Excellent start of the year, good future outlook - The Group's turnover for the first quarter of 2007 increased to MEUR 28.1 (MEUR 8.9 in January-March 2006) and operating profit was up to MEUR 25.4 (MEUR 5.1). - The growth in turnover and operating profit was mainly influenced by growth in carried interest income and the impact of the Company's own investments. Carried interest for the first quarter totalled MEUR 21.2 (MEUR 2.6) and was accrued mainly from CapMan Real Estate I fund, which began to generate carry as a result of its real estate portfolio sale finalised on 31 January 2007. Own fund investments had an impact of MEUR 4.4 (MEUR 2.2). - Profit before taxes was MEUR 26.7 (MEUR 5.1) and profit after taxes was MEUR 19.9 (MEUR 3.7). The share belonging to the owners of the parent company was MEUR 14.3 (MEUR 3.6) and minority interests were MEUR 5.6 (MEUR 0.1). - Earnings per share was EUR 0.19 (EUR 0.05). - Capital under management increased in the first quarter by 17.5%, which is over the average annual growth target of 15%. At 31 March 2007 capital under management totalled MEUR 2,996.1 (MEUR 2,549.6 at 31 December 2006 and MEUR 2,245.3 at 31 March 2006). - The Group's profit before taxes for 2007 will clearly improve from that of 2006. Business CapMan is an alternative asset manager and its core business is private equity fund management and advisory services. The funds under management invest mainly in unlisted Nordic companies or real estate assets. CapMan Plc's income derives from management fees from the funds, carried interest from funds generating carried interest, returns on direct fund investments made from CapMan Plc's own balance sheet and returns on real estate consulting. CapMan Plc's business areas CapMan provides management and advisory services in two business areas: CapMan Private Equity (funds making investments in portfolio companies) and CapMan Real Estate (private equity real estate funds making investments in real estate assets as well as real estate consulting). Investments by CapMan funds investing in portfolio companies focus mainly on the Nordic countries in three investment areas, which are middle market buyouts (CapMan Buyout), technology investments (CapMan Technology) and life science investments (CapMan Life Science). The investment focus of CapMans private equity real estate funds is on real estate targets in Finland. Information on each business area is reported in its own segment in Interim Reports. Associated company Access Capital Partners has been included in the Group's figures under CapMan Private Equity. As for funds, Access Capital Partner's figures have been presented separately. Turnover and profit development in January-March 2007 CapMan's turnover for the first quarter of 2007 increased to MEUR 28.1 (MEUR 8.9 in January-March 2006) mainly as a result of the rise in carried interest income. The sum of management fees paid by the funds increased slightly and was MEUR 5.8 (MEUR 5.6). CapMan started to receive management fees from CapMan Technology 2007 and CapMan RE II funds in the period under review, but on the other hand the sum of management fees received from older funds decreased with exits that were executed after the comparative period, for example as a result of the sale of CapMan Real Estate I fund's portfolio. Carried interest income received by CapMan totalled MEUR 21.2 (MEUR 2.6). The sale of CapMan Real Estate I fund's real estate portfolio accrued carried interest totalling MEUR 21.0, of which the share belonging to the owners of the parent company was MEUR 13.4. The remaining MEUR 0.2 of carried interest income was accrued from the transfer of Finnventure Fund V to carry. The impact of fund investments made from CapMan's own balance sheet totalled MEUR 4.4 (MEUR 2.2). Realised returns on fund investments were MEUR 0.3 (MEUR 0.0). Fair value gains/losses associated with fund investments totalled MEUR 4.1 (MEUR 2.2). Of the gains in fair value MEUR 1.5 was related to value creation in Moventas Oy, from which CapMan Equity VII fund made a partial exit during the period, MEUR 1.5 was mostly related to value creation in other portfolio companies of CapMan Equity VII fund and MEUR 1.1 to value creation in funds managed/advised by Access Capital Partners. Value creation is based on portfolio company valuations, which are made in accordance with EVCA guidelines and with the realised development in 2006 and the outlook for 2007 taken into consideration. The aggregate fair value of all fund investments made from CapMan's own balance sheet was MEUR 38.4 at 31 March 2007. Returns on real estate consulting operations totalled MEUR 0.6 (MEUR 0.5) and other operating income within turnover was MEUR 0.2 (MEUR 0.2). Operating expenses were MEUR 6.8 (MEUR 6.0). The Group's operating profit for the review period increased to MEUR 25.4 (MEUR 5.2). The share from the result of CapMan's associated companies was MEUR 0.9 (MEUR -0.2). Profit before taxes was MEUR 26.7 (MEUR 5.1) and profit after taxes MEUR 19.9 (MEUR 3.7). The share of profit belonging to the owners of the parent company was MEUR 14.3 (MEUR 3.6), on the basis of which earnings per share was EUR 0.19 (EUR 0.05). Balance sheet and financial position at 31 March 2007 The sum of non-current assets in the balance sheet grew to MEUR 60.6 (MEUR 41.6) during the period under review. In line with CapMan's strategy, the sum of CapMan's own investments increased and their fair value totalled MEUR 38.4 (MEUR 22.9) at the end of the review period. Non-current receivables totalled MEUR 12.1 (MEUR 10.2). Of the receivables MEUR 9.0 (MEUR 8.1) was loan receivables from Maneq funds, which make portfolio company investments along with CapMan funds and whose investors are CapMan employees in accordance with certain principles. Goodwill was MEUR 4.8 (MEUR 4.8), and is directed mainly at the acquisition of Swedestart Management AB in 2002. CapMan's net cash assets, including current investments, increased to MEUR 43.7 (MEUR 8.0) as a result of carried interest received from CapMan Real Estate I fund. The Company has interest-bearing liabilities of MEUR 10.0 (MEUR 0.0). CapMan's equity ratio at the end of the review period was 61.9% (87.4%). Return on equity for the period was 32% (7.6%) and return on investment 36.7% (10.6%). The Company has target levels of at least 50% for the equity ratio and over 25% for return on equity. Key ratios 31.3.07 31.3.06 31.12.06 