capman plc’s annual general meeting...

CapMan Plc’s Annual General Meeting 2008

Heikki Westerlund, CEO, Senior Partner27 March 2008

CapMan Plc’s Annual General Meeting 2008 27 March 20082

Contents

CapMan today• Market update• Year 2007• Year 2008• Future outlook

CapMan Plc’s Annual General Meeting 2008 • 27 March 20083

CapMan – the Nordic alternative asset manager

* CapMan owns 35% of affiliated company Access Capital Partners.

Full Nordic presence and market coverage• Established in 1989• Offices in Helsinki, Stockholm, Copenhagen and Oslo• Listed on Helsinki Stock Exchange since 2001Unique listed alternative asset manager • Manages specialised third party private equity,

venture capital and real estate funds• Dedicated teams in each investment areaFunds under management approx. €3.9 billion • Assets managed/advised by Access Capital

Partners approx. €2.5 billion*


0

500

1,000

1,500

2,000

2,500

3,000

3,500

4,000

90-93 94 95 96 97 98 99 00 01 02 03 04 05 06 07 01/08

Strong growth in capital under management

Real Estate fundsLife Science fundsTechnology fundsMezzanine fundsBuyout funds

MBO LISTINGDomestic partnership Nordic presence and fundsCapital under

mgmt, M€


Growth strategy

• CapMan’s strategy is to exploit growth opportunities within the alternative asset class.

• In addition to CapMan’s existing business lines (Private Equity and Real Estate) the alternative asset class includes, among others, infrastructure investment, forestry investment and active public market funds.

• CapMan is at present exploring opportunities to expand geographically into Russia and to establish a fund investing in public markets based on CapMan’s value creation expertise. We aim to concretise the projects during 2008.


Contents

• CapMan today

Market update• Year 2007• Year 2008• Future outlook


European private equity fundraising activity decreased from record year 2006 – investment activity stable

48

40

28 27 28

72

112

74

35

2428 29

37

47

71 68

913 11 14

20

3033

23

0

20

40

60

80

100

120

2000 2001 2002 2003 2004 2005 2006 2007E

Fundraising Investments Divestments

€bn

Source: EVCA

European private equity activity in 2007 – preliminary data


193

339 382456

549 591

51

65117

140

132171

5

5

4

9

2313

0

100

200

300

400

500

600

700

800

2002 2003 2004 2005 2006 2007E

<M€160 M€160 - €1.65bn €1.65bn+

8 13 16 21 24 2728

3553

72 61

92

1413

12

25

8451

0

25

50

75

100

125

150

175

200

2002 2003 2004 2005 2006 2007E

<M€160 M€160 - €1.65bn €1.65 bn+

Remarkable growth in European middle market buyout activity in 2007

Source: unquote’’ Private Equity Barometer, compiled by Incisive Media

Deal value by size range Number of deals by size range

• Mega deals disappeared from European buyout market in the fourth quarter –decrease also in middle market deal activity

• Steady increase in deals below €160 million also in the year-end

92

132

61

17151% increase 30% increase

€bn #


Finnish real estate market activity stabilized

64%53%

0

1

2

3

4

5

6

2001 2002 2003 2004 2005 2006 2007

Domestic International

Source: KTI

• Total deal value increased to €5.7bn in 2007• 64% of the transactions completed in 2007 done by international investors

€bn

Deal value development in Finnish commercial property market


Contents

• CapMan today• Market update

Year 2007• Year 2008• Future outlook


Nordic deal flow in 2007

%A1%A2%A3By team

418

100

229

89

418

176

55

114

73

A3

100%

24%

55%

21%

100%

42%

13%

27%

17%

%

43

6

13

24

43

14

7

16

6

A2

100%

14%

30%

56%

100%

33%

16%

37%

14%

%

100%20Total

35%7Technology

20%4Norway

50%10Buyout

100%20Total

15%3Life Science

20%4Sweden

55%11Finland

5%1Denmark

%A1By country 17%

27%

13%

42%

DenmarkFinlandNorwaySweden

21%

55%

24%

BuyoutTechnologyLife Science

In addition, CapMan Real Estate has analysed around 140 investment opportunities.


