Old Mutual (OMU) CMD 2025 summary

Strategic priorities and operating model

• Two-phase strategy: value unlock through cost efficiency, margin recovery, and capital discipline, followed by growth via market share gains and new business lines.

• Operating model devolves accountability to business clusters, with two new segments: Life & Savings and Banking, and a leaner corporate center.

• Strategic priorities include cost savings, disciplined capital allocation, digital transformation, leveraging data/AI, and driving competitiveness in South Africa.

• Integrated execution model uses digital, data, AI, and rewards to enhance customer engagement and operational efficiency.

• Regular progress updates and clear performance targets for each business unit, with accountability and incentives aligned to delivery.

Financial targets and capital allocation

• Medium-term targets: RoGEV 14%-16%, dividend per share growth 6%-9% (rolling 3-year), own funds/RONAV 15%-17%, VNB margin 2%-3%, and underwriting margin 5%-8%.

• R2.5bn cost savings targeted by FY2027 (10% reduction on 2024 base), with at least R1bn by end-2026.

• Capital allocation follows a horizon-based approach, prioritizing shareholder returns (dividends, buybacks) in value unlock phase, with selective growth investments as performance improves.

• Shareholder distributions since FY2022 total R16.6bn, with strong cash generation and a share price trading at a 27% discount to GEV per share as of September 2025.

• Recent actions include a R3bn share buyback and the acquisition of 10X Investments (R2.2bn EV), with completion targeted for H1 2026.

Business developments and growth initiatives

• OM Bank launched as a digital-first, cloud-native bank, with over 150,000 customers and rapid daily sign-ups; targeting break-even at 2.5–3m customers by FY2028.

• Bank leverages lending expertise, branch network, and rewards program to attract younger customers and drive cross-sell opportunities.

• Acquisition of Two Mountains adds integrated funeral services and micro-insurance, enhancing persistency and value in the mass market.

• OM Rewards program drives customer retention and cross-sell, with 7–10% persistency improvement and 90% of bank customers enrolled.

• Old Mutual Insure maintains a top 3 market position, focusing on direct/digital growth, cost efficiencies, and advanced analytics.