CapMan Plc 1–3 2021 Interim Report

April 29, 2021

CapMan Plc Stock Exchange Release / 1–3 2021 Interim Report
29 April 2021 at 8.00 a.m. EEST

CapMan Plc 1–3 2021 Interim Report

Results and significant events in January–March 2021:

  • Group turnover was MEUR 11.3 1 Jan–31 Mar 2021 (MEUR 11.9
  • 1 Jan–31 Mar 2020), a decrease of 5 per cent from the comparison period.
  • Operating profit was MEUR 10.1 (MEUR -6.0).
  • Management Company business turnover was MEUR 9.0 (MEUR 7.9). Operating profit was MEUR 2.5 (MEUR 1.9).*)
  • Service business turnover was MEUR 2.3 (MEUR 4.1). Operating profit was MEUR 1.2 (MEUR 2.9).*)
  • Investment business operating profit was MEUR 7.9 (MEUR -8.4).
  • Diluted earnings per share were 4.7 cents (-5.3 cents).
  • Capital under management was EUR 3.9 billion on 31.3.2021 (EUR 3.2 billion).
  • The first instalment (7 cents/share) of a total of 14 cents/share, to be distributed for 2020, was paid to shareholders in March. The second instalment is to be paid around September.

This stock exchange release is a summary of CapMan Plc’s 1 January–31 March 2021 Interim Report. 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/.

*) The comparison period figures have been restated following changes to the composition of reporting segments starting from 1 January 2021.

CEO comment:

”Efforts over recent years to grow our fee base and improve value creation of investments are reflected in the strong development over the first months of 2021. Operating profit was MEUR 10 and earnings per share 5 cents for the first quarter of the year.

Our assets under management continued growing and reached a record level of EUR 3.9 billion at the end of March, growing by approx. MEUR 700, or approx. 20 per cent, in the past year. We expect to see continued growth during 2021 due to ongoing fundraising projects and CapMan’s expanding product portfolio. Simultaneously, CapMan’s investor base becomes more diverse and international, providing an excellent foundation for future growth. At the end of March, approx. 50 per cent of our assets under management come from outside the Nordic countries. This percentage has grown significantly over the past three years from when the share of international fund investors was around 10 per cent.

Management Company turnover was MEUR 9 in the first quarter of the year, growing approx. 15 per cent from the comparison period. Turnover grew due to new assets under management. The operating profit of the Management Company business was MEUR 2.5, growing by approx. 30 per cent from the comparison period due to both strong fee growth and cost control.

The remaining Service business turnover was MEUR 2.3 and operating profit MEUR 1.2 in the first quarter of 2021. The Service business includes CapMan’s procurement service CaPS and reporting and analytics service JAY Solutions following the changed segment reporting practice. Both business areas demonstrated strong development during the first quarter of 2021. CaPS’s turnover continued growing and the business was very profitable. The growth in turnover of JAY Solutions was significant.

The fair value changes of our investments were MEUR +8.2 in the first quarter of 2021. This reflects the accelerated positive development in our funds over the past few quarters, supported by the overall market recovery. In the comparison period, fair values decreased significantly due to the market disruption brought on by the Covid-19 pandemic.

The strong start for 2021 is a continuation of the positive result development in the final quarter of last year. Our fee base is strong and growing and the recurring income support the development of fee-based profitability. Successful value creation in our investment business is reflected in our results as positive fair value development. Following value creation work, many of our funds hold significant carried interest potential. Many funds have ongoing exit processes which, when completed, would help realise this carried interest potential.

Our balance sheet is strong, and our liquidity is good. At the end of the year, our equity ratio was 45 per cent and liquid assets were close to MEUR 50. CapMan’s objective is to pay an annually increasing dividend to our shareholders. The 2021 Annual general Meeting decided to distribute 14 cents/share to shareholders as dividend and equity repayment. The distribution is to be implemented semi-annually and the first instalment was paid in March.”

Sincerely,

Joakim Frimodig

CEO, CapMan Plc

Key figures

MEUR 1-3/21 1-3/20
Operating profit (loss) 10.1 -6.0
Result for the period 7.8 -7.4
Earnings per share, cents 4.8 -5.4
Earnings per share, diluted, cents 4.7 -5.3
% 31.3.21 31.3.20
Return on equity, % 29.2 -26.0
Equity ratio, % 45.5 47.4

Financial objectives

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.

CapMan maintains 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.

Result webcast today at 9.00 a.m. EEST

CapMan’s management will present the result for the review period in a webcast to be held at 9.00 a.m. EEST. Please access the webcast at https://capman.videosync.fi/2021-04-29-q1/. 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, 29 April 2021

CAPMAN PLC
Board of Directors

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

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

Appendix: CapMan Plc 1-3 2021 Interim Report

About CapMan

CapMan 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.