South African strategy International strategy Growth & - PowerPoint PPT Presentation

 Overview of Sanlam Group Strategy:  Strategic focus  South African strategy  International strategy  Growth & diversification  Results originating from strategy:  Financial review  Strategic delivery  Growth & diversification  Focus on quality

 Critically focused on two areas: SOUTH AFRICA: Delivery of sustainable growth Efficient & effective Maximising return on management of the investment in the existing business existing business Effective capital manage- ment Identification of core Sourcing new growth markets for growth opportunities and expansion INTERNATIONAL : Creating a platform for future growth

 Improving performance through top-line earnings growth by:  increasing market share in key segments, and  diversifying the base (including diversification of geographical presence, products, market segments and distribution platforms);  Improved operating and cost efficiencies (including quality) ;  Improving capital-efficiency on an on-going basis ,  Prioritising Sanlam’s international positioning (diversification)  Embracing and accelerating transformation of the Group.

Target Themes Focus Areas Net Business Flows Growth/ Diversification Operational Efficiency Operational Efficiency Returns (ROGEV) Optimal Application Capital Strategic Investments Efficiency Return of Excess

Optimise, expand and achieve a leadership position as a diversified financial services group, servicing retail, corporate & institutional markets  Improve efficiency and performance:  operational (including effective use of technology & synergy seeking)  capital efficiency and utilisation  Continued diversification:  product offering,  distribution  geographical presence,  client base / market segments  Building a credible institutional/corporate offering  A focused credit offering & bancassurance/transactional banking capability  Transformation

Offshore expansion into existing and new markets (untapped, non-traditional and niche) to achieve growth  Sanlam Emerging Markets  Africa, India & Asia – lower middle market focus  Position for achievement of scale over time  Sanlam International Investments  A differentiated strategy / niche approach  Provision of specialist financial services, mainly investments, to high net-worth and mass-affluent market:  Sanlam International Investment Partners  Sanlam UK  SPI International  Africa Funds

 Country approach  focussing on all different aspects of financial services  Anglophone countries  Partnership model  generally not Sanlam-branded  Management/partner equity participation  Deferred payment approach on acquisition  Milestone/targets  Technical partner  Actuarial, IT, product development, finance & governance

Entry level Growth Cross Middle market sell South Africa Affluent Consolidate Corporate Rest of Africa Growth Emerging markets India SE Asia UK Niche Developed markets Europe Defensive Australia / USA

Emerging Developed South Africa markets markets All Affluent / Entry- Middle- Affluent Corporate segments Corporate level income Risk Risk Risk Risk Savings / Investment Investment Investment Investment Admin Trust / Admin Admin Admin Short-term Short-term insurance Short-term Credit Credit Credit Health Health Admin Health

 Earnings per share  Net operating profit per share increased by 14%  Normalised headline earnings per share up 16%  Business volumes  New business volumes increased by 11% to R61bn  Net fund inflows of R10bn  Net life VNB up 38% to R491m  VNB margin of 2,86% – up from 2,52%  Group Equity Value of 3 293 cents per share  Annualised RoGEV per share of 18,4%

 2012 2011 Group Equity Value * cps 3 293 3 146 5% RoGEV per share % 18.4 12.8 RoGEV per share (adjusted) % 17.1 12.6 CAR cover (Sanlam Life) * 3.7 3.7 Net operating profit R mil 1 946 1 716 13% cps 96.2 84.7 14% Normalised Headline earnings R mil 2 539 2 202 15% cps 125.5 108.6 16% Diluted Headline earnings cps 120.1 109.6 10% New business volumes + R mil 56 774 51 851 9% New Life business EV (net) R mil 491 356 38% New Life EV margin % 2.86 2.52 * Comparative figure as at 31 December 2011 + Excluding white label

Equity Value * RoGEV  R million 2012 2011 Rm Group operations 59 695 56 809 6 074 10.7% Personal Finance 30 053 28 876 2 583 8.9% Emerging Markets 3 443 3 409 215 6.3% Investments 15 064 14 909 940 6.3% Santam 11 134 9 615 2 336 24.3% Discretionary & Other 7 126 6 712 (207) TOTAL 66 820 63 521 5 867 9.2% cps 3 293 3 146 277 8.8% Adjusted return 8.2% Return target 5.9% * Comparative figure as at 31 December 2011

