Sievi Capital Plc
Market announcement on March 3, 2022 at 8:00 a.m. EET
Publication of the financial statements of Sievi Capital Plc from January 1 to December 31, 2021
Record net profit for 2021, sustained investment activity
This is the summary of the financial statement release for 2021. The full version of the financial statement is attached to this release and is also available on the company’s website at www.sievicapital.fi.
Operating income amounted to €1.9 (6.0) million
Net profit for the period amounted to 3.3 (5.0) million euros
Earnings per share (non-diluted and diluted) was EUR 0.06 (0.09)
The acquisition of Rakennuttajatoimisto HTJ was completed in October
In October, Indoor Group paid dividends of around €15 million, with Sievi Capital’s share of the dividend amounting to around €8.7 million.
Stake in KH-Koneet Group was increased in November
The planned combination of Sievi Capital and Boreo was canceled in December
Operating income amounted to 20.2 (11.7) million euros
Net profit for the period amounted to 18.4 (9.9) million euros
Earnings per share (non-diluted and diluted) was EUR 0.32 (0.17)
The net asset value per share at the end of the reporting period was EUR 1.61 (1.33)
Return on equity was 21.6% (12.7%)
Gearing at the end of the reporting period was 8.6% (-11.1%)
Figures in parentheses are reference figures for the corresponding period of the previous year, unless otherwise indicated. The figures from the publication of the financial statements are audited. Sievi Capital does not consolidate the data of its subsidiaries in calculations at Group level item by item but recognize investments in businesses at fair value through profit or loss.
Profit distribution proposal
The Board of Directors proposes to the General Meeting that no dividend for the past financial year be distributed by decision of the General Meeting, but that the General Meeting authorizes the Board of Directors to decide subsequently, at its discretion , the distribution of a dividend of a maximum total amount of EUR 0.05 per share on one or more occasions.
The Board of Directors’ profit allocation proposal takes into account the liquidity situation of the company at the time of the profit allocation proposal after the shareholding acquisitions made last year and the expected cash flows during the year. ‘current year. The Board of Directors aims to use the proposed authorization during the current year.
CEO Jussi Majamaa:
“The year 2021 did not end in a return to the old normal after the very exceptional year 2020, but we, our target companies and society as a whole, had to continue to operate in an exceptional environment and However, the year 2021 turned out to be financially excellent for Sievi Capital: the net profit for the period of 18.4 million euros was at the highest level in our history as an independent company after the spin-off in 2012, and the return on equity returned above our minimum long-term target level of 21.6% after a year of inactivity The sound financial development is based on the success of our largest target companies, Indoor Group and KH-Koneet Group, as well as the significant dividend income we received from Indoor Group during the year.
When it comes to business operations, 2021 has not been an easy year for our target companies. Net sales for all companies increased year over year, either organically or as a result of acquisitions, but earnings performance was more mixed. International logistics issues, product and component availability issues and price escalations have hampered the business operations of most of our companies and influenced their profitability development. The big hit of the year was the KH-Koneet group, whose significant investments in the Swedish market in recent years have paid off. The company’s net sales increased by 40% and EBITDA by 61% last year, thanks in particular to the excellent development of the Swedish activity. Although the company’s outlook for the current year is uncertain due to challenges with machine availability, we believe the company still has a lot of potential to continue to grow its business in the years to come. As proof, we increased our stake in the company during a transaction concluded in November as soon as the opportunity arose.
In addition to our follow-on investments in KH-Koneet Group and Nordic Rescue Group, we made an initial investment in HTJ in October. HTJ is a well-run company with a strong market position. The development of the company has so far been positive during our short investment period, and our cooperation with company management and the board of directors has gotten off to a good start. We believe the company has a good opportunity to grow its business both organically and through potential acquisitions. With respect to the latter, we have initiated active steps with the company and our goal is to complete the company’s first follow-on acquisition this year.
An important phase of Sievi Capital’s year was the planned combination with Boreo Plc. A letter of intent relating to the combination was signed in August and the Combination Agreement was signed at the end of September. The combination was to be decided by extraordinary general meetings in December, but it was clear after the early votes that the proposed merger would not receive sufficient support from Sievi Capital shareholders. For this reason, the general meeting was canceled and the companies agreed to terminate the Combination Agreement. In addition to the considerable time spent by our own team, the preparation of the proposed combination required a large amount of external resources, which resulted in significant costs for Sievi Capital. After the cancellation of the combination, we will continue to evaluate the company’s strategic options. Our objective remains to increase shareholder value.
The M&A market has continued to perform well. We have recently focused on issues other than finding new initial investments, such as corporate strategy work, developing our target companies and their M&A opportunities. However, we will also continue our aggressive investment activities in line with our current strategy, with the objective of making one to two initial investments per year.
In line with its current strategy, Sievi Capital will continue to explore new investment opportunities. The company expects to make an average of 1-2 new investments per year, but the number of investments made may vary from year to year. For existing investments, the active development of the companies’ business operations will continue. Exit planning and assessment of exit opportunities will also continue. Sievi Capital will carry out strategic work during the current year, in which alternative strategies for increasing shareholder value that differ from the current strategy will also be considered.
Sievi Capital does not consolidate the data of its subsidiaries in the calculations at Group level line by line but recognizes the investments in companies at fair value through profit or loss. Changes in the fair value of investments have a significant impact on the results of Sievi Capital. In addition to the development of the target companies themselves, the factors that influence the development of the fair values of the investments include, for example, the general development of the various sectors and national economies as well as the development of their prospects, the development of the markets stock market and interest rates and other factors beyond the control of Sievi Capital. Moreover, the coronavirus pandemic increases uncertainty when it comes to anticipating development.
Sievi Capital’s financial objective is a return on equity of at least 13%, which the company considers realistic over the long term. Due to the nature of the business, the evolution of the company’s short-term results is subject to volatility that is difficult to predict. Therefore, Sievi Capital does not provide an estimate of the evolution of the result in 2022.
Results Presentation Webcast
Sievi Capital will host a webcast in Finnish for analysts, investors and the media on March 3, 2022 at 2:00 p.m. EET. You can follow the live webcast at https://sievicapital.videosync.fi/sievi-capital-q4.
Presentation material will be available later the same day on the Sievi Capital website and a recording of the webcast no later than one day later.
SIEVI CAPITAL PLC
FURTHER INFORMATION :
CEO Jussi Majamaa, tel. +358 400 412 127
Nasdaq Helsinki Ltd
Sievi Capital is a partner for Finnish entrepreneurs. We support the growth, performance and value creation of small and medium-sized enterprises while strengthening national competitiveness. We believe that we succeed together as joint venturers. Sievi Capital’s share is listed on Nasdaq Helsinki.