Yahoo Finance Sampo Group's Results for January - March 2019
SAMPO PLC INTERIM STATEMENT 8 May 2019 at 9:30 am
Sampo Group`s Results for January - March 2019
Sampo Group`s profit before taxes for January - March 2019 increased to EUR 475 million (445). The total comprehensive income for the period, taking changes in the market value of assets into account, strengthened to EUR 561 million (108). The insurance operations continued to perform well, and the marked-to-market results benefited from the rebound in the equity markets.
-Earnings per share amounted to EUR 0.64 (0.63). Marked-to-market earnings per share were EUR 0.94 (0.15). The return on equity (RoE) for the Group was 16.5 per cent (2.5) for January - March 2019. Net asset value per share on 31 March 2019 amounted to EUR 22.03 (20.60).
-The Annual General Meeting, held on 9 April 2019, decided to distribute a dividend of EUR 2.85 per share for 2018. The dividend was paid on 18 April 2019. In addition to the cash dividend, the Annual General Meeting decided to authorize the Board of Directors to resolve, in its discretion, on the distribution of an extra dividend up to EUR 500,000,000 (EUR 0.9 per share) either in cash and/or in financial instruments. The authorization is valid until the next Annual General Meeting.
-Profit before taxes for the segment If amounted to EUR 198 million (193). Combined ratio for January - March 2019 was unchanged from a year ago at 86.5 per cent (86.5). Return on equity increased to 41.6 per cent (-0.9).
-Topdanmark segment`s profit before taxes amounted to EUR 92 million (60) in Sampo Group`s consolidated accounts. Insurance technical profitability was excellent, and the combined ratio amounted to 78.2 per cent (83.7).
-Sampo`s share of Nordea`s net profit for the first quarter of 2019 decreased to EUR 83 million (165). Nordea booked a provision of EUR 95 million for AML-related matters in the first quarter 2019. Nordea`s return on equity was 5.5 per cent (9.0). In segment reporting the share of Nordea`s profit is included in the segment `Holding`.
-Profit before taxes for the segment Mandatum amounted to EUR 72 million (73). Return on equity increased to 37.6 per cent (-5.8).
KEY FIGURES | 1-3/2019 | 1-3/2018 | Change, % |
EURm | |||
Profit before taxes | 475 | 445 | 7 |
If | 198 | 193 | 3 |
Topdanmark | 92 | 60 | 52 |
Associates | 83 | 165 | -49 |
Mandatum | 72 | 73 | -2 |
Holding (excl. associates) | 29 | -46 | - |
Profit for the period | 398 | 375 | 6 |
Change | |||
Earnings per share, EUR | 0.64 | 0.63 | 0.01 |
EPS (incl. change in FVR) EUR | 0.94 | 0.15 | 0.79 |
NAV per share, EUR *) | 22.03 | 20.60 | 1.43 |
Average number of staff (FTE) | 9,670 | 9,419 | 251 |
Group solvency ratio, % *) | 130 | 147 | -17 |
RoE, % | 16.5 | 2.5 | 14.0 |
*) comparison figure from 31 December 2018
The figures in this report are not audited. Income statement items are compared on a year-on-year basis and comparison figures for balance sheet items are from 31 December 2018 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 | 1-3/2019 | 1-12/2018 | 1-9/2018 | 1-6/2018 | 1-3/2018 |
EURSEK | |||||
Income statement (average) | 10.4187 | 10.2583 | 10.2374 | 10.1508 | 9.9712 |
Balance sheet (at end of period) | 10.3980 | 10.2548 | 10.3090 | 10.4530 | 10.2843 |
DKKSEK | |||||
Income statement (average) | 1.3959 | 1.3764 | 1.3741 | 1.3630 | 1.3390 |
Balance sheet (at end of period) | 1.3929 | 1.3733 | 1.3826 | 1.4026 | 1.3799 |
NOKSEK | |||||
Income statement (average) | 1.0694 | 1.0688 | 1.0678 | 1.0582 | 1.0350 |
Balance sheet (at end of period) | 1.0765 | 1.0308 | 1.0890 | 1.0990 | 1.0628 |
EURDKK | |||||
Income statement (average) | 7.4637 | 7.4533 | 7.4503 | 7.4477 | 7.4468 |
Balance sheet (at end of period) | 7.4652 | 7.4673 | 7.4564 | 7.4525 | 7.4530 |
BUSINESS AREAS
If
Profit before taxes for January - March 2019 for the If segment rose to EUR 198 million (193). The total comprehensive income for the period after tax increased to EUR 259 million (-6). Combined ratio was 86.5 per cent (86.5) and risk ratio 64.8 per cent (64.7).
