Sampo Oyj ($SAMPO)

Distinguished shareholders. My name is Antti Makinen. I've been the Chair of Sampo's Board of Directors for the past financial year. I would like to wish you warmly welcome to Sampo's Annual General Meeting 2026. In my presentation, I will briefly discuss the financial year 2025. The Group CEO, Morten Thorsrud, will, in his presentation, give you a more detailed review of the highlights and financial developments. Last year was another excellent year for the Sampo Group in financial terms. The insurance revenue grew by 8%, which is a very good achievement in this business. The underwriting result grew even faster than the revenue as much as 13% from EUR 1,316 million to EUR 1,485 million. The strong growth of the underwriting result was driven not only by revenue growth, but also the decrease of the combined ratio, which declined from previous year's 84.3% to 83.6%. Correspondingly, a key figure that is central in terms of the distribution of profit, the operating earnings per share, excluding extraordinary items and the unrealized change in value of investments increased by 7% to EUR 0.50. Perhaps the single most important event of last year was the change of Group CEO. Torbjorn Magnusson, who was first If's Managing Director for 18 years and then the Group CEO of Sampo from the beginning of 2020, announced his wish to retire from his role when we found a suitable successor. And after a thorough evaluation of potential successors, the Board of Directors in June decided to appoint the then Managing Director of If Morten Thorsrud as the new Group CEO from the beginning of October 2025. I'm especially happy that the changeover from Torbjorn to Morten was perfectly seamless without even the slightest disturbance in the group's operations. Of course, Torbjorn Morten had had a practice run 6 years earlier when Morten was appointed Torbjorn's successor as Managing Director of If. The group senior management also saw recently another significant change as Group CFO, Knut-Arne Alsaker, resigned last autumn and the new CFO is now Lars Kufall Beck. Both the Group CEO and the Group CFO have seen successful changes and through internal appointments, which reflects our strong corporate culture and the long-term focus. And on the screen, you saw our extremely skilled and engaged core group. The Board of Directors last year also discussed the distribution policy and changes to that policy were announced in early February and will be applied for the first time to the distribution of profit for 2026. We want to offer an attractive distribution of profit, taking into consideration the preferences of different investor categories. And according to this updated policy, we will aim to increase the regular dividend also in the future and complemented by share buybacks. And it is our estimate that in a typical year, the return to shareholders will be approximately 90% of our operative earnings and more than 2/3 of that will be as annual dividend. In order to secure a strong but efficient balance sheet, we can also take action to return excess capital or to protect the balance sheet. So in practice, we will slightly increase the portion of annual allocation towards share buybacks. This will be implemented gradually aiming to increase the regular dividend while at the same time, reducing the dividend payout ratio from the current 70%. And in line with this policy, the Board has proposed that the dividend to be paid out would be EUR 0.36 per share, corresponding to approximately 71% of the operating result of 2025. We continued our determined efforts around sustainability and achieved excellent results. We made progress in the short-term science-based climate targets according to plan. Customer satisfaction remained stable and our efforts in loss prevention and risk management solutions enhanced the well-being and safety of our customers. At the same time, good governance group's internal risk management and predictive sustainability work showed in our full year results. We report on our sustainability efforts in our website and in our sustainability statement. We encourage all shareholders to read the sustainability statement, which gives a more detailed account of the progress made in 2025 and its impact. A few words about the Board work last year. The Board convened 11 times last year. The attendance rate was approximately 100, almost 100. The Board members are highly committed to their job and their wide and diverse expertise and long experience benefits the company in many ways. We will deal with the election of Board members later on in this meeting. We propose that the number of Board members be confirmed at 8 and that Andreas Brandstetter be elected as a new Board member. He will introduce himself later on in that particular agenda item. Our long-term Board member, Christian Clausen, has announced that he is no longer available for reelection. And in this -- at this point, I would like to warmly thank Christian for his valuable work done for the company during 10 years in the Board of Directors. Thank you, Christian. Finally, on behalf of myself and the entire Board of Directors, I would like to thank all of you, shareholders for trusting us last year. And with these words, I declare the Annual General Meeting opened. And the next point on the agenda is calling the meeting to order, and I propose that according to -- in accordance with the organizational documents, the meeting be chaired by Attorney at Law Mikko Heinonen and the Secretary of the meeting.

