29 slides from Sanlam Allianz Holdings (kenya)'s earnings presentation, Apr 8, 2012
Slide 1: Sanlam 2011 annual financial results
page 1 | sanlam 2011 annual financial results
Slide 2: Sanlam Limited business mix by group equity value
Sanlam Limited 55% 15% 13% 3% 4% Admin, Life Short-term Investment Credit & health & business insurance* management structuring other 10% Discretionary & other capital Based on Group Equity Value on 31 December 2011 * General Insurance page 2 | sanlam 2011 annual financial results
Slide 3: Market segments and products by region
South Emerging Developed Africa markets markets Entry- Middle- All Affluent / Affluent Corporate level income segments Corporate Risk Risk Risk Risk Savings / Investment Investment Investment Investment Trust / Admin Admin Admin Admin Short-term insurance Short-term Short-term Credit Credit Credit H
Slide 4: Geographic presence: RSA, rest of Africa, developed markets
RSA based Rest of Africa Botswana Namibia Swaziland Mozambique Zambia Tanzania Kenya Malawi Uganda Ghana Developed markets Nigeria UK / Ireland Switzerland South East Asia Australia India USA page 4 | sanlam 2011 annual financial results
Slide 5: Target focus areas and themes
Target Focus Areas Themes Net Business Growth Operational Diversification Efficiency Operational Quality Returns (ROGEV) Capital Optimal Application Efficiency Return of Excess page 5 | sanlam 2011 annual financial results
Slide 6: Growth strategy by market segment
Entry level Growth Middle market South Africa Cross sell Consolidate Affluent Corporate Rest of Africa Emerging markets Growth India SE Asia UK Niche Developed markets Defensive Europe Australia / USA page 6 | sanlam 2011 annual financial results
Slide 7: Share of population by LSM group
50% 45% 40% 35% % of population 30% 25% 20% 15% 10% 5% 0% 2006 2011 Year LSM 1-4 LSM 5 LSM 6-7 LSM 8-10 Source: AMPS 2011. page 7 | sanlam 2011 annual financial results
Slide 8: Insurance penetration by country
10.0% Global average: 4.0% 5.2% BRIC average: 1.2% 1.5% 0.9% 0.9% 0.5% 0.5% 0.1% 0.1% 0.1% 0.1% South Africa Namibia Botswana Malawi Kenya Ghana Zambia Tanzania Nigeria Uganda Angola Source: Swiss Re and AXCO. page 8 | sanlam 2011 annual financial results
Slide 9: Contribution to group net operating profit
Contribution to group net operating profit (Rm) 2003 – R1 541m 2011 – R3 884m SNT SNT 17% SPF (Life) 10% 46% SICM SICM 5% 5% SI SEB 12% 6% SI 11% SPF & SUK SEB (Life) 2% SEM SPF 74% 8% (Other) 5% page 9 | sanlam 2011 annual financial results
Slide 10: Operating profit 2011
Operating Profit - 2011 Rest of Africa Botswana 1% Other international 7% 3% Namibia 3% SA Entry-level 5% SA Traditional 81% page 10 | sanlam 2011 annual financial results
Slide 11: New life business volumes and gross VNB 2011
New life business volumes - 2011 Gross VNB - 2011 Other Other Rest of interna- Rest of interna- Africa tional Africa tional Botswana 7% 1% Botswana 3% 7% 5% 10% Namibia 2% Namibia 4% SA Entry- level 6% SA Entry- level 25% SA SA Traditional Traditional 53% 77% page 11 | sanlam 2011 annual financial r
Slide 12: Management structure aligned with strategic focus on growth
Management structure aligned with strategic focus on growth New structure largely embedded with focus shifting to growth initiatives Investments in growth Shriram Capital in India Merchant Securities in UK to augment international offering to SA private clients Summit Trust in Switzerlan
Slide 13: Focus on quality of business rather than market share
Focus on quality of business rather than market share Value of new business (Rm) vs new business margins (%) 1100 3.50% 3.30% 900 3.10% 2.90% 700 2.70% 500 2.50% 2.30% 300 2.10% 1.90% 100 1.70% -100 1.50% 2005 2006 2007 2008 2009 2010 2011 South Africa Africa Other International Margins - rhs Slid
Slide 14: Lapses, surrenders and fully paid-ups
Lapses, surrenders & fully paid-ups as % of in-force per half year 5 4.5 4 3.5 3 % 2.5 2 1.5 1 0.5 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 page 14 | sanlam 2011 annual financial results
Slide 15: Retention of maturing policies continues to improve
