investor presentation

Insurance Financial Planning Retirement Investments Wealth

investor presentation2014 interim results

4 September 2014

agenda

Operating environment

Strategic overview

Financial review

Priorities and outlook

2014 interim results agenda

operating environmentfundamentals remain weak

operating environment

Challenging operating conditions

Slow growth in global demand

Weak economic growth in SA

Industrial action, in particular platinum mines

SA consumer under pressure

SA economy

Growth

Interest rates

Equity markets

Currencies

Africa/India/Malaysia

2014 interim results operating environment

sa economy

Growth in real retail sales, GDP and PDI (%)

sub-2% growth outlook


12/05 06/06 12/06 06/07 12/07 06/08 12/08 06/09 12/09 06/10 12/10 06/11 12/11 06/12 12/12 06/13 12/13-7

-4

-1

2

5

8

11

14

Growth y-o-y in real retail sales Growth y-o-y in real GDP Growth y-o-y in real PDI

sa interest rates

SA 9-year bond yields and short-term interest rates

higher LT rates had negative impact on RoGEV and VNB growth


12/12 01/13 02/13 03/13 04/13 05/13 06/13 07/13 08/13 09/13 10/13 11/13 12/13 01/14 02/14 03/14 04/14 05/14 06/144.0%

5.0%

6.0%

7.0%

8.0%

9.0%

10.0%

9-year Short term

+70bps

Impact on growth:

Net VNB -4%

New business margin -3%

sa equity and bond markets

Higher average AuM (average Alsi up 20%)


12/12 01/13 02/13 03/13 04/13 05/13 06/13 07/13 08/13 09/13 10/13 11/13 12/13 01/14 02/14 03/14 04/14 05/14 06/1495

100

105

110

115

120

125

130

135

140

145

All Share rebased All Bond rebased Alsi avg

SA Indices (re-based = 100)

2,3%

11,8%

-1,3%

3,4%

average exchange ratebenefiting non-sa results


Europe United Kingdom

USA Botswana India Rest of Africa0%

5%

10%

15%

20%

25%

30%

21.2%

26.2%

16.4%

7.6%

5.3%

0.2%

Contribution to growth:

Net result from financial services 5%

New business volumes 2%

Net VNB 1%

rest of africa/india/malaysia

Botswana

Resilient economy and consumer base

Rest of Africa

GDP growth prospects exceed SA, despite slow growth in global demand

Ghana economy struggling; devaluation of currency

India

Below-trend economic growth

Buoyant equity market

Positive environment post elections

Malaysia

Growth prospects remain in place


strategic deliveryvalue delivered

strategic focus remains unchanged maximise shareholder return

2014 interim results strategic delivery

Ret

urn

s(R

OG

EV

)

Cap

ital

E

ffic

ien

cy

Optimal Application

Return of Excess

Strategic Investments

Gro

wth

/

Op

erat

ion

al

Eff

icie

ncy

Net Business Flows

Operational Efficiency

Diversification

core strategic objectivesprogress in all areas during 2014, particularly growth markets


South AfricaDelivery of sustainable

growth

InternationalCreating a platform for

future growth

Maximising return on Investment in existing businessEfficient and effective management

Identification of core markets for growth & expansion

Effe

ctiv

e c

ap

ital m

an

ag

em

en

t

Sourcing new growth opportunities

top-line earnings growth

Earnings per share

Net operating profit per share increased by 43%

Normalised headline earnings per share up 27%

Business volumes

New business volumes increased by 8% to R82bn (excl white label)

Net fund inflows of R19bn (excl white label), up 40%

Net life VNB up 7% to R626m

Net VNB margin of 2,68% – maintained on per product basis

Group Equity Value of 4 277 cents per share

Annualised RoGEV per share of 18% (15,3% adjusted)

financial performance in 1H2014


operational efficiencies

Gross VNB grew by 9%; 13% on comparable economic basis

profitable volume growth


1H06 1H07 1H08 1H09 1H10 1H11 1H12 1H13 1H140

100

200

300

400

500

600

700

800

-0.3%

0.2%

0.7%

1.2%

1.7%

2.2%

2.7%

3.2%

South Africa Africa Other International Margins - rhs

Value of new business (Rm) vs new business margins (%)


