Results presentation

1
Results presentation

• For the year ended 31 March 2005

2
Year under review

• Strong operating results from
• All Africa businesses
• International Financial Services
• Review of International Risk Services
• Operating profit (before non-recurring costs)
  decreased to 6,3m
• 9,6m non-recurring restructuring costs, with
  future savings
• Strong growth in Investment Solutions assets
• Global assets grow to R87,7bn
• Significantly strengthened financial position
• Net repayment of debt R1,5bn
• New equity issue to VenFin R1,159bn

3
Operating profit reconciliation
Rm
-84
41
39
27
-27
23
-15
790
786
Excludes non-recurring restructuring costs
4
Africa Risk and Insurance Services

• Strong profit growth
• Modest growth in corporate broking division
• Good performance relative to its market
• Good growth in Cre-8 and Guardrisk
• Success achieved in delivery of new products and
  services
• Continued strong profit growth in Personal
  Services
• Benefiting from good underwriting results and
  expense management

5
International Risk Services
Revenue
Operating profit
Excludes non-recurring restructuring costs of
9,6m

• Factors affecting trading results
• 5 revenue decline in difficult market conditions
• Softening insurance rates
• Impact of weak US
• Industry change
• Initial costs of achieving FSA regulation

6
International Risk Services

• Comprehensive review
• Staff reductions
• Ongoing cost savings, partially offset by cost of
  new hires
• Review of insurance broking accounts
• Write-off of bad debts
• Historic lease issues dealt with
• Expense review ongoing
• Disposal of National Britannia for 5m

7
International Risk Services

• Enhanced strategic position
• International coverage ex USA
• Strengthened management team
• Operations director appointed
• New head of Retail business
• Various new staff hires
• Growth opportunities
• Management focused on revenue creation and client
  retention
• Significant opportunities from competitor market
• Will continue to focus on key recruitment
• Environment remains challenging
• Insurance rates remain under pressure
• US outlook uncertain

8
Africa Financial Services
Revenue
Operating profit

• Good revenue gains in core actuarial consulting
  and administration business
• Strong performances from
• Health Care Consultants
• Financial Planning
• Asset Consulting
• Homeplan
• Nigeria opportunity being progressed

9
International Financial Services
Revenue
Operating profit

• AFFS
• Continued strong growth in revenue and profits
• Good new business and strong current pipeline
• LCP
• Strong second half performance, benefiting from
• New business gains
• Cost measures implemented earlier in the year
• European acquisitions performing in line with
  expectations
• Legislative changes will bring further opportunity

10
Investment Solutions Assets Under Management
Rbn
11
Africa Investment Solutions
Revenue
Operating profit
Assets Under Management (AUM)

• Strong revenue and profit growth
• Good new business
• Net inflows of R3,7bn
• Growth in Stanlib Multi-manager and success with
  larger funds
• Positive impact from favourable market conditions
• Market contribution to assets of R14,3bn
• Pilot project on South African processing
  underway
• Appropriate expense control

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UK Investment Solutions
Revenue
Operating profit

• Assets under management reach 445m (R5,2bn)
• Net inflows of 212m (R2,5bn)
• Market contribution to assets of 38m (R0,4bn)
• 15,5bn under administration
• Retail initiatives progressing
• Client gains admin and assets
• Strong new business prospects
• 1,6m loss seen as an investment

13
Investment SolutionsOperating profit
Rm
14
UK Direct Marketing
Revenue
Operating profit

• Remains profitable operating on a smaller scale

15
Financial review
16
Regional overview
Revenue
Operating profit
Excludes non-recurring restructuring costs
17
Operating profit
18
Headline profit before tax
19
Headline earnings
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Earnings per share (cents)

• Total distribution increased by 34 to R309
  million

21
Reconciliation of growth in Headline EPS
22
Cash flow
23
Cash position
March 2004
March 2005

• Additional solvency capital of 23m under new
  FSA requirements effective January 2005

24
Net interest-bearing debt
March 2004
March 2005
25
Gearing and interest cover
26
Outlook and summary
27
Africa footprint
28
Empowerment

• Remains a key strategic imperative
• Internal transformation
• Positive results of internal transformation
  initiatives
• Recent further senior management promotions and
  appointments
• AF BEE deal compares favourably with others
• Strong SA profit growth is positive for the BEE
  deal
• Shanduka
• Working relationship well entrenched
• Shanduka continue to add value strategically
• AF Community Trust
• Annual contribution in line with stated focus
  areas
• Broad-based ownership achieved through
  participation in BEE deal
• Namibia BEE deal concluded effective 1 April 2004

29
International footprint
30
Value enhancement through growth in core
businesses

• Group wide
• Passion for customers
• Magnet for talent
• Disciplined expense management
• Good governance

31
Growth driversRisk Services

• Africa
• Innovation
• Diversification into allied businesses
• Africa expansion
• Internal synergies
• International
• Cost review ongoing
• Key recruitments
• Change brings opportunity
• Enhanced strategic position
• Ongoing new business drive

32
Growth drivers Financial Services

• Africa
• Continued new business drive
• Diversification of revenue streams
• Innovation
• Growing member focus
• Africa expansion
• Internal synergies
• International
• Changing environment brings opportunity
• Pensions simplification
• Build on successes of past year

33
Financial Services Operating profit
Rm
34
Growth drivers Investment Solutions

• Growth in Assets Under Management
• Exciting UK developments
• Targeted efficiency gains
• Diversified distribution

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Summary

• Strong operating profit growth from most
  businesses
• Africa Risk and Insurance Services 17
• Africa Financial Services 15
• International Financial Services 58
• Africa Investment Solutions 25
• Significant success on Group issues
• International debt repayment
• International Risk Services
• Actions taken in challenging trading conditions

Group well placed to capitalise on opportunities
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