Operations and results 2015
Highlights in 2015 93m New investments >20% Growth in sales of the 15 fastest growing portfolio companies 156m Excellent year for exits Cash flow from investments in 2015 156m 86m Profit for financial year (after taxes)
Business climate 2015 Finland s economy facing challenges, investment and industrial production declining Financial markets were stable, banking sector sound, but stricter regulation squeezed loan availability Favourable developments in investment sector: Finland now a European leader in venture capital investments (as proportion of GDP) Numerous successful IPOs and exits by investors International investments in Finland more selective than previous years Activity levels of Finnish private equity and venture capital investors 2000-2015 Source: FVCA Fundraising Investments Exits (at acquisition cost)
Our business focus Industrial Investments Industrial investments Size of fund / direct investment Venture Capital Venture capital financing for internationalising technology companies Venture capital funds Finnish and international teams Growth Investments Growth financing for mediumsized enterprises Later growth funds Growth financing for SME segment Start-up 2-20m 20m+ Development phase/ net sales 300-400m We operate on market terms, hand-in-hand and on equal terms with private investors.
Result for financial year 2015 Net gains from investments of 108.8m consists of realised and unrealised changes in fair value: 71.6m funds; A number of profitable exits and successful IPOs of portfolio companies. 37.2m direct investments; Unrealised changes in fair value had an appreciable impact. Exits also had a positive impact. Consolidated statement of comprehensive income 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, total 37 203-39 584 Net gains from investments, 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 Personnel expenses -4 418-3 927 Depreciation and impairment -148-155 Other operating expenses -2 782-2 583 Operating profit / loss 108 333-31 421 Financial 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
Balance sheet 31 December 2015 Balance sheet value of funds 326m has increased by 41m from start of year capital calls 68m capital distributions from funds -99m realised and unrealised changes in fair value recognised as a gain 72m Balance sheet value of direct investments 134m has increased by 5m from start of year payments for investments 25m exits -57m realised and unrealised changes in fair value recognised as a gain 37m Current assets 423m consist mainly of liquid assets (financial securities) Consolidated Balance Sheet IFRS EUR thousands 31.12.2015 31.12.2014 Non-current assets Investments Venture capital and private equity funds 326 099 285 316 Direct investments 133 665 128 685 Venture capital and private equity investments, total 459 765 414 001 Non-current assets total 472 312 439 695 Current assets, total 423 004 254 813 Assets, total 895 316 694 508 Equity and liabilities Share capital 438 992 333 992 Share premium account 215 855 215 855 Retained earnings 126 615 152 289 Profit for financial year 86 421-25 674 Equity, total 867 884 676 463 Liabilities Non-current liabilities, total 22 769 16 651 Current liabilities, total 4 663 1 394 Liabilities, total 27 432 18 045 Equity and liabilities, total 895 316 694 508
Cash flow 2015 Cash inflow from investments during the year amounted to 156m and net cash flow was +63m Cash flow 1-12/2015 EUR millions Out In Net Venture capital and private equity funds -68.3 99.1 30.8 Direct investments -24.9 57.3 32.4 Total -93.2 156.4 63.2
Investments in 2015 Venture Capital Growth Investments Industrial Investments Venture Capital -funds Later growth funds INVESTMENTS 2015, TOTAL Funds 67m FoF Growth II 38m Direct 25m
Exits in 2015 Venture Capital Growth Investments Industrial Investments Venture Capital -funds Later growth funds EXITS 2015 Company Fund Company Fund Cash flow from exits Sponsor capital 156m From funds 99m (of which 7m via FoF Growth) From direct investments 57m
Growth and performance of direct investments in 2015 Business development and value creation Active ownership and strengthening the pool of expertise in portfolio companies are important tools for achieving favourable growth, internationalisation and value creation in our portfolio companies. They supplement channelling money into the companies. Growth Net sales of our venture capital portfolio companies grew in 2015 by some 35 % (median) For example, software provider M-Files Oy continued its strong growth: net sales +36 % and personnel in Finland +30 % Some more mature companies, such as Coronaria and Aker Arctic, also showed good growth Valmet Automotive secured a new manufacturing agreement (Mercedes-Benz GLC) Finnish Industry Investment s portfolio companies achieving fastest growth in 2015 Visedo Oy Coronaria Hoitoketju Oy Optomed Oy Multi Touch Oy Rightware Oy Aker Arctic Technology Oy Growth,% Pesmel Oy LeadDesk Oy 69 56 45 38 37 36 36 34 32 25 25 21 21 Net sales ( m) 35,0 8,1 5,7 110 101 5,5 11,4 30,3 4,1 6,7 13,7 4,5 6,1 7,0 90,2 18,4 3,1 0 25 50 75 100 125
Mammoth order for Uusikaupunki: Valmet to start manufacturing new Mercedes model Software provider LeadDesk received millions of euros in financing Indian Mahindra acquires majority holding in Holiday Club further 28m investment Juuri Partners opened the taps renovation building boom attracts investment millions for Kas-Telineet 100m investment in packing board: Kotkamills seeks new growth
Brisk start to 2016 Investment activity has been brisk during early 2016. We have, for instance: invested in the Nordic fund Creandum IV invested in the international cleantech company BMH Technology invested in the rapidly-growing software providers Vaadin and M-Files signed an agreement with international and Finnish investors regarding investing in pre-school and day-care centre operator Touhula Varhaiskasvatus With fund investments we will continue to finance Finnish venture capital and private equity funds with the aim of increasing their fund sizes and encouraging international funds to be more active in Finland s investment market. We focus our direct investments on internationalising companies that need later-stage venture capital financing and also on medium-sized Finnish companies seeking international growth. The objective of our investment operations is international networking, improved channelling of capital, and the strengthening of expertise and active ownership in portfolio companies to enhance growth, profitability and value creation.
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