Strong results, raised dividends
(Thomson Reuters ONE) -
SAMPO PLC FINANCIAL STATEMENT RELEASE 9 February 2011 at 9.30 am
Strong results, raised dividends
Sampo Group's profit before taxes for 2010 grew strongly and amounted to EUR
1,320 million (825). Total comprehensive income for the period, taking changes
in the market value of assets into account, was EUR 1,807 million (3,423).
· Earnings per share rose to EUR 1.97 (1.14). Mark-to-market earnings per
share were EUR 3.22 (5.88) and return on equity for the Group was 21.8 per cent
for 2010 (55.7).
· The Board proposes to the Annual General Meeting to be held on 14 April
2011 a dividend of EUR 1.15 per share (1.00) and an authorization to repurchase
a maximum of 50 million Sampo A shares.
· Net asset value per share increased by more than EUR 3 during 2010 and on
31 December 2010 amounted to EUR 17.79 (14.63). Fair value reserve on the Group
level increased to EUR 736 million (296).
· If P&C sustained a high insurance technical profitability in 2010 despite
the difficult winter. Combined ratio was 92.8 per cent for the full year 2010
(92.1). Profit before taxes rose to EUR 707 million (644). Return on equity was
39.8 per cent (53.2) and fair value reserve increased to EUR 315 million (105).
· Sampo's share of Nordea's net profit amounted to EUR 523 million. In
segment reporting the share of Nordea's profit is included in the segment
'Holding'.
· Profit before taxes for Mandatum Life increased to EUR 142 million (121).
Fair value reserve increased to EUR 436 million as at 31 December 2010 (210).
Return on equity at market value was 36.2 per cent (97.6). Premiums grew almost
40 per cent and exceeded EUR 1 billion for the first time ever.
KEY FIGURES Change Q4/ Q4/ Change
EURm 2010 2009 % 2010 2009 %
Profit before taxes 1,320 825 60 361 199 81
P&C insurance 707 644 10 188 168 12
Associate (Nordea) 523 - - 152 - -
Life insurance 142 121 17 42 36 15
Holding (excl. Nordea) -48 36 - -21 -5 332
Profit for the period 1,104 641 72 302 148 104
Change Change
Earnings per share, EUR 1.97 1.14 0.83 0.54 0.26 0.28
EPS (incl. change in FVR) EUR 3.22 5.88 -2.66 0.83 -0.17 1.00
NAV per share, EUR 17.79 14.63 3.16 - - -
Average number of staff (FTE) 6,914 7,311 -397 - - -
Group solvency ratio, % 167.1 158.3 8.8 - - -
RoE, % 21.8 55.7 -33.9 - - -
The figures in this report are unaudited.
Fourth quarter 2010 in brief
Sampo Group's fourth quarter 2010 profit before taxes rose to EUR 361 million
(199). Earnings per share doubled and were EUR 0.54 (0.26). Mark-to-market
earnings per share were EUR 0.83 (-0.17).
Net asset value per share increased in the fourth quarter of 2010 by EUR 1.25
and amounted EUR 17.79 at the end of 2010.
P&C insurance operation had a good fourth quarter despite somewhat harsher
winter conditions in the Nordic countries. Combined ratio improved to 92.3 per
cent (92.7). Profit before taxes rose to EUR 188 million (168).
Sampo's share of Nordea's fourth quarter 2010 net profit was EUR 152 million.
Profit before taxes for the life insurance operations rose to EUR 42 million
(36). Premiums written remained almost flat at EUR 284 million (289).
Business areas in 2010
P&C insurance
If P&C is the leading property and casualty insurance company in the Nordic
region, with insurance operations that also encompass the Baltic countries and
Russia. The P&C insurance group's parent company, If P&C Insurance Holding Ltd,
is domiciled in Sweden, and the If subsidiaries provide insurance solutions and
services in Finland, Sweden, Norway, Denmark, the Baltic countries and Russia.
If's operations are divided into four business areas: Private, Commercial,
Industrial and Baltic & Russia.
Results Change Q4/ Q4/ Change
EURm 2010 2009 % 2010 2009 %
Premiums, net 3,985 3,677 8 843 787 7
Net income from investments 487 394 24 146 110 33
Other operating income 25 23 9 7 6 24
Claims incurred -2,689 -2,477 9 -672 -630 7
Change in insurance liabilities -91 -33 176 148 144 3
Staff costs -479 -470 2 -120 -123 -2
Other expenses -501 -439 14 -156 -118 32
Finance costs -29 -30 -4 -8 -8 2
Profit (loss) before taxes 707 644 10 188 168 12
Key figures Change Change
Combined ratio, % 92.8 92.1 0.7 92.3 92.7 -0.4
Risk ratio, % 69.1 68.0 1.1 67.7 67.6 0.1
Cost ratio, % 23.7 24.1 -0.4 24.6 25.0 -0.4
Expense ratio, % 17.2 17.6 -0.4 17.8 18.5 -0.7
Return on equity, % 39.8 53.2 -13.4 - - -
Average number of staff (FTE) 6,392 6,807 -415 - - -
Year 2010 was characterized by exceptional weather conditions in most of the
countries where If operates: extreme winter, scorching summer riddled with
storms and heavy downpours, and in the fourth quarter weeks of premature but
abundant snowfall.
Another exceptional development in 2010 reflected in consolidated P&C insurance
result is the significant strengthening of Swedish krona.
