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Notes

1Sanlam investor presentation 2015 annual results

Notes

The Sanlam strategy

Operating environment

Strategic delivery

Financial review

Priorities

Outlook

2 Sanlam investor presentation 2015 annual results

Notes

The Sanlam StrategyMaximising shareholder value


Notes

Strategic focusOptimising value creation

Stra

tegi

c pi

llars

TransformationDiversification

Optimal capital utilisation

Operational efficienciesEarnings growth

Sustainable value creation for shareholders

Maximising RoGEV


Notes

A strategy focused on growthDriving geographic, segment and product diversification

India/SE AsiaLower income

segments have similar dynamics than SA ELM

and RoA

DevelopedNiche, solutions

for SA & RoAclients

South AfricaSolid base & cash flows

Rest of AfricaDemographics, low

insurance penetration, competitive

environment, Pan-Africa opportunity


Notes

Core regional focus areasDifferentiated approach per region

Large player in mature market with strong competition

Further diversifying distribution capability to drive growth: ELM footprint, Reality, health, digital, outcome based solutions, UB partnership, big data

Operational and capital efficiencies key in managing legacy book

South AfricaDelivering growth in mature market

Effective capital managem

ent


Notes


Large player in mature market with strong competition

Further diversifying distribution capability to drive growth: ELM footprint, Reality, health, digital, outcome based solutions, UB partnership, big data

Operational and capital efficiencies key in managing legacy book

South AfricaDelivering growth in

mature market

Focus on accelerated organic growth to obtain leadership position in all countries

Cross-border alliances and relationships; capitalise onexpanded footprint from Saham Finances transaction

Geographic expansion in line with client and intermediary needs

Other Emerging Markets

Balance structural and organic growth






ent


Notes


Focus on accelerated organic growth to obtain leadership position in all countries

Cross-border alliances and relationships; capitalise onexpanded footprint from Saham Finances transaction

Geographic expansion in line with client and intermediary needs



Products and services for SA and Rest of Africa client base

Sanlam UK consolidation; focus on efficiencies and distribution under new CEO

Wealth and investment management focus

Developed Markets

Niche approach


ent


Notes

Operating EnvironmentEconomic, political and internal pressures


Notes

External operating environmentGlobal events impacting on our key markets

Slower growth in

ChinaUS interest

rates

Government & consumer

debtCommodity

prices

Commodity-based

economies under pressure


Notes

External operating environmentEmerging market economies under pressure from global events

Robust economic growth in 2015Macro-economic adjustment required to address wide government budget and current account deficitsCurrency weakened in line with ZARStrong competitive environment across all segments

Namibia

Macro environment and structural constraints limiting capital investment and economic activity Modest growth in employment and disposable incomePolitical events contributed to investment market and currency volatilityPublic/private sector engagement and cooperation to drive economic and employment growth very necessary

South Africa


Notes


Commodity prices and tight financial conditions impacting on growth and currencies of a number of countriesSofter economic growth to persist in 2016 Low insurance penetration enables new business growth despite short-term challengesLonger term growth potential remains intact

Rest of Africa

Best sovereign rating in Africa due to sound management of government financesRobust economic growth, but need to diversify economy away from reliance on diamondsBIHL maintains strong competitive advantage

Botswana


Notes


Below-potential economic growth in 2015, but improvingDelays in roll out of infrastructure projects impacted on credit businesses – activity picked up towards end of 2015More stringent provisioning regulations implemented during 2016 will not affect IFRS-based resultsRobust long-term growth expectations

India

Relatively firm economic growth in 2015, some moderation expected in 2016Lower two-wheeler sales and competitive pressure impacting on general insurance growthUncertainty around effect of de -tariffing in 2016

Malaysia


Notes

SA economy

Growth in real retail sales, GDP and PDI

Modest growth in all key metrics

-10%

-5%

0%

5%

10%

15%

20%

Growth y-o-y in real retail sales Growth y-o-y in real GDP Growth y-o-y in real PDI


