Old Mutual Limited (OMU.L) | Investment Case

1. Company Snapshot

1.a. Company Description

Old Mutual Limited, through its subsidiaries, provides financial services primarily in South Africa and rest of Africa.The company operates through Mass and Foundation Cluster, Personal Finance and Wealth Management, Old Mutual Investments, Old Mutual Corporate, Old Mutual Insure, and Rest of Africa segments.It offers risk products, including group risk and funeral covers; long-term savings; lending products comprising micro-lending; and transactional products.

It also provides financial advice, investment, and income products, as well as asset management services.In addition, the company offers investments, annuities, and consulting services to employee-sponsored retirement and benefit funds; and health, property, and casualty insurance products.It serves low-income and lower-middle income markets; high income and high net worth individuals; and employee-sponsored retirement and benefit funds.

The company was founded in 1845 and is based in Cape Town, South Africa.

Show Full description

1.b. Last Insights on OMU

Old Mutual Limited's recent performance was driven by robust earnings growth, strategic initiatives, and market optimism. Despite a 20% decline in EPS to R0.96, revenue rose 5.6% to R55.5b. CEO Johann Strydom's recent share purchase signals confidence. The company's earnings call highlighted strong growth amid market headwinds. A proposed merger between Anglo American and Teck Resources may have sector-wide implications. These developments suggest a positive outlook, driven by strategic initiatives and market trends.

1.c. Company Highlights

Last Price	61
Change Percentage	1.33%
Open	61.4
Previous Close	60.2
Market Cap ( Millions)	2605
Volume	1186501
Year High	63.4
Year Low	38.54
M A 50	59.14
M A 200	52.36

FCF Yield	75.46%
Dividend Yield	6.38%
ROE	10.98%
Debt / Equity	29.74%
Net Debt / EBIDTA	-364.47%
Price To Book	1.02
Price Earnings Ratio	9.38
Price To FCF	1.33
Price To sales	0.55
EV / EBITDA	-0.12

2. Old Mutual Group 2024 Annual Results: A Resilient Performance Amid Strategic Transformation

Old Mutual Group delivered a resilient performance in its 2024 annual results, with strong financial metrics and strategic progress. Distributable earnings rose 17% to ZAR1.506 per share, while Return on Average Assets (ROA) improved to 12.7%, reflecting enhanced operational efficiency. Funds under management grew 10% to ZAR1.5 trillion, underscoring the company’s ability to attract and retain assets despite challenges in the retail and corporate markets. The Value of New Business (VNB) margin expanded by 20 basis points to 2.5%, supported by strong performance in the Mass and Foundation Clusters, though margins in Mutual Africa regions lagged slightly. The final dividend of ZAR0.52, bringing the total to ZAR0.86, marked a 6% increase, reinforcing Old Mutual’s commitment to returning value to shareholders.

Publication Date: Apr -04

                                    📋 Highlights
                                    Strong Financial Performance:
                                                - Distributable earnings up 17% to ZAR1.506 per share, ROA improved to 12.7%, and funds under management grew 10% to ZAR1.5 trillion.
Launch of OM Bank:
                                                - A digital-first banking platform set to launch in Q4 2025, aiming to break even by 2028, with annual costs projected at ZAR1.1-1.3 billion.
Dividend Growth:
                                                - Final dividend of ZAR0.52 declared, bringing total to ZAR0.86, a 6% increase, aligning with Old Mutual's dividend policy.
Sustainability Progress:
                                                - Improved ESG ratings, including an MSCI AAA rating, with commitments to green investments and carbon emission reductions.
Segment Growth:
                                                - All segments contributed over ZAR1 billion in RFO, with Wealth Management RFO up 27% to ZAR1 billion and MFC RFO growth of 2% to ZAR1.9 billion.

