Sampo Oyj · OMXHEX:SAMPO
Sampo Oyj — Debt Investor Presentation (February 2016)
57 slides from Sampo Oyj's debt investor presentation, Feb 10, 2016
Slide 1: Sampo Group Debt Investor Presentation
Sampo Group Debt Investor Presentation Prepared February 10, 2016 Figures December 31, 2015
Slide 2: Debt Investor Contacts and Financial Calendar 2016
DEBT INVESTOR CONTACTS FINANCIAL CALENDAR 2016 Markku Pehkonen, CRO 10/02/2016 Financial Statement Release for 2015 tel. +358 10 516 0014 Silent period 13/01/2016-10/02/2016 markku.pehkonen@sampo.fi Week 11 Annual Report 2015 21/04/2016 AGM Peter Johansson, CFO 11/05/2016 Interim Statement Q1/2016 t
Slide 3: Agenda
Sampo Group Basic Facts 3-10 If P&C The Leading Nordic P&C Insurer 11-19 Mandatum Life A Finish Financial Services Company 20-28 Sampo Group A Productive Value Creator 29-36 Sampo plc The Listed Parent Company – A Stable Dividend Payer 37-43 Appendix 44-57 3
Slide 4: Sampo: The Leading Nordic Financial Institution
Sampo Group ― Basic Facts Sampo ― The Leading Nordic Financial Institution A Mixed Financial Conglomerate Strong relative performance Market cap January 29, 2016, EURbn 10Y Total Shareholder Return 0 10 20 30 40 Nordea 37.5 Danske 25.0 Sampo 24.8 >21% Swedbank 21.9 SHB 21.6 DnB 18.0 Investor 14.0 Gj
Slide 5: Nordic Financial Group with Strong Brands
Sampo Group ― Basic Facts Nordic Financial Group with Strong Brands • Listed company Sampo plc • Long-term investor • Manager of capital structure and liquidity • Pay-out ratio ≥ 50% 100% 21.2% 100% > 30% • The largest financial • Market leader in corporate MARKET • The leading P&C insurer • The sec
Slide 6: Sampo Group Steering Model and Principles
Sampo Group ― Basic Facts Sampo Group Steering Model and Principles • Non-complex structures and only minor contagion risks – three separate and independent business areas – straightforward and transparent legal structure combined with limited intragroup exposures • General Principles of Business ac
Slide 7: Well-established Insurance Subsidiaries
Sampo Group ― Basic Facts Well-established Insurance Subsidiaries If P&C ― Well-diversified and Mandatum Life ― Respected Finnish Expert Profitable Pan-Nordic in Wealth Management, Rewards Non-life Insurer and Risk Insurance • If P&C provides insurance • Provides a comprehensive range solutions and
Slide 8: Diversified and Most Stable Nordic Bank
Sampo Group ― Basic Facts Diversified and Most Stable Nordic Bank • Pan-Nordic platform with scalability • Simplification • Digitalisation • Superior Nordic distribution power • Cost efficiency • Capital efficiency • Efficiency initiatives • Strong capital generation • Stable returns • Low risk prof
Slide 9: Danish Insurer with a Robust Business Model
Sampo Group ― Basic Facts Danish Insurer with a Robust Business Model 9
Slide 10: Group Strategy: Value Creation in Nordic Financials
Sampo Group ― Basic Facts Group Strategy ‒ Value Creation in Nordic Financials LONG-TERM • Value creation through investments in Nordic financials based on knowledge of VALUE CREATION Nordic markets, Nordic financial institutions & Nordic people. • Commitment to the long-term development of affiliat
Slide 11: Agenda
Sampo Group Basic Facts 3-10 If P&C The Leading Nordic P&C Insurer 11-19 Mandatum Life A Finnish Financial Services Company 20-28 Sampo Group A Productive Value Creator 29-36 Sampo plc The Listed Parent Company – A Stable Dividend Payer 37-43 Appendix 44-57 11
Slide 12: Leading Nordic P&C Insurer with Synergies
If P&C Leading Nordic P&C Insurer with Synergies Market Shares by Country Nordic Market shares Total GWP ~EUR 25bn Norway 2015 Other, 27 If, 18 Topdanmark, Gjensidige 25% 5 If 22% Finland 2014 Tryg 14% Pohjola 32% LähiTapiola, 4 Tryg, 10 Sparebank 1 10% LähiTapiola 25% Pohjola, 4 If 25% Folksam, 5 G
