Buying and selling assertion for the yr ended 31 December 2020

Outdated Mutual Restricted
Included within the Republic of South Africa
Registration quantity: 2017/235138/06
JSE alpha code: OMLI (‘Outdated Mutual’ or “Firm” or “Group”)

Ref 2/21
8 March 2021

TRADING STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2020

Debtholders are suggested that Outdated Mutual Restricted is presently within the strategy of finalising its annual outcomes for the
twelve months ended 31 December 2020 (‘present interval’). This buying and selling assertion gives a sign of a
vary for Headline Earnings per bizarre share (HEPS) and earnings attributable to fairness holders of the Group per
bizarre share (EPS) by way of paragraph 3.4(b) of the JSE Restricted Listings Necessities in comparison with the yr
ended 31 December 2019 (‘comparative interval’). The Group’s annual outcomes can be launched on the Inventory Trade
Information Service of the JSE Restricted on Tuesday, 23 March 2021.

Though stimulus measures and vaccine breakthroughs led to a restoration in native and world fairness markets within the
second half of the yr, the influence of the recessionary surroundings on our prospects’ disposable revenue and the
important influence of COVID-19 on claims and reserving has adversely affected our earnings. We exercised tight value
management throughout the enterprise to half mitigate damaging earnings impacts. Regardless of the influence to earnings, robust gross
flows all year long drove a major improve in NCCF demonstrating the resilience of our enterprise. We
have noticed restoration in gross sales and productiveness ranges through the second half of 2020, after a major
decline in volumes within the second quarter when the nationwide lockdown was most restrictive. The gradual reopening of
worksites and branches and the digital enablement of advisers to promote remotely supported the restoration of
productiveness ranges, with the fourth quarter trending in the direction of historic ranges. Nearly all of premium aid
initiatives supplied to our prospects ended within the fourth quarter and reinstatement charges are encouraging, with a
continued robust focus throughout the enterprise on retention and buyer loyalty actions.

Our Group stays effectively capitalised regardless of some materials one off damaging objects impacting our 2020 earnings,
that are referred to on this announcement. All year long, we carried out rigorous stress assessments to evaluate our
liquidity and solvency place below numerous restoration eventualities. Our liquidity ranges stay constructive and our
solvency ratio stays inside our goal vary in all eventualities.

In H1 2020 we raised a brief time period provision of R1,339 million for the anticipated impacts of worsening mortality,
morbidity and persistency associated to COVID-19. On the time we had famous a development of accelerating mortality and
morbidity claims within the second quarter and into the preliminary weeks of the third quarter. There was restricted noticed
knowledge and important uncertainty across the size and severity of this expertise. The availability was supposed to
present for anticipated expertise within the second half of 2020.

In South Africa, precise claims within the second half of the yr have been greater than the supply raised in H1 2020, with an
acceleration in an infection and extra mortality charges on the finish of the fourth quarter. This acceleration was constant
with early patterns of second waves famous in different nations. Because the begin of 2021 we now have continued to watch
the surplus mortality and an infection knowledge launched weekly by the South African Medical Analysis Council, our personal
claims expertise and different observable sources. This knowledge confirms that Wave 2 expertise is considerably worse
than Wave 1.

There are additionally rising expectations of a 3rd wave given proof of virus mutation, the gradual tempo of the
vaccination rollout and upcoming public holidays and the winter season. In mild of this, we now have elevated our brief
time period provision by R3,962 million. The influence of this has been partially mitigated by the discharge of discretionary
reserves of R1,112 million associated to mortality expertise within the Mass and Basis Cluster. We proceed to
intently monitor claims expertise in 2021 and have recorded roughly R1.9 billion of COVID-19 associated
mortality claims for January and February of 2021. Taking into consideration the discharge of the H1 provision, there's
roughly R2 billion of the pandemic reserve remaining for mortality threat associated to COVID-19 that will come up.

We beforehand communicated to debtholders on the 25 January 2021, that we anticipated a rise of between
R85 million to R140 million within the web enterprise interruption and enterprise rescue reserves reported for the yr
ended December 2020 in comparison with the R464 million reported in June 2020. Subsequent to the earlier
communication we now have refined our estimated reserve as extra knowledge has change into out there which allowed us to
refine key assumptions. This has resulted in a rise in web enterprise interruption reserves of roughly R300
million, versus that reported for the half yr.