                                

Strategic Initiatives and Growth Engines

CEO Iain Williamson highlighted progress in strategic initiatives, including the upcoming launch of OM Bank, a digital-first banking platform set to debut in Q4 2025. While the bank is expected to break even by 2028, the near-term costs are estimated at ZAR1.1 billion to ZAR1.3 billion annually, reflecting the significant investment required to establish this new growth engine. The company also emphasized digital transformation and customer-centric solutions, aligning with its strategic framework to grow core businesses and unlock new opportunities. CFO Casper Troskie noted that the final dividend aligns with Old Mutual’s dividend policy, further supporting its commitment to sustainable returns.

Segment Performance and Capital Management

All segments contributed over ZAR1 billion in Reported Financial Operating Profit (RFO), with the Mass Financial Cluster (MFC) growing 2% to ZAR1.9 billion, driven by life and savings profits. Wealth Management RFO increased 27% to ZAR1 billion, benefiting from annuity revenue and asset growth. Capital management remains a priority, with ZAR10.5 billion in cash remittances allocated to growth initiatives, including OM Bank, and share buybacks. The company’s focus on disciplined capital deployment is evident, as it balances near-term investments with long-term value creation.

Valuation and Risks

Old Mutual’s valuation metrics suggest a potential undervaluation relative to its peers. The Price-to-Book (P/B) ratio of 0.79 and Price-to-Sales (P/S) ratio of 0.57 indicate that the market may not yet fully reflect the company’s strategic transformation and growth potential. The dividend yield of 8.02% remains attractive, aligning with Old Mutual’s focus on returning capital to shareholders. However, the negative free cash flow yield of -22.23% underscores the significant investments required to drive future growth. Risks include persistency challenges, particularly in the寿险 business, and macroeconomic uncertainties. Management is addressing these issues through system improvements and expense management, but results will take time to materialize.

Outlook and Key Takeaways

Old Mutual’s 2024 results demonstrate resilience and strategic progress, with strong financial performance and disciplined capital management. The launch of OM Bank represents a significant bet on future growth, though near-term costs and risks must be closely monitored. Valuation metrics and the attractive dividend yield make Old Mutual an intriguing investment opportunity, particularly for investors focused on sustainability and long-term growth. As the company executes its strategic framework, the ability to sustain margin improvements, manage risks, and deliver on growth initiatives will be critical to unlocking further value for shareholders.

3. NewsRoom

Johann Strydom Buys Handful Of Shares In Old Mutual

Nov -17

Source:

SS&C Technologies Completes Acquisition of Curo Fund Services

Nov -12

Source:

Old Mutual First Half 2025 Earnings: EPS: R0.96 (vs R1.20 in 1H 2024)

Sep -14

Source:

Old Mutual Ltd (FRA:2KS) (H1 2025) Earnings Call Highlights: Strong Earnings Growth Amid Market ...

Sep -11

Source:

Analysis-Anglo-Teck proposed merger could break mining consolidation deadlock

Sep -09

Source:

SS&C Technologies To Acquire Curo Fund Services

Sep -02

Source:

OneConnect Named to IDC China FinTech Emerging 50 for Sixth Consecutive Year

Aug -25

Source:

Whatfix Powers GenAI-Driven Digital Transformation Across the Global Financial Services Sector

Aug -20

Source:

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.93%)

6. Segments

Personal Finance and Wealth Management

Expected Growth: 8.95%

Old Mutual Limited's 8.95% growth in Personal Finance and Wealth Management is driven by increasing demand for retirement solutions, expansion of digital channels, and strategic partnerships. Additionally, the company's diversified product offerings, cost savings initiatives, and strong brand presence in Africa have contributed to this growth.

Old Mutual Corporate

Expected Growth: 7.4%

Old Mutual Corporate's 7.4% growth is driven by increasing demand for insurance and investment products, expansion into African markets, and a strong brand presence. Additionally, the segment has benefited from effective cost management, improved operational efficiency, and a favorable economic environment, leading to increased revenue and profitability.

