TIDMSAMPO
SAMPO PLC HALF-YEAR FINANCIAL REPORT
5 August 2020 at 9:35 am
Sampo Group's Results for January -- June 2020
Sampo Group's profit before taxes for the first half of 2020 was EUR 569
million (981). The Group's insurance technical performance continued to
excel and a large part of the decrease in the market values of
investment assets in March -- April 2020 was recovered. The total
comprehensive income, taking changes in the market value of assets into
account, amounted to EUR 34 million (995) for the first half of 2020 and
EUR 987 million (434) for the second quarter of 2020.
-- Earnings per share was EUR 0.81 (1.37) and mark-to-market earnings per
share was EUR 0.02 (1.68). Return on equity for the Group amounted to 0.2
per cent (15.4) for the first half of 2020. Meanwhile, the net asset
value per share on 30 June 2020 was EUR 16.99 (20.71).
-- Sampo confirmed on 29 July 2020 after market rumours started to circulate
that it is, together with Rand Merchant Investment Holdings Limited (RMI),
in discussions with Hastings Group Holdings Plc regarding a possible cash
offer to acquire the issued and to be issued share capital of Hastings
not already owned or controlled by Sampo and RMI. Today Sampo and RMI
have announced a recommended cash offer, through a newly-formed jointly
owned company, to acquire Hastings.
-- If segment's profit before taxes was EUR 383 million (440). The insurance
technical result increased to EUR 398 million (334) and the combined
ratio for January -- June 2020 amounted to 82.1 per cent (84.7). Premiums
grew by 5 per cent on a fixed currency basis. Furthermore, all business
areas and all markets recorded growth.
-- Topdanmark segment's profit before taxes decreased to EUR 38 million
(146). Meanwhile, the combined ratio amounted to 84.2 per cent (79.0).
-- Sampo's share of Nordea's net profit for January -- June 2020 amounted to
EUR 132 million (222). With regard to segment reporting, the share of
Nordea's profit is included in the segment entitled 'Holding'.
-- Profit before taxes for the Mandatum segment amounted to EUR 39 million
(137). Meanwhile, premiums decreased to EUR 498 million (529).
Change, Change,
Key figures 1-6/2020 1-6/2019 % 4-6/2020 4-6/2019 %
------------------------ -------- -------- ------- -------- -------- -------
EURm
------------------------ -------- -------- ------- -------- -------- -------
Profit before taxes 569 981 -42 407 506 -19
------------------------ -------- -------- ------- -------- -------- -------
If 383 440 -13 254 242 5
------------------------ -------- -------- ------- -------- -------- -------
Topdanmark 38 146 -74 52 53 -3
------------------------ -------- -------- ------- -------- -------- -------
Associates 137 226 -39 51 143 -64
------------------------ -------- -------- ------- -------- -------- -------
Mandatum 39 137 -71 55 65 -15
------------------------ -------- -------- ------- -------- -------- -------
Holding (excl.
associates) -29 31 - -5 2 -
------------------------ -------- -------- ------- -------- -------- -------
Profit for the period 469 826 -45 330 428 -23
------------------------ -------- -------- ------- -------- -------- -------
Change Change
------------------------ -------- -------- ------- -------- -------- -------
Earnings per share, EUR 0.81 1.37 -0.56 0.55 0.73 -0.18
------------------------ -------- -------- ------- -------- -------- -------
EPS (based on OCI) EUR 0.02 1.68 -1.66 1.73 0.74 0.99
------------------------ -------- -------- ------- -------- -------- -------
NAV per share, EUR *) 16.99 20.71 -3.72 - - -
------------------------ -------- -------- ------- -------- -------- -------
Average number of staff
(FTE) 10,322 9,734 588 - - -
------------------------ -------- -------- ------- -------- -------- -------
Group solvency ratio,
% *) 187 167 20 - - -
------------------------ -------- -------- ------- -------- -------- -------
RoE, % 0.2 15.4 -15.2 - - -
------------------------ -------- -------- ------- -------- -------- -------
*) comparison figure from 31.12.2019
The figures in this report have not been audited. Income statement items
are compared on a year-on-year basis and comparison figures for balance
sheet items are from 31 December 2019, 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
https://www.globenewswire.com/Tracker?data=T6zf9vlueHPz00XhXCTvd58orvnF5UK8dj1We_Y8k4KYAxjldXwmrNumdh21IiLkVMz_3nd2JR5F2sef1GKI2AdeIGYyQtoJEwz8w5hiu6Q=
www.sampo.com/result.
