05.11.2021
TAALERI PLC STOCK EXCHANGE RELEASE 5 NOVEMBER 2021 AT 8:00 (EET)
Taaleri Plc Interim Statement 1 January–30 September 2021: Taaleri’s continuing earnings grew and operating profit was 37% of income in the third quarter
On April 30, 2021, Taaleri completed the sale of its wealth management operations to Aktia and recognized a tax-free gain of EUR 111.1 million on the transaction. Taaleri applies the requirements of IFRS 5 Non-current Assets Held for Sale and Discontinued Operations in the classification, presentation, and recognition of sale of the wealth management operations.
On 25 October 2021, Taaleri Plc announced that the Group’s CEO Robin Lindahl had left his post immediately and the Board of Directors has appointed Peter Ramsay, M.Sc. (Econ.), as the new CEO as of 1 December 2021. As of 25 October, Karri Haaparinne, former Deputy CEO of Taaleri and one of the founders of the company, was appointed as Taaleri’s interim CEO.
July–September 2021, segment reporting, continuing operations
- The income according to the segment reporting grew by 0.9% to EUR 12.3 (12.2) million.
- Continuing earnings grew by 4.2% to EUR 9.2 (8.8) million. The continuing earnings of the Private Asset Management segment grew by 6.3% to EUR 4.8 (4.6) million, and the continuing earnings of the Strategic Investments segment decreased by 0.1% to EUR 3.9 (3.9) million.
- Performance fees were EUR 0.0 (0.1) million and investment operations generated EUR 3.1 (3.3) million.
- According to segment reporting, operating profit was EUR 4.6 (5.0) million, corresponding to 37.3% (40.7) of income.
- The AUM in the Private Asset Management segment grew by 27.4% to EUR 2.1 (1.7) billion.
July–September 2021, IFRS reporting, continuing operations
- Income from continuing operations in accordance with IFRS grew by 28.7% to EUR 13.2 (10.3) million.
- Operating profit was EUR 4.6 (3.7) million and profit for the period in accordance with IFRS was EUR 3.2 (4.7) million, taking into account discontinued operations.
- Earnings per share were EUR 0.11 (0.10) for continuing operations, EUR 0.00 (0.08) for discontinued operations and EUR 0.11 (0.17) for the result of the period.
January–September 2021, segment reporting, continuing operations
- The income according to the segment reporting grew by 65.4% to EUR 40.3 (24.4) million, mostly due to changes in the fair value of investment operations.
- Continuing earnings grew by 12.4% to EUR 29.3 (26.1) million. The continuing earnings of the Private Asset Management segment grew by 11.1% to EUR 14.7 (13.2) million, and the continuing earnings of the Strategic Investments segment by 11.3% to EUR 12.1 (10.8) million.
- Performance fees were EUR 0.8 (0.1) million and investment operations generated EUR 10.2 (-1.8) million.
- According to segment reporting, operating profit was EUR 14.1 (3.3) million, corresponding to 35.0% of income.
- The operating profit of discontinued operations for January–April was EUR 3.3 (1–9 2020: 5.1) million, including EUR 1.6 million in costs related to divestment of the wealth management operations.
January–September 2021, IFRS reporting, continuing operations
- Income from continuing operations in accordance with IFRS amounted to EUR 42.4 (20.2) million and operating profit to EUR 12.0 (1.2) million. A total of EUR 2.1 million in non-recurring expenses were attributed to the divestment of the wealth management operations.
- The operating profit of discontinued operations totalled EUR 116.1 (7.6) million, which consists of a profit of EUR 111.1 million from the sale of the wealth management operations and EUR 5.0 million of net operating profit from the wealth management operations in January–April.
- Earnings per share were EUR 0.33 (-0.02) for continuing operations, EUR 4.06 (0.24) for discontinued operations and EUR 4.38 (0.22) for the result of the period.
- The Extraordinary General Meeting decided on 28 May 2021 to pay an additional distribution of assets of EUR 1.00 per share.
There are differences in the figures in the Group's consolidated income statement and segment reporting due to the application of IFRS 5. In the consolidated income statement (p. 24), intra-group income and expenses between discontinued and continuing operations have been eliminated. In segment reporting, income and expenses between discontinued and continuing operations are presented as transactions outside the Group. The earnings figures in the explanatory section in this interim statement represents the Group's continuing operations according to segment reporting, unless otherwise stated. The chosen presentation will improve the comparability of segment reporting in the coming years.
The IAS 34 standard was not observed in the preparation of the interim statement. The information in the interim statement has not been audited. See page 20 for further information of the accounting policies of this interim statement.
REVIEW BY CEO KARRI HAAPARINNE
After the major strategic changes in early 2021, we focused on our core business and advancing our strategy in the third quarter. No significant single events related to the private asset management business took place in the quarter, the effects of which would be reflected in the quarter’s financial indicators.
Continuing earnings for the third quarter grew by 4%. The income from continuing operations was EUR 12.3 million, and operating profit was EUR 4.6 million, representing 37% of income. The amount of assets under management was EUR 2.1 billion.
In the Private Asset Management segment, we prepared and launched new funds and promoted projects for private equity funds in the investment phase. The investment in business growth and development is reflected in the segment’s third quarter results. The ramp-up of the new and developing operations will affect the segment’s result throughout the strategy period due to the nature of private asset management business.
The largest business of Private Asset Management, i.e. renewable energy, focused on projects in the construction phase and project proposals of the Taaleri SolarWind II fund, which held its final closing in June, and on advancing its in-house development projects. The operation and construction projects of the fund proceeded according to plan in the third quarter, and the project pipeline looks promising.