Despite the challenging weather conditions, profit before taxes for P&C
insurance for the year 2010 rose 10 per cent to EUR 707 million (644) and
combined ratio was again on a stable level in 2010 at 92.8 per cent (92.1) being
clearly better than the long-term target of below 95 per cent.
Technical result was EUR 449 million (488), of which the Private business area
accounted for 53 per cent, Commercial 28 per cent, Industrial 15 per cent and
Baltic and Russia 3 per cent.
Insurance margin (technical result in relation to net premiums earned) decreased
from the previous year to 11.5 per cent (13.4). Return on equity (RoE) remained
good and was 39.8 per cent (53.2) while the fair value reserve increased to EUR
315 million (105).
In business area Private risk ratio increased to 68.9 per cent (68.0) affected
by the exceptional weather conditions. Helped by the improved cost ratio,
combined ratio increased slightly to 93.0 (92.5). Also in Commercial cost ratio
improved compared to last year but the weakened risk ratio of 69.8 per cent
(68.3) drove the combined ratio slightly up to 93.5 per cent (92.6).
In business area Industrial combined ratio improved to 90.6 per cent (90.7)
helped by the favorable development in nominal costs. Risk ratio was at previous
year's level at 71.9 percent (71.6). In Baltic and Russia both risk ratio and
combined ratio increased compared to previous year, and were 56.4 per cent
(55.7) and 93.4 per cent (91.7), respectively.
Risk ratio weakened due to extraordinary weather conditions during year 2010 in
all countries excluding Sweden, where despite the severe winter both risk ratio
and combined ratio improved to 70.2 per cent (72.4) and 93.3 per cent (95.2),
respectively. In Norway risk ratio increased to 69.6 per cent (68.8) but due to
improved cost ratio in all business areas, combined ratio was at previous year's
level at 92.1 per cent (92.0). Also in Finland cost ratio improved in all
business areas, but the increase in risk ratio to 67.0 per cent (64.0) lead to a
higher combined ratio of 90.4 per cent (88.5). In Denmark risk ratio increased
to 72.8 per cent (66.1) and combined ratio to 101.4 per cent (93.7).
Gross written premiums increased 8 per cent to EUR 4,189 million (3,888).
Adjusted for currency, premiums increased 1.3 per cent.
Cost ratio improved by 0.4 percentage points to 23.7 per cent compared to a year
earlier as a result of continuous efforts put on streamlining the operations.
The amount of total costs increased to EUR 1,009 million (939), mainly due to
the strengthening of the Swedish krona.
Other operating expenses increased EUR 25 million due to dissolving the
collective guarantee provision in the Finnish workers' compensation insurance.
Claims incurred increased to EUR 2,689 million (2,477) and risk ratio
deteriorated to 69.1 per cent (68.0), affected by the weather. EUR 113 million
(87) was released from technical reserves, which related to prior year claims.
Reserve ratio was 173 per cent (172) of net premiums written and 236 per cent
(240) of claims paid.
Investment market remained positive during the year and net income from
investments increased to EUR 487 million (394). As at 31 December 2010, total
investment assets amounted to EUR 11.7 billion (10.7) of which 85 per cent (89)
was invested in fixed income instruments and 14 per cent (11) in equities.
Investment return for 2010 mark-to-market was 7.4 per cent (12.4). Duration for
interest bearing assets was 1.7 years (2.5).
As at 31 December 2010 If P&C had a solvency ratio (solvency capital in relation
to net premiums written) of 79 per cent (77). Despite the EUR 540 million paid
to Sampo plc in dividends during 2010, solvency capital amounted to EUR 3,373
million (2,943) in comparison to the regulatory minimum capital requirement of
EUR 735 million.
On 1 January 2011 a new five-year cooperation agreement was announced between If
P&C and Volvo Cars regarding Volvia brand insurance. If has more than 443,000
Volvia-insurances in its portfolio, of which 400,000 in Sweden, which means that
40 percent of all Volvo cars in Sweden are insured by Volvia. The deal with
Volvo is worth approximately 2 billion Swedish krona in premiums earned for If
annually.
Life insurance
Mandatum Life Group consists of Mandatum Life, a wholly-owned subsidiary of
Sampo plc, operating in Finland, and its subsidiary Mandatum Life Insurance
Baltic SE, which has the form of a European company and is headquartered in
Estonia. It operates in the other Baltic countries through branches.
Results Change Q4/ Q4/ Change
EURm 2010 2009 % 2010 2009 %
Premiums written 1,111 803 38 284 289 -2
Net income from investments 645 629 3 205 133 53
Other operating income 0 0 -94 0 0 -100
Claims incurred -844 -628 34 -214 -162 32
Change in liabilities for inv. and ins.
contracts -678 -600 13 -210 -205 2
Staff costs -35 -29 23 -10 -9 19
Other operating expenses -49 -46 7 -12 -9 27
Finance costs -8 -8 0 -2 -2 4
Profit before taxes 142 121 17 42 36 15
Key figures Change
Expense ratio, % 112.1 111.0 1.1 - - -
Return on equity, % 36.2 97.6 -61.4 - - -
Average number of staff (FTE) 470 450 20 - - -
Sampo Group's life insurance operations continued their fast growth in 2010 with
premium income growing almost 40 per cent. Profitability was also good and
profit before taxes grew 17 per cent to EUR 142 million (121).
Net investment income, excluding income on unit-linked contracts, amounted to
EUR 312 million (270). Net income from unit-linked investments was EUR 333
million (359). During 2010 fair value reserve increased EUR 75 million amounting
to EUR 436 million. Return on equity (RoE) in life insurance was 36.2 per cent
(97.6).
