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CapMan Group’s result for 2015Heikki Westerlund, CEONiko Haavisto, CFO4 February 2016
DisclaimerCertain statements included in this material, including, without limitation, statements regarding future performance of the company, expectations regarding market growth and trend projections as well as any statements preceded by the words ”expect”, ”believe”, ”foresee” or similar expressions are forward-looking statements. By their nature, forward-looking statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Therefore, actual results may differ materially from the results that are expressed or implied by these forward-looking statements. CapMan Plc assumes no obligation to update such forward-looking statements except as required by mandatory law. Nothing in this presentation constitutes investment advice or an offer to sell or the solicitation of an offer to buy any securities or otherwise to engage in any investment activity.
4 February 2016CapMan Group results 20152
Contents • 2015 highlights and strategy implementation• Business environment• Result for 2015
Highlights for 2015
Financial position – Extended maturity of the loan portfolio from issue of a senior bond
4 February 2016CapMan Group results 20154
Result improvement – EPS €0.06 (vs. €0.03 in 2014)
Growth investments – Norvestia’s fair value change +10% from time of investment
Cash flow and carry – carry €4.4 mn and cash flow €20.7 mn to CapMan from exits
Real Estate investments – Eight new investments, the fair value development of the CapMan Nordic Real Estate fund has been good
Service business – Service fees from Scala Fund Advisory and CaPS
1
2
3
4
5
6
CapMan’s transformation
5 CapMan Group results 2015
One product
One team: investments
and management
Investments frombalance sheet into
own funds
A Platform focused on fund management
services
PARTNERSHIPS
CapMan’s ownership can vary between 30 and 100%
SERVICES Separate business and external clients
FundManagement
Many product areas
Investments in private equity INVESTMENTS
4 February 2016
CapMan’s business model and sources of income
1. Management fees
2. Carried interest
1. Other fees (incl. retainers, commissions and success fees)
3. Return from investments
Management Company and Services business Investment business
4 February 2016CapMan Group results 20156
PARTNERSHIPS SERVICES INVESTMENTS
Cash flow to CapMan from exits was strong in 2015
4 February 20167 CapMan Group results 2015
€4.4 mn
€20.7 mn
Capital calls
ReturnsBROENVesterbrogade 80SundmolenFinsensvej 86Kobmagergade 25
Kabelverket 6
Ruoholahdenk. 4Yrjönkatu 13
Access (fund of fund)
Silverdal INuijamiestentie
Others:
vendor note
CapMan has diversified its investments in the private equity asset class
48%
12%
6%
4%
14%
16%
31.12.2014 €64.3 mn
4 February 2016CapMan Group results 20158
21%
10%
4%3%
47%
7%
8%
31.12.2015€103.7 mn
Buyout
Real Estate
Russia
Credit
Maneq
Others
Norvestia
*not including cash and other liquid assets
Why Scala?
• Service business growth is an important strategic objective
• CapMan utilises the know-how of internal service teams by offering services also to external clients
• Scala is an independent partnership of private equity fund manager CapMan
Scala’s service offering for institutionalinvestors:
• Fundraising
• Investor relations services
• Private equity portfolio analysis
• Secondary fund market analysis
4 February 20169 CapMan Group results 2015
Events after the close of the financial year
CapMan Fund Advisory became Scala Fund Advisory
4 February 201610 CapMan Group results 2015
Events after the close of the financial year
Carried interest from the Public Market fund in 2016
The Public Market fund’s portfolio companies were all sold as of
January
Carried interest from the fund to themanagement company is €1.2 mn
ResidentialOther funds in carry31 December 2015
Portfolio at fair value €12.2 mn
• CME VII A, B, Sweden• FM III A, B
All exits generate carried interest
Additional receivables based onpossible adjustments of the
purchase price of completed exits
Focus areas for 2016
4 February 2016CapMan Group results 201511
Fee profitability Carried interest income and fairvalue development
1
2
3
4
5
Fundraising for new Real Estateand Credit funds
Growth of service business
Savings of at least €1 mn in operating expenses
Continued value development of CapMan funds
