Sampo Group Debt Investor Presentation
May 20, 2011 As of 31. 3. 2011
www.sampo.com/debtpresentation Figures as of March 31, 2011, Presentation May 20, 2011
Disclaimer
This presentation may contain forward‐looking statements that reflect management’s current views with respect to certain future events and potential financial performance. Although Sampo believes that the expectations reflected in such forward llookingooking statements are reasonable, no assurance can be given that such expectations will prove to have been correct. Accordingly, results could differ materially from those set out in the forward‐looking statements as a result of various factors.
Important factors that may cause such a difference for Sampo include, but are not limited to: (i) the macroeconomic development, (ii) change in the competitive climate and (iii) developppments in capital markets.
This presentation does not imply that Sampo has undertaken to revise these forward‐ looking statements, beyond what is required by applicable law or applicable stock exchange regulations if and when circumstances arise that will lead to chachangesnges compared to the date when these statements were provided.
2 Sampo Group BiFBasic Facts Figures as of March 31, 2011, Presentation May 20, 2011 Structure
Sampo plc
• Parent company for the Group • Market Cap ~ EUR 12 bn
21.3% as of 4 Feb 2011
Nordea Mandatum Life 20.09%*
• Leading life & pension • The largest Nordic • The largest pan‐Nordic MARKET P&C insurer, second insurer in Finland, Financial Services group POSITION largest in the Baltics with Baltic operations
STRATEGY • Underwriting focus • Profit oriented • Unit‐linked products • Pan‐Nordic synergies • Cost, Risk & Capital & Wealth Management INVESTMENT ~ EUR 11. 7 bn ~ EUR 587 bn B/S ~ EUR 585.8 bn ASSETS
• TSR in the top of quartile RETURN • RoE above 17.5% of European peer group TARGET • Risk‐adjusted profit • RoE above 17.5% • CoR below 95% to double in 2006‐2013 • RoE above 15%
4 *as of 16 May, 2011 Figures as of March 31, 2011, Presentation May 20, 2011 History
Sampo Group has gone through several structural changes in its history. The timeline below outlines the major changes in Sampo Group during the 21st century.
2000 2001 2002 2003 2004 2005 2006 2007 2009 2010 2011
Sampo Insurance Mandatum 2002 Sampo’s P&C Sampo Group Following the Kari Stadigh Sampo´s Nordea Current holding Company and Bank joins insurance operations divests Sampo transaction, Sampo’s succeeds holding exceeds of Nordea Leonia merge into the Group, are merged with If. Bank Group to business areas are Björn Wahlroos 20% and Nordea is 21.28%, the Sampo‐Leonia and Following the Danske Bank A/S. P&C insurance and as a new becomes an of TopDanmark financial services the Group’s transaction, Sampo life insurance. Group CEO associated over 20%. ggproup. The Grou p’s name is owns 38 per cent of If’. In addition, Sampo plc comppyany. business areas are shortened 2004 If becomes fully has investment assets long‐term savings to Sampo. owned by Sampo. of approximately (life insurance, asset Following the share Eur 5 billion. management and transaction, Sampo has mutual funds), three core businesses: banking, investment P&C insurance, banking banking, and P&C and long‐term savings. insurance. 5 Figures as of March 31, 2011, Presentation May 20, 2011 Market Capitalisation, May 19, 2011, EURm