New portfolio company investments in 2007

Komas Oy, Buyout, Finland

Skandia Autologistics,Buyout, Finland

Walki GroupBuyout, Finland

Mirasys OyTechnology, Finland

Novintel OyTechnology, Finland

IT 2 Treasury SolutionsTechnology, Denmark

Movial OyTechnology, Finland

KMW Energi AB,Technology, Sweden

Nacka Närsjukhus ProximaAB Buyout and Life Science, Sweden

Curato AS Buyout and Life Science, Norway

Mawell Oy,Technology and Life Science, Finland

Varesvuo Partners Oy Buyout, Finland

Barnebygg Group Buyout, Norway


New real estate investments in 2007

Kalevankatu 20, Helsinki

Kasarmikatu 4, Hämeenlinna

Parolantie 104, Hämeenlinna

Viinikankatu 49,Tampere

Malminkaari 9, Helsinki

Lönnrotinkatu 20, Helsinki

Mastola LogisticsCentre, Vantaa

Skanssi ShoppingCentre, Turku

Hankasuontie 3, Helsinki

Ylistönmäentie 33, Jyväskylä

Elimäenkatu 9A and 9B, Helsinki

Ludviginkatu 3–5, Helsinki

TokmanniLogistics Centre,Mäntsälä

EntresseShopping Centre, Espoo

Kristiinankatu 3–5, Turku

Yliopistonkatu 22, Turku

Investment announced


Exits in 2007

Distocraft Oy, Technology, Finland

Announced/partial exitsMoventas Oy Buyout, Finland

Sale of CapMan Real Estate I portfolio(22 real estates)

SysOpenDigia Plc(ex-Sentera Plcj), Technology, Finland

LindPlast A/S Buyout, Denmark

Synerco AB Buyout, Sweden

Secgo Sofware Oy Technology, Finland

MediaNorth Oy Technology, Finland

Hantro, Technology, Finland

Avitec Oy Technology, Finland

Copterline Oy Buyout, Finland

Affecto Oyj, Technology, Finland

Savcor Oy Buyout, Finland

Solid Information Technology Oy, Technology, Finland


Fundraising in 2007

• 18% growth in capital under management• Final closing of three funds

– CapMan Technology 2007 at a level of €142.3 million – CapMan Life Science IV at a level of €54 million– CapMan RE II at a level of €600 million of which 25% is equity and 75%

senior loan

Continued support from Nordic investors in fundraisingAmbition to further internationalise the investor base


Financial objectives

Proposal of the Board of Directors for 2007 dividend €0.16 which equals to 67%of the net profit

Pay-out ratio at least 50% of the net profitDividend policy

Return on equity 39%

Buyout 2002 net IRR 21%Technology 2002 net IRR 0.3%Real estate 2005 net IRR 28%

Return on equity over 25%

Equity fund performance above 15% net IRR to fund investors per annum

Profitability

36% of CapMan Plc’s fund investments financed with debt financing* Gearing -27.5%

Equity ratio 58%

Finance 50% of CapMan Plc’s future fund investments with debt financing

Equity ratio at least 50%

Capital structure

18% growth from 31 December 2006(27% growth already achieved in 2008)Average capital growth of funds under

management at least 15% per annumGrowth

Status as at 31 December 2007Objective

*Debt financing as a percentage of CapMan’s fund investments at fair value..


