STOCKHOLM, Sweden, August 13, 2003 (PRIMEZONE) -- Skandia (Other OTC:SKNFF) (LSE:SDIAq):
Corporate Communications S-103 50 Stockholm Sweden Telephone +46-8-788 10 00 Fax +46-8-788 30 80 www.skandia.com
Office: Sveavagen 44
On 1 May 2003 it was announced that the agreement with Prudential Financial, Inc. (USA) concerning its acquisition of American Skandia has now been completed. For the sake of comparison, all information in this interim report pertains to operations excluding the USA, unless otherwise indicated.
SECOND QUARTER 2003
A. BUSINESS DEVELOPMENT
- Sales amounted to SEK 19,449 million (19,513). Sales rose 8% in local currency. The sales increase contributed to an improvement in the profit margin, to 13.8%.
- Compared with the first quarter of 2003, sales rose 13% in local currency.
- New sales rose 11% in local currency.
B. OPERATING RESULT according to the embedded value method
- The group's operating result according to the embedded value method was SEK 1,034 million (1,662), including SEK 499 million in financial effects (-792). The operating result includes SEK -93 million in items affecting comparability (2,016).
C. RESULT according to Swedish GAAP
- The result before tax was SEK -141 million (1,854). The result includes SEK -93 million in items affecting comparability (2,016).
FIRST HALF 2003
A. BUSINESS DEVELOPMENT
- Sales amounted to SEK 37,142 million (38,549). Sales rose 3% in local currency.
- New sales of unit linked assurance decreased by 5%.
- The net inflow in funds under management was SEK 22.1 billion (22.8).
B. OPERATING RESULT according to the embedded value method. The group's operating result according to the embedded value method was SEK 1,157 million (2,222). The operating result includes SEK -93 million in items affecting comparability (2,016).
- Financial effects were positive, at SEK 216 million (-913).
- The profit margin for newly written unit linked assurance business for the year rose to 13.7% (13.0%).
C. RESULT according to Swedish GAAP
- The result before tax was SEK 23 million (2,328). The result includes SEK -93 million in items affecting comparability (2,016).
- Earnings per share were SEK -0.04 (1.99).
- The return on shareholders' equity was 3% (8%). Excluding items affecting comparability, the return was 6% (10%).
D. CASH FLOW AND BALANCE SHEET
- Cash flow from operating activities amounted to SEK -1.1 billion (-0.4), in part due to the rise in sales.
- Borrowings decreased by SEK 5.4 billion, to SEK 4.2 billion. After deduction for liquid assets, borrowings amounted to SEK 1.9 billion, net.
- Net asset value was SEK 27,025 million (27,033 at year-end 2002).
- Shareholders' equity amounted to SEK 14,562 million (15,238 at year-end 2002).
Comments by Leif Victorin, President and CEO:
- The first half of 2003 started out in the shadow of dramatic global events and ended with a second quarter of dawning optimism. Although the markets are still weak and uncertain on the whole -- with customers bracing a wait-and-see attitude -- several of Skandia's units were able after a slow start to the year to report steadily improving sales figures during the spring and summer. In addition, funds under management have now returned to their previous, high levels.
- Sales in the UK picked up during the spring and margins improved. Bankhall strengthened its leading position as a distribution network. In other respects, the focus is on achieving lasting cost reductions.
- In Sweden, further cost-cutting measures are being taken in addition to the savings targets that have been previously reported and achieved. Sales were weak during the first half of the year, although they gained momentum in June.
- On the European continent, Skandia continues to strengthen its sales and market positions while maintaining profitability. Sales on the continent rose 20% in local currency during the second quarter of 2003 compared with the first quarter of 2003, and in Germany Skandia is now the fourth-largest player in the unit linked market.
- On the initiative of Skandia's board, during the spring the company reviewed existing strategies, plans, policies, markets and products in the aim of either confirming or changing them. The first phase of this work has now been concluded and is being incorporated into the ordinary operating activities.
- The review has indicated that Skandia's strategy -- to provide safe, competitive products to the growing market for long-term savings -- is on target in all essential respects, even though some adjustment to the current reality is needed with respect to focuses, products, ambitions and organization. This adjustment process is now in full swing, and the watchwords are greater profitability, more efficient use of capital, greater customer orientation and continued cost-cutting.
- The review has also covered the group's policies and work routines in most areas -- ranging from ethics and compensation policies to risk management and profitability assessment. In many cases this has resulted in tightened policies, stronger follow-up routines and improved clarity.
- The previously announced cost-cutting programme of SEK 1 billion has now been carried out. A new, extensive savings programme has been started and is scheduled for completion in 2004.
- On the whole this work will lead to a better balance in the group's products and markets - between risk and price and between profitability and capital requirement. We are strengthening our control and monitoring systems and we have a strategy that is geared to sustained, profitable growth through our own strength. In my view we are thus well poised for 2004.
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http://www.waymaker.net/bitonline/2003/08/13/20030812BIT00770/wkr0001.doc
http://www.waymaker.net/bitonline/2003/08/13/20030812BIT00770/wkr0002.pdf