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2020 Annual results

11 March 2021

Looking back on the past year we can again be proud of the Group’s performance in a very challenging environment.

Our performance is testimony to Sanlam’s resilience, and the quality, scale and diversity of our business. Also central to our success is the calibre and commitment of our employees and their ability to execute and deliver value for our shareholders.

Key indicators

Return on group equity value per share

-2,8%

adjusted RoGEV of 2.6%

Net result from financial services

-13%

+17% excl Covid 19 impact

New business volumes

R311bn

+25%

Net value of new covered business (VNB)

R1 921mn

-16%

Net VNB margin

2,58%

2,98% in 2019

The estimated fall in global real gross domestic product (GDP) due to widespread COVID-19-related economic restrictions, was the sharpest since World War II. The South African rand weakened against most of the currencies where we operate, with the Angolan kwanza being the main exception. The weaker average rand exchange rates however did not have an overall significant impact on the Group’s operational earnings and GEV for the period due to offsetting positive and negative foreign currency translation differences. The latter primarily relates to the translation of negative investment return in Sanlam Emerging Markets at the weaker average rand exchange rate and the weaker Angolan kwanza.

Highlights

The Group is guided by its purpose: empowering generations to be financially confident, secure and prosperous. Our commitment to Africa is the cornerstone of our strategic positioning with a vision of becoming the most admired financial services player in Africa. Key to this is humanising technology and designing our digitalisation journey around our clients. We continue to leverage our partnership model to introduce a broader spectrum of society to the benefits of financial resilience.

Highlights for the year include

  • Strengthening our partnership with Ubuntu-Botho through African Rainbow Capital Financial Services (ARC FS) acquiring 25% of Sanlam Investments third-party asset manager and Sanlam Life’s expected acquisition of 25% of a subsidiary of ARC FS
  • New business volumes of over R300 billion for the first time
  • Improvement in Sanlam Pan-Africa general insurance (SPA GI) underwriting margin to 6.1% from 2.0% in 2019
  • Large new investment mandates in Southern Africa and East Africa

Key features

Earnings

  • Net result from financial services decreased 13% (up 17% excluding the impact of COVID-19)*
  • Net operational earnings decreased 23%
  • Headline earnings increased 24%

New business

  • New business volumes exceed R300 billion for the first time, up 25% to R311 billion: life insurance +4%, general insurance +3% and investment business +37%
  • Net fund inflows of R62 billion, 8% higher than the R57 billion achieved in 2019
  • Net value of new covered business decreased by 16% to R1 921 million (down 14% on constant economic basis)
  • Net new covered business margin of 2,58% (2,98% in 2019)

Group equity value

  • Group Equity Value per share of R59,20 (2019: R64,36)
  • Return on Group Equity Value (RoGEV) per share of -2,8% (2019: 6,4%)
  • Adjusted RoGEV per share of 2,6% (2019: 11,9%)

Capital management

  • Discretionary capital of R636 million at 31 December 2020 excluding expected sale of Sanlam UK holding in Nucleus Financial Group plc (2019: R220 million)
  • Sanlam Group Solvency Assessment and Management (SAM) cover ratio of 191% (December 2019: 211%)

Dividend

  • Dividend of 300 cents per share (2019: 334)

* Results excluding the impact of COVID-19 and related market conditions (“impact of COVID-19”)

The information included in this annual results announcement indicated as “excluding the impact of COVID-19” has been presented to illustrate the impact of the COVID-19 pandemic and other existing market conditions on the Group’s results and is the responsibility of the Group’s board of directors (Board). It is presented for illustrative purposes only and because of its nature may not fairly present the Group shareholders’ fund information, Group’s financial position, changes in equity, result of operations or cash flows. All references to information “excluding the impact of COVID-19” was calculated by excluding those components of earnings that were most significantly impacted by COVID-19 and related market conditions. The performance indicators are specifically identified. For comparability, the same earnings components are also excluded from the comparative period. It should be noted that although these impacts are ascribed mainly to COVID-19, it is acknowledged there are also other external and market impacts that could have influenced these items. Given the exclusion of the current and prior year impacts of certain elements of the results, the variances are not necessarily an indication of what the profit growth would have been had COVID-19 not occurred.

Webcasting

Interested parties can view the live video webcast of the results presentation on the Internet via a link on the Sanlam Investor Relations website or by the following URL: https://www.corpcam.com/Sanlam11032021.

This webcast can also be accessed and viewed on Android and Apple tablets and mobile devices. A delayed version of the webcast will be available shortly afterwards at the same address.

Audio dial-in facility

A dial-in facility will be available. We kindly advise callers to dial in 5-10 minutes before the presentation starts at 09:00.

Access numbers for participants dialing live from their country

South Africa +27 10 201 6800
South Africa (Alternate)+27 11 535 3600
United Kingdom0 333 300 1418
USA and Canada1 508 924 4326
Other Countries+27 10 201 6800
Other Countries (Alternate)+27 11 535 3600

Recorded playback will be available until 16 March 2021

South Africa +27 10 500 4108
Australia073 911 1378
United Kingdom0 203 608 8021
USA and Canada1 412 317 0088
Other Countries+27 10 500 4108

Access code for recorded playback: 38614

BusinessDay TV*

The presentation will be broadcast at 09:00 on the South African DStv network channel 412 (BusinessDay TV).

Enquiries

Adri Hofmeyr
Investor Relations: Sanlam Limited
Tel: +27 21 947 8455
Email: adri.hofmeyr@sanlam.co.za

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