Adjusting Items and Reclassifications

Expected Growth: 5.4%

Old Mutual Limited's 5.4% growth is driven by adjusting items and reclassifications, primarily attributed to the release of provisions, positive experience variances, and favorable market movements. Additionally, the insurer's strategic initiatives, such as cost savings and business mix optimization, have contributed to the growth.

Old Mutual Africa Regions

Expected Growth: 8.9%

Old Mutual Africa Regions' 8.9% growth driven by increasing demand for insurance products, economic growth in key markets, and strategic expansion into new territories. Additionally, the region's growing middle class, urbanization, and improving economic stability contribute to the growth. Effective cost management and operational efficiencies also support the segment's growth.

Old Mutual Insure

Expected Growth: 7.4%

Old Mutual Insure's 7.4% growth driven by increasing demand for insurance products in South Africa, expansion into new markets, and strategic partnerships. Additionally, the company's focus on digital transformation, improved customer experience, and cost savings initiatives have contributed to its growth.

Mass & Foundation Cluster

Expected Growth: 8.33%

Old Mutual Limited's Mass & Foundation Cluster achieved 8.33% growth driven by increasing demand for affordable insurance products, expansion into underserved markets, and strategic partnerships. Additionally, effective cost management, improved operational efficiency, and a strong brand presence contributed to the segment's growth.

Consolidation of Funds

Expected Growth: 6.37%

The 6.37% growth in Consolidation of Funds from Old Mutual Limited is driven by increasing demand for diversified investment products, strategic expansion into emerging markets, and effective cost management. Additionally, the company's strong brand reputation, improved operational efficiency, and favorable regulatory environment have contributed to this growth.

Old Mutual Investments

Expected Growth: 9.77%

Old Mutual Investments' 9.77% growth is driven by increasing demand for investment products, expansion into African markets, and a strong brand presence. Additionally, the company's diversified investment portfolio, cost savings initiatives, and strategic partnerships have contributed to its growth. Furthermore, Old Mutual Limited's strong financial position and ability to adapt to changing market conditions have also supported the segment's growth.

Other Group Activities and Inter-company Eliminations

Expected Growth: 4.37%

Old Mutual Limited's 4.37% growth in Other Group Activities and Inter-company Eliminations is driven by increased investment income, cost savings from operational efficiencies, and a decrease in net losses on disposal of subsidiaries. Additionally, the group's diversification strategy and expansion into new markets have contributed to this growth.

7. Detailed Products

Life Insurance

Provides financial protection to individuals and their loved ones in the event of death or disability.

Investments

Offers a range of investment products to help individuals achieve their long-term financial goals.

Short-Term Insurance

Provides protection against unforeseen events such as accidents, theft, or damage to property.

Retirement Solutions

Offers a range of retirement products to help individuals plan and save for their retirement.

Wealth Management

Provides personalized wealth management services to high net worth individuals.

Corporate Insurance

Offers a range of insurance products to businesses, including group life, disability, and funeral cover.

Employee Benefits

Provides a range of employee benefits, including group life, disability, and funeral cover.

8. Old Mutual Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

Old Mutual Limited operates in a highly competitive industry, and there are many substitutes available to customers. However, the company's strong brand reputation and diversified product offerings mitigate the threat of substitutes to some extent.

Bargaining Power Of Customers

Old Mutual Limited's customers have a high bargaining power due to the availability of numerous insurance and financial services providers. This forces the company to maintain competitive pricing and high-quality services to retain customers.

Bargaining Power Of Suppliers

Old Mutual Limited has a diversified supply chain, and its suppliers have limited bargaining power. The company's large scale of operations and strong financial position also give it an upper hand in negotiations with suppliers.

Threat Of New Entrants

The threat of new entrants is low in the insurance and financial services industry due to high regulatory barriers and significant capital requirements. Old Mutual Limited's established brand and extensive distribution network also make it difficult for new entrants to gain a foothold.

Intensity Of Rivalry

The insurance and financial services industry is highly competitive, with many established players competing for market share. Old Mutual Limited faces intense rivalry from its competitors, which forces it to invest heavily in marketing, product development, and customer retention.

