Old Mutual PLC (OML) - Interim Management Statement RNS Number : 4936Q Old Mutual PLC 07 November 2012 7 November 2012 Old Mutual plc Interim Management Statement For the three months ended 30 September 2012 Further strategic progress and a resilient operational performance · Funds under management in core operations up 4% to £263.3 billion · Q3 NCCF outflows narrowed to £(0.5) billion from £(5.4) billion · Continued business improvement and strategic delivery: o £1.5 billion debt repayment target met; o Further repositioning of USAM affiliate portfolio; o Reorganisation of Old Mutual Wealth; o Finnish sale completed; Austrian and German operations closing to new business; o Terms agreed for Nigerian P&C acquisition from Ecobank for around $20 million. Julian Roberts, Group Chief Executive, commented: "This has been another quarter of good operational progress overall with a strong performance in emerging markets. "Our sales during the period highlight the growing shift from traditional life products to modern investment products, including unit trusts and mutual funds, with these sales up 19% in Emerging Markets and 7%, on a comparable basis, in Wealth. "In South Africa our mass foundation business continued to grow and APE sales across Emerging Markets saw a double-digit increase. "Although UK savings trends remain depressed by low consumer confidence and pressure on household finances, our performance in the UK and International was encouraging, with gross sales of £2.8 billion in the quarter. We are progressing well with our plans to build Old Mutual Wealth into a leading wealth manager and are taking further steps to address its cost base. "Nedbank has maintained its progress with positive margins, strong growth in non-interest revenue and continued reductions in credit losses. "In the short term, the sector will continue to be challenged by external factors but we will continue to develop products and services that our customers want, drive efficiency improvements throughout our business and, as a result, deliver sustainable value for shareholders." GROUP RESULTS ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ Group highlights for the Q3 2011 three months ended 30 % of opening (as ^ September 2012 (£bn) Q3 2012 FUM^1 ^ reported) Net client cash flow ^ ^ ^ ^ (NCCF) ^ ^ Long-Term Savings 0.3 1% ^ 1.3 Nedbank 0.5 21% ^ 0.2 US Asset - Continuing (1.1) (4)% (1.9) Management operations^2 ^ ^ - Transferred, disposed or (0.2) (2)% (5.0) held for sale^2 ^ NCCF from core (0.5) (1)% (5.4) operations ^ ^ 30 June 2012 30 (constant % change 30 June Group highlights at 30 September currency (constant 2012 (as % change September 2012 (£bn) 2012 basis) currency) reported) (reported) Funds under management ^ ^ ^ ^ ^ (FUM) ^ Long-Term Savings 118.2 115.1 3% 117.2 1% Nedbank 11.0 10.1 9% 10.6 4% Mutual & Federal 0.2 0.2 - 0.2 - US Asset - Continuing 126.7 122.0 4% 125.6 1% Management operations^2 ^ - Transferred, disposed or 7.2 6.9 4% 7.1 1% held for sale^2 FUM from core operations 263.3 254.3 4% 260.7 1% Group highlights for the % change Q3 2011 three months ended 30 (local (as % change September 2012 (£m) Q3 2012 currency)^3 ^ reported) (reported) Covered sales (APE) ^ ^ ^ ^ ^ Emerging 140 12% ^ 142 (1)% ^ Markets Old Mutual 138 (17)% ^ 166 (17)% Wealth Total covered sales 278 ^ 308 (10)% (APE) ^ Non-covered sales^4 ^ ^ ^ ^ ^ ^ Emerging Markets 2,368 19% ^ 2,219 7% Old Mutual Wealth 1,397 33% ^ 1,048 33% Long-Term Savings 3,765 ^ 3,267 15% US Asset - Transferred Management or - (100)% ^ 362 (100)% disposed^2 Total non-covered sales 3,765 ^ 3,629 4% Note percentage movements on reported figures in the above table are based on rounded sterling numbers. ^ ^ ^ ^ ^ ^ ^ ^1 Annualised NCCF. ^2 Continuing operations exclude the results of OMCap, Dwight, and Lincluden, which were sold prior to 30 June 2012, OMAM(UK), which was transferred to Old Mutual Wealth prior to 30 June 2012, and 2100 Xenon Group, 300 North Capital, Analytic Investors, Ashfield Capital Partners and Larch Lane Advisors, which were held for sale at 30 September 2012. Comparatives have been restated. ^3 Business unit percentages are calculated on a local currency basis. ^4 Non-covered sales