Notes

Regional economic growthHigher growth outside of SA

-15%

-10%

-5%

0%

5%

10%

15%

20%

25%

South Africa Namibia Botswana Ghana Kenya India Malaysia

IMF estimates


Notes

4%

5%

6%

7%

8%

9%

10%

12-1

3

01-1

4

02-1

4

03-1

4

04-1

4

05-1

4

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4

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12-1

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07-1

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08-1

5

09-1

5

10-1

5

11-1

5

12-1

5

9-year 5-year Short-term Avg Short-term

+200bps

+40bps

Interest rates

SA bond yields and short-term interest rates

Higher SA rates; other regions stable

Impact on growthVNB overall -12%Sanlam Sky VNB -25%Higher float income


Notes

SA equity and bond markets

Pressure on fee income in 2015 and 2016

Limiting growth in assets under management

95

100

105

110

115

120

125

12-1

3

01-1

4

02-1

4

03-1

4

04-1

4

05-1

4

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10-1

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11-1

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4

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05-1

5

06-1

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07-1

5

08-1

5

09-1

5

10-1

5

11-1

5

12-1

5

All Share rebased All Bond rebased

7,6%

1,9%

10,1%

-3,9%

Average Alsi up 6%Average Albi up 8%


Notes

Rand exchange rateSharp depreciation in 2015 against most currencies

80

90

100

110

120

130

140

150

160

12-1

3

01-1

4

02-1

4

03-1

4

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4

05-1

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06-1

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07-1

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08-1

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09-1

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10-1

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11-1

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12-1

4

01-1

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05-1

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07-1

5

08-1

5

09-1

5

10-1

5

11-1

5

12-1

5

United Kingdom United States Botswana India Malaysia Rest of Africa


Notes

Average Rand exchange rateSupported non-SA results

17.1%

8.6%

3.8%

-3.2%

11.7%

-1.4%

-5%

0%

5%

10%

15%

20%

USA UnitedKingdom

Botswana Rest of Africa India Malaysia

Contribution to growthNet result from financial services +R82m

New business +R1.5bn

Net VNB +R6m

RoGEV +4%


Notes

Internal operating environment2015 results impacted by internal challenges and one-offs

Bad debt provisioning at STFC equipment financeOne-off item in Shriram Capital 2014 base System implementation challenges in KenyaActuarial reserving in Malaysia

Sanlam Emerging Markets

Loss of PIC funds in 2014 and 2015 impacting on SI results SI admin costs elevated by projects, regulatory compliance and additional marketing spendOne-off items in 2014 base at SEB and SI International (UK)

Sanlam Investments


Notes

Strategic DeliveryExceeding overall targets despite headwinds


Notes

Top-line earnings growth

Earnings per shareNet operating profit per share increased by 6% (11% excl one-offs)Normalised headline earnings per share up 6%

Business volumesNew business volumes increased by 16% to R211bnNet fund inflows of R19bnNet life VNB up 6% on comparable basis & excl large SEB policy in ‘14Net VNB margin of 2.91% on comparable basis

Group Equity ValueGroup Equity Value of R50.57 per shareRoGEV per share of 12.8%

Financial performance in 2015


Notes

DiversificationInternational positioning focused on emerging markets

India

Malaysia

Philippines

Ghana

The Gambia

KenyaUganda

RwandaBurundiTanzania

MalawiZambia

BotswanaNamibia

Swaziland

South Africa

Switzerland

United Kingdom

USA

Australia

Ireland

Mozambique

MoroccoAlgeria

Tunisia

MaliSenegal

GuineaBurkina Faso

Cote D’Ivoire

TogoBeninNigeria

CameroonGabon

Republic of the CongoAngola

Zimbabwe

MadagascarMauritius

Lesotho

Emerging Markets - Indirect presence

Emerging Markets - Direct presence

Developed Markets

Saham Finances presence

Sanlam and Saham Finances presence


Notes

SA Traditional58%SA Entry-level

18%

Namibia4%

Botswana9%

Rest of Africa7%

Other international4%

2015R1 360m

SA Traditional67%

SA Entry-level11%

Namibia5%

Botswana5%

Rest of Africa2%

Other international10%

Diversification – better balanced portfolioGeographic diversification

Net VNB Net operating profit

2015R7 269m


Notes

Life business46%

General insurance15%

Investment management

14%

Credit & structuring10%

Admin, health & other15%

2015R103 506m

Life business62%

General insurance14%

Investment management

12%

Credit & structuring11%

Admin, health & other1%

Diversification – better balanced portfolioLine of business diversification

Group Equity Value Net operating profit

2015R7 269m


Notes

Capital efficiency

Balance 1 January 2015 3 300 Net investments (6 285)

