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Why invest in Sampo?
IR Blog provides information about Sampo as an investment case and the Group's businesses and markets.
Companies generally use both equity and debt to finance their investments and operations in order to keep their capital structure optimal and return on equity attractive. Debt can be obtained directly from a bank in the form of a bank loan or from the financial markets by issuing bonds.
Due to regulatory and practical reasons, usually only institutional investors and private investors classified as professional investors can make orders for corporate bonds in the primary market. The minimum settlement amount is usually EUR 100,000.
This blog entry opens up the process behind the bond issuance with using Sampo’s EUR 1 billion Tier2 hybrid bond issued at the end of August to fund the Hastings acquisition offer as an example.
The management of the company makes the decision on raising debt capital from the financial markets, but the bond issue usually also requires a Board approval. The type of a bond that the company decides to issue depends on many factors, but the company’s current debt structure and the maturity profile of its bonds issued are key factors when deciding on the maturity of a new bond – and of course the interest rate levels.
From the balance sheet and cash management point of view, it is desirable that the maturity profile of the bonds is smooth over the coming years. The first call date for Sampo’s new EUR 1 billion hybrid bond is 12 years from the issue date, i.e. in 2032, which is currently the longest-maturity bond for Sampo.
Maturity profile of Sampo’s debt instruments prior the new issue (30 June 2020)
Once management has decided to issue a bond, the next step is to select the bookrunner banks for the issue and to start preparing the legal documentation required for the issue. The extent of the documentation process depends on whether the bond is issued under an existing bond program or under separate documentation. Sampo’s EUR 1 billion hybrid bond was issued under its existing EUR 4.5 billion EMTN (Euro Medium Term Note) program.
At this stage, the company is also typically in contact with the credit rating agencies, assuming the bond will be rated. Credit rating is a key factor for the spread level of the bond and determines what kind of investors will be interested in investing in the bond. Many investors require that the bond has at least an investment grade rating from the leading credit rating agencies (S&P/Fitch BBB- and Moody’s Baa3). In addition, some investors favor bonds that have a rating from two different agencies. Sampo’s hybrid bond has BBB+ rating from S&P and Baa1 rating from Moody’s.
Once the documentation is completed and the expected ratings are confirmed, markets will be informed about the planned issuance. In practice, this means that the preliminary information about the bond will appear on Bloomberg screens or will be sent to investors in the form of a mandate announcement.
At the same time, the bookrunner banks begin marketing the bond and survey investors’ interest and preliminary thoughts on the spread level. The bookrunners usually have a good idea of the type of investors that might be interested in investing in the bond. Also, investors are often in direct contact with the bookrunners after seeing the preliminary details of the bond. These initial discussions with potential investors give an idea of the initial spread level and the size of the order book.
In case the company has not previously issued similar bonds or the company is less familiar to international investors, views on attractive spread levels may vary a lot. As Sampo is a well-known company in the market and issued a EUR 500 million hybrid bond in the Spring 2019, it was easier for the bookrunners to gather the feedback on pricing from investors. Comments on pricing may be quite general or very precise and are usually expressed as a credit spread to the reference rate (Euro Mid-Swap rate).
The feedback given by the investor could be, for example: “I’m interested, if the rate is MS + 270-280 basis points and I could invest EUR 20-30 million.”
Concurrently with the process of gathering feedback, meetings with the company’s management are arranged for the interested investors. During the pandemic, these meetings are held by telephone or via virtual events. In normal times, the company would also arrange roadshows in the major financial hubs. Prior to this year’s issue, Sampo held virtual roadshows with over 50 investors within two days.
Since fixed income investors have a somewhat different risk tolerance level compared with equity investors, their questions also differ from equity investors’ questions. Balance sheet, debt coverage and capital structure are usually the key factors for fixed income investors to focus on, whereas expectations on next year’s dividend does not raise that much attention.
Once the investor roadshows are done and there’s a good view on the initial investor demand, the books are ready to be opened for investors’ orders. As orders are received in one day and the whole process takes only a few hours, the issue must be carefully planned and the prevailing market sentiment well-observed. However, sometimes, issuers are forced to move ahead with issuance even if the time is not optimal from their perspective.