Though credit score spreads narrowed within the second half of 2020, the onset of the second wave of the pandemic within the
fourth quarter in South Africa added stress to enterprise operations of sure counterparties leading to additional
damaging mark to market losses on the finish of the yr. These have been nevertheless broadly according to these reported in H1
2020. The uncertainty across the tempo of financial restoration and the low rate of interest surroundings continued to
depress earnings forecasts for a few of our unlisted fairness portfolios and has resulted in downward revaluations of
sure property.

Taking into consideration the working surroundings and components outlined above debtholders are suggested that the Group’s
key revenue measures are anticipated to fall inside the ranges outlined beneath:

Key Efficiency Indicators
(R million except said in any other case) Estimated Estimated
% change 31 December 2020 30 December
2019
Outcomes from Operations (79%) to (89%) 1,884 – 987 8,972
Adjusted Headline Earnings (70%) to (80%) 2,957 – 1,971 9,856
AHEPS (cents)¹ (69%) to (79%) 64.9 – 44.0 209.3
1
AHEPS outlined as Adjusted Headline Earnings divided by WANS adjusted to mirror the Group’s BBE shares and shares held in policyholder and
consolidated funding funds.

Debtholders are reminded that the impairments in respect of the carrying worth of our funding in Nedbank and
the goodwill associated to our funding in Outdated Mutual Finance have been recognised within the IFRS revenue assertion within the
first half of the yr, with no additional downward revaluations anticipated within the second half of the yr. They're
nevertheless, not recognised in Headline Earnings, and accordingly not recognised in Adjusted Headline Earnings (AHE),
as that is an specific adjusting merchandise in accordance with the JSE Round.

Headline earnings is greater than AHE, as AHE excludes the outcomes associated to the operations of Residual plc and
Zimbabwe and the adjustment in respect of funding return for group fairness and debt devices held in life
funds, all of which have been constructive in FY 2020.

Taking into consideration the lower in working earnings and the numerous impairments outlined above debtholders
are suggested that HEPS and Fundamental EPS are anticipated to fall inside the ranges outlined beneath:

Key Efficiency Indicators
(R million except said in any other case) Estimated Estimated
% change revenue/(loss) 30 December
31 December 2020 2019
Headline Earnings (42%) to (62%) 6,172 – 4,044 10,641
HEPS (cents) (40%) to (60%) 141.7 – 94.4 236.1
IFRS revenue after tax attributable to fairness (146%) to (166%) (6,195) – (4,318) 9,386
holders of the guardian
Fundamental EPS (cents) (147%) to (167%) (139.5) – (97.9) 208.3

The monetary data on this buying and selling assertion is the duty of the Outdated Mutual Restricted Board of Administrators
and has not been reviewed or reported on by the Group’s exterior auditors.

8 March 2021
Sandton

Debt Sponsor
Nedbank Company and Funding Banking

Enquiries

Investor Relations
Sizwe Ndlovu T: +27 (0)11 217 1163
Head of Investor Relations E: [email protected]

Tokelo Mulaudzi T: +27 (0)11 217 1042
Investor Relations Supervisor [email protected]

Communications
Tabby Tsengiwe T: +27 (11) 217 1953
Normal Supervisor of Public Affairs and M: +27 (0)60 547 4947
Communications E: [email protected]

Notes to Editors

About Outdated Mutual Restricted

Outdated Mutual is a premium African monetary companies group that gives a broad spectrum of monetary options to retail
and company prospects throughout key markets segments in 14 nations. Outdated Mutual’s major operations are in South
Africa and the remainder of Africa, and it has a distinct segment enterprise in Asia. With over 175 years of heritage throughout sub-Saharan
Africa, we're an important a part of the communities we serve and broader society on the continent.

For additional data on Outdated Mutual, and its underlying companies, please go to the company web site at
www.oldmutual.com.

Date: 08-03-2021 07:05:00
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