Interim Results to 30 September 2003

1

• Interim Results to 30 September 2003

2
Key features

• Revenue of R2,2 billion
• Trading profit of R508 million
• Africa 7
• International 2 (in )
• Group trading profit up 3 (at constant exchange
  rates)
• Core EPS of 80,4 cents (-17)
• 25 decrease in Rand exchange rate
• Reduced contribution from Associates

3
Alexander Forbes Group structure
Africa
Africa
Africa
Investment Solutions
Financial Services
Risk Services
UK
International
UK
Risk Services
Financial Services
UK
Direct Marketing
4
Regional overview

• Revenue Trading Profit
• Sept Sept Sept Sept 2003 2002 2003 2002

International (m) 95,5 2 93,7 17,2 (2) 17,5
International (Rm) 1 165 (21) 1
481 204 (27) 278 Africa (Rm) 1
037 9 955 304 7 284 Total 2 202 (10) 2
436 508 (10) 562
Group trading profit up 3 (at constant
exchange rates)
5
Alexander Forbes - International
Africa
Africa
Africa
Risk Services
Financial Services
Investment Solutions
UK
UK
International
UK
Risk Services
Financial Services
UK
Direct Marketing
6
International - Operational review
Revenue Trading Profit Sept Sept Sept Sept
2003 2002 2003 2002 m m m m

• Risk Services 61,6 6 58,3 11,1 (1) 11,2
• Financial Services 26,2 22 21,5 2,5 56 1,6
• Investment Solutions 1,8 - (0,6) -
• Direct Marketing 5,9 (58) 13,9 4,2 (11) 4,7
• Total 95,5 2 93,7 17,2 (2) 17,5

7
International - Operational review
Revenue Trading Profit Sept Sept Sept Sept
2003 2002 2003 2002 m m m m

• Risk Services 61,6 6 58,3 11,1 (1) 11,2
• - UK Europe 53,3 11 48,2 10,4 5 9,9
• - Latin America 5,1 (23) 6,6 0,2
• - Asia 3,2 (9) 3,5 0,7 (36) 1,1

• UK Europe
• Strong growth in Professions with progress in new
  consulting business
• Profit growth in Retail
• Global Broking down year on year
• Mixed trading results with some team movements
• Weaker Dollar - 0,5m impact

8
International - Operational review
Revenue Trading Profit Sept Sept Sept Sept
2003 2002 2003 2002 m m m m

• Risk Services 61,6 6 58,3 11,1 (1) 11,2
• - UK Europe 53,3 11 48,2 10,4 5 9,9
• - Latin America 5,1 (23) 6,6 0,2
• - Asia 3,2 (9) 3,5 0,7 (36) 1,1

• Latin America and Asia
• Lower contribution from the regions
• Latin America
• Strong trading results in Mexico
• Brazil results impacted by reduced political risk
  insurance activity
• Asia
• Mixed trading results from operations
  associates
• Impact of SARS
• China strategy in advanced stages
• Referral contribution to London brokerage
  operations

9
International - Operational review
Revenue Trading Profit Sept Sept Sept Sept
2003 2002 2003 2002 m m m m

• Financial Services 26,2 22 21,5 2,5 56 1,6
• - LCP 14,5 81 8,0 1,8 100 0,9
• - IFA 11,7 (13) 13,5 0,7 - 0,7

• LCP
• Full 6 month contribution (vs 4 months)
• Growth in profits
• Profile continues to build with pensions work
• Good new business activity
• IFA
• Strong new business pipeline
• Improved prospects for second half

10
UK - Investment Solutions
Revenue Trading Profit Sept Sept Sept Sept
2003 2002 2003 2002 m m m m

• Investment Solutions 1,8 - (0,6) -

• Initial regulatory delays impact short-term
  performance
• All regulatory approvals and UK launch now
  complete (Oct 03)
• Portfolios being actively marketed to DC and DB
  schemes
• DC admin business - client gains
• Assets under management reach 125 million
• Assets under administration reach 6 billion