EXCHANGE RATES USED
IN REPORTING 1-6/2020 1-3/2020 1-12/2019 1-9/2019 1-6/2019
--------------------------- -------- -------- --------- -------- --------
EURSEK
--------------------------- -------- -------- --------- -------- --------
Income statement (average) 10.6621 10.6649 10.5853 10.5679 10.5181
--------------------------- -------- -------- --------- -------- --------
Balance sheet (at end
of period) 10.4948 11.0613 10.4468 10.6958 10.5633
--------------------------- -------- -------- --------- -------- --------
DKKSEK
--------------------------- -------- -------- --------- -------- --------
Income statement (average) 1.4280 1.4279 1.4183 1.4158 1.4090
--------------------------- -------- -------- --------- -------- --------
Balance sheet (at end
of period) 1.4813 1.4813 1.3982 1.4326 1.4153
--------------------------- -------- -------- --------- -------- --------
NOKSEK
--------------------------- -------- -------- --------- -------- --------
Income statement (average) 0.9932 1.0195 1.0749 1.0816 1.0810
--------------------------- -------- -------- --------- -------- --------
Balance sheet (at end
of period) 0.9618 0.9610 1.0591 1.0809 1.0897
--------------------------- -------- -------- --------- -------- --------
EURDKK
--------------------------- -------- -------- --------- -------- --------
Income statement (average) 7.4648 7.4714 7.4661 7.4644 7.4651
--------------------------- -------- -------- --------- -------- --------
Balance sheet (at end
of period) 7.4526 7.4674 7.4715 7.4662 7.4636
--------------------------- -------- -------- --------- -------- --------
GROUP CEO'S COMMENT
The second quarter was a strong quarter for Sampo Group, despite the
uncertainty related to COVID-19. Firstly, we continued to excel in P&C
insurance underwriting, the backbone of our profit generation, and
secondly, the investment markets reversed the negative experience from
March and April, as the equity markets surged and bond spreads narrowed
during May and June.
Business has been stable during the summer months, and we have also been
able to focus on project Dorset. The code name refers to the offer we
have published today, together with RMI, to acquire all shares in the UK
motor insurance company Hastings Group Holdings Plc.
The offer is of course a step in the strategy to allocate more capital
to P&C insurance, and Hastings is a unique company which we have
followed for some time. It operates in the large UK motor insurance
market and, more importantly, in the fast-growing segment of modern
digital distribution which continues to take market share from the
traditional operators. Hastings results have been impressive since the
IPO in 2015.
The UK is certainly an interesting insurance market. It is not only very
large, but also very advanced in digital terms. I am excited about the
opportunities to develop Sampo with these digital capabilities, at the
same time as our Nordic expertise in other areas like retention
techniques and car manufacturer collaboration can support Hasting's
future development.
The fact that we do this together with RMI, a long-term shareholder in
Hastings, reduces the acquisition risks significantly. RMI is a South
African financial services investment holding company and has been the
largest shareholder in Hastings since 2017.
Coming back to our existing businesses, If P&C posted a technical result
that improved further from the already excellent level. Stable
operations where premium increases corresponded well to claims
inflation. Topdanmark also recovered from the difficult first quarter of
this year.
Nordea's progress in the second quarter was encouraging. The bank
remains committed to meeting the financial targets 2022, and leading
indicators on cost and customer satisfaction developed strongly. It has
maintained the strong financial position it had when entering the
COVID-19 crisis and with its high equity tier 1 ratio and ample credit
loss buffers, the bank is well prepared to meet the challenges ahead.
Of all our business areas, Mandatum Life is the most exposed to the
volatility in the financial markets. At the same time Mandatum is the
one to benefit most from the upturn in the equity markets as witnessed
in the second quarter of this year when the other comprehensive income
rose to EUR 234 million. The company's Solvency II ratio continues to be
solid at 201 per cent.
Torbjörn Magnusson
Group CEO and President
SECOND QUARTER 2020 IN BRIEF
Sampo Group's profit before taxes for the second quarter of 2020 was EUR
407 million (506). Earnings per share was EUR 0.55 (0.73) and
mark-to-market earnings per share EUR 1.73 (0.74).
Net asset value per share increased EUR 1.63 during the second quarter
of 2020 and was EUR 16.99. The net asset value increased mainly because
of equity market recovery, and particularly, the increase in Nordea's
share price.
If's combined ratio for the second quarter of 2020 amounted to 80.5 per
cent (83.0). Profit before taxes amounted to EUR 254 million (242).
Topdanmark's combined ratio for the second quarter 2020 amounted to 79.7
per cent (79.8) and profit before taxes to EUR 52 million (53).
Sampo's share of Nordea's second quarter 2020 net profit was EUR 48
million (140).
Profit before taxes for Mandatum amounted to EUR 55 million (65).
Premiums written decreased to EUR 210 million (291).
EFFECTS OF COVID-19 ON SAMPO GROUP
Personnel and customer relations
Sampo Group has followed the recommendations from authorities in its
respective countries both during the lock-down in the acute phase of the
crisis as well as now that societies are gradually re-opening in The
Nordic and Baltic countries.
In Sampo Group's biggest subsidiary If P&C, 6,000 of more than 7,000
employees have been working remotely during the crisis and the remainder
have been working in offices where social distancing measures have been
observed. Mandatum Life also has followed the government advice and
continues with remote work. Only a few percent of employees are working
at the office premises. Also, in Topdanmark 95 per cent of employees
have been working remotely.
