PRESENTATION 12 March 2020 AGENDA 01 Strategic review Ian Kirk 02 - PowerPoint PPT Presentation

ANNUAL RESULTS PRESENTATION 12 March 2020

AGENDA 01 Strategic review Ian Kirk 02 Our operating context in 2019 Ian Kirk 03 The financial results we delivered Wikus Olivier 04 Priorities for 2020 Ian Kirk 05 Environment in 2020 Ian Kirk 2

STRATEGIC REVIEW Building a Pan-African business Strategic execution sets us apart Creating inclusive value for all our stakeholders 3

STRATEGY AT A GLANCE KEY STRATEGIC INDICATORS Our purpose A consistent strategy with Our purpose is to build a world that supports people in living their 16% EXECUTED strength in execution best possible lives through financial resilience and prosperity. THROUGH OUR through: Adjusted Return on Group Equity FIVE CLUSTERS Value per share (5-year average) Mutually beneficial Our strategic intent Our strategic pillars partnerships Our strategic intent is to create SPF sustainable value for all 67% Diversification across stakeholders. Profitable top-line growth geographies, market through a culture of Contribution from South Africa Our vision in South Africa client-centricity segments and lines to net result from financial Lead in client-centric wealth creation, management and SEM services (98% in 2003) of business Enhancing Sanlam’s protection in South Africa resilience and earnings Continuous growth through Our vision in other emerging diversification markets transformation to Be a leading Pan-African Level 1 adapt to a changing financial services player SNT Extracting value through with significant focus world B-BBEE contributor innovation and improved on India, Lebanon, Malaysia in South Africa efficiencies Continuous mitigation Our vision in developed markets of risk and pursuit of SIG Play a niche role in Responsible capital opportunities Leading footprint aspects of asset and allocation and wealth management in specific management developed markets Continuous focus on across Africa ethical leadership, Transformation Among top three market leaders SC values and culture Continuous transformation is central to Sanlam’s ability to adapt in 10 African countries for life and to a changing world and underpins all of the strategic pillars. general insurance 4

STRATEGY AT A GLANCE PERFORMANCE SCORECARD FOR 2019 Pressure on general insurance claims ✓  Strong recovery in 2 nd half of 2019 in underwriting experience in key markets, collapse of the We delivered solid results at Santam and Sanlam Corporate Angolan and Zimbabwean currencies and growth across most social and political unrest in Lebanon detracted from SEM results and Group metrics, contributing ✓ Credible performance in SPF under tough conditions RoGEV to systemic resilience. We create value by  Higher corporate credit provisioning in South Capitec Bank partnership: 1,4 million funeral ✓ protecting our stakeholders Africa – no defaults yet policies sold since launch against the potential in May 2018 negative financial Weak South African economic conditions and  consequences of 5% B-BBEE share issuance completed – ✓ low levels of investor confidence impacted strengthening capital base and simultaneously unexpected events. negatively on new business growth in SPF providing Sanlam with leading empowerment We create financial credentials in support of future growth  Underperformance by financial planning prosperity through ✓ Investment in digital and technological businesses in the UK detracted from enhancing people’s ability transformation is ongoing and supports excellent SIG results to maintain financial client-centric growth independence beyond their income-generating ✓ Integration of Saham on track and capability. synergies being realised African Rainbow Life launched as a ✓ complementary distribution channel in the South African entry-level market 5

STRATEGY AT A GLANCE SOUTH AFRICA LEADING General insurance, wealth management, mass affluent and middle-income life and investments STRATEGIC OPPORTUNITIES Third-party asset management, entry-level, employee benefits and healthcare OTHER EMERGING MARKETS PAN-AFRICAN FOOTPRINT Seek top-3 position in insurance in all key markets to support multinational opportunity INDIA, MALAYSIA, LEBANON Strategic diversifiers; strong performance in India and Malaysia life; Malaysia GI lagging DEVELOPED MARKETS EMERGING DEVELOPED FUTURE MARKETS MARKETS EXPANSION NICHE PRESENCE Sanlam has a unique Pan-African footprint, scale and expertise. Providing asset management and wealth management solutions to African client base We continue to extract synergies following the Saham acquisition in 2018 and expand our offering to multinational companies operating across the African continent, wrapped around leading in-country businesses. Our holistic STRATEGIC OPPORTUNITIES approach ensures ease of doing business, aimed at international insurance brokers and developed market Improving planning and advice businesses insurers that need to provide their client base with insurance and employee benefits solutions across Africa. 6

