CapMan Plc H1 2017 results: ”Positive development during ...€¦ · and Russia 200 investments, of which 100 in Finnish companies 7 core investment areas 3 growing service 100

CapMan Plc H1 2017 results:

”Positive development during the first half of 2017”

Joakim Frimodig

Helsinki, 10 August 2017

Statements regarding future development and disclaimer

The following concerns this document, the related oral presentation by either

CapMan Plc (hereinafter the "Company") or a representative of the Company

as well as the subsequent Q&A sessions.

This document published by the Company constitutes the written material of

the presentation for potential investors regarding the possible offering of the

Company's securities ("Securities"). The material set forth herein is not, and

should not be construed as an offer to sell or a solicitation of an offer to

subscribe or purchase any Securities, or a part of such offer. Nothing in this

material shall form the basis of any contract and nothing in this should be

relied upon in connection with any contract or commitment, and nothing in

this constitutes a recommendation regarding the Securities. The decision to

purchase Securities should be made only on the basis of the offer document

(or similar document) that has been prepared in connection with the offering

of the Securities. The offer document (or similar document) contains more

detailed information concerning the Company and the Securities than set

forth in this material, and potential investors should re-view the offer

document (or similar document) to conduct an independent research and

evaluation of the Company's business, financial standing and nature of the

Securities before making an investment decision regarding the Securities.

Certain statements presented that are not historical facts, including, among

others, estimates of the overall economic development and the market

situation, expectations concerning the growth and profitability of the

combined group, the realisation of synergy benefits and cost savings, as well

as statements that contain the expressions "expects”, “estimates”,

“forecasts”, “aims”, “believes”, “pursues”, “intends”, “could”, “anticipates”

“plans”, “seeks”, “will”, “may”, “likely”, and “would” and other corresponding

expressions or their negative variations identify forward-looking

10 August 2017CapMan Plc 1-6/2017 results2

statements. Forward-looking statements are based on the Company's current

expectations, estimates, decisions and plans as well as on the currently

available facts regarding, among others, the Company's financial standing,

results of operations, plans, objectives, future results and operations. Such

statements involve inherent risks and uncertainties that, if materialized, may

cause the actual results of operations of the combined group to be materially

different than currently expected.

These factors include the overall economic conditions, including currency

and interest rate fluctuations impacting the operating environment and

profitability of clients and thereby the orders and margins on them received

by the combined group; competition; the combined group's business

conditions and continuous development and improvement thereof; and the

success of possible future acquisitions. Forwardlooking statements are

further based on numerous assumptions concerning the Company's current

and future strategy and the Company's future business environment.

No liability is accepted and no explicit or implicit guarantee or warranty is

given with regard to this material, and no undue reliance should be placed on

the truthfulness, accuracy or completeness of the material or the opinions

expressed herein. Portions of this material are in draft form. The information

contained in this material has not been independently verified nor will it be

updated. The information contained in this material, including forward-looking

statements, applies only on the date of this material and is not intended to be

a guarantee of the future results. Any unsourced market data used in the

material is an estimate made by the Company and has not been

independently verified. The Company does not undertake to update any

forward-looking statements except in circumstances specified by law and

explicitly waives any liability for the material.

.

Agenda • Strategic direction and highlights for the

beginning of the year 2017

• Results for 1-6/2017

• Financial targets and focus areas for 2017

We are building a leading private equity

investment and asset management company

4

CapMan today

10 August 20175 CapMan Plc 1-6/2017 results

28years of experience

in Finland, Nordics

and Russia

200investments, of

which 100 in Finnish

companies

7core investment

areas

3growing service

areas

100current portfolio

companies and real

estate assets

120LPs as customers

€2.3 bncapital under

management

CapMan’s diverse business portfolio


Buyout Growth

Equity

Credit

Real Estate

Russia Infra

%Tactical

Opportunities

Services

Customer

Specialised asset managementClosed-end funds Open-end funds Mandates Club deals Services

The best private equity experienceObjective

”Modus

Operandi”

Current

offering

Highlights for the beginning of 2017

10.8.20177 CapMan Plc 1-6/2017 results

Profit after taxes

increased from the

comparable period

last year

+188 % +16 %

Return on

Investment p.a.

Positive

development of new

business areas

Infra

+22 %

Return on Equity

p.a.