When the COVID-19 pandemic reached the Nordic countries in mid-March
2020 priority was given to continuity and continued service and support
to customers in the best way in the changed working conditions.
Operational efficiency and availability have been good and early
indications show sick leave to have declined during the crisis.
Physical customer visits to our offices have been stopped or are subject
to extra precautions. Business travel and conferences have also been
halted. During this period subsidiaries have been able to offer a normal
service level and customer satisfaction has remained on a high level.
There has been no disruption in the customer service.
Insurance business
If's claims cost for the first six months of 2020 was negatively
impacted from travel insurance policies primarily following imposed
government travel restrictions due to COVID-19. At the end of the
reporting period, the total number of reported claims amounted to just
over 50 000, corresponding to a gross claims cost of approximately SEK
400 million (EUR 38 million) mostly in BA Private and Norway. The net
claims cost is expected to be significantly reduced by a reinsurance
cover with a net retention for this event of SEK 100 million (EUR 9
million).
The lock down activities in the Nordic countries had a positive effect
on claims cost especially at the beginning of the second quarter of
2020. The largest factor being reduced traffic on the roads that
resulted in an extraordinary and temporary decrease in motor claims.
Towards the end of the period, as governments started to reopen
societies, claims frequency also returned to a more normal level. At the
same time an increase in repair costs is likely because of lack of
material, delays in transportation of material or shortage of personnel
following implemented government travel restrictions.
During the second quarter of 2020 there was a clear negative impact on
premium volume because of the COVID-19 situation. This was a result of
many variables including fewer new cars sold, decommissioning of
vehicles and lower insurable sums and goods.
Mandatum Life's claims cost in January-June 2020 was in line with the
previous year. Premium income was 6 per cent, EUR 32 million, below the
previous year in January-June, but in April-June both claims paid and
premium income were around EUR 80 million below the previous year.
In its Half-year Report for 2020 published on 17 July 2020 Topdanmark
described the impact COVID-19 had on its operations. The report is
available at
https://www.globenewswire.com/Tracker?data=T6zf9vlueHPz00XhXCTvd7dt6RPLXFpuJGSq-7p3P6dKdjWoFisqYEG42uf2oahbwBFqlppqOQ_9O3_itU_UtmESo31W6T8aVKyFigmyqiU=
www.topdanmark.com.
Investment activities
The swift monetary responses by central banks and governments have
helped to stabilize the financial markets after the initial shock
reaction in March 2020. Leading equity indices have rebounded strongly
and credit spreads on bonds have narrowed since then.
Companies in Sampo Group have enjoyed good returns in the second quarter
of 2020. However, the mark-to-market losses in the investment portfolio
suffered during March -- April 2020 had not been fully recovered by the
end of the quarter.
Solvency positions
The solvency positions of Sampo Group and its subsidiaries remained
robust in the second quarter of 2020. More information is available in
the section Solvency.
Impacts on future operating models
As Sampo Group's personnel gradually returns to the offices, the Group
follows the recommendations of authorities in individual countries. This
means that operations are returning to normal step by step and with
somewhat varying speed in each country. Social distancing measures are
still in effect also during the re-opening phase and the principle is to
offer employees the flexibility to continue working from home for the
foreseeable future, while re-opening the offices for those employees who
wish to return.
The COVID-19 pandemic will have lasting effects on how operations are
organized in the Group. The crisis has accelerated the digitalization of
work life. Remote work has proven itself both effective and to be an
important tool for handling unexpected crises. Going forward, increased
flexibility will be expected by employees and recruitment candidates.
Group companies have started several "Post Corona" initiatives relating
to the use of remote work in the future and the required changes in HR
and employment relations.
BUSINESS AREAS
If
Profit before taxes for January -- June 2020 for the If segment was EUR
383 million (440). The total comprehensive income for the period after
tax was EUR 106 million (462). The combined ratio for the period was
82.1 per cent (84.7) and the risk ratio was 61.4 per cent (63.0).
Net releases from the technical reserves relating to the prior year
claims were EUR 103 million (108) in January-June. The technical result
increased to EUR 398 million (334). The insurance margin (the technical
result in relation to the net premiums earned) increased to 18.3 per
cent (15.7).
Large claims were EUR 47 million worse than expected in the first half
of 2020. The Norwegian market was particularly impacted by large loss
development in the first half.
The Swedish discount rate used to discount the annuity reserves was
-0.81 per cent and had a negative effect of EUR 2 million on the profit
in the first half of 2020.
Gross written premiums increased to EUR 2,846 million (2,772) in January
-- June 2020. Adjusted for currency, premium growth was 5.2 per cent
compared to the corresponding period a year ago. Furthermore, growth was
positive in all business and market areas -- it was highest in Denmark
where it accelerated to 12.0 per cent. Gross written premiums grew by
6.6 per cent in Norway, 4.6 per cent in Sweden, and 2.0 per cent in
Finland. In BA Industrial, premium growth amounted to 9.4 per cent, in
BA Commercial it was 6.6 per cent, in BA Baltic it reached 2.1 per cent,
and in BA Private 3.2 per cent.
