Search finnvera.fi
Newsroom

All Current Ones

Articles
15.06.2018
Foreign buyers’ interest in buyer financing is increasing

Arranging financing for a foreign buyer is often an important element of export trade negotiations, in both small and large transactions. Buyer financing increases the competitiveness of the offer and improves the opportunities of closing the deal in a competitive market. Foreign buyers’ interest in the arrangement of financing has also increased in recent years. Buyer financing played a key role in Raumaster’s and Konecranes’ trade transactions in Thailand.Export trade transactions are often the sum of many parts. The buyer may already have financing in place but could still be interested in other financing options, too.“Foreign buyers’ interest in the arrangement of financing has increased in recent years, perhaps due to enterprises’ balance sheet thinking. They pursue a position in which they do not need to use existing bank limits but can seek alternative ways to arrange financing. Secondly, the low interest rate level of the euro also makes buyer credit an attractive option, although in that case, the buyer takes a currency risk,” says Vesa Kalenius, Vice President, Trade & Export Finance at Handelsbanken.He points out that especially for smaller export companies, the use of buyer credit is a major advantage that transfers the credit risk involved in export trade away from the company. In addition, it is worth noting that buyer credit does not protect against pre-delivery risks. That protection can be achieved with a pre-delivery credit risk guarantee or documentary credit granted by Finnvera – especially when manufacturing customised goods.“The use of buyer credit brings security into export trade transactions and is a reasonably inexpensive form of financing. In general, the arrangements are actively used by large enterprises, even if you would think that a single loss would not have a big impact on them. On the other hand, small enterprises rarely use them even though they are more extensively affected if losses occur,” Kalenius comments.The arrangement of financing might be crucial for SMEs’ export efforts or minor export trade transactions.“We started developing buyer credit for minor export trade transactions, ranging approximately from EUR 2 million to EUR 20 million, and created a simplified loan agreement, in which terms, conditions and documentation are condensed into a couple of appendices.It proved to be well-functioning in Sweden and was piloted in Finland, too, when there were inquiries for financing in small projects. The up side is that the loan agreement is easy to understand and accept. The down side is that it is a standardised package with only a little flexibility. However, it is generally functional in minor export trade transactions,” says Kalenius.An export company salesperson’s toolbox should always contain a financing option The arrangement of buyer financing came up when Raumaster Paper, a company from Rauma specialising in material handling systems, conducted trade negotiations with Hiang Seng Fibre Container Company, located in Thailand and manufacturing paper, board and cardboard packaging and boxes. The 2,000-employee plant expanded its operations and needed new machinery. Raumaster Paper was selling a conveyor system for the plant, for taking reels of board from the slitter to the automated warehouse.Financing was arranged by Handelsbanken, with a guarantee from Finnvera.“We had used buyer credit arrangements in 2006 in a transaction in Turkey. In that case, we had Italian competitors who used a similar arrangement. Finnvera gave a guarantee to a German bank and we won the deal. The need for buyer financing depends on the client,” says Kaarlo Talvinen, Sales Director at Raumaster Paper.The lifting equipment manufacturer Konecranes delivered an automated paper warehouse crane to the same plant in Thailand and also utilised buyer financing, a financial instrument that is very familiar to Konecranes. Matti Malminen Director, Trade & Export Finance at Konecranes, says that buyer credit is well suited to both large corporates and SMEs involved in exports, for small and large transactions alike. Not all transactions are worth tens or hundreds of millions. He praises Handelsbanken’s flexibility in arranging buyer financing. “Often the buyer asks early on about financing possibilities or whether we can grant a certain payment period to the buyer. We tell them that we are a crane manufacturer, not a bank, but we know good third parties who can help them,” Malminen says.According to Malminen, certain buyers want to use buyer credit for transparency’s sake, for instance. As the buyer pays all expenses, the costs are fully known.“We would like to encourage the SME sector to use various forms of export financing. You can get help from Finnvera and banks once you dare to take the first step. The goal is to boost Finland’s growth with export trade and, in that sense, it is great that various financing possibilities are available to SMEs, too.”Malminen emphasises that an export company salesperson’s toolbox should always contain at least the basic information about different financing options as often competitors from different countries can offer financing to the buyer.“Without financing, you might lose deals and never find out why.”Joint efforts to export Finnish know-howTuula Jermilä, Finance Manager at Finnvera, says that export trade arrangements require a long-term approach and financing arrangements are not necessarily easy when there are several parties involved. Export trade is team play, in which the provider of financing should be involved as early as possible to make the process easier for the exporter.In small export trade transactions, the exporter conducts preliminary negotiations about financing with the buyer, the bank takes care of the actual credit negotiations and Finnvera’s role is to cover the credit risk related to the buyer’s ability to pay. Often Finnvera makes the decision about accepting the credit risk already after the exporter’s preliminary contact.When the financing bank has been found, negotiations continue with the credit terms and conditions. These negotiations may take a long time and the terms and conditions are often specified in further detail only when trade negotiations proceed. In practice, the bank always acquires approval from Finnvera for the key credit terms and conditions during the negotiations. The buyer may have several financing options and, in the end, it is the buyer who decides which financing option to choose. “The most important thing is that the exporter wins the deal,” says Jermilä.Buyer credit gives security to the exporterThe length of the trade negotiations surprised Raumaster’s Kaarlo Talvinen. However, the duration depends on many factors, not only on phases related to financing and credit. In any case, Talvinen is satisfied with the successful closing of the deal. He believes that on a case-by-case basis, buyer financing will be useful in the future, too.“The buyer credit arrangement provides us with security, too: the bank makes the scheduled payments after the advance payment directly to us against our invoices and documents received from the client.”Currently, Raumaster’s operations focus increasingly on Europe. The boom is on and there are a lot of offer-related inquiries. Orders placed extend well into the next year. However, the company’s market area is the whole world. Talvinen says that in negotiations, you must always be familiar with the local culture and know the rules and conventions with regard to the proper moment to start discussing financing. Achieving trust is important in the long term.“Our goal is to establish a long-term relationship with the client, not to conduct individual trade transactions.”Read more:Finnvera and the Chamber of Commerce: Finnish enterprises fail to close deals in export trade – financing options not well-knownFinancing for the buyerWatch the video to see how buyer financing is used in export trade transactions (in Finnish)

News
13.06.2018
Finnvera and the Chamber of Commerce: Finnish enterprises fail to close deals in export trade – financing options not well-known

Finnish SMEs involved in export trade are very likely to fail to close deals as they are not sufficiently familiar with the financing options offered to the buyer. They are not aware of the significance of buyer financing as a competitive advantage. During the past two years, one in five enterprises involved in exports have suffered from credit losses due to the buyer not paying its invoices. Indeed, export trade is restricted by the fear of credit losses. At the same time, many enterprises feel that they do not need to manage the financing risks associated with export trade. All this is revealed by the export trade financing barometer commissioned by Finnvera, Finland Chamber of Commerce and the International Chamber of Commerce ICC.Larger enterprises that are actively involved in export trade are fairly familiar with export trade credit risk management and buyer financing options. Among SMEs, there is sometimes surprisingly little awareness of export trade procedures and available services.“The Finnish economy is driven by exports but relies on large corporates. The share of SMEs in export trade is among the lowest in the Nordic countries. According to our survey, export trade deals have been lost due to factors related to financing or credit risk management, so improving export trade financing knowledge would make it possible to close more deals,” says Finnvera’s CEO Pauli Heikkilä.A total of 39 per cent of enterprises that have failed to close deals in export trade reported that the buyer could not arrange financing. In addition, 11 per cent reported that the buyer had received financing on better terms from a foreign competitor. In both of these cases, enterprises could tackle the challenges with the help of a bank and an export credit agency. What is alarming is that the lack of buyer financing has especially affected enterprises that are strongly oriented towards growth and have the best potential for internationalisation.One in five enterprises involved in exports took no measures to protect themselves from export trade credit risksHalf of Finnish enterprises involved in exports carry out export trade transactions with invoices and thus grant a payment period, even if it is a short one, to the buyer. Nevertheless, sales transactions with a payment period always involve a risk of credit loss as the buyer may leave the invoice unpaid.Three out of four enterprises use advance payments in their export trade transactions to protect themselves from credit risks. Documentary credits, bank guarantees, credit insurance or Finnvera’s export credit guarantees are mainly known among the largest enterprises involved in exports. No fewer than one in five enterprises that responded to the survey had not taken any measures to protect themselves in export trade transactions. Nearly half of them estimated that no protection was necessary. A small percentage of the enterprises admit that they do not know the means of protection well enough.“The majority of SMEs do not know the options available for protecting themselves against credit risks and, consequently, they are not able to benefit from these options in boosting their export trade. They fail to close deals or simply keep out of export markets for the fear of credit risks. Almost 60 per cent of respondents find that a single loss may jeopardise their operating capacity for a long time,” comments Timo Vuori, Chief Executive, ICC Finland.Providers of financing, credit insurers and the Chambers of Commerce cooperating to improve enterprises’ financing knowledgeOn the initiative of Finnvera, Finland Chamber of Commerce and the International Chamber of Commerce ICC, providers of export financing and credit insurers have decided to launch extensive cooperation to improve financing knowledge in SMEs involved in exports. In 2018–2019, a regional export trade financing tour will be organised. In addition to Finnvera and regional Chambers of Commerce, other tour participants include the largest banks operating in Finland and all private credit insurers.“We have a shared interest and goal in promoting Finnish exports and economic growth. We will increase the amount of advisory services and, starting in the autumn, we will organise export financing workshops for enterprises around the country. We will go to enterprises and lower the threshold, with the aim of reaching the nationally declared goal of increasing the number of SMEs involved in exports,” emphasise Heikkilä and Vuori.The survey was conducted by Taloustutkimus, commissioned by Finnvera, Finland Chamber of Commerce and the International Chamber of Commerce ICC, with an online survey and telephone interviews in April–May 2018. The survey was taken by 654 Finnish enterprises involved in direct export trade. In these enterprises, the share of exports of the total turnover is 42 per cent and the average export turnover is EUR 12.7 million.Further information: Pauli Heikkilä, CEO, Finnvera, tel. +358 29 460 2400, pauli.heikkila@finnvera.fiTimo Vuori, Chief Executive, ICC Finland; Director, Finland Chamber of Commerce, tel. +358 50 553 5319, timo.vuori@chamber.fiAppendix: Survey summary (pdf, in Finnish)

News
11.06.2018
Export credit agencies and private insurers work hard to boost export trade – Finnvera awarded as the best ECA in 2017

A hundred years ago, the world was recovering from the First World War. The first credit insurers and export credit agencies that provided export risk insurance were founded to boost the post-crisis world trade. Export was needed to back up economic growth and exporters needed both protection against trade-related risks and financing for their operations. Export credit agencies and credit insurers are still needed for the same reasons. Using insurance against political risks and export trade credit risks is a growing trend globally.In 2017, already 14 per cent of the world’s exports of goods and services was covered with credit insurance, reports the Berne Union, an international organisation of credit and investment risk insurers. The organisation was founded in 1934, and its 85 members from over 70 countries are state export credit agencies, private credit insurers and multilateral insurers, which all provide insurance for risks related to exports and foreign investments. Globally, the combined new business operations of the Berne Union members amounted to USD 14 trillion last year. The sum is only slightly smaller than USA’s GDP and clearly exceeds China’s GDP, amounting to approximately USD 2,000 per every inhabitant of the world.In recent years, the role of private credit insurers has grown and the private market has gained ground when compared to state bodies. According to Topi Vesteri, Deputy CEO of Finnvera and President of the Berne Union, this is a welcome trend. Vesteri was recently awarded with a TXF Industry Fellowship Award for his lifetime achievements in export finance.“In a boom market, the share of private operators increases while the share of state bodies does not grow as much. During recession, the tendency is opposite: private operators withdraw and public export credit agencies try to compensate for this market deficiency by adopting an increasing responsibility for export risks,” says Vesteri.Certain transactions are not possible without export credit agenciesAccording to Vesteri, state export credit agencies are not making themselves redundant in the foreseeable future, even if people might have sometimes thought and even wished so.“Private operators will not replace state bodies. Certain large transactions that require a long payment period just cannot be completed without the involvement of a state export credit agency. Another influencing factor is the tighter regulation of banks, which has resulted in ever fewer banks being willing to adopt the responsibility for risks and provide financing for export credits. And regulation certainly will not decrease,” comments Vesteri.In some cases, state agencies act as providers of direct export credit themselves, without banks’ involvement, or act as the main arrangers, syndicating part of the credit to banks. Furthermore, banks’ interest in handling small export credits is considered insufficient.Development has led to the situation in which the role of export credit agencies has grown at the international level in large export trade transactions with long payment periods and with more potential risks than average. Adopting the responsibility for such risks was exactly the reason why export credit agencies were founded to begin with. However, it is not all about risks – well-managed export trade can be business that is profitable for the state and has a significant impact on exports and employment. For instance, in Finland an approximately EUR 1.4 billion fund has accumulated from guarantee surplus, acting as a buffer against Finnvera’s potential future export credit guarantee losses.Asian countries increasing their influence – USA the main target countryOf the European countries, Germany and Italy feature among the largest export credit guarantee providers in the world. At the moment, there are three Asian countries in the top 5, including China whose strong impact on the world economy can be seen in this area, too.“The significance of the Asian countries as exporters has increased enormously. In fact, the largest export credit provider in the world is China Development Bank – and it isn’t even China’s official export credit provider. The official export credit providers are China Eximbank and the credit agency Sinosure, with the largest volumes in the Berne Union,” Vesteri notes.“We in the developed countries feel threatened when new exporting countries become more dominant in world trade. On the other hand, the standard of living has improved and entire countries, such as China and India, have risen or are rising from poverty, thanks to globalisation and exports.Export credits granted and guaranteed for trade to the United States account for the largest share of the entire export credit market.“Naturally, there are also risks involved with the United States. For instance, last year the largest category among indemnities paid by the members of the Berne Union was indemnities for credit insurance with short payment period, taken out for trade to the United States.”However, a more significant reason for the top position held by the United States is that the private sector there invests in products that require a long payment period and entail risks related to the sector and economic cycles, for instance."Publicly supported export credits are a precondition for large cruise ship transactions. Moulded by the crisis on the finance market the cruise shipping companies are not willing to sign large ship orders without ensuring a long time financing for deliveries that take place after many years." Finnvera awarded internationally as the best ECA in 2017Finnvera was ranked as the best performing export credit agency in 2017 in the importers’ market survey conducted by TXF Media, an international export trade and finance media and analyst. The respondents were capital equipment importers throughout the world. Finnvera ranked first in the Importers' Choice and performed particularly well in industry expertise, understanding of business and user-friendliness.  Finnvera was number one customer service and financing capacity. Finnvera improved their last year’s performance in both of these categories."In Finnvera we value this survey especially high for the fact that the companies that evaluate us were importers that buy goods from Finnish exporters. Our goal is to promote Finnish exports and more and more often the success in concluding deals depends also on co-operation with the buyer and how the Finnish exporter can offer the buyer a flexible financing", says executive vice president Jussi Haarasilta.Finnvera imnproved the performance also in deal execution and was appreciated for flexibility.The Importers’ Choice award was presented in TXF Global Conference in Prague the 6th of June 2018. Finnvera was also awarded in Exporters’ Choice survey as one of the top 3 ECAs that have managed to promote exporters’ business."We are very happy to stand out as the ECA that understands the needs of both exporters and importers and businesses. Thanks to our industry expertise we are able to find the best solutions for both parties in a way that also takes Finnvera’s risks of the deal carefully into account."TXF also granted the TXF Industry Fellowship Award to Finnvera’s Deputy CEO Topi Vesteri for his achievements in export finance industry.Read more:More information about the awards on TXF Media’s Twitter.TXF News website.