When the Covid-19 crisis hit the market with full force in the spring, plummeting stocks filled the news headlines in financial media. However, less attention was paid to the fact that at the same time, credit spreads of corporate bonds shot up and the new issue market was totally stalled. For example, the credit spread of Sampo’s hybrid bond issued last year rose from below 200 basis points at the end of February to almost 400 basis points at its worst.
For a while, it was almost impossible for companies to issue new bonds. No investor really dared to make bids or if dared, the rate demands were very high. The general market sentiment can therefore significantly affect investors’ appetite and the required rate of return. When talking about bonds worth hundreds of millions or billions, even small movements in rates matter.
In the morning of the planned bond issue, the bookrunners have a so-called ‘Go’ or ‘No-go’ call with the issuer, during which final decision to open the books for the bond is made.
When the books are opened for investors’ orders, the bookrunners announce the preliminary spread level based on the investor feedback. In the case of Sampo’s hybrid bond, the books opened on 27 August 2020 at 10:15 am with initial price talk of MS+300 basis points area.
The orders received during the first hours play an important role for the final pricing as attention generates more attention. For Sampo’s bond, there were orders worth over EUR 2 billion received during the first hour. After two hours, the price guidance was lowered to MS + 270 basis points (+/- 5) area. When the books are open, investors can withdraw their bids at any time. Thus, one must be very careful when setting the price guidance so that that investors will not lose their interest in the bond if the spread falls too low. At 1:55 pm, the book exceeded EUR 5 billion and was closed and the final spread was set at MS + 260 basis points. Over 350 investors participated in the issue and most orders were received from the UK/Ireland, German-speaking Europe and the Nordics.
The coupon rate of Sampo's hybrid bond maturing in September 2052 was set at 2.50 per cent, payable until 3 September 2032, which is the first date for the bond. If the bond is not redeemed at its first call date, the coupon rate will step up to 3m Euribor + 360 basis points until the final maturity.
As the size of Sampo’s hybrid bond was EUR 1 billion and the book was 5 times oversubscribed, investors’ orders had to be scaled back. The allocation of the bond is decided by the company together with the bookrunners in accordance with pre-defined allocation principles.
In the event of an oversubscription, priority is normally given to investors who have given constructive feedback during the process, i.e. shown meaningful interest with preliminary orders at reasonable price level during the roadshow, which has helped the company and the bookrunners to form a better view on pricing as well as investors who were among the first to give their orders to the bookrunners when the books were opened.
Once the allocation is complete and trades are settled, the bond will be listed on a stock exchange. Sampo’s hybrid bond was listed on the London Stock Exchange on 3 September 2020.
Issuing new debt in Sampo
In this blog entry, we answer investors questions collected from different channels. Thank you for the good questions!
In January-March 2020, Sampo’s profit included an impairment of investment assets of EUR 191 million. What are the principals for these kind impairments?
Impairments are booked on a case-by-case basis and are based on accounting principles. The main rule is that impairment is assessed if significant or prolonged. In Sampo Group, e.g. for listed equities, the impairment is normally assessed to be significant if the fair value decreases below the average acquisition cost by 20 per cent and prolonged, when the fair value has been lower than the acquisition cost for over 12 months.
Value of an equity that has already been impaired cannot be increased later even if the fair value has recovered. However, values of fixed income investments can be increased to the original acquisition cost.
Who decides on the direct financial investments made from the parent company (e.g. the purchase and sale of Intrum shares)?
Investments are made in accordance with Sampo’s investment policy, and Patrick Lapveteläinen, Group Chief Investment Officer, is responsible for the decisions. Some, especially larger investments may require the Board’s approval.
Why did Sampo decide to sell its ownership in Intrum in February 2020?
Sampo does not usually comment on its individual financial investments. The sale of Intrum shares was a part of our normal investment operations.
If’s premiums increased 7.0 per cent in January-March. How much of the growth was explained by price increases and how much by new customers?
