CapMan Plc Group Interim Report 1 January - 30 June 2009
(Thomson Reuters ONE) - CapMan Plc Stock Exchange Release 7 August 2009 at 8.40 a.m.CapMan Plc Group Interim Report 1 January - 30 June 2009Performance and main events during and after the review period:- The Group's turnover totalled MEUR 17.0 (January-June 2008: MEUR19.5).- The Group posted an operating loss of MEUR -4.2 (operating profitof MEUR 3.7) as a result of change in the fair value of fundinvestments.- The Group's operating profit for second quarter was MEUR 0.5 (MEUR3.3).- Profit/loss before taxes was MEUR -5.6 (MEUR 3.7) and profit/lossafter taxes was MEUR -5.0 (MEUR 2.7).- Profit/loss attributable to owners of the parent company was MEUR-5.1 (MEUR 2.6). Earnings per share were -8.0 cents (3.3 cents).- Liquid assets on 30 June 2009 totalled MEUR 18.2 (MEUR 6.4).- Capital under management increased to MEUR 3,457.3 in the first sixmonths of the year (MEUR 3,407.5 on 31 December 2008 and MEUR 3,005.8on 30 June 2008).- The size of CapMan's hybrid bond issue was increased to MEUR 29during the period (MEUR 20 on 31 December 2008).- The Management Company business recorded a profit of MEUR 1.0 (MEUR4.0) and the Fund Investment business recorded a loss of MEUR -6.0(MEUR -1.3).- CapMan will incorporate its Fund Investment business to a newlyestablished company, to which it will transfer its fund investmentsand investment commitments by the end of the first quarter of 2010.- CapMan's own investment commitments will lower by a total of MEUR21.6 as CapMan sells investment commitments worth MEUR 13.6 toBelgian private equity firm Gimv and as CapMan's commitment in CapManPublic Market fund decreased by MEUR 8.0 at the close of the period.The incorporation of Fund Investments and sale of investments andcommitments is specified in more detail in a separate Stock Exchangerelease published today.CEO Heikki Westerlund comments on the events of the review period andon future prospects:"The incorporation of own fund investments and investment commitmentsclarifies the distinction between Management Company and FundInvestment businesses. CapMan Plc's capital calls will be lowered inthe next few years by some MEUR 22 with the sale of remainingcommitments, thus significantly strengthening the Group's financialposition. We are pleased to announce this cooperation with Belgianprivate equity house Gimv who has a deep understanding of theindustry and of future opportunities in Europe and Russia.CapMan's operating environment has been challenging in the first halfof 2009. Fundraising as well as M&A and real estate activity havepractically been in a standstill. We are awaiting market developmentsover the following 12 months. The possible gradual recovery of thereal economy and its stimulus to the M&A market provides attractiveopportunities for private equity investors. CapMan funds have accessto more than EUR 1 billion for investments in portfolio companies andreal estate.The operating profit in the second quarter was MEUR 0.5 positive.Management Company business posted a satisfactory result inJanuary-June, taking into account goodwill write-down as well as thatno management fees were received from CapMan Buyout IX fund beforethe end of the second quarter. We have paid special attention tomanaging expenses. The negative development in fair values ofinvestments that contributed to the loss in the first half of 2009was halted in the second quarter."Business operationsCapMan is an alternative asset manager, which also makes investmentsin its own funds. The guiding principle for investment activities ofthe funds managed by the Group is to work actively and directlytowards increasing the value of investments.The Group has two operating segments: Management Company business andFund Investments. The Management Company business is furthersubdivided into two business areas, which are CapMan Private Equity(manages funds that invest in portfolio companies) and CapMan RealEstate (manages funds that invest in real estate and provides realestate consulting). Income from the Management Company business isderived from management fees paid by funds, from carried interestreceived from funds and from income generated by real estateconsulting.The Fund Investment business comprises fund investments made fromCapMan Plc's own balance sheet and investments in Maneq funds. Incomefrom the Fund Investment business is derived from realised returns onfund investments and from changes in the fair value of investments.There may be considerable quarterly fluctuation in carried interestas well as in the fair value of fund investments. For this reason theGroup's financial performance should be analysed over a longer timespan than the quarterly cycle.Incorporation of Fund Investment business and sale of own investmentsand commitmentsCapMan has established a new company, CapMan Fund Investments SICAVSIF, which operates as a feeder fund into funds managed by CapMan.Part of the own investment commitments and fund investments thatCapMan has made as a fund investor were transferred to the feederfund on 30 June 2009, and CapMan will transfer its remaininginvestments and commitments by the end of the first quarter of 2010.Furthermore, CapMan will sell investment commitments worth MEUR 13.6and fund investments worth MEUR 3.4 to Belgian-based private equityfirm Gimv. The incorporation of Fund Investments and sale ofinvestments and commitments is specified in more detail in a separateStock Exchange release published today.In addition, CapMan's own investment commitments fell by MEUR 8.0when the commitment given to CapMan Public Market fund decreased fromMEUR 15.0 to MEUR 7.0 at the close of the period due to a sell to aninstitutional investor.Group turnover and result in January-June 2009The Group's turnover in January-June 2009 decreased from thecomparison period and was MEUR 17.0 (January-June 2008: MEUR 19.5).Fair value changes related to fund investments were MEUR -4.8 (MEUR-1.3), and operating expenses amounted to MEUR 16.5 (MEUR 14.6). Theexpenses have increased after the comparison period particularly as aresult of the new CapMan Russia and CapMan Public Market investmentareas and the impact of CapMan Hotels RE fund's expenses made in fullfrom March 2008.The Group's operating profit/loss totalled MEUR -4.2 (MEUR 3.7).During the review period there was a goodwill write-down of MEUR 0.7related to the life science operations acquired in 2002. CapMan hasno plans to establish new independent life science funds. Financialincome and expenses amounted to MEUR -0.2 (MEUR 0.2), and the shareof the associated companies' result was MEUR -1.2 (MEUR -0.1).Profit/loss before taxes was MEUR -5.6 (MEUR 3.7) and profit/lossafter taxes was MEUR -5.0 (MEUR 2.7).Profit/loss attributable to the owners of the parent company was MEUR-5.1 (MEUR 2.6). Earnings per share were -8.0 cents (3.3 cents).The quarterly breakdown of turnover and profit, as well as turnover,operating profit/loss and profit/loss by segment for the reviewperiod, is presented in the tables section of the Interim Report.Management Company businessTurnover generated by the Management Company business in January-June2009 totalled MEUR 16.8 (MEUR 19.3). Management fees grewsubstantially from the comparable period and amounted to MEUR 15.6 inJanuary-June 2009 (MEUR 13.6). The increase was attributable toestablishment of the CapMan Hotels RE, CapMan Public Market andCapMan Russia funds in 2008. CapMan Buyout IX fund started to paymanagement fees at the end of the review period with the closing ofthe fund's first investment.Income from real estate consulting totalled MEUR 1.0 (MEUR 1.3). Theaggregate total of management fees and income from real estateconsulting was MEUR 16.6 (MEUR 14.9).No substantial exits were made from funds in carry during the reviewperiod and no carried interest income was generated. In thecomparable period carried interest income totalling MEUR 4.1 wasgenerated as a result of the StaffPoint exit.Operating profit for the Management Company business was MEUR 0.6(MEUR 4.9) and profit for the period was MEUR 1.0 (MEUR 4.0).The status of funds managed by CapMan is presented in more detail inAppendix 1.Fund Investment businessTurnover generated by the Fund Investment business in January-June2009 amounted to MEUR 0.2 (MEUR 0.2), as a result of realised returnson fund investments.Fair value changes related to fund investments were MEUR -4.8 (MEUR-1.3), which represents an 8.7% decrease in the value of investmentsduring the review period. In the second quarter fair value changes offund investments were MEUR -0.3, which represents a 0.5% decrease invalue. The negative development in fair value for the whole periodwas attributable to the general market situation and its impact onthe multiples of portfolio companies' listed peers used in companyvaluations. The fall in fair value was also attributable to aweakening in result prospects of certain portfolio companies. Therewere also positive fair value developments within the portfolio. Theaggregate fair value of fund investments on 30 June 2009 amounted toMEUR 56.2 (MEUR 54.7 on 30 June 2008).Operating profit/loss for the Fund Investment business was MEUR -4.8(MEUR -1.2) and profit/loss for the period was MEUR -6.0 (MEUR -1.3).During the review period CapMan made new investments in its own fundsto the amount of MEUR 8.1 (MEUR 14.6). Investments were made inCapMan Buyout VIII, CapMan Buyout IX, CapMan Russia and CapMan PublicMarket, among other funds. CapMan did not give any new investmentcommitments to its funds during the review period, and the commitmentto CapMan Public Market fund was decreased from MEUR 15 to MEUR 7 atthe close of the period. On 30 June 2009 the amount of remainingcommitments was MEUR 61.9 (MEUR 47.0). The aggregate fair value ofexisting investments and remaining commitments at 30 June 2009totalled MEUR 118.1 (MEUR 101.8). CapMan's objective is to invest inits future funds 1-5% of their original capital depending on thefund's demand and CapMan's own investment capacity.Investments in portfolio companies are valued at fair value inaccordance with the International Private Equity and Venture CapitalValuation Guidelines (IPEVG) and real estate assets are valued inaccordance with the value appraisements of external experts, asdetailed in Appendix 1. The fair value changes have no impact on theGroup's cash flows.Investments at fair value and remaining investment capacity byinvestment area are presented in the tables section of the InterimReport.Balance sheet and financial position on 30 June 2009CapMan's balance sheet total increased during the review period toMEUR 134.9 (MEUR 107.1 on 30 June 2008). Non-current assets remainedstable during the period and amounted to MEUR 104.4 (MEUR 91.4 on 30June 2008). Goodwill was MEUR 10.2 on 30 June 2009. The carryingamount of goodwill was adjusted during the review period by MEUR 0.7following the lowering of the final purchase price for the Norumacquisition, and by MEUR 0.7 related to the write-down of lifescience operations. Long-term receivables amounted to MEUR 23.9 (MEUR21.6), of which MEUR 21.7 (MEUR 17.2) were loan receivables from theManeq funds. In addition to CapMan Plc, CapMan personnel areinvestors in the Maneq funds. The expected returns from CapMan'sManeq investments are broadly in line with the return expectationsfor CapMan's other own fund investments. Maneq funds pay market rateinterest on loans they receive from CapMan Plc.Current assets amounted to MEUR 30.5 (MEUR 15.7). Liquid assets (cashin hand and at banks, plus other financial assets at fair valuethrough profit and loss) amounted to MEUR 19.1 (MEUR 6.8). Liquidassets mainly include the remaining proceeds of the hybrid bond,which has been used to finance own fund investments. The size of thehybrid bond was increased to MEUR 29 during the review period (MEUR20 on 31 December 2008), and it may be increased to at most MEUR 30.The hybrid bond is included in 'Other reserves' under equity in thebalance sheet. The interest on the bond is payable semi-annually andhas been deducted from equity at the close of the review period. At30 June 2009 CapMan Plc had a bank financing package of MEUR 60 (MEUR60) available, of which MEUR 46.0 (MEUR 22.0) was in use. There wereno significant changes in the amount of interest-bearing liabilitiesduring the review period. The amount of trade and other payables wasMEUR 12.8 (MEUR 12.9). The Group's interest-bearing net debtsamounted to MEUR 26.9 (MEUR 25.2).The Group's cash flow before financing was MEUR -15.1 (MEUR -10.8).Income from management fees received from the funds is paidsemi-annually in January and in July, which can be seen under workingcapital in the cash flow statement. Cash flow from investments isprimarily related to the fund investments made.Key figuresCapMan's equity ratio on 30 June 2009 was 54.4% (54.5% on 30 June2008). Return on equity was -7.1% (4.3%) and return on investment was-3.8% (5.3%). The target level for the equity ratio is at least 50%and for return on equity at least 25%. 