Financial resultspresentation
Liberty Holdings Limited
For the year ended 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 1
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FINAN
CIAL RESULTS PRESEN
TATION
Notes
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Financial resultspresentation
Liberty Holdings Limited
For the year ended 31 December2017
Liberty Holdings LimitedDavid Munro, Chief Executive
Taking stock
2 Liberty Holdings Limited Financial results for the year ended 31 December 2017
March 1, 2018 8:38 PM Slides-Dec2017
FINAN
CIAL RESULTS PRESEN
TATION
Notes
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3
Challenges led to pressure on margins and the ability to generate value from new business
LIBERTY’S PURPOSE
Improving people’s lives by making their financial freedom possible
Liberty has a broad range of products that deliver for a large and loyal customer base
Operating in a challenging macro environment with increased competitor activity
Too many new efforts layered in complexity and distracted from core capabilities >
Some products have become uncompetitive and difficult for advisers to deliver customer value >
Customer experience and service to financial advisers needs attention >
Poor investment performance from asset management operations >
4
A journey that will take time and hard work – prioritising the right actions
Addressing the immediate priorities in the next two years
This can be achieved by;
• Increasing sales volumes
• Reduction in acquisition and maintenance costs
• Managing to better than assumptions and models
• Efficient management of capital
Value of new business margin 1% - 1.5% range 1 Growth in embedded value
that exceeds 12% 2
RoE 15% - 18% range 3 Maintain robust capital within our target range 2.5 - 3.0 times 4
Liberty Holdings Limited Financial results for the year ended 31 December 2017 3
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Notes
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5
Devising the path forward for Liberty
Horizon 1 Here and now
Manage the present
Horizon 2 The following years
through to 2020
Horizon 3 Beyond 2020
6
• Simplification program › Improve customer service, reduce complexity and simplify processes for our clients and financial advisers
› Reduce costs and improve efficiencies and effectiveness through intelligent automation
• Modernise and improve reporting systems and processes
• Enhance the risk and control environment
• Improve investment performance in asset management operations
Immediate priorities for the leadership team – horizon 1
Initiatives to improve short- to medium-term performance reflect early signs of progress
4 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS PRESEN
TATION
Notes
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7
• Restore financial performance › Sales force effectiveness
› Margins
› Product and portfolio rationalisation
› Expense management
• Working with Liberty Two Degrees management to assess alternatives to the existing structure
• Terminated the intended acquisition in Nigeria
• Optimise outcomes from Liberty Africa Insurance, Liberty Health and the Short-term insurance joint venture with Standard Bank Group
Immediate priorities for the leadership team – horizon 1 continued
8
• Evolve our strategy › Understand and anticipate the changing market and evolving customer needs
› Leverage unique data sets and invest in technology to shape customer engagement
• Identify opportunities to grow › Maximise our relationship with Standard Bank Group, leverage capacity and resources to increase
access to customers
› Digitisation, improve the way we support clients and advisers and prioritise existing initiatives
› Modernise Liberty through culture, people and brand
Looking at our time frame to 2020 – horizon 2
Liberty Holdings Limited Financial results for the year ended 31 December 2017 5
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Financial results review Liberty Holdings Limited Yuresh Maharaj, Financial Director
10
Group financial highlights
Improved normalised headline earnings, higher investment returns and strong capital position
Rm (unless stated otherwise) Dec 17 Dec 16 % Δ
Normalised headline earnings 2 719 2 527 8
Long-term insurance net customer cash flows 1 634 1 119 46
Long-term insurance indexed new business 8 018 7 892 2
Total assets under management (Rbn) 720 676 7
Shareholder Investment Portfolio (SIP) – gross of tax return (%) 8.5 5.7
Liberty Group Limited capital adequacy cover (times covered) 2.92 2.95
Dividend per share (cents) 691 691
6 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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CIAL RESULTS PRESEN
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Notes
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11
5 year track record since 2013 of consistently managing insurance operations to model
SA insurance operations
• Continued positive risk, persistency and credit variances partially offset by:
› Basis changes to better reflect the expectation of future cash flows given policy terms, conditions and regulatory landscape
• SA covered business embedded value maintained R34 billion, generating a return of 8.2%
109
21
43
2017 1H17 2016
Operating experience variances and basis changes remain positive (Rm)
SA covered business net worth (Rm) Dec 17 Dec 16
Expected transfer to net worth 4 112 4 217
Operating experience variances and basis changes 110 264
Development expenses (55) (45) Change in allowance for fair value share rights (3) 28
Actual net of tax transfer to net worth 4 164 4 464
Performance in line with expectation (%) 101 106
12
Capital position at 31 December 2017
Capital levels remain strong post the sovereign credit ratings downgrade
Rm (unless stated otherwise) Liberty
Holdings Limited Liberty
Group Limited
IFRS
IFRS shareholder equity 22 444 18 412
BEE preference shares 123 123
Liberty Two Degrees normalisation (340) -
Normalised shareholder equity 22 227 18 535
Regulatory capital
Shareholder assets 19 144 15 700
Regulatory capital requirement 6 022 5 378
Surplus above regulatory requirement 13 122 10 322
Risk appetite capital coverage ratio 1.50 1.50
Capital buffer in excess of risk appetite 10 111 7 633
Capital ratio at period end (times covered) 3.18 2.92
Liberty Holdings Limited Financial results for the year ended 31 December 2017 7
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Notes
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1 208 1 412
2 719
16
376 252
1 307
(204) (236)
Business unit earnings
• Individual Arrangements earnings largely driven by positive risk variances
• Group Arrangements had increased IPP claims experience and once-off Nigeria acquisition termination costs
• STANLIB SA impacted by margin pressure from less favourable sales mix and increased costs
• Remediation program in STANLIB Rest of Africa continued, with risk of further operational losses significantly reduced
Business unit contribution to normalised earnings (Rm)
FY16 (%): 8 (89) 18 (45) >(100) (13) (19) 66 8 Individual
Arrangements Group
Arrangements LibFin
Markets STANLIB
SA STANLIB
Rest of Africa Central 2017 normalised
operating earnings SIP 2017 normalised
headline earnings
14
• Improved persistency in Individual Arrangements risk business, retention initiatives having positive impact on withdrawals and maturities
• Increased new recurring premium sales offset by umbrella scheme outflows in Liberty Corporate
Insurance operations
Key performance indicators (Rm unless stated otherwise) 2H17 1H17 2017 2016 % Δ
Value of new business 147 86 233 483 (52)
New business margin (%) 0.5 0.4 0.5 1.1
Indexed new business 4 088 3 930 8 018 7 892 2
Individual Arrangements 3 365 3 205 6 570 6 639 (1)
Group Arrangements 723 725 1 448 1 253 16
Net customer cash flows 2 299 (665) 1 634 1 119 46
Individual Arrangements 2 072 774 2 846 1 948 46
Group Arrangements 227 (1 439) (1 212) (268) >(100)
STANLIB Multi-manager* (561)
* Arrangement terminated in 2016, no flows are recorded for 2017 and going forward
8 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS PRESEN
TATION
Notes
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• Value of new business and margins are priorities for the insurance operations: › Focus on meaningful cost efficiencies with prudent expense management
› Continue to innovate on new higher margin products
› Product enhancements to improve margin – risk, critical illness, investment builder
› Retention initiatives
Financial performance – focus areas remain
Committed to deliver on short-term performance targets
15
South African operations • Improved non-money market inflows:
› Fixed income, property, absolute return funds and LISP
• Ongoing initiatives to address investment performance and financial control
Rest of Africa operations • Strengthened control environment in East Africa
• Curtailment of cash mandate business
• Other territories performed to expectation
Asset management operations
Remediation of operations remains an immediate priority for the new leadership at STANLIB
AUM and cash flows Dec 17 Dec 16 % Δ
Assets under management (Rbn) 609 586 4
STANLIB SA 556 535 4
STANLIB Rest of Africa 53 51 4
Net customer cash flows (Rm) 4 251 5 764 (26)
STANLIB SA 4 731 2 801 69
STANLIB Rest of Africa (480) 2 963 >(100)
Liberty Holdings Limited Financial results for the year ended 31 December 2017 9
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CIAL RESULTS PRESEN
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Notes
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In closing Liberty Holdings Limited David Munro, Group Chief Executive
18
We have diagnosed the challenges and put plans in place to restore Liberty
Early signs of progress are emerging
• Financial advisers and distribution partners are critical to success
• Renewed sense of optimism in the organisation
• Focused on delivering exceptional client and adviser experience
• Critical capabilities have been replaced
• Strategy workstreams are driving high levels of engagement
• Emerging confidence and sentiment in South Africa again
10 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS PRESEN
TATION
Notes
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Liberty has all the ingredients for success
Source: 2017 Integrated Annual Report
1 We have been trusted partners to our clients and advisers for over 60 years
2 A diversified multichannel distribution capability
3 We have a track record of pioneering financial solutions in South Africa
4 An integral part of Standard Bank Group with a meaningful bancassurance arrangement
5 Staffed by more than 6 000 people who are passionately committed to the organisation
6 A strong capital base, a unique ability to manage risk, and disciplined cost management
More than 2.5 million in-force policies Paid R8.7bn in
death and disability claims
We administer over 10 000 retirement schemes,
and 500 000 individual and institutional investment customers
More than 3 500 tied financial advisers
Retirement Annuity offering
Insurer to build
shopping malls
JSE-listed Life assurer
Insurer to introduce Nurses
on the Road
To introduce Umbrella
Funds Firs
t
Liberty Group Limited CAR cover 2.92 times
the statutory requirement
LibFin facilitates
differentiating features in
product offerings
Largest provider of long-term insurance solutions to the SA retail affluent market
Questions
Liberty Holdings Limited Financial results for the year ended 31 December 2017 11
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NOTES
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12 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS PRESEN
TATION
NOTES
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SENS-Dec2017 March 1, 2018 6:20 PM
FINAN
CIAL RESULTS
Financial results
Liberty Holdings Limited
Fo r t h e ye a r e n d e d 31 D e ce m b e r 2017
March 1, 2018 6:20 PM SENS-Dec2017
FINAN
CIAL RESULTS HIGHLIGHTS
NORMALISED HEADLINE EARNINGS
R2,7 billion
LIBERTY GROUP LIMITED CAR COVER
2,92 times
LONG-TERM INSURANCE INDEXED NEW BUSINESS
R8 billion
GROUP ASSETS UNDER MANAGEMENT
R720 billion
CONTENTS Page
Financial performance indicators 15
Financial review 16
Accounting policies 20
Auditor statement 20
Directors’ responsibility 21
Explanation of terms 21
Consolidated statement of financial position 23
Consolidated statement of comprehensive income 24
Summary consolidated statement of changes in equity 25
Summary consolidated statement of cash flows 26
Headline earnings and earnings per share 27
Summary consolidated segment information 28
Group equity value report 32
Long-term insurance new business 38
Long-term insurance net cash flows 39
Assets under management 40
Asset management net cash flows 40
Short-term insurance indicators 41
Capital commitments 41
Retirement benefit obligations 42
Related parties 42
Offsetting, enforceable master netting arrangements or similar agreements 43
Liberty Holdings Limited Financial results for the year ended 31 December 2017 15
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FINAN
CIAL RESULTSFINANCIAL PERFORMANCE INDICATORS
for the year ended 31 December 2017
Rm (unless otherwise stated) 2017 2016%
change
Liberty Holdings LimitedEarningsBasic earnings per share (cents) 1 152,6 811,7 42Fully diluted basic earnings per share (cents) 1 120,7 788,9 42Normalised headline earnings(1) 2 719 2 527 8Normalised headline earnings per share (cents) (1) 982,1 904,5 9Normalised return on IFRS equity (%) (1) 12,3 11,4 Group equity valueNormalised group equity value per share (R) (1) 140,31 145,86 (4)Normalised return on group equity value (%) (1) 1,1 5,1 Distributions per share (cents) Normal dividend 691 691
Interim dividend 276 276 Final dividend 415 415
Total assets under management (Rbn) 720 676 7
Long-term insurance operationsIndexed new business (excluding contractual increases) 8 018 7 892 2Embedded value of new business 233 483 (52)New business margin (%) 0,5 1,1 Net customer cash inflows 1 634 1 119 46Capital adequacy cover of Liberty Group Limited (times covered) 2,92 2,95
Asset management Assets under management (Rbn) 609 586 4Net cash inflows including money market(2) 4 251 5 764 (26)
Retail and institutional net cash inflows excluding money market(2) 3 659 4 488 (18)Money market net cash inflows(2) 592 1 276 (54)
(1) Normalised: headline earnings, headline earnings per share, return on equity, group equity value per share and return on group equity value. These measures reflect the economic reality of the consolidation of the listed REIT Liberty Two Degrees (L2D) and the Black Economic Empowerment (BEE) transaction,
as opposed to the required IFRS accounting treatment.(2) Excludes intergroup life funds.
Preparation and supervision: This announcement on Liberty Holdings Limited annual financial results for the year ended 31 December 2017 has been prepared by M Natsas CA(SA) and D Wichmann CA(SA) and supervised by Y Maharaj (Financial Director) CA(SA).
16 Liberty Holdings Limited Financial results for the year ended 31 December 2017
March 1, 2018 6:20 PM SENS-Dec2017
FINAN
CIAL RESULTS FINANCIAL REVIEW
for the year ended 31 December 2017
Normalised headline earnings increased by 8% supported by improving SA retail insurance earnings and higher returns from investment markets. The group’s capital position remains strong. Decisive actions are being taken to improve profitability and place Liberty on a sound strategic footing.
The group remained resilient during the year, as evidenced by the stronger capital position of the group’s main long-term insurance licence, Liberty Group Limited, with a capital adequacy ratio at 2,92 times the regulatory minimum compared to 2,82 at 30 June 2017. This remains at the upper end of our target range at 31 December 2017 despite the impact of downgrades of the South African sovereign credit rating during the year.
The group’s SA covered insurance business continued to deliver positive operating variances and be managed to better than model supporting the core assumptions underlying the insurance book. The SA covered business embedded value was preserved, maintaining embedded value earnings of R2,8 billion compared to the prior year and generating a return of 8,2%. The value of new business (VoNB) and new business
margin however ended the year below expectation. Actions are being taken to restore the new business margin. The economic environment favoured flows into guaranteed products, which manifested in a weaker mix of business from a margin perspective. The improvement in VoNB in the second half of 2017, despite lower volumes, shows signs that the focused initiatives commenced in the second quarter 2017 are starting to deliver the desired outcome.
Group equity value per share was lower at R140,31 (31 December 2016: R145,86). The lower group equity value per share was attributable to weaker earnings from the group’s non-covered businesses particularly within the STANLIB businesses and the resultant capitalisation impact of reduced earnings.
Group net customer cash inflows, including the Gateway LISP, were positive at R6,5 billion despite the poor economic backdrop. Long-term insurance net customer cash inflows of R1,6 billion reflected an improvement on the prior year inflows of R1,1 billion, supported by lower policy withdrawals and maturities in Individual Arrangements.
Long-term insurance indexed new business sales grew marginally to R8 billion. Competitive retail market pricing and the tough economic environment continued to place significant pressure on retail sales volumes, partially offset by growth in Liberty Corporate recurring premiums during the year.
Total group assets under management increased to R720 billion (31 December 2016: R676 billion).
