Coronation Fund Managers Limited · JSE:CML
Coronation Fund Managers — FY2007 Earnings Presentation
40 slides from Coronation Fund Managers's earnings presentation, Nov 13, 2007
Slide 1: 2007 Results Reviewed
2007 Results Reviewed 13 November 2007
Slide 2: Agenda
Agenda Overview of company Financial results Business review • Institutional • Personal Investments Prospects
Slide 3: Overview
CORONATION & FUND MANAGERS
Slide 4: Company structure
Company structure at 30 September 2007 Coronation Fund Managers Ltd 90% Professional Provident Society 49% Coronation Investment 10% The Imvula Trust Investments (Pty) Ltd Management (Pty) Ltd 100% 100% 100% 100% 100% Coronation Coronation Life Coronation Asset Coronation Investment Management Compa
Slide 5: Top shareholders
Top shareholders 30 September 2007 Company Shares held % held Allan Gray Asset Management 90 276 266 28.15 Coronation staff 75 436 103 23.50 CIT 52 627 989 16.41 Public Investment Corporation 13 104 403 4.09 Blue Bay 12 921 830 4.03 Neil Benjamin McWilliams Trust 11 200 000 3.50 Tiedemann 11 000 000
Slide 6: Market movements
Market movements September 2007 3 Months 6 Months 12 Months Economic Group % % % All Share 6.71 11.29 37.38 Resource 20 13.5 21.30 45.90 Small Cap 2.10 13.40 59.40 Financials -1.6 -3.30 19.20
Slide 7: Share price review
Share price review 4 Jun Ex distr : 20cps 11 Dec Ex distr : 53cps 3 Feb Ex div : 36cps 15 Jun – 25 Aug Buyback : 35m 31 Jul – 15 Aug Buyback : 35.5m
Slide 8: Assets under management
Assets under management 2003 – September 2007 160,000 140,000 133,730 125,440 120,000 101,440 100,000 81,930 80,000 63,759 60,000 53,697 40,000 20,000 0 2003 2004 2005 2006 2007 2007 Sept Sept Sept Sept Mar Sept
Slide 9: Reconciliation of AUM (Rbn)
Reconciliation of AUM (Rbn) 6 months 12 months Opening market value 125.44 101.42 Net Flows 1.25 1.47 Other -1.05 -3.17 Capital appreciation 8.08 33.03 Closing market value 133.73 133.73
Slide 10: Unit Trust Mix
Unit Trust Mix September 2007 30/09/2007 30/09/2004 RM RM ASSET ALLOCATION 11,270 40% 1,693 20% 566% FUNDS FIXED INTEREST 7,941 28% 2,351 28% 238% FUNDS EQUITY FUNDS 5,295 19% 2,188 26% 142% REAL ESTATE FUNDS 1,180 4% 620 7% 90% WORLDWIDE FUNDS 1,378 5% 750 9% 84% FOREIGN FUNDS 1,116 4% 866 10% 29%
Slide 11: Financial Highlights
Financial Highlights AUM R134bn 33% Headline earnings 79.6cps 53% Headline earnings (diluted) 72.7cps 55% Distribution 67cps 26%
Slide 12: Financial Highlights (2)
Financial Highlights (2) Revenue 962m 36% Income fund management R432m 47% PAT R285 45% Cashflow (operating activities) R354m
Slide 13: Total Net Margin
Total Net Margin 1.20% 0.99% 1.00% 0.88% 0.80% 0.76% 0.74% 0.69% 0.70% 0.64% 0.62% 0.63% 0.60% 0.52% 0.40% 0.20% 0.00% 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007
Slide 14: Share buy back results
Share buy back results July 2007 (34%)* 10 598 566 Aug 2007 (64%)* 24 906 027 Total shares bought back & cancelled 35 504 593 Total costs including brokerage (R m) 299.58 Average price (Rand) 8.44 % of total issued shares acquired 9.97% *% of volume traded in month
Slide 15: Other
