Sanlam Allianz Holdings (kenya) Plc · NSEKE:SLAM
Sanlam Allianz Holdings (kenya) — Sanlam — FY2015 Earnings Presentation
67 slides from Sanlam Allianz Holdings (kenya)'s earnings presentation, 2016
Slide 1: Investor presentation 2015 annual results
Investor presentation 2015 annual results
Slide 2: Slide 2
Slide 3: Sanlam investor presentation 2015 annual results
Notes Sanlam investor presentation 2015 annual results 1
Slide 4: The Sanlam strategy; Operating environment; Strategic delivery
The Sanlam strategy Operating environment Strategic delivery Financial review Priorities Outlook Notes 2 Sanlam investor presentation 2015 annual results
Slide 5: The Sanlam Strategy
The Sanlam Strategy Maximising shareholder value Notes Sanlam investor presentation 2015 annual results 3
Slide 6: Strategic pillars
Strategic focus Optimising value creation Sustainable value creation for shareholders Maximising RoGEV Earnings growth Operational efficiencies Strategic pillars Optimal capital utilisation Diversification Transformation Notes 4 Sanlam investor presentation 2015 annual results
Slide 7: A strategy focused on growth
A strategy focused on growth Driving geographic, segment and product diversification South Africa Solid base & cash flows Developed India/SE Asia Lower income Niche, solutions segments have similar for SA & RoA dynamics than SA ELM clients and RoA Rest of Africa Demographics, low insurance penetrati
Slide 8: Effective capital management
Core regional focus areas Differentiated approach per region Large player in mature market with strong competition Further diversifying distribution capability to drive Effective capital management South Africa growth: ELM footprint, Reality, health, digital, outcome Delivering growth in mature mark
Slide 9: Effective capital management
Core regional focus areas Differentiated approach per region Large player in mature market with strong competition Further diversifying distribution capability to drive Effective capital management South Africa growth: ELM footprint, Reality, health, digital, outcome Delivering growth in mature mark
Slide 10: Effective capital management
Core regional focus areas Differentiated approach per region Focus on accelerated organic growth to obtain Other leadership position in all countries Effective capital management Emerging Cross-border alliances and relationships; capitalise on Markets expanded footprint from Saham Finances transacti
Slide 11: Operating Environment
Operating Environment Economic, political and internal pressures Notes Sanlam investor presentation 2015 annual results 9
Slide 12: External operating environment
External operating environment Global events impacting on our key markets Slower US interest growth in rates China Commodity- based economies under pressure Government Commodity & consumer prices debt Notes 10 Sanlam investor presentation 2015 annual results
Slide 13: External operating environment
External operating environment Emerging market economies under pressure from global events Macro environment and structural constraints limiting capital investment and economic activity Modest growth in employment and disposable income South Political events contributed to investment market and Afri
Slide 14: External operating environment
External operating environment Emerging market economies under pressure from global events Best sovereign rating in Africa due to sound management of government finances Botswana Robust economic growth, but need to diversify economy away from reliance on diamonds BIHL maintains strong competitive ad
Slide 15: External operating environment
