Old Mutual Ltd

Good morning everyone and thank you for joining us today for the 2025 annual result presentation for the period ended on the 1st December 2025. My name is Langa Manwale. I'm the head of investor relations for Oil Mutual Group. On behalf of our board and the management team, I would like to extend a warm welcome to you all. I would now just ask that we check our devices, make sure that we are not interrupting ourselves. Happy for you to put them on mute. And at this stage, you should be seeing a QR code displayed on the screen that shows you where you can download our results. All our results are now available, including this annual presentation, as well as our annual reporting suite are available online. On the agenda for today is Casper Murray, our Group CEO, Yuri Stradom, and Casper Trotsky will take us through the presentation. We will kick off with Yuri giving us the highlights for the results, as well as the CEO review. He will be shortly followed by the Group CFO, Casper, who will provide us with a financial review. After that, Yuri will return to the stage to give us his outlook and the concluded message. At that point, I will return here on the stage to facilitate the Q&A session. With that, I now hand over to Yuri. Thank you. Thank you.

Good morning, everyone. It's great to be with you this morning. It's great to have our investors, our investor community with us. It's my first annual results presentation for Mutual. I say this is the last of the first. We did the first interims and the first Capital Markets Day. Now it's my first annual results presentation. So just a great privilege and a joy to be here with you. I want to do a couple of things this morning before I hand over to Kasper. The first will be we'll talk about the highlights of the performance for the 25th year. I want to do a little bit of a recap on strategy to just take you a little bit back to the capital markets day and just to track back so that you can kind of locate the performance of the business and our outlook. in terms of that performance, and then I'll get in terms of that strategy, and then we'll get into the cluster performances. But before I do that, I do just want to acknowledge that this is a very big day for Old Mutual, and it's not because this is my first annual results presentation. It's actually that today we announce the retirement of our chairman, Mr. Trevor Manuel, who turned 70 this year. Trevor will be retiring at the AGM on the 5th of June. And we will have lots of opportunity to really pay tribute to the impact and the leadership that Trevor has had in this business. Suffice to say that for me as a non-executive director, first working with Mr. Trevor Manuel and witnessing his leadership and his integrity and his example and his work ethic as a non-exec, and then concisioning into an executive position as chief executive with him as my chairman, has really been one of the highlights of my career. So we'll have an opportunity to pay tribute and to say the things we need to say, but at this stage, just to pay tribute to him, and also then to turn towards Mr. Roger Jardine, who's been announced as chairman-designate of All Mutual. So Roger joined our board in September last year. We've had an opportunity as a management team to sort of start interacting with him in that capacity. But of course, Roger comes to us with an extraordinary pedigree, both as an executive and as a non-executive, and as a chair of some of South Africa's finest companies. And so it is a great privilege for us. I was reflecting on mutual as an institution. to be able to have as your chairs, as successive chairs, two leaders, I think probably two of the highest calibrated leaders in South Africa, I think is just an extraordinary privilege. And we're delighted. So looking forward to that transition that will happen over the next coming months and will culminate in the AGM. And please join me in welcoming Roger into that chairman-designate seat. So moving on to results. I wanted to just spend a few moments talking about the most important metrics that we, in particular, the ones that we've highlighted in our medium-term targets as the key things we're going to pin our success on going forward. Under value maximization, which is ROGV and cash generation, dividend growth, you'd see growth in dividend in the group equity value per share of 2% up to 19, around 80. So that is 7% up, actually, from where we were at the half-year. impacted, of course, by some of the changes that we had, the impact on embedded value with the corner change, the cost of non-hageable risk, and persistency changes, the persistency assumption changes. But what has come through on the positives up to that 1980 was the impact of non-covered business, old mutual wealth, and old mutual insurer coming through that performance. Importantly, on the capital front, we initiated a R3 billion buyback, which we announced in September. We have announced there that we've covered $0.7 billion up until the end of 2025. But in fact, up until yesterday, we've executed $1.3 billion. So the outlook for that is, of course, the trading mandate that we have and the execution of the buyback depends on where we trade as a share and relative to our GEV. It gets reset on GEV per share and is extended until the end of the year. So we'll be following through on the implementation of that buyback as market conditions allow. I think just looking at the performance in some of the other areas, particularly efficiency and competitiveness, You can see there's 6.8% underwriting margin in Omishi Insure. That's within our range that we've set to the markets. If you actually go back and you go and look at the detail, you'll see that there was a once-off exceptional provision in an OMRT sell, which of course is our sell captive business, so not really reflective of our core operations. And if you allow for that, you get to an underwriting margin of 8.3% for the year. And so actually a strong underwriting performance, and I think underscores our thesis that that business has undergone a significant turnaround in operating performance and in actual and other controls. I think the big adjustment that we've done this year is the VNB and VNB margin. You see the VNB margin 1.2%. We announced a 1.4% VNB margin in June. And that was really off the back of those persistency assumption changes and the corner change. It's also been impacted by lower guaranteed annuity volumes, which, of course, is an industry phenomenon. But really, this is the area which is getting the most intense management focus, and it is the KPI that we are most focused on in our life and savings business in particular to drive that back up to the 2% to 3% range. On