SANLAM LIMITED - Trading Statement

Trading Statement

Sanlam Limited
(Incorporated in the Republic of South Africa)
Registration number 1959/001562/06
JSE & A2X share code: SLM
NSX share code: SLA
ISIN: ZAE000070660
(“Sanlam” or “the Group”)

Trading statement for the six months ended 30 June 2021 (2021 interim results)

Shareholders are advised that Sanlam is currently compiling its results for
the six months ended 30 June 2021. This trading statement provides an
indication of the range for headline earnings per ordinary share (HEPS) and
earnings attributable to equity holders of the Group per ordinary share (EPS)
in terms of paragraph 3.4(b) of the JSE Limited Listings Requirements. Sanlam's
2021 interim results will be released on the Stock Exchange News Service
(SENS)of the JSE Limited on Thursday, 9 September 2021.

The Group continued to deliver on the resilient performance demonstrated in
the 2020 financial year, achieving a satisfactory performance despite the
persisting impact of the COVID-19 pandemic on the Group’s operations. The
Group’s performance continues to demonstrate the strength of the underlying
operations, which is built on a foundation of a sound capital base, robust
cash generation and a diversified growth profile.

The Group expects the following earnings performance ranges for the six months
ended 30 June 2021:


                                         Six months to 30 June
                                2021                  2021            2020
                                                                  (comparative
                                                                    period)
                        Expected increase on     Expected range      Actual
                         comparative period        (cents per      (cents per
                            (Percentage)             share)          share)
Net result from               10 to 20           192.0 to 209.4      174.5
financial services
                               0 to 10           188.5 to 207.4      188.5
HEPS
                               0 to 10           185.8 to 204.4      185.8
Diluted HEPS
                             200 to 210          170.9 to 188.0     (170.9)
EPS
                             200 to 210          168.4 to 185.2     (168.4)
Diluted EPS

The main items contributing to the growth in net result from financial
services are:
•   Higher equity market levels that supported fund-based fee income,
    positive marked-to-market changes from credit spread movements compared
    to losses in the comparative period, lower levels of provisions for
    doubtful debts and improved return on insurance funds from the Pan-Africa
    general insurance portfolio.                                                                     
•   Higher earnings from Santam Limited, driven by improved underwriting
    results, partly offset by reduced investment return on insurance funds in
    the current low short-term interest rate environment. The comparative
    period was negatively impacted by the provision for COVID-19 related
    contingent business interruption claims.
•   The above positive contributors were partially offset by a reduction in
    mortality profits due to the impact of COVID-19 on risk claims experience
    at Sanlam Life and Savings. The comparative period included strong
    positive mortality experience, which did not repeat in the first six
    months of 2021.

The main contributors to the lower level of growth in HEPS and diluted HEPS
compared to net result from financial services were non-economic mismatch
profits and losses recognised in terms of International Financial Reporting
Standards (IFRS), which more than offset improved investment return earned
on the shareholder capital portfolios. These mainly consisted of the
following:

•   The impact of eliminating Sanlam shares held in policyholder portfolios
    as treasury shares;
•   Recognition of deferred tax assets in respect of assessed losses in
    policyholder portfolios; and
•   Consolidation of the Broad-based Black Economic Empowerment (B-BBEE) SPV,
    which results in the recognition of interest paid on funding in the SPV,
    marked-to-market changes on the hedging instruments in the structure and
    administration costs incurred by the SPV.

These items collectively contributed negatively to both HEPS and diluted
HEPS in 2021 relative to a positive contribution in 2020.

The main item contributing to the 2021 increase in EPS and diluted EPS
relative to HEPS and diluted HEPS is the impairment charges of some R7,6
billion in the comparative period which did not repeat in 2021.

The financial information in this trading statement is the responsibility of
the Sanlam Board of Directors and has not been reviewed or reported on by
the Group’s external auditors.

For all investor relations queries please contact:

Sanlam Investor Relations
Tel: +27 21 947 8455
E-mail: ir@sanlam.co.za

Cape Town, 2 September 2021
Sponsor: The Standard Bank of South Africa Limited




                                                                    

Date: 02-09-2021 02:00:00
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