Normalised headline earnings for the year ended 31 December 2017 of R2 719 million were 8% up on 2016, supported by a higher contribution of R1 307 million (31 December 2016: R787 million) from the shareholder investment portfolio (SIP). Normalised operating earnings however were 19% down on the prior year. The improved earnings contribution from Individual Arrangements was offset by the lower underwriting result from Liberty Corporate. STANLIB SA’s earnings continued to be impacted by margin pressure due to a less favourable sales mix and operational write-offs. STANLIB Rest of Africa earnings were impacted by operational losses. Normalised return on equity was 12,3% (31 December 2016: 11,4%).
Headline earnings for 2017 amounted to R3 252 million, up 47% compared to R2 207 million in 2016. Liberty’s headline earnings include the positive earnings impact of R543 million arising from the accounting mismatch on the consolidation of the Liberty Two Degrees listed REIT.
Liberty Holdings Limited Financial results for the year ended 31 December 2017 17
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FINAN
CIAL RESULTSFINANCIAL REVIEW (CONTINUED)
for the year ended 31 December 2017
Earnings by business unit
Rm (Unaudited) 2017 2016%
change
Insurance Individual Arrangements 1 208 1 119 8 Group Arrangements 16 149 (89)
Liberty Corporate 81 191 (58)Liberty Africa Insurance 45 41 10 Liberty Health (54) (45) (20)Nigeria(3) and project support costs (56) (38) (47)
Balance sheet management 376 318 18
LibFin Markets – credit portfolio 330 300 10 LibFin Markets – asset/liability management portfolio 46 18 >100
Asset management(1)
STANLIB South Africa 252 459 (45)STANLIB Rest of Africa (204) (97) (>100)
Central overheads and sundry income (236) (208) (13)
Normalised operating earnings 1 412 1 740 (19)LibFin Investments – SIP 1 307 787 66
Normalised headline earnings 2 719 2 527 8 BEE preference share adjustment (10) (16) 38 Reversal of accounting mismatch arising on consolidation of L2D(2) 543 (304) >100
Headline earnings 3 252 2 207 47 (1) Asset management customer facing unit includes the asset management capabilities under STANLIB South Africa and STANLIB Rest of Africa business units, which are managed
separately, with each business having its own accountable executive.(2) Refer Explanation of terms on page 21.(3) Costs associated with the termination of a long-term licence acquisition in Nigeria and project management costs of the Group Arrangements CFU.
Commentary on the earnings by business unit follows below. Additional information is contained in the summary consolidated segment information.
Individual ArrangementsHeadline earnings from the group’s South African retail operations of R1 208 million were 8% up on the prior year. Positive risk variances in the year were partly offset by modelling and assumption changes to better reflect the expectation of future cash flows given policy terms and conditions.
New business strain arising from the geared effects of increased costs relative to new business volumes with a weaker business mix continued to place pressure on earnings. This, together with the impact of the new tax risk fund and basis changes resulted in the value of new business reducing to R155 million in the current year (31 December 2016: R426 million), while the new business margin declined to 0,5% from 1,2% in the prior year. The improvement in the value of new business from R62 million for the six months to 30 June 2017 to R155 million for the year to 31 December 2017 indicates that initiatives implemented in 2017 to improve the value of new business are starting to have the desired effect.
Indexed new business of R6 570 million was 1% down on 2016. Competitive retail market pricing and the tough economic environment continued to place significant pressure on sales volumes. The economic environment favoured flows into guaranteed products, as evidenced by strong demand for the Guaranteed Investment Product and the Bold Living Annuity throughout the year.
Net customer cash inflows of R2,8 billion were 46% up on prior year inflows of R1,9 billion, driven by lower policy withdrawals and maturities. This also reflects a significant improvement over the R0,8 billion inflows reported at 30 June 2017 and confirms that the ongoing initiatives to improve retention are delivering the required results.
Despite the tough environment, the business continued to deliver positive operating variances and has been managed to “better than model” consistently for the last five years.
18 Liberty Holdings Limited Financial results for the year ended 31 December 2017
March 1, 2018 6:20 PM SENS-Dec2017
FINAN
CIAL RESULTS FINANCIAL REVIEW (CONTINUED)
for the year ended 31 December 2017
Group ArrangementsLiberty CorporateEarnings of R81 million were impacted by a considerably lower underwriting result due to a high level of risk claims experienced, particularly an increase in income protection plan (IPP) claims in the second half of 2017. Indexed new business was 39% higher than the prior year at R1 171 million, with recurring premium new business up 42% due to good risk and umbrella enhancement sales. Single premium new business was up 6%. This resulted in the value of new business increasing to R57 million. Net cash outflows amounted to R1,5 billion reflecting a small number of high asset value scheme terminations and higher risk and IPP claims linked to the challenging economic environment and associated job losses, partially offset by increased recurring premium inflows.
Liberty Africa and Liberty Health InsuranceLiberty Africa Insurance earnings of R45 million were 10% up on the prior year despite negative exchange rate movements. Indexed new business in the long-term insurance businesses of R277 million was 33% down on the prior year due to exchange rate movements and a large once off deal in 2016. The value of new business was lower at R21 million at a margin of 3,9%. The short-term insurance businesses have experienced considerable pricing pressure.
The recessionary environment in Nigeria significantly impacted Liberty Health’s short-term profitability. Management remains focused on growing the operations to scale.
Asset managementSTANLIB South AfricaSTANLIB South Africa earnings were R252 million for the year (31 December 2016: R459 million). Earnings were impacted by margin pressure due to a less favourable sales mix, costs associated with the termination of the institutional administration outsourcing programme, the launch of new franchises and operational write-offs.
Total assets under management by STANLIB South Africa increased by R21 billion to R556 billion at 31 December 2017.
Net customer cash inflows (excluding intergroup) grew to R4,7 billion from inflows of R2,8 billion in the prior year. This result was mainly attributable to strong non-money market inflows. Intergroup cash outflows for the year amounted to R15,9 billion.
STANLIB Rest of AfricaSTANLIB Rest of Africa incurred a loss of R204 million for the year (31 December 2016: loss of R97 million). The business continued to be affected mainly by operational losses identified during the remedial programme in East Africa. Efforts to strengthen the operational and control environments have progressed well and risks of further operational losses are significantly reduced. Operations in the other African territories tracked broadly to expectation.
Total assets under management by STANLIB Rest of Africa increased by R1,7 billion to R52,5 billion at 31 December 2017.
Liberty Two Degrees (L2D)L2D’s results for the year ended 31 December 2017 were released on 19 February 2018. The operational performance of the property portfolio remained strong notwithstanding a difficult consumer environment. Together with L2D management, we are assessing alternatives to deal with the limitations of the existing structure.
BancassuranceThe bancassurance agreement with Standard Bank, which is applicable across the group’s asset management and insurance operations, continues to make a positive contribution to new business volumes and earnings. The total indexed new business premiums sold under the agreement increased by 7% to R3,3 billion for the year. Good progress is being made with the implementation of the 10 point bancassurance plan and we continue leveraging our relationship with Standard Bank to capture appropriate opportunities.
Balance sheet managementLibFin Markets – Asset liability management and credit portfolio Earnings from the credit portfolio increased by 10% to R330 million as a result of growth in the credit portfolio notwithstanding the impact of the sovereign ratings downgrades.
The asset liability management profit amounted to R46 million due to favourable market positioning (31 December 2016: R18 million).
LibFin assets under management were higher at R62 billion (31 December 2016: R58 billion).
LibFin Investments – Shareholder Investment Portfolio (SIP) The SIP includes the assets backing capital in the insurance operations as well as the group’s investment market exposure to the 90:10 book of business. The current risk profile of the SIP is similar to a conservative balanced portfolio and is managed with a long-term through the cycle investment horizon.
Market returns experienced in 2017 were higher and the portfolio accordingly delivered a gross return of 8,5% (31 December 2016: 5,7%) which was marginally below the portfolio benchmark. The extent of the SIP exposure to investment markets remains appropriate in the context of the group’s risk appetite. Earnings of R1 307 million were well above 2016 earnings of R787 million despite the significant rand appreciation in December 2017 which reduced the returns on offshore assets.
Liberty Holdings Limited Financial results for the year ended 31 December 2017 19
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FINAN
CIAL RESULTSFINANCIAL REVIEW (CONTINUED)
for the year ended 31 December 2017
Capital adequacy coverThe capital adequacy cover of Liberty Group Limited remained strong at 2,92 times the statutory requirement (31 December 2016: 2,95 times). The group remains well capitalised at the upper end of its target range in respect of the current capital regime and in respect of capital requirements under the impending Solvency Assessment and Management regime.
All other group subsidiary life licences were adequately capitalised.
Dividends2017 final dividend In line with the group’s dividend policy, the board has approved and declared a gross final dividend of 415 cents per ordinary share. The final dividend will be paid out of income reserves and is payable on Monday, 9 April 2018 to all ordinary shareholders recorded in the books of Liberty Holdings Limited on the record date.
The dividend of 415 cents per ordinary share will be subject to a local dividend tax rate of 20% which will result in a net final dividend, to those shareholders who are not exempt from paying dividend tax, of 332 cents per ordinary share. Liberty Holdings Limited’s income tax number is 9050/191/71/8. The number of ordinary shares in issue in the company’s share capital at the date of declaration is 286 202 373.
The important dates pertaining to the dividend are as follows:
Last date to trade cum dividend on the JSE Tuesday, 3 April 2018
First trading day ex dividend on the JSE Wednesday, 4 April 2018
Record date Friday, 6 April 2018
Payment date Monday, 9 April 2018
Share certificates may not be dematerialised or rematerialised between Wednesday, 4 April 2018 and Friday, 6 April 2018, both days inclusive. Where applicable, in terms of instructions received by the company from certificated shareholders, the payment of the dividend will be made electronically to shareholders’ bank accounts on payment date.
In the absence of specific mandates, cheques will be posted to shareholders. Shareholders who have dematerialised their shares will have their accounts with their CSDP or broker credited on Monday, 9 April 2018.
ProspectsLiberty’s business is built on our deep relationships with our customers and advisers which is core to creating value for all stakeholders. We are taking decisive actions to improve profitability and place our business on a sound strategic footing. In 2018, management will focus on restoring the financial performance of the SA Retail insurance business, improving the investment performance of STANLIB, simplifying the group’s overall operations and expanding our relationship with the Standard Bank Group.
We are confident that the group will emerge from this period of change with significantly greater potential to serve the needs of all stakeholders.
David Munro Jacko MareeChief Executive Chairman
1 March 2018
Transfer SecretariesComputershare Investor Services Proprietary Limited(Registration number 2004/003647/07)Rosebank Towers, 15 Biermann Avenue, RosebankJohannesburg 2196Tel: +27 (11) 370 5000
Liberty Holdings Limited Incorporated in the Republic of South Africa (Registration number: 1968/002095/06)JSE code: LBHISIN code: ZAE000012714Preference share code: LBHPISIN code: ZAE000004040Telephone +27 11 408 3911
These results are available at www.libertyholdings.co.za
www.libertyholdings.co.za
Sponsor
20 Liberty Holdings Limited Financial results for the year ended 31 December 2017
March 1, 2018 6:20 PM SENS-Dec2017
FINAN
CIAL RESULTS ACCOUNTING POLICIES
The 2017 consolidated annual financial statements of Liberty Holdings Limited have been prepared in accordance with and contains information required by:
• International Financial Reporting Standards (IFRS) including IAS 34 Interim Financial Reporting (with the exception of disclosures required under IAS 34 16A (j) relating to fair value measurement, which are not required by the JSE Listing Requirements);
• the SAICA Financial Reporting Guides as issued by the Accounting Practices Committee;
• Financial Reporting Pronouncements as issued by the Financial Reporting Standards Council;
• the Listings Requirements of the JSE Limited; and
• the South African Companies Act No. 71 of 2008.
The consolidated annual financial statements have been prepared in compliance with IFRS and interpretations for year ends commencing on or after 1 January 2017.
The accounting policies are consistent with those applied in the prior year except for the mandatory adoption of minor amendments or early adoption of amendments to IFRS. These amendments have not resulted in any material impacts to the group’s 2017 reported results or comparative periods.
Amendments to IFRS 2 Share-based Payments and IAS 40 Investment Properties, effective 1 January 2018, have been early adopted as at 1 January 2017. These amendments have not resulted in any impact to the group’s 2017 reported results, comparative periods or disclosures.
AUDITOR STATEMENT
PricewaterhouseCoopers Inc. (PwC) have audited the consolidated annual financial statements of Liberty Holdings Limited from which the summary consolidated financial results have been extracted. These summary consolidated financial results comprise the consolidated statement of financial position at 31 December 2017, the consolidated statement of comprehensive income, summary consolidated changes in equity and summary consolidated cash flows for the year then ended and selected explanatory notes. These statements and related notes are marked as ‘audited’. This announcement itself is not audited.
The financial results contained in this announcement have been prepared in accordance with the requirements of the JSE Limited Listings Requirements for preliminary reports, and the requirements of the Companies Act applicable to summary financial statements. The Listings Requirements require preliminary reports to be prepared in accordance with the framework concepts and the measurement and recognition requirements of International Financial Reporting Standards (IFRS), SAICA Financial Reporting Guides as issued by the Accounting Practices Committee and Financial Pronouncements as issued by the Financial Reporting Standards Council and also, as a minimum, to contain the information required by IAS 34 Interim Financial Reporting.
The accounting policies applied in the preparation of the consolidated annual financial statements, from which the summary consolidated financial results were extracted, are in terms of IFRS and are consistent with the accounting policies applied in the preparation of the prior year’s consolidated annual financial statements except for the changes outlined in the Accounting policies above. This announcement does not include the information required pursuant to paragraph 16A (j) of IAS 34. The full IAS 34 compliant summary consolidated financial results announcement and a copy of the auditors’ report is available on request or on the company’s website and at the company’s registered office.
The auditors have expressed an unmodified audit opinion on the consolidated annual financial statements. PwC have also issued an unmodified assurance opinion on Liberty Holdings Limited’s group equity value report, which has also been marked as ‘audited’ in this financial results announcement.
Shareholders are advised that in order to obtain a full understanding of the nature of the auditors’ engagement, they should obtain a copy of the auditors’ reports together with the accompanying financial information which is available upon request from Liberty Holdings Limited’s registered office.
Liberty Holdings Limited Financial results for the year ended 31 December 2017 21
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FINAN
CIAL RESULTSDIRECTORS’ RESPONSIBILITY
The summary consolidated annual financial statements included in this announcement are the full responsibility of the directors. The directors confirm that the financial information has been correctly extracted from the underlying 2017 audited consolidated
Liberty Holdings Limited annual financial statements which are available for inspection at the company’s registered office on request.
EXPLANATION OF TERMS
Capital adequacy requirement (CAR)
The capital adequacy requirement is the minimum amount by which the Financial Services Board requires an insurer’s assets to exceed its liabilities. The assets, liabilities and CAR must be calculated using a method which meets the Financial Services Board’s requirements. Capital adequacy cover refers to the amount of capital the insurer has as a multiple of the minimum requirement.
Development costsRepresents project costs incurred on developing or enhancing future revenue opportunities.
FCTRForeign Currency Translation Reserve.
“Liberty” or “group”Represents the collective of Liberty Holdings Limited and its subsidiaries.
Long-term insurance operations – Indexed new businessThis is a measure of new business which is calculated as the sum of twelve months’ premiums on new recurring premium policies and one tenth of single premium sales.