Earnings/share, EUR 0.19 0.05 0.15 Diluted, EUR 0.18 0.05 0.15 Shareholders' equity/share, EUR 0.80 0.62 0.74 Share issue adjusted number of shares 77 158 698 75 923 348 76 212 849 Number of shares at the end of the period 77 158 698 75 923 348 77 158 698 Number of shares outstanding 77 158 698 75 923 348 77 158 698 Return on equity, % 32.0 7.6 23.4 Return on investment, % 36.7 10.6 29.9 Equity ratio, % 61.9 87.4 71.6 Turnover and profit quarterly as well as turnover and operating profit per segment are presented in the tables section of the Interim Report. Fundraising Funds investing in portfolio companies CapMan established a new technology fund CapMan Technology 2007 on 9 February 2007, and commitments totalling MEUR 127 had been raised to the fund as at the end of the first quarter. Fundraising for the fund has progressed well, even though the interest of institutional investors is still directed first and foremost to different buyout products. The funds defined investment focus on expansion and later stage technology companies in the Nordic countries has supported the fundraising. CapMan's own commitment into CapMan Technology 2007 is MEUR 15, and the allocation of possible carried interest that will be received from the fund is 50% for CapMan and 50% for the Technology team. The fund has a target size of MEUR 150 and its fundraising continues. During the first quarter it was decided that fundraising for CapMan Life Science IV fund, which was established in March 2006, will continue until May 2007. The fund invests in medical technology companies mainly in the Nordic countries. The lack of venture allocations by institutional investors has reflected on CapMan Life Science IV's fundraising, but additional investments to the fund are still expected. CapMan's own commitment into the fund is MEUR 5, and the allocation of possible carried interest that will be received from the fund is 50% for CapMan and 50% for the Life Science team. Real estate funds The CapMan RE II fund established in September 2006 reached its maximum investment capacity of MEUR 600 during the review period. The aim is that an average 75% of the fund's investments are financed with debt financing, in which case the fund's investment capacity of MEUR 600 comprises MEUR 150 of shareholders' equity and the remainder debt financing. The investment focus of CapMan RE II is on property development targets in Finland, and the fund made its first investments in the period under review. The funds management company CapMan RE II GP Oy has a commitment of MEUR 2 into the fund. CapMan Plc's share of possible carried interest that will be received from CapMan RE II is 60% and the aggregate share of the Real Estate investment team and the management companys other owner Corintium Oy is 40%. Capital under management As at 31 March 2007 CapMan managed a total of MEUR 2,996.1 in capital (MEUR 2,245.3 at 31 March 2006). Capital under management in funds making direct portfolio company investments totalled MEUR 1,896.1 (MEUR 1,745.3). There was a growth in capital during the year as a result of fundraising for CapMan Buyout VIII and CapMan Technology 2007 funds and a fall in capital as a result of the termination of operations by Swedestart II and Finnmezzanine I funds as well as Alliance ScanEast Fund in 2006. Capital under management in real estate funds grew as a result of fundraising for CapMan RE II fund and totalled MEUR 1,100 (MEUR 500) at the end of the review period. Capital under management by associated company Access Capital Partners CapMan Plc's associated company Access Capital Partners managed/advised MEUR 1,662.1 (MEUR 1,139.1) in total assets as at 31 March 2007. Of this, MEUR 923.5 (MEUR 720.0) was in funds of funds and MEUR 738.6 (MEUR 419.1) in private equity investment mandates. Investments and exits by the funds in January-March Funds investing in portfolio companies In the first quarter of 2007, the funds made three new investments, four substantial add-on investments and smaller add-on investments, investing MEUR 58.1 in total. There were new investments in Komas Oy, John Nurminen Vehicle Logistics Unit and Mirasys Ltd. Add-on investment decisions were made in Savcor Group, Aerocrine AB, Jolife AB and Millicore AB. Additionally new investments in Walki Wisa Group and Novintel Oy were announced during the review period. The funds exited in total from Distocraft Oy and made a partial exit from Moventas Oy during the first quarter. Additionally the funds sold their shares in SysOpenDigia Plc. Exits at acquisition cost (including mezzanine loan instalments and partial exits) totalled MEUR 25.5 for the review period. Real estate funds The Real Estate funds made three new investments in the review period. The new assets are Kiinteistö Oy Helsingin Kalevankatu 20 in Helsinki as well as Kiinteistö Oy Kasarmikatu 4 and Kiinteistö Oy Parolantie 104 in Hämeenlinna. In addition new investments were announced in Kiinteistö Oy Viinikankatu 49 in Tampere and in Tokmanni's logistics centre project in Mäntsälä, which is scheduled mainly for 2008. The sum of gross investments for the period under review was MEUR 19.4. CapMan Real Estate I fund exited in total from 22 properties during the review period when the sale of its real estate portfolio to Samson Properties Ltd, The Royal Bank of Scotland (RBS) and Ajanta Oy was finalised on 31 January 2007. The acquisition cost of the real estate portfolio was MEUR 304.4 and its sale price was MEUR 377.5. Investments and exits at acquisition cost, MEUR 1-3/2007 1-3/2006 1-12/2006 New and follow-on investments Funds investing in portfolio companies 58.1 21.7 158.8 Buyout 54.2 15.3 127.8 Technology 2.3 5.6 16.8 Life Science 1.6 0.8 14.2 Real estate funds 19.4 21.3 78.7 Total 77.5 43.0 237.5 Exits* Funds investing in portfolio companies 25.5 23.4 173.8 Buyout 22.5 23.4 144.7 Technology 3.0 - 24.7 Life Science - - 4.4 Real estate funds 304.4 - - Total 329.9 23.4 173.8 *incl. partial exits and mezzanine loan instalments The investment activities of the funds managed by CapMan are described in more detail in Appendix 2. Status of CapMan funds as at 31 March 2007 Funds investing in portfolio companies Investments in portfolio companies at acquisition cost totalled MEUR 602.4 at 31 March 2007. The fair value of investments was MEUR 723.7. The funds portfolios are valued to fair value in accordance with the guidelines of EVCA as specified in Appendix 