Mandatum Life Group's investment assets, excluding the assets of EUR 3.1 billion
(2.4) covering unit-linked liabilities, amounted to EUR 6.0 billion (5.4) at
market values as at 31 December 2010. Fixed income represented 61 per cent (68),
equity 28 per cent (23), private equity 4 per cent (4), real estate 3 per cent
(3) and other assets 3 per cent (2) of the total assets. Return on investments
in 2010 was 11.1 per cent (16.8). At the end of December 2010 duration of fixed
income assets was 2.7 years (2.6).
Mandatum Life Group's solvency position is strong. Solvency margin grew to EUR
1,339 million (930) as at 31 December 2010. Mandatum Life's solvency ratio was
25.7 (18.6). Total technical reserves were EUR 7.5 billion (6.8). Unit-linked
reserves continued their strong growth and accounted for 3.1 billion (2.4). The
share of unit-linked reserves of total technical reserves increased to 41 per
cent (35).
Majority of Mandatum Life's traditional policies carry a guaranteed interest of
3.5 per cent. Individual policies sold in Finland before 1999 carry a guaranteed
interest of 4.5 per cent. The discount rate for these policies has been lowered
to 3.5 per cent and subsequently technical reserves have been supplemented with
EUR 86 million (95). In addition, EUR 61 million has been reserved to lower the
interest rate of all with-profit liabilities to 2.5 per cent in 2011 and to 3.0
per cent in 2012. This supplement decreases the minimum requirement for
investment yield to 2.5 per cent and 3.0 per cent for 2011 and 2012,
respectively. All in all, Mandatum Life has increased its technical reserves
with EUR 147 million due to low level of interest rates.
Life operation's expense ratio remained on previous year's level and was 112.1
per cent (111.0). This ratio does not take into account all fees intended to
cover the operating expenses. Assuming all fees were to be taken into account,
Mandatum Life Group's expense ratio would have been 90.1 per cent (91.8).
Mandatum Life does not defer acquisition costs.
Mandatum Life Group's premium income on own account exceeded for the first time
one billion euro and amounted to EUR 1,111 million (803). Premiums in the main
focus area of unit-linked insurance increased to EUR 843 million (551) and the
share of unit-linked premiums was 76 per cent (68) of total premiums. The good
sales performance was due to all sales channels working well. Particularly the
successful cooperation between the wealth management unit and the proprietary
corporate sales force produced excellent results.
A new name was adopted for the Baltic subsidiary in 2010. The company is now
called Mandatum Life Insurance Baltic SE. Premium income from the Baltic
countries grew by 42 per cent and amounted to EUR 60 million (42).
Mandatum Life's market share in its focus area, unit-linked business, rose to
28.2 per cent (27.8). The company's overall market share in Finland was 22.0 per
cent (24.8) and market share in the Baltic countries was 19 per cent (16).
Associated company Nordea Bank Ab
On 31 December 2010 Sampo plc held 830,440,497 Nordea shares corresponding to a
holding of 20.5 per cent. The average price paid per share amounted to EUR 6.39
and the book value in the Group accounts was EUR 6.85 per share. The closing
price as at 31 December 2010 was EUR 8.16.
As Sampo's holding exceeds 20 per cent Nordea, is accounted as an associated
company in Sampo Group's accounts since 31 December 2009. Sampo's share of
Nordea's net profit is shown on the face of Sampo Group's profit and loss
account on the line Share of associate's profit/loss.
The following text is based on Nordea's full-year 2010 result release published
on 2 February 2011.
2010 showed record-high total income, up 3 per cent compared to last year.
Operating profit increased 18 per cent, due to higher income and lower net loan
losses. Risk-adjusted profit decreased by 6 per cent compared to the same period
last year.
Net interest income decreased 2 per cent compared to last year as a result of
lower deposit income and higher funding costs. The combined negative effect is
more than EUR 400 million. This income drop was successfully compensated through
strong growth in both lending and deposits as well as higher lending margins.
Lending increased 11 per cent and deposit volumes 15 per cent. Corporate lending
margins were higher, while deposit margins were largely unchanged compared to
last year.
Net fee and commission income has recovered strongly and increased 27 per cent.
Asset management commission income is up 42 per cent driven by assets under
management, which are up 21 per cent in the last 12 months and a more attractive
product mix.
Net result from items at fair value decreased by 6 per cent compared to very
high levels last year. The customer driven capital markets operations continued
to be strong with increasing volumes. The income drop in Group Treasury and
Capital Markets unallocated income was approximately EUR 450 million and almost
compensated by higher income in the customer areas. Premium income in Life
&Pensions was at an all-time-high. Income under equity method was EUR 66 million
and other income was EUR 116 million.
Total expenses increased 7 per cent compared to last year. Staff costs increased
2 per cent. In local currencies, total expenses increased 2 per cent and staff
costs decreased 2 per cent. Excluding the adjustment of pension plans in Norway,
total expenses increased 3 per cent and staff costs were down 1 per cent in
local currencies.
Net loan losses decreased 41 per cent to EUR 879 million, compared to last year,
corresponding to a loan loss ratio of 31 basis points (56 basis points). Net
profit increased 15 per cent to EUR 2,663 million, due to lower net loan losses.
Risk-adjusted profit decreased 6 per cent compared to last year to EUR 2,622
million, mainly due to the exceptionally strong results in Treasury and Markets
in 2009.
Activities related to the Group initiatives launched in early 2010 are on track
in all areas. In 2010, the initiatives have generated more than EUR 300 million
in additional income, i.e. above the target for the year. The efficiency gains
amounted to approximately EUR 70 million, in line with earlier expectations.