includes mutual funds, unit trust and other sales. Introduction Unless otherwise stated, the figures given throughout this document are for the three months ended 30 September 2012 (the period) and comparative figures are for the same period in 2011 (the comparative period). Unless otherwise stated, all percentage movements are presented on a local currency basis to exclude the impact of foreign exchange movements. Group funds under management Funds under management (FUM) in our core operations increased to £263.3 billion (30 June 2012: £254.3 billion on a constant currency basis), with equity markets strengthening during the quarter. The S&P 500 was up 6%, the FTSE 100 was up 3% and the JSE ALSI was up 6%. In our Long-Term Savings division (LTS) FUM increased to £118.2 billion (30 June 2012: £115.1 billion on a constant currency basis).Emerging Markets FUM increased by 3%, on a constant currency basis, to £50.9 billion, due to positive market movements. Old Mutual Wealth FUM increased by 3% to £67.3 billion, driven by net client cash inflows and improved markets. UK FUM increased 5% to £35.8 billion, with UK Platform FUM of £21.7 billion up 6% from 30 June 2012 and up 15% from 31 December 2011. Old Mutual Global Investors (OMGI) managed £13.2 billion of FUM. FUM from continuing operations at USAM increased 4%, on a constant currency basis, to £126.7billion. Positive market movements were partially offset by net client cash outflows, although outflows were improved on Q3 2011. Long-Term Savings In September 2012 the Group announced the merger of the Skandia businesses (Skandia UK, Skandia International, Old Mutual Global Investors and the Skandia European businesses outside of the Nordic region) into a single business called Old Mutual Wealth. The operational changes are designed to combine asset management capability with UK platform strength and offshore expertise to grow into a leading provider of wealth management solutions in the UK and internationally. Net client cash flow LTS achieved positive NCCF of £0.3 billion (Q3 2011: £1.3 billion as reported), with continued net inflows onto the UK Platform and strong flows in Emerging Markets offset by a £1.0 billion cash outflow of low margin equity assets from the South African Public Investment Corporation (PIC). Emerging Markets NCCF was an outflow of £0.2 billion, with strong inflows in Retail Affluent and lower pre-retirement terminations in Corporate offset by the PIC outflow. Excluding the PIC outflow NCCF increased by 74% on Q3 2011. Old Mutual Wealth NCCF was £0.5 billion (Q3 2011: £0.8 billion). NCCF for the UK Platform fell to £0.4 billion from £0.8 billion. Trading conditions continued to be challenging, with increased pressure on household finances, and investor concerns over the eurozone, and markets more generally, impacting confidence. Sales LTS sales on an annual premium equivalent (APE) basis decreased to £278 million, despite strong regular premium sales in Emerging Markets Mass Foundation Cluster (MFC). LTS non-covered sales, including unit trust and mutual fund sales, increased to £3,765 million, with strong sales in both Emerging Markets and Old Mutual Wealth. APE sales in Emerging Markets increased by 12% to £140 million. Regular premium sales increased 11% with continued momentum in MFC, delivering excellent growth of 22%, as a result of a larger sales force, improved productivity and the inclusion of OMF Credit Life sales of R37 million in Q3 2012, which was not consolidated in the comparative period.Single premium sales were up 14% as a result of a large annuity deal secured by Corporate. Retail Affluent sales were flat, having been impacted mainly by lower fixed bond and guaranteed annuity sales, partly offset by legacy to new generation product conversions. Non-covered sales in Emerging Markets increased by 19% to £2,368 million, with strong unit trust and mutual fund sales in South Africa. Other non-life sales were boosted by significant, lower margin inflows into OMIGSA's Dibanisa and Liability-Driven Investment boutiques and the inclusion of the other African countries (Kenya, Malawi, Zimbabwe and Swaziland) in Q3 2012 but not in the comparative period. In Old Mutual