CapMan Oyj : 1-6 2021 Half-Year Report

CAPMAN PLC 1-3 2021 INTERIM REPORT	TILINPÄÄTÖSTIEDOTE	TAULUKOT

Half-Year Report

1-6 | 2021

Strong results for the first

half of 2021

Operating profit MEUR 21.5

CapMan Plc 5 August 2021

CAPMAN PLC 1-6 2021 HALF-YEAR REPORT

CapMan Plc 1-6 2021 Half-Year Report

Strong results for the first half of 2021: operating profit MEUR 21.5

Results and significant events in January-June 2021

• Group turnover was MEUR 23.2 1 Jan-30 Jun 2021 (MEUR 20.7) and increased by 12 per cent.
• Operating profit was MEUR 21.5 (MEUR -1.8).
• Management Company business turnover was MEUR 18.9 (MEUR 15.0). Operating profit was MEUR 4.9 (MEUR 3.5).*)
• Service business turnover was MEUR 4.2 (MEUR 5.6). Operating profit was MEUR 1.9 (MEUR 3.3).*)
• Investment business operating profit was MEUR 17.3 (MEUR -5.7).
• Diluted earnings per share were 10.2 cents (-3.2 cents).
• Capital under management EUR 4.3 billion on 30.6.2021 and increased by EUR 1.2 billion, or 37 per cent from 30.6.2020.

TURNOVER 1-6 2021 OPERATING PROFIT 1-6 2021

€23.2m €21.5m

CAPITAL UNDER	RETURN ON EQUITY
MANAGEMENT 30.6.2021	1-6 2021
€4.3 bn	29.9% p.a.

*) The comparison period figures have been restated following changes to the composition of reporting segments starting from 1 January 2021.

1 l CapMan Plc

CAPMAN PLC 1-6 2021 HALF-YEAR REPORT

CEO comment:

"Efforts over recent years into growth and improved value creation brought CapMan's half-year 2021 results to record levels. The second quarter of the year continued the positive trend of preceding quarters and the reported result for January-June 2021 was the strongest in more than ten years. Operating profit exceeded MEUR 21 and earnings per share 10 cents.

Our assets under management continued growing and reached a new record level of EUR 4.3 billion at the end of June 2021. The increase was EUR 1.2 billion, or 37 per cent from June last year. Growth in the second quarter was mainly due to commitments to our Residential, Special Situations and Credit funds. We expect to see continued strong growth in asset under management in the upcoming 12 months due to ongoing fundraising projects and CapMan's expanding product portfolio.

The second quarter of the year continued the positive trend of preceding quarters and the reported results for January-June 2021 was the strongest in more than ten years.

Recent demand for our funds has been strong especially among blue-chip international investors. At the end of June, approx. 60 per cent of our assets under management come from outside the Nordic countries. The increased diversification and internationalization of our investor base provides an excellent foundation for future growth, and we believe that most of the future growth in assets under management will come from outside the Nordic markets.

CEO

l

REPORT TEXT l TABLES

Management Company turnover was MEUR 18.9 in the first half of the year, growing 26 per cent from the comparison period. Turnover grew due to new assets under management. The operating profit of the Management Company business was MEUR 4.9, growing by approx. 40 per cent from the comparison period due to both strong fee growth and good cost control.

The remaining Service business turnover was MEUR 4.2 and operating profit MEUR 1.9 in the first half of 2021. The Service business includes CapMan's procurement service CaPS and reporting and analytics service JAY Solutions. Both business areas demonstrated strong development during the first half of 2021. CaPS's turnover continued growing and the business was very profitable. The growth in turnover of JAY Solutions was significant.

The increase of assets under management was EUR 1.2 billion, or 37 per cent from June last year.

The fair value changes of our investments were MEUR +17.8 in the first half of 2021. The positive development is broad-based and includes all our active strategies. In the comparison period, fair values decreased significantly due to the market disruption brought on by the Covid-19 pandemic.

