CapMan Plc's 2016 results improved significantly

CapMan Plc Financial Statements Bulletin 2 February 2017 at 8.30 a.m. EET

CapMan Plc's 2016 results improved significantly

Performance and main events for the financial year 1 January - 31 December 2016:

  • Group turnover totalled MEUR 26.7 (1 January - 31 December 2015: MEUR 31.8). Comparable adjusted turnover was MEUR 29.0 (MEUR 31.8)
  • Operating profit was MEUR 18.7 (MEUR 9.3). Comparable adjusted operating profit was MEUR 14.5 (MEUR 10.1).
  • Profit before taxes was MEUR 15.5 (MEUR 6.4).
  • Profit after taxes was MEUR 15.3 (MEUR 6.1). Comparable adjusted profit after taxes was MEUR 10.9 (MEUR 6.7).
  • Diluted earnings per share for the year were 16.1 cents (5.8 cents). Comparable adjusted diluted earnings per share were 11.2 cents (6.5 cents).
  • CapMan's Board of Directors proposes a dividend of 9 cents per share to be paid for 2016.
  • CapMan establishes a new investment area: CapMan Infra
  • Juha Mikkola, responsible for Growth Equity, to join CapMan's Management Group

This stock exchange release is a summary of CapMan Plc's 2016 Financial Statements Bulletin. The complete report is available in pdf-format as an attachment to this release and on the company's website at www.capman.com/newsroom/financial-reports/ .

Key figures

1-12/16 1-12/15
Turnover, MEUR 26.7 31.8
Comparable adjusted turnover, MEUR 29.0 31.8
Operating profit, MEUR 18.7 9.3
Comparable adjusted operating profit, MEUR 14.5 10.1
Profit for the period, MEUR 15.3 6.1
Comparable adjusted profit for the period, MEUR 10.9 6.7
Diluted earnings / share, cents 16.1 5.8
Comparable adjusted diluted earnings / share, cents 11.2 6.5
31.12.2016 31.12.2015
Return on equity, % p.a. 14.7 9.3
Return on investment, % p.a. 10.9 8.0
Equity ratio, % 56.6 43.7
Net gearing, % 14.5 72.9

Heikki Westerlund, CEO:

"We accomplished a significant strategic goal at the end of 2016 as the acquisition of Norvestia was completed according to plan and schedule.

Our result development has been good during the year. Our comparable earnings per share were 11 cents and increased by approx. 70 per cent year-over-year. The turnover from services has grown approx. 80 per cent in line with expectations and we expect strong revenue growth from services also in the future. Upcoming real estate funds and the new investment area investing in infrastructure assets support our growth objectives. Our balance sheet strengthened by Norvestia is part of our broader growth strategy.

We are currently realising synergies from the combination with Norvestia. We have commenced procedures to redeem the hybrid bond issued in 2013. When redeemed, our financial expenses will be reduced. Growth equity investment is now one of CapMan's core investment strategies and we will continue the activity while strengthening Norvestia's growth equity team. We are also investigating options to commercialise Norvestia's strong market portfolio know-how. We expect to realise the synergies fully starting from 2018.

CapMan transferred to the Mid-Cap category on Nasdaq Helsinki in the beginning of the year. The total return of the stock has been approx. 15 per cent p.a. for the past four years and trading volume has picked up significantly during the last year. I want to warmly welcome Norvestia's former shareholders as part of CapMan's more than 11,000-strong shareholder base."

Financial objectives and 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.

Items affecting comparability and alternative performance measures

CapMan uses alternative performance measures to denote the financial performance of its business and to improve the comparability between different periods. Alternative performance measures do not replace performance measures in accordance with the IFRS and are reported in addition to such measures. Alternative performance measures, as such are presented, are derived from performance measures as reported in accordance with the IFRS by adding or deducting the items affecting comparability and they will be nominated as adjusted.

Items affecting comparability are, among others, material items related to mergers and acquisitions or major development projects, material gains or losses related to the acquisition or disposals of business units, material gains or losses related to the acquisition or disposal of intangible assets, material expenses related to decisions by authorities and material gains or losses related to reassessment of potential repayment risk to the funds.

MEUR 1-12/16 1-12/15
Turnover 26.7 31.8
Items affecting comparability
Reassessment of potential repayment risk to the funds 2.3
Items affecting comparability, total 2.3 0
Adjusted turnover 29.0 31.8
Operating profit 18.7 9.3
Items affecting comparability
Items related to the acquisition of Norvestia, of which: -7.1 0.8
gain from a bargain purchase -13.9
loss from the remeasurement of previous ownership at fair value 4.0
transaction costs 2.8 0.8
Reassessment of potential repayment risk to the funds 2.3
Write-down of a value-added tax receivable 1.0
Insurance compensations -0.3
Items affecting comparability, total -4.2 0.8
Adjusted operating profit 14.5 10.1
Profit for the period 15.3 6.1
Items affecting comparability
Items related to the acquisition of Norvestia -7.2 0.6
Reassessment of potential repayment risk to the funds 1.8
Write-down of a value-added tax receivable 1.3
Insurance compensations -0.2
Items affecting comparability, total -4.4 0.6
Adjusted profit for the period 10.9 6.7
Earnings per share, cents 16.2 5.9
Items affecting comparability, cents -5.0 0.7
Adjusted earnings per share, cents 11.2 6.6
Earnings per share, diluted, cents 16.1 5.8
Items affecting comparability, cents -4.9 0.7
Adjusted earnings per share, diluted, cents 11.2 6.5

Press, analyst and investor conference today at 12.00 p.m. EET

CapMan will hold a press, analyst and investor conference today, on2 February 2017, at 12.00 p.m. at CapMan's new head office in Helsinki, address Ludviginkatu 6, 4 fl. CapMan's CEO Heikki Westerlund and CFO Niko Haavisto will present at the conference. The presentation material is available at CapMan's website at the beginning of the event. The conference will be held in Finnish. Welcome!

Helsinki, 2 February 2017
CAPMAN PLC
Board of Directors

Further information:
Niko Haavisto, CFO, tel. +358 50 465 4125

Distribution:
NASDAQ Helsinki
Principal media
www.capman.com

Appendix: CapMan Plc Financial Statements Bulletin 2016

CapMan www.capman.com


CapMan is a leading Nordic investment and specialised asset management company. As one of the Nordic private equity pioneers we have actively developed hundreds of companies and real estate and thereby created substantial value in these businesses and assets over the last 25 years. CapMan has today 100 private equity professionals and manages €2.7 billion in assets. We mainly manage the assets of our customers, the investors. We also make direct investments from our own balance sheet in areas without an active fund. Our objective is to provide attractive returns and innovative solutions to investors and value adding services to professional investment partnerships, growth-oriented companies and tenants. Our current investment strategies cover Buyout, Growth Equity, Real Estate, Russia, Credit and Infrastructure. We also have a growing service business that currently includes fundraising advisory, procurement activities and fund management.

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