Mandatum Oyj

Good morning everyone and thank you for joining Mandatum's Q2 2026 audiocast. My name is Lotta Borgström from Investor Relations and I am pleased to be joined today by our CEO Petri Niemisvirta, our CFO Matti Ahokas and as a special guest the Head of Asset and Wealth Management Janne Saaravikivi. During this audiocast we will begin by presenting the highlights and key developments from Mandatum's second quarter of 2026. We will also comment on the announced acquisition of the Swedish asset manager Kliens, which was communicated earlier this morning. Following the presentation, we will proceed to the Q&A session where you will have the opportunity to dial in with any questions you may have. Participants can also submit questions through the chat, which we will review within the available time after the dial-in Q&A. As stated, Janne Sarvikivi is joining us for today's call and will be available to comment in particular on the transaction and answer related questions later in this audio cast. And with these remarks, I will hand over to Petri. Please go ahead.

Thank you, Lotta, and thank you all for joining us today. The second quarter was a strong one for Mandattu, with good results across the board. Our capital-like profit before taxes increased by 32% year-on-year to 27.1 million euros. This demonstrates the strength of our strategy and the continued growth of our core businesses. The market environment was supportive during the quarter. As a result, our client assets under management increased by 16% year-on-year to a record 16.7 billion euros. Net flow remained solid at 164 million euros and stayed at the same level as a year ago. The strong growth in assets supported our fee result, which increased by 21% to 22.4 million euros. The group's profit before tax is more than doubled from the comparison period and reached 79.1 million euros. The result was supported by a strong net finance result and good investment returns from our own with profit balance sheet investments, particularly fixed income assets benefiting from tightening credit spreads. Alternative investments and especially private equity investments also performed well. Let me then move on to client assets under management and net flow. Client assets under management reached a new record of 16.7 billion euros at the end of June. Client assets increased not only in asset and wealth management but also in our corporate and retail businesses. in which the equity rate of investment is typically higher. This broad-based growth highlights the importance of all our business areas for Mandatum's profitability and demonstrates the strength of our diversified business model. Net flow remained positive in all our key business areas during the first half of the year. Asset and wealth management generated the maturity of net flows while corporate also continued to contribute positively. In corporate business, sales of pension insurance products and personal funds remained at the good level. In retail, our cooperation with Pohjan Tahti continued to support risk insurance sales and investment product sales returned to growth. Retail assets under management increased to more than 4 billion euros. We are also encouraged by early signs of improving economic activity in Finland. A gradual recovery in the economy, including increasing M&A activity, is expected to support both our asset and wealth management business and our corporate customer business going forward. This creates new opportunities for client growth and advisory services. Asset and wealth management continue to deliver strong growth during the quarter. A particularly positive development was the continued success of our international institutional business. International institutional asset increased by 19% year on year, driven mainly by growth in Sweden. During the quarter, we also won our first clients in Italy, further strengthening our position in Europe. Private wealth management asset increased by 18% year on year and exceeded 5 billion euros for the first time. Growth was supported by strong sales of discretionary mandates and continued client confidence. We are pleased with the strong momentum in this business. One of our strategy ambitions is to double our market share in Finnish private wealth management during the strategy period and the current development shows that we are moving in the right direction. We have continued to invest in future growth through new hires among others. While these investments temporarily increase cost, we believe they will accelerate growth and strengthen our position in the coming years. We also made excellent process in fundraising. During the quarter, Mandatum Credit Opportunities 2 raised more than 300 million euros in its first closing and Private Debt 8 secured over 100 million euros of commitments. This demonstrates investors' trust in our expertise and long-term track record. Finally, a few words on profitability and efficiency. Our cost income rates remained at healthy level of 49%. On a rolling 12-month basis, the rates improved by 4 percentage points year on year. We have continued to invest in selected growth areas, especially within asset and wealth management. Despite these investments, we have maintained a very strong level of efficiency. Our fee margin remains stable at 1.12%. While business effects continue as asset and wealth management grows faster than other businesses, underlying product margins remain stable. This reflects good pricing discipline across our operation. Overall, we continue to see clear evidence that our business model is scalable. We are growing assets, increasing earnings, maintaining efficiency and investing for future growth at the same time. With that, I will now hand over to Matti, who will go through the financials in more detail.

