15.08.2019
TAALERI PLC HALF-YEAR FINANCIAL REPORT 2019 STOCK EXCHANGE RELEASE 15 AUGUST 2019 AT 8:30 AM (EET)
Assets Under Management and Earnings From Investment Operations Grew, Result Burdened by Declined Performance Fees
The Group in January-June 2019
- Income was EUR 30.9 (35.2) million. The decrease was mainly due to lower performance fees.
- Continuing earnings declined by 8.6 per cent to EUR 24.5 (26.9) million.
- Earnings from investment operations doubled to EUR 6.8 (3.0) million.
- Operating profit was EUR 6.4 (12.4) million, or 20.6 (35.1) per cent of income.
- Earnings per share were EUR 0.18 (0.32).
- Assets under management grew 15.6 per cent to EUR 6.6 (5.7) billion. Growth was strongest in private equity funds.
- The Guaranty insurance portfolio remained on last year’s level and totaled EUR 1.6 (1.7) billion.
- Taaleri Energia made an international breakthrough in renewable energy with its SolarWind II fund.
| Key figures | H1/2019 | H1/2018 | 2018 | Long-term target |
| Earnings key figures | ||||
| Continuing earnings, MEUR | 24.5 | 26.9 | 52.0 | |
| Income, MEUR | 30.9 | 35.2 | 72.5 | |
| Operating profit, MEUR | 6.4 | 12.4 | 23.9 | |
| Operating profit, % | 20.6 | 35.1 | 33.0 | > 20.0 |
| Profit for the period, MEUR | 4.8 | 9.4 | 21.6 | |
| Return on equity*, % | 8.0 | 17.4 | 18.9 | > 15.0 |
| Balance sheet key figures | ||||
| Equity ratio, % | 48.9 | 48.3 | 51.4 | > 30.0 |
| Group’s capital adequacy ratio, % | 194.6 | 178.1 | 186.0 | |
| Per share key figures | ||||
| Earnings/share, EUR | 0.18 | 0.32 | 0.76 | |
| Equity/share, EUR | 4.22 | 3.84 | 4.26 | |
| Share closing price, EUR | 7.00 | 10.00 | 7.10 | |
| Other key figures | ||||
| Cost/income ratio | 79.5 | 65.1 | 67.0 | |
| Average full-time employees | 185 | 177 | 183 | |
| Market capitalization, MEUR | 198.1 | 283.1 | 201.0 | |
| Assets under management, BEUR | 6.6 | 6.0 | 5.7 | |
| Guaranty insurance portfolio, BEUR | 1.6 | 1.6 | 1.7 |
*annualized
Income statement items are compared with figures for the corresponding period last year. The balance sheet is compared to the situation at the end of 2018, unless otherwise stated.
CEO Robin Lindahl
“The beginning of the year was somewhat weaker than last year for Taaleri. Income totalled EUR 30.9 million and operating profit 6.4 million, corresponding to a margin of 21 per cent. The number of employees was adjusted in the Wealth Management and Financing segments during the spring
Assets under management grew by more than 15 per cent to EUR 6.6 billion. Taaleri strengthened its position as a forerunner in responsible investments by launching three new private equity funds – Taaleri Solarwind II, Taaleri Daycare Properties and Taaleri Wind IV. In addition, two special mutual funds started their operations. Continuing earnings in Wealth Management decreased 10 per cent during the first half-year due to the challenging market environment at the end of last year. The segment’s continuing earnings are estimated to be back on growth track during the end of this year.
Taaleri signed a funds distribution agreement with Nordnet and is now able to reach more than 200,000 private investors. Taaleri Group’s corporate finance arm, Taaleri Kapitaali Oy, received Certified Adviser status on the First North marketplace. From now on, Taaleri Kapitaali’s service offering will include IPOs both on the stock exchange main list and on the Nasdaq First North marketplace.
Garantia’s income grew 69 per cent to EUR 10.4 million due to the success of the investment operations. Net earned premiums grew 23 per cent to EUR 6.8 million, but net income from guaranty insurance operations declined 6 per cent to EUR 5.5 million as a result of change in claim provisions. Garantia’s return on investments at fair value totalled 5.3 per cent.
