Taaleri Plc: Financial Statement Bulletin for

TAALERI PLC                                 STOCK EXCHANGE RELEASE   14 February 2019 AT 8.30 EET

Continuing earnings grew, Earnings per share was EUR 0.76 and dividend proposal is EUR 0.30 per share

The Group in January-December 2018

• Income was EUR 72.5 (81.0) million, a decrease of 10.5 per cent due to lower performance fees.
• Continuing earnings grew 6.3 per cent to EUR 52.0 (48.9) million.
• Net income from investment operations was EUR 12.2 (16.8) million. Garantia investment operations yielded EUR -0.7 (11.9) million, and a profit of EUR 13.8 million was recorded due to the listing of Fellow Finance.
• Operating profit was EUR 23.9 (27.6) million, or 33 (34) per cent of income, due to improved cost efficiency.
• Earnings from investment operations were EUR 12.2 (16.8) million. Garantia investment operations totalled EUR -0.7 (11.9) million. Fellow Finance’ listing resulted in a EUR 13.8 million recorded profit.
• Operating profit was EUR 23.9 (27.6) million, or 33 (34) per cent of income, due to improved cost efficiency.
• Earnings per share were EUR 0.76 (0.76).
• Assets under management grew 2.9 per cent to EUR 5.7 (5.6) billion.
• Insurance exposure grew 11.8% and totalled EUR 1.7 (1.5) billion.
• The Board of Directors’ proposes a dividend of EUR 0.30 per share.

The Group in July-December 2018

• Income declined 11.8 per cent and was EUR 37.3 (42.3) million.
• Continuing earnings grew by 5.4 per cent to EUR 25.2 (23.9) million.
• Performance fees were EUR 2.5 (10.1) million.
• Earnings from investment operations were EUR 9.2 (8.7) million.
• Operating profit was EUR 11.5 (12.0) million.
• Earnings per share were EUR 0.44 (0.32).  

* 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 2017, unless otherwise stated.

CEO Juhani Elomaa

”Our company’s result remained at a good level also in 2018. Taaleri’s operating margin in 2018 was 33%, and earnings per share EUR 0.76, both at last year’s level. Income slightly declined, mainly due to the weak equity and bond market during the second half of the year, and totalled EUR 72.5 million. The operating profit of the Wealth Management segment remained at last year’s level, EUR 16.8 (16.7) million, and the operating profit margin strengthened to 35 per cent. The improved operating profit was due mainly to lower variable personnel costs. Garantia’s net income from insurance operations grew by 33 per cent to EUR 13.0 (9.8) million due to the growth of premiums written, continued low claims incurred and growth in the insurance portfolio. Taaleri Energia’s projects advanced well and as planned. In January 2019, Taaleri Energia and energy company Masdar, signed a letter of intent to establish a joint development company. In fact, the Energy segment is continually seeking new investment opportunities in international renewable energy infrastructure markets. The earnings improvement in “Other” came from the listing of Fellow Finance.

The year included many successes, one good example of which is the listing of the associated company Fellow Finance. Taaleri has been part of Fellow Finance’s story since 2015. We envisioned strong change in the financial market, and we believed in Fellow Finance’s position as one of the clear frontrunners. This view proved to be correct. 

Unfortunately, the year also included setbacks. The private equity fund Taaleri Geo Fund I made a decision to invest in the Höhenrain geothermal energy plant project in the Bavarian state in Germany. In the test drilling, the project’s production capacity proved to be insufficient and thus the project became commercially unviable.

Taaleri has been a growth company throughout its history; accordingly, we must be bold so that we can find new investment targets and grow faster than the market. The finance arrangements-related megatrend is fundamentally helping us; when entrepreneurs, companies and developers of new business models seek capital directly through different financial actors on the capital markets. This means that today entrepreneurs, companies, and developers of new operating models in need of capital are seeking it primarily from the capital market via various financial operators. This creates diverse demand for special expertise in financing. Taaleri has several examples of these kinds of direct financing activities from the year, among them: Turun Toriparkki, Garantia’s multi-issuer bond, and the financing of the Keilaniemi tower building.