1. Excluding realised and estimated future expenses, CapMan funds had an investment capacity of about MEUR 770 for new and follow-on investments in portfolio companies. Of this, approx. MEUR 540 is reserved for buyout investments (incl. mezzanine), approx. MEUR 190 for technology investments and approx. MEUR 40 for life science investments. Real estate funds At the end of the first quarter, the funds investments in real estate assets at acquisition cost totalled MEUR 19.4 and the fair value of investments was MEUR 19.0. The current portfolio is wholly comprised of assets acquired during the period under review. The majority of these assets are investment targets of CapMan RE II fund, which has investment focus on property development. The funds have an investment capacity of about MEUR 710 for new investments. Funds gross portfolio* as at 31 March 2007, MEUR Portfolio Portfolio Share of at at portfolio acquisition fair (fair cost value value) % MEUR MEUR Funds investing in 602.4 723.7 97.4 portfolio companies Real estate funds 19.4 19.0 2.6 Total 621.8 742.7 100.0 Funds investing in portfolio companies Buyout 462.8 587.9 81.2 Technology 104.9 104.1 14.4 Life Science 34.7 31.7 4.4 Total 602.4 723.7 100.0 * Gross portfolio of all portfolio companies and real estate assets managed by CapMan funds. As a result of the real estate portfolio sale that was finalised in January and the short holding period of the current real estate portfolio, the relative proportion of real estate assets in the gross portfolio of all funds managed by CapMan is at an exceptionally low level. Funds generating carried interest as at 31 March 2007 A private equity fund begins to generate carried interest after the investors have regained their investment in addition to a preferred annual return, usually 7-8%. CapMan Real Estate I and Finnventure V funds began to generate carried interest during the period under review, and of these funds CapMan Real Estate I is still in the active investment phase. At the close of the review period the following funds were in carry: CapMans Portfolio at share fair value of cash 31.3.2007 flows* Finnventure Fund II, Finnventure Fund III and Finnmezzanine Fund II B in total: 20-35 % 2.9 Finnventure Fund V: 20 % 56.9 Fenno Program (Fenno Fund, Skandia I and Skandia II) in total: 10-12 % 21.3 CapMan Real Estate I**: 25 % 7.2 * Net share of cash flows, taking into consideration Fenno Management Oys share as far as Fenno Program is concerned, and of Corintium Oys and the investment teams shares as far as CapMan Real Estate I is concerned. ** The fund still continues active investment operations. At 31 March 2007 the current portfolios of funds generating carried interest at fair value totalled MEUR 88.3, which represents 11.9% of fair value of portfolios of all funds at 31 March 2007 (MEUR 742.7). Information on each funds investment targets is presented on CapMan's website at www.capman.com/En/InvestorRelations/Funds. CapMan's share of carried interest received from funds generating carry is typically 20-25% of a funds cash flow in the case of CapMan funds that were established before 2004, and 10-15% for newer funds. The lower carried interest percentage for newer funds results from the distribution of a share of their carried interest to the members of the investment team responsible for the funds investment activities during its life cycle (typically 10 years), in accordance with common practice in the private equity investment industry. CapMans own investments in the funds Since 2002, CapMan Plc has been a substantial investor in the funds managed by the Group. The Company's objective is to invest about 5-10% of the total capital in future funds from its own balance sheet. The investment strategy, which applies to investments by equity funds investing in portfolio companies, aims to improve the Company's return on equity and to even out fluctuations in income with coming years with returns from these investments. The investments made have been valued at fair value in accordance with EVCA guidelines as specified in Appendix 1. There may be quarterly changes in fair value gains and/or losses and, in addition to the value creation of portfolio companies, these are affected by executed realisations. CapMan, like other investors in the funds, gives commitments to the funds when they are established. As at 31 March 2007 the total sum of current investments at fair value and remaining commitments was MEUR 96.4, of which remaining commitments totalled MEUR 58.0. Of these commitments MEUR 25.4 is targeted for CapMan Buyout VIII and MEUR 15 for CapMan Technology 2007, with the remainder targeting mainly CapMan Life Science IV, CapMan Mezzanine IV, CapMan Equity VII and Access Capital Fund II funds. The commitments will be drawn down gradually within the next 3-5 years as new investments are made. Fund investments for the review period totalled MEUR 7.4 (MEUR 1.5). The majority of investments were made in CapMan Buyout VIII fund. The fair value of cumulative fund investments made from CapMans own balance sheet was MEUR 38.4 as at 31 March 2007. CapMans investments and commitments in the funds as at 31 March 2007, MEUR Investments Remaining In at fair commitments total value Funds investing in portfolio companies Equity funds 27.6 48.6 76.2 Mezzanine funds 3.0 4.5 7.5 Funds of funds* 7.7 2.2 9.9 38.3 55.3 93.6 Real estate funds 0.1 2.7 2.8 Total 38.4 58.0 96.4 * Managed/advised by CapMans associated company Access Capital Partners. CapMans own investments in the funds 1 January - 31 March 2007, MEUR 1-3/2007 1-3/2006 1-12/2006 Funds investing in portfolio companies Equity funds 5.6 0.5 9.8 Mezzanine funds 1.5 0.1 0.7 Funds of funds* 0.3 0.9 2.6 7.4 1.5 13.1 Real estate funds 0.0 0.0 0.1 Total 7.4 1.5 13.2 * Managed/advised by CapMans associated company Access Capital Partners. Personnel As at 31 March 2007 the Group had 101 (95) employees, of whom 74 (67) were located in Finland and the remainder in other Nordic countries. In addition there were five Senior Advisors and two other advisors acting as consultants for CapMan. Four of the Senior Advisors were located in Finland and one in Denmark. 