REG - Old Mutual Ltd - Old Mutual Limited Voluntary Operating Update

Old MutualAnnouncement

22/11/2023 08:00

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RNS Number : 3006U  Old Mutual Limited  22 November 2023

Old Mutual Limited

Incorporated in the Republic of South Africa

Registration number: 2017/235138/06

ISIN: ZAE000255360

LEI: 213800MON84ZWWPQCN47

JSE Share Code: OMU

LSE Share Code: OMU

NSX Share Code: OMM

MSE Share Code: OMU

ZSE Share Code: OMU

 

("Old Mutual" or "Company" or "Group")

 

Ref 58/23

22 November 2023

 

OLD MUTUAL VOLUNTARY OPERATING UPDATE FOR THE PERIOD ENDED 30 SEPTEMBER 2023 -
CONTINUED SALES MOMENTUM IN SOUTH AFRICA AND OLD MUTUAL AFRICA REGIONS

Global growth has proven relatively resilient in 2023, while China's economy
recorded better than expected growth in the third quarter. In South Africa,
loadshedding remains a key area of focus, however, with government and the
private sector collaborating and the continued focus on the restoration of
power stations we have seen a reduction in loadshedding during the fourth
quarter. Several African markets have experienced severe currency depreciation
against the USD and dollar shortages remain a challenge while high inflation
and elevated interest rates continue to impact our customers' disposable
income in all the markets in which we operate. Despite these challenges, our
business remains well positioned for growth, as evidenced by the strong sales
trajectory over the past 3 years with Life APE sales excluding China up 13%
relative to 2022 and 23% relative to 2021.

Financial key performance indicators for the period ended 30 September 2023

 

The table below sets out certain key performance indicators for the nine
months ended 30 September 2023 (the "current period").

 Key Performance Indicators             30 September 2023  30 September 2022  change

 (R millions unless otherwise stated)
 Life APE sales                          9 853              9 498             4%
 Gross flows                             146 548            136 136           8%
 Net client cash flow                    (10 832)           (1 163)           (>100%)
 Loans and advances(1)                   19 396             19 009            2%
 Gross written premiums                  19 306             16 860            15%

(1)Comparative amounts represent FY2022 balance sheet amounts.

 

Excluding China, Life APE sales recorded strong growth of 13% from the nine
months ended 30 September 2022 (the "prior period"). In Mass and Foundation
Cluster, sales benefited from solid risk sales across all retail channels and
higher credit life sales driven by continued improvements in productivity
levels. The positive sales momentum in Personal Finance contributed to sales
growth, with strong single premium guaranteed annuity sales and higher
recurring premium savings sales. Old Mutual Africa Regions delivered strong
retail and corporate sales mainly due to new business, renewals, and improved
productivity in East Africa. Including China, the increase was 4% as the prior
period included certain savings products sales in China's broker channel which
we stopped selling in anticipation of regulatory changes.

 

Gross flows grew by 8% from the prior period mainly due to higher inflows in
Old Mutual Africa Regions following a higher demand for offshore investments
in Namibia as well as new mandates secured and higher unit trust sales in East
Africa. The increase in flows was supported by the impact of annual premium
increases in Mass and Foundation Cluster and higher single premium inflows in
Personal Finance as well as better inflows in Old Mutual Corporate with a
strong secured-to-flow pipeline.

 

Strong growth in net client cash flow in Mass and Foundation Cluster, Personal
Finance and Old Mutual Africa Regions was offset by significant outflows in
Old Mutual Investments and Wealth Management, where we continue to see clients
requiring liquidity given the challenging economic conditions. Old Mutual
Investments saw low margin indexation outflows from a large offshore investor
rotating investment exposure and higher contractual Liability Driven
Investments benefit payments. Despite lower net client cash flow in Old Mutual
Investments, we raised a significant amount of capital totalling R8.4 billion
in our higher margin Alternatives business supporting future revenue
generation.

 

The marginal growth in loans and advances in Mass and Foundation Cluster was
in line with our cautious lending strategy, which was partially offset by the
decline in the loan book in Old Mutual Africa Regions due to the depreciation
of Kenyan shilling against the rand.

 

Gross written premiums grew by 15% from the prior period. This was driven by
new business growth, premium increases, and renewals across all divisions in
Old Mutual Insure and the acquisition of Genric Insurance Company Limited.
Excluding Genric Insurance Company Limited, gross written premiums grew by
11%. In Old Mutual Africa Regions, new business secured across all regions and
improved renewals in both the medical and general insurance books in East
Africa contributed to the growth in gross written premiums.

In our Mass and Foundation Cluster, given the slower than expected economic
recovery, we remain focused on the management interventions to mitigate the
persistency pressure which is starting to yield positive results. We will
reassess the need to strengthen our persistency basis at year-end and any
other basis changes which may be required.

Group Chief Financial Officer

 

Shareholders are advised that Casper Troskie, Group Chief Financial Officer of
Old Mutual Limited will reach the Company's normal retirement age in April
2024. The Old Mutual Limited Board is pleased to announce that it has agreed
with Mr Troskie to extend his employment contract for a period of one year to
the end of April 2025. Mr Troskie's extension allows for at least one
supplementary financial reporting cycle under the new insurance accounting
standard, IFRS 17. The process to appoint a suitable candidate as a successor
to Mr Troskie has commenced.

 

Investor engagement

 

Investors are invited to participate in a conference call to address matters
related to this voluntary operating update on 22 November 2023 at 17:30pm,
SAST. Investors and media may register on the following link:

Diamond Pass Registration (choruscall.za.com)
(https://services.choruscall.za.com/DiamondPassRegistration/register?confirmationNumber=7875839&linkSecurityString=14ee9e5e69)

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 30 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: 45568

 South Africa   010 500 4108
 UK             0 203 608 8021
 Australia      073 911 1378
 USA            1 412 317 0088
 International  +27 10 500 4108

 

The financial information in this voluntary operating update 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
 
        Merrill Lynch South Africa (Pty) Limited t/a BofA Securities

Malawi
                Stockbrokers Malawi
Limited

Namibia
                PSG Wealth Management (Namibia) Proprietary
Limited

Zimbabwe
                  Imara Capital Zimbabwe plc

 

Enquiries

 

Investor Relations

Langa Manqele                              M: +27
82 295 9840

 
E: investorrelations@oldmutual.com

Communications

Tabby Tsengiwe                               M:
+27 60 547 4947

 
 E: oldmutualnews@oldmutual.com

 

Notes to Editors

 

About Old Mutual Limited

 

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 14 countries. Old Mutual's primary operations are in
Africa, and it has a niche business in China. With over 178 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 (http://www.oldmutual.com) .

 

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