News
01.06.2018
Topi Vesteri to be presented with the TXF Industry Fellowship Award for his service to the export finance sector

Topi Vesteri, Deputy CEO, Group CCO at is to be honoured with the TXF Industry Fellowship Award in recognition for his exceptional service to the international export finance sector. The award is granted by international trade and export finance news, data and event provider TXF.This is the first time this title has been awarded. Topi Vesteri’s career in Finnvera started in December 1998 and he was in charge of running the large corporates unit and export finance unit for almost 17 years. Since 2015 as Deputy CEO and Group Chief Credit Officer (CCO) of Finnvera, heading Finnvera's Credit and Analysis Unit he has managed Finnvera's credit risk analysis and credit decision making process. Internationally he has served as International Union of Credit & Investment Insurers, Berne Union's President (2015–) and Vice President (2002–2003) and as Chairman of the Union's Medium- & Long-Term Committee between 2009–2011, and also as a member of the Union's Management Committee during these years.“What Topi Vesteri has given to the ECA world and the export credit industry at large over the years has been nothing short of exceptional,” says Jonathan Bell, Editor-in-Chief and Director at TXF in London.”Finnvera has during these 20 years become known as one of the most innovative and service oriented ECAs, enjoying very high customer satisfaction. Finnvera has been constantly developing its products and services and working in close cooperation with international banks, private political and credit risk insurers as well as other ECAs. During Topi’s presidency in the Berne Union, the union has seen through such significant changes as the merger with the Prague Club. It is with great pleasure that we make this inaugural TXF Industry Fellowship Award to Topi, who is an inspiration to us all.”The award will be presented at the TXF 6th Global Export & Project Finance Conference in Prague on 6 June 2018. It is the largest annual event on trade and export financing with over 1,000 participants.Additional information:TXF: Vesteri to be presented with TXF Industry Fellowship Award

Articles
03.05.2018
There is room among the big players – midcap enterprises have tremendous growth potential

Companies in the midcap category have the highest potential for boosting Finnish exports. The fastest road to growth is through acquisitions. This has been the path taken by Aulis Asikainen’s Comatec, which has an impressive 28 acquisitions under its belt.Midcap enterprises have every opportunity to be among the drivers of growth and exports in Finland. They have sufficient resources and they are already engaged in international operations.A midcap enterprise has an annual turnover of EUR 50–300 million and more than 250 employees. Depending on the method of calculation, there are 300–400 enterprises in this category in Finland.According to Pertti Lähdeaho, Financing Manager at Finnvera, various corporate reorganisation measures are the fastest option for reaching the next level.“Midcap enterprises have potential, but purely organic growth is a long road to take,” Lähdeaho says.The midcap category includes a large number of subsidiaries of large foreign corporations as well as family businesses.According to the PwC Global Family Business Survey, a report published over two years ago, seven per cent of Finnish family businesses aim for aggressive growth, while as many as 89 per cent look to grow at a moderate pace. The surveyed enterprises indicated they are specifically seeking growth in the international markets.“Enterprises need to have people with export- and culture-related expertise concerning new countries. The basic requirement for success is that the product is very good and there is demand for it in the global market. Rising through the ranks to enter the midcap category is difficult purely by subcontracting,” Lähdeaho explains.Moving forward by making acquisitionsAulis Asikainen’s Comatec has an impressive story of growth. Over a period of 33 years, the company has grown from a one-man enterprise into a group with more than 500 employees.This development has been propelled by Asikainen’s personal drive to grow the company. International business has been part of the strategy.“We were already doing international sales during the recession of the 1990s. We had to. We won assignments in the United States and Germany with the help of our partners at the time. They had strong relationships in those markets and they were familiar with the culture,” Asikainen recalls.Comatec is a Tampere-based engineering company that specialises in engineering design and project management for the technology industry and machine building. Comatec has subsidiaries in Estonia and Poland. The group also holds a stake in an Indian company that it obtained as part of an acquisition.After Comatec’s first acquisition 15 years ago, the group has continued to acquire companies almost non-stop, bringing the total number up to 28.“Acquisitions are a more effective way to achieve growth. The most difficult thing before making an acquisition is evaluating how the target fits the rest of our business. When the deal has been completed, you need to focus on how to integrate the acquired business. Over the years, we have developed a clear path. We can make two acquisitions per year. That seems to be the ideal rate from the perspectives of integration and financing,” Asikainen explains.The impact of acquisitions is clearly reflected in Comatec’s export figures. Two years ago, direct exports amounted to EUR 1.5–2 million. Last year, the figure approached EUR 5 million. Comatec’s total annual turnover is EUR 36 million.The engineering company's turnover would place it in the SME class, but it is considered a midcap enterprise in terms of the size of its personnel.“Direct exports have grown threefold since the recession that began in 2009. The economic slowdown again forced us to look for clients abroad,” Asikainen says.He admits that Comatec’s international growth has also required a lot of mental growth. The company has recruited new experts. On the Board of Directors alone, there are two university professors. Four of the Board members are external to the company.“We have hired business experts, a lawyer, a business analyst and many more. We are increasingly investing in technological development and the efficiency of project management,” Asikainen adds.Growth requires moneyIt takes money to achieve growth and internationalisation. According to Asikainen, Finnvera has played a big role in Comatec’s growth by providing guarantees. The engineering company has also had cooperation projects with Business Finland.According to Kalle Åström, Growth Loan Programme Manager at Finnvera, midcaps are compatible with all of Finnvera’s financial instruments except Entrepreneur Loans.He highlights the Growth Loan and bonds as examples.A Growth Loan supports a company’s equity. It is a junior loan, which means it is subordinated to senior loans.In practice, companies seek an unsecured Growth Loan from Finnvera in order to obtain more financing from other financial institutions. For example, financing of EUR 1 million can be arranged by having 20 per cent of it internally financed and 30 per cent covered by a Growth Loan. The remainder can then be financed by a bank loan.“With a bond, an entity acts as the issuer and sells the bond to investors. Finnvera can subscribe for half of the entire bond issue at a maximum. Bonds are suited to large financing requirements exceeding EUR 5 million,” Åström explains. Fact: What is midcap? An SME is a company that has an annual turnover of at most EUR 50 million and less than 250 employees. Typically, an SME employs 50–249 people. Finland’s 2,600 SMEs make up less than one per cent of Finnish companies. Midcaps are one level above SMEs in size. A midcap enterprise has an annual turnover of at most EUR 300 million. Midcaps have more than 250 employees. Finnvera’s Growth Loan is intended particularly for midcap enterprises. Read more about the Growth Loan

Articles
26.04.2018
Smart exporters protect their receivables – take advantage of these risk mitigation methods

Export trade involves credit risks arising from the buyers themselves as well as from the buyer’s bank and country. The more customised and significant the export trade transaction is, the higher the significance of risk mitigation.The realisation of credit risk in a failed export trade transaction can be a fatal blow for an SME that is just getting started with exports. When you apply a systematic approach, take the necessary precautions against risks and create a credit policy for your company that defines the risks you are willing to take, you can safely increase your investments in the export trade without losing any sleep.“There are many ways to mitigate export risks. Advance payments, the choice of payment method, credit insurance and various financing solutions all come together in export trade as a comprehensive approach that exporters should discuss with their bank and Finnvera in a timely manner, even before putting in a bid,” says Minna Lindqvist, Development Manager at Finnvera.Advance payments reduce the need for other protection measuresThe higher the advance payments received from the buyer, the smaller the need for other protection measures. However, reaching an agreement on advance payments is not always successful, and your bid may not be competitive if it calls for advances that are much higher than those sought by your competitors.The buyer may also require collateral against advance payments, such as a bank guarantee issued on behalf of the exporter. The guarantee ensures that the buyer will receive a refund of the advance payment if the exporter is unable to fulfil its contractual obligations.In these situations, you can use our export guarantee as a countersecurity for your bank.Choosing the right payment methodSome of the payment methods used in export trade transactions leave the exporter fully exposed to the buyer’s ability and willingness to pay. Other methods ensure that payment will be received in almost any circumstance.Further reading: In export trade transactions, choosing a payment method is, first and foremost, a part of risk managementYou insure your luggage when you travel, so why would you not insure your export receivables?Credit insurance is a service that, like other insurance, compensates you for damage when things do not go as planned. In export trade transactions, this means a situation in which the buyer fails to pay the agreed amount for one reason or another. Credit insurance products are offered by commercial credit insurance providers as well as Finnvera.Using credit insurance is a sensible decision especially when the payment method used in the transaction is not secure and therefore does not ensure that payment will be received.“Our export receivables guarantee is intended for post-delivery insurance needs involving short payment periods. It is generally used in ongoing trade with the same buyer when the payment period is a few months. Another product granted to exporters is the credit risk guarantee, which can even be used for transactions with longer payment periods and to mitigate the risk related to the cancellation of the transaction prior to delivery when the export product in question is customised to the buyer’s needs.In addition to these export credit guarantees granted to the exporter, we offer many credit risk protection products aimed at providers of financing.Further reading: Financing SME export trade transactions (in Finnish)

Articles
20.04.2018
In export trade transactions, choosing a payment method is, first and foremost, a part of risk management

When a Finnish company is preparing a sales contract with a foreign buyer, one of the first decisions it makes is the payment method to be used in the transaction. Payment methods differ from each other in many ways but, from the exporter’s perspective, the most significant difference is the credit risk they involve. Some payment methods leave the exporter fully exposed to the buyer’s ability and willingness to pay, while others ensure that payment will be received in almost any circumstance.The starting point in the choice of payment method is often that the exporter would prefer to receive payment before delivery. Buyers, for their part, would prefer to pay after taking delivery.For an SME that is getting into the export business, it pays to compare different payment methods well before putting in a bid and choose the most suitable option for each case.“Every export company should consider the impact that realised credit risk would have on its finances. A secure payment method increases costs, but the expenses arising from the payment method are usually only a fraction of the impact that a payment delay or credit loss would have on the company’s result. Furthermore, these costs can be estimated ahead of time,” says Outi Mikola, Finance Manager at Finnvera.The more significant the transaction, the more secure the payment methodOne payment method is unlikely to suit every export trade transaction. When choosing the payment method, the aim is to find a solution that satisfies both the exporter and the buyer. The chosen solution should also eliminate unnecessary risks related to payment and the delivery of the goods.“Companies should have a risk policy that largely defines which risks they are willing to take in different types of transactions. The more customised and significant the export trade transaction is, the higher the significance of risk mitigation,” Mikola explains.The most secure payment method is confirmed documentary credit, which protects the exporter also from risks associated with the buyer’s bank and country. When used appropriately, a documentary credit is a 100% guarantee of receiving the payment. If agreement on a secure payment method cannot be reached with the buyer, the exporter should consider using credit insurance or Finnvera’s export credit guarantee to cover the credit risk.In export trade, the choice of payment method, risk mitigation and the financing-related needs of the buyer and exporter constitute a comprehensive solution that can both improve a company’s competitiveness and prevent credit losses.Read more about the differences between payment methods and other export financing solutions here (in Finnish).

Articles
05.04.2018
The platform economy requires strong expertise

The platform economy has become a phenomenon. While the space is currently dominated by companies from the United States and Asia, the opportunities presented by the platform economy are also starting to be widely recognised in Europe. The Finnish company Zadaa aims to launch its fashion marketplace in 100 countries within five years according to its CEO Iiro Kormi.Various forecasts suggest that the platform economy will grow to represent a quarter of all business in less than a decade. The surge is being led by giants such as Google, Alibaba and Airbnb, whose platforms attract millions of users every day.The Finnish company Zadaa has already reached the milestone of 150,000 users, in spite of only releasing the beta version of its service two years ago. This year, consumers will use Zadaa’s platform to buy and sell clothing worth more than EUR 10 million. The service also includes product delivery.“The idea for Zadaa was conceived when I saw a Facebook post by a friend of mine. The photo showed a pile of clothes my friend was selling. I wondered why someone would choose to sell their clothes on Facebook,” recalls Iiro Kormi, Founder & CEO of Zadaa.The product development stage of the service took more than a year but, following the launch of its service, Zadaa has grown at a monthly rate of 10–15 per cent. In addition to Finland, the company currently operates in Sweden and Denmark. Germany is next, in April.“The size of the market is EUR 18 billion, but everything comes down to timing. Online shopping has revolutionised the way people buy fashion, and consumers don’t always want to return the clothes they buy. Consumers are also prepared to reveal their clothing size and they want to buy clothes across borders,” Kormi explains.Quick entry into the international markets and sorting out financingManaging the big picture is essential. The idea and the need or, in other words, the community and timing, are key to success. A company like Zadaa also needs a team with expertise in the network business as well as funding.“We systematically built everything to be internationally scalable and in English. You have to start somewhere, but you also need to enter the international markets quickly. We are a very data-driven company. All of our forecasts and decisions are based on data. I know a lot of startups that haven’t used this approach in building their business model,” Kormi says.According to Kormi, data and money go hand in hand. Zadaa is currently wrapping up a financing round of EUR 3–4 million.“We have four founding partners and we are in our third round of financing. We also have a credit limit loan from Finnvera. It is an important part of our financing,” Kormi explains.Zadaa’s strong potential has also been recognised internationally. The US-based financial media Forbes included Kormi in its latest list of young innovators and influencers in the e-commerce category.Focusing on growing scaleup companies in addition to startupsZadaa is one of only a few Finnish success stories in the platform economy. According to Jukka Viitanen, an expert on the development of growth enterprises and innovation platforms, there are only a few dozen companies in Finland that are purely focused on the platform economy. Viitanen is the Chief Executive Officer of Resolute HQ.“You have to tip your hat to those riding the first wave. Very few startups make it. It is typical of the space that new entrants get widespread attention,” Viitanen explains.He says the biggest obstacle to growth for Finnish enterprises is the lack of experts in the network business.Titta Mantila, Vice President and head of the growth and internationalisation team at Finnvera, also expects to see the emergence of more companies specialising in the platform economy.“The platform economy is currently not a particularly visible phenomenon in our work. Studies also indicate that we are still in the nascent stages of this development in Finland and companies are building platforms that are semi-open at most,” Mantila says.She goes on to point out that the enterprises in the platform economy are funded by founders and investors in the early stages. In the product development stage, Business Finland has various options at its disposal. Debt-based financing enters the picture when the company has sufficient equity as well as evidence of its ability to repay its liabilities.“The optimal financing path needs to be built on a case-specific basis. When seeking debt financing, it is important to forecast the development of profitability and cash flow financing. In the worst case, utilising debt financing too early can become an obstacle to subsequent investment. When the company has a finished product or service, or it is already generating turnover, we can participate by providing collateral for bank financing."According to Mantila, a phased financing package is a good model to follow. It involves negotiating a sufficient amount of money from investors and providers of financing. The withdrawal of the funds is divided into multiple phases. The withdrawal of the capital is tied to the development of the company’s business.“There is a lot of buzz around startups right now. Still, it is also important to pay attention to companies that are in the scaleup stage. Their needs are very different compared to startups with regard to financing and expertise, for example,” Mantila says.FACTS: Financing exports by hundreds of millions of euros Last year, Finnvera granted more than EUR 960 million in financing for SMEs and midcaps in response to nearly 19,000 financing applications. Financing granted to growing and internationalising enterprises was approximately 40 per cent of the total, or EUR 385 million. Some 80 per cent of the applicants received a positive decision. In spite of their potential, not all companies seeking robust growth have a long history of financial profitability, in which case their rating might not be adequate. Rating affects the cost and availability of capital. The rule of thumb is that the company must have adequate equity in addition to debt-based financing. The level that is generally considered adequate is 30 per cent. Private investors and venture capital firms invested a total of EUR 383 million in early stage growth companies the year before last. This represented a year-on-year increase of 42 per cent.

News
29.03.2018
Growth company Midaxo continues to grow with a new round of funding – Finnvera was one of the early investors but is now making an exit

Midaxo, the Finnish developer of the award-winning cloud M&A platform, announces a €12.9m funding round comprising of €10.3m for the company and €2.6m for the existing shareholders – led by major growth investor Idinvest Partners, with the participation of the existing investors Tesi (Finnish Industry Investment) and EOC Capital. This B round brings Midaxo’s total funding to €18.6m and follows a period of sustained and rapid growth. In 2017, Midaxo more than doubled its revenue and expanded its customer base to hundreds of leading corporations, consultants, and private equity firms, including over 40 companies on the Fortune 1000 list, such as HP, Philips, Daimler and Verizon. With Additional Funding, Midaxo Reinforces Its Position as The Leading Provider Of M&A Software.After successfully entering the US, Midaxo is now focused on expanding its European operations, including into the Nordic region. Midaxo has 70 employees across four offices in Boston, Helsinki, Amsterdam, and Riga. Headcount has doubled over the past year and is set to further increase as the company is actively looking to recruit a number of high-quality software developers in Helsinki.Finnvera has been one of the investors enabling Midaxo’s growth and internationalisation.– Our co-operation with Midaxo has been excellent and we hope all the best for them in the future. Now that our role as an early stage risk sharer has been fulfilled and Midaxo’s future is secured by capable investors, the time for our exit is right, says Heidi Ahonen, manager at Finnvera.  Midaxo helps companies run successful M&A and corporate development projects – minimizing deal risk and maximizing value creation.– Virtually all larger corporations and 60% of mid-market companies actively use M&A to grow and accelerate their transformation. To consistently succeed in M&A, thought-leaders use purpose-built tools to drive systematic, transparent, and repeatable deal execution from opportunity identification through to integration. For example, their due diligence efforts take 50% less time and 50% less resources, enabling faster reaction and more thorough analysis. With its leading software, Midaxo is proud to support M&A professionals in their important and complex work, says Ari Salonen, CEO at Midaxo.For further information, please contact:Heidi Ahonen, manager, Finnvera Oyj+358 400 606 122heidi.ahonen(at)finnvera.fiAri Salonen, CEO, Midaxo Oy+1 617 818 0501ari.salonen(at)midaxo.comMidaxo Oy’s cloud software helps companies succeed in mergers & acquisitions by driving an efficient end-to-end process from target identification and due diligence to integration. www.midaxo.com and @Midaxo

Articles
23.03.2018
A growing number of Finnish companies are looking to enter the Norwegian market

There are an estimated 200–300 Finnish companies operating in Norway, but this number may increase quickly. Norway is regularly ranked among the 3–4 most interesting export markets in surveys. Kokkola-based Mesmec is one example of a company seeking growth in Finland’s neighbouring countries. According to Anders Asplund from Mesmec, building trust is easier in neighbouring areas than in faraway countries.Interest in Norway is particularly high among enterprises in the ICT, health technology, renewable energy, metal and construction industries."Through various sources, I have received more than 100 contacts during the past six months from companies that are either interested in operating in Norway or have recently started operating there,” says Markus Laakkonen, Regional Director at Finnvera.According to statistics published by the Finnish Customs, exports from Finland to Norway grew by three per cent last year. During the same period, exports to Sweden grew by 10 per cent, Russia 15 per cent and Estonia 20 per cent.The traditional oil, gas and energy industries have attracted companies to the land of fjords for a long time. There is also demand in the maritime, fishing and construction industries. The Norwegian state is investing EUR 6–8 billion annually in infrastructure alone. The construction sector is in a boom period in general.“The metal industry has faced challenges over the past few years. I expect that the new investments seen recently in the oil industry will create attractive opportunities,” Laakkonen says.Laakkonen wants to dispel the notion that Norway is a champion of protectionism. Only the agricultural sector and Norwegian food production are strongly protected by import duties. In other sectors, the country’s trade policies are liberal."The relative lack of interaction between the Norwegian and Finnish business sectors has been the biggest obstacle to growth in trade. In general, the attitude towards Finns is quite positive,” Laakkonen explains.It takes time to build market awarenessMesmec was attracted to the Norwegian market by strong demand. The company designs and manufactures raw material processing systems for the food and process industries.Last year, the owners and management of the Kokkola-based company decided to make a serious push to increase exports following the restructuring of its ownership. Mesmec’s growth will come from Finland’s neighbouring countries, at least in the early stages of its international expansion. Building trust in Sweden and Norway is much easier than in more distant markets.Some 6–10 per cent of Mesmec’s total turnover of EUR 9 million comes from foreign markets. The target is to increase the share of exports to 20 per cent by 2022.“We have sales representatives in Sweden, Norway and the United Kingdom. We also have good references in these countries. Our sales work takes perseverance and a long-term approach because communicating our core expertise takes time and requires experience,” says Senior Vice President Anders Asplund.The company’s international customers consist mainly of companies in the food industry, such as meat processing companies, pet food producers and plants that process slaughterhouse byproducts.“Norwegian food companies mostly purchase their process machinery from foreign suppliers, so we received a very favourable welcome as a Finnish enterprise. It also helped that we have strong Swedish and Norwegian language skills in our organisation,” Asplund explains.He recommends other Finnish enterprises to pay attention to their references and the importance of making a commitment to serve the customer throughout the product’s lifespan.Asplund says the challenges faced by Mesmec have been related to creating market awareness. Norwegian companies want to have a strong understanding of the competence of their foreign business partners.“They value Finnish companies’ reliability and way of working. This is a strong foundation to build on. Managing the big picture and having strong industry experience have helped us achieve robust progress,” Asplund concludes.