31.3.2007 31.3.2006 31.12.2006 CapMan Private Equity 37 39 38 CapMan Real Estate 26 19 24 General functions 38 37 36 Total 101 95 98 During the period under review CapMan was placed in the top third of the Best Workplaces in Finland 2007 study conducted by Great Place to Work Institute Finland. CapMan's personnel in Finland responded to the study, which was implemented through a confidential employee survey in November 2006. Shares and shareholders There were no changes in the share capital of CapMan Plc in the first quarter, and the Company's share capital totalled EUR 771,586.98 at 31 March 2007. The number of listed B shares was 69,158,698 and the number of A shares was 8,000,000. There was a clear increase in trading turnover and value of B shares traded compared to the comparative period of 2006. Share price development was strong and the B share reached an all-time high of EUR 3.64 in March. At the end of the review period the B shares had a closing price of EUR 3.48 and market value totalling MEUR 242.1 (MEUR 200.4). The Company's total market capitalisation, including CapMan A shares, was MEUR 269.9 (MEUR 224.0). There was also clear growth in trading turnover of 2000A/B stock options from the comparative period. The subscription period for B shares with 2000A/B options expires on 31 October 2007. Trading of 2003A options that were listed in October 2006 also continued at a livelier pace than previously. No shares were subscribed with stock options of either program during the period under review. Trading and price development of shares and options B shares 2000A/B stock 2003A stock options options 1-3/2007 1-3/2006 1-3/2007 1-3/2006 1-3/2007 Trading turnover, number 8 819 149 5 902 203 878 690 709 600 250 866 Trading value, MEUR 28.2 17.5 2.2 1.5 0.4 Trading price, EUR Highest 3.64 3.15 2.88 2.27 2.07 Lowest 2.86 2.81 2.06 1.96 1.40 Volume weighted average price 3.20 2.97 2.45 2.16 1.64 Closing price 3.48 2.95 2.87 2.22 2.06 31.3 CapMan Plc had 4,813 (5,424) shareholders at the end of the review period. The number of shareholders has fallen from the comparative period, and at the same time the proportion of foreign and nominee- registered shareholders has risen from 28.5% to 32.5%. There was one disclosure of changes in shareholding during the review period, when the ownership of Vesasco Oy decreased to less than 5% of the share capital and to 10% of the voting rights. Decisions adopted by the AGM The Annual General Meeting (AGM) of CapMan Plc was held in Helsinki on 29 March 2007. The AGM confirmed the 2006 financial statements and granted discharge from liability to the Board of Directors and the CEO for the 2006 financial year and decided that a dividend of EUR 0.12 per share be paid to shareholders for year 2006. The dividend payment date was 12 April 2007. The AGM decided that the Board of Directors consists of six members. Tapio Hintikka, Lennart Jacobsson, Urban Jansson, Teuvo Salminen and Ari Tolppanen shall continue as Board members. Sari Baldauf was elected as a new member to the Board. The organisation meeting of the Board of Directors that was held immediately after the AGM elected Ari Tolppanen as Chairman of the Board and Teuvo Salminen as Vice Chairman of the Board. Board members Sari Baldauf, Tapio Hintikka, Urban Jansson and Teuvo Salminen are independent of the Company. In addition, the AGM decided that monthly compensation of EUR 3,500 shall be paid to the Chairman and Vice Chairman and EUR 3,000 to members. Compensation shall not be paid for those Board members that are employed by CapMan Group. Reasonable travel expenses shall be compensated for all Board members. The AGM elected PricewaterhouseCoopers Oy, corporation of authorised public accountants, as the Company's auditors with Jan Holmberg, APA (Auditor approved by the Central Chamber of Commerce), as the Lead Auditor. Terja Artimo, APA, from the same accounting corporation, shall act as Mr Holmberg's deputy. In accordance with the proposals of the Board of Directors, the AGM also decided - to amend the Company's Articles of Association - to authorise the Board of Directors to resolve to issue a maximum of 20,000,000 B shares, or to issue stock options and other entitlements referred to in the Finnish Companies Act section 10, paragraph 1, and to determine the terms and conditions related to these issues - to authorise the Board of Directors to repurchase a maximum of 8,000,000 of the Company's own B shares by using the Company's unrestricted shareholders' equity. The share repurchases shall be carried out through public trading on the Helsinki Stock Exchange in another proportion than according to the holdings of the shareholders. The repurchase price shall be based on the market price of the Company's shares in public trading - that the share subscription prices to be accrued from share subscriptions pertaining to the Company's stock option plans shall be recorded in the Company's invested unrestricted shareholders' equity. The decisions adopted by the AGM and the amended Articles of Association in their entirety are presented on CapMan's Internet pages under www.capman.com/En/InvestorRelations/AnnualGeneralMeetings and www.capman.com/En/AboutCapMan/CorporateGovernance/ArticlesofAssociation/ . Future outlook CapMan Private Equity Private equity investment in Europe is estimated to show growth in the mid and long term. The foundation for growth is the increasing inclusion of private equity investment as a part of investment allocations by institutional investors and other substantial investor groups, including high net worth individuals. The stock exchange listing intentions of management companies like CapMan have emerged as a new phenomenon in the markets. A prominent example of that are the listing preparations by US- based Blackstone Group, one of the worlds leading private equity investors. The goal in going public is to create a new source of capital for funds under management. CapMan's strategy is to invest 5-10% of the total capital in its respective equity funds. Private equity investment has also claimed some of the role that has traditionally been played by public markets in the financing of M&A and growth. The growth of traditional private equity investment in unlisted companies in the Nordic countries continues to be accelerated by consolidation in various sectors, family successions, privatisation of public services and functions, strong investment in research and development in technology and life science sectors, and increasing entrepreneurial activity. The competition for middle market investee companies in buyout markets is fierce because of the number of players and the plentiful availability of loan financing. However