finnish industry investment economic impact review 2015...source: economic impact questionnaire...

Finnish Industry Investment

Economic Impact Review 2015

1Economic Impact Review 2015

Investing in Growth

Enabling the Finnish growth story

Developing the VC & PE industry in Finland

Renewing business structures

Making profitable investments

Investments enable companies to grow faster

Growth in sales

Growth in exports

Growth in jobs


Portfolio companies’ sales grew by over 12%

Source: Statistics Finland, Finnish Industry Investment

Sales

Exports

Jobs

Portfolio companies’ net sales in Finland in 2015 (€M)

1) ”Change -14 -> 15” only includes companies that were in FII’s investment portfolio all year

2) ”New companies -15” are new investments made during the year

1)

2)

€M


3 8274 838

447564

0

1 000

2 000

3 000

4 000

5 000

6 000

Starting point 2014,

Portfolio companiesChange-14-> 15

New companies2015

Total2015

Finland’s GDP +1 %

Portfolio companies’ exports grew by over 17%

Source: Finnish Customs, Finnish Industry Investment

Portfolio companies’ exports from Finland 2015 (€M)



1)

2)MEUR

5

Net sales

Jobs

Exports


783

1 134

136

215

0

200

400

600

800

1 000

1 200

Starting point 2014,Portfolio companies

Change-14 -> 15

New companies2015

Total2015

Finland’s exports fell -3.8%

Portfolio companies’ personnel grew by 13%

Jobs in portfolio companies in Finland in 2015 (number of jobs)

Source: Statistics Finland, Finnish Industry Investment



1)2)

6

Net sales

Jobs

Exports


25 836

32 998

3 449

3 713

0

5 000

10 000

15 000

20 000

25 000

30 000

35 000

Starting point 2014,

Portfolio companies

Change

-14 -> 15

New companies

2015

Total

2015

People employed in Finland -0.4%No.


Fund investments develop and internationalise Finland’s VC & PE industry

Increasing the supply of risk financing

International investors becoming more active

EU financing collaboration getting stronger

FoF Growth I & II boosting capital to the market

Supply of risk financing has increased in Finland

Development of venture capital investments into Finnish companies (€M)

MEUR

Source: FVCA, FiBAN

Venture capital investments in Finnish companies have more than doubled in four years, FII and FoFGrowth being important catalysts

Over one-half (14 in number) of the companies that listed on the Helsinki Stock Exchange during 2014 -2016 were backed by VC & PE investors


21 3068 59

89 9487 60

70 9073

96

89

2424

33

37

23

9 19

11

26

0

50

100

150

200

250

300

2010 2011 2012 2013 2014 2015

International investors

Finnish VC & PE companies

Finnish private individuals

Others

Finland leads Europe in venture capital investments per GDP

Source: Invest Europe

% of GDP

2015 2011-2015 average

Proportion of venture capital as a percentage of GDP (%)


FII’s investments act as a catalyst for other capital

Division of capital in FII’s direct investments (€M)*

FII has catalysed a diversified supply of financing into Finland’s VC & PE sector

International co-investors also contribute their valuable expertise and networks to accelerate the international growth of Finnish growth companies

M€


*Finnish Industry Investment’s direct portfolio companies in Finland

FII also encourages EIF investments into Finnish funds

International capital in FII’s Finnish portfolio funds (M€)

European Investment Fund (EIF) invested altogether €169M in Finnish venture capital and private equity funds during 2011-2015

In total EIF has invested €320M in Finnish funds during the period 1997-2015

FII and EIF share a common objective of enhancing their cooperation to strengthen the supply of risk financing to growth companies

M€


40

1524

60

30

1

77 54

38

55

0

20

40

60

80

100

120

2011 2012 2013 2014 2015

Other international capital

EIF

41 M€

92 M€

78 M€

98 M€

85 M€

FoF Growth I

FoF Growth I is a €135M fund managed by FII. FII’s share of the fund is €54M.

