7.5.2024 08:00:03 EEST | Taaleri Oyj | Interim report (Q1 and Q3)
TAALERI PLC STOCK EXCHANGE RELEASE 7 MAY 2024 AT 8:00 (EEST)
Taaleri Plc Interim Statement 1 January-31 March 2024: Growth in Taaleri's continuing earnings and strong net income from investment operations, Q1 operating profit 56% of income
January-March 2024
- Continuing earnings grew by 4.5% to EUR 10.3 (9.8) million. The Private Asset Management segment's continuing earnings grew by 6.2% to EUR 5.9 (5.6) million, and the Strategic Investments segment's continuing earnings grew by 1.0% to EUR 3.9 (3.9) million.
- Performance fees were EUR 0.0 (0.0) million, and net income from investment operations was EUR 6.8 (-0.6) million.
- Income increased by 84.2% to EUR 17.0 (9.3) million.
- Operating profit was EUR 9.6 (1.6) million, corresponding to 56.2% of income.
- The assets under management in the Private Asset Management segment remained at the level of the turn of the year at EUR 2.6 (31 December 2023: 2.6) billion.
- Earnings per share were EUR 0.26 (0.02).
The Interim Statement has not been prepared in accordance with IAS 34. Unless otherwise stated, the figures in parentheses in the Interim Statement refer to the corresponding period of the previous year. See page 18 of the Interim Statement for further information of the accounting policies of the Interim Statement.
Review by CEO Peter Ramsay
In the first quarter of 2024, we continued to promote our strategy that focuses on renewable energy, bioindustry and real estate. In the strategy update published at the end of last year, we put direct investments at the core of our strategy. During the first quarter, we built them a dedicated strategy and organisation, in addition to which we revised the strategy of our real estate business.
Taaleri Group's net income developed positively in the first quarter. The Group's continuing earnings grew to EUR 10.3 million, mainly driven by the Private Asset Management segment. Income increased to EUR 17.0 million as a result of growth in continuing earnings and a strong net income from investment operations. The strong growth in income also supported the strengthening of the operating profit, and the operating profit margin was 56.2%.
The Private Asset Management segment's continuing earnings grew to EUR 5.9 million and operating income to EUR 6.7 million. Operating profit improved and was EUR 0.5 million. No performance fees were recognised during the quarter.
During the first quarter, the renewable energy business continued the active fundraising for Taaleri SolarWind III Fund and the active development of the fund's project development portfolio. Our goal is to raise EUR 700 million for the fund. Several of the fund's projects approached towards a construction decision during the review period. The Taaleri SolarWind II Fund focused on the high-quality and efficient operation of projects already in production. Preparations to exit the Taaleri Wind II and Taaleri Wind III Funds continued.
The new strategy for the real estate business was completed in the review period. According to the strategy, we will develop new products and services for the real estate business and aim to launch them on the market this year. In accordance with the new strategy of the real estate business, the focus of operations will shift more strongly to the structuring of new investment products, as well as to the investment activities themselves.
In the bioindustry business, we continued to support the investees of the Taaleri Bioindustry I Fund in promoting growth and profitability, as well as in sustainability work. We also promoted the due diligence processes of the fund's new potential investees. In addition to the preparations for the new venture capital fund and its provisional fundraising, we continued the construction work of the torrefied biomass plant being built in Joensuu. In Taaleri's updated strategy, the bioindustry business will play a greater role in increasing direct investments and raising the Group's international profile. This role change is supported, among other things, by the recruitment processes we completed during the review period.
In the Strategic Investments segment, Garantia's insurance service result increased to EUR 4.0 million as insurance service expenses decreased. The combined ratio, which measures the profitability of insurance operations, improved during the first quarter to 21.5%. Garantia's net income from investment operations increased to EUR 4.8 million mainly as a result of unrealised fair value changes and the strong development of the stock market and the stabilisation of the interest rate environment.
The year 2024 started at Taaleri actively with the determined promotion of our updated strategy. Our optimism is also boosted by the positive trends seen in our operating environment, such as the stabilisation of the interest rate environment, the pick-up of the investment and fundraising markets, and, especially from an international perspective, the better-than-expected momentum of general economic development in early 2024.
