Taaleri Oyj: Taaleri Plc Half-Year Financial Report 1.1.-30.6.2024: Taaleri's continuing earnings grew and profitability remained at a good level in the second quarter of the year

20.8.2024 08:00:01 EEST | Taaleri Oyj | Half Year financial report

Taaleri Plc Half-Year Financial Report 1.1.-30.6.2024: Taaleri's continuing earnings grew and profitability remained at a good level in the second quarter of the year

April-June 2024

• Continuing earnings grew by 2.6% to EUR 10.1 (9.9) million. The Private Asset Management segment's continuing earnings grew by 7.2% to EUR 6.1 (5.6) million, and the Garantia segment's continuing earnings fell by 4.5% to EUR 3.3 (3.5) million.

• Performance fees were EUR 0.0 (1.5) million, and net income from investment operations was EUR 1.8 (15.0) million.

• Income fell by 54.8% to EUR 11.9 (26.3) million.

• Operating profit was EUR 4.4 (17.8) million, corresponding to 36.9% (67.5) of income.

• Earnings per share were 0.11 (0.49) EUR.

January-June 2024

• Continuing earnings grew by 3.5% to EUR 20.4 (19.7) million. The Private Asset Management segment's continuing earnings grew by 6.7% to EUR 11.9 (11.2) million, and the Garantia segment's continuing earnings fell by 1.6% to EUR 7.2 (7.4) million.

• Performance fees were EUR 0.0 (1.5) million, and net income from investment operations was EUR 8.5 (14.4) million.

• Income fell by 18.6% to EUR 28.9 (35.6) million.

• Operating profit was EUR 14.0 (19.3) million, corresponding to 48.3% (54.3) 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 0.37 (0.51).?

This Half-Year Financial Report has been prepared in accordance with IAS 34. The information presented is unaudited. Unless otherwise stated, the figures in parentheses in the Half-Year Financial Report refer to the corresponding period of the previous year. See page 21 for further information of the accounting policies of this Half-Year Financial Report.?

Review by CEO Peter Ramsay

In the second quarter of 2024, we continued to promote our strategy that focuses on private asset management and direct investments. We advanced projects broadly in all business units. In addition, our investment organisation continued to assess direct investments.

Taaleri Group's continuing earnings grew by 3% to EUR 10.1 million in the second quarter, especially due to the development of the renewable energy business. Income was EUR 11.9 million, down from the corresponding period as a result of lower returns on investment operations. The operating profit margin was 36.9%.

In the Private Asset Management segment, continuing earnings grew by 7% to EUR 6.1 million. Operating profit fell from the corresponding period and was EUR 0.3 million. The decrease in operating profit was due to EUR 8.3 million in capital gains from the sale of the renewable energy project development portfolio in the corresponding period and EUR 1.5 million in performance fees recognised in the real estate business in the corresponding period. No corresponding capital gains or performance fees were recognised during the quarter ended. Without these items, the segment's operating profit was stronger than in the corresponding period.

The renewable energy business continued the fundraising for Taaleri SolarWind III Fund and the active development of the fund's project development portfolio. Several investors are currently conducting due diligence on the fund, and the amount of committed capital is expected to grow towards the end of the year. Our goal is to raise EUR 700 million for the fund. The Taaleri SolarWind II Fund focused on the high-quality and efficient operation of the wind and solar farms already in production. Preparations to exit the Taaleri Wind II and Taaleri Wind III Funds continued during the second quarter.

The bioindustry business continued preparations for the new venture capital fund and the evaluation of its investor base. The fund's fundraising will start in the early autumn after the anchor investors have been confirmed. The Taaleri Bioindustry I Fund promoted its strategy as planned by developing its portfolio companies and assessing potential new investments. The fund made its fourth investment in eniferBio, a company producing fungi-based mycoprotein, in the second quarter of the year. The construction work of the torrefied biomass plant in Joensuu is in the final stages, and we expect it to start production at the end of the year. In addition, we promoted the internationalisation of the bioindustry business by establishing a project development company in Canada to explore the opportunity to start production of torrefied biomass. During the review period, Taaleri also made an add-on investment in its associated company Fintoil by participating in the company's share issue.

