DISCOVERY LIMITED
(Incorporated in the Republic of South Africa)
(Registration number: 1999/007789/06)
Legal Entity Identifier: 378900245A26169C8132
JSE share code: DSY ISIN: ZAE000022331
JSE share code: DSBP ISIN: ZAE000158564
Debt company code: DSYI
Company tax reference number: 9652/003/71/7
(“Discovery” or “the Company” or “the Group”)


SUMMARISED RESULTS FOR THE SIX MONTHS ENDED 31 DECEMBER 2023 AND CASH DIVIDEND DECLARATION

 KEY FINANCIAL RESULTS

  For the six months ended 31 December




                                                                                                                Restated
  Group earnings                                                           Unit             2023                 20221                   % change
  Normalised profit from operations                                    R million            5 622                4 973                         13
  Normalised headline earnings                                         R million            3 320                3 004                         11
  Headline earnings                                                    R million            3 260                3 276                           -
  Basic earnings per share                                                Cents             492.9                487.9                           1
  Basic headline earnings per share                                       Cents             493.8                498.4                         (1)
  Basic normalised headline earnings per share                            Cents             502.8                457.0                         10
  Business volumes
  Total income from non-insurance lines2                               R million           2 942                  2 554                        15
  New business annualised premium income                               R million           14 197                 11 106                       28
  Group net asset value and embedded value
  Net asset value                                                      R million            52 206                43 524                       20
  Embedded value                                                       R million           103 480                92 459                       12
  Annualised ROEV                                                              %             12.1                  14.4
  Basic embedded value per share                                               R           156.29                 140.43                       11
  Financial leverage and capital management
  Financial leverage ratio (FLR)3                                             %             19.7                   22.1
  Ordinary dividend declaration per share                                  Cents          65.00000                  -

  1 Restated for the adoption of IFRS 17 Insurance Contracts. Refer discussion below
  2 Not included in new business API
  3 FLR allowing for the inclusion of 50% of the contractual service margin (CSM) net of reinsurance and net of tax in the denominator



  Discovery Group delivered a robust performance for the period ended 31 December 2023 (“the reporting
  period”) demonstrating resilience and strong underlying growth dynamics in a complex operating
  environment.

  The reporting period was characterised by continued macroeconomic complexities. Global inflation rates
  declined from the prior period highs, but remained elevated and cumulative interest rate increases
  heightened consumer pressures in many regions constraining economic growth.
  The Group’s focus in the reporting period centred on the following:

  •    Delivering strong growth, cash generation and capital resilience across all three composites;
  •    Establishing platforms to accelerate future growth by scaling Discovery Bank and Vitality Global through
       evolving the Vitality Shared-value model; and
  •    Transitioning to the new IFRS 17 Insurance Contracts accounting standard.
The Group generated normalised operating profit growth of 13% to R5 622 million with positive
contributions from each composite, as South Africa (SA) increased 9%, United Kingdom (UK) increased 13%
and Vitality Global (VG) increased 71%. The UK and VG results benefitted from a weaker rand compared
with the prior period. New business annualised premium income (API) for the Group increased by 28% to
R14 197 million as a result of robust growth across the composites, with Discovery Health’s new business
augmented by the successful take-on of the Sasolmed medical scheme. Excluding Discovery Health, new
business API for the Group increased 11%.

Normalised headline earnings grew 11% to R3 320 million while headline earnings were largely unchanged
at R3 260 million. The difference is explained by the considerable prior period fair value gain from the UK
interest rate swaption. The swaption was realised towards the end of the prior financial year. Consistent
with prior reporting, headline earnings are normalised for this.

The Group demonstrated continued financial resilience over the period. Organic cash generation increased
with cash conversion now at 66% of after-tax normalised operating profit and central liquidity remained
strong. The financial leverage ratio (FLR) improved to 19.7% and capital ratios remained strong across each
business.

The Group’s embedded value increased to R103.5 billion, which represents a 12.1% annualised return on
embedded value (RoEV), with a positive contribution from experience variances over the period, reflecting
the positive dynamics of the Shared-value Insurance model.

Earnings for the period are reported under the new IFRS 17 Insurance Contracts accounting standard for the
first time and the earnings for the prior period have been restated. At the Group’s June 2023 financial year
results announcement, the Group highlighted that the transition to IFRS 17 would result in a reduction in
shareholder equity, with a resulting increase in the contractual service margin (CSM), which should be seen
as a store of value to be released as future profit. As such, the transition would not have any material impact
on the Group’s underlying economic value, solvency levels or cash flows, but would affect its incidence of
profit recognition. The restated normalised profit from operations under IFRS 17 for the prior period to 31
December 2022 was 16% lower than under the previously disclosed IFRS 4 Insurance Contracts accounting
standard.

 ORDINARY SHARE CASH DIVIDEND DECLARATION

The directors declared an interim gross cash dividend of 65.00000 cents (52.00000 cents net of dividend
withholding tax) per ordinary share, out of income reserves. A dividend withholding tax of 20% will be
applicable to all shareholders who are not exempt.

The number of ordinary shares in issue at the declaration date is 676 374 092.
The salient dates for the dividend will be as follows:
Last day of trade to receive a dividend                                                Tuesday, 16 April 2024
Shares commence trading “ex” dividend                                                  Wednesday, 17 April 2024
Record date                                                                            Friday, 19 April 2024
Payment date                                                                           Monday, 22 April 2024

Share certificates may not be dematerialised or rematerialised between Wednesday 17 April 2024 and Friday 19
April 2024, both days inclusive.
DIRECTORS’ STATEMENT

The contents of this summarised results announcement are the responsibility of the Board of Directors of the
Company (Board). Shareholders and/or investors are advised that this results announcement represents a
summary of the information contained in the unaudited interim results for the six months ended 31 December
2023 (interim results), published on https://senspdf.jse.co.za/documents/2024/JSE/ISSE/DSY/H12024.pdf and
on Discovery’s website: https://www.discovery.co.za/corporate/financial-results on 20 March 2024. Any
investment decisions by investors and/or shareholders should be based on a consideration of the interim results
as a whole and shareholders and/or investors are encouraged to review interim results, which are available for
viewing on the JSE's website and on the Company's website as set out above.


On behalf of the Board

ME Tucker                                                 A Gore
Chairperson                                               Group Chief Executive
19 March 2024


Directors ME Tucker (UK) (Chairperson), A Gore* (Group Chief Executive), L Chiume1, R Farber, WM Hlahla,
FN Khanyile, D Macready, Dr TV Maphai2, T Mboweni, KC Ramon1, M Schreuder, B Swartzberg*, B van
Kralingen, DM Viljoen* (Group Chief Financial Officer), SV Zilwa2
* Executive.
1 Appointed effective 18 September 2023
2 Retired effective 16 November 2023

Debt officer
DM Viljoen

Registered office and business address
1 Discovery Place,
Sandton 2146

PO Box 78672,
Sandton 2146

Transfer secretaries
Computershare Investor Services Proprietary Limited

Equity and Debt Sponsor
Rand Merchant Bank (a division of FirstRand Bank Limited)

Company secretary
A Ceba

Independent auditors
Deloitte & Touche
KPMG Inc.

www.discovery.co.za


SENS release date 20 March 2024