STOREBRAND ASA: Results for the fourth quarter of 2023
Solid results and capital situation lead to increasing dividends and continued buybacks
Group profit [1] of NOK 947 million, and NOK 3,480 million in total for the year
- The Board proposes a dividend of NOK 4.1 per share for 2023, up 11% from 2022
- The Board initiates new buyback program with target of NOK 1.5 billion in 2024
- Solvency II ratio 192%
- Weak insurance quarter, driven by challenging weather and persistent high disability in Norway
- Record-high assets under management NOK 1,212 billion
- Strong growth in all business areas
"The past year has shown us the strength of a diversified business model and we are pleased to gain trust from an increasing number of customers. We experience double-digit growth across the Group and funds are flowing into asset management. It is a milestone to have reached more than NOK 1,200 billion in assets under management."
"The insurance result is weak due to challenging weather and persistent high disability levels in society. We have been working to adapt to these trends over time and have implemented various measures to strengthen results. P&C insurance and disability development are two areas we will follow very closely also in 2024 to gradually get back to the targeted combined ratio level."
"The Board proposes a dividend of NOK 4.1 for the full year 2023 and launches a NOK 400 million share buyback program starting today and until the AGM in April. With this we deliver on our strategy of scalable, profitable growth and increasing dividends. Storebrand has a solid capital position, and we plan to continue share buybacks with an ambition to buy back shares worth NOK 1.5 billion in 2024," says CEO Odd Arild Grefstad.
Group Profit
Group profit was NOK 947 million in the 4th quarter, compared to NOK 841 million in the fourth quarter of 2022. For the full year, group profit ended at NOK 3,480 million (NOK 2,732 million in 2022). When adjusted for integration costs related to the acquisitions of Danica and Kron, the profit was NOK 3,707 million. This reflects underlying growth across all business areas and improved financial results driven by higher interest rates, but results are also hampered by weak insurance results.
Fee and administration income amounted to NOK 1,959 million in the 4th quarter, an increase of 19% compared to the same quarter last year. For the year in total, revenues amounted to NOK 6,782 million. Income growth is driven by strong growth in defined contribution pensions in Norway and Sweden, as well as increased assets under management. Total assets have increased by 18% in the last 12 months to above NOK 1,200 billion. Performance-based fees of NOK 242 million were booked at the end of the fourth quarter.
Weak Insurance Result
Insurance delivered weak margins in the quarter due to higher claims in all segments. Challenging weather conditions, increased frequencies and inflation led to increased claims in P&C. In group life and pension-related disability segments, a strengthening of reserves has led to weak results for the quarter and full year.
Combined ratio was 115% in the quarter and 102% for the full year, while the target level is 90-92%. Repricing and other measures have been implemented to strengthen the profitability of the insurance portfolio.
Improved Financial Result
The financial items and risk result ended at NOK 465 million in the 4th quarter, up from NOK 219 million in the same quarter in 2022. For the full year, the financial result ended at NOK 1,362 million, up from NOK 13 million in 2022.
Higher interest rate levels have contributed to higher returns on the company portfolios, together with increased profit sharing from the pension area in Sweden.
Solvency Ratio Development
The solvency ratio was 192% at the end of the 4th quarter, an increase of 8 percentage points compared to the end of 2022. However, the solvency ratio is 12 percentage points lower than at the end of the previous quarter.
Higher capital requirements, write downs in the Norwegian real estate portfolio and a substantial decrease in interest rates in Norway and Sweden were among the main explanations for the quarterly reduction. Storebrand has a strong solvency position and the solvency ratio continues to be well above the threshold for overcapitalisation of 175%.
Dividends and Share Buybacks
The Board proposes an ordinary dividend of NOK 4.10 per share for 2023 to the Annual General Meeting. The dividend proposal represents an increase of about 11% per share from 2022.
Based on the strong solvency ratio of 192% the share buyback program continues with a further NOK 400 million until the AGM in April. Storebrand's long-term ambition is to make annual share buybacks for NOK 1.5 billion, totalling NOK 12 billion up to 2030, in addition to increasing annual dividends.
Capital Markets Day
In December, Storebrand held a Capital Markets Day with focus on the Group's strategic direction and financial ambitions towards 2025. Storebrand has gone from being a Norwegian provider of occupational pensions to becoming a Nordic financial group with focus on savings and insurance, and will continue this development going forward.
Storebrand also updated its financial ambitions, with Group Profit and Return on Equity (RoE) as key targets. The ambition is to deliver a Group Profit of NOK 5 billion in 2025 and increase RoE from 10% to 14%.
Key Figures in the Quarter: (Q4-2022 in brackets)
- Solvency ratio: 192% (184%)
- Earnings per share, adjusted for amortisation NOK 2.14 (NOK 1.83)
- Equity NOK 29,531m (NOK 29,519m)
- Assets under management NOK 1,212bn (NOK 1,020bn)
Activities Related to the 4th Quarter 2023
07:30: Release of stock exchange notification. Press release, quarterly report and analyst presentation will be available on www.storebrand.no/ir
10:00: Live investor and analyst conference in English. A webcast will be available at www.storebrand.no/ir The presentation will be available on demand afterwards. Analysts who would like to ask questions at the end of the presentation must register for and participate in the MS Teams Webinar.
Link: https://www.storebrand.no/en/investor-relations/quarterly-reporting/programme
For further inquiries, please contact
Johannes Narum, Head of Investor Relations: johannes.narum@storebrand.no or (+47) 993 33 569
Kjetil Ramberg Krøkje, Head of Strategy & Finance: kjetil.r.krokje@storebrand.no or (+47) 934 12 155
Stig-Øyvind Blystad, Director of Communications: stig-oyvind.blystad@storebrand.no or (+47) 918 47 226
About Storebrand
Storebrand is a Nordic financial group, delivering increased security and financial wellness for people and companies. We offer sustainable solutions and encourage our customers to take good economic decisions for the future. Our purpose is clear: we create a brighter future.
Storebrand has about 55,000 corporate customers, 2.2 million individual customers and manages NOK 1,212 billion. The Group is headquartered at Lysaker outside of Oslo, Norway. Storebrand (STB) is listed on Oslo Stock Exchange. Visit us on www.storebrand.no
This is information is pursuant to the EU Market Abuse Regulation and subject to the disclosure requirements pursuant to Section 5-12 the Norwegian Securities Trading Act.
This information is based on the Storebrand Group’s alternative income statement and contains Alternative Performance Measures as defined by the European Securities and Market Authority (ESMA). The alternative income statement is based on reported IFRS results for the individual group companies. The statement differs from the official accounts layout. An overview of APMs used in financial reporting is available on storebrand.com/ ir.
[1] Cash equivalent earnings before amortisation and tax. www.storebrand.no/ir provides an overview of APMs used in financial reporting.