SANLAM INVESTOR PRESENTATION 2006 Interim Results
INDEX INDEX Page Sanlam Group Results Presentation Sanlam Group Results Presentation Highlights 3 Strategic Delivery • Sanlam Group 4 • Sanlam Personal Finance 13 • Sanlam Developing Markets 17 • Sanlam Investments 19 • Sanlam Capital Markets 23 • Sanlam Employee Benefits 24 • Sanlam Independent Financial Services 26 • Santam 28 Financial & Actuarial Review • Salient Features 31 • New Business Flows 33 • Net Business Flow 35 • Operating Result 36 • Income Statement 37 • Embedded Value 38 • Return on Embedded Value 39 Strategic Focus • Sanlam Group 41 • Business Environment 45 Appendices Appendices Sanlam Group • Accounting Policy & Presentation 48 • Group Balance Sheet 49 • Group Income Statement 50 • Group Statement of Changes in Equity 51 • Group Cash Flow Statement 52 • Notes to the Financial Statements 52 • Financial Information for the Shareholders’ Fund 56 • Shareholders’ Fund Balance Sheet at Net Asset Value 57 • Shareholders’ Fund Balance Sheet at Fair Value 58 • Segmental Income Statement 60 • Reconciliation of Earnings 62 • Notes to the Shareholders’ Fund Information 65 • Adjusted Headline Earnings — LTRR 75 • Group Embedded Value 76 Sanlam Group Businesses • Life Cluster 86 • Sanlam Investments 88 • Sanlam Independent Financial Services 89 • Santam 90 Economic Review 92 Contact Details & Sanlam Limited Board 94 1 | sanlam group | 2006 interim results
AGENDA AGENDA • Highlights • Strategic Delivery 1H2006 • Financial & Actuarial Review • Strategic Focus Notes 2 | sanlam group | 2006 interim results
HIGHLIGHTS HIGHLIGHTS • Significant growth in new business volumes across the board • Capital efficiency impact evident in per share returns and earnings • Excellent financial performance by Investment Cluster Core strategic initiatives delivering Core strategic initiatives delivering Notes 3 | sanlam group | 2006 interim results
STRATEGIC DELIVERY STRATEGIC DELIVERY 1st Half 2006 Notes 4 | sanlam group | 2006 interim results
DRIVING INCREASED ROEV DRIVING INCREASED ROEV Strategic Investments Capital Efficiency Balanced Portfolio Application of Capital ROE/ROEV Net Top-Line Growth Earnings Costs Investment Returns Notes 5 | sanlam group | 2006 interim results
MAIN AREAS OF FOCUS FOR 2006 … MAIN AREAS OF FOCUS FOR 2006 … • Capital Efficiency • Continue buy-back program • Debt raising • Earnings • Top-Line Growth : Focused Market Initiatives • Improve net inflows … without losing focus in the other areas Notes 6 | sanlam group | 2006 interim results
DRIVING INCREASED ROEV DRIVING INCREASED ROEV Share buy-back program • Purchased in 2005 • 359m shares • Total cost of R4.4bn • Purchased in 2006 • 83m shares • Total cost of R1.3bn • Net reduction in issued share capital of 16% Notes Number of shares Average price Total cost million % cps R million Purchased & cancelled in 2005 359 13.0 1 239 4 446 Total 2006 to date 83 3.5 1 549 1 291 • Purchased & cancelled up to AGM 70 2.9 1 592 1 112 • Purchased after AGM 13 0.6 1 459 197 Dividend received -21 -18 Total in 2005 / 2006 Total in 2005 / 2006 442 442 16.0 16.0 1 297 297 5 737 5 737 7 | sanlam group | 2006 interim results
DRIVING INCREASED ROEV DRIVING INCREASED ROEV Debt raising : Sanlam Life debt issue • R3bn approved • Initial Issue • R2bn • 7 year maturity (9.54%) : R1.2bn • 10 year maturity (9.64%) : R0.8bn • Invested in ring-fenced bond portfolio • Reduced volatility in Sanlam Life capital portfolio • Group’s overall capital requirement reduced Notes 8 | sanlam group | 2006 interim results
DRIVING INCREASED ROEV DRIVING INCREASED ROEV Strong Top-line growth achieved in all businesses Ne New Business Volumes usiness Volumes Retail 79% Institutional 16% SCI white label 84% Short-term 18% Total 47% Notes 9 | sanlam group | 2006 interim results
CORE EARNINGS PER SHARE CORE EARNINGS PER SHARE 129.7 103.4 77.7* 69.9 59.4 50.2 2003 2004 2005 1H04 1H05 1H06 *Restated for change in definition Notes 10 | sanlam group | 2006 interim results
SANLAM CREATES VALUE SANLAM CREATES VALUE ROEV (cps) Driving increased ROEV 26.6%* 24.4% 23.2%* 22.6% 14.2% Dec ’03 Dec ’04 Jun ’05 Dec ’05 Jun ’06 *Annualised Notes 11 | sanlam group | 2006 interim results
ACCELERATED SUCCESS TOWARDS … ACCELERATED SUCCESS TOWARDS … the Leader in Wealth Creation the Leader in Wealth Creation Transforming Sanlam from a mutual insurer into a world-class Financial Services Group providing a wide range of client-centric solutions Notes 12 | sanlam group | 2006 interim results
