Sanlam (SLM) Q2 2024 earnings summary

Executive summary

• Delivered strong operational results in H1 2024, with robust profit and cash earnings growth, supported by disciplined capital allocation and successful integration of acquisitions and partnerships across South Africa, Pan-Africa, and Asia.

• Diversified business model and strategic partnerships (Ubuntu-Botho, Allianz, Shriram) drove growth in Africa and India, with progress toward reaching 100 million lives by 2030.

• Strategic acquisitions and integrations, including SanlamAllianz JV, Capital Legacy, and Absa/Alexforbes platforms, contributed to performance.

• Board changes included appointment of Temba Mvusi as chair effective April 2024.

Financial highlights

• Net result from financial services (NRFFS) up 14% to R7,056 million, with cash NRFFS per share up 20% and diluted EPS up 23% year-over-year.

• Life insurance new business volumes increased 14% year-over-year; value of new business up 10%; net client cash flows up 111% to R23,972 million.

• Group equity value reached R155.3 billion (7,341 cents per share); ROGEV at 9.2% and adjusted ROGEV at 10.7%, both above the 7.5% hurdle rate.

• General insurance NRFFS up 16%, Santam's underwriting margin at 6.5% within target range.

• Group solvency cover ratio at 166%, stable from December 2023.

Outlook and guidance

• Focus for H2 2024 on maintaining profit growth, integrating Assupol, improving Retail Mass persistency, and concluding Capitec JV.

• Confident in long-term outlook, with growth momentum in all markets, but global market risks and regulatory changes remain.

• Implementation of 'two-pot' retirement fund legislation expected to have modest short-term outflows but benefit long-term asset accumulation.

• NRFFS for 2H2024 expected to be similar to 1H2024, excluding Capitec recapture fee.