Mandatum plc’s Interim Report 1 January–31 March 2024: Client assets under management continued steady growth

Stock exchange releases 8.5.2024 at 10:45 AM EEST

Mandatum plc, Stock exchange release, 8 May 2024 at 10.45 a.m. EEST

January–March 2024 in brief

  • Profit before taxes increased by 47% to EUR 46.9 million (1–3/2023: 32.0). The growth was mainly due to the net finance result, but the fee result also increased from the comparison period.
  • Fee result increased by 9% to EUR 15.2 million (14.0).
  • Net flow decreased to EUR 246 million (291).
  • Client assets under management increased by 5% from year-end and 16% from last year and amounted to EUR 12.5 billion.
  • Net finance result increased to EUR 29.9 million (13.4).
  • Result related to risk policies was EUR 2.2 million (2.9).
  • Solvency II ratio adjusted for dividend accrual was 216.5% (31 Dec 2023: 221.4%).

 

Outlook 2024 (unchanged)

  • The fee result is expected to increase from year 2023 provided that the market environment remains stable. While Mandatum has been able to maintain disciplined pricing and stable fee margins within capital-light customer segments during years 2022 and 2023, the fee result for year 2024 is dependent on several factors, such as client behaviour and client asset allocation, competition, and capital market conditions.
  • The with-profit portfolio is expected to decrease further. Value changes of the investments in the with-profit portfolio can create relatively high volatility in the net finance result due to changes in the market environment.
  • In addition, and as typical for the industry, the overall results of Mandatum will be impacted by actuarial assumptions that are updated from time to time.
  • The strong solvency gives the company a sound basis to operate in different market conditions.

 

Key figures

EUR million

1–3/2024

1–3/2023

Change, % 

10–12/2023

Change, %

1–12/2023

Profit before taxes for the period

46.9

32.0

47%

46.3

1%

210.4

Fee result

15.2

14.0

9%

13.4

13%

52.6

Net finance result

29.9

13.4

123%

24.9

20%

148.6

Result related to risk policies

2.2

2.9

-24%

8.0

-72%

17.9

Other income

-0.5

1.7

 

0.0

 

-8.7

Earnings per share, EUR

0.08

0.05

60%

0.06

33%

0.32

Equity per share, EUR

3.26

3.06

7%

3.19 

2%

3.19

Price/earnings ratio (P/E ratio)

13.7

 

 

 

 

12.7

Net flow

246

291

-16%

210

17%

754

Return on equity-%

9.3%

5.8%

 

9.8%

 

9.8%

Cost/income ratio related to client AuM, %1

65%

66%

 

66%

 

66%

 

EUR million

31.3.2024

31.3.2023

Change, % 

31.12.2023

Change, %

 

Client AuM

12,504

10,776

16%

11,892

5%

 

Solvency ratio adjusted for dividend accrual, %

216.5%

279.5%

-63%

221.4%

-5%

 

 

1)         Moving average 12 months.

CEO’s review

The year 2024 began according to our expectations for Mandatum. The fee result, key for our growth strategy, increased by 9 per cent from the comparison period, indicating good performance in our capital-light business areas, especially in Institutional & Wealth management. Client assets under management increased by 16 per cent to EUR 12.5 billion from the previous year and net flow for the quarter was EUR 246 million, giving us a good start to the new year.

 

Mandatum’s profit before taxes increased to EUR 46.9 million. The growth was especially due to the net finance result, which increased to EUR 29.9 million. Return on investments in the with-profit portfolio was 0.9 per cent in the first quarter, with the moderate increase in interest rates pushing down the return on the fixed-income assets, which is the largest asset class in the portfolio. On the other hand, the interest cost of insurance contract liabilities was low due to the increase in the discount rate, being approximately EUR 6 million. We also succeeded in organic capital generation during the quarter. The company’s solvency ratio on 31 March 2024 remained at the same level as in the beginning of the year, 216.5 per cent adjusted for dividend accrual, giving an accurate picture of Mandatum’s solid solvency position.  