The risk ratio 59.3 (61.2) for the second quarter improved compared to
last year. This was driven by an underlying improvement from implemented
actions over a longer period as well as an extraordinary benign
frequency situation in the second quarter due to the COVID-19 which
resulted in a significant reduction in traffic and lower activity
especially at the beginning of the quarter. Towards the end of the
period claims returned to more normal levels. The positive effect on the
net risk ratio in the second quarter was approximately 4 percentage
points.
The cost ratio was 20.8 per cent (21.7) and the expense ratio was 15.2
per cent (16.2).
On 30 June 2020, the total investment assets of If amounted to EUR 10.8
billion (10.8).
If's solvency position is described in the section entitled 'Solvency'.
Topdanmark
At the end of June 2020, Sampo plc held 41,997,070 Topdanmark shares,
which corresponds to 46.7 per cent of all shares and 48.1 per cent of
related voting rights in the company. The market value of the holding
was EUR 1,544 million on 30 June 2020.
As a consequence of the COVID-19 situation, only DKK 8.5 of the
previously announced dividend of DKK 17 per share was paid following the
AGM on 2 April 2020. Consequently, Sampo received EUR 48 million in
dividends from Topdanmark on 7 April.
Topdanmark's Board of Directors has decided to postpone payment of the
remainder of the dividend for 2019 until the AGM on 25 March 2021. It is
still the intention to distribute in part or in full the remaining DKK
8.5 of the previously announced dividend.
Topdanmark's profit before taxes for January--June 2020 amounted to EUR
38 million (146). During the second quarter of 2020, Topdanmark's profit
before taxes was almost unchanged despite a lower life result.
The combined ratio amounted to 84.2 per cent (79.0). The expense ratio
was almost unchanged at 16.7 per cent.
The following text is based on Topdanmark's Half-year report 2020 report,
which was published on 17 July 2020.
During the first half of 2020, Topdanmark's premiums increased 2.7 per
cent in non-life insurance and 20.7 per cent in life insurance. In the
private segment, premiums were negatively impacted by the termination of
the distribution agreement with Danske Bank at the end of the first half
of 2019. From 2021, it is expected that the Nordea agreement will
compensate fully for the terminated distribution agreement with Danske
Bank in terms of premiums.
During the first half of 2020, Topdanmark's technical result decreased
due to lower run-off, and by a higher level of weather-related claims.
During the second quarter, however, the technical result increased.
In the first half of 2020, weather-related claims represented a 1.0
percentage point deterioration of the claims trend. Thereby, the level
of weather-related claims was EUR 1 million below the assumed normal
level.
The level of large claims represented a 0.1 percentage point
deterioration of the claims trend in the first half of 2020.
Topdanmark's solvency position is described in the section entitled
'Solvency'.
Further information on Topdanmark A/S and its January -- June 2020
results is available at
https://www.globenewswire.com/Tracker?data=T6zf9vlueHPz00XhXCTvdzFwWjNSkAEZE-VUAUrLnp_6P-m4lLC11OTX9cHl3bzvfD7hKtXlT7L39McFUCCRxbGGTJurkOCIzPfb7GdsgHg=
www.topdanmark.com.
NORDEA (associated company)
On 30 June 2020, Sampo plc held 804,922,858 Nordea shares, which
corresponds to a holding of 19.87 per cent. The average price paid per
share amounted to EUR 6.46 and the book value in the Group accounts was
EUR 8.42 per share. The closing price as at 30 June 2020 was EUR 6.15.
The AGM on 28 May 2020 mandated the Board of Directors to decide on a
dividend payment of a maximum of EUR 0.40 per share for the financial
year 2019 to be distributed in one or several instalments. The Board of
Directors intends to follow the recommendation adopted by the ECB and
refrain from deciding on a dividend payment based on the authorization
before 1 October 2020.
The following text is based on Nordea's Half-Year Financial Report 2020
published on 17 July 2020.
Nordea reported a solid result with revenues largely unchanged. Net
interest income increased by 2 per cent, supported by volume growth,
especially in mortgages, in all countries. Operating profit was EUR 306
million - significantly impacted by loan loss provisions.
Nordea estimates total net loan losses for the full year 2020 to be
below EUR 1 billion.
In the quarter underlying net loan losses were EUR 310 million. On top
of that Nordea has made additional management judgement allowances of
EUR 388 million leading to total Q2 net loan losses of EUR 698 million.
Nordea now has a management judgement buffer of EUR 650 million in place
to cover for future loan losses, IFRS 9 model improvements and the
European Central Bank's new guidance on non-performing loans.
Nordea's capital position remains very strong with a common equity tier
1 ratio of 15.8 per cent, which is 5.6 percentage points above the
requirement.