Rona, 15.2%, but fully acknowledging, of course, as with our peers, that being boosted by market returns and on a normalized basis still below that range of 15% to 17%. But before I get into the clusters, I do want to just do a little bit of a recap of where we were at the Capital Markets Day and the progress that we've made as a group since then. I think just to take you back to our strategic priorities, we always start with this. We acknowledge the imperative of unlocking value for the group, that there is a latent potential and a latent value here that needs to be unlocked, and in particular just driving the competitiveness of our South African businesses and really an execution story, which I'll get to in a second. I think further in South Africa looking at then generating growth, keep establishing the right to win of OM Bank. I think one's got to see the two phases as being not just sequential, but actually they are concurrent to a degree because the very things that you're doing to execute well, to drive competitiveness, are the things that ultimately create your growth engines for the future. And so we are orientated as a group, not just to unlocking value, but also to actually simultaneously generating growth and in particular regaining some of the market share that we think we're able to recover in South Africa and of course on the continent. Speaking of the continent, we really divided the continent into two. The one was Southern Africa and looking at our imperative to build profitable scale in the Southern African markets. We've been in those markets for a long time. We understand them well. Our brand is very well represented and understood and a love brand and really about building more profitable scale and getting better returns and margins there. And distinguishing that, you know, in East and West Africa, which are growth markets for us, we see the potential in those markets. We think long-term, certainly there's a place for our mutual to succeed, but we do need to earn the right to deploy further capital there, and that comes from improved margins and returns in each of those markets. Along with the strategic focus areas, we talked about our medium-term targets. I think if there's one slide that almost all mutualites can talk to, it's probably this slide. It's one that has driven a lot of the work that we've done as a group over the last six months in terms of how we've organized ourselves and then ultimately into our targets and incentives. And I'll get back to that in a moment. My outlook slide at the end, I will return to the slide and I will give you a sense on where we are, how to understand our numbers for financial year 25 and where we are in terms of executing to getting into those medium term targets. We have completed our operating model changes. You'll recall the move towards end-to-end accountability for businesses, bringing together distribution, operations, and product into business units where those trade-offs can be made and competitiveness can be driven. So we've completed that. We've started creating a leaner corporate center where we're much clearer on what our focus is at the center. That focus really is on governance, risk, and in particular capital. Type principle, we talked about type versus loose principles, which define how we work between the center and the clusters. And being clear that corporate strategy is about the stewardship of capital and where we play. Business strategy is about how we compete in every segment and really empowering clusters to compete through a business strategy that's appropriate to where they play. The cost savings target, of course, an important part of that execution, and I'll get back to that a bit later, but just suffice to say the $2.5 billion cost savings commitment that we made, equivalent to 10% of our operating cost for 2024. We've really clarified and internally been through a process of using the structures, using the targeting process to be able to cascade those targets now into the group. I am confident that the ownership of those targets is now much more deeply embedded into the organization. We have made progress in this year. We've saved 450 million of the 2.5 in 2025. So we are well on our way. But of course, 2026 is a year of significant execution of this commitment. When we do this, we bake in an underlying base contribution from, of course, from all clusters. but we do also look and benchmark where each cluster is against their peer group. And so on that basis, and I think a very rigorous piece of work, we've now landed on a set of targets that we think are going to be executable for us. On our capital horizons, just again pointing out that we remain, and we'll continue to track this and show you this, we remain, if on a normalized basis, below the 15% to 17% range, and that is because even though we're reporting the 15.2%, the 12.4% is actually when you normalize for excess investment returns. What that means is while we are in Horizon 1, our commitment is just to prioritize shareholder distributions until we are able to move into Horizon 2 and 3, where other opportunities to grow capital can be considered. We'll only consider deployments of capital and acquisitions that are really tightly coupled to strategy and are time-sensitive. So just to kind of be clear with you on the milestones of execution, and you will see a repeat of this when I talk to you at interims and at results next year, you're going to see us tracking these KPIs. And it's essentially around the cost savings and being – we will be communicating in a very simplified way the way we've done now as to what we mean by cost savings against the 2024 base. And it is net of increases above – of any other increases in cost and other investments above inflation. We've made the full 50 million savings of which half of that about was at the centre. I'm very pleased with the progress in the creation of the Life and Savings Cluster. We have made some very significant moves, but I can see already in this year the management team is able to start really taking ownership and executing. I think there's clear accountability. There's work to be done. We have delivered on management actions and are delivering new business quality collections, system implementations, and we're firmly orientated towards regaining market share. This is something which does not, it doesn't turn in a matter of three months. It is a piece of work that requires foundational change, but we're confident the changes we're making will translate ultimately into those results. On the bank, we're pleased with the progress with the bank. As I said to you, we talked about establishing the right to win for IM Bank. We went live in September