Thank you, Chairman. Dear shareholders, dear Sampo Board and dear colleagues as well. On my behalf as well, I warmly welcome to the Annual General Meeting for 2026 for Sampo Group. It is also my very first AGM as Sampo CEO. As I'm speaking largely to a Finnish audience, please accept my apologies for my limited vocabulary in Finnish. For that reason, I will be giving this presentation in English. As Antti mentioned, I took the helm of Sampo last year after my predecessor, Torbjorn Magnusson, decided to retire from his role. I'm deeply honored by this opportunity. Having been with Sampo Group now for more than 20 years, I have witnessed the remarkable evolution firsthand and of course, are truly excited about leading this next chapter in our history. In a world of risks and uncertainty, Sampo provides safety, stability and value through understanding and mitigating risks. As a group, we create value for our customers through modern insurance operations under several brands and thereby also create value for our shareholders. Before diving into last year's operational performance, if you let me showcase our position and strengths as a company and investment case. As a modern pure-play P&C insurer, Sampo has a truly unique position. Starting from the fact that we are the leading P&C insurance group in the Northern Europe, we serve around 9 million customers in 8 markets through our strong and trusted customer brands. Our scale enable us to provide excellent insurance products and services in a cost-efficient manner and at the same time, benefit from diversification so that we can deliver attractive and stable financial results. Our scale also makes us into an attractive partner. This, for example, includes partnership with multiple leading car brands that not only give us a great distribution network, but also valuable insight into technology development when it comes to, for instance, electrical vehicles or even the future autonomous vehicles. Sampo is also the most diversified insurer in our region. In addition to scale benefits, having a large diversified portfolio is key in insurance as it reduces volatility. This means that our performance can be more stable and more predictable compared to players that are heavily exposed to one single country or one single region. In the Nordics, we are a clear market leader. However, we are not #1 in any of our single markets, meaning that there's plenty of room for stable long-term organic growth. And offering organic growth is what Sampo is all about. I'll get back to the different growth drivers in a minute. But as you see on the pie chart here on the right-hand side, we have multiple -- or left-hand side, I guess it's for you. We have multiple attractive areas where we see structural growth and also attractive areas where we see more cyclical growth. Now let's take a look at last year's financial performance. 2025 was yet an excellent year for Sampo, underpinned by strong top line growth and maintained solid margins. We saw 8% top line growth, leading to a 13% growth in the underwriting result. Combined with solid investment return, our operating earnings per share or operating EPS in short, increased by 7%. As you see from the table here, our reported EPS increased by 65%. This was supported by the significant gain of EUR 540 million on our NBA investments. This investment gain is not included in the operating EPS, which then better represent the underlying operational performance of the group. Thus, this also explains the large difference between the 7% operating EPS and the reported 65% growth in reported EPS. Our balance sheet remained robust with solvency and financial leverage ratios being in line with our targets. Strong operational performance, combined with a resilient balance enabled the Sampo Board to propose a 6% increase in the regular dividend per share for 2025. But more about capital distribution a little bit later in my presentation. The underwriting profit, which is the main profit driver for Sampo and shows how much of the insurance revenue remains after deducting claims costs and other insurance operational costs increased by 13%. This was actually the third consecutive year with exactly 13% growth in the underwriting profit. While I would like to attribute this to our razor sharp precision, it's fair to attribute this more to excellent diversification across markets and segments. Nevertheless, over this 3-year period, we have produced more than 40% cumulative growth in the insurance service result. In 2025, we have some called good luck from benign weather and also from fewer large claims than what we had anticipated. Although in insurance, we don't really talk about luck, but rather about stochastic deviations from an expected norm. Yet as you can see, the primary driver for the underwriting result growth was our organic premium growth. And this is what the Sampo equity story is all about, maintaining attractive insurance margins while seizing attractive growth opportunities through leveraging our scale, leading market position, superior pricing sophistication and best-in-class digital capabilities. Now let's look closer at what were the main drivers behind our solid top line growth. In the Nordics, the fastest growing product area over the last couple of years has been personal insurances. This includes products such as health, accident and child insurances. Today, we are insuring more than 1 million customers with health insurances across the Nordics. Due to the quite comprehensive public health care systems we have in the Nordics, the market penetration of personal insurance products is still relatively low compared to Western countries. However, the demand is increasing because of demographic changes, wealth accumulation and also a pressure on public health care. Hence, we see a great potential in future growth in this area going forward, driven both by increased demand and also supported by our excellent cross-selling capabilities. Another example of growth in the Nordics is the SME segment, for us defined as companies with less than 50 employees. This sector represents the majority of our commercial client portfolio. And in 2025, we achieved a 7% like-for-like top line growth in this area and added some 3,200 new customers. Moving to our digital U.K. business, which has been a significant contributor to our organic growth. We also there see very good growth momentum throughout 2025. Since the acquisition of Hastings in 2020, we have added around 1.5 million customers to our book in the U.K., out of which 600,000 in 2025 alone. While we see attractive growth potential in the U.K. in the long term, I'd like to remind you that due to different market dynamics, the U.K. market is more cyclical than the Nordic market, meaning short-term volatility is more normal. We, of course, always