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MarketScreener Homepage  >  Equities  >  NASDAQ OMX HELSINKI LTD.  >  Sampo plc    SAMPO   FI0009003305


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Sampo : Oyj Sampo Group's Results For January - -3-

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11/06/2019 | 02:46am EST
amounted to EUR 26 million (482), which includes EUR 155 million loss 
incurred when distributing Nordea shares as dividends. Nordea's result 
in the third quarter was also impacted by one-off items of EUR 1.3 
billion. With the afore-mentioned items included Sampo's share of 
profits of associated companies Nordea and NDX Intressenter for January 
-- September 2019 amounted to EUR 0 million (524) of which Nordea's 
share was EUR -8 million (527) and NDX Intressenter's EUR 8 million 
(-3). The segment's profit before taxes excluding the associates was EUR 
26 million (-42). 
   Changes in market values of derivative instruments and currency exchange 
rates can cause volatility in the net investment income and finance cost 
   Sampo plc's holding in Nordea was booked in the consolidated balance 
sheet at EUR 6.5 billion, i.e. EUR 8.10 per share. The market value of 
the holding was EUR 5.2 billion, i.e. EUR 6.50 per share, at 30 
September 2019. 
   In addition, the assets on Sampo plc's balance sheet included holdings 
in subsidiaries of EUR 3.4 billion (3.4). 
   Extra dividend in the form of Nordea shares 
   On 7 August 2019, the Board of Directors of Sampo plc, as planned and 
announced on 13 June 2019, resolved to distribute an extra dividend in 
the form of shares of Nordea Bank Abp. Each shareholder received 1 
Nordea share for each 10 Sampo shares held. Fractional entitlements to 
Nordea shares were paid in cash. The share dividend was paid on 12 
August 2019 and cash compensation on 16 August 2019. 
   In total, Sampo distributed 55,517,639 Nordea shares. The value of the 
share dividend, based on the volume weighted average price of Nordea on 
the payment date, was EUR 5.661. The total amount of the extra dividend 
was EUR 314,484,010.20, of which EUR 314,384,682.29 was paid in the form 
of Nordea shares and EUR 99,327.91 in cash. In addition, Sampo paid the 
Finnish transfer tax in total of EUR 4,819,931.14 on behalf of the 
   As a result of the distribution of the extra dividend, Sampo's ownership 
in Nordea decreased to 804 922 858 shares, corresponding to 19.87 per 
cent of all shares and voting rights. On 7 August 2019, Sampo filed an 
application with the Finnish Supervisory Authority for the termination 
of the conglomerate rules (FICO) calculation. The Finnish Supervisory 
Authority approved the application on 21 October 2019. Henceforth, Sampo 
Group's solvency is calculated only by Solvency II rules. The 
consolidation of Nordea as an associated company in Sampo Group's 
financial statement (IFRS) remains unchanged. 
   The effects of the termination of FICO on Sampo's solvency position are 
described in the section Solvency. 
   Change in Sampo's view on expected dividends 
   On 24 October 2019 Sampo management announced that it no longer thinks 
the company's and its shareholders' interests are best served by an 
increase in the dividend. The change is due to the increasingly 
difficult operating environment, with government bond yields expected to 
remain negative for some time to come, and Nordea's new dividend policy 
announced on 24 October 2019. 
   Management expects to propose to the Board a dividend of EUR 2.10 - 2.30 
a share for 2019, not including the extra dividend paid in the form of 
Nordea shares in August 2019. Management's target going forward is to 
maintain a sustainable and attractive dividend. Sampo's current dividend 
policy is to pay out at least 50 per cent of the net profit as 
dividends. Over the last five years Sampo's pay-out ratio has on average 
been approximately 80 per cent. The Board will review the dividend 
policy in early February 2020. 
   In January - September 2019 payments of EUR 18 million (23), including 
social costs, were made on the basis of the long-term incentive schemes. 
The result impact of the long-term incentive schemes in force in January 
- September 2019 was EUR 9 million (12). At the end of September 2019 
Sampo Group had provisioned EUR 4 million (23) for future payments of 
long-term incentive schemes. EUR 41 million (36), including social costs, 