Taaleri Energia made its international breakthrough with the launch of Taaleri SolarWind II. The international renewable energy fund Taaleri Solarwind II raised commitments of EUR 220 million during its first closing with a strong institutional investor base. Good progress and international recognition was also seen in the development of the renewable projects in Taaleri Solarwind I. The Texas-based 275-MW Truscott-Gilliland Wind farm project is being enhanced with a new turbine supplier so that electricity production can start 2021.
The prevailing megatrends continue supporting Taaleri’s growth in Renewable Energy, Circular Economy, Real Estate and the related Financial Services. Responsibility is the foundation of our business, and through impact investing we positively influence on the surrounding community and the environment. We will continue creating interesting investment opportunities, and, in addition to economic returns, we want to offer our customers a way to positively impact the surrounding society and the environment.”
Half-Year Review 1 January–30 June 2019
Operating environment
Economic growth in the euro area was stronger than expected as the continued improvement of employment supported the economic development, but the economic outlook in the area weakened due to the slowing of the global economy and weak international trade. Economic growth in Finland, however, slowed in the first half of 2019. The key factors impacting the economic outlook in the euro area are geopolitical factors, protectionism, and the uncertainty related to the weaknesses of emerging markets.
Stock market development was strong, even though economic growth in the euro area and globally slowed down. The risk appetite and activeness of investors increased, and the looser policy of central banks had a favourable impact on stock market development. International politics in Europe and around the world is creating uncertainty in future market development.
Decelerating climate change is one of the key factors for a sustainable future and it requires significant investments. The EU has set a target to grow the share of renewable energy sources in energy production. Today wind power and solar energy are market-competitive alternatives in relation to other energy forms, which help the transition to renewable energy sources.
In addition to the investment environment and climate change, our operating environment and our company are directly and indirectly impacted by major trends in the financial sector, trends like changes in customer behaviour, the Americanization of the capital markets, and regulation. Creating responsible solutions and flexible structures gives us much more ability to handle the major changes targeting the sector – and ideally to also benefit from them.
Financial result
Income and operating profit
Segment-specific income and operating profit
| H1/2019 | H1/2018 | Change, % | 2018 | |
| EUR million | ||||
| Group income | 30.9 | 35.5 | -13.0 | 72.3 |
| Wealth Management | 17.2 | 29.7 | -42.0 | 48.7 |
| Financing | 10.4 | 6.2 | 68.8 | 12.5 |
| Energia | 1.4 | 1.1 | 29.2 | 2.3 |
| Other Operations | 1.8 | -1.5 | na | 8.8 |
| Group operating profit/loss | 6.4 | 12.4 | -48.2 | 23.9 |
| Wealth Management | 2.0 | 14.1 | -85.6 | 16.8 |
| Financing | 6.1 | 2.4 | 154.2 | 4.9 |
| Energia | -1.6 | -0.9 | 78.2 | -2.3 |
| Other Operations | -0.1 | -3.3 | -97.0 | 4.4 |
The Group's share of the result of associated companies is taken into account in the segment-specific income.
January–June 2019
The Group’s income in January-June 2019 was EUR 30.9 (35.2) million, a decrease of 12.4 per cent compared to the same period in 2018. The decrease was mainly due to the development of Wealth Management’s fees, and especially the negative development of performance fees during the beginning of the year. Performance fees totalled EUR -0.5 (5.6) million. The Group’s continuing earnings were EUR 24.5 (26.9) million, the development reflects the challenging stock market at the end of last year. Net income from insurance operations grew 68.7 percent to EUR 10.4 (6.2) million, of which earned premium (net) grew by 23.1 per cent to EUR 6.8 (5.5) million. Claims incurred were EUR 1.3 (-0.3) million, and investment operations generated EUR 5.0 (0.4) million. The Group’s other investment operations and other earnings totalled EUR 2.8 (3.4) million.
The Group’s operating profit was EUR 6.4 (12.4) million and represented 20.6 (35.1) per cent of the Group's income.
The total administrative costs totalled EUR 17.1 (14.2) million. Personnel costs totalled EUR 12.3 (10.2) million. The increase in personnel costs was mainly due to changes in variable personnel costs. Staff adaption measures due to organizational changes also burdened the result during the first half of the year. Other administrative expenses totaled EUR 4.7 (4.0) million and other operating expenses EUR 2.4 (3.7) million.