Slide 13: Nordic P&C Insurance Market
If P&C Nordic P&C Insurance Market CONSOLIDATED • The four largest companies account for 75-90% of the markets in Norway, MARKET Finland and Sweden. In Denmark the market is less consolidated. LOYAL CLIENTS • Renewal rates are around 80-90%. DISTRIBUTION • In addition to traditional channels, the In
Slide 14: Diversification in Sales and Results
If P&C Diversification in Sales and Results Gross Written Premiums, EUR 4,559m By Business Area By Country Baltic, 133, Baltic, 3% Denmark, 133, 3% Industrial, Norway, 395 , 9% 572, 13% 1 432 , Private, 31% 2644, 58% Finland , Commercial, 1 038 , 1210, 26% 23% Sweden, 1 560 , 34% Technical Results,
Slide 15: Disciplined Underwriting and Diversification works
If P&C Disciplined Underwriting and Diversification works Combined Ratio Development Geographical Diversification in CR % 91.8 92.1 92.8 92.0 88.9 88.1 87.7 100 90.5 89.9 90.6 85.4 80 24.3 24.0 23.7 23.7 24.1 23.7 23.5 23.0 22.8 22.5 18.8 60 40 66.2 65.9 66.9 68.1 68.0 69.1 68.4 65.9 65.4 65.1 66.6
Slide 16: Strong & Stable Annual Profit Development
If P&C Strong & Stable Annual Profit Development EURm 1,200 Profit before tax 1,127 Comprehensive income 943 978 960 1,000 929 931 864 800 800 730 707 689 644 636 624 600 534 549 526 400 308 200 0 -200 -267 -400 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 16
Slide 17: Seasonality in Quarterly Results and CR%
If P&C Seasonality in Quarterly Results and CR% EURm Technical result Investment result Operating result 350 300 250 200 150 100 50 0 Q4 Q3 Q2 Q1 Average Quarterly CR%, 2006-2015 89.9 88.6 88.2 93.1 Year 2014 CR% 87.1 86.9 86.5 90.3 17 Year 2015 CR% 87.7 83.8 80.9 89.2
Slide 18: Conservative Investment Portfolio
If P&C Conservative Investment Portfolio Investment Allocation of Total EUR 11.4bn Mark-to-Market Investment Return 14% 12.4% 11% Private Real Estate 9% 7.4% Equity 0.2% 5.8% 6.1% Money 6% 4.3% 4.4% 5.0% 0.2% 4.1% Equities Market 2.6% 13% 12% 4% 1.8% 1.5% 1% Public sector -2% 12% -4% -3.1% Investmen
Slide 19: If P&C Solvency Capital Requirement Dec 31, 2015
If P&C If P&C Solvency Capital Requirement Dec 31, 2015 Standard Formula (SF) Partial Internal Model (PIM) EURm EURm 3,500 3,500 3,000 3,000 2,500 118 2,500 473 211 176 246 2,000 128 2,000 828 992 3,377 3,202 3,058 3,058 176 139 128 1,388 1,500 1,500 2,073 1,000 1,000 1,692 1,378 500 500 757 0 0 19
Slide 20: Agenda
Sampo Group Basic Facts 3-10 If P&C The Leading Nordic P&C Insurer 11-19 Mandatum Life A Finnish Financial Services Company 20-28 Sampo Group A Productive Value Creator 29-36 Sampo plc The Listed Parent Company – A Stable Dividend Payer 37-43 Appendix 44-57 20
Slide 21: Finnish Life Insurer with Wealth Management Focus
Mandatum Life Finnish Life Insurer with Wealth management Focus Client Underlying Critical Success Factors Sales & Client Segment Market Services Corporates Employee Benefit • Expertise in Rewards and Incentives, Mandatum Life Pension & Risk Life Solutions and Asset Management Cross-sales HNWI Wealt
Slide 22: Mandatum Life Business Volumes
Mandatum Life Mandatum Life Business Volumes Premiums Written*, total EUR 1,147m Insurance Savings, total EUR 10,031m 2 18 36 With-Profit 8030 2,101 EUR 177m 65 31 406 U-L With-Profit 3,926 U-L EUR 970m EUR 4,175 EUR 5,856m 1,821 385 147 196 1,779 155 Unit-linked life Unit-linked pension Unit-linked
Slide 23: Market Position by Premiums Written 12/2015
Mandatum Life Market Position by Premiums Written 12/2015, % Market Shares in Finland 51.3 41.4 22.7 17.7 17 11.9 7.3 All Products Unit-Linked With-profit Group Private Corporates Baltics Pension Customers 23