0 4,000 8,000 12,000 16,000 20,000 24,000 28,000 32,000
Nordea 32,039 DnB NOR 16,766 Swedbank 14,776 Handelsbanken 14,416 S E B 13,934 Danske Bank 13,780 Market cap 19.5.2011 Investor 12,774 +Pref.shares 19.5.2011 Sampo 12,669 Industrivärden 5,142 Gjensidige 4,337 Storebrand 2,817 Tryg 2,662 Pohjola Bank 2,444 Jyske Bank 2,187 TdTopdanmar k2,011 Alm.Brand 288 6 Source: ReutersEcoWin Figures as of March 31, 2011, Presentation May 20, 2011 Ownership as of March 31, 2011
Solidium*,14.1%
Varma Mutual Pension, 8.5% Ilmarinen Mutual Pension, 23%2.3% Björn Wahlroos, 2.1%
Kaleva Mutual Insurance, 1.1% Other domestic owners, 22.6% Foreign and nominee
*100 % owned by the Republic of Finland registered owners, 49.2% 7 Figures as of March 31, 2011, Presentation May 20, 2011
Value Creation in Nordic Financials
• Sampo’s goal is to create value for its investors through investments in Nordic financials • Sampo is a conservative long‐term investor that aims to flexibly utilise opportunities that arise in the market – Knowledge of Nordic markets, Nordic financial institutions and Nordic people – Proven first‐class track record in successfully developing investments and realizing value for investors in Nordic Financials • Sampo is committed to the long‐term development of its operating subdbsidiaries and dffl affiliate d companies – The business areas have clear strategies, based on targets for return on equity – Profitability before market share • Sampo has a conservative capital structure, low leverage and a diversified business portfolio • Bondholder value well protected
8 Figures as of March 31, 2011, Presentation May 20, 2011 Value Creation Track Record Acquisition of If in 2004
• Total consideration of EUR 1,370m in cash Skandia • The transaction valued If at EUR 2,600m 51.89% Skandia Liv – ca. 1.25 x NAV • Sampo acquired the remaining shares (10. 06%) in If Storebrand from Varma in October 2004 for EUR 270m, which brought Sampo’ ownership to 100%
Divestment of Sampo Bank in Nov 2006
• Total consideration of EUR 4,050m in cash – P/BV of 3.5x Sampo 100% – P/E multiple of 16.0x Bank • The transaction was at the time the largest cash only M&A transaction in Finland since 2000
Nordea investment 2006 2011
• Total consideration of EUR 5,557.3m in cash – P/BV of [1.1]x, P/E [9.4]x 21.28% – Average purchase price €6.46 (vs. current market value €7. 94) • Sampo is a long‐term owner in Nordea and committed to shareholder value creation 9 Figures as of March 31, 2011, Presentation May 20, 2011 Diversified Business Portfolio
Nordea Grouplevel Diversification – Geographical diversification, Strong – Correlations between reported Retail Franchise profits (()*) create futher stability – Diversified Earnings base: Banking, at Group level Transaction Services, Asset Managg,ement, Markets & Life Insurance Mandatum Nordea IF P&C Life IF P&C Nordea 1 – Geographical diversification, Strong IF P&C -0,04 1 Retail Franchise Mandatum Life -0,04 0,85 1 – Several Business Lines Mandatum Life – Wealth Management and Traditional Business
* Quarterly Reported Profits 2005 – Q1/2011 10 Figures as of March 31, 2011, Presentation May 20, 2011 Principles of Capital Management
