Psg Financial Services Limited · JSE:KST

Psg Financial Services — H1 2024 Earnings Presentation

30 slides from Psg Financial Services's earnings presentation, October 2023

Slide 1: Investor Presentation FY2024 Interim Results
Investor Presentation FY2024 Interim Results For the six months ended 31 August 2023
Slide 2: Contents
Contents 1. H1 2024: Financial Results 2. H1 2024: Divisional Performance 3. 2024 Focus 4. Return and Trading Statistics 5. Conclusion 2 Copyright © PSG
Slide 3: PSG Structure
PSG Structure PSG Wealth* PSG Asset Management PSG Insure** 100% 100% 100% * Includes PSG Employee Benefits ** Includes Western National Insurance Note: PSG Group unbundled its shareholding in PSG Financial Services (previously PSG Konsult) with effect from 12 September 2022 3 Copyright © PSG
Slide 4: A Great Company
A Great Company Wealthy Clients serviced where they reside FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 H1 2024 No. of advisers 932 935 932 952 947 961 PSG Wealth 546 559 563 584 590 603 PSG Insure 386 376 369 368 357 358 No. of offices 254 257* 263 263 266 269 Source: PSG Distribution * Number revised f
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 Volatile economic environment Key indicators H1 2020 %∆ H1 2021 %∆ H1 2022 %∆ H1 2023 %∆ H1 2024 Rand / US$ 15.19 12% 16.94 -15% 14.47 18% 17.04 11% 18.94 S&P 500 (Rand) 44 446 33% 59 295 10% 65 421 3% 67 411 27% 85 353 FTSE/JSE Index 55 260 0% 55 476 22% 67 428 0% 67 257 11% 74
Slide 8: H1 2024 financial results overview
H1 2024 financial results overview Recurring HEPS grew by 21% for H1 2024 Consolidated results H1 2020 %∆ H1 2021 %∆ H1 2022 %∆ H1 2023 %∆ H1 2024 Headline earnings 311 4% 324 25% 405 1% 408 18% 482 Recurring headline earnings 311 7% 332 22% 405 1% 408 18% 482 Weighted average no. of shares (million
Slide 9: Recurring Headline Earnings By Division
Recurring Headline Earnings By Division Total recurring headline earnings growth of 18% for H1 2024 Recurring Headline Earnings * H1 2020 %∆ H1 2021** %∆ H1 2022 %∆ H1 2023 %∆ H1 2024 CAGR % Wealth 176 25% 219 7% 234 13% 265 18% 313 16% Asset Management 81 -39% 50 95% 96 -16% 81 23% 100 5% Insure 54
Slide 10: Financial Trend
Financial Trend We always look at our 10 year rolling track record YoY FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 CAGR % H1 2023 H1 2024 Gwth % AUM (Rbn) 71 99 133 154 175 205 222 230 268 315 354 17% 317 376 19% Premiums (Rbn)* 1.6 1.8 2.1 2.5 2.9 3.3 4.5
Slide 12: Wealth Plans
Wealth Plans Growing and protecting client wealth Market Wealth Assets Split Feb-23 Net flows Aug-23 % Growth movement Excellence in products & services PSG Multi Managed * 148 962 6 584 3 442 158 988 7% Third party funds ** 93 126 3 384 5 045 101 555 9% Stockbroking portfolios 63 413 2 402 -753 65
Slide 13: Wealth
Wealth Excellence in products and services Net Flows (Rm) ALSI Independent %∆ 25% -5% 23% 40% -10% -15% -40% 55% process with 12 000 80 000 advisers’ 10 820 9 735 oversight 10 000 2 150 70 000 2 357 8 291 7 734 6 663 7 733 201 8 000 60 000 1 401 2 166 6 302 5 318 2 731 Rapid growth in 6 000 1 748 42
Slide 14: Top Advisers
Top Advisers We continue to add top advisers to our PSG Wealth distribution business Wealth advisers (incl. EB) H1 2020 H2 2020 H1 2021 H2 2021 H1 2022 H2 2022 H1 2023 H2 2023 H1 2024 Balance – opening 546 549 559 563 563 579 584 586 590 Net movement 3 10 4 0 16 5 2 4 13 Balance – closing 549 559 56
Slide 15: Asset Management Plans
Asset Management Plans Net new money at acceptable margin Market AM assets split Feb-23 Net flows Aug-23 %△ movement Focused marketing PSG Single manager * 46 579 -44 1 668 48 203 3% Investment PSG Money market and related assets* 2 060 -2 72 2 130 3% performance Total assets under management 48 639
Slide 16: Asset Management
Asset Management ‘Brick by Brick’ strategy Net Flows (Rm) ALSI %∆ -12 203% 8% 81% 117% -491% 204% -72% 607% Long-term assets 2 000 1 740 80 000 72 (retail emphasis) 1 000 -789 868 70 000 1 668 -37 837 138 927 246 -82 -4 552 -4 174 387 -677 86 160 0 -59 60 000 45 -416 -249 -261 -1 000 -1 626 50 000 G