Components of income and operating costs

24.62.1

23.6 0.8 0.55.7 0.2

1.1 1.9

0.0

10.0

20.0

30.0

40.0

50.0

60.0

70.0

Management fees Income from real estate consultingCarried interest Other operating incomeIncome from fund investments, realised Fair value gains and losses of investmentsOther income Operating expenses

Share of associated companies result

27.7

Turnover €51.6 million

Operating profit €29.8 million

Pre-tax profit in €32.7 million

Total effect of own investments €6.2 million

Minority interest €7.6 million

Share of equity holders’ of the Company €16.0 million

(31 Dec 2007, M€)

Financial income and expenses


Income statement, IFRS

29,75915,626Operating profit

-11,783-11,958Other operating expenses

5,6963,549Fair value gains / losses of investments

977

11,455

12,432

-4,893

17,325

1,279

420

-726

-13,958687

38,032

1-12/2006

1,070Financial income and expenses

-581Depreciation and amortisation

24,235Profit for the financial year

5,615

18,620

-8,509

32,744

1,915

-15,381236

51,572

1-12/2007

Equity holders of the company

Profit before taxes

Income taxes

€1,000

Minority interest

Attributable to:

Share of associated companies' result

Personnel expenses

Other operating incomeTurnover


Balance sheet – Assets, IFRS

44,23033,122Investments in funds

42,43522,43719,74114,137Cash and bank

3,4072,860Investments in associated companies

Investments at fair value through profit and loss

79,560

2,779

5,521

57,123231

13,835848

7104,845

672

31.12.2006

16,191Receivables

1,001Other intangible assets

Current assets

117,353

14,8577,837

74,9183,547

878

4,845819

31.12.2007

Other financial assets at fair value through profit and loss

€1,000

TOTAL ASSETS

Trade and other receivables

Deferred income tax assets

Other financial assets

Goodwill

Tangible assetsNon-current assets


Balance sheet – Total equity and liabilities, IFRS

8,018596Current income tax liabilities01,944Interest-bearing loans and borrowings

29,3749,94949,80922,613Total liabilities

Current liabilities

67,51056,348

Non-current liabilities

21,3567,409Trade and other payables

20,43512,664701430Other liabilities

133316Translation difference24,67615,074Retained earnings

79,560

10,0002,234

56,947599

1,21838,968

772

31.12.2006

2,961Other reserves

67,544Total equity

117,353

16,0003,734

34

38,968772

31.12.2007

Interest-bearing loans

Minority interest

€1,000

TOTAL EQUITY AND LIABILITIES

Deferred income tax liabilities

Share premium accountShare capital

Capital attributable the Company's equity holders


Key figures

98

71.6

29.9

23.4

9.3

80.0

0.12

0.74

0.15

0.15

2006IFRS

87

85.8

20.2

14.8

5.3

78.0

0.07

0.64

0.09

0.09

2005IFRS

110

57.6

44.2

38.9

-

67.0

0.16

0.86

0.24

0.24

2007IFRS

88.893.6Equity ratio, %

4,53.7Dividends paid, €11.12.3Return on equity, %

74

18.9

94.4

0.06

0.60

0.06

0.06

2004IFRS

2003FAS

Personnel (at the end of the year)

Return on investment, %

Dividend / result, %*Dividend / share, €*Shareholders’ equity / share, €Diluted, €Earnings per share, €

71

4.9

327.0

0.05

0.61

0.02

0.02

* Proposal of the Board of Directors for 2007.


CapMan’s ownership

35%

36%

29%

CapMan Partners B.V. and employee shareholders

Nominee registered and foreign shareholders

Other owners

• Nominee registered owners at the end of 2007 included funds managed by several international investors

– Dunedin Enterprise Investment Trust Plc, Explora Capital Management ASA, Legg Mason Inc, Partners Group, Sjunde AP-fonden, Royce & Associates and Troy Asset Management

– In addition Barwon Investment Partners, C Brooke Investment Partners Ltd. and Hermes Investment Management managed CapMan shares on behalf of discretionary clients

• According to the information received from the investors, the aggregate holding of these entities was slightly above 20 per cent of the shares

31 December 2007


37%

24%

39%

Current 14 Senior Partners

CapMan Partners B.V.

