Sampo Oyj · OMXHEX:SAMPO
Sampo Oyj — Debt Investor Presentation (May 2017)
47 slides from Sampo Oyj's debt investor presentation, May 9, 2017
Slide 1: Sampo Group Debt Investor Presentation
Sampo Group Debt Investor Presentation Prepared May 9, 2017 Figures March 31, 2017
Slide 2: Debt Investor Contacts, Financial Calendar and Ratings
DEBT INVESTOR CONTACTS FINANCIAL CALENDAR 2017 Markku Pehkonen, CRO 08/02/2017 Financial Statement Release for 2016 tel. +358 10 516 0014 Silent period 09/01/2017-08/02/2017 [email protected] Week 12 Annual Report 2016 27/04/2017 AGM Peter Johansson, CFO 11/05/2017 Interim Statement Q1/2017 t
Slide 3: Sampo Group agenda
Sampo Group Nordic Financial Group with Strong Brands 3-17 If P&C Diversified Nordic P&C Insurer 18-23 Mandatum Life A Finnish Financial Services Company 24-28 Sampo plc Parent Company with Capacity to Generate Funds 29-35 Appendix Separate Supplementary Information 36-47 3 5/12/2017
Slide 4: Nordic Financial Group with Strong Brands
Sampo Group ― Nordic Financial Group with Strong Brands Nordic Financial Group with Strong Brands • Listed company Sampo plc • Long-term investor • Manager of capital structure and liquidity • Pay-out ratio ≥ 50% 100% >45% 21.2% 100% Associated company Associated company • The leading P&C insurer •
Slide 5: 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 April 27, 2017, EURbn 10Y Total Shareholder Return 0 10 20 30 40 50 Nordea 44,1 Danske 30,5 >21% Sampo 26,0 SHB 24,4 Swedba
Slide 6: If P&C ‒ Diversified Nordic P&C Insurer
Sampo Group ― Nordic Financial Group with Strong Brands If P&C ‒ Diversified Nordic P&C Insurer • Diversified and profitable subsidiary Strong & Stable Annual Profit Development • Provides insurance solutions and EURm services in the Nordic and Baltic 1 200 regions as well as to Nordic 1 000 custome
Slide 7: Topdanmark – Danish Non-life and Life Insurer
Sampo Group ― Nordic Financial Group with Strong Brands Topdanmark – Danish Non-life and Life Insurer Pre-tax Profit Quarterly, DKKm • A profitable associated company with DKKm robust business model 800 • Carries out Danish non-life insurance, 700 600 life insurance and pension fund business 500 • N
Slide 8: 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 Profit Development services in Finland and Baltics EURm for private and corporate 500 customers. • Services provided 250 ‒ Wealth management 140 121 495 142
Slide 9: Nordea – A Nordic Banking Group
Sampo Group ― Nordic Financial Group with Strong Brands Nordea – A Nordic Banking Group Low Quarterly Result Volatility • The Leading Bank in the Nordics and a major European Bank company EURm 1 600 • Diversified and stable returns 1 400 • Offers a full range of banking services 1 200 • Business are
Slide 10: Diversified Companies & Diversified Portfolio
Sampo Group ― Nordic Financial Group with Strong Brands Diversified Companies & Diversified Portfolio* 1 0.30 1 0.15 0.85 1 P/L CONTRIBUTIONS LOW VOLATILITY EARNINGS LOW VOLATILITY C/R FOCUS ON U-L & WM PBT 2010-16 • Geographical diversification • Geographical diversification • Finland & Baltics • S
Slide 11: Steady Development of Profit before Taxes
Sampo Group ― Nordic Financial Group with Strong Brands Steady Development of Profit before Taxes EURm 3M/17 3M/16 P&C 202 216 Life 54 53 • If P&C • If P&C • If P&C Nordea 171 159 • Mandatum Life • Mandatum • Topdanmark / Associated Holding 3 -12 EURm • Sampo Bank 3,833 Life • Mandatum Life Group 43
