Sampo Oyj · OMXHEX:SAMPO
Sampo Oyj — Debt Investor Presentation (November 2015)
59 slides from Sampo Oyj's debt investor presentation, Nov 17, 2015
Slide 1: Sampo Group Debt Investor Presentation
Sampo Group Debt Investor Presentation Prepared November 17, 2015 Figures September 30, 2015
Slide 2: Debt Investor Contacts and Financial Calendar
DEBT INVESTOR CONTACTS FINANCIAL CALENDAR Markku Pehkonen, CRO 07/05/2015 Interim Report Q1/2015 tel. +358 10 516 0014 Silent period 09/04/2015-07/05/2015 markku.pehkonen@sampo.fi 12/08/2015 Interim Report Q2/2015 Silent period 15/07/2015-12/08/2015 Peter Johansson, CFO 05/11/2015 Interim Report Q3/
Slide 3: Agenda
Sampo Group Basic Facts 3-10 If P&C The Leading Nordic P&C Insurer 11-20 Mandatum Life A Finish Financial Services Company 21-30 Sampo Group A Productive Value Creator 31-38 Sampo plc The Listed Parent Company – A Stable Dividend Payer 39-45 Appendix 46-59 3
Slide 4: Sampo has created Value
Sampo Group ― Basic Facts Sampo has created Value A Mixed Financial Conglomerate Strong relative performance Market cap November 4, 2015, EURbn 10Y Total Shareholder Return 0 10 20 30 40 50 Nordea 42.2 Sampo 25.2 >21% Danske Bank 25.0 Swedbank 23.7 SHB 23.6 DnB 19.6 Investor 15.6 Gjensidige 7.1 Samp
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% • Market leader in corporate MARKET • The leading P&C insurer • The second largest • The larges
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 Modell 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: If P&C The Leading Nordic P&C Insurer
Sampo Group Basic Facts 3-10 If P&C The Leading Nordic P&C Insurer 11-20 Mandatum Life A Finnish Financial Services Company 21-30 Sampo Group A Productive Value Creator 31-38 Sampo plc The Listed Parent Company – A Stable Dividend Payer 39-45 Appendix 46-59 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 Q2/2015 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,
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 3,659 m By Business Area By Country Baltic, Baltic, 101 Denmark, 101, 3% Norway, Industrial, 319 , 9% Private, 1,139 , 523 2,012 31% Finland , Commercial, 886 , 24% 1,023 Sweden, 1,213 , 33% Technical Results, EUR 480 m By Busin
Slide 15: Disciplined Underwriting and Diversification works
If P&C Disclipined Underwriting and Diversification works Combined Ratio Development Geographical Diversification in CR % 91.8 92.1 92.8 92.088.9 88.1 87.7 87.8 100 90.5 89.9 90.6 84.6 80 24.3 24.0 23.7 23.7 24.1 23.7 23.5 23.0 22.8 22.5 22.5 17.6 60 40 66.2 65.9 66.9 68.1 68.0 69.1 68.4 65.9 65.4 6
Slide 16: Strong & Stable Annual Profit Development
If P&C Strong & Stable Annual Profit Development EURm 9M/2015 9M/2014 EURm Profit before taxes 756 711 Comprehensive Income 434 532 1,200 Profit before tax 1,127 Comprehensive income 943 978 1,000 929 931 864 800 800 730 707 689 644 636 600 534 549 526 400 308 200 0 -200 -267 -400 2005 2006 2007 200
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%, 2006-2014 90.1 89.2 88.2 93.1 Year 2014 CR% 87.1 86.9 86.5 90.3 17 Year 2015 CR% 83.8 80.9 89.2
Slide 18: Conservative Investment Portfolio
If P&C Conservative Investment Portfolio Investment Allocation of Total EUR 11.5bn Mark-to-Market Investment Return 14% 12.4% 9M/2015 0.9% 11% Private Real Estate 9% 7.4% Equity 0.2% 5.8% 6.1% Money 6% 4.3% 4.4% 5.0% Equities 0.2% 4.1% Market 2.6% 12% 4% 1.8% 14% 1% Public -2% sector -4% 13% -3.1% I
Slide 19: If P&C – Solvency Capital Requirement, Partial Internal Model
