Creating South Africa s leading financial services institution - Slide #1 -
Johan van Zyl, CEO Sanlam Johan van Zyl, CEO Sanlam Unlocking value for shareholders - Slide #2 -
Transaction based on Transaction based on business and social imperatives Business imperative Develop a world class business Enhance shareholder value Strengthen Sanlam s position in its traditional markets Access to new markets and business opportunities Broad-based empowerment Attract, develop and retain best human talent - Slide #3 -
Transaction based on Transaction based on business and social imperatives Business imperative Social imperative Contribute to the development of SA Facilitate broad-based empowerment A Truly South African Company - Slide #4 -
Highlights Positions Sanlam as the leading empowered financial services group to service and reach all markets in SA, including: The growing individual emerging market sector Retirement fund market in corporate, union & parastatal sectors Ubuntu-Botho becomes largest active beneficial shareholder in Sanlam Active role in Sanlam s leadership & future development - Slide #5 -
Highlights /continued Broad-based participation in transaction through business, community and traditional leaders, trade unions, women, youth, church and other groups Positions Sanlam to fully participate in the changing financial services landscape - Slide #6 -
Salient Terms Ubuntu-Botho group to acquire 10% of Sanlam as one indivisible transaction Certainty of shareholding, vesting and full voting rights R200m cash contribution by the Patrice Motsepe Group through Sizanani-Thusanang-Helpmekaar (Proprietary) Limited ( Sizanani ) Board representation at Sanlam Group and subsidiary level - Slide #7 -
Salient Terms /continued Broad-based participation achieved through diverse shareholder base Business, traditional and community leaders, women, church, youth, trade union groups and other successful BEE companies Development Trust aimed at advancing community upliftment, BEE and CSI initiatives - Slide #8 -
Salient Terms /continued 169m shares constituting 6% of Sanlam s equity will be acquired by Ubuntu-Botho for R1.3bn R200m of which will be funded by a cash contribution provided by the Patrice Motsepe Group through Sizanani 56m shares constituting 2% of Sanlam s equity will be transferred to the Sanlam Ubuntu-Botho Community Development Trust to benefit disadvantaged communities after servicing of debt - Slide #9 -
Salient Terms /continued Deferred shares issued to convert into ordinary shares as growth targets are achieved over 10 year period, based on Net inflow of funds; segregated and group Annual growth in New Business Embedded Value Effective date targeted for 1 January 2004, subject to approvals - Slide #10 -
Potential Impact Transfer of shares to Trust will have 2% EV dilution, increases to <3% due to new issues at below EV Transaction aimed at growing Sanlam and its business; structure motivates & rewards growth Worst case scenario will result in a dilution of <5% If expectations are met, transaction will be earnings enhancing - Slide #11 -
Potential Impact /continued Benefits of transaction should contribute to further re-rating of Sanlam s share-price Further detail on potential impact will be provided in circular and detailed terms announcement - Slide #12 -
Operations : Sanlam Life Major steps taken to improve cost effectiveness, distribution and product innovation Offers full range of competitive individual risk and savings products Comprehensive and competitive EB offering covering admin, risk and investment Group schemes business launched to service entry level market Working at developing TPA in-source offering Covers wide spectrum of target markets - Slide #13 -
Operations : Sanlam Investment Management Management team and investment process restructured Results improving, targeting sustainable top half performance Significant new mandates won, net inflow of segregated funds of R4 bn by 30 June 2003 Responsibility for investment management of off-shore funds Full offering of multi-manager, unit trusts, linked products, property asset management, administration - Slide #14 -
Other Operations Santam: real market leader excellent performance strategy to further enhance value through operational and strategic actions Gensec restructuring progressing SCM business model completed enhancing the Sanlam value proposition Absa co-operation progressing partnership potential being pursued enhance offering of both groups - Slide #15 -
Patrice Motsepe Chairman, Ubuntu-Botho A partner in the creation of sustainable value for all stakeholders - Slide #16 -
Ubuntu-Botho shareholding structure Broad Based BEE Groups Sanlam Ubuntu-Botho Sizanani-Thusanang Thusanang- (including business, community & Community Helpmekaar (Pty) Ltd traditional leaders, trade unions, women, youth, church and other groups) Development Trust ( Sizanani ) 25% 20% 55% Ubuntu-Botho Investments Limited ( Ubuntu-Botho ) 10% Sanlam Limited Sanlam Life Insurance Limited 100% 100% 54% Sanlam Investment Management Limited Santam Limited 1 - Slide #17 -
Composition of broad-based BEE Groups Provincial Groups * Single company per province ± 720 total shareholders ± 80 shareholders per company ± 50 nonprofessional ± 30 professional Male and female Includes traditional leaders Women Provincial Groups * Single company per province ± 540 total shareholders ± 60 shareholders per company Trade Unions Church Groups Youth Groups Corporates Ubuntu-Botho * Provinces Free State, Gauteng, KwaZulu Natal, Western Cape, Eastern Cape, Limpopo Province, Northern Cape, North West & Mpumalanga 25% - Slide #18 -
Ubuntu-Botho : Social & economic upliftment of all South Africans The Ubuntu-Botho consortium consists of broad based empowerment shareholders including: Respected business, traditional and community leaders, women, church, youth, trade union groups and other successful empowerment companies Poor and unemployed South Africans will also benefit from the transaction through the Sanlam Ubuntu-Botho Community Development Trust, which will: Advance and support community upliftment and development projects Support other BEE initiatives and corporate social investment programmes - Slide #19 -
Ubuntu-Botho : Social & economic upliftment of all South Africans /continued The R200m cash contribution by the Patrice Motsepe Group through Sizanani assists and facilitates the participation of the broad based empowerment groups in this transaction - Slide #20 -
Contribution of Ubuntu-Botho For Ubuntu-Botho this transaction presents an opportunity: To participate in Sanlam and contribute to making it the leading financial services company in South Africa To assist and facilitate broad-based empowerment in the financial services sector To strategically position Sanlam to provide financial services to the emerging market in South Africa To participate in the creation of a truly South African company that makes a meaningful contribution to the growth and development of the economy To contribute towards generating sustainable competitive returns for shareholders - Slide #21 -
Contribution of Ubuntu-Botho /continued Consortium s experienced leadership is well positioned to add value to the Sanlam franchise Through Board representation at Group and subsidiary levels Key to preserving and unlocking value Substantial cash contribution reflects commitment and confidence in Sanlam s growth prospects Positions Sanlam to fully participate in the changing financial services landscape - Slide #22 -
Questions - Slide #23 -
- Slide #24 - Sanlam Group Limited