CapMan Plc Stock Exchange Release / Financial Statements Bulletin / 4 February 2021 at 8:30 a.m. EET
CapMan Plc 2020 Financial Statements Bulletin
Results and significant events in January–December 2020:
- Group turnover was MEUR 43.0 1 Jan–31 Dec 2020 (MEUR 49.0 1 Jan–31 Dec 2019), a decrease of 12 per cent from the comparison period.
- Management Company business turnover was MEUR 30.9 (MEUR 32.8), a decrease of 6 per cent from the comparison period. Management fees were MEUR 28.9 (MEUR 24.7), growth was 17 per cent. Operating profit was MEUR 9.1 (reported MEUR 6.0, comparable MEUR 10.2).
- Service business turnover was MEUR 11.4 (MEUR 15.7), decrease was 28 per cent from the comparison period, and operating profit MEUR 5.0 (MEUR 9.1).
- Investment business operating profit was MEUR 4.0 (reported MEUR 10.2, comparable MEUR 10.4).
- Operating profit was MEUR 12.3 (reported MEUR 19.4, comparable MEUR 25.0).
- Diluted earnings per share were 3.3 cents (reported 9.0 cents, comparable 11.6 cents).
- Capital under management was EUR 3.8 billion on 31.12.2020.
- The Board of Directors proposes a total of 14 cents/share to be distributed for 2020, consisting of a dividend of 2 cents/share and equity repayment of 12 cents/share. The distribution of funds would be paid in two equal instalments six months apart.
This stock exchange release is a summary of CapMan Plc’s 2020 Financial Statements Bulletin. The complete report is available in pdf-format as an attachment to this release and on the company’s website at https://www.capman.com/shareholders/financial-reports/.
Joakim Frimodig, CEO:
”We have grown our assets under management and our fee base significantly during 2020. This is also reflected in our fee-based profitability, which is at record levels. At the same time, the significance of recurring fees as a result driver has grown steadily. Our investment income showed strong development in the last quarter of the year and the fair value change was clearly positive for the entire year following the steep decline in the beginning of the year. This year, we have completed several new growth and development initiatives that support our chosen strategic direction and help build a foundation for growing results in the coming years.
Our assets under management reached a record level of EUR 3.8 billion by the end of the year. In the second half of the year, they grew by more than 20 per cent (MEUR 700). We continued fundraising for CapMan Nordic Real Estate III and the fund has already exceeded its target size. The MEUR 535 in commitments as of January make it the largest fund in CapMan’s history. CapMan Growth II fund also exceeded its target size and reached a final close at MEUR 97. Both funds have already made several investments. We expect further growth in assets under management in 2021 following new funds and fundraising projects.
Management Company turnover was MEUR 31. The segment declined by 6 per cent due to lower carried interest compared to the comparison period. Management fees grew by more than 17 per cent following new funds under management. The operating profit of the Management Company business was MEUR 9 growing by 50 per cent from the comparable comparison period due to both growth in fees and improved cost efficiency.
Our Service business turnover was MEUR 11 and operating profit MEUR 5 in 2020. The turnover decreased by 28 per cent from the comparison year mainly due to lower transaction-based services. Recurring service fees grew by 14 per cent in total from the comparison year.
Management and service fee-based profitability exceeded MEUR 13 in 2020, growth of 7 per cent from the comparison year. The growth was almost entirely constituted from recurring fees. Fee-based profitability has more than quadrupled over the past three years and we expect the positive development to continue over the upcoming years.
Fair value changes of our investments have fluctuated over the past year following market development. Our reported fair values increased by approx. MEUR 7 in the last quarter of the year, which reflects the improved outlook for many investments. Funds have developed well following the steep decline in the beginning of the year, and the fair value increase of our investments was MEUR 4.4 for the entire year 2020.
Our fee-base is strong and growing and the recurring income support the development of fee-based profitability. Many of our funds hold significant carried interest potential, which the revival of the exit market should help realise. The strong result for the end of 2020 provides direction for developments in 2021.
Our balance sheet is strong and our liquidity is very good. At the end of the year, our equity ratio was 52 per cent and liquid assets close to MEUR 60. CapMan’s objective is to pay an annually increasing dividend to our shareholders. The Board of Directors proposes 14 cents per share to be distributed as dividend and equity repayment for 2020. This would increase CapMan’s distribution to shareholders for eight consecutive years.”