Retention of maturing policies continue to improve Retention as percentage of maturities (Middle-income market SA) 45.9% 47.4% 43.9% 46.4% 44.8% 3.10% 4.00% 6.30% 3.40% 4.50% 42.40% 44.30% 39.60% 40.50% 40.30% 2007 2008 2009 2010 2011 Life - Retention Non-life - Retention page 15 | sanlam 2011 ann
Slide 16: Sky NTUs, lapses and surrenders
Sky - Number of NTUs, lapses and surrenders as % of in-force 27.6% 17.5% 16.8% 15.2% 14.1% 14.5% 12.7% 12.7% 11.4% 11.1% 2007 2008 2009 2010 2011 H1 H2 page 16 | sanlam 2011 annual financial results
Slide 17: Percentage of SIM's AUM exceeding benchmark
Percentage of SIM’s AUM to exceed benchmark (R312bn) 100% 100% 90% 95% 80% 70% 90% 60% 50% 85% 40% 30% 80% 20% 10% 75% 0% Rolling 3 Yr Rolling 5 Yr 2008/12/31 2009/12/31 2008/12/31 2009/12/31 2010/12/31 2011/12/31 2010/12/31 2011/12/31 page 17 | sanlam 2011 annual financial results
Slide 18: Capital deployment: buy-backs, acquisitions, disposals
Balance 1 January 2011 4 000 Share buy-back (979) Acquisitions (3 094) Emerging markets (incl Shriram Capital) (2 241) Developed markets (480) Santam (incl MiWay) (373) Disposals 988 Vukile 790 Other 198 Investment return, capital released & other 985 Buy-backs & corporate activity 1 900 page 18 | s
Slide 19: Maximise ROGEV
Maximise ROGEV Cost of capital = i + 3% Target = i + 4% Strong track record of superior returns Outperformed ROGEV target since listing in 1998 Growth potential over medium term (business volumes) South Africa/developed markets • Real growth, with potential to outperform in selected se
Slide 20: Outperform cumulative growth target since listing
Outperform cumulative growth target of long-bond rate + 400bp since listing 600 500 400 300 200 100 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Target Cost of Capital (RFR + 300bps) Actual page 20 | sanlam 2011 annual financial results
Slide 21: Sanlam 2011 annual financial results
page 21 | sanlam 2011 annual financial results
Slide 22: Key results summary 2011
2011 2010 Group Equity Value cps 3 146 2 818 12% ROGEV per share % 15.7 18.2 ROGEV per share (adjusted) % 14.6 16.0 CAR cover (Sanlam Life) 3.7 3.4 Net operating profit R mil 3 760 3 303 14% cps 186.1 161.5 15% Normalised Headline earnings R mil 5 023 5 143 -2% cps 248.7 251.5 -1% Headline earning
Slide 23: New business volumes and net fund flows by business
Gross Net R million 2011 2010 2011 2010 by business Personal Finance 27 246 25 422 7% 5 898 5 660 Emerging Markets 10 995 10 660 3% 2 008 799 Sanlam Investments 56 062 50 304 11% 11 444 10 141 Santam 14 653 13 561 8% 5 249 4 868 by license Life insurance 21 455 17 099 25% 6 685 2 784 Investment 72
Slide 24: Value of new business and margin
Value of New Business Margin R million 2011 2010 2011 2010 1 051 762 38% 3.21% 2.79% Personal Finance 705 510 38% 3.01% 2.50% Emerging Markets 223 221 1% 6.12% 5.87% Employee Benefits 115 20 475% 2.65% 0.91% Sanlam UK 8 11 -27% 0.58% 1.10% Net of minorities 958 666 44% 3.05% 2.57% Including STC 90
Slide 25: Net operating profit by business
R million 2011 2010 Personal Finance 1 990 1 680 18% Emerging Markets 309 286 8% Sanlam Investments 945 882 7% Santam 640 567 13% Corporate & other (124) (112) -11% Total 3 760 3 303 14% page 25 | sanlam 2011 annual financial results
Slide 26: Net operating profit and headline earnings
R million 2011 2010 Net operating profit 3 760 3 303 14% Per share 186.1 161.5 15% Net investment return 1 571 2 123 -26% Investment income 792 851 -7% Investment surpluses 715 1 131 -37% Equity-accounted income 64 141 -55% Other (308) (283) -9% Normalised headline earnings 5 023 5 143 -2% Per sha
Slide 27: Group Equity Value and RoGEV
Equity Value RoGEV R million 2011 2010 Rm Group operations 56 887 50 458 8 981 17.8% Personal Finance 28 876 25 612 5 519 21.5% Emerging Markets 3 487 2 777 598 21.5% Investments 14 909 13 683 1 669 12.2% Santam 9 615 8 386 1 195 14.2% Discretionary & Other 6 634 6 903 424 6.1% TOTAL 63 521 57 361
Slide 28: Key investment themes
1. Clear strategy (firm commitment to deliver on promises) 2. Profitable growth opportunities 3. Diversification (reducing risk of overall portfolio) 4. Cost efficiency focus 5. Capital efficiencies 6. Prudence underpins quality and sustainability of base 7. Creation of shareholder value (share pric
Slide 29: page 29 | sanlam 2011 annual financial results
page 29 | sanlam 2011 annual financial results