Morgan Stanley EuropeanFinancialsConferenceEuropean ......March 29, 2012 Insurance operations...
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Morgan Stanley European Financials Conference European Financials Conference 2012 Björn Wahlroos Björn Wahlroos Chairman of the Board
Transcript of Morgan Stanley EuropeanFinancialsConferenceEuropean ......March 29, 2012 Insurance operations...
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
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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
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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
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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…
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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
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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
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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%
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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
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Morgan Stanley European Financials ConferenceEuropean Financials Conference 2012
BjörnWahlroosBjörn WahlroosChairman of the Board
