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OMLI-Unaudited Interim results and interim dividend declaration for the six months end
Old Mutual Limited
Incorporated in the Republic of South Africa
Registration number: 2017/235138/06
JSE Alpha Code: OMLI
("Old Mutual" or "Company" or "Group")
26 September 2024
Interim results announcement: Unaudited Interim results and interim dividend declaration for the six months ended 30 June
2024
Interim A message from the Chief Executive Officer
We are pleased with the solid performance delivered while investing for the future. Adjusted headline earnings, an important
metric for distributable earnings, grew by 3% supported by a robust 14% increase in shareholder investment returns due to
improved performance in South African equities. Adjusted headline earnings per share increased by 7% to 73.5 cents bolstered
by the R1.5 billion share buyback executed in 2023.
Return on net asset value increased by 70 bps to 12.6%, driven by the growth in earnings and capital optimisations. The return
on net asset value excluding new growth initiatives increased by 210 bps to 15.5% which is within our medium-term target
range of cost of equity plus 2% to 4%.
Operating environment
Positive investor sentiment on South Africa following the general election outcome and the forecasted policy rate cuts reset the
base case for growth during the second quarter of the period under review. While business and consumer confidence remains
low, there has been a slight improvement in the period. Significant currency depreciation and inflation in our Africa regions
added strong headwinds to the operating environment.
Despite the complexity in the operating environment, we increased our life sales by 6% and grew our gross written premiums
by 9%. Positive market performance led to a 5% rise in funds under management. Gross flows increased by 7%, with net client
cash flow improving by 56%.
In an increasingly competitive environment, our continued investment in new growth engines and technology modernisation
reflects our intention to future-proof the business and achieve our victory condition to be our customers' first choice to sustain,
grow and protect their prosperity.
Key performance overview
Life APE sales increased by 6% to R6 598 million benefiting from strong growth in risk sales across all channels in Mass and
Foundation Cluster, and higher guaranteed annuities sales, better recurring premium savings sales in Personal Finance. This
was partially offset by lower group risk sales in Old Mutual Corporate due to the non-repeat of a large risk product deal secured
in the prior period.
Gross written premiums increased by 9% to R13.8 billion, supported by strong new customer acquisitions and intermediary
productivity in Old Mutual Insure, particularly in the Specialty business, and better renewals in the general and health insurance
businesses in Kenya and Uganda.
Results from operations declined by 3%, with our short-term results impacted by our deliberate strategy to invest in new growth
engines. Excluding new growth engines, results from operations increased by 4%. This was driven by improved performance in
the Mass and Foundation Cluster and Old Mutual Insure, partially offset by lower life profits in Personal Finance mainly due to
lower economic variances and an increased number of large claims. The disposable income of our customers in the Mass and
Foundation Cluster remained constrained and we continue to monitor persistency trends.
We delivered value of new business margin of 2.4% which is well within our medium-term target range of 2% to 3%. Coming
from a high base in the first half of 2023, value of new business of R858 million was lower by 8%. Our growth trend in value of
new business remains strong as evidenced by a compound annual growth rate of 10% from June 2022, with continued market
share growth in retail from Mass and Foundation Cluster.
Gross flows increased by 7% to R101 billion, driven by higher inflows in local collective investment schemes, Private Clients
and the offshore platform in Wealth Management. New mandates secured in Malawi and strong unit trust flows in Uganda also
contributed to higher gross flows.
Net client cash outflows improved by a material 56% to R3.2 billion, reflecting a positive turnaround in Wealth Management due
to robust inflows and the non-repeat of higher outflows recorded in the prior period. This was partially offset by higher
retrenchment benefit outflows in Old Mutual Corporate and significant outflows in Old Mutual Investments' money market and
low margin indexation funds where large investors continue to adjust their investment strategies.
Funds under management grew by 5% to R1.4 trillion largely due to improved equity market performance.
The Group return on embedded value remained strong at 12.5% supported by higher expected returns, profitable new business
written and positive risk experience variances, partially offset by worse persistency and once-off expense experience.
Our balance sheet remained robust with a Group shareholder solvency ratio of 188% for the half year ended 30 June 2024,
which is well within our target range of 170% to 200%. Old Mutual Life Assurance Company (South Africa) Limited's
(OMLACSA) regulatory solvency ratio remained strong at 201% and within our target range of 175% to 210%. As part of our
debt management and cost of capital optimisation strategy, the total value of subordinated debt in issue was reduced to
R9.5 billion with OMLACSA issuing R1 billion and redeeming R2 billion in subordinated debt.