last year. We are gaining traction with customer numbers. It is too early to report revenue numbers to you. The journey there is about building a customer base and then driving increasing customer activity and traction. and we're also well on our way in terms of the integration of OM Finance and OM Bank. Those businesses are working together, and OM Finance has already played a significant role in the distribution strategy for OM Bank, as we'll get to in a moment. And then finally, stewardship on capital. So from an operational point of view, just to touch on a few of the key points, the life and savings, the big story, of course, impacted in volumes by the guaranteed annuity, shift in the markets, a lot of bond yields, which impacted everybody. I think we've picked up some good volumes on the non-covered side in OM Wealth. The big call out, of course, is the impact on VNB of those margin changes and of the guaranteed annuity sales. So this is the big focus area for us. It's not new news from half year, but it is the position as we explained it at that point, but it requires us to take urgent action and is a key KPI for us returning that row give into the 14% to 16% range. On life and savings, I think just calling out from a risk point of view, a good growth in the mass and foundation markets, so 15% growth in retail risk sales there. We're working on quality of new business and efficiencies, of course. Persistency is a big piece, but we remain the largest advisor-led model in the market and really a very significant presence in the mass market. On personal finance, some early green shoots in risk sales improvements and in the gaining of market share, but really at this stage still somewhat overshadowed by the guaranteed and losing moves. So we will be watching that and driving those operational improvements that will in turn drive further market share gains in the year ahead. On wealth management, calling out this retail APE, comparable sales of 14% increase, and life APE of 18%. So pleased with that. And I'll meet for corporate, also just calling out significantly improved retention, both at the member and at the client level, which is a key piece of continuing to build the AUM. So in this life and savings engine, you've got these kind of recurring premium, predominantly risk engines in Massive Foundation and PF. And then you've got these asset-based engines, which are wealth management and corporate. And so we see those complementing each other into the future. Muted growth in the core operations. Much of the growth, that 7% coming from one financial services, which was an excellent acquisition, which we did a number of years ago. Significant improvement in margins and in underwriting profits. You can see that the growth year on year from 6.2 to 6.8 at the margin level this year. And, of course, the 8.3 on a normalized basis. So we are pleased with the performance of that business. We think it is a business that is poised for market share growth. market share gains and we're now in the position we believe we've got the operational foundations to be able to drive stronger growth, particularly in the core operations. On the banking side, just pointing out really for the first time, I think you're starting to see and starting to show the bank numbers with the old mutual finance numbers. From a mutual finance perspective, just seeing that gross loan book and really improvement in credit loss ratio and in the net lending margin, which is pleasing. There has been a period of consolidation there. in our mutual finance, but we see we're starting to grow in loans and disbursements again, and in line with really growing our presence in the banking space. Here you can see that we may put the ROFOs together at a cluster level, but actually notwithstanding the increased investment in the bank, you can actually see on a net basis a lower loss for 2025, a smaller loss than in 2024, and so we look at these pieces together as we start to drive cluster profitability. But, of course, the bank is the big growth piece. And you can see there we've got a customer run rate now of about 3,000 a day. We have been, for now, still being significantly orientated towards old mutual customers. 46% of customers originated through the old mutual finance branch network. We've had 48% conversion of the active money account customer base. So that strategy has been working for us. We are in Q2, beginning our above-the-line marketing campaigns to the public. So we would expect to see a shift towards neutral, mutual customers or greater emphasis there, but pleased with the customer run rate and with the customer deposit numbers. But just to kind of reiterate, you know, the buildup of customer base is one thing, but the driving of activation and revenue, transactional volumes and credit, that's really the key. Those are the key tests. And 2026 and 2027, of course, for the bank are key years to be able to really establish that right to win. But I think we have been well vindicated in our strategy of putting this own bank business together with own finance. And we certainly are seeing the future of that coming through in the business. In own investments, I think a shout out just to celebrate passing one trillion threshold in AUM. And then in particular, calling out the alternatives business for another exceptional year. I mean, I think... Now, the private markets business is such an important part of the armory of a group like us, and I think we have unquestionably the leading franchise on the continent in this space. So we're delighted with the performance of this business. Just, you know, notable investments here. A five-year deal flow of $85 billion, exits of $31 billion, and you can see the CAGRs in AUM and in revenue there. You can see very, very significant on a five-year basis. So really building a very valuable business in that space. And then on all mutual Africa regions, just dividing the picture again between LIFE and PNC, very pleased, the 8% growth in LIFE APE, but particularly pleased with the pickup in BNB margin. I think when we spoke at interims, we were concerned about that. There were some pricing changes coming through and some portfolio changes in mix. So pleased with that. On the PNC side, still some work to be done. Of course, the premium numbers impacted by Nigeria and Tanzania that we disposed of. but in particular the margin. That's where there's been significant corrective action that's been taken already in the year, but we need to see those results coming through in the coming year. So with that, that's my brief cluster overview. I will be coming back a little bit later to talk to you about Outlook, but in the meantime, I'm going to hand back to Kasper.

