Psg Financial Services Limited · JSE:KST

Psg Financial Services — PSG Konsult — H1 2021 Earnings Presentation

30 slides from Psg Financial Services's earnings presentation, November 2020

Slide 2: Contents
Contents 1. H1 2021: financial results 2. H1 2021: divisional performance 3. 2021 Focus 4. Return and Trading Statistics 5. Conclusion 2 Copyright © PSG Konsult Limited
Slide 3: PSG Structure
PSG Structure PSG Group Other 59.9% 40.1% PSG Wealth* PSG Asset Management PSG Insure** 100% 100% 100% * Includes PSG Employee Benefits ** Includes Western National Insurance PSG Group’s holding net of treasury shares = 60.6% As at 31 August 2020 3 Copyright © PSG
Slide 4: A great company
A great company Wealthy clients serviced where they reside 256 Adviser offices 938 Advisers FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 H1 2021 No. of advisers 711 744 784 932 935 938 PSG Wealth 480 515 539 546 559 563 PSG Insure 231 229 245 386 376 375 No. of offices 206 208 211 254 257* 256 * Number r
Slide 5: Business characteristics
Business characteristics • Equity market dependent • Administration businesses people/systems dependent • Not very balance sheet intensive • Free cash flow generative • Vulnerable to regulatory change 5 Copyright © PSG
Slide 7: Key macro indicators
Key macro indicators Weakening economic environment Key indicators H1 2016 %∆ H1 2017 %∆ H1 2018 %∆ H1 2019 %∆ H1 2020 %∆ H1 2021 Rand / US$ 13.27 11% 14.69 -12% 13.01 13% 14.68 3% 15.19 12% 16.94 S&P 500 (Rand) 26 162 1% 31 890 3% 32 148 23% 42 608 4% 44 446 33% 59 295 Cash Index - STeFI Call 305 7
Slide 8: H1 2021 financial results overview
H1 2021 financial results overview Recurring HEPS grew by 7% for H1 2021 H1 2016 H1 2017 H1 2018 H1 2019 H1 2020 H1 2021 Consolidated results %Δ %Δ %Δ %Δ %Δ Rm Rm Rm Rm Rm Rm Headline earnings 187 15% 214 12% 239 18% 283 10% 311 4% 324 Recurring headline earnings 187 15% 214 12% 239 18% 283 10% 311
Slide 9: Recurring headline earnings by division
Recurring headline earnings by division Total recurring headline earnings growth of 7% for H1 2021 H1 2016 H1 2017 H1 2018 H1 2019 H1 2020 H1 2021 CAGR Recurring Headline Earnings * %∆ %∆ %∆ %∆ %∆ Rm Rm Rm Rm Rm Rm % Wealth 120 17% 141 7% 150 7% 160 10% 176 25% 219 13% Asset Management 46 2% 47 20%
Slide 10: Financial trend
Financial trend We always look at our 10-year rolling track record FY FY FY FY FY FY FY FY FY FY FY H1 H1 YoY CAGR % 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2020 2021 Growth % AUA (Rbn) 72 97 139 180 233 309 327 371 402 422 397 19% 401 350 -13% AUM (Rbn) 28 36 51 71 99 133 154 175 205
Slide 12: Wealth plans
Wealth plans Growing and protecting client wealth Market Wealth assets split (Rm) Feb-20 Net flows Aug-20 % Growth movement Excellence in PSG Multi Managed * 83 481 8 991 4 317 96 789 16% products & services Third party funds ** 65 434 1 697 1 559 68 690 5% Discretionary 44 188 3 608 426 48 222 9% T
Slide 13: Wealth
Wealth Excellence in products and services Independent Net Flows (Rm) ALSI process with %∆ 19% 25% -36% -2% 31% 6% -59% 83% 25% -5% 10 000 advisers’ oversight 8 208 55 000 6 663 8 000 1 876 7 048 6 553 6 676 425 2 731 6 302 45 000 787 5 318 6 000 5 516 426 Rapid growth in 2 237 5 213 5 095 1 748 3 0
Slide 14: Top advisers
Top advisers We continue to add top advisers to our PSG Wealth distribution business Wealth advisers (incl. EB) H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H2 2020 H1 2021 Balance – opening 434 443 480 505 515 527 539 546 546 549 559 Net movement 9 37 25 10 12 12 7 0 3 10
Slide 15: Asset management plans
Asset management plans Net new money at acceptable margin Market AM assets split (Rm) Feb-20 Net flows Aug-20 % Growth movement Focused marketing PSG Single manager * 32 303 -1 124 -3 863 27 316 -15% PSG Money market and related assets* 3 343 0 -644 2 699 -19% PSG Segregated Portfolios 1 079 38 333
Slide 16: Asset management
Asset management ‘Brick by Brick’ strategy Net Flows (Rm) ALSI Long-term assets %∆ -40% -166% 461% -23% 81% -20% -54% -102% -12403% 8% (retail emphasis) 6 000 5 079 449 5 000 55 000 3 669 4 077 4 000 2 599 2 807 Getting adequate 3 000 625 1 548 5 130 1 870 45 000 margins 2 000 4 054 3 285 4 286 2 37
Slide 17: Asset management: investment performance track record
Asset management Investment Performance track record 1 month 3 months 6 months 1-year 3-year 5-year 10-year Rank since Inception Single manager funds Performance Rank Rank Rank Rank Rank Rank Rank inception date Rank 1 6 49 52 43 33 14 2 PSG Flexible 01-Nov-04 Return 4.46% 10.91% -3.64% -10.93% -5.0