During the early part of the year, the real estate business conducted an extensive international tender for the sale of Taaleri Housing Fund VI, which was completed very successfully in July for the purchase price of approximately EUR 145 million. The fund almost doubled the capital invested by its investors. The performance fee for Taaleri from the fund will be fully recognised after the final purchase price has been confirmed in the last quarter of the year. During the review period, the real estate business also concluded its first international management agreement. In addition, the retail sale of Taaleri Housing Fund VIII started in Aktia at the end of the review period.
The preparation of the first private equity fund for the bioindustry business is progressing as planned. We are a pioneer in private asset management business in investments focused on bioindustry, and we believe that the fund will attract a lot of interest. The biocoal plant to be built in Joensuu is also progressing as expected, and the sale of the co-investment to institutional customers started at the end of the third quarter.
In the third quarter, we continued to launch joint fund products with Aktia, and we will continue to develop active cooperation.
In our Strategic Investments segment, Garantia continued its strong business operations in accordance with its own strategy. Net income from guaranty insurance operations remained at the level of the comparison period. The sale of new residential mortgage guarantees has continued to grow as a result of an expanded distribution channel and a buoyant housing market. The net income from investment operations was EUR 1.8 million, and the combined ratio describing the profit development of insurance operations was 36.8% in the third quarter, as claims incurred remained very low.
The cost reduction effects of financial, personnel and corporate arrangements made earlier in the year began to show as expected in the third quarter. In the Other group, fixed personnel costs fell by over 30% and finance costs by 65%. The divestments of non-strategic investments are proceeding as planned.
GROUP KEY FIGURES
| Group key figures, continuing operations in segment reporting |
7–9/2021 | 7–9/2020 | Change % | 1–9/2021 | 1–9/2020 | Change % | 2020 |
| Earnings key figures | |||||||
| Continuing earnings, MEUR | 9.2 | 8.8 | 4.2 | 29.3 | 26.1 | 12.4 | 35.9 |
| Income, MEUR | 12.3 | 12.2 | 0.9 | 40.3 | 24.4 | 65.4 | 40.0 |
| Operating profit, MEUR | 4.6 | 5.0 | -7.6 | 14,.1 | 3.3 | >100.0 | 9.1 |
| Operating profit, % | 37.3 | 40.7 | 35.0 | 13.5 | 22.8 | ||
| Profit for the period in consolidated income statement, MEUR | 3.2 | 4.7 | -33.0 | 124.1 | 6.2 | >100.0 | 13.1 |
| Return on equity*, % | 5.8 | 15.5 | 93.7 | 6.6 | 10.1 | ||
| Balance sheet key figures | |||||||
| Equity ratio, % | 67.5 | 48.5 | 67.5 | 48.5 | 49.7 | ||
| Group’s capital adequacy ratio, % | 378.7 | 170.4 | 378.7 | 170.4 | 181.5 | ||
| Other key figures | |||||||
| Cost/income ratio excluding investment operations | 84.0 | 80.5 | 85.1 | 80.1 | 83.6 | ||
| Cost/income ratio | 62.9 | 58.7 | 63.5 | 85.9 | 77.0 | ||
| Full-time personnel in continuing operations, at the end of the period | 105 | 90 | 16.7 | 105 | 90 | 16.7 | 92 |
| Assets under management in Private Asset Management segment, BEUR | 2.1 | 1.6 | 2.1 | 1.6 | 1.7 | ||
| Guaranty insurance portfolio, BEUR | 1.7 | 1.8 | 1.7 | 1.8 | 1.8 |
*Annualised
OUTLOOK AND FINANCIAL TARGETS
Taaleri does not publish a short-term outlook. However, the company has set itself targets related to growth, profitability and return on invested capital.
Taaleri’s long-term targets include:
- Continuing earnings growth at least 15 per cent
- Operating profit at least 25 per cent of income
- Return on equity at least 15 per cent.
The company’s goal is to distribute to its shareholders at least 50 per cent of the profit for the financial year as well as the capital that the company does not need for growth investments or to fulfil its targets for solvency.
WEBCAST PRESENTATION FOR ANALYSTS AND MEDIA
A live webcast for analysts and the media will be held on November 11, 2021, at 11 a.m. The event is in Finnish. The webcast can be followed online at https://taaleri.videosync.fi/2021-11-05-taaleriosavuosiraporttiq32021. The event will be recorded and will be available later on Taaleri's investor pages at www.taaleri.com/investors/reports-and-presentations.
Helsinki, 5 November 2021
Taaleri Plc
Board of Directors
For further information, please contact:
CEO Karri Haaparinne, 358 40 519 0441, karri.haaparinne@taaleri.com
CFO Minna Smedsten, 358 40 700 1738, minna.smedsten@taaleri.com
Head of Communications and IR Siri Markula, 358 40 743 2177, siri.markula@taaleri.com
Distribution:
Nasdaq Helsinki
Key media
www.taaleri.com
Taaleri in brief
Taaleri is a Nordic investment and asset manager with an emphasis on renewable energy and other alternative investments. We channel capital towards economically profitable undertakings that have a lasting positive impact on the environment and society. We are a signatory of the UN Principles for Responsible Investment (UNPRI) since 2010. Taaleri’s vision is to be a Nordic forerunner in alternative investments focusing on sustainability.
Taaleri has two business segments: Private Asset Management and Strategic Investments. Private Asset Management consists of renewable energy, real estate, bioindustry and infrastructure businesses. The Strategic Investments segment includes Garantia Insurance Company Ltd.
Taaleri has EUR 2.1 bn of assets under management in its private equity funds and co-investments. The company has approximately 120 employees. Taaleri Plc is listed on Nasdaq Helsinki.
Siri Markula, Head of Communications and IR, tel. 358 40 743 2177, siri.markula@taaleri.com
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