Roughly 60 per cent of growth came from price increases and 40 per cent from new customers. Premiums increased in all business areas and markets, but in Denmark and Norway, the growth was very strong.
Why did If’s combined ratio weaken so much in Norway in January-March from a year ago?
In Norway, the combined ratio was burdened by two very large claims. One of these was the fire in the parking garage at Stavanger Airport, which also gained some attention in the news headlines. If has limited its risk in individual large claims to approximately EUR 25 million through re-insurance.
How does inflation affect If’s business?
Very high inflation would create pressure on profitability as the increase in claims costs cannot be passed on to insurance prices between contract periods. So-called “normal” inflation does not have a large impact on business.
Does Sampo favor certain sectors or geographical areas in its investments?
Geographically we prefer the Nordic countries, where we know the markets, companies and people. Other main principle is that we like to keep our investments and technical reserves in substantially the same currency in order to avoid extra currency risk.
The Group’s investments by sectors and equities by geographical areas are described in the risk management report.
Has the coronavirus crisis affected Sampo’s investment policy? Has Sampo’s risk appetite increased or decreased during the crisis?
Sampo is a conservative investor and thus careful. We monitor the situation. No major allocation changes have been made.
Some investors feel betrayed as Sampo cut its dividend twice during the past year. How is Sampo going to regain their trust?
Investors’ trust can be earned sustainably only through deeds, not words. Sampo’s objective is to create shareholder value and success in this will play a crucial role in investor confidence.
In your view, how Sampo succeeded in its communication regarding the dividend during the past year?
There’s always room for improvement and, in retrospect, it is easy to see what could have been done differently. However, it is good to remember that all decisions and comments are always based on the best available information.
Has Sampo considered paying dividends quarterly?
There have been discussions about it every now and then. Such change would be decided by the Annual General Meeting and it would be good if the proposal came from the shareholders.
Would it be time for Sampo to sell Nordea?
As we stated many times, all of Sampo’s businesses and investments are for sale if the price is right. However, It is noteworthy that the sale of a nearly 20 per cent ownership in the largest bank in the Nordics cannot be conducted simply by pressing the sell button.
In autumn 2019, Nordea published its new financial targets for 2022. We consider the first steps encouraging and we believe that Nordea will achieve these targets. It is reasonable to expect that the success in the turnaround will also be reflected in Nordea’s share price.
Electric cars are becoming more and more common. In addition, cars will become more autonomous in the future. How these trends will affect insurance business?
Patrik Duraj, If’s Project Manager, Corporate Control & Strategy, answers this question.
“The automotive industry is presently undergoing structural change, driven by a long-term shift towards a more convenient, safer and cleaner mobility future. Two of the key technological trends fueling this transformation is vehicle autonomy and electrification, which we will hereby explore in more detail.
The term ‘autonomous vehicles’ emerged into the mainstream after the US military’s Defense Advanced Research Projects Agency in the early 2000’s showcased how new sensors, connectivity and computing technology could be merged to enable self-driving or even driverless vehicles. The trials induced the private sector to enter the race, most famously Google’s self-driving car project (now: Waymo) in 2008. The initial technological leap spurred aggressive deployment timelines, suggesting widespread deployment in just under five years – an outlook which since has been modified as the broader scope and complexity of the problem has been understood. Increasingly non-technological factors, namely ethical issues, costs, new insights on human-machine interaction, liability and legal obstacles has further prolonged development. Today, the leading players foresee a more gradual roll-out of self-driving functions, and signal that widespread adaptation of full self-driving systems (i.e. Level 5, according to SAE J3016) is likely still decades away.
Nevertheless, Advanced Driver Assistance Systems (ADAS) have gradually trickled down to vehicles available to consumers. Already today the most advanced vehicles are able to accelerate, change gears, steer and break under predefined conditions. This provides insights on how the computerization of vehicles influence driving behavior and risk, under real-life traffic scenarios. On the one hand, systems may be effective in limiting certain accidents. On the other hand, new accidents emerge from lacking user understanding of the systems’ capability, user error or sensor malfunction. Furthermore repair of even trivial accidents has increasingly become costly due to exposed expensive sensory equipment and evolving vehicle design.