During the fourth quarter, total investments amounted to EUR 77 million, of
which EUR 22 million were accounted for as expenses in the income statement. In
the full year 2010, total investments amounted to approximately EUR 200 million,
of which EUR 74 million were accounted for as expenses in the income statement.
The investments are expected to be somewhat higher in 2011.
For more information on Nordea Bank Ab, see www.nordea.com.
Holding
Sampo plc controls its subsidiaries engaged in P&C and life insurance. In
addition Sampo plc held on 31 December 2010 approximately 20.5 per cent of the
share capital of Nordea, the largest bank in the Nordic countries. Nordea is an
associated company to Sampo plc.
Results Change Q4/ Q4/ Change
EURm 2010 2009 % 2010 2009 %
Net investment income 60 109 -45 3 17 -84
Other operating income 16 13 29 5 4 28
Staff costs -13 -11 18 -3 -3 -4
Other operating expenses -11 -17 -34 -3 -4 -13
Finance costs -100 -58 73 -22 -19 18
Share of associates' profit 523 - - 152 - -
Profit before taxes 474 36 1,217 132 -5 -
Change
Average number of staff (FTE) 52 54 -2 - - -
The segment's profit before taxes amounted to EUR 474 million (36), of which EUR
523 million relates to Sampo's share of Nordea's 2010 profit. Segment's profit
without Nordea was EUR -48 million.
Sampo plc's holding in Nordea Bank was booked in the consolidated balance sheet
at EUR 5.7 billion. The market value of the holding was EUR 6.8 billion at 31
December 2010. In addition the assets on Sampo plc's balance sheet included
holdings in subsidiaries for EUR 2.4 billion (2.4).
In 2010, Sampo plc received a total of EUR 540 million (SEK 5,000 million) in
dividends from If P&C Insurance Holding AB: in April a dividend of EUR 103
million (SEK 1,000 million) and in December a dividend of EUR 437 million (SEK
4,000 million) was paid. In addition the associated company Nordea Bank AB paid
on 8 April 2010 Sampo plc a dividend amounting to EUR 204 million. Mandatum Life
paid no dividends to Sampo plc during 2010.
Sampo plc's debt financing at the end of 2010 was EUR 1,731 million and interest
bearing assets including bank accounts were of EUR 715 million. During the year
the net debt decreased marginally by EUR 32 million to EUR 1,016 million
(1,048). Gross debt to Sampo plc's equity was 26 per cent (24).
As at 31 December 2010 financial liabilities in Sampo plc's balance sheet
consisted of issued senior bonds and notes of EUR 1,026 million, EUR 576 million
of outstanding CPs issued and a TYEL-pension loan of EUR 130 million. The
average interest on Sampo plc's debt as of 31.12.2010 was 3.36 per cent.
Developments in 2010
Personnel
The number of full-time equivalent staff decreased to 6,844 employees (7,087) as
at 31 December 2010. In P&C insurance, the number of staff mainly decreased in
the Baltic and Russian operations and in Norway. In life insurance, the number
of staff increased slightly both in Finland and the Baltics.
During 2010, approximately 92 per cent of the staff worked in P&C insurance, 7
per cent in life insurance and 1 per cent in the parent company Sampo plc.
Geographically, 31 per cent worked in Finland, 27 per cent in Sweden, 22 per
cent in Norway and 20 per cent in the Baltic countries, Russia, Denmark and
other countries. The average number of employees during 2010 was 6,914, which
compares to an average of 7,311 during 2009.
Management incentive schemes
On 8 June 2010 Sampo's Board approved a Compensation Code which applies to all
Group companies. The Boards of these companies have adopted company-level
policies based on the Code. The Code lays down the principles for e.g.
management incentives and can be viewed at www.sampo.com/compensation .
The variable compensation in Sampo Group is divided into short term and long
term compensation. The short term compensation is based on annual performance
whilst the long term compensation is carried out through the management
incentive schemes. For the short term variable compensation systems decided
after 1 January 2011, at least 50.1 per cent of significant pay-outs will be
deferred for at least three years. In Sweden different national rules are
applied and at least 60 per cent of pay-out for persons in risk-taking positions
will be deferred.
The management incentive schemes of Sampo Group were in 2010 of two types; long-
term management incentive schemes based on share appreciation rights and one
share-based incentive scheme.
The outcome of the long-term management incentive schemes is determined by
Sampo's share-price development over a period of approximately three years
starting from the issue of the respective program. The programs are subject to
thresholds on share price development and company profitability, as well as
ceilings for maximum bonuses. Furthermore, the programs are subject to rules
requiring part of the paid bonus to be used to acquire Sampo shares, which must
in turn be held for a specified period of time.
In 2006, Sampo's Annual General Meeting decided on a share-based incentive
scheme for the Executive Management belonging to the Group Executive Committee.
Under the program, the participants are granted the right to receive up to a
pre-determined number of Sampo shares, if Sampo's share price has outperformed a
predefined threshold value and insurance margin targets have been exceeded. The
reward will be paid in Sampo shares, in cash or a combination thereof.
Furthermore, the programs are subject to lock-up on Sampo shares received. The
scheme ended during 2010.
In 2010 EUR 10 million (0) was paid out based on the long-term management
incentive schemes and EUR 4 million (2) was paid out based on the share-based
incentive scheme.
The terms of all incentive schemes are available on Sampo's website at
www.sampo.com/compensation.