Slide 24: Finnish With-Profit Life Insurance Market
Mandatum Life Finnish With-Profit Life Insurance Market PRINCIPLE • There is no exact rule on profit sharing (e.g. 90%/10%). OF FAIRNESS • In the current markets, the principle is reflected in policyholdersʼ reasonable expectations for total accrual, which is an average annual yield of Finnish gover
Slide 25: Profit Development
Mandatum Life Profit Development Profit before taxes EURm 495 Comprehensive income 500 342 332 295 286 286 250 220 163 149 181 168 140 142 137 136 153 121 80 0 -115 -250 -378 -500 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 25
Slide 26: Mandatum Life Profit by Components
Mandatum Life Mandatum Life Profit by Components EURm 2015 2014 Net investment income 632.0 539.8 - Transferred to expense result -25.0 -22.7 - Return on Unit-linked policies -238.8 -267.3 - Return on With-profit policies* -260.9 -121.2 INVESTMENT RESULT 107.3 128.6 EXPENSE RESULT** 25.0 18.5 RISK R
Slide 27: Absolute Return Investment Portfolio
Mandatum Life Absolute Return Investment Portfolio Investment Allocation of Total EUR 6.7bn Mark-to-Market Investment Return 20% 16.8% Biometric Commodities Other 15% Alternative Trading 12.0% 11.1% 0.3 % 0% 9.7% 9.4% 6% Derivatives Money 10% 8.3% Unlisted Market 7.1% 6.9% 0% 5.0% Equity Securities
Slide 28: Mandatum Life Solvency II Capital Requirement
Mandatum Life Mandatum Life Solvency II Capital Requirement Dec 31, 2015 EURm 2,500 With transitional measures 2,000 * 351 252 1,500 39 91 37 303 1,000 1,913 1,431 1,212 500 0 28 * Own Funds without transitional measures EUR 1,307m LAC = Loss Absorbing Capacity, TP = Technical Provision, DT = Deferr
Slide 29: Agenda
Sampo Group Basic Facts 3-10 If P&C The Leading Nordic P&C Insurer 11-19 Mandatum Life A Finnish Financial Services Company 20-28 Sampo Group A Productive Value Creator 29-36 Sampo plc The Listed Parent Company - A Stable Dividend Payer 37-43 Appendix 44-57 29
Slide 30: Stable Development of Profit before Taxes
Sampo Group ― Results, Capitalisation and Investments Stable Development of Profit before Taxes EURm 4,000 3,833 3,500 * • If P&C • If P&C • If P&C 3,000 • Mandatum Life • Mandatum • Topdanmark / Associated • Sampo Bank Life • Mandatum Life 2,500 • Nordea / • Nordea / Associated Investment 2,000 1,7
Slide 31: Stable Companies & Group Level Diversification
Sampo Group ― Results, Capitalisation and Investments Stable Companies & Group Level Diversification* 1 0.27 1 0.13 0.85 1 P/L CONTRIBUTIONS LOW VOLATILITY EARNINGS LOW VOLATILITY C/R FOCUS IN U-L & WM • Geographical diversification • Geographical diversification • Finland & Baltics • Strong Retail
Slide 32: Group Solvency by Financial Conglomerate Rules
Sampo Group ― Results, Capitalisation and Investments Group Solvency by Financial Conglomerate Rules (1 EURm 12,000 Group solvency ratio 193% / SI rules applied for Insurance Subsidiaries 10,000 8,000 6,000 59 9,599 4,000 3,770 2,000 4,983 269 0 881 If P&C Mandatum Life Sampo plc's Sampo plc Total c
Slide 33: Different Types of Investment Allocations
Sampo Group ― Results, Capitalisation and Investments Different Types of Investment Allocations Total Group (MEUR) 20 211 19 226 18 688 19 373 14 000 11 827 11 778 11 516 12 000 11 395 10 000 8 000 6 716 6 705 6 503 6 667 6 000 4 000 1 667 1 311 2 000 743 669 0 Mandatum Mandatum Mandatum Mandatum Sa
Slide 34: Investments & Counterparty Exposures
Sampo Group ― Results, Capitalisation and Investments Investments & Counterparty Exposures* AA+ - A+ - BBB+ - BB+ - Non Fixed Income Derivatives Change from 31.12.2015 AAA AA- A- BBB- C D Rated Total Equities Other (Counterparty Risk) Total 30.9.2015 Basic Industry - 34 0 38 153 - 64 289 173 - - 461