• Risk Capital Available > Risk Capital needed – Risk Capital Available = SI Capital + Other items absorbing economic losses – Risk Capital Need = Measured Economic Capital + ”Non‐measurable” risks – Buffer between measures under constant considerations – ProActive management of Risks/Capitalisation
• Economic Capital at 99.5% as a basis for Risk Capital Need – Economic capital is an estimate of Risk Capital needed to keep the Group solvent – EC is calculated at 99.5% confidence level and 1 year risk horizon – ”Non‐measurable” risks include liquidity, market , illiquidity and business environment risks
• Adjusted Solvency Capital is a measure of Risk Capital Available – Solvency I capital items included as such – The difference between Undiscounted technical provisions in balance sheet and their discounted value (so called Liability Side adjustment) – Capital instruments excluded from regulatory capital in Solvency I
11 Figures as of March 31, 2011, Presentation May 20, 2011 Principles of Investment Management
• Company specific needs form the basis for all investments – Liabilities intensively analysed and modelled – Regulatory requirements
• Strategy – Absolute Return targets taking into account the liabilities and general business targets – Direct Investments into Nordic countries mainly, Outside Nordics Funds mainly – No diversification for the sake of diversification
• Centrally Managed – Sampo plc Chief Investment Officer responsible for all investments, all portfolio managers have a direct reporting line to him – Common infrastructure for investment administration and reporting – Investment strategies coordinated and streamlined, no overlapping activities to prevent Group Wide concentrations
12 Sampo Group
CitlitiRCapitalisation, Resu lts and Investments Figures as of March 31, 2011, Presentation May 20, 2011 Capitalization Internal Treatment Current Reggyulatory Treatment
EURm Internal Treatment ≈ S II 9,000 8,432 • Sampo is measuring Risk Capital Liabilityyj side adjustment , needed by Economic Capital tools If and Mandatum Life 1,099 7,500 • By nature SII framework is similar to EC techniques, however there are technical differences 6,000 • EC models are developed to be in If 733 line w ith regu latory requ irements 4,103 for Internal models to maintain 4,500 666 connection between EC figures line Sampo plc,44 with S II 2,492 7,333 3,000 Nordea SI = Regulatory Treatment 3,095 • Minimum requirement (4,103) is 4,281 1,074 sum of IF, ML (SI) and Nordea 1,500 (BII) requirements Life 232 1,381 • Additive figure does no t inc lu de If 733 diversification effects and 0 Nordea´s requirement is P&C Life Nordea Diversific. Group EC Adj. group Minimum calculated at 99.90% confidence solv. capital Basel II level
as per 31 March 2011 14 Figures as of March 31, 2011, Presentation May 20, 2011 Profit Before taxes
EURm 4000 3,833
3500
3000
2500
2000 1,508* 1500 1,295 1,353 948 1000 870 825 387 500
0
‐500 2004 2005 2006 2007 2008 2009 2010 Q1/2011 P&C Life Banking Nordea dividends Other
(*) Nordea´s PBT is calculated by average tax‐rate of 29% 15 Figures as of March 31, 2011, Presentation May 20, 2011
Investment allocation
Total Group (MEUR) 16,979 17,784 18,301 18,373
14,000 11,770 11,661 11,674 12,000 11,188
10,000
8,000 5,781 5,957 5,804 6,000 5,547
4,000
2,000 683 894 245 233 0 If If If If P&C P&C P&C P&C Plc Plc Plc Plc Sampo Sampo Sampo Sampo Life Life Life Life Mandatum Mandatum Mandatum Mandatum