If P&C If P&C – Solvency Capital Requirement (SCR) Partial Internal Model (PIM), September 30, 2015 EURm 4,000 * 3,500 3,000 2,500 206 2,000 200 583 3,830 1,500 142 123 1,292 1,000 1,676 500 579 0 *ASC EUR 3.820m 19 LAC = Loss Absorbing Capacity, DT = Deferred Taxes
Slide 20: If P&C – Solvency Capital Requirement, Standard Formula
If P&C If P&C – Solvency Capital Requirement (SCR) Standard Formula (SF), September 30, 2015 EURm 4,000 3,500 * 3,000 2,500 957 1,817 206 270 123 2,000 3,650 1,500 82 2,136 1,000 500 1,135 0 *ASC EUR 3.820m 20 LAC = Loss Absorbing Capacity, DT = Deferred Taxes
Slide 21: Agenda: Mandatum Life
Sampo Group Basic Facts 3-10 If P&C The Leading Nordic P&C Insurer 11-20 Mandatum Life A Finnish Financial Services Company 21-30 Sampo Group A Productive Value Creator 31-38 Sampo plc The Listed Parent Company – A Stable Dividend Payer 39-45 Appendix 46-59 21
Slide 22: 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 23: Mandatum Life Business Volumes
Mandatum Life Mandatum Life Business Volumes Premiums Written*, total EUR 840m Insurance Savings, total EUR 9,756m 2 17 25 With-Profit 5720 1,966 EUR 132m 54 19 292 U-L With-Profit 3,943 U-L EUR 708m EUR 4,190 EUR 5,566m 1,727 298 98 204 1,726 147 Unit-linked life Unit-linked pension Unit-linked cap
Slide 24: Market Position by Premiums Written 6/2015
Mandatum Life Market Position by Premiums Written 6/2015, % Market Shares in Finland 53.4 42 22.8 17.3 16.6 11.5 7.3 All Products Unit-Linked With-profit Group Private Corporates Baltics Pension Customers 24
Slide 25: 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 policyholders´ reasonable expectations for total accrual, which is an average annual yield of Finnish gover
Slide 26: Profit Development
Mandatum Life Profit Development EURm 9M/2015 9M/2014 Profit before taxes 132 112 EURm Comprehensive Income 50 103 495 500 342 332 295 286 286 250 220 142 153 163 149 140 121 137 136 80 0 -115 -250 Profit before taxes Comprehensive income -378 -500 2006 2007 2008 2009 2010 2011 2012 2013 2014 26
Slide 27: Mandatum Life Profit by Components
Mandatum Life Mandatum Life Profit by Components EURm 1-9/2015 1-9/2014 Net investment income 339.7 469.7 - Transferred to expense result -19.1 -16.3 - Return on unit-linked policies -22.9 -257.5 - Return on with-profit policies* -204.2 -111.1 INVESTMENT RESULT 93.5 84.8 EXPENSE RESULT** 19.5 14.6 R
Slide 28: Absolute Return Investment Portfolio
Mandatum Life Absolute Return Investment Portfolio Investment Allocation of Total EUR 5.3bn* Mark-to-Market Investment Return 20% 9M/2015 3.7% 16.8% Other 8% Real estate 4% Money market 15% 12.0% 11.1% 10% 9.7% 9.4% 10% 8.3% 7.1% Private equity Public sector 5.0% 4.6% 4% 1% 5% 0% -1.4% -5% -10% -7.8
Slide 29: Conservative portfolio of Segregated Fund
Mandatum Life Conservative portfolio of Segregated Fund Mark-to-Market Investment Return Investment allocation of Total EUR 1.2bn Real Estate 6% Other 0% Private Equity Money Market 3% 11% Equities 10% Public Sector 4% Other Fixed Income 65% Duration 2.1 years Average maturity 3.6 years 29 Fixed inc
Slide 30: Mandatum Life – Solvency II Capital Requirement
Mandatum Life Mandatum Life – Solvency II Capital Requirement (SCR) With transitional measures, September 30, 2015 EURm 2,000 1,800 * 350 247 1,600 39 101 1,400 31 297 1,200 1,000 1,860 800 1,415 600 1,189 400 200 297 0 * Own Funds without transitional measures EUR 1,274m 30 LAC = Loss Absorbing Cap
Slide 31: Agenda: Sampo Group A Productive Value Creator
Sampo Group Basic Facts 3-10 If P&C The Leading Nordic P&C Insurer 11-20 Mandatum Life A Finnish Financial Services Company 21-30 Sampo Group A Productive Value Creator 31-38 Sampo plc The Listed Parent Company - A Stable Dividend Payer 39-45 Appendix 46-59 31
