Old Mutual is hosting a showcase for investors ahead of the primary listing of its emerging markets businesses as Old Mutual Limited (OML) on the Johannesburg Stock Exchange (JSE) next year.
The showcase includes an update on Old Mutual plc’s managed separation strategy, and an introduction to the businesses within OML, including an overview of Nedbank, growth prospects, governance structures, historic financial performance, and risk and capital management of the Emerging Markets business.
It has been agreed that subsequent to the unbundling of the majority of Old Mutual’s shareholding in Nedbank, the remaining minority holding of Nedbank by OML will be 19,9%, as a foundation for the continued strategic relationship between the two entities.
In his presentation, Peter Moyo, CEO-designate of OML, will highlight the company’s opportunities as a standalone public company.
“OML’s listing on the JSE — as well as stock exchanges in London, Malawi, Namibia and Zimbabwe — is designed to unlock shareholder value,” he says. “OML will continue to contribute positively to the socioeconomic development of our chosen geographies and markets.”
Moyo says OML can become a premium African financial services group given its existing strengths and market positions, particularly through its franchises in South Africa and elsewhere in sub-Saharan Africa. It produces sustained high cash generation from its businesses and there are substantial business improvement and cost efficiency opportunities.
“This is a solid business with good capital strength,” he adds. “We have strong positions in key segments, underpinned by a breadth of product offerings, and multi-channel distribution. Furthermore, we see substantial opportunities to drive growth through operational leverage and efficiencies and an enhanced and simplified customer experience.”
Growth opportunities include the underpenetrated East and West African markets, the turnaround of the Wealth and Investment cluster and continued improvement in Old Mutual Insure.
Traditional financial services penetration in East and West Africa is low but is expected to rise due to high GDP and population growth rates. There is also the opportunity to use technology to accelerate economic development.
“Across Africa we have a strong and experienced management team to lead the business and build long term value. It is a priority to continue to focus on attracting the best people to the business.
“In short, we have a clear strategy set out in our eight ‘battlegrounds’ to: firstly, consolidate and grow our position where we are market leaders; secondly, turn around key underperforming businesses; and also build long-term competitive advantage by winning the war for talent, refreshing our technology offering and driving cost efficiencies,” Moyo says.
He is confident that, by meeting crucial needs in customers’ lives and contributing to their financial wellbeing through a broad range of value propositions and a multi-channel network, OML can create value for shareholders.
“It is all about focus, discipline and delivery. Our reshaped Exco is firmly focused on enhancing efficiency with customer-facing leadership reporting directly to me. We have also established a robust Board ahead of listing and now have the skills and expertise needed for a listed environment,” Moyo adds.