the largest and most publicly visible investment volume is still focused in the bigger buyout segment, where deals are larger, whereas CapMan's focus is on middle market buyouts. Competition is also visible in the markets as a rise in investment professionals' compensation levels. CapMan's local presence in different Nordic countries, which enables the active search for investee companies throughout the Nordic region, is important in the prevailing competitive situation. The competition in technology and life science sectors is less fierce and there are good opportunities for syndicated investments. CapMan will continue to implement its portfolio company investment strategy on a Nordic level. The number of new potential investee companies remains at a good level. Our investment teams continue to have solid market coverage ensuring access to the majority of potential investment targets, and they have comprehensive resources for value creation in portfolio companies via active work on the companies Boards of Directors. CapMan is in a good position to continue as a proactive player in the private equity market, as its funds making investments in portfolio companies have approximately MEUR 770 in capital for new and follow-on investments. Fundraising for CapMan Technology 2007 and CapMan Life Science IV funds still continues. CapMan Real Estate The liquidity of real estate markets has remained good throughout the beginning of 2007. The supply and demand of properties has still been at a high level, as a result of increased vendor activity and the growing number of foreign investors. Pricing of properties is quite aggressive and there is tough competition for completed good properties. The number of real estate funds in Finland is still growing and the funds have strong activities in the markets. Market activity has also expanded outside of the greater Helsinki region. The challenge for investors in the acquisition and management of targets requiring development work is to find the right and adequate resources. There are no signs of a turn in Finland's positive economic growth, and therefore adequate resources and expertise will continue to be in a critical position for success in the markets. The resources of CapMan's Real Estate funds have been further strengthened as far as making real estate investments and developing and managing the real estate portfolio are concerned. At present our two funds have adequate personnel resources, a competitive structure and an aggregate investment capacity of approx. MEUR 710 for finding good investment targets and developing the current portfolio in Finland. These resources together with the teams reliability and flexible way to do business have brought the funds plenty of investment opportunities. We believe that also in future there will be good potential to find individual properties that fit the investment focus of our funds and which we can acquire for further development on competitive terms in the market. CapMan Plc Group CapMan's strategy is to exploit growth opportunities within the alternative asset class. In addition to CapMan's existing product areas (Private Equity, Real Estate) the alternative asset class includes, among others, infrastructure investment, forestry investment and active public market funds. CapMan is investigating the possibilities to expand into some of these areas and will define its geographical strategy, especially concerning Russia, during this year. The Group's profit before taxes for 2007 will clearly improve from that of 2006. The final result for 2007 will depend on how many exits are made by funds already generating carried interest, on the possible transfer of new funds to carry, and on how the value of investments develops in those funds in which CapMan is a substantial investor. According to our understanding the exit markets will remain favourable and CapMan Equity VII A, B and Sweden funds as well as Finnventure Fund IV are expected to begin to generate carried interest during 2007-2008. The funds investing in portfolio companies have several exit processes underway. CapMan Plc will publish its Interim Report for the period 1 January - 30 June 2007 on 10 August 2007. Helsinki 3 May 2007 CAPMAN PLC Board of Directors Press conference: A press conference will be held in Finnish for the media and analysts today at 12.00 p.m. in CapMan's premises, address Korkeavuorenkatu 32, Helsinki. Heikki Westerlund, CEO, will present CapMan Plc's interim result and describe the current market environment. A light lunch will be served at the event. Presentation material from the press conference will be published in Finnish and English on the Groups website when the press conference has commenced. For further information, please contact: Mr Heikki Westerlund, CEO, tel. +358 9 6155 8304 or +358 50 559 6580 Mr Olli Liitola, CFO, tel. +358 9 6155 8306 or +358 400 605040 DISTRIBUTION: Helsinki Exchanges Principal media www.capman.com GROUP BALANCE SHEET IFRS IFRS IFRS EUR 31.3.07 31.3.06 31.12.06 ASSETS Non-current assets Tangible assets 641,802 879,065 672,155 Goodwill 4,845,174 4,845,174 4,845,174 Other intangible assets 682,864 722,410 709,754 Investments in associated companies 2,866,089 851,386 2,860 458 Investments at fair value through profit and loss Investments in funds 38,377,578 22,909,476 33,121,817 Other financial assets 845,735 1,037,293 848,290 Receivables 12,062,020 10,171,022 13,834,881 Deferred income tax assets 230,562 229,619 230,562 60,551,824 41,645,445 57,123,091 Current assets Trade and other receivables 9,988,018 9,480,184 5,521,345 Other financial assets at fair value through profit and loss 19,653,655 1,986,979 2,779,410 Cash and bank 24,053,072 5,991,821 14,136,732 53,694,745 17,458,984 22,437,487 Total assets 114,246,569 59,104,429 79,560,578 EQUITY AND LIABILITIES Capital attributable the Company's equity holders Share capital 771,587 759,303 771,587 Share premium account 38,968,183 38,161,514 38,968,186 Other reserves 1,234,715 1,036,890 1,218,624 Translation difference 216,796 -161,410 316,780 Retained earnings 20,155,179 7,412,596 15,073,517 61,346,460 47,208,893 56,348,694 Minority interest 6,035,989 128,881 598,720 Total equity 67,382,449 47,337,774 56,947,414 Non-current liabilities Deferred income tax liabilities 3,258,046 943,558 2,233,718 Interest-bearing loans 10,000,000 0 10,000,000 Other liabilities 490,000 457,845 430,000 13,748,046 1,401,403 