, we've obviously got Aon Uk in the market. Is that something you guys are looking at or have any interest in?

Andrea Rossi

Let's be clear we have presented a clear strategy three years ago and we're delivering on the strategy. I think we have a very clear path of what we want to deliver moving forward. We are very much focused on that. When I see some of the M&A activities around us, what is it that they're trying to achieve?

It's either significant scale, so you're talking £2/3/ 4 trillion, passive, active, everything. And then you have another activity, which is alternative asset managers looking for permanent capital.

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M&G plc 2025 Full Year Results 12 March 2026

Particularly here in the UK, we've seen two transactions. Well, when I look at that, that's effectively what we are doing already since a long time, with a big difference that we have also the With-Profits funds, which is a competitive advantage.

So, I think we have a very clear competitive advantage. And given that we're delivering on our strategic drivers, and also that we have come out now with using the With-Profits fund in a smarter way, we have a very strong independent future in front of us. We are focused on continuing to deliver what you would like, which is growing profitable earnings and we're not looking at Aon Uk. That we can say.

Now, then on flows. You asked, first on BPAs. Well, I said it before, we are committed to the £3 billion to £4 billion of BPAs by 2027. We did £1.5 billion in 2025. Of course, now with the With-Profits BPAs, we can do more. We have a competitive advantage from a cost of capital. Let's not forget also, we also have a diversified offering because we also do what we call the Value Share BPA. You remember we presented this where we are sharing the economics with the scheme sponsor. We will see more momentum this year. And we will write most With-Profits BPAs, but of course there will also be alignments from the shareholder, and we will align ourselves and write some alongside those deals. There might be also cases where we would like to take all on our own balance sheet from a return perspective. So the guidance that we gave you already when we presented, I think it was last year, where we were saying 75% to 25%, that sort of remains the guidance you should think.

Luca Gagliardi

25% our capital and 75% either value share or With-Profits capital.

Andrea Rossi

Then you asked about flows on Dai-ichi Life. So, I said it before, once again, the partnership is going extremely well. Obviously, they decided to be our partner because they went through all the possible partnerships in Europe and said, okay, who's the strongest asset manager? Well, I think our numbers probably said that we are in terms of investment performance and reach. And then they wanted also to understand more about the BPA market since that's a possibility at a certain stage in Japan as well. We are really working extremely well with them and not only did we see the £400 million of flows in 2025, but we see continued momentum in 2026 as well. Let's not forget that they had a commitment of $6 billion over 5 years. And we said that it would be good to have $1 billion the first year. First year anniversary is in May. I think we will do more than that number by May with Dai-ichi, but obviously, we will have to see. There is still a couple of months to go. But good momentum with Dai-ichi Life and a very, very strong partnership.

Then Future+, sort of what we're doing in UAE is a bit of Future+ but it's not Europe. Future+ is PruFund in

Europe and continues to be a very relevant opportunity, but you need to have the right distribution partner.

And I always said that the right distribution partner for us is probably a strong insurance group. We had done a partnership with a strong insurance group in the UAE. There are others, of course. There are several strong large, pan-European ones. That's what we were working on. It will come.

Kathryn McLeland

The question on the annuity book credit quality is that it still remains 96% investment grade, 74% single A and above. We anticipated there'd be a question on this given the external environment at the moment. The 4.5% net downgrades was driven by the ground rent asset class. As you said, there were just one or two other small impacts as well on the book. But overall it remains very high quality. With the announcement in January, what we did is essentially look at the valuation and when we see either a situation changing perhaps with where the government was, in terms of potential imminent announcement coming as we entered 2025, there were some ratings moves. So that's what it was.

Nasib Ahmed, UBS: Firstly, on private assets, about more than £80 billion, I think most asset managers out there would want a piece of the pie.

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M&G plc 2025 Full Year Results 12 March 2026

Do you think that it's going to be margin pressure as a result of other guys coming in and trying to access more of the private assets on the asset manager side? That's one part of it. And then do you see commoditisation of that product as well kind of impacting revenue margins as well?

Second question, technical one for Kathryn. I'm trying to square the OCG growth versus the AOP growth. If you take the £928 million, keep it flat, you get to the £2.7 billion target. Whereas AOP growth implied for the next two years is about 8% to get to the 5%, so there's flat on OCG applied by the guidance and 8% on AOP.

What's the difference, any colour on that? Thanks.

Andrea Rossi

Okay, so private assets and what you are saying is are there any pressure on fees in private assets? Now, let's remember where our focus of private assets is. It is mainly Europe, and of course in real estate, and we also have roughly £10 billion in Asia on the real estate side.

Our franchises are leading franchises. Let's not forget £34 billion in real estate, £27 billion in private structured credits, and then we have £6 billion in infra and another £14 billion in Impact and private equity, so we have strong franchises there. But I think the key message here is Europe is still under-penetrated when it comes down to private assets. There are still opportunities in Europe. I said it before on private credit, roughly 70% of loans are still with the banks. Banks are retrenching, as you all know, here in Europe, so that's an opportunity. Not too many players playing in this field either because Europe is not a United States of Europe.

