Finnvera and the European Investment Bank (EIB) have signed a Memorandum of Understanding on cooperation with the European Investment Advisory Hub (EIAH).The cooperation covers such issues as the exchange of information and the sharing of good operating models. It can also mean participation in the EIAH working groups, discussions and, for example, in initiatives intended for the exchange of information or development of a national advisory service.The European Investment Bank and the European Commission have launched the European Investment Advisory Hub as part of the Investment Plan for Europe. The aim of the Investment Plan is to remove obstacles to investments in Europe, to provide visibility and technical assistance to investment projects and to make smarter use of existing financial resources. So far twenty European countries have signed a Memorandum of Understanding with the EIB. As part of the Investment Plan for Europe, Finnvera also maintains advisory service (esir.fi) for the European Fund for Strategic Investments (EFSI).“The cooperation improves the possibilities of Finnish investment projects to make use of the European Investment Advisory Hub. A central feature of this participation is also the development of cooperation with other national Team Finland actors,” says Pauli Heikkilä, CEO of Finnvera.The Memorandum of Understanding will be in effect until the end of 2020.Additional information:Valtteri Vento, Programme Manager, Finnvera plctel. +358 29 460 firstname.lastname@example.org
As in previous years, we have published our annual report online.Each year we also report on corporate responsibility. Our corporate responsibility report is included in the annual report. Finnvera has compiled the reports in accordance with the G4 Guidelines of Global Reporting Initiative (GRI). In our reporting, we concentrate on key issues in terms of the company’s operations and its stakeholders and we adhere to the reporting guidelines of State-owned companies whenever applicable.The annual report is published in Finnish and in English.Open the annual report.
Stock Exchange ReleaseThe Financial Statements, the Report of the Board of Directors and the Statement on the Corporate Governance and Steering System published by the Finnvera Group on 28 February 2017 contained some incorrect information. These errors have no effect on the bonds issued by the company or on the ability of the issuer, Finnvera plc, to repay its loans.The final versions of the Finnvera Group’s Financial Statements, Report of the Board of Directors and Statement on the Corporate Governance and Steering System 2016 are appended to this release.The corrections made: (information before the correction in brackets)Report of the Board of Directors- Balance Sheet on 31 December 2016The parent company’s long-term liabilities as per 31 December totalled EUR 5,175 million (4,962 million).Notes to the Financial Statements- Note B1 Credit risks, figures given in EUR 1,000Debt securities; 193,425 (208,919)- Note B11 Liquidity risk, maturity of assets, liabilities and guarantees, figures given in EUR 1,000Presentation of figures on the row ‘Assets, liabilities and derivatives, net’ has been corrected for the reference year 2015.- Note E3 Investments, figures given in EUR 1,000Investments in associated companies, totalFinnvera Group 31 Dec 2015; 19,860 (2,058,655)Finnvera plc 31 Dec 2016; 0 (2,153,299)Finnvera plc 31 Dec 2015; 0 (2,178,721)Investments totalFinnvera Group 31 Dec 2015; 2,058,655 (19,860)Finnvera plc 31 Dec 2016; 2,153,299 (0)Finnvera plc 31 Dec 2015; 2,178,721 (0)Statement on the Corporate Governance and Steering System- FundingRating given by Moody’s to Finnvera Aa1 (Aaa)Finnvera Group’s H2/2016 and Financial Statements 1 Jan-31 Dec 2016 (PDF)Statement on Corporate Governance and Steering System 2016 (PDF)Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, CFO, tel. +358 29 460 2458Also read: Financial Statements of the Finnvera Group 1 January–31 December 2016 (PDF)
A year of reviving demand and new authorisationsThe world economy showed some positive signs in 2016, although political events created a degree of uncertainty. Finnish companies also reported greater demand and increasing investments, and individual large export deals gave much-needed impetus to Finland’s otherwise sluggish exports. Owing to the anticipated increase in demand for export financing services, and to respond to higher exposures, Finnvera’s authorisation to provide export financing was raised markedly. In addition, Finnvera received new mandates, such as the Growth Loan for financing projects undertaken by rapidly growing SMEs and midcap companies. New financing solutions relating to the promotion of small export transactions were also introduced on the market during the year.Business operations and the financial trendThe