Following successful value creation work, many of our funds hold significant carried interest potential and ongoing exit processes in many funds will, when successfully completed, realise this potential. The second quarter of the year was active in terms of transactions, and we expect this trend to continue short to mid-term.

2 l CapMan Plc

CAPMAN PLC 1-6 2021 HALF-YEAR REPORT

CEO

l

REPORT TEXT l TABLES

Our balance sheet and liquidity have strengthened further. At the end of June, our equity ratio was 48 per cent and liquid assets were MEUR 52. CapMan's objective is to pay an annually increasing dividend to our shareholders and recent result development and growth expectations support this objective. The 2021 Annual General Meeting decided to distribute 14 cents/share to shareholders as dividend and equity repayment. The distribution is to be implemented semi-annually. The first instalment was paid in March and the second instalment will be paid in September in accordance with the decision of the AGM."

Sincerely,

Joakim Frimodig

CEO, CapMan Plc

3 l CapMan Plc

CAPMAN PLC 1-6 2021 HALF-YEAR REPORT

CapMan Plc 1-6 2021 Half-Year Report

Group turnover and result in 1-6 2021

CapMan Group's turnover totalled MEUR 23.2 in the period spanning 1 January-30 June 2021 (1 January-30 June 2020: MEUR 20.7). The 12 per cent increase in turnover was mainly due to an increase in management fees compared to the comparison period. Recurring fees of the Management Company and Service business grew by 27 per cent in total.

Operating expenses were MEUR 19.5 (MEUR 17.3) in total. Personnel expenses, including incidentals, were MEUR 14.0 (MEUR 11.5). The growth was mainly due to higher bonus accruals and the recruitment of new key persons to support growth. The comparison period included cost savings measures undertaken due to the global Covid-19 pandemic. Depreciations and amortisations were MEUR 0.7 (MEUR 0.7). Other operating expenses amounted to MEUR 4.8 (MEUR 5.0).

Fair value changes of investments were MEUR +17.8 for January-June 2021 (MEUR -5.3). The fair value change was positive across all funds. General strong market development has supported fund development. During the comparison period, fair values decreased sharply mainly following the outbreak of the pandemic.

The Group's operating profit was MEUR 21.5 (MEUR -1.8) following turnover growth, positive fair value changes and cost efficiency.

Financial income and expenses amounted to MEUR -2.1 (MEUR -1.3). Financial expenses increased due to increased debt. Profit before taxes

CEO

l

REPORT TEXT l TABLES

was MEUR 19.3 (MEUR -3.1) and profit after taxes was MEUR 16.6 (MEUR -4.3).

Diluted earnings per share were 10.2 cents (-3.2 cents).

A quarterly breakdown of turnover and profit, together with turnover, operating profit/loss, and profit/loss by segment for the review period are available in the Tables section of this report.

Management Company business

Turnover generated by the Management Company business for the first six months totalled MEUR 18.9 (MEUR 15.0). The 26 per cent increase was mainly due to an increase in management fees from the comparison period.

Management fees were MEUR 16.5 (MEUR 12.7), growth was 30 per cent. Several new funds, among them Nest Capital III, CapMan Special Situations, CapMan Growth II and CapMan Nordic Real Estate III funds, contributed favourably to management fees for the period. The full effect on management fees of the funds, including CapMan Residential, is not visible until the year 2022. Of the turnover, 96 per cent was based on long term contracts (95 per cent during the comparison period).

Carried interest income for the review period totalled MEUR 0.3 (MEUR 0.5).

Other Management Company fees were MEUR 2.1 (MEUR 1.8). CapMan includes CapMan Wealth Services as part of the Management Company business segment starting from January 2021 and comparison period figures have also been restated accordingly.

Operating expenses of the Management Company business amounted to MEUR 14.1 (MEUR 11.5). Operating profit of the Management Company business was MEUR 4.9 (MEUR 3.5).

4 l CapMan Plc