Other owners

28%

6%66%

Current 14 Senior Partners

CapMan Partners B.V.

Other owners

All Senior Partners shareholders of CapMan Plc

Senior Partners

• CapMan Partners B.V. form the second largest shareholder and thelargest user of voting rights

Ownership of CapMan Plc(by shares)

Ownership of CapMan Plc(by voting rights)

31 December 2007


Contents

• CapMan today• Market update• Year2007

Year 2008• Future outlook


Growth continued in the beginning of 2008

• Substantial 27% growth in funds under management– CapMan Hotels RE fund established at a level of €835 million on 18

January. Fundraising continues with maximum fund size €1.1 billion.– Final closing of CapMan Technology 2007 at a level of €142.3 million

on 23 January.

• Acquisition of 39 hotel properties closed in 29 February• Three new buyout investments announced

– Varesvuo Partners Oy (TV content production)– Barnebygg Group (provider of day care services)– Cargo Partner Group AS (logistics)

CapMan Plc’s Annual General Meeting 2008 27 March 200826 2602/10/2007

• 38 hotels in Finland and 1 in Sweden

• 6,477 hotel rooms in 2007• Well-known hotel chains as

tenants• Restel Group• Sokotel• Scandic

HelsinkiCrowne Plaza Helsinki (349)

Sokos Hotel Pasila (178)Palace Linna (48)

Sokos Hotel Albert (95)

TurkuHoliday Inn Turku (199) Scandic Turku Plaza (117)

RaumaCumulus Rauma (103)

TampereCumulus Koskikatu (230)Holiday Inn Tampere (135)Holiday Club Tampere (92)

Cumulus Pinja (60)

VaasaRadisson SAS Vaasa (285)

Rantasipi Tropiclandia (184)

SeinäjokiCumulus Seinäjoki (71)

HyvinkääRantasipi Sveitsi (194)

KuusamoRantasipi Rukahovi (180)

Holiday Club Kuusamon Tropiikki (125)

RovaniemiCumulus Rovaniemi (64)

Rantasipi Pohjanhovi (215)Scandic Rovaniemi (167)

NokiaRantasipi Eden (204)

InariHoliday Club Saariselkä (139)

KemiCumulus Kemi (184)

OuluHoliday Inn Oulu (154)

Cumulus Oulu (207)Holiday Club Oulun Eden (169)

KuopioCumulus Kuopio (141)

JyväskyläRantasipi Laajavuori (175)Cumulus Jyväskylä (203)

JoutsaRantasipi Joutsenlampi (42)

HämeenlinnaRantasipi Aulanko (246)

Cumulus Hämeenlinna (100)Sokos Hotel Vaakuna (123)

KotkaSokos Hotel Seurahuone (128)

VantaaCumulus Airport (278)Ramada Airport (292)

Holiday Inn Garden Court (284)

SotkamoHoliday Club Katinkulta (116)

Acquired hotels on a map

Åre, SwedenHoliday Club Åre

Palace Hotels


Contents

• CapMan today• Market update• Year 2007• Year 2008

Future outlook


Future outlook

• Management fees and returns on real estate consulting operations cover CapMan’s fixed expenses.

• The Group’s result for 2008 will depend on how many new exits are made by funds already generating carried interest; on whether new funds transfer to carry; and on how the value of investments develops in those funds in which CapMan is a substantial investor.

• According to our understanding CapMan Equity VII A, B and Sweden funds, Finnventure Fund IV and Finnmezzanine III A and B funds will begin to generate carry during 2008 and 2009. The funds have several exitprocesses underway.

• We expect that our portfolio companies and real estate assets will develop favourably in 2008. However the prevailing unstable situation in financial markets may reflect, as a result of the changes in listed peers’ valuations, on the fair value of the funds’ investment targets and hence also reflect on the fair value of the Group’s fund investments in 2008.

capman plc’s annual general meeting...

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