Growth

EquityAppoint-

mentsCaPS

Scala

Services:

new contracts and

mandates in 2017

Pia Kåll appointed Buyout’s

Managing Partner and Member

of CapMan’s Management

Group

Positive development in business areas during H1

• Investment business had a significant impact on

results

– Exit from Idean in the first quarter

– CapMan’s own fund investments

– Market investments

• Development work in Buyout portfolio companies is

now reflected as positive value increases

– Buyout market activity have shown signs of

recovering especially in terms of value of the

deals*

– CapMan is actively looking for new exit

opportunites

– Changes in the Team: Pia Kåll appointed

Managing Partner, Johan Pålsson appointed

Co-Managing Partner


*Source: SL Capital Barometer Q2 2017

Positive development in business areas during H1

• Various Real Estate transactions

– Positive activity in the real estate market

– Several Real Estate exits

– In June, CapMan made two new real estate

investments in Norway and Denmark

– First property investment in Norway

• Services business had an excellent performance

in the first half of 2017

– Contractual procurement volumes of CapMan

Procurement Services CaPS grew by 25 %

– Scala Fund Advisory completed a fund raising US

Hamilton Lane mandate

International demand for Scala’s services has

been strong, several mandates will be

executed during 2017


• Nest Capital

– 3 new investments in

Nest Capital 2015

Fund Ky

• CapMan Russia

– 2 new investments in

CapMan Russia II

fund

Focus on renewal and growth

10

CapMan growing and getting stronger


Own investment

capacity

Employees

Market cap

Investment areas

Return on Equity

(ROE), %

Q2 2016 Q2 2017

€130 m €210 m

101 110

€90 m €235 m

4 7

16 % 22 %%

€

Net gearing 74 % 25 %

Shareholders 7 000 14 500

Growth initiatives progress as planned


CapMan Nordic Real Estate II fund

Infrastructure investments and fundraising

Growth Equity

Infra

Real EstateNew real estate products

Services

Demonstrated strong growth in services

Other

Growth iniatives are starting to materialize

• Nordic Real Estate II fund raising to be completed during

Q3 2017

– CapMan is confident to obtain at least the targeted

MEUR 350 fund size

• Planning to launch new Real Estate investment

products

• Planning to establish a Growth Equity fund

– CapMan has strenghtened the Growth Equity team

with a new recruitment

• The activity of CapMan Infra has gotten off to a good

start

– A number of deal opportunities being explored






Comparable turnover and operating profit in 2017 and 2016


Items affecting comparability are detailed in the appendix of this presentation as well as in the Tables section of the Half year financial report 2017.

Comparable turnover Comparable operating profitMEUR MEUR

7,5

15,4

22,0

29,0

7,5

16,6

0,0

10,0

20,0

30,0

40,0

1-3 1-6 1-9 1-12

2016 2017

3,8

8,1

10,9

14,5

10,9

18,3

0

2

4

6

8

10

12

14

16

18

20

1-3 1-6 1-9 1-12

2016 2017

Management Company and Services Business


MEUR 1-6 2017 1-6 2016

Turnover 13,2 15,4

Fees 13,2 13,9

Carried interest (reviewed) 0 1,5

Comparable adjusted costs from

operating activies -13,1 -13,3

Comparable adjusted operating

result 0,1 2,1

Comparable adjusted profit/ loss 0,1 2,1

CapMan did not receive any

carried interest for the review

period.

Costs from operating

activities decreased during

the review period due to,

inter alia, lower office costs

related to moving in Helsinki

and Moscow.

Investment Business


MEUR 1-6 2017 1-6 2016

Turnover (interest income from

financial assets and dividends) 3,4 0,0

Fair value changes in fund

investments 15,9 6,0

Fund investments 4,4 4,4

Growth equity investments 10,3 -

Trading portfolio 1,2

Other financial assets - 1,6


expenses -1,2 0,0


profit 18,1 6,0

Comparable adjusted profit 15,2 4,2

Items affecting comparability are detailed in the

appendix of this presentation as well as in the Tables

section of the Half year financial report 2017.

Fair value changes in Investment

business had a significant impact

on the results during the review

period.

Fund investments include fair

value changes of joint ventures.

Investments and Loans, 30.6.2017

56,1

28,8

5,4

83,2

32,9

Investments – Total 206 M€

Fund investmentsGrowth investmentsJoint venturesMarket investmentsCash & bank


10,0

15,0

10,0

30,0

Loans – Total 65 M€*

Bank loan - installments 2017-19Bond I - due 12/2017Multi-issuer bond - due 2019Bond II - due 2019

*) Based on nominal capital of loans

Investments in

private markets

44% of total

Diversified and actively managed private equity portfolio

19

CapMan’s balance sheet

allocation 30 June 2017CapMan’s target allocation

Private equity

44 % Private equity

80 %

10 August 2017

Market and liquid investments Private equity investmens (incl. fund and direct investments)

CapMan Plc 1-6/2017 results

Realisation of synergies on a good path

10 August 201720

Overlapping operationsOne administration and Board of Directors

Fixed costs Employees of Norvestia have moved to CapMan’s premises

Accounting, IR, public company related

costs Reporting responsibility for Norvestia has ended

Financing synergiesMEUR 15 hybrid bond has been redeemed in February

Possibility to pay back a MEUR 15 bond maturing in 2017

Expected annual cost

and financing synergies

in total

MEUR 3

in full value starting

from 2018

Synergies are expected to be reached around 2017 and in total starting from 2018.