SANLAM PERSONAL FINANCE SANLAM PERSONAL FINANCE Profitable Top-line growth • Recapturing market share • Total new business APE 29% • RSA life recurring premiums 13% • RSA single premiums 35% • Net funds inflows from SA individual life of R226m but • Margins under pressure Notes 13 | sanlam group | 2006 interim results
SANLAM PERSONAL FINANCE SANLAM PERSONAL FINANCE Top-line growth Middle Market • Share of ABSA broker business > 25% • Gauteng presence growing; sales increasing • Improve footprint and distribution efficiency • Increase number of advisors from 1 788 to 1 950 • Advisor recurring premium per policy up by 10% Notes 14 | sanlam group | 2006 interim results
SANLAM PERSONAL FINANCE SANLAM PERSONAL FINANCE Top-line growth Affluent Market • Excellent top-line growth by Innofin : 49% • Glacier brand launched • Provides holistic solutions for affluent market • Build on existing intermediary relationships • Incremental roll-out of full solution set Notes 15 | sanlam group | 2006 interim results
SANLAM PERSONAL FINANCE SANLAM PERSONAL FINANCE Top-line growth Other revenue sources • Non-SA APE sales up 33% • New mortgage and personal loans up by 54% (1) Alternate profit sources • Growth of 40% • Comprise 18% of total SPF profits (1) Alternate profits to traditional RSA life business Notes 16 | sanlam group | 2006 interim results
SANLAM DEVELOPING MARKETS SANLAM DEVELOPING MARKETS Top-line growth Focussed on the integration of Aflife • Sanlam Group Solutions (SGS) integrated into Aflife SA; R50m benefits • Efficient capital management; >R1bn released • Stabilising operations and systems • Endorsed branding strategy Notes 17 | sanlam group | 2006 interim results
SANLAM DEVELOPING MARKETS SANLAM DEVELOPING MARKETS Top-line growth • SA businesses delivered on target • New business volumes R701m vs R35m • Strong growth from Channel, Aflife maintained volumes • Solid results from non-SA businesses • New business volumes of R278m • Sound basis in India for rapid growth (9 000 agents accredited) Notes 18 | sanlam group | 2006 interim results
SANLAM INVESTMENTS SANLAM INVESTMENTS Strong financial performance & growth (R’m) Operating Profit before tax 234 154 76 465 21 73 343 236 328 248 196 SA International 2002 2003 2004 2005 1H05 1H06 Notes 19 | sanlam group | 2006 interim results
SANLAM INVESTMENTS SANLAM INVESTMENTS Strong financial performance & growth (R’bn) 9.2* Net flows Assets under Management 4.8 358 6.4 3.3* 327 286 1.2 -6.5 227 209 2002 2003 2004 2005 1H05 1H06 2002 2003 2004 2005 Jun ’06 *Excluding PIC outflow of R6bn Notes 20 | sanlam group | 2006 interim results
SANLAM INVESTMENTS SANLAM INVESTMENTS Comprehensive offering • Comprehensive business offering further expanded • Boutique teams within asset manager operational • Focussed attention to retail offering created • Specialist product development team • Continued growth in international businesses • BBBEE partner introduced to Sanlam Properties Notes 21 | sanlam group | 2006 interim results
SANLAM INVESTMENTS SANLAM INVESTMENTS Investment performance • LMW: rolling 12 months — 3/11 (Domestic); 4/11 (Global)* • Retail funds: • rolling 12 months — 21% top quartile; 68% top half • Value Fund — 1/7 over 2 and 3 years • Small Cap Fund — 1/7 over 3 years • Industrial Fund — 1/7 over 1 and 2 years • SIM Global: • Global Financial Fund: rolling 12 months — 8% out performance • Global Best Ideas Fund: rolling 12 months — 17% out performance *As at 31/07/2006 Notes 22 | sanlam group | 2006 interim results
SANLAM CAPITAL MARKETS SANLAM CAPITAL MARKETS • Continued delivery on growth and ROE • Extracted synergies with Investment Cluster • Centralised Group credit function bedded down • Successfully steered the business through market volatility Notes 23 | sanlam group | 2006 interim results
SANLAM EMPLOYEE SANLAM EMPLOYEE BENEFITS ENEFITS Profitable Top-line growth • New business volumes up 32% • Recurring premiums up 12% • Single premiums up 33% • Profitability of new business improved • Investments • Outflows reduced to R1,3bn • Some recapturing by Sanlam Investments • Highly competitive market Notes 24 | sanlam group | 2006 interim results
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