Old Mutual Ltd. · JSE:OMU
Old Mutual — Deutsche Bank South Africa Conference 2001
40 slides from Old Mutual's conference presentation, Nov 22, 2001
Slide 1: Deutsche Bank South Africa Conference
Deutsche Bank South Africa Conference Julian Roberts, Group Finance Director Old Mutual plc 22 November 2001
Slide 2: From Domestic Leadership in South Africa to Diversified International Financial Services Group
Old Mutual From Domestic Leadership in South Africa to Diversified International Financial Services Group
Slide 3: Old Mutual Revenue in US$m
Old Mutual Revenue(1)(1)- in US$m Rest of Africa $219m South Africa $4,105m 1: 2000 pro forma revenue including F&G
Slide 4: Old Mutual Revenue in US$m
Old Mutual Revenue(1)(1)- in US$m GNI UK $406m Rest of Africa $219m South Africa $4,105m 1: 2000 pro forma revenue including F&G
Slide 5: Old Mutual Revenue in US$m
Old Mutual Revenue(1)(1)- in US$m UK $406m USA $1,635m Rest of Africa $219m South Africa $4,105m 1: 2000 pro forma revenue including F&G
Slide 6: Old Mutual Revenue in US$m
Old Mutual Revenue(1)(1)- in US$m UK $406m USA $1,635m Asia $363m Rest of Africa $219m South Africa $4,105m 1: 2000 pro forma revenue including F&G
Slide 7: Powerful management team in place
Powerful management team in place Jim Sutcliffe Richard Julian Laubscher Roberts Roddy Guy Scott Ed Sparks Barker Powers Warner Nedcor OM SA US Life US AM UK FD, M&F
Slide 8: South Africa: Leading Position in Financial Services
Old Mutual South Africa Leading Position in Financial Services
Slide 9: Old Mutual South Africa
Old Mutual South Africa • Economic Background • Market dominant position • Old Mutual Life Assurance Company South Africa • Largest life assurer in South Africa • 2000 gross premium £2,580m (R27,145m) • FUM £15,763m (R22,992m) at 30th June 2001 • Nedcor • 53% owned listed subsidiary • 2nd largest ba
Slide 10: Old Mutual South Africa
Old Mutual South Africa • Economic Background • Market dominant position • Old Mutual Life Assurance Company South Africa • Nedcor • Mutual & Federal • 51% owned listed subsidiary • 2nd largest general insurer in South Africa • 2000 gross premium R3.5bn • 99.9% operating ratio at 30th June 2001
Slide 11: Old Mutual South Africa: Growth drivers
Old Mutual South Africa • Economic Background • Market dominant position • Growth drivers • Product development • Focus on profitability • Segmentation of business • Bancassurance • In-sourcing
Slide 12: The Challenge
The Challenge • Transform Old Mutual From Local to Global
Slide 13: UK: Investment Services to High Net Worth Individuals
Old Mutual UK Investment Services to High Net Worth Individuals
Slide 14: UK Operations
UK Operations GNI • UK H1 2001 revenue of £126m • UK FUM of £18bn at 30th June 2001
Slide 15: Gerrard
Gerrard • Largest private client stockbroker • Strong Position in attractive HNW market • Strong product range • Profitability linked to retail volumes on London Stock Exchange
Slide 16: OMAM UK
OMAM UK • Institutional and pension mandates • Retail capability • UK smaller Companies • European equity • Worldwide equity • Fixed income • Consolidated Unit trust management with the move of Gerrard funds
Slide 17: GNI
GNI GNI • Market leader in • CFDs • Equity derivatives • Foreign exchange derivatives • Good trading in 2001
Slide 18: Securities
Old Mutual Securities • Institutional stockbroker • Innovative corporate finance • Excellent research
Slide 19: Selestia
Selestia • What is Selestia • New company targeting the mass affluent sector of the retail investment market • Distribution exclusively via IFAs • Innovative products • Initial product will offer a highly flexible system through which IFAs can build portfolios carefully tailored to meet clients’ pre
Slide 20: US: Multi style asset manager
Old Mutual US Multi style asset manager
Slide 21: Old Mutual (US) Holdings
Old Mutual (US) Holdings h US Savings Market Overview h Mutual Funds Management h Institutional Asset Management Capabilities h Life Assurance h The Old Mutual Model
Slide 22: Size of savings markets
Size of savings markets Global Assets Under Management ($ Trillion)* 21.2 1.8 2.7 14.6 6.6 1999 2004E 2.8 3.7 2.0 UK 19992004E 19992004E 1999 2004E EU Japan USA 3.2 1.9 0.1 0.2 Note: * Excluding insurance assets Sources: Bernstein, Charterhouse, BA&H 19992004E 1999 2004E South Africa ROW
Slide 23: Total U.S. Money Management Industry
Total U.S. Money Management Industry $5.3 Trillion $20.4 Trillion Mutual Funds $1.0 Mutual Funds $6.9* Individuals $0.7 Institutions $11.0* Institutions $3.6 Individuals $2.5 1990 2000 * Includes $800 billion of defined contribution plan assets invested in mutual funds Source: Federal Reserve, FDIC,
Slide 24: Institutional Sector of Money Management Industry