06/10 09/10 12/10 03/11
Money Market 7% 13% 66% 9% 14% 62% 5% 10% 85% 6% 11% 89% Bonds 80% 51% 15% 78% 50% 20% 80% 51% 9% 80% 51% 6% Equity 12% 25% 7% 12% 27% 8% 14% 28% 3% 13% 27% 2% Private Equity 0% 4% 8% 0% 4% 8% 0% 4% 2% 0% 5% 2% Other 1%6%3% 1%5%3% 1%6%1% 1%6%1%
16 Figures as of March 31, 2011, Presentation May 20, 2011 Investments by rating and by sector
AA+ - A+ - BBB+ - BB+ - Not Fixed Income Derivat ives Change from AAA D Equities Other Total 31.3.2011 AA- A- BBB- C Rated Total (Counterparty Risk) 31.12.2010
Asset-Backed Securities - - 4 3 0 - 13 20 - - - 20 + 2 Basic Industry - - 4 30 410 - 276 720 213 4 - 937 - 63 Capital Goods - 3 138 76 - - 33 251 508 - - 759 - 156 Consumer Products - 5 22 307 41 - 161 536 357 7 - 899 + 18 Covered Bonds 3 703 93 56 1 - - 13 3 865 - - - 3 865 + 166 Energy - 6 14 30 - - 438 488 59 - - 546 - 81 Financial Institutions 29 1 862 3 065 317 160 - 200 5 633 17 23 88 5 760 + 580 Governments 621 7 4 17 - - 63 711 - - - 711 - 219 Index-Linked Bonds 42 10 149 66 27 - - 295 - - - 295 - 4 Insurance - - 28 22 - - 26 76 306 - - 382 + 69 Media ------282855- - 83 - 12 Municipalities 36111----- 372- - - 372 + 59 Real Estate ------35 35 - 237 - 272 +32+ 32 Services - - - 20 27 - 12 59 52 12 - 123 - 12 Technology and Electronics - - - 18 - - 16 34 81 - - 115 - 2 Telecommunications - - 93 114 22 - - 229 78 - - 307 - 11 Transportation -1----22222314- - 237 - 1 Utilities - 13 387 92 --14 507 58 --565 - 25 Others - 26 7 - - - 57 90 27 1 - 118 - 2 Funds - - - - 246 - 40 286 1 282 479 - 2 047 - 231
Total 4 756 2 038 3 972 1 112 933 - 1 647 14 458 3 107 761 88 18 414 + 107
Change from 31.12.2010 - 49 - 62 + 468 - 81 - 54 - + 44 + 266 - 249 + 57 + 33 + 107 EURm
Note: Category Other includes private equity and non-listed real estate. Category Derivatives includes only OTC derivatives and corresponding collaterals. 17 Figures as of March 31, 2011, Presentation May 20, 2011 Fixed Income Investments in Banking Sector
Covered Money Long‐term Long‐term Total % bonds market senior debt subord. debt Sweden 3,313 618 1,001 400 5,332 56% Finland 62 1 479 188 122 1,851 19% Norway 240 508 264 1,012 11% Denmark 74 227 138 439 5% France 77 137 17 231 2% United States 167 10 177 2% Germany 55 64 119 1% Switzerland 95 95 1% Estonia 72 0 72 1% United Kingdom 40 18 58 1% Netherlands 50 50 1% Austria 32 1 33 0% Luxembourg 10 10 0% Belgium 5 5 10 0% Ireland 4 4 0% Latvia 1 1 0% Total 3,865 2,168 2,489 973 9,494 100 %
18 Figures as of March 31, 2011, Presentation May 20, 2011 Fixed Income Investments in Governments
Total EUR 1.1 billion
Netherlands Other 3 % 3%3 % Germany 7 %
Norway 8 % Sweden 40 %
United States 12 %
France 12 % Finland 17 % 19 If P&C A/A2 Sta ble Figures as of March 31, 2011, Presentation May 20, 2011 Business in a nutshell Geoggpraphical presence Facts about If 2010 (()2009) • If P&C provides insurance • If generated EUR 707m (611m) in pre‐tax profits solutions and services in: • Excellent combined ratio of 92.8% (92.1%) –Finland –Sweden – Risk ratio 69.1% (68%) – Denmark – Cost ratio 23.7% (24.1%) –Norway – Baltics (and Russia) – Expense ratio 17.2% (17.6%) • Business model resilient over the cycle
Q1/11 Q1/10 Pre‐tax‐profit, EURm 221 125 CR,% 94.4 98.2 Risk ratio,% 71.0 74.8 Cost ratio,% 23.4 23.5
Gross premiums written by If 2010 by business area by country