volume of loans and guarantees offered by Finnvera to SMEs and midcap companies in 2016 was 7 per cent less than in the year before. However, financing for growing and internationalising companies and for transfers of ownership picked up in line with the strategy. Financing offered for growing and internationalising companies rose by 6 per cent from the previous year, while financing for transfers of ownership rose by 21 per cent.Demand for export credit guarantees and special guarantees increased by 50 per cent in 2016, to EUR 14.6 billion. Demand for export credits rose to EUR 12.5 billion, which was 74 per cent more than a year ago. Although interest in export credit guarantees, special guarantees and export credits perked up, the offers given by Finnvera for export credit and special guarantees and for export credits fell by 34 per cent and 82 per cent, respectively. The reason was that some projects or their credit agreements were still being negotiated at the closing of the financial period. Finnvera Group 1 Jan–31 Dec 2016 1 Jan–31 Dec 2015 Change % Offered financing, MEUR Loans and guarantees 845 906 -7 % Export credit guarantees and special guarantees 4 438 6 760 -34 % Export credits 760 4 131 -82 % 31 Dec 2016 31 Dec 2015 Change % Outstanding commitments, MEUR Loans and guarantees 2 261 2 285 -1 % Export credit guarantees and special guarantees 18 426 17 436 6 % Export credits 4 782 4 240 13 % 1 Jan–31 Dec 2016 1 Jan–31 Dec 2015 Change % Net interest income and net fee and commission income, MEUR 194 197 -2 % Operating profit, MEUR 69 114 -39 % Profit for the period, MEUR 70 111 -37 % 31 Dec 2016 31 Dec 2015 Change % Balance sheet total, MEUR 9 498 8 418 13 % Equity, MEUR 1 207 1 121 8 % -of which non-restricted reserves, MEUR 955 871 10 % 31 Dec 2016 31 Dec 2015 Change %-point Equity ratio, % 12,7 13,3 -0,6 Capital adequacy, Tier 2 , % 24,3 19,6 4,7 Cost-income ratio, % 27,0 28,3 -1,3 The Finnvera Group’s profit for July–December 2016 was EUR 77 million. Financial performance improved by EUR 84 million when compared against the loss of EUR 7 million entered for January–June 2016.The main reasons for the improvement in financial performance from the first to the second half of the year were the smaller losses from export credit guarantee operations and the smaller provisions for losses recorded by the parent company, Finnvera plc. In July–December, export credit guarantee losses and provisions for losses totalled only EUR 2 million, whereas the losses entered and the provisions made in January–June came to EUR 66 million. During the first half of 2016, a provision of EUR 55 million for guarantee losses was made for Oi S.A. of Brazil when it transpired that the receivables from the company involve an obvious risk.The profit of the Finnvera Group for 2016 was EUR 70 million (111 million). This was EUR 41 million, or 37 per cent, less than in the previous year. As was pointed out above, the reasons for the weaker performance were the parent company’s export credit guarantee losses as well as provisions for losses that were realised during the first half of the year and were markedly greater than those entered the year before.The profit of the parent company, Finnvera plc, for 2016 stood at EUR 65 million (95 million), of which large corporates business accounted for EUR 33 million (82 million) and SME and midcap business for EUR 32 million (38 million). The performance of the large corporates business declined clearly from the previous year, while the performance of SME and midcap business was at a good level for a second year in a row. Finnvera Group H2/2016 H1/2016 Change H2/2015 2016 2015 Change Change MEUR MEUR % MEUR MEUR MEUR MEUR % Net interest income 24 27 -11 28 50 56 -6 -10 Fee and commission income and expenses (net) 77 67 16 68 144 141 3 2 Gains/losses from items carried at fair value -10 -10 0,3 -15 -20 -21 -1 -6 Net income from investments 0,2 0,1 16 0,4 0,3 0,1 0,2 133 Other operating income 12 0,2 - 2 12 2 10 - Administrative expenses -22 -22 -4 -22 -44 -44 0,1 0 Depreciation and amortization -2 -1 157 -1 -2 -1 1 124 Other operating expenses -2 -3 -31 -3 -4 -6 -1 -22 Net impairment loss on financial assets -0,2 -65 -100 -0,2 -66 -15 51 348 Impairment loss on other financial assets -2 0 - 0 -2 0 2 - Operating profit 77 -7 - 58 69 114 -44 -39 Profit for the period 77 -7 - 57 70 111 -41 -37 Outlook for financingThe economic expectations of SMEs have taken a slightly upward turn, which is believed to reflect positively on financing granted by Finnvera to SMEs in 2017. This will probably be seen particularly clearly in financing for growth companies, but the rising trend in financing intended for investments by growing and internationalising enterprises may also continue following the turn that occurred in 2016. It is assumed that financing granted by