Shares and share capital
As at 31 December 2010, Sampo plc had 561,282,390 shares, which were divided
into 560,082,390 A shares and 1,200,000 B shares. At the end of the financial
year, Sampo plc didn't hold any of its own A shares. Neither did the other Group
companies hold any shares in the parent company.
On 13 October 2010, Sampo plc received a disclosure according to which Capital
Research and Management Company's holding in Sampo plc had on 11 October 2010
fallen below one twentieth (1/20) of Sampo plc's entire stock and voting rights.
According to the notification Capital Research held 4.95 per cent of Sampo's
total share capital and 4.91 per cent of related votes.
Ratings
All the main ratings for Sampo Group companies remained unchanged in 2010.
+--------------------------------------+--------------+-------------------+
|Rated company | Moody's |Standard and Poor's|
+--------------------------------------+------+-------+---------+---------+
| |Rating|Outlook| Rating | Outlook |
+--------------------------------------+------+-------+---------+---------+
|Sampo plc | Baa2 |Stable |Not rated| - |
+--------------------------------------+------+-------+---------+---------+
|If P&C Insurance Ltd (Sweden) | A2 |Stable | A | Stable |
+--------------------------------------+------+-------+---------+---------+
|If P&C Insurance Company Ltd (Finland)| A2 |Stable | A | Stable |
+--------------------------------------+------+-------+---------+---------+
Group solvency
With Nordea Bank AB (publ) as its associated company as of 31 December 2009
Sampo Group became a financial and insurance conglomerate according to the Act
on the Supervision of Financial and Insurance Conglomerates (2004/699).
Group solvency has in 2010 been calculated according to Chapter 3 of the Act on
the Supervision of Financial and Insurance Conglomerates (2004/699). The Act 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.
SAMPO GROUP SOLVENCY 31 December 2010 31 December 2009
EURm
Group capital 8,886 7,613
Sectoral items 1,711 1,545
Intangibles and other deductibles -2,388 -2,314
Dividends for the current period -646 -561
Group's own funds, total 7,564 6,283
Minimum requirements for own funds, total 4,526 3,968
Group solvency 3,038 2,315
Group solvency ratio
(Own funds % of minimum requirements) 167.1 158.3
The Group's solvency ratio (own funds in relation to minimum requirements for
own funds) was 167.1 per cent (158.3) as at 31 December 2010. The part of
Nordea's capital requirement corresponding to Sampo's holding in Nordea is taken
into account in the Group's capital requirement.
In Sampo Group solvency is assessed internally by comparing the capital required
to the capital available. Capital requirement assessment is based on an economic
capital framework, in which Group companies quantify the amount of capital
required for measurable risks over a one year time horizon at 99.5 per cent's
confidence level. In addition to economic capital companies are assessing their
capital need related to non-measurable risks like risks in business environment.
Capital available or Adjusted Solvency Capital include regulatory capital and in
addition other loss absorbing items like the effect of discounting technical
reserves and other reserves excluded from regulatory capital.
The economic capital tied up in Group's operations on 31 December 2010 was EUR
4,281 million (3,783) and adjusted solvency capital was EUR 8,521 million
(7,077).
Events after the end of the reporting year
Sampo plc increased its stake in Nordea Bank AB (publ) with 0.7 percentage
points by buying 30 million shares in an auction organized by the Swedish state
on 4 February 2011. SEK 2,235 million was paid for the shares. After the
purchase, Sampo holds 860,440,497 Nordea shares corresponding to 21.3 per cent
of all shares in Nordea.
Outlook for 2011
Growth in the global economy is expected to pick up momentum and deleveraging to
continue as markets prove their resilience and adaptiveness. The European debt
crisis, if properly managed, is expected to abate gradually. All in all the
economic landscape in 2011 is expected to be fairly benign.
Sampo Group is expected to report a good result for 2011. P&C and life insurance
operations are expected to report good and stable results and the contribution
to profit of associated company Nordea Bank is anticipated to remain strong. The
continuing rise of short term interest rates will also further strengthen Sampo
Group's profits.
If P&C is expected to reach its long-term combined ratio target of below 95 per
cent in 2011. Profit is expected to remain very good.
Nordea's contribution to the Group's profit is expected to be significant.
Mandatum Life's profitability is expected to remain good although it is highly
dependent on capital market developments.
Dividend proposal
On 11 February 2010 the Board adopted a new dividend policy. According to the
policy total annual dividends paid will be higher than 50 per cent of Group's
net profit for the year (excluding extraordinary items). In addition share buy-
backs can be used to complement the cash dividend.
The parent company's distributable capital and reserves totaled EUR
6,597,907,788.86, of which profit for the financial year was EUR 710,467,413.51.
The Board proposes to the Annual General Meeting a dividend of EUR 1.15 per
share to company's 561,282,390 shares. The dividends to be paid are EUR
645,474,748.50 in total. Rest of funds are left in the equity capital.
The dividend will be paid to shareholders registered in the Register of
Shareholders held by Euroclear Finland Ltd as at the record date of 4 April
2011. The Board proposes that the dividend be paid on 28 April 2011.
No significant changes have taken place in the company's financial position
since the end of the financial year. The company's liquidity position is good
and in the view of the Board, the proposed distribution does not jeopardize the
company's ability to fulfill its obligations.
