Trading statement NETCARE LIMITED (Registration number 1996/008242/06) JSE ordinary share code: NTC ISIN: ZAE000011953 JSE preference share code: NTCP ISIN: ZAE000081121 ("Netcare") TRADING STATEMENT In terms of paragraph 3.4 (b) of the JSE Listings Requirements, a listed company is required to publish a trading statement as soon as it is satisfied that a reasonable degree of certainty exists that the financial results for the period to be reported upon next will differ by at least 20% from those of the previous corresponding period. Netcare will be releasing its unaudited interim Group results for the six months ended 31 March 2020 (“H1 2020”) on Monday, 25 May 2020. The results for H1 2020 have been affected by the following factors: Broad-based Black Economic Empowerment transaction On 15 October 2019, Netcare approved a further allocation of 61 110 000 previously unallocated Netcare shares that were available under its Health Partners For Life Broad-based Black Economic Empowerment (“B-BBEE”) scheme concluded in 2005. The shares were allocated to 20 350 Netcare employees (excluding executives), of which 80% are black and 65% are black women, as part of Netcare’s commitment to the imperative of building a transformed South Africa characterised by values of social and economic equality and inclusion for all. The transaction further enabled Netcare to strengthen the ownership component of its empowerment rating. A once-off, non-cash share-based payment expense of R348 million arising from the implementation of this B-BBEE transaction, has been recognised in the H1 2020 results and equates to a charge of 26.0 cents against Earnings per Share (“EPS”) and Headline Earnings per Share (“HEPS”) respectively. However, it is excluded from the calculation of adjusted HEPS, which is the primary measure used by management to assess Netcare’s underlying financial performance. IFRS 16: Leases Netcare adopted the new accounting standard IFRS 16: Leases with effect from 1 October 2019. Under this new accounting standard leases are brought onto the statement of financial position through the capitalisation of a right-of-use asset and recognition of a related lease liability. Rental payments are no longer expensed through the statement of profit and loss, but are applied to reduce the lease liability. The right-of-use asset is depreciated over the lease period, creating an additional depreciation charge, while an interest charge is recognised on the balance of the lease liability. As Netcare has elected to apply the modified approach for the adoption of IFRS 16, comparative figures for the six months ended 31 March 2019 (“H1 2019”) have not been restated. Accordingly, the H1 2020 results are not directly comparable to the comparative period results which were not prepared under IFRS 16. The adoption of IFRS 16 has resulted in a reduction in EPS, HEPS and adjusted HEPS of 7.3 cents per share in the H1 2020 results. The non-recurring, non-cash share-based payment expense on the B-BBEE transaction and the adoption of IFRS16: Leases will have the following impact on earnings in H1 2020: • EPS for H1 2020 is anticipated to be between 39.5 cents and 47.3 cents, representing a decrease of between 40% and 50% from the 78.9 cents per share reported for H1 2019. • HEPS for H1 2020 is anticipated to be between 40.4 cents and 48.4 cents, representing a decrease of between 40% and 50% from the 80.7 cents per share reported for H1 2019. • Adjusted HEPS from continuing operations for H1 2020 is anticipated to be between 67.4 cents and 75.9 cents, representing a decrease of between 10% and 20% from the 84.3 cents per share reported for H1 2019. • However, excluding the impact of IFRS 16: Leases from the H1 2020 results, thereby reporting on a directly comparable basis against the H1 2019 results, adjusted HEPS for H1 2020 is expected to be between 75.9 cents and 84.3 cents, representing a decrease of between 0% and 10% from the 84.3 cents per share reported for H1 2019. The information provided in this trading statement has not been reviewed or reported on by Netcare’s external auditors. Johannesburg 21 May 2020 Sponsor Nedbank Corporate and Investment Banking Date: 21-05-2020 05:00:00 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. The JSE, their officers, employees and agents accept no liability for (or in respect of) any direct, indirect, incidental or consequential loss or damage of any kind or nature, howsoever arising, from the use of SENS or the use of, or reliance on, information disseminated through SENS.