Mandatum Oyj · OMXHEX:MANTA
Mandatum Oyj — Investor Day (August 2024)
29 slides from Mandatum Oyj's investor day presentation, Aug 20, 2024
Slide 1: Mandatum Analyst Day
Mandatum Analyst Day Helsinki, 20 August 2024
Slide 2: Capital-light business as the spearhead of the strategy
Capital-light business as the spearhead of the strategy Petri Niemisvirta, CEO
Slide 3: Focus on fee-generative products and run-off of the with-profit book
Focus on fee-generative products and run-off of the with-profit book AuM (EUR bn); 30 Jun 2024 13.0 Capital-light Retail Retail 3.5 With-profit Institutional & Corporate Retail Wealth Management Corporate 2.5 Corporate Unit-linked liabilities (EUR bn) With-profit liabilities (EUR bn) +138% -55% 12.6
Slide 4: Leading market position in Finland
Leading market position in Finland Significant market share gains in Finnish market offering attractive fundamentals and further growth opportunities MARKET OVERVIEW MARKET CHARACTERISTICS Insurance savings CAGR (2008 - 2023)1 AuM CAGR (2008 - 2023)2 • Robust growth across insurance and asset & weal
Slide 5: Value proposition makes Mandatum go-to partner for corporates
Value proposition makes Mandatum go-to partner for corporates Extensive value proposition for Corporate customers reflected in high customer satisfaction and sticky asset base Product and service offering - Medium & large companies Corporate net promoter score >50 employees ~5,000 companies in focus
Slide 6: 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 7: 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 8: Growth opportunities in Institutional and Wealth Management business
Growth opportunities in Institutional and Wealth Management business Lauri Vaittinen, CEO, Mandatum Asset Management
Slide 9: Top ranked asset and wealth manager in Finland
Top ranked asset and wealth manager in Finland MANDATUM RANKED SECOND BEST INSTITUTIONAL ASSET MANAGER CUSTOMER RECOGNITION (SFR Research 2023) IN FINLAND (SFR Research 2023) INSTITUTIONAL ASSET MANAGEMENT Service Performance: Average of all criteria among large service providers 4.2 #1 4.0 Expected
Slide 10: Comprehensive product offering across core investment areas
Comprehensive product offering across core investment areas Industry leading expertise and state-of-the art investment platform stemming from prior own balance sheet investing Extensive expertise across alternatives built on Core focus heritage of balance sheet investing Credit Alternatives Others O
Slide 11: Mandatum Asset Management (MAM) Credit Strategies
Mandatum Asset Management (MAM) Credit Strategies MAM credit strategies YTD 2024 performance and European credit market aggregates MAM Credit Strategies UI-MAM Senior European European European Senior Loan Opportunistic Nordic High Fixed Income YTD 7/2024 Secured Loan Leveraged High Yield Investment
Slide 12: Floating-rate as well as low and actively managed duration fixed-rate investments have performed well
Floating-rate as well as low and actively managed duration fixed-rate investments have performed well Mandatum credit strategies RETURNS FROM EUR GOV. AND CORPORATE BONDS, AND MANDATUM'S CREDIT PRODUCTS (31.7.2024) (Total return; 1/2022-7/2024; %; indexed) Total return 2024 120 YTD 2023 1/22 -> Euro
Slide 13: Significant growth opportunity in the Nordics in I&WM
Significant growth opportunity in the Nordics in I&WM Potential to expand institutional client base across the Nordics by leveraging established investment platform NORDIC GROWTH TRACK RECORD POTENTIAL ADDRESSABLE MARKET Growth track record Finland • Established market presence €1.8bn 10 +49% Prod
Slide 14: Update on financials
Update on financials Matti Ahokas, CFO
Slide 15: 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 2.6 444% 17.9 Result related to risk policies -5.9 -7.0 17% -6.3 -5.4 -
Slide 16: Peer group net flows Q4 23- Q2 24