Sampo's share of Nordea's profit before taxes for January--June 2020
amounted to EUR 132 million (222).
Mandatum Life
Mandatum segment's profit before taxes for January - June 2020 amounted
to EUR 39 million (137). The total comprehensive income for the period
after tax reflecting the changes in market values of assets decreased to
EUR -90 million (190). Return on equity was -13.3 per cent (30.1).
Mandatum Life Group's premium income amounted to EUR 498 million (529)
for the first half of 2020 Unit-linked premiums were EUR 439 million,
i.e. 88 per cent of total premiums.
Net investment income, excluding income on unit-linked contracts,
decreased to EUR 30 million (203) due to the market turmoil in the first
quarter of 2020. In April - June, net investment income, excluding
unit-linked contracts, was EUR 53 million.
Net income from unit-linked contracts decreased to EUR -312 million
(523). In the second quarter of 2020, net income from unit-linked
contracts amounted to EUR 572 million. In January - June of 2020 fair
value reserve decreased to EUR 316 million (438).
Mandatum Life Group's total technical reserves amounted to EUR 11.5
billion (12.0). Unit-linked reserves decreased to EUR 7.8 billion (8.1)
at the end of June 2020. The amount corresponds to 67 percent (68) of
total technical reserves. Since the end of March 2020, unit-linked
reserves increased by almost EUR 600 million.
At the end of June 2020, with-profit reserves decreased to EUR 3.7
billion (3.9). Reserves related to the higher guarantees of 4.5 and 3.5
per cent decreased by EUR 149 million to EUR 2.0 billion in January -
June 2020.
Mandatum Life has overall supplemented its technical reserves with a
total of EUR 184 million (230) due to low level of interest rates. The
figure does not take into account the reserves relating to the
segregated fund. The discount rate used for the years 2020 and 2021 is
0.25 per cent. The rate used for 2022 is 1.25 per cent.
The discount rate for segregated liabilities is 0.0 per cent and the
discount rate reserve of segregated liabilities amounted to EUR 250
(263) at the end of June 2020.
At the end of June 2020, Mandatum Life's investment assets, excluding
the assets of EUR 7.8 billion (8.1) covering unit-linked liabilities,
amounted to EUR 5.3 billion (5.7) at market values.
The expense result in the first half of 2020 amounted to EUR 10 million
(7). Risk result was EUR 11 million (10).
Mandatum Life's solvency position is described in the section Solvency.
Holding
Profit before taxes for January -- June 2020 for the Holding segment
amounted to EUR 109 million (258). Sampo's share of profits for the
associated companies Nordea and NDX Intressenter for January -- June
2020 amounted to EUR 137 million (226), of which Nordea's share was EUR
132 million (222) and NDX Intressenter's share was EUR 5 million (4).
The Holding segment's profit before taxes, excluding the associates for
January -- June 2020, was EUR -29 million (31).
Changes in market values of derivative instruments and currency exchange
rates can cause volatility in the net investment income and finance cost
lines.
Sampo plc's holding in Nordea was booked in the consolidated balance
sheet at EUR 6.8 billion, i.e. EUR 8.42 per share. The market value of
the holding was EUR 4.9 billion, i.e. EUR 6.15 per share, on 30 June
2020.
OTHER DEVELOPMENTS
Events after the end of the reporting period
Sampo confirmed on 29 July 2020 after market rumours started to
circulate that it is, together with a South-African financial services
investment holding company Rand Merchant Investment Holdings Limited
(RMI), in discussions with the UK P&C insurance company Hastings Group
Holdings Plc (Hastings) regarding a possible cash offer to acquire the
issued and to be issued share capital of Hastings not already owned or
controlled by Sampo and RMI.
Following the announcement on 29 July 2020, Sampo and RMI have today
announced a recommended cash offer, through a newly-formed jointly owned
company, to acquire all issued and to be issued shares Hastings not
already owned or controlled by Sampo and RMI.
The cash offer price is GBp 250 for each Hastings share, valuing
Hastings' entire issued and to be issued share capital at approximately
GBP 1.66 billion or approximately EUR 1.84 billion.
The cash offer represents a premium of approximately 37.5 per cent to
volume-weighted average price of GBp 182 per Hastings share for the
three-month period ended on 4 August 2020, the last business day before
of the date of the offer announcement.
Following the completion of the offer, Sampo and RMI will own and
control 70 per cent and 30 per cent of the shares and votes in the
jointly owned company, respectively.
The size of Sampo's investment, based on its 70 per cent stake, would be
GBP 1.16 billion or EUR 1.29 billion valued at the offer price. Sampo
expects to fund its part of the acquisition with approximately EUR 1
billion of newly issued hybrid Tier 2 capital with the residual coming
from existing cash resources.
Sampo estimates that the acquisition of Hastings will have a positive
impact on its earnings per share in the mid-single digits. The
acquisition is not expected to impact on Sampo's dividend policy in the
short term but is expected to enhance the dividend potential in the long
term.
