Slide 1: 2023 Interim Results
2023 INTERIM RESULTS
Slide 2: Agenda
AGENDA Alessandro Bottega www.presentationists.com Strategic review Financial review Looking ahead Q&A Iain Williamson Casper Troskie Iain Williamson OML Executive Group CEO Group CFO Group CEO Committee 2
Slide 3: Strategic Review
STRATEGIC REVIEW 2023 interim results
Slide 4: Financial Highlights at June 2023
FINANCIAL HIGHLIGHTS AT 30 JUNE 2023 Core business delivering sustained sales momentum Alessandro Bottega www.presentationists.com 1% 16% 40bps 6% Life APE Gross written Value of new Funds under sales premiums business margin management R6.2 billion R12.6 billion 2.6% R1.3 trillion Excluding China,
Slide 5: Our Strategic Framework
OUR STRATEGIC FRAMEWORK Alessandro Bottega www.presentationists.com RESPONSIBLY TO BE OUR CUSTOMERS’ BUILD THE MOST 1ST CHOICE TO SUSTAIN, VALUABLE BUSINESS GROW AND PROTECT IN OUR INDUSTRY THEIR PROSPERITY Growing and protecting the core Integrated financial services Unlocking new growth engines 5
Slide 6: The Hallmarks of an Integrated Financial Services Business
THE HALLMARKS OF AN INTEGRATED FINANCIAL SERVICES BUSINESS Alessandro Bottega www.presentationists.com Advice led Integrated Tech-forward Trusted 6
Slide 7: Through Our Five Strategic Focus Areas
THROUGH OUR FIVE STRATEGIC FOCUS AREAS Alessandro Bottega www.presentationists.com Growing and protecting the core A Holistic coverage of customer needs B Distribution and digital engagement C Operational efficiencies Unlocking new growth engines D Strategic growth markets Integrated financial servi
Slide 8: Grow and Protect the Core
GROW AND PROTECT THE CORE Progress against building our integrated financial services business Alessandro Bottega www.presentationists.com Holistic coverage of customer needs Distribution & digital engagement Operational efficiencies completed next up completed next up completed next up Launched Lau
Slide 9: Unlocking New Growth Engines
UNLOCKING NEW GROWTH ENGINES Investing in tomorrow's success Alessandro Bottega www.presentationists.com Strategic growth markets Strategic growth businesses Strategic growth businesses Prioritising presence in key markets Delivering on building a bank Building adjacent businesses ► East Africa & We
Slide 10: Leading Sustainability Initiatives
LEADING SUSTAINABILITY INITIATIVES Driving beneficial impact for all our stakeholders Alessandro Bottega www.presentationists.com LEADING IN IMPACT LEADING IN TRANSFORMATION #1 insurance brand & Asset owner of the year 8th strongest brand Coolest insurance brand LEADING IN ASSET STEWARDSHIP & RESPON
Slide 11: Operating Environment
OPERATING ENVIRONMENT 2023 interim results
Slide 12: Macro Environment in Our Markets Remains Challenging
MACRO ENVIRONMENT IN OUR MARKETS REMAINS CHALLENGING Customers continue experiencing tough conditions, worsened by load shedding Alessandro Bottega www.presentationists.com Headline CPI moderating in our markets Unemployment still elevated in South Africa Load shedding in South Africa¹ (%, year-on-y
Slide 13: Global Factors Impacting Market Levels
GLOBAL FACTORS IMPACTING MARKET LEVELS Alessandro Bottega www.presentationists.com FTSE/JSE Capped SWIX Top 401 2021 2022 2023 Markets at higher average levels compared to prior period in South YTD 2023 30 Jun 31 Dec Africa as equity markets showed a 9.9% 20.7% recovery, despite periods of decent
Slide 14: Segment Reviews
SEGMENT REVIEWS 2023 interim results
Slide 15: Mass and Foundation Cluster
MASS AND FOUNDATION CLUSTER Alessandro Bottega www.presentationists.com Life APE sales Risk Savings Life insurance business continues gaining market share (Rm) 18% 2 125 Distribution diversification strategy continues to pay off with strong 1 656 1 806 1 366 706 694 value of new business growth 64
Slide 16: Personal Finance and Wealth Management