Net releases from technical reserves relating to prior year claims were EUR 51 million (50) in the first quarter of 2019. Swedish discount rate used to discount the annuity reserves rose from -0.41 percent at the end of 2018 to -0.34 at the end of the first quarter of 2019 and had a positive impact of EUR 5 million on the profit. Technical result increased to EUR 147 million (143). Insurance margin (technical result in relation to net premiums earned) improved slightly to 13.9 per cent (13.8).
Large claims overall ended up EUR 4 million worse than expected in the first quarter of 2019. In BA Commercial large claims were EUR 8 million worse than expected and in BA Industrial EUR 5 million better than expected.
Gross written premiums increased 1.9 per cent to EUR 1,651 million (1,621) in January - March 2019, but adjusted for currency, premium growth was strong at 3.9 per cent. The growth was driven by increased retention levels and increased number of customers. Price increases were on average slightly higher than claims inflation. Growth was positive in all business areas, except the Baltics, and all markets, except Finland. The growth was highest in Norway and accelerated to 10.5 per cent. In BA Industrial premiums grew by 11.7 per cent.
Cost ratio improved further and amounted to 21.7 per cent (21.8). Expense ratio improved to 15.7 per cent (16.2).
The total investment assets of If on 31 March 2019 were EUR 11.4 billion (10.9), of which fixed income investments constituted 84 per cent (88), money market 6 per cent (2) and equity 10 per cent (10). Net income from investments amounted to EUR 59 million (53). Investment return marked-to-market for the first quarter of 2019 was 2.1 per cent (-0.1). Duration for interest bearing assets was 1.4 years (1.4) and average maturity 2.7 years (2.7). Fixed income running yield without taking into account the FX hedging costs was 1.7 per cent (1.7) on 31 March 2019.
If P&C`s solvency position is described in the section Solvency.
Topdanmark
On 31 March 2019 Sampo plc held 41,997,070 Topdanmark shares, corresponding to 46.7 per cent of all shares and 48.5 per cent of related voting rights in the company. The market value of the holding was EUR 1,870 million on 31 March 2019.
The AGM on 3 April 2019 decided to pay a dividend of DKK 15 per share. Sampo plc`s share of the dividend payment was EUR 84 million.
The following text is based on Topdanmark`s January - March 2019 result release published on 25 April 2019.
Topdanmark`s profit before taxes for January - March 2019 amounted to EUR 92 million (60).
Topdanmark`s premiums increased to EUR 906 million (837). In non-life insurance premiums earned increased 2.6 per cent (1.7) and in life insurance gross premiums increased 12.8 per cent (18.6). The non-life insurance run-off profits of EUR 23 (8) million were primarily generated in workers` compensation, motor and illness/accident insurance.
In January - March 2019, weather related claims amounted to EUR 2 million (0) and large claims amounted to EUR 5 million (1). Adjusted for run-off, weather related claims, large claims other positions including the change of risk margin, the claims trend was 68.7 per cent (69.6).
The combined ratio amounted to 78.2 per cent (83.7) in the first quarter of 2019. The expense ratio was 17.1 per cent (17.4).
Topdanmark`s solvency position is described in the section Solvency.
Further information on Topdanmark and its January - March 2019 result is available at www.topdanmark.com.
Associated company Nordea
On 31 March 2019 Sampo plc held 860,440,497 Nordea shares corresponding to 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 8.10 per share. The closing price as at 31 March 2019 was EUR 6.81.
The following text is based on Nordea`s First Quarter Report 2019 published on 30 April 2019.
Compared to the previous quarter, reported revenues were largely unchanged while revenues excluding items affecting comparability increased by 4 per cent, due to improved fees and commission and net fair value. Net interest income decreased by 7 per cent compared to the previous quarter, mainly driven by higher regulatory costs, fewer interest days and continuing pressure on household lending margins. Fees and commission improved by 3 per cent from the previous quarter.