30.6.09 30.6.08 31.12.08Earnings per share, cents -8.0 3.3 -10.2Diluted, cents -8.0 3.3 -10.2Shareholders' equity per share,cents* 89.1 72.0 86.1Share issue adjusted number ofshares 82 257 171 79 977 875 80 432 600Number of shares at end of period 83 674 965 80 007 632 81 458 424Number of shares outstanding 83 648 666 80 007 632 81 322 921Own shares held by the Company atend of period 26 299 0 135 503Return on equity, % -7.1 4.3 -11.8Return on investment, % -3.8 5.3 -6.3Equity ratio, % 54.4 54.5 50.3Net gearing, % 36.5 43.8 30.3* In line with IFRS standards, the hybrid bond has been included inequity also when calculating equity per share.Fundraising and capital under management on 30 June 2009Capital under management refers to funds' remaining investmentcapacity and capital already invested at acquisition cost. CapMan'starget is to increase the capital under management by an average of15% per year.Fundraising for CapMan Buyout IX, CapMan Russia, CapMan Hotels RE andCapMan Public Market funds was carried out during the review period.New capital amounting to MEUR 18 was raised to the CapMan Buyout IXfund during the review period. The fund's size was increased to MEUR221 in April and its fundraising continues.The final close of CapMan Russia fund was held at MEUR 118.1 inApril. Following the final closing, CapMan Plc's share of thepossible carried interest to be generated by the fund was alsodetermined. CapMan Plc will receive 3.4% of the fund's cash flows ifthe fund is in carry. The relatively lower carried interest shareresults from the fact that part of the fund had already been raisedbefore its transfer under CapMan's management.During the review period, equity in CapMan Hotels RE fund grew byMEUR 27.6 and CapMan Public Market fund raised MEUR 15.0 in newcapital, of which MEUR 8.0 was subscribed to the investmentcommitment that had been previously given by CapMan.Capital under management totalled MEUR 3,457.3 on 30 June 2009 (MEUR3,005.8 on 30 June 2008). Of this, MEUR 1,789.2 (MEUR 1,365.3) was infunds making investments in portfolio companies and MEUR 1,668.1(MEUR 1,640.5) in real estate funds.The funds under management and their investment activities arepresented in more detail in Appendices 1 and 2.PersonnelOn 30 June 2009 CapMan employed altogether 148 people (126 people on30 June 2008), of whom 107 (100) worked in Finland and the remainderworked in other Nordic countries or Russia. In particular, theestablishment of the CapMan Russia and CapMan Public Market teamsboth contributed to growth in the number of personnel. A breakdown ofpersonnel by country and by team is presented in the tables sectionof the Interim Report.Shares and share capitalThere were no changes in CapMan Plc's share capital during the reviewperiod. The share capital on 30 June 2009 was EUR 771,586.98 (EUR771,586.98 on 30 June 2008). The number of listed CapMan Plc B sharesincreased to 77,674,965 following the issue by CapMan Plc of2,216,541 new CapMan B shares in connection with the directed issuerelated to the Norum acquisition. There were no changes in the numberof unlisted CapMan Plc A shares, which totalled 6,000,000 shares on30 June 2009. The Company's B shares entitle one vote per share andthe Company's A shares 10 votes per share.ShareholdersCapMan Plc had 4,735 shareholders on 30 June 2009 (4,467 on 30 June2008). No flagging notices were issued during the review period.Own sharesDuring the review period 109,204 of the Company's own shares wereused as part payment of the additional purchase price in the Norumacquisition. On 30 June 2009 the Company held altogether 26,299CapMan Plc B shares. There were no purchases of own shares during thereview period.Stock option programsAs at 30 June 2009 CapMan Plc had two stock option programs, OptionProgram 2003 and Option Program 2008, as part of the incentive andcommitment program for the key personnel. The 2003B options aretraded on the options list of NASDAQ OMX Helsinki. A total of 625,000B shares may be subscribed for with 2003B options, for which thesubscription period ends on 31 October 2009. No shares weresubscribed for with 2003B options during the review period.The maximum number of stock options issued within the Option Program2008 will be 4,270,000, which will carry entitlement to subscribe fora maximum of altogether 4,270,000 new B shares. The subscriptionperiod for 2008A options starts on 1 May 2011 and for 2008B optionson 1 May 2012. Receivables from shares subscribed with options areentered in the Company's invested unrestricted shareholders' equity.Trading and market capitalisationThe exceptional market climate and global stock market developmentthat continued in the first half of 2009 were reflected also in thetrading volumes and prices of CapMan Plc shares. On 30 June 2009 theclosing price of CapMan Plc B shares was EUR 1.00 (EUR 2.50 on 30June 2008). The average price during the review period was EUR 0.95(EUR 2.69). The highest price was EUR 1.21 (EUR 3.40) and the lowestEUR 0.77 (EUR 2.30). Altogether 8.3 million (6.3 million) CapMan PlcB shares were traded in the review period for a total value of MEUR7.9 (MEUR 16.9).The market capitalisation of CapMan Plc B shares on 30 June 2009 wasMEUR 77.7 (MEUR 185.0). The market capitalisation of all shares,whereby A shares are valued at the closing price of B shares for thereview period, was MEUR 83.7 (MEUR 200.0).Changes in Group managementOn 3 April 2009 Head of CapMan Life Science, Senior Partner Mr JanLundahl, B.Sc. (Econ.) resigned from CapMan Plc Group and left itsManagement Group. Partner Dr Johan Bennarsten, M.Sc. (Eng.), M.D.,who had previously acted as Deputy Head of CapMan Life Science, wasappointed Head of CapMan Life Science effective 6 April 2009.Board authorisationsBy decision of the Annual General Meeting, CapMan Plc's Board ofDirectors is