CapMan Plc 1-6/2017 results





Financial objectives


Growth of the

Management

Company and

Services business

>10 %

Average annual growth

objective

Net gearing

Average ratio of interest

bearing net debt to equity

≤40 %

Dividend

distribution

objective from EPS

Dividend per share has

grown since 2012

≥75 %

Return on equity

>20 %

In addition to successful

investment, profitable

service business and carried

interest income support

ROE

Financial objectives are excluding any items affecting comparability.

H1/17:-5 %*Investments in to future

growth

H1/17: 22 % H1/17: 25 % 2017: 80.4 %(EUR 0.09)

* Without carried interest income.

Focus areas for 2017


Growth strategy

implementation

Utilisation of a growing

market

New investment

strategies and fast-

growing service

business

New customer bases

Profitability

Successful

investments

Growing and profitable

service business

Norvestia: Cost and

financing synergies

We build a foundation

for even stronger

future profitability

Actively

managed

balance sheet

Investment

capacity approx.

200 M€

CapMan maintains its outlook estimate for 2017

CapMan renewed its financial objectives at the end of 2016. The growth objective for Management

Company and Services business is more than 10 per cent p.a. on average. The objective for return on

equity is more than 20 per cent p.a. on average. The objective for net gearing, that is ratio of net interest

bearing debt to equity, is a maximum of 40 per cent on average. CapMan’s objective is to pay at least 75

per cent of earnings per share as dividend.

CapMan expects to achieve these financial objectives gradually and key figures are expected to show

seasonality. CapMan expects fees from services to have a larger impact on results from the Management

Company and Services business in 2017. The Management Company and Services business is profitable

before carried interest income and any possible items affecting comparability. The integration of Norvestia

and other growth initiatives will generate expenses in 2017.

The return on 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 of CapMan’s overall investments in addition to company and real estate specific development.

CapMan’s objective is to improve results longer term, taking into account the seasonality affecting services

and the Investment business. For these and other above mentioned reasons, CapMan does not provide

numeric estimates for 2017.

IR calendar and IR team


IR calendar 2017 IR team

Joakim Frimodig, Interim CEO

p. +358 50 529 0665

[email protected]

Niko Haavisto, CFO

p. +358 207 207 583

[email protected]

Katariina Kataja, Manager, Communications & IR

p. +358 40 527 1427

[email protected]

• Arvopaperin Rahapäivä

21 September 2017 in Helsinki

Messukeskus

• 1-9 2017 Interim Report

2 November 2017

mailto:[email protected]







• Appendix

M&A activity creates a good environment for successful

investment activity


Source: SL Capital Barometer Q2 2017

0

20

40

60

80

100

2009 2010 2011 2012 2013 2014 2015 2016 2017

Q1 Q2 Q3 Q4

0

2

4

6

8

10

12

14

16

18

2009 2010 2011 2012 2013 2014 2015 2016 2017

Q1 Q2 Q3 Q4

Number of private equity deals in the

Nordics

Value of private equity deals in the

Nordicsbn. €#

22

€7.7bn

Nordic real estate transaction volume on a record high level

Source: Pangea Property Partners, CapMan Real Estate


28%

72%

0

5

10

15

20

25

30

35

40

45

2009 2010 2011 2012 2013 2014 2015 2016 1-6 2017

bn. €

Domestic International

28%

72%

+14 %

€22,3 bn.