11
UK - Direct Marketing
Revenue Trading Profit Sept Sept Sept Sept
2003 2002 2003 2002 m m m m
Direct Marketing 5,9 (58) 13,9 4,2 (11) 4,7

• Reduced profits as anticipated
• Actively marketing other products
• Smaller scale

12
Alexander Forbes - Africa
Africa
Africa
Africa
Financial Services
Risk Services
Investment Solutions
UK
International
UK
Risk Services
Financial Services
UK
Direct Marketing
13
Africa - Operational review

• Revenue Trading Profit
• Sept Sept Sept Sept 2003 2002 2003 2002
• Rm Rm Rm Rm

Risk Services 385 8 357 138 23 112 Financial
Services 415 11 374 87 (7) 94 Investment
Solutions 237 6 224 79 1 78 Total 1
037 9 955 304 7 284
14
Africa - Risk Services
Revenue Trading Profit Sept Sept Sept Sept
2003 2002 2003 2002 Rm Rm Rm Rm
Risk Services 385 8 357 138 23 112

• Benefits of hard insurance market
• Good revenue gains and profit growth in Broking
• Continued benefits from Personal Services
  restructure with strong profit growth
• A number of new initiatives including Reinsurance
  Solutions

15
Africa - Financial Services
Revenue Trading Profit Sept Sept Sept Sept
2003 2002 2003 2002 Rm Rm Rm Rm
Financial Services 415 11 374 87 (7) 94

• Difficult market conditions for Financial
  Planning business (particularly currency
  impact)
• AF Life - claims impact profit share
• Asset Consulting restructure
• Good revenue gains but some cost pressures
• Acquisitions
• Empowerment positioning and capacity building
• Compliance

16
Africa - Investment Solutions
Revenue Trading Profit Sept Sept Sept Sept
2003 2002 2003 2002 Rm Rm Rm Rm
Investment Solutions 237 6 224 79 1 78

• Assets under management exceed R54bn
• Some successes with larger funds
• Stanlib Multi-Manager - assets reach R2,5bn
• Average Assets up 13
• Revenue and profit growth negatively affected by
  
• Impact of Rand strength
• Effects of lower margins from large funds
  Stanlib
• Reduction in initial fees

17
Associates

• Reduced contribution from associates
• Small trading losses in National Britannia and
  Medscheme
• No contribution from Thebe Risk Benefits (sold
  on 31 March 2003)

18

• Analysis of financial results
• Mike Ilsley

19
Revenue trading profit

• Sept Sept
• 2003 2002
• Rm Rm
• Total revenue 2 216 (9) 2 438
• Operating expenses (1 761) (9) (1 935)
• Operating profit 455 (10) 503
• Operational interest income 53 59
• Trading profit 508 (10) 562
• Trading profit ratio 23 23
• Operating profit ratio 21 21

20
Attributable core earnings

• Sept Sept
• 2003 2002
• Rm Rm
• Trading profit 508 (10) 562
• Net finance costs (92) (38)
• Profit before associates 416 (21) 524
• Associates 3 21
• Profit 419 (23) 545
• Tax (121) (166)
• Minority interests (20) (42)
• Core earnings 278 (17) 337

(excludes taxation on non-trading items)
21
Segmental profit before tax
International
Africa

• Sept Sept Sept Sept
• 2003 2002 2003 2002
• Rm Rm m m
• Trading profit 304 284 17,2 17,5
• Net finance costs (19) 22 (6,1) (3,8)
• Profit before associates 285 306 11,1 13,7
• Associates 1 13 0,5
• Core profit before tax 286 319 11,1 14,2

22
Regional split of results
Sept 2003
Sept 2002

• Inter- Inter-
• Africa national Africa national
• Revenue 47 53 39 61
• Trading profit 60 40 51 49
• Core profit before tax 68 32 59 41

23
Effective tax rate

• Sept Sept
• 2003 2002
• Rm Rm
• Effective tax rate on headline earnings 28,8 30,
  4
• Tax per income statement 113 168
• Tax on unrealised currency loss / (gain) 8 (2)
• Tax on core earnings 121 166
• Effective tax rate on core earnings 28,9 30,5