Acceleration of growthinvestments
4
67
3.5%
6.5%7.5%
0.0%
1.0%
2.0%
3.0%
4.0%
5.0%
6.0%
7.0%
8.0%
0
1
2
3
4
5
6
7
8
2013 2014 2015
CapMan’s dividend and dividend yield
Dividend (cents) Dividend yield (%)
Dividend history and the Board’s proposal for 2015
Proposal for 2015: €0.07 per share
Dividend policy: at least 60% of EPS
4 February 2016CapMan Group results 201512
cents
Contents • Main events during the review period and strategy implementation
• Business environment• Result for January–September 2015
Business environment
4 February 2016CapMan Group results 201514
1
2
3
4
5
Widespread uncertainty in the stock market
Record amount of dry powder available for private equity investments
Global growth has slowed, but growth prospects for different markets and sectors remain uneven
Good access to financing and ultra low interest rate levels
Growing demand for real estate and credit products
90
95
100
105
110
115
120
125
Nordic_EUR_PI Helsinki_PI Stockholm_PI
The stock market was turbulent in 2015
Index: 2 January 2016 = 100
4 February 2016CapMan Group results 201515
+15.1%
+6.4%
+9.8%
The Nordic buyout market has slowed down from last year partially due to an active IPO market
4 February 2016CapMan Group results 201516
Source: SL Capital Partners / Unquote Private Equity Barometer Q3 2015
0
20
40
60
80
100
2007 2008 2009 2010 2011 2012 2013 2014 2015
Q1 Q2 Q3 Q4
0
5
10
15
20
25
2007 2008 2009 2010 2011 2012 2013 2014 2015
Q1 Q2 Q3 Q4
Number of buyout deals in the Nordic region
Buyout deal value in the Nordic region
Bn €#
€8.1mn
64
The fundraising environment remains competitive
4 February 2016CapMan Group results 201517
Source: Preqin Fundraising Update 2015
0
200
400
600
800
1000
1200
1400
1600
2010 2011 2012 2013 2014 2015
# of funds closed Aggregate Capital Raised ($bn)
Annual private capital fundraising Private capital funds in the market
0
500
1000
1500
2000
2500
3000
01/08 01/09 01/10 01/11 01/12 01/13 01/14 01/15 01/16
# of funds closed Aggregate target capital ($bn)
Small to mid-market buyout funds continue to be perceived as presenting the best opportunities
Preqin Investor Outlook: Alternative Assets H2 2015
4 February 2016CapMan Group results 201518
7%
4%
6%
4%
10%
10%
14%
17%
10%
23%
51%
13%
4%
6%
11%
11%
11%
15%
17%
20%
26%
50%
0% 10% 20% 30% 40% 50% 60%
Other
Cleantech
Natural Resources
Growth
Large to Mega Buyout
Secondaries
Mezzanine
Distressed Private Equity
Fund of Funds
Venture Capital
Small to Mid-Market Buyout
Proportion of Respondents
Investor Attitudes towards Different Fund Types at Present
Areas of the MarketInvestors Are Seeking toInvest in over the Next 12Months
Areas of the MarketInvestors View asPresenting the BestOpportunities
0
0.5
1
1.5
2
2.5
3
3.5
4
4.5
5
2013 2014 2015
Q1 Q2 Q3 Q4
0
2
4
6
8
10
12
14
16
2013 2014 2015
Q1 Q2 Q3 Q4
Sweden’s and Denmark’s property markets remainedunchanged from 2014 levels
4 February 2016CapMan Group results 201519
Source: CBRE Market View Nordic Investment Q1, Q2 , Q3 Q4 2015
Real estate investment volumes in Sweden Real estate investment volumes in Denmark
€ bn € bn
€13.4 bn€4.3 bn
The Finnish real estate market continued growing from last year due to large ownership agreements
Source: KTI, January 2016
4 February 2016CapMan Group results 201520
0
2
4
6
2003 2009 2010 2011 2012 2013 2014 2015
Domestic buyer International buyer
€5.5bn€bn
Contents • Main events during the review period and strategy implementation
• Business environment• Result for 2015
Group turnover and operating profit
4 February 2016CapMan Group results 201522
7.0
15.0
23.1
39.5
7.3
15.7
24.731,8
0
10
20
30
40
50
1-3 1-6 1-9 1-122014 2015
1.72.8
2.2
6.4
0.9
3.74.2
9.3
0123456789
10
1-3 1-6 1-9 1-12
2014 2015
Turnover Operating profit€ million € million
Breakdown of results in 2015
4 February 2016CapMan Group results 201523
0.0
5.0
10.0
15.0
20.0
25.0
30.0
35.0
40.0
27.43.4
-26.3
0.3
Fees Fair value changes of investments
Carried interest income (net) Operating expenses (adjusted for a total of MEUR 1.7 of investment teams’ carry bonuses and non-recurring expenses)
10.0Adjusted operating profit €10.0 mn
€ million
Other operating income
5.2
+
Adjusted turnover€30.8 mn
Expenses of Management Company and Services business decreased from 2014
4 February 201624 CapMan Group results 2015
€ million 2015 2014
Turnover 31.8 39.5Fees 27.4 28.7Carried interest 4.4 10.8
Operating expenses -28.0 -30.2
