Financial Year 2014 Presentation

Transcription

1 1 Financial Year 2014 Presentation

2 Agenda Results Divisional performance Focus 1

3 A great company Wealthy clients serviced where they reside 193 offices 618 advisers clients 2 Source : PSG Finance function

4 FY2014 financial results overview Recurring headline earnings grew by 44% for FY 2014 Consolidated results FY 2013 Rm FY 2014 Rm % Revenue 1,862 2,592 39% PBT % Headline earnings % Recurring headline earnings % Non recurring headline earnings (1) (7) 981% Weighted average number of shares (000 s) 1,131,880 1,220,524 8% HEPS (Rand Cents) % Recurring HEPS (Rand Cents) % Cost: Income Ratio * 67.2% 63.8% Debt: Equity Ratio ** 23.0% 9.4% Return on Equity 19.0% 23.4% 3 * Net Revenues ** Based on interest bearing debt Source : PSG Finance Function

5 Execution year: 2013 Structure Three divisions and nine licenses Office centralisation Sold or closed underperforming businesses People changes Performance driven Incentive based Hired industry talent Business processes Governance structures Greater risk management Customer processes 4

6 New structure 5 * Includes PSG Employee Benefits ** Includes Western National Insurance Source : PSG Finance function

7 Recurring earnings by division All three divisions posted credible earnings growth year on year Recurring headline earnings * FY 2013 Rm % FY 2014 Rm * Wealth Management % 167 Asset Management % 54 Insurance % 30 Total % 251 * All overhead costs are fully allocated 6 Source : PSG Finance function

8 Our brand is getting stronger We are gaining industry recognition on all fronts PSG Wealth: SA Stockbroker of the year 2013 (3 rd year running) PSG Asset Management: Multiple Raging Bull and Morningstar awards Flexible Fund No. 1 over ten years Equity Fund No. 1 over five years Balanced Fund No. 3 over five years PlexCrown Top 4 Collective Investment Scheme Manager for Q PSG Insure: Santam Personal Lines Broker of the year 2013 (3 rd year running) Santam Portfolio Administration Broker of the year

9 Financial trend We always look at a 10 year rolling track record FY 2005 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 CAGR % FY 2014 YoY Gwth % AUA (Rbn) % % Premiums (Rbn) * 38% 2.5 * 27% Revenues (Rm) ,379 1,862 36% 2,592 39% Headline earnings (Rm) Shares in issue (m) Headline earnings per share (cents) % % ,072 1,210 16% 1,221 1% % % Source : PSG Finance function 8 * Includes Western National Premiums from Nov 2012.

10 Business characteristics Equity market dependent Administration businesses people / systems dependent Not very balance sheet intensive Free cashflow generative Vulnerable to regulatory change 9

11 Contents overall results divisional performance focus 10

12 Wealth plans End to end client proposition Wealth management assets overview Top advisers Wealth assets split (Rbn) FY 2013 Market movement Net flows FY 2014 % Third party funds * 37,792 4,004 3,560 45,357 20% Excellence in products & services PSG Multi Managed 16,923 3,817 6,627 27,367 63% Discretionary 17,957 5,097 1,573 24,627 37% Total managed assets 72,672 12,918 11,759 97,621 34% Non discretionary 94,209 22, ,032 24% Superb platform Total wealth assets 166,881 35,222 12, ,653 29% 11 Source : PSG Wealth * Includes PSG single managed funds of R1.8bn for FY2013 and R3.1bn for FY2014

13 Wealth top advisers We continue to add top advisers to our wealth distribution business Larger offices More profitable Growing faster Wealth advisers Number of advisers Growing number of advisers Scale offices via New hires in office Build new offices Increase practice efficiencies Balance 28 Feb Net new acquisitions 27 Balance 28 Feb Growth 7% 12 Source : PSG Wealth

14 Wealth excellence in products &services Reduced cost to clients and lower risk to advisers Independent process with advisers oversight Documented and tracked 4,000 3,000 2,000 1, ,128 Half yearly multi managed net flows (Rm) 1,552 v Moderate FoF, ,007 Creator FoF, ,595 H H H H Negotiation with product providers Source : PSG Wealth Returns Income FoF, 0.93 Preserver FoF, 1.32 SA MA Income, 1.18 v SA MA Low Equity, 1.96 SA MA High Equity, 2.17 SA Equity General, Downside deviation

15 Wealth superb platform Value added service for clients and ease of use for advisers Proper control and custody of client assets Client data 3,500 2,500 Half yearly PSG Invest net flows (Rm) Reporting Clients Internal reports 1, , , H H H H Source : PSG Wealth