authorised to purchase the Company's own shares and toaccept them as a pledge, to decide on a share issue and to issuestock options and other entitlements to shares. The authorisationsare in force until 30 June 2010, and the terms and conditionsattached to them were specified in more detail in the Stock Exchangerelease issued on 7 April 2009.Norum acquisitionThe purchase price of the Norum acquisition that was announced in May2008 and in which CapMan acquired a 51% stake in Norum decreased toMEUR 7.3. The Board of Directors of CapMan Plc decided that theadditional purchase price of MEUR 0.3 would be paid to the sellers incash and in CapMan Plc shares owned by the Company. FurthermoreCapMan Plc acquired the remaining 49% Norum shares in April. Thepurchase price for the remaining shares was MEUR 3.6, of which CapManPlc paid approx. MEUR 1.8 in cash and approx. MEUR 1.8 through adirected issue to the sellers.The Norum acquisition was specified in more detail in the StockExchange releases issued on 26 May 2008, 27 August 2008, 7 April 2009and 20 April 2009 and available on CapMan's website atwww.capman.com/En/Media/Releases/.Events after the review periodFundraising for CapMan Hotels RE and CapMan Public Market funds wasfinalised in July after the end of the period under review.The real estate hotel fund held a final close at MEUR 872.5, of whichMEUR 332.5 comprises equity and the balance is senior debt.New capital totalling MEUR 25 was raised to the CapMan Public Marketfund after the review period, and the fund was closed at MEUR 138.0.Significant risks and short-term uncertaintiesCapMan Plc's Management Company business is profitable on a yearlybasis, but the prevailing market climate has increased theuncertainty attached to forecasting the Company's financialperformance. The combination of an almost total standstill in the M&Amarket, a credit squeeze and a sharp decline in fair values ofinvestments has appreciably further weakened exit opportunities. Thismay result in postponement of exits, and consequently therefore ofcarried interest income. In the real estate market, the economicclimate may impact tenants' operations, and thereby the vacancy rateand rental income of investment properties. CapMan believes thatfundraising will also continue to be challenging, which might affectthe end result of ongoing fundraising activities and, through that,management fees over the next few years.Business environmentThe prospects for growth in the demand for alternative assets stillremain good over the long term. The financial crisis and the steepdecline in market valuations of other asset classes, however, areclearly slowing the growth in the alternative asset class. Privateequity has consolidated its position in financing M&A and growth, andcontinues to focus typically on consolidation in various sectors,family successions, privatisation of public services and functions,and the commercialisation of R&D in the technology and life sciencesectors. Increased entrepreneurial activity has also boosted growth.Real estate funds, for their part, have gained an established shareof institutional investors' investment allocations.The EU legislative initiative on regulation for alternative assetmanagers and funds will stipulate, when passed, an operating licensefor participants as well as other significant requirements includingfund investor and authority reporting, among others. The newregulations will burden the smaller players in particular and mayalso impact on the number of players to be registered. CapMan, due tothe Company's organisation and operating model, is in a good positionto meet the new regulations.The CapMan funds investing in portfolio companies will continue toimplement their investment strategies. The deep crisis in the debtmarket has been reflected, however, in CapMan's operating area also.The banks have focused their lending on large corporations inparticular which has delayed the positive impact on other companies.We believe that bank financing for buyouts, mergers & acquisitionsand real estate investments will gradually recover during the next 12months. We haven't yet seen forced sales, as price elasticity hasbeen lower in the private equity market than in public markets. Thenumber of new potential portfolio companies has remained at a goodlevel especially for the Public Market and Russia funds. The exitmarket has at present come to a standstill.The slowdown in growth of the real economy has been seen in ourportfolio companies, especially in those sectors that are linked, forinstance, to consumer demand or the automobile industry. A steepdecline in listed market valuations especially in the beginning ofthe year reflected in the fair value of our investments. The resultprospects for portfolio companies have weakened since the spring, butthe negative fair value development was offset by the favourabledevelopment in the multiples of listed peers in most cases. We planto keep enough reserves in our funds to support our companies' growthand financing in this market situation. Long-term cooperation withNordic banks is particularly important to us.In the real estate sector, the debt market crisis has depressed thevolume of real estate transactions. The number of foreign players inparticular has fallen significantly. Weakening property demand andrising yield expectations have lowered property valuation levels. Weanticipate transaction volumes to remain low but that deals arepoised to pick up in the second half of 2009. We also expect to seeincreased use of equity for the financing of real estatetransactions. Demand for prime real estate is still at a good leveland the changed market situation could well open up good investmentopportunities. Occupancy rates and demand for office and retailpremises are at a satisfactory level. However vacancy rates foroffice premises are expected to rise in the Helsinki metropolitanarea, which creates downward pressure on rent levels. The demand forreal estate consulting has remained stable.All CapMan's investment teams are in a good position and haveadequate resources to implement their investment strategies in theNordic countries and Russia. The funds investing in portfoliocompanies have some MEUR 860 for making new and follow-oninvestments, while the real estate funds have