Thank you, Yuri. I will now take us through the financial review, focusing on value, capital and earnings. And starting with value, Group Equity Value or GEV per share increased marginally to R19.80, with growth in value exceeding our distributions. While market performance improved and yields declined, These gains were offset by methodology and assumption changes. Our covered business embedded value was impacted by the reallocation of 2.8 billion in our mutual Africa regions from covered business to banking and lending business as we refined our methodology. This does not have an impact on total DEV but changes values between lines of business. The increase in valuations of our non-covered businesses were mainly driven by our mutual insurer and our mutual wealth, following continued improved performance. On a forward-looking basis, return on Group Equity Value, or ROGAV, is our primary measure of long-term shareholder value creation. Our ROGAV for 2025 is 4.1%. If we adjust for the impact of material methodology and assumption changes, our row gives would have been 10.1%. These impacts were almost entirely related to methodology and assumption changes that we had implemented during the first half of the year. These were the cost of the non-heasable risk charge, the change in valuation methodology for OM Bank, where we adjusted the valuation methodology to reflect the unlock of value as we meet critical rollout milestones, and the persistency basis change in mass and foundation. From 2026, we will be expanding our GEV disclosure with additional cluster level views and reconciliations. Our covered business embedded value reduced by 14% to $57.3 billion, following high capital and dividend outflows, as well as negative model and assumption changes. This included strengthening persistency assumptions in mass and foundation and personal finance and increasing the cost of non-hittable risk capital charge. This was partially offset by positive experience variances driven by mortality experienced in personal finance, all mutual corporate and mass and foundation. Economic variances reduced embedded value earnings with the return on embedded value earnings falling from 9.7% in 2024 to 7.8%. While market performance had a positive impact on embedded value earnings, this was more than offset by the significant reduction in particularly long-duration yields beyond the longest state's available instruments. It is also worth noting that we apply a market-consistent embedded value approach that uses the Prudential Authority yield curve. As really already mentioned, our South African life and salience business was the primary driver behind the decline in the group's value of new business. This was largely driven by the assumption and model changes I just described, as well as lower annuity and retirement fund umbrella sales. Recovering our VNB and VNB margin is a key focus area for us, and this is clearly reflected in the group's strategic priorities going forward. Moving to the contractual service margin, or CSM, this represents the store of future life profits for the bulk of our life business. Despite the reduction caused by significant assumption and model changes, the CSM still increased driven by new business value, interest and positive experience variances. Our actual allocation rate to profit was at the upper end of the expected range at 11%. Turning now to capital. Our systematic approach to capital management has not changed and it remains the foundation of our approach to value creation. Our focus remains on maintaining a resilient balance sheet and strong solvency levels underpinned by disciplined and efficient capital management. We expect cash remitted to be between 70% and 80% of adjusted headline earnings before optimizations and special dividends. Ongoing optimisation shows strong growth in cash emitted from subsidiaries, representing 123% of adjusted headland earnings, with a $6.1 billion contribution to discretionary capital. Our South African Life and Savings Cluster continues to be the leading contributor to cash generation for the group, with all mutual insurers turnaround in sustainable earnings, resulting in a healthy contribution. This then brings us to our discretionary capital balance, which almost doubled year on year due to the strong cash remittances mentioned before, net of dividends paid to shareholders. Our balance of $6.1 billion includes an expected capitalisation of OM Bank in 2026 and 2027 of $2 billion in line with our plans, with $2.3 billion permitted for the completion of the approved share buyback. The buyback program will continue for as long as it remains value-accretive to shareholders. Deployment of the remaining balance of discretionary capital of $1.8 billion will be guided by a Horizons-based approach to return to net asset value. The Group Shell Solvency Ratio of 162% remained well within the target range of 155 to 185%. There were two key drivers that reduced the Group Solvency Ratio. Firstly, there were significant market nuisance, particularly lower yields and higher prescribed equity shocks due to stronger equity markets. Secondly, We optimized our sources of capital. Our subordinated debt level reduced by $1.8 billion during 2025 as part of our strategy to smooth the debt maturity profile. And we initiated the $3 billion share buyback, which is fully recognized in the Solvency Ratio. The target range is set to ensure that we maintain sufficient solvency levels to withstand a 1 in 200 year stress event. The lower end of the target range serves as a point at which management increases monitoring and considers operational actions to support the solvency levels if the future outlook indicates downward pressure on coverage ratios. These ranges are set with subtle margins of safety, allowing us to manage our balance sheet efficiently across the cycle. This is evidenced by our non-share buyback and dividend growth well within our new medium-term target range of 69%, with continued strong capital remittances from our MLAATSA during 2025. Our strong capital position is supported by a gearing ratio of 14.2% at December 25, below our target range of 15 to 20%. This indicates capacity to raise further debt with our balance sheets supported by diverse sources of liquidity. We will continue to optimize our capital stack and gearing ratio to ensure the efficiency of our balance sheet. Our current year return on net asset value, or RONAV, of 15.2% is within our new medium term target range of 15 to 17%. Supported by earnings and ongoing balance sheet optimizations. Excluding higher than expected market returns, return on net asset value would have been 12.4%. Going forward, we are planning on adjusting our ROLEF targets to a more normalised target in line with our 2026 remuneration targets. RONAV will be normalised for sell the investment returns, adjusting for the difference between actual and expected market returns. This aligns with our value creation metrics, as Rogiev uses adjusted GEV earnings, which removes economic impacts, and our dividend growth rate is a rolling three year rate, which normalises across the cycle. Moving now to earnings. HE was up 26% per share, driven mainly by shareholder investment returns, where equity market performance in South Africa and Malawi was substantially above expected returns. Our 2025 earnings are significantly impacted by the elevated returns and performance in Malawi. We have provided detailed sensitivity analyses from the impacts of the Malawi business in our financial statements and results book. Assuming a devaluation of the Malawian kwacha of between 50 and 30%, the increase in adjusted headline earnings would have been between 11 and 16%. We continue to exclude our Zimbabwean business from adjusted headline earnings due to restrictions on accessing capital by way of dividends. Year-on-year IFRS profits was impacted by the reduction in earnings from Zimbabwe following the transition of Zimbabwe's functional currency from Zimbabwe Gold to the US Dollar in 2024. IFRS profits benefited from the non-recurrence of 2024 losses related to the impairment of our China business and the loss on sale of our Nigeria and Tanzania businesses. We have seen a continued upward trend in RFO even after our ongoing investment in OM Bank. RFO per share increased by 15%, supported by improved operating performance in all mutual life and savings and all mutual insure. Turning to the cluster-specific RFO performance and starting with all mutual life and savings, that's in foundation declined by 8%, partially due to the strengthening of long-term persistency basis on our federal book, which was partially offset by higher annual premium and cover increases on the in-force book, improved persistency outcomes against a stronger basis, growth in the risk in-force book, and higher investment returns. Personal finance RFO increased by 28% of a low base in 2024. primarily due to improved mortality and annuity longevity experience and better market growth and yield movements. This was partially offset by the impact of assumption changes, which included a persistency basis change. Wealth management profits increased by 12%, driven by the improved annuity revenue from increased average asset levels and non-commissioned expense growth below inflation. a little corporate RFO increased by 23%, supported by strong market conditions, an underwriting experience that continues to be positive and remains a significant contributor to the results from operations. Wilmotron ensures RFOs for excellent growth of 14% and is now contributing sustainably to the new RFO and is supported by good top-line growth, margin improvements and tight expense management. The underwriting margin and results from operations were both negatively impacted in the second half by the launch of an exceptional provision related to a third party sell in our mutual alternative risk transfer. We continue to see the benefits of our diversified our mutual investments business with consistent strong AUM growth supported by diversified revenue streams. Results from operations was down 8% largely due to lower non annuity revenue. This was driven by the prior year including exceptional fair value gains in our alternatives business and higher market musings on the credit portfolio and equity exposures in our specialised finance business. Non-annuity revenue is more volatile by nature but provides significant economic value through the investment cycle and is a major differentiator from our peer group. Local Africa's region's results benefited from elevated returns and performance in Malawi, with Malawi RFO more than doubling to over 1 billion. Results from operations in the east and west region increased by 54% due to improved performance in the non-insurance lines of business, with banking and lending results from operations improving by 51% due to the non-recurrence of the costing curve to right size of the Fululi business, and the consequent reduction of operating expenses in the current year. RFO also benefited from the exit, while last making Nigeria business in 2024. The next result from group activities no longer includes the investment in OM Bank, which is now reported under the OM Bank cluster. Going forward, cost savings will be tracked through a two-pronged approach, Firstly, savings will be evidenced through improvements in our key efficiency metrics as set out on the left of the slide. This includes ROGEV as the 2.5 billion expense savings target is incorporated into our December 2025 group equity value base. Secondly, we will track total savings by reconciling to our IFRS expense base in the financial statements from 2026. We will track and disclose net savings after a line for inflation and other costs to save future costs which are removed in the subsequent year. We will also adjust for business boundary items where we incur costs to generate future revenue. An example of this would be the acquisition of 10X. For the 2025 year, we achieved savings of $450 million on our total 2024 group expense base after accounting for inflation and $440 million of restructuring costs. Excluding the ones of restructuring costs, shareholder operational costs reduced by $246 million or 15% in 2025. Our next 176 costs increased due to the restructuring of the business in 2025. Going forward, next 176 will be managed as a portfolio by future growth and costs have been significantly rationalised. And with that, over to you, Yuriy.

