Old Mutual Zimbabwe Limited FY 2013 financial results presentation

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Old Mutual Zimbabwe Limited FY 2013 financial results presentation

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Old Mutual Zimbabwe Limited FY 2013 financial results presentation

  1. 1. OLD MUTUAL ZIMBABWE ANALYST BRIEFING 16 APRIL 2014 INSURANCE | INVESTMENT | SAVINGS | BANKING
  2. 2. AGENDA Business performance Zomunoda Chizura, Deputy CEO Financial Review Isiah Mashinya, Group FD 2 Group FD Strategy Zomunoda Chizura, Deputy CEO
  3. 3. BUSINESS PERFORMANCEBUSINESS PERFORMANCEBUSINESS PERFORMANCEBUSINESS PERFORMANCE REVIEWREVIEWREVIEWREVIEW INSURANCE | INVESTMENT | SAVINGS | BANKING
  4. 4. INSURANCE | INVESTMENT | SAVINGS | BANKING
  5. 5. ZIMBABWE MARKETS| PERFORMANCE REVIEW 32.6% 20.0% 25.0% 30.0% 35.0% Equities Money Market 5 4.5% 10.0% 9.5% 11.1% 9.6% 2.9% 0.3% 0.0% 5.0% 10.0% 15.0% 2012 2013 Money Market Property Inflation
  6. 6. OMZIL – VISION,STRATEGY,VALUES VISION To be our customers' most trusted partner - passionate about helping them achieve STRATEGY To build a long-term savings, protection & investment group by VALUES 1. Pushing beyond boundaries; 6 helping them achieve their lifetime financial goals. investment group by leveraging the strength of our people & capabilities in Zimbabwe& around the world. We will focus, drive & optimise our businesses to enhance value for customers and shareholders. boundaries; 2. Integrity; 3. Respect; 4. Accountability
  7. 7. OMZIL- FOCUS AREAS Delivery of Brand promise Custodial OMCUS Insurance RMI Assurance OMLAC o Leverage on Group synergies o Seed Growth opportunities Stockbroking OMSEC Investments OMIG/OMP Banking CABS 7 opportunities o Participate in the economic recovery of the economy
  8. 8. OVERVIEW Operating profit up by 7% to $64m Insurance and banking contributed 85% of profit Premium income increased by 16% to $159m NCCF at $97m in low liquidity environment 8 NCCF at $97m in low liquidity environment Brand increasing market presence - RMI attained top position in 2013. Investment into digital distribution and marketing (Texta – cash)
  9. 9. 2013 HIGHLIGHTS Insurance: Life insurance number 1 in market – 53% market share Guaranteed Fund declared a bonus of 17.5% up from 7% prior year Life premiums grew by 3% to US$133mLife premiums grew by 3% to US$133m Increased use of new distribution models – banc assurance, mobile platform Attained top short term insurer with 13.5% of market share (GWP) 9
  10. 10. 2013 HIGHLIGHTS Banking: Maintained A+ Global Credit Rating Implemented a new banking system (T24) that has widened service (foreign accounts, for-ex trading, international payments) Expansion of distribution models: Deployed 29 ATMs to make a total of 56 ATMsDeployed 29 ATMs to make a total of 56 ATMs Increased Point of Sale terminals by 51% to register 1628 Additional services on mobile banking platform Credit line growth of 22% to US$24m. Loan book growth of 14% to US$322m NPLs were 10.3% against industry average of 15.9% 10
  11. 11. 2013 HIGHLIGHTS Investment Services: Growth of Property portfolio: Completed Borrowdale office park 220 housing units completed in Budiriro Housing Project. Phase 1 target is 900 unitsPhase 1 target is 900 units Opening up of Green Zone for customer convenience Launched OTC market for OMZIL shares 11
  12. 12. FINANCIAL REVIEWFINANCIAL REVIEWFINANCIAL REVIEWFINANCIAL REVIEW INSURANCE | INVESTMENT | SAVINGS | BANKING
  13. 13. US$m 2013 2012 AOP 64 60 IFRS Profit 122 15 GROUP PERFORMANCE HIGHLIGHTS • AOP went up by 7% • IFRS Profit went up by 713% 13 Premium Income 159 137 NCCF 97 107 FUM 1,7bn 1,3bn • Premium Income up by 16% • NCCF went down by 9% • FUM went up 31%