Other ¾ International - Assets under management up from $1.2bn (Sept 06) to $1.75bn (Sept 07) ¾ Success in Botswana ¾ NAM restructuring complete – focused fund manager ¾ Imvula NAV: R152m - Sept 07 (R86m - Sept 06)
Slide 16: Financial Review of the Group
Financial Review of the Group
Slide 17: Earnings
Earnings % Change Sept-2007 Sept-2006 Attributable earnings 283,886 195,528 EPS 57 81.4 51.9 Headline earnings 277,870 195,515 HEPS 53 79.6 51.9 Diluted HEPS 55 72.7 46.8 Distribution 221,983 185,276 DPS 26 67c 53c Weighted average shares in issue 348,894 376,671 Adjustments: HEPS –Profit on sale of
Slide 18: Earnings (cont)
Earnings (cont) % Change Sept-2007 Sept-2006 EBITDA 44% 448,725 310,754 Market capitalisation 33% 2,780,753 2,097,464 Share price @ 30 September 45% 8.67 6.00 Cost to income - Actual 5% 57.2 60.4
Slide 19: Shares in issue
Shares in issue 2007 2006 Opening balance – 1 Oct 349,577,402 382,274,930 Issued during the year 6,659,990 2,618,324 Bought back and cancelled (35,504,593) (35,315,852) Closing balance – 30 Sept 320,732,799 349,577,402 Weighted average – 30 Sept 348,893,885 376,670,543
Slide 20: Earnings summary
Earnings summary 2007 2nd half versus 1st half Variance Apr-Sept’2007 Oct-Mar’2007 % Rm Rm Revenue 24 557.9 451.2 Operating expenses (14) (233.5) (204.8) Trailer Commissions (36) (57.0) (42.0) IFRS 2 charges (35) (23.1) (17.1) PBT 30 244.3 187.3 Tax (44) (86.9) (60.2) PAT 24 157.4 127.1
Slide 21: Cash returned to shareholders
Cash returned to shareholders Sept-2007 Sept-2006 Sept-2005 R’000 R’000 R’000 Share-buy back 299,577 200,168 - Distribution – interim 71,238 - - Special distribution – BEE deal - - 95,569 Distribution – final 165,819 185,276 138,197 Dividend tax (15,074) - - Total cash returned 521,560 385,444 233,7
Slide 22: IFRS 2 effect
IFRS 2 effect Sept-2006 Sept-2007 Sept-2008 R’000 R’000 R’000 December 2003 options 1,968 637 149 Imvula transaction 5,877 8,969 6,087 CIT transaction 1 (February 2005) 13,132 15,405 10,158 CIT transaction 2 (April 2005) 9,556 9,556 7,754 CIT transaction 3 (September 2005) 8,156 5,645 2,408 Preferen
Slide 23: Cost Comparison
Cost Comparison % Sept-2007 Sept-2006 Change R’000 R’000 Fixed operational costs (18) 183,943 155,633 IFRS 2 22 40,212 51,384 Variable costs (54) 339,352 220,959 TOTAL OPERATIONAL COSTS (32) 563,507 427,976 Other costs 35 14,030 21,622 TOTAL COSTS (28) 577,537 449,598
Slide 24: Institutional
CORONATION & FUND MANAGERS
Slide 25: Performance
Performance SA Large Manager Watch 3 years ending 30 September 2007 Allan Gray 35.48% Investec 35.10% Coronation 33.66% Prudential 33.30% Stanlib 33.04% Median 32.60% OMIGSA 32.31% Oasis 31.96% RMBAM 31.54% Metropolitan 30.47% Sanlam 30.37% Cadiz African Harvest 30.18%
Slide 26: Performance
Performance Global Large Manager Watch 3 years ending 30 September 2007 Investec 32.97% Allan Gray 31.78% Prudential 31.34% OMIGSA 31.33% Coronation 31.12% Oasis 30.99% Median 30.64% Stanlib 29.93% Cadiz African Harvest 29.85% Metropolitan 29.66% RMBAM 29.44% Sanlam 29.01%
Slide 27: Performance
Performance Absolute Return product Periods ending 30 September 2007 Since 1 Year 3 Years inception* Absolute 25.0% 27.9% 21.9% CPIX 6.4% 5.4% 6.3% CPIX +7 13.4% 12.4% 13.3% *Since inception – August 1999
Slide 28: Performance