External operating environment Emerging market economies under pressure from global events Below-potential economic growth in 2015, but improving Delays in roll out of infrastructure projects impacted on credit businesses – activity picked up towards end of 2015 India More stringent provisioning reg
Slide 16: SA economy
SA economy Modest growth in all key metrics Growth in real retail sales, GDP and PDI 20% 15% 10% 5% 0% -5% -10% Growth y-o-y in real retail sales Growth y-o-y in real GDP Growth y-o-y in real PDI Notes 14 Sanlam investor presentation 2015 annual results
Slide 17: Regional economic growth
Regional economic growth Higher growth outside of SA 25% 20% IMF 15% estimates 10% 5% 0% -5% -10% -15% South Africa Namibia Botswana Ghana Kenya India Malaysia Notes Sanlam investor presentation 2015 annual results 15
Slide 18: Interest rates
Impact on growth Interest rates VNB overall -12% Higher SA rates; other regions stable Sanlam Sky VNB -25% Higher float income SA bond yields and short-term interest rates 10% +200bps 9% 8% 7% +40bps 6% 5% 4% 12-13 01-14 02-14 03-14 04-14 05-14 06-14 07-14 08-14 09-14 10-14 11-14 12-14 01-15 02-15 0
Slide 19: SA equity and bond markets
SA equity and bond markets Limiting growth in assets under management Average Alsi up 6% Pressure on fee income in 2015 and 2016 Average Albi up 8% 125 120 1,9% 115 7,6% 110 -3,9% 105 100 10,1% 95 12-13 01-14 02-14 03-14 04-14 05-14 06-14 07-14 08-14 09-14 10-14 11-14 12-14 01-15 02-15 03-15 04-15 0
Slide 20: Rand exchange rate
Rand exchange rate Sharp depreciation in 2015 against most currencies 160 150 140 130 120 110 100 90 80 12-13 01-14 02-14 03-14 04-14 05-14 06-14 07-14 08-14 09-14 10-14 11-14 12-14 01-15 02-15 03-15 04-15 05-15 06-15 07-15 08-15 09-15 10-15 11-15 12-15 United Kingdom United States Botswana India Ma
Slide 21: Average Rand exchange rate
Average Rand exchange rate Supported non-SA results Contribution to growth Net result from financial services +R82m 20% New business +R1.5bn 17.1% Net VNB +R6m RoGEV +4% 15% 11.7% 10% 8.6% 5% 3.8% 0% -1.4% -3.2% -5% USA United Botswana Rest of Africa India Malaysia Kingdom Notes Sanlam investor pres
Slide 22: Internal operating environment
Internal operating environment 2015 results impacted by internal challenges and one-offs Loss of PIC funds in 2014 and 2015 impacting on SI results Sanlam SI admin costs elevated by projects, regulatory Investments compliance and additional marketing spend One-off items in 2014 base at SEB and SI In
Slide 23: Strategic Delivery
Strategic Delivery Exceeding overall targets despite headwinds Notes Sanlam investor presentation 2015 annual results 21
Slide 24: Top-line earnings growth
Top-line earnings growth Financial performance in 2015 Earnings per share Net operating profit per share increased by 6% (11% excl one-offs) Normalised headline earnings per share up 6% Business volumes New business volumes increased by 16% to R211bn Net fund inflows of R19bn Net life VNB up 6% on c
Slide 25: Diversification
Diversification International positioning focused on emerging markets United Kingdom Ireland Switzerland Tunisia USA Algeria Morocco Mali Senegal The Gambia Guinea India Burkina Faso Philippines Kenya Cote D’Ivoire Uganda Ghana Benin Rwanda Togo Nigeria Burundi Malaysia Cameroon Gabon Tanzania Sanla
Slide 26: Diversification – better balanced portfolio
Diversification – better balanced portfolio Geographic diversification Net VNB Net operating profit Other international Rest of Africa 4% Other international 7% Rest of Africa 10% 2% Botswana Botswana 9% SA Traditional 5% 67% Namibia Namibia 4% 5% 2015 2015 R1 360m R7 269m SA Entry-level 11% SA Trad
