Coronation Fund Managers Limited · JSE:CML
Coronation Fund Managers — FY2023 Earnings Presentation
33 slides from Coronation Fund Managers's earnings presentation, Nov 21, 2023
Slide 1: 2023 Reviewed Annual Results
2023 Reviewed Annual Results FOR THE YEAR ENDED 30 SEPTEMBER 2023 21 November 2023 Anton Pillay, CEO Mary-Anne Musekiwa, CFO
Slide 2: Agenda
Agenda Economic & market overview Business update Financial update Questions Annexure
Slide 3: Economic & market overview
Economic & market overview 30 Years of Earning Trust CORONATION TRUST IS EARNED”
Slide 4: 2023 been a year of ongoing uncertainty
2023 been a year of ongoing uncertainty THE SAME FORCES REMAIN IN PLAY – WITH GEOPOLITICS RAMPING UP & INCREASED FOCUS ON INTEREST RATES SA environment Globally, asset strained – fiscal & manager pressures monetary positions Global environment continue – net weak; low growth; volatile – geopolitics
Slide 5: Business update
Business update 30 Years o ning Trust CORONATION TRUST IS EARNED”
Slide 6: Resilient business operating in a challenging environment
Resilient business operating in a challenging environment RESULTS REFLECT CONTRACTION IN SA SAVINGS POOL & PREVAILING CAPITAL MARKETS Level 1 Assets under management 5% R602bn B-BBEE contributor As measured by the Financial Sector Code Revenue 2% R3.7bn 29% R2.0bn Employee owned Expenses excl impact
Slide 7: AUM maintained for a decade despite tough environment
AUM maintained for a decade despite tough environment CONSISTENT INVESTMENT PHILOSOPHY & SOLID TEAM UNDERPIN RESILIENT BUSINESS 2% 0% R’bn 700 54 64 82 101 134 125 155 203 247 339 492 588 610 599 614 587 571 569 634 574 602 8% 600 39% 141 28% Instrument 127 155 190 176 160 Location 500 163 164 162 1
Slide 8: Outflows continue to reflect operating environment
Outflows continue to reflect operating environment LARGELY DUE TO LOCAL ECONOMIC CHALLENGES & GEM ASSET CLASS MARKET PERFORMANCE & NET FLOWS AS A % OF AVERAGE AUM NET CLIENT FLOWS BY MARKET SEGMENT1 20,0% 650,0 15,2% 15,0% 14,1% 600,0 -4.3% Local institutional 10,0% 6,8% 550,0 5,0% -3.5% Local retai
Slide 9: Multi-decade outperformance
Multi-decade outperformance EXCELLENT PERFORMANCE IN OUR LOCAL PORTFOLIOS Houseview Equity Strategy Aggressive Equity Strategy Bond Fund 30-year track record 21-year track record 26-year track record Annualised alpha of 2.4% since Annualised alpha of 2.5% since Annualised alpha of 0.9% since incepti
Slide 10: Multi-decade outperformance
Multi-decade outperformance LONG-TERM OUTPERFORMANCE RESTORED Global Emerging Markets Equity Strategy Africa Frontiers Strategy Global Multi-Asset Strategy 15-year track record 15-year track record 14-year track record Annualised alpha of 2.1% since Annualised alpha of 8.4% since Annualised alpha of
Slide 11: Continue to deliver compelling 30-year track record
Continue to deliver compelling 30-year track record SINGULAR FOCUS ON DELIVERING ALPHA RETAIL CLIENT ASSETS 1 INSTITUTIONAL CLIENT ASSETS 2 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% 5 years 10 years 20 years SI 5 years 10 years 15 years SI 1st 2nd 3rd 4t
Slide 12: Developing our global footprint
Developing our global footprint POSITIONED FOR THE INTERNATIONALISATION OF THE DOMESTIC SAVINGS POOL LOCAL CLIENTS GLOBAL CLIENTS Total institutional AUM Manage meaningful share of SA’s savings Spread of institutional clients across the globe R337bn industry, including offshore multi asset The globa
Slide 13: A trusted custodian of South Africa's retail savings
A trusted custodian of South Africa’s retail savings SA CONSUMERS UNDER PRESSURE DUE TO ECONOMIC SITUATION Total retail AUM Industry challenged by low growth, cash-strapped consumers & structural industry shifts R265bn Strong focus on client engagement & communication Long-term, domestic-biased fund
Slide 14: We are active owners & a responsible business
We are active owners & a responsible business STEWARDSHIP IS AT THE HEART OF OUR INVESTMENT PROCESS & BUSINESS OPERATIONS Investment approach Support the move to a greener, more sustainable & equitable world Number of engagements Number of companies Integrate I Engage I Collaborate – built into inve
Slide 15: Meaningful social impact with a focus on education
Meaningful social impact with a focus on education EDUCATION & ENTREPRENEURSHIP IS THE FOUNDATION OF A PROSPEROUS ECONOMY EDUCATION SUPPORT CONSUMER FINANCIAL EDUCATION EDUCATION PROGRAMMES Students awarded >17 950 Participants in 2023 >250 study opportunities Limpopo >800 Schools 2 203 Participants
Slide 16: A substantial track record of promoting transformation
