SANLAM LIMITED - Trading Statement

Trading Statement

Sanlam Limited
(Incorporated in the Republic of South Africa)
Registration number 1959/001562/06
JSE share code: SLM
A2X share code: SLM
NSX share code: SLA
ISIN: ZAE000070660
(“Sanlam” or “the Group”)

Trading Statement – 2019 Annual Results

Shareholders are advised that Sanlam is currently compiling its annual results for the
year ended 31 December 2019. This trading statement provides an indication of a range
for headline earnings per ordinary share (HEPS) and earnings attributable to equity
holders of the Group per ordinary share (EPS) in terms of paragraph 3.4(b) of the JSE
Limited Listings Requirements. Sanlam's annual results will be released on the Stock
Exchange News Service of the JSE Limited (SENS) on Thursday, 12 March 2020.

The Group achieved satisfactory growth in net result from financial services as well as
investment return earned on its capital portfolios for the 2019 financial year, contributing
to estimated combined growth of between 8% and 18% from these sources of earnings.

The Group also concluded a share issuance to a new Broad-Based Black Economic
Empowerment (B-BBEE) entity (B-BBEE Entity) as approved by Sanlam shareholders in
December 2018 and notified on SENS in March 2019 (B-BBEE Share Issuance). The B-
BBEE Share Issuance positions Sanlam as the foremost empowered insurance and
investment management group in South Africa.

Headline earnings for the year ended 31 December 2019 are impacted by the following:
•   A one-off expense of R1.7 billion recognised in terms of International Financial
    Reporting Standards (IFRS) 2 Share Based Payment in respect of the B-BBEE Share
    Issuance, as reported to shareholders in our 10-month operational update in
    December 2019.
•   The value of business acquired (VOBA) intangible assets recognised in 2018 upon
    the first-time consolidation of Saham Finances and Nucleus as Group subsidiaries
    contributed an additional amortisation charge of some R250 million in 2019.
•   Profits and losses recognised in terms of IFRS in respect of the treatment of Sanlam
    shares held in policyholder portfolios as treasury shares, the movement in deferred
    tax assets recognised in respect of assessed losses in policyholder funds and the
    consolidation of the Sanlam Foundation and B-BBEE Entity (Fund transfers), declined
    from a R106 million net profit in 2018 to a net loss of R868 million in 2019. The
    consolidated results of the B-BBEE Entity included in the 2019 Fund transfers
    comprises interest paid on the external funding and administration costs incurred of
    some R600 million.

Given the size of these items, headline earnings of the Group for the year ended 31
December 2019 are expected to decrease by between 15% and 25% compared to 2018.
Earnings attributable to equity holders for the year ended 31 December 2019 are further
impacted by the profit on deemed disposal of Saham and Nucleus of R2,8 billion in 2018.
These were one-off earnings that increased the comparative base, contributing to an
expected decrease in earnings attributable to equity holders of between 35% and 45%
compared to 2018.

Excluding the one-off IFRS 2 charge, the additional amortisation of intangible assets, the
Fund transfers and the profit on disposal of Saham and Nucleus referred to above,
headline earnings and earnings attributable to equity holders of the Group would have
increased by between 10% and 20%, reflecting the solid underlying operational
performance by the Group.

The weighted average number of shares used for HEPS and EPS is not impacted by the
B-BBEE Share Issuance as the Sanlam shares held by the B-BBEE Entity is treated as
treasury shares upon consolidation. These shares will, however, be treated as issued
shares for purposes of the Group’s disclosed per share management information, such
as net result from financial services per share and Group Equity Value per share.
Shareholders are advised that the Group expects HEPS and EPS for the 2019 year,
expressed as growth on the prior period, to fall within the following ranges:


                              12 months to        12 months to
                         31 December 2019         31 December            12 months to
                                  Expected                 2019     31 December 2018
                           Decline on prior     Expected range            Prior period
                                    period      cents per share        cents per share
 HEPS will                       15% - 25%        334.2 – 378.8                  445.6
 decrease between
 Diluted HEPS will                15% - 25%        330.8 – 374.9                   441.1
 decrease between
 EPS will decrease                35% - 45%        311.0 – 367.5                   565.4
 between
 Diluted EPS will                 35% - 45%        307.8 – 363.8                   559.7
 decrease between


The financial information in this trading statement is the responsibility of the Sanlam
Board of Directors and has not been reviewed or reported on by the Group’s external
auditors. The pro forma financial information included in this trading statement is
prepared for illustrative purposes only and because of its nature may not fairly present
the Group’s financial position, changes in equity, results of operations or cash flows.

Cape Town
06 March 2020

Sponsor
The Standard Bank of South Africa Limited

Date: 06-03-2020 11:30:00
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