morgan stanley europeanfinancialsconferenceeuropean ......march 29, 2012 insurance operations...
TRANSCRIPT
Morgan Stanley European Financials ConferenceEuropean Financials Conference 2012
BjörnWahlroosBjörn WahlroosChairman of the Board
March 29, 2012
Sampo has been a great investmentTotal shareholder return of Sampo share and a benchmark index
2
March 29, 2012
WHY?WHY?
3
March 29, 2012
Because…
• Sampo has very profitable operationsp y p p
4
March 29, 2012
Insurance operations have produced high returns
53.239.8
405060
Return on Equity in P&C insurance%
24.1 22.0 19.2
‐0.812.4
0102030 Average
24.3%
‐100
2005 2006 2007 2008 2009 2010 2011
100Return on Equity in Life insurance%
39.0 30.09.1
97.636.2
20406080100
Average 18 8%
68 8‐11.7
‐80‐60‐40‐200
2005 2006 2007 2008 2009 2010 201118.8%
5
‐68.8‐80
March 29, 2012
Because…
• Sampo has very profitable operationsp y p p• Sampo has the ability to execute great deals
6
March 29, 2012
Example: Sampo Bank sale in 2006/2007P/BV R EP/BV v. RoE
3.5
4.0Danske Bank/Sampo Bank
2.5
3.0
3.5
alue Danske Bank/
Östgota Enskilda BankHandelsbanken/
Midtbank Danske Bank/N h B k d NIB
1 5
2.0
2.5
ce/b
ook
v
Danske Bank/R lD k
Midtbank
Kaupthing/FIH
Danske Bank/Fokus Bank
Nordea/Postgirot
Nordbanken/Merita
Northern Bank and NIB
Santander/Elcon
SEB/Privatbanken
Nykredit/Totalkredit
Sparbanken Sverige/ Föreningsbanken
0 5
1.0
1.5
Pric RealDanmark
Den Norske Bank/Gjensidige NOR Handelsbanken/
StadshypotekNordea/Unidanmark
Nordea/Christiania Bank
g
Kaupthing Bank/Bunadarbanki Islands
Islandsbanki/BNbank
Islandsbanki/Kredittbanken
0.0
0.5
0% 5% 10% 15% 20% 25%
Note: Acquirer/TargetSource: Company data, Factiva Target RoE
March 29, 2012
Because…
• Sampo has very profitable operationsp y p p• Sampo has the ability to execute great deals• Sampo puts shareholder value firstSampo puts shareholder value first
8
March 29, 2012
Shareholder value focus manifested in the dividend yield
Average dividend yieldin 2001‐2011
6 67
in the dividend yieldAnnual dividend yield, calculated using the year‐end share price
6.75%
%6.6
6.0 6.0 5.76.3
6
7Total shareholderreturn of Sampo A share1 Jan 2007=100
4
5 1 Jan 2007=100
2
3
0
1
02007 2008 2009 2010 2011 9
* Board’s proposal to the AGM held on 12 April 2012: EUR 1.20/share
March 29, 2012
Past performance is no guarantee of futureresultsresults..
..but…
10
March 29, 2012
In 2001 we saw our business like this...
Fast MutualF d
Privatebanking
Funds
LifeInsurance
AM
MARKET
Insurance
Investmentbanking
MARKET GROWTH Banking
RetailBankingSME
Non-life InsuranceSMESII
Non-life InsurancePrivate
Largecorporatelending
Non-life InsuranceMajor accounts
11
Slow Small BigMARKET SHARE
lending
March 29, 2012
…today we have no dogs left!= If P&C is a cash machine
1,000
If P&C is a cash machineEURm
800
• Dividends paid to Sampo plc by If P&C EUR 3.4 billion• Book value of If P&C in Group Accounts EUR 1.9 billion
1,031
400
600 Average EUR 488 million/ year
249
519 488 540406200
400 year
249 1810
2005 2006 2007 2008 2009 2010 2011
12
March 29, 2012
…and we think Nordea is seriously undervalued%
12 315.7
18
22.919.7
15.3 15.015
20
25 Return on Equity, Nordea%
7.5
12.3 11.3 11.5 10.6
5
10
15
02002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Target
Nordea share price, SEK
13Source: ReutersEcowin
March 29, 2012
…while stable P&C insurance operations offer downside protectionoffer downside protection
100.9%
Long term
Combined ratio, If P&C
26.625.6 24.3 24.0 23.7 23.7 24.1 23.7 23.5
92.6 90.5 89.9 90.6 91.8 92.1 92.8 92.0
80
100 Long‐term target < 95%
60The standard deviation for 20052011 quarterlycombined ratios:
74.3 67.0 66.2 65.9 66.9 68.1 68.0 69.1 68.4
20
40If: 2.5%Tryg: 5.4%Gjensidige: 5.4%
02003 2004 2005 2006 2007 2008 2009 2010 2011
Pohjola: 5.8%Topdanmark: 5.3%
14
Risk ratio Cost ratio
March 29, 2012
In my viewSampo is a great investmentp g
Total shareholder return of Sampo share and a benchmark index
15
Morgan Stanley European Financials ConferenceEuropean Financials Conference 2012
BjörnWahlroosBjörn WahlroosChairman of the Board