News
22.03.2018
14 per cent of global cross-border trade supported by Berne Union’s export credit and investment insurers

Use of insurances against political risks and export credit risks is a growing trend which is good news for all the parties of global cross-border trade. Members of an international association of export credit and investment insurers, the Berne Union, now cover over 14 per cent of the world trade and their share rose in 2017. As an export credit agency Finnvera too is a member of the Berne Union. The Union’s Spring Meeting was held in Kilifi, Kenya in March 2018.Africa is a growing market to the Berne Union members. In 2017 the members collectively covered trade to African countries for an amount of USD 80 billion. In addition, last year Berne Union members also supported USD 9 billion of foreign direct investment into Africa in areas such as infrastructure, power generation including renewable energy, and mining.Globally the new business underwritten by members of the Berne Union in 2017 totalled USD 2,350 billion. This was 3 per cent more than in the previous year.Members paid over USD 6 billion in claims through the course of 2017. This is well above the 10-year average of USD 4.5 billion, but still 2.4 per cent lower than the recent peak in 2016.Berne Union President, Finnvera’s Deputy CEO, Topi Vesteri, commented that “by all accounts 2017 was an excellent year for Berne Union members and once again we made a tremendous positive impact on global cross-border trade and investment. Business is growing, which is positive news both for insurers and the real economy in which trade is insured. While indemnifications are also high, this is good news for the insured, who are thus able to maintain their business, despite the inherent trade risks. For we insurers, measures of long-term sustainability are positive and we are well-placed and well-resourced to adapt and to continually improve our support to trade and investment globally”.  The Berne Union is the international association of export credit and investment insurers. The 85 members include government-backed export credit agencies, private credit and political risk insurers and multilateral agencies from from 73 countries – representing all aspects of the industry worldwide. Finnvera’s Topi Vesteri has headed the association since autumn 2015.Additional Information:Topi Vesteri, Deputy CEO, Finnvera, tel. +358 29 460 2679For more information and a list of members, please visit www.berneunion.org

Press Releases
16.03.2018
Finnvera’s Annual General Meeting: New members appointed to Finnvera's Supervisory Board - No changes in the composition of the Board of Directors

Finnvera Plc Stock Exchange Release 16 March 2018, at 17:15On 16 March 2018, Finnvera's Annual General Meeting elected new members to the company's Supervisory Board. No changes were made to the composition of the Board of Directors.The new members of the Supervisory Board are Pia Kauma and Anne Louhelainen, Members of Parliament; and Timo Saranpää, Chairman.Antti Rantakangas, Member of Parliament will continue as Chairman and Krista Kiuru, Member of Parliament as Vice Chairman of the Supervisory Board. Pia Björkbacka, Adviser for International Affairs; Eeva-Johanna Eloranta, Member of Parliament; Lasse Hautala, Member of Parliament; Laura Huhtasaari, Member of Parliament; Timo Kalli, Member of Parliament; Leila Kurki, Senior Adviser; Veli-Matti Mattila, Chief Economist; Ville Niinistö, Member of Parliament; Carita Orlando, Managing Director; Olli Rantanen, Team Manager; Eero Suutari, Member of Parliament; and Tommi Toivola, Senior Adviser will continue as members of the Supervisory Board.Pentti Hakkarainen, Member of the Supervisory Board, ECB Banking Supervision, will continue as Chairman, Pekka Timonen, Director General, as First Vice Chairman and Terhi Järvikare, Director General, as Second Vice Chairman of Finnvera's Board of Directors. The following persons will continue as Board members: Kirsi Komi, LL.M.; Ritva Laukkanen, MBA; Pirkko Rantanen-Kervinen, B.Sc (Econ.); and Antti Zitting, Enterprise Councellor, Chairman of the Board.The Annual General Meeting adopted the Consolidated Financial Statements and the Parent Company’s Financial Statements for the period 1 January–31 December 2017, discharged the Supervisory Board, the Board of Directors and the Chief Executive Officer from liability, and approved the proposal made by the Board of Directors for the use of the parent company’s profits.KPMG Oy Ab was re-elected Finnvera’s regular auditor with Juha-Pekka Mylén, Authorised Public Accountant, as the principal auditor.Further information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Risto Huopaniemi, Senior Vice President, Administration, Legal Affairs and Administration tel. +358 29 460 2520

Press Releases
20.02.2018
Finnvera Group's Report of the Board of Directors and Financial Statements for 2017

Stock Exchange Release 20.2.2018Export financing grew strongly – future deliveries by export companies accounted for more than half of the exposureCEO Pauli Heikkilä:“In the important export sectors, especially in shipping, telecommunications, energy and forestry sectors, the outlook is good. In the EUR 22.2 billion exposure for large corporates’ export credit guarantees and special guarantees, drawn guarantees and credits accounts for approximately EUR 9.0 billion. More than half of the exposure is tenders or agreements that are related to future deliveries by export companies. Demand extending this far into the future has not been previously witnessed at Finnvera.Throughout its history, Finnvera’s export credit guarantee operations have been self-sustainable and our performance has been profitable, which has enabled our export credit guarantee operations to accumulate approximately EUR 1.4 billion in buffer assets for potential future losses. In line with our goals, the result for the financial period 2017, EUR 107 million, showed a profit. This improves our ability to cover current and future commitments. We constantly develop our risk management, and we invest heavily in reinsurance and other risk transfer methods.Economic activity and investments picked up also in Finland; however, this did not directly lead to growth in Finnvera’s SME and midcap financing. For its part, the European Fund for Strategic Investments (EFSI) replaces or complements our financing offering, and EFSI financing has proved to be easily found by Finnish enterprises. This is a good indication of corporate financing options becoming more versatile.In line with our strategy, we target our financing first and foremost at corporate changes, that is, setting up a company, growth, internationalisation and transfers of ownership. Currently, 80 per cent of our financing is already allocated to our focus areas. Impact is one of the key indicators of our success. The common denominator in impact is the fact that enterprises grow and become more international in a manner that would not have been possible without Finnvera.”Finnvera Group, business operations and the financial trend, 2017 (vs. 2016) Loans and guarantees granted: EUR 782 million (EUR 845 million), change -7% Export credit guarantees and special guarantees granted: EUR 7,693 million1 (EUR 4,438 million), change 73% Export credits granted: EUR 6,555 million1 (EUR 760 million), change 763% Exposure, loans and guarantees for SMEs and midcap enterprises: EUR 2,129 million (EUR 2,232 million), change -5% Exposure, export credit guarantees and special guarantees, incl. SME and midcap export credit guarantees: EUR 22,562 million (EUR 18,426 million), change 22%of which drawn guarantees amount to EUR 9,136 million (EUR 9,659 million), change -5% Exposure, export credits: EUR 4,758 million2 (EUR 4,782 million), change -1% Net interest income and net fee and commission income: EUR 174 million (EUR 194 million), change -11% Impairment losses on receivables, guarantee losses, incl. the State’s credit loss compensation: EUR 19 million (EUR 66 million), change -72% Finnvera Group’s profit for the period: EUR 107 million (EUR 70 million), change 52% Equity EUR 1,314 million (EUR 1,207 million), change 9% Balance sheet total: EUR 10,337 million (EUR 9,498 million), change 9% 1 One of the factors behind the significant increase in the financing granted was individual major tenders in shipping and telecommunications.2 The credit risk for Finnish Export Credit Ltd’s export credits is covered by the parent company Finnvera plc’s export credit guarantee.Finnvera Group, year 2017 (vs. 2016) Cumulative self-sustainability has been realised according to the goals,Finnvera's operations have been economically self-sustainable during company's almost 20 years of operation. Return on equity, ROE1–12/20178,5% (6,0%) Return on assets, ROA1–12/20171,1% (0,8%) Reserve for domestic operations31 Dec. 2017214 M€ (155) Reserve for export credit guarantees and special guarantees 688 M€ and SGF3 673 M€ 31 Dec. 20171 361 M€ (1 334) Equity ratio31 Dec. 201712,7% (12,7%) Capital adequacy, Tier 1, domestic operations 31 Dec. 201725,3% (22,4%) Expense-income ratio1–12/201727,2% (27,0%) Number of employees31 Dec. 2017375 (381) 3) SGF=The State Guarantee FundFinnvera Group’s profit for H2/2017 was EUR 50 million (EUR 77 million) and for the entire year EUR 107 million (EUR 70 million). The result for the entire year 2017 was EUR 36 million, or 52 per cent, more than in the previous year. Profit was boosted by the fact that the parent company Finnvera plc’s impairment losses on receivables and guarantee losses were EUR 53 million, or 56 per cent, lower than in the previous financial period. Finnvera Group Financial trend H2/2017 MEUR H1/2017 MEUR Change % H2/2016 MEUR 2017 MEUR 2016 MEUR Change MEUR Change % Net interest income 23 23 -2 % 24 46 50 -4 -8 % Net fee and commission income  61 66 -8 % 77 127 144 -17 -12 % Gains and losses from financial instruments carried at fair value through P&L -2 3 -177 % -10 1 -20 20 103 % Administrative expenses -21 -22 -4 % -22 -43 -44 -1 -2 %  - of which personnel expenses -14 -15 -3 % -15 -29 -30 -1 -4 % Impairment loss on financial assets -22 -20 9 % -13 -41 -94 -53 -56 % Credit loss compensation from the State 12 11 6 % 13 23 28 -5 -19 % Operating profit 49 60 -18 % 77 109 69 39 57 % Profit for the period 50 57 -13 % 77 107 70 36 52 % Outlook for financingThe outlook for the Finnish economy for 2018 is good. According to the Bank of Finland’s forecast, GDP will grow by 2.5 per cent this year. Demand for financing is expected to remain high in the entire SME and midcap sector, and the availability of financing is estimated to stay at a good level this year, too. Finnvera’s goal is still to shift the focus of SME and midcap financing to growing and internationalising enterprises, enterprises seeking change, transfers of ownership, and start-ups. The campaign to accelerate transfers of ownership continues, and demand for financing for transfers of ownership and company acquisitions will probably remain high, as in previous years.Another goal is to increase the number of SMEs involved in exports and target advisory services at such SMEs, in order to enable them to prepare for risks associated with export trade transactions. We expect that this will increase demand for financing this year.Financing solutions offered to buyers play a pivotal role in the export trade of capital goods sold by large corporates. Demand for export credit guarantees and export credits is expected to remain strong in 2018. As in previous years, the overall demand is affected by the realisation of individual major projects. Demand is expected to be strong especially in shipping, forestry and telecommunications sectors. Regionally, the strongest demand is anticipated to occur in the United States and Latin America. Finnish enterprises’ interest in the Russian market took an upward turn in 2017, and further demand is expected for 2018.It is estimated that the implementation of the strategy throughout the Group will proceed as planned in 2018 and that operations will be self-sustainable in the current financial period as well. The trends in impairment losses on receivables and in guarantee losses involve some uncertainty. In consequence, the results realised may differ from the forecasts even significantly.Further information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Ulla Hagman, CFO, tel. +358 29 460 2458Report of the Board of Directors and Financial Statements for 1 January–31 December 2017 (PDF)Statement on the Corporate Governance and Steering System 2017 (PDF)

Articles
01.02.2018
Responsibility and transparency guide the assessment of environmental and human rights risks

When financing exports, Finnvera considers environmental and social impacts as part of the overall risk assessment of the projects financed. The assessment of the environmental and social risks plays an important role in financing projects carried out abroad. At Finnvera, assessments are conducted by Lauri Etelämäki (on the right), Environmental Adviser, and Timo Hankala, Human Rights Adviser, who started working in this position in autumn 2017. The assessment is a concrete way of ensuring that the company operates responsibly, and work is driven by the aim of achieving transparency. What does your job description involve? Lauri and Timo: We assess and screen the environmental and human rights risks of projects. First, we get to know the projects on the basis of the information we have received and assess risks potentially related to them.After this, we make an on-site visit, if necessary, and assess what kinds of management approaches the sites have for managing risks. In 2017, we conducted an actual environmental and human rights risk assessment for approximately ten projects. If a project involves excessive risks, that usually becomes evident right at the beginning of the assessment. We come across at most a couple of cases like this per year.Which aspect of your work do you like the most? Timo: As Human Rights Adviser, I feel my work is important as I contribute to responsibility in projects. Moreover, each project is one of a kind even though they are assessed using the same standards.Lauri: I agree with Timo, and I would also like to add that as my work is so concrete I can clearly see the results I achieve. For me personally, a great source of motivation is the impacts that the projects have. Some projects are enormous and offer a chance to exert more extensive influence on the operating methods of the sector in question, even at a national level.Which is the most memorable project you have been involved in?  Timo: The project that enabled us to exert influence on the operating methods of a major state company. It is truly rewarding to see how our work can lead to big changes.Lauri: We use external consultants in risk assessment, and sometimes there may be differing views about the selection of consultants in projects. I remember a project where there was heated debate about replacing the consultant with another one, but, in the end, our view was listened to. The consultant we selected has managed to significantly improve the operating methods in the project and even in the company when it comes to environmental and social issues.What is your greatest professional success? Lauri: I think my greatest success is the project I just mentioned, where the consultant’s assessment can be said to have changed the company’s attitudes towards environmental and social issues.Timo: I have been in my current role for such a short period of time that it is still difficult to answer this question. In my earlier Senior Legal Counsel role at Finnvera, I was involved in a project where our power plant project looked—in a positive sense—completely different, both inside and outside, from neighbouring power plants. That made a lasting impression on me.Can you see certain broader trends related to project reviews or responsible financing? Timo: In the field of human rights, a clear trend is the increasing transparency requirements, especially from NGOs. In addition, human rights requirements for enterprises and projects are constantly evolving and becoming more extensive. The hard-to-measure management of risks related to human rights and a systematic approach to it are still at the development stage.Lauri: As far as different sectors are concerned, there seems to be quite a mining boom going on, particularly in Latin America. Mining projects are very extensive and among the most demanding projects. Their realisation requires a lot of area, which may have a very significant impact on biodiversity and the life of local people.The project requirement level also keeps on rising, especially as projects grow in size and move to high-risk countries and as Finnvera’s risk management develops. This requires constantly more from us experts.Further information:Policy for reviewing the environmental and social impacts of projectsResponsible financing

Press Releases
30.01.2018
Advance information about Finnvera’s operations in 2017: Export financing grew strongly – in growing and internationalising enterprises, investments accounted for an increasingly large share of financing