9. SWOT Analysis

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

	Value
Debt Weight	32.37%
Debt Cost	8.85%
Equity Weight	67.63%
Equity Cost	8.85%
WACC	8.85%
Leverage	47.87%

11. Quality Control: Old Mutual Limited passed 4 out of 9 key points

Strong Liquidity

Low Debt

Strong Interest Coverage

Healthy Cash Flow

Operating Efficiency

Strong Return On Equity

Consistent Revenue Growth

Consistent Operating Cash Flow Growth

Margin Improvement

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Phoenix Group

A-Score: 7.3/10

Value: 7.3

Growth: 6.3

Quality: 3.9

Yield: 10.0

Momentum: 8.0

Volatility: 8.0

1-Year Total Return ->

Credicorp

A-Score: 7.2/10

Value: 4.7

Growth: 7.1

Quality: 7.3

Yield: 7.5

Momentum: 8.5

Volatility: 8.0

1-Year Total Return ->

Alm. Brand

A-Score: 6.5/10

Value: 4.8

Growth: 1.8

Quality: 7.6

Yield: 8.1

Momentum: 8.0

Volatility: 9.0

1-Year Total Return ->

Bank of Ireland

A-Score: 5.9/10

Value: 7.3

Growth: 5.2

Quality: 5.7

Yield: 3.1

Momentum: 9.0

Volatility: 5.0

1-Year Total Return ->

Old Mutual

A-Score: 5.5/10

Value: 8.9

Growth: 2.9

Quality: 7.6

Yield: 4.4

Momentum: 5.0

Volatility: 4.0

1-Year Total Return ->

Hargreaves Lansdown

A-Score: 5.1/10

Value: 3.3

Growth: 5.1

Quality: 9.4

Yield: 1.9

Momentum: 5.0

Volatility: 6.0

1-Year Total Return ->

Peers Metrics

12.e Scoring ^Insights

12.f DCF ^BETA

Parameters

Short Term Growth

-14.29%

Short term Time

10.0

Long-Term Growth

2.00%

WACC

8.85%

Old Mutual Limited - ZAE000255360

1. Company Snapshot

1.a. Company Description

1.b. Last Insights on OMU

1.c. Company Highlights

Lower Yield

Cheaper

Weak Momentum

More Volatile

Lower Quality

Revenues Miss

Stable Momentum

Average Growth

Fairly Valued

Revenues Beats

Medium Volatility

Lower Growth

2. Old Mutual Group 2024 Annual Results: A Resilient Performance Amid Strategic Transformation

Strategic Initiatives and Growth Engines

Segment Performance and Capital Management

Valuation and Risks

Outlook and Key Takeaways

3. NewsRoom

4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (7.93%)

6. Segments

Personal Finance and Wealth Management

Expected Growth: 8.95%

Old Mutual Corporate

Expected Growth: 7.4%

Adjusting Items and Reclassifications

Expected Growth: 5.4%

Old Mutual Africa Regions

Expected Growth: 8.9%

Old Mutual Insure

Expected Growth: 7.4%

Mass & Foundation Cluster

Expected Growth: 8.33%

Consolidation of Funds

Expected Growth: 6.37%

Old Mutual Investments

Expected Growth: 9.77%

Other Group Activities and Inter-company Eliminations

Expected Growth: 4.37%

7. Detailed Products

Life Insurance

Investments

Short-Term Insurance

Retirement Solutions

Wealth Management

Corporate Insurance

Employee Benefits

8. Old Mutual Limited's Porter Forces

Forces Ranking

Threat Of Substitutes

Bargaining Power Of Customers

Bargaining Power Of Suppliers

Threat Of New Entrants

Intensity Of Rivalry

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

11. Quality Control: Old Mutual Limited passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

Peers Group Analysis

Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

12.e Scoring ^Insights

12.f DCF ^BETA