DISCOVERY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number 1999/007789/06)
Legal Entity Identifier: 378900245A26169C8132
JSE share codes: DSY, DSBP
DSY ISIN: ZAE000022331
DSBP ISIN: ZAE000158564
JSE bond company code: DSYI
(“Discovery” or “the Group”)

Voluntary trading statement for the year ended 30 June 2023

   1. Overview

Discovery delivered a robust Group performance for the year ended 30 June 2023 (“the reporting
year”), with all of its three business composites – South Africa, United Kingdom and Vitality Global –
performing well over the year. High levels of engagement in the Vitality Shared-value model, together
with the efficacy of the model, underpinned the Group’s performance, despite a challenging and volatile
macro-economic environment.

   •   Normalised profit from operations is expected to increase by between 22% and 27%;
   •   Headline earnings (“HE”) is expected to increase by between 3% and 8%; and
   •   Normalised headline earnings (“NHE”) is expected to increase by between 30% and 35%.

   2. Normalised profit from operations

The following table demonstrates the expected change in the Group’s normalised profit from
operations for the reporting year over the prior year (30 June 2022) by composite:

 Business                                            Normalised profit from operations
                                                           expected % change
 SA Composite                                                  20% to 25%
 UK Composite                                                  18% to 23%
 Vitality Global                                               72% to 77%
 Normalised profit from operations                             22% to 27%

Within the composites:

   •   SA Composite: Businesses across the composite all delivered strong growth, with Discovery Bank
       continuing to deliver excellent progress across all metrics, as acquisition of quality clients
       accelerated over the year.
   •   UK Composite: VitalityLife performed strongly, with profit boosted by positive operating
       variances, benefiting from significantly higher premium inflation indexation. VitalityHealth’s
       profits declined slightly off a strong prior result, given elevated new business strain from strong
       sales and the industry-wide return of PMI claims post the COVID-19 pandemic.
   •   Vitality Global: The composite delivered strong growth in operating profits, given a strong
       recovery in investment returns for Ping An Health Insurance during the second half of the 2023
       financial year, combined with continued strong operating delivery.




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    3. Normalised headline earnings and headline earnings

The strong growth in normalised profits from operations is anticipated to drive strong normalised
headline earnings, which are expected to grow between 30% and 35% for the reporting year.

The reporting year coincided with considerable macro-economic volatility, with significant movements
of interest rates within the markets in which Discovery operates. The headline earnings impact of higher
rates in the United Kingdom was more muted over the reporting year, as the hedging strategy proved
effective despite significant market volatility. The sizeable increase in both real and nominal interest
rates in South Africa had a more pronounced impact on headline earnings over the reporting period.

As in prior reporting periods, the increase in interest rates creates volatility in Discovery’s headline
earnings but has no impact on the operations of the Group, with little impact on the Group’s liquidity,
cash flows and solvency. Consequently, the Group has a stated policy of normalising for the impact of
interest rate movements in the presentation of normalised headline earnings. This predominantly
explains the difference between the expected headline earnings growth of between 3% and 8% and the
expected growth in normalised headline earnings of between 30% and 35%.

Voluntary trading statement

Shareholders and noteholders are advised that, for the reporting year:

•   Earnings per share (“EPS”) (basic) is expected to be between 3% and 8% lower (to between 759.5
    cents and 800.7 cents) compared to the reported EPS (basic) of 825.5 cents for the prior period.
•   Headline earnings per share (“HEPS”) (basic) is expected to be between 3% and 8% higher (to
    between 816.2 cents and 855.8 cents) compared to the reported HEPS (basic) of 792.4 cents for the
    prior period.
•   Normalised HEPS (“NHEPS”) (basic) is expected to be between 30% and 35% higher (to between 1
    151.2 cents and 1 195.4 cents) compared to the reported NHEPS (basic) of 885.5 cents for the prior
    period.

Discovery intends to report its annual 2023 financial results on or about 21 September 2023. The
information contained in this announcement, including any forecast financial information on which this
voluntary trading statement is based, is the responsibility of the Board of Directors of Discovery and has
not been reviewed and reported on by Discovery's external auditors.

Sandton
12 September 2023

Sponsor and Debt Sponsor
RAND MERCHANT BANK (A division of FirstRand Bank Limited)




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