25.02.2016
TAALERI GROUP 1 JANUARY–31 DECEMBER 2015
- The Group’s turnover was EUR 58.4 million, growth of 9.0% (1–12/2014: EUR 53.6 million)
- The Group’s operating income increased by 48.3 % to EUR 58.4 million (39.4 million)
- EUR 27.3 million was entered in the 2015 result as income from the Garantia acquisition
- The Group’s profit increased by 127.5% to EUR 47.4 million (20.8 million)
- The Group’s operating profit increased by 202.4 % to EUR 20.1 million, where one-off items from the acquisition of Garantia in 2015 are not counted (6.6 million – in 2014, the fair value change of EUR 14.2 million of Finsilva was not counted)
- Earnigs per share 1.53 (0.61) euro and adjusted earnings per share 0.55 (0.15) euro
- The Board of Directors proposes a dividend of EUR 0.14 per share and a return of capital of EUR 0.06 per share
- At the end of December, the Group’s managed assets amounted to EUR 3.9 billion (3.4 billion), growth of 13.3%
- The company’s name was changed from Taaleritehdas Plc to Taaleri Plc in January 2016.
Taaleri GROUP 1 JULY–31 DECEMBER 2015
- The Group’s turnover was EUR 28.4 million, decrease of 22.7% (7-12/2014: EUR 36.8 million)
- The Group’s operating income grew by 25.9% to EUR 28.4 million (22.6 million)
- The Group’s profit decreased by 53.9% to EUR 8.3 million (17.9 million)
- The Group’s operating profit grew by 121.9% to EUR 8.3 million (3,7 million)
- Earnings per share 0.21 (0.53) euro and adjusted earnings per share 0.21 (0.07) euro
Outlook
Taaleri’s objectives are an equity ratio minimum 30% and operating profit of minimum 15%. Long term objectives for the return on equity is to exceed minimum 15%.
In addition, the company aims to increase the amount of dividend distributed, and each year to distribute a competitive dividend, taking into consideration the company’s situation and financial circumstances. Despite the challenging economic environment, our goal is controlled profitable growth, and we expect that the company’s financial targets will be met in 2016.
This report has been prepared in accordance with the IAS 34 standard and the information presented in it is audited.
CEO Juhani Elomaa on the result:
The result for last year was good. The Group’s operating profit more than doubled to EUR 20 million. Our goal has been to increase shareholder value. In practice, this means that, as our client, you can own with our help, own with us or even own a part of us. In this goal-oriented development, we succeeded very well last year.
The wealth management market is very competitive. During last year, however, we managed to increase assets under management by 13% to EUR 3.9 billion. It is essential for us to continue as an innovative group and to maintain our clients’ capital even in challenging market conditions. Private equity business developed significantly last year, and income from this doubled.
The purchase of Garantia Insurance Company has proved to be an excellent acquisition. Garantia’s operations are reflected in the Financing segment’s turnover and result, which increased Taaleri Group’s operative income by EUR 13 million and operating profit by EUR 8 million.
In addition to its excellent impact on the result, the Garantia acquisition as well as arrangements relating to Fellow Finance, which provides peer-to-peer lending services, helped us streamline our Group structure into two segments. The Wealth Management segment is built around asset management and various private equity fund products. The Financing segment focuses on various corporate and private market financing services.
The Garantia acquisition is presented in the financial statement as entries according to the international IFRS reporting standard. We have, however, transparently revealed the effects of different financial statement items on Taaleri’s result and financial performance. We are now creating clear reporting practices for the journey soon to begin on the main list of the Helsinki Stock Exchange.
Taaleri’s business during the review period
2015 was full of events. In March 2015, Taaleri organised a successful share issue worth EUR 23.2 million, which financed part of the acquisition of Garantia. A new Board of Directors and new CEO were appointed for Garantia in connection with the acquisition. Garantia is creating for the Group new business opportunities and has brought with it strong expertise in risk management. After the execution of the Garantia transaction, the decision was made to move to the observance of international IFRS accounting principles from the beginning of 2015. As a result of the acquisition of Garantia, Taaleri became a financial and insurance group, which the Financial Supervisory Authority confirmed through a decision on 23 October 2015.
Taaleri’s strategic objective is to maintain a good equity ratio. In May 2015, Taaleri divested financing company Lainaamo, and invested in Fellow Finance Plc, which specialises in peer-to-peer loans and whose objective is to become an international peer-to-peer lender. In the second quarter of the year, the decision was also made to sell half of the shares that the Group owned in Finsilva Plc. By the end of the 2015 financial year, the Group’s equity ratio had strengthened to 44.8 %.
In the second half of 2015, several wind farm projects were divested, a property and real estate development fund was established, a EUR 1 million investment made in Rauma Marine Constructions and EUR 1.5 million investment in Sotkamo Silver in the form of a convertible bond. In the second half of the year, a major revamping of the brand was completed and investments were made in the company’s processes and IT systems, in order to be able to serve clients better in the future, including online.
The Group’s IFRS-based turnover increased by 9.0% to EUR 58.4 million (53.6). The Group’s operating turnover increased by 48.3% to EUR 58.4 million (EUR 39.4 million in 2014, if the change in the fair value of Finsilva of EUR 14.2 million is not taken into account). The positive development of the Group’s turnover in 2015 was affected by the turnover of Garantia of EUR 13.2 million, divested private equity fund projects valued at EUR 6.1 million, earnings bonuses of EUR 4.5 million and dividend yields of EUR 4.7 million.
Taaleri Group consolidated profit increased by 127.5% to EUR 47.4 million (20.8). Negative goodwill of EUR 28.6 million was entered in the consolidated result from the acquisition of Garantia Insurance Company Ltd together with costs of EUR 1.3 million. Operating profit for the financial year, which does not take into account non-recurring items from the Garantia acquisition in 2015, strengthened by 202.4% to EUR 20.1 million (6.6).