Thank you, Petri. Let's now take a closer look at the second quarter result components. As pointed out, our fee result was up by 21% year on year, with assets under management up by 16%, and both of these are at all-time high levels. Compared to Q1, our AUM was up by 8%, or 1.3 billion euros, to 16.7 billion. The main driver for this quarter was the strong market performance of our corporate and retail assets, which have a higher equity weight than our asset and wealth management segment. As Petri mentioned, the cost-income ratio of our client AUM was 49%, actually slightly down quarter on quarter. Our income was up in Q2, but the increased growth initiatives in the capital light business meant that costs in this area increased as well. This is in line with our business plan, as you know. It's worth noting that the overall cost control remains good. Our total cost income ratio continued to improve and we're well in line with our overall annual cost growth target of around 1% until 2028. The net finance result was strong across the board in Q2 and I'll talk a bit more about this later on. And the result related to risk policies at 5.1 million euros in Q1 was a significant improvement compared to last year. As you know, one of our key financial targets is to grow the capital like profit before taxes by more than 10% annually by 2028 compared to 2024. Looking at the second quarter, the reported profit before tax was 27.1 million euros or 32% growth versus Q2 2025. Although the comparison number in Q2 2025 was maybe a bit low, we are at the run rate above our long-term target growth. Looking at the segments, asset and wealth management profit grew by 19% year on year, driven by a 20% grow in the fee result. The corporate segment saw a significant profitability jump as the result related to risk policies increased due to a higher CSM release. In addition, the AUM increased by 18%. The retail segment saw the largest increase in fee result, or 32%. The fee result was positively impacted by the very strong AUM development in the quarter. Actually, the AUM was up by some 400 million euros compared to Q1. And then let's take a closer look at the group net finance result which came in at 55 million euros. As you all know Q2 was a positive quarter in the financial markets and this is also reflected in our client AUM. The with profit investment return in the quarter at 2.5 was above the expected level. Fixed income credit makes up now as much as 79% of our own investment portfolio. In Q2, the return was positively impacted by mark-to-market adjustments from lower rates and tighter spreads. The portfolio mark-to-market yield was down by 20 basis points in the quarter to 4.7%, but is significantly still above the cost of liabilities. Our equity portfolio return was 5.5% in the quarter, broadly in line with the market. We continued the portfolio de-risking in line with our strategy and now listed equities amount to only 2% of the portfolio. One specific thing in the quarter was that private equity returns were very strong in the quarter, actually at 7%, and we are seeing clearly higher capital distributions from the portfolio. In Q2, the PE capital distributions were over 40 million euros, much higher than the level in previous quarters. This supports the capital release in line with our plan. Our private credit portfolio has also continued a positive trend like we've seen in previous quarter. The real estate portfolio return was negative and this was mainly due to a write down of a single lease contract. Turning then to the other part of the net finance result or discounting and cost of liabilities. As you saw, market interest rates decreased slightly in Q2 and this had a 21 million negative discounting impact. Remember also that this item also includes the profit sharing impact from the segregated portfolio and the impact was unusually high in Q2 as the investment return from the segregated portfolio was unusually high here as well. As in previous quarters, it's nice to say that we continue to consistently generate capital. Organic capital generation was 90 million euros or 18 cents per share in Q2. This was the highest quarterly figure in the history of the group. Q2 was the third quarter in the history of Mandatum when the SCR from the with profit business is smaller than the capital light SCR. and this confirms and shows our clear transformation journey towards a high ROE capital light group. The group fully loaded solvency ratios to the 195%. This was down from 207% in Q1, but clearly still above our target range. The decline was mainly driven by the increased SCR from significant increase in client equity AUM and then the increase in the symmetrical adjustment factor, which was at the maximum level in Q2. And now back to you, Petri.