SAMPO PLC STOCK EXCHANGE RELEASE 5 May 2011 at 9.30 am
SAMPO GROUP'S RESULTS FOR JANUARY - MARCH 2011 PUBLISHED
Strong reported profits in all areas
Sampo Group's profit before taxes for the first quarter of 2011 rose to EUR 387
million (287). The total comprehensive income for the period, taking changes in
the market value of assets into account, decreased to EUR 232 million (596).
* Earnings per share amounted to EUR 0.58 (0.44) and mark-to-market EPS was
EUR 0.41 per share (1.06). The return on equity for the Group amounted to
10.3 per cent for the period (30.1).
* Net asset value per share remained almost unchanged at EUR 17.71 (17.79).
The fair value reserve after tax on the Group level decreased to EUR 643
million (736).
* In the P&C insurance operations the combined ratio for the first quarter of
2011 improved to 94.4 per cent (98.2). The profit before taxes was EUR 221
million (125) and mark-to-market result EUR 91 million (308). Return on
equity decreased to 14.0 per cent (52.7).
* In the life insurance operations the profit before taxes increased to EUR
44 million (36). The mark-to-market result decreased to EUR 13 million
(133). The return on equity at market value decreased to 5.0 per cent
(65.4).
* Nordea is accounted for as an associated company. Sampo's share of Nordea's
first quarter 2011 profit was EUR 152 million (124).
KEY FIGURES 1-3 1-3 Change
EURm 2011 2010 %
Profit before taxes 387 287 35
P&C insurance 221 125 77
Life insurance 44 36 22
Associates (Nordea) 152 124 22
Holding excl. associates -30 2 -
Profit for the period 325 245 32
Change
Earnings per share, EUR 0.58 0.44 0.14
EPS, mark-to-market, EUR 0.41 1.06 -0.65
NAV per share, EUR *) 17.71 17.79 -0.08
Average number of staff (FTE) 6,872 6,982 -110
Group solvency ratio, % *) 157.7 167.1 -9.4
RoE, % 10.3 30.1 -19.8
*) comparison figure from 31.12.2010
The figures in the interim report are not audited. Income statement items are
compared on a year-on-year basis whereas comparison figures for balance sheet
items are from 31 December 2010 unless otherwise stated.
Sampo follows the new disclosure procedure enabled by the Finnish Financial
Supervisory Authority (Standard 5.2b) and hereby publishes its Interim Report
attached as a PDF file to this stock exchange release. The Interim Report is
also available at www.sampo.com/result.
BUSINESS AREAS
P&C insurance
Profit before taxes for P&C insurance in January-March 2011 increased to EUR
221 million (125). Risk ratio and combined ratio improved to 71.0 percent (74.8)
and 94.4 per cent (98.2), respectively, mainly due to less winter related claims
than in the same period in 2010.
Technical result increased to EUR 100 million (68). Technical result for Private
business area amounted to EUR 56 million (27), Commercial EUR 23 million (24),
Industrial EUR 16 million (15) and Baltic & Russia EUR 2 million (1).
Return on equity (RoE) decreased to 14.0 per cent (52.7) due to lower investment
result mark-to-market. Insurance margin (technical result in relation to net
premiums earned) increased to 9.7 per cent (7.2). Fair value reserve at the end
of March 2011 amounted to EUR 242 million (315).
Life insurance
Profit before taxes in life insurance for January-March 2011 rose to EUR 44
million (36). Mandatum Life has strengthened its technical reserves with EUR 35
million in anticipation of rising future customer bonus levels. The measure
weakens the reported profit and mark-to-market profit with the corresponding
amount. Return on equity (RoE), which amounted to 5.0 per cent (65.4), would
have exceeded 14 per cent without the reserve strengthening.
Together with the earlier measures of lowering of discount rate to 2.5 per cent
for 2011 and 3.0 per cent for 2012 it substantially enhances the opportunities
of reporting continued strong profits for 2011 and 2012.
Associated company Nordea Bank
On 31 March 2011 Sampo plc held 860,440,497 Nordea shares corresponding to a
holding of 21.3 per cent. The average price paid per share amounted to EUR 6.46
and the book value in the Group accounts was EUR 6.79 per share. The closing
price as at 31 March 2011 was EUR 7.75.
The following text is based on Nordea's January - March 2011 interim report
published on 28 April 2011.
Nordea's total income remained at the record level from the previous quarter and
increased 9 per cent compared to the first quarter last year. Risk-adjusted
profit increased by 7 per cent to EUR 771 million. Nordea's risk-adjusted profit
has increased by close to 40 per cent from 2006 and the company estimates that
it is not far from the trend line to reach the goal of doubling it in 7 years.
Nordea assesses that the best performing banks can reach ROE levels around 15
per cent under the new regulation. Nordea is committed to take the necessary
steps to maintain its position in the top league of European banks. To meet
these new challenges, it will have to maintain its strong business momentum and
at the same time focus on increasing ROE. Nordea's response will be to implement
its New Normal Plan. It contains measures to increase capital efficiency, cost
efficiency and ROE.
OTHER DEVELOPMENTS
The Annual General Meeting of 14 April 2011 decided to distribute a dividend of
EUR 1.15 per share for 2010. The dividend was paid on 28 April 2011.
The following members were re-elected to the Board of Directors: Anne Brunila,
Veli-Matti Mattila, Eira Palin-Lehtinen, Jukka Pekkarinen, Christoffer Taxell,
Matti Vuoria and Björn Wahlroos. Adine Grate-Axén was elected as a new Board
member. At its organisational meeting, the Board elected Björn Wahlroos as
Chairman and Matti Vuoria as Vice Chairman.
The Annual General Meeting elected Ernst & Young Oy as Auditor. The Auditor will
be paid a fee determined by a reasonable invoice. Heikki Ilkka, APA, was re-
elected as the principally responsible auditor.
OUTLOOK FOR THE REST OF 2011
Sampo Group is expected to report a good result for 2011. The continuing rise of
short term interest rates will further strengthen Sampo Group's profits.
If P&C is expected to achieve 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.
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 telephone conference for investors and analysts at 4 pm
Finnish time (2 pm UK time). The call is held in English. Please call
+44 20 7162 0125 (Europe) or +1 334 323 6203 (North America). Please be ready to
state the conference ID '893213', the conference title 'Sampo plc 2011/Q1
release' and the password 'SAMPO'
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 arrange an Investor Lunch in New York on 11 May 2011 and hold its
traditional Capital Market Day in London on 1 June 2011. Further information is
available at www.sampo.com closer to the date.
Sampo will publish the second quarter 2011 interim report on 10 August 2011.
DISTRIBUTION:
NASDAQ OMX Helsinki
The principal media
Financial Supervisory Authority
www.sampo.com
[HUG#1512739]