act in a disciplined manner in our underwriting and manage growth according to the different cycles. Turning then to one of Sampo's core strengths and an important driver of our compelling organic growth, namely digital -- our digital capabilities. This is again something that's amplified by our scale and our pan-Nordic operating model. Sampo has been a digital pioneer in the Nordics, beginning our investments in online distribution some 20 years ago. Today, we see that those investments bear fruit as our digital capabilities continue to drive growth as well as efficiency. In 2025, we saw 15% growth in digital sales in our Nordic retail business, and we achieved our operational ambition for this metric 1 year ahead of plan. Similarly, we saw the same growth rate in our commercial -- Nordic commercial business, where we see that SME customers, in particular, are following the same path in adopting digital service channels as retail customers. Having market-leading digital capabilities means faster and easier-to-use services for our customers and enable cost efficiency improvements that benefit both our customers and our shareholders. Use of AI, of course, is a very hot topic these days. While some sectors may see it as a threat, we see it as a great opportunity. Insurance is at large a digital and highly data-driven industry with a high number of customer journeys that could be automated. Consequently, the industry should be well positioned to take advantage of new technology such as AI. However, only the digitally advanced companies are ready to harvest these benefits and Sampo is certainly one of them. Although I also would like to highlight that AI for us is not something new. It's not really even a separate thing for us. It's just the next step in our technological development in which we have consistently invested. Moving then to Denmark and commenting on the Topdanmark integration. In 2024, we completed our transformation into a unified pure-play P&C insurance group by acquiring the rest of Topdanmark. And in 2025, we are focused on integrating it into our pan-Nordic operating model. The integration process is progressing at full speed and the benefits are already materializing. Last spring, we -- as we got more detailed insight into the business, we increased our run rate synergy estimate for 2028 up to EUR 140 million, up from the original estimate of EUR 95 million. By the end of 2025, we have already achieved run rate synergies of EUR 37 million, exceeding our original plan of EUR 24 million, although the faster-than-planned progress appears largely attributable to timing. Most of the synergies come from the cost side through such as overlapping corporate center functions and IT systems. But we are now starting also to see clear benefits on the revenue side as well. In 2025, our substantially strengthened position in Denmark enabled us to sign multiple new distribution agreements with car brands. Combining 2 large organizations is, of course, never easy as changes can naturally create uncertainty, both among employees and customers. Therefore, I'm very proud of our organization and how they have adapted to this change and proactively seized the opportunities. This gives me a strong confidence for our future development in Denmark. While the underwriting result is our main profit driver, we also aim to achieve attractive investment returns with manageable risks on top of that. As for most P&C insurers, the majority of our investment portfolio is allocated to fixed income instruments that generates stable, predictable recurring income and do not tie up too much capital. At the same time, we like to have a certain exposure to equities. This help us match our liabilities with longer durations. But more importantly, it also provides attractive return in the longer term. As our track record shows, this has been a good strategy. Over the last 17 years or so, we have achieved more than 4% investment return on average, clearly exceeding the return if we would have just have invested in low-risk, low-return government bonds. Last year, the investment return were, of course, exceptionally high and largely driven by our investment in Nova, which was listed in September. Nova has been a good investment for Sampo as our original investment of EUR 325 million back in the days have more than doubled. As this is what we call a legacy asset made during the old strategy, we will eventually sell our stake, but of course, in a controlled manner. 2025 again was an excellent year for Sampo, and our performance have been well in line with our financial targets set for the strategic period 2024 to 2026. As 2026 then is the last year of our current strategic period, we have already started preparing our operational and financial ambitions for the next one. Therefore, we will host an investor update on the 17th of November this year, where we will provide further insight into our new strategic period. I'm confident that 2026 will be yet another good year for Sampo as we continue to leverage our scale and unique capabilities across segments and geographies. We have set an outlook for the full year, expecting 5% to 8% top line growth and up to 8% growth in the underwriting result. The outlook is in line with our main financial target of achieving more than 9% growth in the operating EPS on average for the period 2024 to 2026. Shifting from earning capital to returning it to you, our shareholders. As Antti already highlighted in his opening speech, we recently updated our distribution policy. Sampo aims to pay a reliable and progressive regular dividend and the proposed dividend per share of EUR 0.36 is exactly in line with this. With continued strong performance, you can expect a steady increase in the regular dividends. And we plan to maintain a historic -- a growth that is in line with historic trajectory, where we then slightly reduce the payout ratio over time. The regular dividend will be complemented with share buybacks, which will support our EPS, but also our dividend per share development. Going forward, the capital for buybacks will mainly be generated from our operational business, but there is still some excess capital expected to be released as we continue to sell down our legacy assets. As communicated in connection with the full-year results, we will review and comment on our excess capital position in connection with the Q1 results that is published on the 6th of May. To conclude my presentation, I'm very pleased with Sampo's performance in 2025. These achievements were made possible by our more than 15,000 employees who together with trusted partners are dedicated to creating value for our customers and thereby also for our shareholders. I would like to thank our employees, our customers, partners and all shareholders for your continued support. Thank you.