| Thu 8 Mar 2012, 9:08 | | OML - OLD MUTUAL plc - Update on Proposed Sale of Old Mutual`s Nordic Business |
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OML
OLOML
OML - OLD MUTUAL plc - Update on Proposed Sale of Old Mutual`s Nordic Business
OLD MUTUAL plc
Issuer code: OLOML
JSE Share code: OML
NSX share code: OLM
ISIN: GB0007389926
Old Mutual plc
Ref 15/12
8 March 2012
Update on Proposed Sale of Old Mutual`s Nordic Business
Old Mutual plc ("Old Mutual") announced on 15 December 2011 that it had entered
into an agreement to sell its Nordic business, comprising Old Mutual`s long-term
savings and banking operations in Sweden, Denmark and Norway, to Skandia Liv
(the "Disposal").
Old Mutual welcomes the announcement this morning of regulatory approval for the
Disposal from the Swedish Financial Supervisory Authority. Danish regulatory
approval for the sale was confirmed on 2 March 2012.
Completion of the Disposal now remains conditional only on approval by Old
Mutual shareholders at the General Meeting on 14 March 2012. Subject to that
approval being given, completion of the sale is expected to occur on or around
21 March 2012.
We have today also announced a trading update on the Nordic business, which
confirms that it has continued to benefit from its product depth and good
operational performance. The trading statement is set out in the Appendix to
this announcement.
As previously indicated, Nordic will be treated for accounting purposes as
"held for sale" in our 2011 preliminary results, which will be released
tomorrow. It will thus be excluded from Adjusted Operating Profit and reported
under IFRS. We will also report on our cost savings and RoE targets excluding
Nordic going forward.
Enquiries
External Communications / Investor Relations
Patrick Bowes +44 (0)20 7002 7440
Kelly de Kock +27 (0)21 509 8709
Media
William Baldwin-Charles +44 (0)20 7002 7133
Sponsor:
Merrill Lynch SA (Pty) Limited
Notes to Editors
Old Mutual
Old Mutual is an international long-term savings, protection and investment
Group. Originating in South Africa in 1845, the Group provides life assurance,
asset management, banking and general insurance to more than 15 million
customers in Europe, the Americas, Africa and Asia. Old Mutual is listed on the
London Stock Exchange and the Johannesburg Stock Exchange, among others.
In the year ended 31 December 2010, the Group reported adjusted operating profit
before tax of GBP1.5 billion (on an IFRS basis) and had GBP309 billion of funds
under management from core operations, and shareholders` equity of GBP9.0
billion.
For further information on Old Mutual plc, please visit the corporate website at
www.oldmutual.com
Appendix - Nordic Trading Statement for the year ended 31 December 2011
Discontinued business - Nordic
Despite the turbulent stock markets and a number of one-off costs, the Nordic
business had a robust underlying IFRS AOP result. A cost reduction programme was
implemented during the year and the management team has refocused the business
on delivering its key priorities, namely:
Strengthening distribution power
Improving the product offering to customers
Stimulating future growth in net client cash flow
Increasing operational efficiency to secure profitable growth
Optimising structures and risk frameworks to unlock value.
Product development has been accelerated with the release of the Depa pension
product and a bank investment savings account.
According to customer surveys, Skandiabanken had the most satisfied banking
customers for the tenth year in a row and was also nominated for best customer
service in Norway in 2011.
Net client cash flow and funds under management
NCCF decreased 3% to SEK7.2 billion, driven by higher surrenders in the
occupational pension business and outflows from the bank offering. The increased
outflows in Skandiabanken were primarily driven by customers seeking lower-risk
investments, such as deposit accounts. Skandiabanken Sweden retail deposits
grew, which are not included in NCCF, to SEK33.1 billion.
Funds under management (FUM) reduced by 8% to SEK134.3 billion at the year-end,
with negative market movements partially offset by positive NCCF. The stock
market recovery during the fourth quarter had a positive impact on FUM.
Sales
APE sales rose 6% to SEK2,381 million, driven by strong sales in Denmark as a
result of attractive products and continued distribution growth via the Tied
Agents sales force. Swedish APE sales were 5% down, with lower Corporate sales.
Corporate business growth was held back by the delay in launching the
occupational pension version of the Depa product and the current market
conditions, which favour products with guarantees.
Mutual fund sales were up 1% to SEK6,553 million, with customers transferring
assets to the low risk and popular Skandia interest-earning funds.
IFRS AOP results
IFRS AOP (pre-tax) was down 16% to SEK1,036 million (2010:SEK1,227 million). The
2010 result included one-off income of SEK126 million related to a divestment of
a private equity holding and restructuring costs of SEK49 million. The 2011
result includes several one-off costs totalling SEK281 million, including IT
costs. Excluding all one-off items, the underlying profit was SEK1,317 million
(2010: SEK1,150 million) - a robust result in a challenging economic climate.
MCEV results
Operating MCEV earnings after tax increased to SEK1,336 million (2010: SEK503
million), primarily due to growth in existing business contribution, strong new
business value and a strengthening of operating assumptions in 2010 that
negatively impacted 2010 earnings. Operating MCEV earnings included two one-off
effects, a restructuring expense from the ongoing redundancy programme and a
change in the modelling of tax on overhead expenses. Without these two non-
recurring effects, operating MCEV earnings after tax would have been SEK1,482
million.
The value of new business increased 27% to SEK584 million, driven by positive
new sales in Skandia Link Denmark. The APE margin increased from 21% to 25%, due
to a more profitable product mix.
Date: 08/03/2012 09:08:01 Produced by the JSE SENS Department.
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