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
Essi Nikitin, IR manager, tel. +358 10 516 0066
Maria Silander, Press Officer, tel. +358 10 516 0031
Sampo will arrange a Finnish-language press conference (Savoy, Eteläesplanadi
14, Helsinki), at 12:30 pm Finnish time. An English-language telephone
conference for investors and analysts will be arranged at 4 pm Finnish time (2
pm UK time). Please call +44 207 162 0025 (Europe) or +1 334 323 6201 (North
America). Please be ready to state the conference ID '886644' and the conference
title 'Sampo plc 2010/Q4 Release'.
The telephone conference can also be followed from a direct transmission on the
Internet at www.sampo.com/result. A recorded version will later be available at
the same address.
In addition, Group CEO and President Kari Stadigh's video interview and
Supplementary Financial Information are available at www.sampo.com/result.
Sampo will publish an on-line Annual Report 2010 in week 10. At the same time
Corporate Governance Statement and Salary and Remuneration Report will be
published.
Distribution:
NASDAQ OMX Helsinki
The principal media
Financial Supervisory Authority
www.sampo.com
GROUP FINANCIAL REVIEW
FINANCIAL HIGHLIGHTS 1-12/2010 1-12/2009
GROUP
Profit before taxes EURm 1,320 825
Return on equity (at fair value) % 21.8 55.7
Return on assets (at fair value) % 10.0 18.6
Equity/assets ratio % 29.8 28.6
Group solvency ¹) EURm 3,038 2,315
Group solvency ratio % 167.1 158.3
Average number of staff 6,914 7,311
PROPERTY & CASUALTY INSURANCE
Premiums written before reinsurers' share EURm 4,189 3,888
Premiums earned EURm 3,894 3,643
Profit before taxes EURm 707 644.0
Return on equity (at current value) % 39.8 53.2
Risk ratio ²) % 69.1 68.0
Cost ratio ²) % 23.7 24.1
Loss ratio ²) % 77.1 76.2
Loss ratio excl. unwinding of discount ³) % 75.6 74.6
Expense ratio ²) % 17.2 17.6
Combined ratio % 94.3 93.8
Combined ratio excl. unwinding of discount % 92.8 92.1
Average number of staff 6,392 6,807
LIFE INSURANCE
Premiums written before reinsurers' share EURm 1,117 809
Profit before taxes EURm 142 121
Return on equity (at current value) % 36.2 97.6
Expense ratio % 112.1 111.0
Average number of staff 470 450
HOLDING
Profit before taxes EURm 474 36
Average number of staff 52 54
PER SHARE KEY FIGURES
Earnings per share EUR 1.97 1.14
Earnings per share, incl. other
comprehensive income EUR 3.22 5.88
Capital and reserves per share EUR 15.83 13.56
Net asset value per share EUR 17.79 14.63
Adjusted share price, high EUR 20.71 18
Adjusted share price, low EUR 16.13 8.63
Market capitalisation EURm 11,254 9,553
¹) The Group solvency is calculated according to the consolidation method
defined in Chapter 3 of the Act on the Supervision of Financial and Insurance
Conglomerates (2004/699).
²) The key figures for P&C Insurance are based on activity based costs and
cannot, therefore, be calculated directly from the consolidated income
statement. The result analysis of P&C insurance is presented in note 13.
In calculating the per share key figures, the number of shares used at the
balance sheet date and as the average number of shares was 561,282,390.
The valuation differences on investment property have been taken into account in
calculating the return on assets, return on equity, equity/assets ratio and net
asset value per share. The tax component includes the tax corresponding to the
result for the period, and the deferred tax liability related to valuation
differences on investment property.
The total comprehensive income has been used in the calculation of the return on
assets and return on equity.
The key figures for the insurance business have been calculated in accordance
with the decree issued by the Ministry of Finance and the specifying regulations
and instructions of the Finance Supervisory Authority (former Insurance
Supervisory Authority).
CALCULATION OF KEY FIGURES
Return on equity (fair values), %
+ total comprehensive income
+ valuation differences on investments less deferred tax x 100 %
------------------------------------------------------------------------
+ total equity
+ valuation differences on investments less deferred tax
(average of values 1 Jan. and the end of reporting period)
Return on assets (at fair values), %
+ operating profit
+ other comprehensive income before taxes
+ interest and other financial expense
+ calculated interest on technical provisions
+ change in valuation differences on investments x 100 %
------------------------------------------------------------------------
+ balance sheet, total
- technical provisions relating to unit-linked insurance
+ valuation differences on investments
(average of values on 1 Jan. and the end of the reporting period)
Equity/assets ratio (at fair values), %
+ total equity
+ valuation differences on investments after deduction of deferred tax x 100 %
------------------------------------------------------------------------
+ balance sheet total
+ valuation differences on investments
Risk ratio for P&C Insurance, %
+ claims incurred
- claims settlement expenses x 100 %
------------------------------------------------------------------------
insurance premiums earned
Cost ratio for P&C Insurance, %
+ operating expenses
+ claims settlement expenses x 100 %
------------------------------------------------------------------------
insurance premiums earned
Loss ratio for P&C Insurance, %
claims incurred x 100 %
------------------------------------------------------------------------
insurance premiums earned
Expense ratio for P&C Insurance, %
operating expenses x 100 %
------------------------------------------------------------------------
insurance premiums earned
Combined ratio for P&C Insurance, %
Loss ratio + expense ratio
Expense ratio for life insurance, %
+ operating expenses before change in deferred acquisition costs
