Sampo Oyj · OMXHEX:SAMPO
Sampo Oyj — Debt Investor Presentation (May 2018)
51 slides from Sampo Oyj's debt investor presentation, May 17, 2018
Slide 1: Debt Investor Presentation January–March 2018
Debt Investor Presentation JANUARY – MARCH 2018 PREPARED May 17, 2018 FIGURES January-March, 2018
Slide 2: Debt Investor Contacts and Financial Calendar 2018
DEBT INVESTOR CONTACTS FINANCIAL CALENDAR 2018 Markku Pehkonen, CRO 07/02/2018 Financial Statement Release for 2017 tel. +358 10 516 0014 Silent period 08/01/2018-07/02/2018 markku.pehkonen@sampo.fi Week 11 Annual Report 2017 19/04/2018 AGM Peter Johansson, CFO 09/05/2018 Interim Statement Q1/2018 t
Slide 3: Sampo Group: Subsidiaries and Associated Companies
Sampo Group 3-15 Subsidiaries and Associated companies If P&C 16-21 Topdanmark 22-26 Mandatum Life 27-31 Nordea Bank 32-33 Sampo plc 34-41 Appendix 42-51 3
Slide 4: Value Creation in the Nordic Financials as Group Strategy
Sampo Group ― Nordic Financial Group with Strong Brands Value Creation in the Nordic Financials as Group Strategy LONG-TERM • Value creation through investments in Nordic financials based on knowledge of VALUE Nordic markets, Nordic financial institutions & Nordic people. CREATION • Commitment to th
Slide 5: Sampo Group ‒ Nordic Financial Group with Strong Brands
Sampo Group ― Nordic Financial Group with Strong Brands Sampo Group ‒ Nordic Financial Group with Strong Brands • Long-term investor • Manager of capital structure and liquidity • Pay-out ratio ≥ 50% 100% > 45% 100% 21.2% 36.2% Subsidiary Subsidiary Subsidiary Associated Company Associated Company N
Slide 6: Efficient and Stable Operations as Basis for Value
Sampo Group ― Nordic Financial Group with Strong Brands Efficient and Stable Operations as Basis for Value A Mixed Financial Conglomerate Strong relative performance Market cap May 3, 2018, EURbn 10Y Total Shareholder Return Nordea 33.6 Danske 26.0 DNB 25.7 >21% Sampo 24.5 Swedbank 19.9 SHB 17.7 SEB
Slide 7: If P&C ‒ A Diversified Nordic P&C Insurer
Sampo Group ― Nordic Financial Group with Strong Brands If P&C ‒ A Diversified Nordic P&C Insurer • Diversified and profitable subsidiary Strong & Stable Annual Profit Development EURm • Provides insurance solutions and services 1,200 in the Nordic and Baltic regions as well as 1,000 to Nordic custo
Slide 8: Topdanmark – A Danish Non-life and Life Insurer
Sampo Group ― Nordic Financial Group with Strong Brands Topdanmark – A Danish Non-life and Life Insurer • A profitable subisdiary with robust business model • Carries out Danish non-life insurance, Profit before taxes DKKm life insurance and pension fund business • Non-life business is divided to 70
Slide 9: Mandatum Life ‒ A Finnish Financial Service Company
Sampo Group ― Nordic Financial Group with Strong Brands Mandatum Life ‒ A Finnish Financial Service Company • Provides a comprehensive range of wealth Profit Development EURm managment and health and life risk services 500 in Finland and the Baltics for private and corporate customers 250 Profit bef
Slide 10: Nordea – A Nordic Banking Group
Sampo Group ― Nordic Financial Group with Strong Brands Nordea – A Nordic Banking Group • The largest financial services group in the Nordic Low Quarterly Result Volatility EURm region and one of the largest banks in Europe 1,600 • Diversified and stable returns 1,400 Restructuring/ • Global presenc
Slide 11: Diversified Companies & Diversified Portfolio
Sampo Group ― Nordic Financial Group with Strong Brands Diversified Companies & Diversified Portfolio* 1 0.25 1 0.14 0.86 1 0.36 0.67 0.69 1 P/L CONTRIBUTIONS* LOW VOLATILITY EARNINGS LOW VOLATILITY C/R FOCUS ON U-L & WM LOW VOLATILITY C/R PBT 2010-17 • Geographical diversification • Geographical di
Slide 12: Steady Development of Profit before Taxes
Sampo Group ― Nordic Financial Group with Strong Brands Steady Development of Profit before Taxes • If P&C • If P&C • If P&C • Mandatum Life • Topdanmark / Associated • Topdanmark • Nordea / Investment • Mandatum Life • Mandatum Life • Nordea / Associated • Nordea / Associated EURm 2,600 2,482 ** Q1