Slide 12: Risk Profiles of Investments
Sampo Group ― Nordic Financial Group with Strong Brands Risk Profiles of Investments 18,844 19,652 20,708 20,813 * Total Group (MEUR) 14,000 12,305 12,192 12,337 12,000 11,517 10,000 8,000 6,448 6,569 6,582 6,547 6,000 4,000 1,933 1,929 2,000 879 778 0 P&C P&C P&C P&C Mandatum Mandatum Mandatum Mand
Slide 13: Investments & Counterparty Exposures
Sampo Group ― Nordic Financial Group with Strong Brands Investments & Counterparty Exposures* 31.3.2017 Derivatives Change AA+ - A+ - BBB+ - BB+ - Non Fixed Income AAA D Equities Other (Counterparty Total from AA- A- BBB- C Rated Total Risk) 31.12.2016 Basic Industry - - 34 47 102 - 97 280 109 - - 3
Slide 14: If P&C Solvency Capital Requirement, March 31, 2017
Sampo Group ― Nordic Financial Group with Strong Brands If P&C Solvency Capital Requirement, March 31, 2017 Standard Formula Solvency Ratio 215% Internally assessed Solvency ratio 261% EURm EURm 4 000 4 000 3 500 3 500 S&P TTC for A rating 3,019 S&P TTC for A rating 3,019 3 000 3 000 2 500 101 2 500
Slide 15: Mandatum Life – Solvency II Capital Requirement (SCR)
Sampo Group ― Nordic Financial Group with Strong Brands Mandatum Life – Solvency II Capital Requirement (SCR) With Transitional Measures, March 31, 2017 EURm SF with Transitional Measures Solvency ratio 181% 2 500 2 000 * 395 277 1 500 37 67 45 291 1 000 2 107 1 321 1 163 500 241 0 15 * Own Funds wi
Slide 16: Group Solvency Capital by Financial Conglomerates Rules
Sampo Group ― Nordic Financial Group with Strong Brands Group Solvency Capital by Financial Conglomerates Rules March 31, 2017 Group solvency ratio 159% / SII Standard Formula applied for Insurance Subsidiaries EURm 12 000 10 000 8 000 51 6 000 11 233 3 633 4 000 241 7 068 1 163 2 000 1 980 0 If P&C
Slide 17: 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 VALUE of Nordic markets, Nordic financial institutions & Nordic people. CREATION • Commitment to th
Slide 18: Sampo Group agenda
Sampo Group Nordic Financial Group with Strong Brands 3-17 If P&C Diversified Nordic P&C Insurer 18-23 Mandatum Life A Finnish Financial Services Company 24-28 Sampo plc Parent Company with Capacity to Generate Funds 29-35 Appendix Separate Supplementary Information 36-47 18 5/12/2017
Slide 19: Diversified Client Base
If P&C – Diversified Nordic P&C Insurer Diversified Client Base Gross Written Premiums, EUR 1,643m (Q1/2017) By Business Area By Country Baltic Denmark Baltic 2 % 2% Industrial 10 % 17% Norway 30 % Private 41 % Finland 30% Sweden Commercial 40 % 28 % Technical Results, EUR 140m (Q1/2017) By Business
Slide 20: Disciplined Underwriting and Diversification work
If P&C – Diversified Nordic P&C Insurer Disciplined Underwriting and Diversification work If P&C and BA Combined Ratios and deviation Expense ratio 2016, % 14 Denmark Topdanmark 16,4 12 CR % Standard deviation If P&C 16,6 Q1/2007-Q1/2017 10 Finland Nordic peer group -15 16,5 Norway Industrial 8 RSA
Slide 21: Conservative Investment Portfolio
If P&C – Diversified Nordic P&C Insurer Conservative Investment Portfolio Investment Allocation Mark-to-Market Investment Return, % Total EUR 12.3bn 1-3/2017 1.5% 14% 12,4% Real Estate 11% 0,2 % 9% 7,4% 6,1% 5,8% 5,0% Private equity Other 6% 4,3% 4,4% 4,1% 2,9% 0,2 % -0,03% 4% 2,6% 1,8% Money 1,5% m
Slide 22: Seasonality in Quarterly Results and CR%