Long-term insurance operations – Value of new business and marginThe present value, at point of sale, of the projected stream of after tax profits for new business issued, net of the cost of required capital. The present value is calculated using a risk adjusted discount rate. Margin is calculated using the value of new business divided by the present value of future modelled premiums.
Short-term insurance operations – Claims loss ratioThis is a measure of underwriting risk and is measured as a ratio of claims incurred divided by the net premiums earned.
Normalised: headline earnings, headline earnings per share, return on equity, group equity value per share and return on group equity valueThese measures reflect the economic reality of the Black Economic Empowerment (BEE) transaction and the consolidation of the listed REIT Liberty Two Degrees (L2D) as opposed to the required IFRS accounting treatment.
BEE transaction
IFRS reflects the BEE transaction as a share buy-back. Dividends received on the group’s preference shares (which are recognised as an asset for this purpose) are included in income. Shares in issue relating to the transaction are reinstated.
22 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS EXPLANATION OF TERMS (CONTINUED)
Normalised: headline earnings, headline earnings per share, return on equity, group equity value per share and return on group equity value (CONTINUED)
Reversal of accounting mismatch arising on IFRS profit or loss consolidation of L2DAn accounting mismatch arises on consolidation of L2D in the group annual financial statements, resulting from the different measurement bases applied to L2D’s assets and Liberty Group Limited’s (100% subsidiary of Liberty Holdings Limited) policyholder liabilities. Specifically:
• on a consolidated look through basis the investment property assets of L2D are included in the group annual financial statements at fair value; whereas
• the corresponding linked obligations to Liberty Group Limited’s policyholders are required under IFRS to continue to be measured in the group annual financial statements at the listed price of the L2D units.
The result of this is an accounting mismatch that represents any difference in the profit and loss movement in the price at which L2D’s listed units trade relative to the underlying net asset value.
L2D adjustment in group equity value
In addition to the reversal of the accounting mismatch in IFRS profit or loss described above, the group equity value adjusts the exposures in the shareholder investment portfolios (SIP) to the listed unit price.
Summary of impact
Below is a summary of the L2D transaction impact on the ordinary shareholders interest:
Rm
Group equityvalueTotal
IFRSnet asset
value
SIP equity value
adjustment
Opening adjustment at 1 January 2017 (330) (193) (137)IFRS profit or loss 543 543 Group equity value earnings 394 394Transaction between owners (10) (10)
Closing adjustment at 31 December 2017 597 340 257
Liberty Holdings Limited Financial results for the year ended 31 December 2017 23
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FINAN
CIAL RESULTSCONSOLIDATED STATEMENT OF FINANCIAL POSITION
as at 31 December 2017
Rm (Audited) 2017 2016
AssetsIntangible assets 231 390 Defined benefit pension fund employer surplus 171 215 Properties 34 768 33 828 Equipment 1 128 1 105 Interests in joint ventures 1 244 1 229 Interests in associates 15 197 12 995 Deferred taxation 336 358 Deferred acquisition costs 737 713 Long-term policyholder assets – insurance contracts 7 484 7 314 Reinsurance assets 1 774 1 674 Long-term insurance 1 481 1 352 Short-term insurance 293 322 Financial investments 338 534 316 441 Loans and receivables 1 222 1 242 Assets held for trading and for hedging 7 871 8 609 Repurchase agreements, scrip and collateral assets 11 900 15 483 Prepayments, insurance and other receivables 6 361 5 300 Cash and cash equivalents 15 169 14 994 Total assets 444 127 421 890
LiabilitiesLong-term policyholder liabilities 322 918 307 230 Insurance contracts 210 554 204 155 Investment contracts with discretionary participation features 11 845 11 462 Financial liabilities under investment contracts 100 519 91 613 Reinsurance liabilities 663 555 Third-party financial liabilities arising on consolidation of mutual funds 49 713 44 046 Provisions 76 191 Deferred taxation 3 386 2 586 Deferred revenue 291 268 Deemed disposal taxation liability 436 873 Short-term insurance liabilities 780 925 Financial liabilities 5 581 4 601 Liabilities held for trading and for hedging 6 311 6 798 Repurchase agreements liabilities and collateral deposits payable 9 097 11 748 Employee benefits 1 446 1 369 Insurance and other payables 11 995 11 213 Current taxation 1 043 481 Total liabilities 413 736 392 884
EquityOrdinary shareholders’ equity 22 444 21 676 Share capital 26 26 Share premium 5 157 5 296 Retained surplus 18 166 16 990 Other reserves ( 905) ( 636)Non-controlling interests 7 947 7 330 Total equity 30 391 29 006 Total equity and liabilities 444 127 421 890
24 Liberty Holdings Limited Financial results for the year ended 31 December 2017
March 1, 2018 6:20 PM SENS-Dec2017
FINAN
CIAL RESULTS
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOMEfor the year ended 31 December 2017
Rm (Audited) 2017 2016
Insurance premiums 39 970 41 288 Reinsurance premiums (1 950) (1 922)Net insurance premiums 38 020 39 366 Fee income and reinsurance commission 3 683 3 731 Investment income 21 652 20 885 Hotel operations sales 532 585 Investment gains/(losses) 18 835 (1 823)Total revenue 82 722 62 744 Claims and policyholder benefits under insurance contracts (38 819) (39 664)Insurance claims recovered from reinsurers 1 800 1 450 Change in long-term policyholder assets and liabilities (6 829) 598 Liabilities under insurance contracts (6 504) 1 164 Policyholder assets related to insurance contracts 170 (265)Investment contracts with discretionary participation features (521) (404)Applicable to reinsurers 26 103 Fair value adjustment to long-term policyholder liabilities under investment contracts (9 116) (3 891)Fair value adjustment to financial liabilities (27)Fair value adjustment on third party mutual fund interests (4 619) 619 Acquisition costs (4 935) (4 723)General marketing and administration expenses (11 345) (10 733)Finance costs (1 344) (1 415)Profit share allocations under bancassurance and other agreements (972) (1 029)Equity accounted earnings from joint venture 25 22 Profit before taxation 6 568 3 951 Taxation(1) (2 864) (1 325)Total earnings 3 704 2 626 Other comprehensive income (233) (148)Items that may be reclassified subsequently to profit or loss (95) (101)Net change in fair value on cash flow hedges 75 218 Income and capital gains tax relating to net change in fair value on cash flow hedges (21) (56)Foreign currency translation (149) (263)Items that may not be reclassified subsequently to profit or loss (138) (47)Owner-occupied properties – fair value adjustment (67) (1)Income and capital gains tax relating to owner-occupied properties fair value adjustment (14)Change in long-term policyholder insurance liabilities (application of shadow accounting) (32) 1 Actuarial gains on post-retirement medical aid liability 45 30 Income tax relating to post-retirement medical aid liability (13) (8)Net adjustments to defined benefit pension fund(2) (41) (96)Income tax relating to defined benefit pension fund (16) 27
Total comprehensive income 3 471 2 478 Total earnings attributable to:Shareholders 3 118 2 209 Non-controlling interests 586 417
3 704 2 626 Total comprehensive income attributable to:Shareholders 2 932 2 128 Non-controlling interests 539 350
3 471 2 478 Basic and fully diluted earnings per share Cents Cents Basic earnings per share 1 152,6 811,7 Fully diluted basic earnings per share 1 120,7 788,9 (1) IFRS requires both policyholder and shareholder taxation to be reported in the taxation line. This therefore distorts the effective tax charge relative to profit before taxation.(2) Net adjustments to defined benefit pension fund include actuarial gains or losses, return on plan assets, reduced by the interest on the net defined benefit asset and the effect of
the application of the asset ceiling.
Liberty Holdings Limited Financial results for the year ended 31 December 2017 25
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FINAN
CIAL RESULTS
SUMMARY CONSOLIDATED STATEMENT OF CHANGES IN EQUITYfor the year ended 31 December 2017
Rm (Audited) 2017 2016
Balance of ordinary shareholders’ equity at 1 January 21 676 21 739 Ordinary dividends (1 942) (2 022)Total comprehensive income 2 932 2 128 Share buy-back(1) (350) (477)Black economic empowerment transaction 32 195 Share-based payments 99 132 Transaction costs of issuing units in Liberty Two Degrees (78)Preference dividends (2) (2)Transactions between owners 9 (40)Transactions between owners – Liberty Two Degrees (10) 101
Ordinary shareholders’ equity 22 444 21 676
Balance of non-controlling interests at 1 January 7 330 4 254 Total comprehensive income 539 350 Acquisition of Liberty Two Degrees 3 000 Transactions between owners – Liberty Two Degrees 351 (101)Acquisition of unincorporated property partnership 87 98 Acquisition of subsidiaries 33 Unincorporated property partnerships net distributions (238) (219)Non-controlling interests’ share of subsidiary distributions (133) (21)Non-controlling interests’ share of shares issued in subsidiary 2 3 Transaction costs of issuing units in Liberty Two Degrees (38)Transactions between owners 9 (29)
Non-controlling interests 7 947 7 330
Total equity 30 391 29 006 (1) Share buy-backs are purchases from the market to meet employee share-based payment obligations.
26 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS SUMMARY CONSOLIDATED STATEMENT OF CASH FLOWS
for the year ended 31 December 2017
Rm (Audited) 2017 2016
Cash flows from operating activities 5 121 2 443
Cash utilised by operations (7 082) (9 157)Interest and dividends received 18 841 18 242 Distributions paid (3 075) (2 717)Taxation paid (1 946) (2 260)Other operating cash flows (1 617) (1 665)
Cash flows from investing activities (3 581) (6 607)
Net purchase of investments (2 906) (4 937)Net purchase of other assets (375) (288)Repayment of collateral deposits payable (258) (1 236)Acquisition of subsidiaries (146)Acquisition of equity accounted joint ventures (42)
Cash flows from financing activities (1 280) (18)
Net advance of financial liabilities 980 687 Net repayment of repurchase agreements liabilities (2 393) (3 175)Net cash flows from equity transactions with non-controlling interests 483 3 063 Transaction costs of issuing units in Liberty Two Degrees (116)Share buy-back (350) (477)
Net increase/(decrease) in cash and cash equivalents 260 (4 182)Cash and cash equivalents at the beginning of the year 14 994 19 305 Cash and cash equivalents acquired through business acquisitions 61 Foreign currency translation (85) (190)
Cash and cash equivalents at the end of the year 15 169 14 994
Liberty Holdings Limited Financial results for the year ended 31 December 2017 27
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FINAN
CIAL RESULTSHEADLINE EARNINGS AND EARNINGS PER SHARE
for the year ended 31 December 2017
Rm (unless otherwise stated) (Audited) 2017 2016
Reconciliation of total earnings to headline earnings attributable to shareholdersTotal earnings attributable to shareholders 3 118 2 209 Preference share dividend (2) (2)
Basic earnings attributable to ordinary shareholders 3 116 2 207 Impairment of intangible assets 164 Tax on headline earnings adjustable item (28)
Headline earnings attributable to ordinary shareholders 3 252 2 207 Net income earned on BEE preference shares 10 16 Reversal of the accounting mismatch arising on consolidation of L2D(1) (543) 304
Normalised headline earnings attributable to ordinary shareholders 2 719 2 527
Weighted average number of shares in issue (‘000) 270 348 271 883 Normalised weighted average number of shares in issue (‘000) 276 847 279 373 Fully diluted weighted average number of shares in issue (‘000) 278 030 279 760
Earnings per share Cents Cents
Total earnings attributable to ordinary shareholdersBasic 1 152,6 811,7 Headline 1 202,9 811,7 Normalised headline 982,1 904,5
Fully diluted earnings attributable to ordinary shareholdersBasic 1 120,7 788,9 Headline 1 169,7 788,9 (1) Refer Explanation of terms on page 21.
28 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS SUMMARY CONSOLIDATED SEGMENT INFORMATION
for the year ended 31 December 2017
The audited segment results for the year ended 31 December 2017 are as follows:
Group Arrangements
Rm (Audited)
IndividualArrange
mentsLiberty
Corporate
Liberty Africa
InsuranceLiberty Health
Assetmanagement Other Total
Reportingadjustments(1)
IFRSreported
Total revenue 68 161 15 676 2 420 929 3 085 4 625 94 896 (12 174) 82 722
Profit before taxation 2 957 223 121 (134) 263 2 793 6 223 345 6 568 Taxation(3) (1 819) (62) (74) 28 (212) (725) (2 864) (2 864)
Total earnings 1 138 161 47 (106) 51 2 068 3 359 345 3 704
Reconciliation of total earnings to headline earnings attributable to shareholdersTotal earnings 1 138 161 47 (106) 51 2 068 3 359 345 3 704 Attributable to non-controlling interests (1) (58) (3) (179) (241) (345) (586)Preference share dividend (2) (2) (2)Impairment of intangible assets 13 71 52 136 136
Headline earnings 1 150 232 (11) (54) 48 1 887 3 252 3 252 Net income earned on BEE preference shares 10 10 10 Reversal of the accounting mismatch arising on consolidation of L2D (543) (543) (543)
Normalised headline earnings 1 150 232 (11) (54) 48 1 354 2 719 2 719
Reconciliation of business unit earnings to segment resultIndividual Arrangements 1 208 1 208 Group Arrangements 81 (11) (54) 16
Liberty Corporate 81 81 Liberty Africa Insurance 45 45 Liberty Health (54) (54)Nigeria(2) and project support costs (56) (56)
LibFin (Markets and Investments) (138) 151 1 670 1 683
LibFin Markets – credit portfolio 192 138 330 LibFin Markets – asset/liability matching 35 1 10 46 LibFin Investments – SIP (365) 12 1 660 1 307
Asset managementSTANLIB South Africa 252 252 STANLIB Rest of Africa (204) (204)
Central overheads and sundry income 80 (316) (236)
Normalised headline earnings 1 150 232 (11) (54) 48 1 354 2 719 (1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, the classification of long-term
insurance into defined IFRS ‘investment’ and ‘insurance’ products, the application of shadow accounting for the change in long-term policyholder insurance liabilities and the elimination of intergroup transactions.
(2) Costs associated with the termination of a long-term licence acquisition in Nigeria and project management costs of the Group Arrangements CFU.(3) IFRS requires both policyholder and shareholder taxation to be reported in the taxation line. This therefore distorts the effective tax charge relative to profit before taxation.
The customer facing units are supported by shared service functions (Group Enablement) and LibFin (incorporating LibFin Markets and LibFin Investments), which are strategic competency units. The impact of LibFin Markets is disclosed in the relevant customer grouping.