Our dividend policy targets an ordinary dividend cover range of 1.5 times to 2.0 times adjusted headline earnings. Considering
our strong liquidity levels and well capitalised balance sheet, the Old Mutual Board declared an interim dividend of 34 cents per
share, which amounts to 6% growth and a dividend cover of 2.0 times.
Headline earnings were up by 34% mainly as a result of increased profits from our Zimbabwe operations which we exclude
from adjusted headline earnings due to barriers to access capital.
We are evaluating the functional currency of the Zimbabwean banking business, CABS, as we see a shift in the banking
environment towards US dollar denominated loans. If we change the functional currency from ZiG to US dollars, we do not
expect CABS to continue reporting the same level of foreign exchange gains, and we expect reduced transfers to the foreign
currency translation reserve in the future. This will substantially reduce IFRS profits and headline earnings but will have no
impact on adjusted headline earnings.
Strategic overview
I am proud of the continued progress in the disciplined execution of our strategy and considered capital allocation. This has
translated into the successful completion of industry testing and integration of OM Bank into the National Payment System in
line with the Prudential Authority's section 17 conditions.
We have made progress in our perimeter review in Old Mutual Africa Regions, setting us on the path to achieve our ambition to
be in the top three market positions. We remain focused on simplifying our IT estate and delivering efficiencies following the
successful Greenlight migration in 2023.
We expect the delivery of these strategic initiatives to significantly enhance our competitive strengths, revenue growth, capital
efficiencies and operating margins in the medium to long term.
Growing and protecting the core
With our life IT estate now moved to the cloud, our focus is on cost optimisation and leveraging the potential scale benefits. We
continue to reduce our legacy estate by decommissioning and migrating to new platforms across our technology systems. The
build phase of our new Savings and Income proposition is materially complete, with national rollout planned for 2025.
From a customer and adviser experience perspective, we recorded a slight decrease in our Net Promoter Score to 68,
marginally down from 70 at December 2023. Despite continued service improvement, customers' perceptions of Old Mutual
was negatively impacted by the social media case in March 2024.
Unlocking new growth engines
Our South African bank initiative, OM Bank, remains a key priority of our strategy to build an integrated financial services
business. The technical and operational progress is ahead of schedule, with successful industry testing and integration into the
National Payments System already completed. Pending the remaining Section 17 regulatory conditions, unrelated to technical
readiness, we anticipate the public launch in Q1 2025. For the rest of the year, we are focused on meeting the remaining
Section 17 conditions and continue refining systems and capabilities to ensure a seamless launch.
Across our Africa regions, the execution of our perimeter review supported disciplined capital allocation and shareholder value
creation. We concluded the exit of the life and general insurance lines of business in Nigeria and Tanzania. The turnaround in
Property and Casualty in Southern and East Africa supported by actions to improve claims management and experience-based
pricing led to improved underwriting margins in these regions. This was more than offset by a negative net underwriting margin
in West Africa. Excluding Nigeria there was improvement in the net underwriting margin. Our 'pivot to corporate' strategy
continues to yield results with increased profitability in our Life insurance business across East and West Africa.
Sustainable value creation
Sustainability is integral to our business, driving positive economic and social outcomes while delivering value. As a leader in
responsible investing, Old Mutual Investment Group integrates ESG factors across investment decisions, practices active
stewardship, and develops return-seeking and sustainability focused products. Old Mutual Investment Group was recognised
as the Leading Sustainable African Investment Manager by the European Magazine Awards for the third consecutive year and
received the Best Asset Manager – Sustainable Investing in South Africa award.
Outlook for H2 2024
We are encouraged by the cautiously optimistic outlook in South Africa following the formation of the Government of National
Unity. Growth is expected to be muted with GDP forecasted between 1% and 1.4%. Moderate inflation outlook and the 25 bps
rate cut, the first since 2020, ushering in an interest rates easing cycle from the latter half of the year should bolster consumer
spending, alleviate pressure on households' disposable income and boost sentiment.
The outlook for our Africa regions suggests a challenging yet slightly improved economic environment. Growth for Sub-Saharan
Africa is expected to rise to between 3.5% and 3.7%, reflecting gradual recovery despite continued elevated debt levels, high
inflation, external financing pressures and climate change impacts in some parts of the regions.
East Africa's economies are showing resilience with growth projected at approximately 5.1% in 2024, while inflation is likely to
moderate by the end of the year. We expect fiscal risks in East and West Africa to remain largely contained either through debt
restructuring or recourse to debt markets.