Persistency – SA middle-income market

focus on quality


2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014

-1%

0%

1%

2%

3%

4%

5% 4.8%

3.9% 3.9%3.6%

3.4%3.8% 3.9%

3.0% 2.9% 2.9% 2.8% 2.9%

4.2%4.0%

3.8% 3.7% 3.6%

4.2%

3.4%

2.9% 2.8% 2.7%2.9%

Lapses, surrenders & fully paid-ups as % of in-force per half year

H1 H2


Persistency – SA lower income market

focus on quality


2007 2008 2009 2010 2011 2012 2013 20140%

5%

10%

15%

20%

25%

30%

15.2%

17.5%

14.1%12.7%

11.4% 11.1%10.0%

11.3%

27.6%

16.8%

14.5%12.7%

11.1% 10.4% 11.0%

Number of NTUs, lapses and surrenders as % of in-force

H1 H2

investment performance

Percentage of SIM’s AUM to exceed benchmark

focus on long-term performance track record


Rolling 3 Yr0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 2012 2013 1H14

Rolling 5 Yr0%

10%

20%

30%

40%

50%

60%

70%

80%

90%

100%

2011 2012 2013 1H14


Focus on quality, costs + prudence = consistent positive experience

experience variances


2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 1H140

200

400

600

800

1,000

1,200

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

241

142 138

277 288 278

636

468

681

555

1021

477

R'million% of VIF (rhs)

Group Equity Value Net operating profit

diversificationdiversified earnings base


Life business57%

Short-terminsurance*

13%

Investmentmanagement

13%

Credit & banking14%

Admin, health & other3%

Life business53%

Short-term insurance*17%

Investment management

14%

Credit & banking8%

Admin, health & other8%

* General insurance

diversificationinternational positioning


RSA based

Rest of Africa

BotswanaGhanaKenyaLesothoMalawiMozambiqueNamibiaNigeriaRwandaSouth SudanSwazilandTanzaniaThe GambiaUgandaZambia

South-East Asia

IndiaMalaysiaPhilippines

Developed markets

UK / IrelandSwitzerlandAustraliaUSA

Emerging Markets - Direct presence

Emerging Markets - Indirect presence

Developed Markets

SA Traditional98%

Namibia2%

diversificationgrowth markets delivering value


Net VNB – 1H03 (R100m) Net VNB – 1H14 (R626m)

SA Traditional55%

SA Entry-level22%

Namibia4%

Botswana8%

Rest of Africa8%

Other international3%

SA Traditional98%

Namibia1%


SA Traditional65%

SA Entry-level11%

Namibia5%

Botswana4%

Rest of Africa2%

India/Malaysia7%


SA Traditional65%

SA Entry-level11%

Namibia5%

Botswana5%

Rest of Africa1%

India/Malaysia7%


1H03 – R756 million

diversification

Contribution to group net operating profit

increasing contribution from growth markets


1H13 – R2 409 million 1H14 – R3 461 million

diversificationcontribution from businesses outside of South Africa


South Africa Other emerging markets Developed markets

1H14 1H13

76% 76%

18% 18%

6% 6%

Net operating profit

1H14 1H13

77%82%

20%14%

3% 4%

Net VNB

1H14 1H13

77%81%

16%13%

7% 6%

Group Equity Value

capital efficiency

Final SAM specifications expected towards end of the year

SAM QIS3 results indicate that sufficient capital is allocated to life operations

R1,8 billion of investments in growth opportunities finalised during 1H14

Discretionary capital of R3,3 billion earmarked for investment in growth opportunities

optimising capital base


capital efficiency

Balance 1 January 2014 4 000

Investments (1 761)

SE Asia (1 258)

Rwanda (255)

Botswana (95)

Rest of Africa (81)

SEM/Santam co-investment 43

Developed markets (25)

South Africa (90)

Investment return & other 1 061

Balance 30 June 2014 3 300

discretionary capital


sanlam groupfinancial review

changes in presentation / key assumptions

Accounting policies & basis of presentation

No change from 2013

Changes in RDR: (Sanlam Life 11,0%)

30 bps up from December 2013

70 bps up from June 2013 Negative impact on valuations and RoGEV

2014 interim results financial review

salient features

2014 2013 ê

Group Equity Value* cps 4 277 4 121 4%Annualised RoGEV per share % 18,0 14,3Annualised RoGEV per share (adjusted)% 15,3 15,1CAR cover (Sanlam Life)* 4,4 4,5Net operating profit R mil 3 461 2 409 44%

cps 169,2 118,1 43% Normalised Headline earnings R mil 4 393 3 449 27%

cps 214,8 169,1 27% New business volumes + R mil 81 833 75 796 8% Net fund flows + R mil 19 222 13 746 40% New Life business EV (net) R mil 626 587 7% New Life EV margin % 2,68 2,83


