Interim results

June 2000

Interim results

June 2000

HighlightsHighlightsNew business

Value of new business

Bancassurance new business

Claims & policyholder benefits

Net cash flow from insurance operations

New business

Value of new business

Bancassurance new business

Claims & policyholder benefits

Net cash flow from insurance operations

+ 22%

+ 23%

+58%

+ 3%

+ 121%

+ 22%

+ 23%

+58%

+ 3%

+ 121%

HighlightsHighlights

EPS and DPS

Embedded value

Sale of interest in Liberty International – premium

EPS and DPS

Embedded value

Sale of interest in Liberty International – premium

+ 10%

+3%

+ 22%

+ 10%

+3%

+ 22%

Revenue earnings –Continuing operationsRevenue earnings –

Continuing operations

Life fund operating surplus

Revenue earnings – shareholders’ funds

Headline earnings

Headline EPS (cents)

DPS (cents)

Life fund operating surplus

Revenue earnings – shareholders’ funds

Headline earnings

Headline EPS (cents)

DPS (cents)

30.6.00(Rm)

30.6.00(Rm)

30.6.99

(Rm)

30.6.99

(Rm)

%

Change

%

Change

516

204*

720

265,9

133,0

516

204*

720

265,9

133,0

519

133

652

242,7

120,9

519

133

652

242,7

120,9

(1)

54

10

10

10

(1)

54

10

10

10* Includes interest R122m

Net cash inflows ofinsurance operationsNet cash inflows of

insurance operations

Single premiums

Recurring premiums

Total premiums

Claims & policyholder benefits

Net cash flow

Single premiums

Recurring premiums

Total premiums

Claims & policyholder benefits

Net cash flow

30.6.00(Rm)

30.6.00(Rm)

30.6.99

(Rm)

30.6.99

(Rm)

%

Change

%

Change

3 119

2 799

5 918

4 861

1 057

3 119

2 799

5 918

4 861

1 057

2 665

2 514

5 179

4 700

479

2 665

2 514

5 179

4 700

479

17

11

14

3

121

17

11

14

3

121

New businessNew business

Total

Recurring

Single

Index

Present value of profits

Total

Recurring

Single

Index

Present value of profits

+22

+25

+21

+24

+23

+22

+25

+21

+24

+23

%

Change

%

Change

Reasons: Product innovation

Growth in sales forceBancassurance (no longer vulnerable)

Reasons: Product innovation

Growth in sales forceBancassurance (no longer vulnerable)

Agency headcount1995 – June 2000

Agency headcount1995 – June 2000

893 950783

187

715

420

642

668

676

916

0

200

400

600

800

1000

1200

1400

1600

1800

1995 1996 1997 1998 1999 Jun-00

Agency Franchise

970970

11351135

13101310

15921592

BancassuranceBancassurance

New business premiums ex StanbicNew business premiums ex Stanbic 632632

Number of funeral policies in-force – 120 000Number of funeral policies in-force – 120 000

400400 5858

30.6.00(Rm)

30.6.00(Rm)

30.6.99

(Rm)

30.6.99

(Rm)

%Change

%Change

Funeral policies* +100%

Loan protection policies* +41%

Improved penetration of banking customer base, but slower than we plan for* Period 1 January 2000 – 30 June 2000

Life fund operating surplus –Investment returns

Life fund operating surplus –Investment returns

1999 – first half

2000 – first half

1999 – second half

2000 – second half

1999 – first half

2000 – first half

1999 – second half

2000 – second half

JSE All Share

%

JSE All Share

%

Liberty

Equity

%

Liberty

Equity

%

+31,6

-8,7

+22,6

?

+31,6

-8,7

+22,6

?

+30.1

-4,6

+26,7

?

+30.1

-4,6

+26,7

?

Note:Main portfolios in first quartile of performance

Note:Main portfolios in first quartile of performance

TaxationTaxation

Life fund

Corporate

Secondary tax

Life fund

Corporate

Secondary tax

30.6.00(Rm)

30.6.00(Rm)

30.6.99

(Rm)

30.6.99

(Rm)

125

35

29

189

125

35

29

189

14

5

25

44

14

5

25

44

Embedded valueEmbedded value

Shareholders’ funds

Value of life business in force

Adjustment to financial services subsidiaries

Value per share (R)

Shareholders’ funds

Value of life business in force

Adjustment to financial services subsidiaries

Value per share (R)

30.6.00(Rm)

30.6.00(Rm)

31.12.99

(Rm)

31.12.99

(Rm)

%

Change

%

Change

8 979

4 395

881

14 255

52,63

8 979

4 395

881

14 255

52,63

9 092

4 756

n/a

13 848

51,25

9 092

4 756

n/a

13 848

51,25

(1,2)

(7,6)

2,9

2,7

(1,2)

(7,6)

2,9

2,7

Present value of new business profitsPresent value of new business profits

Value of new businessValue of new business

30.6.00(Rm)

30.6.00(Rm)

30.6.99

(Rm)

