SAMPO OYJ
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 -- September 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 September 2020.
Internal dividends
If has decided to pay a dividend of SEK 6.30 billion (approx. EUR 600
million) to Sampo plc in December 2020.
Nordea's AGM on 28 May 2020 mandated the Board of Directors to decide on
a dividend payment for the financial year 2019. According to Nordea's
interim report for the third quarter of 2020, the bank intends to pay
out a dividend for the financial year 2019. Nordea's Board of Directors
will refrain from deciding on the 2019 dividend payment before 1 January
2021 and review the situation in the fourth quarter of 2020 in the light
of any further European Central Bank communication.
Following the Danish FSA's recommendation, Topdanmark's Board of
Directors decided to postpone paying out 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 of DKK 17 per share.
Mandatum Life decided not to pay the dividend of EUR 150 million planned
for March 2020.
Ratings
The relevant ratings for Sampo Group companies did not change in the
third quarter of 2020. The ratings at the end of September 2020 are
presented in the table below.
Both S&P and Moody's confirmed all Sampo Group's ratings after the
announcement of the bid on Hastings and maintained the Stable outlook
for the ratings.
Rated company Moody's Standard & Poor's
-------------------------------- --------------- -------------------
Rating Outlook Rating Outlook
-------------------------------- ------ ------- --------- --------
Sampo plc -- Issuer Credit A3 Stable A 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
214 per cent (167) at the end of September 2020. The ratio includes the
subordinated Tier 2 notes of EUR 1 billion issued on 3 September 2020 to
partly finance the offer on Hastings Group Holdings Plc.
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 September 2020, If Group's Solvency II capital
requirement under the standard formula amounted to EUR 1,804 million
(1,890) and own funds amounted to EUR 3,167 million (3,592). The
solvency ratio amounted to 176 per cent (190).
The S&P single-A capital requirement for If Group amounted to EUR 2,959
million (3,083) on 30 September 2020 and the capital base was EUR 3,387
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 200 per cent (177) at the end of September 2020.
Mandatum Life's solvency ratio after transitional measures amounted to
206 per cent (176) on 30 September 2020. Own funds were EUR 2,245
million (2,117) and the Solvency Capital Requirement (SCR) was EUR 1,091
million (1,204). Without transitional measures, own funds would have
amounted to EUR 1,906 million (1,756) and the solvency capital
requirement would have amounted to EUR 1,102 million (1,234), leading to
a solvency ratio of 175 per cent (142).
Debt financing
On 30 September 2020, Sampo plc's debt financing amounted to EUR 4,714
million (3,908) and interest bearing assets amounted to EUR 548 million
(1,725). Interest bearing assets include bank accounts, fixed income
instruments and EUR 345 million (359) of hybrid capital and subordinated
debt instruments issued by the subsidiaries and associated companies.
Sampo plc's net debt amounted to EUR 4,166 million (2,183). The net debt
calculation takes into account interest bearing assets and liabilities.
Gross debt to Sampo plc's equity was 70 per cent (52) and financial
leverage was 41 per cent (34).
On 3 September 2020 Sampo plc issued 32-nc-12 Tier 2 notes of EUR 1,000
million maturing on 3 September 2032.
On 30 September 2020, financial liabilities in Sampo plc's balance sheet
consisted of issued senior bonds and notes of EUR 3,089 million (3,414).
In addition, Sampo plc has issued subordinated notes of EUR 1,486
million (494). Outstanding commercial papers amounted to EUR 140 million
(0). The average interest, net of interest rate swaps, on Sampo plc's
debt as of 30 September 2020 was 1.6 per cent (1.2).
More information on Sampo Group's outstanding debt issues is available
at:
https://www.globenewswire.com/Tracker?data=VtcZaM5XomdKrs_UGU9xP5oDS2SgyfRYkjOAt_2pB9r_h2S8aHN5j6L_Nc0np4cTwUtK-i2scPKq4cJHieyxBCHbMXT7yqMDynkE770izmMl5UJr2wM2n06QotFijDHI
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 -- 84 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 and the
measures taken to contain the virus are causing significant negative
effects on economies and uncertainties on capital market development.
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
within 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 and analysts will be
arranged today at 2 pm Finnish time (12 pm UK time). To participate,
please call one of the following telephone numbers: +1 631 913 1422, +44
33 3300 0804, +46 8 5664 2651, or +358 9 8171 0310. The conference code
is 50800225#.
The conference call can also be followed live at:
https://www.globenewswire.com/Tracker?data=VtcZaM5XomdKrs_UGU9xP8y8ZGhiaK8OwGKsKrrHgfbEhu3lcLC1qJWFO1q04r2T29-h3DNmNIaT4LiEPgRJDz3cqwrfgaFhQGjnefTPn_A=(MORE TO FOLLOW) Dow Jones Newswires
11-04-20 0255ET
