Coronation Fund Managers Limited · JSE:CML
Coronation Fund Managers — H1 2005 Earnings Presentation
36 slides from Coronation Fund Managers's earnings presentation, May 10, 2005
Slide 1: Interim Results
2005 Interim Results 10 May 2005
Slide 2: Agenda
Agenda • Key themes • Financial highlights • Assets under management • Corporate developments • Investment performance highlights • Corporate structure and shareholding • Financials • Strategic environment • Future focus
Slide 3: Summary of results: Key themes
Summary of results Key themes
Slide 4: Strong financial results
Strong financial results • Revenue: 39% growth from R188,9 million to R262,7 million • Fixed fees: 19% growth from R127,8 million to R151,6 million • Operating costs increased, due to: • Restraint payments (R28 million) • Increased staff remuneration (2 months) • Increased administrative costs (as %
Slide 5: Assets under management
Assets under management 80000 70,037 70000 63,759 59,978 60000 53,697 50000 48,114 43,902 40000 30000 28,189 23,935 25,920 20000 12,267 10000 7,520 803 2,800 0 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 31 March 2005
Slide 6: Reconciliation of assets under management
Reconciliation of assets under management Total assets 30 September 2004 63,758,820,582 Market movement 9,511,044,090 Currency effect (275,448,845) Net assets acquired/(lost) (2,957,735,566) Total assets 31 March 2005 70,036,680,260
Slide 7: Corporate developments (pre March 2005)
Corporate developments • Pre 31 March 2005: • Sale of 11% of Coronation’s equity to senior management and staff by Coronation Investments & Trading Limited • Establishment of Bojammogo Asset Management Company (Pty) Limited in Botswana
Slide 8: Corporate developments (post March 2005)
Corporate developments • Post 31 March 2005: • Creation of the Imvula Trust • Formalised commitment to achieving black participation in equity of the business • Disposal of 49% shareholding in Kagiso Asset Management
Slide 9: Alignment of interest
Alignment of interest • Staff interests aligned with those of clients and shareholders • Number of staff = 146 – South Africa: 120 – International: 26 • 71 SA staff members are shareholders through either/or Imvula or CIT transaction • Investment team operating at full strength – 37 individuals (wit
Slide 10: Investment performance highlights
Investment performance highlights Institutional • SA balanced portfolios – Ranked 1st over one year and 3rd over three years in Alexander Forbes SA Large Manager Watch survey (31 March 2005) • Global balanced portfolios – Ranked 2nd over one year in Alexander Forbes Global Large Manager Watch survey
Slide 11: SA Institutional Performance
SA Institutional Performance SA Large Manager Watch 1 year ended 31 March 2005 Coronation 33.73% Prudential 32.91% RMBAM 32.26% African Harvest 32.12% Stanlib 31.67% OMAM 31.46% Median 31.46% Sanlam 30.36% Investec 30.15% Oasis 29.45% Allan Gray 28.47% Metropolitan 27.83% Source: Alexander Forbes
Slide 12: SA Institutional Performance (Global Large Manager Watch)
SA Institutional Performance Global Large Manager Watch 1 year ended 31 March 2005 Prudential 30.01% Coronation 29.94% OMAM 29.70% African Harvest 29.48% RMBAM 29.42% Median 27.53% Sanlam 27.53% Oasis 27.18% Stanlib 27.10% Investec 26.93% Metropolitan 25.26% Allan Gray 23.72% Source: Alexander Forbe
Slide 13: Investment performance highlights: Absolute Return product
Investment performance highlights Absolute Return product Since 1 Year 3 Years inception* Absolute 28.6% 19.7% 19.8% CPIX 3.7% 5.6% 6.6% CPIX + 7 10.7% 12.6% 13.6% * Since inception – August 1997
Slide 14: Investment performance highlights: Retail
Investment performance highlights Retail • ACI/Raging Bull Best Unit Trust Company of the Year for 2004 • 18th consecutive 1st or 2nd place in quarterly Plexus Survey
Slide 15: Plexus Survey
Plexus Survey ee ee ee ee Prudential 2.00 2.31 1. Coronation| 2. Old Mutual 2.09 2. Investec = =e Investec = 2. Investec = PEE} 2. Nedbank 2.50 3. Stanlib 2.58 3. Nedbank 2.60 4. Absa 2.31 2. Oasis 2.50 4. Nedbank 269 4. Old Mutua 2.71 5. Nedbank 2.550 2. Prudential 2.50 5. RMB 3.00 5. Sage 2.93 6.
