eQ PLC’S FINANCIAL STATEMENTS RELEASE 2017 – eQ’S OPERATING PROFIT INCREASED BY 24% TO EUR 20.1 MILLION

eQ PLC’S FINANCIAL STATEMENTS RELEASE

5 February 2018 at 8:00 AM

   
  
 
 

January to December 2017 in brief  

• The Group’s net revenue during the financial period was EUR 40.7 million (EUR 35.4 million from 1 Jan. to 31 Dec. 2016).

• The Group’s net fee and commission income was EUR 38.9 million (EUR 33.2 million).
• The Group’s net investment income from own investment operations was EUR 1.7 million (EUR 2.2 million).

• The Group’s operating profit grew by 24% to EUR 20.1 million (EUR 16.2 million).
• The Group’s profit was EUR 15.9 million (EUR 12.8 million).
• The consolidated earnings per share were EUR 0.43 (EUR 0.35).
• The net cash flow from own investment operations was EUR 1.9 million (EUR 4.4) and the change in fair value was EUR -0.2 million (EUR -1.0 million).
• The net revenue of the Asset Management segment increased by 32% to EUR 33.9 million (EUR 25.6 million) and the operating profit by 50% to EUR 18.0 million (EUR 12.0 million).
• The net revenue of the Corporate Finance segment fell to EUR 5.2 million (EUR 7.9 million). It is typical of corporate finance business that success fees have a considerable impact on invoicing, due to which the result may vary considerably from quarter to quarter.

• Dividend proposal EUR 0.43 (EUR 0.35) and proposal for equity repayment EUR 0.07 (EUR 0.15) per share.

October to December 2017 in brief  

• In the last quarter, the Group’s net revenue totalled EUR 13.9 million (EUR 9.2 million from 1 Oct. to 31 Dec. 2016).

• The Group’s net fee and commission income was EUR 13.0 million (EUR 8.6 million).
• The Group’s net investment income from own investment operations was EUR 0.9 million (EUR 0.7 million).

• The Group’s operating profit grew by 75% to EUR 7.3 million (EUR 4.2 million).
• The Group’s profit was EUR 5.8 million (EUR 3.3 million).
• The consolidated earnings per share were EUR 0.16 (EUR 0.09).

Key ratios	1-12/17	1-12/16	Change %	10-12/17	10-12/16	Change %
Net revenue, Group, M€	40.7	35.4	15%	13.9	9.2	50%
Net revenue, Asset Management, M€	33.9	25.6	32%	10.5	7.0	48%
Net revenue, Corporate Finance, M€	5.2	7.9	-34%	2.6	1.6	60%
Net revenue, Investments, M€	1.4	1.9	-26%	0.8	0.6	37%
Net revenue, Group administration and
eliminations, M€	0.1	0.0		0.1	0.0

Key ratios	1-12/17	1-12/16	Change %	10-12/17	10-12/16	Change %
Operating profit, Group, M€	20.1	16.2	24%	7.3	4.2	75%
Operating profit, Asset Management, M€	18.0	12.0	50%	5.6	3.3	72%
Operating profit, Corporate Finance, M€	2.0	3.7	-46%	1.3	0.7	93%
Operating profit, Investments, M€	1.4	1.9	-26%	0.8	0.6	37%
Operating profit, Group administration, M€	-1.3	-1.4	-7%	-0.4	-0.4	12%
Profit for the period, M€	15.9	12.8	24%	5.8	3.3	76%
Earnings per share, €	0.43	0.35	22%	0.16	0.09	73%
Proposal for dividend and equity repayment per share, €	0.50	0.50	0%
Equity per share, €	1.67	1.75	-5%	1.67	1.75	-5%
Cost/income ratio, Group, %	50.5	53.0	-5%	47.5	54.1	-12%
Liquid assets, M€	24.7	16.7	48%	24.7	16.7	48%
Private equity fund investments, M€	18.8	19.2	-2%	18.8	19.2	-2%
Interest-bearing liabilities, M€	0.0	0.0	0%	0.0	0.0	0%
Assets under management, € billion	8.4	8.8	-4%	8.4	8.8	-4%

Janne Larma, CEO

eQ’s result was excellent in 2017. We increased our net revenue by 15% to EUR 40.7 million and our operating profit to EUR 20.1 million. The Group’s profit for the financial period increased by 24% to EUR 15.9 million, i.e. 43 cents per share.

