SANLAM LIMITED - Trading statement - 2020 annual results

Trading statement - 2020 annual results

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


Trading statement – 2020 annual results

Shareholders are advised that Sanlam is currently compiling its results for
the year ended 31 December 2020. 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
(SENS) of the JSE Limited on Thursday, 11 March 2021.

Shareholders are referred to the Group’s operational update for the 10-month
period ended 31 October 2020 released on SENS on Wednesday, 9 December 2020.
The Group’s core operations remained resilient and sustained strong
operational performance and capital position for the 2020 financial year in
the context of a difficult operating environment. Growth in net operational
earnings improved since 31 October 2020, largely due to continued recovery
in net result from financial services at Sanlam Emerging Markets and Sanlam
Specialised Finance.

The Group expects net result from financial services and net operational
earnings for the year ended 31 December 2020 to decrease within the
following ranges:


                                    12 months to 31 December
                             2020                 2020            2019
                       Expected decrease     Expected range     (cents per
                        on prior period    (cents per share)     share)
                         (Percentage)
 Net result from           10 to 20          350.4 to 394.2       438.0
 financial services
 Net operational            18 to 28         352.0 to 400.9       488.9
 earnings

The main item contributing to the decline in net operational earnings per
share relative to net result from financial services per share is a net R726
million IFRS 9 expected credit loss provision raised in respect of
government bond and banking exposure on the Lebanon balance sheet.

Despite the decline in net operational earnings, HEPS are expected to
increase, while EPS are expected to decrease within the following ranges:




                                                                   
                                      12 months to 31 December
                               2020                    2020             2019
                     Expected change on prior     Expected range     (cents per
                       period (Percentage)      (cents per share)      share)
                             19 to 29 increase      430.5 to 466.7         361.8
HEPS
                            19 to 29 increase      425.9 to 461.7         357.9
Diluted HEPS
                            55 to 65 decrease      121.0 to 155.6         345.8
EPS
                            55 to 65 decrease      119.7 to 153.9         342.1
Diluted EPS

The main items contributing to the growth in HEPS and diluted HEPS relative
to net operational earnings per share are:
•   The one-off IFRS 2 charge of R1.7 billion recognised in 2019 in respect
    of the share issuance to the Broad-Based Black Economic Empowerment (B-
    BBEE) special purpose vehicle (SPV).
•   Non-economic mismatch profits and losses recognised in terms of IFRS
    through
       o the elimination of Sanlam shares held in policyholder portfolios as
         treasury shares;
       o the recognition of deferred tax assets in respect of assessed
         losses in policyholder portfolios; and
       o the consolidation of the B-BBEE SPV which results in the
         recognition of interest paid on funding in the SPV, marked-to-
         market changes on the hedging instruments in the structure and
         administration costs incurred by the SPV.
    These items collectively contributed positively to both HEPS and diluted
    HEPS in 2020 as compared to a reduction in 2019.
•   R1,2 billion recognised by the Group at 31 December 2020 in respect of
    the hyperinflation environment in Lebanon as required by accounting
    standards. Hyperinflation accounting has no impact on the Shareholders’
    fund net asset value and are commensurately non-economic in nature and
    excluded from net operational earnings.

The main items contributing to the 2020 decline in EPS and diluted EPS
relative to HEPS and diluted HEPS are impairment charges of some R7 billion
mostly recognised in the Group’s interim results for the six months ended 30
June 2020. These mainly related to the Saham Finance's acquisition
intangible assets and the Shriram Capital credit businesses.

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.

For all investor relations queries please contact:

Sanlam Investor Relations
Tel: +27 21 947 8455
E-mail: ir@sanlam.co.za

Cape Town, 4 March 2021
Sponsor: The Standard Bank of South Africa Limited




                                                                       

Date: 04-03-2021 03:00:00
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