Slide 35: Fixed Income Investments in the Financial Sector
Sampo Group ― Results, Capitalisation and Investments Fixed Income Investments in the Financial Sector* Covered Money Long-term Long-term bonds market senior debt subord. debt Total % Sweden 1,691 468 947 330 3,436 38% Finland 162 1,898 206 6 2,273 25% Norway 693 586 183 1,462 16% Denmark 218 116 29
Slide 36: Public Sector Fixed Income Investments
Sampo Group ― Results, Capitalisation and Investments Sampo Group Public Sector Fixed Income Investments ― no Periphery* Government Public sector, EURm Government guaranteed other Total Sweden 159 821 981 Norway 234 234 Finland 55 73 127 Germany 11 71 82 Denmark 32 32 Japan 18 18 Russia 1 1 Total 17
Slide 37: Agenda
Sampo Group Basic Facts 3-10 If P&C The Leading Nordic P&C Insurer 11-19 Mandatum Life A Finnish Financial Services Company 20-28 Sampo Group A Productive Value Creator 29-36 Sampo plc The Listed Parent Company – A Stable Dividend Payer 37-43 Appendix 44-57 37
Slide 38: Straightforward Cash Flows & Strong Balance Sheet
Sampo plc Straightforward Cash Flows & Strong Balance Sheet Flow of Funds Balance Sheet Dividends Income Assets EURm 9,606 Liabilities EURm 9,606 • If P&C • Interest on Liquidity Liquidity 739 CPs Issued 305 • Mandatum Life • Income from other • Nordea investments Investment assets 275 LT Senior Deb
Slide 39: Dividends & Reported Profits
Sampo plc Dividends & Reported Profits EURm 1300 1,226 * 1,229 2010 2011 2012 2013 2014 2015 1100 1,069 1,050 879 900 832 747 762 773 737 702 683 700 500 300 100 17 -100 -8 -10 -17 -20 -18 -14 -37 -20 -26 -1 -70 Dividend income Operating expenses Net financial Profit before taxes expenses 39 * Paren
Slide 40: Dividends Received by Payment Year
Sampo plc Dividends Received by Payment Year EURm 1,600 Low Net Debt vs. Stable Dividend Inflows 1,406 1,400 75 1,220 1,200 300 1,067 1,000 883 533 756 768 370 800 754 744 35 293 676 200 568 204 250 224 100 100 600 490 511 1,031 80 100 141 130 100 400 551 100 200 597 600 519 488 540 544 490 200 406
Slide 41: Sampo Group: Conservative Leverage
Sampo plc 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 25% 8,000 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 Q1/12 Q1/13 Q1/14 Q1/15 Q1/16 Q1/09 Q1/11 Q1/05 Q1
Slide 42: Sampo plc Debt Instruments
Sampo plc Sampo plc Debt Instruments Effective Instrument & Principal Coupon Swap Maturity Rate Senior Bond 300 EURm (EMTN) 4.2500% Euribor3M + 1.4727% 1.3807% 22.02.2016 Senior Bond 500 EURm (EMTN) 4.2500% Euribor3M + 2.7910% 2.6870% 27.02.2017 Senior Bond 2,000 SEKm (EMTN) Stibor3M + 1.45% --- 1.0
Slide 43: Sampo plc Key Credit Considerations
Sampo plc Sampo plc Key Credit Considerations Stable Dividend Flows from Affiliated Companies with strong Brands Diversification through Insurance & Banking in the Nordic Region Conservative Financial Profile, strong Capitalization and Liquidity Management with a proven Track Record in long-term Val
Slide 44: Appendix
SAMPO = GROUP Appendix 44-57 44
Slide 45: Sampo Group's Outlook for 2016
Appendix Sampo Group’s Outlook for 2016 • Sampo Group’s business areas are expected to report good operating results for 2016. • However, the mark-to-market results are, particularly in life insurance, highly dependent on capital market developments. The continuing low interest rate level also creat
Slide 46: Principles of Investment Management
Appendix Principles of Investment Management • Company specific needs form the basis for all investments – Liabilities intensively analysed and modelled. – Regulatory requirements. • Strategy – Absolute Return targets taking into account the liabilities and general business targets. – Direct Investm