Thanks, Kasper. I wanted to just close by returning to this, which I said is my favorite slide, becoming our favorite slide, which is really just anchoring everybody back towards our group targets and the achievement of those medium-term targets by KPI. So what we've got here is we've got the medium-term targets themselves, then we've got our financial year 25 reported numbers, and then what we've done is we've just normalized, and we're not creating a new normalized KPI, but what we just want to do is point out where we are from a run rate perspective in terms of the financial year 25 numbers, and then what are the leading KPIs of delivery. So let me first say I'm confident that as we have restructured our business, we've driven the right accountabilities, we've created incentives and targets that cascade. And 2026 really is the year into 2027 of delivery on what we're doing, becoming famous, as we say in Tunisia, becoming famous for doing what we say we're going to do. If you look at those ROGAV numbers, you see, yes, the 4.1% is what Casper reported, but also alluded to that 10.1% normalized, which is for those three very specific adjustments. Dividend per share, we're within range. RONAV is the other area that we are still outside of range at 12.4% when you allow for excess investment returns. and VNB margin, the other area we're outside of range. So if you look at those of where we're tracking, you can see, you know, the ground that needs to be covered in each of those KPIs where we are below target, and particularly in ROGEV, RONAV, and VNB margin. Now, the lead KPIs are really the things that we're signaling to you are the internal measures that we're using to track lead indicators of progress and which we're also going to be reporting to you as we go to milestone the execution of these priorities. So the delivery of the cost savings is clear and we'll be reporting on that on a net or inflation basis relative to 2024. Persistency variance is, of course, really key to see the importance of, to see the impact of the operational changes that we've made. Of course, we've changed our basis But relative to that basis now, what we want to do is to start generating positive persistency variances as a result of the actions that we're taking. New business volumes, of course, and the regaining of market share. As I said earlier, generating growth is not something that we're postponing to after the unlocking of value. Generating growth starts now. And the very same things that improve competitiveness in unlocking value are often the things that also will then drive your new business volumes. And then finally, traction with the OM Bank. customer base. So these are the things which we're going to be driving internally and which we'll be signposting and will be the kind of cadence of reporting to you and certainly starting at Interims. So with that, Langa, I'm going to hand back to you to take some questions.