Slide 32: Stable Development of Profit before Taxes
Sampo Group ― Results, Capitalisation and Investments Stable Development of Profit before Taxes EURm 9M/2015 9M/2014 P&C 756 711 EURm Life 132 112 4,000 3,833 Nordea 577 501 Holding 12 -10 3,500 * Group 1,475 1,313 3,000 •If P&C •If P&C •If P&C •Mandatum Life •Mandatum Life •Mandatum Life 2,500 •Sam
Slide 33: Stable Companies & Group Level Diversification
Sampo Group ― Results, Capitalisation and Investments Stable Companies & Group Level Diversification* 1 0.27 1 0.12 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 34: 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 143% Business Area Capitalization 10,000 • Focus in Business areas’ capitalization • IF and Nordea are strongly capitalized • ML is adequately capitalized 8,000 60
Slide 35: Investment Allocation by Risk Profile
Sampo Group ― Results, Capitalisation and Investments Investment Allocation by Risk Profile Total Group (MEUR) 19,215 20,211 19,226 18,688 14,000 11,513 11,827 11,778 11,516 12,000 10,000 8,000 6,644 6,716 6,705 6,503 6,000 4,000 1,667 2,000 1,058 743 669 0 Mandatum Mandatum Mandatum Mandatum Sampo
Slide 36: Investments & Counterparty Exposures
Sampo Group ― Results, Capitalisation and Investments Investments & Counterparty Exposures* AA+ - A+ - BBB+ - BB+ - Non Fixed Income Derivatives Change from 30.9.2015 AAA AA- A- BBB- C D Rated Total Equities Other (Counterparty Risk) Total 30.6.2015 Basic Industry - 33 0 100 230 - 134 498 158 - - 65
Slide 37: 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 1,519 874 926 307 3,627 44% Finland 163 1,265 201 11 1,640 20% Norway 700 553 214 1,467 18% Denmark 218 296 2
Slide 38: 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 208 803 1,011 Norway 277 277 Finland 53 64 117 Germany 11 70 81 Denmark 33 33 Japan 18 18 France 4 4 Total
Slide 39: Agenda: Sampo plc The Listed Parent Company
Sampo Group Basic Facts 3-10 If P&C The Leading Nordic P&C Insurer 11-20 Mandatum Life A Finnish Financial Services Company 21-30 Sampo Group A Productive Value Creator 31-38 Sampo plc The Listed Parent Company – A Stable Dividend Payer 39-45 Appendix 46-59 39
Slide 40: Straightforward Cash Flows & Strong Balance Sheet
Sampo plc Straightforward Cash Flows & Strong Balance Sheet Flow of Funds Balance Sheet Dividends Income Assets EURm 8,971 Liabilities EURm 8,971 • If P&C • Interest on Liquidity Liquidity 106 CPs Issued 300 • Mandatum Life • Income from other • Nordea investments Investment assets 355 LT Senior Deb
Slide 41: Dividends & Reported Profits
Sampo plc EURm 9M/2015 9M/2014 Dividends & Reported Profits Dividends Operating expenses 638.4 -10.7 471.6 -11.8 Net financial expenses/income 18.0 0 Profit before taxes 645.7 459.8 EURm 1100 1,069 * 1,050 2010 2011 2012 2013 2014 879 900 832 773 747 762 737 702 683 700 500 300 100 -8 -10 -17 -20 -1
Slide 42: 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 1,233 1,200 300 1,067 1,000 883 533 756 768 370 800 754 744 35 293 600 200 568 204 250 224 100 100 490 511 1,031 80 100 400 141 130 100 ** 100 200 597 ~600 519 488 540 544 490 200 406 ** 2
Slide 43: Sampo Group ― Conservative Leverage
EURm 0 10,000 12,000 14,000 16,000 -4,000 -2,000 2,000 4,000 6,000 8,000 Q1/05 Q3/05 Q1/06 Q3/06 Q1/07 Q3/07 Group NAV Q1/08 Group Equity Q3/08 Q1/09 Q3/09 Sampo plc Net debt Q1/10 Q3/10 Q1/11 Q3/11 Q1/12 Q3/12 Q1/13 Q3/13 Q1/14 Q3/14 Q1/15 Q3/15 10% 15% 20% 25% 30% 35% 40% 0% 5% Q1/05 Q3/05 Q1/06 Q
