CapMan Plc 1–6 2022 Half-Year Report

CapMan Plc Stock Exchange Release / Half-Year Report
4 August 2022 at 8:00 a.m. EEST

CapMan Plc 1–6 2022 Half-Year Report

Results and significant events in 1–6 2022:

• Group turnover was MEUR 31.9 1 January–30 June 2022 (MEUR 23.2 1 January–30 June 2021) and increased by 38 per cent.
• Operating profit was MEUR 33.0 (MEUR 21.5) and increased by 53 per cent.
• Management Company business turnover was MEUR 26.2 (MEUR 18.9). Operating profit was MEUR 10.5 (MEUR 4.9).
• Service business turnover was MEUR 5.7 (MEUR 4.2). Operating profit was MEUR 3.0 (MEUR 1.9).
• Investment business operating profit was MEUR 24.1 (MEUR 17.3).
• Diluted earnings per share were 15.6 cents (10.2 cents).
• Capital under management was EUR 4.8 billion on 30 June 2022 and increased by MEUR 530 from 30 June 2021.

This stock exchange release is a summary of CapMan Plc’s Half-Year Report for the period 1 January–30 June 2022. 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/.

CEO’s comment:

“CapMan’s strong performance continued in the second quarter of 2022 despite challenging overall market conditions. We made progress with our strategic projects according to plan and the drive in our operations remained positive. The turnover for the first half of 2022 was MEUR 32, growth of 38 per cent from the first half of last year and the operating profit was MEUR 33, growth of 53 per cent. The profitability of all business segments improved from last year. Strong international fundraising, steadily improving fee profitability, successful long-term value creation work and well-executed recent exits continued as key drivers behind the positive development. CapMan’s outlook remains strong despite increased general market uncertainty.

Assets under management were EUR 4.8 billion at the end of the first half of 2022 and increased by approx. 12 per cent over the last twelve months. We have already raised approx. MEUR 450 in new capital in 2022 year-to-date and our many ongoing fundraising projects are proceeding as planned. Investor demand has so far remained favourable despite the increased uncertainty prevalent in the market, and we anticipate continued growth in assets under management over the next years.

Fee-based profitability is stable and predictable and has continued its steady growth over several years to reach a new record level. Growth in the first half of 2022 was almost 40 per cent from last year’s comparable figures. We expect fee-based profitability to continue its strong growth during upcoming years especially due to growth in assets under management and the positive development of the Service business.

The share of carried interest as part of our earnings mix demonstrates notable growth. The exit from Picosun transferred the Growth Equity 2017 fund to carry. The investment in Picosun was very successful and the company held the highest exit value throughout CapMan’s history. The Nordic Real Estate Fund started generating carry earlier in the year. Both funds have several assets remaining that generate carry when exited. In addition to these, many other funds are close to carry and we expect some of them to start generating carry in the next 12 months.

Long-term value creation work was very successful in the beginning of the year. The fair value changes of investments from our balance sheet were MEUR +24 in the first half of 2022. The positive development was broad-based and included almost all our active strategies and external funds. The positive fair value change was driven primarily by completed transactions in our own and external funds.

Our balance sheet and liquidity are strong. At the end of the second quarter of 2022, our equity ratio was 48 per cent and liquid assets including cash on hand and cash assets classified as fund investments were MEUR 58. Liquid assets have maintained a good level especially following successful exits and carried interest. CapMan’s objective is to pay an annually increasing dividend. The recent result development and growth expectations support this objective. The Annual General Meeting for 2022 decided to distribute 15 cents per share in dividends and equity repayments, which increases distribution to shareholders for the ninth consecutive year.

Sustainability is a key focus area for our operations. During the first half of 2022, we have continued with our ambitious sustainability work and, among others, committed to the Science Based Targets initiative, hired new expertise, issued a sustainability-linked bond, published a sustainability report outlining our sustainability work and organised internal training on the subject. We also continue to strengthen the dialogue with our portfolio companies to reach our joint sustainability targets.

Overall, I am very pleased with CapMan’s performance in the first half of the year. We progressed as planned with our central fundraising and value creation projects and in executing our strategic and operational agenda. CapMan’s value creation work and partnership with fund investors is long-term and the prevailing geopolitical and general market uncertainty has so far not had a significant impact on our business. After many favourable years, we are now likely to experience more challenging business conditions. However, a clear strategic direction, a growing international investor base, an attractive product offering and a strong financial position help CapMan navigate successfully also through shifting economic conditions and to generate attractive long-term returns for our customers and shareholders.”

Sincerely,

Joakim Frimodig

CEO, CapMan Plc

Key figures

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 2022

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 2022. Our objective is to improve the aggregate profitability of the 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 2022.

Result webcast today at 9.30 a.m. EEST

CapMan’s management will present the result for the review period in a webcast to be held at 9.30 a.m. EEST. Please access the webcast at https://capman.videosync.fi/q2-2022-interimreport. The conference will be held in English. A replay of the webcast will be available on the company’s website after the event.

Helsinki, 4 August 2022

CAPMAN PLC
Board of Directors

Further information:
Atte Rissanen, CFO, CapMan Plc, tel. +358 50 040 5732

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

Appendix: CapMan Plc 1-6 2022 Half-Year Report

About CapMan

CapMan is a leading Nordic private asset expert with an active approach to value creation. As one of the private equity pioneers in the Nordics we have built value in unlisted businesses, real estate, and infrastructure for over three decades. With over to €4.8 billion in assets under management, our objective is to provide attractive returns and innovative solutions to investors. We are dedicated to set science-based targets to reduce our greenhouse gas emissions in line with the Paris Agreement. We have a broad presence in the unlisted market through our local and specialised teams. Our investment strategies cover minority and majority investments in portfolio companies and real estate, and infrastructure assets. We also provide wealth management solutions. Our service business includes procurement and analysis, reporting and back office services. Altogether, CapMan employs approximately 180 professionals in Helsinki, Stockholm, Copenhagen, Oslo, London and Luxembourg. We are listed on Nasdaq Helsinki since 2001. Read more at www.capman.com.