Institutional Sector of Money Management Industry $11.0 Trillion Defined Contribution $2.4 12% Annual Growth Defined Benefit $6.7 8% Annual Growth Foundation/Endowment $1.9 10% Annual Growth Source: Federal Reserve, FDIC, ICI and independent estimates
Slide 25: Institutional Assets 1955-2015
Institutional Assets 1955-2015 $ Trillions $44 Trillion 50 40 30 20 10 0 1955 1965 1975 1985 1995 2005 2015 Source: Federal Reserve, Department of Labor and Independent Estimates
Slide 26: L-T Mutual Fund Assets
L-T Mutual Fund Assets $ in Billions $4,194 Billion 5,000 4,000 3,000 2,000 1,000 0 89 90 91 92 93 94 95 96 97 98 99 00 7/01
Slide 27: Old Mutual - US Asset Management
Old Mutual - US Asset Management • Committed to building a multi-asset class active investment management business in North America • $135 billion in assets under management • High quality active investment skills in all major asset classes • Focused distribution strategy supports organic growth
Slide 28: Asset Mix and Client Base
Asset Mix and Client Base Asset mix Client base U.S. Bonds and Cash 12% Wrap Accounts 3.1%* Mutual Funds 25.1%* International Securities 12% Real Estate 5% Stable Value Individuals 12% U.S. Assets 7% Equities 64% Institutional 61%* *Includes $21 billion of defined contribution plan $135 Billion asse
Slide 29: Strategically Aligned Organization
Strategically Aligned Organization Old Mutual (US) Holdings Old Mutual Old Mutual Old Mutual Pilgrim Baxter Asset Managers (US) Affiliates Sales & Services • PBHG Funds • Old Mutual Japan • 7 Independent • Support growth No load Funds member firms • Integra Capital Sold Direct • Limit risk • Multi s
Slide 30: High Quality Investment Skills in all Major Asset Classes
High Quality Investment Skills in all Major Asset Classes US Equity Fixed Income Global Equity Alternatives Old Mutual Asset Managers (US) Large Cap Value Short Term Growth Real Estate Mid Cap Value Intermediate Value Small Cap Value Timber Long Term Large Cap Growth Emerging Markets Mortgage/ABS He
Slide 31: Asset Management Growth Strategy
Asset Management Growth Strategy 1. Strengthen position and accelerate growth in core U.S. defined benefit market • Maintain investment strength • Shift market share • Build sales capability within subsidiaries and shared channels • Strengthen cross-selling OM 2. Source new investors Growth • Intern
Slide 32: Attractiveness of the U.S. Life Market
Attractiveness of the U.S. Life Market • World’s largest life insurance and retirement services market (Approximately 29% of global sales) • More than US $50 billion in 2000 premium income for fixed annuities only(1) • Favorable demographic characteristics(2) • 61 million Americans in 45-64 age brac
Slide 33: US Fixed Annuities Sales - Competitive Position
US Fixed Annuities Sales - Competitive Position Estimated 2001 full Rank year in billions 1 Aegon $6.2 2 American General $5.6 3 General Electric $3.6 4 ING Companies $3.2 5 Jackson National $2.6 6 Allstate $2.6 7 Allianz $2.4 8 NY Life $1.7 9 Travelers $1.6 10 Keyport/Sun Life of Canada $1.5 11 Nat
Slide 34: US life strategy
US life strategy • Start-up operation • Established franchise • Retail agency distribution • MGA distribution • Experienced senior • Proven senior management management team team • Simple, good value fixed • Simple, good value fixed annuity annuity and life products and life products • Proven produc
Slide 35: Old Mutual US
Old Mutual US Institutional Equity Retail Fixed Interest Retail Specialist Quality Mutual Best Product Multi Style Funds Development Multi style asset management with focussed distribution channels
Slide 36: Old Mutual plc
Old Mutual plc
Slide 37: Current trading
Current trading h Quality businesses h Rand h Asset market levels world wide h Well positioned to take advantage of recovery
Slide 38: Balance sheet strength
Balance sheet strength Gearing ratio • 15% return on equity • Debt of £1.2bn • $650m convertible bond heavily oversubscribed • £900m five year revolving credit 25% 24% facility secured • Interest cover of 13 times on smoothed earnings 3% • Moody’s A2 rating Dec 99 Dec 00 June 01
Slide 39: Revenues from outside home market
Revenues from outside home market 100% % of 2000 revenue from overseas 0% AIG Axa Aegon ZFS Generali ING Prudential L&G OM Allianz Fortis Hartford Source: Bloomberg Merrill Lynch
Slide 40: Delivering our potential
Delivering our potential • Long Term: • Build an international financial services organisation in selected markets • Short term priorities: • Growth from SA • Drive returns from UK & USA acquisitions • Create value from international start up operations
Old Mutual — Deutsche Bank South Africa Conference 2001 on 6ix