FoF Growth I invested in 11 venture capital and growth funds operating in Finland during 2009-2013

The total capital of FoF Growth I’s portfolio funds was over 15 times more than the €54M investment made by FII

Some €230M of the portfolio funds’ capital was raised from international investors

Portfolio funds have invested in altogether 163 companies (as at 31.12.2015)

FundFoF Growth I’s commitment

(M€)

Total capital of fund (M€)

Sentica Buyout III Ky 15 119

Folmer Equity Fund I Ky 10 31

Nexit Infocom II LP 10 85

Open Ocean Fund Three Ky 10 45

Conor Technology Fund II Ky 10 50

Vaaka Partners Buyout Fund II Ky

20 150

Power Fund III Ky 10 77

VisionPlus Fund I Ky 10 50

Lifeline Ventures Fund I Ky 8 29

Inventure Fund II Ky 14 70

Sentica Buyout IV Ky 12 129

TOTAL 129 835


FoF Growth II

FundFoF Growth II’s

commitment (M€)

Total capital of fund (M€)

Sentica Buyout IV Ky 10 126

Verso Fund II Ky 15 50

Juuri Rahasto I Ky 7,5 82

Open Ocean Fund 2015 Ky 15 71

Lifeline Ventures Fund III Ky

15 52

TOTAL 25 179

FoF Growth II is a €130M fund managed by FII. FII’s share of the fund is €60M.

FoF Growth II will invest in venture capital and growth funds operating in Finland during 2014-2018

During 2014-2015 FoF Growth II invested in 5 Finnish funds

The total capital of the portfolio funds so far is over 13 times more than the commitments of €29M given to portfolio funds by FII

Almost €300M of the portfolio funds’ capital was raised from other investors


Strategic focus areas contribute to therenewal of Finnish economic structures

Investments in strategically important sectors


Objective: to promote the Finnish mining industry

Programme size €30M

Altogether €8M invested

(31.12.2015)

Investment programmes

Source: Finnish Industry Investment

Mining Cluster programme

Industrial Renewal programme

Objective: to promote the growth, renewal and internationalisation of Finnish industry


Altogether €47M invested

(31.12.2015)

International Co-investors programme

Objective: to promote international investments into Finnish growth companies


Altogether €2.2M invested

(31.12.2015)


Specific focus sectors

Source: Finnish Industry Investment

Cleantech

• Cumulatively 2011-2015: direct investments amounting to €27M in 12 companies

• During 2015: Follow-on investments of €2M in two companies

• Cumulatively 2011-2015: direct investments amounting to €33M in four companies

• During 2015: one initial investment of €5M in one company

Bioeconomy

• Cumulatively 2011-2015: direct investments amounting to €44M in seven companies

• During 2015: one initial investment of €10M in one company

Healthcare industry

• Cumulatively 2011-2015: direct investments amounting to €6M in four companies

• During 2015: Follow-on investment of €0.1M in one company

Marine cluster

Digitalisation

• Cumulatively 2011-2015: investments totalling €17M in 11 companies

• During 2015: almost €4M in follow-on investments in five companies


Growing and profitable portfolio companies lead to overall profitability

Allocation of resources to strategically important players

Business viability through profitable growth of portfolio companies

Profitable operation over the long term


Investments and commitments

FII focuses on growth, profitability and economic impact

Investments and commitments total €784.4M (as at 31.12.2015)


26 %

28 %9 %

15 %

20 %

2 %

Venture Capital funds

€189MLater growth funds

€208MBuyout funds €68M

FoF Growth funds

€109MDirect investments €143M

Start Fund I Ky’s investments

€15M

Direct investments generate strong growth

Fastest growing companies in FII’s direct investment portfolio in 2015 (€M)