The Group’s balance sheet remains very strong. The market value of eQ’s own private equity fund investments totalled EUR 18.8 million and liquid assets amounted to EUR 24.7 million at the close of the year. The Group has no interest-bearing liabilities.

eQ Asset Management continued to grow and the operating profit rose by 50%

eQ Asset Management’s net fee and commission income increased by 32% to EUR 33.9 million. The segment’s profitability improved markedly, and the operating profit grew by 50% to EUR 18.0 million. Above all real estate and private equity asset management continued to grow strongly. The fund net assets of eQ’s real estate funds totalled EUR 968 million at the close of the year, and the funds raised a record amount of net subscriptions at an annual level. The annual returns of both funds were the highest in their history. Private equity asset management also grew and gained plenty of new capital. We established the first eQ Private Credit Fund (EUR 92 million) and our first secondary market fund eQ PE SF (EUR 138 million) and raised USD 105 million to the eQ PE IX US Fund. In addition, we obtained several new asset management clients to private equity asset management. Traditional asset management also posted high growth, and eQ´s equity and fixed-income funds as well as asset management portfolios gave excellent returns to our clients. During the past three years, 86% of eQ’s mutual funds registered in Finland that it manages itself have surpassed their benchmark indices.

Advium has a good market position as advisor in large real estate transactions 

eQ’s corporate finance unit Advium had a successful year above all as advisor in major real estate transactions. Advium acted as advisor in twelve finalised transactions, eight of which were real estate transactions. Advium’s net revenue fell to EUR 5.2 million and its operating profit was EUR 2.0 million. Advium maintained its market leading position in large real estate transactions and was chosen the best Finnish investment bank in the real estate sector, already for the eleventh time, in an enquiry by the distinguished Euromoney magazine.  

Advium acted as advisor to, e.g. Sanoma, as it agreed on the sale of an office property in the city centre of Helsinki to a fund managed by Aberdeen Standard Investments. Advium acted as advisor to Kesko, the Rakauskas family and Zabolis Partners, as they sold real estate in the Baltic countries to a U.S. fund for EUR 174 million. In addition, Advium issued a fairness opinion to the Board of Ilmarinen on the joining of the two occupational pension insurance companies Ilmarinen and Etera.

Operating profit of the Investments segment EUR 1.4 million

The operating profit of the Investments segment was EUR 1.4 million (EUR 1.9 million in 2016). The net cash flow of investments was lower than the year before, i.e. EUR 1.9 million (EUR 4.4 million). The market value of the private equity fund investments was EUR 18.8 million at the close of the year.

Dividend proposal and outlook

The Board of Directors’ dividend proposal for 2017 is 43 cents per share, and in addition, the Board proposes an equity repayment of 7 cents per share.

The success of the asset management business in 2017 offers an excellent starting point for the year 2018. We expect the net revenue and operating profit of the Asset Management segment to grow in 2018. In accordance with our disclosure policy, we do not issue profit guidance for the Corporate Finance and Investments segments. The results of these segments are highly dependent of factors that are not dependent of the company. Consequently, the operating profit of these segments may vary considerably and is difficult to foresee.

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eQ’s financial statements release 1 January to 31 December 2017 is enclosed to this release and it is also available on the company website at www.eQ.fi.

Additional information: Janne Larma, CEO, tel. +358 9 6817 8920

Distribution: Nasdaq Helsinki, www.eQ.fi, media

eQ Group is a group of companies that concentrates on asset management and corporate finance business. eQ Asset Management offers a wide range of asset management services (including private equity funds and real estate asset management) for institutions and private individuals. The assets managed by the Group total approximately EUR 8.4 billion. Advium Corporate Finance, which is part of the Group, offers services related to mergers and acquisitions, real estate transactions and equity capital markets.

More information about the Group is available on our website www.eQ.fi.

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