122 122 Private Norway 374 591 Commercial Sweden 1,496 886 Industrial Finland 2,239 1, 240 Baltic and Russia Denmark Baltic and Russia 1,314 21 Figures as of March 31, 2011, Presentation May 20, 2011 Largest and well‐diversified Nordic P&C insurer
P&C Market shares, %Country volatility in combined ratio
NORWAY 2010 Gjensidige 28% FINLAND 2010 If 26% Pohjola 28% Tryg 17% If 25% Sparebank 1 10% Tapiola 19% Fennia 10%
SWEDEN 2010 Länsförsäkringar 29%
If 19% If - Total If Sweden If Norway Trygg‐Hansa (RSA) 16% If Finland If Denmark Folksam 15% Note: Distribution based on quarterly figures 2005‐2010 DENMARK 2009 BALTICS 2010 Tryg 21% RSA 21% Topdanmark 19% If 15% Codan (RSA) 14% BTA 15% Alm. BdBrand 10% Ergo 13% If 5% Gjensidige 7% 22 Figures as of March 31, 2011, Presentation May 20, 2011 Combined Ratio Development Q1/10 Q1/11 CR, % 98. 2 94. 4 Risk ratio,% 74.8 71.0 Cost ratio,% 23.5 23.4 % 100.9 100 92.6 90.5 89.9 90.6 91.8 92.1 92.8 Long‐term CoR target < 95% 26.6 23.7 80 25.6 24.3 24.0 23.7 23.7 24.1
60
40 74.3 67.0 66.2 65.9 66.9 68.1 68.0 69.1 20
0 2003 2004 2005 2006 2007 2008 2009 2010 Risk ratio Cost ratio 23 Figures as of March 31, 2011, Presentation May 20, 2011 Strong Profits based on Market Leadership
EURm Q1/11 Q1/10 EURm Other comprehensive income items Pre‐tax‐profit 221 125 Foreign exchange differences Profit for the period 162 92 1,500 Profit before taxes Exchange differences 2 83 Other compr. inc. items ‐73 133 Profit for the period 1,200 1,127 943 900 518 211 800 600 730 707 214 644 123 534 549 485 518 300
0
‐267 *) ‐300 2005 2006 2007 2008 2009 2010
*) incl. foreign exchange differences EUR 248m 24 Figures as of March 31, 2011, Presentation May 20, 2011 Results by Quarters
Profit and loss account, EURm Q1/11 Q4/10 Q3/10 Q2/10 Q1/10
Premiums earned 1,003 992 981 972 949 Cla ims incurre d ‐777 ‐740 ‐723 ‐708 ‐772 Operating expenses ‐170 ‐176 ‐168 ‐167 ‐160
Other technical income and expenses 2 0 0 0 0 Allocated investment return transferred 42 32 39 46 51 from the non‐technical account
Technical result 100 109 129 143 68
Investment result 178 153 111 127 125 Allocated investment return transferred to ‐57 ‐46 ‐54 ‐60 ‐66 thhilhe non‐technical account Other income and expenses 0‐27‐1‐2‐2
Operating result 221 188 186 208 125
25 Figures as of March 31, 2011, Presentation May 20, 2011 Solvency Capital & Solvency Ratio*
EURm % 100 %
3,000 88 % 80 % 77 % 79 % 77 % 74 % 70 % 71 % 2,000 66 % 60 % 54 % 40 % 1,000 20 %
0 0 % 2003 2004 2005 2006 2007 2008 2009 2010 Q1/2011
Solvencyyp capital ()(lhs) Solvencyy() ratio (rhs)
+ solvency capital * Solvency ratio, (IFRS) % = x 100% + premiums earned from 12 months 26 Figures as of March 31, 2011, Presentation May 20, 2011 Investments
Investment allocat ion March 31, 2011 Total EUR 11.7bn MarktoMarket Investment returns
RlEReal Estate 14 % 12.4% Private Equity 1 % 0.3 % Money Market 11 % Equities 6 % 9 % 7.4% 13 % 5.8% 6%6 % 43%4.3% 44%4.4% 4 % 2.6% 1 % ‐2%2 % ‐4 % ‐3.1% 2004 2005 2006 2007 2008 2009 2010
Bonds 80 %
Duration 1.71 years %Q1/11Q1/10 Fixed income running yield 3.9% M‐t‐m return 0.7 2.8 27 Figures as of March 31, 2011, Presentation May 20, 2011
If’s Financial Strength Rating History If P&C Insurance Ltd (Sweden), If P&C Insurance Company Ltd (Finland)
