CapMan Plc's Interim Report for 1 January - 31 March 2017

CapMan Plc Interim Report 4 May 2017 at 11.30 a.m. EEST

CapMan Plc's Interim Report for 1 January - 31 March 2017

Performance and main events for the review period:

  • Group turnover was MEUR 7.5 (MEUR 7.5 1 Jan -31 Mar 2016).
  • Operating profit was MEUR 10.5 (MEUR 3.8). Comparable adjusted operating profit was MEUR 10.9 (MEUR 3.8).
  • Profit before taxes was MEUR 9.6 (MEUR 3.0).
  • Profit for the period was MEUR 9.1 (MEUR 2.9). Comparable adjusted profit was MEUR 9.3 (MEUR 2.9).
  • Diluted earnings per share for the period were 5.9 cents (3.0 cents). Comparable adjusted diluted earnings per share were 6.1 cents (3.0 cents).
  • CapMan exited Idean Enterprises Oy.
  • CapMan redeemed the MEUR 15 hybrid bond issued in 2013.
  • Heikki Westerlund announced on 27 March 2017 that he will step down as CEO. Joakim Frimodig has been appointed Interim CEO as of 4 May 2017.

This stock exchange release is a summary of CapMan Plc's 1 January - 31 March 2017 interim report. The complete interim report is available in pdf-format as an attachment to this release and on the company's website at https://www.capman.com/newsroom/financial-reports/.

Key figures

1-3/17 1-3/16
Turnover, MEUR 7.5 7.5
Operating profit, MEUR 10.5 3.8
Comparable adjusted operating profit, MEUR 10.9 3.8
Profit for the period, MEUR 9.1 2.9
Comparable adjusted profit for the period, MEUR 9.3 2.9
Diluted earnings / share, cents 5.9 3.0
Comparable adjusted diluted earnings / share, cents 6.1 3.0
31.3.2017 31.3.2016
Return on equity, % p.a. 27.6 17.9
Return on investment, % p.a. 21.4 11.6
Equity ratio, % 53.1 40.9
Net gearing, % 18.2 68.1

Heikki Westerlund, CEO:

"We achieved good results in the beginning of the year especially due to the performance of our investment business. The most significant event was the realisation of Idean from the Growth Equity portfolio. Our own fund investments have also developed in the right direction, although there is some industry-specific variance in the portfolio.

Norvestia was acquired in order to boost our growth objectives and the integration with CapMan proceeds acording to plan. New growth initiatives for 2017 include, among others, our new investment area CapMan Infra and growth investment-focused Growth Equity. We expect strong demand for infrastructure investments, and growth investing has become a separate category within private equity. Of our existing businesses, the service business has continued on a growth track and the outlook for the rest of the year is good.

We are establishing the next Nordic real estate fund and based on discussions with potential investors we are well-positioned to reach the MEUR 350 target size for the fund. The team's value-add predecessor fund has been among the best performing in its segment.

A month ago, I announced my decision to resign as CEO after almost four years on the job. I have worked at CapMan for a total of 23 years, during which our industry has transformed from a niche of the capital markets into the mainstream. CapMan is in a good position to take advantage of the tailwinds of the industry. Our value-add fund offering is versatile and well-suited for our growing customer base. I want to especially thank our investors, shareholders and personnel, who have supported us on our journey to become a leading Nordic private equity investor and asset manager."

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.

Items affecting comparability are described in the Tables section of the attached report.

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 1-3/17 1-3/16
Operating profit 10.5 3.8
Items affecting comparability
Norvestia integration related costs 0.4
Items affecting comparability, total 0.4
Adjusted operating profit 10.9 3.8
Profit for the period 9.1 2.9
Norvestia integration related costs 0.3
Items affecting comparability, total 0.3
Adjusted profit for the period 9.3 2.9
Earnings per share, cents 6.0 3.0
Items affecting comparability, cents 0.2
Adjusted earnings per share, cents 6.2 3.0
Earnings per share, diluted, cents 5.9 3.0
Items affecting comparability, cents 0.2
Adjusted earnings per share, diluted, cents 6.1 3.0

Press, analyst and investor conference today at 3.00 p.m. EEST

CapMan's management will present the result for the review period to press, analysts and investors and review the market situation in a press conference to be held at 3.00 p.m. EEST at CapMan's head office in Helsinki, address Ludviginkatu 6, 00130 Helsinki. The press and analyst conference will be held in Finnish. To join the conference, please register with linda.tierala@capman.com. Welcome!

Helsinki, 4 May 2017
CAPMAN PLC
Board of Directors

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

Distribution:
NASDAQ Helsinki Ltd
Principal media
www.capman.com

Appendix: CapMan Plc 1 January-31 March 2017 Interim Report

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 €2.8 billion in assets. We mainly manage the assets of our customers, the investors, but 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, Infrastructure and Tactical Opportunities. We also have a growing service business that currently includes fundraising advisory, procurement activities and fund management.

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