  14. 14. AOP BY LINE OF BUSINESS Investment Services 7% Holdings & Other 5% Banking Investment Services 11% Holdings & Other 4% 2013 (US$64m) 2012 (US$60m) 14 Banking 40% Insurance 48% Banking 29% Insurance 56%
  15. 15. GROUP STATEMENT OF PROFIT OR LOSS FOR THE YEAR ENDED DEC 2013 2013 US$m 2012 US$m Y-o-Y Growth % Revenue Net earned premiums 148.8 127.7 17% Investment income (non banking) 235.2 92.4 155% Banking interest and similar income 32.7 29.8 10% Fee income, commissions and income from service contracts 37.4 35.2 6% Other income 0.4 1.5 (70%) Total revenue 454.6 286.5 59% Expenses 15 Expenses Net claims and benefits (240.5) (148.1) 62% Change in provision for investment contract liabilities (19.9) (6.4) 212% Fees, commissions and other acquisition costs (6.8) (5.1) 34% Other operating and administration expenses (65.8) (111.6) (41%) Total expenses (332.9) (271.1) 23% Profit before tax 121.7 15.4 690% Income tax expense (16.0) (10.1) 59% Profit for the financial year 105.6 5.3 1892%
  16. 16. GROUP STATEMENT OF FINANCIAL POSITION AS AT DECEMBER 2013 2013 US$m 2012 US$m Y-o-Y Growth % Assets Investment property 465.0 421.4 10% Property and equipment 93.4 78.1 20% Investments and securities 787.7 640.1 23% Loans and advances 322.3 274.2 18% Other assets 63.3 33.6 88% Cash and cash equivalents 89.6 84.4 6% Total assets 1,821.3 1,531.7 19% 16 Liabilities Insurance & Investment contract liabilities 995.8 832.1 20% Tax liabilities 39.4 27.2 45% Amounts due to group companies 60.3 60.3 0% Amounts owed to bank depositors 319.3 295.1 8% Other liabilities 66.5 73.8 -10% Total liabilities 1,481.2 1,288.5 15% Net assets 340.1 243.2 40% Total equity 340.1 243.2 40%
  17. 17. GROUP STATEMENT OF CASH FLOWS FOR THE YEAR ENDED DEC 2013 2013 US$m 2012 US$m Cash flows from operating activities Profit before tax 121.7 15.4 Non-cash movements and adjustments to profit before tax 1.1 165.8 Changes in working capital (64.6) 20.6 Taxation paid (3.9) (2.6) Net cash from operating activities 54.3 199.2 Cash flows from investing activities Net acquisition of financial assets 4.3 (91.3) Net acquisition of investment properties (22.2) (13.9) 17 Net acquisition of investment properties (22.2) (13.9) Net acquisition of property and equipment (6.1) (6.8) Net cash used in investing activities (24.0) (112.1) Cash flows from financing activities Dividends paid (25.1) (37.9) Net cash used in financing activities (25.1) (37.9) Net increase in cash and cash equivalents 5.2 49.2 Net foreign exchange differences on cash and cash equivalents 0.1 (0.0) Cash and cash equivalents at the beginning of the year 84.4 35.2 Cash and cash equivalents at the end of the year 89.6 84.4
  18. 18. OMLAC KPI 2013 US$m 2012 US$m Growth AOP 31 26 19% IFRS Profit 42 25 68% Gross CBZ Life 3% Fidelity 5% FML 11% Zimnat 5% Nyaradzo 18% Others 2% Market Share by Premium Income 18 Gross earned Premium 133 129 3% Life sales 19 19 0% NCCF 55 62 (11%) FUM 1,100 900 22% Old Mutual 53% Zb Life 3% IPEC 2013 report
  19. 19. CABS KPI 2013 US$m 2012 US$m Growth Net Interest Income 33 30 10% Surplus 18 24 (25%) CABS, 11 % CBZ, 31% Barclays, 6% ZB, 5% NMB, 5% Other, 12 % Market share by deposits Loans and Advances 322 278 16% Deposits 462 356 30% NPLs 33 17 94% 19 Stanbic, 9% Stanchart , 7%FBC, 7% ABC, 7%
  20. 20. RMI KPI 2013 US$m 2012 US$m Growth Gross Written Premium 28 23 22% Underwriting Result 3 2 50% RM, 14% Nicoz, 13 % Others, 3 5% , 0% Market share by Gross premium written Result FUM 19 14 36% Underwriting Ratio 18% 16% 13% Claims Ratio 45% 43% 5% 20 Alliance, 13% Cell, 11% Zimnat Lion, 8%Eagle, 7% IPEC 2013 Report
