Sampo's Strategic Share Buyback Program Analysis

Based on my comprehensive research, I can now provide a detailed analysis of Sampo’s share buyback program strategy and its implications for shareholder value and company valuation.

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Sampo Oyj, the largest Nordic property and casualty (P&C) insurance group headquartered in Helsinki, Finland, has been executing an aggressive and disciplined share buyback program. The company announced its latest €150 million buyback program on November 5, 2025, which commenced on November 6, 2025 and runs through January 30, 2026 [1][2]. The program is being conducted in accordance with the EU Market Abuse Regulation and European Commission Delegated Regulation, with Morgan Stanley executing the transactions across multiple trading venues including the Helsinki Stock Exchange (XHEL), AQEU, CEUX, and TQEX [1].

As of January 16, 2026, Sampo had acquired 12,190,789 of its own A-shares, representing 0.46% of the company’s total outstanding shares, at an average price of approximately €10.00 per share [1][2]. The purchased shares are intended to be cancelled, which directly reduces the company’s share capital.

Sampo has demonstrated a consistent commitment to returning capital to shareholders through share buybacks since 2021:

Buyback Program	Period	Amount (EUR million)
1st	Oct 2021 - Mar 2022	€750 million
2nd	Mar 2022 - May 2022	€228 million
3rd	Jun 2022 - Feb 2023	€1,000 million
4th	Mar 2023 - Aug 2023	€400 million
5th	Jun 2024 - Nov 2024	€475 million
6th	Aug 2025 - Oct 2025	€200 million
7th (Current)	Nov 2025 - Jan 2026	€150 million

[3]

This sustained buyback activity represents one of the most aggressive capital return programs among European insurers and underscores management’s long-term commitment to optimizing shareholder value.

The continuation and timing of Sampo’s buyback programs send a powerful signal to the market regarding management’s confidence in the company’s intrinsic value. By repurchasing shares at current market prices, management effectively communicates its belief that the market is not fully valuing the company’s earnings potential and assets.

Analyst assessments support this view. According to Excess Returns analysis, Sampo’s intrinsic value is estimated at approximately

, implying the shares trade at a to this estimate [4]. Additionally, Simply Wall St’s proprietary Fair P/E Ratio model values Sampo at 19.46x compared to its current trading P/E of 16.21x, further suggesting undervaluation relative to its fundamentals [4].

Sampo operates under a well-defined capital allocation framework that balances shareholder returns with growth investments:

• ~70%
  of operating EPS returned as ordinary dividends
• ~20%
  available for buybacks and special returns
• ~5-10%
  retained for growth opportunities [5]

This disciplined approach ensures consistent capital returns while maintaining the financial flexibility to pursue strategic initiatives. The company reviews its excess capital position annually, and buybacks are executed when capital levels exceed operational requirements and strategic buffers.

The current €150 million buyback program is specifically funded by proceeds from the partial sale of Sampo’s stake in NOBA (a leading European consumer bank) during its IPO in September 2025. The transaction generated approximately

as Sampo reduced its holding from 20% to 15% [3][5]. This represents a highly rational capital allocation decision—returning IPO proceeds to shareholders rather than retaining excess capital that could dilute returns.

By reducing the number of outstanding shares, buybacks directly enhance key per-share metrics:

• Earnings per share (EPS)
  : With fewer shares outstanding, the same level of profitability translates into higher reported and operating EPS
• Return on Equity (ROE)
  : By reducing equity capital through share cancellations, the company’s ROE numerator (net income) is spread over a smaller denominator, potentially boosting this key profitability metric

Sampo’s Q3 2025 results showed operating EPS growth of

to €0.38, supported by strong underwriting performance [3]. The buyback program amplifies the impact of this growth on per-share metrics.

The 6th buyback program (August-October 2025) repurchased

at an average price of €9.76, reducing the company’s unrestricted equity by [2]. These shares were cancelled on November 5, 2025, permanently reducing the share count.

This share reduction benefits remaining shareholders in several ways:

• Increased ownership percentage
  : Each remaining share represents a larger stake in the company
• Enhanced EPS
  : Future earnings are allocated across fewer shares
• Improved valuation multiples
  : A lower share count can support higher P/E multiples as metrics like P/B (price-to-book) become more favorable

Sampo’s total shareholder return (TSR) track record supports the effectiveness of its capital return strategy:

Time Period	Share Price Return
7 days	+0.8%
30 days	-1.3%
Year-to-date (2026)	-2.3%
1 year	+29.9%
5 years	+103.5%

The strong 1-year and 5-year returns demonstrate that Sampo’s combined dividend and buyback strategy has delivered substantial value to long-term shareholders [4].

With the stock trading at approximately

and analyst estimates suggesting an intrinsic value of , the buyback program enables Sampo to purchase shares at a significant discount to fair value [4]. This is analogous to a value investor buying quality assets at a discount—the company is essentially buying back its own shares at favorable prices.