AA‐/Aa3 e Feb 04 rade Jan 03 22 dd 66 gg A+/A1 egative Aug 0 table Apr 03 ositive May 0 ossible down ossible upgra table Nov 08 table Feb 02 table May 04 SS PP SS SS NN PP PP SS A/A2
A‐/A3
Moody´s
4 S&P
BBB+/Baa1 00
BBB/Baa2 atch neg Feb able Aug 03 able Apr 04 able Sep 04 able Oct 05 egative Jul 03 ‐Feb 02 tt tt tt tt AA NN S WW S S S
2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 28 The Sampo Group’s P&C insurance companies became part of If January 2002. MdMandatum Life Figures as of March 31, 2011, Presentation May 20, 2011 Business in a nutshell Geoggpraphical presence Facts about Mandatum 2010 (()2009)
• Mandatum Life provides life • Mandatum Life is a leading life and pension insurer and pension insurance in Finland services in: • Mandatum has a strong market position in Finland –Finland with ca. 25% of the market –Baltics • Mandatum contributed with EUR 142m (121) in pre tax profit to the Group
EURm Q1/11 Q1/10 Pre‐tax‐profit 44 36
Premiums written 2010, EURm* Insurance savings 2010, EURm 3 21 19 Unit-linked life 202 197 Unit-linked pension 1,173 Unit-linked capital redemption 66 135 Unit-linked Baltic 1,070 58 3,793 Other life Other pension 729 454 Other capital redemption 334 146 Other Baltic
*) differs from P/L due to eliminations within Life group 30 Figures as of March 31, 2011, Presentation May 20, 2011 Profit Development
Profit before taxes Comprehensive income EURm 495 500
342 332 295 286 250 140 121 142 80
0
EURm Q1/11 Q1/10 ‐250 Pre‐tax‐profit 44 36 Comprehensive income 13 133
‐378 ‐500 2006 2007 2008 2009 2010
31 Figures as of March 31, 2011, Presentation May 20, 2011 Profit by Components
Q1/ Q1/ EURm 2011 2010 2010 2009 2008 2007 2006 2005
Investment result 43 31 101 103 107 320 249 199
Expense result* 1 ‐18 5 7161411
Risk result 4 5231416178 9
Others 3 0 10 ‐0 10 ‐11 24 15
Profit before taxes 44 36 142 121 140 342 295 234
Change in the market value of investments 27 144 306 536 ‐651 ‐234 91 211 Profit at market values 17 180 448 658 511 108 386 444 before taxes
*result of unit‐linked business EUR 0.8 m
32 Figures as of March 31, 2011, Presentation May 20, 2011 Market Position
Market share in Finland Technical reserves: % guaranteed rate vs. unitlinked 40 EURm 35 28.2 Focus 30 27.9 6,000 25.5 25.2 area 25 22.4 20.8 21.5 24.8 20 22.0 4,000 20.4 19.5 19.8 19.3 15 17.9
10 2,000
5
0 0 2004 2005 2006 2007 2008 2009 2010 20032004200520062007200820092010 All products Unit‐linked Guaranteed interest rates Unit‐linked
33 Figures as of March 31, 2011, Presentation May 20, 2011 Investments Investment allocation March 31, 2011 Total EUR 5.8bn MarktoMarket Investment Returns 20 % RlEReal Estate OhOther 16. 8% 3 % 3 % Money Market 15 % 12.0% 11.1% Private Equity 11 % 9.7% 4.7 % 10 % 8.3% 5.0% 5 % 0 % Equities ‐5 % 27 % ‐10 % ‐7.8% 2004 2005 2006 2007 2008 2009 2010 Bonds 51 %
Duration 217years2.17 years % Q1/11 Q1/10 Fixed income running yield 5.0% M‐t‐M Return 1.4 3.9
34 Figures as of March 31, 2011, Presentation May 20, 2011 Solvency Ratio (*)
30 % 25.8% 25 % 23.9% 21. 3% 20.1% 20 % 17.7% 18.5% 16.5% 15 %
10 % 7.9%
5 %
0%0 % 2004 2005 2006 2007 2008 2009 2010 2011
* Solvency ratio, % of technical provision, (IFRS) = + solvency capital x 100% + liabilities for insurance and investment contracts ‐ reinsurers’ share of insurance liabilities ‐ 75% x technical provisions relating to unit‐linked insurance 35 Nordea AA‐/Aa 2 Sta ble Figures as of March 31, 2011, Presentation May 20, 2011 Sampo’s Nordea ownership