30.6.99

(Rm)

%

Change

%

Change

208208169169

+2

3

+2

3Notes:

•Calculated on new tax basis

Comparative figure not restated for increased LIBAM charges

•Margins maintained

Financial services subsidiariesFinancial services subsidiaries

Libam operating profit up from R7 million to R29 million

Positive inflow to unit trusts up to R1 363 million from R227 million

Healthcare membership lower than target at 18 815 principal members – costs managed accordingly

Libam operating profit up from R7 million to R29 million

Positive inflow to unit trusts up to R1 363 million from R227 million

Healthcare membership lower than target at 18 815 principal members – costs managed accordingly

Shareholders’ fundsShareholders’ funds

Financial services activitiesListed investments

SAB Metro Liberty International Other

Other investments Cash Due iro GNI Proceeds of Liberty

International Convertible bond (net of cash) Other

TOTAL

Financial services activitiesListed investments

SAB Metro Liberty International Other

Other investments Cash Due iro GNI Proceeds of Liberty

International Convertible bond (net of cash) Other

TOTAL

30.6.00(Rm)

30.6.00(Rm)

31.12.99

(Rm)

31.12.99

(Rm)

9962 6281 933

330–

365

5 3552 790

–1 559

(1 531)

2 537

8 979

9962 6281 933

330–

365

5 3552 790

–1 559

(1 531)

2 537

8 979

9564 7002 482

6881 235

295

3 4362 096

646–

(1 557)

2 251

9 092

9564 7002 482

6881 235

295

3 4362 096

646–

(1 557)

2 251

9 092

Sale of interest in Liberty International

Sale of interest in Liberty International

In line with focus on financial services

Premium to market price achieved - 22%

Negative gearing on convertible bond eliminated

Bond payable September 2004 (Rm) 1 807

Cash held offshore 1 811

In line with focus on financial services

Premium to market price achieved - 22%

Negative gearing on convertible bond eliminated

Bond payable September 2004 (Rm) 1 807

Cash held offshore 1 811

Summary of cash positionSummary of cash position

For shareholders South Africa Offshore

Security for convertible bond

For policyholders – ex sale of Lib Int

Remitted to South Africa Held offshore

For shareholders South Africa Offshore

Security for convertible bond

For policyholders – ex sale of Lib Int

Remitted to South Africa Held offshore

2,79

1,814,60

1,500,872,37

2,79

1,814,60

1,500,872,37

R billion

Progress with strategiesProgress with strategies

Deployment of capital Disposal of interest in Liberty

International Options for deployment of cash

resources being evaluated “with discipline”

Focusing on core financial services

Focus on upper income market Satisfactory new business volumes

from this market segment

Deployment of capital Disposal of interest in Liberty

International Options for deployment of cash

resources being evaluated “with discipline”

Focusing on core financial services

Focus on upper income market Satisfactory new business volumes

from this market segment

Progress with strategiesProgress with strategies

Leverage LIBAM’s research Innovative and successful products

brought to the market and planned Expanding product range for Liberty

and Liberty Unit Trust

Expand corporate benefits New business up 85%

Leverage LIBAM’s research Innovative and successful products

brought to the market and planned Expanding product range for Liberty

and Liberty Unit Trust

Expand corporate benefits New business up 85%

Progress with strategiesProgress with strategies

Achieve critical mass in Liberty Healthcare

The healthcare environment has become restrictively regulated

Future profits dependant on regulatory certainty

Acquire distribution for emerging market

Strengthened bancassurance relationship will be prime channel for access to the emerging market

Achieve critical mass in Liberty Healthcare

The healthcare environment has become restrictively regulated

Future profits dependant on regulatory certainty

Acquire distribution for emerging market

Strengthened bancassurance relationship will be prime channel for access to the emerging market

Progress with strategiesProgress with strategies

Structures to deliver offshore products

New structures to enhance offshore products are being implemented

Develop an e-commerce offering MyLife.co.za to be launched in

September 2000

Structures to deliver offshore products

New structures to enhance offshore products are being implemented

Develop an e-commerce offering MyLife.co.za to be launched in

September 2000

ProspectsProspects

FSV profits for the second half of the

year are dependant upon the

performance of the investment markets

Revenue earnings on shareholders’

funds are dependant upon deployment

of cash

Embedded value is also geared to

investment markets

FSV profits for the second half of the

year are dependant upon the

performance of the investment markets

Revenue earnings on shareholders’

funds are dependant upon deployment

of cash

Embedded value is also geared to

investment markets

ConclusionConclusion Good progress on issues under

management control New business Bancassurance Management of in-force business CRM and customer service Relative investment performance Recruitment

Good progress on issues under management control

New business Bancassurance Management of in-force business CRM and customer service Relative investment performance Recruitment

ConclusionConclusion Focus on financial services further

improved

Employment of capital a priority

Ready for upturn in markets

Focus on financial services further improved

Employment of capital a priority

Ready for upturn in markets

QuestionsQuestions