Saham Finances (4 224)Rest of Africa other (29)Shriram Insurance (969)Afrocentric (703)Other (360)

Investment return & excess cover 1 285 Capital released from portfolios 4 000Available for investment 2 300

Discretionary capital

Available for strategic initiatives


Notes

Financial Review


Notes

Changes in presentation / key assumptions

Accounting policies & basis of presentationNo change from 2014

Changes in RDR:Sanlam Life (10.1%): 200 bps up from December 2014Sanlam Sky (9.6%): 200 bps up from December 2014Negative impact on RoGEV and VNB

Weaker Rand exchange rate largely offset adverse impact of higher interest rates in SA and Namibia, apart from VNB


Notes

Salient features

2015 2014

Group Equity Value cps 5 057 4 684 8%RoGEV per share % 12,8 18,5CAR cover (Sanlam Life) 5,8 4,5Net operating profit R mil 7 269 6 879 6%

cps 355,2 336,2 6% Normalised Headline earnings R mil 8 851 8 340 6%

cps 432,5 407,6 6% New business volumes R mil 210 842 182 297 16% Net fund flows R mil 19 049 41 994 -55% New Life business EV (net) R mil 1 360 1 592 -15% New Life EV margin % 2,62 2,92


Notes

Sanlam Personal Finance


Notes


R million 2015 2014

New business volumes 63 825 52 566 21% Sanlam Sky 1 279 1 127 13% Individual Life 12 829 12 443 3% Glacier 49 717 38 996 27%

Net flows 22 895 19 580Sanlam Sky 2 739 2 635Individual Life (3 005) (1 372)Glacier 23 161 18 317


Notes


R million 2015 2014

Value of new life business 955 1 084 -12% Sanlam Sky 241 361 -33% Individual Life 502 551 -9% Glacier 212 172 23%Comparable economic basis 1 148 1 084 6%

New business margin 2,48% 3,12%Sanlam Sky 5,86% 9,51%Individual Life 2,59% 2,88%Glacier 1,40% 1,45%Comparable economic basis 2,89% 3,12%


Notes


R million 2015 2014

Gross operating profit 5 313 4 801 11% Sanlam Sky 1 125 949 19% Individual Life life and investments 3 378 3 162 7% Glacier 426 339 26% Personal loans 346 308 12% Other 38 43 -12%

Net operating profit 3 831 3 476 10%

Group Equity Value 38 249 38 453 RoGEV 12,1% 17,9%

label


Notes



Notes


R million 2015 2014

New business volumes 11 913 9 259 29% Namibia 2 780 3 322 -16% Botswana 5 398 3 031 78% Rest of Africa 2 099 1 560 35% India/Malaysia 1 636 1 346 22%

Net fund flows (7 346) 3 971Namibia 358 1 021Botswana (9 781) 1 129Rest of Africa 1 459 1 451India/Malaysia 618 370

Value of new life business 448 431 4% Margin 5,97% 7,60%


Notes


R million 2015 2014

Gross operating profit 2 248 2 213 2% Namibia 618 534 16% Botswana 858 706 22%Rest of Africa 208 265 -22%India/Malaysia 572 749 -24%Corporate (8) (41) 80%

Net operating profit 1 197 1 241 -4%

Group equity value 18 047 14 571 RoGEV 29,9% 28,0%


Notes

Sanlam Investments


Notes

Sanlam Investments

R million 2015 2014

Net investment business flows (3 251) 4 097Investment management SA (753) 4 152Wealth management 3 569 (29)International (6 065) (246)Capital management (2) 220New life business 6 664 13 859 -52% Employee benefits 2 913 10 154 -71% Sanlam UK 3 751 3 705 1% Net life business (261) 8 002Value of new life business 111 228 -51% Margin 1,34% 1,43%


Notes

Sanlam Investments

R million 2015 2014

Gross operating profit 1 877 1 927 -3% Investment management 1 205 1 337 -10%Employee benefits 501 325 54% Capital management 171 265 -35%

