2017-11-02 08:30:00 CET
2017-11-02 08:30:46 CET
REGULATED INFORMATION
Sampo - Interim report (Q1 and Q3)
Sampo Group's results for January - September 2017
SAMPO PLC INTERIM STATEMENT 2 November 2017 at 9:30 am
SAMPO GROUP'S RESULTS FOR JANUARY - SEPTEMBER 2017
Sampo Group's January - September 2017 results were impacted by the change in
accounting status of Topdanmark from an associated company to a subsidiary
triggering a non-recurring profit of EUR 706 million. Excluding this item Sampo
Group's profit before taxes was EUR 1,340 million, earnings per share amounted
to EUR 2.09 and RoE to 13.8 per cent.
* Sampo Group's profit before taxes for January - September 2017, including
the non-recurring item, amounted to EUR 2,046 million (1,343). The total
comprehensive income for the period, taking changes in the market value of
assets into account, rose to EUR 1,972 million (1,212). Earnings per share
amounted to EUR 3.35 (2.11). Mark-to-market earnings per share were EUR
3.51 (2.16). The return on equity (RoE) for the Group was 21.4 per cent
(14.1) for January - September 2017. Net asset value per share on 30
September 2017 amounted to EUR 26.84 (24.86).
* Profit before taxes for the If segment was EUR 603 million (624). Combined
ratio for January-September 2017 was 85.9 per cent (84.0). This is the best
January - September combined ratio that If has ever reported when adjusted
for non-recurring items. Return on equity was 24.6 per cent (22.3).
* Sampo's share of Topdanmark's January - September 2017 profit was EUR 90
million (35). In addition, the difference between the carrying value and the
fair value of Sampo's holding on 30 September 2017 of EUR 706 million, was
recognized in profit and loss.
* Sampo's share of Nordea's net profit for January - September 2017 amounted
to EUR 491 million (546). Nordea's RoE amounted to 10.1 per cent (11.7).
Core Tier 1 ratio (excluding transition rules) was 19.2 per cent (18.4). In
segment reporting the share of Nordea's profit is included in the segment
'Holding'.
* Profit before taxes for Mandatum Life increased to EUR 180 million (157).
Return on equity amounted to 15.6 per cent (18.0).
+------------------------+--------+--------+--------+--------+--------+--------+
|KEY FIGURES |1-9/2017|1-9/2016|Change,%|7-9/2017|7-9/2016|Change,%|
+------------------------+--------+--------+--------+--------+--------+--------+
|EURm | | | | | | |
+------------------------+--------+--------+--------+--------+--------+--------+
|Profit before taxes **) |2,046 |1,343 |52 |1,181 |450 |162 |
+------------------------+--------+--------+--------+--------+--------+--------+
| If |603 |624 |-3 | | |-2 |
| | | | | | | |
| | | | |202 |207 | |
+------------------------+--------+--------+--------+--------+--------+--------+
| Topdanmark |796 |35 |- |744 |17 |- |
+------------------------+--------+--------+--------+--------+--------+--------+
| Associate (Nordea) |491 |546 |-10 |169 |182 |-7 |
+------------------------+--------+--------+--------+--------+--------+--------+
| Mandatum |180 |157 |15 |64 |53 |20 |
+------------------------+--------+--------+--------+--------+--------+--------+
| Holding (excl. Nordea)|-27 |-19 |-40 |0 |-9 |- |
+------------------------+--------+--------+--------+--------+--------+--------+
|Profit for the period |1,875 |1,179 |59 |1,122 |396 |183 |
+------------------------+--------+--------+--------+--------+--------+--------+
| | | |Change | | |Change |
+------------------------+--------+--------+--------+--------+--------+--------+
|Earnings per share, EUR |3.35 |2.11 |1.24 |2.01 |0.71 |1.30 |
|**) | | | | | | |
+------------------------+--------+--------+--------+--------+--------+--------+
|EPS (incl. change in |3.51 |2.16 |1.35 |2.04 |1.08 |0.96 |
|FVR) EUR | | | | | | |
+------------------------+--------+--------+--------+--------+--------+--------+
|NAV per share, EUR *) |26.84 |24.86 |1.98 |- |- |- |
+------------------------+--------+--------+--------+--------+--------+--------+
|Average number of staff |9,418 |6,769 |2,649 |- |- |- |
|(FTE) | | | | | | |
+------------------------+--------+--------+--------+--------+--------+--------+
|Group solvency ratio, % |156 |154 |2 |- |- |- |
|*) | | | | | | |
+------------------------+--------+--------+--------+--------+--------+--------+
|RoE, % **) |21.4 |14.1 |7.3 |- |- |- |
+------------------------+--------+--------+--------+--------+--------+--------+
*) comparison figure from 31 December 2016.