Finnvera’s export financing grew strongly in 2017. Finnvera granted nearly 80 per cent more export credit guarantees and special guarantees than in the previous year. The volume of export credits also increased significantly, to EUR 6.6 billion. Financing concentrates especially on the shipping and telecommunications sectors, where Finnvera was involved in the largest financing projects in its history. In SME and midcap financing, the focus is on growing and internationalising enterprises. Investments accounted for an increasingly large share of the overall projects of growing and internationalising enterprises in 2017. The number of the financed transfers of ownership also remained high.The volume of export credit guarantees, special guarantees and export credits grewIn 2017, granted export financing grew as expected: Finnvera granted export credit guarantees and special guarantees amounting to EUR 7.5 billion (EUR 4.2 billion), which is nearly 80 per cent more than in the previous year. The volume of export credits also increased significantly, with the amount granted by Finnvera totalling EUR 6.6 billion (EUR 0.8 billion).Finnvera’s authorisation to grant export credit guarantees rose to EUR 27 billion at the beginning of the year and the authorisation to finance export credits to EUR 22 billion, which made it possible to respond to the increasing demand for financing.The outlook for export industry is good. Especially in shipping, telecommunications, energy and forestry sectors, companies have orders booked even for years to come. In the EUR 22.2 billion exposure for export credit guarantees and special guarantees, drawn guarantees and credits accounted for approximately EUR 9 billion. This means that more than half of the exposure was tenders or agreements that are related to future deliveries by export companies and extend up to 2024.In 2017, Finnvera was involved in the largest ship financing transaction in its history, which was also its largest-ever individual financing project: Finnvera contributed more than EUR 2.5 billion to financing the order for ships by the shipping company Royal Caribbean Cruises.In the telecommunications sector, Finnvera was involved in providing approximately EUR 1.3 billion in financing for Nokia’s telecommunications equipment deliveries to the teleoperator Verizon. Financing was a result of cooperation between export credit agencies: the Canadian export credit agency Export Development Canada (EDC) also took part in the arrangement of financing. This financing arrangement carried out jointly by export credit agencies is the first of its kind.Major financing and export projects have a significant impact on employment both for the exporting company and the subcontracting network, and Finnvera is involved in financing the entire value chain of enterprises that operate in the key sectors of the Finnish export industry. An excellent example of the far-reaching impact of investments by large corporates is Metsä Fibre’s bioproduct mill inaugurated in Äänekoski in 2017.Financing for growth, internationalisation and transfers of ownership increasedIn 2017, Finnvera granted a total of EUR 963 million (EUR 1,040 million) in financing to SMEs and midcap enterprises, showing a year-on-year decrease of seven per cent. This decrease is mainly due to the fact that the European EFSI guarantee, used actively by banks, partly reduced the need to use Finnvera’s guarantees.However, Finnvera’s financing to growing and internationalising enterprises increased, in line with the strategy. The share of growing and internationalising enterprises out of all financing grew to 40 per cent (38%). In euros, the share was EUR 385 million.The investment activity of growing and internationalising enterprises took an upward turn in 2016, after a long period of decline, and both the number of projects financed and the EUR amount of investments financed continued to increase in 2017. In growing and internationalising enterprises, the euro-denominated share of investments in the overall projects financed increased to approximately EUR 180 million, or 19 per cent (17%) The increase in software and service concept exports can also be seen in the structure of investments—the share of intangible investments is growing in a trend-like manner.SME and midcap financing exposure was EUR 2.5 billion at the end of 2017.Transfers of ownership gained a lot of visibility during the year, which goes to show that the significance of company acquisitions for the vitality of business life and for the establishment of growth companies has been recognised. The number of transfers of ownership financed in 2017 was at the same level as in the previous year. Finnvera was involved in financing nearly 1,000 transfers of ownership with EUR 121 million (EUR 141 million).Finnvera will release its financial statements for 1 January–31 December 2017 on 20 February 2018. The Annual Report will be published on Finnvera’s website in Week 8.Further information:Pauli Heikkilä, CEO, tel. +358 29 460 2400

Articles
11.01.2018
Repatriate the money from export trade – use the versatile tools in our toolbox

When talking with SMEs that export goods and services, it sometimes turns out that exporters have anything but a clear idea of the various risks and hedging options related to payment transactions and the financing of export trade. Therefore, we made a summary of a few tips for managing the risks in export trade. Do not forget to scroll down for a small challenge that helps to illustrate the solutions offered by Finnvera!The first step of risk management and the selection of the most suitable financing solution is an evaluation of the overall situation. To assist the evaluation, you can draw a timeline describing the lifecycle of the export trade transaction. This helps in determining the risks involved in each phase of the transaction and the cause of the risks identified.Risks can be classified into several different categories: They can be short- or long-term risks and relate to the period before, during or after delivery. When financing foreign trade, commercial risks, i.e. credit risks, and political risks, i.e. country risks, are often mentioned. Risks also vary according to the degree of customisation of the exported products. Examples of other types of risk include exchange risk caused by the use of different currencies and risk to the profit margin caused by the fluctuating prices of raw materials. The legislation of the buyer’s country often involves its own requirements for the product and the sales contract. Because some risks are created even before the sales contract is concluded, it is a good idea to perform the risk analysis in time to include potential hedging costs in the sales price. Once the timeline has been drawn and risks have been identified, the company’s own risk policy needs to be checked. The risk policy helps to determine the company’s risk appetite, limits of tolerance and the decision-making powers. It is a guideline for employees. If your company does not yet have a written risk policy, now is the time to prepare it.Concrete ways to manage risks include the introduction of client and country limits, the use of standardized sales contract clauses and recommendations for the use of payment methods and hedging instruments.Only one third of export companies use a hedging mechanism to avoid credit loss.Companies do not think that guarantees are necessary, because the client has a clear payment history or the buyer is a large company. On the other hand, SMEs do not recognise the opportunities to protect their sales receivables. Do not forget that even one credit loss can cause major damage to company finances.Choose the right product for the right situation – test how well you know export trade!In this export trade challenge, we identify the link between hedging against risks and the financing needs in export trade. The estimated value of each deal in the examples is below EUR 2 million.Can you find the right pairs by matching the situations 1–4 with the most appropriate tool A–D? Find the right answers at the end of this article.Situations1. Export of a production line to China. The line has been highly customised according to the specific needs of the buyer. If the buyer cancels the deal, it is difficult to sell the product to anybody else. The buyer is a new client. The exporter wants to hedge against the risk that the deal is cancelled and ensure that the sales price is received at the time of delivery.2. Export of secondary timber products to Russia. The buyer is an established trading partner of the exporter and purchases products constantly. The buyer has a payment period of 3 months. The exporter’s liquidity is excellent, because it receives a part of the sales price in advance.3. Export of machinery to a dealer in South America. The machines are mobile and resellable. Cooperation with the dealer has continued for years. The exporter sells several machines every year, and the annual sales to this dealer amount to between EUR 1 and 2 million. The buyer requires a payment period of five months, but the exporter would like to have the cash in hand immediately after delivery.4. A single delivery of devices worth EUR 2 million to a hospital in Brazil. The devices are the core products of the exporter and can be sold to another buyer if the deal is cancelled. The buyer requires a payment period of 3 years. The exporter wishes that the bank would finance the payment period and the exporter would be paid on delivery.Answers:A. With credit insurance, the exporter can insure its sales receivables and ensure that the sales price is paid.Because it is a simple insurance product, it is suitable for situations where the exporter has enough liquidity to finance the payment period of the buyer. The credit insurance has the most competitive price.By using credit insurance, the exporter can transfer risks related to the buyer’s liquidity and willingness to pay, as well as those related to the buyer’s country, to Finnvera. Credit insurance is generally employed in insuring post-delivery receivables, but it is also suitable for covering incurred costs of manufacturing if the deal is cancelled before delivery.B. Receivables purchase guarantee provides the exporter with similar coverage as credit insurance once the delivery has taken place and the exporter sells the accounts receivable incurred on the basis of the sales contract to its bank.The bank finances the payment period of the buyer and the exporter receives the price as cash after the delivery at the time of selling the receivables.Finnvera’s guarantee provides the bank that purchased the accounts receivable extensive coverage in case the buyer does not pay its invoice on the due date. Like credit insurance, a receivables purchase guarantee is typically suitable for cases where deliveries are repeatedly made to one buyer and the payment period is less than six months.C. Using a bill of exchange guarantee, the exporter can grant the buyer a payment period of up to five years and receive the purchase price as cash as soon as the delivery has been made and the exporter takes the bill of exchange approved by the buyer to its bank.The bill of exchange is separate from the sales contract and consists of a transferrable debt instrument between the exporter and the buyer. The bill of exchange is suitable for a number of countries. The exporter transfers the credit risk involved in the bill of exchange to its bank by selling the bill.The bill of exchange guarantee protects the bank that bought the bill of exchange against credit risks. It is suitable for both short and long payment periods.D. A letter of credit guarantee protects the bank that confirms the documentary credit. With a confirmed documentary credit, the exporter can eliminate risks related to the buyer and the buyer’s country.The exporter receives the sales price covered by the documentary credit from its own bank as soon as the exporter meets the conditions agreed on the documentary credit and submits the required documents to its bank.A letter of credit guarantee is an excellent solution if the trading partners do not know each other, because the documentary credit protects both parties. It provides protection even before delivery.If the buyer needs a certain payment period, it is possible to agree on the use of documentary credit with a payment period, in which case the exporter’s bank can discount the sales price for the exporter.The correct pairs are: 1–D, 2–A, 3–B, 4–C.Read more:Credit risks in export tradeExport Credit Guarantee operationsCountry classification and mapContact us:Finnvera’s financial advice: Tel. +358 29 460 2582 weekdays 9 a.m.–4:15 p.m.

Articles
08.01.2018
Wood exploited to its full potential – The Äänekoski bioproduct mill is the driver of growth in Central Finland

Sometimes opinions change swiftly. Some were already prepared to write off the entire Finnish forestry industry as a thing of the past, despite the fact that the investments of forestry companies – even during the darkest years of financial crisis – were worth more than EUR 500 million every year. That swansong was replaced with happier notes at the latest when Metsä Fibre announced the construction of a new EUR 1 billion bioproduct mill in Äänekoski, Central Finland. The annual pulp production capacity of the mill, inaugurated last August, is 1.3 million tonnes, making the production volumes of the plant more than twice those of the previous plant. In Finland, another reason to be happy is the high domestic rate of machine purchases, which eventually rose to 70 per cent. This was enabled by the so-called Lex Jordan.“The Export Credit Guarantee Act was amended three years ago. Before that, it was possible for us to support major companies only by granting export credit for foreign exports. Now we can participate in the investments of major companies even in Finland”, says Satu Savelainen, Finnvera’s account and project manager for the Äänekoski investment.Finnvera guaranteed a loan of EUR 400 million for the Äänekoski investment. Savelainen says that the investment must promote exports, either directly or indirectly. Metsä Fibre has estimated the project will increase the value of Finnish exports by half a billion euros a year.“Finnish machine suppliers may now provide quotes with the same terms of financing as their foreign competitors. In the worst case, Metsä Fibre would have maximised its machine purchases from abroad, in which case it could have used the services of local export credit agencies. In such large-scale projects, financing is typically derived from a number of sources. In this project, we collaborated with the Swedish export credit agency EKN”, Savelainen says.Finnvera’s financing instrument for foreign investments goes by the name of the buyer credit guarantee. It is a guarantee granted to the provider of financing of the export, usually the bank, to secure the risks related to the repayment of the credit. Arranging the financing for the buyer helps the Finnish export company to secure the deal.A new, similar guarantee arrangement for Finnish investments is called the finance guarantee.Savelainen says that she currently has several Finnish investment projects on her desk that are similar to the Äänekoski project.“They come in various sizes and from various industries. At any rate, all these projects are beyond the overture phase.”Watch the video interview of Metsä Fibre’s President and CEO Ilkka Hämälä and EcoEnergy SF Oy’s CEO Tero Mäki on the Äänekoski project. The interview is in English.Driving the growth of the entire regionThe purpose of the bioproduct mill is to use the byflows of wood processing to their full potential. This means that no landfill waste is generated in the process.The core of the product offering consists of pulp, pine oil, turpentine, bioelectricity and district heat. Metsä Fibre has announced that the self-sufficiency rate in electricity production in the mill is 240 per cent.“The mill is a significant driver of growth in Central Finland. About half a dozen other companies have already been established around it, and more businesses that use the byflows of the mill will be created over the next 12 to 18 months, when the production in the mill is ramped up”, says Mikko Vänttinen, Regional Director at Finnvera.Vänttinen says that the fulfillment of the role of a growth driver is apparent in numerous areas, but particularly in the movements of raw material.“The mill uses pulpwood, while logwood is redirected to the sawmill industry. Replacement investments at sawmills confirm that the outlook for sawmills has been positive for a long time. The mill also has significant impact on logistics and transport”, Vänttinen continues.Finnvera may provide financing for investments by SMEs either directly or by granting guarantees.The regional director also refers to the importance of innovations in the entire forestry cluster. Last year, the forest industry spent more than EUR 100 million on product development in Finland.“Industries in the traditional sense are losing their importance. In their product development efforts, companies should look beyond the boundaries of different industries”, Vänttinen says.FACTS: Drivers of exports, the forestry cluster Last year, the forest industry exported goods worth EUR 11.5 billion. The proportion of the forest industry of the entire goods exports of Finland was 21.6 per cent. Finland is one of the largest producers of pulp, paper and board in the world. The forest industry employs up to 150,000 people in Finland either directly or indirectly. The largest concentration of forest industry companies lies between South Karelia and Central Finland. The proportion of the forest industry in the gross value of the manufacturing industry in South Karelia reaches 69 per cent, while the proportion in Central Finland is 35 per cent (the fourth highest figure in the country). The vast investment of Metsä Fibre in Äänekoski will increase the future importance of the forest industry in Central Finland. The bioproduct mill cost EUR 1.2 billion. The annual pulp production capacity of the mill is 1.3 million tonnes. The mill consumes 4.5 million cubic metres of softwood and 2 million cubic metres of birch each year.

Articles
31.12.2017
The Montreal Group: Innovative products and services are important for SMEs

Environmentally friendly financing, innovative products and services, online services and digitalisation are important themes for SMEs even at an international level. These themes were discussed in Helsinki in June 2017 as Finnvera hosted the annual meeting of The Montreal Group. The event attracted nearly forty participants for the nine member states of the group.The Montreal Group, established in 2012, is a global cooperation group for state-owned national development banks focused on micro, small and medium-sized enterprises. The purpose of the group is to exchange best practices and innovations. Finland joined the group in 2014, and the other members are: Brazil, Canada, China, France, India, Malesia, Mexico and Saudi Arabia.Each year, The Montreal Group focuses on three key topics. In 2016–2017, these were Green Financing, Innovative Products and Services, and Online Services and Digitalisation.During the course of the year, the topics are discussed in working groups that have members from all member banks, and the working group output is then presented at the annual meetings. The annual meeting in Helsinki was hosted by Finnvera’s CEO Pauli Heikkilä and Executive Vice President Katja Keitaanniemi, who is also a member of The Montreal Group’s Board.An international SME event was organised in connection with the annual meetingThe three-day annual meeting in Helsinki was the first time that an SME event was organised in connection with the meeting, with cleantech and the Internet of Things (IoT) as its themes. This event, SMEs’ Helsinki Mission, was organised by The Montreal Group, Finnvera and Finpro, and its participants included over 50 foreign SME executives from six member states and more than 30 executives of Finnish companies.The business event consisted of thematic lectures, round table discussions and over 120 meetings among the participating companies. The event’s cleantech companies also took part in the World Circular Economy Forum, organised in Helsinki at the same time, and the IoT companies visited Tieto, Startup Sauna and Nokia. The SME event received excellent feedback and will also be organised in connection with the 2018 annual meeting in Montréal.Further information on The Montreal GroupCaption: Pascal Lagarde, The Montreal Group’s Chairman and Bpifrance’s Executive Director, opened the annual meeting in Helsinki, describing it as one of the most innovative cities in the world.

News
20.12.2017
Finland has benefitted the most from EU corporate financing in relation to population

Total of EFSI financing approved for Finland reaching EUR 1.4 billionFinnish businesses have been keen to make use of the available EU funding. Of all European countries, Finland is the No. 1 beneficiary of the European Fund for Strategic Investments (EFSI) in relation to the size of its population; in relation to GDP, Finland is sixth. So far, a total of EUR 1.4 billion of EFSI financing has been approved for Finland, expected to launch investments worth EUR 5.6 billion during the next few years. The newest financing agreements focus on high technology projects, research and development. EFSI is part of the European Investment Plan, aiming at increasing investment and improving employment in Europe. EFSI was originally launched in 2015, and the number of projects financed in Finland has increased every year. Finnish banks have been very active in making use of the European financing. Growth is also partially explained by increased awareness.“The EFSI financing has taken off excellently, and SMEs have had the opportunity to benefit more and more not only from EFSI, but also direct financing by the European Investment Bank (EIB) and other EU financing instruments. In previous years, mainly large infrastructure and construction projects were targeted, but this year, the focus has been on high-tech SMEs as well as research and development projects”, says Valtteri Vento, Finnvera’s EFSI financing programme manager.The size of financing plans directly supported with the EFSI guarantee scheme have varied from EUR 10 million to 150 million.Project criteria include research activities and environmental and energy efficiencyThe financing available from EFSI may be applied for viable projects that meet the set industry criteria and already have some other financing arranged for them – from own sources or elsewhere. The key industry criteria for Finland include research, development and innovation, environmental protection and management, education, SMEs, and energy efficiency and renewable energy.With assistance from the EU, a business may get a 50% guarantee for its financing. When the financing requirement is less than EUR 10 million, the guarantee is channelled through intermediary banks. For larger projects, the financing comes directly from the EIB.  SME InnovFin is one of the SME instruments that offers EFSI guarantee arrangements through an intermediary bank for projects that do not exceed EUR 7.5 million. Since EFSI financing is not assistance, but provided for consideration, the applicant’s own contribution is always required. When financing is provided for SMEs, an individual project may have both the EFSI guarantee and a 30% partial guarantee by Finnvera. In January–June 2017, the total of Finnvera’s partial guarantees tripled to about EUR 24 million compared to the second half of 2016. This gives a reason to expect that the strong demand is going to continue.On the European level, the size of the guarantee arrangement is huge. In the first phase, which ends on 4 July 2018, the aim is to launch investments in Europe worth EUR 315 billion. Later, the ceiling for the guarantee arrangement should be increased to EUR 500 billion, while the time frame will be extended up to the year 2020.Demand for information services keeps growingAs part of the European Investment Plan, Finnvera has, since early 2017, provided guidance on European financing through a helpline, via e-mail and by appointment. For more information, customers are referred to esir.fi, where they can fill in a suitability assessment of whether their project is compatible with EFSI financing.“Businesses are increasingly attracted to EFSI financing. The website has about 300 new visitors every month. So far, we have provided personal guidance to around 120 customers and held dozens of information sessions all over Finland.”Even banks can call Finnvera’s helpline whenever they need help with questions related to EFSI and other European financing.Additional information:Valtteri Vento, programme manager, Finnvera, +358 29 460 2531, firstname.lastname@finnvera.fiFor more information on EFSI financing, visit esir.fi.