Net operating profit 1 417 1 468 -3%

Group Equity Value 22 412 20 122 Covered business 7 210 7 833 Other 15 202 12 289 RoGEV 21,3% 20,4%


Notes

Sanlam Investments

Percentage of SIM’s benchmark-managed funds exceeding hurdle

Investment performance

2011

2012

2013

2014

2015

Rolling 3 year Rolling 5 year

100% 80% 60% 40% 20% 0% 20% 40% 60% 80% 100%


Notes

Santam


Notes

Santam

R million 2015 2014

Net earned premiums 18 522 17 222 8%

Gross operating profit 2 321 1 968 18% Underwriting surplus 1 777 1 489 19% Working capital & other 544 479 14%

Net operating profit 933 801 16%

Underwriting margin 9,6% 8,7%

Group Equity Value 12 850 14 593RoGEV -8,4% 19,1%


Notes

Sanlam Group


Notes

Business flows

Gross NetR million 2015 2014 2015 2014

by businessPersonal Finance 63 825 52 566 21% 22 895 19 580 Emerging Markets 11 913 9 259 29% (7 346) 3 971 Sanlam Investments 116 582 103 250 13% (3 512) 12 099 Santam 18 522 17 222 8% 7 012 6 344

by licenceLife insurance 39 976 42 290 -5% 12 081 18 430 Investment 150 670 121 383 24% (523) 16 853 General insurance 20 196 18 624 8% 7 491 6 711

Total 210 842 182 297 16% 19 049 41 994


Notes

Operational efficiencies

Persistency – SA middle-income market

Focus on quality supports net fund flows

4.8

3.9 3.9 3.6

3.4 3.8 3.9

3.0 2.9 2.9 2.8 2.9 2.9

4.2 4.0

3.8 3.7 3.6

4.2

3.4

2.9 2.8 2.7 2.9 2.8 2.8

0

0.5

1

1.5

2

2.5

3

3.5

4

4.5

5

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

Lapses, surrenders & fully paid-ups as % of in-force per half year

H1 H2


Notes

Operational efficiencies

Persistency – SA lower income market

Focus on quality supports net fund flows

9.6 8.7

10.6 9.8

8.5

9.6 9.2

9.9

0

2

4

6

8

10

12

2012 2013 2014 2015

Lapses, surrenders & fully paid-ups as % of in-force per half year

H1 H2


Notes

Value of new covered business

Value of New Business MarginR million 2015 2014 2015 2014

Personal Finance 955 1 084 -12% 2,48% 3,12%

Emerging Markets 448 431 4% 5,97% 7,60%

Employee Benefits 85 198 -57% 1,96% 1,66%

Sanlam UK 26 30 -13% 0,66% 0,75%

Total 1 514 1 743 -13% 2,80% 3,09%

Net of minorities 1 360 1 592 -15% 2,62% 2,92%

Comparable economic basis 1 545 1 592 -3% 2,91% 2,92%


Notes

Value of new covered business

Large SEB policy in 2014, Kenya and Zambia also affecting growth

Significant impact from higher long-term interest rates

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

0

200

400

600

800

1 000

1 200

1 400

1 600

1 800

2 000

2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015South Africa Rest of AfricaOther International Margins - rhs


Notes

Net operating profit

R million 2015 2014

Personal Finance 3 831 3 476 10%

Emerging Markets 1 197 1 241 -4%

Sanlam Investments 1 417 1 468 -3%

Santam 933 801 16%

Corporate & other (109) (107) -2%

Total 7 269 6 879 6%


Notes

Income statement

R million 2015 2014

Net operating profit 7 269 6 879 6% Per share 355,2 336,2 6%

Net investment return 1 946 1 794 8%

Other (364) (333) -9%

Normalised headline earnings 8 851 8 340 6% Per share 432,5 407,6 6%

Fund transfers 449 (15)

Headline earnings 9 300 8 325 12% Per share 459,5 411,6 12%


Notes

Group Equity Value

Equity Value RoGEVR million 2015 2014 Rm %

Group operations 91 558 87 739 12 191 13,8% Personal Finance 38 249 38 453 4 658 12,1% Emerging Markets 18 047 14 571 4 369 29,9% Investments 22 412 20 122 4 386 21,3% Santam 12 850 14 593 (1 222) -8,4%

