Wrap Text
Operational update and trading statement for the six-month period ended 31 December 2025
DISCOVERY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1999/007789/06)
Legal Entity Identifier: 378900245A26169C8132
JSE share code: DSY, DSBP
DSY ISIN: ZAE000022331
DSBP ISIN: ZAE000158564
JSE bond company code: DSYI
("Discovery" or the "Group")
Operational update and trading statement for the six-month period ended 31 December 2025
1. Operational update: Strong overall performance
Discovery delivered robust results for the six-month period ended 31 December 2025 (the "reporting period"):
• Normalised profit from operations is expected to increase by between 22% and 27%, compared to 31
December 2024 (the "prior period").
• Headline earnings ("HE") is expected to increase by between 27% and 32%.
• Normalised headline earnings ("NHE") is expected to increase by between 25% and 30%.
• New business annual premium income (API) increased 12% for the reporting period.
2. Performance of operating businesses within Discovery South Africa (SA) and Vitality for the reporting
period
Growth in normalised profit from operations expected Growth in
Operating business for the reporting period new
business API
Discovery Life1 13% to 18% (1%)
Discovery Health 3% to 8% 16%
Discovery Invest1 0% to 5% 13%
Discovery Insure 32% to 37% (2%)
Discovery Bank Profit increased by between R210 million to R230 million,
from prior period loss of R145 million
Discovery SA1 16% to 21% 10%
VitalityHealth 95% to 100% 9%
VitalityLife 5% to 10% 36%
Ping An Health Insurance 33% to 38% 6%
Vitality Network decreased by 45% to 50%
Vitality Health International other losses reduced by 85% to 90%
Vitality 38% to 43% 16%
(Vitality UK & Vitality Global)
Normalised profit from 22% to 27%
operations1
New business API 12%
1. Restated prior period result, as published in the Group's full year 2025 financial statements, per section 4
3. Business specific observations
The Vitality Shared-value (SV) model had a significant impact across both the SA and global composites, and
within each business of each composite. This manifested in superior margins for the short-term businesses,
superior returns on capital for the long-term businesses and scalable growth in value for Discovery Bank.
Discovery SA's robust operating performance reflects compelling contributions from each business within the
South African composite.
• Discovery Bank performed ahead of plan and there was a further acceleration in the acquisition of
clients, averaging approximately 1,500 customers per day by the end of the reporting period.
Additionally, all key metrics performed well – the credit loss ratio, increases in non-interest revenue and
net interest income – illustrating the consistent quality of customers and their levels of engagement and
primacy.
• Discovery Health delivered strong new business growth, with an improved risk profile expected to
benefit the scheme. Earnings growth was solid, as a result of continued scalability and cost efficiency,
fully absorbing a once-off administration concession to members of R125 million disclosed in December
2025.
• Discovery Life's operating profit grew strongly, driven in part by continued favourable mortality and
morbidity experience. New business grew 16% on the embedded value (EV) basis, including a recovery
from group life. Total API declined slightly - a result of the impact of lower inflation rates on automatic
contribution increases (ACIs) and lower umbrella fund sales, both of which are not incorporated into the
EV basis.
• Discovery Invest benefited from strong growth in capital markets and positive net flows. The rate of
earnings growth was dampened by an in-period asset liability matching loss related to the steep decline
in yields, following the prior period asset liability matching gain. Excluding this, earnings increased 21%,
in line with the growth in assets. New business was robust, with API increasing 13%.
• Discovery Insure delivered a strong result, with rigorous implementation of the SV model resulting in a
substantial increase in operating margin – with specific focus on pricing and claims management, whilst
maintaining quality of new business.
The Vitality composite's progress reflects the work done to restructure and scale the composite onto one
platform based on the Vitality Shared-value model:
• VitalityHealth performed ahead of plan, with a substantial increase in operating margin from the
focused execution of the SV model, through rigorous pricing and claims actions, as well as effective
expense management. New business production was robust despite a challenging economic
environment.
• VitalityLife performed robustly with earnings growth reflecting the expected unwind of the Contractual
Service Margin (CSM). The business successfully leveraged the SV model to deliver excellent levels of
new business growth and new business value - important determinants of return on invested capital
and future earnings momentum.
• Ping An Health Insurance (PAHI) delivered an excellent performance, with a strong operating result
boosted by exceptional investment returns from equity markets in China. New business growth was
impacted by recent changes implemented to its distribution arrangement with Ping An Life (PAL),
another Ping An Group subsidiary. In response to PAL's regulatory requirements pertaining to related
parties, it ceased distributing PAHI's main eShengBao product range, accounting for approximately
22.5% of new business at the time (September 2025). This will affect new business production in the
short term but is being ameliorated by PAHI's rapidly growing multi-channel distribution capability, and
a widening product range. Existing eShengBao in-force policies that were sold by PAL will remain with
PAHI and the impact on PAHI's operating profits is expected to be largely mitigated.
• Vitality Network's reported profit was significantly impacted by the decline in the Japanese Yen over the
reporting period. The consistent and exceptional performance of Sumitomo Life has driven an increased
Yen-based contract asset, which resulted in earnings volatility through its currency translation, as
required by the applicable accounting standard. Excluding the impact of economics, primarily the
significant change in the Yen/USD over the reporting period, profits increased 7%, reflecting the
restructure underway to build greater longer-term scale and value.
• The Group has invested into Vitality AI, and launched its partnership with Google, over the reporting
period, which is anticipated to drive increased engagement in the Vitality programmes globally,
accelerating traction in existing partnerships and enhancing the value from new partnerships.
4. Trading statement
As published in the Group's full year 2025 financial statements, Discovery Life and Invest's earnings to 31
December 2024 were restated upwards, following a correction in the allocation between the CSM and Insurance
Finance Reserve (IFR). The trading statement below incorporates the restatement of all core measures to ensure
the correct comparison to the prior period.
Shareholders and noteholders are advised that, for the reporting period:
• Earnings per share ("EPS") (basic) is expected to increase by between 25% and 30% (to between 826.6
cents and 859.7 cents) compared to the restated EPS (basic) of 661.3 cents (previously reported of 637.1
cents) for the prior period.
• Headline earnings per share ("HEPS") (basic) is expected to increase by between 25% and 30% (to
between 833.9 cents and 867.2 cents) compared to the restated HEPS (basic) of 667.1 cents (previously
reported of 642.9 cents) for the prior period.
• Normalised HEPS ("NHEPS") (basic) is expected to increase by between 24% and 29% (to between 842.7
cents and 876.7 cents) compared to the restated NHEPS (basic) of 679.6 cents (previously reported of
655.4 cents) for the prior period.
Further details of the above will be available when Discovery reports on its results for the six months ended 31
December 2025, expected to be released on or about 3 March 2026.
The information contained in this announcement, including any forecast financial information on which this
trading statement is based, is the responsibility of the board of directors of Discovery and has not been reviewed
and reported on by Discovery's joint external auditors.
Sandton
26 February 2026
Equity and Debt Sponsor
Nedbank Corporate and Investment Banking, a division of Nedbank Limited
Date: 26-02-2026 08:30:00
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