approx. MEUR 340investment capacity for identifying new investment targets anddeveloping the existing portfolio.Future outlookManagement fees and income from real estate consulting will coverCapMan's fixed expenses in 2009. Income from carried interest willdepend on developments in the exit market. Despite the slowdown inthe exit market, the funds still have portfolio companies ready toenter the exit process. We expect the CapMan Equity VII A, B andSweden funds as well as the Finnmezzanine III A and B funds totransfer to carry during 2010. The fair value of CapMan Plc's fundinvestments has developed negatively during the first half andprogress during the second half will depend on the general marketsituation and the development of portfolio companies. The Group'soverall result for 2009 will mainly depend on whether new exits aremade by funds already generating carried interest, and on how thevalue of investments develops in those funds in which CapMan is asubstantial investor. Without significant positive fair value changesand carried interest income the result for the full year 2009 will beloss-making.CapMan Plc's Interim Report for January-September 2009 will bepublished on Friday 30 October 2009.Helsinki, Finland, 7 August 2009CAPMAN PLCBoard of DirectorsPress conference:A press conference for analysts and the media will be held today at12.00 noon in CapMan's offices at Korkeavuorenkatu 32, Helsinki,Finland. CapMan's CEO Heikki Westerlund will present the result forthe first six months of the year and review the market situation. Alight lunch will be served at the event.Presentation material for the press conference will be published inFinnish and English on CapMan Plc Group's Internet website once theconference has started.Further information:Heikki Westerlund, CEO, tel. +358 207 207 504 or +358 50 559 6580Kaisa Arovaara, CFO, tel. +358 207 207 583 or +358 50 370 3715Distribution:Helsinki Stock ExchangePrincipal mediawww.capman.comAppendices (after the tables section):Appendix 1: CapMan Plc Group's funds under management on 30 June2009, MEURAppendix 2: Operations of CapMan's funds under management, 1 January- 30 June 2009Appendix 3: Capital and mandates under management of associatedcompany Access Capital Partners on 30 June 2009Accounting principlesThe Interim Report has been prepared in accordance with InternationalFinancial Reporting Standards (IFRS). As of 1 January 2009 the Grouphas applied the following new and revised standards: IFRS 8 OperatingSegments and IAS 1 Presentation of Financial Statements. In otherregards the accounting principles applied in the Interim Report arethe same as in the financial statements for 2008. The Interim Reporthas not been audited.GROUP STATEMENT OF COMPREHENSIVE INCOME (IFRS)EUR ('000) 1-6/09 1-6/08 1-12/08Turnover 17 040 19 528 37 126Other operating income 95 4 108Personnel expenses -9 074 -8 255 -16 867Depreciation and amortisation -494 -263 -635Impairment of goodwill -700 0 0Other operating expenses -6 238 -6 044 -12 321Fair value gains / losses ofinvestments -4 846 -1 308 -13 709Operating profit / loss -4 217 3 662 -6 298Financial income and expenses -187 156 -1 994Share of associated companies' result -1 237 -79 -2 378Profit / loss before taxes -5 641 3 739 -10 670Income taxes 622 -1 047 2 612Profit / loss for the period -5 019 2 692 -8 058Other comprehensive income:Translation differences -41 28 -359Total comprehensive income / loss -5 060 2 720 -8 417Profit / loss attributable to:Equity holders of the company -5 140 2 638 -8 209Minority interest 121 54 151Total comprehensive income / lossattributable to:Equity holders of the company -5 181 2 666 -8 568Minority interest 121 54 151Earnings per share for profit / lossattributableto the equity holders of the Company:Earnings per share, cents -8.0 3.3 -10.2Diluted, cents -8.0 3.3 -10.2Accrued interest payable on the hybrid bond has been taken intoconsideration when calculating earnings per share.GROUP BALANCE SHEET (IFRS)EUR ('000) 30.6.09 30.6.08 31.12.08ASSETSNon-current assetsTangible assets 1 024 1 000 1 064Goodwill 10 245 5 338 11 762Other intangible assets 3 131 1 300 3 229Investments in associated companies 4 345 2 914 1 575Investments at fair value through profit andloss Investments in funds 56 190 54 734 53 147 Other financial assets 796 973 828Receivables 23 944 21 607 24 451Deferred income tax assets 4 685 3 547 3 707 104 360 91 413 99 763Current assetsTrade and other receivables 11 451 8 933 12 965Other financial assets at fair valuethrough profit and loss 852 378 942Cash and bank 18 210 6 387 24 330 30 513 15 698 38 237Total assets 134 873 107 111 138 000EQUITY AND LIABILITIESCapital attributable to theequity holders of the CompanyShare capital 772 772 772Share premium account 38 968 38 968 38 968Other reserves 36 625 3 010 25 829Translation difference -703 161 -226Retained earnings -2 550 14 519 3 585 73 112 57 430 68 928Minority interest 186 123 221Total equity 73 298 57 553 69 149Non-current liabilitiesDeferred income tax liabilities 341 3 375 284Interest-bearing loans and borrowings 43 125 22 000 43 125Other liabilities 2 297 1 246 6 600 45 763 26 621 50 009Current liabilitiesTrade and other payables 12 806 12 937 15 751Interest-bearing loans and borrowings 2 875 10 000 2 875Current income tax liabilities 131 0 216 15 812 22 937 18 842Total liabilities 61 575 49 558 68 851Total equity and liabilities 134 873 107 111 138 000GROUP STATEMENT OF CHANGES IN EQUITY Attributable to the equity holders of the Company Share Share Other Trans- Re- Total Min- Total capital premium reser- lation tained ority equity account ves differ- earnings inte-EUR ('000) ences restEquity on31 Dec 2007 772 38 968 2 961 133 24 676 67 510 34 67 544Options 49 49 49Dividendspaid -12 795 -12 795 -12 795Other changes 0 35 35Comprehensiveprofit / loss 28 2 638 2 666 54 2 720Equity on30 Jun 2008 772 38 968 3 010 161 14 519 57 430 123 57 553Equity on31 Dec 2008 772 38 968 25 829 -226 3 585 68 928 221 69 149Options 20 20 20Dividendspaid 0 -46 -46Share issue 1 796 1 796 1 796Hybrid bond 9 000 9 000 9 000Hybrid bond,interest paid -1 015 -1 015 -1 015Other changes -436 -436 -110 -546Comprehensiveprofit / loss -41 -5 140 -5 181 121 -5 060Equity on30 Jun 2009 772 38 968 36 625 -703 -2 550 73 112 186 73 298CASH FLOW STATEMENTEUR ('000) 