Proposal of the Board of Directors regarding distribution of funds
CapMan Plc’s objective is to distribute an annually growing dividend to shareholders. CapMan Plc’s Board of Directors will propose to the Annual General Meeting (AGM) to be held on 17 March 2021 that a total of EUR 0.14 per share would be paid to shareholders, equivalent of a total of MEUR 21.9, from distributable funds for 2020. The distribution of funds would be divided in a dividend of EUR 0.02 per share, equivalent to a total of approx. MEUR 3.1 as well as an equity repayment of EUR 0.12 per share to be returned from the invested unrestricted equity fund, equivalent to a total of approx. MEUR 18.8. CapMan’s distributable funds amounted to MEUR 72.2 on 31 December 2020. The dividend and equity repayment would be paid in two equal instalments six months apart.
Andreas Tallberg, Chairman of the Board:
“CapMan’s Board of Directors proposes that a total of 14 cents per share of dividends and equity repayments be paid out for 2020. In line with increasingly frequent market practice, we propose that the distribution is to be executed in two instalments starting from the year 2021. CapMan’s objective is to pay an annually increasing dividend to its shareholders and the company grows its distribution to shareholders for eight consecutive years following this proposal.”
CapMan’s objective is to pay an annually increasing dividend to its shareholders.
The combined growth objective for the Management Company and Service businesses 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. CapMan’s equity ratio target is more than 60 per cent.
Outlook estimate for 2021
CapMan expects to achieve these financial objectives gradually and key figures are expected to show fluctuation on an annual basis considering the nature of the business. CapMan estimates capital under management to continue growing in 2021. Our objective is to improve the aggregate profitability of Management Company and Service businesses. These estimations do not include possible items affecting comparability.
Carried interest income from funds managed by CapMan and the return on CapMan’s investments have a substantial impact on CapMan’s overall result. In addition to portfolio company and asset-specific development and exits from portfolio companies and assets, various factors outside of the portfolio’s and CapMan’s control influence fair value development of CapMan’s overall investments as well as the magnitude and timing of carried interest.
CapMan’s objective is to improve results in the longer term, taking into consideration annual fluctuations related to the nature of the business. For these and other above-mentioned reasons, CapMan does not provide numeric estimates for 2021.
Items affecting comparability are described in the Tables section of this report.
|Items affecting comparability|
|Acquisition related costs||1,1|
|Impairment of goodwill||4,2|
|Items affecting comparability, total||5,7|
|Adjusted operating profit||12,3||25,0|
|Result for the period||6,3||15,9|
|Items affecting comparability|
|Acquisition related costs||1,0|
|Impairment of goodwill and other writedowns||2,8|
|Items affecting comparability, total||4,1|
|Adjusted result for the period||6,3||20,0|
|Earnings per share, cents||3,3||9,2|
|Items affecting comparability, cents||2,7|
|Adjusted earnings per share, cents||3,3||11,9|
|Earnings per share, diluted, cents||3,3||9,0|
|Items affecting comparability, cents||2,6|
|Adjusted earnings per share, diluted, cents||3,3||11,6|
|Return on equity, %||5,2||12,7|
|Return on equity, comparable, %||5,2||16,0|
|Equity ratio, %||51,9||59,9|
Result webcast today at 9.00 a.m. EET
CapMan’s management will present the result for the review period in a webcast to be held at 9.00 a.m. EET. Please access the webcast at https://capman.videosync.fi/2020-q4-results. The conference will be held in English. A replay of the webcast will be available on the company’s website after the event. Due to the ongoing Covid-19 pandemic, CapMan will not arrange an in-person conference.
Helsinki, 4 February 2021
Board of Directors
Niko Haavisto, CFO, CapMan Plc, tel. +358 50 465 4125
Nasdaq Helsinki Ltd
About CapManCapMan is a leading Nordic private asset expert with an active approach to value creation. We offer a wide selection of investment products and services. As one of the Nordic private equity pioneers, we have developed hundreds of companies and real estate assets and created substantial value in these businesses and assets over the past 30 years. With close to €4 billion in assets under management, our objective is to provide attractive returns and innovative solutions to investors. We have a broad presence in the unlisted market through our local and specialised teams. Our investment strategies cover Private Equity, Real Estate and Infra. We also have a growing service business that includes procurement services, wealth management, and analysis, reporting and back office services. Altogether, CapMan employs around 150 people in Helsinki, Stockholm, Copenhagen, London and Luxembourg. We are a public company listed on Nasdaq Helsinki since 2001 and a signatory of the UN Principles for Responsible Investment (PRI) since 2012. Read more at www.capman.com.