12,663,718 Current liabilities Trade and other payables 28,096,982 9,523,454 7,409,436 Interest-bearing loans and borrowings 0 0 1,943,967 Current income tax liabilities 5,019,092 841,798 596,313 33,116,074 10,365,252 9,949,446 Total liabilities 46,864,120 11,766,655 22,613,164 Total equity and liabilities 114,246,569 59,104,429 79,560,578 GROUP INCOME STATEMENT IFRS IFRS IFRS EUR 1-3/07 1-3/06 1-12/06 Turnover 28,090,550 8,916,867 38,032,121 Other operating income 18,108 150 687,133 Personnel expenses -3,427,394 -2,523,232 -43,957,949 Depreciation and amortisation -142,676 -173,958 -725,993 Other operating expenses -3,205,799 -3,289,437 -11,958,181 Fair value gains / losses of investments 4,082,718 2,220,716 3,549,490 Operating profit 25,415,507 5,151,106 15,626,621 Financial income and expenses 328,665 170,230 420,027 Share of associated companies' result 914,873 -247,442 1,279,086 Profit before taxes 26,659,045 5,073,894 17,325,734 Income taxes -6,754,775 -1,407,138 -4,892,972 Profit for the financial year 19,904,270 3,666,756 12,432,762 Attributable to: Equity holders of the company 14,278,672 3,606,698 11,455,302 Minority interest 5,625,598 60,058 977,460 Earnings per share for profit attributable to the equity holders of the Company: Earnings per share, 0.19 0.05 0.15 Diluted, 0.18 0.05 0.15 GROUP STATEMENT OF CHANGES IN EQUITY Attributable to the equity holders of the Company Share Share Other Trans- Re- Total Mino- Total EUR ('000) capital premium reser- lation tained rity equity account ves differ- earn- inte- rences ings rest Equity on 31.12.2006 772 38,968 1,218 316 15,074 56,348 599 56,947 Share subscriptions with options Translation difference -100 9 Options 17 61 Profit for the financial year 14,279 5,625 Dividends paid -9,259 -188 Equity on 31.3.2007 772 38,968 1,235 216 20,155 61,346 6,036 67,382 GROUP'S CASH FLOW IFRS IFRS IFRS EUR 1-3/07 1-3/06 1-12/06 Cash flow from operations Profit for the financial year 14,278,672 3,606,698 11,455,302 Depreciation and other adjustments 7,707,089 -502,349 352,225 Change in working capital 7,914,361 926,737 889,351 Financing items and taxes 135,483 -669,798 -1,549,100 Cash flow from operations 30,035,605 3,361,288 11,147,778 Cash flow from investments -4,601,879 -429,157 -9,466,501 Financial cash flow -15,517,386 -3,786,797 5,608,968 Change in cash funds 9,916,340 -854,666 7,290,245 Cash funds at start of the period 14,136,732 6,846,487 6,846,487 Cash funds at end of the period 24,053,072 5,991,821 14,136,732 ACCOUNTING PRINCIPLES The same accounting principles have been applied in the Interim Report as in the 2006 financial statements. AUDIT OF THE ACCOUNTS The information presented in the Interim Report is un-audited. SEGMENT INFORMATION IFRS IFRS IFRS EUR 1-3/07 1-3/06 1-12/06 Turnover CapMan Private Equity 5,654,540 7,685,836 33,115,589 CapMan Real Estate 22,436,010 1,231,031 4,916,532 Total 28,090,550 8,916,867 38,032,121 Operating profit CapMan Private Equity 4,579,334 4,945,062 15,404,707 CapMan Real Estate 20,836,173 206,044 221,914 Total 25,415,507 5,151,106 15,626,621 SEASONAL NATURE OF BUSINESS Carried interest income is accrued on an irregular schedule depending on the time of execution of realisations. One exit may have substantial impact on CapMan Plcs result for the financial year. TURNOVER AND PROFIT QUARTERLY YEAR 2007 MEUR 1-3/07 Turnover 28.1 Management fees 5.8 Carried interest 21.2 Income of investments in funds 0.3 Real Estate consulting 0.6 Other income 0.2 Fair value gains / losses of investments 4.1 Financial income and expenses 0.3 Share of associated companies' result 0.9 Profit before taxes 26.7 Profit for the period 19.9 YEAR 2006 MEUR 1-3/06 4-6/06 7-9/06 10-12/06 1-12/06 Turnover 8.9 9.5 10.6 9.0 38.0 Management fees 5.6 6.8 6.3 6.2 24.9 Carried interest 2.6 1.2 3.7 1.9 9.4 Income of investments in funds 0.0 0.7 0.0 0.2 0.9 Real Estate consulting 0.5 0.6 0.4 0.5 2.0 Other income 0.2 0.2 0.2 0.2 0.8 Fair value gains / losses of investments 2.2 -0.5 1.0 0.8 3.5 Financial income and expenses 0.1 0.2 0.2 -0.1 0.4 Share of associated companies' result -0.2 0.2 0.1 1.2 1.3 Profit after financial items 5.1 2.8 4.7 4.7 17.3 Profit for the period 3.7 2.2 3.6 2.9 12.4 PERSONNEL 31.3.07 31.3.06 31.12.06 Finland 74 67 72 Denmark 5 8 5 Sweden 16 15 16 Norway 6 5 5 In total 101 95 98 CONTINGENT LIABILITIES EUR 31.3.07 31.3.06 31.12.06 Leasing contracts and other contingent liabilities 10,420,886 11,789,355 13,451,476 Commitments to funds 58,092,795 56,552,801 50,528,624 APPENDIX 1: CAPMAN PLC GROUP FUNDS 31 DECEMBER 2006, MEUR Size Paid- Funds Distributed Liquid * in current portfolio casflow assets capital at at to in- to man- ** cost fair vestors agement value company *** (carried interst) Funds generating **** carried interest FV II, FV III 1) and FM II B in total 58.6 57.4 3.2 2.9 179.6 44.1 0.4 FV V 169.9 159.8 63.8 56.9 213.5 0.1 4.2 Fenno Program 2) (Fenno Fund, Skandia I and Skandia II) in total 59.0 59.0 16.2 21.3 113.2 7.3 0.2 CMRE I 5) 500.0 301.1 7.3 7.2 183.0 28.5 -5.2 In total 787.5 577.3 90.5 88.3 689.3 80.0 Funds that are expected to start generating carried interest in 2007/2008 FV IV 59.5 59.5 14.1 16.0 62.2 0.7 CME VII A 156.7 123.0 85.9 144.9 66.4 5.5 CME VII B 56.5 49.9 35.2 66.8 29.7 3.0 CME SWE 67.0 52.4 36.7 61.9 28.5 2.8 In total 339.7 284.8 171.9 289.6 186.8 Other funds not yet in carry CME VII C 23.1 14.0 9.4 10.2 5.4 0.2 CMB VIII A 360.0 116.4 76.5 76.5 28.6 CMB VIII B 80.0 25.5 17.0 17.0 6.3 CM LS IV 46.1 10.9 8.7 8.7 0.4 CMT 20071) 127.0 FM III 1) 135.5 131.3 68.5 77.0 99.8 2.7 CMM IV 4) 240.0 108.0 77.2 83.4 10.9 20.6 CMRE II 6) 600.0 3.0 12.1 11.8 -9.3 In total 1,611.7 409.1 269.4 284.6 116.1 Funds with limited carried interest- potential to CapMan NPEP II 3) 20.6 20.6 7.1 3.2 11.4 0.5 FV V ET 34.0 34.0 14.2 11.8 4.7 1.0 SWE LS 3) 49.2 40.7 26.0 23.0 0.2 0.4 SWE Tech 1), 3) 82.1 61.9 33.8 32.0 23.7 1.1 FM II A,C,D 1) 71.3 71.3 8.9 10.2 72.8 2.0 In total 257.2 228.5 90.0 80.2 112.8 Equity funds in total 2,996.1 1,499.7 621.8 742.7 1,105.0 80.0 CAPITAL MANAGED/ADVISED BY ASSOCIATED COMPANY ACCESS CAPITAL PARTNERS AS AT 31 MARCH 2007, MEUR Fund Size* ACF 1) 250.3 ACF II A 1) 153.4 ACF II B 1) 123.5 ACF III A 1) 307.4 ACF III B 1) 88.9 Private Equity Mandates 738.6 Total capital 1,662.1 Fund abbreviations: ACF = Access Capital Fund ACF II A = Access Capital Fund II Mid-market Buyout ACF II B = Access Capital Fund II Technology ACF III A = Access Capital