Slide 16: Investment performance highlights: Retail
Investment performance highlights Retail • 8 Standard & Poor’s Investment Fund Awards • Best overall composite performance in the industry as at 31 March 2005 and rolling 12-month performance: • Coronation Balanced Plus, with a 32.7% return, was the best performing prudential fund • Coronation Top 2
Slide 17: CIS Industry
CIS Industry Market share: single managers Ranking excl. cash, institutional, FoF, white-labels (R135.4bn; 3/05) 1 Allan Gray (15%, up 1%) R20.5bn 2 Investec (13%, down 1%) R18.1bn 3 Old Mutual (13%, unchanged) R18.1bn 4 Stanlib (13%, unchanged) R17.0bn 5 Coronation (6%, unchanged) R9.0bn 6 Sanlam (
Slide 18: Investment performance highlights: International
Investment performance highlights International • Coronation Global Equity Alternative Strategy Fund named Best Global Equity Fund for 2004 by InvestHedge • Rolling 1 year return: +7.70% • Since inception annual return: +12.04%
Slide 19: Corporate structure and shareholding
Corporate structure and shareholding
Slide 20: Corporate structure
Corporate structure Coronation Fund Managers Limited Coronation Investment Management (Pty) Limited 100% 100% 100% 100% Coronation Asset Coronation Coronation Life CFM (Isle of Man) Management Management Assurance Limited (Pty) Limited Company Limited Company Limited 51% 26% 100% 100% Bojammogo Asse
Slide 21: Shareholding
Shareholding As at 31 March 2005 Other STANLIB Allan Gray* CIT (<5% ea) 21.37% 51.3% Coronation Fund 5.52% Managers 21.81% * On behalf of clients
Slide 22: Financials
CORONATION FUND MANAGERS
Slide 23: Snap shot results
Snap shot results 31 March 31 March % 2005 2004 change Earnings 75,307 60,484 25 Headline earnings 74,809 61,683 21 Headline EPS Normal 19.6 16.1 22 Diluted 19.3 16.0 21 NAV per share 54.4 59.1 (8)
Slide 24: Snap shot results
Snap shot results 31 March 31 March % 2005 2004 change Cost to income 56.5% 54.2% (4) Segment contribution SA 90.0% 92.0% (2) International 10.0% 8.0% 2 Annuity income as % of 57.7% 67.7% (15) operating income
Slide 25: Cost to income ratio analysis
Cost to income ratio analysis 31 March 31 March 2005 2004 Cost to income 56.5% 54.2% Cost to income excluding restraints 45.8% 54.2% Cost to income excluding performance fees & restraints 61.2% 62.1%
Slide 26: Financial summary
Financial summary 31 March 2005 31 March 2004 Rm Rm Revenue R262,7 R188,9 Performance fees R96,4 R46,6 Management fees R151,6 R127,8 Others R14,7 R14,5 Operating Expenses R148,5 R102,3 Fixed R102,6 R67,0 Variable R45,9 R35,3 PBT R114,2 R86,6 Tax R39,7 R27,0 PAT R74,5 R59,6
Slide 27: Average fixed fee
Average fixed fee 0.90% 0.90% 0.78% 0.75% 0.46% 0.44% 0.35% 0.32% 2004 2005 International Institutional Retail Total
Slide 28: Funds subject to performance fees
Funds subject to performance fees % of assets under management Institutional 58% Retail 31% International 73% Total 55%
Slide 29: Cost base – per month
Cost base – per month 6 months 12 months 31 March 2005 30 September 2004 International (USD) 429,000 441,000 SA (ZAR) 8,687,000 8,200,000 Total (ZAR) 11,241,000 11,110,000 Exchange rate 5.9537 6.5990
Slide 30: Cost base – per month (including salary increase)
Cost base – per month (including salary increase) 6 months 12 months 31 March 2005 30 September 2004 International (USD) 429,000 441,000 SA (ZAR) 9,882,000 8,200,000 Total (ZAR) 12,436,000 11,110,000 Exchange rate 5.9537 6.5990
Slide 31: Strategic environment
Strategic environment
Slide 32: Major strategic environmental issues
Major strategic environmental issues • Low barriers to entry in Collective Investment Schemes industry • Fragmentation - “small is beautiful” • Mandate complexity • Corporate governance issues / rising shareholder activism by fund boards of trustees • Life company vulnerability
Slide 33: Future focus
CORONATION FUND MANAGERS
Slide 34: Future focus
Future focus • Singular focus on managing money for institutional and individual clients • Equity ownership culture reinstated – staff now own more than 21% of the business • Staff interests aligned with those of clients and shareholders, enhancing long-term competitiveness and sustainability
Slide 35: Future focus
Future focus • Team of talented and committed people who share passion and drive for excellence • Investment team operating at full strength • Remain committed to producing strong consistent investment performance, appropriate products and exceptional client service • Building a more sustainable bus
Slide 36: Questions
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