Momentum Group (MTM) investor relations material

Executive summary

• Normalized headline earnings reached ZAR 1.76 billion for Q1 2026, reflecting strong operational performance and disciplined strategy execution, with 8% sales growth to ZAR 22.4 billion.

• Positive market variances contributed ZAR 201 million to earnings, down from the prior year, while short-term insurance underwriting experience remained excellent.

• Life annuity sales dropped 28% year-on-year, driving a decline in value of new business (VNB) from ZAR 197 million to ZAR 146 million, with new business margin reducing from 2.7% to 0.7%.

• Management remains focused on driving sales, managing expenses, and improving VNB margin amid a competitive and subdued economic environment.

Financial highlights

• Recurring premiums grew by 8% to ZAR 1,154 million and single premiums by 5% to ZAR 16,490 million year-over-year.

• Solvency coverage ratio (SCR) decreased to 1.76, within the 1.6–2.0x target range, mainly due to dividend payouts, buybacks, and lower yield curves.

• Direct expenses increased by 5%, mainly due to inflation, regulatory changes, and IT investments.

• ZAR 389 million in cost savings realized from performance optimization, with a further ZAR 500 million identified.

• Mortality experience was positive across all business areas, with group-wide expense management in line with budget.

Outlook and guidance

• F2027 targets remain achievable: normalized headline earnings of ZAR 7 billion, ROE of 20%, and VNB margin between 1%-2%.

• Modest economic growth expected in South Africa, supported by improved energy, logistics, and a ratings upgrade, but tempered by lower inflation targets and competitive pressures.

• Management expects continued positive CSM growth for the year, but emphasizes the need to double VNB for 8%-10% core life earnings growth.