Investments are allocated to the most promising fast-growing companies

Source: Economic Impact Questionnaire 5/2016


31%

33%

34%

36%

36%

38%

39%

44%

54%

70%

103%

109%

0% 20% 40% 60% 80% 100% 120%

Cavitar Oy

NewIcon Oy

MariaDB Corp. Ab

Aker Arctic Tech. Oy

M-Files Oy

Multi Touch Oy

Rightware Oy

Optomed Oy

IonPhasE Oy

Coronaria Oy

Aidon Oy

Visedo Oy

Growth in net

sales -%

Net sales

(MEUR)

18 m€

91 m€

7 m€

6 m€

4 m€

11 m€

30 m€

14 m€

7 m€

5 m€

2 m€

3 m€

Profitable operation over the long term

Net profit for 2015 attributable to numerous profitable exits

New record for profit after taxes in 2015

Cumulative profit at end of 2015 stood at €213M

*The Group switched to IFRS reporting in financial year 2015. For this reason the figures for 2014 presented here are not directly comparable to the FAS-compliant figures published in the 2014 Economic Impact Report.

*


m€

Consolidated income statement IFRS

EUR thousands 1-12/2015 1-12/2014

Net gains from venture capital and private equity funds 71 594 -82

Venture capital 10 293 -10 252

Later stage 26 910 -29 332

Net gains from direct investments 37 203 -39 584

Net gains from VC & PE funds, total 108 797 -39 666

Net gains from financial securities 6 417 14 394

Income from fund management 467 516

Other operating income, total 6 884 14 910

Employee benefit costs -4 418 -3 927

Depreciation and impairment -148 -155

Other operating expenses -2 782 -2 583

Operating profit/loss 108 333 -31 421

Finance income and expenses 24 35

Profit/loss before taxes 108 357 -31 386

Income taxes -21 936 5 712

Profit/loss for financial year 86 421 -25 674

Total comprehensive income/loss for year 86 421 -25 674

Examples of portfolio companies

M-Files

Valmet Automotive

Meyer Turku Rauma Marine ConstructionNorthzone


• The Tampere-based software provider is one of Finland’s fastest growing companies

• Altogether 6,000 customers in over 100 countries

FII participated, together with international VC investors, in financing the company’s growth with investments totalling €24M

Net sales in 2015 over €30M, representing growth of almost 250% during FII’s ownership

Number of employees has more than doubled during FII’s ownership

• Valmet Automotive is one of the world’s largest contract manufacturers in the automotive industry

• Generated net sales of almost €400M and operating profit of €22M in 2015

During FII’s ownership the company’s performance became profitable through an agreement made in 2012 for manufacturing A-Series Mercedes cars

Successful cooperation continued in 2015 when Valmet landed a contract for manufacturing the Mercedes GLC model

Examples – M-Files & Valmet Automotive


• Finnish shipbuilding company that constructs the world’s largest luxury cruise liners

• Generated net sales of €594M in 2015

FII enabled Meyer’s involvement by sharing investment risks during the acquisition of the Turku shipyard in 2014

During FII’s ownership the Turku shipyard landed numerous shipbuilding orders

• Rauma Marine Constructions, the recently established company owning the Raumashipyard, manufactures passenger & car ferries and other vessels

• During its first full year of operation (2015) the company generated net sales of over €20M

FII has co-invested, together with Taaleritehdas and Finda, €19M in the company as at the end of 2015

Under FII’s ownership, the Rauma shipyard received its first €68M ship order

Examples – Meyer Turku & Rauma Marine Constructions


Examples - Northzone

Northzone has invested in four Finnish companies from its funds, in which FII is an investor

2014 2015 2016

Total size of financing round:

3.6 million dollars

Source: Arcticstartup, Playraven, Seriously, Northzone


3.3 million euros


18 million dollars


4 million euros


The investments of individual funds are not disclosed.

Investing in Growth

Enabling the Finnish growth story

Developing the VC & PE industry

Renewing business structures

Making profitable investments

finnish industry investment economic impact review 2015...source: economic impact questionnaire...

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