Coronation Fund Managers Limited · JSE:CML
Coronation Fund Managers — H1 2020 Earnings Presentation
31 slides from Coronation Fund Managers's earnings presentation, May 26, 2020
Slide 1: Coronation - Trust is earned
eonpee CORONATION ({) TRUST IS EARNED™
Slide 2: 2020 Reviewed Interim Results
2020 Reviewed Interim Results FOR THE PERIOD ENDED 31 MARCH 2020 26 May 2020 Anton Pillay, CEO Mary-Anne Musekiwa, CFO 2
Slide 3: Agenda
Agenda Economic environment Highlights AUM and financial results Business update Good corporate citizenship Questions Annexure A 3
Slide 4: Economic environment
Economic environment 4
Slide 5: Global & SA macro overview
Global & SA macro overview NO ONE COULD HAVE FORESEEN THE POSSIBILITY OR PREPARED FOR THE IMPACT OF COVID-19 At the end of 2019, geopolitical tensions eased and world markets began to recover Record-breaking market moves; first quarter of 2020 sharp declines, only to recover with equal speed Policym
Slide 6: Highlights
Highlights 6
Slide 7: Singular focus on clients
Singular focus on clients THROUGH ACTIVE ASSET MANAGEMENT INVESTMENT Very encouraging outperformance by our clients’ portfolios in 2019, Total AUM PERFORMANCE supporting continued long-term outperformance R508bn REVENUE R1.8 bn Increase due to improved performance COSTS 5.2% Total dividend per share
Slide 8: AUM & financial results
AUM & financial results 8
Slide 9: Assets under management
Assets under management AUM REFLECTIVE OF MARKET CONDITIONS 700 4% 3% 610 614 599 587 571 600 Local Rbn International Rbn Avg AUM Rbn 588 36% 27% 141 127 155 508 176 492 163 500 164 85 160 1% 400 7% 339 22% 40 300 247 Equity Local 203 24 461 469 444 438 424 200 407 406 Fixed Interest Local 15 155 34
Slide 10: Market performance and net flows
Market performance and net flows NET FLOWS IN LINE WITH EXPECTATIONS 8,0% 600,0 580,0 6,0% 5,4% 560,0 4,0% 3,7% 540,0 2,0% 1,3% 520,0 0,0% 500,0 480,0 -2,0% 460,0 -4,0% -3,4% -3,8% 440,0 -6,0% -5,2% 420,0 -6,9% -8,0% -7,5% 400,0 2018 Mar-19 2019 Mar-20 Total Flows as % of opening AUM Capital and Cur
Slide 11: Revenue
Revenue STRONG PERFORMANCE OVER SIX MONTHS NET FEE MARGIN March March 90 bps Change 2020 2019 80 bps Revenue (from fund 8% R1 769m R1 632m 70 bps management) 60 bps Profit (from fund 50 bps 10% R834m R758m management) 40 bps 30 bps Profit after tax 8% R624m R578m 20 bps 10 bps Cost-to-income 0 bps 5
Slide 12: Cost control
Cost control VARIABLE COST MODEL CONTINUES TO PROVE ITS STRENGTH REVENUE AND COSTS 2,50 March March Change 2020 2019 80,00% 2,00 65,00% Fixed costs 11% R402m R362m 50,00% 1,50 35,00% Variable costs* 1% R533m R527m 20,00% 1,00 5,00% -10,00% Operating costs 5% R935m R889m 0,50 -25,00% - -40,00% 2015 (
Slide 13: Fixed costs
Fixed costs INFORMATION TECHNOLOGY & SYSTEMS SPEND TO DRIVE EFFICIENCY & MANAGE RISKS March March Change 2020 2019 8% 10% Total fixed costs 11% R402m R362m 49% - Employee costs 6% R195m R183m 25% - Information systems & 43% R100m R70m technology 8% - Professional fees* 28% R32m R25m - Marketing (12%
Slide 14: Dividend declared reflects cash earnings
Dividend declared reflects cash earnings 100% OF DILUTED HEADLINE EARNINGS PER SHARE DECLARED 600 106,0% March March Change 2020 2019 500 104,0% Diluted HEPS 8% 178.3c 165.1c 400 102,0% (cents) 300 100,0% Interim dividend 8% 178.0c 165.0c per share (cents) 200 98,0% 100 96,0% 0 94,0% 2015 2016 2017
Slide 15: Business update
Business update 15
Slide 16: Our business
Our business 26 YEARS OF INTEGRATED STEWARDSHIP OF CLIENT ASSETS An active manager with a singular focus on long-term investing Long-term performance Creating a sustainable We put our clients first Active Corporate Citizen our true measure of success global business We focus on growing the value of