**) excluding the non-recurring profit incurring from the change of Topdanmark's
accounting status from an associated company to a subsidiary, Sampo Group's
profit before taxes was EUR 1,340 million, earnings per share amounted EUR 2.09
and to RoE 13.8 per cent. The profit before taxes for the third quarter of 2017
was EUR 475 million and earnings per share amounted EUR 0.74.
The figures in this report are not audited. Income statement items are compared
on a year-on-year basis whereas comparison figures for balance sheet items are
from 31 December 2016 unless otherwise stated.
Sampo follows the disclosure procedure enabled by the Finnish Financial
Supervisory Authority and hereby publishes its Interim Statement attached as a
PDF file to this stock exchange release. The Interim Statement is also available
at www.sampo.com/result.
Exchange rates used in reporting
+--------------------------------+--------+--------+--------+---------+--------+
| |1-9/2017|1-6/2017|1-3/2017|1-12/2016|1-9/2016|
+--------------------------------+--------+--------+--------+---------+--------+
|EURSEK | | | | | |
+--------------------------------+--------+--------+--------+---------+--------+
|Income statement (average) |9.5833 |9.5968 |9.5063 |9.4698 |9.3739 |
+--------------------------------+--------+--------+--------+---------+--------+
|Balance sheet (at end of period)|9.6490 |9.6398 |9.5322 |9.5525 |9.6210 |
+--------------------------------+--------+--------+--------+---------+--------+
|DKKSEK | | | | | |
+--------------------------------+--------+--------+--------+---------+--------+
|Income statement (average) |1.2885 |1.2904 |1.2785 |1.2718 |1.2586 |
+--------------------------------+--------+--------+--------+---------+--------+
|Balance sheet (at end of period)|1.2965 |1.2963 |1.2816 |1.2849 |1.2912 |
+--------------------------------+--------+--------+--------+---------+--------+
|NOKSEK | | | | | |
+--------------------------------+--------+--------+--------+---------+--------+
|Income statement (average) |1.0376 |1.0456 |1.0575 |1.0192 |0.9998 |
+--------------------------------+--------+--------+--------+---------+--------+
|Balance sheet (at end of period)|1.0251 |1.0072 |1.0397 |1.0513 |1.0706 |
+--------------------------------+--------+--------+--------+---------+--------+
|EURDKK | | | | | |
+--------------------------------+--------+--------+--------+---------+--------+
|Income statement (average) |7.4373 | | | | |
+--------------------------------+--------+--------+--------+---------+--------+
|Balance sheet (at end of period)|7.4423 | | | | |
+--------------------------------+--------+--------+--------+---------+--------+
THIRD QUARTER 2017 IN BRIEF
Excluding the non-recurring profit of EUR 706 million from the change in
accounting treatment of Topdanmark, Sampo Group's profit before taxes for the
third quarter of 2017 was EUR 475 million and earnings per share amounted EUR
0.74.
Sampo Group's profit before taxes for the third quarter 2017, including the non-
recurring item, amounted to EUR 1,181 million (450). Earnings per share amounted
to EUR 2.01 (0.71). Marked-to-market earnings per share increased to EUR 2.04
(1.08). Net asset value per share increased EUR 1.24 during the third quarter
and was EUR 26.84.
Combined ratio for If for the third quarter was 84.8 per cent (84.6). Profit
before taxes amounted to EUR 202 million (207).
Sampo's share of Topdanmark's July - September 2017 profit was EUR 37 million
(17). In addition, the difference between the carrying value and the fair value
of Sampo's holding on 30 September 2017 of EUR 706 million, was recognized in
profit and loss.
Sampo's share of Nordea's third quarter 2017 net profit amounted to EUR 169
million (182).
Profit before taxes for Mandatum Life rose to EUR 64 million (53). Premiums
written increased to EUR 207 million from EUR 177 million at the corresponding
period a year ago.