Slide 13: Investment Allocation
Sampo Group ― Nordic Financial Group with Strong Brands Investment Allocation Total Group (MEUR) 26,524 25,286 27,111 14,000 12,192 11,459 11,647 12,000 10,000 8,000 6,991 6,582 6,263 5,816 5,944 6,008 6,000 4,000 2,465 1,933 1,620 2,000 0 P&C P&C P&C Mandatum Mandatum Mandatum Topdanmark Topdanmark
Slide 14: Sampo Group’s FICO Solvency March 31, 2018
Sampo Group ― Nordic Financial Group with Strong Brands Sampo Group’s FICO Solvency March 31, 2018 Group solvency ratio 146% EURm 12,000 10,000 8,000 3,701 6,000 10,842 4,000 7,443 264 536 1,047 2,000 1,895 0 If P&C* Mandatum Topdanmark* Sampo plc* Sampo plc's Total minimum Group’s Life** share of r
Slide 15: Sampo Group Solvency by Solvency II Rules March 31, 2018
Sampo Group ― Nordic Financial Group with Strong Brands Sampo Group Solvency by Solvency II Rules March 31, 2018 Ratio of eligible Own Funds to Group SCR 146% EURm 12,000 10,000 8,000 6,000 3,702 10,763 7,394 4,000 2,000 3,692 0 Consolidated Nordea and Group SCR Group’s own funds Group SCR* Other fi
Slide 16: If P&C A Pan-Nordic Diversified P&C Insurer
If P&C A Pan-Nordic Diversified P&C Insurer 16
Slide 17: Diversified Client Base
If P&C – Diversified Nordic P&C Insurer Diversified Client Base 1-3/2018 By Business Area By Country 3% 3% Norway 10% 17% Private 29% Sweden Gross Written Premiums 41% Commercial Finland EURm 1,621 Industrial 29% Denmark Baltic Baltic 39% 29% 3% 3% 3% 2% 3% Norway 6% Private 26% Sweden Technical Res
Slide 18: Disciplined Underwriting and Diversification
If P&C – Diversified Nordic P&C Insurer Disciplined Underwriting and Diversification If P&C and BA Combined Ratios and deviation Expense ratio 2017, % 12 CR % Standard deviation Finland Topdanmark 16.1 10 Denmark If P&C 16.4 Q1/2008-Q1/2018 Industrial Norway Nordic market excl. If (-16) 17.2 8 Balti
Slide 19: Conservative Investment Portfolio
If P&C – Diversified Nordic P&C Insurer Conservative Investment Portfolio Investment Allocation Mark-to-Market Investment Return 8% 7.4% Total EURbn 11.6 6.1% Q1/2018 Q1/2017 6% 5.0% % -0.1 1.5 Real Estate 4.1% Private Equity 0.2 % 0.2 % 4% 2.9% 2.6% Other 0.0 % 1.8% Equities 2% 1.5% Money 11% Marke
Slide 20: Seasonality in Quarterly Results and CR%
If P&C – Diversified Nordic P&C Insurer Seasonality in Quarterly Results and CR% EURm 350 300 250 200 Investment result 150 Technical result 100 Operating result 50 0 Q4 Q3 Q2 Q1 Average Quarterly CR%, 2008-2017 88.8 88.1 87.3 90.9 Year 2017 CR% 83.6 84.8 85.7 87.4 Year 2018 CR% 86.5 20
Slide 21: If P&C Solvency March 31, 2018
If P&C – Diversified Nordic P&C Insurer If P&C Solvency March 31, 2018 Standard Formula Solvency Ratio 214% Internally assessed Solvency ratio 293% EURm EURm 4,000 4,000 3,500 3,500 S&P TTC for A rating 3,046 EURm S&P TTC for A rating 3,046 EURm 3,000 3,000 2,500 133 2,500 495 4,063 4,063 1,089 2,00
Slide 22: Topdanmark A Danish Non-life and Life Insurer
Topdanmark A Danish Non-life and Life Insurer 22
Slide 23: Diversified business model
Topdanmark – Danish P&C and Life Insurer Diversified business model 1-3/2018 Pre-tax profit, DKKm 344 Premiums earned, DKKm 4,682 3% 13% Non-life insurance, Personal Non-life insurance 27% 32% Life insurance Non-life insurance, SME Parent company Life insurance, regular 22% 84% 19% Life insurance, s
Slide 24: Non-life insurance
Topdanmark – Danish P&C and Life Insurer Non-life insurance Technical result by Business Line, DKKm 336 Combined Ratio by Business Line, % % Personal SME 100 86.2 85.2 82.3 84.0 86.4 87.4 85.0 81.5 88.3 83.8 80 16.3 16.7 17 15.4 16 17.7 17.7 16.2 17.1 16 60 49% 51% 40 Personal 70 68.5 66.1 66.9 69.4
Slide 25: Life insurance
Topdanmark – Danish P&C and Life Insurer Life insurance Result by components, DKKm 44 Gross Premiums (Regular and Single), DKKm 2,409 DKKm 50 Regular premiums,DKKm 881 Single premiums DKKm 1,528 Individual policies, single 11% 21% Individual policies, regular 25 37 44 -10 22% 3% Policies, part of a