Slide 47: Risk Management Principles
Appendix Risk Management Principles • Scope – Sampo’s Board of Directors requires that all activities involving the exposure of any Sampo Group company to risks, as well as activities controlling those risks, are arranged to comply with these general guidelines and related instructions as well as wi
Slide 48: Capital Management Framework at Operating Company Level
Appendix Capital Management Framework at Operating Company Level Capital requirements by risks Expected Market Realized profits expectations profits Regulatory Self- Capital defined Paid Dividends Size Requirement Potentially of Own Funds ”SCR” Higher buffer ”OF” Capital Issued capital Need instrume
Slide 49: Capital Management Framework at Group Level
Appendix Capital Management Framework at Group Level IF P&C Sampo PLC’s Profit SCR liquidity diversification in SEK capacity Consolidated Group equity Mandatum Life SCR Group Capital Group in EUR Requirements Buffer Solvency Capital Sectoral in EUR in EUR items added Sampo plc CR in EUR Intangibles
Slide 50: Sampo Group: Through Structural Changes to the Leading Nordic Financial Group
Appendix Sampo Group ― Through Structural Changes to the Leading Nordic Financial Group Mandatum Bank is merged Sampo divests Sampo Bank Sampo Group’s(If P&Cʼs) Sampo Group into Sampo-Leonia, and the to Danske Bank. • Topdanmark holding exceeds (Mandatum Life) acquires Group’s name is shortened • Bu
Slide 51: Financial Strength Rating History
Appendix Financial Strength Rating History If P&C Insurance Ltd (Sweden), If P&C Insurance Company Ltd (Finland), Sampo plc Possible downgrade Jan 03 AA-/ Moodyʼs If P&C Possible upgrade Feb 04 Aa3 S&P If P&C Moodyʼs Sampo plc Negative Aug 02 Positive May 06 Stable May 04 Stable Nov 08 Stable Apr 03
Slide 52: IF P&C Quarterly Results and C/R
Appendix IF P&C Quarterly Results and C/R EURm Q4/15 Q3/15 Q2/15 Q1/15 Q4/14 Q3/14 Q2/14 Q1/14 Q4/13 Q3/13 Q2/13 Q1/13 Premiums earned 1,077 1,087 1,103 1,076 1,108 1,124 1,122 1,104 1,112 1,139 1,140 1,115 Claims incurred -764 -735 -864 -780 -776 -793 -783 -811 -791 -802 -800 -824 Operating expense
Slide 53: IF Regulatory Solvency Capital & Ratio
Appendix IF Regulatory Solvency Capital & Ratio* EURm % 4,500 100% 88% 81% 4,000 79% 75% 82% 77% 72% 75% 3,500 74% 71% 80% 70% 66% 3,000 54% 60% 2,500 2,000 40% 1,500 1,000 20% 500 0 0% 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Solvency capital (lhs) Solvency ratio (rhs) + sol
Slide 54: IF P&C Reinsurance Programmes
Appendix 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 Programmes in place Catastrophe per
Slide 55: Mandatum Life Regulatory Solvency Ratio
Appendix Mandatum Life Regulatory Solvency Ratio* 30% 27.7% 27.6% 25.8% 25% 22.9% 23.6% 21.3% 20.9% 20.1% 20% 17.7% 18.5% 16.5% 15% 10% 7.9% 5% 0% 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 * Solvency ratio, % of technical provision, (IFRS) = + solvency capital x 100% + liabilities
Slide 56: Nordea: Profitable & The Most Diversified Nordic Bank
200 400 600 800 0 1,200 1,400 1,600 1,000 EURm 1Q08 885 21 2Q08 883 36 Nordea 3Q08 847 89 4Q08 781 320 1Q09 833 356 2Q09 818 425 3Q09 832 358 4Q09 592 347 1Q10 878 261 2Q10 730 245 3Q10 960 207 4Q10 1,071 166 1Q11 1,003 242 2Q11 949 118 3Q11 566 112 1,029 263 Restructuring/impairment charges 4Q11 1Q
Slide 57: Nordea BV on Consolidated Balance Sheet
Appendix Nordea BV on Consolidated Balance Sheet Nordea in Sampo Group’s B/S EURm Acquisition price 5,557.3 Retained earnings 1,570.7 Figures Per Share EUR Accumulated other changes in Nordea’s equity -62.7 Share of Nordea’s net profit 778.2 Acquisition price 6.46 Book value 8.49 Amortisation -35.4
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