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Sampo Group’s results for January–September 2021

SAMPO PLC INTERIM STATEMENT                3 November 2021 at 9:30 am

Sampo Group’s results for January–September 2021        

Sampo Group continued its strong performance in January–September 2021. Profit before taxes increased to EUR 1,974 million (1,054), or EUR 1,737 million excluding accounting effects related to Nordea disposals in the first nine months. Earnings per share rose to EUR 2.74 (1.51).

Sampo Group’s core business, P&C insurance, achieved an underwriting result of EUR 985 million (719) for the first nine months of 2021, representing year-on-year growth of 37 per cent. Adjusting for the Hastings acquisition and COVID-19 effects reported by If P&C and Topdanmark, underwriting profit growth was 19 per cent. The Group combined ratio improved by 2.3 percentage points year-on-year to 80.8 per cent (83.1). Excluding COVID-19 effects and adjusting for the Hastings acquisition, the combined ratio improved by 2.1 percentage points to 82.6 per cent (84.7). The strong result is well ahead of Sampo Group’s 2021–2023 annual financial targets of mid-single digit per cent growth in underwriting profits and a combined ratio below 86 per cent.

If P&C reported an underwriting profit of EUR 681 million (588) and a record-low combined ratio of 80.8 per cent (82.4) for January–September 2021. The result was supported by a solid 4.1 per cent currency adjusted premium growth and strong underlying performance. If’s risk ratio improved by 1.2 percentage points, excluding the impact of large losses and severe weather, prior year development and COVID-19 effects. Profit before taxes increased to EUR 818 million (616). Following the strong year-to-date performance, If’s combined ratio outlook has been narrowed to 81.5–82.5 per cent.

Topdanmark’s profit before taxes for January–September 2021 amounted in Sampo Group’s profit and loss account to EUR 256 million (85). The combined ratio improved to 82.9 per cent (85.7).

Hastings reported strong results in a competitive motor market as it remained disciplined in pricing. Hastings’ live customer policies were stable at 3.1 million and its private car market share stood at 8.3 per cent at the end of September 2021. Hastings’ operating ratio for January–September 2021 was 78.1 per cent, well below the annual target of 88 per cent, while profit before taxes amounted to EUR 115 million, net of EUR 30 million of non-operational depreciation and amortisation.

Mandatum’s profit before taxes for January–September 2021 increased to 201 million (100), net of the establishment of EUR 46 million of new discount rate reserves. The result was driven by continued good momentum in the investment markets. Mandatum’s Solvency II ratio was a record high at 214 per cent (188). Unit-linked and other client assets under management grew by 16 per cent to EUR 10,618 million from EUR 9,192 million at year end.

Sampo’s share of Nordea profits in January–September 2021 amounted to EUR 381 million (299). On 10 September 2021, Sampo sold 73 million Nordea shares to institutional investors. The transaction generated gross proceeds of EUR 745 million and a positive accounting effect of EUR 165 million that will be treated as an extraordinary item in the calculation of Sampo’s dividend payout ratio for the 2021 financial year. In connection with the share sale, Sampo announced a plan to launch a share buyback programme of EUR 750 million. The programme was launched on 1 October 2021 and share purchases started on 4 October 2021.

On 25 October 2021, Sampo launched a further sale of 162 million Nordea shares, generating gross proceeds of EUR 1,725 million. Group management has proposed that the proceeds of the sale are used for an extra dividend of at least EUR 2.00 per share, and that the group’s buyback programme is extended beyond the Annual General Meeting, expected to be held on 18 May 2022, to allow for more capital to be returned through share repurchases. Since the end of September 2020 Sampo has decreased its stake in Nordea from 19.9 per cent to 6.1 per cent as at the reporting date of 3 November 2021.

Sampo Group’s Solvency II ratio increased to 211 per cent from 176 per cent at year-end and 209 per cent at the end of the second quarter. The figure includes the effects of the Nordea share sales on 10 September 2021 and 26 May 2021, the buyback programme of EUR 750 million announced on 1 October 2021 and If P&C’s hybrid bonds that will be called in December 2021. After adjusting for dividend accrual based on the 2020 dividend per share of EUR 1.70, the Solvency II ratio was 199 per cent. Sampo targets a solvency ratio of 170–190 per cent.

Sampo Group’s financial leverage declined to 25.0 per cent from 28.4 per cent at the end of the second quarter, partly due to a EUR 631 million reduction in gross debt through maturities and a tender offer repurchase. Sampo Group targets financial leverage below 30 per cent.

KEY FIGURES1-9/20211-9/2020Change, %7-9/20217-9/2020Change, %
Profit before taxes1,9741,0548763248530
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