Slide 1: 2020 Annual Results
Slide 2: Agenda
Agenda 1 OVERVIEW Group CEO 2 FINANCIAL REVIEW Group CFO 3 CONCLUDING REMARKS Group CEO 4 Q&A 2
Slide 3: Overview
OVERVIEW Iain Williamson 3
Slide 4: 2020 at a glance
2020 at a glance • Global crisis that left no human life untouched Period of extreme crisis for humanity • Unprecedented volatility in local and global capital markets • Lockdowns and travel restrictions impacted economic growth • Paid mortality claims of R13 billion during 2020 A certain friend in
Slide 5: Macroeconomic environment
Macroeconomic environment Subdued GDP growth outlook in South Africa South Africa - equity market levels (SWIX) 13,000 13.5 11,981 12,206 12,037 14 12,000 11,813 12 12,033 11,722 11,084 10 11,000 8 10,000 2019 6 3.3 2020 4 1.5 1.7 9,175 2 0.8 0 -0.2 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 0
Slide 6: South African excess mortality rates
South African excess mortality rates 15 885 Wave 3 forecast ▪ Reserve for wave 3 experience 16 000 has been assumed to occur at similar level to wave 1 14 000 12 000 ▪ R1.9 billion of claims experience in January and February 2021 10 000 8 162 ▪ Remaining reserve of c. R2 billion 8 000 for further i
Slide 7: Business demonstrated resilience under stress
Business demonstrated resilience under stress +336% +10% Good top line performance 187 137 9.6 170 689 ▪ Strong gross flows drove significant increase in NCCF ▪ Encouraging recovery in life sales levels in Q4 2020 with trend continuing in Q1 2021 2.2 Strong balance sheet after significant stress eve
Slide 8: Operational review
Operational review Mass and Foundation Cluster Old Mutual Investments Old Mutual Insure • Customer base • Improved investment • Positive top line growth impacted most by performance for listed • Underwriting result and COVID-19 equities margin impacted by the • Improving CLR • High levels of deal fl
Slide 9: Green shoots evident in our distribution channels
Green shoots evident in our distribution channels Mass and Foundation Cluster Personal Finance and Wealth Management Change in average number of issued lives per advisers Change in number of issued sales per adviser per month per week +3% -9% -79% -53% -10% -32% -5% -15% FY 2019 FY 2020 Q1 Q2 Q3 Q4
Slide 10: Three phased response to the crisis
Three phased response to the crisis Stabilisation Transition Re-envision Q2 2020 H2 2020 2021+ Financial Operational Strategic • Strong balance sheet • Digital enablement of • Adopting a truly mutual through decisive employee and strategy that puts the management actions intermediary journeys custom
Slide 11: Re-envisioning our business
Re-envisioning our business A SOLID CORE A CHANGING WORLD Changing customer expectations driven by technology Long-standing brand with Everything is replicable a high level of trust Scale and breadth Disruption is a given of our physical distribution channels Sustainability is a necessity Delivering
Slide 12: A Truly Mutual strategy
A Truly Mutual strategy WHY DO WE EXIST? WHERE DO WE WANT TO BE? Our purpose is to champion mutually positive Our vision is to be our customers’ 1st choice to sustain, grow and futures every day protect their prosperity We will make it evident that Old Mutual Cares through We will aim to be Always p
Slide 13: Strategic delivery
Strategic delivery OLD MUTUAL ALWAYS PRESENT REWARDING DIGITAL ENGAGED SOLUTIONS CARES FIRST ENGAGEMENT EMPLOYEES THAT LEAD • R141 billion invested in • 5th most valuable • 406,000 active digital • Reimagining new • 202,000 applications the green economy customers, representing 50% ways of working o
Slide 14: Financial Review
FINANCIAL REVIEW Casper Troskie 14
Slide 15: Financial delivery in 2020
Financial delivery in 2020 RFO ex COVID Impact of COVID-19 AHE Group Solvency RoEV R7,742 million R6,079 million R2,484 million 185% 3% Mainly pandemic Impacted by Strong position Remains positive Commendable reserve impact, COVID-19 after significant despite the performance business reserves, lower