Slide 26: Topdanmark Solvency March 31, 2018
Topdanmark – Danish P&C and Life insurer Topdanmark Solvency March 31, 2018 Standard Model Solvency ratio 168% EURm used in Sampo Group SCR calculations Partial Internal Model Solvency ratio 204% 1,500 EURm as reported by Topdanmark, Net figures 402 1,000 1,000 592 71 40 414 95 500 900 743 536 0 900
Slide 27: Mandatum Life A Finnish Financial Services Company
Mandatum Life A Finnish Financial Services Company 27
Slide 28: Mandatum Life Business Volumes
Mandatum Life - A Finnish Financial Services Company Mandatum Life Business Volumes 1-3/2018 Technical Provisions, EURm 11,398 1 With-Profit EURm EURm 38 6 34 31 12,000 4 Unit-linked Guaranteed interest rates 34 U-L 10,000 Premiums Written EURm 206 7,066 6,440 6,907 5,858 5,312 EURm 244 8,000 4,616
Slide 29: Investment Portfolio covering With-Profit liabilities
Mandatum Life - A Finnish Financial Services Company Investment Portfolio covering With-Profit liabilities Investment Allocation Mark-to-Market Investment Return 15% Asset Allocation 31.3.2018, 6 008 EURm Q1/2018 Q1/2017 11.1% % -0.7 2.3 Commodities Other Trading 9.4% 0% Alternative Derivatives 10%
Slide 30: Mandatum Life Profit by Components
Mandatum Life - A Finnish Financial Services Company Mandatum Life Profit by Components EURm 1-3/2018 1-3/2017 Net investment income -18.7 309.2 - Transferred to expense result -6.5 -6.9 - Return on Unit-linked policies 90.3 -212.5 - Return on With-profit policies* -5.7 -46.7 INVESTMENT RESULT 59.4
Slide 31: Mandatum Life Solvency with transitional measures, March 31, 2018
Mandatum Life - A Finnish Financial Services Company Mandatum Life Solvency with transitional measures, March 31, 2018 EURm SF with transitional measures Solvency ratio 186% 2,500 2,000 1,500 375 276 38 130 62 262 1,000 * 1,947 1,239 500 1,047 262 0 * Own Funds without transitional measures EUR 1,55
Slide 32: Nordea Bank The Largest Nordic Financial Services Group
Nordea Bank The Largest Nordic Financial Services Group 32
Slide 33: Nordea - The most diversified Nordic bank
Nordea - The most diversified Nordic bank Nordea 1-3/2018 Operating profit breakdown Diversified sources of Profit EURm EURm 3,000 2,315 2,500 84 51 2,000 454 2,000 441 1,205 1,500 472 770 1,070 1,000 2,315 40 536 37 1,000 241 1,053 1,070 820 204 500 769 267 0 321 0 Operating Income Operating Profit
Slide 34: Sampo plc Parent Company with Capacity to Generate Funds
Sampo plc Parent Company with Capacity to Generate Funds 34
Slide 35: Simple Cash Flows, low leverage and adequate liquidity
Sampo plc - Parent Company with Capacity to Generate Funds Simple Cash Flows, low leverage and adequate liquidity Flow of Funds Balance Sheet, EURm Dividends Income Assets 12,091 Liabilities 12,091 • If P&C • Interest on Liquidity Liquidity 1,922 CPs Issued 232 • Mandatum Life • Income from other •
Slide 36: Cash and tradable financial investments 31.3.2018
Sampo plc - Parent Company with Capacity to Generate Funds Cash and tradable financial investments 31.3.2018 million Market Value/ Running Yield,% Call Date Instrument Nominal Cash EUR 1,922 Investment Assets EUR 369 Sub-Ordinated Loans EUR 485 5.10 - Mandatum Life T1 Perpetual EUR 100 4.42 Annual -
Slide 37: Sampo plc ‒ Sources and Uses of Funds until year end 2018
Sampo plc - Parent Company with Capacity to Generate Funds Sampo plc ‒ Sources and Uses of Funds / Until year end 2018 EURm EURm Cash balance (as of 31.3.2018) 1,922 Sources Uses SEK Bond Issuance 190 SEK Bond repayment 190 Sampo dividend 1,444 If dividends 600 Saxo Bank 265 Repayment of CPs 232 Tot
Slide 38: Sampo Group ― Conservative Leverage
Sampo plc - Parent Company with Capacity to Generate Funds Sampo Group ― Conservative Leverage EURm 16,000 40% Sampo plc Net debt Net debt/NAV 14,000 35% Group NAV 12,000 Group Equity 30% 10,000 8,000 25% 6,000 20% 4,000 15% 2,000 10% 0 -2,000 5% -4,000 0% Q1/05 Q1/06 Q1/07 Q1/08 Q1/09 Q1/10 Q1/11 Q