Finnvera for transfers of ownership will continue at the same solid level as in 2016. It is generally believed that the bond activities of SMEs and midcap companies will gain slightly more momentum and will also be reflected in Finnvera’s financing.Financing solutions offered to buyers play a pivotal role in exports of capital goods sold by large corporations. Demand for export credit guarantees and export credits is expected to rise from the previous year, but the total amounts depend on the timing of individual large export transactions. Ships, telecommunications and the forest industry are still anticipated to account for the bulk of demand associated with large corporations’ exports. Among the new, opening markets, the greatest demand is likely to focus on Iran and Argentina. Exposures for Russian trade declined in 2016 as buyers postponed investments, but new demand is expected in 2017. Other countries where the demand for Finnvera’s guarantees is expected to rise are India and Mexico. In these countries, reforms associated with the modernisation of infrastructure will provide export opportunities for Finnish companies. In Finland, the progress of large investment projects promoting exports have an impact on the demand for guarantees.The year 2017 is expected to be a year of growing demand. It is thought that implementation of the strategy throughout the Group will proceed as planned and that operations will be self-sustainable in the current financial period as well. The uncertainty factors associated with economic trends make it difficult to predict financial performance. If more risks materialise than has been anticipated, the situation may weaken considerably from what is projected.CEO Pauli Heikkilä:“Finnvera’s year 2016 was driven, above all, by the greater demand for export financing and the substantial increase in transfers of ownership. Development of Team Finland activities continued and as a result of this work, 370 internationalising enterprises received tailored service proposals. The Finnish Parliament’s decisions to raise Finnvera’s authorisations guarantee that we’ll be able to contribute to the success of Finnish enterprises on the international market in the coming years as well.With regard to the formation of financial performance, the past year stands out among the preceding years. In terms of domestic financing, the structure of the credit portfolio – and hence the financial result – were at a good level. In contrast, with respect to export credit guarantees, the year 2016 saw the realisation of one major risk. A large Brazilian telecommunications company filed for debt restructuring and, for this reason, Finnvera’s performance at the company level was lower than in past years. Finnvera’s statutory mission is to bear some of the credit risks that are inevitable in all export transactions.It is likely that 2017 will be characterised by increasing demand for Finnvera’s export financing services. In SME financing, transfers of ownership will remain at a high level. Finnvera will serve as an intermediary organisation for the European EFSI financing. The international operating environment will remain uncertain. In order to spur domestic growth, we need long-term improvements in the structure of the Finnish export sector and in cost competitiveness.”Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, CFO, tel. +358 29 460 2458Financial Statements 1 January – 31 December 2016 (PDF)Statement on the Corporate Governance and the Steering System 2016 (PDF)
SMEs strongly oriented towards growth are keen to develop their business through company acquisitions. Financing is sought for investments but also – slightly more than before –for working capital.SMEs see a slightly brighter future, though the positive outlook has not been very strong. Despite the slow trend, the share of strongly growth-oriented enterprises has remained steady, and roughly one SME in ten characterises itself as strongly growth-oriented. Interest in company acquisitions is reflected in financing needsOne in five SMEs sees company acquisitions as potential accelerators of growth. It is particularly positive to note that nearly one in three strongly growth-oriented enterprises is interested in expanding its business through acquisitions within the next few years. The interest in company acquisitions also impacts on the need for external financing, since about 80 per cent of these enterprises indicated that potential expansion would require financing.