Wealth gross sales (gross client cash inflows) were £2.8 billion (Q3 2011: £2.6 billion). On the UK Platform gross sales were £0.9 billion (Q3 2011: £1.2 billion). The structural shift of the business towards non-covered sales continued. Old Mutual Wealth's Austrian and German businesses are closing to new business, as they do not meet the Group's investment criteria for adding shareholder value. These businesses will now be managed for value. Old Mutual Wealth APE sales decreased by 17% to £138 million. International APE sales were impacted by the HMRC restriction on Qualifying Recognised Overseas Pension Schemes (QROPS). A new structure was successfully implemented in Malta in Q3 2012 and some recovery in sales performance is expected in this product line in Q4 2012. Single premium APE sales in Old Mutual Wealth Europe increased, as a result of strong sales in Italy. Old Mutual Wealth non-covered sales increased by 33% to £1,397 million, of which OMGI sales were £856 million. Old Mutual Wealth non-covered sales increased by 7% taking into account the results of OMAM (UK) in both Q3 2012 and Q3 2011. Similarly, non-covered sales in OMGI increased by 58%, primarily resulting from strong sales of the OMAM Global Bond and the Global Strategic Bond. Investment performance in OMAM (UK) remains strong with 50% of OMAM (UK)'s on and off-shore OEIC funds in the 1st quartile over 3 years, and 81% of funds above median. US Asset Management On 11 October 2012, US Asset Management (USAM) announced that it had entered into definitive agreements to sell five of its US affiliates to their current senior management teams, subject to customary closing conditions. The five affiliate asset managers are 2100 Xenon Group, 300 North Capital, Analytic Investors, Ashfield Capital Partners and Larch Lane Advisors (the "held for sale" affiliates). These businesses had combined assets under management of $11.7 billion at 30 June 2012. These transactions complete the transition of USAM's existing portfolio and will enable USAM to focus on its nine remaining affiliates. Results from continuing operations exclude the held for sale affiliates. As in prior periods, they also exclude Lincluden, Dwight and Old Mutual Capital, which were sold prior to 30 September 2012, and the results of OMAM (UK), which is now part of Old Mutual Wealth. USAM reported results for 2011 and Q1 2012 include OMAM (UK). NCCF from continuing operations was an outflow of £1.1 billion, largely relating to equities and global fixed income products. Gross inflows were £3.7 billion (Q3 2011: £2.6 billion), of which £1.4 billion came from new client accounts. Inflows were largely driven by sales in higher fee products such as emerging market equities. Gross outflows were £4.9 billion (Q3 2011: £4.5 billion), largely in lower fee products such as fixed income strategies. Gross outflows included £0.6 billion (Q3 2011: £0.4 billion) of realizations of client investment property assets, managed by the Heitman affiliate. A further £0.3 billion ($0.5 billion) of gross outflows related to a client account which was re-deposited early in Q4 2012. In early October 2012 USAM's Campbell Group affiliate closed a £0.4 billion ($0.7 billion) acquisition of forestry assets in South Australia. This was Campbell Group's first deal outside the United States as it seeks to expand its international operations. For the one-year period ended 30 September 2012, 64% of assets in continuing operations outperformed benchmarks (Q3 2011: 63%). Over the three- and five-year periods, 88% (Q3 2011: 60%) and 67% (Q3 2011: 61%) of assets outperformed benchmarks. Nedbank Nedbank figures are for the nine months ended 30 September 2012 and comparative figures are for the same period in 2011. Nedbank is still on track to meet its earnings growth target in 2012 notwithstanding the more challenging economic environment. Net interest income grew by 9% to R14.5 billion and non-interest revenue increased 14% to R12.4 billion. The credit loss ratio from impairments improved from 1.13% to 1.03%. Nedbank's capital ratios remained well above current regulatory minima, with a Basel II.5 Core Tier 1 ratio of 10.7% (30 June 2012: 10.6%). Nedbank remains