PERSONAL FINANCE AND WEALTH MANAGEMENT Alessandro Bottega www.presentationists.com Life APE sales Risk Savings Annuities 12% Robust topline growth trajectory and gains of market share in (Rm) challenging economic environment 2 251 2 024 2 001 1 539 314 246 390 Value of new business recovering – im
Slide 17: Old Mutual Investments
OLD MUTUAL INVESTMENTS Alessandro Bottega www.presentationists.com Revenue Annuity Non-annuity Diversified investment capability set continues to pay off (Rm) 15% Strong growth in annuity and non-annuity revenue 1 395 1 541 1 770 274 593 141 170 Gross flows are up 71% to R17.4 billion driven by
Slide 18: Old Mutual Corporate
OLD MUTUAL CORPORATE Alessandro Bottega www.presentationists.com Value of new business margin1 50bps Strong growth in topline metrics driving better margins (%) 1.6% Strong savings and satisfactory pre-retirement sales driving the 7% 1.1% 1.0% increase in Life APE sales 0.7% Gross flows grew 19%
Slide 19: Old Mutual Insure
OLD MUTUAL INSURE Alessandro Bottega www.presentationists.com Gross written premiums Positive topline growth across all portfolios (Rm) 17% 9 559 Gross written premiums up 17%, excluding Genric up 12% 7 199 7 761 8 186 The net underwriting margin came in below the target range due to weather-rel
Slide 20: Old Mutual Africa Regions
OLD MUTUAL AFRICA REGIONS Alessandro Bottega www.presentationists.com Life APE sales 18% Resilient topline growth despite challenging macros (Rm) 787 Gross written premiums up 12% 665 506 520 Gross flows grew 34% driven by new mandates and increased unit trust sales H1 2020 H1 2021 H1 2022 H1 20
Slide 21: Financial Review
FINANCIAL REVIEW 2023 interim results
Slide 22: Bridging from IFRS 4 to IFRS 17
BRIDGING FROM IFRS 4 TO IFRS 17 Comparative 2022 restated to IFRS 17 and updated from provisional investor update Alessandro Bottega www.presentationists.com HY2022 FY 2022 Rm IFRS 17 IFRS 4 IFRS 17 IFRS 4 Mass and Foundation Cluster 1 341 1 583 1 517 2 442 Personal Finance and Wealth Management 1 5
Slide 23: Robust Financial Performance
ROBUST FINANCIAL PERFORMANCE Alessandro Bottega www.presentationists.com EARNINGS CAPITAL EFFICIENCY VALUE Results from operations Group return on net asset value Value of new business (Rbn) (%) (Rm) 3% 180bps 32% 4.4 937 4.3 11.9% 10.1% 708 H1 2022 H1 2023 H1 2022 H1 2023 HY 2022 H1 2023 Adjusted h
Slide 24: Results from Operations
RESULTS FROM OPERATIONS Strong sales growth and operational performance Alessandro Bottega www.presentationists.com (Rm) HY 2022 HY 2023 3% 4 254 4 366 23% (46%) 1 886 (2%) 1 538 14% 1 341 (2%) >100% 727 806 787 3% 566 643 478 323 317 166 (486) (472) Mass and Personal Finance Old Mutual Old Mutual O
Slide 25: Adjusted Headline Earnings Up 23%
ADJUSTED HEADLINE EARNINGS UP 23% Good operational growth supported by increased investment returns Alessandro Bottega www.presentationists.com Rm H1 2023 H1 2022 change Results from operations 4 366 4 254 3% Shareholder investment return 1 055 205 >100% Finance costs (455) (330) (38%) Income from a
Slide 26: Adjusted Headline Earnings to IFRS Profit Reconciliation
ADJUSTED HEADLINE EARNINGS TO IFRS PROFIT RECONCILIATION Zimbabwe remains the main driver Alessandro Bottega www.presentationists.com Rm H1 2023 H1 2022 change Adjusted headline earnings 3 160 2 579 23% Accounting mismatches and hedging impacts (823) 49 (>100%) Impact of restructuring (2) 31 (>100%)
Slide 27: Contractual Service Margin
CONTRACTUAL SERVICE MARGIN Allocation within expected range Alessandro Bottega www.presentationists.com (Rbn) Predictable Not predictable 2.2 1.6 1.0 0.1 61.3 59.8 (3.2) (0.2) Expected range of future CSM allocation to P&L: 8% - 12% FY 2022 New Interest CSM release Economic Non-economic Foreign exch
Slide 28: Value of New Business