16 Asset management plans Asset management assets overview Investment performance AM assets split (Rbn) FY 2013 Market movement Net flows FY 2014 PSG single manager 5,757 1,815 3,945 11, % % Focused marketing PSG money market and related assets Total assets under management 4, ,273 10% 10,495 1,746 3,548 15,788 50% PSG Wealth administered assets * 16,723 3,643 7,133 27,500 64% Superb platform PSG white label 5, ,697 11% Total AM assets 32,338 6,093 10,555 48,985 51% Source : PSG Asset Management 15 * Excluded from total PSG assets under admistration to eliminate duplication

17 Asset management investment performance Consistent process across funds and over time Single manager funds Performance 3 month rank 6 month rank 1 year rank 3 year rank 5 year rank 10 year rank PSG Flexible PSG Equity A PSG Balanced A Rank Return 5.2% 13.5% 28.5% 17.9% 25.2% 18.6% Rank Return 8.4% 19.1% 34.9% 21.8% 28.6% 20.6% Rank Return 4.1% 10.8% 21.4% 15.7% 19.4% 15.6% PSG Stable Rank Return 2% 5.5% 11.9% 1 st Quartile 2 nd Quartile 3 rd Quartile 4 th Quartile 16 Source : MorningStar Lower Risk

18 Asset management focused marketing Brick by Brick strategy Focused marketing Institutional Multi managers Platforms PSG advisers Independent advisers Direct Our Approach Long term assets (Retail emphasis) Protect our capacity Getting adequate margins 17 Source : PSG Asset Management & PSG Wealth Returns 2,000 1, Half yearly single managed (excl. money markets) net flows (Rm) 476 PSG Flexible, 3.55 PSG Balanced, v PSG Equity, PSG Optimal Income, 1.23 SA MA Flexible, SA 2.20 Equity General, 10 v SA MA High Equity, SA MA Income, SA IB Money Market, Downside deviation 1,692 1,876 H H H H2 2014

19 Asset management superb platform Proper control and custody of client assets 5,000 Half yearly total assets under administration new flows (Rm) 4,000 3,000 Building operational excellence 2,000 1,000 2,293 2,152 4,389 4,738 Maintaining connectivity with clients 0 H H H H Source : PSG Asset Management

20 Insure management plans Top advisers Excellence in underwriting Gross written premium Half yearly PSG Insure gross written premium (Rm) 1,400 1,295 1,186 1, , , Superb platform 0 H H H H ST Distribution ST Admin Western Western acquisition Nov Source : PSG Insure

21 Insure organisational structure 40% Santam PSG Insure Rikus Visser CEO: PSG Insure 60% 100% 100% 100% Western ST Distribution ST Administration Operations Jurgen Hellweg CEO: Western Bertus Visser CEO: ST Distribution Gordon Whitcher CEO: ST Admin Johann Hugo COO: PSG Insure Western RSA Central Gerhard Raath Platform HR Western Namibia North Finance Karin Erasmus South Ros Schults 20

22 Insure ST distribution and administration 21 ST Distribution Growing adviser base across South Africa Merged 21 offices into six 100% owned Focus on commercial >10% growth ST Administration Platform service to PSG distribution network 50% of PSG Insure business is on platform Expanding product offering focus on commercial Gross written premium R(m) Half yearly PSG Insure gross written premium (Rm) 1, H H H H ST Distribution ST Admin Revenues (Rm) FY 2013 FY 2014 ST Distribution ST Admin Source : PSG Insure

23 Insure Western National Key differentiators Highly personalised service to brokers Focus on commercial business Product offering now also distributed by PSG adviser network Gross written premium Half yearly PSG Insure gross written premium (Rm) v H H H H Gross written premium 22 Excellence in underwriting In depth underwriting skills and knowledge in commercial risks Healthy insurance float level > R400m Limited insurance and investment risk retention levels R(m) Source : PSG Insure Revenues (Rm) v H H U/W profit Investment Income

24 Measured approach Risk vs return Recurring revenues Margin enhancing 23

25 Contents Overall results Divisional performance Focus 24

26 Our Focus Top line organic growth Internally funded South African focused 25

27 Conclusion Thank you 26

28 Appendix 27

29 Key indicators Key Indicators % Headline earnings (Rand) % Recurring headline earnings (Rand) % EPS (Cents) % Recurring HEPS (Cents) % Cash Index STeFI Call % All Bond Index % Listed Property PR Index % JSE Index 39,250 46, % Gold Price 1,664 1,202 (27.8%) Rand / US$ % 28 Source : PSG Finance function