in a strong position to meet the expected Basel III capital requirements. The full text of Nedbank's Q3 2012 trading update, released on 29 October 2012 and also announced by Old Mutual plc on the same day, can be accessed on Nedbank's website at: http://www.nedbankgroup.co.za/financialQuaterlyResults.asp Mutual & Federal M&F delivered strong growth in the number of policies written, particularly in new direct markets, supported by improved service. Gross written premiums grew 8% to R2.5 billion, with continued focus on premium growth in alternative distribution channels, including underwriting management agencies and direct through iWyze. Investment in iWyze continues to have a significant impact on the overall underwriting result. M&F recorded several large claims, particularly in its Commercial business line, and experienced a softening underwriting environment. Management continued to take steps to improve underwriting performance including cost containment and selective pricing action on poor performing lines of business. M&F has recorded approximately R50 million of hailstorm and flood claims from storms in early October 2012. We have agreed terms to acquire Ecobank's property and casualty business in Nigeria. The transaction will be subject to regulatory approval. The agreed consideration will be around R170 million (US$20 million). Capital and liquidity On 19 July 2012, the Group announced a tender to repurchase debt securities for an aggregate consideration of £450 million. The tender was subsequently increased to £459 million, due to high demand, and was satisfied in its entirety against £388 million notional of the £500 million 7.125% senior notes maturing in 2016. In addition, on 25 September 2012 the Group announced that it had redeemedall of the $750 million 8% guaranteed cumulative perpetual preferred securities. The redemption of these preferred securities took the total amount of cash used to reduce debt to £1.52 billion, exceeding the Group's target of £1.5 billion by the end of 2012. A further £180 million will be repaid in due course, in accordance with the plans set out in the shareholder circular relating to the Nordic sale. The pro-forma Financial Groups Directive (FGD) surplus reduced to £1.9 billion at 30 September 2012 (30 June 2012: £2.3 billion), with statutory profits and other positive movements, largely from Emerging Markets, Old Mutual Wealth and Bermuda, offset by the redemption of the Group's $750 million retail preferred instrument and the accrual for ordinary and preferred dividends. The £0.9 billion repayment of debt and the repayment at maturity of an intercompany loan with Nedbank reduced holding company available liquid assets and undrawn committed facilities to £1.3 billion (30 June 2012: £2.4 billion). Available liquid assets at the holding company were £0.3 billion (30 June 2012: £1.4 billion). Material events and transactions The Group completed the sale of the Finnish branch of Skandia Life Assurance Company Ltd to OP-Pohjola osk on 31 August 2012. At 30 June 2012, the Finnish branch had gross assets of €1.3 billion. We have agreed the terms of the transfer of the Group's Colombian and Mexican businesses to Old Mutual South Africa, subject to regulatory approval. The consideration for the transfers is based on local currency values. We have hedged the local currency consideration for the transfers to protect the sterling value. The proposed disposal of the held for sale affiliates of USAM is expected to complete by the end of 2012. The consideration includes some performance contingent consideration. Client consents in respect of 300 North and Larch Lane have been received. We have been informed that Harbinger Inc has completed its refinancing of the remaining CARVM reserves in respect of our previously owned US Life business. This removes the need for the reinsurance arrangements between it and Old Mutual Reassurance and consequently the Group no longer provides the $265 million letter of credit to back these reserves. Long-term interest rates in South Africa decreased, with the 10-year government bond yield reducing from 7.6% at 30 June 2012 to 7.0% at 30 September 2012. The financial soundness