Sampo’s current valuation profile presents an interesting picture:

Metric	Sampo	Industry Average	Peer Average
P/E Ratio	16.21x	12.01x	12.07x
Fair P/E (Model)	19.46x	—	—
Solvency II	172%	—	—
Financial Leverage	24.5%	—	—

Notably, Sampo trades at a

to industry and peer averages on a P/E basis, suggesting the market already prices in some premium characteristics such as:

• Strong market position as the largest Nordic P&C insurer
• Superior underwriting performance (combined ratio: 82.6-84.3%)
• Disciplined capital management
• Growth optionality in personal insurance, SME, and UK markets

The apparent contradiction between Sampo’s premium P/E and analyst assessments of undervaluation can be explained by:

1. Quality Premium
   : Sampo’s superior underwriting margins, digital capabilities, and market position may warrant a premium multiple
2. Growth Expectations
   : The raised operating EPS growth target (to >9% annually for 2024-2026) supports higher multiples
3. Hidden Value
   : Excess Returns analysis reveals that when accounting for book value and stable EPS, the market may still underappreciate the company’s sustainable earnings power

Active share buybacks can contribute to multiple expansion through:

• Share count reduction
  : Making the company appear smaller in market cap terms but more profitable on a per-share basis
• Signaling effect
  : Continuous buybacks signal management confidence, which can attract value-oriented investors
• Improved ROE
  : Higher ROE typically supports higher valuation multiples

Sampo’s capital strength provides the foundation for its buyback program:

• Solvency II ratio
  : 172% (net of dividend accrual and planned buyback), well above the typical 100-150% target range for European insurers [5]
• Financial leverage
  : 24.5%, indicating a conservative capital structure with low financial risk [5]
• Underwriting profit
  : Q1-Q3 2025 underwriting result of €1.1 billion, up 17% year-on-year [3]
• Strong combined ratio
  : 82.6% (Q2 2025), demonstrating disciplined underwriting and cost control [5]

This robust capital position enables Sampo to maintain its aggressive capital return program while preserving financial flexibility for growth investments and maintaining regulatory capital buffers.

1. Management Alignment
   : Buybacks demonstrate that management views the stock as an attractive use of capital, aligning management interests with those of shareholders

2. Flexibility vs. Commitment
   : Unlike dividends, buybacks provide flexibility—they can be adjusted based on market conditions and capital availability without setting expectations

3. Market Confidence Signal
   : The consistent execution of multi-year buyback programs signals stable corporate governance and disciplined capital allocation

4. Competitive Positioning
   : As the largest Nordic P&C insurer with operations across Finland, Sweden, Norway, Denmark, and the UK, Sampo’s strong capital position supports its ability to compete effectively and pursue acquisition opportunities

5. NOBA Exit Strategy
   : The buyback funded by NOBA IPO proceeds represents rational capital rotation—returning capital from non-core investments to shareholders while maintaining potential upside through the remaining 15% stake

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Sampo’s continued share buyback program reflects a sophisticated, disciplined approach to capital management that creates value for shareholders through multiple mechanisms:

1. Direct value creation
   via share cancellation at prices believed to be below intrinsic value
2. Enhanced per-share metrics
   through share count reduction
3. Signaling benefits
   that demonstrate management confidence and attract value-oriented investors
4. Optimal capital allocation
   by returning excess capital rather than allowing it to dilute returns

The program’s funding from NOBA IPO proceeds represents particularly rational capital deployment, while the consistent multi-year track record provides evidence of a sustainable shareholder return strategy. Given analyst assessments indicating approximately

and the company’s strong financial position, the buyback program appears well-positioned to continue generating shareholder value in 2026 and beyond.

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[1] Investing.com - “Sampo continues share buyback program with €2.8 million purchase” (https://www.investing.com/news/company-news/sampo-continues-share-buyback-program-with-28-million-purchase-93CH-4453332)

[2] Sampo Group - “Share buybacks” Official Investor Relations (https://www.sampo.com/investors/share/share-buybacks/)

[3] Sampo Group - “Investor Presentation Q3/2025” (https://www.sampo.com/globalassets/investors/quarterly-reporting/2025/q3/investor-presentation-q3_2025.pdf)

[4] Yahoo Finance/Simply Wall St - “Is It Time To Revisit Sampo (HLSE:SAMPO) After Its Recent Share…” (https://finance.yahoo.com/news/time-revisit-sampo-hlse-sampo-031807484.html)

[5] Sampo Group - “Half-Year Financial Report 2025” (https://www.sampo.com/globalassets/investors/quarterly-reporting/2025/q2/sampo-groups-half-year-financial-report-2025.pdf)

[6] GlobeNewswire/Via Ritzau - “Sampo plc’s share buybacks 15 January 2026” (https://via.ritzau.dk/pressemeddelelse/14754660/sampo-plc)