24
Earnings per share

• Sept Sept
• 2003 2002
• cents cents
• EPS 53,5 (36) 83,9
• Headline adjusting items 21,4 14,9
• Headline EPS 74,9 (24) 98,8
• Unrealised currency loss / (gain) 7,8 (2,3)
• - Tax thereon (2,3) 0,6
• Core EPS 80,4 (17) 97,1

25
Headline adjusting items per share

• Sept Sept 2003 2002
• cents cents
• Goodwill amortisation (18,7) (15,8)
• National Britannia accelerated amortisation (3,6)
  -
• Other 0,9 0,9
• Total headline adjustments per share (21,4) (14,9
  )

26
Cash flow

• Sept Sept
• 2003 2002
• Rm Rm
• Cash from operations 467 343
• Tax and dividends paid (329) (395)
• Cash from fiduciary activities
• Change in insurer balances 285 416
• Refund of vendor loan notes (42) (298)
• Cash invested
• Subsidiaries and associates (19) (244)
• Fixed assets (127) (60)
• - Other 15 (121)
• Cash from financing (124) 262
• Movement in cash balances 126 (97)

27
Cash position

• Inter-
• Africa national Total
• Rm Rm Rm
• Cash per balance sheet 399 1 971 2 370
• Utilisation
• Insurer balances (278) (1 007) (1 285)
• Loan note deposits - (20) (20)
• Other net current liabilities andsolvency
  requirements (203) (644) (847)
• Cash immediately available (82) 300 218
• Refinancing of premium financereceivables in
  SA 240 - 240
• Expected cash available 158 300 458

28
Net interest-bearing debt

• Inter-
• Africa national Total
• Rm Rm Rm
• Interest-bearing liabilities 493 2 038 2 531
• - short-term 81 85 166
• - long-term 412 1 953 2 365
• Less
• - matching deposits (490) (20) (510)
• - cash immediately available 82 (300) (218)
• Net interest-bearing debt 85 1 718 1 803

29
Gearing interest cover

• Inter-
• Africa national Total
• Rm Rm Rm
• Net interest-bearing debt (a) 85 1 718 1 803
• Equity before goodwill effects (b) 1 841 982 2
  823
• Gearing (a) / (b) 5 175 64
• Trading profit (c) 304 204 508
• Net finance costs (d) (19) (73) (92)
• Interest cover (times) (c) / (d) 16 3 6

30
Return on equity capital (annualised)

• Inter- Africa national Total
• Core earnings after tax - annualised 382 174
  556
• Shareholders funds (before
• goodwill effects) - average 1 874 939 2 813
• Return on equity 20,4 18,5 19,8
• Core earnings after tax
• before interest costs - annualised 437 325
  762
• Total funds (including debt) - average 2
  367 2 977 5 344
• Return on total capital employed 18,4 10,9
  14,3

31

• Shareholders and strategy
• Rael Gordon

32
Shareholding at 30 September 2003
33
Africa - Developments

• Ed Fagan - responding as appropriate
• Management restructure
• Empowering of businesses
• New structures to focus on BEE advancement
• MCI playing an integral role
• Risk Services premises move synergies and savings

34
Africa - Empowerment update

• MCI adding value
• Financial Services Charter
• Independent Empowerdex rating - BB
• Some senior BEE appointments and board
  restructures (will enhance Empowerdex rating)

35
International - Developments

• Acquisitions now driven by divisional management
• Still looking for synergistic acquisitions
• Acquisition opportunities to be reviewed in light
  of debt levels
• Refinancing of UK debt receiving early attention
• Discussions with Venfin and other current debt
  providers
• Investigating a variety of potential structures
• Capital structure and access to capital remain on
  agenda

36
Prospects conclusion

• Business remains significantly profitable and
  cash generative
• Margins maintained
• Growth rate significantly affected by currency
• Significant successes offset by challenging
  conditions in other areas
• Remaining 6 months still challenging but aiming
  for improved 2nd half
• Strong management in place

37

• Thank you