Mandatum plc’s half-year financial report 1 January–30 June 2024: Strong earnings growth continued, assets under management increased to EUR 13 billion

Mandatum plc, Stock exchange release, 13 August 2024 at 10.30 a.m. EEST

April–June 2024 in brief

• Profit before taxes increased by 57% to EUR 75.8 (4–6/2023: 48.2) million. All result areas contributed to the growth.
• Fee result increased by 18% to EUR 14.7 (12.4) million due to the good development in Institutional & Wealth management.
• Net flow increased by 48% to EUR 231.9 (157.0) million.
• Client assets under management increased by 16% from the previous year and amounted to EUR 13.0 (30 Jun 2023: 11.2) billion.
• Net finance result was EUR 55.1 (43.1) million.
• Result related to risk policies was EUR 11.9 (-0.3) million.
• Solvency II ratio adjusted for dividend accrual was 224.1 (31 Dec 2023: 221.4)%.

 

January–June 2024 in brief

• Profit before taxes increased by 53% to EUR 122.7 (1–6/2023: 80.2) million. The growth was mainly due to the net finance result, but the fee result also increased from the comparison period.
• Fee result increased by 13% to EUR 29.9 (26.4) million.
• Net flow increased to EUR 477.8 (448.0) million.
• Net finance result increased to EUR 85.0 (56.6) million.
• Result related to risk policies was EUR 14.1 (2.6) million.

 

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	4–6/2024	4–6/2023	Change, %	1–6/2024	1–6/2023	Change, %	1-12/2023
Fee result	14.7	12.4	18%	29.9	26.4	13%	52.6
Net finance result	55.1	43.1	28%	85.0	56.6	50%	148.6
Result related to risk policies	11.9	-0.3	n.m	14.1	2.6	n.m	17.9
Other result	-5.9	-7.0	17%	-6.3	-5.4	-18%	-8.7
Profit before taxes for the period	75.8	48.2	57%	122.7	80.2	53%	210.4
Earnings per share, EUR	0.12	0.08	46%	0.19	0.13	51%	0.32
Equity per share, EUR				3.05	3.14	-3%	3.19
Net flow	231.9	157.0	48%	477.8	448.0	7%	753.8
Return on equity-%	14.6%	10.0%	5 p.p.	12.2%	7.7%	5 p.p.	9.8%
Cost/income ratio related to client AuM, %1				64%	71%		66%

EUR million				30.6.2024	30.6.2023	Change, %	31.12.2023
Client AuM				12,965	11,223	16%	11,892
Solvency ratio, adjusted for dividend accrual %				224.1%	286.7%	-62.6 p.p.	221.4%

1)         Moving average 12 months.

 

CEO’s review
 

Mandatum’s business continued on a positive trend during the second quarter: profit before taxes increased by 57 per cent from the previous year to EUR 76 million. I am particularly pleased to see that all result areas contributed to the growth. In addition, our Solvency II ratio increased to 224 per cent during the quarter. Mandatum is a well-capitalised company, and the solvency position has improved further along with the positive earnings development.

 

The fee result increased by 18 per cent due to the good performance in Institutional & Wealth management business area. Net flow for the quarter remained strong at EUR 232 million, having now been positive for over three consecutive years. We are thus well on the way towards our annual net flow target of 5 per cent. New subscriptions were made particularly in higher-risk corporate bond products, whilst net subscriptions in allocation mandates and products also increased. The average fee margin remained unchanged at 1.2 per cent, as per our financial targets.

 

We managed to increase client assets under management by 16 per cent from the previous year to EUR 13 billion. In addition to the private wealth management, the greatest increase, 26 per cent, was seen among the international institutional customers. Expanding institutional asset management particularly to Sweden and Denmark is a clear strategic target for us, and it is excellent to see how our sales efforts in the Nordic countries are paying off. Although the asset management market is highly competitive, Mandatum’s fixed-income and alternative investment products, in particular, have proven to be competitive internationally. We thus have excellent potential for growth beyond Finland’s borders.

 

Net finance result increased by 28 per cent

 

The net finance result for the second quarter increased by 28 per cent from the previous year to EUR 55 million. The first half of the year was strong in the investment market, and both the equity and corporate bond markets performed well. However, return on investments in the with-profit portfolio was moderate at 0.7 per cent, as rising interest rates decreased the investment return of the fixed-income assets. On the other hand, the increased discount rate decreased the cost of insurance contract liabilities, thus improving the net finance result. With the hedges put in place one year ago, we have achieved a position where a higher hedging rate reduces the financial impact of interest rate fluctuations and thus makes our results more predictable. The net finance result for the second quarter includes EUR 12 million in dividends from Saxo Bank A/S.

 

We reported earlier that Mandatum plc acquired a 19.83% holding in the Danish investment and trading service provider Saxo Bank A/S from Sampo plc on 13 May 2024. The purchase price, EUR 302 million, had been determined in advance in the terms of the transaction. Saxo Bank is not a strategic asset for Mandatum; the intention is to sell it at a suitable juncture. In July, Saxo Bank announced that an external advisor had been engaged to explore strategic options.

 

At the end of June, Mandatum joined the international Net Zero Asset Managers initiative, whereby we committed to seek to reduce net emissions from our investments to zero by 2050. We will also set interim targets for our emissions reductions, and devise a concrete plan to attain them. The initiative is aligned with the Paris Agreement on climate change, which seeks to limit the global temperature increase to 1.5 degrees. Mandatum has put a lot of effort on its sustainability work after the listing. The initiative is an important step for us in our climate efforts, which we aim to pursue determinedly also in the future.  

 

Petri Niemisvirta
Chief Executive Officer

 

Conference call on 13 August at 1.00 p.m. EEST, Finnish time

A conference call in English for analysts and investors is scheduled for 13 August 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: https://palvelu.flik.fi/teleconference/?id=50050133

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:

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

The half-year financial 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 Q3 interim report on 12 November 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