(soft music) - Hello, I'm here with our Chief Executive, John Foley. And we're going to spend a bit of time talking about business strategy, the progress we've made to date, colleagues surveys, and a bit about the outlook for the business. John, thanks for joining us. Sustainability, personal priority for you. What's been your take on the reaction of the business to the challenge that we need to put this at the heart of the business? - So, it's the big one. And I think it's going to make a huge difference to us as an organisation. And the response has been nothing short of phenomenal. We've had serious interest from everybody around the organisation, whether it's impacting our fund management part of the business, or whether it's folks as individuals, what can they do on sustainability for us as a corporate? This has got real traction. There's no doubt about it. So, we're pushing on an open door. And we need to keep pushing. Because it's going to make a big difference to our business if we can be seen to be better than the competition in this space. We should be, we believe in it. We think it's the right thing to do. And so, we need to live it. And we need to breathe it as an organisation. We're doing that. There's lots of things to get through to get to that end point. And I don't know what the end point looks like. And I don't think anybody else does. But it is an enormous opportunity for us. And I've been really impressed with the work that Rob Marshall and his team have done. And in fact, everybody associated with this project, it's been really good. - And can we move on to culture and talk a bit about this idea of One M&G and how closely we're starting to align the culture to that concept? - Yes, I appreciate that it's not that easy, because we have been in the past two distinct businesses. But I have been impressed with the way people have embraced the idea of One M&G. We've got a lot of evidence that either in staff surveys, or in terms of the work we're doing, new products and so on. That One M&G is absolutely the way to go The collaboration to generate new product ideas and then send them off to market is absolutely the right thing. And it's a differentiator for us as well. So, all that's very important, but I appreciate that it takes time. We have to reinforce the message, and importantly, people need to see the evidence that this is what is happening. And there's a tangible result in doing it. In explaining this to various stakeholders, whether it be a shareholder or indeed regulators or others, this is really gaining traction now. People are understanding that this is making a difference as far as M&G is concerned with people who would be considered our peers. So, we need to keep going in this space. Rather like the sustainability space. We just need to keep going. We need to keep developing. And we need to keep coming up with new ideas that bring back the word innovation as far as M&G is concerned. And we can do that, and we are doing it. - And there's been two major surveys here. The culture diagnostic survey and the employee poll; What's your personal main takeaways from that rich source of information you've got there? - So, there's a few things, obviously some are positive, some are negative. That's what you'd expect. On the positive side. I've been around this organisation for a long time. And I've always thought we've had a good positive culture here. What I've been pleased to see is that most people who responded to those surveys think the same as I do. That we have a good culture. A culture that's inclusive and respectful as an organisation, which is good. But we can do better. And we should listen more. We should listen more to our customers. We should listen more to our colleagues who are telling us where we need to improve. So in areas like bureaucracy for example, where we probably have too much of that. We need to be mindful about governance. Of course we do, but I think we can be overzealous sometimes. And I absolutely appreciate the need to get that sort of pitch between an appropriate amount of governance and the freedom to actually create and do new things and exciting things. We need to get that balance right. And that's what I'm hearing from the survey. And that's what we'll respond to. - And you mentioned about being customer focused. We need to get more of that into the business. That's one of the key takeaways from these pieces of work. We've recently read some work, we've actually talked to many of our customers some of our biggest wholesale customers. What would you like to share from those findings? - So, and again, inevitably, there were some positive messages from some of our customers and not so positive. So, the positives would have been around things like, how we as an organisation respond to them. We're very much a human organisation. They see us as people that they like to deal with. We have quality people with good ideas who they like to and enjoy to have conversations with. They don't understand necessarily our commitment to this space. I obviously find that difficult to understand, but I will be pressing that button really hard with our customers, because we are committed. And so any customer who feels that we are not committed to them, it means we're not doing a good enough job in telling them that we are. But I understand the reasons why. It's because broadly speaking we are new still. And that we have presented a new equity story, a new strategy to the market that shows we're One M&G and what all that means. And they don't work in our organisation. They don't live and breathe our organisation as we do. So, they need to be reminded of it. It's worked with shareholders and analysts. We've seen that. So, we absolutely need to do this in customer space as well. And we will. So, I'll be talking to a lot more of my peers in our customer organisations. - And embedding that focus on customers within our own people. What are your thoughts on what we need to do there? So, if you're not in a customer facing role, how do we get that sense of the customer always comes first? - Yeah, it's not easy, but that is why we're here. So, we talked a moment ago about minimising bureaucracy. That's not cutting it out, and it's not putting the company at risk. But it's minimising it where we can. That actually has a positive impact on our customers. If they realise we can service them with speed, with agility, with the right sort of emphasis in terms of what they want and how they want to be serviced, that usually means us being more responsive. And that usually means having less bureaucracy. So, that's what we'll aim for. It's two sides of the same coin so to speak. So, we'll be taking a whole long hard to look at that. - Okay, and another message that came back from the colleagues surveys, was this sense among certain people that they are slightly fuzzy about our strategy. Not at the high level, but what it means for them, for their teams, for their department, how they should prioritise and so on. What would you say to that? - So look, the strategy I'm pleased to hear you say is pretty clear at the high level. We know what we want to do. We know where we want to go. Let's step back for a second. We