Thank you Yuri and Kasper for efficiently moving us through the presentation. We will now move straight into the questions and answer session. Just as a reminder, I will first this time around take the questions that have already been submitted over at least our webcast link. Thank you very much for those who submitted the questions. So I will start there, read those questions, and I'll move back into the room. At this stage, may I just kindly ask that we all also just keep our devices still on flight mode so we don't interfere with the questions so we can hear everyone quite clearly. When we get to the Q&A, taking calls over the call, I will take just two questions per person, checking the time to make sure that we all have finished up efficiently. One more reminder for the cluster CEOs, when there is a question directed to you, may I kindly ask that you come up on stage. There is a rosy mic. Take the question. and then you may go back to your seat. Thank you very much. The first question came from Baron Gomo. That's JP Morgan. Baron would like to know, Yuri, how quickly can you move from the normalized runoff, the one that we've mentioned of 12.4, towards the target of 15 to 17? What are the top levers that you have to move the dial in the capital structure? Thank you.

So thanks, thanks, Baron. Yeah, so I mean, I think the levers that I highlighted in Baron that last slide really are, I mean, cost savings obviously is a key element to drop straight through to Ronav. Persistency also helps in the sense that you're keeping your business on the books, and that then results in, over time, a higher CSN release, and so that also drives Vonav. There's also, of course, a capital and NAV piece, which I think we can talk to you, and maybe I'll suggest, Kasper, you talk to that.

And not to forget that in the prior year we disposed a – a RONAV which excluded the bank costs. So that number includes the full bank costs. So as the bank recovers, we'll see quite a big uplift in the RONAV as we try and move the bank to profitability. But just to add that point and also to add that we then are continuing to work on the balance sheets to make sure that it's optimal, which will also assist RONAV. Once you've concluded the buyback, you know, that's really a big, big reduction in the NAV that we have as a base at this point.

