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:

Effective capital manage- ment

Sourcing new growth

• pportunities

Identification of core markets for growth and expansion SOUTH AFRICA: Delivery of sustainable growth Maximising return on investment in the existing business Efficient & effective management of the existing business 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.

Returns (ROGEV)

Growth/ Operational Efficiency

Operational Efficiency Diversification Net Business Flows

Capital Efficiency

Optimal Application

Focus Areas

Return of Excess

Themes Target

Strategic Investments

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

South Africa Emerging markets Developed markets

UK Europe Australia / USA Affluent Entry level Middle market SE Asia Rest of Africa India

Growth Cross sell Consolidate Growth Niche Defensive

Corporate

South Africa

Risk

Entry- level Middle- income Affluent

Short-term insurance Savings / Investment Risk Credit Trust / Admin Health Admin Risk Investment Short-term Credit Health

Corporate

Admin

All segments Emerging markets

Risk Short-term Investment Credit Health

Affluent / Corporate Developed markets

Investment Admin Admin

 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

+ Excluding white label * Comparative figure as at 31 December 2011

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

100 200 300 400 500 600 700 800 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 Target Cost of Capital (RFR + 300bps) Actual

Sanlam Limited Short-term insurance Admin, health &

• ther

Discretionary & other capital Life business Investment management Credit & structuring

54% 17% 12% 3% 3%

11%

Based on Group Equity Value at 30 June 2012

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

 Gross VNB grew by 33%, at higher average margins

1.50% 1.70% 1.90% 2.10% 2.30% 2.50% 2.70% 2.90% 50 100 150 200 250 300 350 400 450 500 550 1H06 1H07 1H08 1H09 1H10 1H11 1H12 South Africa Africa Other International Margins (net) - rhs

Value of new business (Rm) vs new business margins (%)

SA Traditional 77% SA Entry- level 6% Namibia 3% Botswana 8% Rest of Africa 1% Other inter- national 4%

SA Traditional 98% Namibia 1% Other inter- national 1%

1H2003 – R1 222m 1H2012 – R3 104m Contribution to group operating profit

SA Tradi- tional 50% SA Entry- level 28% Namibia 5% Botswana 7% Rest of Africa 9% Other interna- tional 1% SA Traditional 75% SA Entry- level 5% Namibia 2% Botswana 5% Rest of Africa 4% Other interna- tional 9%

New life business volumes – 1H2012 Gross VNB – 1H2012

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

2007 2008 2009 2010 2011 2012 15.2% 17.5% 14.1% 12.7% 11.4% 11.1% 27.6% 16.8% 14.5% 12.7% 11.1% H1 H2

Strategic focus on quality + prudence = consistent positive experience

45 32 96 241 142 138 277 288 278 636 468 681 100 200 300 400 500 600 700 800 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 R'million Average 277

Percentage of SIM’s AUM to exceed benchmark (R327bn)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Rolling 3 Yr

2008/12/31 2009/12/31 2010/12/31 2011/12/31 2012/06/30

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% Rolling 5 Yr 2008/12/31 2009/12/31 2010/12/31 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 CityWealth Offshore Awards : Trust Company of the Year 2012 Gold Category - World Quality Commitment (WQC) International Star Award Deloitte Best Company to Work For in the Medium Co Category & Financial Services Insurance Category Short-term Insurance Category in the Ask Afrika Orange Index for Service Excellence Won all awards in the Fund of Funds category at prestigious HedgeNews Africa Awards in 2012 2012 Employee Benefits Product Supplier of the Year Short-term Insurer of the Year – Personal Lines 2012 FIA Short-term Insurer of the Year – Commercial 2012 Product Supplier of the Year Award : Investment Products Single Premium Platform of the Year - Aberdeen UK Platform Awards 2011 The Sunday Times 100 Best Small Companies to Work for 2012 Kokkie Kooyman 3rd year running Sanlam & WWF partnership won: First of the Sudley Adams Memorial Award; The award for Water Care and Management Excellence in Growth Award 2011 in the insurance segment as the fastest growing company over 3 years 2010 Manager of the Year ~ Kenya Life Insurance Company

• f the year

2012 Best Foreign Equity Fund Ghana Club 100

• No. 1 in the

Financial Services Sector Client Contact Centre Best Client Contact Centre in SA Best Business Processing Centre in the country Community involvement programme won national 1st prize