* Comparative information as at 31 December 2013+ Excludes white label

sanlam personal finance

R million 2014 2013 ê

New business flows 23 662 19 239 23%

Sanlam Sky 474 503 -6%

Individual Life 5 821 5 368 8%

Glacier 17 367 13 368 30%

Net flows 8 087 6 564

Sanlam Sky 1 307 1 410

Individual Life (859) (701)

Glacier 7 639 5 855




Value of new life business 437 450 -3%

Sanlam Sky 135 146 -8%

Individual Life 228 240 -5%

Glacier 74 64 16%

Comparable economic basis 467 450 4%

New business margin 2,73% 3,07%

Sanlam Sky 7,62% 7,46%

Individual Life 2,59% 2,89%

Glacier 1,37% 1,45%

Comparable economic basis 2,89% 3,07%




Gross operating profit 2 439 1 941 26%

Sanlam Sky 518 360 44%

Individual Life life and investments 1 571 1 267 24%

Glacier 171 122 40%

Personal loans 148 157 -6%

Other 31 35 -11%

Net operating profit 1 763 1 409 25%

Group Equity Value* 36 976 35 666

RoGEV (six months) 8,7% 6,8%


* Comparative information as at 31 December 2013ite label

sanlam emerging markets


New business flows 4 030 5 933 -32% Namibia 1 541 4 263 -64% Botswana 1 137 871 31% Rest of Africa 827 436 90% India/Malaysia 525 363 45%

Net fund flows 1 762 607Namibia 343 (419)Botswana 478 460Rest of Africa 814 530India/Malaysia 127 36

Value of new life business 196 136 44% Margin 7,30% 6,52%




Gross operating profit 1 129 697 62%

Namibia 254 112 127%

Botswana 348 276 26%

Rest of Africa 108 76 42%

India/Malaysia 432 244 77%

Corporate (13) (11) -18%

Net operating profit 624 391 60%

Group equity value* 12 967 10 189



* Comparative information as at 31 December 2013

sanlam investments


Net investment business flows 4 871 2 959Investment management SA 3 883 (810)Wealth management (457) 2 457International 1 346 1 312Capital management 99 -

New life business 4 389 3 644 20% Employee benefits 952 1 157 -18% Sanlam UK 3 437 2 487 38%