  21. 21. DIVIDEND HISTORY Dividend Amount (USD c) Payment Date Interim 2012 0.6176 31 May 2013 Final 2012 1.7780 31 May 2013 Interim 2013 0.7297 31 October 2013 Final 2013 2.2132 (est) 31 May 2014 21 Earnings per share 2013 (USD c) 2012 (USD c) Basic and diluted 30 4
  22. 22. FINANCIAL STRENGTHS OMZIL Financial Diversified revenue streams. Overall economies of scale translating to high client value Portfolio mix balances returns. Financial Strengths Solid capital base to fund growth. Banking lines of credit below $25m. Liquidity in excess of regulatory requirements 9
  23. 23. OUTLOOKOUTLOOKOUTLOOKOUTLOOK INSURANCE | INVESTMENT | SAVINGS | BANKING
  24. 24. OUTLOOK Constrained Operating environment Subdued aggregate demand Low inflation Tight liquidity Changing demographics present new opportunities to grow business 24 Continue to participate in the recovery process of the economy Housing developments Provision of mortgage Finance Dimaf
  25. 25. OUTLOOK (CONTD) Defend and grow market share Leverage on strong capital base, solid governance and risk management systems to grow business Deliver brand promise to customers 25 Increase distribution footprint by leveraging on Group synergies Expand services on Mobile platform Increase Texta cash agents
  26. 26. SUMMARY Strong results amid the difficult operating environment Leverage on strong capital base, solid governance and risk management systems to grow business Continue pushing beyond boundaries to deliver both client and shareholder value through a strengthened skill base 26
  27. 27. For Choosing To Do Great Things With Us INSURANCE | INVESTMENT | SAVINGS | BANKING With Us
  28. 28. Q & A INSURANCE | INVESTMENT | SAVINGS | BANKING
  29. 29. TRADING IN THE COMPANY’STRADING IN THE COMPANY’STRADING IN THE COMPANY’STRADING IN THE COMPANY’S SHARESSHARESSHARESSHARES INSURANCE | INVESTMENT | SAVINGS | BANKING
  30. 30. SHAREHOLDING AT 31 DECEMBER 2013 Registered Member Holding Class Beneficiary Old Mutual BV (1) 75.00% A OMPlc Old Mutual BV (2) 3.50% B OMPlc Indigenisation Trusts and the intended Plan Pensioners, Staff,Indigenisation Trusts and the intended Plan beneficiaries 21.5% B Pensioners, Staff, Zim. Youth Total B Class shares 25.00% Total A & B Class Ordinary 100.00% (1) To be held through OMA, subject to requisite approvals (2) To be held by Stiefel Investments upon completion of sale
  31. 31. TRADING OF SHARES a) B Class Shares available for trading; b) Shares to trade on the Over the Counter (OTC) Platform managed by Old Mutual Securities (Private) Limited (OMSEC); c) Shares to be traded among eligible participants only; d) After trading account is opened, buyer or seller completes signed order (during operating hours 8:00am tosigned order (during operating hours 8:00am to 4:30pm), indicating volume and bid / offer limits; e) Commencement of trading, Monday 7 October 2013 (1) Supply the usual KYC documents
  32. 32. ELIGIBLE PARTICIPANTS a) Employees of the Old Mutual Zimbabwe Group; b) Old Mutual Zimbabwe Group staff pensioners; c) Old Mutual Life Assurance Company Zimbabwe Limited Client Pensioners; d) Pension funds that are clients of Old Mutual Life Assurance Company Zimbabwe Limited (OMLAC); e) Stiefel Investments (Private) Limited; and f) Any other persons that are approved by the directors of Old Mutual Zimbabwe Limited. Pre-certification process to be applied at account opening stage, i.e. Seller/Buyer Client Account Opening Information to be submitted to Old Mutual Securities (Private) Limited

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