Liberty Holdings Limited Financial results for the year ended 31 December 2017 29
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FINAN
CIAL RESULTS
The audited segment results for the year ended 31 December 2017 are as follows:
Group Arrangements
Rm (Audited)
IndividualArrange
mentsLiberty
Corporate
Liberty Africa
InsuranceLiberty Health
Assetmanagement Other Total
Reportingadjustments(1)
IFRSreported
Total revenue 68 161 15 676 2 420 929 3 085 4 625 94 896 (12 174) 82 722
Profit before taxation 2 957 223 121 (134) 263 2 793 6 223 345 6 568 Taxation(3) (1 819) (62) (74) 28 (212) (725) (2 864) (2 864)
Total earnings 1 138 161 47 (106) 51 2 068 3 359 345 3 704
Reconciliation of total earnings to headline earnings attributable to shareholdersTotal earnings 1 138 161 47 (106) 51 2 068 3 359 345 3 704 Attributable to non-controlling interests (1) (58) (3) (179) (241) (345) (586)Preference share dividend (2) (2) (2)Impairment of intangible assets 13 71 52 136 136
Headline earnings 1 150 232 (11) (54) 48 1 887 3 252 3 252 Net income earned on BEE preference shares 10 10 10 Reversal of the accounting mismatch arising on consolidation of L2D (543) (543) (543)
Normalised headline earnings 1 150 232 (11) (54) 48 1 354 2 719 2 719
Reconciliation of business unit earnings to segment resultIndividual Arrangements 1 208 1 208 Group Arrangements 81 (11) (54) 16
Liberty Corporate 81 81 Liberty Africa Insurance 45 45 Liberty Health (54) (54)Nigeria(2) and project support costs (56) (56)
LibFin (Markets and Investments) (138) 151 1 670 1 683
LibFin Markets – credit portfolio 192 138 330 LibFin Markets – asset/liability matching 35 1 10 46 LibFin Investments – SIP (365) 12 1 660 1 307
Asset managementSTANLIB South Africa 252 252 STANLIB Rest of Africa (204) (204)
Central overheads and sundry income 80 (316) (236)
Normalised headline earnings 1 150 232 (11) (54) 48 1 354 2 719 (1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, the classification of long-term
insurance into defined IFRS ‘investment’ and ‘insurance’ products, the application of shadow accounting for the change in long-term policyholder insurance liabilities and the elimination of intergroup transactions.
SUMMARY CONSOLIDATED SEGMENT INFORMATION (CONTINUED)
for the year ended 31 December 2017
30 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS
SUMMARY CONSOLIDATED SEGMENT INFORMATION (CONTINUED)
for the year ended 31 December 2017
The audited segment results for the year ended 31 December 2016 are as follows:
Group Arrangements
Restated(4)
Rm (Audited)
IndividualArrange-
mentsLiberty
Corporate
Liberty Africa
InsuranceLiberty Health
Assetmanagement Other Total
Reportingadjustments(1)
IFRSreported
Total revenue 56 583 13 963 2 811 1 276 3 384 1 097 79 114 (16 370) 62 744
Profit before taxation 2 018 376 144 (74) 517 653 3 634 317 3 951 Taxation(3) (950) (112) (79) 29 (148) (65) (1 325) (1 325)
Total earnings 1 068 264 65 (45) 369 588 2 309 317 2 626
Reconciliation of total earnings to headline earnings attributable to shareholdersTotal earnings 1 068 264 65 (45) 369 588 2 309 317 2 626 Attributable to non-controlling interests (62) (7) (31) (100) (317) (417)Preference share dividend (2) (2) (2)
Headline earnings 1 068 264 3 (45) 362 555 2 207 2 207 Net income earned on BEE preference shares 16 16 16 Reversal of the accounting mismatch arising on consolidation of L2D 304 304 304
Normalised headline earnings 1 068 264 3 (45) 362 875 2 527 2 527
Reconciliation of business unit earnings to segment resultIndividual Arrangements 1 119 1 119 Group Arrangements 191 3 (45) 149
Liberty Corporate 191 191 Liberty Africa Insurance 41 41 Liberty Health (45) (45)Nigeria(2) and project support costs (38) (38)
LibFin (Markets and Investments) 6 103 996 1 105
LibFin Markets – credit portfolio 197 103 300 LibFin Markets – asset/liability matching 15 3 18 LibFin Investments – SIP (206) (3) 996 787
Asset management STANLIB South Africa 459 459 STANLIB Rest of Africa (97) (97)
Central overheads and sundry income (57) (30) (121) (208)
Normalised headline earnings 1 068 264 3 (45) 362 875 2 527 (1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, the classification of long-term
insurance into defined IFRS ‘investment’ and ‘insurance’ products, the application of shadow accounting for the change in long-term policyholder insurance liabilities and the elimination of intergroup transactions.
(2) Costs associated with the possible acquisition of a long-term licence in Nigeria and project management costs of the Group Arrangements CFU.(3) IFRS requires both policyholder and shareholder taxation to be reported in the taxation line. This therefore distorts the effective tax charge relative to profit before taxation.(4) The segment results for the year ended 31 December 2016 have been restated to provide more information on the three distinct segments within Group Arrangements, in order to
better align to the information reported to the chief operating decision maker.
Liberty Holdings Limited Financial results for the year ended 31 December 2017 31
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FINAN
CIAL RESULTS
The audited segment results for the year ended 31 December 2016 are as follows:
Group Arrangements
Restated(4)
Rm (Audited)
IndividualArrange-
mentsLiberty
Corporate
Liberty Africa
InsuranceLiberty Health
Assetmanagement Other Total
Reportingadjustments(1)
IFRSreported
Total revenue 56 583 13 963 2 811 1 276 3 384 1 097 79 114 (16 370) 62 744
Profit before taxation 2 018 376 144 (74) 517 653 3 634 317 3 951 Taxation(3) (950) (112) (79) 29 (148) (65) (1 325) (1 325)
Total earnings 1 068 264 65 (45) 369 588 2 309 317 2 626
Reconciliation of total earnings to headline earnings attributable to shareholdersTotal earnings 1 068 264 65 (45) 369 588 2 309 317 2 626 Attributable to non-controlling interests (62) (7) (31) (100) (317) (417)Preference share dividend (2) (2) (2)
Headline earnings 1 068 264 3 (45) 362 555 2 207 2 207 Net income earned on BEE preference shares 16 16 16 Reversal of the accounting mismatch arising on consolidation of L2D 304 304 304
Normalised headline earnings 1 068 264 3 (45) 362 875 2 527 2 527
Reconciliation of business unit earnings to segment resultIndividual Arrangements 1 119 1 119 Group Arrangements 191 3 (45) 149
Liberty Corporate 191 191 Liberty Africa Insurance 41 41 Liberty Health (45) (45)Nigeria(2) and project support costs (38) (38)
LibFin (Markets and Investments) 6 103 996 1 105
LibFin Markets – credit portfolio 197 103 300 LibFin Markets – asset/liability matching 15 3 18 LibFin Investments – SIP (206) (3) 996 787
Asset management STANLIB South Africa 459 459 STANLIB Rest of Africa (97) (97)
Central overheads and sundry income (57) (30) (121) (208)
Normalised headline earnings 1 068 264 3 (45) 362 875 2 527 (1) Reporting adjustments include the consolidation of unincorporated property partnerships, the consolidation of third party mutual fund liabilities, the classification of long-term
insurance into defined IFRS ‘investment’ and ‘insurance’ products, the application of shadow accounting for the change in long-term policyholder insurance liabilities and the elimination of intergroup transactions.
SUMMARY CONSOLIDATED SEGMENT INFORMATION (CONTINUED)
for the year ended 31 December 2017
32 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS GROUP EQUITY VALUE REPORT
for the year ended 31 December 2017
1 IntroductionLiberty presents a “group equity value” report to reflect the combined value of the various components of Liberty’s businesses.
Section 2 below describes the valuation bases used for each reported component. It should be noted that the group equity value is presented to provide additional information to shareholders to assess performance of the group. The total equity value is not intended to be a fair value calculation of the group but should provide indicative information of the inherent value of the component parts.
2 Component parts of the group equity value and valuation techniques usedGroup equity value has been calculated as the sum of the following component parts:
2.1 South African (SA) covered business:The wholly owned subsidiary, Liberty Group Limited, comprises the South African long-term insurance entities and related asset holding entities. The embedded value methodology in terms of Advisory Practice Note 107 issued by the Actuarial Society of South Africa continues to be used to derive the value of this business cluster described as “South African covered business”. The embedded value report of the South African covered business has been reviewed by the group’s statutory actuary. The full embedded value report is included in the supplementary information section.
2.2 Other businesses:
STANLIB South Africa
Valued using a 10 times (2016: 10 times) multiple of estimated sustainable earnings.
STANLIB Rest of Africa
Valued using a 10 times (2016: 10 times) multiple of estimated sustainable earnings.
Liberty Health As Liberty Health has yet to establish a history to support a sustainable earnings calculation, an adjusted IFRS net asset value is applied.
Liberty Africa Insurance
Liberty Africa Insurance is an emerging cluster of both long and short-term insurance businesses located in various African countries outside of South Africa. A combination of valuation techniques including embedded value, discounted cash flow and earnings multiples have been applied to value these businesses. The combined value of this cluster is not material relative to the other components of group equity value and therefore a detailed analysis of this valuation has not been presented. At 31 December 2017 and 31 December 2016 the combined valuations approximated the group’s IFRS net asset value. Therefore the IFRS net asset value was used.
Liberty Holdings The net market value of assets and liabilities held by the Liberty Holdings Limited company excluding investments in any subsidiaries which are valued separately.
2.3 Liberty Two Degrees normalisation adjustment:This represents the difference between Liberty’s share of the net asset value of L2D as at the reporting date and the listed price of L2D units multiplied by the number of units in issue to Liberty at the reporting date. Adjusting the valuation from net asset value to share price is required to ensure consistency between policyholder liabilities and their backing assets, and to provide a market consistent valuation of the L2D shares held within the shareholder investment portfolio.
2.4 Other adjustments: These comprise the fair value of share rights allocated to staff not employed by the South African covered businesses, adjusting certain deferred tax assets to current values and allowance for certain shareholder recurring expenses incurred in Liberty Holdings Limited capitalised at a multiple of 9 times (2016: 9 times).
Liberty Holdings Limited Financial results for the year ended 31 December 2017 33
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FINAN
CIAL RESULTSGROUP EQUITY VALUE REPORT (CONTINUED)
for the year ended 31 December 2017
3 Normalised group equity value
3.1 Analysis of normalised group equity value
31 December 2017Rm (Audited)
SA covered business
Other businesses Total
Liberty Group Limited 18 412 18 412 STANLIB South Africa(2) 795 795 STANLIB Rest of Africa(2) 100 100 Liberty Health (including Total Health Trust) 299 299 Liberty Africa Insurance 813 813 Liberty Holdings 1 428 1 428 Liberty Two Degrees adjustment to net asset value 597 597
Shareholders’ equity reported under IFRS 18 412 4 032 22 444 Difference between statutory and published valuation methods (7 253) (7 253)
Negative rand reserves (6 806) (6 806)Deferred acquisition costs (730) (730)Deferred revenue liability 283 283
Subordinated notes (including accrued interest) 5 581 5 581 CAR of subsidiaries (10) (10)Reverse value of in-force acquired (12) (12)Inadmissible assets (1 018) (1 018)
Statutory excess assets over liabilities(3) 15 700 4 032 19 732 Reverse CAR of subsidiaries 10 10 Reverse subordinated notes (including accrued interest) (5 581) (5 581)Reverse inadmissible assets 1 018 1 018 Frank Financial Services allowance for future expenses (100) (100)Impact of discounting on deferred tax asset (100) (100)BEE preference funding 123 123 Liberty Two Degrees normalisation adjustment(1) (597) (597)Allowance for employee share rights (36) (36) (72)
Normalised net worth 11 134 3 299 14 433 Value of in-force – Individual Arrangements 22 088 22 088 Value of in-force – Group Arrangements: Liberty Corporate 3 049 3 049 Cost of required capital (1 690) (1 690)Fair value adjustment – STANLIB South Africa(2) 3 655 3 655 Fair value adjustment – STANLIB Rest of Africa(2) 50 50 Allowance for future shareholder expenses (2 217) (2 217)
Normalised equity value 34 581 4 787 39 368 (1) This represents the difference between Liberty’s share of the net asset value of L2D as at the reporting date and the listed price of L2D units multiplied by the number of units in
issue to Liberty at the reporting date. Adjusting the valuation from net asset value to share price is required to ensure consistency between policyholder liabilities and their backing assets, and to provide a market consistent valuation of the L2D shares held within the shareholder investment portfolio.
(2) STANLIB valuation: RmSTANLIB South Africa 4 450STANLIB Rest of Africa 150 Total 4 600
(3) The adjustments between the IFRS and statutory net asset values for the Liberty Africa subsidiaries have not been included. This is because the group equity value for these entities is set to their IFRS net asset value and so these adjustments do not affect group equity value.
34 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS GROUP EQUITY VALUE REPORT (CONTINUED)
for the year ended 31 December 2017
3 Normalised group equity value (continued)
3.1 Analysis of normalised group equity value (continued)
31 December 2016Rm (Audited)
SA covered business
Other businesses Total
Liberty Group Limited 18 505 18 505 STANLIB South Africa(2) 777 777 STANLIB Rest of Africa(2) 104 104 Liberty Health (including Total Health Trust) 404 404 Liberty Africa Insurance 808 808 Liberty Holdings 1 408 1 408 Liberty Two Degrees adjustment to net asset value (330) (330)
Shareholders’ equity reported under IFRS 18 505 3 171 21 676 Difference between statutory and published valuation methods (6 786) (58) (6 844)
Negative rand reserves (6 344) (6 344)Deferred acquisition costs (698) (698)Deferred revenue liability 256 256 Other (58) (58)
Subordinated notes (including accrued interest) 4 601 4 601 CAR of subsidiaries (10) (10)Reverse value of in-force acquired (17) (17)Inadmissible assets (807) (85) (892)
Statutory excess assets over liabilities 15 486 3 028 18 514 Reverse difference between statutory and published valuation methods 58 58 Reverse CAR of subsidiaries 10 10 Reverse subordinated notes (including accrued interest) (4 601) (4 601)Reverse inadmissible assets 807 85 892 Frank Financial Services allowance for future expenses (100) (100)Impact of discounting on deferred tax asset (100) (100)BEE preference funding 148 148 Liberty Two Degrees normalisation adjustment(1) 330 330 Allowance for employee share rights (33) (27) (60)
Normalised net worth 11 717 3 374 15 091 Value of in-force – Individual Arrangements 21 635 21 635 Value of in-force – Group Arrangements: Liberty Corporate 2 759 2 759 Cost of required capital (1 641) (1 641)Fair value adjustment – STANLIB South Africa(2) 5 013 5 013 Fair value adjustment – STANLIB Rest of Africa(2) 256 256 Allowance for future shareholder expenses (1 892) (1 892)
Normalised equity value 34 470 6 751 41 221 (1) This represents the difference between Liberty’s share of the net asset value of L2D as at the reporting date and the listed price of L2D units multiplied by the number of units in
issue to Liberty at the reporting date. Adjusting the valuation from net asset value to share price is required to ensure consistency between policyholder liabilities and their backing assets, and to provide a market consistent valuation of the L2D shares held within the shareholder investment portfolio.