1-6/09 1-6/08 1-12/08Cash flow from operationsProfit / loss for the period -5 019 2 692 -8 058Adjustments 7 063 2 742 16 526Cash flow before change in working capital 2 044 5 434 8 468Change in working capital -3 915 -3 460 -4 564Financing items and taxes -3 238 -8 762 -10 327Cash flow from operations -5 109 -6 788 -6 423Cash flow from investments -9 965 -3 985 -20 387Cash flow before financing -15 074 -10 773 -26 810Dividends paid -46 -18 589 -18 589Other net cash flow 9 000 16 008 49 988Financial cash flow 8 954 -2 581 31 399Change in cash funds -6 120 -13 354 4 589Cash funds at start of period 24 330 19 741 19 741Cash funds at end of period 18 210 6 387 24 330SEGMENT INFORMATIONThe Group reports two segments:Management Company business and Fund InvestmentsEUR ('000) 1-6/09 1-6/08 1-12/08TurnoverManagement Company business CapMan Private Equity 12 570 15 665 29 273 CapMan Real Estate 4 273 3 676 7 517Total 16 843 19 341 36 790Fund Investments 197 187 336Total turnover 17 040 19 528 37 126Operating profit / lossManagement Company business CapMan Private Equity 741 5 218 7 607 CapMan Real Estate -186 -311 -284Total 555 4 907 7 323Fund Investments -4 772 -1 245 -13 621Total operating profit / loss -4 217 3 662 -6 298Profit / loss for the periodManagement Company business CapMan Private Equity 1 214 4 580 6 766 CapMan Real Estate -186 -553 -284Total 1 028 4 027 6 482Fund Investments -6 047 -1 335 -14 540Profit / loss for the period -5 019 2 692 -8 058Non-current assetsManagement Company business CapMan Private Equity 17 580 10 943 16 763 CapMan Real Estate 1 769 1 816 2 299Total 19 349 12 759 19 062Fund Investments 85 011 78 654 80 701Non-current assets total 104 360 91 413 99 763Income taxesThe Group's tax expenses comprise taxes on taxable income for theperiod and deferred taxes. Deferred taxes are calculated on the basisof all temporary differences between book value and fiscal value.DividendsNo dividend was paid for the 2008 financial year. (2007: EUR 0.16 pershare representing a total of MEUR12.8)Non-current assetsEUR ('000) 30.6.09 30.6.08 31.12.08Investments in funds at fair value throughprofit and loss at 1 Jan 53 147 44 230 44 230Additions 8 114 14 635 26 326Disposals -225 -2 823 -3 700Fair value gains / losses on investments -4 846 -1 308 -13 709Investments in funds at fair value throughprofit and loss at end of period 56 190 54 734 53 147Investments in funds at fair value throughprofit and loss at end of periodBuyout 29 018 30 104 29 301Technology 5 043 5 623 5 843Life Science 2 680 2 504 2 053Russia 2 274 0 1 919Public Market 2 019 0 0Mezzanine 4 308 2 837 2 570Other 350 567 340Real Estate 4 695 5 578 5 088Access 5 803 7 521 6 033Total 56 190 54 734 53 147Transactions with related parties (associated companies)EUR ('000) 30.6.09 30.6.08 31.12.08Receivables - non-current at end of period 21 140 17 606 21 257Receivables - current at end of period 1 193 2 497 2 196Non-current liabilitiesEUR ('000) 30.6.09 30.6.08 31.12.08Interest-bearing loans at end of period 43 125 22 000 43 125Seasonal nature of businessCarried interest income is accrued on an irregular schedule dependingon the timing of exits. One exit may have an appreciable impact onCapMan Plc's result for the full financial year.PersonnelBy country 30.6.09 30.6.08 31.12.08Finland 107 100 102Denmark 3 3 3Sweden 20 18 19Norway 6 5 6Russia 12 0 11In total 148 126 141By teamCapMan Private Equity 58 36 54CapMan Real Estate 43 45 43Investor Services 26 26 24Internal Services 21 19 20In total 148 126 141Contingent liabilitiesEUR ('000) 30.6.09 30.6.08 31.12.08Leasing agreements 8 811 9 879 9 087Securities and othercontingent liabilities 69 084 66 075 69 604Remaining commitments tofunds 61 911 47 041 77 234Remaining commitments by investment areaBuyout 23 351 18 988 26 133Technology 11 759 13 742 12 226Life Science 5 340 6 153 5 684Public Market 5 511 0 15 000Russia 10 509 0 11 091Mezzanine 913 3 490 2 504Other 595 343 311Real Estate 1 654 2 338 1 879Access 2 279 1 987 2 406In total 61 911 47 041 77 234Turnover and profit quarterly2009MEUR 1-3/09 4-6/09 1-6/09Turnover 8.3 8.7 17.0 Management fees 7.4 8.2 15.6 Carried interest 0.0 0.0 0.0 Income of investments in funds 0.2 0.0 0.2 Real estate consulting 0.6 0.4 1.0 Other income 0.1 0.1 0.2Other operating income 0.0 0.1 0.1Operating expenses -8.4 -8.1 -16.5Fair value gains / lossesof investments -4.5 -0.3 -4.8Operating profit / loss -4.7 0.5 -4.2Financial income andexpenses -0.5 0.3 -0.2Share of associatedcompanies' result 0.6 -1.8 -1.2Profit / loss beforetaxes -4.6 -1.0 -5.6Profit / loss for theperiod -3.7 -1.3 -5.02008MEUR 1-3/08 4-6/08 1-6/08 7-9/08 10-12/08 1-12/08Turnover 7.2 12.3 19.5 7.7 9.9 37.1 Management fees 6.4 7.2 13.6 7.3 8.7 29.6 Carried interest 0.0 4.1 4.1 0.0 0.0 4.1 Income of investments in funds 0.0 0.2 0.2 0.0 0.1 0.3 Real estate consulting 0.7 0.6 1.3 0.4 0.7 2.4 Other income 0.2 0.1 0.3 0.0 0.4 0.7Other operating income 0.0 0.0 0.0 0.0 0.1 0.1Operating expenses -6.7 -7.9 -14.6 -6.6 -8.6 -29.8Fair value gains / lossesof investments -0.1 -1.2 -1.3 -1.4 -11.0 -13.7Operating profit / loss 0.4 3.3 3.7 -0.4 -9.6 -6.3Financial income andexpenses 0.3 -0.1 0.2 -0.8 -1.4 -2.0Share of associatedcompanies' result 0.1 -0.2 -0.1 0.2 -2.5 -2.4Profit / loss afterfinancial items 0.7 3.0 3.7 -1.0 -13.4 -10.7Profit / loss for theperiod 0.5 2.2 2.7 -0.8 -10.0 -8.1APPENDIX 1: CAPMAN PLC GROUP'S FUNDS UNDER MANAGEMENT ON 30 JUNE2009, MEURThe tables below show the status of funds managed by CapMan at theend of the review period. When analysing the schedule for funds tostart generating carried interest, the relationship betweendistributed cash flows to investors and paid-in capital should becompared. When a fund starts generating carried interest the capitalmust be returned and an annual preferential return paid on it. Thefair value of a portfolio, including any of the fund's net cashassets, represents the capital distributable to investors at the endof the review period.When assessing the cash flow a fund needs in order to startgenerating carried interest, it should be noted that the capital ofsome funds has not yet been called and paid in. The percentage figurein the last column on the right shows CapMan's share of cash flows ifthe fund is generating carried interest. After the previousdistribution