Over the recent years, the push for electrification has overshadowed most of the other trends in the automotive industry. With the help from new lithium-ion batteries Tesla redefined the electric vehicle formula, showing how Electric Vehicles (EVs) could match fossil fueled cars on performance and luxury. Despite facing ever more stringent emission regulations, such as EU’s 2019/631, high battery costs proved prohibitive for most automakers. However, the Dieselgate-scandal fundamentally altered the narrative, as the targets were proven to no longer be achievable with fossil fuel drivetrains alone. As a consequence, most major OEMs are presently heavily focused on electrifying their line-ups, with disruptive implications on the automotive value chain as a whole.
One of Ifs home markets, Norway, has been a leader in electromobility, after introducing special incentives already in the late 1990s. Norway therefore is today by far the most electrified car market in the world per capita, with 42% of all new cars delivered in 2019 being fully electrified and even 9,3% of the total car stock being fully electrified. This provides If with an unique insight into how electromobility affects risk. On the one hand, electric vehicles induce new driving behavior, be it if you aim to drive efficiently (‘hypermile’) or enjoy the performance embedded in the vehicle (e.g. 0-100 in 2,5 seconds). On the other hand, electric vehicles diverge from traditional vehicles in construction, for example through the use of exotic materials (e.g. aluminum, carbon) or parts (e.g. batteries, electromotors, sensors), which affect repairability, repair methods and lead times.
As with fossil fuel equivalents, there are differences among both models and users, calling for close-knit risk models. Rooted in our Best In Risk culture, If has continuously evolved its tariffs and claim processes to accommodate the shift towards green mobility, and is already distributing the insights gathered in Norway to prepare for more electrification in the rest of the Nordic markets.
As an end-note, it is important to highlight how the long-term trends are constantly moderated by the industry’s need to meet short-term obligations. Already prior to Covid-19, industry headlines were dominated by stagnating global demand and profitability pressures. These pushed some OEMs into cost-cutting mode even prior to Covid-19, with “moonshot” innovation projects typically being the easiest to scale back on. Although still early to conclude, it seems evident that timelines could be affected as the long-term consequences from the supply- and demand side disruptions caused from the ongoing pandemic are made clear.”
What are Sampo’s largest equity investments after Nordea? Which have performed best?
At the end of 2019, the Group’s largest listed equity investments were Intrum (EUR 184 million), Volvo (134), Nobia (122), Norwegian Finans Holding (114) and Asiakastieto (92). Of these, Intrum was sold in February 2020 with a profit of approximately EUR 30 million.
In addition, Sampo has invested EUR 284 million in Saxo Bank, EUR 230 million in Nets through a private equity fund, and EUR 245 million in Nordax, which is an associated company.
Sampo will not report the performance of its individual investments.
In what situation and at what price would Sampo buy its own shares?
Share buybacks are decided by the Board, which is traditionally authorized by the AGM to buy a maximum of 50 million own shares. However, Sampo’s primary method of profit distribution, also preferred by the shareholders, is paying dividends.
Why have Sampo’s insiders hardly bought any shares recently?
Naturally, we do not comment on the personal investments of the company employees or board members.
Has Sampo’s solvency been a limiting factor in seizing opportunities during the past corona-related market turmoil? How could Sampo be better positioned for similar events in the future?
Last year, Sampo’s solvency decreased below our comfort zone, but after the issuance of the hybrid loan and the extra dividend in the form of Nordea shares, solvency returned to a solid level, which allows enough room for our investment activities. During the market turmoil, our solvency was at a strong level and was not a limiting factor.
For possible larger mergers and acquisitions, Sampo can back its solvency for example by issuing more hybrid capital. However, it is worth noticing that larger-scale moves require lots of time and planning. Thus, it’s difficult to take the advantage of these kind short-term dips.
What are Sampo’s key growth drivers in the coming years?
