Taaleri Q4’24 preview: Focus in this year’s strategy update

Translation: Original published in Finnish on 2/10/2025 at 7:15 am EET.

Taaleri publishes its result on Wednesday, February 12, at approximately 08:00 am EEST. The numbers in the report are not expected to provide any major surprises, so the focus will be on the outlook and comments from the new management on possible strategic changes.

No significant non-recurring fees in the reporting period

Taaleri’s revenue is a rather poor indicator of the development of the group’s business operations, as most of the investment income that fluctuates by quarter is also reflected in revenue. We recommend focusing on the development of the individual segments. At group level, we expect Taaleri's revenue to be 11.9 MEUR. Revenue is almost entirely continuous, as there were no major non-recurring fees in the reporting period. Due to the lack of non-recurring fees, profitability will also remain moderate in absolute terms, at around 3.3 MEUR.

We forecast stable development in both segments

In private equity funds, we anticipate revenue to be at the previous year's level of 6.8 MEUR and to be fully continuous. In renewable energy, we are awaiting further information on the progress of fundraising for the critical SolarWind 3 fund and the process of selling old wind funds. In other private equity funds, revenue is also in line with the previous year, as the recently announced real estate mandate is not yet reflected in the figures. The real estate mandate is an important opening for Taaleri's real estate business after a long period of weak sales. We estimate the overall result for private equity funds to be slightly positive, now that renewable energy is clearly in the black with recurring fees.

We expect Garantia's insurance revenue to have been flat with the previous quarter, as well as the guaranty insurance portfolio, with mortgage demand remaining weak. We consider this to be a temporary challenge, however, that will pass as the housing market picks up. We expect claims costs to remain moderate and therefore the company should once again report a good insurance service result (3.3 MEUR). We also expect a small plus in investment returns, and overall Garantia will deliver an excellent result. Furthermore, we predict that Garantia will pay a significant dividend of 14 MEUR to Taaleri within the first half of this year.

We do not expect additional dividend payouts

We expect Taaleri to pay a dividend of EUR 0.49 per share, or approximately 60% of the result for the financial year. In the dividend decision a year ago, Taaleri clearly indicated that the additional dividends have now been paid out and that the capital will be used to implement the strategy in the future. We therefore expect the dividend to follow the dividend policy (at least 50% of earnings), even if the company's balance sheet would allow for a significantly higher dividend distribution.

Outlook the most interesting part of the report

One of the most interesting aspects of the report and the earnings call is the recent CEO change and the announcement of a strategy update in the fall of this year. The company's current strategy period is still ongoing, so the strategy update is likely to represent a change of pace in the company's own activities. The implementation of the company's strategy has been slower than expected and, for example, key strategic investments in the bioindustry have not been made. In addition, the growth of private equity funds has been slower than expected. Therefore, we think it is most likely that the strategy update will aim to accelerate the implementation of the strategy. However, we also see the possibility that the strategy update could include major changes aimed at releasing the significant hidden value in the stock. Our rather conservative estimates put the sum of the parts at around EUR 10, which is significantly higher than the current share price. As we have previously stated, the current group structure (Garantia, Private Asset Management and an investment company) is not optimal and a significant amount of value could be unlocked by breaking it up. Obviously, we will not get specific plans for the strategy update in the context of the results, but any comments in this regard will naturally be of interest.