capman – an international investment and asset management … · 2018. 12. 7. · financial...

CapMan – an international investment and asset management company

Annual General Meeting 2016 – CEO review (original presentation in Finnish)

Heikki Westerlund, CEOHelsinki 16 March 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.

16 March 2016AGM 2016 – CEO review2

Contents • CapMan’s transformation• Highlights for 2015• Results for 2015• Outlook for 2016

CapMan is a leading Nordic investment and asset management

company with €2.8 bn

in assets under management

CapMan’s growt drivers

16 March 20165 AGM 2016 – CEO review

Continued growth of the private equity asset class

Demand for returns

• Ultra low interest rates• Volatile stock market

New investor groups

• Smaller institutions and private investors are interested in private equity

Increased regulation

• Higher barriers to entry

• Demand for external services

• Clear benefits of scale

Diversification of private equity

products

• Real estate• Private debt

% §

Our objective is to offer the best private equity experience.”

”

What do we do?

We provide attractive returns and innovative solutions for our investors and value adding

services for professional investment partnerships, growth-oriented companies and

tenants.

”

”

CapMan’s business model today


The service concept is based on long-termclient knowledge

Rahastojen hallinnointiSERVICES

Value adding investment strategiesASSET

MANAGEMENT

Private equity investmentsINVESTMENTS

Dedicated entrepreneurial teams –CapMan’s ownership 30–100%

Interests aligned with fund investors

Specialised private equity industry expert

Asset management – five investment strategies

9

Majority investments Minority investments Credit investments

AGM 2016 – CEO review 16 March 2016

Three growing service businesses

10

For companies For fund managers (GPs) For investors (LPs)

CaPSCapMan Purchasing Scheme

Fund management

services

AGM 2016 – CEO review 16 March 2016

Management Company and Services Business Investment Business

FundManagement

1. Management fees and other fees 2. Carried interest 3. Income from

investments

CapMan’s earnings model

SERVICESASSET MANAGEMENT

INVESTMENTS


21%

10%

4%3%

47%

7%8% Buyout

Real Estate

RussiaCredit

Norvestia

Maneq

Others

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 €4.4mn and cash flow €20.7mn 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

International CapMan Real Estate


The focus and investors of CapMan Nordic Real Estate


41%

34%

25%<1%

Investors of the CapMan Nordic Real Estatefund per geographic region

Finland Other Europe USA ROW

Nearly €700mn investment capacity

Fully integrated value-add investment strategy

Pan-Nordic investment scope

Currently investing with 15 deals to date

One exit less than three years from investment with excellent return

equitycommitments

of€273mn

The fund increases the carried interest potential available for shareholders through CapMan

CapMan Fund Advisory became Scala Fund Advisory


Why Scala? Scala’s service offering

1. Service business growth is an important strategic objective

2. CapMan utilises the know-how of internal service teams by offering services also to external clients

3. Scala is an independent partnership of CapMan Group

4. CapMan receives advisory and success fees through Scala, earnings logic remains unchanged

1. Fundraising and investor relations services

2. Private equity portfolio analysis for institutional investors

3. Secondary fund market services

Access to growth investments through Norvestia

CapMan supports Norvestia’s strategy to grow private equity investments

Provides tools to participate in the private equity market

more flexibly

Private equity has historically outperformed

equity and debt asset classes

A larger pool of potential investments

Flexible holding periods

Benefits from the diversification of sources

of incomeLess dependent on

fundraising16 March 2016AGM 2016 – CEO review17

+€4.4 mn for CapMan in 2015

CapMan’s stake 28.7%

-1

3

6

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%

-2-1012345678

2013 2014 2015

EPS, dividend and dividend yield

Tulos (senttiä) Osinko (senttiä) Osinkotuotto (%)

Earnings and dividends have demonstrated a positive trendfor the past three years

Proposal for 2015: €0.07 per share

Dividend policy: at least 60% of EPS


cents

EPS (cents) Dividend (cents) Dividend yield (%)

CapMan’s total return has exceeded the total return of listedprivate equity 2015–2016


CapMan vs. listed private equity indices 1 Jan 2015 – 2 Mar 2016 (total return)

80

90

100

110

120

130

140

01/01/2015 01/04/2015 01/07/2015 01/10/2015 01/01/2016

S&P Listed Private Equity Index (TR) LPX Europe (TR) CapMan (TR)

+24.1%

+9.7%

-6.3%

Focus areas for 2016


Fee profitability Carried interest income and fair value development

1

2

3

4

5

Fundraising for new Real Estate and Credit funds

Growth of service business

Savings of at least €1 mn in operating expenses

Continued value development of CapMan funds

Acceleration of growth investments

Our objective is to improve our earnings per share”

”

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

Investments and loans as of 31 December 2015

Fund investments,

47.2

Norvestia, 48.7

Maneq, 7.7

Cash, 21.6

Investments and cash in total €125.2mn


Senior bank loan, 15.0

Bond (2013), 15.0

Multi-issuer bond, 10.0

Bond (2015), 30.0

Loans in total€70.0mn*

* €15 mn hybrid bond excluded

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

28

€ thousands 31.12.2015 31.12.2014Tangible 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 78,978Trade 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

16 March 2016AGM 2016 – CEO review

Group Balance Sheet – Total equity and liabilities, IFRS

29

€ thousands 31.12.2015 31.12.2014Share 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 13,108 19,116

Total equity and liabilities 149,640 113,906


Key figures

30

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

31

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.


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.

Our mission is to build successfulbusinesses enriching society.”

”

capman – an international investment and asset management … · 2018. 12. 7. · financial...

Documents