Slide 44: Sampo plc Investments and Debt Instruments
Sampo plc Sampo plc Investments and Debt Instruments Effective Instrument & Principal Coupon Swap Maturity Rate Senior Bond 300 EURm (EMTN) 4.2500% Euribor3M + 1.4727% 1.4427% 22.02.2016 Senior Bond 500 EURm (EMTN) 4.2500% Euribor3M + 2.7910% 2.7580% 27.02.2017 Senior Bond 2,000 SEKm (EMTN) Stibor3M
Slide 45: 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 46: Appendix
SAMPO = GROUP Appendix 46-59
Slide 47: Sampo Group’s outlook for 2015
Appendix Sampo Group’s outlook for 2015 • Sampo Group’s business areas are expected to report good operating results for 2015. • However, the marked-to-market results are, particularly in life insurance, highly dependent on capital market developments. The very low interest rate level also creates a
Slide 48: 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 49: 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 50: Capital Management Framework at Group Level
Appendix Capital Management Framework at Group Level Transaction risks Leverage Liquidity portfolio affecting companies’ profits Profit Sampo plc’s capacity diversification to generate liquidity IF P&C SCR Consolidated EURSEK in SEK Group equity EURSEK Mandatum Nordea’s Life SCR in EUR Group share S
Slide 51: Capital Management Framework at Operating Company Level
Appendix Capital Management Framework at Operating Company Level Capital Risks needs by risks Expected profits Realized profits Total Potential Total diversified self- actual capital defined capital need by higher Buffer & Dividends regulatory capital capital • • rules need structure Issued capital
Slide 52: 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&C´s) Sampo Group into Sampo-Leonia, and the to Danske Bank. •Topdanmark holding exceeds (Mandatum Life) Group’s name is shortened • Business are
Slide 53: 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-/ Moody´s If P&C Possible upgrade Feb 04 Aa3 S&P If P&C Moody´s Sampo plc Negative Aug 02 Positive May 06 Stable May 04 Stable Nov 08 Stable Apr 03
Slide 54: IF P&C Quarterly Results and C/R
Appendix IF P&C Quarterly Results and C/R EURm Q3/15 Q2/15 Q1/15 Q4/14 Q3/14 Q2/14 Q1/14 Q4/13 Q3/13 Q2/13 Q1/13 Premiums earned 1,087 1,103 1,076 1,108 1,124 1,122 1,104 1,112 1,139 1,140 1,115 Claims incurred -735 -864 -780 -776 -793 -783 -811 -791 -802 -800 -824 Operating expenses -176 -29 -180 -
Slide 55: IF Regulatory Solvency Capital & Ratio
Appendix IF Regulatory Solvency Capital & Ratio* EURm % 4,500 100% 88% 87% 81% 4,000 79% 75% 82% 77% 72% 3,500 74% 71% 80% 70% 66% 3,000 54% 60% 2,500 2,000 40% 1,500 1,000 20% 500 0 0% Solvency capital (lhs) Solvency ratio (rhs) + solvency capital 55 * Solvency ratio, (IFRS) % = x 100% + premiums e
Slide 56: 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 57: 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% * Solvency ratio, % of technical provision, (IFRS) = + solvency capital x 100% + liabilities for insurance and investment contracts - reinsurers’ share o
Slide 58: Nordea Profitable & The Most Diversified Nordic Bank
200 400 600 800 0 1,000 1,200 1,400 1,600 EURm Nordea 1Q08 885 21 2Q08 883 36 3Q08 847 89 4Q08 781 320 1Q09 833 356 2Q09 818 425 3Q09 832 358 4Q09 592 347 1Q10 878 261 2Q10 730 245 960 207 Restructuring provision 3Q10 4Q10 1,071 166 1Q11 1,003 242 2Q11 949 118 3Q11 566 112 4Q11 1,029 263 1Q12 1,037
Slide 59: 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 598.0 Acquisition price 6.46 Book value 8.24 Amortisation -26.5
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