Release Date: March 06, 2025
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
Positive Points
- Sanlam Ltd (SLLDY, Financial) reported strong operational and strategic delivery in 2024, with each business cluster performing well and customer growth and earnings being strong.
- The integration of historic acquisitions, such as ABSA asset management and linked investment services platform transactions, has progressed well, contributing to the company's growth.
- Sanlam Ltd (SLLDY) achieved a 17% increase in cash net result from financial services per share, excluding one-off boosts, and a 26% increase in operational earnings per share.
- The company's return on group equity value and dividend growth both produced satisfactory outcomes, with a dividend increase of 11% supported by robust cash earnings growth.
- Sanlam Ltd (SLLDY) maintains a strong solvency position and has introduced return on equity as a further financial metric, achieving an ROE of 19.8% excluding one-off fees.
Negative Points
- New business and value of new business growth were modest due to structural corporate activity and currency depreciations impacting the Pan-African operations.
- The integration of some businesses, such as in Morocco, may take longer than expected, potentially delaying the realization of synergies.
- The South Africa health portfolio recorded lower earnings due to weaker performance from Afrocentric, impacting overall results.
- Persistency experience variances on covered business, while improved, remained slightly negative, affecting the individual life business.
- The company's growth in net client cash flow was 10% lower than in 2023, impacted by net outflows in the corporate business and the loss of a large client.
Q & A Highlights
Q: Please provide some color on the mortality variances in the corporate business for 2024 and how this compares to 2023.
A: (Mlondolozi Mahlangeni, Group Chief Risk Officer and Chief Actuary) In 2024, we had very good re-experience profits for the corporate business, slightly lower than last year by about 60 million, but they remain strong. We've indicated that profits have been at elevated levels in recent years, and some normalization was expected, but profits remain robust.
Q: What is the broad split of Sunamm Allianz's earnings by currency?
A: (Heinie Werth, Chief Executive Officer) We provided an indication of the currency split during the investor's day a year ago, and it has changed slightly since then. We will need to get back to you with the updated details.
Q: How do you intend to extend banking and credit to your retail customers?
A: (Paul Hanratty, Group Chief Executive Officer) Through our relationship with Time Bank, a fully digital bank, we plan to offer digital banking services at affordable prices. We are also enhancing our existing credit business with digital capabilities, and these services will be integrated with our rewards program to handle customer payments efficiently.
Q: Some South African competitors are targeting earnings growth of 15-20% over the next 3-5 years. Is that a level of growth Sanlam can deliver at a group level?
A: (Paul Hanratty, Group Chief Executive Officer) Achieving 15-20% growth would be challenging for corporate South Africa as a whole. We will outline our medium-term targets for our growth engines later this year. While we have strong positions, such high growth rates may not be feasible across all sectors.
Q: Can you provide more details on the contribution to new business value and experience variances specifically from Capitec in 2024?
A: (Paul Hanratty, Group Chief Executive Officer) We may need to address this question offline, as we don't have the specific split of the VNB impacts and experience variances from Capitec readily available.
For the complete transcript of the earnings call, please refer to the full earnings call transcript.
