Slide 1: Mandatum Group Result presentation Q2 2024
Mandatum Group Result presentation Q2 2024 13 August 2024
Slide 2: April–June 2024
April–June 2024 ▪ Profit before tax increased to EUR 75.8 million. All result areas contributed to the growth ▪ Fee result up by 18% to EUR 14.7 million ▪ Client AuM increased by 16% to EUR 13.0 billion due to continued positive net flow and positive asset returns ▪ Net flow EUR 232 million correspo
Slide 3: Mandatum's financial targets
Mandatum’s financial targets TARGET 4–6/2024 (1–3/2024) Annual net flows2 Net flow EUR 232 million, 8% of Client AuM (medium-term) (annualised) 5% of AuM Focus on strong and profitable growth of capital-light offering1 Disciplined Fee margin 1.2 (1.2)% Pricing and fee margin Improving Cost/income ra
Slide 4: Financial performance
Financial performance
Slide 5: Overview of the 4–6/2024 results
Overview of the 4–6/2024 results RESULTS 4–6/2024 4–6/2023 Change % 1–6/2024 . 1–6/2023 Change % 1–12/2023 EURm 14.7 12.4 18% 29.9 26.4 13% 52.6 Fee result 55.1 43.1 28% 85.0 56.6 50% 148.6 Net finance result 11.9 -0.3 n.m. 14.1 2.6 n.m. 17.9 Result related to risk policies -5.9 -7.0 17% -6.3 -5.4 -
Slide 6: Profit increase driven by a higher net finance and fee result
Profit increase driven by a higher net finance and fee result PROFIT BEFORE TAXES (EURm) FEE RESULT (EURm) NET FINANCE RESULT (EURm) 122.7 14.7 55.1 12.4 43.1 80.2 75.8 48.2 1-6/2023 1-6/2024 4-6/2023 4-6/2024 4-6/2023 4-6/2024 4-6/2023 4-6/2024 ▪ PBT up 57% to EUR 76 million ▪ Fee result up 18% sup
Slide 7: Quarterly results since Q1/22
Quarterly results since Q1/22 100 84 80 76 63 60 56 48 46 47 40 32 20 0 -20 -21 -22 -40 1-3/2022 4-6/2022 7-9/2022 10-12/2022 1-3/2023 4-6/2023 7-9/2023 10-12/2023 1-3/2024 4-6/2024 EURm 1–3/22 4–6/22 7–9/22 10–12/22 1–3/23 4–6/23 7–9/23 10–12/23 1–3/24 4–6/24 Fee result 10 8 19 6 14 12 13 13 15 15
Slide 8: Capital-light segments
Capital-light segments
Slide 9: Q2 net flow 8% exceeding the 5% target
Q2 net flow 8%* exceeding the 5% target NET FLOW (EURm) CLIENT ASSETS UNDER MANAGEMENT (EURbn) Net flow Annualised net flow % of BoP AuM 350 18% Institutional & WM Corporate Retail 16% 13.0 300 291 12.5 11.9 14% 11.2 11.2 251 246 10.8 250 10.3 3.5 232 3.4 12% 3.2 210 3.1 3.1 199 3.1 200 10% 3.0 2.5
Slide 10: Client AuM up 16% y/y and net flow positive in all segments
Client AuM up 16% y/y and net flow positive in all segments CLIENT ASSETS UNDER MANAGEMENT (EURbn) NET FLOW DEVELOPMENT (EURm) Institutional & WM Corporate Retail 1-6/2024 11 0.7% 13.0 Retail Growth y/y 11.2 1-6/2023 -26 -1.8% 3.5 10% 3.1 1-6/2024 6.0% Corporate 68 2.5 14% 2.2 1-6/2023 69 6.9% 7.0 1
Slide 11: Institutional & Wealth management as a growth driver
Institutional & Wealth management as a growth driver AUM BY CUSTOMER SEGMENT AUM BY PRODUCT (EURm) COMMENTS (EURm) Institution Finland Institution Int. Credit Equity Asset allocation UHNW Private WM Alternative investments • Positive net flows and good AuM External products growth in all customer se
Slide 12: Fee income up - fee margin unchanged
Fee income up - fee margin unchanged FEE INCOME (EURm) 1 FEE INCOME MARGIN (%) 2 COMMENTS • Fee income increased by 12.4% 75.8 due to EUR 1.4 billion higher 67.4 1.2% 1.2% average AuM • Net flow and AuM growth mainly from credit and asset allocation products • Fee margin unchanged at 1.2% 1-6/2023 1
Slide 13: Decreasing cost-income ratio
Decreasing cost-income ratio CLIENT AUM COSTS (EURm) CLIENT AUM C/I RATIO (%) 1 COMMENTS 46.6 44.1 ▪ Costs related to client AuM 71% increased by 5.6% 64% ▪ Cost increase mostly due to FTE growth ▪ Fees growing faster than costs → 12 months C/I-ratio down by 7 p.p. 1-6/2023 1-6/2024 1-6/2023 1-6/202
Slide 14: With-profit segment
With-profit segment
Slide 15: With-profit segment: Net finance result
With-profit segment: Net finance result INVESTMENT RETURNS (EURm) COST OF LIABILITIES I.E. NET FINANCE RESULT (EURm) Investment UNWINDING & DISCOUNT (EURm) 1.2% 0.7% return (%) 1 47 14 42 42 28 = -6 4-6/2023 4-6/2024 4-6/2023 4-6/2024 4-6/2023 4-6/2024 ▪ Investment return 0.7% (1.2%) ▪ Increased dis
Slide 16: Higher discount rate for with-profit IFRS liabilities
Higher discount rate for with-profit IFRS liabilities IFRS 17 DISCOUNT CURVE WITH-PROFIT IFRS LIABILITES (EURm) • The discount curve increased in H1 which decreased with-profit liabilities by EUR 41 million and EUR 28m in Q2 Actual Forecast • Unwinding rate 3.4% for year 2024 and 2,426 expected full