“The survey found that about half of SMEs had no plans for transfer of ownership in the future. On the other hand, 40 per cent said that they will wind up enterprise activities within the next ten years. We want to be there to ensure that sellers start preparing for transactions in good time and companies seeking growth do not miss a deal for lack of financing. There are solutions in place for financing transfers of ownership and company acquisitions,” says CEO Pauli Heikkilä of Finnvera.Transfers of ownership are also reflected in measures to develop enterprise value. SMEs interested in transfers of ownership and company acquisitions are active in monitoring the value of the enterprise, whereas other enterprises show clearly less interest in this.No essential change in the availability of financingThe availability of financing is still at a good level, and slightly over one out of five small businesses reported that they had applied for financing from a bank or some other source. Growth-oriented enterprises in particular have maintained a high level of interest in external financing. SMEs intend to apply for financing for various investment needs and also for growth inputs. Underlying the plans to apply for financing are the quickening economic growth, the assumption that growth will continue, and the consequent increase in investment activity. In this respect, the outlook has improved slightly more since the previous barometer survey. On the other hand, expectations are somewhat uncertain, as indicated by the slightly greater share of enterprises that plan to apply for financing and use it for working capital.The Federation of Finnish Enterprises, Finnvera and the Ministry of Economic Affairs and Employment jointly conduct an SME Barometer Survey twice a year, the purpose being to study the operations and economic environment of small and medium-sized enterprises. The barometer for spring 2017 is based on responses given by about 4,800 SMEs.https://www.yrittajat.fi/suomen-yrittajat/tutkimukset/pk-yritysbarometrit/pk-yritysbarometri-12017-549090Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Jonna Myllykangas, Information Officer, tel. +358 29 460 2740
Finnvera plc is selling about 80 per cent of its holding in Seed Fund Vera Ltd. This deal is one step in the process where Finnvera gradually gives up its venture capital investments.The holding is being sold to Innovestor Kasvurahasto I Ky, a Finnish limited partnership. Finnvera will remain an owner of Seed Fund Vera Ltd, with a holding of about 20 per cent. The Fund attracted interest among both Finnish and foreign buyers. Innovestor’s offer corresponded most closely to the seller’s objectives.Now that there will be a new private company on the venture capital investment market, the arrangement ensures the continuity of the Fund’s investment activities and provides better opportunities to obtain further financing for the portfolio companies.Underlying the deal is the policy decision made by the Ministry of Economic Affairs and Employment, whereby responsibility for the development of early-stage venture capital investments, which used to be vested in Finnvera, has been transferred to Tekes Venture Capital Ltd.The Seed Fund has activated private investment“From the perspective of its impact, Finnvera’s early-stage investment has been important. Through the Fund’s activities, portfolio companies have acquired a total of EUR 350 million in private capital. Of this total, business angels have accounted for about EUR 90 million. These sums are important even in international comparison,” says Pauli Heikkilä, CEO of Finnvera.The sale of Seed Fund Vera Ltd will bring much private capital and know-how to the Fund. This will add stability to the further development of the portfolio companies. The current portfolio companies will gain more networks and new kinds of opportunities for growth.Finnish Industry Investment and Tekes will share responsibility for the State’s venture capital investmentsFrom now on, Finnish Industry Investment Ltd and Tekes will bear the primary responsibility for the State’s venture capital investments. Of these two, Tekes Venture Capital Ltd, which is administered by Tekes, focuses on early-stage investments through investment funds.Seed Fund Vera Ltd began operations in 2005.Additional information:CEO Pauli Heikkilä, Finnvera plc, +358 29 460 2400
The Board of Directors of Finnvera adopted a Code of Conduct for Finnvera on 15 December.Code of Conduct is an internationally established term that is used when describing the business principles – both ethical and legal – that companies themselves have defined and their management has expressed publicly.Finnvera’s operations are closely regulated. Several principles, policies and guidelines have therefore arisen over time to assist compliance with the requirements. The Code of Conduct serves as Finnvera’s joint set of rules. It brings together both the ethical principles and legal rules that we adhere to in our operations and to which we are committed. By using the Code of Conduct we also want to tell outsiders what type of an organisation we are.The Code of Conduct is available here.