In the 2015 financial year, profit increased by 167.4% to EUR 44.1 million (16.5), whilst operating profit for the period after taxes was EUR 16.8 million (4.9). The overall result for the period from 2015 was EUR 39.5 million (16.5).
In 2015, Taaleri reorganised its business operations and now manages the group through two segments: Wealth Management and Financing. Activity that does not belong to the segments is presented in the group ‘Other business’, which includes parent company Taaleri Plc’s corporate governance and the Group’s own investments, which are made through Taaleri Investments Ltd. In May 2015, Taaleri sold the shares it owned in Lainaamo Ltd, as a result of which Lainaamo is presented separately in the income statement under ‘discontinued business’.
Events after the review period
- Taaleri announced on 11 January 2016 that a Taaleri-managed private equity fund will sell a biogas plant chain to Gasum Ltd. The sale is conditional and it is expected to be completed on 29 February 2016. The completion of the sale will have a positive impact on Taaleri’s result.
- An Extraordinary General Meeting of Taaleri Plc, held on 8 January 2016, decided to amend the Articles of Association and to combine the share series. The company’s Series A shares were converted to shares identical in rights to Series B shares in the ratio 1:1. After the combination, the company has only one series of share and each share has one vote and otherwise equal rights. After the combination, all of the company’s 28,350,620 shares are subject to trading in the First North Finland marketplace, maintained by NASDAQ OMX Helsinki Ltd, with the ticker code TAALA. At the same time, the company’s business name was changed to Taaleri Plc. The change relates to a change in Taaleri Group’s wider corporate identity and to gradual internationalisation.
- The company’s Extraordinary General Meeting also authorised the Board of Directors to decided on the acquisition of up to 2,000,000 of the company’s own shares using unrestricted equity in one or more instalments. The authorisation is valid for 18 months from the date of decision of the General Meeting and it cancels the authorisation to acquire the company’s own shares given at the General Meeting held on 20 March 2015. The shares may be acquired to develop the company’s capital structure, to finance or implement company acquisitions, investments or other arrangements pertaining to the company’s business operations or to use as part of the company’s incentive scheme or to be cancelled, if this is justified from the perspective of the company and shareholders.
- In connection with the Extraordinary General Meeting, the company’s listing on the main list of the NASDAQ OMX Helsinki Stock Exchange during the first quarter of the year was also announced.
Estimate of likely future development
The super-cycle in industrial and investment demand fuelled by the growth in developing markets and rising raw material prices has ended. It is unlikely that the cycle of over-indebtedness of the 2000s will be seen again in the near future. In Taaleri’s view, investors should be prepared for the fact that economic growth will be slower than before in the coming years, and the rate of inflation will be very slow. Stock market gains will be less than in recent years and rate fluctuation will increase. This does not mean, however, that there will be no opportunities on offer for investors – quite the contrary. In the near future, the stabilisation of raw material prices, new stimulus measures by central banks and the alleviation of the worst fears surrounding China may well trigger a strong recoil action in the most oversold stock market sectors. For example, the under-performance of developing stock markets that has been going on for years may finally turn positive.
In the longer term, fairly slow growth and a clear flattening out in the rise of stock markets will also open up opportunities for those that pick and choose their shares. An increasing amount of attention will be paid to pricing and profit growth potential, and earnings differences will increase.
The company’s management thinks that its business environment has become more demanding, but that the company has the opportunity to win market share on capital markets. The development of the Wealth Management segment has been positive, and the company has gained new clients from a competitive market with the aid of successful and different private equity fund projects. The development of the Financing segment has been positive, both in relation to insurance premium income and compensation costs. The company believes that moderate growth is achievable through continually improving risk management. It is believed that returns from the segment’s investment activity will remain on a low level.
Taaleri’s objectives are an equity ratio of minimum 30% and operating profit of minimum 15%. Long term objectives for the return on equity is to exceed 15%.
In addition, the company aims to increase the amount of dividend distributed, and each year to distribute a competitive dividend, taking into consideration the company’s situation and financial circumstances. Despite the challenging economic environment, our goal is controlled profitable growth, and we expect that the company’s financial targets will be met in 2016.
Board of Directors’ proposal on actions relating to profit and unrestricted equity
The parent company’s result for the financial year 1 January – 31 December 2015 was a profit of EUR 2,309,144.24 and the parent company’s distributable funds totalled EUR 42.1 million on 31 December 2015. The Board of Directors proposes to the Annual General Meeting to be held on 7 April 2016 that, on the basis of the balanced sheet adopted for the financial year ended on 31 December 2015, a dividend of EUR 0.14 per share be paid, a total of EUR 3,969,086.80, as well as a return of capital of EUR 0.06 per share, a total of EUR 1,701,037.20. The record date of the distribution of funds is 11 April 2016 and the dividend and return of capital will be paid on 18 April 2016. No substantial changes in the company’s financial position have taken place after the end of the financial year. The proposed distribution of funds does not jeopardise the company’s liquidity.
Helsinki 25.2.2016
The Board of Directors
All forecasts and estimates presented in this report are based on management’s current judgment of economic development and the actual results may be significantly different.
Taaleri Plc
Communications
Merasco Oy, tel. 358 9 612 9270, serves as Taaleritehdas’ Certified Advisor
The full financial statements will be published in the week commencing 29 February 2016.
Additional information:
Juhani Elomaa, CEO, Tel. 358 40 778 9020
Minna Smedsten, CFO, Tel. 358 40 700 1738
Taneli Hassinen, Head of Communications and IR, Tel. 358 40 504 3321