Articles
18.12.2017
TD Securities and Natixis are the first financial institutions to use Finnvera’s Refinancing Guarantee Scheme

Finnvera and TD Securities have closed a refinancing guarantee allowing the refinancing of around USD 85 million which is a part of a USD denominated buyer credit guarantee facility in the amount of USD 200 million arranged by Natixis to finance Nokia´s deliveries of networks equipment and guaranteed by Finnvera. Finnvera has had its Refinancing Guarantee Scheme available for some time already as an alternative for the scheme where Finnvera´s subsidiary Finnish Export Credit provides funding and benefits from Finnvera´s guarantee cover.This transaction was the first time Finnvera’s Refinancing Guarantee Scheme was used. TD Securities’ strong funding base in USD together with Finnvera’s credit enhancement for the buyer credit and its funding enabled the transaction. Under its refinancing guarantee scheme Finnvera issues a 100 percent refinancing guarantee in favour of a financing institution in addition to its standard buyer credit guarantee to a bank arranging the credit.  TD Securities is one of Canada´s leading providers of advisory and capital market services as well as provider of liquidity to corporations, governments and institutions. TD Securities is a part of The Toronto-Dominion Bank Group, one of Canada´s oldest banks.Natixis is the international corporate and investment banking, asset management, insurance and financial services arm of Groupe BPCE, the 2nd-largest banking group in France.Further information:Eeva-Maija Pietikäinen, Head of Trade Finance, Finnvera, tel. 029 460 2674Tommi Sirviö, Senior Legal Counsel, Finnvera, tel. 029 460 2803More information about Refinancing Guarantee.

Articles
13.12.2017
Knowing your customer is in everyone’s interest in the export trade

Financial institutions are bound by the duty to know their customers – Finnvera’s KYC policyMany elements in financing operations are based on national and international laws and regulations, which Finnvera must also comply with. The obligation to know your customer is based on the EU money laundering directive. Its national application is regulated and monitored by the Finnish Financial Supervisory Authority (FIN-FSA). Following the recent reform of the Finnish Money Laundering Act, Finnvera will also redefine its Know Your Customer (KYC) policy from January 2018.In essence, the new and more effective KYC means more systematic and documented CDD (customer due diligence) practices towards customers and, in certain cases, other parties to a funding project.What does KYC mean in concrete terms?KYC refers to an obligation under the Money Laundering Act that is related to the prevention of money laundering and terrorism. It means the duty of financial institutions or other bodies to recognise and know their customers and have knowledge of the nature and extent of the customer’s operations.In concrete terms, when a company is applying for funding, the basic-level KYC duty includes registering the customer’s identifying data and information on the company’s ownership structure and the nature of its business operations. In this context, ‘customer’ refers to the company applying for funding and the beneficiaries of Finnvera’s guarantee.Where necessary, it is also possible to obtain various background information related to the so-called risk of damage to reputation, such as negative news, possible authority penalties, or appearance on sanction or corruption lists.From June 2018, the KYC policy will also cover the buyer client of an export company, the so-called ‘third party’. This means that the buyer and other necessary parties will be subjected to an investigation of the risk of damage to reputation in cases that involve a buyer credit guarantee of more than two years, an export credit, or a letter of credit or bill of exchange guarantee of more than two years. While not required by law, such third party due diligence is part of Finnvera’s responsible financing operations.Why is Finnvera revising its practices?A more extensive KYC of the parties to funding projects reflects current practice. Our owners, partner banks and Fiva either require or strongly recommend such responsible financing practices. Similar KYC obligations are applied widely in the financial sector. It is also a part of sensible risk management to conduct an independent review of project parties.What does this require from customers and other parties to funding projects?We will need more information on companies and, where necessary, the other parties to a funding project. As far as possible, Finnvera uses information available in public registers and other databases. Our aim is to minimise the extra work for our customers.The background studies conducted by Finnvera may also benefit other parties to a funding project. We are allowed to exchange information with bodies, such as banks, that are participating in the same project.Why is Finnvera asking for the same information on the same projects that the bank has already requested?Although parties involved in the same project may exchange information, the Money Laundering Act ultimately requires knowing your customers independently. Therefore, we may not rely solely on investigations performed by others. Of course, whenever possible, we will collaborate with banks if the project involves a foreign buyer or other party that the bank may already know.What does Finnvera do if the KYC investigation reveals negative news of the borrower company or other similar information? Will Finnvera refrain from granting a guarantee?Refusing to grant a guarantee is not our primary option. Negative issues revealed about a borrower (such as corruption, violations of human rights or the environment, or other criminal activities) will always be dealt with on a case-by-case basis and the risk assessed from the perspective of the applied project. In assessing such issues, their relevance depends on how recent the events have been, whether the company has taken corrective action due to the event and, above all, whether it is possible to obtain reasonable assurance that the applied project will not be affected by such issues.What are the requirements and practices of export credit agencies in other countries? Enhanced KYC of the parties to funding projects is a common trend among credit agencies today. Recently, the responsibility for funding operations has gained more momentum, particularly among public providers of financing. In practice, this means enhanced KYC obligations. KYC resources and databases are becoming increasingly extensive.Finnvera’s model has been prepared largely on the basis of the model of other Nordic export credit agencies, and the risk management model applied in Sweden is very similar.For more information, please contactAnne Haataja, Compliance Officer, Finnvera, tel. +358 29 460 2852

Articles
24.11.2017
Tiny Sri Lanka is having a facelift with Chinese money

Sri Lanka, a relatively little-known country for Finnish companies, wants to become an important port of call for marine traffic. The impact of the Chinese Dream, the new Silk Road, reaches far and wide. A prime example of this is Sri Lanka, a miniature state currently seeing hundreds of millions of euros of Chinese money being invested in its ports and other infrastructure. Finnvera's CEO Pauli Heikkilä welcomed Prime Minister Ranil Wickremesinghe in October in Helsinki to discuss Finnish companies' export prospects to Sri Lanka.The reason for the investment boom is the island’s excellent location.“Virtually all marine traffic in Asia goes past Sri Lanka, and now China hopes to make it an intermediary port for cargo ships”, says Outi Homanen, senior adviser at Finnvera.One of the marketing assets of Sri Lanka is the fact that it has signed free trade agreements with nearby countries. This makes it a convenient gateway to large markets, such as neighbouring India.Right now, the island state is intensely interested in maritime infrastructure projects and especially maritime surveillance. But to carry out such projects, the help of Chinese companies is not enough. Finland’s strength in this respect is its strong maritime cluster of more than 3,000 enterprises.During Prime Minister Ranil Wickremesinghe’s visit to Finland in October, a number of other topics were also raised for discussion. Homanen says that the Finnish health technology, energy sector, power plants, cleantech and education all featured in the discussions.“It is worth noting that the Prime Minister visited Finland only and none of the other Nordic Countries. He found the offering of Finnish businesses particularly interesting.”Potential for Finnish exporters - Finnvera recommends export trade transactions to be securedSri Lanka’s vast investments and important location have not yet drawn the attention of many Finnish enterprises. Statistics by the Customs Finland reveal that the total value of goods exports to Sri Lanka were just EUR 9.4 million in 2016, and even less in the first half of 2017.For comparison, the value of goods exports by Finnish companies to neighbouring India totalled half a billion euros, and even for Pakistan, the figure was EUR 60 million.“The operating environment in Sri Lanka is less complicated than in, say, Bangladesh or Pakistan. The country is agile and its production standards are better in fields such as the textile industry”, Homanen says.She would like to remind companies of the fact that the island state’s virtual official language is English. Its British heritage is also visible in the banking system, which Homanen describes as reliable and practical.Finnvera recommends export trade transactions to be secured with documentary credit, particularly in cases where the buyer is new. For Sri Lanka, it is also possible to consider, in individual cases, medium-term or long-term export financing guaranteed by Finnvera.Financing for investmentsIn spite of Sri Lanka’s dark history of a long civil war that left its marks everywhere, the country’s new political leadership is ready to turn a new leaf.The island state and its 20-plus million population wants to attract tourism and increase the exports of its textile industry. One of the most important export assets is tea.According to Homanen, Sri Lanka’s economy has grown at the rate of 5 to 8 per cent, although the figure has been below five in the last few years.The economic growth has its flipside, too. By the World Bank’s standards, Sri Lanka has entered the category of lower-middle-income countries, which means less concessional development funding.However, Sri Lanka still has access to many partly concessional forms of funding. If you have a project involving Sri Lanka, one of your options is to apply for the Public Sector Investment Facility (PIF) for developing countries, a finance instrument managed by the Ministry for Foreign Affairs of Finland.“One of the major risks in Sri Lanka is the growing of the state debt. While bold investing increases indebtedness, investments are also necessary for economic growth”, Homanen says.Read more on Finnvera's export credit guarantee operationsSee all country classifications

Articles
13.11.2017
An extensive network enables shipbuilding

When a ship deal worth billions is concluded, you can hear the champagne corks popping also in places other than just Turku Shipyard. The design and construction of a giant cruise ship is a joint effort by several companies acting as drivers in the project as well as hundreds of subcontractors around Finland. Konecranes is delivering an enormous crane to the shipyard, while a company from Turku is in charge of designing ship interiors. The illustration from Turku Shipyard shows the heights that the new crane from Konecranes reaches. In the background, you can see the old crane that will still continue to be used by the shipyard.A globally exceptional maritime industry cluster has evolved in Finland. A study by Brahea Centre at the University of Turku indicates that the sea cluster is comprised of up to 3,000 companies. Their combined revenue is EUR 13 billion.Roughly one-third of the sea cluster companies are located in Southwest Finland, with Turku Shipyard, owned by the Germany company Meyer, at the core of the cluster.One of the most nostalgic moments at Turku Shipyard will take place in May next year when the enormous shipyard crane delivered by Konecranes will be ready for use. The company’s first Goliath shipyard crane was delivered more than 40 years ago and, as it happens, it was also delivered to Turku.The old crane will continue to be used as well and its modernisation is currently under way. Moreover, Konecranes has concluded a maintenance agreement for both cranes.“You simply cannot pass up these changes. This transaction is one of the most significant for us,” says Matti Malminen, Vice President, Trade & Export Finance, Trade Compliance at Konecranes.The maximum height of the crane is 120 metres and its hoisting capacity is 1,200 tonnes. There is an interesting fact related to the welding stage: the shipyard that ordered the crane has operated as a subcontractor for Konecranes in welding the main support beam.“All critical components come from Konecranes’ plants in Finland. The gearbox, electric systems and hoisting machinery are the heart of the crane,” explains Project Engineer Vesa Pietilä.He has been involved in the crane project for nearly four years. The actual delivery time is two years.Financing playing a key role in transactionsAccording to Pietilä and Malminen, a competent subcontracting network is the key to success for both Konecranes and the entire shipyard. The chain is extensive and quality and delivery reliability are required from subcontractors.“We have invested heavily in the subcontractor network and want it to function smoothly. Companies are trained and monitored,” notes Malminen.The value of the shipyard deal for Konecranes is EUR 35 million, only a fraction of the listed company’s revenue that exceeds EUR 3 billion.International transactions amounting to tens of millions of euros often require financing arrangements. The so-called “Lex Jordan” gave Finnvera the opportunity to issue guarantees for domestic projects, too, provided that they promote Finnish exports. The crane delivery to Turku Shipyard is a good example of this.“Finnvera and SEB Leasing Oy arranged the financing. As we speak, we have four other major export trade transactions in progress, in which buyer credit or Finnvera’s export credit guarantees play a significant role in securing the orders,” says Malminen.Empowered by the networkAccording to Jari Suominen, Managing Director of Naval Interior Team (NIT), a company specialising in ship interior design, the Turku Shipyard cluster is one of the four most significant networks in the world. The three other networks are located in Germany, France and Italy, all connected with local shipyards.“Turku’s best asset is that the network possesses the all-important technology. Elsewhere, shipyards keep it to themselves,” comments Suominen.“Turku Shipyard is vital for us. It is easier to develop operations and introduce new innovations here,” he goes on to say.The family business was founded at the beginning of the millennium and it has witnessed the decline and rebirth of Turku Shipyard. When the shipyard’s future hung in the balance under Korean ownership, the NIT management decided to enter international markets.“We gained a foothold in German shipyards and in Japan. For a while, we also operated in France, but the biggest demand was in Japan. This enabled us to overcome,” says Suominen, thinking back.A total of 75% of NIT’s more than EUR 77 million revenue comes from abroad. The company’s growth figures are impressive: a few years ago, its revenue was only one-tenth of the current level.According to Suominen, NIT is one of the few turnkey suppliers in its field. The most significant success factor is cooperation with the shipyard, the shipping company and architects.In ship projects, the company’s own employees operate as project directors, take care of design and purchasing, manage logistics and act as site supervisors. Materials and installation work are mainly provided by subcontractors.“All solutions must be created from scratch. The key to a successful project is our competent team. It is extremely challenging to build efficient teams,” notes Suominen.The Managing Director finds that Finnvera plays a significant role from the entire cluster’s point of view.“We couldn’t have gone abroad without financing from Finnvera. Shipyards always require us to acquire a security. In addition, we need working capital in the design and production phase.”Last year, the euro amount of new export credit guarantee applications received by Finnvera reached a record-breaking level, EUR 14.6 billion. The strong demand results especially from the order book growth in the shipbuilding industry.Finnvera’s Regional Director Seija Pelkonen says that the success of the sea cluster reflects on the entire country and hundreds of companies. On the first level, there are turnkey suppliers, such as NIT. They need delivery securities and other project funding.Financing-related needs trickle down in the network to the subcontractors of the turnkey suppliers, too.“Companies now have a low threshold to launch international operations as there is another Meyer shipyard in Germany. Competence is cross-pollinated. Finnish subcontractors are also approached because they have a good reputation. We constantly receive inquiries about financing,” says Pelkonen.FACTS: Drivers of exports, the sea cluster A study by Brahea Centre at the University of Turku indicates that the Finnish sea cluster is comprised of up to 3,000 companies. Half of these are limited companies, with information about their financial statements available. In 2015, the combined revenue of the sea cluster was EUR 13.0 billion and the companies had approximately 49,000 employees. The sea cluster companies concentrate in Uusimaa and Southwest Finland. Brahea Centre’s study reveals that almost a third of the sea cluster companies are located in the Turku region. The core of the cluster in Turku is the shipyard. The shipyard’s order book extends all the way to 2024 and includes eight passenger ships. Southwest Finland also boasts a growing automotive and mining industry cluster. Customs’ statistics for the first half of the year show that, as an export region, Southwest Finland comes second in Finland in terms of euros and third in terms of the number of export companies. Read more about credit risks in export trade here. Read more about our working capital for export products here. Read more about financing for the buyer here. Read also: Finnvera to contribute more than EUR 2.5 billion to cruise ship financing

News
09.11.2017
Finnvera to contribute more than EUR 2.5 billion to cruise ship financing – the order by Royal Caribbean Cruises is the largest financing project in Finnvera’s history

In October, Finnvera participated in the financing of two cruise ships ordered by Royal Caribbean Cruises Ltd. by providing the shipping company with buyer credit financing and an export credit guarantee, amounting to more than EUR 2.5 billion. This buyer financing is related to the letters of intent published by the shipping company and Meyer Turku Ltd in 2016. As export trade transactions, the ship orders to be executed are remarkably large and will have positive cascade effects on employment and subcontracting for several years.Mainly due to increasing demand for ship financing, the ceilings of Finnvera’s export credits and export credit guarantees were raised at the beginning of 2017.“From the perspective of export prospects and the impact on employment, it is great that the order book extends a long way into the future. This enables many sea cluster companies to make investments and plan their operations over the long term. As an export credit agency, Finnvera plays a major role in financing projects when payment periods are long. Financing again involved cooperation between export credit agencies, this time with Euler Hermes of Germany,” says Jussi Haarasilta, Executive Vice President.Finnvera provided the bank that arranged the transaction with guarantees for a 12-year buyer credit that was financed by Finnvera’s subsidiary Finnish Export Credit Ltd.The shipyard will hand the ICON 1 and 2 ships over to the customer in 2022 and 2024. The ships will be record-breaking in many respects: energy efficiency, low amount of emissions and environmental friendliness. ICON 1 and 2 will use LNG, or liquefied natural gas, as their main fuel. The plan is that part of the energy consumed by the ships will be generated with fuel cells.The largest ship financing project in Finnvera’s historyDuring the year, the decision to raise the ceilings of Finnvera’s export credits and export credit guarantees has proved to be well-founded. In January–June, Finnvera offered export credit guarantees and special guarantees amounting to EUR 6.3 billion, which is over five times more than during the corresponding period the year before. The amount of export credits increased significantly, too: in January–June, the export credits offered by Finnvera totalled EUR 5.7 billion (0.5 billion).The current financing of more than EUR 2.5 billion is the largest ship financing transaction that Finnvera has ever been involved in and, at the same time, the largest individual financing project in Finnvera’s history. Such projects are not only major financing and export projects but also significant for promoting employment.“Securing large individual export trade transactions for Finland may result in hundreds or even thousands of person-years in the exporting company and its subcontracting network. According to reports, the Finnish sea cluster encompasses 3,000 companies. The construction of two large cruise ships will bring up to 25,000 person-years of employment so the impact is truly significant,” notes Haarasilta.Further information:Jussi Haarasilta, Executive Vice President, Finnvera, +358 29 460 2601Read also: An extensive network enables shipbuilding

Articles
26.10.2017
Energy brings companies together in Vaasa -Financing solutions are often important in export trade