Slide 27: Diversification – better balanced portfolio
Diversification – better balanced portfolio Line of business diversification Group Equity Value Net operating profit Admin, health & other Admin, health & other 15% Credit & structuring 1% 11% Credit & structuring Life business 10% Investment 62% management 2015 12% R103 506m 2015 R7 269m Investment
Slide 28: Capital efficiency
Capital efficiency Discretionary capital Balance 1 January 2015 3 300 Net investments (6 285) Saham Finances (4 224) Rest of Africa other (29) Shriram Insurance (969) Afrocentric (703) Other (360) Available for Investment return & excess cover 1 285 strategic Capital released from portfolios 4 000 i
Slide 29: Financial Review
Financial Review Notes Sanlam investor presentation 2015 annual results 27
Slide 30: Changes in presentation / key assumptions
Changes in presentation / key assumptions Accounting policies & basis of presentation No change from 2014 Changes in RDR: Sanlam Life (10.1%): 200 bps up from December 2014 Sanlam Sky (9.6%): 200 bps up from December 2014 Negative impact on RoGEV and VNB Weaker Rand exchange rate largely offset adve
Slide 31: Salient features
Salient features 2015 2014 Ì Group Equity Value cps 5 057 4 684 8% RoGEV per share % 12,8 18,5 CAR cover (Sanlam Life) 5,8 4,5 Net operating profit R mil 7 269 6 879 6% cps 355,2 336,2 6% Normalised Headline earnings R mil 8 851 8 340 6% cps 432,5 407,6 6% New business volumes R mil 210 842 182 297
Slide 32: Sanlam Personal Finance
Sanlam Personal Finance Notes 30 Sanlam investor presentation 2015 annual results
Slide 33: Sanlam Personal Finance
Sanlam Personal Finance R million 2015 2014 Ì New business volumes 63 825 52 566 21% Sanlam Sky 1 279 1 127 13% Individual Life 12 829 12 443 3% Glacier 49 717 38 996 27% Net flows 22 895 19 580 Sanlam Sky 2 739 2 635 Individual Life (3 005) (1 372) Glacier 23 161 18 317 Notes Sanlam investor presen
Slide 34: Sanlam Personal Finance
Sanlam Personal Finance R million 2015 2014 Ì Value of new life business 955 1 084 -12% Sanlam Sky 241 361 -33% Individual Life 502 551 -9% Glacier 212 172 23% Comparable economic basis 1 148 1 084 6% New business margin 2,48% 3,12% Sanlam Sky 5,86% 9,51% Individual Life 2,59% 2,88% Glacier 1,40% 1,
Slide 35: Sanlam Personal Finance
Sanlam Personal Finance R million 2015 2014 Ì Gross operating profit 5 313 4 801 11% Sanlam Sky 1 125 949 19% Individual Life life and investments 3 378 3 162 7% Glacier 426 339 26% Personal loans 346 308 12% Other 38 43 -12% Net operating profit 3 831 3 476 10% Group Equity Value 38 249 38 453 RoGE
Slide 36: Sanlam Emerging Markets
Sanlam Emerging Markets Notes 34 Sanlam investor presentation 2015 annual results
Slide 37: Sanlam Emerging Markets
Sanlam Emerging Markets R million 2015 2014 Ì New business volumes 11 913 9 259 29% Namibia 2 780 3 322 -16% Botswana 5 398 3 031 78% Rest of Africa 2 099 1 560 35% India/Malaysia 1 636 1 346 22% Net fund flows (7 346) 3 971 Namibia 358 1 021 Botswana (9 781) 1 129 Rest of Africa 1 459 1 451 India/M
Slide 38: Sanlam Emerging Markets
Sanlam Emerging Markets R million 2015 2014 Ì Gross operating profit 2 248 2 213 2% Namibia 618 534 16% Botswana 858 706 22% Rest of Africa 208 265 -22% India/Malaysia 572 749 -24% Corporate (8) (41) 80% Net operating profit 1 197 1 241 -4% Group equity value 18 047 14 571 RoGEV 29,9% 28,0% Notes 36
Slide 39: Sanlam Investments
Sanlam Investments Notes Sanlam investor presentation 2015 annual results 37
Slide 40: Sanlam Investments
