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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 1-3/2011 1-3/2010 Change %
EURm      
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

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