Underlying costs, excluding resolution fees and items affecting comparability decreased by 7 per cent to EUR 1.16 billion and 4 per cent from the first quarter of 2018. Nordea is on track to meet the target to reduce costs in constant currencies in 2019 compared to 2018.
Credit quality remained robust and loan losses were 7 bps in the quarter. Nordea continues to expect largely unchanged credit quality in the coming quarters. Adjusted operating profit increased by 21 per cent from the previous quarter whilst statutory operating profit decreased by 11 per cent.
The CET1 ratio decreased to 14.6 per cent mainly due to the acquisition of Gjensidige, increased lending volumes and IFRS16. The management buffer is 130 bps over the nominal capital commitment made as part of Nordea`s transition to the banking union.
Nordea has previously stated that it expects to be fined in Denmark for its past weak AML processes and procedures, and Nordea is consequently making a provision of EUR 95 million for AML-related matters.
Further information on Nordea and its January - March 2019 result is available at www.nordea.com.
Mandatum Life
Mandatum segment`s profit before taxes for January - March 2019 amounted to EUR 72 million (73). The total comprehensive income for the period after tax reflecting the changes in market values of assets increased to EUR 113 million (-19). Return on equity rose to 37.6 per cent (-5.8).
Net investment income, excluding income on unit-linked contracts, amounted to EUR 126 million (72). Net income from unit-linked contracts was EUR 427 million (-90). In the first quarter of 2019 fair value reserve increased to EUR 407 million (352).
Mandatum Life Group`s total technical reserves amounted to EUR 11.6 billion (11.2). Unit-linked reserves increased to EUR 7.4 billion (7.0) at the end of the first quarter of 2019. The amount corresponds to 64 percent (62) of total technical reserves. At the end of the first quarter of 2019 with profit reserves amounted to EUR 4.2 billion (4.2). Reserves related to the higher guarantees of 4.5 and 3.5 per cent decreased by EUR 74 million to EUR 2.4 billion in January - March 2019.
Mandatum Life has all in all supplemented its technical reserves with a total of EUR 258 million (232) 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 2019, 2020 and 2021 is 0.25 per cent. Bringing down the discount rate for 2021 from 2.5 per cent to 0.25 per cent had a negative impact of 54 million euro on the first quarter 2019 profit. Discount rate applied for the segregated fund is 0.50 per cent.
On 31 March 2019 Mandatum Life Group`s investment assets, excluding the assets of EUR 7.4 billion (7.0) covering unit-linked liabilities, amounted to EUR 5.5 billion (5.6) at market values.
The assets covering Mandatum Life`s original with profit liabilities on 31 March 2019 amounted to EUR 4.5 billion (4.6) at market values. 44 per cent (49) of the assets were in fixed income instruments, 14 per cent (9) in money market, 28 per cent (27) in equities and 14 per cent (15) in alternative investments. The investment return marked-to-market for January - March 2019 was 4.0 per cent (-0.7). The duration of fixed income assets at the end of March 2019 was 2.6 years (2.5) and average maturity 2.8 years (2.8). Fixed income running yield without taking into account the FX hedging cost was 2.6 per cent (2.6).
The assets covering the segregated fund amounted to EUR 1.0 billion (1.0), of which 69 per cent (77) was in fixed income, 13 per cent (5) in money market, 12 per cent (11) in equities and 7 per cent (6) in alternative investments. Segregated fund`s investment return marked-to-market for January - March 2019 was 2.7 per cent (-0.7). At the end of March 2019, the duration of fixed income assets was 2.6 years (2.5) and average maturity 3.1 years (3.1). Fixed income (incl. money market) running yield without taking into account the FX hedging cost was 2.1 per cent (2.2).
The expense result in the first quarter amounted to EUR 5 million (7). Risk result amounted to EUR 5 million (5).
Mandatum Life Group`s premium income on own account amounted to EUR 238 million (243) in the first quarter of 2019.
Mandatum Life`s solvency position is described in the section Solvency.
Holding
Holding segment`s profit before taxes for January - March 2019 amounted to EUR 113 million (119), of which EUR 83 million (165) relates to Sampo`s share of Nordea`s and NDX Intressenter`s January - March 2019 profit. Nordea`s share was EUR 83 million (165) and NDX Intressenter`s EUR 1 million. Segment`s profit before taxes excluding the associated companies was EUR 29 million (-46).
