Coronation Fund Managers Limited · JSE:CML
Coronation Fund Managers — H1 2007 Earnings Presentation
48 slides from Coronation Fund Managers's earnings presentation, May 15, 2007
Slide 1: Interim Results Reviewed
March 2007 Interim Results Reviewed 15 May 2007
Slide 2: Agenda
Agenda Financial highlights Overview of company Financial results Business review • Retail • Institutional Other • CFM International – UK & Ireland • NAM - Namibia • CFM Botswana
Slide 3: CML vs Financial Index
CML vs Financial Index (capital return based) Dec 03: 13c Dec 04: 25c Jan 06: 36c capital Dec 06: 53c capital dividend dividend distribution distribution 280 Apr 05: 25c special distribution 230 180 130 80 Jan-04 Mar-04 Jan-05 Mar-05 Mar-06 Jul-03 Sep-03 Nov-03 May-04 Jul-04 Sep-04 Nov-04 May-05 Jul
Slide 4: Market movements
Market movements 3 Months 6 Months 12 Months Economic Group % % % All Share 10.4 23.4 37.6 All Share (Capital Return) 9.44 21.87 33.98 All Share (Dividend Return) 0.94 1.58 3.67 Platinum Mining 30.7 48.1 83.8 Mobile Telecommunications 15.3 55.6 61.0 Resource 20 15.1 20.3 46.9 General Financial 7.9 2
Slide 5: Financial highlights
CORONATION & FUND MANAGERS Financial highlights
Slide 6: Financial Highlights
Financial Highlights AUM R125 bn 33% Headline earnings 35 cps 43% Headline earnings (diluted) 31 cps 45% Earnings pre IFRS 2 41 cps 32% Distribution 20 cps
Slide 7: Financial Highlights (2)
Financial Highlights (2) Revenue R422m 25% Profit from fund management R187m 28% PAT R127m 37% Cashflow (operating activities) R157m
Slide 8: Company overview
CORONATION & FUND MANAGERS Company overview
Slide 9: Assets under management
Assets under management 2003 – March 2007 140,000 125,440 120,000 113,980 101,440 100,000 81,930 80,000 63,759 60,000 53,697 40,000 20,000 0 2003 2004 2005 2006 2006 2007 Sept Sept Sept Sept Dec Mar
Slide 10: Asset class summary
Asset class summary % of Asset Class Market Value AUM Domestic Equity 84,630,438 67.5 Domestic Cash 19,492,103 15.5 Foreign Equity 11,712,863 9.3 Domestic Fixed Interest 5,247,561 4.2 Domestic Other (UTs,Hedge,Pooled) 3,287,500 2.6 Foreign Cash 799,343 0.6 Foreign Fixed Interest 224,310 0.2 Foreign
Slide 11: Reconciliation of AUM
Reconciliation of AUM 6 months Opening market value 101.42 Net Flows 0.23 Capital appreciation and other 23.79 Closing market value 125.44
Slide 12: Company structure
Company structure at 31 March 2007 Coronation Fund Managers Ltd 49% 90% Professional Provident Society 10% Coronation Investment The Imvula Trust Investments (Pty) Ltd Management (Pty) Ltd 54.95 51% 100% 100% 100% 100% 100% Namibia Asset Coronation Fund Coronation Coronation Life Coronation Asset Co
Slide 13: Shareholder Analysis
CORONATION & FUND MANAGERS Shareholder Analysis
Slide 14: Top shareholders
Top shareholders 31 March 2007 Company Shares held % Allan Gray + Orbis 97 020 288 27.41 CIT 94 627 989 26.62 Staff 70 747 530 19.90 Tiedemann 15 140 001 4.26 McWilliams Family Trust 11 200 000 3.15 Stanlib 8 094 662 2.28 Total 83.62
Slide 15: Financial Results
CORONATION & FUND MANAGERS Financial Results
Slide 16: Earnings
Earnings % Mar-2007 Mar-2006 Change Attributable earnings 127,009 93,158 EPS 49 36.0 24.2 Headline earnings 122,561 92,704 HEPS 43 34.7 24.2 Diluted HEPS 45 31.1 21.5 Weighted average shares in issue 353,182 383,361 Capital repayment 20c per share -
Slide 17: Earnings (cont)
Earnings (cont) % Change Mar-2007 Mar-2006 Price earnings per share (10%) 11.2 12.4 Market capitalisation 13% 2,758,220 2,437,648 EBITDA 27% 196,039 153,934 EBITDA (adj for CIT transactions) 24% 209,872 169,356 Share price @ 31 March 29% 7.76 6.00 PE earnings – share price/annualised HEPS EBITDA – A
Slide 18: Earnings ratios