The seminar ‘Support for export growth – the role of the State of Finland’, organised by Finnvera on 23 November 2016, focused on the State’s role in ensuring the success of Finnish enterprises in international competition.The seminar was opened by Pauli Heikkilä, CEO of Finnvera, who underscored that Finnvera wants to offer Finnish companies the same starting points as those offered by the export credit agencies of competitor countries in their own countries.“The playing field is increasingly challenging. We compete against bigger players, such as Germany, Sweden and Italy,” Heikkilä said.However, Heikkilä stressed that it is not the purpose, nor desirable, to compete on the terms of export financing.“This should be restricted by international agreements. But until that happens, Finland and Finnvera have to meet the challenge.”Demand for Finnvera’s export financing has increased steeply in recent years. In fact, Parliament is currently debating a Government proposal that would raise Finnvera’s statutory limits for export financing from the current EUR 19 billion to EUR 27 billion.“We can ask whether Finland can afford not to offer its enterprises the same type of services as international competitors do,” Heikkilä pondered.In his address, Topi Vesteri, Deputy CEO of Finnvera and President of the Berne Union, discussed the role of export credit agencies in the changing landscape of world trade.“Globally, exports have grown most rapidly in China. In consequence, Chinese public financial institutions have become the largest providers of export financing. The playing field is less level than ever before because the international rules only apply to OECD members. Now it’s interesting to see whether the Trump Administration will close public export financing in the United States or whether it sees the opportunity to create jobs through exports,” said Vesteri.Panellists: Statutory limits must be sufficiently highThe importance of the State for exports was also discussed by two panels. The members on the first panel were Ilona Lundström, Director General of the Enterprise and Innovation Department, Ministry of Economic Affairs and Employment; Pentti Pikkarainen, Director General of the Financial Markets Department, Ministry of Finance; Tommi Toivola, Chief Policy Adviser, Confederation of Finnish Industries; and Peter Zettinig, Researcher, University of Turku.The panellists considered it important to ensure that the State contributes to the success of Finnish export enterprises. They would like to see more input to support the export efforts of SMEs. However, the panel underlined that risks need to be balanced.The second panel concentrated on the perspective of companies. The panellists were Jan Meyer, CEO, Meyer Turku; Timo Ihamuotila, CFO, Nokia Corporation; Kari Hietanen, Executive Vice President, Corporate Relations and Legal Affairs, Wärtsilä Corporation; and Hannu Puhakka, Managing Partner, MB Funds (Kotka Mills).The panel recognised that Finnvera very often has a major role in bringing export transactions to a successful conclusion. It is therefore important that the statutory limits for export financing are high enough for Finnish companies to do well in the ever more stringent international competition.Jan Meyer, CEO of Meyer Turku, pointed out that when large Finnish companies win major deals, the benefits also trickle down to an extensive network of subcontractors.“The orders for ships secured by the Turku shipyard have a strong positive impact on the SME sector. When smaller enterprises have the opportunity to swim in our tail water, up to 15,000 jobs can be created in Finland,” Meyer said.Additional information:Tarja Svartström, Senior Vice President, Corporate Communications and HR, tel. +358 40 826 2006Finnvera provides financing for the start, growth and internationalisation of enterprises and for protection against export risks. We strengthen the operating potential and competitiveness of Finnish enterprises by providing loans, domestic guarantees and export financing services. The risks involved in financing are shared between Finnvera and other providers of financing. Finnvera is a specialised financing company owned by the State of Finland. It has official Export Credit Agency (ECA) status. www.finnvera.fi
Team Finland is again a main partner of Slush, one of the world’s leading events for growth companies. The technology and growth company event will be held from 30 November to 1 December 2016 at the Messukeskus Expo and Convention Centre in Helsinki, Finland. Now being held for the ninth time, the event brings together companies, international opinion-leaders, investors and the media.Team Finland’s experts will be available at the Team Finland booth in Hall 6. We provide growth companies with information on funding, and growth and internationalisation opportunities. We also advise foreign companies and investors on investment opportunities in Finland, a country with cutting-edge technological know-how.We share our booth with Finnvera, Finpro, Tekes, Finnish Industry Investment, Finnish Patent and Registration Office, the Ministry for Foreign Affairs, Finnfund, Finnpartnership, Enterprise Europe Network and the Registered Association Finnish-Russian Chamber of Commerce.We invite you to our booth to meet Team Finland’s experts and explore the services we offer.Team Finland team.finland.fiSlush slush.org