The real estate business continued to implement its new strategy in the second quarter of the year. In addition to planning a new closed-end fund, we are strengthening the team through new recruitments. In accordance with the strategy, the focus of operations will shift more strongly to the structuring of new investment products, as well as to investment activities. We aim to develop and launch new products this year. The market has been challenging but may offer favourable opportunities in the future.

Garantia's insurance service result in the second quarter was at level with the corresponding period at EUR 3.5 million due to the sluggish development of the housing market. The combined ratio, which measures the profitability of insurance operations, improved to 26.5%. Garantia's net income from investment operations was EUR 1.4 million and the return on investment at fair value was 1.6% in the second quarter, mainly due to the favourable market development.

We continued to systematically advance our strategy during the second quarter. The operating environment is more positive than early in the year, as the interest rate environment is stabilising, and the transaction market shows subtle signs of picking up. While the fundraising environment continues to be challenging, signals at fundraising meetings have been positive. As an established player and thanks to our new products, we are in a good position and confident in our ability to capitalise on the next growth phase in our industry as the outlook cautiously improves.

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Key figures

Group key figures	4-6/ 2024	4-6/ 2023	Change, %	1-6/ 2024	1-6/ 2023	Change, %	1-12/ 2023
Earnings key figures
Continuing earnings, MEUR	10.1	9.9	2.6	20.4	19.7	3.5	39.9
Income, MEUR	11.9	26.3	-54.8	28.9	35.6	-18.6	66.3
Operating profit, MEUR	4.4	17.8	-75.3	14.0	19.3	-27.7	31.9
Operating profit, %	36.9	67.5		48.3	54.3		48.1
Profit for the period, MEUR	3.4	16.0	-78.6	10.9	16.6	-34.2	26.5
Return on equity, annualised %	6.7	31.9		10.9	16.6		13.0
Balance sheet key figures
Equity ratio, %	67.3	67.1		67.3	67.1		67.8
Other key figures
Cost/income ratio, %	64.6	34.3		53.5	47.7		52.8
FTE (full-time equivalents), at the end of the period	127	125	1.8	127	125	1.8	118
Assets under management in Private Asset Management segment, BEUR	2.6	2.6		2.6	2.6		2.6
Guaranty insurance portfolio, BEUR	1.7	1.9		1.7	1.9		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, among other things, the net income from the investment operations and 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 such 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.

Garantia

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, 20 August 2024, at 11:00 am EEST at Event Venue Eliel at Sanomatalo, Töölönlahdenkatu 2, Helsinki. The conference can be followed as a live webcast at https://taaleri.videosync.fi/q2-2024. The event will be recorded and available later on Taaleri's investor pages at?www.taaleri.com/en/investors/reports-and-presentations.

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Helsinki, 20 August 2024
Taaleri Plc
Board of Directors

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For further information, please contact:

CEO Peter Ramsay, [phone],?[e-mail]
CFO Ilkka Laurila, [phone],?[e-mail]
Director, Investor Relations and Communications Linda Tierala, [phone], [e-mail]

Distribution:

Nasdaq Helsinki
Key media
www.taaleri.com

This stock exchange release is a summary of Taaleri Plc's Half-Year Financial Report for the period 1 January-30 June 2024. The complete report is attached to this release and also available on Taaleri's investor pages at www.taaleri.com/en/investors/reports-and-presentations.

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 Garantia. Private Asset Management consists of bioindustry, renewable energy and real estate businesses.

Taaleri has EUR 2.6 bn of assets under management in its private equity funds and co-investments. The company has approximately 125 employees. Taaleri Plc is listed on Nasdaq Helsinki.

www.taaleri.com

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Linda Tierala, Director, Investor Relations and Communications, [phone], [e-mail]