In the third quarter of 2017 Sampo plc announced that it will invest EUR 265
million in Saxo Bank Group and EUR 230 million in Nets A/S both located in
Denmark.
BUSINESS AREAS
If Group
Profit before taxes for January-September 2017 for the If Group amounted to EUR
603 million (624). These figures do not include Sampo Group's share of
Topdanmark's profit.
Combined ratio amounted to 85.9 per cent (84.0) and risk ratio to 64.2 per cent
(62.0). In the first quarter of 2017 the discount rate used to discount Finnish
annuities was lowered by 0.3 percentage points to 1.2 per cent. This impacts the
combined ratio for January - September 2017 negatively with 2.2 percentage
points. The comparison year contains an extraordinary reserve release in Swedish
motor insurance improving the combined ratio for the first nine months of 2016
by 2.3 percentage points.
Net releases from technical reserves relating to prior year claims were EUR 68
million (100) in January - September 2017. Return on equity increased to 24.6
per cent (22.3) and the fair value reserve at the end of September 2017 was EUR
590 million (484). Technical result amounted to EUR 463 million (514). Insurance
margin (technical result in relation to net premiums earned) decreased to 14.5
per cent (16.1).
Large claims were EUR 48 million higher than expected in January - September
2017 and EUR 31 million higher than expected in the third quarter of 2017. In
business area Commercial large claims were EUR 51 million worse than normalized
and in business area Industrial large claims were EUR 3 million better than
normalized. Sweden and Norway were impacted most. The lowering of the discount
rate for annuities in Finland in the first quarter of 2017 impacted Finnish
country specific result and also on all the business areas excluding Baltic
negatively. The combined ratio for Finland for January - September 2017
increased 9.9 percentage points due to the change. The release from the Swedish
MTPL reserves affected both the Swedish country specific result and the Private
and Commercial business area results positively in the comparison period.
Swedish discount rate used to discount the annuity reserves decreased to -0.14
percent (-0.03) and had a negative impact of EUR 7 million on the January -
September 2017 results.
Gross written premiums grew to EUR 3,621 million (3,565) in January-September
2017. Adjusted for currency, premium growth was 1.5 per cent. Growth was
positive in all business areas and in all markets except Finland.
Cost ratio improved to 21.8 per cent (22.1) and expense ratio to 16.2 per cent
(16.6).
At the end of September 2017, the total investment assets of If amounted to EUR
12.4 billion (12.2), of which fixed income investments constituted 80 per cent
(79), money market 7 per cent (8) and equity 12 per cent (13). Net income from
investments increased to EUR 170 million (123). Investment return marked-to-
market for January-September 2017 amounted to 2.8 per cent (2.4). Duration for
interest bearing assets was 1.4 years (1.4) and average maturity 2.7 years
(2.8). Fixed income running yield without taking into account the FX hedging
cost as at 30 September 2017 was 1.5 per cent (1.6).
Topdanmark
Sampo consolidates Topdanmark as a subsidiary as of 30 September 2017 in its
financial reporting in accordance with IFRS (for further details see section
Consolidation of Topdanmark).
Sampo's share of Topdanmark's profit for January-September 2017 amounted to EUR
90 million (35). In addition, the difference between the carrying value and the
fair value of Sampo's holding on 30 September 2017 of EUR 706 million, is
recognized in profit and loss.
Associated company Nordea Bank AB
On 30 September 2017 Sampo plc held 860,440,497 Nordea shares corresponding to a
holding of 21.2 per cent. The average price paid per share amounted to EUR 6.46
and the book value in the Group accounts was EUR 8.71 per share. The closing
price as at end of September 2017 was EUR 11.44.
The following text is based on Nordea's January-September interim report
published on 26 October 2017.
Despite increasing geopolitical risks and imbalances in the economy, Nordea
continues to see synchronised growth in its home markets. Margins remain stable,
although Nordea has not seen the usual pick-up in demand for corporate advisory
services after the summer. Costs developed according to plan and credit quality
improved as expected.
Total income was up 1 percent in local currencies and up 1 per cent in EUR from
the prior year and operating profit was down 1 per cent in both local currencies
and EUR from the previous year excluding non-recurring items.
