Psg Financial Services Limited · JSE:KST

Psg Financial Services — FY2024 Earnings Presentation

30 slides from Psg Financial Services's earnings presentation, Feb 29, 2024

  1. Slide 1: Investor Presentation 2024 Financial Results

    Investor Presentation 2024 Financial Results For the year ended 29 February 2024

  2. Slide 2: Contents

    Contents 1. FY 2024: Financial Results 2. FY 2024: Divisional Performance 3. 2024 Focus 4. Return and Trading Statistics 5. Conclusion 2 Copyright © PSG

  3. 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

  4. Slide 4: A Great Company

    A Great Company Wealthy Clients serviced where they reside 266 Adviser offices 953 Advisers FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 No. of advisers 935 932 952 947 953 PSG Wealth 559 563 584 590 608 PSG Insure** 376 369 368 357 345 No. of offices 257* 263 263 266 266 Source: PSG Distribution * Numbe

  5. 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

  6. Slide 6: FY 2024: Financial Results

    01 | FY 2024 : Financial Results 6 Copyright © PSG

  7. Slide 7: Key macro indicators

    Key macro indicators Volatile economic environment Key indicators FY 2020 %∆ FY 2021 %∆ FY 2022 %∆ FY 2023 %∆ FY 2024 Rand / US$ 15.73 -4% 15.15 2% 15.45 19% 18.36 5% 19.18 S&P 500 (Rand) 46 474 24% 57 725 17% 67 588 8% 72 877 34% 97 766 SA Property Index 363 -21% 285 13% 322 -3% 313 9% 342 Cash Ind

  8. Slide 8: FY 2024 financial results overview

    FY 2024 financial results overview Recurring HEPS grew by 11% for FY 2024 Consolidated results FY 2020 %∆ FY 2021 %∆ FY 2022 %∆ FY 2023 %∆ FY 2024 CAGR Headline earnings 644 8% 697 32% 921 3% 948 9% 1 033 13% Recurring headline earnings 644 9% 704 31% 921 3% 948 9% 1 033 13% Weighted average no. of

  9. Slide 9: Recurring Headline Earnings By Division

    Recurring Headline Earnings By Division Total recurring headline earnings growth of 9% year on year Recurring Headline Earnings** FY 2020 %∆ FY 2021* %∆ FY 2022 %∆ FY 2023 %∆ FY 2024 CAGR Wealth 376 19% 448 14% 510 11% 569 17% 666 15% Asset Management 146 -28% 105 133% 244 -10% 220 -1% 217 10% Insur

  10. Slide 10: Financial Trend

    Financial Trend We always look at our 10 year rolling track record YoY FY 2014 FY 2015 FY 2016 FY 2017 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 CAGR % FY 2023 FY 2024 Gwth % AUM (Rbn) 99 133 154 175 205 222 230 268 315 354 407 15% 354 407 15% Premiums (Rbn)* 1.8 2.1 2.5 2.9 3.3 4.5 5.

  11. Slide 11: FY 2024: Divisional Performance

    02 | FY 2024: Divisional Performance 11 Copyright © PSG

  12. Slide 12: Wealth Plans

    Wealth Plans Growing and protecting client wealth Market Wealth Assets Split Feb-23 Net flows Feb-24 % Growth movement Excellence in products & services PSG Multi Managed * 148 962 17 341 9 536 175 839 18% Third party funds ** 93 126 5 693 10 864 109 683 18% Stockbroking portfolios 63 413 6 933 -780

  13. Slide 13: Wealth

    Wealth Excellence in products and services Net Flows (Rm) ALSI Independent 25% -5% 23% 40% -10% -15% -40% 55% 54% process with 14 000 80 000 advisers’ 11 886 oversight 12 000 10 820 70 000 9 735 10 000 2 150 7 734 60 000 7 733 2 357 8 291 5 819 6 663 201 8 000 1 401 Rapid growth in 5 318 2 731 6 302

  14. Slide 14: Top Advisers

    Top Advisers We continue to add top advisers to our PSG Wealth distribution business Wealth advisers (incl. EB) FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Balance – opening 546 559 563 584 590 Net movement 13 4 21 6 18 Balance – closing 559 563 584 590 608 Growth 2% 1% 4% 1% 3% Source: PSG Distribution