was paid as short-term incentives during January - September 2019. 
   The terms of the long-term incentive schemes are available at 
   Internal dividends 
   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. 
   Mandatum Life paid a dividend of EUR 150 million to Sampo plc in March 
   If decided on 5 November 2019 to distribute a dividend of SEK 7.5 
billion (approx. EUR 710 million). 
   Relevant ratings for Sampo Group companies are presented in the table 
below. S&P gave Mandatum Life Insurance Company a long-term issuer 
credit rating of A+ on 18 September 2019 and raised Sampo plc's rating 
from A- to A on 18 July 2019. 
Rated company                      Moody's          Standard & Poor's 
---------------------------------  ---------------  ------------------- 
                                   Rating  Outlook   Rating   Outlook 
---------------------------------  ------  -------  --------  --------- 
                                   A3      Stable   A 
  Sampo plc -- Long-term Issuer                                 Stable 
---------------------------------  ------  -------  --------  --------- 
                                   A1      Stable   A+        Stable 
  If P&C Insurance Ltd 
  (Sweden) -- Insurance Financial 
  Strength Rating 
---------------------------------  ------  -------  --------  --------- 
Mandatum Life Insurance            -                A+ 
 Company Ltd --Issuer Credit                -                  Stable 
---------------------------------  ------  -------  --------  --------- 
   Group solvency 
   Sampo plc distributed in August 2019 a total of 55,517,639 shares of 
Nordea Bank Abp as an extra dividend (See section Extra dividend in the 
form of Nordea shares). As a result of the dividend, Sampo's ownership 
in Nordea decreased below 20 per cent. On 21 October 2019 the Finnish 
Financial Supervisory Authority gave its formal approval to terminate 
the conglomerate rules (FICO). 
   Going forward Sampo Group calculates its group solvency only under the 
Solvency II rules and Nordea will be treated as an equity investment. 
Sampo Group's solvency ratio according to the Solvency II directive 
amounted to 178 per cent (140) at the end of September 2019. The pro 
forma Solvency II ratio at the end of June 2019 amounted to 170 per 
cent. The potential dividend has not been deducted from own funds in the 
Solvency II calculation. According to the FICO rules the solvency ratio 
was 125 per cent (147) at the end of September 2019. 
   The consolidation of Nordea as an associated company in Sampo Group's 
Financial Statements (IFRS) will remain unchanged. 
   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 30 September 2019 If Group's Solvency II capital 
requirement under standard formula amounted to EUR 1,846 million (1,833) 
and own funds to EUR 3,212 million (3,599). The solvency ratio amounted 
to 174 per cent (196). 
   The S&P A+ rating capital requirement for If Group amounted to EUR 3,026 
million (2,949) on 30 September 2019 and the capital base was EUR 3,534 
million (3,149). 
   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 185 per cent (196) at the end of September 2019. 
   Mandatum Life's solvency ratio after transitional measures amounted to 
178 per cent (176) on 30 September 2019. Own funds was EUR 2,051 million 
(1,740) and Solvency Capital Requirement (SCR) was EUR 1,152 million 
(990). The increase in own funds is mostly due to the Tier 2 issue of 
EUR 250 million in September 2019. Without transitional measures, own 
funds would have amounted to EUR 1,683 million (1,348) and the solvency 
capital requirement to EUR 1,183 million (1,030) leading to a solvency 
ratio of 142 per cent (131). 
   More information on Sampo Group's capital policy is available in the 
Risk Management Report 2018 at 
   Debt financing 
   Sampo plc's debt financing on 30 September 2019 amounted to EUR 3,906 
million (4,067) and interest bearing assets to EUR 1,045 million 
(2,114). Interest bearing assets include bank accounts, fixed income 
instruments and EUR 361 million (503) of hybrid capital and subordinated 
debt instruments issued by the subsidiaries and associated companies. 
   At the end of September 2019 the interest bearing net debt amounted to 

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11-06-19 0245ET

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