million shares
1,000 21.3% 20.5% 20.5% 20.5% 20.3% 20.1% 2% 900 19.8% 18. 800 860 830 830 830 818 809 800 700 4 33 600 7
500 15.5% .1% 2.2% 3% 3% .. .. 11
400 11 %% 1 10 10 9.6 300 402 7.6% 318
200 288 267 267 6 250 .1% % 3.7% 7% 99 33 44 1 100 1. 0. 81 97
0 44
37 Figures as of March 31, 2011, Presentation May 20, 2011 Nordea’s Low Volatility Adds to Stability Nordea’ s quarterly operating profit & EURm loan losses Q1/07 – Q1/11 Highlights 1,500 • Nordea’s operating profit has Operating profit Loan losses Write backs remained stable throughout the financial crisis 1,200 166 • Nordea has excellent earnings quality, 242 a diversified loan book and a limited 207 356 425 358 261 exposure to Baltic countries and other 21 36 320 Eastern Europe 900 89 245 • Similar to If P&C, Nordea has strong 347 retail franchise thus creating diversification benefits to Sampo’s
88 600 11 bibusiness port flifolio 1,07 1,07
978 •
960 Nordea has maintained a solid AA 1,003 932 895 885 883 878 847 833 832
818 rating and access to capital markets 781 730
300 92 throughout the financial crisis and its 55 capita l base was s treng thene d throug h a rights issue in 2009 • Strong Impact of rising interest rates ‐ on Net Interest Income
38 Figures as of March 31, 2011, Presentation May 20, 2011 Nordea’s book value on Sampo Group consolidated balance sheet Nordea in Sampo’s B/S EURm
Acquisition price (= 860,440,497 x 6,4587) 5,557.3
Retained earnings from previous years 384.4 Share of Nordea’s net profit 157.9 Depreciation ‐8.6 Deferred tax 2.3 Dividends ‐249.5 Share of Nordea’s other comprehensive income ‐1.7 Share of Nordea’ ssotherchangesinequity other changes in equity 111.1 Share of Nordea’s goodwill change 0.4
Total 5,843.8
EUR/Share: Average purchase price 6.46; Book value 6.79; Market value 7.75 39 Sampo plc B2SblBaa2 Stable ‐ the Parent Company has no Business Activities of its own Figures as of March 31, 2011, Presentation May 20, 2011 Cash Flows and Balance Sheet
Assets 8,997 Liabilities 8,997 EURm EURm Liquidity 544 CPs Issued 563 Dividends Income If P&C Interest on Liquidity IttInvestments 38 LT SiSenior DbtDebt 1, 346 Mandatum Life Income on Other Nordea Investments Real Estate 4 PrivatePlacements 104 Private Equity 14 Bonds Issued 1,242
Other 20 Pension Comp. Loans 0
Sampo Plc Hybrid Loans 114 Hybrid Debt 0
Equity Holdings 7,927 Capital 6,294
• Internal Administration Costs Subsidiaries 2,370 Undistributable 98 • Discretionary Dividends for Shareholders • Interest Expenses for Bondholders Associated 5555,557Distribblbutable 6,826
Other Assets 374 Other Liabilities 164
41 Figures as of March 31, 2011, Presentation May 20, 2011 Parent Company Reported Profits* EURm Q1/2011 Dividend income 250.6 Operating expenses ‐3.3 2008 2009 2010 Net financial expenses ‐27.3 EURm Profit before taxes 220.0 800 746.9 701.9 700 600 569 564 514 522 500 400 300 200 100 65 0 *) ‐15 ‐16 ‐8.4 ‐100 ‐31 ‐36.7 Dividend income Operating expenses Net financial Profit before taxes expenses
*) Parent Company is not equal to Holding Segment; Dividend Income includes also dividends from Private Equity investments 42 Figures as of March 31, 2011, Presentation May 20, 2011 Dividends Received by the Parent Company
EURm 1,600 1,406 1,400 75