Group Income Statement, IFRS

MEUR 1-6/17 1-6/16

Turnover 16,6 15,4

Fees 13,2 13,9

Carried interest 0 1,5

Dividend and interest income from financial assets held for trading 3,4 0

Operatiivisen toiminnan kulut -14,7 -14,3

Fair value changes of investments 15,9 6,0

Operating profit 17,8 7,2

Financial income and expenses -1,7 -1,7

Share of the income of investments accounted for using the equity

method 0,0 0,0

Profit before taxes 16,1 5,5

Profit for the period 14,8 5,1


Items affecting comparability and alternative performance

measures


€ ('000) 1-6/17 1-6/16

Operating profit 17 798 7 181

Items affecting comparability

transaction costs 51 215

integration related costs 437

Write-down of a value-added tax receivable 975

Insurance compensations -294

Items affecting comparability, total 488 896

Adjusted operating profit 18 286 8 077

Profit for the period 14 844 5 146

Items affecting comparability

Items related to the acquisition of Norvestia 439 172

Write-down of a value-added tax receivable 1 255

Insurance compensations -236

Items affecting comparability, total 439 1 191

Adjusted profit for the period 15 283 6 337

Earnings per share, cents 9,9 5,4

Items affecting comparability, cents 0,3 1,4

Adjusted earnings per share, cents 10,2 6,8

Earnings per share, diluted, cents 9,8 5,4

Items affecting comparability, cents 0,3 1,4

Adjusted earnings per share, diluted, cents 10,1 6,8

Items affecting comparability – Investment business

1 000 EUR 1-6/2017 1-6/2016

Turnover 3 357 0

Profit/ loss 17 650 5 772

Items affecting comparability:

Transaction costs related to the acquisition of Norvestia 51 215

Norvestia integration related costs 437

Items affecting comparability in total 488 215

Adjusted operating profit/ loss 18 138 5 987

Result for the review period 14 726 4 019

Items affecting comparability:

Transaction costs related to the acquisition of Norvestia 89 172

Norvestia integration related costs 350

Items affecting comparability in total 439 172

Adjusted operating profit for the review period 15 165 4 191


Balance sheet – Assets, IFRS

1 000 EUR 30 Jun 17 30 Jun 16 31 Dec 16

Non-current assets

Tangible assets 153 173 169

Goodwill 6 204 6 204 6 204

Other intangible assets 292 382 277

Investments accounted for using the equity method 87 95 87

Investments at fair value through profit and loss

Investments in funds 56 059 46 599 51 394

Growth equity investments 28 785 0 37 856

Other financial assets 179 46 894 179

Investments in joint ventures 5 387 7 418 5 376

Receivables 4 010 7 224 5 202

Deferred income tax assets 2 712 4 400 4 887

103 868 119 389 111 631

Current assets

Trade and other receivables 6 561 6 085 9 849

Financial assets at fair value 83 454 306 86 213

through profit and loss 32 883 20 576 45 001

122 898 26 967 141 063

Total assets 226 765 146 356 252 694


Balance sheet – Equity and Liabilities, IFRS 1 000 EUR 30 Jun 17 30 Jun 16 31 Dec 16

Capital attributable the Company's equity holders:

Share capital 772 772 772

Share premium account 38 968 38 968 38 968

Other reserves 82 112 27 397 97 111

Translation difference -81 134 -101

Retained earnings 3 893 -2 974 6 229

Total equity 125 664 64 297 142 979

Non-current liabilities:

Deferred income tax liabilities 8 131 1 955 9 868

Interest-bearing loans and borrowings 46 640 66 389 48 065

Other non-current liabilities 124 0 124

54 896 68 344 58 057

Current liabilities:

Trade and other payables 25 266 11 645 33 341

Interest-bearing loans and borrowings 18 000 2 000 18 000

Current income tax liabilities 2 940 70 317

46 206 13 715 51 658

Total liabilities 101 102 82 059 109 715

Total equity and liabilities 226 765 146 356 252 694


Key figures

30 Jun 17 30 Jun 16 31 Dec 16

Earnings per share, cents * 9,9 5,4 16,2

Diluted, cents * 9,8 5,4 16,1

Shareholders' equity / share, cents ** 86,7 74,0 98,6

Share issue adjusted number of shares 144 990 351 86 290 659 88 382 868

Number of shares at the end of period 144 990 351 86 325 511 143 313 255

Number of shares outstanding 144 964 052 86 299 212 143 286 956

Company's possession of its own shares, end of period 26 299 26 299 26 299

Return on equity, % 22,1 15,9 14,7

Return on investment,% 17,8 10,8 10,9

Equity ratio,% 55,4 44,0 56,6

Net gearing,% 25,0 73,9 14,5

* Hybrid bond of MEUR 15 (MEUR 15 as at 31 December 2016) is recognised as equity until its repayment date 17 March 2017. Interest on the hybrid bond (net of tax)

for the financial year has been deducted when calculating earnings per share. The share issue adjusted number of shares includes the shares issued as

consideration transferred in the acquisition of Norvestia as of December 19, 2016, when calculating earnings per share under IAS 33.

** Included a hybrid bond of MEUR 15 (MEUR 15 as of 31 December 2016) until 17 March 2017. Calculation of shareholders' equity per share includes all shares

issued as consideration in the acquisition of Norvestia.


Documents

CapMan Plc H1 2017 results: ”Positive development during ...€¦ · and Russia 200 investments, of which 100 in Finnish companies 7 core investment areas 3 growing service 100