valuation (FSV) economic assumptions are based on the 10-year government bond yield. A reduction in this yield has an unfavourable impact on IFRS AOP for Emerging Markets and in particular its Retail businesses. The 10-year government bond yield at 31 October 2012 improved to 7.3%. The 2012 rates for the long-term investment return (LTIR), effective from 1 January 2012, are 9.0% for Emerging Markets, 8.6% for Mutual & Federal and 1.5% for Old Mutual Wealth. The reduction in nominal yields on fixed income and cash, and lower equity appreciation in recent years are likely to reduce the long-term rate in the future. Actual investment returns recorded for Emerging Markets represent the net results after write offs and market movements from all shareholder capital, excluding capital invested in Nedbank and M&F. Bermuda At 30 September 2012, the estimated gross cash cost of meeting the remaining fifth anniversary guarantees to Guaranteed Minimum Accumulation Benefit (GMAB) policyholders over the next 11 months reduced to approximately $305 million (30 June 2012: $559 million). In March 2012 Bermuda enhanced its hedging strategy by implementing an option-based hedging arrangement to protect against the risk of equity market declines increasing the cash cost of meeting fifth anniversary contract top-up obligations. Foreign currency exchange exposures and the residual equity market risk for the risk extending beyond the five-year top-ups are now at a hedge level of 50%. Surrenders on contracts reaching their fifth anniversary guarantee continued at a similar, higher than expected, rate during the third quarter. As at 30 September 2012 about 38% of guaranteed policies had reached their fifth anniversary date of which 61% were surrendered on or after the anniversary date. The reserving in the Bermuda business is a function of expected surrenders, as well as other factors. The actual surrender experience during the course of the year is ahead of assumptions, so we expect to revise the assumptions we use in our full year results. This is likely to lead to a reduction in the guarantee reserve reported at 31 December 2012, all other things being equal. Notes to Editors: A conference call for analysts and investors will take place at 09.00 (UK time) and 11.00 (South African time) today. Analysts and investors who wish to participate in the call should dial the following numbers quoting conference pin 959227#: UK and International (outside South Africa and US) +44 (0)20 3140 0668 South Africa +27 (0)11 019 7051 US +1 631 510 7490 Please dial in 10 minutes before the scheduled start time of the call to avoid excess holding. A replay facility will be available until midnight on 21 November 2012 on the following number, quoting access pin 387375#: UK / standard international +44 (0)20 3140 0698 Copies of this update, together with high-resolution images and biographical details of the Executive Directors of Old Mutual plc, are available in electronic format to download from the Company's website at www.oldmutual.com. This Interim Management Statement has been prepared in accordance with section 4.3 of the Disclosure and Transparency Rules (DTR) and covers the period 1 July 2012 to 6 November 2012. The business update is included in this Interim Management Statement. A Disclosure Supplement relating to the Company's business update can be found on our website. This contains key financial data for the three months ended 30 September 2012. Life assurance APE sales are calculated as the sum of (annualised) new regular premiums and 10% of the new single premiums written in an annual reporting period. Foreign exchange rates used for constant currency calculations Appreciation / Appreciation / (depreciation) of local (depreciation) of Q3 2012 Q3 2011 currency HY 2012 local currency Average 12.70 11.27 (13)% 12.52 (1)% Rand Rate* Closing 13.39 12.58 (6)% 12.84 (4)% Rate Average 1.58 1.61 2% 1.58 - USD Rate* Closing 1.62 1.56 (4)% 1.57 (3)% Rate * Average rate is for the nine months to 30 September. Cautionary statement This announcement contains forward-looking statements with respect to certain of Old Mutual plc's and its subsidiaries' plans and its current goals and expectations