Peer group net flows Q4 23- Q2 24 Mandatum’s relative net flows higher and more stable than the peer group Quarterly AuM net flow (EURm) Annualised AuM quarterly net flow (%) 500 10% 400 8% 300 6% 200 4% 100 2% 0 Mandatum Evli Nordea Aktia OP S-Bank 0% -100 Mandatum Evli Nordea Aktia OP S-Bank -200
Slide 17: Asset de-risking since 2022 means improved profit stability
Asset de-risking since 2022 means improved profit stability 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 resul
Slide 18: 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 19: P&L items impacted by IFRS 17
P&L items impacted by IFRS 17 Segment result 1-6/2024 IFRS 17 These items are calculated and reported based on IFRS 17 accounting rules: ▪ Unit-linked Fee result consists of two parts. Insurance service result for unit-linked pensions policies sold before 2023. ▪ Result for risk policies for all the
Slide 20: Contractual Service Margin
Contractual Service Margin Income booked in the balance sheet ▪ Contractual Service Margin (CSM) represents how much profit is expected to be realized from group of contracts. • CSM is calculated at the inception of policies based on expected future cash flows and acquisition costs related to sales
Slide 21: Asset allocation and SCR - With-profit investments
Asset allocation and SCR - With-profit investments Asset allocation ORIGINAL PORTFOLIO ▪ Equals what internally used and ASSET ALLOCATION RISK ALLOCATION disclosed in supplementary package AUM EUR 3,286 m MARKET RISK SCR EUR 538m Risk allocation ▪ Based on market risk SCR ▪ Does not include any dive
Slide 22: Net finance result explained
Net finance result explained Jukka Kurki, CEO, Mandatum Life
Slide 23: Net finance result = Asset return minus cost of liabilities
Net finance result = Asset return minus cost of liabilities Q2/2024 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 ▪ Share of fixed in
Slide 24: Cost of liabilities = unwinding + discount rate movement
Cost of liabilities 1 = unwinding + discount rate movement Discount rate movement SENSITIVITY BY MATURITY BUCKETS, RATES DOWN 100BPS COMMENTS 0-5yr 5-10yr 10-15yr 15-20yr 20yr+ Total • Liability is based on IFRS discount 50 rate 29 • Discount rate is swap rate + 28 19 illiquidity premium based on BB
Slide 25: Cost of liabilities = unwinding + discount rate movement
Cost of liabilities = unwinding + discount rate movement Unwinding cost UNWINDING COST IFRS DISCOUNT CURVE • Unwinding cost = unwinding rate times IFRS liability • Unwinding rate is locked for 12 months period in 1st January. • Rate equals to 1 Y rate based on discount curve. For year 2024 rate is 3
Slide 26: Expected unwinding cost in a longer term
Expected unwinding cost in a longer term UNWINDING RATE WITH-PROFIT IFRS LIABILITES (EURm) • Natural estimate for expected unwinding rate is 1Y Actual Forecast forward rate starting at 1st of Jan each year. 2,426 2,268 2,205 • Mandatum’s estimate for expected IFRS liabilities is 632 2,015 1,830 608
Slide 27: Net Finance result (wp segment)
Net Finance result (wp segment) Investment return (%) 1 1.8% 1.2% 0.5% 4.1% 0.9% 0.7% 70 4.00% 3.80% 60 3.72% ▪ De-risking decreased 3.60% volatility since year 2022 50 3.40% 3.30% 3.35% ▪ Avg EUR 35 million result 40 3.22% 3.20% per quarter 65 3.00% 3.00% ▪ Impact of discount rate 30 2.88% 2.80% mo
Slide 28: Asset return
Asset return ORIGINAL PORTFOLIO, EUR 3,236 m SEGREGATED PORTFOLIO, EUR 674 m Original Portfolio ▪ Money market weight increased representing 23.2% share of fixed 7% 3% 2% income assets (16.6% in Q1) 9% ▪ Fixed income asset mark-to-market yield at 5.3% (5.3% in Q1) 3% ▪ Share of alternatives 19%. Exi
Slide 29: Investor contacts
Investor contacts: Lotta Borgström VP, Investor Relations Tel. +358 50 022 1027 lotta.borgstrom@mandatum.fi Mandatum Bulevardi 56, 00120 Helsinki www.mandatum.fi