Discretionary & Other 11 948 8 197 35 0,5%TOTAL 103 506 95 936 12 226 12,7% cps 5 057 4 684 598 12,8% Adjusted return 14,8% Return target 12,1%


Notes

Group Equity Value earnings

R million 2015 2014

Net value of new business 1 360 1 592 -15%Existing business 5 328 4 881 9%Expected return on VIF 3 759 3 368 12%Operating experience variance 1 081 991 9%Operating assumption changes 488 522 -7%

6 688 6 473 3%Inv variances in-force 320 551 -42%Tax changes and goodwill (62) (168) 63%Economic assumption changes (1 608) 86 >-100%

5 338 6 942 -23%Return on net worth 1 699 1 297 31%EV earnings 7 037 8 239 -15%Non-life 5 189 7 344 -29%GEV earnings 12 226 15 583 -22%


Notes

Experience variancesPositive experience persisting

241

142 138

277 288 278

636

468

681

555

1 021 991

1 081

0.0%

0.5%

1.0%

1.5%

2.0%

2.5%

3.0%

3.5%

4.0%

4.5%

5.0%

0

200

400

600

800

1 000

1 200

2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015

R'million % of VIF (rhs)


Notes

Return on Group Equity ValueOut perform growth target of long-bond rate + 400bp

13.4 12.4 12.2 10.8 12.2 12.1 12.2

4.8 3.3

9.8

6.26.3

0.7

5.2

0

5

10

15

20

25

2010 2011 2012 2013 2014 2015 Avg

Target Out performance


Notes

2016 Priorities


Notes

Challenges

South African life businessMaintaining new business and profit growth over the long termNew business margins

Sanlam Emerging Markets headwindsAppropriate capacity and level of support

Sanlam InvestmentsGrowing the base, in particular institutional net flows

Addressing challenges a key priority


Notes


Continue to anticipate evolving consumer needs and demands

Focus on profitable sales growthAdapt and expand product range across entry-level, middle and affluent marketContinued focus on risk business in middle and affluent marketsExpand and adapt distribution footprint Enhance Glacier product set and intermediary supportImprove big data and advanced analytics capabilities

Focus on operational efficiencies in distribution and operations

Transforming with the high levels of regulatory change

Ensure that all business units are agile, cost efficient and market orientated


Notes


Shift in focus to accelerated organic growth through enhancing partnerships, strategic alliances and expanding product range sensibly

Increased visibility of Sanlam brand as partnership brand for markets and employees

Vest and integrate the Saham Finances acquisition

Deliver on corporate opportunities in Africa in line with client and broker service needs to support the retail growth

Increased collaboration on human resource development across the cluster

Continued focus on governance, compliance and ethics


Notes

Sanlam Investments

Maintain consistent superior investment performance

Further leverage business model in SA to grow net inflows in retail

Enhance competitive positioning for institutional segments

Focus on implemented solutions for both retail and institutional clients

Further align UK businesses to enhance competitiveness in international market

Continued focus on transformation and people development

Continue focus on passive (Satrix)

Grow Alternative Investments

Focus on operational efficiencies in low growth environment


Notes

Santam

Focus on profitable growth – both in SA and emerging markets

Capital review to consider future regulatory requirements, pending SAM implementation, review asset allocations

Technical support to SEM general insurance partners to unlock value

Improve operational efficiencies to optimise acquisition cost ratio

Implementation of new underwriting platform for intermediated business in SA

Work with local municipalities to reduce risk on the ground


Notes

Outlook


Notes

Outlook for 2016

Growth in most markets (particularly SA) to remain below longer term potential – pressure on new business growth and margins

Investment market volatility to persist, adversely affecting fund -based fee income and return on capital portfolio

Exceptional underwriting performance at Santam will be difficult to repeat

Conclude and embed AfroCentric and Saham Finances transactions

Investment opportunities will remain under consideration – primary focus on Pan-African financial services positioning

Implementation of regulatory changes in SA and UK will continue to be a challenge – strategic focus on managing risks and capturing opportunities

Difficult year ahead; medium to long-term prospects intact


Notes

thank you


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