Discovery (DSY) investor relations material

Executive summary

• Normalised operating profit rose 24% to R8,891 million for the six months ended 31 December 2025, with headline earnings up 29% and normalised headline earnings up 27%, and new business up 12%.

• Strong performance across all business segments and regions, with Discovery South Africa profit up 19% and Vitality Global profit up 41%.

• Discovery Bank achieved profitability, with client growth of 28% to over 1.4 million and profit over R75 million.

• Vitality AI, launched in partnership with Google, is a strategic milestone driving innovation and hyper-personalised engagement.

• Interim ordinary dividend declared at 111 cents per share, up 28%.

Financial highlights

• Normalised headline earnings increased 27% to R5,745 million; net income attributable to shareholders was R5,716 million.

• Embedded value per share increased 13% to R201.97, with annualised return on embedded value at 17.3%.

• Cash conversion ratio was 71%, with operating cash flow of R9.7 billion.

• Dividend growth of 28% reflects strong underlying earnings, with dividend cover maintained at ≤5x.

• Financial leverage ratio improved to 15.1%, within plan.

Outlook and guidance

• Group targets 15–20% compound annual growth in normalised profit from operations through 2029, with current performance ahead of plan.

• Dividend policy remains at approximately five times cover by normalised headline earnings, with interim dividends at 30–40% of the annual total.

• Spend on new initiatives at 3% of earnings, below the 5% guideline, as embedded growth drives results.

• Discovery Bank expected to scale further, targeting ZAR 3 billion operating profit at 2-2.5 million clients.

• Vitality Health International and Amplify Health expected to be profitable by 2027.