Slide 39: Dividends Received by Payment Year
Sampo plc - Parent Company with Capacity to Generate Funds Dividends Received by Payment Year EURm Topdanmark 1,600 1,555 Nordea 1,452 1,400 Mandatum Life 1,220 551 1,200 If P&C Extra Dividend 557 1,067 1,000 If P&C 883 533 125 756 370 744 768 800 107 293 293 * 275 568 204 250 224 100 100 600 511 80
Slide 40: Reported Profit facilitates Debt Servicing
Sampo plc - Parent Company with Capacity to Generate Funds Reported Profit facilitates Debt Servicing EURm 2010 2011 2012 2013 2014 2015 2016 2017 Q1/2018 Dividend 747 762 * 773 879 1,069 1,226 1,567 1,453 737 income* Operating -8 -10 -17 -20 -18 -14 -17 -14 -3 expenses Net financial -37 -70 -20 -26
Slide 41: Issued Debt Instruments
Sampo plc - Parent Company with Capacity to Generate Funds Issued Debt Instruments Effective Instrument & Principal Coupon Swap Maturity Rate CPs issued EURm 232 Euribor + Margin 0.2500% Average 3M Senior Bond SEKm 2,000 (EMTN) Stibor3M + 1.45% Euribor3M+1.375% 1.0470% 29.05.2018 Senior Bond EURm 50
Slide 42: Appendix Separate Supplementary Information
Appendix Separate Supplementary Information 42
Slide 43: Sampo Group’s Outlook for the rest of 2018
Appendix – Separate Supplementary Information Sampo Group’s Outlook for the rest of 2018 Sampo Group’s business areas are expected to report good operating results for 2018. However, the mark-to-market results are, particularly in life insurance, highly dependent on capital market developments. The
Slide 44: Sampo Group Steering Model and Principles
Appendix – Separate Supplementary Information Sampo Group Steering Model and Principles • Four separate and independent business areas and Sampo plc an active owner • General Principles of Business activities • Straightforward and transparent legal structure combined with limited intragroup exposure
Slide 45: Calculation Principles of Sampo Group Solvency
Appendix – Separate Supplementary Information Calculation Principles of Sampo Group Solvency • Group Solvency Capital • Under FICOD rules, capital is Group equity with some additional items added or deducted (subordinated loans, deferred tax assets, planned dividends…) • Under SII rules capital – re
Slide 46: Structural changes of Sampo Group to the leading Nordic financial group
Appendix – Separate Supplementary Information Structural changes of Sampo Group to the position as the leading Nordic financial group 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Sampo’s ownership exceeds 36% and Sampo Group’s (If P&C’s) Mandatum Lif
Slide 47: If P&C Reinsurance Programmes
Appendix – Separate Supplementary Information If P&C Reinsurance Programmes If is using reinsurance to ‒ Utilize its own capital base efficiently and reduce cost of capital ‒ Limit large fluctuations of underwriting results ‒ Get access to reinsurers’ competence base If has the following Reinsurance
Slide 48: Nordic P&C Insurance Market
Appendix – Separate Supplementary Information Nordic P&C Insurance Market Nordic Market Shares, % If P&C and Topdanmark P&C Market Shares by Country, % If + If Finland 23 Other Topdanmark 23% 25% If If Norway 21 18% Topdanmark If Sweden 18 LähiTapiola 5% 4% Tryg If Denmark + 6 17 OP 9% Topdanmark 6%
Slide 49: Life insurance Market
Appendix – Separate Supplementary Information Life insurance Market Finland ‒ Market Shares, % Mandatum Life and Topdanmark Life Market Shares by Country, % Aktia Other Sp- Baltics/ 2% 4% 7 Henkivakuutus Mandatum Life Nordea 3% Fennia 31% 5% LähiTapiola 9% Danmark/ 9 Topdanmark Life OP Life 22% Mand
Slide 50: Sampo Group ‒ Legal Supervision Structure
Appendix – Separate Supplementary Information Sampo Group ‒ Legal Supervision Structure SAMPO FICO GROUP SAMPO SII GROUP Sampo plc (FI) IF If P&C Insurance MANDATUM Mandatum Life TOPDANMARK Topdanmark A/S NORDEA INSURANCE INSURANCE INSURANCE BANKING Nordea Bank AB Holding Ltd (SE) Ltd (FI) (DK) 49.3
Slide 51: Debt Investor Presentation
Debt Investor Presentation JANUARY – MARCH 2018