+ claims settlement expenses x 100 %
------------------------------------------------------------------------
expense charges
Per share key figures
Earnings per share
profit for the financial period attributable to the parent
company's equity holders
------------------------------------------------------------------------
adjusted average number of shares
Equity per share
equity attributable to the parent company's equity holders
------------------------------------------------------------------------
adjusted number of shares at the balance sheet date
Net asset value per share
+ equity attributable to the parent company's equity holders
+ valuation differences on listed associates in the Group
+ valuation differences after the deduction of deferred taxes
------------------------------------------------------------------------
adjusted number of shares at balance sheet date
Market capitalisation
number of shares at the balance sheet date
x closing share price at the balance sheet date
GROUP QUARTERLY INCOME
STATEMENT
EURm 10-12/2010 7-9/2010 4-6/2010 1-3/2010 10-12/2009
Insurance premiums written 1,127 1,007 1,198 1,764 1,077
Net income from investments 346 310 163 363 259
Other operating income 11 6 6 3 6
Claims incurred -886 -855 -874 -918 -792
Change in liabilities for
insurance and investment
contracts -62 25 26 -759 -61
Staff costs -133 -135 -124 -135 -134
Other operating expenses -162 -125 -139 -121 -130
Finance costs -33 -35 -29 -35 -25
Share of associates'
profit/loss 152 140 106 124 0
Profit for the period before
taxes 361 338 334 287 199
Taxes -59 -55 -62 -41 -51
Profit for the period 302 284 273 245 148
Other comprehensive income for
the period
Exchange differences on
translating foreign operations 43 58 30 83 -8
Available-for-sale financial
assets 146 311 -179 328 -189
Cash flow hedges -1 -2 -4 -2 -3
Share of other comprehensive
income of associates 10 1 9 27 -
Income tax relating to
components of other
comprehensive income -38 -81 48 -85 -50
Other comprehensive income for
the period, net of tax 161 288 -96 351 -250
TOTAL COMPREHENSIVE INCOME FOR
THE PERIOD, NET OF TAX 463 571 177 596 -102
Profit attributable to
Owners of the parent 302 284 273 245 148
Non-controlling interests 0 0 0 0 0
Total comprehensive income
attributable to
Owners of the parent 463 571 177 596 -101
Non-controlling interests 0 0 0 0 0
CONSOLIDATED COMPREHENSIVE INCOME STATEMENT
EURm Note 1-12/2010 1-12/2009
Insurance premiums written 1 5,096 4,479
Net income from investments 2 1,183 1,155
Other operating income 26 20
Claims incurred 3 -3,533 -3,105
Change in liabilities for insurance and investment
contracts -769 -633
Staff costs 4 -527 -510
Other operating expenses -547 -495
Finance costs -131 -87
Share of associates' profit/loss 523 1
Profit before taxes 1,320 825
Taxes -217 -184
Profit for the period 1,104 641
Other comprehensive income for the period
Exchange differences 214 123
Available-for-sale financial assets 605 2,989
Cash flow hedges -9 -3
Share of other comprehensive income of associates 48 -
Income tax relating to components of other
comprehensive income -156 -326
Other comprehensive income for the period, net of tax 703 2,782
TOTAL COMPREHENSIVE INCOME FOR THE PERIOD 1,807 3,423
Profit attributable to
Owners of the parent 1,104 641
Non-controlling interests 0 0
Total comprehensive income attributable to
Owners of the parent 1,807 3423
Non-controlling interests 0 0
Basic earnings per share (eur) 1.97 1.14
CONSOLIDATED BALANCE SHEET
EURm Note 12/2010 12/2009
Assets
Property, plant and equipment 29 34
Investment property 122 124
Intangible assets 5 742 688
Investments in associates 5,699 5,172
Financial assets 6, 7 17,508 15,479
Investments related to unit-linked insurance contracts 8 3,127 2,366
Tax assets 68 81
Reinsurers' share of insurance liabilities 514 481
Other assets 1,515 1,439
Cash and cash equivalents 527 771
Total assets 29,851 26,635
Liabilities
Liabilities for insurance and investment contracts 9 13,749 13,014
Liabilities for unit-linked insurance and investment
contracts 10 3,124 2,359
Financial liabilities 11 2,187 2,098
Tax liabilities 640 500
Provisions 36 35
Employee benefits 105 104
Other liabilities 1,124 912
Total liabilities 20,965 19,022
Equity
Share capital 98 98
Reserves 1,530 1,530
Retained earnings 6,459 5,889
Other components of equity 799 96
Equity attributable to owners of the parent 8,886 7,613
Non-controlling interests 0 0
Total equity 8,886 7,613
Total equity and liabilities 29,851 26,635
STATEMENTS OF CHANGES IN EQUITY, IFRS
Avai-
In- Trans- lable-
Sha- vest- lation for-
re ed un- Re- of sale
pre- Le- re- tain- foreign finan- Cash
Sha- mium gal strict- ed ope- cial flow
re ac- re- ed earn- rations assets hedges
EURm capital count serve equity ings *) **) ***) Total
Equity at 1
Jan. 2009 98 1,161 370 0 5,688 -323 -2,375 11 4,631
Changes in
equity
Transfers
between
equity -1,161 -366 1,527 1 0
Share-based
payments -1 -1
Acquisition
of treasury
shares -1 -1
Recognition
of undrawn
dividends 11 11
Dividends -449 -449
Total comprehensive
income for the period 641 122 2,662 -2 3,422
Equity at
31 Dec. 2009 98 0 4 1,527 5,889 -200 287 9 7,613
Changes in
equity
Share-based
payments -1 -1
Recognition
of undrawn
dividends 10 10
Dividends -561 -561
Share of
associate's
other
changes
in equity 19 19
Total comprehensive
income for the period 1,104 262 447 -6 1,807
Equity at
31 Dec. 2010 98 0 4 1,527 6,459 62 734 3 8,886
*) The total comprehensive income includes also the share of the associate
Nordea's other comprehensive income, in accordance with the Group's share
holding. As Nordea's other comprehensive income comprise mainly the currency
hedging of net investments and exchange differences, the Group's share of
Nordea's other comprehensive income EURm 48 is also included in the Group's
exchange differences in the statement of changes in equity.