Operating profit 4.1 10.4
Profit 3.3 8.4
Carried interest from the exit from Symbio, Silex and Access, as well as Inflight Service vendor note repayment
Operating expenses included €0.7 million in non-recurring items (€0.8 million)
Investment business profitability improved significantly from last year
4 February 201625 CapMan Group results 2015
€ million 2015 2014
Fair value gains of investments 5.2 -4,1Operating expenses 0.0 -0.0
Operating profit/loss 5.2 -4.1
Profit/loss 2.8 -4.4
The fair value change of fund investments was + €0.2 million
The fair value change of Norvestia was + €4.4 million
The fair value change of Maneqs was + €0.6 million
Fund investment development was positive but below targetM€
-2.8
0.2 3.0
47.2
26
Balance as of 31.12.2015
Positive impact
Negative impact
Fair value changes 2015
CapMan Group results 2015
+0.3%
6%
44%
19%
31%
Fair value changes of 48 portfolio companies in 2015*
31.12.2015
Fair value changes of investments in 2015
27
12%
31%
49%
8%
Fair value changes of 67 real estateinvestments in 2015*
New investments
Fair value increased
Fair value same as 31 December 2014
Fair value decreased*Exits are not included in the calculations
4 February 2016CapMan Group results 2015
Fair value change of Norvestia• Book value of CapMan’s
investment in Norvestia 12.5.2015 €44.3 mn• CapMan’s share of Norvestia’s
adjusted NAV 31.12.2015 €48.7 mn
• Fair value change + €4.4 mn
4 February 2016CapMan Group results 201528
• CapMan owns 28.7% of the shares in Norvestia Plc.
• The fair value change of the associated company Norvestia is booked in CapMan’sincome statement, based on the change in Norvestia’s adjusted net asset value (NAV) as communicated in Norvestia’sstock exchange releases.
Investments and commitments totalled €121.1 million
4 February 2016CapMan Group results 201529
Investments in fair value, in total €95.9 million
Remaining commitments, in total €25,2 million
€ millionFund investments
0
10
20
30
40
50
60
Buyout, 29 % Real Estate, 10%
Russia, 5 % Credit, 5 % Others, 10 % Funds of funds,2 %
Norvestia, 40%
Investments and loans as of 31 December 2015
47.2
48.7
7.7
21.6
Investments and cash in total €125.2 mn
Fund investments NorvestiaManeq Cash & bank
4 February 2016CapMan Group results 201530
15.0
15.0
10.0
30.0
Loans in total €70.0 mn*
Bank loan Bond (issued 2013)
Multi-issuer bond Bond (issued 2015)
* €15 mn hybrid bond excluded
Financial targets
4 February 201631 CapMan Group results 2015
Target Performance 2015
Profitability Return on equity of over 20 % Return on equity 9.3% p.a.
Capital structure Equity ratio of 45–60 % Equity ratio 43.7%
Dividend policyPayout ratio of at least 60 % of earnings per share
The Board of Directors’ proposal for 2015: 0.07 €
CapMan has updated its guidance policy. In line with the new policy, CapMan typically provides general descriptive statements related to the
general outlook of its business and its sources of income in lieu of estimates.
Outlook for 2016
The Management Company and Services business is profitable before carried interest income and any possible non-recurring expenses related to acquisitions or larger development projects. CapMan expects fees from services to continue growing and to constitute a larger share of overall fee income in 2016 compared to 2015.
A significant component contributing to CapMan’s result is carried interest income. CapMan receives carried interest income from funds as a result of a completed exit in the event that the fund already is in carry or will enter carry due to the exit. The current portfolio holds several investments, which are in exit process, although the exact timing of such exits may fluctuate.
The fair value development of CapMan’s investments have a substantial impact on CapMan’s overall result. The development of industries and local economies, inflation development, valuation multiples of peer companies, exchange rates and various other factors outside of CapMan’s control influence fair value development in addition to company and real estate specific development, and the fair value development of the overall portfolio depends on the interplay of these factors. For a future outlook on Norvestia, CapMan refers to the assessment published by Norvestia in its own reports. As a consequence, CapMan refrains from providing projections related to the fair value development of its investments.