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 7.0 billion. The market value of the holding was EUR 5.9 billion, i.e. EUR 6.81 per share, on 31 March 2019. In addition the assets on Sampo plc`s balance sheet included holdings in subsidiaries for EUR 3.4 billion (2.4).
OTHER DEVELOPMENTS
Changes in Group Management
Peter Johansson retired from Sampo`s Group CFO position as of 1 January 2019. On 8 August 2018 the Board of Sampo plc nominated Knut Arne Alsaker, CFO of If P&C, as the new Group CFO as of 1 of January 2019.
The Group CEO and President of Sampo Kari Stadigh will retire on 31 December 2019. He also stepped down as Chairman of If P&C Insurance Board of Directors as of 7 February 2019. On 7 February 2019 Sampo`s Board of Directors appointed Torbjörn Magnusson, the CEO of If, to succeed Stadigh as Group CEO and President of Sampo Group, effective 1 January 2020. Magnusson took immediately over as Chairman of If P&C.
On the same day the Sampo and If Boards appointed Morten Thorsrud, the Head of If Business Area Private, to succeed Magnusson as the CEO of If, effective immediately. Thorsrud was in turn be succeeded by Ingrid Janbu Holthe as Head of If BA Private. She was also nominated a member of the Group Executive Committee of Sampo Group.
Annual General Meeting
The Annual General Meeting of Sampo plc, held on 9 April 2019, decided to distribute a dividend of EUR 2.85 per share for 2018. The record date for dividend payment was 11 April 2019 and the dividend was paid on 18 April 2019. In addition to the cash dividend, the Annual General Meeting decided to authorize the Board of Directors to resolve, in its discretion, on the distribution of an extra dividend up to EUR 500,000,000 (EUR 0.9 per share) either in cash and/or in financial instruments. The authorization is valid until the next Annual General Meeting.
The Annual General Meeting adopted the financial accounts for 2018 and discharged the Board of Directors and the Group CEO and President 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, Jannica Fagerholm, Veli-Matti Mattila, Risto Murto, Antti Mäkinen and Björn Wahlroos. Fiona Clutterbuck and Johanna Lamminen were elected as new members 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 Chairman and Jannica Fagerholm as Vice Chairperson. Veli-Matti Mattila, Risto Murto, Antti Mäkinen and Björn Wahlroos (Chairman) were elected to the Nomination and Compensation Committee and Christian Clausen, Fiona Clutterbuck, Jannica Fagerholm (Chairman), and Johanna Lamminen to the Audit Committee.
All the Board members have been determined to be independent of the company under the rules of the Finnish Corporate Governance Code 2015. Furthermore, all Board members but Antti Mäkinen have been determined to be independent of the major shareholders.
The Annual General Meeting decided to pay the following fees to the members of the Board of Directors until the close of the 2020 Annual General Meeting:the Chairman of the Board will be paid an annual fee of EUR 175,000 and other members of the Board will be paid EUR 90,000 each. Furthermore, the members of the Board and its Committees will be paid the following annual fees: the Vice Chairperson of the Board EUR 25,000, the Chairperson of the Audit Committee EUR 25,000 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.
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.
The Annual General Meeting 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.
There were 1,052 shareholders represented at the beginning of the meeting holding altogether 360,849,587 shares and 365,649,587 votes in the company.
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 share capital
The Annual General Meeting 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.
Sampo plc did not repurchase its own shares during the first quarter of 2019 and at the end of March 2019, neither Sampo plc nor its Group companies held any Sampo A shares.
After the end of the first quarter of 2019 Sampo plc received a notification of change in holding pursuant to Chapter 9, Section 5 of the Securities Markets Act according to which the total number of shares and voting rights owned by Solidium Oy decreased on 2 April 2019 below ten (10) per cent of Sampo plc`s entire stock and voting rights.
The details of the notifications are available at www.sampo.com/flaggings.
Internal dividends
Mandatum Life paid a dividend of EUR 150 million to Sampo plc in March 2019.
On 28 March 2019 Nordea`s Annual General Meeting decided on a dividend of EUR 0.69 per share. Sampo plc`s share of total dividends amounted to EUR 594 million. The dividend was paid on 8 April 2019.