We answered this questions on our IR Blog on 17 December 2019.
“Insurance business is rather defensive and steady and one should not expect any rapid growth leaps. In P&C insurance, premiums can be expected to grow roughly at the same pace as GDP. However, If’s growth has been exceptionally strong recently, partly due to the favorable competitive environment in the Nordics. Low interest rates make it difficult to achieve good investment returns, which has forced all insurance companies to focus on technical profitability. This has reduced the aggressive price competition, which has positively reflected in If’s premium and customer volume growth.
In life insurance, the premium growth can be expected to be faster than the GDP growth. For the coming years, one key growth driver is the increasing importance of personal savings and financial safety net as unfavorable demographic trend create pressure on the public social security and pension system.
In the short-term, the biggest single profit potential relates to Nordea’s new business plan and targets.”
Could If seek growth from the healthcare sector?
If has no such plans at the moment and providing healthcare services is not within the company’s core competence.
Nordea will refrain from paying dividend at least until 1 October 2020 as the ECB recommends. If Nordea decides to pay the dividend after that, what will Sampo do with its share?
Sampo has no plans for the dividend it possibly receives from Nordea later this year.
Why is Sampo’s dividend policy so different (inconsistent according to the questioner, referring the decision to cut the dividend) than, for example, many American companies that have been increasing dividends every year for decades?
The dividend policy is decided by the Board elected by the AGM. Sampo’s shareholders have traditionally wanted to receive stable and high dividend, which is why the dividend payout ratio has been relatively high. Due to the high payout ratio, the dividend is more susceptible to significant changes, such as the change in Nordea’s dividend policy last year.
Some analysts have argued that there’s a “conglomerate discount” in Sampo’s share price, i.e. the share trades below Sampo’s sum of parts mainly due to Nordea. Does Sampo acknowledge such a discount and is it in the interest of shareholders? By what means could Sampo resolve the current situation?
Naturally, we do not comment on the valuation of our share, although Nordea-related questions have played a key role over the past couple of years, and that cannot be denied.
Sampo’s objective is to create shareholders’ value through its profitable businesses, investments and potential M&As. It’s reasonable to assume that in the longer-term, the valuation and share price will reflect our success in this. The fact is that Nordea’s success in achieving its new financial targets has a key role in creating shareholders value.
The first quarter of 2020 will be remembered as a very exceptional period as the whole world suddenly stopped. The coronavirus pandemic (COVID-19) and the massive containment measures have directly or indirectly affected everyone’s lives.
The biggest effect of the coronavirus to Sampo Group has come through its investments. In March, the financial markets experienced an extreme turmoil, which took its toll on Sampo’s investment income. The Group’s total comprehensive income, taking changes in the market value of assets into account, plunged to a loss of EUR 954 million from a profit of 561 million a year ago. In addition, Sampo’s NAV per share decreased to EUR 15.36 from 20.71 at the end of 2019. After the first quarter, markets have somewhat recovered and lifted Sampo’s key figures as well.
Sampo’s insurance businesses have been affected by the coronavirus both negatively and positively. For example, If received about 26,000 claims in January-March, mostly related to travel. By the end of April, the figure had already increased to almost 48,000 claims. On the other hand, in motor insurance, the sharp decline in traffic due to the restrictions has naturally reduced the number of claims.
The overall effect of the coronavirus on Sampo Group’s insurance businesses was limited during the first quarter. However, the longer the crisis will last, the more it will drag down the economic activity and affect insurance companies as well.
Most of the Group’s over 10,000 professionals have worked from home in the past weeks, which has required adjustments. Despite that, our subsidiaries have been able to serve our customers almost normally throughout the crisis, and we have received lots of positive customer feedback. The effects of the coronavirus on Sampo Group’s operations are described in the interim report.
|Key figures, EURm||1-3/2020||1-3/2019||Change, %|
|Profit before taxes||162||475||-66|
|Holding (excl. associates)||-24||29||-|
|Profit for the period||139||398||-65|
|Earnings per share, EUR||0.26||0.64||-0.38|
|EPS (incl. change in FVR), EUR||-1.71||0.94||-2.65|
|NAV per share, EUR*||15.36||20.71||-5.35|
|Average number of staff, FTE||10,303||9,670||633|
|Group solvency ratio, %*||179||167||12|
|* Comparison figure from 31 December 2019|
The figures are not audited. Income statement items are compared on a year-on-year basis and comparison figures for balance sheet items are from 31 December 2019 unless otherwise stated.