**) The amount recognised in equity from available-for-sale financial assets for
the period totalled EURm 615 (2,626). The amount transferred to p/l amounted
to EURm -168 (35).
***) The amount recognised in equity from cash flow hedges for the period
totalled EURm -6 (-2) .
The amount included in the translation, available-for-sale and cash flow hedge
reserves represent other comprehensive income for each component, net of tax.
STATEMENT OF CASH FLOWS
1-12/2010 1-12/2009
Cash and cash equivalent at the beginning of the period 761 499
Cash flow from/used in operating activities 147 1,484
Cash flow from/used in investing activities 67 -1,771
Cash flow from/used in financing activities -448 549
Dividends paid -554 -444
Acquisition of treasury shares - -1
Increase of liabilities 1,954 2,002
Decrease of liabilities -1,848 -1,008
Cash and cash equivalent at the end of the period 527 761
The cash flow statement reports cash flows during the period classified by
operating, investing and financing activities. Cash flows are reported by
using the indirect method. Cash flows from operating activities derive primarily
from the principal revenue-producing activities. Cash flows from investments in
subsidiaries and associated undertakings and those from investments in
intangible assets and property, plant and equipment are presented in investing
activities. Financing activities include cash flows resulting from changes in
equity and borrowings in order to conduct the business. Cash and cash
equivalents consist of cash at bank and in hand and short-term deposits (under
3 months).
NOTES
ACCOUNTING POLICIES
Sampo Group's consolidated financial statements are prepared in accordance with
the International Financial Reporting Standards (IFRS) adopted by the EU. The
interim financial statements are presented in accordance with IAS 34 Interim
Financial Reporting. In preparing the interim financial statements, the same
accounting policies and methods of computation are applied as in the financial
statements for 2009.
Sampo adopted various new or revised standards and interpretations at the
beginning of the year 2010. These standards and interpretations are explained in
Sampos accounting policies for the financial year 2009. The financial statements
will be available on Sampo's website at www.sampo.com/annualreport.
The most significant of the adopted standards is the revised IFRS 3 Business
combinations. The standard includes various significant changes regarding the
accounting treatment of business combinations by allowing the company to measure
the non-controlling interest at fair value instead of the proportionate interest
in the acquiree's net assets. The choice affects the amounts of recognised
goodwill and non-controlling interest.
CONSOLIDATED INCOME STATEMENT BY SEGMENT FOR TWELVE MONTHS ENDED
31 DECEMBER 2010
EURm P&C insurance Life insurance Holding Elimination Group
Insurance premius
written 3,985 1,111 - - 5,096
Net income from
investments 487 645 60 -9 1,183
Other operating income 25 0 16 -15 26
Claims incurred -2,689 -844 - - -3,533
Change in liabilities
for insurance and
investment contracts -91 -678 - - -769
Staff costs -479 -35 -13 - -527
Other operating expenses -501 -49 -11 15 -547
Finance costs -29 -8 -100 6 -131
Share of associates'
profit/loss 0 0 523 - 523
Profit before taxes 707 142 474 -3 1,320
Taxes -189 -37 9 0 -217
Profit for the period 518 105 483 -3 1,104
Other comprehensive
income for the period
Exchange differences 214 0 - - 214
Available-for-sale
financial assets 286 315 4 1 605
Cash flow hedges - -9 - - -9
Share of other
comprehensive income of
associates - - 48 - 48
Income tax relating to
components of other
comprehensive income -75 -80 -1 0 -156
Other comprehensive
income for the period,
net of tax 425 226 51 1 703
TOTAL COMPREHENSIVE
INCOME FOR THE PERIOD 943 332 534 -2 1,807
Profit attributable to
Owners of the parent 1,104
Non-controlling
interests 0
Total comprehensive
income attributable to
Owners of the parent 1,807
Non-controlling
interests 0
CONSOLIDATED INCOME STATEMENT BY SEGMENT FOR TWELVE MONTHS ENDED 31 DECEMBER
2009
EURm P&C insurance Life insurance Holding Elimination Group
Insurance premius
written 3,677 803 - - 4,479
Net income from
investments 394 629 109 24 1,155
Other operating income 23 0 13 -16 20
Claims incurred -2,477 -628 - - -3,105
Change in liabilities
for insurance and
investment contracts -33 -600 - - -633
Staff costs -470 -29 -11 - -510
Other operating expenses -439 -46 -17 7 -495
Finance costs -30 -8 -58 9 -87
Share of associates'
profit/loss 0 0 - - 1
Profit before taxes 644 121 36 23 825
Taxes -159 -28 9 -6 -184
Profit for the period 485 93 45 17 641
Other comprehensive
income for the period
Exchange differences 123 0 - - 123
Available-for-sale
financial assets 709 546 1,756 -23 2,989
Cash flow hedges - -3 - - -3
Income tax relating to
components of other
comprehensive income -191 -141 0 6 -326
Datum: 09.02.2011 - 08:32 Uhr
Sprache: Deutsch
News-ID 51252
Anzahl Zeichen: 65631
contact information:
Town:
Helsinki
Kategorie:
Business News
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