Thank you very much, Kaspar. I think staying with the theme on capital stack, Sanamile from Sonac Bank Securities would like to know, can you please provide an update on the share buyback? I think, Yuri, you touched on it briefly. If you may just maybe voice it.

Yeah, just to reiterate, so we had at 31 December implemented 0.7 billion of the 3 billion. As of yesterday, that number was 1.3 billion. How it works is that we We execute on that depending on where the share price is trading over time relative to GEV. So it's dependent on that, the ability to execute. And we reset that based on published GEV. And so today's number will, of course, be then factored in. And that program runs until the end of the year.

Thank you very much, Yuri. Another question related to the capsule stack. This one is coming from Michael Chris, UBS. Michael is asking, could you please comment on the group solvency position, the sensitivity thereof to the equity market stress scenario?

Obviously the biggest sensitivity comes through OMLAXA, but there are also what we call non-operating entities. So any cash, any sort of cash that's sitting in these subsidiaries, those entities are treated as an equity shock. So we are quite sensitive to the equity risk premiums the systemic adjustment. That's sitting at the maximum at the moment. So Michael, I'm not expecting further pressure on solvency ratios because we are at the max. In fact, what we should be seeing is that equity is a systemic risk in coming down with the reason for in markets.

Thank you very much, Kasper. I'll now shift a little bit and take Brad Moorcroft from Peregrine. Brad would like to know a technical question. This one says, please explain the rationale for the new mass lapse reinsurance treaty. What impact did it have on self-insurance ratios? What is the annual cost of implementing this treaty?

Maybe let me just talk through the rationale. I think what we're seeing is that the actual credential shocks that we're required to apply are very onerous and therefore when you take reinsurance you get relief at quite a a good return on values. Our shop reduces, but it doesn't cost us a lot. This is the short answer.

Thank you very much Kaspar. We now shift to segments. Michael Christy submitted a question and he's asking specifically about OM Insure. my expression let me get it right says could you please give more color on on omen show underwriting margin in the second half which seems well below the target uh it's thicker for four percent seems to be cost related with an implied expense ratio above 46 so we would like to hand over the two tasks yes charles if you may please step over there thank you yes please

Thanks for the question, Michael. Your analysis is correct. So in H2, we have already spoken about the impairment that we needed to take in our self-captive business. and take a precautionary provision there in line with group accounting policies. So that was the bulk of the impact on – it's in the non-attributable expenses line that you see there, which, as you observe, was up some 40%. There was another three items. There was some technology project costs that we decided to expense, particularly some of our investments in Gen AI. Never quite sure what the long-term benefit of these things is going to turn out to be, so we've taken a conservative view there and taken out certain expenses and written them off in H2. And then the third most material item is as one financial services transitions out of a self-captive outsourced type of arrangement into its own license, it needed to build out certain capacities and staffing, and that has given us a one-time uplifting cost as we prepare for that new license migration. Thank you.

Thank you very much, Charles. Staying with this segment, I will now move on to Harry Porter from the Bank of America. Harry would like to know, the question is on the life and savings cluster. First, it says, well done on the strategic progress in the cluster. It says, could you please provide more color on personal finance, new business sales, excluding the guaranteed annuity volumes? That's the first part. Where are you seeing green shoots? What is your view on the sustainability of the corporate RFO? I would like to just mention that Matt, most of you may have not seen him, Matt Brickman is the Chief Financial Officer of the Life and Saving Cluster, working with Prabhas Nia. Over to you, Matt.

Thank you. Thank you, Lange, and thanks for the questions. I think on personal finance, the green shoots we're seeing are on the risk side of sales. We actually saw some quite pleasing growth in risk sales over the year and green shoots also in terms of regaining market share. on the risk side, and risk is obviously an important contributor to our BNB margin. So that's very important from a personal finance perspective. Guaranteed annuity sales were down. That was an industry-wide rotation, as we know, but we saw some benefit of the shift to living annuities in the wealth business. In terms of corporate, RFO, Obviously, there were some benefits from economics in the year. We also still see, you know, relatively strong mortality profits on the group risk business. So, you know, I think those are the things to think about on a forward-looking basis. Thanks.

Thank you very much, Matthew. Can you just take that with you? I'm now going to shift and take Maria Stadom. He submitted a number of questions for Maria. So I'll take two out of your four questions that he submitted. The first says, thank you for an opportunity to ask the question. The first one is on liability matching losses impact. The question is, to what extent did the liability matching losses impact your earnings and where has this been reflected? And the second one will go over to Zulfa. Marias would like to know why has OMIC asset management segments not grown in RFO over the past three years? I'll start with the liability mismatch. Would you like to comment on it Kasper or maybe ask for input from Marias?