have achieved, as an organisation, an immense amount in the last four years, call it. We've merged two businesses. We've created an equity story. We've demerged that business listed on the Stock Exchange. We've put sustainability. The whole firm has pivoted to sustainability. We've addressed the issues around culture. We've looked at performance in our fund management space. We have done an awful lot in this last four years. And sometimes the strategy can be a bit blurred when you've done all of that. It is, I think clear to people what we want to do going forward. We want to grow our international business for example. We expect our revenues to be significantly more from our international operations than our UK operations over next four to five years. But that's not to say you expect less from your UK operations. I'm expecting the whole to grow, but the emphasis perhaps in terms of speed of growth to be non-UK. So, what that means for people I hope, is increasing opportunity. We won't do any of this stuff, unless we're agile, we do things differently, we are creative in the way we do things. And also, I guess to a certain extent, mindful of what the competition is doing. Because everybody's going through this. We need to be better than them on every level and at every point. And so, if everybody in the organisation is mindful of that, then they will be keeping the customer front and centre of their mind, even if they're not customer centric in the sense that they're dealing with customers every day of the week. - And one of the things we also hear is some of our colleagues struggle with the seeming tension between investing for growth and cutting costs because various challenges, fee pressures and so on. What's your take on that? What's your perspective on that? - Yeah, I think it's a little out of whack to be honest with you Richard. So, when we talk about costs, it's really about efficiency. It's about making sure that our business is optimised at every point. And we are, as I said, we are not alone in doing this. Every firm, whether it's in our sector or otherwise, everybody's going through this. Because you need to optimise your activities so that you've got the space to grow your business. You can scale your business. And therefore you will achieve our goal, which is to be the best loved, savings and investments business. Now, you can't achieve that goal without making sure you're efficient. So, I think the language has been about costs and cutting costs, which is quite emotive. It isn't, we will invest for growth. I can tell you that here and now. And I'll tell everybody, we will invest for growth. But we have to do it, mindful of being an efficient organisation. And I don't think there's anybody that would argue with that. - Okay. - I hope there wouldn't be. - And you mentioned the equity stories beginning to get good traction with the shareholders. In light of the speculation we've seen about Schroders in the press, could you give us more colour on how shareholders view our business and the prospects for it? - Yeah, and obviously I get first hand feedback from them. And I've got some evidence as well to back it up. The way they think about our businesses is that we've performed very solidly in the first period of our independence. So, the questions have moved from what are you all about? What is M&G? Are you an insurer or an asset manager? And how does all that look? The questions have moved on from that, to what do you expect to be in five years time? And that's the right question to be asking any company. And so, I'm really pleased with that. It means that the proposition that is M&G has resonated with them. So now they want to understand what are they investing in for the longer term? If you look at our top 15 or so shareholders, and I think they would account for just around 50% of our shares, they are predominantly long-only shareholders who have in the main been buying. So again, there's traction in the story, that's a kind of proof point to the story. There'll always be firms who sell a bit from time-to-time because they might be an outflow themselves or something. But generally speaking, that tone is positive. But what we will have to do is prove that we're an efficient organisation. It's one you can invest in with confidence that we will be proactive, we will develop new products, and we've got a number of those coming down the pipe. And we will do it in way that we can move quickly to market. If they see that and those proof points, they will continue to back this company, I have no doubt. Especially with the sort of returns we've been giving them. So, if you look at the total shareholder return since the 21st of October, 2019, which was the date we listed, has been over 30%. So that will include reinvestment of dividends. But yeah, that's the way investors assess returns from companies. We've been over 30%, which basically beats just about anybody else that you might consider in our sector and certainly the market. - Just to wrap up, in many countries it looks like some of the restrictions on movement put in place for the pandemic are beginning to be removed. And we see this as an opportunity to think about future ways of working. Where are we on our thinking on that? - So, we've done a lot of work in this space because it's really important. And, I dare say colleagues would have, I have read a lot from other firms where they think they are with this topic. And we've got the spectrum, haven't we? We've got people who expect to all go back to work five days a week. And that's that, as you were type of thing, through to everything's flexible, and you can do more or less as you like. I suspect we'll have some sort of initial hybrid model, would be my view. Because I think that there are some benefits to having flexible working, but we miss collaboration. There's no doubt about that. And we need to identify those areas of the business that really desperately need collaboration. And they will want to work in a collaborative way more regularly. And those areas that perhaps need less, they can operate differently. So, we do need a hybrid model. We do need to be flexible. And I think the pandemic, this whole lockdown unlocked down and lockdown again business, has meant that we can think flexibly around all of this. The one thing I'm pretty sure about though, is the first thing we do in terms of how we will go back to work, won't be cut and dry. I suspect we'll have to go through a couple of iterations. But I think if people take away the point that we are not going to be dogmatic, we will be flexible and it will be a hybrid model, that's what we'll expect them to see. - Okay, thanks John. And any last words for colleagues? - Yeah, just that I absolutely know this last couple of years has been a challenge to say the least. And I rattled off earlier, all the different things we've done over the last period of time. And the fact that we managed to do all of that, during a pandemic has been nothing short of wonderful, marvellous in my view. So, I just really want to thank everybody for what they've done and their commitment, but please keep it coming. - Thanks John, great place to end. Thank you again. - Sure, thanks.