(2) STANLIB valuation: Rm
STANLIB South Africa 5 790STANLIB Rest of Africa 360
Total 6 150
Liberty Holdings Limited Financial results for the year ended 31 December 2017 35
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FINAN
CIAL RESULTSGROUP EQUITY VALUE REPORT (CONTINUED)
for the year ended 31 December 2017
3 Normalised group equity value (continued)
3.2 Normalised group equity value earnings and value per share
2017 2016
Rm (Audited)
SA covered business
Other businesses Total
SA covered business
Other businesses Total
Normalised equity value at the end of the year 34 581 4 787 39 368 34 470 6 751 41 221
Equity value at the end of the year 34 458 5 384 39 842 34 322 6 421 40 743 Liberty Two Degrees adjustment(1) (597) (597) 330 330 BEE preference shares 123 123 148 148
Net share buy-backs 350 350 477 477 Funding of restricted share plan 92 (92) 92 (92)Intragroup dividends 2 600 (2 600) 3 500 (3 500)Dividends paid 1 944 1 944 2 024 2 024 Normalised equity value at the beginning of the year (34 470) (6 751) (41 221) (35 268) (6 367) (41 635)
Equity value at the beginning of the year (34 322) (6 421) (40 743) (34 946) (6 367) (41 313)Liberty Two Degrees adjustment(1) (330) (330) BEE preference shares (148) (148) (322) (322)
Normalised equity value earnings 2 803 (2 362) 441 2 794 (707) 2 087 Normalised return on group equity value (%) 8,2 (36,4) 1,1 7,9 (11,8) 5,1Normalised number of shares 280 573 282 615
Number of shares in issue (‘000) 270 120 272 247 Shares held for the employee restricted share scheme (‘000) 4 014 3 794 Adjustment for BEE shares (‘000) 6 439 6 574
Normalised group equity value per share (R) 140,31 145,86 (1) This represents the difference between Liberty’s share of the net asset value of L2D as at the reporting date and the listed price of L2D units multiplied by the number of units in
issue to Liberty at the reporting date. Adjusting the valuation from net asset value to share price is required to ensure consistency between policyholder liabilities and their backing assets, and to provide a market consistent valuation of the L2D shares held within the shareholder investment portfolio.
36 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS GROUP EQUITY VALUE REPORT (CONTINUED)
for the year ended 31 December 2017
3 Normalised group equity value (continued)
3.3 Sources of normalised group equity value earnings
2017 2016
Rm (Audited)
SA covered business
Other businesses Total
SA covered business
Other businesses Total
Value of new business written in the year 212 21 233 454 29 483 Expected return on value of in-force business 2 926 2 926 2 997 2 997 Variances/changes in operating assumptions 109 109 43 240 283
Operating experience variances 330 330 477 477 Property portfolio liquidity fee/STANLIB REIT Fund Managers(1) (167) 240 73 Operating assumption changes 30 30 (295) (295)Changes in modelling methodology (251) (251) 28 28
Development costs (55) (166) (221) (45) (62) (107)Liberty Holdings shareholder expenses(3) (584) (584) (228) (228)Headline earnings of other businesses/intragroup transfer 46 100 146 185 185
Operational equity value profits 3 238 (629) 2 609 3 449 164 3 613 Economic adjustments (432) (139) (571) (683) (67) (750)
Return on net worth(2) (14) (139) (153) 153 (67) 86 Investment variances(2) (594) (594) (963) (963)Change in economic assumptions 176 176 127 127
Change in fair value adjustments on value of other businesses (1 585) (1 585) (825) (825)Change in allowance for share rights (3) (9) (12) 28 21 49
Group equity value earnings 2 803 (2 362) 441 2 794 (707) 2 087 (1) Following the listing of Liberty Two Degrees in December 2016, STANLIB REIT Fund Managers (RF) Proprietary Limited (the Manager), a 100% held subsidiary of Liberty Holdings
Limited (LHL), was appointed as the Manager of L2D. The property portfolio liquidity fee which was previously earned in Liberty Group Limited will be used to fund the asset management fee paid to STANLIB REIT Fund Managers. STANLIB REIT Fund Managers has been valued using a 10 times multiple of the estimated sustainable earnings.
(2) The investment return on net worth includes an amount of negative R7 million (2016: negative R16 million) in respect of the change in the fair value of cash-flow hedges supporting LGL subordinated notes. Similarly, the investment variances include an amount of R61 million (2016: R178 million) in respect of the change in the fair value of cash-flow hedges supporting LibFin Credit.
(3) This includes the actual shareholder expenses incurred by Liberty Holdings of R259 million (2016: R122 million) plus the change in the allowance for future shareholder expenses over the period.
Liberty Holdings Limited Financial results for the year ended 31 December 2017 37
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FINAN
CIAL RESULTSGROUP EQUITY VALUE REPORT (CONTINUED)
for the year ended 31 December 2017
3 Normalised group equity value (continued)
3.4 Analysis of value of long-term insurance new business and margins
Rm (unless otherwise stated) (Audited) 2017 2016
South African covered business:Individual Arrangements 1 445 1 652
Traditional Life 1 159 1 306 Direct Channel 67 96 Credit Life 83 86 LibFin Credit uplift to Individual Arrangements 136 164
Group Arrangements: Liberty Corporate 162 131
Traditional Business 137 113 LibFin Credit uplift to Group Arrangements: Liberty Corporate 25 18
Gross value of new business 1 607 1 783 Overhead acquisition (including underwriting) costs impact on value of new business (1 305) (1 243)Cost of required capital (90) (86)
Net value of South African covered new business 212 454Present value of future expected premiums 42 782 42 370Margin (%) 0,5 1,1
Group Arrangements: Liberty Africa InsuranceNet value of new business 21 29Present value of future expected premiums 528 519Margin (%) 3,9 5,6
Total group net value of new business 233 483Total group margin (%) 0,5 1,1
38 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS LONG-TERM INSURANCE NEW BUSINESS
for the year ended 31 December 2017
Rm (Unaudited) 2017 2016
Sources of insurance operations total new business by product typeRetail 27 132 27 435
Single 22 660 22 916 Recurring 4 472 4 519
Institutional 2 034 2 296
Single 838 1 350 Recurring 1 196 946
Total new business 29 166 29 731
Single 23 498 24 266 Recurring 5 668 5 465
Insurance indexed new business 8 018 7 892 Sources of insurance indexed new business:
Individual Arrangements 6 570 6 639 Group Arrangements: 1 448 1 253
Liberty Corporate 1 171 842 Liberty Africa Insurance(1) 277 411
(1) Liberty owns less than 100% of certain entities that make up Liberty Africa. The information is recorded at 100% and is not adjusted for proportional legal ownership.
The difference between the single premiums reported under total long-term insurance premiums and single premiums reported under long-term insurance new business by distribution channel arises mainly from different treatment for extensions of matured policies, reinvestment of fund withdrawals, conversions of standalone funds to umbrella funds and fund member movements within Liberty administered funds.
Liberty Holdings Limited Financial results for the year ended 31 December 2017 39
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FINAN
CIAL RESULTSLONG-TERM INSURANCE NET CASH FLOWS
for the year ended 31 December 2017
Rm (Audited) 2017 2016
Net premiums by product typeRetail 43 467 43 150
Single 22 191 22 522 Recurring 21 276 20 628
Institutional 10 673 11 889
Single 1 416 3 170 Recurring 9 257 8 719
Net premium income from insurance contracts and inflows from investment contracts 54 140 55 039
Single 23 607 25 692 Recurring 30 533 29 347
Net claims and policyholders benefits by product typeRetail (40 436) (40 924)
Death and disability claims (6 567) (6 570)Policy surrender and maturity claims (27 984) (28 870)Annuity payments (5 885) (5 484)
Institutional (12 070) (12 996)
Death and disability claims (2 118) (1 912)Scheme terminations and member withdrawals (9 139) (10 280)Annuity payments (813) (804)
Net claims and policyholders benefits (52 506) (53 920)
Long-term insurance net customer cash flows(2) 1 634 1 119
Rm (Unaudited)Sources of insurance operations net cash flows:Individual Arrangements 2 846 1 948 Group Arrangements: (1 212) (268)
Liberty Corporate (1 536) (751)Liberty Africa Insurance(1) 324 483
Asset Management:STANLIB Multi-manager(3) (561)
(1) Liberty owns less than 100% of certain of the entities that make up Liberty Africa. The information is recorded at 100% and is not adjusted for proportional legal ownership.(2) This excludes net cash inflows attributed to the off balance sheet GateWay LISP of R350 million (2016: R557 million).(3) The arrangement whereby funds were placed with external asset managers via STANLIB Multi-manager was terminated in 2016 and accordingly there are no flows in 2017 and
going forward.
40 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS ASSETS UNDER MANAGEMENT(1)
as at 31 December 2017
Rbn (Unaudited) 2017 2016
Managed by group business units 684 653
STANLIB South Africa 556 535STANLIB Rest of Africa(2) 53 51LibFin Markets 62 58Other internal managers 13 9
Externally managed 36 23
Total assets under management(3) 720 676(1) Includes funds under administration. (2) Liberty owns less than 100% of certain of the entities that make up STANLIB Rest of Africa. The information is recorded at 100% and is not adjusted for proportional legal
ownership.(3) Included in total assets under management are the following LISP December 2017 amounts:
Unit trusts listed (Rbn)
STANLIBmanaged
Othermanaged Total
STANLIB 42 80 122 Gateway 3 5 8
ASSET MANAGEMENT NET CASH FLOWS(1)
for the year ended 31 December 2017
Rm (Unaudited) 2017 2016
STANLIB South AfricaNon-money market 4 815 764
Retail 8 249 (2 327)Institutional (3 434) 3 091
Money market (84) 2 037
Retail (1 400) 1 007 Institutional 1 316 1 030
Net South Africa cash inflows 4 731 2 801
STANLIB Rest of AfricaNon-money market (1 156) 3 724
Retail 738 (422)Institutional (1 894) 4 146
Money market 676 (761)
Net Rest of Africa cash (outflows)/inflows (480) 2 963
Net cash inflows from asset management 4 251 5 764(1) Cash flows exclude intergroup segregated life fund mandates.
Liberty Holdings Limited Financial results for the year ended 31 December 2017 41
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FINAN
CIAL RESULTSSHORT-TERM INSURANCE INDICATORS
for the year ended 31 December 2017
Rm (Audited) 2017 2016
Net premiums 1 297 1 484
Liberty Health – medical risk 777 919 Liberty Africa Insurance – motor, property, medical and other 520 565
Net claims (886) (994)
Liberty Health – medical risk (637) (743)Liberty Africa Insurance – motor, property, medical and other (249) (251)
Net cash inflows from short-term insurance 411 490
UnauditedClaims loss ratio (%)Liberty Health 82 81Liberty Africa Insurance 48 44
Combined loss ratio (%)Liberty Health 102 104 Liberty Africa Insurance 99 94
CAPITAL COMMITMENTSas at 31 December 2017
Rm (Audited) 2017 2016
Equipment 741 823 Investment and owner-occupied properties 1 432 1 485 Committed capital(1) 1 071 636
Total capital commitments 3 244 2 944
Under contracts 430 657 Authorised by the directors but not contracted 2 814 2 287
(1) Liberty has committed capital to certain infrastructure and development funds. The committed funds are only drawn down when required.
The above 2017 capital commitments will be financed by available bank facilities, existing cash resources, internally generated funds and R452 million (2016: R360 million) from non controlling interests in respect of investment properties.
Throughout the group there are various short term leases (less than one year) for office and computer equipment. The obligations outstanding at 31 December are not material.
42 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS RETIREMENT BENEFIT OBLIGATIONS
as at 31 December 2017
Audited
Post-retirement medical benefitThe group operates an unfunded post-retirement medical aid benefit for permanent employees who joined the group prior to 1 February 1999 and agency staff who joined prior to 1 March 2005.
As at 31 December 2017, the Liberty post-retirement medical aid benefit liability was R495 million (2016: R493 million).
Defined benefit retirement fund The group operates a defined benefit pension scheme on behalf of employees. The fund is closed to new membership and is well funded.
RELATED PARTIESfor the year ended 31 December 2017
AuditedStandard Bank Group Limited and any subsidiary (excluding Liberty) is referred to as Standard Bank in the context of this section.
The following selected significant related party transactions have occurred or have been contracted in the 31 December 2017 financial year:
1. Summary of related party transactions with Standard Bank1.1 Summary of movement in investment in ordinary shares held by the group in the group’s holding company is
as follows:Number Fair value Ownership
’000 Rm %
Standard Bank Group LimitedBalance at 1 January 2017 9 572 1 454 0,60 Purchases 12 496 2 117 Sales (5 888) (1 020)Fair value adjustments 615
Balance at 31 December 2017 16 180 3 166 1,02
1.2 Bancassurance The bancassurance business agreements with the Standard Bank group caters for the manufacture, sale and promotion of insurance, investment and health products through the Standard Bank’s African distribution capability. New business premium income in respect of this business in 2017 amounted to R9 129 million (2016: R7 973 million). In terms of the agreements, Liberty’s group subsidiaries pay profit shares to various Standard Bank operations. The amounts to be paid are in most cases dependent on source and type of business and are paid along geographical lines. The total combined net profit share amounts accrued as payable to the Standard Bank group for the year to 31 December 2017 is R948 million (2016: R1 005 million).
The bancassurance business agreements are evergreen agreements with a 24-month notice period for termination – as at the date of the approval of these financial statements, neither party had given notice.
A binder agreement was entered into with Standard Bank effective from 31 December 2012. The binder agreement is associated with the administration of policies sold under the bancassurance business agreement, and shall remain in force for an indefinite period with a 90-day notice period for termination. Fees accrued for the year to 31 December 2017 is R206 million (2016: R150 million).
1.3 Purchases and sales of financial instrumentsAs per Liberty’s 2017 group annual financial statements, in the normal course of conducting business, Liberty deposits cash with Standard Bank, purchases and sells financial instruments issued by Standard Bank and enters into sale and repurchase agreements and derivative transactions with Standard Bank. These transactions are at arm’s length and are primarily used to support investment portfolios for policyholders and shareholders’ capital.
There are no other significant changes to related party transactions as reported in Liberty’s 2017 annual financial statements.
Liberty Holdings Limited Financial results for the year ended 31 December 2017 43
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FINAN
CIAL RESULTS
OFFSETTING, ENFORCEABLE MASTER NETTING ARRANGEMENTS OR SIMILAR AGREEMENTSas at 31 December 2017
The group does not have any financial assets or financial liabilities that are currently subject to offsetting in accordance with IAS 32 Financial Instruments: Presentation. The table below sets out the nature of agreements and the types of rights relating to items which do not qualify for offset but that are subject to a master netting arrangement (MNA) or similar agreement.
NATURE OF AGREEMENT RELATED RIGHTSDerivative assets and liabilities International swaps and derivatives associations
The agreement allows for offset in the event of default
Repurchase agreements Global master repurchase agreements
Collateral deposits payable Global master securities lending arrangements
Rm (Audited) Total
Not subject to MNA
or similar agreements
Subject to MNA
or similar agreements
Financial collateral(1) Net
2017 AssetsAssets held for trading and for hedging 7 871 (1 356) 6 515 (6 016) 499
Total assets 7 871 (1 356) 6 515 (6 016) 499
LiabilitiesLiabilities held for trading and for hedging 6 311 (56) 6 255 (6 016) 239 Repurchase agreements liabilities 4 671 4 671 (4 671)Collateral deposits payable 4 426 4 426 (4 426)
Total liabilities 15 408 (56) 15 352 (15 113) 239
2016AssetsAssets held for trading and for hedging 8 609 (595) 8 014 (6 532) 1 482
Total assets 8 609 (595) 8 014 (6 532) 1 482
LiabilitiesLiabilities held for trading and for hedging 6 798 (49) 6 749 (6 532) 217 Repurchase agreements liabilities 7 064 7 064 (7 064)Collateral deposits payable 4 684 4 684 (4 684)
Total liabilities 18 546 (49) 18 497 (18 280) 217 (1) Financial collateral relates to these instruments that are subject to MNA or similar agreements.