1,200 300 1,000 ~850 800 754 744 35 250 200 568 204 600 490 511 1,031 80 100 400 141 130 100 519 200 488 540 500** 200 249 181 0 2005 2006 2007 2008 2009 2010 2011 If Mandatum Life Banking*
*) Sampo Bank 2005‐2006, Nordea 2007‐2009 **) expected 43 Figures as of March 31, 2011, Presentation May 20, 2011 Funding Strategy
Leverage CidiConsiderations
• Sampo plc is structurally subordinated to its subsidiaries & Nordea (“affiliates”) and hence dependent on the dividend capacity of the affiliates • Drivers behind affiliates´ dividend capacity are profitability, capitalisation & rating targets • The stronger the capital adequacy & expected profitability and the smaller the volatility of the profits at the Group level, the higher the potential leverage in the parent company
=> Currently EUR 1.5 to 2.5bn is considered as an appropriate gross debt at the parent company => Potential of Domestic CP‐and retail private placement markets will be utilized (EUR 700‐800m) also in the future and the balance is covered from public markets
Risk Considerations and Issuance Preferences
• Rising interest rates: debt is mostly tied to floating rates (interest rate risk). However, rising interest rates contribute ppypositively to the profitabilit y of the affiliates • Increasing margins on debt and the availability of funding (refinancing risk) • Weakening of SEK: the dividends of If P&C are denominated in SEK (FX risk)
=> Diversification over maturities and Investors => Natural currencies EUR and SEK and short‐term reference rates
44 Figures as of March 31, 2011, Presentation May 20, 2011 Debt Profile as of 30.4.2011
Issued Debt Instruments Swap Book Value Coupon Net Margin Current Maturity
Senior Bond 750 m€ EUR3M + 4,0565% 749 6,3390 % 4,0565 % 5,3365 % 12.4.12
Senior Bond SEK 1,750m EUR3M + 1,7638% 195 STIBOR3M 1,7638 % 2,9402 % 16.9.11
Senior Bond 300 m€ EUR3M + 1,4860% 298 4,2500% 1,4860% 2,5160 % 22.2.2016
CP´s issued m€ 563 EURIBOR ≈0,4000% ≈1,7000 %
Public Debt. m€ 1,805 3,4775 %
Private Placements,m€ 116 2,8937%
Sampo Plc Total,m€ 1,921 ≈3,4424 %
Maturity Profile Key credit figures as of 31.3.2011
900 Double Leveragg(qe (Equity Holdin g/gs / Ca pital ) 114% 800 700 Equity m€ (31.3.2011) 6 ,924 600 500 Gross Debt to Equity 27.6% 400 300 200 Near Term Options 100 0 Refinance (SEK 1,750m & EUR 750m) 2011 2012 2013 2014 2015 2016
Sampo CP´s Sampo LT Senior Public Sampo LT Senior Private IF Hybrids New Issues potentially combined with Buy-backs
45 Summary Figures as of March 31, 2011, Presentation May 20, 2011 Key Credit Considerations
Strong market Market leading positions and retail franchises in P&C insurance, life insurance position and banking
Stable profits Stable profits arising from If P&C’ s strong cash generation supported by the stable cash flow contribution of Nordea and solid investment returns
Diversification Insurance and banking operations in the Nordic region provide diversification
Strong financial Conservative financial profile, strong capitalization and solvency profile
Management Dedicated and highly experienced management team
Value creation Proven first‐class track record in successfully developing investments and realizing value for investors in Nordic Financials
Ownership Strong shareholder base anchored in government and institutional holders supported by significant management ownership
47