CapMan Group’s result for 2015capman.studio.crasman.fi/pub/files/Presentations/Result+presentati… · 10 CapMan Group results 2015 4 February 2016. Events after the close of the

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


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


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


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


Events after the close of the financial year

CapMan Fund Advisory became Scala Fund Advisory


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


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


cents

Contents • Main events during the review period and strategy implementation

• Business environment• Result for January–September 2015

Business environment


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


+15.1%

+6.4%

+9.8%

The Nordic buyout market has slowed down from last year partially due to an active IPO market


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


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


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


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


0

2

4

6

2003 2009 2010 2011 2012 2013 2014 2015

Domestic buyer International buyer

€5.5bn€bn


• Business environment• Result for 2015

Group turnover and operating profit


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


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


€ 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


€ 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


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


• 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


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


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


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


IR Calendar 2016 IR team

Heikki Westerlund, CEO, Senior PartnerTel. +358 207 207 [email protected]

Niko Haavisto, CFOTel. +358 207 207 [email protected]

Linda Tierala, Manager, Communications & IRTel. +358 405 717 [email protected]

AGM16 March 2016

Q1 2016 result4 May 2016

Q2 2016 result 11 August 2016

Q3 2016 result3 November 2016

mailto:[email protected]




• Business environment• Result for 2015

• Attachments

Group Income Statement, IFRS


€ 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


€ 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


€ 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


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


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.

Documents

CapMan Group’s result for 2015capman.studio.crasman.fi/pub/files/Presentations/Result+presentati… · 10 CapMan Group results 2015 4 February 2016. Events after the close of the