of profits, any new capital paid in, as well as thepreferential annual return on it, must however be returned toinvestors before further carried interest income is paid. Of thefunds already generating carried interest, CapMan Real Estate I fundis still in the active investment phase and Finnventure V fund canstill make follow-on investments in its current portfolio companies.The definitions for column headings are presented below the tables. FUNDS INVESTING DIRECTLY IN PORTFOLIO COMPANIES Size Paid-in Fund's Net Distributed CapMan's capital current cash cash flow share of portfolio as- to in- to man- cash at at sets vestors agement flow, cost fair company if fund value (carried gene- interest) rates carriedFunds interestgeneratingcarriedinterestFV II, FVIII 1)and FM IIBin total 58.6 57.4 3.1 0.1 0.1 180.1 44.2 20-35%FV V 169.9 164.7 49.0 24.0 0.8 237.9 5.3 20%FennoProgramin total2) 59.0 59.0 10.7 6.5 0.1 123.4 8.7 10-12%Total 287.5 281.1 62.8 30.6 1.0 541.4 58.2Funds thatareexpectedtotransferto carryduring2010CME VII A 156.7 137.5 88.7 108.5 0.4 92.4 20%CME VII B 56.5 54.2 35.1 51.8 1.2 41.9 20%CME SWE 67.0 58.7 38.0 46.3 0.5 39.8 20%FM III A 101.4 99.8 32.9 26.0 2.0 103.1 20%FM III B 20.2 19.8 8.4 10.5 0.7 18.6 20%Total 401.8 370.0 203.1 243.1 4.8 295.8Otherfundsnot yet incarryCME VII C 23.1 17.6 10.6 5.7 0.2 7.1 20%CMB VIII1) 440.0 318.7 273.9 214.9 6.7 14%CM LS IV 54.1 25.4 14.9 12.9 1.5 10%CMT 20071) 142.3 43.4 33.2 28.1 0.4 10%CMR 118.1 26.2 20.0 20.0 0.0 3.4%CMPM 113.0 24.0 21.0 32.7 0.4 10%CMB IX 221.0 14.1 12.3 12.3 0.7 10%CMM IV 4) 240.0 230.0 164.7 158.7 43.3 29.8 15%Total 1,351.6 699.4 550.6 485.3 53.2 36.9Funds withnocarriedinterestpotentialto CapManFM III C,FV IV, FVV ET,SWE LS,SWE Tech1), 3)and FM IIA, C, D 1)Total 292.2 277.3 80.3 44.9 4.6 190.0Fundsinvestinginportfoliocompanies,total 2,333.1 1,627.8 896.8 803.9 63.6 1,064.1 58.2REAL ESTATE FUNDS Invest- Paid-in Fund's current Net Distributed CapMan's ment capital portfolio cash cash flow share of capa- at at as- to in- to man- cash city cost fair sets vestors agement flow, value company if fund (carried gene- interest) rates carriedFunds interestgeneratingcarriedinterestCMRE I 5) equity and bonds 200.0 192.5 71.2 64.3 187.1 27.4 26% debt financing 300.0 264.1 104.1 104.1 Total 500.0 456.6 175.3 168.4 0.8 187.1 27.4Other fundsnot yet incarryCMRE II equity 150.0 73.5 93.9 90.7 0.5 12% debt financing 450.0 227.2 225.7 225.7 Total 600.0 300.7 319.6 316.4 -0.6 0.5CMHRE equity 332.5 295.3 302.7 225.3 10.8 12% debt financing 540.0 526.0 518.7 518.7 Total 872.5 821.3 821.4 744.0 5.2 10.8Real estatefunds, total 1,972.5 1,578.6 1,316.3 1,228.8 5.4 198.4 27.4All funds,total 4,305.6 3,206.4 2,213.1 2,032.7 72.2 1,262.5 85.6Abbreviations used to refer to funds:CMB = CapMan Buyout CMRE = CapMan Real EstateCME = CapMan Equity CMT 2007 = CapMan Technology 2007CMLS = CapMan Life Science FM = Finnmezzanine FundCMM = CapMan Mezzanine FV = Finnventure FundCMHRE = CapMan Hotels RE SWE LS = Swedestart Life ScienceCMPM = CapMan Public Market Fund SWE Tech = Swedestart TechCMR = CapMan Russia FundSize/Investment capacity:Total capital committed to the fund by investors, i.e. the originalsize of the fund. For real estate funds, investment capacity alsoincludes the share of debt financing used by the fund.Capital under management by Access Capital Partners is presentedseparately in Appendix 3.Paid-in capital:Total capital paid into the fund by investors at the end of thereview period.Fund's current portfolio at fair value:The funds' investments in portfolio companies are valued at fairvalue in accordance with the International Private Equity and VentureCapital Valuation Guidelines (IPEVG, www.privateequityvaluation.com)and investments in real estate assets are valued in accordance withthe value appraisements of external experts.The fair value is the amount for which an asset could be exchangedbetween knowledgeable, willing parties in an arm's lengthtransaction. Due to the nature of private equity investmentactivities, the funds' portfolios contain investments with a fairvalue that exceeds their acquisition cost as well as investments witha fair value less than the acquisition cost.Net cash assets:When calculating the investors' share, the fund's net cash assetsmust be taken into account in addition to the portfolio at fairvalue. Real estate funds' shares of debt financing are presented inseparate rows in the table.CapMan's share of cash flow if the fund generates carried interest:When a fund has produced for investors the cumulative preferentialreturn specified in the fund agreements, the management company isentitled to an agreed share of future cash flows from the fund(carried interest). Cash flow, in this context, includes both profitdistributed by the funds and repayments of capital. After theprevious distribution of profits, any new capital called in, as wellas any annual preferential returns on it, must however be returned toinvestors before the new distribution of profits can be paid.Footnotes to the table1) The fund is comprised of two or more legal entities (parallelfunds are presented separately only if their investment focuses orportfolios differ significantly).2) The Fenno Rahasto, Skandia I and Skandia II funds togethercomprise the Fenno Program, which is managed jointly with FennoManagement Oy.3) Currency items are valued at the average exchange rates quoted on30 June 2009.4) CapMan Mezzanine IV: The paid-in commitment includes a MEUR 192bond issued by Leverator Plc. Distributed cash flow includes paymentsto both bond subscribers and to the fund's partners.5) CapMan Real Estate I: Distributed cash flow includes repayment ofthe bonds and cash flow to the fund's partners.APPENDIX 2: OPERATIONS OF CAPMAN'S FUNDS UNDER MANAGEMENT, 1 JANUARY- 30 JUNE 2009The operations of private equity funds managed by CapMan in thereview period comprised direct investments in portfolio companiesmainly in the Nordic countries and Russia (CapMan Private Equity) aswell as real estate investments mainly in Finland (CapMan RealEstate). The investment activities of funds making direct investmentsin portfolio companies include mid-sized buyout investments in themanufacturing industry and the service and retail sectors, technologyinvestments in growth stage and later