Topdanmark`s Annual General Meeting held on 3 April 2019 decided to pay a dividend of DKK 15 per share. Sampo plc`s share of the dividend payment was EUR 84 million. The dividend was paid on 8 April 2019.
If normally pays its dividend towards the end of the calendar year.
Ratings
All the ratings for Sampo Group companies remained unchanged in the first quarter of 2019.
Rated company | Moody`s | Standard & Poor`s | ||
Rating | Outlook | Rating | Outlook | |
| A3 | Stable | A- |
|
| A1 | Stable | A+ | Stable |
Solvency
Group solvency
Sampo Group`s capital requirement and the amount of group`s own funds are calculated by both the conglomerate rules (FICO) and the Solvency II directive. Until the end of 2018 the total minimum capital requirement under FICO rules was calculated based on the subsidiaries` standard formula capital requirements. At the year-end 2018 Sampo started to use Partial Internal Model (PIM) Solvency Capital Requirements (SCR) for most of non-life insurance business of If and Topdanmark in FICO calculations.
In Solvency II Sampo Group has not, however, an approved Group PIM, although the PIMs of If and Topdanmark are approved by their respective local regulators, and therefore the Standard Formula SCRs are applied in Solvency II on a group-level. The treatment of Nordea`s capital requirement in Sampo is similar under FICO and Solvency II and the effects of any changes are similar as well. The calculation methods also differ in their treatment of foreseeable dividends. Going forward in Solvency II calculation the foreseeable dividend is not deducted from the own funds whereas in the FICO calculation they are deducted with quarterly cumulation.
The underlying risks for Sampo`s holding in Nordea have not changed. Despite this in the first quarter of 2019 Sampo`s capital requirement on Nordea increased by EUR 896 million from the end of 2018 because of the 2 per cent O-SII (other systemically important institution) buffer, which came into force as of 1 January in Finland, and higher REA, which grew from EUR 156 billion to EUR 163 billion during the first quarter. The 3 per cent Systemic Risk Buffer (SRB), which replaces the O-SII buffer in Nordea`s capital requirement calculation, will be applied in Finland from 1 July 2019 and this will, everything else equal, increase Nordea`s capital requirement for Sampo further.
Group`s conglomerate solvency ratio (own funds in relation to minimum requirements for own funds) amounted to 130 per cent (147) as at 31 March 2019. The components of the calculation are described in the table below.
SAMPO GROUP SOLVENCY | 31 Mar 2019 | 31 Dec 2018 | Change |
EURm | |||
Group capital | 13,518 | 13,014 | 504 |
Goodwill, other intangibles, foreseeable dividends and distributions and deductibles | -5,677 | -5,269 |
|
Sectoral items | 2,849 | 2,586 | 263 |
Group`s own funds, total | 10,691 | 10,330 | 361 |
Minimum requirements for own funds, total | 8,255 | 7,017 | 1,238 |
Group solvency | 2,436 | 3,313 | -877 |
Group solvency ratio | 130 | 147 |
|
The Group solvency calculated according to the Solvency II directive amounted to 126 per cent (140) on 31 March 2019.
Sampo`s management has actively been planning the adoption of measures to reverse the solvency ratio development which is mainly caused by Nordea`s increased Pillar 1 requirements after the redomiciliation to Finland. The measures may include i.a. issuing of hybrid capital and use of the authorization the Board received from the AGM to distribute an extra dividend either in cash and/or in financial instruments held by Sampo plc. The exact timetables have not yet been decided upon, but the potential actions are expected to be taken before the end of 2019.
Sampo Group`s capital requirement would be positively impacted if Sampo plc`s holding in Nordea decreased below 20 per cent. Sampo Group would no longer be treated as a financial conglomerate and calculated by Solvency II method the solvency ratio would exceed the level it was at the end of 2018.
Solvency position in the subsidiaries
The insurance subsidiaries apply Solvency II rules in their regulatory solvency calculations. If Group companies use either partial internal models or standard model for calculation of their solo solvency position. Mandatum Life reports in accordance with standard formula for Solvency II. 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 standard formula has no practical implications on If Group`s capital position. On 31 March 2019 If Group`s pro forma Solvency II capital requirement under standard formula amounted to EUR 1,887 million (1,833) and own funds to EUR 3,825 million (3,599). Solvency ratio amounted to 203 per cent (196).
