Psg Financial Services Limited · JSE:KST
Psg Financial Services — PSG Konsult — UBS Financial Services Conference 2016
30 slides from Psg Financial Services's conference presentation, Oct 13, 2016
Slide 1: UBS Financial Services Conference
Francois Gouws UBS Financial Services Conference 13 October 2016
Slide 2: Contents
Contents 1. Overview 2. Divisions 3. PSG advisers using technology 4. Conclusion 2
Slide 3: 01 Overview
01 | Overview GS PsG
Slide 4: PSG Structure
PSG Structure PSG Group Other 61.3% 38.7% PSG Wealth* PSG Asset Management PSG Insure** 100% 100% 100% * Includes PSG Employee Benefits ** Includes Western National Insurance As at 31 August 2016 Copyright © PSG 4
Slide 5: A great company
A great company Wealthy clients serviced where they reside 207 Adviser offices 738 Advisers No. of advisers• 193 offices H1 2014 H1 2015 H1 2016 H1 2017 PSG Wealth • 618391advisers 419 443 505 PSG Insure • 150219000+ 210 clients 224 233 Total 610 629 667 738 Source: PSG Distribution 5
Slide 6: Business characteristics
Business characteristics • Equity market dependent • Administration businesses - people / systems dependent • Not very balance sheet intensive • Free cash flow generative • Vulnerable to regulatory change 6
Slide 7: 02 Divisions
02 | Divisions GOPsG
Slide 8: Key macro indicators
Key macro indicators Weakening economic environment H1 H1 H1 H1 Key indicators %∆ %∆ %∆ 2014 2015 2016 2017 Rand / US$ 10.3 3.8% 10.7 24.5% 13.3 10.9% 14.7 Cash Index – STeFI Call 289 5.5% 305 6.4% 325 7.0% 348 All Bond Index 420 11.7% 469 5.4% 494 4.5% 516 SA Property Index 479 12.3% 538 20.1% 646
Slide 9: H1 2017 financial results overview
H1 2017 financial results overview H1 2014 H1 2015 H1 2016 H1 2017 Consolidated results %Δ %Δ %Δ Rm Rm Rm Rm Headline earnings 109 34% 145 28% 187 15% 214 Recurring headline earnings 109 36% 147 27% 187 15% 214 Weighted average no. of shares (millions) 1,221 3% 1,260 1% 1,267 2% 1,290 HEPS (Cents) 8
Slide 10: Headline earnings by division
Headline earnings by division H1 H1 H1 H1 Headline earnings* 2014 %∆ 2015 %∆ 2016 %∆ 2017 Rm Rm Rm Rm Wealth 71 32% 94 28% 120 17% 141 Asset Management 21 63% 34 37% 46 2% 47 Insure 17 4% 17 16% 21 29% 26 Total 109 34% 145 28% 187 15% 214 * Includes amortisation of intangibles of H1 2017: R21m (H1 2
Slide 11: Wealth
Wealth Excellence in products and services Net Flows (Rm) Year-on-year Wealth managed asset net flows ALSI Independent process %∆ -13% 39% -23% -10% 19% 25% with advisers’ 9 000 8 176 7 971 oversight 8 000 55 000 7 000 6 580 2256 6 553 6 154 3580 45 000 6 000 5 744 991 5 516 1853 1138 Rapid growth i
Slide 12: Asset management
Asset management ‘Brick by Brick’ strategy Net Flows (Rm) Year-on-year single managed net flows ALSI %∆ 128% 137% -93% 591% -40% -166% Long-term assets 6 000 5 658 (retail emphasis) 5 000 930 55 000 1 028 4 000 45 000 2 599 3 000 2 390 625 1 548 Getting adequate 2 000 1 048 201 35 000 3 700 376 marg
Slide 13: Asset management
Asset management Solid long-term track record Single manager 1-month 3-months 6-months 1-year 3-year 5-year 10-year Performance funds rank rank rank rank rank rank rank Rank 11 13 10 6 8 13 5 1st Quartile PSG Flexible Return 2.0% 1.1% 9.2% 11.0% 13.4% 16.2% 14.7% 2nd Quartile 3rd Quartile Rank 21 8
Slide 14: Gross written premium
Insure Grow gross written premium income PSG Insure gross written premium (Rm) %∆ 10% 4% 10% 7% 7% 4% Top advisers 2 000 1 800 1 763 1 693 1 587 1 600 1 483 482 Gross written premium 1 325 478 1 400 1 299 463 Excellence in 1 200 1 186 432 363 underwriting 271 347 405 415 1 000 386 362 800 320 342 31
Slide 15: Underwriting margin
Western National Insurance Insurance results %∆ -12% 37% -28% 69% -5% 31% 40.0 15.0% Key differentiators • Personalised service to 35.0 10.0% 6.8 10.0% brokers 7.8% 7.3% Focus on commercial 30.0 6.6% • 5.7% business 6.2% 5.0% 25.0 Underwriting margin 6.6 Net insurance result 3.7% 6.7 4.1 20.0 0.0% 1
