Annual Report 2015

Economic responsibility

Impact through risk-taking

As a government-owned company, Finnish Industry Investment has a special mandate and follows the Finnish government's ownership steering policies in its operations. The policy objectives are based on the best possible overall social and economic result, which is primarily evaluated on the basis of how the company achieves its service mission and the costs that this incurs. The government's ownership steering policy focuses on increasing ownership value in a sustainable and responsible manner, taking all stakeholders into account.

Alongside profitable operation, we want our operations to have a positive social impact. Our operations must be profitable over the long term, meaning that the real value of the capital invested in the company must increase. The targets set for the company’s impact necessitate a higher level of risk-taking, and the risks taken can affect the company’s profitability.

The impact is made through the indirect effects of private equity and venture capital investment on Finland’s society and economy, such as the growth of companies, the creation of new jobs and preservation of existing jobs, and the renewal of economic structures.

The challenging nature of the business environment has in recent years also been reflected in the Finnish Industry Investment’s financial result. Over the long term, our operations have been profitable.

During Finnish Industry Investment's 20 years of operation:

  • The cumulative profit from operations, including the figure for 2015, amounted to €213m. The cumulative total of €655m of investments in Finnish Industry Investment by the Finnish government has grown into €868m of shareholders’ equity.
  • The return on investment (internal rate of return, IRR)  for the Finnish government, taken over the company’s whole period of operation, has been positive (approx. 3.2% after taxes).

 

Key figures
Key figures IFRS 2015 IFRS 2014 FAS 2013 FAS 2012 FAS 2011
Group's investments and commitments (m€) 768 785 763 719 670
No. of portfolio companies, directly and through funds 670 610 517 510 486
Consolidated profit/loss (m€) 86 -26 -8 7 -13
Shareholder's equity (m€) 868 677 560 567 510
New commitments during financial year (m€) 93 82 130 57 78
Total governmental equity investments in FII, since 1995 (m€) 655 550 470 470 420

Economic impacts through capital flows

Finnish Industry Investment has had a considerable impact on the development of the Finnish private equity and venture capital market and on the creation of new funds. Direct economic impacts consist of direct investments and capital calls paid to portfolio companies and funds, payments to suppliers of goods and services, personnel expenses, income taxes paid and investments. The direct economic impacts on stakeholders are illustrated in the table below.

Capital flows by stakeholder group, € thousands
IFRS 2015 IFRS 2014 FAS 2013 FAS 2012 FAS 2011 FAS 2010
Portfolio companies Direct investments paid 24,901 39,049 36,965 24,611 48,036 52,637
Repayments of direct investments and sales proceeds 56,024 6,026 7,673 7,594 11,998 3,553
Portfolio funds Capital calls paid to funds 68,335 62,830 43,927 57,513 57,956 60,427
Repayments of principle and profit distribution from funds 99,146 60,515 54,406 28,598 40,992 28,078
Suppliers of goods and services Other operating expenses 2,782 2,583 2,563 2,327 2,516 2,461
Personnel Salaries and fees 3,633 3,217 2,855 2,800 2,374 2,386
Pension expenses 568 555 459 471 425 389
Other personnel expenses 217 155 162 118 114 110
Personnel expenses, total 4,418 3,927 3,476 3,389 2,913 2,886
Public sector Direct taxes 2,779 0 0 0 519 20
Charitable bodies Donations given 2 2 2 2 2 4
Shareholders Dividends paid to owners 0 0 0 0 0 0
Investments Investments in tangible and intangible assets 40 69 21 650 67 0

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