Sanlam (SLM) Q3 2024 earnings summary

Executive summary

• Achieved double-digit growth in key earnings and new business metrics for the nine months ended 30 September 2024, with net result from financial services up 15% and net operational earnings up 17%.

• Successfully terminated Capitec joint venture at end of October 2024, receiving ZAR 1.9 billion reinsurance recapture fee, to be recognized in full-year results.

• Completed acquisition of Assupol Holdings in October 2024 for ZAR 6.6 billion, aiming for synergies in sales productivity, IT, and efficiency; integration underway and contributing to group results.

• Namibia operations incorporated into Pan-African joint venture, with R2.3 billion proceeds received in October 2024.

• Maintained robust new business margins and strong performance across all business lines.

Financial highlights

• Net result from financial services grew 15% year-over-year for the nine-month period; net operational earnings up 17%.

• Life insurance new business volumes increased 12%, value of new business (VNB) up 13%, and VNB margin at 2.81%.

• General insurance net result from financial services up 46% for nine months, driven by improved underwriting and investment returns, especially at Sanlam and in Africa.

• Group client net cash flows more than doubled to ZAR 40 billion, with improved flows across all business lines.

• Discretionary capital balance at ZAR 841 million as of 30 September 2024, after major acquisitions.

Outlook and guidance

• Optimistic for the remainder of the year, expecting continued robust performance and strategic execution.

• Capitec JV termination will reduce full year VNB and new business volume trends; Assupol's VNB currently lower than Capitec's but expected to improve over time.

• No immediate capital synergies from Assupol acquisition; any benefits will materialize over a longer period.

• Expects further outflows from retirement funds due to "two-pot" legislation in South Africa.

• NRFFS for the second half of 2024 expected to be similar to the first half, excluding Capitec recapture fee.