Climate change is one of our biggest global crises and it has negative impacts around the world. Making more clearly defined choices for the sake of responsibility is something we must do. As an enabler of responsible ownership, we believe in responsible actions rather than written assurances. We are creating a sustainable future by taking a bold role in energy market transformation by building renewable energy. We can make an impact by seeking out opportunities to finance projects and players that are focused on building a sustainable future. Our operations must be transparent so that Taaleri’s credibility as a responsible partner can be seen and assessed by all.

As our operative environment quickly evolves, we too are evolving while simultaneously taking care of our competitiveness. In 2018 there was an increased focus on leadership. Personnel motivation, opportunities to influence one’s own work and to be self-directed have improved well.

A fundamental transformation of the Wealth Management business model is under way. High-quality, personal service is at the core of our operations. A multi-channel approach, standardization of our processes, and quantitative analysis are the kinds of development paths that will now bring further development to Taaleri’s wealth management. The acquisition of Evervest, Finland’s only robo-advisor asset manager last summer, and the personnel that was transferred with the acquisition and streamlining the customer experience are at the core of the internal change.

An event-filled year is now behind us, and I want to thank all our colleagues, customers and partners for the shared efforts in 2018.”

Outlook

Short-term risks and concerns

To change and grow in a changing market environment requires courage. The most significant external factors affecting the Group’s operating profit are changes in the operating and regulatory environment and the development of the financial market globally but especially in Finland.

The results of the Wealth Management and the Energy 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. The profit development is also influenced by the realization of performance fees, which are tied to the success of our investment operations.  The Energy segment’s earnings are also affected by the success of its own investments in development-stage energy projects.

The Financing segment’s i.e. Garantia’s guaranty insurance business and investment activity, has a major impact on Taaleri’s operational income.

The Other operations segment’s returns consist of the market value changes in investments and of sales profits/losses gained in connection with exits. The returns and income of the Other operations segment 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, taking into account the company’s financial and financing situation as well as the Finnish Financial Supervisory’s capital adequacy requirement.

Board of Directors´ Dividend Proposal

The Board of Directors proposes that a dividend of EUR 0.30 per share, a total of EUR 8,505,186.00 be paid for the financial year 2018. The parent company’s distributable funds total EUR 60,954,918.41, which includes EUR 11,591,097.91 in net profit for the year. The dividend is paid on a yearly basis.

The dividend will be paid to shareholders who are registered in the list of shareholders maintained by Euroclear Finland Ltd on the record date, which is 22 March 2019. The dividend payment date proposed by the Board is 29 March 2019.

The Board of Directors’ report and financial statements will be available at www.taaleri.com on 28 February 2019 at the latest.

Taaleri Plc

Board of Directors’

Further information:

CEO, Juhani Elomaa, Taaleri Plc, tel. +358 40 778 9020, juhani.elomaa@taaleri.com CFO, Minna Smedsten, Taaleri Plc, tel. +358 40 700 1738, minna.smedsten@taaleri.com Head of Group communication and IR, Sophie Jolly, Taaleri Plc, tel. + 358 40 828 7317, sophie.jolly@taaleri.com

Taaleri publishes its Financial Statements Bulletin 2018 as PDF files attached to this stock exchange release. The report is also available at https://www.taaleri.com/en/investor-relations...sentations . 

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 2018, Taaleri had assets under management totaling EUR 5.7 billion and 5,400 wealth management customers. Taaleri Plc has some 4,100 shareholders. Taaleri’s operations are supervised by the Finnish Financial Supervisory Authority.

More information about our company and services: 

www.taaleri.com/en www.fellowfinance.fi/en www.garantia.fi/en

Sophie Jolly, Head of Communications and IR, sophie.jolly@taaleri.com, tel. +358 40 828 7317

Attachment

• Taaleri financial statements bulletin 2018