VALUE OF NEW BUSINESS Robust result with continued progress in Personal Finance Alessandro Bottega www.presentationists.com Value of new business¹ Value of new business margin¹ HY 2022 (Rm) (%) HY 2023 32% 120bps 937 8.9 28% 7.7 708 611 478 (80bps) 40bps 50bps 2.9 >100% 28% 2.6 (17%) 50bps 2.1 2.2 1
Slide 29: Embedded Value
EMBEDDED VALUE Excellent growth in embedded value Alessandro Bottega www.presentationists.com Rbn 13.9% Annualised return on embedded value R4.5bn Operating embedded value earnings 29
Slide 30: Group Equity Value
GROUP EQUITY VALUE Share price trading at a discount to group equity value Alessandro Bottega www.presentationists.com (Rbn) 10.5% Annualised return on Group equity value 97.3 91.6 9.9 Subordinated debt 23.8 Non-covered 59.2 Eligible own funds 87.4 (excluding subordinated 68.0 Covered debt) (0.2) Ot
Slide 31: Capital Management Framework
CAPITAL MANAGEMENT FRAMEWORK Enhancing value for shareholders Alessandro Bottega www.presentationists.com Balance Considered Balance sheet capital sheet strength deployment efficiency Appropriately balanced Free surplus RONAV for protection and potential generated Group solvency ratio Ordinary divid
Slide 32: OML Group Solvency
OML GROUP SOLVENCY Appropriately balanced for protection and potential Balance Considered Balance sheet Alessandro capital Bottega sheet strength deployment efficiency www.presentationists.com 199 184 188 186 189 168 FY 2018 FY 2019 FY 2020 FY 2021 FY 2022 HY 2023 1 2 Adjusted IFRS equity Solvency r
Slide 33: Free Surplus Generated
FREE SURPLUS GENERATED Continue to generate a high proportion of cash earnings Balance Considered Balance sheet Alessandro capital Bottega sheet strength deployment efficiency www.presentationists.com (Rbn) 116% 74% 3.0 2.3 0.7 3.2 2.6 2.5 2.3 (0.2) HY 2022 HY 2023 Contribution to dividend Contribut
Slide 34: Discretionary Capital
DISCRETIONARY CAPITAL Considered capital deployment Balance Considered Balance sheet Alessandro capital Bottega sheet strength deployment efficiency www.presentationists.com Rm 29% Used for Group Growth Initiatives Net contribution per 43% previous slide A portion of this Returned to balance is earm
Slide 35: Return on Net Asset Value
RETURN ON NET ASSET VALUE Balance sheet efficiency Balance Considered Balance sheet Alessandro capital Bottega sheet strength deployment efficiency www.presentationists.com HY 2022 HY 2023 Near to medium term target Long term target (3-6 years) (6+years) Old Mutual Group 10.1% 11.9% ~ COE + 2% Core
Slide 36: Revised Medium-Term Targets
REVISED MEDIUM-TERM TARGETS Strong delivery in H1 Alessandro Bottega www.presentationists.com KPI Target H1 2023 outcome Growth Deliver growth of nominal GDP +1% Gross flows and gross written premiums Solid delivery over the medium term Value of new business margin Between 2% and 3% 2.6% Net underwr
Slide 37: Looking Ahead
LOOKING AHEAD 2023 interim results
Slide 38: Revised Medium-Term Targets
REVISED MEDIUM-TERM TARGETS Strong delivery in H1 with delivery to continue into H2 Alessandro Bottega www.presentationists.com KPI Target H1 2023 outcome Outlook Growth Deliver growth of nominal GDP +1% Gross flows and gross written premiums Solid delivery Continue to regain market share over the m
Slide 39: Conclusion
CONCLUSION Alessandro Bottega www.presentationists.com Integrated financial services Strong operational performance Growing and protecting the core Significant growth top-line A Holistic coverage of customer needs Life APE sales, GWP and gross flows all up B Distribution & digital engagement Excelle
Slide 40: Q&A
Q&A 2023 interim results
Slide 41: Disclaimer
DISCLAIMER Alessandro Bottega www.presentationists.com This presentation may contain certain forward-looking statements with respect to certain of Old Mutual Limited’s plans and its current goals and expectations relating to its future financial condition, performance and results and, in particular,