IR calendar and IR team
4 February 201634 CapMan Group results 2015
IR Calendar 2016 IR team
Heikki Westerlund, CEO, Senior PartnerTel. +358 207 207 504heikki.westerlund@capman.com
Niko Haavisto, CFOTel. +358 207 207 583niko.haavisto@capman.com
Linda Tierala, Manager, Communications & IRTel. +358 405 717 895linda.tierala@capman.com
AGM16 March 2016
Q1 2016 result4 May 2016
Q2 2016 result 11 August 2016
Q3 2016 result3 November 2016
Contents • Main events during the review period and strategy implementation
• Business environment• Result for 2015
• Attachments
Group Income Statement, IFRS
4 February 201636 CapMan Group results 2015
€ million 2015 2014
Turnover 31.8 39.5Fees 27.4 28.7
Carried interest 4.4 10.8Other operating income 0.3 0.2Operating expenses -28.0 -30.2
Fair value changes of investments 5.2 -3.2Operating profit 9.3 6.3Financial income and expenses -2.9 -1.4
Share of the income of investments accounted for using the equity method 0.1 0.0Profit before taxes 6.5 4.9Profit for the period 6.1 4.0
Group Balance Sheet – Assets, IFRS
4 February 201637 CapMan Group results 2015
€ thousands 31.12.2015 31.12.2014
Tangible assets 189 236Goodwill 6,204 6,204Other intangible assets 487 756Investments accounted for using the equity method 95 42
Investments at fair value through profit and lossInvestments in funds 47,249 55,258Other financial assets 48,784 121Investments in joint ventures 7,651 9,014
Receivables 6,062 3,250Deferred income tax assets 4,400 4,097Non-current assets 121,121 78,978
Trade and other receivables 6,637 5,959Other financial assets at fair value through profit and loss 306 319Cash and bank 21,576 28,650Current assets 28,519 34,928Total assets 149,640 113,906
Group Balance Sheet – Total equity and liabilities, IFRS
4 February 201638 CapMan Group results 2015
€ thousands 2015 2014
Share capital 772 772Share premium account 38,968 38,968Other reserves 27,397 27,175Translation difference 96 137Retained earnings -2,048 -1,485Total equity 65,185 65,567
Deferred income tax liabilities 1,958 1,976Interest-bearing loans and borrowings 69,389 27,247Non-current liabilities 71,347 29,223
Trade and other payables 13,108 13,734Interest-bearing loans and borrowings 0 5,000Current income tax liabilities 0 382Current liabilities 84,455 48,339
Total equity and liabilities 149,640 113,906
Key figures
4 February 201639 CapMan Group results 2015
31.12.2015 31.12.2014
Earnings per share, cents 5.9 3.4
Diluted, cents 5.8 3.4
Shareholders' equity / share, cents * 75.5 76.1
Share issue adjusted number of shares 86,290,467 86,163,919
Number of shares at the end of period 86,316,766 86,316,766
Number of shares outstanding 86,290,467 86,290,467
Company's possession of its own shares, end of period 26,299 26,299
Return on equity, % 9.3 6.1
Return on investment,% 8.0 7.0
Equity ratio,% 43.7 57.8
Net gearing,% 72.9 5.0
*) In line with IFRS standards, the MEUR 15 ( 31 December 2014: MEUR 15) hybrid bond has been included in equity, also when calculating equity per share. The interest on the hybrid bond (net of tax) for the review period has been deducted when calculating earnings per share.
CapMan Plc’s largest shareholders 31 December 2015
4 February 201640 CapMan Group results 2015
Shares of all shares, % Shares of all voting rights, %
Gimv NV*** 9.9 % 6.2 %
Ilmarinen Mutual Pension Insurance Company 8.3 % 5.2 %
Oy Inventiainvest Ab + (Ari Tolppanen**) 8.1 % 19.4 %
Winsome Oy + Tuomo Raasio* 4.4 % 8.4 %
Varma Mutual Pension Insurance Company 4.3 % 2.7 %
Joensuun Kauppa ja Kone 4.1 % 2.6 %
Vesasco Oy 3.8 % 2.4 %
Åbo Akademi University foundation 3.5 % 2.2 %
Heiwes Oy + Heikki Westerlund* 3.4 % 10.3 %
Geldegal Oy** + Mom Invest Oy** + Olli Liitola* 2.9 % 9.3 %
10 largest shareholders, in total 52.7 % 68.7 %
*Employed by CapMan. ** CapMan employee who exercises controlling power in the aforementioned company but who does not own CapMan shares directly. *** Flagging notice 30 December 2013.
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