Net interest income was up 1 per cent in both local currencies and EUR from
2016. Average lending volumes in business areas in local currencies were down by
1 per cent compared to the first nine months of 2016 while deposits volumes were
up by 2 per cent.
Net fee and commission income increased 7 per cent in both local currencies and
in EUR from the previous year.
Net result from items at fair value decreased both in local currencies and in
euros from 2016: 9 per cent in local currencies and 10 per cent in EUR.
Total expenses were up 5 per cent in both local currencies and EUR from the
previous year excluding non-recurring items and amounted to EUR 3,741 million.
Staff costs were up 5 per cent in local currencies excluding non-recurring
items.
Credit quality continues to improve. Net loan losses decreased to EUR 298
million, corresponding to a loan loss ratio of 12 bps (down from 15 bps in the
first nine months of 2016). Nordea's expectation is that loan losses will be
below the long-term average of 16 bps in the coming quarters.
Net profit excluding non-recurring items decreased 4 per cent in both local
currencies and EUR to EUR 2,419 million.
Currency fluctuations had no effect on income and expenses but a negative effect
of 1 percentage point on loan and deposit volumes compared to a year ago.
Nordea Group's Basel III Common equity tier 1 (CET1) capital ratio remained flat
at 19.2 per cent and the end of the third quarter 2017 compared to 19.2 per cent
at the end of the second quarter 2017. Risk exposure amount, REA, decreased with
EUR 1.4 billion. The main drivers are improved credit quality and lower volumes
in the corporate portfolio, somewhat offset by the PD/ADF implementation. The
management buffer increased to 180 bps to its highest level ever. This is above
Nordea's target level of 50-150 bps.
Nordea announced on Thursday 26 October 2017 that the Group transformation
enters the next phase. So far the focus has been in technology and build-up of
capabilities in compliance and risk management. Investments start to deliver, so
Nordea sees its time to enter the next phase of the transformation in which it
sees it can structurally bring down costs and increase efficiency. In order to
secure long-term competitiveness, Nordea also plans to reduce the number of
employees and consultants with at least 6,000 of which approximately 2,000 are
consultants.
Further information on Nordea Bank AB and its January-September 2017 result is
available at www.nordea.com.
Mandatum Life
Mandatum Life's profit before taxes rose to EUR 180 million (157) for the first
three quarters of 2017. The total comprehensive income for the period after tax
reflecting the changes in market values of assets amounted to EUR 163 million
(193). Return on equity (RoE) amounted to 15.6 per cent (18.0). At the end of
September 2017 fair value reserve was EUR 617 million (596). Net investment
income, excluding income on unit-linked contracts, amounted to EUR 310 million
(224). Net income from unit-linked contracts was EUR 335 million (135).
On 30 September 2017 Mandatum Life Group's total technical reserves amounted to
EUR 11.5 billion (11.3). In January - September 2017 with profit reserves
decreased to EUR 4.6 billion (4.8). Reserves related to the higher guarantees of
4.5 and 3.5 per cent decreased by EUR 170 million to EUR 2.7 billion during
January - September 2017. The unit-linked reserves increased to EUR 6.9 billion
(6.4), which corresponds to 60 per cent (56) of total technical reserves.
Mandatum Life has supplemented its technical reserves with a total of EUR 325
million (273) due to low level of interest rates. The figure does not take into
account the reserves relating to the segregated fund. The discount rates used
remained the same as at the end of the second quarter of this year and are for
2017, 2018 and 2019 is 0.25 per cent and for 2020 the rate is 1.00 per cent. Due
to this the discount rate reserve decreased EUR 33 million. Discount rate
applied for the segregated fund is 0.50 per cent.
Mandatum Life Group's investment assets, excluding the assets of EUR 6.9 billion
(6.5) covering unit-linked liabilities, amounted to EUR 6.3 billion (6.6) at
market values at the end of September 2017.
The assets covering Mandatum Life's original with profit liabilities on 30
September 2017 amounted to EUR 5.2 billion (5.4) at market values. 45 per cent
(41) of the assets are in fixed income instruments, 12 per cent (14) in money
market, 30 per cent (30) in equities and 13 per cent (15) in alternative
investments. The investment return marked-to-market for January - September
2017 was 5.7 per cent (5.1). The duration of fixed income assets at the end of
September 2017 was 2.1 years (1.9) and average maturity 2.3 years (2.3). Fixed
income (incl. money market) running yield without taking into account the FX
hedging cost as at 30 September 2017 was 2.8 per cent (3.1).
