Voluntary trading statement: six months ended 31 December 2019 DISCOVERY LIMITED (Incorporated in the Republic of South Africa) (Registration number 1999/007789/06) Legal Entity Identifier: 378900245A26169C8132 JSE share code: DSY, DSYBP DSY ISIN: ZAE000022331 DSBP ISIN: ZAE000158564 JSE bond code: DSYI (“Discovery” or “the Company” or “the Group”) VOLUNTARY TRADING STATEMENT: SIX MONTHS ENDED 31 DECEMBER 2019 Over the six months ended 31 December 2019 (“current period”), all of Discovery’s established and emerging businesses, with the exception of VitalityLife, produced robust operating results. VitalityLife was largely impacted by its previously announced strategic decision to mitigate its exposure to further interest rate declines in the United Kingdom. In addition, the Group has continued its budgeted increased investment into new strategic initiatives. As a result, normalised profit from operations for the current period is expected to decrease by between 5% and 10% to between R3 609 million and R3 419 million compared to reported R3 799 million for the six months ended 31 December 2018 (“prior period”) and the Group's normalised headline earnings per share (diluted) (Notes 1 and 2) for the current period is expected to reduce by between 10% and 15% to between 330 cents and 311 cents compared to reported 366.4 cents for the prior period. Cash, capital and financial leverage metrics remain well within guidance. Normalised profit from operations before investment in new initiatives is expected to increase by between 2% and 7% compared to the prior period as per the following reconciliation to normalised profit from operations. Indicative increase / (decrease) in normalised profit from key operations for current period compared to prior period Discovery Health +8% Discovery Life +25% Discovery Invest +7% Discovery Insure +21% VitalityHealth +11% VitalityLife (*) -145% Vitality Group +16% Ping An Health +467% Normalised profit from operations before from +2 to +7% investment in new initiatives Increase in spend on new initiatives (**)(before +81% allowing for finance costs) Normalised profit from operations from -5% to -10% (*) VitalityLife’s result during the current period was impacted by a strategic decision to mitigate its exposure to further interest rate declines in the highly volatile, low interest rate United Kingdom environment. This was effected by way of an interest rate hedge structure as previously announced. This, combined with a generally difficult operating environment in the UK, resulted in VitalityLife recording an operating loss for the period, which is a key factor in the higher effective tax rate as compared with the prior period. (**)The group has previously highlighted the continuation of increased investment into strategic initiatives including Discovery Bank, VitalityInvest, Vitality1, Umbrella Funds and Discovery Business Insurance. Investment spend was budgeted to be higher in the first six months of the year and is expected to be lower over the remaining period of the year, further supported by these initiatives having gained traction over this period. Accordingly, shareholders are advised that given the impact of VitalityLife and continuing investment in new initiatives as described above: • Headline earnings per share (diluted) (Note 1) for the current period is expected to reduce by between 8% and 13% to between 319 cents and 302 cents compared to reported 347.2 cents for the prior period. • Earnings per share (diluted) (Note 1) for the current period is expected to reduce by between 10% and 15% to between 317 cents and 300 cents compared to reported 352.5 cents for the prior period. Discovery's interim financial results for the six months ended 31 December 2019 are due to be released on SENS on 20 February 2020. The financial information on which this trading statement is based has not been reviewed or reported on by the Company's external auditors. Notes: 1 The expected percentage change in the current period is approximately the same for both diluted and undiluted earnings per share. 2 The expected difference between normalised profit from operations and normalised headline earnings is predominantly due to an increase in finance costs in line with the long-term capital plan and a higher average effective tax rate. Sandton 17 February 2020 Sponsor RAND MERCHANT BANK (A division of FirstRand Bank Limited) Date: 17-02-2020 01:01:00 Produced by the JSE SENS Department. The SENS service is an information dissemination service administered by the JSE Limited ('JSE'). The JSE does not, whether expressly, tacitly or implicitly, represent, warrant or in any way guarantee the truth, accuracy or completeness of the information published on SENS. 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