Profit for January-June 2019 amounted to EUR 4.8 (9.4) million. Comprehensive income was EUR 6.6 (9.0) million.
Taaleri’s balance sheet, investments and financing
The balance sheet total of the Taaleri Group was EUR 242.9 (31 Dec. 2018: 238.0) million. The Group’s cash and cash equivalents totaled EUR 11.9 (26.1) million, and investments EUR 169.2 (162.4) million, corresponding to 69.7 (68.2) per cent of the Group’s balance sheet total.
The Group’s interest-bearing liabilities amounted to EUR 61.3 (61.8) million, which consisted of EUR 54.8 (54.8) million in Taaleri Plc bond programmes and EUR 6.5 (7.0) million in liabilities to credit institutions. The EUR 20 million bond maturing in September will be refinanced with a bank loan signed in June. Liabilities totalled EUR 124.2 (115.6) million and equity stood at 118.7 (122.4) million. The dividend for the financial year 2018, totalling EUR 8.5 million, was paid in March.
The equity ratio of Taaleri Group remained strong and was 48.9 (51.4) per cent.
Outlook
Taaleri Plc announced 19 June that the year 2019 operating profit margin is estimated to be slightly lower than in 2018. The decrease is mainly due to the weakened continuing earnings of Wealth Management during the first half-year, and the realization of planned projects that has been postponed to the second half of 2019.
Short-term risks and concerns
The most significant external uncertainties affecting the Group’s operating profit are changes in the operating and regulatory environment and the development of the financial markets globally and especially in Finland.
The results of the Wealth Management and the Energia segments are influenced by the development of assets under management, which depends among other things on the progress of the private equity funds’ projects and the development of capital markets. Profit development is also influenced by the realization of performance fees, which are tied to the success of the investment operations. The Energia segment’s earnings are also affected by the success of its own investments in energy projects.
The Financing segment’s guaranty insurance business and investment activities have a major impact on Taaleri’s operational income and capital adequacy.
The Other Operations returns consist of the market value changes in investments and of sales profits/losses gained as well as returns of loans granted. The returns and income of the Other Operations may thus vary significantly between periods under review.
Long-term financial targets
Taaleri’s long-term operating profit target is at least 20 per cent of income, its long-term return-on-equity target is at least 15 per cent, and its long-term equity ratio target is at least 30 per cent.
The company strives to increase the amount of dividend it distributes, and to annually distribute a competitive dividend, with consideration to the company’s financial and financing situation as well as the Group’s capital adequacy requirement.
Helsinki, 15 August 2019
Taaleri Plc
Board of Directors
For more information, please contact:
CEO Robin Lindahl, 358 50 595 9616
CFO Minna Smedsten, 358 40 700 1738
Head of Communications and IR Sophie Jolly, 358 40 828 7317, investors@taaleri.com
Taaleri publishes its Half-Year Financial Report 2019 as a PDF file attached to this stock exchange release. The report is also available at https://www.taaleri.com/en/investor-relations/reports-and-presentations.
An English presentation will be available today, 15 August 2019, from 13:00 CET at https://www.taaleri.com/en/investor-relations/reports-and-presentations. The web cast is conducted in Finnish.
Taaleri in brief
Taaleri is a Finnish financial service company, whose parent company Taaleri Plc is listed on Nasdaq Helsinki's, Finland, main market. The Taaleri Group comprises three business areas: Wealth Management, Financing, and Energy. In addition, the Group makes investments from its own balance sheet.
At the end of June 2019, Taaleri had assets under management totalling EUR 6.6 billion and 5,300 wealth management customers. Taaleri Plc has some 4,300 shareholders. Taaleri’s operations are supervised by the Finnish Financial Supervisory Authority.
More information about our company and services:
www.taaleri.com/en
www.taalerivarainhoito.com/en
www.taalerienergia.com
www.taalerikapitaali.com/en
www.garantia.fi/en
Sophie Jolly, Head of Communications and IR, sophie.jolly@taaleri.com, tel. 358 40 828 7317
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