As at 10 September 2025

Executive Summary

Key highlights

In this report, we review the latest FY25 results for the year ended 30 June 2025.
Financial results at a glance:
• Normalised profits from operations increased by 29% from R11.8 billion in FY24 to R15.2 billion. Locally,
contribution was driven by a 7% increase in Health, a 14% increase in Life, a 29% increase in Invest, and a 229% rise in Insure. On the offshore side, VitalityHealth increased by 173% and VitalityLife rose by 70%.
• New business API on the SA side had strong headwinds, as sectors like Health declined by 14% and Life by 10%. The offshore segment looked more promising as new business API increased on all fronts, most notably
VitalityHealth by 28% and PAHI by 225%. Overall, new business API declined by 2% year-on-year.
• Income from non-insurance business lines grew by 12% to R6.6 billion in FY25, compared to R5.9 billion in FY24, as it continues to become an integral part of Discovery’s future earnings potential.
• Basic headline earnings per share rose by 30% to 1 447 cents in FY25, up from 1 117 cents in FY24.
• Cash conversion ratio was 77% for FY25, up from 65% in FY24.
• Embedded value per share improved by 14% to R189.85 in FY25, from R166.95 in FY24, driven by strong
contributions from non-covered businesses, positive experience variances, and the competitive advantages of the Shared-value Insurance model.
• The normalised return on equity improved to 15.4% in FY25, from 13.5% in FY24.
• The financial leverage ratio was reduced to 16.8% in FY25, down from 20.3% in FY24.
• A final dividend of 201 cents per share was declared, bringing the full-year dividend to 288 cents per share, an increase of 33% from FY24.

Analyst thesis

Our recommendation is based on:

• Premium brand and consumer focus: Serves affluent, health-conscious clients who value rewards, wellness
integration, and quality service, enabling consistently higher pricing than other insurers, while maintaining strong customer loyalty and brand strength.
• Vitality moat & diversification: The data-driven Vitality platform drives deeper engagement and cross-selling
opportunities. Earnings are well spread across health, life, banking, and fee-based services, supporting stability and predictable cash flow.
• Growth runway: International Vitality partnerships, new product extensions, and Discovery Bank’s expansion
provide scalable long-term upside.
• A broad product suite enables Discovery to increase value per client by cross-selling health, life, banking, and investment offerings, thereby expanding revenue without incurring heavy new-customer acquisition costs.