Sanlam Investments R million 2015 2014 Ì Net investment business flows (3 251) 4 097 Investment management SA (753) 4 152 Wealth management 3 569 (29) International (6 065) (246) Capital management (2) 220 New life business 6 664 13 859 -52% Employee benefits 2 913 10 154 -71% Sanlam UK 3 751 3 705
Slide 41: Sanlam Investments
Sanlam Investments R million 2015 2014 Ì Gross operating profit 1 877 1 927 -3% Investment management 1 205 1 337 -10% Employee benefits 501 325 54% Capital management 171 265 -35% Net operating profit 1 417 1 468 -3% Group Equity Value 22 412 20 122 Covered business 7 210 7 833 Other 15 202 12 289
Slide 42: Sanlam Investments
Sanlam Investments Investment performance Percentage of SIM’s benchmark-managed funds exceeding hurdle 2011 2012 2013 2014 2015 100% 80% 60% 40% 20% 0% 20% 40% 60% 80% 100% Rolling 3 year Rolling 5 year Notes 40 Sanlam investor presentation 2015 annual results
Slide 43: Santam
Santam Notes Sanlam investor presentation 2015 annual results 41
Slide 44: Santam
Santam R million 2015 2014 Ì Net earned premiums 18 522 17 222 8% Gross operating profit 2 321 1 968 18% Underwriting surplus 1 777 1 489 19% Working capital & other 544 479 14% Net operating profit 933 801 16% Underwriting margin 9,6% 8,7% Group Equity Value 12 850 14 593 RoGEV -8,4% 19,1% Notes 42
Slide 45: Sanlam Group
Sanlam Group Notes Sanlam investor presentation 2015 annual results 43
Slide 46: Business flows
Business flows Gross Net R million 2015 2014 Ì 2015 2014 by business Personal Finance 63 825 52 566 21% 22 895 19 580 Emerging Markets 11 913 9 259 29% (7 346) 3 971 Sanlam Investments 116 582 103 250 13% (3 512) 12 099 Santam 18 522 17 222 8% 7 012 6 344 by licence Life insurance 39 976 42 290 -5%
Slide 47: Operational efficiencies
Operational efficiencies Focus on quality supports net fund flows Persistency – SA middle-income market Lapses, surrenders & fully paid-ups as % of in-force per half year 5 4.8 4.5 4.2 4.2 3.9 4.0 3.9 3.8 3.9 4 3.8 3.6 3.7 3.6 3.4 3.4 3.5 3.0 2.9 2.9 3 2.8 2.9 2.7 2.8 2.9 2.9 2.8 2.9 2.8 2.5 2 1.5 1
Slide 48: Operational efficiencies
Operational efficiencies Focus on quality supports net fund flows Persistency – SA lower income market Lapses, surrenders & fully paid-ups as % of in-force per half year 12 10.6 9.8 9.9 10 9.6 9.6 9.2 8.5 8.7 8 6 4 2 0 2012 2013 2014 2015 H1 H2 Notes 46 Sanlam investor presentation 2015 annual resul
Slide 49: Value of new covered business
Value of new covered business Value of New Business Margin R million 2015 2014 Ì 2015 2014 Personal Finance 955 1 084 -12% 2,48% 3,12% Emerging Markets 448 431 4% 5,97% 7,60% Employee Benefits 85 198 -57% 1,96% 1,66% Sanlam UK 26 30 -13% 0,66% 0,75% Total 1 514 1 743 -13% 2,80% 3,09% Net of minoriti
Slide 50: Value of new covered business
Value of new covered business Significant impact from higher long-term interest rates Large SEB policy in 2014, Kenya and Zambia also affecting growth 2 000 3.5% 1 800 3.0% 1 600 1 400 2.5% 1 200 2.0% 1 000 1.5% 800 600 1.0% 400 0.5% 200 0 0.0% 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015
Slide 51: Net operating profit
Net operating profit R million 2015 2014 Ì Personal Finance 3 831 3 476 10% Emerging Markets 1 197 1 241 -4% Sanlam Investments 1 417 1 468 -3% Santam 933 801 16% Corporate & other (109) (107) -2% Total 7 269 6 879 6% Notes Sanlam investor presentation 2015 annual results 49
Slide 52: Income statement
Income statement R million 2015 2014 Ì Net operating profit 7 269 6 879 6% Per share 355,2 336,2 6% Net investment return 1 946 1 794 8% Other (364) (333) -9% Normalised headline earnings 8 851 8 340 6% Per share 432,5 407,6 6% Fund transfers 449 (15) Headline earnings 9 300 8 325 12% Per share 459,
Slide 53: Group Equity Value