Slide 16: Results from Operations
Results from Operations Segment contribution to RFO excl. direct Rm FY 2020 FY 2019 % Change COVID-19 impacts -5% Mass and Foundation Cluster 5% 2,008 3,527 (43%) 4% 26% Personal Finance and Wealth Management 3,208 2,169 48% Old Mutual Investments 888 1,008 (12%) 17% Old Mutual Corporate 1,340 1,816
Slide 17: Direct COVID-19 impacts
Direct COVID-19 impacts RFO excluding Rm Results from Direct direct Operations COVID-19 COVID-19 Total (RFO) impacts Impacts R6,079 Mass and Foundation Cluster 1,265 743 2,008 million Personal Finance and Wealth Management 525 2,683 3,208 Old Mutual Investments 180 708 888 Old Mutual Corporate 87 1,
Slide 18: Pandemic reserve impact
Pandemic reserve impact Pandemic impact Rm Group Reserve at 30 June 2020 1,339 ▪ H1 reserve not sufficient to cover experience in H2 H2 experience in excess of H1 reserve 204 Reserve at 31 December 2020 3,962 ▪ Increase of R3,962 million in reserves in December to provide for wave 2 and 3 Pandemic i
Slide 19: Adjusted Headline Earnings
Adjusted Headline Earnings Rm FY 2020 FY 2019 % Change 1 Decrease driven by low interest rates, Operating segments 8,154 9,249 (12%) decrease in shareholder asset base Net expenses from central functions (412) (277) (49%) and fair value losses on unlisted equity RFO excluding direct COVID-19 impacts
Slide 20: AHE to IFRS reconciliation
AHE to IFRS reconciliation Rm Includes 5 088 impairment 229 of investment 1 408 in Nedbank 1 093 497 Profit related Includes 785 impairment 2 484 to operations Includes in Zimbabwe of goodwill reversal of related to provision in Old Mutual Wealth Finance 8,777 -5,097 Adjusted Investment Impact of Op
Slide 21: CFO focus areas
CFO focus areas • Appropriateness of • Transferred 12.4% of pandemic reserve and Nedbank’s issued capital business interruption reserves from OMLACSA to OMEM Complex Balance • Nedbank impairment of R8.7 billion in H1, no further • Simplification of legal entity sheet structure impairment judgements
Slide 22: Robust group solvency
Robust group solvency Rm FY 2020 FY 20191 % Change 1 Decrease driven by: OMLACSA ▪ Transfer of 12.4% of Nedbank from OMLACSA to OMEM decreased Own funds 60,659 79,556 (24%) eligible own funds Solvency capital requirements 29,447 36,518 (19%) ▪ Reduction in the Nedbank share price 1 Solvency ratio 20
Slide 23: Embedded value resilient through crisis
Embedded value resilient through crisis (Rm) Total EV Earnings of R826 million, RoEV of 3% Includes dividends of 153 272 R4.7 billion and transfer of capital to 3 850 Banking Includes H1 5 833 Pandemic and Lending reserve release and excess 1 639 73,123 72,297 mortality Includes 286 621 claims impac
Slide 24: Group Equity Value
Group Equity Value Rands per R11.89 R14.20 R20.90 share +7% ▪ Group Equity Value has reduced 98.5 from R116.5 billion to R98.5 billion 92.0 ▪ Life and savings business +20% included at Embedded Value 67.0 65.9 ▪ Material non-covered business 56.0 valued at fair value ▪ Nedbank included at recoverabl
Slide 25: Concluding Remarks
CONCLUDING REMARKS Iain Williamson 25
Slide 26: Outlook for 2021
Outlook for 2021 • Drive recovery in productivity levels as rapidly as possible, with pleasing momentum in Drive recovery of Q1 2021 the business • Uncertainties remain but believe we are appropriately reserved for wave 3 • Recovery in RFO and RoNAV to 2019 levels by 2023 • Deliver VNB margin of 1.5
Slide 27: Q&A
Q&A 27
Slide 28: Disclaimer
DISCLAIMER This presentation may contain certain forward looking statements with respect to certain of Old Mutual Limited’s plans and its current goals and expectations relating to its future financial condition, performance and results and, in particular, estimates of future cash flows and costs. B
Slide 29: Thank You
THANK YOU Old Mutual is a Licensed Financial Services Provider