Slide 18: Insure
Insure Grow gross written premium income PSG Insure gross written premium (Rm) %∆ 7% 4% 9% 6% 5% 16% 20% 11% 2% -2% 3 500 3 397 3 341 3 336 Top advisers 3 000 3 013 731 789 773 652 2 501 2 500 Gross written premium 2 153 623 643 628 605 2 041 556 2 000 1 931 Excellence in 1 696 1 767 587 597 underwr
Slide 19: Top advisers
Top advisers We have been adding top advisers to our business over the last 5 years Insure advisers H1 2016 H2 2016 H1 2017 H2 2017 H1 2018 H2 2018 H1 2019 H2 2019 H1 2020 H2 2020 H1 2021 * * Balance – opening 225 224 231 233 229 226 245 316 386 379 376 Net movement -1 7 2 -4 -3 19 71 70 -7 -3 -1 Ba
Slide 20: Underwriting margin
Western National Insurance Net insurance result & shareholders income %∆ 3% 32% 51% -22% 22% 0% -28% 40% 58% -18% 120.0 115.7 20.0% 110.0 16.1 12.6494,5 16.6% 100.0 8.5 94.5 15.0% 90.0 13.2% 16.8 Underwriting margin 80.0 76.9 11.5% 72.6 73.0 10.4% 72.6 10.5% 7.9 70.0 10.0% 9.2% 12.5 NIBT (Rm) 24.6 5
Slide 22: Top line focus
Top line focus Core operations (excl. IFRS consolidated fund and policyholder related income) 3 000 2 525 2 558 2 500 2 278 2 062 Top line revenue (R’m) 2 000 1 855 1 035 1 054 867 1 655 786 1 500 672 579 278 218 290 220 1 000 201 200 1 213 1 286 500 982 1 056 1 121 876 0 H1 2016 H1 2017 H1 2018 H1
Slide 23: COVID-19: Resilient Business Model
COVID-19 Resilient Business Model COVID-19 & Lockdown • KST classified as an essential service and remained fully operational, 99% of advisers and staff worked from home during level 4 & 5 lockdown • Employees are encouraged to continue working remotely, 85% of advisers and staff have continue to wo
Slide 24: Reducing risk
Reducing risk Recurring revenues Margin enhancing Risk vs return H1 17 H1 18 H1 19 H1 20 H1 21 H1 17 H1 18 H1 19 H1 20 H1 21 H1 17 H1 18 H1 19 H1 20 H1 21 Perf fees/HE 6.6% 4.4% 4.6% 0.0% 0.0% Op margin 14.3% 14.4% 15.9% 15.3% 16.3% ROE 22.9% 21.4% 21.9% 20.2% 19.6% Recurring HEPS 16.6c 18.2c 21.5c
Slide 26: TRI of PSG Konsult
TRI of PSG Konsult PSG Konsult performed better than JSE ALSI since 2005 Investment of R100 000 in PSG Konsult shares on 11 April 2005, and reinvesting all dividends received (net of DWT) and other distributions over period vs R100 000 invested on JSE ALSI PSG Konsult Annual growth JSE ALSI Annual g
Slide 27: Historical P/E ratio & ROE trend
Historical P/E ratio & ROE trend Recurring HEPS CAGR of 19% since 2005 P/E Ratio Recurring HEPS P/E Ratio (Recurring Date Share Price % Growth Recurring HEPS % Growth (before % Growth (Recurring ROE HEPS before amortisation) HEPS) amortisation) 2005/02/28 40 - 2.9 - 3.0 - 13.8 13.3 20.6% 2006/02/28
Slide 28: Trading statistics
Trading statistics Creating shareholder value Statistic FY 11 FY 12 FY 13 FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 H1 21* No. of shares in issue (millions) 733 1 072 1 210 1 222 1 262 1 279 1 322 1 342 1 365 1 358 1 353 No. of shares traded (millions) 9.5 14.9 21.2 31.4 61.8 113.9 111.7 91.9 83.5 1
Slide 30: Conclusion
Conclusion Business features underpinning our expectations for future success • Formidable adviser network in South Africa, with a broad geographic footprint that continues to expand • Strong governance structures • Clear growth opportunities for our businesses • History of superior shareholder retu

PSG Konsult — H1 2021 Earnings Presentation on 6ix

Psg Financial Services — PSG Konsult — H1 2021 Earnings Presentation

Slide 1: Investor Presentation: 2021 Interim Results

Slide 2: Contents

Slide 3: PSG Structure

Slide 4: A great company

Slide 5: Business characteristics

Slide 6: H1 2021: financial results

Slide 7: Key macro indicators

Slide 8: H1 2021 financial results overview

Slide 9: Recurring headline earnings by division

Slide 10: Financial trend

Slide 11: H1 2021: divisional performance

Slide 12: Wealth plans

Slide 13: Wealth

Slide 14: Top advisers

Slide 15: Asset management plans

Slide 16: Asset management

Slide 17: Asset management: investment performance track record

Slide 18: Insure

Slide 19: Top advisers

Slide 20: Underwriting margin

Slide 21: 2021 Focus

Slide 22: Top line focus

Slide 23: COVID-19: Resilient Business Model

Slide 24: Reducing risk

Slide 25: Return and Trading Statistics

Slide 26: TRI of PSG Konsult

Slide 27: Historical P/E ratio & ROE trend

Slide 28: Trading statistics

Slide 29: Conclusion

Slide 30: Conclusion