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Old Mutual Voluntary Operating Update for the Period Ended 30 September 2024
Old Mutual Limited
Incorporated in the Republic of South Africa
Registration number: 2017/235138/06
ISIN: ZAE000255360
LEI: 213800MON84ZWWPQCN47
JSE Share Code: OMU
JSE Alpha Code: OMLI
LSE Share Code: OMU
NSX Share Code: OMM
MSE Share Code: OMU
ZSE Share Code: OMU
("Old Mutual" or "Group")
Ref: 94/24
19 November 2024
OLD MUTUAL VOLUNTARY OPERATING UPDATE FOR THE PERIOD ENDED 30 SEPTEMBER 2024 - RESILIENT TOP
LINE GROWTH DESPITE CHALLENGING CONDITIONS
Sales momentum continued into the third quarter of 2024, with double digit growth in gross flows, which
supported the ongoing improvement in net client cash flow. This performance was achieved against a
challenging operating environment characterised by enduring geopolitical risks. Tensions in the Middle
East, uncertainty around China's economic growth prospects, the potential for higher trade tariffs and
weaker emerging market currencies driven partly by recent US election outcomes are key concerns
impacting the broader market.
In South Africa, the formation of the Government of National Unity and the 25-basis point interest rate
cut had a positive impact on investor and customer sentiment, though tangible improvements in capital
investments and disposable income remain constrained. In our Africa regions, excluding South Africa,
the economic climate continued to be affected by elevated inflation and currency depreciation in
some markets.
Financial key performance indicators for the period ended 30 September 2024
The table below sets out certain key performance indicators for the nine months ended 30 September
2024 (the "current period").
Key Performance Indicators 30 September 30 September change
(R million unless otherwise stated) 2024 2023
Life APE sales 10 410 9 853 6%
Gross flows1 170 224 142 748 19%
Net client cash flow (557) (10 832) 95%
Loans and advances2 19 377 19 391 (0%)
Gross written premiums 20 735 19 306 7%
1 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
2 Comparative amounts represent FY2023 balance sheet amounts
The strength of our diversified distribution strategy contributed to the growth in sales. Life APE sales
increased by 6% from the nine months ended 30 September 2023 (the "prior period") due to good risk
sales in Mass and Foundation Cluster across all distribution channels. Personal Finance delivered higher
guaranteed annuity sales, better savings and funeral sales while Wealth Management reported good
sales growth in tax-free savings, wealth life and investment funds. This was partially offset by marginally
lower sales in Old Mutual Corporate due to lower single premium sales and Old Mutual Africa Regions
as a result of currency depreciation in Malawi.
Gross flows increased by 19% from the prior period mainly driven by excellent inflows in Wealth
Management which saw a significant uplift across all platforms, particularly into the new cash and
liquidity solutions launched towards the end of 2023. Gross flows were also bolstered by robust unit trust
inflows in Old Mutual Africa Regions due to a highly productive agency force coupled with the launch
of the Dollar Unit Trust Fund in East Africa. The strong inflows into the Equity and Multi-Asset capabilities
and higher Alternatives flows in Old Mutual Investments further contributed to growth in gross flows.
Net client cash flow improved materially, benefiting from robust inflows and reduced levels of outflows
in Wealth Management. This was partially offset by increased outflows in Old Mutual Investments, Old
Mutual Corporate and Old Mutual Africa Regions. Old Mutual Investments experienced low margin
outflows from Futuregrowth mainly due to client liquidity requirements and a change in the client
investment strategy. Old Mutual Corporate recorded higher retirement, retrenchment and withdrawal
benefits outflows, particularly in Superfund. We expect a negative impact on net client cash flow at year
end as we anticipate higher two-pot withdrawals and further low margin customer outflows.
Loans and advances were in line with the prior period. In Old Mutual Africa Regions, loans and advances
were higher due to currency impacts in our Kenyan market. In constant currency, the loan book reduced
due to lower disbursements, in line with our strict lending criteria in a constrained environment. Loans
and advances in Mass and Foundation Cluster were marginally lower than the prior period, aligned with
our cautious lending strategy.
Gross written premiums grew by 7% from the prior period, primarily driven by strong new business and
rate increases in Old Mutual Insure, particularly in the Specialty business.
Capital
The regulatory solvency ratio for Old Mutual Life Assurance Company (South Africa) Limited
("OMLACSA") for the current period marginally reduced to 198% and remains within our target range of
175% - 210%.
The Group discretionary capital balance as at 30 September 2024 has increased to R1.6 billion from the
R1.4 billion reported at 30 June 2024 principally as a result of dividends received from Old Mutual Africa
Regions of R650 million largely offset by capital allocations to the bank build of R351 million.
The Group received approval in October from the Prudential Authority for the OMLACSA special
dividend of R2 billion and the Old Mutual share buyback of R1 billion under the general repurchase
authority obtained at our May 2024 annual general meeting. The OMLACSA special dividend will
increase discretionary capital by R2 billion upon its receipt in the fourth quarter. The share buyback will
reduce discretionary capital by R1 billion as we execute on the repurchase programme into the first
quarter of 2025. The remaining discretionary capital remains available for investment into growth or
return to shareholders. Further detail will be provided at the full year results announcement.
Two-pot retirement regime
The two-pot retirement regime was implemented effective 1 September and provides for a one-third
savings pot, which members may withdraw once in a tax year, and a two-thirds retirement pot, which
needs to be preserved. We remain well positioned to manage the impact of the increase in claims
volumes. As at the end of October 2024, we have paid 93% of the 240 000 claims submitted, amounting
to R2.4 billion, with most of the claims paid in October. In our continued focus to encourage digital
adoption, 99.7% of claims were submitted via WhatsApp. Over the medium to long term, the initial
outflows will be offset by higher assets under management retained as a result of the compulsory
preservation of the accumulated contributions in the non-accessible retirement savings pot.
Investor engagement
Investors are invited to participate in a conference call to address matters related to this voluntary
operating update on 21 November 2024 at 12pm, SAST. Investors and media may register on the
following link:
Diamond Pass Registration
Please note that registered participants will receive their dial in number upon registration. We advise
callers to dial in at least five minutes before the conference call starts. A recorded playback will be
available for 3 days after the conference call. The replay can be accessed in the following link:
https://services.choruscall.com/ccforms/replay.html
Access numbers for recorded playback:
Access code for recorded playback: 46893
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
The financial information in this voluntary operating update including forward-looking statements and
constant currency information is the responsibility of the Old Mutual Board of Directors and has not been
reviewed or reported on by the Group's external auditors.
Sandton
Sponsors
JSE Equity Sponsor: Tamela Holdings (Proprietary) Limited
Debt Sponsor: Nedbank Corporate and Investment Banking, a
division of Nedbank Limited
Namibia PSG Wealth Management (Namibia) (Proprietary) Limited
Zimbabwe Imara Capital Zimbabwe plc
Malawi Stockbrokers Malawi Limited
Enquiries
Investor Relations
Langa Manqele M: +27 82 295 9840
Head of Investor Relations E: investorrelations@oldmutual.com
Communications
Wendy Tlou M: +27 82 906 5008
Chief Communications
and Reputation Officer E: oldmutualnews@oldmutual.com
Notes to Editors
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: 19-11-2024 04:10:00
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