Over the years, the Ostrobothnia region has become home to an exceptionally active hub of companies that promote one another’s growth. All the companies in the cluster work with energy in one way or another. Wärtsilä is one of the companies driving exports in the area. One of the growth companies WE Tech wants to cut the energy consumption of ships by one-third, says CEO Mårten Storbacka.The energy cluster in Ostrobothnia boasts impressive figures. It comprises approximately 150 companies with a combined revenue of over four billion euros. The companies employ a total of 11,000 people, of which over 1,000 work in product development.One of the most successful growth companies in the area is WE Tech, which specialises in improving energy efficiency in the marine sector. The company’s vision is to reduce oil consumption in the global shipping industry by one-third.CEO Mårten Storbacka sees the extensive network of experts as Vaasa’s strength. WE Tech’s key employees used to work at other companies in the cluster before joining the company.“We benefit one another. We have a strong culture of win-win strategies,” Storbacka says.WE Tech uses permanent magnet and variable speed drive technology. To put it more simply, a shaft generator is installed in the ship and it provides energy while the vessel is at sea. The auxiliary engines can be shut down, which reduces fuel consumption.WE Tech’s partners include the wind power company The Switch and Danfoss Drives (former Vacon).“We are the leading company in our sector. Our services cover the entire life cycle of the solution, from sales to maintenance,” Storbacka says.The company’s leading position and the prospect of partnering with larger enterprises also interests suppliers. CEO Storbacka says that smaller companies are interested in collaboration with WE Tech and, on the other hand, WE Tech is constantly on the lookout for new partners.Last year, WE Tech’s revenue amounted to EUR 6.2 million, and this year’s forecast is EUR 12 million. The company has immense potential to grow because hundreds of new cargo vessels are ordered every year.“Our competitors are large, global enterprises, but our technical expertise is unrivalled. We have also collected an impressive list of references of past deliveries. Potential new customers want to know what we have achieved so far. We also rely on our service network of partners that covers over 50 countries,” Storbacka says.Leading export companies teach othersUp to one-third of exports in the Finnish energy sector originate from the Vaasa region.According to John Erickson, Regional Manager for Western Finland at Finnvera, the importance of major companies like Wärtsilä can be seen in the statistics.“These important export companies have also attracted other growth companies to the area, such as engineering offices, component manufacturers and software developers,” Erickson lists.Leading export companies like Wärtsilä also cooperate with one another. Wärtsilä’s Energy Solutions unit in Vaasa exports, among other things, gas and oil power plants.The plants are powered with Wärtsilä’s engines, but Energy Solutions always provides the customer with the entire solution, complemented with support from Wärtsilä’s Services unit during the entire life cycle of the plant. The solution is based on the engine, but it covers the entire package, including services provided by subcontractors and partners.“We play an important role in enabling export trade. We combine the elements into an exportable package,” says Tuomas Haapakoski, Director of Financial Services at Wärtsilä.Wärtsilä helps its suppliers enter international business.“The entire supply chain must meet international quality and other requirements, and also our financial partners must be competitive in the global market,” Haapakoski says.Different funding needsDelivering power stations with a capacity of up to hundreds of megawatts is not small-time business. Sales published by Wärtsilä this year include the delivery of power plants to Indonesia. The company operates globally.“The funding pressure facing our customers also affects us, particularly in developing countries. Large-scale projects require competitive financing,” Haapakoski says.Often, the outcome of potential exports depends to a large extent on financing.According to Petri Vartiainen, Senior Adviser at Finnvera’s Large Corporations, the companies need Finnvera’s help in organising funding because most of the buyers are in developing and growing economies. In most cases, the competitors are supported by the export credit agency of their country.“The typical amount of funding is EUR 50–100 million, with a payback period of eight to twelve years,” Vartiainen says.The exporter usually contacts Finnvera first. In Finnvera’s buyer credit arrangement, the vendor receives the money by the handover of the power plant. The buyer funds the investment using long-term credit, and Finnvera guarantees the buyer credit for the bank.If necessary, Finnvera’s subsidiary Finnish Export Credit Ltd can issue the export credit and offer interest equalisation. Project funding is another option.There are also several funding solutions for SMEs. The needs of different companies differ greatly. Some need funding during the manufacturing phase, while others want to guarantee their receivables after delivery.For example, WE Tech uses the Bond Guarantee. Under a Bond Guarantee, the exporter can insure a bid bond, an advance payment bond, a performance bond or a maintenance period bond issued by a bank in favour of a foreign buyer.Erickson from Finnvera points out that the important thing is to contact the funding partner at an early stage.“Export volumes are increasing, as is the amount of funding we grant during manufacture. Companies have understood that we can offer financing and guarantee their exports. Finnish suppliers, on the other hand, need working capital financing when they recruit more personnel to handle the increasing volumes,” Finnvera’s Erickson comments.FACTS: Drivers of exports in Ostrobothnia The Vaasa energy cluster comprises approximately 150 companies with a combined revenue of over four billion euros. Approximately 80 per cent of the revenue comes from exports. The companies employ around 11,000 people, of which over 1,000 work in product development. There is also another cluster in Ostrobothnia, it is part of the bioenergy and chemical industry cluster in Kokkola, Central Ostrobothnia. According to statistics by Finnish Customs, the share of Ostrobothnia in all Finnish exports is six per cent. Read more about credit risks in export trade here. Read more about our working capital for export products here. Read more about financing for the buyer here.

News
09.10.2017
Buyer financing arranged through cooperation between export credit agencies

The arrangement of financing plays an increasingly important role in export trade negotiations, and this trend has gained strength in recent years. Finnvera facilitated Nokia’s telecommunications equipment deliveries to Verizon, one of the leading teleoperators in the world, by providing financing and and guarantee. In this major transaction, the share of Finnvera’s guarantee and financing is USD 1.5 billion, or roughly EUR 1.3 billion. Targeted at North American operations, financing is a result of cooperation between export credit agencies: the Canadian export credit agency Export Development Canada (EDC) also took part in the arrangement of financing.This financing arrangement carried out jointly by export credit agencies is the first of its kind.“Verizon is one of Nokia’s leading customers for all major technologies, products and services, and we are pleased to have been able contribute to the close Nokia-Verizon relationship with this landmark Export Credit Financing, which was supported by Nokia’s ECA partners Finnvera and EDC,” says Nokia’s Lenny Floria, Head of Regional Treasury & Structured Finance, Americas.The largest telecom sector deal where Finnvera has participated in financingThe more difficult and more competitive the market an enterprise strives to enter, the more probable it is that the buyer sees financing as a competitive edge.As an export credit agency, it is Finnvera’s task to improve the chances of Finnish export companies on the market. What was exceptional for Finnvera in this deal was its size. This is the largest telecom sector deal in which Finnvera has been involved.“This demonstrated that with financing and guarantees, we can promote Finnish companies’ export activities. Even when the buyer is a global company, an export credit agency may play an important role in financing as major corporations aim to seek financing in a diversified manner from various sources,” says Antti Saviaho, Senior Adviser at Finnvera.Finnvera provided Deutsche Bank, the bank that arranged the financing, with a guarantee. The buyer credit was financed by Finnvera’s subsidiary Finnish Export Credit Ltd.“For Finnvera, this is a normal financing arrangement that is based, like other major financing transactions, on careful analysis, risk assessment and self-sustainability, which is a key guiding factor in Finnvera’s operations. Finnvera does not hand out subsidies but instead covers its expenses with income received from customers,” notes Jussi Haarasilta, Executive Vice President at Finnvera.Telecommunications is one of the main export sectors in FinlandDue to increasing demand, the ceilings of Finnvera’s export credits and export credit guarantees were raised with legislative amendments twice during 2016. On the basis of the current year’s figures, the increased authorisations were truly needed. The Verizon deal is a good and large-scale example of how Finnvera uses its increased authorisations to promote the Finnish export sector.As is typical of export credit agencies in general, Finnvera’s export financing focuses especially on three sectors: telecommunications, shipping and shipbuilding industry, and forest industry.Further information:Jussi Haarasilta, Executive Vice President, Finnvera, +358 50 346 9537 Antti Saviaho, Senior Adviser, Finnvera, +358 50 468 4478

Articles
03.10.2017
Taking SME support to the next level

Ensuring that profitable projects do not fail due to lack of financing, is an important part of Finnvera’s mandate as a state-backed risk financier. Katja Keitaanniemi, executive vice president responsible for SMEs at Finland’s Finnvera, explains what special measures the group takes to look after smaller businesses.Small and medium-sized enterprises (SMEs) have become an important part of our export credit agency (ECA) mandates. We all like to (repeatedly) state this in our strategies and in our communications, both internally and externally. Certainly, many ECAs have streamlined their products and processes to better serve their SME clients.Finnvera too has ‘upgraded’ its products targeting SMEs or small transactions in general. The group recently launched ‘Export Receivables Guarantee’ aimed at the exporter and ‘Receivables Purchase Guarantee’ aimed at banks financing export invoices. Finnvera has also introduced a ‘Bill of Exchange Guarantee’ for markets where bills of exchange work well as a simple way of documenting an export credit. In the trade credit business, these new modified credit insurances and buyer credit guarantees serve the short-term credit insurance with relatively small amounts. However, there has been some discussion about longer credit terms and about the possibility to offer direct cross-border export credits for small transactions – a business area where banks seem to have lost interest due to ever-increasing transaction costs resulting from tightening regulation.Many ECAs have in recent years successfully introduced products such as Working Capital Guarantee. From our perspective this seems curious as Finnvera has been combining domestic SME financing and an export credit agency from the beginning and has always had Working Capital Guarantee in its product portfolio. Providing credit enhancement for the working capital needs of SMEs, has been bread and butter in our business model since the 1960s.When working with SMEs, one must use simplified policies and procedures. Most ECAs have by now introduced SME-friendly approaches to process applications quickly and efficiently and to offer products with a minimal amount of ‘fine print’. But what else can be done for SMEs apart from improving products and processes? In its risk policy, Finnvera has introduced increased flexibility, a more aggressive approach to taking risk in SME exporters’ small transactions compared to larger exporters’ transactions. This may be shown, for example, in accepting a lower level of information required on the buyer. We have experienced a tendency where SMEs often sell or export to other SMEs – and the buyer credit information tends to be insufficient or very scarce. In such cases, Finnvera can be more flexible. The experience so far is encouraging. If loss ratios turned out to be higher, one could argue that the impact of these transactions for SMEs is very high and the SME-related buyer credit portfolio is only a small fraction of Finnvera’s overall portfolio.Focusing merely on products is clearly not enough - and may even be a bit old-fashioned. SMEs may not know which products they need or want. And client managers in commercial banks working with growth oriented SMEs and mid-caps may have gaps in their knowledge of financing instruments used in foreign trade. To bridge these gaps Finnvera has been organising training programmes both for growth oriented companies and their bankers. It is now considering the next step: offering trade finance-related consulting services for SMEs.As a domestic SME financier, Finnvera offers a product palette that covers loans and guarantees from investments and working capital to financing changes of company ownership, environmental guarantees, start-up -guarantees, internationalisation guarantees, etc. Until recently the products on offer also included early stage Venture Capital ‘Seed Financing’ for innovative growth-oriented SMEs. The special focus is to offer a palette that covers financing needs from the start to internationalisation. And for the customer, it does not really matter which product is being used: they just need financing or risk cover.Finnvera focuses specifically on SMEs aiming at growth and internationalisation. Our target clients are growing and globalising enterprises - or ‘global’ companies. The special unit that covers this market segment offers both domestic financing needs and export credit products. It is absolutely essential that our client relationship and credit managers can offer solutions on a larger scale of financing needs so that domestic SME financing and export credit guarantees as operational functions do not work in silos.This of course requires some expertise from the personnel as they need to master a wider range of products. These particular client managers focusing on growth-oriented and export-oriented customers are very experienced and have worked on both the domestic and the export finance side of business. The same specialisation is needed on the credit manager side as Finnvera has separated its credit function from its client function. Finnvera has some 1,000 clients in this customer segment taken care of by around 20 highly skilled customer relationship managers, and the yearly offering reaches to several hundreds of millions of euros.Combining domestic financing solutions with export credit agency offerings is not all: Finnvera is part of ‘Team Finland’, which gathers various official actors together to find synergies when serving customers. Team Finland members include other important state-backed agencies or entities promoting innovation and growth such as TEKES (organisation for financing research, development and innovation), Finpro (Finland’s export promotion agency helping SMEs to export), and TESI (equity / venture capital provider).  These groups share the same premises in the same office building. In total, 600 experts from four separate organisations now share a modern open plan, multi-space office focusing on their joint customer base of growth and export-oriented companies.We are quite sure that the next megatrend in public SME financing will be in external focusing and cooperation, not any more in internal concentration: how to combine forces with your colleague organisations to serve SMEs better. This requires a new attitude, but Finnvera is determined to remain in the frontline in finding new and better ways to support SMEs. In the end, it is results that matter: we need more ‘global’ companies!Katja KeitaanniemiExecutive Vice President, SME's, FinnveraThe article was originally published in Berne Union’s newsletter The Bulletin in September 2017 More information about Berne Union

Articles
19.09.2017
Risk mitigation is an element of export credit insurance

Through reinsurance, Finnvera prepares for increased exposures and, in particular, strives to mitigate the concentration of risks in certain sectors.As part of the company’s risk management strategy, Finnvera has revised its portfolio reinsurance for export credit guarantees. Through reinsurance, Finnvera prepares for increased exposures and, in particular, strives to mitigate the concentration of risks in certain sectors.Owing to the structure of Finnish industry, exports are heavily concentrated in a few sectors. This underlines the importance of Finnvera’s risk management system. In addition, individual export transactions, such as orders for cruise vessels, may be very large. According to the international evaluation report published in March 2017, Finnvera’s management of risks and exposures is at an excellent level in international comparison. In reinsurance, Finnvera is a pioneer among export credit agencies.The renegotiated, more extensive portfolio reinsurance entered into force on 1 July 2017. Portfolio reinsurance covers a significant share of Finnvera’s risks related to export credit guarantees and is tailor-made to cover Finnvera’s risk profile. The revised portfolio reinsurance has multiple levels so that it would encompass all of the necessary exposure volumes. In order to ensure the scope of coverage, reinsurance is provided by several international reinsurance companies.Internationally, Finnvera is one of the first export credit agencies whose risk mitigation strategy has included systematic risk mitigation through reinsurance for years. In addition, Finnvera’s activities are always based on controlled risk-taking and an analysis of the buyer, sector and country.“Systematic commercial reinsurance is not necessarily a part of the functions for all Export Credit Agencies. The expectation for long-term self-sustainability for export guarantee facilities are derived from international legislation but also included in the direct legislation governing Finnvera’s activities. This means that we are obliged to cover our expenses with our income. Reinsurance covers us from export risks much in the same way as a normal home insurance covers your house or belongings in advance, before an accident has materialized. It’s too late to think about purchasing home insurance when your kitchen is on fire,” says Senior Adviser Jenni Ruotsi from the Large Corporates Unit of Finnvera, who is responsible for reinsurance.“We are concerned because surveys indicate that only one third of Finnish SMEs have coverage against export risks, and we want to practice what we preach. To ensure the continuity of our activities, we must have coverage against risks that cannot always be predicted. As a state-owned export credit agency, our task is to support Finnish export companies so that they can secure deals abroad. Without Finnvera’s risk-taking, many export transactions would not materialiseOur exposures are large, but we must act so that the potential realisation of the risk would not endanger self-sustainability even over the long term,” says Ruotsi.Sectoral concentration, a typical feature of export credit guaranteesFinnish companies have signed large export deals, which is positive for the Finnish economy. Owing to increased demand, the maximum amounts of Finnvera’s export credits and export credit guarantees were raised twice during 2016 through legislative amendments. On the basis of figures from the first few months of the year, the increased authorisations have really been needed.Finnvera’s export financing has focused particularly on three sectors: telecommunications; shipping companies and shipyards; and the forest industry. So far the only larger risk realised during Finnvera’s existence was in the telecommunications sector. In 2016, Finnvera reported that it was preparing for a more substantial loss in Brazil. Thanks to reinsurance, the loss is considerably smaller than it might be otherwise.Sectoral concentration is a well-known factor that is part of the nature of export credit guarantees.“It is typical of export credit agencies that their exposures weigh heavily on an individual sector that dominates the industrial structure of the country in question. For instance, in Denmark the focus is on wind power, in Norway on the oil sector and in Italy on the shipbuilding industry. The emergence of concentration risks is also the reason why export credit agencies, in the end, need support from the government for their activities.”Search for new insurance methods part of risk management strategyIn addition to portfolio reinsurance, Finnvera uses and actively develops other methods for insuring covered exposures, such as one-off policies pertaining to a specific risk. The same risk can be covered in various ways, and in the same way as the buyer of a house uses the house purchased as collateral, the export trade may also include the use of collateral.“The search for new insurance methods is part of Finnvera’s risk management strategy. Our aim is self-sustainability in the long term, and we want to be proactive. Reinsurance is one area where we want to continue to be a pioneer among the world’s export credit agencies.”Inquiries:Jenni Ruotsi, Senior Adviser, tel. +358 50 352 2430

Press Releases
17.08.2017
Half-Year Report of the Finnvera Group for 1 January–30 June 2017