Slide 17: Institutional business
Institutional business A SIGNIFICANT MANAGER OF INSTITUTIONAL ASSETS IN SA AND A GROWING NUMBER OF GLOBAL CLIENTS Local Clients Global Clients Total client AUM R292bn Client outflows totalling 5.8% of opening Client outflows totalling 0.2% of opening balance in line with prior year’s flows; we balan
Slide 18: Retail business
Retail business CORONATION REMAINS ONE OF SA’S FOREMOST MANAGERS OF RETAIL SAVINGS AT R216BN AUM Industry remains under pressure due to tough economic conditions and muted medium-term returns - We expect industry flows to remain under pressure for R240bn -2.5% -7.3% R216bn the foreseeable future Cor
Slide 19: Investment performance
Investment performance 98% of rand-denominated retail assets have 97% of institutional client assets outperformed peers since inception outperformed benchmark since inception QUINTILE RANKINGS FOR UNIT TRUST RANGE % INSTITUTIONAL FUNDS OUTPERFORMING 4% 8% 8% 5% 100% 2% 3% 7% 3% 90% 34% 80% 70% 67% 6
Slide 20: Good corporate citizenship
Good corporate citizenship 20
Slide 21: Transforming our business and industry
Transforming our business and industry A HOMEGROWN SOUTH AFRICAN BUSINESS COMMITTED TO TRANSFORMING FROM WITHIN & THE BROADER INDUSTRY Transforming our business from within We are a proud South African business 56% 50% 78% >R225bn1 of total AUM managed by black investment professionals 1As at 30 Sep
Slide 22: Meaningful social impact
Meaningful social impact CONTINUED FOCUS ON EDUCATION Education support Consumer financial education Education programmes 2043 >17,000 >200 >300 participants (2019) Limpopo Students awarded Young girls reached 664 3710 446 >190 000 Learners 2172 Schools study opportunities by staff mentorship North
Slide 23: Our response to Covid-19
Our response to Covid-19 FOCUS ON ENSURING DELIVERY & SUPPORT NOW… WHILE KEEPING AN EYE ON THE FUTURE Enabling employees Ensuring clients Reducing the impact Contributing to the continue to be on society way forward serviced 85% seamlessly working Increased communications Committed support to 3rd En
Slide 24: Closing comments
Closing comments ONGOING FOCUS AND COMMITMENT TO INVESTMENT EXCELLENCE FOR OUR CLIENTS GLOBALLY Covid-19 epidemic an unforecastable event & unprecedented in modern times - with many unknowns and no immediate solutions, there remains large-scale uncertainty in global economies Responsible continuity
Slide 25: Questions
Questions CORONATION TRUST IS EARNED™
Slide 26: About Coronation Fund Managers
About Coronation Fund Managers Founded in Cape Town, South Africa, in 1993 with zero assets under management Listed in 2003 25% employee-owned An independent fund manager with no safety net of inhouse assets Singular focus on asset management, outsourcing non-core components of business An active ma
Slide 27: Annexure A: Market performance
Annexure A: MARKET PERFORMANCE 27
Slide 28: Capital markets
Capital markets 3 months 6 months 12 months Economic group % % % All Share (ZAR) -21.38% -17.74% -18.42% CAPI -22.86% -19.09% -20.15% Resources -25.27% -14.97% -18.50% All Property -48.07% -47.47% -48.92% Industrials -8.44% -8.44% -7.18% Financials -39.48% -37.77% -38.82% USD/ZAR -21.58% -15.22% -18
Slide 29: Disclaimer
Disclaimer This presentation contains certain forward-looking statements. These forward-looking statements are based on current information and expectations, and involve a number of risks and uncertainties. Although Coronation Fund Managers Limited believes that the expectations reflected in such fo
Slide 30: Thank you
+ + + + . . . . CORONATION TRUST IS EARNED™
Slide 31: Coronation - Trust is earned
eonpee CORONATION ({) TRUST IS EARNED™
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