  15. Slide 15: Asset Management Plans

    Asset Management Plans Net new money at acceptable margin Market AM assets split Feb-23 Net flows Feb-24 %△ movement Focused marketing PSG Single manager * 46 579 -349 3 332 49 562 6% Investment PSG Money market and related assets* 2 040 -3 217 2 274 11% performance Total assets under management 48

  16. Slide 16: Asset Management

    Asset Management ‘Brick by Brick’ strategy Net Flows (Rm) ALSI -12 403% 8% 81% 117% -491% 204% -72% 607% 4% Long-term assets 2 000 1 740 1 809 80 000 72 145 (retail emphasis) 1 000 138 868 70 000 1 668 1 664 837 927 246 -4 552 -4 174 -789 387 -677 86 0 45 -82 -59 160 60 000 -416 -249 -261 -1 000 -1

  17. Slide 17: Asset Management

    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 56 11 5 27 8 1 PSG Flexible 01-Nov-04 Return 0.5% 9.0% 15.2% 9.3% 8.7% 13.6% Rank 64 4 4 52 26 3 PSG Equity 01-M

  18. Slide 18: Insure: Gross written premium

    Insure Grow gross written premium income PSG Insure gross written premium (Rm) %∆ 1% 4% 9% 12% 9 000 8 701 Top advisers 7 796 8 000 7 133 2 307 Gross written premium 7 000 6 738 6 830 1 919 1 675 6 000 1 520 1 604 1 722 Excellence in 5 000 1 441 1 609 1 266 1 321 underwriting 4 000 3 000 4 672 2 000

  19. Slide 19: Top Advisers

    Top Advisers Growing adviser base over the long term Insure advisers FY 2020 FY 2021 FY 2022 FY 2023 FY 2024 Balance – opening 386 376 369 368 357 Net movement -10 -7 -1 -11 -12 Balance – closing 376 369 368 357 345 Growth -3% -2% 0% -3% -3% Source: PSG Distribution *Decrease in Insure advisers due

  20. Slide 20: Western National Insurance

    Western National Insurance Net insurance result & shareholders income NIBT (Rm) Underwriting margin Key differentiators %∆ 58% -18% 51% -17% 43% -44% 79% -29% 24% • Personalised service to 180 25% 169.0 168.6 brokers • Focus on commercial 160 33.0 22.7% 147.0 142.8 business 140 20% 66.0 17.2% 9.5 11

  21. Slide 21: 2024: Focus

    03 | 2024: Focus 21 Copyright © PSG

  22. Slide 22: Top Line Focus

    Top Line Focus Core operations (excl. IFRS Consolidated fund and policyholder related income) 8 000 7 329 7 000 6 494 6 039 6 000 2 793 5 069 5 268 2 423 5 000 2 227 Top line revenue (Rm) 4 000 2 100 2 171 853 787 799 3 000 462 525 2 000 3 683 3 012 3 284 2 444 2 635 1 000 0 FY2020 FY2021 FY2022 FY2

  23. Slide 23: Reducing risk

    Reducing risk Recurring revenues Margin enhancing Risk vs return FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 FY20 FY21 FY22 FY23 FY24 Perf fees / HE* 0.0% 0.6% 10.6% 6.5% 2.8% Op margin 16.3% 16.8% 19.9% 18.0% 16.9% ROE* 20.5% 20.4% 23.8% 22.7% 23.4% Op margin ROE * Recurring HEPS 48.1c 52.7c

  24. Slide 24: Return and Trading Statistics

    04 | Return and Trading Statistics 24 Copyright © PSG

  25. 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

  26. 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

  27. Slide 27: Trading Statistics

    Trading Statistics Creating shareholder value Statistic% FY 14 FY 15 FY 16 FY 17 FY 18 FY 19 FY 20 FY 21 FY 22 FY 23* FY 24 No. of shares in issue (millions) 1 222 1 262 1 279 1 322 1 342 1 365 1 358 1 341 1 331 1 296 1 280 No. of shares traded (millions) 31.4 61.8 113.9 111.7 91.9 83.5 112.0 127.4

  28. Slide 28: Conclusion

    05 | Conclusion 28 Copyright © PSG

  29. 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

  30. Slide 30: End - Thank You

    End - Thank You Copyright © PSG

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