Rising export industry orders have increased demand for Finnvera’s export financingThe upturn in the Finnish economy and the rise in export industry orders have increased the demand for Finnvera’s export credit guarantees and export credits. The ceilings for Finnvera’s export credit guarantees and the authorisation to finance export credits were raised from the start of 2017 to help the company meet the increased demand especially in ship financing. Raising the ceilings for Finnvera’s and export credits proved useful during the first half of the year. The higher ceilings were really needed, not only for securing new large orders but also, for instance, in the telecommunications sector. Demand for SME and midcap financing remained steadier during the first half of the year. The Group’s financial performance was strong in the first six months of the year. The profit was EUR 57 million (-7 million).The maximum amounts of Finnvera’s export credit guarantees and export credits were raised from the beginning of 2017. The authorisation to grant export credit guarantees was raised to EUR 27.0 billion, while the authorisation to grant export credits was raised to EUR 22.0 billion. According to an external evaluation of Finnvera’s activities commissioned by the Ministry of Economic Affairs and Employment, the company’s risk management is at an excellent level internationally. When granting financing, Finnvera manages risks through careful analysis. Exposure is monitored constantly and, whenever possible, protective measures are taken using for instance reinsurance.During the period under review, Finnvera’s funding responded to the increased demand for export credits. In May, Finnvera issued a 15-year bond of EUR 750 million, which attracted a great deal of interest. By means of a private placement, the bond sum was raised by EUR 100 million at the end of June. This has the longest maturity among the bonds issued by Finnvera to date.Business operations and the financial trendThe value of the export guarantees and special guarantees offered by Finnvera in January–June totalled EUR 6.3 billion, or over five times more than during the corresponding period the year before (1.2 billion). Significantly more export credits were also offered. The value of export credits offered by Finnvera in January–June totalled EUR 5.7 billion (0.5 billion). Some large individual projects for instance in the shipbuilding and telecommunications sectors contributed to the growth.Finnvera continued to speed up the financing of small export transactions by launching the Receivables Purchase Guarantee, which is suitable for short-term export transactions of less than EUR two million. The goal is to boost financing and to promote the operating potential of Finnish export companies of all sizes.The total exposure for export credit guarantees and special guarantees, including current exposures and offers given, totalled EUR 22.4 billion at the end of June (18.4 billion). Total exposure increased by 22 per cent during the period under review. The increase was attributable, in particular, to the rise in offers given. Current exposure accounted for EUR 15.8 billion of the total exposure at the end of June, or only 2 per cent more than at the start of the year. At the end of June, the exposure included in the maximum authorisation of EUR 27 billion for export credit guarantees totalled EUR 17.2 billion (14.4 billion).In January–June, the demand for SME and midcap financing was slightly higher than the year before. However, as financing was available on market terms, the volume of loans and guarantees offered during the period under review was 6 per cent less than in the previous year. Domestic loans and guarantees in SME and midcap financing stood at EUR 2.2 billion at the end of June; this was 2 per cent less than at the start of the year. SME and midcap financing still focuses on working capital, but a positive feature is that financing is now more closely targeted at investments and growth enterprises. During the period under review, Finnvera continued its well-received campaign to accelerate transfers of ownership in SMEs. The goal is to increase the number of growth enterprises through transfers of ownership. By the end of June, Finnvera contributed to the financing of ownership arrangements for nearly 550 enterprises, which was 3 per cent more than the year before. Expressed in euros, financing for ownership arrangements was 18 per cent less than during the same period in 2016. Finnvera Group         1 Jan–30 Jun 2017 1 Jan–30 Jun 2016 Change % Offered financing, MEUR           Loans and guarantees 454 483 -6 %     Export credit guarantees and special guarantees  6 262 1 226 411 %     Export credits 5 748 477 1105 %           30 Jun 2017 31 Dec 2016 Change % Outstanding commitments, MEUR            Loans and guarantees 2 226 2 261 -2 %      Export credit guarantees and special guarantees  22 397 18 426 22 %      Export credits 5 043 4 782 5 %           1 Jan–30 Jun 2017 1 Jan–30 Jun 2016 Change % Net interest income and net fee and commission income, MEUR 90 93 -4 % Operating expenses, MEUR 23 25 -8 % Operating profit, MEUR 60 -7,4 913 % Profit for the period, MEUR 57 -6,9 929 %           30 Jun 2017 31 Dec 2016 Change % Balance sheet total, MEUR 9 986 9 498 5 % Equity, MEUR 1 264 1 207 5 %  -of which non-restricted reserves, MEUR 1 012 955 6 %           30 Jun 2017 31 Dec 2016 Change %-point Equity ratio, % 12,7 % 12,7 % 0,0 Capital adequacy, Tier 2 , domestic operations, % 23,1 % 22,5 % 0,6 Cost-income ratio, % 25,4 % 27,0 % -1,6 The Group’s profit for January–June 2017 was EUR 57 million, as against a loss of EUR 7 million during the corresponding period the year before.The main reasons for the improvement of financial performance from the previous year were the smaller losses from export credit guarantee operations and the smaller provisions for losses recorded by the parent company, Finnvera plc. In January–June, export credit guarantee losses and provisions for losses totalled only EUR 2 million, whereas the losses entered and the provisions made in the reference period amounted to EUR 66 million. In the report period, the Group’s guarantee losses and provisions as well as impairment losses on loans amounted to EUR 9 million (65 million), or EUR 57 million less than during the corresponding period the year before. The entries for impairment losses and provisions for losses are estimates. Their amounts may change even substantially as the volume and accuracy of information increase.Apart from smaller guarantee losses and provisions, the gains from items carried at fair value contributed to the Group’s improved performance during the period under review. These totalled EUR 3 million (-10 million). The increase in gains from items carried at fair value was mainly attributable to changes in the fair values of derivatives, liabilities and venture capital investments.In addition, financial performance was improved by the decrease of 8 per cent, or EUR 2 million, in operating expenses. Above all, the lower operating expenses were the result of a decrease in personnel, lease and property expenses.The profit of the parent company, Finnvera plc, stood at EUR 53 million (-7 million) in the period under review. The profit was broken down by the divisions as follows: Large Corporates accounted for EUR 40 million (-17 million) and SMEs and Midcap for EUR 13 million (10 million). The subsidiaries had an impact of EUR 4 million on the Group’s profit for the period (0.1 million). Finnvera Group H1/2017 H1/2016 Change Change 2016   MEUR MEUR MEUR % MEUR Net interest income 23 27 -3 -12 % 50 Fee and commission income and expenses (net) 66 67 -0,3 -1 % 144 Gains/losses from items carried at fair value 3 -10 12 127 % -20 Net income from investments -0,5 0,1 -0,7 -496 % 0 Other operating income 0,6 0,2 0,4 202 % 12 Administrative expenses -22 -22 -0,4 -2 % -44 Depreciation and amortization -0,8 -0,7 0,2 25 % -2 Other operating expenses -1,0 -2,6 -1,6 -61 % -4 Net impairment loss on financial assets -9 -65 -57 -87 % -66 Impairment loss on other financial assets 0 0 0 0 % -2 Operating profit 60 -7,4 67 913 % 69 Profit for the period 57 -6,9 64 929 % 70 Outlook for financingIt is expected that the demand for export credit guarantees and export credits provided by Finnvera will continue to be strong. Total volumes will be largely dependent on individual major projects, especially in shipbuilding and telecommunications. Large corporations’ trade negotiations requiring long-term financing often take a long time, and we do not foresee any significant changes in the demand forecast previously.More often than before, demand focuses on Western industrialised countries, which indicates the importance of long-term financing in the export of capital goods. Ships, telecommunications and the forest industry are still expected to account for the bulk of demand associated with large corporations’ exports. Among Finnvera’s major country exposures, Russia has shown signs of modest economic growth. It is also believed that demand for export credit guarantees will pick up when compared against previous years. Despite the problems in the Brazilian economy and administration, demand for guarantees is expected to continue and focus widely on different industries. New demand is also visible in the Middle East region.Driven by Finland’s good economic growth, the demand for and granting of Finnvera’s SME financing are expected to pick up speed towards the end of the year. In the first half of the year, an increasingly large percentage of the financing was granted to growth enterprises. Launched in 2016, the volume of loans guaranteed for banks by the European Investment Fund (EIF) increased, as did Finnvera’s partial guarantees. During the first six months of 2017, the volume of partial guarantees tripled, to about EUR 24 million, when compared to late 2016. This predicts that demand will continue to be strong.The campaign to accelerate transfers of ownership continued in the first half of 2017. The number of transfers of ownership financed during the first six months was record high when compared to previous years. The demand for financing for transfers of ownership is also expected to continue at a good level for the second half of the year.With respect to financial markets, it is likely that the trend in demand for both export financing and domestic SME financing will remain at the present level for the second half of 2017 as well.CEO Pauli Heikkilä:“Judging by the demand for Finnvera’s export credit guarantees and financing, it can be assumed that Finnish exports are reviving in other sectors as well. The barometer surveys published last spring also forecast rising investments and greater demand for financing in Finland, but this has not yet been seen as definite growth in the demand for Finnvera’s domestic SME financing. We assume the explanation to be that the Finnish banking sector operates well and can respond to the demand for financing on market terms. The economic outlook is good, and companies seeking financing are economically in a better shape than before, which may reduce the risk-sharing role sought from Finnvera. In addition, there is a new option: a guarantee granted by the European Fund for Strategic Investments, which banks can use as an alternative to Finnvera’s guarantees.The use of Finnvera’s authorisations means at the same time that the State’s total exposure associated with export financing has risen rapidly. However, it is worth noting that the increase in authorisations is associated with export deliveries taking place in the future. The growth of Finnvera’s real commitments based on current disbursements is clearly more moderate. Finnvera manages risks through careful analysis when granting credits and by constantly monitoring the exposure situation. According to the international assessment report commissioned by the Ministry of Economic Affairs and Employment and published in March 2017, the export financing system implemented by Finnvera in Finland is of a high standard, and risk management is on a par with the best international practices.Financially, Finnvera’s first six months of 2017 were strong. On the whole, our objective continues to be that Finnvera’s activities remain self-sustainable in the long term and that our activities are funded by proceeds from guarantee activities. Our statutory task is to bear credit risks that arise, for instance, from export transactions. The realisation of individual risks is impossible to predict in every respect.”Half-Year Report 1 January–30 June 2017 (PDF)Inquiries:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, CFO, tel. +358 29 460 2458

News
19.06.2017
Small and medium-sized export companies believe export values will increase this year

Finnvera’s new Receivables Purchase Guarantee speeds up the financing of small export transactionsHalf of Finnish SMEs engaged in exports believe that the value of their exports will rise this year. Equally many companies will also increase their investments in internationalisation. These are some of the findings of the SME Barometer Survey that was conducted this spring. The survey encompassed about 4,800 companies, of which 1,100 operate on the international market. However, export companies still face challenges in arranging financing for small export transactions and protecting themselves against export risks. In order to speed up financing, Finnvera has introduced a new Receivables Purchase Guarantee to complement the Bill of Exchange Guarantee and the Export Receivables Loan, which were launched a year ago.The Receivables Purchase Guarantee is typically applicable to continuous exports with a short payment period, when the export products are, for example, consumer goods, raw materials, services or semi-finished products. Finnvera bears the risks associated with financing and the bank is protected from the eventuality that the buyer fails to pay the invoice on the due date. The guarantee is granted directly to the bank that purchases receivables from its own client, i.e. the exporter, in connection with foreign trade.- The instruments used for financing small export transactions should be as simple and easy to use as possible for both the exporter and the bank. We continuously strive to develop our products so that banks would find it easy, with the help of our guarantees, to offer financing for even small export deals. For products aimed at contracts of under two million euros, Finnvera bears more of the risk itself and, by relaxing the terms, strives to speed up financing and promote the business opportunities of Finnish export companies irrespective of their size, says Minna Lindqvist, Development Manager at Finnvera.New products reduce the exporter’s and bank’s riskBoth the Receivables Purchase Guarantee and the Bill of Exchange Guarantee enable the exporter to grant payment time to the buyer while receiving the money for the transaction on cash terms. Both guarantees protect the bank against credit risks associated primarily with the buyer and the buyer’s country. A Bill of Exchange Guarantee can be granted for a payment period of up to five years and it is well suited, for instance, to an individual capital goods transaction, such as exports of machinery or equipment, whereas the Receivables Purchase Guarantee is suited to short payment periods. The products complement each other. For instance, Finnvera does not grant Bill of Exchange Guarantees for exports to Russia, but a Receivables Purchase Guarantee may be granted for this purpose.The Bill of Exchange Guarantee was launched a year ago, and its use is gradually increasing. Applicants for the guarantee include large, small and midcap companies that have exported primarily to European and South American markets. Calculated on the basis of the applications, the average contract value has been EUR 1.3 million. So far the smallest contract guaranteed by a Bill of Exchange Guarantee has been valued at EUR 200,000.  Only one in three export companies protect themselves against risksThe new products also provide exporters with additional means of protecting themselves against risks associated with export trade. According to the SME Barometer, Finnish SMEs export goods and services abroad at a high risk. As many as two thirds of export companies trust their customers’ ability and willingness to pay so much that they do not protect their sales receivables.This is the case even if a single credit loss may at its worst endanger the future of the entire company, especially if the company is just starting exports. Protection against export risks is also important now when exports are gaining momentum and the economy is at a very promising stage.- The more important and more tailored the transaction is for the company, the more crucial it is to protect receivables. We encourage export companies to contact us at an early stage of business negotiations if something about the export transaction puzzles them. We are glad to advise about selecting an applicable financing solution. Our goal is to help Finnish companies of all sizes to win contracts and protect themselves from risks associated with exports, says Lindqvist.Inquiries:Minna Lindqvist, Development Manager, Finnvera, +358 50 5267 639, firstname.lastname@finnvera.fiThe SME BarometerThe Federation of Finnish Enterprises, Finnvera and the Ministry of Economic Affairs and Employment jointly conduct an SME Barometer Survey twice a year. The barometer for spring 2017 is based on responses given by about 4,800 SMEs throughout Finland. Nearly 1,100 of the respondents are active on international markets.Read also:More about the Bill of Exchange Guarantee More about the Export Receivables Loan

News
14.06.2017
Russia’s desire to develop its own production may open markets for Finnish export companies

Russians now believe in cautious economic growth, says Team Leader Anu-Leena Koskelainen.Finnish companies’ increasing interest in Russian markets is reflected as more frequent inquiries at Finnvera’s Representative Office in St. Petersburg. The Russian economy has had a slight upturn. Despite challenges, this is opening opportunities for Finnish companies. Finnvera estimates that demand for financing for Russian trade will pick up this year.The following tip sounds like a cliché but is absolutely true: A company aiming at Russian markets must do its homework well.- In Russia, one cannot think that a good product sells itself. Relations and the trading partner’s trust are important, says Team Leader Anu-Leena Koskelainen of Finnvera.Koskelainen was appointed to lead the management of country and environmental risks in the Large Corporates Unit of Finnvera in April 2017. Before that she had worked as an economic and financial adviser at the Embassy of Finland in Moscow, where she had an excellent view of the development of the Russian economy for three and a half years. She was already familiar with Russia and its neighbouring areas from her previous career at Nordea Bank and its predecessors, and she also knew Finnvera through corporate finance.Compared to the situation in 2014–15, the economic outlook in Russia has improved. The sanctions imposed by the West and Russia’s own counter-sanctions have undoubtedly had an effect, but maybe not as great as had been predicted, Anu-Leena Koskelainen says.- When the economy shrinks, it must also grow at some point.  Private consumption, previously the engine of economic growth, is showing a slight upswing after a steep decline.  Russia’s foreign trade is increasing after having decreased for two or three years. A turn in sentiments took place in early 2017, and Russians now believe in cautious economic growth.Investments need machines and equipment exported by FinlandFinnish companies also have a more positive view of Russia than before. Although Russia has turned to a more protectionist direction and has an import substitution policy that favours domestic production, opportunities may open for Finnish export companies. For instance, the sanctions imposed by the EU on trade with Russia are still in force, but trade is possible when the sanctions are taken into account.- The development of Russia’s own production calls for investments, and these require technology from abroad. There is then a need for machinery and equipment, the greatest of Finland’s exports, Koskelainen says.Russia is a very noteworthy trading partner despite the fact that exporters must know the local conditions and authorities, get used to the bureaucracy and ponder their attitude to corruption.- Russia encourages foreign companies to shift their production to Russia. Export trade, in turn, is easier without having to become established. However, there are challenges: finding partners; trust; and how to secure receivables from the goods sold.- Among established partners, trade is generally conducted against an invoice. Finnish exporters can insure their receivables from a foreign buyer by means of Finnvera’s export receivables guarantee which is well suited to the short-term exports of raw materials and consumables. At the moment Finnvera is covering credit risks connected to over 100 Russian buyers. When there’s a crisis in Russia, advance payments are common. Then the buyer must trust the seller. A letter of credit is often used to secure receivables, but in Russia it is also a financial instrument.No change in economic policy is foreseen for the next few yearsRussia’s economy is troubled by structural problems, such as the state’s strong role, a low productivity of work and demographic challenges. However, major changes in economic policy are hardly likely before the presidential election in March 2018. In recent years, funds collected from oil revenues have been used to cover the budget deficit.- The budget deficit is one of the biggest problems in the economy. In an economy dominated by the state, this affects the allocation of resources.  Now that the economic outlook is better, it is not absolutely necessary to carry out extensive reforms.From the Finnish perspective, Russia is near and geographically huge, when compared against many other export markets. Even though there are problems, Russia has improved its ranking in the Doing Business comparison conducted by the World Bank on business regulations.--“Inquiries keep coming about how Russia is doing”After a break of a few years, Finnish companies are again interested in trading with Russia.- Many clients inquire generally about the market and how Russia is doing. This is a positive feature. It’s also positive that more Russian tourists are again coming to Finland this year, giving a boost to Finnish business on this side of the border. The purchasing power of the rouble against the euro has improved, which makes Finland a more attractive destination for Russian tourists, says Timo Pietiläinen, Head of Finnvera’s Representative Office in St. Petersburg, who has been managing Finnish companies’ relations in the St. Petersburg area for about ten years. During this time, he has been stationed in St. Petersburg for a total of seven years. - I act as Finnvera’s eyes and ears in St. Petersburg, he says, characterising his role.Finnvera’s financing for exports to Russia kept rising in 2014–15, when Finnvera’s exposure in Russia increased 1.5-fold. Since then, the exposure has diminished slightly because Russians are paying back their loans.Tools for networking and efficient expert servicesAccording to Pietiläinen, the Finnish SMEs that invest in Russia at present are primarily those that already know Russian markets as exporters or that are already established in Russia. A production line in Russia helps a company now that Russia is restricting imports from outside its customs territory.Even now, many Finnish companies engaged in the building product industry, wood processing industry and the service sector are operating in Russia.In Russia, Finnvera works in cooperation with Team Finland actors. They help companies to network and create contacts, and guide companies for instance in the use of local expert services.  After the initial phase, companies themselves manage most of their contacts with the authorities and other Russian cooperation bodies.In Northwest Russia, Finns have a good reputation as reliable trading partners. Most Finnish companies active in Russia operate in the St. Petersburg area. Knowledge of Finland is not as solid in Moscow or further away. The Astana Expo 2017, being held in Kazakhstan from June to September, will offer Finland the opportunity to raise its profile also outside Russia.Read also:Country classification and mapCredit risks in export trade