A substantial track record of promoting transformation DRIVING TRANSFORMATION OF INDUSTRY FOR OVER THREE DECADES 1998 1999 2001 2005 2006 2016 We established We founded AFRICAN Together with Kagiso We partnered with our The CORONATION Our Business Support FINSOURCE (now HARVEST ASSET Trust Investmen
Slide 17: Diversity, equality & inclusion are embedded in our business
Diversity, equality & inclusion are embedded in our business OUR TALENTED PEOPLE ENSURE THE SUSTAINABILITY OF OUR BUSINESS RACE 31% black owned 42% of total AUM managed by 64% 50% 67% 80% R254bn black investment professionals to grow & support black-owned of our employees are black of our SA investm
Slide 18: Financial update
Financial update TRUST IS EARNED”
Slide 19: Stable fixed fee margin over time
Stable fixed fee margin over time RESILIENCE IN TURBULENT MARKETS NET FEE MARGIN bps Sept Sept Change 2023 2022 Revenue from -2% R3 647m R3 738m fund management Management fees 2% R3 353m R3 277m Performance fees -36% R294m R461m Source: Coronation 19
Slide 20: Balancing strong cost discipline with continued investment in business
Balancing strong cost discipline with continued investment in business EXPENSES REFLECT THE ADJUSTMENT FOR SARS PROVISION R’m 16% 8% Total Operating Expenses Fixed Expenses Variable Expenses Other Expenses Total Operating Expenses Tax Matter Related Interest1 Total Operating Expenses 2022 2023 2023
Slide 21: Total expenses
Total expenses FOCUSED & RESPONSIBLE MANAGEMENT OF FIXED EXPENSES Sept Sept R’bn OPERATIONAL COST TO INCOME RATIO3 Change 2023 2022 5,00 80,00% Fixed expenses 8% R933m R861m 4,50 Variable expenses1 60,00% 2% R1 019m R1 000m 4,00 - Tax matter related interest R200m - 3,50 40,00% Total operating expen
Slide 22: Fixed expenses well managed in an inflationary environment
Fixed expenses well managed in an inflationary environment GROWING OUR UK- & IRISH-BASED GLOBAL BUSINESS Sept Sept 7% Change 2023 2022 8% Total fixed expenses 8% R933m R861m 25% 51% - Employee expenses 14% R484m R426m 9% - Information systems & 7% R224m R210m technology Employee costs Professional f
Slide 23: Well-capitalised & sustainable business
Well-capitalised & sustainable business REMAINS A HIGHLY CASH GENERATIVE WITH SIGNIFICANT CAPITAL RESERVES cps Sept Sept 600 110,0% 2023 2022 500 Cash R1 141m R656m 105,0% 400 Investments (seed capital) R639m R693m 100,0% 300 Total liquid assets R1 135m R1 349m 95,0% 200 Capital surplus R742m R563m
Slide 24: Closing comments
Closing comments 30 Years of Earning Trust CORONATION TRUST IS EARNED”
Slide 25: We remain focused on unlocking value for all stakeholders
We remain focused on unlocking value for all stakeholders DELIVERING LONG-TERM ALPHA IS OUR NORTHSTAR THROUGH THE CYCLE 25
Slide 26: Resilient business…invested in the success of our clients & South Africa
Resilient business…invested in the success of our clients & South Africa Coronation: long-term thinking, active investment management & client service driven by a team of high-calibre people Local & global macro Continue to Remain a responsible Collaborative corporate environment remains Focus on of
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Slide 28: Thank you
CORONATION TRUST IS EARNED”
Slide 29: About Coronation Fund Managers
About Coronation Fund Managers We celebrate our 30th birthday this year Founded in Cape Town, South Africa, in 1993 with zero assets under management Listed in 2003 29% employee owned An independent fund manager with no safety net of in-house assets or shareholder of reference Singular focus on asse
Slide 30: Capital markets
Capital markets Economic group 3 months 6 months 12 months Capped SWIX (ZAR) -3,81% -2,69% 11,87% CAPI -3,42% -2,87% 16,41% Resources -4,35% -10,17% -0,59% All Property -0,58% 0,38% 12,91% Industrials -6,23% -3,04% 27,41% Financials 1,74% 7,10% 20,60% USD/ZAR -0,41% -5,98% -4,40% AF Money Market/CAS
Slide 31: Local market indicators
Local market indicators 5 years (p.a.) 10 years (p.a.) As at 30 September 2023 % % Capped SWIX 6,44% 6,90% All Bond 7,15% 7,15% All Property -4,78% 0,51% AF Money Market 5,78% 6,30% MSCI World (ZAR) 13,67% 15,37% Global Bonds (ZAR) 3,26% 5,29% CPI 4,98% 5,15% USD/ZAR -5,64% -6,16% Source: IRESS 31
Slide 32: Disclaimer
Disclaimer THIS PRESENTATION CONTAINS CERTAIN FORWARD-LOOKING STATEMENTS. THESE FORWARD-LOOKING STATEMENTS ARE BASED ON CURRENT INFORMATION & EXPECTATIONS, & INVOLVE A NUMBER OF RISKS & UNCERTAINTIES. ALTHOUGH CORONATION FUND MANAGERS LIMITED BELIEVES THAT THE EXPECTATIONS REFLECTED IN SUCH FORWARD-
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Coronation Fund Managers — FY2023 Earnings Presentation on 6ix