Meanwhile it is expected that Sampo's solvency position will remain
robust at approximately 175 per cent (post planned issuance of
approximately EUR 1 billion of hybrid Tier 2 capital). Sampo does not
believe that the transaction will lead to a change in the Group's credit
ratings subject to the planned financing structure.
The independent directors of Hastings intend to recommend unanimously
that Hastings' shareholders approve the offer and have entered into
irrevocable undertakings to do so in an amount of 0.33 per cent of the
company's issued share capital.
The transaction is subject to Hastings' shareholder approval and
regulatory approvals and is expected to be closed by the end of 2020.
More information on the offer at
https://www.globenewswire.com/Tracker?data=T6zf9vlueHPz00XhXCTvd4jj6r7OHJv_wIsDrb-n2c0wqY_pEEXtZ36EpuR9_VY3cTVEtbv0C-983Iz3-XFT-hmgp6WShUsjjUFpeKo7Mi8=
www.sampo.com/offer and
https://www.globenewswire.com/Tracker?data=T6zf9vlueHPz00XhXCTvd58YRXzuoVSEJAHI9fEkhQwaoTGkvICkTtEMxunlIDA0NhZ3v4lvWOvd6xEWOczkebgZ1gW6aX6guPz5rbU4pPQ=
www.hastingsplc.com.
Annual General Meeting
The Board of Directors of Sampo plc decided on 25 March 2020 to postpone
the Annual General Meeting that was scheduled to be held on 23 April
2020. The postponement was made in order to ensure the safety and
well-being of Sampo's shareholders, Sampo's employees, and other
stakeholders, in light of the COVID-19 outbreak and the related health
threat.
On 6 May 2020 Sampo Board decided to cancel the previous dividend
proposal of EUR 2.20 per share and announce a new proposal of EUR 1.50
per share. The Annual General Meeting, held on 2 June 2020, decided to
distribute the proposed dividend of EUR 1.50 per share for 2019. The
record date for dividend payment was 4 June 2020 and the dividend was
paid on 11 June 2020. The Annual General Meeting adopted the financial
accounts for 2019 and discharged the Board of Directors and the CEO from
liability for the financial year.
The Annual General Meeting elected eight members to the Board of
Directors. The following members were re-elected to the Board: Christian
Clausen, Fiona Clutterbuck, Jannica Fagerholm, Johanna Lamminen, Risto
Murto, Antti Mäkinen and Björn Wahlroos. Georg Ehrnrooth was
elected as a new member to the Board. The Members of the Board were
elected for a term continuing until the close of the next Annual General
Meeting.
At its organizational meeting, the Board elected Björn Wahlroos as
Chair of the Board and Jannica Fagerholm as Vice Chair. Christian
Clausen, Risto Murto, Antti Mäkinen and Björn Wahlroos (Chair)
were elected to the Nomination and Remuneration Committee. Fiona
Clutterbuck, Georg Ehrnrooth, Jannica Fagerholm (Chair) and Johanna
Lamminen were elected to the Audit Committee.
All the proposed Board members have been determined to be independent of
the company and its major shareholders under the rules of the Finnish
Corporate Governance Code 2020. The curriculum vitaes of the Board
Members are available at www.sampo.com/board.
The Annual General Meeting decided to pay the following fees to the
members of the Board of Directors until the close of the 2021 Annual
General Meeting: the Chair of the Board will be paid an annual fee of
EUR 180,000 and other members of the Board will be paid EUR 93,000 each.
Furthermore, the members of the Board and its Committees will be paid
the following annual fees: the Vice Chair of the Board EUR 26,000, the
Chair of the Audit Committee EUR 26,000 and the member of the Audit
Committee EUR 6,000. A Board member shall in accordance with the
resolution of the Annual General Meeting acquire Sampo plc's A shares at
the price paid in public trading for 50 per cent of his/her annual fee
excluding taxes and similar payments.
The Annual General Meeting accepted Sampo plc's Remuneration Policy for
Governing Bodies. The resolution on the Remuneration Policy was
advisory.
Ernst & Young Oy was elected as Auditor. The Auditor will be paid a fee
determined by an invoice approved by Sampo. Kristina Sandin, APA, will
act as the principally responsible auditor.
At the general meeting 320,359,477 shares (57.7 per cent of shares) and
325,159,477 votes (58.0 per cent of all votes) were represented,
including advance voting and a proxy representation.
The minutes of the Annual General Meeting are available for viewing at
www.sampo.com/agm and at Sampo plc's head office at Fabianinkatu 27,
Helsinki, Finland.
Shares and shareholders
The Annual General Meeting held on 2 June 2020 authorized the Board to
repurchase a maximum of 50,000,000 Sampo A shares. The price paid for
the shares repurchased under the authorization shall be based on the
current market price of Sampo A shares on the securities market. The
authorization will be valid until the close of the next Annual General
Meeting, nevertheless not more than 18 months after AGM's decision.