Net life business 1 491 1 235

Value of new life business 64 53 21% Margin 1,16% 1,13%


sanlam investments


Gross operating profit 982 687 43%

Investment management 605 451 34%

Employee benefits 216 174 24%

Capital management 161 62 160%



Covered business 7 268 6 901

Other 11 999 11 070




santam


Net earned premiums 8 459 8 096 4%

Gross operating profit 871 296 194%

Underwriting surplus 626 101 520%

Working capital & other 245 195 26%


Underwriting margin 7,4% 1,3%





business flows

Gross Net

R million 2014 2013 ê 2014 2013

by business

Personal Finance 23 662 19 239 23% 8 087 6 564

Emerging Markets 4 030 5 933 -32% 1 762 607

Sanlam Investments 45 682 42 528 7% 6 362 4 194

Santam 8 459 8 096 4% 3 011 2 381

by licence

Life insurance 17 536 14 956 17% 6 137 5 159

Investment 55 251 52 436 5% 9 979 6 160

Short-term 9 046 8 404 8% 3 106 2 427

Total 81 833 75 796 8% 19 222 13 746


* Excludes white label

value of new covered business

Value of New Business Margin

R million 2014 2013 ê 2014 2013

Personal Finance 437 450 -3% 2,73% 3,07%

Emerging Markets 196 136 44% 7,30% 6,52%

Employee Benefits 42 30 40% 2,30% 1,45%

Sanlam UK 22 23 -4% 0,59% 0,87%

Total 697 639 9% 2,88% 2,98%

Net of minorities 626 587 7% 2,68% 2,83%

Comparable economic basis 650 587 11% 2,77% 2,83%


net operating profit


Personal Finance 1 763 1 409 25%

Emerging Markets 624 391 60%

Sanlam Investments 727 523 39%

Santam 353 128 176%

Corporate & other (6) (42) 86%

Total 3 461 2 409 44%


income statement


Net operating profit 3 461 2 409 44% Per share 169,2 118,1 43%

Net investment return 1 122 1 150 -2%

Other (190) (110) -73%

Normalised headline earnings 4 393 3 449 27% Per share 214,8 169,1 27%

Fund transfers 54 25

Headline earnings 4 447 3 474 28% Per share 220,2 171,4 28%


group equity value

Equity Value* RoGEV+

R million 2014 2013 Rm %

Group operations 82 446 76 470 7 282 9,5%

Personal Finance 36 976 35 666 3 107 8,7%

Emerging Markets 12 967 10 189 1 258 12,3%

Investments 19 267 17 971 2 031 11,2%

Santam 13 236 12 644 886 7,0%

Discretionary & Other 5 142 7 939 6 0,1%

TOTAL 87 588 84 409 7 288 8,6%

cps 4 277 4 121 356 8,6%

Adjusted return 7,4% Return target 5,9%


* Comparative information as at 31 December 2013+ Return for six months

group equity value earnings

R million Actual Adjusted

Net value of new business 626 626Existing business 2 260 2 260Expected return on VIF 1 659 1 659Operating experience variance 477 477Operating assumption changes 124 124

2 886 2 886Inv variances in-force 497 (497) - Tax changes (3) 3 - Economic assumption changes (200) 200 -

3 180 (294) 2 886Return on net worth 765 (189) 576EV earnings 3 945 (483) 3 462Non-life 3 343 (578) 2 765GEV earnings 7 288 (1 061) 6 227


summary

Delivery on strategy:

Shareholder value

Cumulative RoGEV per share exceeds hurdle

Profitable growth

Strong growth in most markets and segments

Net VNB +11% on comparable basis

Net operating profit up 29% on comparable basis

Diversification

Increasing contribution from growth markets

Capital management

Investments in growth markets


rogev versus target

Out perform cumulative growth target of long-bond rate + 400bps since listing


1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 20140

200

400

600

800

1000

1200

Target Cost of Capital (RFR + 300bps) Actual

priorities for 2H14


Focus on sales growth and maintain margins on same discount rate

Grow adviser force in all market segments

Product innovation, particularly recurring premiums

Improve Sanlam Sky broker channel performance

Increased focus on persistency

Continue focus on operational efficiency - manage costs

Focus on transformation and employer of choice

Meet regulatory obligations

2014 interim results priorities for 2014


Focus remains on Africa, India and South-East Asia

Continue focus on top-line growth, efficiencies and capital optimisation in current operations

Bed down new acquisitions in Rwanda and Malaysia

Unlock Shriram Capital synergies

Bed down IT implementations

Delivery on revenue diversification initiatives

Bolt-on transactions/deepening existing partnerships in Africa, India and Malaysia

Strong deal-making focus to remain the leading player in Africa

Continuously refine organisational capacity to support growth

Governance, ethics and values


sanlam investments

Maintain consistent upper quartile investment performance

Grow market share in higher margin areas

Institutional fund flows

Retail fund flows

Large mandates from promising EB pipeline

Provide appropriate, innovative and cost effective solutions to clients from across SI value chain

Further leverage competitive active and passive management capabilities

Accelerate efforts to grow a market leading African Investments proposition

Continued focus on collaboration and efficiencies across businesses


santam

Deliver on diversified growth

Market diversification (specialist business, Santam Re, investment in SEM partners)

Continued growth at MiWay

Increased emphasis on quality of risk pool

Ongoing segmented premium rate increases

Underwriting actions to rectify unprofitable accounts

Drive efficiency through value chain

Focus on cost management and strategic sourcing to counter rand weakness

Ongoing implementation of key strategic projects in Santam Commercial and Personal


outlook

outlook for 2014

Weak SA environment will continue to hamper new business growth

Some market volatility likely in second half of 2014

Focus on bedding down new acquisitions

Number of investment opportunities under consideration

Compliance to regulatory changes

2014 interim results outlook

questionsTHANK YOU

thank you

investor presentation

Documents

conditionsslow growth

net life vnb

r626mnet vnb margin

net result

global demandghana economy

year bond

shareannualised rogev

normalised headline