Performance Coronation Houseview Equity 3 years ending 30 September 2007 Allan Gray 44.88% Stanlib Value Fund 42.19% ABSA Asset Management Value 41.68% Fraters Specialist Equity 41.67% Coronation Houseview Equity 41.66% Fraters Equity 40.68% Oasis Specialist Domestic 40.51% Investec Value* 39.50% OM
Slide 29: Performance
Performance SA Bond Manager Watch 1 year ending 30 September 2007 Futuregrowth Yield Enhanced 10.24% Metropolitan Managed Gilt Portfolio 10.10% SIM Duration Bond Fund 9.91% Coronation Active Bond Portfolio 9.88% Coronation Core Bond 9.87% Investec Dynamic Bond Portfolio 9.67% Pan Africa AM Segregate
Slide 30: Net fund flows within the industry
Net fund flows within the industry 16.2% 20.00% 15.00% 9.5% 5.12% 10.00% 4.4% 3.05% 2.8% 2.8% 2.4% 1.26% 2.3% 1.3% 5.00% 0.00% -0.5% -0.3% -0.51% -1.03% -5.00% -4.9% -5.2% -5.6% -5.9% -6.2% -6.20% -6.3% -7.8% -8.3% -8.20% -10.00% -9.1% -10.2% -10.2% -10.9% -12.2% -15.00% -17.6% -20.00% 2001 2002 200
Slide 31: Personal Investments
CORONATION & FUND MANAGERS Personal Investments
Slide 32: Highlights
Highlights September 2007 • Investment performance remains competitive • Market share up to 8% • R5.5bn net inflows: Highest absolute number in Coronation’s history • Market-leading funds: • Strategic Income (R5.2bn) the largest managed income fund in SA • Capital Plus (R4.7bn) the largest long-only
Slide 33: Unit trust assets R28.5bn
Unit trust assets R28.5bn as at 30 September 2007 Most supported funds in 2007: Cash funds 2,063 7.2% Strategic Income: +R1.9bn Capital Plus: +R1.8bn Fixed interest funds 7,207 25.0% Managed funds 11,401 40.0% International Total assets doubled over funds 2,506 the last 24 months, with 8.7% managed
Slide 34: CIS industry
CIS industry Getting to the comparable market Assets Under Management Sep 07 Sep 06 Long-term single manager assets R330bn R249bn Fund of Funds R81bn R55bn Institutional Multi-Manager funds R70bn R58bn Institutional Single-Manager funds R57bn R46bn Money Market & Enhanced cash funds R149bn R120bn Di
Slide 35: CIS industry
CIS industry Overall net flows (unadjusted) 12 Months Grand Total 92,541 ABSA 21,414 PRUDENTIAL 19,952 ALLAN GRAY 16,491 STANLIB 6,748 INVESTEC 6,578 CORONATION 6,488 OLD MUTUAL 6,234 METROPOLITAN 3,805 NEDGROUP 3,576 SIS 2,810 EFFICIENT GROUP 1,984 PSG 1,963 OASIS CRESCENT 1,817 PRESCIENT 1,308 RMB
Slide 36: Single manager cash flows
Single manager cash flows to end September ‘07 Net inflows: Long-term single managers only ranking excl. cash and dividend income funds 12 Months ALLAN GRAY 14,857 CORONATION 5,460 INVESTEC 3,258 STANLIB 2,643 RMB 2,015 NEDGROUP 1,981 PRUDENTIAL 1,135 METROPOLITAN 825 OASIS CRESCENT 796 FOORD 688 OT
Slide 37: Prospects
CORONATION & FUND MANAGERS Prospects
Slide 38: Bull Markets don't last
Bull Markets don’t last AJ203/ECPI Quarterly 1960/03/31 -2007/09/30 200- 150- 100- 80- 60- 50- 40- 30- 20- 1964 [| 1969 | 1974 | 1979 | 1984 [| 1989 | 1994 1999 2004 2009 we &J203/ECPI (205.0594798) 200 150 -100 I-30 I-20
Slide 39: Year ahead
Year ahead ¾ GEM initiative ¾ International products ¾ New Building
Slide 40: Thank you
CORONATION ®&® FUND MANAGERS Thank you
Coronation Fund Managers — FY2007 Earnings Presentation on 6ix