If P&C – Diversified Nordic P&C Insurer 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%, 2006-2016 89.5 88.3 87.9 92.2 Year 2016 CR% 85.6 84.6 84.5 83.0* Year 2017 CR% 87.4 22 * incl. pos
Slide 23: Nordic P&C Insurance Market
If P&C – Diversified Nordic P&C Insurer Nordic P&C Insurance Market Nordic Market Shares, % If P&C Market Shares by Country, % Finland 24 If + Topdanmark 22% Other Norway 22 27 % If 17 % Sweden 18 Topdanmark 5% Denmark/ If P&C 6 Tryg Denmark/ Topdanmark 17 9% Baltics 12 LF 10 % Gjensidige Codan 9% 9
Slide 24: Sampo Group agenda
Sampo Group Nordic Financial Group with Strong Brands 3-17 If P&C Diversified Nordic P&C Insurer 18-23 Mandatum Life A Finnish Financial Services Company 24-28 Sampo plc Parent Company with Capacity to Generate Funds 29-35 Appendix Separate Supplementary Information 36-47 24 5/12/2017
Slide 25: Mandatum Life Business Volumes
Mandatum Life - A Finnish Financial Services Company Mandatum Life Business Volumes Premiums Written, EUR 231m, Q1 2017 Insurance Savings, EUR 10,539m, Q1 2017 1 28 17 With-Profit EUR 35m 3 31 2 404 58 4 With-Profit 3 688 EUR 3,909 U-L U-L EUR 196m EUR 6,630m 28 2 047 106 176 2 016 164 Unit-linked l
Slide 26: 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, % 20% 16,8% 1-3/2017 2.3% Asset Allocation 31.3.2017, 6 548 EURm 15% 12,0% 11,1% Commodities Other Trading 9,7% 9,4% 6,9% 0 % Alternative
Slide 27: Mandatum Life Profit by Components
Mandatum Life - A Finnish Financial Services Company Mandatum Life Profit by Components EURm 1-3/2017 1-3/2016 Net investment income 309.4 -65.0 - Transferred to expense result -6.9 -6.1 - Return on Unit-linked policies -212.5 143.3 - Return on With-profit policies* -46.7 -27.6 INVESTMENT RESULT 43.
Slide 28: Life insurance Market
Mandatum Life - A Finnish Financial Services Company Life insurance Market Finland ‒ Market Shares, % Market Shares by Country, % Other 5% OP Life Baltics/ 8 LähiTapiola 25 % Mandatum Life 7% Danmark/ 8 Topdanmark Mandatum Life 19 % Nordea 38 % • Various distribution channels • Bankassurance Total p
Slide 29: Sampo Group agenda
Sampo Group Nordic Financial Group with Strong Brands 3-17 If P&C Diversified Nordic P&C Insurer 18-23 Mandatum Life A Finnish Financial Services Company 24-28 Sampo plc Parent Company with Capacity to Generate Funds 29-35 Appendix Separate Supplementary Information 36-47 29 5/12/2017
Slide 30: 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 11,261 Liabilities 11,261 • If P&C • Interest on Liquidity Liquidity 1,418 CPs Issued 534 • Mandatum Life • Income from other •
Slide 31: Sources of Short-term and Medium-term Liquidity
Sampo plc - Parent Company with Capacity to Generate Funds Sources of Short-term and Medium-term Liquidity Instrument & Principal Running Yield Call/ Maturity Cash / Other FI 1,418m€ Other Investments 196m€ Subordinated loans (MV) 640m€ ≈ 5.30% - Mandatum Capital Loan 100m€ 4.57% Every year - IF Per
Slide 32: 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 33: Dividends Received by Payment Year
Sampo plc - Parent Company with Capacity to Generate Funds Dividends Received by Payment Year EURm If P&C 1 600 1 555 If P&C Extra Dividend 1 406 1 400 75 Mandatum Life 1 220 551 1 200 300 Nordea 1 067 1 000 883 533 125 756 768 370 800 754 744 35 293 * 293 684 200 568 204 250 224 100 100 600 490 511
Slide 34: Reported Profits facilitates Debt Servicing
