Old Mutual Ltd. · JSE:OMU
Old Mutual — H1 2020 Earnings Presentation
20 slides from Old Mutual's earnings presentation, 2020
Slide 1: 2020 Interim Results
2020 INTERIM RESULTS
Slide 2: Agenda
Agenda 1 H1 2020 OVERVIEW Group CEO 2 FINANCIAL REVIEW Group CFO 3 CONCLUDING REMARKS Group CEO 4 Q&A 2
Slide 3: Long term growth supported by our strategy
Long term growth supported by our strategy 1 Old Mutual Cares To be our customers’ 2 Always present first 1st Our role is to sustain, grow and protect the prosperity of the customers, 3 Rewarding digital engagement families and choice, enabled by communities the delivery of our 5 4 we serve strategi
Slide 4: Pandemic is a global crisis
Pandemic is a global crisis Rapidly escalating global pandemic… …and widespread lockdowns have impacted our business Daily no. of confirmed cases 300,000 250,000 200,000 150,000 100,000 50,000 0 Jan Feb Mar Apr May Jun Jul Aug Americas 12 423 028 Total no. of confirmed Europe 3 995 425 South-East As
Slide 5: Significant macroeconomic volatility and uncertainty
Significant macroeconomic volatility and uncertainty Significant volatility in equity markets in H1 2020 Recession in South Africa 13,000 6 4 Prolonged period of 12,500 negative economic 12,206 2 growth 0 12,000 -2 11,500 -4 11,084 -6 11,000 -8 -10 10,500 JSE SWIX -12 10,000 -14 2019 -16 9,500 2020
Slide 6: Three phase approach to respond to crisis
Three phase approach to respond to crisis Stabilisation Transition Reimagine Q2 2020 H2 2020 2021+ Focused on six key priorities in initial Focus areas as we transition out of the Reimagine the future of our business period of the crisis: crisis: through: • Health and safety of our employees • Take
Slide 7: Key achievements in stabilisation phase
Key achievements in stablisation phase Health and safety of our employees Continuity of service to our customers Ensuring our solvency and liquidity remained resilient Strict Employee Email, USSD safety wellbeing and 182% protocols initiatives WhatsApp OML Solvency in place at all Ratio rolled out a
Slide 8: Normalised RFO robust in difficult environment
Normalised RFO robust in difficult environment Segment contribution to Results from Rm H1 2020 H1 2019 % Change Operations before COVID-19 impacts Mass and Foundation Cluster 650 1,512 (57%) 6% 15% Personal Finance and Wealth Management 1,718 1,426 20% -3% 12% Personal Finance 1,409 1,227 15% Wealth
Slide 9: Financial Review
FINANCIAL REVIEW Casper Troskie
Slide 10: Financial delivery in H1 2020
Financial delivery in H1 2020 AHE Impact of COVID-19 Group Solvency Embedded Value Stress testing R1,704 million R2,793 million 182% R67.8 billion Operating earnings Reserving for Strong position after Robust after Within target impacted by anticipated significant stress, in solvency range in impact
Slide 11: Adjusted Headline Earnings
Adjusted Headline Earnings Rm H1 2020 H1 2019 % Change 1 Decrease driven by lower equity Operating segments 4,534 4,674 (3%) market levels in South Africa and fair Net expenses from central functions (200) (162) (23%) value losses on unlisted equity Normalised Results from Operations 4,334 4,512 (4%
Slide 12: Separately identifiable COVID-19 items
Separately identifiable COVID-19 items Business Unrealised Forward Incremental interruption Rm Life Reserves Mark to looking net operating Total and rescue Market information expenses 1 2 3 4 5 Mass and Foundation Cluster 550 - - 104 66 720 Personal Finance and Wealth Management 510 - - - 43 553 Old
Slide 13: Other adjusting items
Other adjusting items • Partial release of Old Mutual International data provision following resolution of Impact of certain data differences restructuring • Excluded from RFO and AHE, consistent with the treatment of the expense when the provision was raised in 2019 • Profit of R253 million due to
Slide 14: Embedded value resilient through crisis
Embedded value resilient through crisis (Rm) 72 106 1,329 2,903 72,297 2,380 125 65 3,825 67,822 A B C D E F G Opening EV New business Existing business Experience Development Assumption and Economic Non operating Capital outflows Closing EV value contributions variances cost variances model changes
Slide 15: Group Solvency through the crisis
Group Solvency through the crisis Rm H1 2020 FY 2019¹ % Change 1 Driven by: ▪ Decrease in the Nedbank share price, reducing the weight of OMLACSA positive contribution of Nedbank to Own funds 68 311 79 556 (14%) OMLACSA ratio Solvency capital requirements 32 794 36 518 (10%) ▪ Repayment of OMLACSA S
Slide 16: Stress testing and management actions
Stress testing and management actions Solvency resilient under stress Management actions implemented during H1 2020 Expected progression of Real GDP (based to 100) o Immediate expense savings actions in place: 102 V 100 ▪ Vacancy freeze 98 U ▪ Salary increases deferred 96 94 ▪ Actions contributed to
Slide 17: Concluding Remarks
CONCLUDING REMARKS Iain Williamson
Slide 18: Outlook and focus areas for H2 2020
Outlook and focus areas for H2 2020 ➢ Improve adviser productivity to normalised levels as rapidly as possible ➢ Continue to improve customer access through increasing digitalisation ➢ Maintain focus on improving expense efficiency ➢ Continued focus on simplification initiatives ➢ Revised short term
Slide 19: Q&A
Q&A
Slide 20: Disclaimer
DISCLAIMER 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, estimates of future cash flows and costs. B