Sampo Group's profit before taxes amounted to EUR 162 million (475) and earnings per share to EUR 0.26 (0.64) in January-March. The profit included impairments of investments assets worth almost EUR 200 million.
If’s profit before taxes decreased to EUR 129 million (198) due to poor investment income. However, from a technical point of view, the first quarter was excellent. Technical result strengthened to EUR 180 million (147) and for the first quarter, combined ratio was record-strong at 83.7 per cent (86.5).
In addition, If’s strong premium growth continued during the first quarter. In local currency, premium growth was 7.0 per cent (3.9). Premiums increased in all markets and business areas. The growth was exceptionally strong in Denmark and Norway.
Topdanmark’s result before taxes amounted EUR -13 million (92) and combined ratio was 88.7 per cent (78.2).
In addition to weak investment income, Topdanmark’s result was burdened by lower run-off gains, increased claims due to coronavirus and weather-related claims above normal level.
Mandatum Life’s result before taxes for January-March decreased to EUR -16 million (72) due to poor investment income.
Thanks to strong January-February, Mandatum Life’s premiums increased to EUR 287 million (238), although it decreased in March.
Mandatum Life’s technical reserves were burdened by the market turmoil and amounted to EUR 11.0 billion from EUR 12.0 billion at the end of 2019. Unit-linked reserves were EUR 7.2 billion (8.1). The with-profit portfolio with higher guarantees (3.5% and 4.5%) continued to shrink as planned and decreased by EUR 65 million to EUR 2.1 billion.
Sampo’s share of Nordea’s net profit amounted to EUR 84 million. Despite the significantly changed market environment, Nordea’s businesses continued to develop in the right direction and towards the targets set for 2022.
Sampo expects its insurance businesses to report good insurance technical results for 2020. The investment results are at this point in time more uncertain than usual. The mark-to-market results for 2020 are highly dependent on capital market developments, particularly in life insurance.
If is expected to reach a combined ratio of 84 - 87 per cent in 2020. Previous outlook, in February, was 85 - 89 per cent.
Sampo’s Board has today decided to cancel its previous dividend proposal of EUR 2.20 per share and to announce a new proposal of EUR 1.50 per share. In total, the dividend is proposed to be EUR 883 million.
The decision was affected by the high level of uncertainty in the financial markets and changes in Sampo’s internal dividends. During 2020, Sampo has received internal dividends only from Topdanmark, EUR 48 million. Under normal circumstances, internal dividends would have been expected to be EUR 568 million at this stage.
Mandatum Life decided not to pay the dividend of EUR 150 million planned for March. In light of the ECB recommendation, Nordea plans to postpone the dividend until after 1 October 2020. Topdanmark paid half of its dividend and left the other half to be decided later this year, when there’s more clarity in the markets. If normally pays its dividend towards the end of the year.
In its decision the Board has considered the recent statements by the supervisors. The Board’s view is that the proposed dividend will not jeopardize the company’s operations or ability to fulfill its obligations to the policyholders.
With the new dividend proposal, Sampo’s solvency will clearly improve. Based on preliminary figures, the Group’s solvency ratio was 187 per cent at the end of April 2020. Calculated with the previous dividend proposal, the solvency ratio would have been 178 per cent.
The ex-dividend date of the proposed dividend is 3 June 2020 and date of payment 11 June 2020.
Sampo’s Annual General Meeting has traditionally been very popular, especially among private investors, which makes us sincerely happy. It is gratifying that so many of our shareholders find the AGM interesting and worthwhile event. Unfortunately, this year’s AGM differs from the previous ones in almost every way.