Iain Williamson
Chief Executive Officer of Old Mutual
Group highlights
Key performance indicators
Rm (unless otherwise stated) H1 2024 H1 2023 FY 2023 Change
Results from operations 4 243 4 366 8 343 (3%)
Adjusted headline earnings 3 267 3 160 5 861 3%
1
Headline earnings 5 825 4 358 7 380 34%
IFRS profit after tax attributable to equity holders of the parent1 5 241 4 354 7 065 20%
Return on net asset value (%) 12.6% 11.9% 11.1% 70 bps
Return on net asset value excluding new growth initiatives (%)2 15.5% 13.4% 13.1% 210 bps
Group equity value3 89 761 91 624 90 114 (0.4%)
3
Discretionary capital (Rbn) 1.4 1.0 1.1 40%
Shareholder solvency ratio (%)1,3,4 188% 186% 190% (200 bps)
Regulatory solvency ratio (%)1,3 175% 186% 177% (200 bps)
Dividend cover (times) 2.0 2.0 1.5 —
Per share measures
Cents H1 2024 H1 2023 FY 2023 Change
5
Results from operations per share 95.5 95.1 183.6 0.4%
Adjusted headline earnings per share6 73.5 68.8 129.0 7%
1
Headline earnings per share 133.6 96.8 165.5 38%
1
Basic earnings per share 120.2 96.7 158.4 24%
Total dividend per share 34 32 81 6%
Interim 34 32 32 6%
Final 49
Group equity value per share3,7 1 873.5 1 880.6 1 880.9 (0.4%)
Supplementary performance indicators
Rm (unless otherwise stated) H1 2024 H1 2023 FY 2023 Change
Life and Savings
Life APE sales 6 598 6 249 14 604 6%
Value of new business 858 937 1 921 (8%)
Value of new business margin (%) 2.4% 2.6% 2.3% (20 bps)
Life and Savings and Asset Management
Gross flows8 101 487 95 160 198 863 7%
Net client cash flow (3 165) (7 254) (7 510) 56%
3
Funds under management (Rbn) 1 394.4 1 300.4 1 331.0 5%
Banking and Lending
Loans and advances3 19 919 19 255 19 391 3%
Net lending margin (%) 8.3% 10.7% 11.3% (240 bps)
Property and Casualty
Gross written premiums 13 764 12 591 25 513 9%
Insurance revenue 13 336 12 245 25 204 9%
Net underwriting margin (%) 4.4% 0.2% 0.1% 420 bps
1 These metrics include the results of Zimbabwe. All other key performance indicators exclude Zimbabwe
2 Return on net asset value excluding new growth initiatives excludes adjusted headline earnings and equity impacts as well as any expected
investment over the next 12 months into these initiatives. The June 2023 core return on net asset value of 13.1% has been re-presented as
return on net asset value excluding new growth initiatives to 13.4%
3 The % change was calculated with reference to FY 2023
4 Shareholder solvency ratio is a new key performance indicator which represents the regulatory solvency ratio adjusted for material differences
in the way the Group manages capital and is consistent with the basis on which the current Old Mutual target range was established
5 Results from operations per share is calculated as results from operations divided by the adjusted weighted average number of shares. The
adjusted weighted average number of shares is adjusted to reflect the Group's BEE shares and retail scheme shares as being in the hands of
third parties, consistent with the treatment of the related revenue in results from operations. Adjusted weighted average number of shares used
is 4 443 million (H1 2023: 4 590 million)
6 Adjusted headline earnings per share is calculated with reference to adjusted weighted average number of ordinary shares
7 Group equity value per share is calculated with reference to closing number of ordinary shares. Closing number of shares used in the
calculation of the Group equity value per share is 4 791 million (FY 2023: 4 791 million)
8 The comparative amounts for Old Mutual Investments were re-presented to include institutional products that are an alternative to bank
deposits on a net flow basis
Interim results announcement
This results announcement is the responsibility of the Old Mutual Board. It is only a summary of the information contained in the
Group Interim results for the six months ended 30 June 2024 (Interim results). The Interim results can be found on our website
at https://www.oldmutual.com/investor-relations/reporting-centre/reports. This results announcement has not been reviewed or
reported on by Old Mutual's independent joint auditors.
Any investment decisions by investors and/or shareholders should be based on consideration of the Interim results accessible
via the JSE cloudlink https://senspdf.jse.co.za/documents/2024/jse/isse/OMUE/HY24Result.pdf and on our website above as
the information in this announcement does not provide all the details. The Interim results are available for inspection at the
registered office of the Company and the Sponsors, at no charge during office hours from the date of this announcement for a
period of 30 days.
Interim dividend declaration
The Old Mutual Board declared an interim dividend of 34 cents per share. This results in a dividend cover of 2.0 times for the
half year ended 30 June 2024, which is in line with Old Mutual's dividend cover target range of 1.5x to 2.0x adjusted headline
earnings over the financial year. The growth in the interim dividend from the prior period was due to our resilient operational
performance and strong capital and liquidity position. The interim dividend will be paid out of distributable income reserves to all
ordinary shareholders recorded on the record date.