The assets covering the segregated fund amounted to EUR 1.1 billion (1.2), of
which 75 per cent (75) was in fixed income, 9 per cent (10) in money market, 9
per cent (8) in equities and 7 per cent (7) in alternative investments.
Segregated fund's investment return marked-to-market for January - September
2017 was 1.8 per cent (3.6). At the end of September 2017 the duration of fixed
income assets was 2.6 years (2.4) and average maturity 3.4 years (3.5). Fixed
income (incl. money market) running yield without taking into account the FX
hedging cost as at 30 September 2017 was 2.1 per cent (1.8).
Mandatum Life's expense result rose to EUR 21 million (17) and risk result to
EUR 21 million (15).
Mandatum Life Group's premium income on own account amounted to EUR 630 million
(669) for January - September 2017.
Mandatum Life Insurance Co. Ltd. disclosed on 27 October 2016 that it will
exercise its option to sell the insurance portfolio, sold through Danske Bank's
branch network in Finland, to Danske Bank or its nominee. The valuation process
was finalized by 19 June 2017 and the value of the insurance portfolio as at the
31 December 2016 was determined to be EUR 334 million. The transfer of the
portfolio is expected to take place during 2018.The sales gain is taxable under
the Finnish tax law. The transaction will have a positive impact on Mandatum
Life's solvency position.
Holding
Holding segment's profit before taxes for January - September 2017 amounted to
EUR 464 million (527), of which EUR 491 million (546) relates to Sampo's share
of Nordea's January - September 2017 profit. Segment's profit excluding Nordea
was EUR -27 million (-19).
Sampo plc's holding in Nordea Bank was booked in the consolidated balance sheet
at EUR 7.5 billion. The market value of the holding was EUR 9.8 billion, i.e.
EUR 11.44 per share, at 30 September 2017. In addition the assets on Sampo plc's
balance sheet included holdings in subsidiaries for EUR 3.4 billion (2.4).
In the third quarter of 2017 Sampo plc announced that it will invest EUR 265
million in Saxo Bank Group and EUR 230 million in Nets A/S both located in
Denmark. Sampo plc will hold 19.9 per cent of shares in Saxo Bank Group after
the transaction.
OTHER DEVELOPMENTS
Consolidation of Topdanmark
Sampo Group has since May 2011 consolidated Danish insurer Topdanmark A/S as an
associated company by reporting in the P&C Insurance segment the share of
Topdanmark's profit corresponding to Sampo's holding. Sampo consolidates
Topdanmark as a subsidiary as of 30 September 2017 in its financial reporting in
accordance with IFRS.
Previously Sampo reported three segments; P&C Insurance (including Topdanmark),
Life Insurance and Holding segment (including Sampo's share of Nordea's profit).
Subsequent to consolidation of Topdanmark as a subsidiary, Sampo will change its
reporting structure and going forward report four segments; If, Topdanmark,
Mandatum and Holding (incl. Nordea).
In this January - September 2017 Interim Statement Topdanmark's balance sheet is
fully consolidated to Sampo Group's balance sheet. The share of Topdanmark's
profit for January-September 2017 corresponding to Sampo's holding is reported
as share of associate's profit/loss in the segment Topdanmark as a separate
line. In addition, the difference between the carrying value and the fair value
of Sampo's holding on 30 September 2017, EUR 706 million, is recognized in
profit and loss.
As of 1 October 2017 Topdanmark's profit and loss items will be recognized line-
by-line in Sampo Group's consolidated financial statements in the segment
Topdanmark. Sampo plc's share of Topdanmark's purchase price allocated to
customer relations was EUR 271 million. This amount will be amortized over a
period of 10 years leading to a quarterly amortization of around EUR 5 million,
net of tax.
Changes in the Group structure
The transformation of If's Finnish subsidiary, If P&C Insurance Company Ltd
(Finland), into a branch office of the Swedish company, If P&C Insurance Ltd,
was completed as of 2 October 2017 after all the necessary regulatory approvals
were obtained.
According to the plan published in May 2017 Mandatum Life's Baltic subsidiary,
Mandatum Life Baltic SE, will be merged to the parent company on 1 December
2017. Mandatum Life's Baltic operations will thereafter become branches to
Mandatum Life.
