OLD MUTUAL LIMITED - Operating Update for the 3 Months ended 31 March 2019

Operating Update for the 3 Months ended 31 March 2019

Old Mutual Limited
Incorporated in the Republic of South Africa
Registration number: 2017/235138/06
ISIN: ZAE000255360
LEI: 213800MON84ZWWPQCN47
JSE Share Code: OMU
NSX Share Code: OMM
MSE Share Code: OMU
ZSE Share Code: OMU
("Old Mutual" or “Company” or “Group”)


Ref 25/19
24 May 2019

OPERATING UPDATE FOR THE 3 MONTHS ENDED 31 MARCH 2019


Operating environment
In South Africa, our largest market, the economic environment remains challenging
with low economic growth and rising fuel prices expected to place further pressure
on our customers’ disposable income levels. During the first 3 months of 2019,
the JSE delivered its best first quarter since 2007 with the ALSI rising 7.1%
reflecting the strong performance of resource and industrial sectors. Whilst
equity markets in South Africa are up from December 2018 the absolute levels are
still below where they were in the first quarter last year, placing pressure on
earnings.


In Zimbabwe, the equity markets remain volatile, decreasing 17% since the
beginning of the year. Inflation reached 67% at the end of March 2019, reflecting
the increased cost of imports. Our customers’ in this market are impacted by the
rising inflation and the resultant impact thereof on their disposable income
levels. On 20 February 2019 the Reserve Bank of Zimbabwe announced that RTGS had
been recognised as an official currency and established an inter-bank foreign
exchange market to allow trading between RTGS and other currencies. At the end
of March 2019, the RTGS was trading at 3.01 to the USD dollar.


Financial performance
Despite the challenging economic environment the business continues to attract
new business from customers. Life APE sales of R2,945 million were 4% ahead of
prior year largely due to higher recurring premium SuperFund sales in Old Mutual
Corporate.


Gross flows of R39.3 billion were 10% behind prior year due to lower flows in
Wealth and Investments and lower single premium sales in Old Mutual Corporate.
NCCF in the first quarter of 2019 was negative (-R1.1 billion) mainly reflecting
lower net flows in Wealth and Investments.


Funds under Management was up from December 2018 at R1,084 billion in line with
equity market returns in South Africa.
Corporate activity
The sale of our business in Latin America completed on 1 April 2019, with gross
proceeds of R4.4 billion ($308 million) received. The associated costs are
expected to be approximately $40 million. We expect to realise an IFRS profit on
the disposal of this business.

We have repurchased shares under the share repurchase programme announced on 11
March 2019. The price at which shares were repurchased ranged from 2,222 to 2,313
cents. The shares repurchased will be cancelled and revert to authorised but
unissued share capital. Following the shares repurchased to date the Group will
have 4,831,264,848 ordinary shares in issue.

Outlook
Our RFO target of GDP + 2% CAGR will become increasingly challenging to achieve
over the three year target period due to negative RFO growth in 2018. If poor
economic conditions persist during 2019 in our key markets, this will further
challenge the achievement of this target. We remain on track to deliver on our
other medium term targets.

We anticipate making a further operating update ahead of the publication of our
2019 Interim Results announcement on 2 September 2019.

This update for the 3 months ended 31 March 2019 has not been audited or reviewed
by the Group’s auditors.

Sandton

Sponsors
JSE                           Merrill Lynch South Africa (Pty) Limited
Namibia                       PSG Wealth Management (Namibia) (Proprietary)
                              Limited
Zimbabwe                      Imara Capital Zimbabwe plc
Malawi                        Stockbrokers Malawi Limited

Enquiries

Investor Relations
Sizwe Ndlovu                  T: +27 (0)11 217 1163
Head of Investor Relations    E: tndlovu6@oldmutual.com
Communications
Tabby Tsengiwe                T: +27 (11) 217 1953
Head of Communications        M: +27 (0)60 547 4947
                              E: ttsengiwe@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
markets 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
170 years of heritage across sub-Saharan Africa, we are a crucial part of the
communities we serve and broader society on the continent.
For further information on Old Mutual, and its underlying businesses, please
visit the corporate website at www.oldmutual.com.

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