So I'll sort and then Ron can add. So, you know, our fresh results, you're not seeing any liability in stretch results. We effectively hedge those liabilities on our balance sheets. Where you have seen some impact on EV is where we are unable to hedge long-dated exposures. In our EV, we usually use a prudential curve. and the potential curve had a much lower profile post the long dates as tradable assets. So that's where you're seeing the impact on EV on RFE is not seeing any mismatch. In fact, we had mismatched profits.

Thank you, Kaspar. Over to you, Zulfar.

Thank you, Marius, for the question. I think the way we report is potentially leading to some of that question. So we report our cluster in a very specific way. We consolidate our asset management businesses into one report effectively. So in that consolidation, we actually have three affiliates. We've got the Marriott business. We've got future growth as well as OMEG. So actually on the OMEG side, which is our listed equity multi-asset and LDI business, we actually have seen quite significant growth in our RFO over the last few years, particularly for 2025. Marriott was muted and flat, and where we've seen a drop, which is resulting in the flat growth, is actually in our future growth side. So we had a number of expenses, ones of expenses last year, which did impact the RFO number. That related to a bad debt provision in our agri business and some double executive costs as well that came through in 2025 as we transitioned new leadership into that business. So overall, OMEG positive, Marriott muted, future growth was down relative to last year.

yeah thank you very much for that i will now move back and take one more question and then we'll come back to the chorus call if there are any bread from a peregrine again this question is related to dev It says, please expand upon why there's an $808 million negative expense assumption change that was made on GEV. That's the first part. The second part, which segment this applies to? The third part of the question is how this ties up to the cost savings target. I think you may just maybe voice over again on the cost savings target. Kaspar, would you like to?

Rodan, will you take that one? Thanks.

Thank you very much. Over to you, Ranan.

Thank you. So the 800 million basis change that we've taken is actually a short-term expense basis change. And what it's reflecting is that over the short term, we actually have to incur costs to take out costs, and we still have the elevated costs. So we are recognizing that short-term expense provision. In our embedded value, when we reach a point where our maintenance expenses are at a point where we're getting positive variances, we actually don't capitalize that into our embedded value. So it's recognizing the short-term trajectory.

Thanks. Thank you. Thank you very much. I would like to check if we have any questions on the call.

At this stage, there are no questions on the conference.

Okay. I will go back through the submitted questions. Take one from Jared Alweather. Jared is asking the question of what are the expectations for losses in Next 176 in 2026? I think Yorit may be helpful to just voice over that first, yeah.

Yeah, so what we've done is there's been a strategic change in Next 176 where we've transitioned from really a significant operational cost on that portfolio to that portfolio being managed by future growth. Future growth is a sort of center of excellence in the group for managing venture capital. And so that transition has taken place. You will have seen an escalation of next one, seven, six costs in the 2025 numbers. But going forward with that change, there will be some one-off rationalization costs, but those costs are going to be very significantly rationalized going forward.

Thank you very much Yuri. You are not off the hook, there is a question for you. Here is James Duck from Morgan Stanley. He would like to know, first he says welcome the progress on the credit loss ratio in the lending business. Please can you elaborate on how the prevalence of gambling amongst South African consumers has affected your credit and writing process, and how have you adjusted for this in your origination stages? Over to you, Clarence. Whilst you're here, there's a second one for you.

That's a very difficult question, but the reality of the matter is that we have seen elevated levels of gambling. And in Oyambang in particular, what we have seen is we do provide value-added services, and one of those is vouchers. And we have seen that vouchers have actually taken off. in such a highway and we understand that people are using those vouchers for gambling purposes. So it does impact customers from a disposable income perspective and we have seen some of our customers who normally will pass our credit assessment failing this time around and we have taken precautions. to make sure that, you know, we bring extra data or alternative data in order to make sure that we assess for that type of risk when it comes to trade. And we are seeing that, you know, some of them have also had challenges from a persistence perspective because it does also impact persistence.

Yes, thank you. The next one is banking, but not OMF. I will ask Kasper, maybe Remy, for solving this one. It's from Marias. Marias, could you please explain the large increase contribution from Malawi banking?

Yes, so in Malawi we have in that business an investment in an associate called FDH. That associate had a significant increase in earnings during the year and what you're seeing coming through is the associate earnings that we're accounting for in Malawi.

Thank you very much. So that brings us to the close. I think we've covered pretty much all the questions. There are none questions that are being sent through over the chorus call. So at this stage, I would like to thank Kasper, you thank the management team for joining us here. But also most importantly, thanks to all of you who've dialed in to listen to our presentation and to those who submitted questions. I would like to thank you on the board and the management team. And this brings the presentation to a close. Thank you very much. Enjoy the rest of your day.