Changes in Group management
Timo Vuorinen, former Managing Director of If P&C Insurance Company (Finland),
Head of Private Sales and Services (Finland) and Head of Business Area Baltic
has decided to resign from his operative responsibilities and will hence leave
Sampo Group Executive Committee as of today. This is a consequence of the
decision to merge If P&C Insurance Company Ltd (Finland) with If P&C Insurance
Ltd. Vuorinen will be employed by Sampo Group until the end of 2017.
Remuneration
Sampo plc's Board of Directors decided on 14 September 2017 to adopt a new long-
term incentive scheme 2017:1 for the management of Sampo Group (including the
Group CEO) and other key employees of Sampo Group. Sampo Board Members are not
included in the scheme. The incentive scheme complies with the Sampo Group
Remuneration Principles and the remuneration policies of the relevant Sampo
Group companies.
The incentive rewards to be paid shall be based on the share price development
of the Sampo A share, on the insurance margin in If, on the return on capital at
risk and on the number of theoretical incentive units granted. The threshold
values for the performance conditions are presented in the terms and conditions
of the incentive scheme 2017:1 are available at www.sampo.com/incentiveterms.
The core of the Remuneration Principles of Sampo Group is that all remuneration
systems in Sampo Group shall safeguard the long-term financial stability of the
Group and shall comply with regulatory and ethical standards. Risk sensitive but
fair and rewarding compensation mechanisms enhance Sampo Group's ability to
create stakeholder and shareholder value.
In January-September 2017 payments of EUR 19 million (37), including social
costs, were made on the basis of the long-term incentive schemes. The result
impact of the long-term incentive schemes in force in January-September 2017 was
EUR 22 million (8). At the end of September 2017 Sampo Group had provisioned EUR
25 million (15) for future payments of long-term incentive schemes. EUR 37
million (37), including social costs, was paid as short-term incentives during
the same period.
The terms of the long-term incentive schemes are available at
www.sampo.com/incentiveterms.
Shares in the joint book-entry account
The AGM made on 27 April a decision on the forfeiture of the share certificates
that were still in the joint account and the rights carried by the shares. The
decision did not apply to shares whose transfer into the book-entry system had
been validly requested by 2pm on 27 April 2017 and whose request for conversion
after the conversion period was finalized by 31 October 2017. Approximately
98.9 per cent of the votes cast at the AGM were in favor of the proposal for the
forfeiture of the share certificates that were still in the joint account and
the rights carried by the shares.
The number of shares on the joint account on 30 September 2017 amounted to
4,784,390 which corresponds 0.85 per cent of the total number of shares and
votes.
The company's Board of Directors will cancel the treasury shares to be held by
the company as a result of the forfeiture.
Internal dividends
Mandatum Life paid a dividend of EUR 150 million to the parent company Sampo plc
in September 2017. If will pay a dividend of approximately EUR 620 million (SEK
6 billion) in December 2017.
Solvency
Sampo Group calculates and reports its Group solvency according to the Act on
the Supervision of Financial and Insurance Conglomerates (2004/699) which is
based on Directive 2002/87/EC of the European Parliament and of the Council on
the supplementary supervision of credit institutions, insurance undertakings and
investment. The consolidation will change the treatment of Topdanmark in the
Group Conglomerate Solvency calculation. As of 30 September 2017 Topdanmark is
treated in the same way as If and Mandatum Life, which means that when the
Solvency Capital Requirement (SCR) for Sampo Group is calculated Topdanmark's
contribution to the Group SCR is calculated using standard formula.
On 30 September 2017 If Group's SCR under standard formula amounted to EUR
2,004 million (1,942) and own funds to EUR 3,867 million (3,822). Solvency ratio
was 193 per cent (197).
Topdanmark's SCR, calculated by approved Partial Internal Model, amounted to EUR
400 million and own funds to EUR 956 million. Solvency ratio was 239 per cent.
Respective figures by standard formula needed to calculate Sampo Group level
solvency were the following. SCR was EUR 509 million, own funds EUR 956 million
and solvency ratio 188 per cent.