Due to the prevailing coronavirus pandemic, on 24 April 2020, the Finnish Parliament passed a temporary law that allows for general meetings to be held as remote meetings only without shareholders’ presence. The purpose of the law is to enable the company to hold a quorate AGM, and at the same time, obey the current meeting restrictions and other recommendations in order to minimize the risk of infection.
Sampo’s Board has today decided that the AGM will be held as a remote only meeting based on the temporary law. In other words, it is going to be the most boring AGM in Sampo’s history – and it is a good thing for the health of the company’s shareholders, staff and other stakeholders.
When and where will the AGM be physically held?
The AGM will be held on 2 June 2020 at 2:00 pm Finnish time at Sampo’s headquarter in Helsinki.
Why will the AGM be held as a remote meeting?
The AGM will be held as a remote meeting in order to prevent the spread of the coronavirus and to ensure the health and safety of Sampo’s shareholders, staff and other stakeholders.
Is it legal to hold the AGM as a remote only meeting?
Yes, it is. The extraordinary procedures are based on the temporary legislation approved by the Finnish parliament on 24 April 2020.
Can I attend the AGM in person?
No, you cannot.That is best for your and others’ safety.
Will there be any addresses by members of the Board or the Management?
A pre-recorded address by the Chairman of the Board Björn Wahlroos will be published at www.sampo.com/agm on the day of the Annual General Meeting.
Will the members of Sampo’s Board or Management attend the AGM in person?
No, they will not. Many of the Board and Management members live abroad and traveling to Finland would be very difficult in these exceptional circumstances.
Who will physically be present at the AGM?
Only the Chairman of the meeting, the secretary of the meeting and the scrutinizer of the minutes will physically be present at the meeting.
Will the AGM be webcasted?
No, it will not. Nothing that interesting will happen at the physical meeting place.
What will actually happen at the physical meeting place?
As all items on the agenda have already been voted on in advance and no addresses will be given at the meeting, the physical meeting will only be a technicality i.e. the legality of the AGM will be recorded, the voting results will be verified and the minutes will be scrutinized.
Can I use my voting rights?
Yes, you can. Shareholders may use the advance voting service or vote by way of proxy presentation. The voting will begin on 12 May 2020 at 10:00 am. Please see detailed instructions in the Notice to the AGM.
Can I make counter-proposals?
Shareholders who hold at least one percent of all the company’s shares (i.e. at least 5,553,519 shares) are entitled to make counter-proposals subject for voting to the agenda points of the AGM. Please see detailed instructions in the Notice to the AGM.
Can I ask questions?
Yes, you can. Shareholders may ask questions on topics included in the meeting agenda in advance until 18 May 2020 at 2:00 pm. Questions can be sent by email to email@example.com or by mail to Sampo plc, Fabianinkatu 27, 00100 Helsinki, Finland. Questions and answers will be published at www.sampo.com/agm at the latest on 22 May 2020.
What is the ex-dividend date and when will the dividend be paid?
The ex-dividend date will be 3 June 2020 and the dividend will be paid on 11 June 2020.
In order to receive the dividend, when I must own Sampo’s shares?
The dividend will be paid to shareholder who owns the shares as at the AGM date i.e. 2 June 2020.
The coronavirus (COVID-19) pandemic is causing concern and turbulence around the world affecting the economy, financial markets and everyone’s daily life. Sampo plc and its subsidiaries monitor the situation closely and have taken actions to protect its personnel, customers and other stakeholders while continuing its businesses as normally as possible in these exceptional circumstances.
Our shareholders are naturally concerned about the possible effects of the coronavirus on Sampo Group and we have received lots of questions. In this blog entry we try to clarify the exposures to the coronavirus and the mechanics of the possible effects. However, it is important to note that due to the nature of the Group’s businesses and wide geographical presence in the Nordics, it is not possible to give detailed estimates or a firm view at this stage as the situation changes and evolves very fast.
This blog entry was published on 26 March 2020 and is based on information and views of the possible effects of the corona virus at the time of publishing. All the pictures are from materials published at Sampo.com, except the simplified graph that illustrates Nordea’s effect on Sampo’s solvency.
