Sievi Capital Plc’s Business Review for January–March 2023
Sievi Capital Plc
Stock Exchange Release 4 May 2023 at 8:00 am EEST
Sievi Capital Plc’s Business Review for January–March 2023
Focus on operational efficiency and preparation for strategy change
This is the summary of the Business Review for January–March 2023. The full Business Review is attached to this release and is also available on the company’s website at www.sievicapital.fi
Operating profit was EUR -2.8 (-2.9) million
Net profit for the period was EUR -2.4 (-2.4) million
Earnings per share (undiluted and diluted) were EUR -0.04 (-0.04)
Net asset value per share at the end of the review period was EUR 1.42 (1.57)
Return on equity for rolling 12 months was -9.5% (14.6%)
Gearing at the end of the review period was 16.8% (10.3%)
Ville Nikulainen became the interim CEO of Sievi Capital in March
After the end of the review period, Lauri Veijalainen was appointed as the permanent CEO of Sievi Capital and he will start in the position in August
After the end of the review period, HTJ made a business acquisition
Figures in parentheses are figures from the corresponding period in the previous year, unless indicated otherwise. Information in the Business Review is unaudited. Sievi Capital does not consolidate the data of its subsidiaries into Group-level calculations line item by line item but recognises investments in the companies at fair value through profit or loss.
CEO Ville Nikulainen:
“I started as the interim CEO of Sievi Capital in March at an extremely interesting phase. We have made preparations and rolled up our sleeves for the journey of transformation with the new strategy published in December. This includes, among other things, changing the company’s reporting this year. Once the amendments to the Articles of Association are approved by the Annual General Meeting, we will consolidate the figures of our target companies line by line as a conglomerate in the future.
Many of our target companies will continue measures to improve the efficiency of their operations in 2023. This has also been partly reflected in the companies’ development, as four out of five companies managed to improve their profits from the comparison period. KH-Koneet Group’s profit development was at a strong level, supported by good demand in the rental market in particular. Logistikas’ net sales grew substantially and EBITDA improved by as much as 130% year-on-year. The company’s outlook is favorable and the demand for services is at a good level. HTJ’s net sales grew substantially, but EBITDA was slightly lower than in the comparison period.
For Indoor Group, the beginning of the year was mixed. Sales did not yet return to the usual level, but the company, nevertheless, managed to improve its profits from the comparison period. Nordic Rescue Group’s performance improved after ceasing the loss-making rescue lift business. The company is now focusing on the business operations of Saurus and Sala Brand.
Sievi Capital’s result for the first quarter showed a loss due to unrealised changes in values, particularly as a result of the negative change in the value of the Indoor Group investment. Over the past year, there has been no realised income from the target companies, as a result of which the return on equity for the rolling 12 months remained negative and was -9.5% at the end of the review period.
Sievi Capital’s organisation will be strengthened in August with Lauri Veijalainen starting as the company’s permanent CEO. Lauri is well-placed to support the target companies in their development and lead Sievi Capital in its transformational journey towards being an industrial group.”
As a result of the change in strategy announced on 15 December 2022, Sievi Capital will transform from a private equity investment company into a conglomerate during 2023. Sievi Capital’s strategy will no longer include making private equity investments in new industries. The medium-term objective is to become an industrial group built around the KH-Koneet Group’s business and to divest other target companies in line with previous strategy. For Sievi Capital’s other investments, the active development of the companies’ business operations will continue. Exit planning for the other investments will also continue.
Sievi Capital does not consolidate the figures of its subsidiaries into Group-level calculations line item by line item. Instead, investments in the companies are recognised at fair value through profit or loss. Changes in the fair values of the investments have a material impact on Sievi Capital’s results. In addition to the target companies’ own development, factors that influence the development of the fair values of the investments include, for instance, the general development of different sectors and national economies as well as changes in their outlooks, the development of stock market and interest rates and other factors beyond Sievi Capital’s control. The coronavirus pandemic and impacts of the war in Ukraine also increase uncertainty in projections of future development.
The financial target for Sievi Capital’s private equity investment activities is a return on equity of at least 13%, the achievement of which the company considers to be realistic in the long term. Due to the nature of the business, the company’s short-term result development is subject to volatility that is difficult to predict. Therefore, Sievi Capital does not provide an estimate of the development of its result in 2023. Sievi Capital’s new strategy and financial targets will be discussed in more detail at the Capital Markets Day to be held in autumn 2023.
SIEVI CAPITAL PLC
CEO Ville Nikulainen, tel. +358 400 459 343
Nasdaq Helsinki Ltd
Sievi Capital is a partner for Finnish entrepreneurs. We are on a transformation journey from a private equity investment company into a conglomerate. Our medium-term objective is to become an industrial group built around the business of our target company KH-Koneet Group. Sievi Capital’s share is listed on Nasdaq Helsinki.