 

The net flow in the Institutional & Wealth management business area was strong in all client segments during the quarter. Much of the incoming money still came to fixed-income products, such as the Nordic High Yield Fund, which mainly invests in Nordic higher-risk bonds. The LSEG Lipper Fund Awards 2024 recognised the fund as the best in Europe in the Bond Europe High Yield category over three-year and five-year review periods, an achievement we can be very proud of. Net flows to alternative investment products and allocation mandates also increased. Mandatum’s strong investment expertise stems from a long tradition of investment activities and a strong track record in returns, especially in the fixed-income and credit markets and in alternative investment products.

 

Mandatum committed to the UN Principles for Sustainable Insurance

 

I am proud and happy that our efforts to manage our company culture with exceptionally good employee understanding earned the well-recognised Siqni Future Workpalces Certification again for the third time in a row. The certification is based on a survey that measures how factors deemed meaningful by employees are fulfilled in the workplace. Our flourishing corporate culture is the factor that leads to not only an excellent employee experience, but also a high level of customer satisfaction, thus creating the foundation for successful business. Mandatum’s employee satisfaction has remained at a high level for over a decade and investing in an excellent employee experience is one of our strategic goals.

 

We committed to the UN Principles for Sustainable Insurance in the turn of the year. Mandatum’s Sustainable Insurance Policy, based on those principles, was published on our webpage in April 2024. The principles provide an international framework for the insurance industry, including themes of environmental responsibility, social responsibility, and good governance. As a large Finnish life insurer, Mandatum also has an important societal role, and commitment to the UN Principles for Sustainable Insurance was a natural next step in the development of our sustainability work.

 

The start of the year has been strong in the investment markets. The growth of the global stock market has continued from last year, with good returns from high-yield corporate loans and senior loans, to name a few. The general economic outlook, driven by the United States, remains confident, and expectations for the future are generally positive despite the difficult situation in global politics.

 

Thus, it seems that the operating environment will continue to be favourable for Mandatum. Central banks are expected to start lowering their key interest rates during the current year, but the development of long-term interest rates is more important for the shorter-term results development of the company. As a company, Mandatum is highly resilient on several metrics, and we are in a solid position to continue the implementation of our growth strategy going forward.   

 

Petri Niemisvirta
Chief Executive Officer

 

Conference call on 8 May at 1.00 p.m. EEST, Finnish time

A conference call in English for analysts and investors is scheduled for 8 May 2024 at 1.00 p.m. EEST, Finnish time. You can register for the conference call using the link provided below. The phone numbers for the conference call and the associated code will be provided upon registration.

Registration for the event: http://palvelu.flik.fi/teleconference/?id=10012280

The conference call can be followed live on the internet at www.mandatum.fi/en/result. A recording of the call will be made available for later access at the same web address.

Additional information

Investor enquiries:
Matti Ahokas

CFO

Tel. +358 40 575 1978
matti.ahokas(a)mandatum.fi

 

Lotta Borgström
VP, Investor Relations
Tel. +358 50 022 1027
lotta.borgstrom(a)mandatum.fi

Media enquiries:
Niina Riihelä 
SVP, Communications, Brand and Sustainability
Tel. +358 40 728 1548
niina.riihela(a)mandatum.fi


The interim report can be found as an attachment to this stock exchange release. The supplementary presentation material for investors accompanying the Mandatum interim report is available at www.mandatum.fi/en/result.

Mandatum plc will publish its Half-year Financial Report on 13 Aug 2024 and Q3 Interim Report on 12 Nov 2024.

Mandatum in brief
Mandatum is a major financial services provider that combines expertise in wealth management and life insurance. Mandatum offers clients a wide array of services covering asset and wealth management, savings and investment, compensation and rewards as well as pension plans and personal risk insurance. Mandatum offers services to corporate, retail, institutional and wealth management clients. At the centre of Mandatum's success are highly skilled personnel, a strong brand as well as a proven investment track record
mandatum.fi/en/group

Distribution:
Nasdaq Helsinki 
Financial Supervisory Authority 
The principal media 
www.mandatum.fi