Slide 16: Reducing risk, recurring revenues, margin enhancing
Reducing risk Recurring revenues Margin enhancing Risk vs return H1 14 H1 15 H1 16 H1 17 H1 14 H1 15 H1 16 H1 17 H1 14 H1 15 H1 16 H1 17 Perf fees/HE 10.2% 7.0% 7.5% 6.6% Op margin 13.0% 14.1% 14.2% 14.3% ROE 23.8% 24.0% 23.9% 22.9% Recurring HEPS 8.9c 11.7c 14.7c 16.6c Op margin 11.8% 13.5% 13.4% 1
Slide 17: 03 PSG advisers using technology
03 | PSG advisers using technology 17
Slide 18: Client strategy
Client strategy Our clients must have a choice on how they want to deal with us PSG Wealth Direct 18
Slide 19: Growing our Wealth adviser base
Growing our Wealth adviser base Consistent growth in our advisers over the long term %∆ 38% 27% 4% 11% 1% 5% 2% 6% 7% 11% 10%* 500 400 300 505 480 434 200 384 406 354 359 376 307 318 242 100 176 0 FY 2006 FY 2007 FY 2008 FY 2009 FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 H1 FY 2017 * An
Slide 20: myPractice
myPractice Client flow Clients Advisers Platform Functions Astute Transact Face-to-face Ski Statements Research www.psg.co.za myPractice Legal & Watchlists Nutcracker Compliance Information Reports & Systems iComply Analysis Call centre Marketing BlendIT Communicate Training www. Source: myPractice
Slide 21: myPractice
myPractice Adviser dashboard Smith, John PGK800384742 Adams, Luke 200948271358 Adams, Luke HHF335 Adams, Luke 1998437 Adams, Luke 0846804 Adams, Luke Copyright © PSG Source: myPractice 21
Slide 22: myPSG
myPSG Secure transactional site WELCOME BACK JOHN SMITH 200948271358 SMITH, JOHN 1998437 SMITH, JOHN 0846804 SMITH, JOHN Smith, John PGK800384742 Smith, John 0846804 Smith, John 1998437 Smith, John 200948271358 Smith, John HHF335 Copyright © PSG Source: myPractice 22
Slide 23: myPSG
myPSG Mobile site FundsAtWork Provident Fund Provident Fund 2133838523 R 711 835.12 Local Share Portfolio 3958587324 R 1 257 262.58 Retirement Annuity PSG Wealth 3958693204 R 231 588.50 SSF Portfolio Source: myPractice 23
Slide 24: myPractice stats
myPractice stats Providing access to the broadest range of financial services’ products Platforms Available Number Linked Investment Service Providers (“LISP’s”) 12 Management Companies (“Manco’s”) 15 Products & Funds Available Number Investment funds 2 055 Investment products 734 Life & Risk produc
Slide 25: Platform metrics
Platform metrics A non-exhaustive list of how we manage our platforms Business Growth Capacity Revenue growth Total headcount Net flows/premium growth Volumes per person No. of clients/contracts Calls/emails per person New or repeat business Leave days taken Margin analysis No. of claims/redemptions
Slide 26: Growing our Wealth operating margin
Growing our Wealth operating margin 2 500 25.0% 22.4% 20.6% 2 000 20.0% 18.3% 1 500 15.0% 1 000 1 973 10.0% 1 684 1 476 500 5.0% 0 0.0% FY14 FY15 FY16 Revenue Operating Margin Source: 2016 PSG Konsult Integrated Report 26
Slide 27: 04 Conclusion
04 Conclusion GS PsG copyrig 27
Slide 28: TRI of PSG Konsult
TRI of PSG Konsult PSG Konsult performed better than JSE ALSI during tough times (in USD terms) Investment of R100 000 in PSG Konsult shares on 11 April 2005, and reinvesting all dividends received (net of DWT) and other distributions over period vs R100 000 invested on JSE ALSI Annual Annual JSE AL
Slide 29: Conclusion
Conclusion • PSG is a growing financial services company • IT is a critical lever in operational management and achieving growth • Real-time data access allows for swift management of clients 29
Slide 30: END | thank you
END | thank you Affiliates of the PSG Konsult Group are authorised financial services providers. SO) P SG Copyright © psc konsult Led