During January -- June 2020 Sampo plc made no repurchases of its own
shares and it has not purchased any shares after the end of the
reporting period. Furthermore, Sampo plc and its subsidiaries did not
hold any Sampo shares as at 30 June 2020.
Internal dividends
Topdanmark's Annual General Meeting on 2 April 2020 decided to pay
one-half of the planned dividend and postpone the decision on the
payment of the other half until autumn. Sampo received EUR 48 million on
7 April in dividends from Topdanmark. On 17 July 2020 Topdanmark's Board
of Directors decided to follow the recommendation by the Danish FSA and
postpone the payment of the remainder of the dividend until the AGM on
25 March 2021.
Mandatum Life decided not to pay the dividend of EUR 150 million planned
for March 2020.
Nordea's AGM on 28 May 2020 mandated the Board of Directors to decide on
a dividend payment for the financial year 2019. The Board of Directors
intends to follow the recommendation adopted by the ECB and refrain from
deciding on a dividend payment based on the authorization before 1
October 2020.
If normally pays its dividend at the end of each year. The company had
already paid a dividend of SEK 7.5 billion (EUR 710 million) in December
2019.
Ratings
The relevant ratings for Sampo Group companies did not change in the
first half of 2020. The ratings at the end of June 2020 are presented in
the table below.
Rated company Moody's Standard & Poor's
----------------------------- --------------- -------------------
Rating Outlook Rating Outlook
----------------------------- ------ ------- -------- ---------
A3 Stable A
Sampo plc -- Issuer Credit Stable
Rating
----------------------------- ------ ------- -------- ---------
If P&C Insurance Ltd -- A1 Stable A+ Stable
Insurance Financial Strength
Rating
----------------------------- ------ ------- -------- ---------
If P&C Insurance Holding - - A Stable
Ltd (publ) -- Issuer Credit
Rating
----------------------------- ------ ------- -------- ---------
Mandatum Life Insurance - - A+ Stable
Company Ltd -- Issuer Credit
Rating
----------------------------- ------ ------- -------- ---------
Group solvency
Sampo Group calculates its group solvency under the Solvency II rules.
In this calculation Nordea is treated as an equity investment. According
to the Solvency II directive, Sampo Group's solvency ratio amounted to
187 per cent (167) at the end of June 2020. Had the year-end 2019
solvency been calculated taking into account the revised dividend
proposal, the adjusted solvency ratio would have been 174 per cent.
Positive development in the equity market, strong underwriting result
and the narrowing of bond spreads increased Sampo Group's own funds. On
the other hand, changes in the symmetric adjustment and the volatility
adjustment increased SCR (Solvency Capital Requirement) and reduced the
solvency level. The volatility adjustment changes also decreased Group's
Own funds. The rise in Nordea's share price during the second quarter of
2020 increased SCR, but had, in aggregate, a positive impact on the
solvency by increasing the own funds even more.
Solvency position in the subsidiaries
The insurance subsidiaries apply Solvency II rules in their regulatory
solvency calculations. The If Group companies use either partial
internal models or the standard model for the calculation of their solo
solvency position. Mandatum Life reports in accordance with the standard
formula for Solvency II. Meanwhile, Topdanmark uses a partial internal
model to report its stand-alone solvency position.
If Group has an A+ rating from S&P which will continue to require
significantly more capital than the standard formula and therefore the
use of the standard formula has no practical implications on If Group's
capital position. On 30 June 2020, If Group's Solvency II capital
requirement under the standard formula amounted to EUR 1,794 million
(1,890) and own funds amounted to EUR 3,474 million (3,592). The
solvency ratio amounted to 194 per cent (190).
The S&P single-A capital requirement for If Group amounted to EUR 2,939
million (3,083) on 30 June 2020 and the capital base was EUR 3,121
million (3,151).
Topdanmark calculates most of its non-life and health risks and their
respective solvency capital requirement by applying a partial internal
model approved by the DFSA. Other risks are calculated by the Solvency
II SCR standard formula. Topdanmark's solvency ratio under the partial
internal model was 197 per cent (177) at the end of June 2020.
Mandatum Life's solvency ratio after transitional measures amounted to
201 per cent (176) on 30 June 2020. The comparison figure would have
increased from 176 per cent to 194 per cent if the cancellation of the
EUR 150 million dividend payment in March 2020 was taken into account.
Own funds were EUR 2,127 million (2,117) and the Solvency Capital
Requirement (SCR) was EUR 1,058 million (1,204). The strong investment
returns and growth in unit-linked savings increased own funds. On the
other hand, tightening volatility adjustment intensified the negative
effect of the decreased interest rate level. SCR increased because of
the higher equity risk exposure and the change in the symmetric
adjustment factor.
Without transitional measures, own funds would have amounted to EUR
1,781 million (1,756) and the solvency capital requirement would have
amounted to EUR 1,070 million (1,234), leading to a solvency ratio of
166 per cent (142).