Fund III Mid-market Buyout ACF III B = Access Capital Fund III Technology CMB = CapMan Buyout Fund CME = CapMan Equity CMLS = CapMan Life Science Fund CMM = CapMan Mezzanine CMRE = CapMan Real Estate CMT 2007 = CapMan Technology 2007 FM = Finnmezzanine Fund FV = Finnventure Fund SWE LS = Swedestart Life Science SWE Tech = Swedestart Tech * Total capital committed by investors. In CapMan's statistics the terms capital under management and fund size refer to the gross capital commitment in the fund. Funds managed by associated company Baltcap Management Oy are excluded (CapMan's share of Baltcap Management Oy is 20%; the total size of the funds is approx. MEUR 31.2). Capital under management by Access Capital Partners is presented separately. ** Total capital paid into the fund by investors. *** The funds portfolios are valued to fair value in accordance with the guidelines of the European Private Equity & Venture Capital Association (EVCA). The fair value is the amount for which an asset could be exchanged between knowledgeable, willing parties in an arms length transaction. Due to the nature of private equity investment activities, the funds portfolios contain companies with fair value greater than acquisition cost as well as companies with fair value less than acquisition cost. **** CapMan Plc Group's share of carried interest income. When the return of a fund has exceeded a required cumulative return target, the management company is entitled to a share of the cash flow from the funds (carried interest). Cash flow includes both the distribution of profits and distribution of capital. Carried interest % of the remaining cash flows are (for the funds which were generating carried interest as at 31 December 2006): Finnventure Fund II: 35%, Finnventure Fund III: 25%, Fenno Program/Fenno Fund: 20%, Fenno Program/Skandia I: 20%, Fenno Program/Skandia II: 20%, Finnmezzanine Fund II B: 20%, CapMan Real Estate I: 40%. CapMan Plc Group's share of the carried interest is less than 100% for the following funds: CapMan Buyout VIII A and B: 70%, CapMan Mezzanine IV: 75%, CapMan Real Estate I: 64%, CapMan Real Estate II: 60%, Fenno Fund and Fenno Program (Skandia I and II): 50-60%, CapMan Technology 2007: 50%, CapMan Life Science IV: 50%, Swedestart Tech: 12%, Swedestart Life Science: 10%, Alliance ScanEast Fund: 42%, Access Capital Fund: 47.5%, Access Capital Fund II: 45%, Access Capital Fund III: 25%, Access/Private Equity Mandates: 25%. 1.The fund is comprised of two or more legal entities (parallel funds are presented separately only if their investment focuses or portfolios differ significantly). 2.The Fenno, Skandia I and Skandia II funds together comprise the Fenno Program, which is managed jointly with Fenno Management Oy. 3.Currency items are valued at the average exchange rates quoted at 31 March 2007. 4.CapMan Mezzanine IV: The paid-in commitment includes a MEUR 96 bond issued by Leverator Plc. The funds liquid assets include a loan facility, with which investments are financed up to the next bond issue. Distributed cash flow includes payments to both bond subscribers and equity investors. 5.CapMan Real Estate I: The paid-in commitment includes a MEUR 100 bond issued by Real Estate Leverator Plc and a MEUR 178.5 senior loan. Distributed cash flow includes repayment of the bonds and cash flow to the funds equity investors. 6.CapMan Real Estate II: 25% or MEUR 150 of the funds size is shareholders equity and the 75% remainder is credit. APPENDIX 2: INVESTMENTS AND EXITS BY CAPMAN FUNDS 1 JANUARY - 31 MARCH 2007 The investment activities of private equity funds managed by CapMan comprise investments in portfolio companies mainly in the Nordic countries as well as real estate investments in Finland. The investment activities of funds investing in portfolio companies and of funds investing in real estate assets are presented separately in this Appendix. In addition CapMan has a 35% stake in the funds of funds and private equity investment mandate manager and adviser Access Capital Partners, which is based in Paris, Munich and Guernsey. Access Capital Partners manages/advises three funds that invest in European mid-market buyout and technology venture capital funds. Further information on Access Capital Partners can be found at www.access-capital-partners.com. INVESTMENT ACTIVITIES BY THE FUNDS INVESTING IN PORTFOLIO COMPANIES The investment activities of funds making direct investments in portfolio companies include buyouts, technology investments and investments in the life science sector. Buyouts are made in the middle market class in manufacturing, service and retail industries. Technology investments focus on expansion and later stage technology companies. Life science investments focus on companies specialising in medical technology. Q1 Investments in portfolio companies CapMan funds investing directly in portfolio companies made three new investments, four substantial add-on investments and smaller add-on investments in the first quarter of 2007 (one new investment, one substantial add-on investment and smaller add-on investments in the comparative period of 2006). All in all, MEUR 58.1 (MEUR 21.7) was invested during the period under review. CapMan Buyout VIII and CapMan Mezzanine IV funds investment in Finnish Komas Oy was finalised in January. Komas supplies complete products, subassemblies and individual components within the metal, manufacturing, vehicle and defence industries. The company's customers mainly operate in Northern and Western Europe. On 1 February 2007 CapMan Buyout VIII and CapMan Mezzanine IV funds and John Nurminen Oy announced an agreement for the transfer of John Nurminens Vehicle Logistics Unit to the majority ownership of the funds. Vehicle Logistics Unit provides logistics services to vehicle manufacturers, importers and dealers, and it is the market leader in the Baltic Sea Region. CapMan Equity VII funds invested in the Finnish video surveillance system specialist Mirasys Ltd. in March. Mirasys develops and markets innovative solutions for recording, analysing, storing and managing video and other surveillance-related data for the security industry. The investment will finance Mirasys growth and internationalisation. During the review period, add-on investment decisions were made by Swedestart Life Science fund in its Swedish portfolio companies Aerocine AB, Jolife AB and Millicore AB as well as by Finnmezzanine Fund III in