SANLAM LIMITED - Sanlam Limited Group Interim results for the six months ended 30 June 2020

Sanlam Limited Group Interim results for the six months ended 30 June 2020

Sanlam Limited Group
Incorporated in the Republic of South Africa
(Registration number 1959/001562/06)
"Sanlam", "Sanlam Group", or "the Company"
JSE Share code (Primary listing): SLM
A2X share code: SLM
NSX share code: SLA
ISIN: ZAE000070660


Sanlam Limited Group Interim results for the six months ended 30 June 2020

Key features

Earnings
- Net result from financial services decreased by 22%
- Net operational earnings decreased by 39%

New business
- New business volumes increased by 40% to R157 billion
- Net fund inflows of R33 billion compared to R23 billion in 2019
- Net value of new covered business decreased by 29% to R666 million
- Net new covered business margin of 2,06% (2,79% in 2019)

Group Equity Value
- Group Equity Value per share of R58,08
- Return on Group Equity Value per share of -4.6 %
- Adjusted Return on Group Equity Value per share of -0.9%

Capital management
- R1,3 billion invested in Group operations
- Discretionary capital of R264 million at 30 June 2020
- Sanlam Group SAM cover ratio of 187% (December 2019: 211%)

Dividend
No interim dividend declared in line with Group policy

SALIENT RESULTS                                                                          June
for the six months ended 30 June 2020                                              2020        2019      Change
SANLAM GROUP
GROUP EQUITY VALUE
Group Equity Value(1)                                             R million     129 315     143 271        (9%)
Group Equity Value per share(1)                                       cents       5 808       6 436        (9%)

Return on Group Equity Value per share                                    %        (4.6)        5,4

Adjusted Return on Group Equity Value per share                           %        (0.9)        4,6
Earnings
Net result from financial services                                R million       3 898       4 968       (22%)
Net operational earnings                                          R million       3 511       5 801       (39%)
Headline earnings                                                 R million       3 893       3 534        10%
Weighted average number of shares(2)                                million     2 095,8     2 090,8          -
Adjusted weighted average number of shares(2)                       million     2 233,9     2 189,6         2%
Net result from financial services per share                          cents       174,5       226,9       (23%)
Net operational earnings per share                                    cents       157,2       264,9       (41%)
Basic headline earnings per share                                     cents       188,5       170,7        10%
Diluted headline earnings per share                                   cents       185,8       169,0        10%
Basic (loss)/profit attributable to the shareholders' fund per share  cents      -170,9       166,2     >(100%)

Business volumes
New business volumes                                              R million     157 480     112 102        40%
Net fund inflows                                                  R million      33 413      23 283        44%
Net new covered business
 Value of new covered business                                    R million         666         942       (29%)
 Covered business PVNBP(3)                                        R million      32 403      33 779        (4%)
 New covered business margin                                              %        2,06        2,79
Solvency cover
Sanlam Group(1)                                                           %         187         211
Sanlam Life Insurance Limited(1)                                          %         272         253
Sanlam Life Insurance Limited covered business(1)                         %         201         206
    
(1) Comparative figures as at 31 December 2019.
(2) Weighted average number of shares excludes Sanlam shares held directly or indirectly through consolidated investment funds in policyholder portfolios, as
    well as Sanlam shares held by the Group's broad-based black economic empowerment special purposes vehicle (B-BBEE SPV) that is consolidated in terms of
    International Financial Reporting Standards. These shares are treated as shares in issue for purposes of adjusted weighted average number of shares in
    issue, which is the base to determine net result from financial services per share and net operational earnings per share. Diluted headline earnings per
    share is based on the weighted average number of shares.
(3) PVNBP = present value of new business premiums and is equal to the present value of new recurring premiums, at the relevant risk discount rate for each
    business, plus single premiums.

The Group commenced the 2020 financial year from a solid base, with growth accelerating for most businesses in the second half of 2019. While recognising
that we would continue to face headwinds in some of our key markets in 2020 due to subdued economic growth, we remained confident in our ability to deliver
solid growth in all key performance indicators. This was achieved in the first two months of 2020, with most businesses outperforming targets for the period
by a healthy margin. However, the outbreak of the 2019 coronavirus disease (COVID-19) pandemic, followed by the declaration of states of disaster and
emergency in a number of countries where we operate, abruptly transformed the operating environment into one of the most challenging periods faced by the
Group and our stakeholders. Despite these challenges we remain resilient as reflected in our underlying operational performance during the six months to 30
June 2020 and a healthy solvency position throughout the period. This resilience is founded on the quality of our client and other stakeholder
relationships, a superior strategic positioning, highly skilled and motivated employees and a generally prudent approach to managing our business.

Net result from financial services (net operating profit) of R3,9 billion declined by 22% on the first six months of 2019, but increased by 18% excluding
the impact of COVID-19 on certain earnings components. Sanlam Personal Finance's net result from financial services decreased by 12%, but was up 2% excluding the 
COVID-19 impact, and up 6% also excluding the R70 million one-off prior year tax adjustment at Sanlam Personal Loans in 2019. Sanlam Emerging Markets' net result 
from financial services declined by 28% (up 27% excluding the impact of COVID-19). Sanlam Investment Group's net result from financial services decreased by 77% 
(up 4% excluding the COVID-19 credit impact), a particularly satisfactory performance under challenging conditions. Santam's net result from financial services
declined by 21% (more than doubling excluding the impact of COVID-19 on provisions). Sanlam Corporate achieved strong growth in net result from financial services
of 39%. The improvement in risk claims experience in the second half of 2019 persisted into 2020, driving a more than doubling in risk profits.

New business volumes increased by 40% under particularly difficult trading conditions. All clusters contributed strong growth, apart from Santam where large
specialist business written in the period resulted in an increase in the unearned premium and reinsurance reserves, reducing growth in net earned premiums
relative to gross written premiums. Life insurance new business volumes were in line with 2019, investment business inflows increased by 64% and general
insurance earned premiums increased by 6%. Overall net fund inflows of R33 billion in 2020 is a particularly satisfactory performance given the challenging
market conditions.

Shareholders are advised that the final cash dividend of 334 cents for the year ended 31 December 2019 was paid on Monday, 20 April 2020 by way of
electronic bank transfers to ordinary shareholders recorded in the register of Sanlam at close of business on Tuesday, 14 April 2020. Shareholders who have
not yet provided their banking details for dividend payments are requested to do so by contacting Sanlam's transfer secretary, Computershare, at 0861 100
913 or +27(0)11 370 5000.

This short-form results announcement is the responsibility of the Sanlam Board of directors and is a summary of the information contained in the full
announcement which can be found at: 
https://senspdf.jse.co.za/documents/2020/jse/isse/slm/SLM1H20.pdf
and available on the Sanlam website at www.sanlam.com
Direct company link to full announcement: http://sanl.am/e8JoF

Copies of the full reviewed results are available for inspection at, or may be requested from Sanlam's registered office and the offices of its sponsor
during office hours, at no charge. Any investment decision should be based on a consideration of the full reviewed results.

Elias Masilela                          Paul Hanratty
Chairman                                Chief Executive
10 September 2020

SANLAM LIMITED
Registered office: 2 Strand Road, Bellville, 7530, South Africa

JSE SPONSOR
The Standard Bank of South Africa Limited
Registered office: 30 Baker Street, Rosebank, Johannesburg, 2196, South Africa.

Date: 10-09-2020 07:05:00
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