Outperform cumulative growth target of long-bond rate + 400bp since listing 800 700 600 500 400 300 200 100 0 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Target Cost of Capital (RFR + 300bps) Actual

Sanlam Limited 54% 17% 12% 3% 3% Admin, Short-term Investment Credit & Life business health & insurance management structuring other 11% Discretionary & other capital Based on Group Equity Value at 30 June 2012

RSA based Rest of Africa Botswana Namibia Swaziland Mozambique Zambia Tanzania Kenya Malawi Uganda Ghana Nigeria South-East Asia India Developed markets UK / Ireland Switzerland Australia USA

 Gross VNB grew by 33%, at higher average margins Value of new business (Rm) vs new business margins (%) 550 2.90% 500 450 2.70% 400 2.50% 350 300 2.30% 250 2.10% 200 150 1.90% 100 1.70% 50 0 1.50% 1H06 1H07 1H08 1H09 1H10 1H11 1H12 South Africa Africa Other International Margins (net) - rhs

Contribution to group operating profit 1H2003 – R1 222m 1H2012 – R3 104m Other inter- Rest of national Africa Other Botswana 4% 1% inter- Namibia 8% national 1% Namibia 1% 3% SA Entry- level 6% SA SA Traditional Traditional 98% 77%

New life business volumes – 1H2012 Gross VNB – 1H2012 Other Other Rest of interna- interna- Rest of Africa tional tional Africa 9% 1% 9% Botswana 4% Botswana 7% 5% Namibia Namibia 5% 2% SA Entry- level 5% SA Entry- level SA Tradi- SA 28% tional Traditional 50% 75%

Lapses, surrenders & fully paid-ups as % of in-force per half year 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 H1 H2

Sky - Number of NTUs, lapses and surrenders as % of in-force 27.6% 17.5% 16.8% 15.2% 14.5% 14.1% 12.7% 12.7% 11.4% 11.1% 11.1% 2007 2008 2009 2010 2011 2012 H1 H2

Strategic focus on quality + prudence = consistent positive experience 800 681 636 700 600 468 500 400 288 277 278 277 300 241 200 142 138 96 100 45 32 0 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 R'million Average

Percentage of SIM’s AUM to exceed benchmark (R327bn) 100% 100% 90% 90% 80% 80% 70% 70% 60% 60% 50% 50% 40% 40% 30% 30% 20% 20% 10% 10% 0% 0% Rolling 3 Yr Rolling 5 Yr 2008/12/31 2009/12/31 2010/12/31 2008/12/31 2009/12/31 2010/12/31 2011/12/31 2012/06/30 2011/12/31 2012/06/30

Unallocated balance 1 January 2012 1 900 Share buy-back (22) Investments (245) Sanlam Emerging Markets (85) Sanlam Personal Finance (66) Sanlam Investments (94) Capital released 1 848 Illiquid investments 750 Santam special dividend 576 Excess return on life capital 522 Investment return & other 519 Buy-backs & corporate activity 4 000

2012 Gold Category - World 2012 Employee Benefits Quality Commitment (WQC) Product Supplier of the Year 2012 CityWealth International Star Award Short-term Insurer of the Year Offshore Awards : – Personal Lines Trust Company of 2012 FIA Short-term Insurer of the Year the Year – Commercial Deloitte Best Company to Work Platform of the Year - For in the Medium Co Category & Won all awards in the 2012 Product Supplier of the Aberdeen UK Platform Financial Services Insurance Fund of Funds category at Year Award : Investment Awards 2011 Category prestigious HedgeNews Products Single Premium 2010 Manager of the Africa Awards in 2012 The Sunday Times 100 Short-term Insurance Category in Year ~ Kenya Best Small Companies to Sanlam & WWF partnership won: the Ask Afrika Orange Index for Work for 2012 Service Excellence Life Insurance Company First of the Sudley Adams of the year Memorial Award; The award for Water Care and Client Contact Centre Management Ghana Club 100 Best Client Contact Centre in SA No. 1 in the Excellence in Growth Kokkie Kooyman Best Business Processing Centre Financial Services Award 2011 in the 3 rd year running Sector in the country insurance segment as Community involvement programme the fastest growing 2012 Best Foreign won national 1 st prize company over 3 years Equity Fund