Savcor Group. Q1 Exits from portfolio companies The funds managed by CapMan made eight final exits and one partial exit in the first quarter of 2007. Exits at acquisition cost (including mezzanine loan instalments and partial exits) totalled MEUR 25.5. There was one exit in the comparative period of 2006, for which exits at acquisition cost (including mezzanine loan instalments) totalled MEUR 23.6. CapMan Equity VII fund sold the majority of its shareholding in Moventas Oy to Industri Kapital 2004 fund in January. At the same time, Finnmezzanine III and CapMan Mezzanine IV funds exited from the company. The transaction was closed at the end of March. Moventas Oy is a global leading manufacturer of industrial and wind turbine gears as well as provider of gear maintenance and service. CapMan Equity VII fund retained 16% ownership in the company. The funds invested in Moventas in April 2005, and their investment in the company has been very good for investors in the funds. The exit by CapMan Equity VII and Swedestart Tech funds from the Finnish provider of software products and solutions for telecom operators Distocraft Oy, which was announced in August 2006, was finalised during the period under review. The funds sold their stake in the company to Ericsson. The funds invested in Distocraft in 2003, and the investment was good for the funds investors. At the end of February Finnventure IV, V and V ET funds sold their remaining shares in SysOpenDigia Plc. The funds had received the shares when their portfolio company Sentera Plc was merged with SysOpenDigia Plc in 2006. The funds had initially invested in the company in years 2000 and 2003. Other events in Q1 In February CapMan Buyout VIII and CapMan Mezzanine IV funds and UPM- Kymmene Corporation signed an agreement for the transfer of Walki Wisa Group owned by UPM into the ownership of the funds managed by CapMan. It is expected that the transaction will be finalised in the second quarter of 2007. Walki Wisa produces wrappings for the paper, metal and wood industries and composite materials for the packaging industry and industrial applications. Walki Wisas net sales totalled MEUR 287 in 2006 and it employs some 950 persons in different countries. CapMan Equity VII funds announced an investment in Finnish technology company Novintel Oy at the end of March. Novintel provides customised Market Intelligence services and solutions for a wide variety of industries. The investment will support the growth of the companys international operations in particular. The investment was finalised in April after the close of the period under review. Events after the review period CapMan Equity VII funds announced an exit from the Swedish provider of integrated facility, security and office services Synerco AB in April. The funds will sell their stake to Service Management company Addici Holding AB, and the transaction is expected to be finalised by the end of May 2007. The funds invested in the company in 2003. The investment in Synerco has been good for investors in the funds managed by CapMan. Nordic Private Equity Partners II exited from LindPlast A/S in April. LindPlast is a manufacturer of plastic polyethylene packaging materials. The funds invested in the company in 1996. The exit does not have an impact on CapMan Plc's result for 2007, because the fund is not in carry. Finnventure IV, Finnventure V and Finnventure V ET funds sold their holding in the Finnish information security and mobility management software provider Secgo Software Oy to the Norwegian listed company Birdstep Technology ASA at the end of April. In the transaction, the funds will receive shares in Birdstep Technology ASA listed on the Oslo Stock Exchange. The funds will exit from the company in total when they sell the shares received in Birdstep. The transaction is expected to be closed by the end of the second quarter in 2007. Because the transaction will be executed as an exchange of shares, it does not have a direct impact on CapMan Plc's result for 2007. The funds invested in Secgo in 2004 and their holding in Secgo was 18% prior to the sale. INVESTMENT ACTIVITIES BY THE REAL ESTATE FUNDS Q1 Investments The Real Estate funds made three new investments in the first quarter of 2007. Gross investments for the review period totalled MEUR 19.4. CapMan Real Estate I acquired the property and lot located at Kalevankatu 20 from the Local Government Pensions Institution in early January. Kalevankatu 20 is located in the Kamppi district of central Helsinki, and it is the funds first investee property following the sale of the real estate portfolio that was announced in December. The property was constructed in 1968 and it comprises approx. 3,500 m of lettable space. In February CapMan RE II fund made its first investments and acquired two properties located in Hämeenlinna from Aina Group. Kasarmikatu 4 is located in the centre of Hämeenlinna, and it has a lettable space of approx. 3,500 m. The property was built in 1965 and its extensions were completed in 1990. Parolantie 104 is an office, industrial and warehouse complex that was built in 1979. The lettable space of the buildings totals approx. 11,000 m. CapMan RE II fund and Aina Group entered into a long-term lease from the property in connection with the transaction. Q1 Exits: Sale of CapMan Real Estate I fund's portfolio The sale of CapMan Real Estate I fund's real estate portfolio comprising 22 commercial properties to Samson Properties Ltd, The Royal Bank of Scotland (RBS) and Ajanta Oy was closed at the end of January. The acquisition cost of the portfolio was MEUR 304.4 and its sale price was MEUR 377.5. CapMan Real Estate I continues its active investment operations after the transaction. Other events in Q1 In February CapMan RE II fund signed an agreement with Tokmanni Oy on the acquisition of a logistics centre to be constructed close to the Helsinki-Lahti Motorway in Mäntsälä. Tokmanni's logistics centre will have a lettable space of approx. 74,400 m, and the project will be completed in autumn 2008. A long-term lease for the centre has been signed with Tokmanni. In March, CapMan RE II fund announced an investment in the property located at Viinikankatu 49 in the Nekala district of Tampere. The property comprises commercial premises and warehouse space and it was built in 1968. The lettable area of the property totals 10,000 m, and it is almost fully leased at the time of investment.