Earnings ratios Change Mar-2007 Mar-2006 % % % Cost to income - Actual 1% 58.5 59.1 Cost to income – Pre-IFRS2 (5%) 54.7 51.9 Cost to income – Actual (as previously 3% 54.2 55.8 reported)
Slide 19: Balance Sheet ratios
Balance Sheet ratios % Change Mar-2007 Mar-2006 NAV per share - R3.38 R3.38 ROE 45% 20.7% 14.3% Total equity (7%) R1,2 billion R1,3 billion
Slide 20: Earnings summary
Earnings summary Mar-2007 Mar-2006 Rm Rm Revenue R451.2 R357.8 Net fee income R380.5 R310.5 Trailer Commissions R42.0 R27.0 Other R28.7 R20.3 Operating expenses R204.9 R158.7 Trailer Commissions R42.0 R27.0 IFRS 2 charges R17.1 R25.8 PBT R187.2 R146.3 Tax R60.2 R53.1 PAT R127.0 R93.2 Cash earnings p
Slide 21: Total net fee %
Total net fee % 1.27% 1.17% 0.81% 0.75% 0.70% 0.65% 0.56% 0.50% 2007 2006 International Institutional Retail Total
Slide 22: CFM expenses
CFM expenses % Mar-2007 Mar-2006 SIX MONTHS INTERIMS TO MARCH Change R’000 R’000 Fixed operational costs 21 86,978 71,998 IFRS 2 (34) 17,089 25,822 Variable costs 40 150,670 107,564 TOTAL OPERATIONAL COSTS 24 254,737 205,384 Other costs 48 9,194 6,200 Interest expense 9 6,729 6,200 Impairment of cap
Slide 23: IFRS 2 effect
IFRS 2 effect Mar 2007 Mar 2006 Mar 2005 R’000 R’000 R’000 December 2003 options 456 952 865 Imvula transaction 2,800 3,064 - CIT transaction 1 (February 2005) 6,310 6,566 1,308 CIT transaction 2 (April 2005) 4,778 4,778 - CIT transaction 3 (September 2005) 2,745 4,078 - Preference shares - 6,384 37
Slide 24: Listed Asset Manager Comparisons
Listed Asset Manager Comparisons Traditional Asset P/E Enterprise value Managers Last 12 Last 12 Latest 2007 2007 2006 months net months AUM EBITDA revenue EBITDA UK median 16.4 17.1 2.2% 4.1X 11.7X 11.6X USA Median 18.8 - 4.0% 4.2X 11.9X - CFM at 31 11.2 12.4 2.2% 3.9X 7.4X 6.6X March Source: Goldm
Slide 25: Business Review Retail
CORONATION & FUND MANAGERS Business Review Retail
Slide 26: CIS industry
CIS industry Overall market (excl. Fund of Funds) Manco AUM Manco AUM STANLIB 72,609 12% MOMENTUM 6,942 ALLAN GRAY 67,189 24% MARRIOTT 5,303 ABSA 63,158 35% PSG 4,804 INVESTEC 55,992 44% COMM. GROWTH 3,415 SANLAM 51,859 53% FRATERS 2,758 OLD MUTUAL 46,663 61% ADVANTAGE 2,140 PRUDENTIAL 43,444 68% FO
Slide 27: CIS industry
CIS industry Getting to our real market Assets Under Management Mar 07 Total industry assets R658bn Exclude Fund of Funds -R72bn R585bn Exclude Money Market funds -R154bn R431bn Exclude Dividend Income funds -R22bn R408bn Exclude Institutional funds -R77bn R330bn Exclude Multi-Managers -R22bn R307bn
Slide 28: CIS industry
CIS industry Market share: Long-term single managers only Ranking excl. cash and dividend income funds Mkt Share Mar 07 Sep 06 6↑ Coronation 7% market share growth 7.8% R22.7bn R17.2bn Long-term single managers R293.3bn R237.8bn Source: ACI Quarterly Statistics, March 2007 & Sep 2006
Slide 29: CIS industry
CIS industry Getting to the real flows Net flows Mar 07 Total industry Net flows R22.7bn Exclude Fund of Funds -R800m R21.9bn Exclude Institutional Multi-Managers -R600m R22.5bn Exclude Institutional Single-Managers -R1.7bn R20.8bn Exclude Money market & Enhanced cash -R8.3bn R12.5bn Exclude Dividen
Slide 30: Single manager cash flows
Single manager cash flows Six months to end March ‘07 Net inflows: Long-term single managers only ranking excl. cash and dividend income funds Net flows Last 3 Months Last 6 months Coronation R1,695bn R2,560bn CIS Industry R8,604bn R15,350bn Source: ACI Quarterly Statistics, March 2007 & Sep 2006
Slide 31: PlexCrown
PlexCrown Overall CIS manager ranking Mar07 Dec06 Sep06 Oasis 3.916 4.375 4.666 Coronation 3.683 3.958 3.958 Stanlib 3.361 2.702 2.886 Prudential 3.250 3.375 3.375 Nedgroup 3.239 3.187 3.250 RMB 3.196 2.940 3.333 Investec 3.175 3.608 3.533 Sanlam 3.162 3.114 2.783 Old Mutual 3.137 2.932 2.721 Absa 3
