OLD MUTUAL LIMITED - Old Mutual trading statement for the six months ended 30 June 2021

Old Mutual trading statement for the six months ended 30 June 2021

Old Mutual Limited
Incorporated in the Republic of South Africa
Registration number: 2017/235138/06
JSE alpha code: OMLI ("Old Mutual" or “Company” or “Group”)


18 August 2021


OLD MUTUAL TRADING STATEMENT FOR THE SIX MONTHS ENDED 30 JUNE 2021

Debtholders are advised that Old Mutual is currently in the process of finalising its interim results for the six months
ended 30 June 2021 ("current period"). Following on the Old Mutual Voluntary Operating Update on 23 June 2021,
this trading statement provides an indication of a range for headline earnings per ordinary share (HEPS) and earnings
attributable to equity holders of the Group per ordinary share (EPS) in terms of paragraph 3.4(b) of the JSE Limited
Listings Requirements compared to the six months ended 30 June 2020 ("comparative period"). The Group's interim
results will be released on the Stock Exchange News Service of the JSE Limited on Tuesday, 31 August 2021.

The local and global equity markets have recovered given the improvement in corporate profits as lockdown
restrictions have eased. Markets have rallied ahead of pre-COVID-19 levels, however, the environment remains
volatile as we navigate the challenging impact of the pandemic.

We continue to demonstrate agility in our response to the impact of the pandemic on our business, with good recovery
in sales and earnings for the first half of the year. Productivity levels in our South African retail segments, Mass and
Foundation Cluster and Personal Finance have materially improved in the first half of the year. There has been a strong
customer take up in the Old Mutual Protect (OMP) proposition, which has seen rapid growth supporting the recovery
in risk sales. In Mass and Foundation Cluster, issued sales in the first half of the year were above the comparative
period due to the significant impact that lockdown had on issued sales in 2020. This was supported by improved credit
experience in the banking business. Personal Finance had higher single and recurring premiums, driven by an increase
in productivity. In Old Mutual Corporate, SuperFund umbrella quote activity improved relative to the comparative
period. The recovery in local equity markets, combined with positive flows in our Asset Management business have
benefited Old Mutual Investments. In Rest of Africa, we continue to upgrade the digital channels to improve
customers experience and providing connectivity support to enable intermediaries to work remotely.

The mortality claims paid relating to COVID-19 in our life businesses are driving negative Net Client Cash Flows (NCCF),
however this is offset by inflows in our Asset Management and Wealth businesses. Our mortality experience has been
worse than anticipated with impact on profits mitigated by a partial release of provisions raised at the end of 2020.
Our COVID-19 provisions have been increased by R2 billion as at 30 June 2021 to take into account the emerging
expectations of wave 3 and 4 as well as potential future waves. The provisions have been updated to take into account
the additional available data to date as well as the anticipated impact of the proposed vaccination rollout plan.

In Old Mutual Insure, business interruption claims paid in the first half of the year were offset by the reserves raised
at the end of 2020. The reserves raised in the comparative period still remain as the best estimate and no further
provisions were raised. There was a significant turnaround in the Credit Guarantee Insurance Corporation (CGIC)
business profitability due to large COVID-19 related claims in prior year that did not repeat, as well as lower attritional
claims in the current year.

Taking into account the increase in operating earnings and the significant improvement in sales momentum outlined
above debtholders are advised that the Group’s key profit measures are expected to fall within the ranges outlined
below:
  Key Performance Indicators                               Estimated             Estimated
  (R million unless stated otherwise)                       % change         30 June 2021         30 June 2020
  Results from Operations                                 37% to 47%         2,113 – 2,267               1,541
  Adjusted Headline Earnings                              65% to 75%         2,813 – 2,984               1,704
  AHEPS (cents)¹                                          65% to 75%            61.6 – 65.3               37.3

  AHEPS defined as Adjusted Headline Earnings divided by WANS adjusted to reflect the Group's B-BBEE shares and
shares held in policyholder and consolidated investment funds.

HEPS and Basic EPS are expected to fall within the ranges outlined below:



 Key Performance Indicators                            Estimated                Estimated 30 June
 (R million unless stated otherwise)                   % change                 2021                        30 June 2020
 IFRS profit after tax attributable to equity
 holders of the parent                                               >100%           2,704 – 3,266               (5,621)

 Basic EPS (cents)                                                   >100%             61,4 - 74,3               (128.5)
 
 Headline Earnings                                            (20%) - (30%)           2,946 – 3,368               4,215

 HEPS (cents)                                                 (21%) - (31%)             66,9 – 76,5                96.3


Debtholders are reminded that the impairments in respect of the carrying value of our investment in Nedbank and
the goodwill related to our investment in Old Mutual Finance were recognised in the IFRS income statement in H1
2020 and were not repeated. These are however, not recognised in Headline Earnings, and accordingly not recognised
in Adjusted Headline Earnings (AHE), as this is an explicit adjusting item in accordance with the JSE Headline Earning
Circular 1/2021.

Headline earnings is lower than the prior year as AHE excludes adjustments in respect of equity and debt instruments
held in life funds, the impact of restructuring as well as the results related to Residual Plc which were all lower than
H1 2020, partially offset by higher results related to Zimbabwe.

On the 23 June 2021 Old Mutual announced its intention to unbundle a portion of its shareholding in Nedbank Group
Limited (“Nedbank”). Subject to regulatory approval, Old Mutual will unbundle all the Nedbank ordinary shares
currently held by Old Mutual Emerging Markets Limited (being 62,131,692 Nedbank ordinary shares and comprising
12.2% of the issued ordinary share capital of Nedbank). The remaining Nedbank Stake held by Old Mutual Life
Assurance Company South Africa (“OMLACSA”) (comprising c.7.2% of the Nedbank ordinary shares currently in
issue) continues to support the capital structure of OMLACSA and will be managed in line with the Group’s Financial
Management Framework. In order to optimally manage the capital structure, we have entered into a zero cost collar
arrangement on the majority of the OMLACSA exposure to Nedbank.


The financial information in this trading statement is the responsibility of the Old Mutual Limited Board of Directors
and has not been reviewed or reported on by the Group’s external auditors.


Sandton

Debt sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited

Enquiries
 Investor Relations
 Sizwe Ndlovu                                   T: +27 (0)11 217 1163
 Head of Investor Relations                     M: +27 (83) 500 8019
                                            E: tndlovu6@oldmutual.com
 Communications
 Vuyo Mtawa                                 M: +27 68 422 8125
 Head: Group Communications                 E: VMtawa@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 South Africa and the Rest of Africa and it has a niche business in
Asia. With over 176 years of heritage across sub-Saharan Africa, Old Mutual is a crucial part of the communities they
serve and the 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: 18-08-2021 07:15:00
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