Mandatum Life's solvency ratio with transitional measures amounted to 193 per
cent (160) despite the dividend of EUR 150 million paid in September 2017. Own
funds of EUR 2,100 million (1,893) exceed SCR of EUR 1,089 million (1,182) by
EUR 1,011 million. Without transitional SCR capital requirement would have been
EUR 1,670 million (1,441) and SCR EUR 1,273 million (1,409) leading to a
solvency ratio of 131 per cent (102).
Group's conglomerate solvency ratio (own funds in relation to minimum
requirements for own funds) using Solvency II rules for the insurance
subsidiaries was 156 per cent (154) as at 30 September 2017.
Group solvency is also calculated by Solvency II rules. More information on this
method is available at the Risk Management section of the Annual Report 2016.
The results calculated with the two methods differ very little from one another.
More information on Sampo Group's capital policy is available at the Risk
Management section of the Annual Report 2016 at www.sampo.com/annualreport.
Debt financing
Sampo plc's debt financing on 30 September 2017 amounted to EUR 3,178 million
(3,548) and interest bearing assets to EUR 1,184 million (2,104). Interest
bearing assets include bank accounts, fixed income instruments and EUR 500
million (637) of hybrid capital and subordinated debt instruments issued by the
subsidiaries and associated company. At the end of the third quarter of 2017 the
net debt amounted to EUR 1,994 million (1,443). The net debt calculation only
takes into account interest bearing assets and liabilities. Gross debt to Sampo
plc's equity was 45 per cent (47) and financial leverage 31 per cent (32).
On 30 September 2017 financial liabilities in Sampo plc's balance sheet
consisted of issued senior bonds and notes of EUR 2,885 million (2,745) and EUR
293 million (671) of CPs issued. The average interest, net of interest rate
swaps, on Sampo plc's debt as of 30 September 2017 was 0.93 per cent (1.38).
More information on Sampo Group's outstanding debt issues is available at
www.sampo.com/debtfinancing.
OUTLOOK
Outlook for the rest of 2017
Sampo Group's business areas are expected to report good operating results for
2017.
However, the mark-to-market results are, particularly in Mandatum Life, highly
dependent on capital market developments. The continuing low interest rate level
also creates a challenging environment for reinvestment in fixed income
instruments.
If is expected to reach a combined ratio of 85 - 87 per cent for the full-year
2017.
With regard to Topdanmark reference is made to the profit forecast model that
the company publishes quarterly.
Nordea's contribution to the Group's profit is expected to be significant.
The major risks and uncertainties to the Group in the near-term
In its day-to-day business activities Sampo Group is exposed to various risks
and uncertainties mainly through its separately managed major business units.
Parent company Sampo plc's contribution to risks is a minor one.
Major risks affecting the Group companies' profitability and its variation are
market, credit, insurance and operational risks that are quantified
independently by the major business units. At the Group level sources of risks
are same, but they are not additive because of diversification effects.
Uncertainties in the form of major unforeseen events may have an immediate
impact on the Group's profitability. Identification of unforeseen events is
easier than estimation of their probabilities, timing and potential outcomes.
Currently there are a number of widely identified macro-economic, political and
other sources of uncertainty which can in various ways affect financial services
industry negatively.
Other sources of uncertainty are unforeseen structural changes in the business
environment and already identified trends and potential wide-impact events.
These external drivers may also have a long-term impact on how the business
shall be conducted.
SAMPO PLC
Board of Directors
For more information, please contact:
Peter Johansson, Group CFO, tel. +358 10 516 0010
Jarmo Salonen, Head of Investor Relations and Group Communications, tel.
+358 10 516 0030
Maria Silander, Communications Manager, tel. +358 10 516 0031
Conference call
An English-language conference call for investors and analysts will be arranged
at 4pm Finnish time (2pm UK time). Please call tel. +44 (0)330
336 9105, +1 719 325 2213, +46 (0)8 5033 6574 or +358 (0)9 7479 0361.
Confirmation Code: 5573363
The conference call can also be followed live at www.sampo.com/result. A
recorded version will later be available at the same address.
In addition the Supplementary Financial Information Package is available at
www.sampo.com/result.
Sampo will publish the Full-Year Financial Report 2017 on 7 February 2018.
Distribution:
Nasdaq Helsinki
London Stock Exchange
The principal media
Financial Supervisory Authority
www.sampo.com
[]
© 2024 Nasdaq, Inc. All Rights Reserved |