Sampo plc - Parent Company with Capacity to Generate Funds Reported Profits facilitates Debt Servicing Q1/2017 Q1/2016 EURm Dividends 686.2 676.3 1 700 Operating expenses -4.5 -4.4 1 567 Net financial expenses/income 5.0 -8.6 1 567 1 500 * Profit before taxes 686.8 664.1 1 300 1 226 1 229 1 069 1 05
Slide 35: Issued Debt Instruments
Sampo plc - Parent Company with Capacity to Generate Funds Issued Debt Instruments Effective Instrument & Principal Coupon Swap Maturity Rate CPs issued 534 EURm Euribor + Margin 0.2500% Average 3M Senior Bond 2,000 SEKm (EMTN) Stibor3M + 1.45% Euribor3M+1.375% 1.0460% 29.05.2018 Senior Bond 500 EUR
Slide 36: Sampo Group agenda
Sampo Group Nordic Financial Group with Strong Brands 3-17 If P&C Diversified P&C Insurer 18-23 Mandatum Life A Finnish Financial Services Company 24-28 Sampo plc Parent Company with Capacity to Generate Funds 29-35 Appendix Separate Supplementary Information 36-47 36 5/12/2017
Slide 37: Sampo Group’s Outlook for 2017
Appendix – Separate Supplementary Information Sampo Group’s Outlook for 2017 Sampo Group’s business areas are expected to report good operating results for 2017. However, the mark-to-market results are, particularly in life insurance, highly dependent on capital market developments. The continuing l
Slide 38: Sampo Group ― Through Structural Changes to the Leading Nordic Financial Group
Appendix – Separate Supplementary Information Sampo Group ― Through Structural Changes to the Leading Nordic Financial Group Mandatum Bank is merged Sampo divests Sampo Sampo Group’s(If P&Cʼs) Sampo Group Mandatum Life into Sampo-Leonia, and the Bank to Danske Bank. • Topdanmark holding exceeds (Man
Slide 39: 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 Nordea Bank AB INSURANCE INSURANCE INSURANCE BANKING Holding Ltd (SE) Ltd (FI) (DK) >41%
Slide 40: Fixed Income Investments by Sector and Country
Appendix – Separate Supplementary Information Fixed Income Investments Fixed Income Investments in the Financial Sector in the Public <Sector Covered bonds subordinated Money market Public sector, Government Government senior debt guaranteed Long-term Long-term other debt EURm Total % EURm Total Swe
Slide 41: 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 active owner • General Principles of Business activities – Straightforward and transparent legal structure combined with limited intragroup exposures –
Slide 42: Principles of Investment Management
Appendix – Separate Supplementary Information 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
Slide 43: Principles of Capital Management
Appendix – Separate Supplementary Information Principles of Capital Management • Sub-Groups are adequately capitalized to ensure normal business operations • At Group level the following issues are managed/monitored – Direct risk concentrations – Correlations of the sub-groupsʼ profits – Sub-groups
Slide 44: 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 45: Risk Management Principles
Appendix – Separate Supplementary Information 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 a
Slide 46: Financial Strength Rating History
Appendix – Separate Supplementary Information Financial Strength Rating History If P&C Insurance Ltd (Sweden), If P&C Insurance Company Ltd (Finland), Sampo plc Moodyʼs If P&C Possible downgrade Jan 03 S&P If P&C Moodyʼs Sampo plc Possible upgrade Feb 04 Stable Dec 16 AA-/ Aa3 S&P Sampo plc Negative
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