With its investment portfolio of EUR 21.8 billion at the end of 2019, Sampo Group has a major exposure to the equity and bond markets. Thus, the market turmoil caused by the coronavirus is significantly impacting Sampo through its investments.
Picture from the Q4/2019 Supplementary Financial Information Package.
The effects of market movements on Sampo’s investments are described in the sensitivity analysis below.
Picture from the Q4/2019 Supplementary Financial Information Package.
At the end of 2019, Sampo Group’s investments in the energy sector amounted to EUR 226 million. Of that, the share of oil and gas sector was roughly EUR 150 million, of which largely in bonds. Sampo’s exposure to airlines and other leisure sector is very limited.
Sampo’s exposures by sector, asset class and rating are specified in the table below.
Picture from the Board of Directors’ Report and Financial Statements 2019.
The impacts of different scenarios on the Group’s solvency are described in the sensitivity analysis below. Nordea shares are included in this analysis.
Picture from the Q4/2019 Supplementary Financial Information Package.
In the Group’s solvency calculations, Nordea is treated as a normal equity investment. Thus, the changes in Nordea’s share price affect solvency. Nordea is included in the sensitivity analysis above.
The simplified graph below illustrates the impact of Nordea’s share price movements on Sampo’s solvency from the end of 2019, if all other factors remain unchanged and symmetric adjustments are not taken into account.
As mentioned above, the most significant impact comes from the equity and bond markets. For insurance business, it is not possible to give detailed estimates at this stage because the whole coronavirus situation changes and evolves day by day.
On the private customer side, claims related to travel insurances obviously increase if flights get suddenly cancelled and people need hospitalization abroad. For If, travel insurance is not a very significant business line.
The coronavirus spreading in the Nordics may affect health insurances as well, although the public healthcare system carries the heaviest burden. For If, health insurance is a fairly small business line.
On the corporate side, the coronavirus may cause claims pressure for example through business interruption insurances depending on the cause of the interruption and how comprehensive insurance the customer has bought. Since the terms and conditions vary between countries, sectors and customers, it is not possible to estimate the total impact for If at this stage.
However, for some insurance products, the coronavirus may have a positive short-term effect on results due to lower number of claims. For example, within motor insurance, the claims usually decrease if there is less traffic on the road.
More information about the effects of coronavirus on insurances can be found at If’s website.
The market turmoil naturally affects Mandatum Life’s investments and solvency.
Within personal risk insurance, the impact on the number of claims is not likely to be significant. In the field of wealth management, drastic market movements increase clients’ interest to contact and talk about their investments and possible actions.
On the corporate side, new deals are being made but the risk of delays in payments from some customers has increased as many companies face challenges during in these exceptional circumstances.
Topdanmark published a stock exchange release about the effects of the coronavirus on 23 March 2020.
As recommended by the authorities, the personnel of both Sampo plc and the Group’s subsidiaries work from home as much as possible in order to protect the health of personnel, customers and other stakeholders. Otherwise, all operations continue normally despite these exceptional circumstances.
Sampo Group has a continuity plan to ensure the continuity of operations in the event of exceptional and crisis situations.
On 25 March 2020, Sampo decided to postpone the Annual General Meeting scheduled to be held on 23 April 2020. Sampo now intends to hold the Annual General Meeting on 2 June 2020. Notice to the Annual General Meetings will be published in May.
The Finnish Tax Administration will send pre-completed tax returns for 2019 to its individual clients resident in Finland in March or April 2020. We kindly ask our shareholders to check the information regarding the extra dividend paid in August 2019 in the form of Nordea shares, and correct the information if needed.
Sampo has sent the information regarding the share dividend and the transfer tax paid on behalf of the shareholders to the Finnish Tax Administration. Thus, in principle, the information should be on the pre-completed tax return.
We have today published instructions on payment of the tax for Individuals resident in Finland and nonresident individuals.
For more information, we kindly ask our shareholders to contact directly The Finnish Tax Administration.