Shareholders on the London, Malawian and Namibian registers will be paid in the local currency equivalents of the interim
dividend. Shareholders on the Zimbabwean register will be paid the equivalent of the interim dividend in United States dollars.
Old Mutual's income tax number is 9267358233. The number of ordinary shares in issue in the Company's share register at the
date of declaration is 4 790 906 428.
JSE, MSE, NSX, ZSE LSE
Declaration date Thursday, 26 September 2024 Thursday, 26 September 2024
Finalisation announcement and exchange rates announced Tuesday, 1 October 2024 Tuesday, 1 October 2024
Transfers suspended between registers Tuesday, 1 October 2024 Tuesday, 1 October 2024
Last day to trade cum dividend for shareholders on the South African Tuesday, 15 October 2024 N/A
register and Malawi, Namibia and Zimbabwe branch registers
Ex-dividend date for shareholders on the South African register and Wednesday, 16 October 2024 N/A
Malawi, Namibia and Zimbabwe branch registers
Last day to trade cum dividend for shareholders on the UK register N/A Wednesday, 16 October 2024
Ex-dividend date for shareholders on the UK register N/A Thursday, 17 October 2024
Record date (South African register and Malawi, Namibia and Zimbabwe Close of business on Friday, N/A
branch registers) 18 October 2024
Record date (UK register) N/A Friday, 18 October 2024
Transfers between registers restart Opening of business on Opening of business on
Monday, 21 October 2024 Monday, 21 October 2024
Interim dividend payment date Monday, 21 October 2024 Friday, 15 November 2024
Share certificates for shareholders on the South African register may not be dematerialised or rematerialised between
Wednesday, 16 October and Friday, 18 October 2024, both dates inclusive. Transfers between the registers may not take place
between Tuesday, 1 October and Friday, 18 October 2024, both days inclusive. Trading in shares held on the Namibian branch
register through Old Mutual (Namibia) Nominees Proprietary Limited will not be permitted between Tuesday, 1 October and
Friday, 18 October 2024, both days inclusive.
The dividend for South African shareholders will be subject to dividend withholding tax of 20% for all shareholders who are not
exempt from or do not qualify for a reduced rate of withholding tax. International shareholders who are not exempt or are not
subject to a reduced rate in terms of a double taxation agreement will be subject to dividend withholding tax of 20%. The net
dividend payable to shareholders subject to withholding tax of 20% amounts to 27.20000 cents per ordinary share. Distributions
made through the dividend access trust or similar arrangements established in a country will not be subject to South African
withholding tax, but may be subject to withholding tax in the relevant country. We recommend that shareholders consult with
their tax adviser regarding the in-country withholding tax consequences.
Shareholders that are tax residents in jurisdictions other than South Africa may qualify for a reduced rate under a double
taxation agreement with South Africa. To apply for this reduced rate, non-South African taxpayers should complete and submit a
declaration form to the respective registrars. The declaration form can be found at: https://www.oldmutual.com/investor-
relations/dividend-information/
Notes to editors
A webcast of the presentation for the 2024 Interim results and Q&A will be broadcast live on Thursday, 26 September 2024 at
11:00 South African time on the Investor Relations website: https://www.oldmutual.com/investor-relations/. Analysts and
investors who wish to participate in the call may do so using the following link or telephone numbers below:
https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=8554084&linkSecurityString=23421
b6d3c
South Africa +27 10 500 4108
UK +44 203 608 8021
Australia +61 73 911 1378
USA +1 412 317 0088
International +27 10 500 4108
Replay access code 46631
To access the replay using an international dial-in number, please select the link below:
https://services.choruscall.com/ccforms/replay.html
The replay will be available until 1 October 2024.
JSE debt sponsor: Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Enquiries
Investor Relations
Langa Manqele
M: +27 (0)82 295 9840
E: investorrelations@oldmutual.com
Communications
Wendy Tlou
M: +27 (0)82 906 5008
E: oldmutualnews@oldmutual.com
About Old Mutual
Old Mutual is a premium African financial services group that offers a broad spectrum of financial solutions to retail and
corporate customers across key market segments in 12 countries. Old Mutual's primary operations are in Africa and it has a
niche business in China. With over 179 years of heritage across sub-Saharan Africa, Old Mutual is a crucial part of the
communities it serves as well as broader society on the continent. For further information on Old Mutual and its underlying
businesses, please visit the Corporate website at www.oldmutual.com.
Date: 26-09-2024 08:13:00
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