Q&A – Annual results 2018 and changes in top management

Mirko Hurmerinta

In this blog entry we aim to answer questions that may rise regarding our Annual Results 2018 and the announced changes in our top management.

Annual Results 2018

Sampo’s profit before taxes for 2018 was EUR 2,094 million, but the total comprehensive income for the period was EUR 1,034 million. What is the reason for such big difference between these figures?

The profit before taxes describes more operational performance, whereas the total comprehensive income includes changes in exchange differences, available-for-sale financial assets, cash flow hedges, share of associate's other comprehensive income as well as actuarial gains and losses from defined pension plans.

The total comprehensive income for 2018 was burdened especially by the rough decline in the stock markets in the last quarter.

Why does Sampo distribute such high dividend?

Sampo has profiled itself as a dividend stock and our shareholders appreciate high and stable dividend. Good profit performance, good internal dividends and strong balance sheet make it possible to pay high dividend.

What is the ex-dividend date and when the dividend is paid?

If the AGM held on 9 April 2019 approves the dividend proposal, the ex-dividend is 10 April. The payment date is 18 April.

In 2017, Sampo’s results included a positive non-recurring item of EUR 706 million because of the change in Topdanmark’s accounting treatment. In 2018, Mandatum Life received a non-recurring contribution of EUR 197 related to the co-operation agreement with Danske Bank. How does these items differ?

The non-recurring item related to Topdanmark purely a change in accounting and had no effect in cash flow. Practically, the book value of Topdanmark increased in Sampo’s balance.

The non-recurring contribution received by Mandatum Life, on the other hand, was paid in cash.

In Sampo’s financial statement release, for example Topdanmark’s premiums increased significantly from the year before. What is the reason for this?

In this case, the figures don’t tell the whole truth because the year 2018 was first for Topdanmark as Sampo’s subsidiary. In 2017, only the last quarter was fully consolidated in Sampo’s accounting because before this Topdanmark was an associated company.

The best view on Topdanmark’s performance can be found in the company’s own reports.

In Sampo’s Financial Statement Release, Topdanmark’s combined ratio is 82.3 per cent but in Topdanmark’s own report it is 83.6 per cent. Why the figures differ?

There are small differences in calculation methods. To present a congruent view, Sampo calculates Topdanmark’s key figures like they are calculated for If.

In Sampo’s outlook for 2019, If is expected to reach a combined ratio of 86-90 per cent in 2019. In previous years, Sampo tended to use a target of below 95 per cent combined ratio, which was trimmed during the year. What is the reason for more detailed outlook?

If has maintained its high-level of performance for years. Taking this to account, the old practice was no longer that functional.

Why did Sampo’s solvency ratio decrease in 2018?

Sampo’s solvency ratio decreased due to increased capital requirement for Nordea in 2019, which was caused by the re-domiciliation from Sweden to Finland.

Changes in Sampo’s top management

Why did Kari Stadigh decide to retire right now?

It was Kari’s personal decision. Kari reached his official retirement age over 3 years ago but he has prolonged his tenure at the request of the Board.

Why was Torbjörn Magnusson appointed the next Group CEO and President?

Torbjörn has worked as CEO of If since 2002 with excellent track record. He knows the insurance industry better than his own pockets and he has quickly got into the banking sector via his positions of trust in Nordea. Torbjörn’s appointment is a proof of Sampo’s strong corporate culture and bench strength.

Is Sampo’s strategy going to change after Torbjörn Magnusson becomes the Group CEO and President on 1 January 2020?

The Board of Directors decides on Sampo’s strategy and the Group CEO and President is in charge of the execution of the strategy. Sampo’s main objective is to create value to its shareholders, now and in the future.

During his tenure, Kari Stadigh’s goal has been a forever increasing dividend. Does Torbjörn Magnusson have the same goal?

Torbjörn shares Kari’s view on the importance of rising dividend curve for investors.

Why did Torbjörn Magnusson step down as CEO of if immediately?

Torbjörn starts to focus on his new responsibilities right away. These are the chairmanship of If and subsequently the chairmanship of Nordea if he is elected as proposed by the Nomination Committee of Nordea.

Why is Björn Wahlroos no longer available as Chairman of the Board Directors of Nordea?

Nalle’s decision to step down from Nordea’s Board was his personal one. According to him, Nordea’s Board needs new energy and from Sampo’s perspective the best choice is the Sampo’s future Group CEO and President of Sampo.

Were the money laundering allegations related to Danske Bank and Nordea the reason for Björn Wahlroos’ decision?

No, they were not.

Björn Wahlroos steps down from Nordea’s Board. Does Sampo now have one representative fewer in the Board?

Sampo is Nordea’s largest shareholder and, thus, uses its power in Nordea’s Nomination Board. Through the Nomination Board, Sampo has influenced the proposals and is happy with them.

How the changes in Nordea’s Board affect the bank?

Sampo does not comment matters of Nordea’s Board.

What plans does Björn Wahlroos have for his chairmanship of Sampo?

Nalle is proposed to be re-elected as Chairman of the Board of Sampo.

What kind of representation is Sampo going to have in Topdanmark’s Board?

The current Chairman Torbjörn Magnusson will step down from the Board. Ricard Wennerklint from If, the Member of the Board since 2017, is proposed to succeed him as Chairman. If’s new CEO Morten Thorsrud is proposed to be elected as new member. Petri Niemisvirta, CEO of Mandatum Life, is proposed to be re-elected.

Photo: Mirko Hurmerinta, Sampo
Mirko HurmerintaIR and Communications Specialist, Sampo plc