Debt financing
On 30 June 2020, Sampo plc's debt financing amounted to EUR 3,659
million (3,908) and interest bearing assets amounted to EUR 787 million
(1,725). Interest bearing assets include bank accounts, fixed income
instruments and EUR 351 million (359) of hybrid capital and subordinated
debt instruments issued by the subsidiaries and associated companies.
Sampo plc's net debt amounted to EUR 2,797 million (2,183). The net debt
calculation takes into account interest bearing assets and liabilities.
Gross debt to Sampo plc's equity was 54 per cent (51) and financial
leverage was 35 per cent (34).
On 28 May 2020 Sampo plc repaid SEK 3,000 million senior notes maturing
on that date.
On 30 June 2020, financial liabilities in Sampo plc's balance sheet
consisted of issued senior bonds and notes of EUR 3,109 million (3,414).
In addition, Sampo plc has issued subordinated notes of EUR 495 million
(494). Outstanding commercial papers amounted to EUR 50 million (0). The
average interest, net of interest rate swaps, on Sampo plc's debt as of
30 June 2020 was 1.3 per cent (1.3).
More information on Sampo Group's outstanding debt issues is available
at:
https://www.globenewswire.com/Tracker?data=T6zf9vlueHPz00XhXCTvd_zu7YDjoI7xWzQv_94RXWxKmlYe06noeArF32iYWXH1-eG7Yb8UMIRLiu-OAtzJkLsukWPkBeSdoV0kRMciGQPorATXnPisEZKoLRzJyja3
www.sampo.com/debtfinancing.
OUTLOOK
Outlook for 2020
Sampo Group's insurance businesses are expected to report good insurance
technical results for 2020. However, the investment results are at this
point in time more uncertain than usual. The mark-to-market results for
2020 are highly dependent on capital market developments, particularly
in life insurance.
If P&C is expected to reach a combined ratio of 82 -- 85 per cent in
2020.
With regard to Topdanmark, reference is made to the profit forecast
model that the company publishes on a quarterly basis.
Nordea's contribution to the Group's profit is expected to be
significant.
The major risks and uncertainties for the Group in the near-term
In its current day-to-day business activities Sampo Group is exposed to
various risks and uncertainties, mainly through its separately managed
major business units.
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 the same, although they are not directly additive
due to the effects of diversification.
Uncertainties in the form of major unforeseen events may have an
immediate impact on the Group's profitability. The identification of
unforeseen events is easier than the estimation of their probabilities,
timing, and potential outcomes. Currently, the COVID-19 pandemic is
causing significant negative effects on the Nordic economies. The
duration of the measures taken to contain the virus and their effects on
economic and capital market development are uncertain. There are also a
number of widely identified macroeconomic, political and other sources
of uncertainty which can, in various ways, affect the financial services
industry in a negative manner.
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 have a long-term impact
on how Sampo Group's business will be conducted. Examples of already
identified trends are technological developments in areas such as
artificial intelligence and digitalization, demographic changes, and
sustainability issues that may also have profound effects on companies
from the financial sector.
SAMPO PLC
Board of Directors
For more information, please contact:
Knut Arne Alsaker, 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, Media Relations, tel. +358 10
516 0031
Conference call
An English language conference call for investors, analysts and the
media will be arranged today at 1 pm Finnish time (11 am UK time). To
participate, please call one of the following telephone numbers: +1 631
913 1422, +44 333 300 0804, +46 856 642 651, or +358 981 710 310. The
conference code is 25893753#.
The conference call can also be followed live at:
https://www.globenewswire.com/Tracker?data=T6zf9vlueHPz00XhXCTvd58orvnF5UK8dj1We_Y8k4IyOa1b1OEvcjGLcXZKofy8mosezM57g7anDMWR7oirOuaxhaQwico7AcAjHMqvTsQ=
www.sampo.com/result. A recorded version will be available later at the
same address.
In addition, the Supplementary Financial Information Package is
available at:
https://www.globenewswire.com/Tracker?data=T6zf9vlueHPz00XhXCTvd58orvnF5UK8dj1We_Y8k4JAT34RTkp9N-R69BsY7SNqZZsqVJUyVPESjCYw0K9EWD71dKr4e0fMczfCtPf0AQM=
www.sampo.com/result.
Sampo will publish the Interim Statement for the period
January--September 2020 on 4 November 2020.
Distribution:
Nasdaq Helsinki
London Stock Exchange
The principal media
Financial Supervisory Authority
https://www.globenewswire.com/Tracker?data=T6zf9vlueHPz00XhXCTvd8fD81Fg3gru9gi8YKs5tKcadpqGd6V9FN86g6FFAhiLRRXVUNFFuWCTUs-DCjaVqA==
www.sampo.com
Attachment
-- Half-Year Financial Report January - June 2020
https://ml-eu.globenewswire.com/Resource/Download/b0fa0a99-6d8b-4dd6-b047-dad97e17e80c
(END) Dow Jones Newswires
August 05, 2020 02:50 ET (06:50 GMT)
Copyright (c) 2020 Dow Jones & Company, Inc.
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