S&P A+ rating requirement for If Group amounted to EUR 3,056 million (2,949) on 31 March 2019 and the capital base was EUR 3,331 million (3,149). On 31 March 2019 If Group`s internally assessed Solvency II capital requirement was EUR 1,411 million (1,305) and own funds EUR 3,825 million (3,599). Solvency ratio amounted to 271 per cent (276).
Topdanmark calculates most of its non-life and health risks and their respective solvency capital requirement by a partial internal model approved by the DFSA. Other risks are calculated by Solvency II SCR standard formula. Topdanmark`s solvency ratio under the partial internal model was 174 per cent (196) at the end of March 2019.
On 31 March 2019 Topdanmark`s Solvency II capital requirement under standard formula amounted to EUR 629 million and own funds to EUR 940 million. Solvency ratio amounted to 150 per cent (163).
Mandatum Life`s solvency ratio after transitional measures amounted to 161 per cent (176) on 31 March 2019. Own funds was EUR 1,869 million (1,740) and Solvency Capital Requirement (SCR) was EUR 1,164 million (990). The increased requirement is explained by an increase in the symmetric adjustment and higher credit risk. Without transitional measures, own funds would have amounted to EUR 1,485 million (1,348) and the solvency capital requirement to EUR 1,202 million (1,030) leading to a solvency ratio of 124 per cent (131).
More information on Sampo Group`s capital policy is available in the Risk Management Report 2018 at www.sampo.com/year2018.
Debt financing
Sampo plc`s debt financing on 31 March 2019 amounted to EUR 4,023 million (4,067) and interest bearing assets to EUR 2,114 million (1,959). Interest bearing assets include bank accounts, fixed income instruments and EUR 503 million (489) of hybrid capital and subordinated debt instruments issued by the subsidiaries and associated companies. Altogether, excluding cash and equivalents, the fixed income instruments yield over 5 per cent.
At the end of the first quarter of 2019 the interest bearing net debt amounted to EUR 1,908 million (2,108). The net debt calculation takes into account interest bearing assets and liabilities. Gross debt to Sampo plc`s equity was 46 per cent (52) and financial leverage 32 per cent (34).
On 31 March 2019 financial liabilities in Sampo plc`s balance sheet consisted of issued senior bonds and notes of EUR 3,942 million (3,943) and EUR 80 million (124) of CPs issued. The average interest, net of interest rate swaps, on Sampo plc`s debt as of 31 March 2019 was 0.87 per cent (0.81).
More information on Sampo Group`s outstanding debt issues is available at www.sampo.com/debtfinancing.
OUTLOOK
Outlook for 2019
Sampo Group`s business areas are expected to report good operating results for 2019.
However, the marked-to-market results are, particularly in life insurance, 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 - 88 per cent in 2019.
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 current day-to-day business activities Sampo Group is exposed to various risks and uncertainties mainly through its separately managed business areas including the parent company Sampo plc.
Major risks affecting the Group companies` profitability and its variation are market, credit, insurance and operational risks that are quantified independently by the business areas. At the group level sources of risks are the same, but they are not directly 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 the 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 business shall be conducted. Examples of already identified trends are technological development in areas such as artificial intelligence and digitalization, climate change, demographic changes and sustainability issues that may have profound effects on financial sector companies as well.
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
Mirko Hurmerinta, IR and Communications Specialist, Media Relations, tel. +358 10 516 0032
Conference call
An English-language conference call for investors and analysts will be arranged on 8 May 2019 at 4 pm Finnish time (2 pm UK time). Please call tel. +44 (0)333 300 0804, +46 (0)8 5664 2651, +1 631 913 1422 or +358 (0)9 8171 0310. The conference code is 77854006#.
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 Half-Year Financial Report for January - June 2019 on 7 August 2019.
Distribution:
Nasdaq Helsinki
London Stock Exchange
The principal media
Financial Supervisory Authority
www.sampo.com
This announcement is distributed by West Corporation on behalf of West Corporation clients.
The issuer of this announcement warrants that they are solely responsible for the content, accuracy and originality of the information contained therein.
Source: Sampo Oyj via GlobeNewswire
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