Key figures
Group key figures | 1-3/2024 | 1-3/2023 | Change, % | 1-12/2023 |
Earnings key figures | ||||
Continuing earnings, MEUR | 10.3 | 9.8 | 4.5 | 39.9 |
Income, MEUR | 17.0 | 9.3 | 84.2 | 66.3 |
Operating profit, MEUR | 9.6 | 1.6 | >100.0 | 31.9 |
Operating profit, % | 56.2 | 16.8 | 48.1 | |
Profit for the period, MEUR | 7.5 | 0.6 | >100.0 | 26.5 |
Return on equity, annualised % | 14.2 | 1.2 | 13.0 | |
Balance sheet key figures | ||||
Equity ratio, % | 69.1 | 65.7 | 67.8 | |
Other key figures | ||||
Cost/income ratio, % | 45.8 | 86.1 | 52.8 | |
FTE (full-time equivalents), at the end of the period | 126 | 121 | 3,9 | 118 |
Assets under management in Private Asset Management segment, BEUR | 2.6 | 2.5 | 2.6 | |
Guaranty insurance portfolio, BEUR | 1.7 | 1.8 | 1.7 |
Outlook and financial targets
Taaleri's business outlook for the current financial year is described below. The outlook is based on Taaleri's understanding of business developments during the current financial year and in relation to the corresponding period.
Private Asset Management
Continuing earnings from the renewable energy business are expected to develop positively during the financial year 2024. The operating profit for 2024 will depend on the revision of the estimated performance fees of the exit-phase funds Taaleri Wind II and Taaleri Wind III Funds, or their final amount, and on the timing of exits.
According to Taaleri's updated strategy, strong international growth is sought in Taaleri's bioindustry, real estate and other businesses, which is reflected in the profitability of Other private asset management and the increase in the number of employees. Operating profit in Other private asset management is expected to be negative for 2024.
Strategic Investments
Garantia's continuing earnings are expected to fall slightly from the level of the corresponding period, in particular due to the development of the Finnish housing market. In an interest rate environment in line with market expectations, Garantia's net income from investment operations is expected to develop positively compared to the corresponding period.
Other group
The income from the Other group in 2024 is heavily dependent on changes in the fair value of non-strategic investments, and final exits in particular. The cost level of Group operations is expected to remain at approximately the level of the corresponding period.
Long-term targets
Taaleri has set itself targets related to growth, return on invested capital and dividend payout. Taaleri's long-term targets are:
- Growth in Group's continuing earnings and performance fees at least 15 percent
- Return on equity at least 15 percent
- Dividend payout at least 50 percent of the FY profit.
Webcast presentation for analysts, investors and media
An analyst, investor and media conference will be held in English by CEO Peter Ramsay and CFO Ilkka Laurila today, 7 May 2024, at 1:00 pm EEST at Event Venue Eliel at Sanomatalo, Töölönlahdenkatu 2, Helsinki. The conference can be followed as a live webcast at https://taaleri.videosync.fi/q1-2024/register. The event will be recorded and available later on Taaleri's investor pages at www.taaleri.com/en/investors/reports-and-presentations.
Helsinki, 7 May 2024
Taaleri Plc
Board of Directors
For further information, please contact:
CEO Peter Ramsay, +358 50 343 7493, peter.ramsay@taaleri.com
CFO Ilkka Laurila, +358 40 076 1360, ilkka.laurila@taaleri.com
Distribution:
Nasdaq Helsinki
Key media
www.taaleri.com
Taaleri in brief
Taaleri is a Nordic investment and asset manager that focuses on businesses with industrial-scale opportunities within bioindustry and renewable energy. We create value by combining extensive know-how, deep expertise, entrepreneurship and capital through both funds under management and direct investments. We have been a signatory of the UN Principles for Responsible Investment (UNPRI) since 2010, and we joined the Net Zero Asset Managers initiative in 2021. Taaleri's vision is to become a leading investment manager operating internationally in bioindustry and renewable energy.
Taaleri has two business segments: Private Asset Management and Strategic Investments. Private Asset Management consists of bioindustry, renewable energy and real estate businesses. The Strategic Investments segment includes Garantia Insurance Company Ltd.
Taaleri has EUR 2.6 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.
www.taaleri.com
CFO Ilkka Laurila, +358 40 076 1360, ilkka.laurila@taaleri.com