Group Equity Value Equity Value RoGEV R million 2015 2014 Rm % Group operations 91 558 87 739 12 191 13,8% Personal Finance 38 249 38 453 4 658 12,1% Emerging Markets 18 047 14 571 4 369 29,9% Investments 22 412 20 122 4 386 21,3% Santam 12 850 14 593 (1 222) -8,4% Discretionary & Other 11 948 8 197
Slide 54: Group Equity Value earnings
Group Equity Value earnings R million 2015 2014 Ì Net value of new business 1 360 1 592 -15% Existing business 5 328 4 881 9% Expected return on VIF 3 759 3 368 12% Operating experience variance 1 081 991 9% Operating assumption changes 488 522 -7% 6 688 6 473 3% Inv variances in-force 320 551 -42%
Slide 55: Experience variances
Experience variances Positive experience persisting 1 200 5.0% 1 081 1 021 4.5% 991 1 000 4.0% 3.5% 800 681 3.0% 636 600 555 2.5% 468 2.0% 400 1.5% 277 288 278 241 1.0% 200 142 138 0.5% 0 0.0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 R'million % of VIF (rhs) Notes Sanlam inve
Slide 56: Return on Group Equity Value
Return on Group Equity Value Out perform growth target of long-bond rate + 400bp 25 20 9.8 4.8 6.3 15 5.2 3.3 6.2 0.7 10 13.4 12.4 12.2 12.2 12.1 12.2 5 10.8 0 2010 2011 2012 2013 2014 2015 Avg Target Out performance Notes 54 Sanlam investor presentation 2015 annual results
Slide 57: 2016 Priorities
2016 Priorities Notes Sanlam investor presentation 2015 annual results 55
Slide 58: Challenges
Challenges Addressing challenges a key priority South African life business Maintaining new business and profit growth over the long term New business margins Sanlam Emerging Markets headwinds Appropriate capacity and level of support Sanlam Investments Growing the base, in particular institutional
Slide 59: Sanlam Personal Finance
Sanlam Personal Finance Continue to anticipate evolving consumer needs and demands Focus on profitable sales growth Adapt and expand product range across entry-level, middle and affluent market Continued focus on risk business in middle and affluent markets Expand and adapt distribution footprint En
Slide 60: Sanlam Emerging Markets
Sanlam Emerging Markets Shift in focus to accelerated organic growth through enhancing partnerships, strategic alliances and expanding product range sensibly Increased visibility of Sanlam brand as partnership brand for markets and employees Vest and integrate the Saham Finances acquisition Deliver
Slide 61: Sanlam Investments
Sanlam Investments Maintain consistent superior investment performance Further leverage business model in SA to grow net inflows in retail Enhance competitive positioning for institutional segments Focus on implemented solutions for both retail and institutional clients Further align UK businesses t
Slide 62: Santam
Santam Focus on profitable growth – both in SA and emerging markets Capital review to consider future regulatory requirements, pending SAM implementation, review asset allocations Technical support to SEM general insurance partners to unlock value Improve operational efficiencies to optimise acquisi
Slide 63: Outlook
Outlook Notes Sanlam investor presentation 2015 annual results 61
Slide 64: Outlook for 2016
Outlook for 2016 Difficult year ahead; medium to long-term prospects intact Growth in most markets (particularly SA) to remain below longer term potential – pressure on new business growth and margins Investment market volatility to persist, adversely affecting fund -based fee income and return on c
Slide 65: thank you
thank you Notes Sanlam investor presentation 2015 annual results 63
Slide 66: Notes
Notes 64 Sanlam investor presentation 2015 annual results
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