Slide 17: Asset Management: Investment Performance track record
Asset Management Investment Performance track record 1-year 2-year 3-year 5-year 10-year Rank since Single manager funds Performance Inception date Rank Rank Rank Rank Rank inception Rank 5 2 4 19 6 1 PSG Flexible 01-Nov-04 Return 21.0% 17.2% 23.9% 8.4% 10.1% 14.0% Rank 1 3 3 76 16 2 PSG Equity 01-M
Slide 18: Insure: Grow gross written premium income
Insure Grow gross written premium income PSG Insure gross written premium (Rm) %∆ 2% -2% 5% 1% 1% 7% 4% 7% 4 500 Top advisers 4 245 3 971 4 000 3 825 3 493 3 545 3 588 1 097 3 500 3 341 3 397 3 336 995 924 856 Gross written premium 831 819 3 000 731 789 773 Excellence in 821 850 2 500 788 underwriti
Slide 19: Top Advisers
Top Advisers Growing adviser base over the long term Insure advisers H1 2020 H2 2020 H1 2021 H2 2021 H1 2022 H2 2022 H1 2023* H2 2023 H1 2024 Balance – opening 386 379 376 375 369 369 368 362 357 Net movement -7 -3 -1 -6 0 -1 -6 -5 1 Balance – closing 379 376 375 369 369 368 362 357 358 Growth -2% -
Slide 20: Western National Insurance
Western National Insurance Net insurance result & shareholders income NIBT (Rm) Underwriting margin Key differentiators %∆ 59% -18% 51% -17% 43% -44% 79% -29% • Personalised service to 180 25% 169.0 168.6 brokers. • Focus on commercial 160 22.7% 33.0 142.8 business. 140 20% 66.0 17.2% 9.5 115.7 36.0
Slide 22: Top Line Focus
Top Line Focus Core operations (excl. IFRS Consolidated fund and policyholder related income) 3 607 3500 3 096 3000 2 879 1 384 2 526 2 558 2500 1 176 Top line revenue (Rm) 1 108 Top line revenue (Rm) 2000 1 035 1 054 412 337 350 1500 278 218 1000 1 811 1 583 1 286 1 421 1 213 500 0 H1 2020 H1 2021
Slide 23: Reducing risk
Reducing risk Recurring revenues Margin enhancing Risk vs return H1 20 H1 21 H1 22 H1 23 H1 24 H1 20 H1 21 H1 22 H1 23 H1 24 H1 20 H1 21 H1 22 H1 23 H1 24 Op margin 15.3% 16.3% 18.0% 17.3% 16.2% ROE* 20.2% 19.6%1 22.0% 19.8% 22.5% Perf fees/HE 0.0% 0.0% 7.8% 3.7% 2.5% Op margin 15.3% 16.3% 16.9% 16.
Slide 25: PSG Financial Services performed better than JSE ALSI since 2005
TRI of PSG Financial Services PSG Financial Services performed better than JSE ALSI since 2005 Investment of R100 000 in PSG Financial Services 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 Financ
Slide 26: Historical P/E ratio & ROE trend
Historical P/E ratio & ROE trend Recurring HEPS CAGR of 19% since 2005 P/E Ratio Recurring P/E Ratio Recurring (Recurring Date Share Price % Growth % Growth HEPS (before % Growth (Recurring ROE CPI* ROE - CPI HEPS HEPS before amortisation) HEPS) amortisation) 2005/02/28 40 - 2.9 - 3.0 - 13.8 13.3 20
Slide 27: Trading Statistics
Trading Statistics Creating shareholder value Statistic% FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023* H1 2024** No. of shares in issue (millions) 1 072 1 210 1 222 1 262 1 279 1 322 1 342 1 365 1 358 1 341 1 331 1 296 1 286 No. of shares traded (mi
Slide 29: 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 Financial Services — H1 2024 Earnings Presentation on 6ix

Psg Financial Services — H1 2024 Earnings Presentation

Slide 1: Investor Presentation FY2024 Interim Results

Slide 2: Contents

Slide 3: PSG Structure

Slide 4: A Great Company

Slide 5: Business characteristics

Slide 6: H1 2024: Financial Results

Slide 7: Key macro indicators

Slide 8: H1 2024 financial results overview

Slide 9: Recurring Headline Earnings By Division

Slide 10: Financial Trend

Slide 11: H1 2024: 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: Grow gross written premium income

Slide 19: Top Advisers

Slide 20: Western National Insurance

Slide 21: 2024: Focus

Slide 22: Top Line Focus

Slide 23: Reducing risk

Slide 24: Return and Trading Statistics

Slide 25: PSG Financial Services performed better than JSE ALSI since 2005

Slide 26: Historical P/E ratio & ROE trend

Slide 27: Trading Statistics

Slide 28: Conclusion

Slide 29: Conclusion

Slide 30: End - Thank You