Slide 32: AUM of biggest Unit Trusts
AUM of biggest Unit Trusts (incl. International & Internal) – March 2007 Dec Mar Market Values Including Internal Investments % ’06 ’07 CORONATION STRATEGIC INCOME FUND 3,519 4,130 17.4 CORONATION CAPITAL PLUS FUND 3,150 3,724 18.2 CORONATION MONEY MARKET FUND 2,161 2,389 10.6 CORONATION ABSOLUTE FU
Slide 33: Business Overview Institutional
Business Overview Institutional
Slide 34: Performance
Performance Global Large Manager Watch 3 years ending 31 March 2007 OMIGSA 34.6% Prudential 34.0% Coronation 33.9% Allan Gray 33.8% Median 33.0% Investec 32.8% Cadiz African Harvest 32.7% Oasis 32.5% Sanlam 32.4% Metropolitan 31.8% Stanlib 31.6% RMBAM 31.6%
Slide 35: Performance
Performance SA Large Manager Watch 3 years ending 31 March 2007 Allan Gray 38.3% Coronation 37.0% Prudential 36.2% OMIGSA 35.8% Median 35.2% Investec 35.0% Stanlib 34.7% Sanlam 34.7% Cadiz African Harvest 33.7% RMBAM 33.6% Metropolitan 33.2% Oasis 33.0%
Slide 36: Coronation International Limited
Coronation International Limited
Slide 37: Coronation International AUM
Coronation International AUM Mar Sep Sep Sep 2007 2006 2005 2004 Fund of Hedge Funds $738m $666m $844m $846m Global Equity $431m $438m $537m $597m Relative Value $228M $165m $241m $190m Other hedge $79M $63m $66m $59m Long Only Fund of Funds $719M $536m $297m $158m International Active Unit Trust $1
Slide 38: Coronation Global Equity FoF's
Coronation Global Equity FoF’s Period ending 31 March 2007 Coronation Global Equity Long Only 25.0% Coronation Global Equity Long Only US$ MSCI US$ 20.4% 20.0% 17.3% 16.9% 16.0% 15.2% 15.0% 14.4% 13.0% 10.7% 10.0% 5.0% 0.0% 1 YEAR 2 YEAR 3 YEARS 5 YEARS
Slide 39: Evolution of the hedge fund universe
Evolution of the hedge fund universe – protection has decreased 60% Downside protection by hedge fund style (Downside capture of MSCI world by HFR style) 40% Most protected In 1995-97 Equity hedge funds generate positive 20% performance when MSCI fell Downside protection1 0% -20% -40% By 2004-06 thi
Slide 40: Namibia Asset Management Limited (NAM)
Namibia Asset Management Limited (NAM)
Slide 41: Current shareholding structure
Current shareholding structure Coronation Fund Managers 48.05% EXE Other GIPF* /Ae//Gams Heike Share 39 Inv Scheme 11.32% 11.53% 8.6% 14% 6.5% 20.5% Namibia Asset Management Limited
Slide 42: Value of our investment - NAM
Value of our investment - NAM Shares in issue 200,000,000 Current share price 25 cents Market capitalisation (N$) 50,000,000 CFM current shareholding 96 096 518 Consideration paid by CFM (,R) (47.14%) 8,870,000 Dividends received 2,882,895 Current value 24,024,130
Slide 43: Performance – combined mandates
Performance – combined mandates For 3 years ending 31 March 2007 Prudential 34.50% NAM 34.20% Omam Segregated 33.90% Sanlam Balanced 33.70% Omam Balanced 32.40% Investec Segregated 32.20% Allan Gray 31.90% Average 31.50% IS Focused 31.30% IS Diversified 30.40% Met Managed 29.40% Stanlib Managed 29.2
Slide 44: Coronation Fund Managers (Botswana) Limited
Coronation Fund Managers (Botswana) Limited
Slide 45: Current shareholding structure
Current shareholding structure Coronation Fund Staff & Botswana Citizen Empowerment Managers Staff Trust Trust Consortium Limited 51% 25% 14% 10% Coronation Fund Managers Botswana
Slide 46: Future Focus
CORONATION & FUND MANAGERS
Slide 47: Future focus
Future focus Strategy in place to grow a sustainable business – Remain singularly focussed on fund management – Committed to delivering Investment Excellence: excellence of investment performance, innovative products and exceptional client service – Promote a culture of staff ownership and entrepr
Slide 48: Thank you
CORONATION ®&® FUND MANAGERS Thank you
Coronation Fund Managers — H1 2007 Earnings Presentation on 6ix