relating to its future financial condition, performance and results. By their nature, all forward-looking statements involve risk and uncertainty because they relate to future events and circumstances that are beyond Old Mutual plc's control, - including, among other things, UK and South African domestic and global economic and business conditions, market-related risks such as fluctuations in interest rates and exchange rates, policies and actions of regulatory authorities, the impact of competition, inflation, deflation, the timing and impact of other uncertainties or of future acquisitions or combinations within relevant industries, as well as the impact of tax and other legislation and other regulations in territories where Old Mutual plc or its subsidiaries operate. As a result, Old Mutual plc's actual future financial condition, performance and results may differ materially from the plans, goals and expectations set out in Old Mutual plc's forward-looking statements. Old Mutual plc undertakes no obligation to update any forward-looking statements contained in this announcement or any other forward-looking statements that it may make. Enquiries External communications Patrick Bowes UK +44 (0)20 7002 7440 Investor relations Kelly de Kock SA +27 (0)21 509 8709 Media William Baldwin-Charles +44 (0)20 7002 7133 +44 (0)7834 524 833 Interim Management Statement - Appendix GROUP FINANCIAL DATA ^ ^ ^ ^ ^ ^ ^ ^ ^ ^ Q3 YTD 2011 Group highlights for the % of (constant Q3 YTD nine months ended 30 Q3 YTD opening currency 2011 (as ^ September 2012 (£bn) 2012 FUM^1 basis) reported) Net client cash flow (NCCF) ^ ^ ^ ^ ^ ^ Long-Term Savings 1.7 2% 3.2 3.3 Nedbank 1.3 18% 0.5 0.6 US Asset - Continuing 1.3 1% (3.2) (3.2) Management operations^2 ^ - Transferred, disposed or (1.0) (4)% (10.4) (10.1) held for sale^2 NCCF from core operations 3.3 2% (9.9) (9.4) 30 June 2012 30 (constant 30 June Group highlights at 30 September currency 2012 (as % September 2012 (£bn) 2012 basis) % change reported) change Funds under management ^ ^ ^ ^ ^ (FUM) ^ Long-Term Savings 118.2 115.1 3% 117.2 1% Nedbank 11.0 10.1 9% 10.6 4% Mutual & Federal 0.2 0.2 - 0.2 - US Asset - Continuing 126.7 122.0 4% 125.6 1% Management operations^2 ^ - Transferred, disposed or 7.2 6.9 4% 7.1 1% held for sale^2 FUM from core operations 263.3 254.3 4% 260.7 1% Q3 YTD 2011 Group highlights for the (constant Q3 YTD nine months ended 30 Q3 YTD currency 2011 (as % September 2012 (£m) 2012 basis) % change reported) change Covered sales (APE) ^ ^ ^ ^ ^ Emerging 394 352 12% 397 (1)% ^ Markets Old Mutual 445 548 (19)% 548 (19)% Wealth Total covered sales (APE) 839 900 (7)% 945 (11)% Non-covered sales^3 ^ ^ ^ ^ ^ ^ Emerging Markets 6,219 4,883 27% 5,458 14% Old Mutual Wealth 4,063 3,513 16% 3,513 16% Long-Term Savings 10,282 8,396 22% 8,971 15% US Asset - Transferred 344 1,269 (73)% 1,240 (72)% Management or disposed^2 Total non-covered sales 10,626 9,666 10% 10,211 4% Note percentage movements on reported figures in the above table are based on rounded sterling numbers. ^ ^ ^ ^ ^ ^ ^ ^1 Annualised NCCF. ^2 Continuing operations exclude the results of OMCap, Dwight, and Lincluden, which were sold prior to 30 June 2012, OMAM(UK), which was transferred to Old Mutual Wealth prior to 30 June 2012, and 2100 Xenon Group, 300 North Capital, Analytic Investors, Ashfield Capital Partners and Larch Lane Advisors, which were held for sale at 30 September 2012. Comparatives have been restated. ^3 Non-covered sales includes mutual funds, unit trust and other sales. ^ Long-Term Savings: Emerging Markets APE sales Rm Single premium APE Gross regular premiums Total APE By Cluster: Q3 '12 Q3 '11 % Q3 '12 Q3 '11 % Q3 '12 Q3 '11 % South Africa Mass Foundation 1 1 - 685 561 22% 685 562 22% Retail Affluent 215 216 - 398 396 1% 613 612 - Corporate 156 75 108% 135 168 (20)% 291 243 20% OMIGSA 49 77 (36)% - - - 49 77 (36)% Total South Africa 421 369 14% 1,218 1,125 8% 1,638 1,494 10% Rest of Africa* 35 29 21% 114 73 56% 150 102 47% Asia & Latin America** 7 7 - 24 21 14% 31 28 11% Total Emerging Markets 463 405 14% 1,356 1,219 11% 1,819 1,624 12% * Rest of Africa includes R69 million of APE sales in Q3 2012 from the consolidation