44 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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FINAN
CIAL RESULTS
NOTES
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SuppInfo-Dec2017 2 March 1, 2018 6:54 PM
Supplementaryinformation
Liberty Holdings Limited
Fo r t h e ye a r e n d e d 31 D e ce m b e r 2017
46 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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CONTENTS Page
Analysis of ordinary shareholders’ equity 47
Analysis of group earnings – core earnings 48
South African covered business embedded value 49
Bancassurance – Benefit to Liberty 56
90:10 Shareholder exposure 56
Long-term policyholder liabilities IFRS reconciliation 57
South African insurance distribution headcount 57
Long-term insurance – New business by distribution channel 58
Total long-term insurance premiums 59
LibFin – Shareholder Investment Portfolio 59
LibFin – Shareholder Investment Portfolio percentage allocation 60
LibFin – Shareholder Investment Portfolio return 60
LibFin – Markets Credit Portfolio 60
Individual Arrangements – Headline earnings 61
Individual Arrangements – Key performance indicators 61
Individual Arrangements – Indexed new business 61
Individual Arrangements – Maintenance cost per policy 62
Individual Arrangements – Negative rand reserves 62
Liberty Corporate – Headline earnings 62
Liberty Corporate – Key performance indicators 63
Liberty Health – Headline earnings 63
Liberty Health Cover Product – Lives serviced 63
Liberty Africa Insurance – Headline earnings 64
Liberty Africa Insurance – Key performance indicators 64
Liberty Africa Insurance – Long-term insurance net cash flows 65
Our presence in Africa 65
STANLIB South Africa – Headline earnings 66
STANLIB South Africa – Net cash flows and assets under management by asset category 66
STANLIB South Africa – Assets under management breakdown by source and asset type 67
STANLIB South Africa – Retail investment performance 68
STANLIB South Africa – Institutional investment performance 68
STANLIB South Africa – Investment performance 69
STANLIB Rest of Africa – Assets under management 69
STANLIB Rest of Africa – Assets under management by geographical location 70
Liberty Holdings Limited Financial results for the year ended 31 December 2017 47
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ANALYSIS OF ORDINARY SHAREHOLDERS’ EQUITYfor the year ended 31 December 2017
Group funds invested Contribution to earnings
Rm 2017 2016 2017 2016
South African insurance 18 412 18 505 2 972 2 415
Insurance operating surplus 1 618 1 663 Present value of in-force business 12 17 (5) (13)Investment portfolios 17 235 14 686 1 480 703 Fixed assets and working capital(1) 6 665 8 302 190 293 Subordinated notes (excluding accrued interest) (5 500) (4 500) (311) (231)
Other insurance 1 112 1 212 (65) (42)
Liberty Africa Insurance 813 808 45 41 Nigeria(4) and project support costs (56) (38)Liberty Health 299 404 (54) (45)
Asset managementSTANLIB South Africa 795 777 252 459 STANLIB Rest of Africa 100 104 (204) (97)
Central overheads and sundry income (244) (222)Liberty Holdings Limited 1 428 1 408 Liberty Two Degrees adjustment to net asset value(2) 597 (330) Mismatch earnings on L2D policyholder assets 543 (304)Preference share dividend (2) (2)
Headline earnings 3 252 2 207 Preference share dividend 2 2 Impairment of intangible assets (136)
Liberty Holdings shareholders’ equity/total earnings 22 444 21 676 3 118 2 209
Normalised:Liberty Holdings shareholders’ equity/headline earnings 22 444 21 676 3 252 2 207 BEE preference shares 123 148 10 16 Liberty Two Degrees normalisation adjustment(3) (340) 193 (543) 304
Normalised shareholders’ equity/headline earnings 22 227 22 017 2 719 2 527 (1) With effect from 1 July 2005 Liberty Group Limited established a working capital funding loan between insurance operations and shareholder assets, subsequently supported by
the subordinated notes issue. Inter-divisional interest is charged at 8,77% nacm.(2) Represents the difference between Libertys’ share of the net asset value of L2D at the end of the period and the listed price of L2D units multiplied by the number of units in issue
to Liberty at the end of the period.(3) Reversal of the accounting mismatch arising on consolidation of the policyholders obligation linked to L2D units and the policyholders allocation of the group funds investment.(4) Costs associated with the termination of a long-term licence acquisition in Nigeria and project management costs of the Group Arrangements CFU.
48 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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Rm 2017 2016
Individual Arrangements planned margin release including annual contribution increases 1 971 1 805 Individual Arrangements credit life 167 160 Individual Arrangements VIF amortisation (5) (12)LibFin Markets 376 318 Expected long-term rate of return on Shareholder Investment Portfolio(1) 1 464 1 485 Other businesses headline earnings 240 303
Group Arrangements 16 149
Liberty Corporate 81 191 Liberty Africa Insurance 45 41 Liberty Health (54) (45)Nigeria(2) and project support costs (56) (38)
Asset managementSTANLIB South Africa 445 459 STANLIB Rest of Africa 15 (97)
Central overheads and sundry income (236) (208)
Centre overheads and sundry income (246) (224)BEE preference share income 10 16
Core operating earnings 4 213 4 059 Individual Arrangements new business strain (675) (611)Individual Arrangements operating variances, assumption changes and other (250) (223)
Adjusted core operating earnings 3 288 3 225 Variance to long-term rate of return on Shareholder Investment Portfolio (157) (698)STANLIB South Africa sustainable earnings adjustment (193)STANLIB Rest of Africa sustainable earnings adjustment (219)
Normalised headline earnings 2 719 2 527 (1) The expected long term rate of return on the SIP portfolio is based on the long term view to avoid volatility in the core operating earnings..(2) Costs associated with the termination of a long-term licence acquisition in Nigeria and project managements costs of the Group Arrangements CFU.
ANALYSIS OF GROUP EARNINGS – CORE EARNINGSfor the year ended 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 49
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1 Description of embedded value of South African covered businessThe prudential regulatory regime governing South African insurance companies is expected to change imminently, which may affect the basis on which embedded value is calculated. Liberty will continue to report embedded value on the same basis as before until the best practice for embedded value reporting emerges.
The current version of Advisory Practice Note (APN) 107 came into force for all financial years ending on or after 31 December 2012. APN 107 governs the way in which embedded values of life assurance companies are reported.
The embedded value consists of:
• The net worth; plus
• The value of in-force covered business; less
• The cost of required capital.
The net worth represents the excess of assets over liabilities on the statutory valuation method, adjusted for the elimination of the carrying value of covered business acquired and for the fair value of share rights granted to Liberty Group Limited employees.
The value of in-force covered business is the discounted value of the projected stream of after-tax shareholder profits arising from existing in-force covered business. These shareholder profits arise from the release of margins under the statutory basis of valuing liabilities, which differs from the release of profits on the published accounting basis. Covered business is defined as business regulated by the FSB as long-term insurance business written in Liberty Group Limited.
For reversionary and smoothed bonus business, the value of in-force covered business has been calculated assuming that bonuses are changed over time so that the full amount of the
bonus stabilisation reserves is distributed to policyholders over the lifetime of the in-force policies.
The required capital is defined as the level of capital that is restricted for distribution to shareholders. This comprises the statutory CAR calculated in accordance with Standard of Actuarial Practice (SAP) 104 plus any additional capital considered appropriate by the board given the risks in the business. Required capital has been calculated at 1,5 x CAR, consistent with risk appetite. The cost of required capital is the present value, at the risk discount rate, of the projected release of the required capital allowing for investment returns on the assets supporting the projected required capital.
The value of new business written is the present value at the point of sale of the projected stream of after-tax profits from that business, reduced by the cost of required capital. New business is defined as covered business arising from the sale of new policies and once-off premium increases in respect of in-force covered business during the reporting period. Risk policies with an inception date prior to the reporting date where no premium has been received are included in the embedded value and value of new business. The contractual terms of these policies state that Liberty Group Limited is on risk from the inception date, even though a premium may not have been received. This definition is consistent with that used in the financial statements.
The value of new business has been calculated on the closing assumptions. Investment yields at the point of sale have been used for new fixed annuities, guaranteed investment plans, and embedded derivatives; for all other business the investment yields at the date of reporting have been used.
No adjustment has been made for the discounting of tax provisions in the embedded value.
SOUTH AFRICAN COVERED BUSINESS EMBEDDED VALUEfor the year ended 31 December 2017
50 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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2 Normalised embedded valueRm (unless otherwise stated) 2017 2016
Risk discount rate %(1) 11,79 11,92Net worth 11 134 11 717
Ordinary shareholders’ funds on published basis 18 412 18 505 BEE preference share funding 123 148 Adjustment of ordinary shareholders’ funds from published basis(2) (7 253) (6 786)Adjustment for carrying value of in-force business acquired(3) (12) (17)Allowance for fair value of share rights (36) (33)Frank Financial Services allowance for future expenses (100) (100)
Net value of life business in-force 23 447 22 753
Value of life business in-force 25 137 24 394 Cost of required capital (1 690) (1 641)
Normalised embedded value 34 581 34 470
3 Normalised embedded value earningsEmbedded value at the end of the year 34 581 34 470 Funding of restricted share plan 92 92 Intragroup dividends 2 600 3 500 Less embedded value at the beginning of the year (34 470) (35 268)
Embedded value earnings 2 803 2 794
Return on embedded value (%) 8,2 7,9
SOUTH AFRICAN COVERED BUSINESS EMBEDDED VALUE (CONTINUED)
for the year ended 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 51
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4 Analysis of normalised embedded value earnings2017 2016
RmNet
worth
Value of in-force covered
business
Cost of required
capital
Em-bedded
valueNet
worth
Value of in-force covered
business
Cost of required
capital
Em-bedded
value
Embedded value at the end of the year 11 134 25 137 (1 690) 34 581 11 717 24 394 (1 641) 34 470 Plus dividends paid 2 600 2 600 3 500 3 500 Plus funding of restricted share plan 92 92 92 92 Embedded value at the beginning of the year (11 717) (24 394) 1 641 (34 470) (12 761) (24 025) 1 518 (35 268)
Embedded value earnings 2 109 743 (49) 2 803 2 548 369 (123) 2 794
Components of embedded value earningsValue of new business written in the year (1 790) 2 092 (90) 212 (1 661) 2 201 (86) 454 Expected return on value of in-force business(4) 2 888 38 2 926 2 961 36 2 997 Expected net of tax profit transfer to net worth 4 112 (4 112) 4 217 (4 217)Variances/changes in operating assumptions 110 (8) 7 109 264 (155) (66) 43
Operating experience variances(5) 225 105 330 450 15 12 477 Operating assumption changes(6) (45) 75 30 (160) (39) (96) (295)Changes in modelling methodology(7) (70) (188) 7 (251) (22) 32 18 28 Property portfolio liquidity fee variance (4) (163) (167)
Development expenses (55) (55) (45) (45)Intragroup transfers 46 46
Embedded value earnings from operations 2 423 860 (45) 3 238 2 775 790 (116) 3 449 Economic adjustments (311) (117) (4) (432) (255) (421) (7) (683)
Return on net worth(8) (14) (14) 153 153 Investment variances(9) (393) (201) (594) (164) (799) (963)Changes in economic assumptions(10) 96 84 (4) 176 (244) 378 (7) 127
Change in allowance for fair value of share rights(11) (3) (3) 28 28
Normalised embedded value earnings 2 109 743 (49) 2 803 2 548 369 (123) 2 794
SOUTH AFRICAN COVERED BUSINESS EMBEDDED VALUE (CONTINUED)
for the year ended 31 December 2017
52 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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Notes to embedded value
(1) Future investment returns on major asset classes and other economic assumptions have been set with reference to the market yield on medium-term South African government stock.
Investment return p.a.
% 2017 2016
Government stock 8,99 9,12Equities 12,49 12,62Property 9,99 10,12Cash 7,49 7,62
The risk discount rate has been set equal to the risk free rate plus 80% of the equity risk premium 11,79 11,92
Maintenance expense inflation rate 7,24 7,37
(2) Adjustment of ordinary shareholders’ funds from the published basis
The amounts represent the change in the amount of shareholder funds as a result of moving from a published valuation basis to the net worth on the embedded value basis. This is largely due to the elimination of certain negative rand reserves on the statutory valuation basis. The reduction in net worth results in a corresponding increase in the value of in-force.
(3) Adjustment for carrying value of in-force business acquired
The carrying value of business acquired by Liberty has been deducted from shareholders’ funds in order to avoid double counting. For embedded value purposes, the value in respect of this acquired business is included in the value of life business in-force. The net adjustment was R12 million (2016: R17 million).
(4) The expected return on the value of life business is obtained by applying the previous year’s risk discount rate to the value of life business in force at the beginning of the period and the current year’s risk discount rate from the point of sale to the valuation date in respect of the value of new business.
SOUTH AFRICAN COVERED BUSINESS EMBEDDED VALUE (CONTINUED)
for the year ended 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 53
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Notes to embedded value (continued)
(5) Operating experience variances consist of the combined effect on net worth and value of in-force of operating experience being different to that anticipated at the prior year end.
The net operating experience variance of R330 million (2016: R477 million) comprised:
Rm Net worth
Value of in-force
covered business
Cost of required
capitalEmbedded
value
2017Individual Arrangements 117 140 257
Mortality and morbidity 255 78 333 Policyholder behaviour (8) 93 85 Other(i) (130) (31) (161)
Group Arrangements: Liberty Corporate (70) (35) (105)Credit portfolio variance 178 178
Total 225 105 330
2016Individual Arrangements 202 (10) 192
Mortality and morbidity 67 84 151 Policyholder behaviour 52 (35) 17 Other, including tax variances 83 (59) 24
Group Arrangements: Liberty Corporate 98 25 123 Credit portfolio variance 150 150 Other 12 12
Total 450 15 12 477 (i) The amount of R130 million is primarily related to strengthening in respect of regulatory and other simplification projects.
SOUTH AFRICAN COVERED BUSINESS EMBEDDED VALUE (CONTINUED)
for the year ended 31 December 2017
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Notes to embedded value (continued)
(6) The amount of R30 million (2016: negative R295 million) is due to a number of offsetting assumption changes.
(7) The amount of negative R251 million (2016: R28 million) is due to a number of data refinements and modelling changes including refinements to the modelling of reinsurance.
(8) Reconciliation of embedded value return on net worth to LibFin Investments earnings:
Rm 2017 2016
LibFin Investments after consolidation of L2D 1 307 787 Adjustment to reflect L2D at listed unit price (394) 95
LibFin Investments earnings 913 882 Adjustments for differences between the statutory and published basis (604) (527)90:10 book (194) (5)Frank Financial Services (50) (28)Bancassurance obligations relating to Liberty Africa Insurance and STANLIB (54) (39)BEE preference scheme 7 21 Central treasury investments 115 19 Software asset impairment (71)Other (76) (170)
Return on net worth (14) 153
The return on net worth includes an amount of negative R7 million (2016: negative R16 million) in respect of the change in the fair value of cash-flow hedges supporting LGL subordinated notes.
(9) The amount of negative R393 million (2016: negative R164 million) arises from the mismatch created by hedging market risk on the IFRS basis and the negative investment variance on the 90:10 book. The investment variances include an amount of R61 million (2016: R178 million) in respect of the change in the fair value of cash-flow hedges supporting LibFin Credit.
(10) The amount of R176 million (2016: R127 million) relates to changes in economic assumptions as described in note (1).