STRATEGY AT A GLANCE We have a dual focus on future growth and dividend flows PERFORMANCE IN 2019 Dividend per share of 334 cents (3% real growth) STABLE AND CONSISTENT Quality of earnings CONSISTENT CUMULATIVE OUTPERFORMANCE DIVIDEND GROWTH OF RoGEV TARGET remains solid: continuation of positive experience variances and strong 1800 350 cash flow generation 14.8% 12.4% 1600 300 +4% 10 yr 2-4% Difficult operating 10 yr 1400 CAGR CAGR environments resulting in Target: SA 250 Target: real 1200 9yr risk free growth adjusted RoGEV per share 200 of 11.9% 1000 800 150 600 100 400 50 200 0 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 Target Actual Dividend Cash earnings 7

OUR OPERATING CONTEXT SOUTH AFRICA OTHER AFRICAN REGIONS Competition Commodity-based economies growing at Pedestrian economic growth and high much slower pace, in particular Angola, unemployment; requires structural reforms Exchange Nigeria and Namibia. Robust growth in Risk of sovereign credit rating downgrade rate West, North and East Africa volatility increasing Angolan and Zimbabwean currencies Need to restore confidence depreciated sharply, fuelling inflation Public/private partnerships key to deliver Elevated general insurance claims Cyber favourable environment experience: motor, health and security catastrophes Investment INDIA, LEBANON AND MALAYSIA GLOBAL market volatility Liquidity constraints in India persisting into 2019; Protectionism impacting on global growth slowdown in economic growth and investment market volatility Share prices of Indian credit businesses under Uncertainties around Brexit Climate pressure in line with other NBFCs change Accommodative monetary policy stance Significant weakening in Lebanon economic by most central banks Global environment Fading impact of US fiscal stimulus trade wars 8

SANLAM MAKING A DIFFERENCE IN PEOPLE’S LIVES There’s never been a better time to partner with us R190bn of wealth distributed in 2019: R540m €160m R153bn to clients invested in managed in a joint venture communities R6,4bn to government with the Dutch Development over the past R7,8bn to shareholders Bank to mitigate against R185m invested ten years climate change R13,3bn to employees and the balance to suppliers in enterprise and supplier development up to 2019 38 years R3,4bn R856bn 99% of retirement research via invested in of assets under of death claims Sanlam Benchmark Symposium B-BBEE transactions management paid out, maintaining by Sanlam by SIG a 5-year record 9

FINANCIAL REVIEW Solid overall performance Partnerships delivering value Challenging conditions impacted on RoGEV 10

OPERATING AND UNDERWRITING ENVIRONMENT EXCHANGE RATES SA bond yields & short-term Average Rand exchange rates +2% (% change) interest rates Net result from 9.6% 10,5% 10% financial services 7.0% 6.1% 4.6% 10,0% 3.3% -3% 5% 9,5% 0% RoGEV INTEREST 9,0% -5% -5.2% RATES 8,5% -10% 8,0% +3% -15% 7,5% -20% RoGEV 7,0% -25% -23.6% Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 United USA Botswana Morocco Angola India Rest of +5% Kingdom Africa 9 year 5 year Avg ST VNB GI UNDERWRITING 7.7% 2.0% JSE indices Santam underwriting result (R million) Santam SEM Africa underwriting underwriting 2 300 60 000 14 000 margin margin 58 000 1 950 13 500 56 000 1 600 13 000 54 000 1 250 12 500 INVESTMENT 52 000 12 000 900 RETURN 50 000 11 500 550 48 000 -R358m 11 000 200 46 000 44 000 10 500 - 150 EV investment Dec-17 Jun-18 Dec-18 Jun-19 Dec-19 variances All Share - lhs Swix - rhs Avg Swix - rhs Pressure on fee income 2018 2019 11