Every country has its own rules and laws, so you need to have had that track record and knowledge, which we have. We've been around 25 years doing private credit. The same is with the other asset classes, so I don't see too much pressure there. Then we have some uniqueness as well. I mean, we are with the PCP acquisition, we are the leader in the non-sponsored private credit space. We are clear leaders there and we see significant appetite into that space. So no, I don't see any key pressure on margins on the private asset side given our focus in Europe. In particular also on private credit, I really see significant demand here. Coming, by the way, from everyone, not only European clients, but also Asian and North American clients as well. So very, very important point.

On commoditisation, we used to be more core given also that we had a large internal client that was looking for less value add. So yes, we're moving more towards that. PCP is a good example. BauMont is another one.

I think we're in a good place, and we should see, thanks also to the proximity and Life business growing, but also having access to the Dai-ichi Life, we should see strong momentum here. Because remember the slide as shown before on institutional clients. We had 800 institutional clients three years ago. Now they have 1,000.

Now, that's not because we're lucky, we have invested in distribution people. Joseph and myself were out there seeing big, relevant, big asset allocators, and they want to invest alongside other big balance sheets and now we have two balance sheets. You should see strong momentum on the private asset side moving forward.

Kathryn McLeland

I think the answer to the technical OCG versus AOP growth, as you averaged them to get to the 5%, I think if you look at underlying cap gen, where we did guide to it, growing over time, there will be a similarity, and clearly what you've seen is us try to align our approach for both CSM and PVST. You get a broadly similar approach, but that will be on an underlying basis, and they'll be similar. We've given the reiteration of the management actions of £100 million to £200 million, and obviously we exceeded that a bit last year. But, I think, that will bring you closer into line. Clearly it will evolve, addressing the question we got today around the CSM contributing to a meaningful proportion of profits while we see this really exciting fee earnings grow over time, which will change that equation again.

Luca Gagliardi Importantly, the £2.7 billion, it's a target that we just issued 12 months ago. So, we all have our incentives to do as well as we can. It's not a cap.

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M&G plc 2025 Full Year Results 12 March 2026

Abid Hussain, Panmure Liberum: I've got two questions.

The first one was on margin. Thank you for the colour on the fee business margins that you've given so far. I just wonder if you could give us a sense of the margin versus lifetime value on the bulk business that you've written last year, and sort of perhaps compare, that with the fee-based business that you hope to run. I'm trying to dimension the sort of 10 to 15 bps on profit margin on fee-based business versus, I think sort of 100 bps on profit margin on the traditional BPAs, which of course comes with a higher new business strain. Just trying to sort of square all of that.

And then the second question is on private credit. Just wondering if you are indeed expecting a tick up in the default rates across any of the private asset classes, and if you could help us with quantifying what you're seeing perhaps at the industry level in default rates across Europe versus US, any colour on that would be helpful?

Andrea Rossi

I can take the first one, and I think I explained before, we're talking two very different markets between US and Europe, and I know there's a lot of focus on private credit lately. Most of the problems we see are mainly in the US and it's linked to poor underwriting, overcrowding, but also a lot is linked to software exposure. We know the US market is a larger one than Europe. Europe is less mature, smaller, less players, and then it comes down also to the quality of the players. I mean, I don't want to speak about peers, but we've been in this business over 25 years. We start as a credit house. Let's not forget about that and then we moved into private credit 25 years ago. If you look at our default rates, I think the European loan fund, it's less than

1%. That shows the quality of how we are underwriting this. I'm not overly concerned. I mean, we have not seen any trend in Europe of more defaults lately. Yes, of course, there are cases. Well, we have seen MFS and others. By the way, we have no exposure to MFS, to be very clear. Once again, it shows how good we are in turning away two-thirds of the businesses that are offered to us. I would be, let's call it cautiously optimistic on Europe given our focus on Europe. We have no real exposure to the US, so you should not be overly concerned on this. Of course, I don't know what's going to happen in the Middle East. Maybe it goes on for another six months and we will see, but these are all things that we cannot control. And exposure to software for us is extremely limited. So, if you look at our private credit book, it's less than 2% in the Asset Management business. So very, very, very low. I'm sure you can see some of our peers came out with much, much higher numbers there.

Kathryn McLeland

I think, you'll probably get more colour as we start to write more of these products. We've obviously talked about the CSM margin and the strain for the BPAs we did last year, and we're really pleased with the start of fixed term annuity and with individual annuities coming. For now, we've grouped all of these products together in that 10 to 15 basis points of profit. Obviously as volumes grow, we'll give more colour to support the products that we're writing, but we're not going to give individual product by product. Clearly what we've said very clearly is that we need to meet our cost of capital hurdle rates for shareholder business.

The With-Profits Fund has got a different objective for the business that they write. Look, we see this as very high-quality earnings, very transparent, very repeatable that will build over time.

Luca Gagliardi

Perfect. I think everyone has asked their questions.

Thank you very much and see you at our half-year results.

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