(11) The amount of negative R3 million (2016: R28 million) in respect of the change in the fair value of share rights arises from the change in the number of share rights for staff employed by Liberty Group Limited and the change in the market value of Liberty Holdings Limited shares over the reporting period.
Other bases, bonus rates and assumptionsTaxation has been allowed for at rates and on bases applicable to Section 29A of the Income Tax Act. Full taxation relief on expenses to the extent permitted was assumed. Capital gains taxation has been taken into account in the embedded value.
Assumptions reflect best estimates of future experience consistent with the valuation basis excluding any compulsory or discretionary margins. However, in contrast to the assumptions in the valuation basis, the embedded value makes allowance for non-compulsory automatic premium and benefit increases.
The assets backing the required capital are consistent with the long-term strategic mix of shareholder funds approved by the Liberty Holdings board.
SOUTH AFRICAN COVERED BUSINESS EMBEDDED VALUE (CONTINUED)
for the year ended 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 55
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5 Sensitivity to risk discount rate and other assumptions In order to indicate sensitivity to varying assumptions, the value of the in-force life business less cost of required capital and the value of the new business written for Liberty Group Limited are shown below for various changes in assumptions. The reserving basis has been kept constant and only future experience assumptions have been varied. Each value is shown with only the indicated parameter being changed.
2017 2016
AuditedRm
Value of in-force life
business less cost of
required capital at
31 December
Value of new business
written in
Value of in-force life
business less cost of
required capital at
31 December
Value of new business
written in
Base value 23 447 212 22 753 454 Value of in-force/new business 25 137 302 24 394 540 Cost of required capital (1 690) (90) (1 641) (86)
100 basis point increase in risk discount rate 21 758 61 21 125 330 Value of in-force/new business 23 829 169 23 127 436 Cost of required capital (2 071) (108) (2 002) (106)
100 basis point decrease in interest rate environment 23 891 329 23 051 545 Value of in-force/new business 25 580 421 24 710 629 Cost of required capital (1 689) (92) (1 659) (84)
10% fall in equity and property market values 22 901 22 188 Value of in-force 24 591 23 829 Cost of required capital (1 690) (1 641)
100 basis point increase in equity and property returns 24 364 249 23 639 493 Value of in-force/new business 25 795 325 25 034 565 Cost of required capital (1 431) (76) (1 395) (72)
10% decrease in maintenance expenses 24 331 293 23 610 536 Value of in-force/new business 26 021 383 25 251 622 Cost of required capital (1 690) (90) (1 641) (86)
10% decrease in new business acquisition expenses (other than commissions) 375 595 Value of new business(1) 465 681 Cost of required capital (90) (86)
10% decrease in withdrawal rates 24 843 405 24 061 661 Value of in-force/new business 26 533 495 25 702 747 Cost of required capital (1 690) (90) (1 641) (86)
5% decrease in mortality and morbidity for life assurance business 25 028 373 24 179 600 Value of in-force/new business(2) 26 718 463 25 820 686 Cost of required capital (1 690) (90) (1 641) (86)
5% decrease in mortality for annuity business 23 219 209 22 482 450 Value of in-force/new business 24 909 299 24 123 536 Cost of required capital (1 690) (90) (1 641) (86)
(1) The effect of decreasing acquisition expenses on the value of new business includes the effect on the deferred tax asset impairment, which decreases materially when acquisition expenses decrease. The effect of acquisition expenses on the value of new business is shown in the analysis of value of long-term insurance business and margins in the group equity value report.
(2) A correction was made to the 2016 value of in-force morbidity sensitivity.
SOUTH AFRICAN COVERED BUSINESS EMBEDDED VALUE (CONTINUED)
for the year ended 31 December 2017
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Liberty share (Rm) 2017 2016
Credit LifeIFRS headline earnings 167 160 Embedded value of in-force contracts 506 461 Other insurance productsEmbedded value of new business 32 53 Embedded value of in-force contracts 1 198 1 113 STANLIBNet service fees on assets under management sourced from Standard Bank distribution 422 406
90:10 SHAREHOLDER EXPOSUREas at 31 December 2017
The “90:10 exposure” refers to the shareholders exposure to certain policyholder portfolios on which a fee arrangement exists whereby the investment return on the portfolios is shared between the policyholders and shareholders in a 90:10 ratio.
As a result of the market risk that arises for shareholders on this exposure it is managed as part of the Shareholders Investment Portfolio (SIP) and consequently the earnings form part of the SIP returns and are included in the LibFin Investments revenue account.
Because of its nature as a management fee the present value of these 90:10 fees are included in the Value of In Force of the business and the annual expected amount forms part of the expected transfer to Net Worth in the AoEV. There is therefore an inconsistency between the IFRS revenue account (shown as LibFin Investments revenue) and the AoEV (shown as expected Life Fund Operating earnings).
Rm 2017 2016
Exposure as at the beginning of the year 4 142 4 622
Expected earnings 303 364 Variance (109) (359)
Total net earnings 194 5
Exposure as at the end of the period 3 920 4 142
BANCASSURANCE – BENEFIT TO LIBERTYas at 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 57
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Rm 2017 2016
Policyholder liabilities at beginning of the year net of reinsurance 299 119 296 915
Policyholder liabilities 307 230 305 194 Reinsurance liabilities 555 617 Policyholder assets (7 314) (7 579)Reinsurance assets (1 352) (1 317)
Transfers to policyholder liabilities 15 767 2 555
Net premium income from insurance contracts and inflows from investment contracts 54 140 55 039
Net insurance premiums 36 723 37 882 Fund inflows from investment contracts 17 417 17 157
Investment returns 31 102 17 457 Net claims and policyholder benefits (52 506) (53 920)
Net insurance claims (36 133) (37 220)Fund outflows from investment contracts (16 373) (16 700)
Acquisition costs (4 326) (4 136)Management expenses, finance costs and profit share allocations (9 441) (9 238)Taxation (1 906) (1 058)Operating profit from insurance operations (1 296) (1 589)
Foreign currency translation reserve (270) (351)
Policyholder liabilities at end of year net of reinsurance 314 616 299 119
Policyholder liabilities 322 918 307 230 Reinsurance liabilities 663 555 Policyholder assets (7 484) (7 314)Reinsurance assets (1 481) (1 352)
SOUTH AFRICAN INSURANCE DISTRIBUTION HEADCOUNTas at 31 December 2017
LONG-TERM POLICYHOLDER LIABILITIES IFRS RECONCILIATIONas at 31 December 2017
(1)Tied agents December 2013 December 2014 December 2015 December 2016 December 2017
0
300
600
900
1 200
1 500
982
1 351
761
518
152
BrokerConsultants
Standard BankFinancial Consultants
Liberty@work(1)Liberty entrepreneurs(1)Agency(1)
58 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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Recurring premiums Single premiums Total premiums Indexed premiums
Rm 2017 2016 2017 2016 2017 2016 2017 2016
Retail 5 817 5 772 22 660 22 916 28 477 28 688 8 084 8 064
Broker 1 236 1 332 5 527 7 006 6 763 8 338 1 789 2 033 Bancassurance 2 601 2 483 6 519 5 451 9 120 7 934 3 253 3 028 Tied channels(2) 1 732 1 726 10 359 10 170 12 091 11 896 2 768 2 743 Other 248 231 255 289 503 520 274 260
Institutional 1 196 946 838 1 350 2 034 2 296 1 280 1 081
Broker 691 525 398 754 1 089 1 279 731 600 Bancassurance 22 41 22 41 22 41 Tied channels(2) 462 349 419 461 881 810 504 395 Other 21 31 21 135 42 166 23 45
Total new business 7 013 6 718 23 498 24 266 30 511 30 984 9 364 9 145
Split between:South Africa(1)
Individual Arrangements 5 657 5 609 22 583 22 830 28 240 28 439 7 916 7 892
Broker 1 234 1 330 5 527 7 006 6 761 8 336 1 787 2 031 Bancassurance 2 547 2 419 6 494 5 430 9 041 7 849 3 196 2 962 Tied channels(2) 1 652 1 642 10 359 10 170 12 011 11 812 2 688 2 659 Other 224 218 203 224 427 442 245 240
Liberty Corporate 1 089 765 816 771 1 905 1 536 1 171 842
Broker 648 457 376 175 1 024 632 686 474 Bancassurance 22 38 22 38 22 38 Tied channels(2) 419 270 419 461 838 731 461 316 Other 21 135 21 135 2 14
Total new business 6 746 6 374 23 399 23 601 30 145 29 975 9 087 8 734
Liberty Africa InsuranceRetail 160 163 77 86 237 249 168 172
Broker 2 2 2 2 2 2 Bancassurance 54 64 25 21 79 85 57 66 Tied channels(2) 80 84 80 84 80 84 Other 24 13 52 65 76 78 29 20
Institutional 107 181 22 579 129 760 109 239
Broker 43 68 22 579 65 647 45 126 Bancassurance 3 3 3 Tied channels(2) 43 79 43 79 43 79 Other 21 31 21 31 21 31
Total new business 267 344 99 665 366 1 009 277 411 (1) Includes premium escalations for Individual Arrangements; excludes STANLIB Multi-manager.(2) Tied channels include Agency, Liberty entrepreneurs and Liberty@work.
LONG-TERM INSURANCE – NEW BUSINESS BY DISTRIBUTION CHANNEL(1)
for the year ended 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 59
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Recurring premiums Single premiums Total premiums
Rm 2017 2016 2017 2016 2017 2016
Individual Arrangements 20 824 20 142 22 151 22 437 42 975 42 579 Liberty Corporate 8 784 8 281 1 222 2 294 10 006 10 575 Liberty Africa Insurance 925 924 234 685 1 159 1 609 STANLIB Multi-manager 276 276
Total premiums 30 533 29 347 23 607 25 692 54 140 55 039
Indexed premiums 32 893 31 916
Individual Arrangements 23 039 22 386 Liberty Corporate 8 906 8 510 Liberty Africa Insurance 948 992 STANLIB Multi-manager(1) 28
(1) The arrangement whereby funds were placed with external asset managers via STANLIB Multi-manager was terminated in 2016 and accordingly there are no flows in 2017 and going forward.
The difference between the single premiums reported under total long-term insurance premiums and single premiums reported under long-term insurance new business by distribution channel arises mainly from different treatment for extensions of matured policies, reinvestment of fund withdrawals, conversions of standalone funds to umbrella funds and fund member movements within Liberty administered funds.
LIBFIN – SHAREHOLDER INVESTMENT PORTFOLIOas at 31 December 2017
Exposure category 2017 2016
Rm Local Foreign Total % Local Foreign Total(1) %
Equities 4 431 4 787 9 218 33 3 971 3 891 7 862 29 Bonds 7 197 304 7 501 27 6 016 289 6 305 23 Cash 5 385 49 5 434 20 6 779 457 7 236 27 Property 3 093 3 093 11 3 561 3 561 13 Other 1 649 937 2 586 9 1 613 570 2 183 8
Total 21 755 6 077 27 832 100 21 940 5 207 27 147 100
Assets backing capital 17 235 62 14 686 54 Assets backing policyholder liabilities 6 677 24 8 319 31 90:10 exposure 3 920 14 4 142 15
Reconciliation to IFRS shareholders’ equityShareholder Investment Portfolio 27 832 27 147
Less: 90:10 exposure (3 920) (4 142)Less: Subordinated notes (5 500) (4 500)
SA insurance IFRS shareholder’s equity 18 412 18 505
.
TOTAL LONG-TERM INSURANCE PREMIUMSfor the year ended 31 December 2017
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Exposure category 2017 2016
%
Assets backing
capital
Assets backing
policyholderliabilities
90:10 exposure Total
Assets backing
capital
Assets backing
policyholderliabilities
90:10 exposure Total
Local assetsEquities 9 1 6 16 8 1 6 15Bonds, cash and property 41 12 3 56 36 20 4 60Other 4 1 1 6 6 6Foreign assets Equities 4 10 3 17 1 9 4 14Bonds, cash and property 1 1 2 1 1 1 3Other 3 3 2 2
Total 62 24 14 100 54 31 15 100
LIBFIN – SHAREHOLDER INVESTMENT PORTFOLIO RETURNas at 31 December 2017
Rm 2017 2016
Realised gross result 2 328 1 539 Taxation (512) (349)Bond cost (432) (321)Expenses (including asset management fees) (77) (82)
Net profit 1 307 787
Gross return (%) 8,5 5,7
Taxation note:
The taxation treatment of income derived from assets backing capital is the normal taxation rules applicable to life investment portfolios. The taxation applicable to income derived from assets backing life funds and the 90:10 exposure is determined by the tax rates pertaining to each life tax fund to which the assets are allocated (I-E tax). In addition there is transfer tax at 28% on the net surplus, after the applicable I-E tax.
LIBFIN – MARKETS CREDIT PORTFOLIOas at 31 December 2017
Rm (unless otherwise stated) 2017 2016%
change
Net earnings from Credit portfolio 330 300 10Total LibFin assets (Rbn) 62 58 7
Credit portfolio assets (Rbn) 42 38 11Banks, treasuries and shorter dated assets (Rbn) 20 20
LIBFIN – SHAREHOLDER INVESTMENT PORTFOLIO PERCENTAGE ALLOCATIONas at 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 61
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Rm 2017 2016
Expected profit and premium escalations 2 040 2 020 Variances, modelling and assumption changes (144) (341)New business strain (675) (611)Project, outperformance incentive and non cost per policy expenses (286) (106)Direct Financial Services (8) (109)Other 176 195Release of tax provisions 16
Earnings before bancassurance 1 103 1 064 Liberty share of credit life bancassurance (net of all taxes) 167 160Complex bancassurance preference dividend (62) (105)
Headline earnings 1 208 1 119
INDIVIDUAL ARRANGEMENTS – KEY PERFORMANCE INDICATORSas at 31 December 2017
Rm (unless otherwise stated) 2017 2016
Net customer cash flows 3 196 2 505
Insurance products 2 846 1 948 LISP 350 557
Gross sales (excluding LISP) 26 895 27 186 Indexed new business (excluding LISP) 6 570 6 639 Value of new business 155 426 Retail margin excluding STANLIB (%) 0,5 1,4Retail new business margin including STANLIB (%)(1) 0,5 1,2(1) The arrangement whereby funds were placed with external managers via STANLIB Multi-manager was terminated in 2016 and accordingly there are no flows in 2017 resulting in
the same margin being reported.
INDIVIDUAL ARRANGEMENTS – INDEXED NEW BUSINESSas at 31 December 2017
Rm 2017 2016
Individual Arrangements Insurance (excluding emerging consumer market) 5 844 5 785 Emerging consumer market 264 272
Total Individual Arrangements Insurance 6 108 6 057 Direct Financial Services 79 102 STANLIB ‘on balance sheet’ sales 383 480
Total ‘on balance sheet’ sales 6 570 6 639 STANLIB ‘off balance sheet’ sales 2 398 2 063 GateWay LISP ‘off balance sheet’ sales 220 215
Total Individual Arrangements distribution 9 188 8 917
INDIVIDUAL ARRANGEMENTS – HEADLINE EARNINGSfor the year ended 31 December 2017
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R 2017 2016
Valuation basisComplex 636 596Simplex 318 298Annuities 318 298
INDIVIDUAL ARRANGEMENTS – NEGATIVE RAND RESERVES(1)
as at 31 December 2017
Rm 2017 2016
Published IFRS basis 16 767 16 632 Statutory basis 7 379 7 824 (1) Gross of taxation
By their nature “negative rand reserves” includes offsets between policies with positive and negative reserves. The Directive 145 adjustment is applied only to policies with negative reserves.