growth stage technologycompanies, life science investments in companies specialising inmedical technology and healthcare services, investments in mid-sizedcompanies operating in Russia, and investments in significantminority stakes in listed mid-cap companies.CAPMAN PRIVATE EQUITYInvestments in portfolio companies in January-June 2009The CapMan funds made two new investments as well as severalfollow-on investments during the review period, investing MEUR 73.8in all. The new investment targets were Nobia AB and Metals andPowders Holding AB. The largest follow-on investments during thereview period were in Avelon Group Oy, InfoCare AS, Komas Group Oy,Metallfabriken Ljunghäll AB, Proxima AB and ScanJour A/S. In thecomparable period of the previous year the funds made three newinvestments as well as follow-on investments amounting to MEUR 67.9.Exits from portfolio companies in January-June 2009The CapMan funds exited completely from XLENT AB and partially fromÿ&R Carton AB in the period under review. It is expected that thepartial exit from ÿ&R will be closed in August. Additionally theBirdstep Technology ASA shares, which had been received in connectionwith the exit from Secgo Software in 2007, were sold. Final andpartial exits at acquisition cost by the funds during the reviewperiod totalled MEUR 3.3. During the comparable period in 2008 thefunds exited completely from two companies and partially from severalothers and exits at acquisition cost, including repayments ofmezzanine loans, amounted to MEUR 23.5.CAPMAN REAL ESTATEInvestments in and commitments to real estate acquisitions andprojects in January-June 2009During the review period the CapMan Real Estate funds made two newinvestments and several follow-on investments worth MEUR 85.8 in all.CapMan Real Estate I fund invested in a commercial property inTuusula in April and acquired an office property in the Helsinkisuburb of Munkkiniemi in June. The largest follow-on investment wasmade in the Kauppakeskus Skanssi shopping mall in Turku, which wascompleted and opened to the public in April. In addition, as at 30June 2009 the funds had made commitments to finance real estateacquisitions and projects over the next few years to the amount ofMEUR 22.0. In the comparable period the funds exercised theircommitment to finance the Skanssi shopping mall and made newinvestments in 39 hotel properties, two retail properties, one landarea as well as several follow-on investments in other targetsamounting to MEUR 915.7. Commitments to financing new projectstotalled MEUR 227.8 on 30 June 2008.Exits from real estate investments in January-June 2009An exit by CapMan Real Estate I fund from the office property locatedat Ludviginkatu 3-5 in Helsinki was announced during the reviewperiod. The transaction was closed after the review period in July.The funds did not make exits from real estate investments during thecomparable period.FUNDS' INVESTMENT ACTIVITIES IN FIGURESFunds' investments and exits at acquisition cost, MEUR 1-6/2009 1-6/2008 1-12/2008New and follow-on investmentsFunds investing in portfolio companies 73.8 67.9 232.6 Buyout 42.9 62.1 190.3 Technology 5.6 3.9 20.3 Life Science 1.1 1.9 5.2 Russia 3.2 - 16.8 Public Market 21.0 - -Real estate funds 85.8 915.7 1,070.4Total 159.6 983.6 1,303.0ExitsFunds investing in portfolio companies 3.3 23.5 39.4 Buyout - 17.9 20.9 Technology 3.3 5.6 14.6 Life Science - - 3.9 Russia - - - Public Market - - -Real estate funds - - -Total 3.3 23.5 39.4* Including partial exits and repayments of mezzanine loans.In addition, as at 30 June 2009 the real estate funds had madecommitments to finance real estate acquisitions and projects to theamount of MEUR 22.0.The funds' aggregate combined portfolio* as at 30 June 2009, MEUR Portfolio at Portfolio at Share of acquisition fair value portfolio cost (fair value) %Funds investing in portfoliocompanies 896.8 803.9 39.5Real estate funds 1,316.3 1,228.8 60.5Total 2,213.1 2,032.7 100.0Funds investing in portfoliocompanies Buyout 695.9 651.9 81.1 Technology 118.9 74.6 9.3 Life Science 41.0 24.7 3.1 Russia 20.0 20.0 2.5 Public Market 21.0 32.7 4.0Total 896.8 803.9 100.0* Aggregated entity formed of all investments of funds undermanagement.Remaining investment capacityAfter deduction of actual and estimated expenses, as at 30 June 2009the funds that invest in portfolio companies had remaining investmentcapacity amounting to some MEUR 860 for new and follow-oninvestments. Of the remaining capital, some MEUR 500 was earmarkedfor buyout investments (incl. mezzanine investments), some MEUR 140for technology investments, some MEUR 35 for life scienceinvestments, some MEUR 95 for CapMan Russia team's investments andsome MEUR 90 for CapMan Public Market team's investments. The realestate funds had remaining investment capacity amounting to some MEUR340.APPENDIX 3: CAPITAL AND MANDATES UNDER MANAGEMENT OF ASSOCIATEDCOMPANY ACCESS CAPITAL PARTNERS ON 30 JUNE 2009CapMan Plc owns a 35% holding in the European company Access CapitalPartners, which manages funds of funds. As at 30 June 2009 AccessCapital Partners had capital under management of approx. EUR 2.5billion. Further information about the operations of Access CapitalPartners is available on the Internet:www.access-capital-partners.com.Fund/Mandates Size, MEURAccess Capital Fund 1) 250.3Access Capital Fund II Mid-market buy-out 1) 153.4Access Capital Fund II Technology 1) 123.5Access Capital Fund III Mid-market buy-out 1) 307.4Access Capital Fund III Technology 1) 88.9Access Capital Fund IV Growth buy-out 1) 425.0Access Capital Fund IV High Growth Technology Europe 1) 35.0Private Equity Mandates 1,162.0Total 2,545.51) The fund is comprised of two or more legal entities (parallelfunds are presented separately only if their investment focuses orportfolios differ significantly).CapMan Plc Group's share of the carried interest from the Accessfunds is: Access Capital Fund: 47.5%, Access Capital Fund II: 45%,Access Capital Fund III: 25%, Access Capital Fund IV: 25%,Access/Private Equity Mandates: 25%.http://hugin.info/132028/R/1333308/316029.pdfThis announcement was originally distributed by Hugin. The issuer is solely responsible for the content of this announcement.
Datum: 07.08.2009 - 07:40 Uhr
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