Slide 17: With-profit investment portfolio by asset class
With-profit investment portfolio by asset class ORIGINAL PORTFOLIO, EUR 3,236 m SEGREGATED PORTFOLIO, EUR 674 m Original Portfolio ▪ No major changes in asset allocation – fixed income weight 74% of the 7% 3% 2% portfolio 9% ▪ Money market weight increased representing 23.2% share of fixed 3% income
Slide 18: IFRS Liability and asset sensitivity (original portfolio)
IFRS Liability and asset sensitivity (original portfolio) Assets and liabilities are managed by alignment of assets and active management actions SENSITIVITY BY MATURITY BUCKETS, RATES DOWN 100BPS COMMENTS Hedging 150% 90% • Interest rate risk related to first eight 79% 42% 0% 76% ratio years of lia
Slide 19: Solvency and capital generation
Solvency and capital generation
Slide 20: Underlying Solvency II ratio improved during quarter
Underlying Solvency II ratio improved during quarter QUARTERLY SOLVENCY POSITION (EURm) SOLVENCY II RATIO SENSITIVITY Base 233% Own funds SCR Solvency II ratio Equity 250% markets (20)% 266% 284% 296% 317% 237% 221% 221% 233% 224% Interest 224% 2,532 2,498 rates (100)bps 2,378 2,412 2,198 2,200 2,25
Slide 21: Own funds increased q/q exceeding dividend accrual
Own funds increased q/q exceeding dividend accrual BREAKDOWN OF OWN FUNDS (EURm) Solvency II ratio COMMENTS 224% ▪ Own funds increased by EUR 56 million during Q2, exceeding dividend accrual based on FY2023 dividend level ▪ Market risk, and especially equity risk is the most significant risk SCR ele
Slide 22: Organic capital generation exceeding net profit growth
Organic capital generation exceeding net profit growth COMPONENTS OF ORGANIC CAPITAL GENERATION, SEGMENTAL CONTRIBUTION, H1 24 (EURm) H1 24 (EURm) With-profit SCR At 200% reduction was offset Solvency II ratio by Unit-linked policies SCR increase caused by higher than expected AUM’s and methodology
Slide 23: Key drivers of capital generation (1–6/2024)
Key drivers of capital generation (1–6/2024) KEY DRIVERS Organic capital generation • Own funds: Stable growth of fee result and strong net finance result • SCR: Predictable, continuous run-off of with-profit liabilities. However, this was offset by increase of capital-light Solvency business due to
Slide 24: Outlook
Outlook
Slide 25: Outlook for year 2024 (unchanged)
Outlook for year 2024 (unchanged) ▪ The fee result is expected to increase from year 2023 provided that the market environment remains stable. While Mandatum has been able to maintain disciplined pricing and stable fee margins within capital-light customer segments during years 2022 and 2023, the fe
Slide 26: Appendix
Appendix Supporting materials
Slide 27: Result by segments
Result by segments RESULTS 1–6/2024 . EURm Institutional Corporate Retail With Profit Other Total 1–6/2023 Fee result 12 10 8 0 0 30 26 Insurance service result 0 10 5 0 0 15 15 Fee result from investment and asset management services 12 1 3 0 0 15 11 Net finance result 0 0 0 72 13 85 57 Investment
Slide 28: Development of policy savings (original portfolio)
Development of policy savings1 (original portfolio) WITH-PROFIT POLICY SAVINGS 2019–Q2/2024 (EURm) COMMENTS 3.000 ▪ With-profit portfolios decreased in 2.500 line with expectations 422 ▪ Policy savings with highest (3.5% 400 2.000 374 and 4.5%) guarantees down YTD by 360 EUR 79 million and EUR 44 mi
Slide 29: Sustainability at Mandatum
Sustainability at Mandatum Q2 SUSTAINABILITY HIGHLIGHTS ✓ Mandatum joined the international Net Zero ✓ Mandatum Group’s Responsible Asset Managers (NZAM) initiative and Investment Review and Responsible committed to support the goal of net-zero Real Estate Investment Review were greenhouse gas emiss
Slide 30: CSM development – 1–6/2024
CSM development – 1–6/2024 CSM DEVELOPMENT (1-6/2024; EURm) CSM SENSITIVITY (6/2024; EURm) Discount rate (100)bps -9 3 3 2 2 Discount rate +100bps 10 Equity markets (20)% -59 Equity markets +20% 59 2/2023 ew business CSM Accreted interest xperience variance Assumption changes CSM release /202 Credit
Slide 31: Investor contacts
Investor contacts: Lotta Borgström Vice President, Investor Relations Tel. +358 50 022 1027 lotta.borgstrom@mandatum.fi Mandatum Bulevardi 56, 00120 Helsinki www.mandatum.fi