of Kenya, Malawi, Zimbabwe and Swaziland. ** Includes Mexico only. Rm Single premium APE Gross regular premiums Total APE By Product: Q3 '12 Q3 '11 % Q3 '12 Q3 '11 % Q3 '12 Q3 '11 % Emerging Markets Savings 325 356 (9)% 655 515 27% 980 871 13% Protection - - - 701 704 - 701 704 - Annuity 138 49 182% - - - 138 49 182% Total Emerging Markets 463 405 14% 1,356 1,219 11% 1,819 1,624 12% Non-covered sales* Rm Unit trust / mutual Other non-covered Total non-covered fund sales sales sales Q3 '12 Q3 '11 % Q3 '12 Q3 '11 % Q3 '12 Q3 '11 % South Africa 8,137 5,031 62% 12,646 11,177 13% 20,783 16,208 28% Rest of Africa** 1,542 1,219 26% 649 53 1,125% 2,191 1,272 72% Asia & Latin America 7,267 7,986 (9)% 521 365 43% 7,788 8,351 (7)% Emerging markets 16,946 14,236 19% 13,816 11,595 19% 30,762 25,831 19% * Non-covered sales exclude Zimbabwe CABS deposits. ** Rest of Africa includes R759 million of total non-covered sales (R246 million unit trust / mutual fund sales and R513 million other non-covered sales) in Q3 2012 from the consolidation of Kenya, Malawi, Zimbabwe and Swaziland. Long-Term Savings: Old Mutual Wealth Gross sales and funds under management £bn Market and Gross Net other 30-Jun-12 Sales Redemptions flows mvmnts 30-Sep-12 Old Mutual Wealth UK Legacy 13.8 0.2 (0.5) (0.3) 0.6 14.1 UK Platform 20.4 0.9 (0.5) 0.4 0.9 21.7 International* 14.6 0.4 (0.3) 0.1 (1.0) 13.7 OMGI - external 7.0 0.9 (0.8) 0.1 0.5 7.6 Old Mutual Wealth Europe 9.7 0.4 (0.2) 0.2 0.3 10.2 Total 65.5 2.8 (2.3) 0.5 1.3 67.3 Old Mutual Global Investors OMGI - external 7.0 0.9 (0.8) 0.1 0.5 7.6 OMGI - Group internal 5.5 0.3 (0.3) - 0.1 5.6 Total OMGI funds managed 12.5 1.2 (1.1) 0.1 0.6 13.2 * The negative movement in international FUM 'market and other movements' was as a result of the sale of Finland, which resulted in an outflow of around £1 billion of assets. APE Sales £m Gross single premiums Gross regular Total APE premiums Q3 Q3 Q3 Q3 Q3 '12 Q3 '11 % '12 '11 % '12 '11 % UK market Pensions 359 387 (7)% 8 9 (11)% 45 48 (6)% Bonds 80 99 (19)% - - - 8 10 (20)% Total UK Platform 439 486 (10)% 8 9 (11)% 53 58 (9)% International Unit-linked 42 40 5% 4 7 (43)% 8 12 (33)% Bonds 315 425 (26)% 6 6 - 37 47 (21)% Total International 357 465 (23)% 10 13 (23)% 45 59 (24)% Old Mutual Wealth Europe Unit-linked 243 156 56% 2 4 (50)% 26 19 37% Total Old Mutual 124 136 Wealth 1,039 1,107 (6)% 20 26 (23)% (9)% Heritage business UK Legacy 26 51 (49)% 6 10 (40)% 8 15 (47)% Old Mutual Wealth Europe* 7 9 (22)% 5 14 (64)% 6 15 (60)% Total Heritage 33 60 (45)% 11 24 (54)% 14 30 (53)% Total Old Mutual Wealth (including 138 166 heritage business) 1,072 1,167 (8)% 31 50 (38)% (17)% Non-covered sales £m Q3 '12 Q3 '11 % Mutual Funds 218 418 (48)% ISA 185 256 (28)% Total UK Platform 403 674 (40)% OM Global Investors** 856 284 201% Old Mutual Wealth Europe 8 10 (20)% Total Old Mutual Wealth 1,267 968 31% Heritage business UK Legacy 127 74 72% Old Mutual Wealth Europe* 3 6 (50)% Total Heritage 130 80 63% Total Old Mutual Wealth (including heritage business) 1,397 1,048 33% * Includes business written in Germany, Austria and Switzerland. ** OMAM (UK) sales were recorded in USAM up until the transfer to OMGI in Q2 2012. OMAM (UK) non-covered sales for Q3 2011 were £258 million. Bermuda reserve development The movement in guarantee reserves over the last two years is shown below: $m UGO GMAB Actual Cumulative Estimated UGO fifth-anniversary Period reserve top-up paid top-up 30 September 2010 824 - 458 31 December 2010 660 - 334 31 March 2011 573 - 303 30 June 2011 620 - 346 30 September 2011 1,144 - 738 31 December 2011 1,035 - 689 31 March 2012 794 18 463 30 June 2012 851 101 559 30 September 2012 533 256 305 31 October 2012 463 320 237 Exposure to sovereign debt in Portugal, Italy, Ireland, Greece, Spain and France The Group has no exposure to the sovereign debt of Portugal, Italy, Ireland, Greece or Spain. The Group's exposure to French sovereign debt is less than £1 million. This information is provided by RNS The company news service from the London Stock Exchange END IMSBKADQCBDDDDK -0- Nov/07/2012 07:00 GMT
Old Mutual PLC OML Interim Management Statement
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