LIBERTY CORPORATE – HEADLINE EARNINGS for the year ended 31 December 2017
Rm 2017 2016
Gross contribution 1 072 1 142
Underwriting margin 417 488 Fee income 589 548 Longevity improvement factor assumption change (50)Provision movements and sundry ad hoc items (36) 59Pension businesses and other income 102 97
Expenses and other items (960) (877)
Profit before tax 112 265 Taxation (31) (74)
Headline earnings 81 191
INDIVIDUAL ARRANGEMENTS – MAINTENANCE COST PER POLICYas at 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 63
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Rm (unless otherwise stated) 2017 2016
Gross sales 1 905 1 536 Indexed new business 1 171 842 Value of new business 57 28 New business margin (%) 0,6 0,4Net customer cash outflows (1 536) (751)
LIBERTY HEALTH – HEADLINE EARNINGSfor the year ended 31 December 2017
Rm 2017 2016
Earnings before depreciation and amortisation (78) (16)Amortisation and depreciation (11) (33)
Loss before taxation (89) (49)Taxation 35 4
Headline loss (54) (45)
LIBERTY HEALTH COVER PRODUCT – LIVES SERVICEDas at 31 December 2017
Thousands 2017 2016 2015 2014
RegionEastern Africa 57 55 48 37 Western Africa 36 35 36 34 Southern Africa 29 31 21 19
Total 122 121 105 90
Liberty owned licences 79 81 67 57Third party licences 43 40 38 33
LIBERTY CORPORATE – KEY PERFORMANCE INDICATORS for the year ended 31 December 2017
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Rm 2017 2016
Insurance entities earnings(1)
Long-term insurance 100 107 Short-term insurance 58 74
Headline earnings (before head office expenses) 158 181 Non controlling shareholders share of headline earnings (61) (66)
Liberty share of headline earnings 97 115
Liberty owned businesses >3 years 101 119 Liberty owned businesses <3 years (3) (4)
Head office costs (52) (74)
Net headline earnings attributable to Liberty 45 41 (1) The headline earnings result is shown at 100% of the earnings of certain of the entities that make up Liberty Africa Insurance.
LIBERTY AFRICA INSURANCE – KEY PERFORMANCE INDICATORSfor the year ended 31 December 2017
Rm (unless otherwise stated) 2017 2016
Value of new business 21 29New business margin (%) 3,9 5,6Long term:Gross sales 366 1 009 Indexed new business 277 411 Net customer cash flows 324 483 Short term:Net customer cash flows 271 314 Claims loss ratio (%) 48 44
LIBERTY AFRICA INSURANCE – HEADLINE EARNINGSfor the year ended 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 65
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Rm 2017 2016
Net premiums by product typeRetail 492 571
Single 40 85 Recurring 452 486
Institutional 667 1 038
Single 194 600 Recurring 473 438
Net premium income from insurance contracts and inflows from investment contracts 1 159 1 609
Net claims and policyholders benefits by product typeRetail (307) (293)
Death, critical illness and disability claims (61) (77)Policy surrender and maturity claims (242) (212)Annuity payments (4) (4)
Institutional (528) (833)
Death, critical illness and disability claims (110) (81)Scheme terminations and member withdrawals (418) (752)
Net claims and policyholders benefits (835) (1 126)
Net cash flow split as follows: 324 483
Retail 185 278 Institutional 139 205
OUR PRESENCE IN AFRICA
LIBERTY AFRICA INSURANCE – LONG-TERM INSURANCE NET CASH FLOWSfor the year ended 31 December 2017
21
43 6
5 7
8910 11
12 13
14
15 171620
2122
25 2423
18 19
KEYLife insuranceAsset managementShort-term insurancePropertyHealth
14 Tanzania 15 Zambia 16 Malawi 17 Mozambique 18 Madagascar 19 Mauritius 20 Zimbabwe 21 Botswana 22 Namibia 23 Swaziland 24 Lesotho 25 South Africa
1 Senegal 2 Burkina Faso 3 Ivory Coast 4 Ghana 5 Niger 6 Nigeria 7 Chad 8 Cameroon 9 Equatorial Guinea 10 Gabon 11 Congo 12 Uganda 13 Kenya
66 Liberty Holdings Limited Financial results for the year ended 31 December 2017
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Rm (unless otherwise stated) 2017 2016
Net fee income 1 704 1 679 Base fees 1 676 1 651 Performance fees 28 28 Total operating expenses (1 390) (1 127)Operating expenses (1 262) (1 062)Non-recurring projects and expenses (128) (65)
Profit before investment income 314 552 Other income 57 91 Profit before taxation 371 643 Taxation (119) (184)Total headline earnings 252 459 Average margin (bps) 32 34 Average assets under management (Rbn) 546 525
STANLIB SOUTH AFRICA – NET CASH FLOWS AND ASSETS UNDER MANAGEMENT BY ASSET CATEGORYas at 31 December 2017
Net cash inflows/(outflows) Assets under management
Rm 2017 2016 2017 2016
Retail 6 849 (1 320) 228 202 210 016
Fixed interest 7 846 913 48 940 40 988 Equity (752) (1 072) 13 504 13 044 Property 325 (211) 14 954 13 403 Money Market (1 400) 1 007 24 794 26 188 Absolute Return 2 572 (551) 6 008 3 249 Balanced (3 818) (280) 24 819 27 675 International (855) (946) 11 308 11 231 Retail Life 20 (91) 211 183 LISP 3 280 2 116 80 093 70 603 Structured (369) (2 205) 3 571 3 452
Institutional (2 118) 4 121 103 831 100 107
Fixed interest (5) 1 531 19 905 20 134 Equity 1 021 1 653 6 743 4 462 Property (641) 2 440 8 539 8 053 Money Market 1 316 1 030 56 217 51 807 Absolute Return (687) (402) 514 1 070 Balanced (2 481) (1 855) 9 494 11 797 International (641) (280) 1 711 2 138 Other 4 708 646
Liberty – Delta LISP 483 (800) 41 877 37 167 Liberty – intergroup (16 346) (9 207) 181 753 187 696
Total (11 132) (7 206) 555 663 534 986
STANLIB SOUTH AFRICA – HEADLINE EARNINGSfor the year ended 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 67
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STANLIB SOUTH AFRICA – ASSETS UNDER MANAGEMENT BREAKDOWN BY SOURCE AND ASSET TYPEas at 31 December 2017
Rm
Mon
ey m
arke
t (in
cl
cash
)Fi
xed
inte
rest
Equi
tyPr
oper
tyO
ther
Abs
olut
ere
turn
Bala
nced
Inte
r-na
tiona
lSt
ruc-
ture
dRe
tail
life
LISP
Tota
l
2017
Reta
ilCo
llect
ive
Inve
stm
ents
46
561
11
010
11
102
5 1
64
19
010
11
308
104
155
Link
ed In
vest
men
t and
St
ruct
ured
Pro
duct
s 3
571
8
0 09
3 8
3 66
4 M
oney
mar
ket
24
794
24
794
Mul
ti-m
anag
er
Colle
ctiv
e In
vest
men
ts 2
379
2
494
3
852
8
44
5 8
09
211
1
5 58
9 In
stitu
tiona
lSe
greg
ated
fund
s 1
9 90
5 6
743
8
539
7
08
514
9
494
1
711
4
7 61
4 M
oney
mar
ket
56
217
56
217
Libe
rty
– Del
ta L
ISP
41
877
41
877
Libe
rty
– int
ergr
oup
5 1
98
32
877
53
169
24
032
645
6
859
2
8 44
1 2
9 02
6 1
506
1
81 7
53
STAN
LIB
tota
l 8
6 20
9 1
01 7
22
73
416
47
525
1 3
53
13
381
62
754
42
045
5 0
77
211
1
21 9
70
555
663
2016
Re
tail
Colle
ctiv
e In
vest
men
ts 3
8 74
2 1
0 56
4 9
671
2
373
2
3 58
1 1
1 23
1 9
6 16
2 Li
nked
Inve
stm
ent a
nd
Stru
ctur
ed P
rodu
cts
3 4
52
70
603
74
055
Mon
ey m
arke
t 2
6 18
8 2
6 18
8 M
ulti-
man
ager
Co
llect
ive
Inve
stm
ents
2 2
46
2 4
80
3 7
32
876
4
094
1
83
13
611
Inst
itutio
nal
Segr
egat
ed fu
nds
786
2
0 13
4 4
462
8
053
6
46
1 0
70
11
664
2 1
38
48
953
Mon
ey m
arke
t 5
1 02
1 1
33
51
154
Libe
rty
– Del
ta L
ISP
37
167
37
167
Libe
rty
– int
ergr
oup
9 1
03
31
547
59
757
25
833
637
7
648
2
1 36
1 3
0 42
9 1
381
1
87 6
96
STAN
LIB
tota
l 8
7 09
8 9
2 66
9 7
7 26
3 4
7 28
9 1
283
1
1 96
7 6
0 83
3 4
3 79
8 4
833
1
83
107
770
5
34 9
86
68 Liberty Holdings Limited Financial results for the year ended 31 December 2017
March 1, 2018 6:54 PM SuppInfo-Dec2017 2
SUPPLEM
ENTARY IN
FORM
ATION
Rolling period
1 Year 3 Year 5 Year
Core retail funds – quartile performance Fund name 2017 2016 2017 2016 2017 2016
STANLIB Bond 1 1 1 2 2 2 STANLIB Income 2 2 1 2 2 2 STANLIB Money Market 2 2 2 3 2 3 STANLIB Flexible Income 1 1 2 2 3 2 STANLIB Aggressive Income 2 1 1 1 3 2
STANLIB Property Income 2 1 2 2 2 3
STANLIB Balanced 3 4 4 4 3 3 STANLIB Balanced Cautious 4 3 3 3 3 3 STANLIB Inflation Plus 5% 4 4 4 4 4 4 STANLIB Inflation Plus 3% 2 1 1 1 3 3 STANLIB Absolute Plus 1 1 1 1 2 2
STANLIB SA Equity 3 3 4 4 4 3 STANLIB Equity 2 4 3 3 2 2 STANLIB Growth 3 3 4 4 4 4 STANLIB Value 4 2 4 4 4 4
STANLIB SOUTH AFRICA – INSTITUTIONAL INVESTMENT PERFORMANCE for the year ended 31 December 2017
Rolling period
1 Year 3 Year 5 Year
Survey funds (Alexander Forbes Surveys – quartile performance) 2017 2016 2017 2016 2017 2016
Stanlib Core Bond 2 1 1 2 2 2 Money Market 2 3 4 4 4 4 Stanlib Institutional Property 3 1 3 2 3 3
Large Manager – Global 4 4 4 4 4 4 Full Global Mandate 4 4 4 4 4 4 Domestic Only Mandate 4 4 4 4 4 4
Stanlib Core Equity 4 4 4 4 4 4 Stanlib Growth Equity 3 3 4 4 4 4 Stanlib Value 4 2 4 4 4 4 Stanlib Enhanced Index 1 4 4 4 4 4
STANLIB Inflation Plus 3% 2 4 2 3 1 2 STANLIB Inflation Plus 5% 4 4 4 4 4 4 Absolute Return 4 3 2 Domestic Absolute Return 4 4 4
STANLIB SOUTH AFRICA – RETAIL INVESTMENT PERFORMANCEfor the year ended 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 69
SuppInfo-Dec2017 2 March 1, 2018 6:54 PM
SUPPLEM
ENTARY IN
FORM
ATION
STANLIB REST OF AFRICA – ASSETS UNDER MANAGEMENTas at 31 December 2017
Rm 2017 2016
Opening market value 50 787 50 317 Net cash (outflows)/inflows (756) 2 891
External (480) 2 963Liberty – intergroup (276) (72)
Capital appreciation/(depreciation) 2 500 (2 421)
Closing market value 52 531 50 787
Segregated funds 31 683 32 220 Unit trusts 7 364 6 395 Money Market 13 484 12 172
Total assets under management 52 531 50 787
STANLIB SOUTH AFRICA – INVESTMENT PERFORMANCEas at 31 December 2017
0
10
20
30
40
50
60
70
60
53
40
■ 2014 ■ 2015 ■ 2016 ■ 2017
% OF CORE RETAIL PRODUCTS IN 1ST AND 2ND QUARTILE
5 Year3 Year1 Year
0
10
20
30
40
50
60
70
33
17 17
■ 2014 ■ 2015 ■ 2016 ■ 2017
% OF INSTITUTIONAL FUNDS IN 1ST AND 2ND QUARTILE
5 Year3 Year1 Year
70 Liberty Holdings Limited Financial results for the year ended 31 December 2017
March 1, 2018 6:54 PM SuppInfo-Dec2017 2
SUPPLEM
ENTARY IN
FORM
ATION
Rm 2017 2016
Southern region(1) 30 729 27 287
Fixed interest 6 395 5 904 Equity 11 096 10 634 Money Market 11 587 9 906 Other 1 651 843
Eastern region(2) 17 408 19 975
Fixed interest 9 939 11 595 Equity 3 812 3 308 Property 1 864 3 003 Money Market 1 793 2 069
Western region(3) 4 394 3 525
Fixed interest 1 018 997 Money Market 104 197 Other 3 272 2 331
Total assets under management 52 531 50 787
CombinedFixed interest 17 352 18 496 Equity 14 908 13 942 Property 1 864 3 003 Money Market 13 484 12 172 Other 4 923 3 174
52 531 50 787 (1) Southern region includes Botswana, Swaziland, Lesotho and Namibia. (2) Eastern region includes Kenya and Uganda.(3) Western region is Ghana.
STANLIB REST OF AFRICA – ASSETS UNDER MANAGEMENT BY GEOGRAPHICAL LOCATIONas at 31 December 2017
Liberty Holdings Limited Financial results for the year ended 31 December 2017 71
SuppInfo-Dec2017 2 March 1, 2018 6:54 PM
SUPPLEM
ENTARY IN
FORM
ATION
NOTES
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72 Liberty Holdings Limited Financial results for the year ended 31 December 2017
March 1, 2018 6:54 PM SuppInfo-Dec2017 2
SUPPLEM
ENTARY IN
FORM
ATION
NOTES
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Financial DirectorYuresh MaharajTel: +27 (11) 408 [email protected]
Head Office and Registered AddressLiberty Life Centre, 1 Ameshoff StreetBraamfontein, Johannesburg 2001Postal address: PO Box 10499, Johannesburg 2000Tel: +27 (11) 408 3911Registration number: 1968/002095/06
Investor RelationsSharon SteynTel: +27 (11) 408 [email protected]@liberty.co.za
AuditorsPricewaterhouseCoopers Inc.4 Lisbon Lane, Waterfall City,Jukskei View 2090Tel: +27 (11) 797 4000
Company SecretaryJill ParrattTel: +27 (11) 408 [email protected]
Transfer SecretariesComputershare Investor Services Proprietary Limited(Registration number 2004/003647/07)Rosebank Towers, 15 Biermann Avenue, RosebankJohannesburg 2196Tel: +27 (11) 370 5000
Website: www.libertyholdings.co.zaCustomer Call CentreTel: 0860 456 789
Contact details
www.libertyholdings.co.za