Articles
12.06.2017
The South American giant is ready for new growth

Finnish companies’ business deals with Brazil are traditionally very large. SMEs also have good export prospects.The tunes of the samba, Brazil’s national dance, are gradually turning from a minor key to a major key. The economy of the country with the world’s fifth largest population and area has emerged from the worst recession of its history. In 2015, the economy shrank by nearly four per cent, and last year was not much better.- Brazil has traditionally been a strong exporter of raw materials, but both the recession sparked by the global downturn and the political crisis have shaken the business environment in recent years. Modest growth is finally expected for this year, and more growth is predicted for next year, says Mika Relander, Senior Adviser responsible for Latin America at Finnvera.What’s more, statistics support Relander’s view. Brazil’s gross domestic product turned positive early this year. According to Relander, protectionism and bureaucracy still hold sway and issues related to corruption are in the public eye, but attitudes to free trade are gradually becoming more favourable. At the same time, the United States is going in a different direction.- Brazil has a huge internal market, and domestic demand has traditionally been the engine for economic growth. Demand has suffered slightly as unemployment has risen, but there has been a turn for the better even in that respect.Brazil has long been Finland’s most important trading partner in South America. Individual contracts are very large in monetary terms. Finnish exports to Brazil have mainly been machines and equipment for heavy industry, various chemicals and fertilisers. The country also offers enormous opportunities for the exports of SMEs.Relander points out that, with regard to Finnvera’s export credit guarantee exposure, Brazil is still among the three countries with the highest political risks.- Demand for guarantees is continuous and fairly extensive, even though it has been quieter than before in the pulp and telecommunications sectors. Investments in Brazil’s infrastructure are expected to pick up in the coming years. This will create opportunities for Finnish exporters, says Relander.Growth keeps Valmet in BrazilThe developing economy attracted Valmet to Brazil over 50 years ago.Valmet’s current focus in Brazil is on pulp production technologies and the associated automation and service solutions. During the past five years, Valmet has delivered two large pulp mills to Brazil. The value of the deliveries has been hundreds of millions of euros. In addition, Valmet has established service business in the region. At present, the company has about 500 employees in Brazil, divided among five locations. Bertel Karlstedt, President of Pulp and Energy at Valmet, says that Brazil’s economy and political system are much less stable than those in Europe.- The instability naturally has an impact on us and our customers. Brazil has had periods of strong growth, for instance from 2002 to 2011. On the other hand, the country has also gone through periods of recession, like those of the past couple of years. The business environment is still attractive to us, as we operate on global markets and seek growth in developing regions.Karlstedt says that much of the pulp produced by their customers is exported.- Our customers’ investments and profitability of business are largely dependent on global markets. The pulp mills built in Brazil during a period of over ten years have been among the world’s largest.According to Karlstedt, Brazil’s annual inflation has recently been around six per cent. However, in 2015 inflation exceeded ten per cent.- High inflation affects both wages and various supply contracts.Brazil has not been the easiest possible operating environment for Valmet. Competition among pulp technology suppliers is very stiff.- Valmet is one of the leading players in Brazil, but new competitors are also entering the market. We have developed both our own local production and production with a partner network. We must act in this way so that we can ensure competitiveness and, on the other hand, can pay import duties and taxes.Karlstedt remarks that the Brazilian administration has striven to steer production into the country by means of import duties and taxes.- There is pressure to dismantle duties. The internal situation in the country may also drive things to another direction.In Karlstedt’s opinion, a company planning to locate in Brazil should also be prepared for the fact that companies in Brazil bear social responsibility by investing in charity, especially in the company’s own operating area.- Valmet gives significant support to local charity organisations, such as Instituto Ayrton Senna and Instituto Ecofuturo. The goal of the programmes supported is to promote basic education and environmental protection. In addition, we have donated old computers to a school and collected funds for a daycare centre.FACT: Brazil The country category determined by Finnvera for Brazil’s credit quality is 5/7 (questionable credit quality). Gross domestic product: About EUR 1,603 billion (2015). Finland’s gross domestic product is EUR 207 billion (2015). Gross domestic product per capita: EUR 7,838 (2015). Finland’s gross domestic product per capita is EUR 37,827 (2015). Economic growth: -3.6% (2016). The growth expected for this year is 0.6 per cent. Inflation: 10.7% (2015). Exports: EUR 170 billion (2015). Imports: EUR 152 billion (2015). The total value of Finnish exports to Brazil in 2016 was about EUR 381 million. Principal sectors: agriculture, mining industry and pulp industry. Currency: Brazilian Real: The exchange rate is EUR 1 to BRL 3.3. Links:Country classification and mapExport Credit GuaranteesSources: Ministry for Foreign Affairs, Focus Economics, Finnish CustomsMain photo: Mika Relander, Finnvera

Articles
09.06.2017
Financing and an export credit guarantee decided a crushering and screening plant deal in Oman

On the competitive international market, financing associated with export trade may give a decisive edge to a Finnish player. The guarantee granted by Finnvera and financing offered by Nordea helped Metso to secure a contract in Oman, where Metso will deliver a crushing and screening installation to Al Tasnim, a local cement company. The project is underway and the first equipment deliveries were made in February 2017.This is Metso’s first contract for the delivery of an entire crushing and screening plant to Oman, after a break of many years. It is also the first deal in Oman that was decided with the help of a buyer financing arrangement.Metso gave Al Tasnim an offer where export financing covered 85 per cent of the price of the export contract. The financing was provided by Nordea, and Finnvera covered the credit risks by means of a Bill of Exchange Guarantee.The Bill of Exchange Guarantee covers the credit risks arising from the buyer and the buyer’s country. The most typical risk is the buyer’s insolvency, i.e. bankruptcy.The Bill of Exchange Guarantee is well suited, for instance, to individual capital goods transactions, such as purchases of machinery and equipment. The exporter and the buyer agree in their negotiations that the buyer pays the purchase price on credit terms and the debt instrument is a bill of exchange. The exporter receives the payment in cash and the buyer repays the credit to the bank in accordance with the payment schedule agreed. Finnvera gives the bank a Bill of Exchange Guarantee, i.e. compensates the bank if the buyer is unable to repay the credit.- The Bill of Exchange Guarantee is feasible as a guarantee when the buyer and the buyer’s country are creditworthy and the buyer’s country has working legislation on bills of exchange. The Bill of Exchange Guarantee has the challenge that preparations must be started at a fairly early stage of the transaction. While the exporter and the buyer are negotiating about the product, the financier’s representatives are analysing the terms of financing and the risks associated with the transaction, Eeva-Maija Pietikäinen, Head of Trade Finance at Finnvera, explains.Finnvera has developed the Bill of Exchange Guarantee and wants to promote its use in projects lasting at most five years and valued at a few million euros. In the Oman contract, the buyer’s repayment period for the bill of exchange is three years.- From the perspective of competition, an equally matched trading partner offering financing has an edge over a competing enterprise if the latter is unable to offer a comparable financing package. In international competition, the aim of export credit guarantees is always to promote the competitiveness and exports of Finnish enterprises, says Pietikäinen. The successful Oman contract is a good example of cooperation between the exporter, the export credit agency and a commercial bank.- Winning a competition is based not only on the solutions we offer but also on seamless cooperation between sales and financing. We are committed to lowering buyers’ threshold for signing a deal by ‘meeting them halfway’ in terms of financing. I appeal to our sales teams across the world so that they really listen to customers in order to understand what would ease their customers’ pain during the purchase process, says Olli Kellokumpu, General Manager, Sales and Services, Metso Minerals, Middle East and Eastern Africa.More information about Finnvera's export credit guarantees.Read more about the Bill of Exchange Guarantee.

News
19.05.2017
The credit and investment insurance industry important in sustaining economic growth

Export credit and investment insurers are optimistic about growth, despite increasing trade risks and political uncertainty. Berne Union members’ business closely tracks developments in the world economy, but at the same time shows considerably less volatility, says Berne Union President and Deputy CEO of Finnish ECA, Finnvera, Topi Vesteri. The Berne Union is an association for the global export credit and investment insurance industry.According to Vesteri this shows how important the credit and investment insurance industry is to sustaining economic growth.–Last year Berne Union members insured 11 % of total world trade and have paid over USD 40 billion in claims since the beginning of the global financial crisis in 2008. Although we have seen some high claims, these are well within tolerable limits for our business, Vesteri says.The Berne Union held its Spring Meeting in Copenhagen in May.Danish Minister of Finance, Kristian Jensen, addressed attendees to the meeting in a speech highlighting the importance of global free trade in promoting growth, prosperity and peace. The former Danish Minister of Foreign Affairs, Uffe Elleman-Jensen, stressed that “international cooperation and cohesion are more needed than ever before” to restore public trust in international institutions.Additional information:Topi Vesteri, Deputy CEO, Finnvera, + 358 29 460 2679Berne Union's Press Release 19.05.2017.The Berne Union Website.

Articles
02.05.2017
Nearly everyone is now excited about Argentina

Energy and telecommunications sector companies in particular are attracted to the country.Having overcome its debt problems, Argentina has aroused interest among more and more export companies. For a long time, the country was out of range for Western financiers but now it attracts, above all, energy and telecommunications sector companies.- Argentina’s new Government is pro-business, and it seems that the country’s foremost companies are able to obtain money from the bond markets at a competitive price. This has created a situation where nearly everyone is enthusiastic about Argentina, says Mika Relander, Senior Adviser responsible for Latin America at Finnvera.According to him, there are many investment needs. Apart from the energy and telecommunications sectors, there is demand for developing infrastructure and for the mining and wood processing industries.- Argentina’s economy is also advanced enough to attract Finnish companies engaged in the exports of services and education, Relander says.Basic structures in placeRelander believes that positive developments will continue in Argentina even if the political risk is high.- The economy was weak for a long time because of unpaid debts, but recovery has been surprisingly quick. It’s good to remember that Argentina was one of the world’s richest countries until the 1950s. The level of education continues to be the best in Latin America, and the institutional basic structures still exist. Compared against many other countries, such as Iran, Argentina may be a more approachable new market area, says Relander.In the wake of the debt restructuring agreement concluded by international creditors in the Paris Club, Argentina’s country risk category rose from the weakest category to 6/7.- At present, Argentina has little public debt because it was not eligible for debt before. It’s now relatively easy for the country to get credit. The resulting concern is that important reforms aimed at restructuring the economy will be postponed and positive development is delayed, Relander ponders.He believes that many financiers are still cautious and are waiting to see how the country’s political development will continue after the next elections. The presidential and parliamentary elections, important for the future direction of Argentina, will be held in 2019.- Financiers have a long memory and most remember the old problems that arose when borrowers did not meet their payments. However, Argentina is a good example of how democracy sooner or later corrects itself.An explosion of ordersThe opening of the markets has also kept Wärtsilä, a supplier of power plants, busy in Argentina.Tuomas Haapakoski, Director, Financial Services at Wärtsilä, says that the company’s order book multiplied in Argentina following the opening of the country’s markets.- We made the decision to be present in Argentina many years ago and we have had a subsidiary there since 1997. At present, our power plant solutions are really in great demand, says Tuomas Haapakoski, Director, Financial Services at Wärtsilä.Last year, Wärtsilä won seven orders for power plants in Argentina. The combined output of the plants is over 500 megawatts, and the orders will multiply Argentina’s power plant capacity in one go. This also opens up possibilities for growth in maintenance services.- The orders are connected to management of the country’s acute energy crisis, where the government strives to cover the capacity deficit accumulated over the years and to curb the rising costs of power production. The power plants to be delivered now will be built to a fast timetable and will serve primarily as first aid. The opportunities in this sector will certainly rise, says Haapakoski.According to him, the situation in Argentina has quickly turned positive for foreign actors.- For example, currency regulation has been relaxed and energy policy has been developed in a direction that encourages investments. On the financial markets, Argentina has been able to break the isolation that continued for years, and the country is currently working with reasonable openness, Haapakoski says.FACT: Argentina Finnvera’s country risk category for Argentina is 6/7. Gross domestic product: About EUR 402 billion (2015). Finland’s gross domestic product is EUR 207 billion (2015) Gross domestic product per capita: EUR 9,653 (2015). Finland's gross domestic product per capita is EUR 37,827 (2015). Economic growth: 2.1% (2015). Inflation: 26.9% (2015). Exports: EUR 52.2 billion (2015). Imports: EUR 55 billion (2015). The total value of Finnish exports to Argentina in 2015 was about EUR 15 million. Principal sectors: Industry, services and agriculture. Argentina’s main export products are soybeans, oil, gas, and vehicles. Currency the Argentine Peso: The exchange rate is EUR 1 to ARS 16.0. More information about Finnvera’s export credit guarantees is available here.Sources: Ministry for Foreign Affairs, Focus Economics, Finnish Customs

Articles
19.04.2017
Financing for exports of services requires creative solutions

Finnvera’s support enabled us to take risks abroad, says Roope Heinilä, CEO of Smarp.It has long been predicted that services will save Finland’s exports. Services related to information technology, in particular, are growing rapidly and account for over 40 per cent of all exports of services, which total nearly EUR 18 billion year 2015.The only security that a company providing services generally has is its cash flow.According to Finnvera’s experts, exports of services require much more creative financing solutions than traditional exports of goods.- Often a company incurs costs before it has even started to produce the service. While an exporter of goods can use, for instance, machines and equipment as collateral, the only security in exports of services is often the company’s cash flow, says Finance Manager Jani Tuominen of Finnvera.This is a vital difference when negotiating for financing.- In exports of services, we concentrate on earnings and business logic. Attention is paid, among other things, to the agreements that the company makes and the type of cash flow it has, Tuominen continues.When exporting goods, it is often simpler to find a solution for financing.- When goods are exported, we can usually look at the company’s history. The company’s financial statements and key indicators reveal how it has exported similar products before. With an exporter of services, we cannot necessarily see the same from the periodic key figures, Ilkka Soininen, Finance Manager responsible for the exports of goods at Finnnvera, explains.A vacillating lineThe rise in exports of services does not show all that clearly in Finnvera’s statistics because, increasingly often, exports of services are included in exports of goods. Finnvera always tailors financing solutions to suit each individual enterprise, which means that the security for exporting goods and the security for exporting services do not necessarily differ from each other.- At present, the services exported are really diverse, as many companies engaged in traditional trading in goods also sell services. For instance, companies in the machine and equipment industry sell maintenance for the equipment, Tuominen says.In his view, the rise in exports of services is due in part to the economic situation. In addition, the market has changed, and more and more services are sold.- Exporters of services usually need a steady presence on site in the buyer’s country. This is especially true for large markets, such as the United States, where many service companies wish to gain a foothold. Singapore, the modern hotspot for business in Asia, also attracts exporters of services.Growth by taking risksSmarp, a software company specialised in employee communication, has been exporting its services for over four years. Finnvera’s support has played an important role for this service company since its inception as a start-up.- Financing has enabled us to take risks, and without risk we wouldn’t have been able to grow, says Roope Heinilä, CEO of Smarp.Smarp has now over 50 employees.According to Heinilä, Smarp has entered international markets by establishing its own offices, by distributing through local partners and by selling their product directly from Finland. Exports have required help, especially when the company has founded offices abroad.Aside from Helsinki, Smarp has now a foothold in Stockholm, London and New York. Next, the company will look to Asia.- Above all, exports must be considered according to the target country. As an exporter, we want to be available on site when the goal is to meet potential customers face-to-face. For example, on the Indonesian market this has not been sensible so far, but in the UK it is vital.FACT: Export financingFinnvera has a wide selection of alternatives for loans, domestic guarantees and export credit guarantees, which can be used to assemble a suitable financing solution for the exporter. Finding a suitable financing solution always depends on each individual case. Loans. Short-term loans are often appropriate financing solutions for exporters or services and goods. For instance, the Internationalisation Loan is intended for financing a Finnish SME’s business abroad. Domestic guarantees. Guarantees granted by Finnvera can be used as security for loans received from banks and other providers of financing, as well as for other contingent liabilities. For instance, by means of an Export Guarantee, an exporter can acquire pre-delivery or post-delivery financing for working capital from a bank. Finnvera can guarantee, for example, accounts with overdraft facility, limits, and accounts with bank guarantee. Export credit guarantees. A Letter of Credit Guarantee protects a confirming bank against commercial or political risks associated with a confirmed letter of credit, whereas a Bill of Exchange Guarantee is best suited for transactions valued at less than EUR 2 million. The Export Receivables Guarantee is intended for short-term exports. It can be used by exporters to insure their receivables from a foreign buyer against credit losses. Text: Pi Mäkilä

Articles
12.04.2017
Flexible financing solutions increasingly important in export trade

International recognition to Finnvera for financing the world’s largest biomass-fired power plantThe arrangement of financing plays an increasingly important role in export trade negotiations, and this trend has gained strength in recent years. The more difficult and the more international the market an enterprise strives to enter, the more probable it is that the buyer sees financing as an edge in competition. The financing solution tailored for the world’s largest biomass-fired power plant, to be constructed in England, brought Finnvera the international Deal of the Year award. Flexible and innovative financing models were also commended by an international team of consultants that assessed Finnvera’s export financing.According to the assessment commissioned by the Ministry of Economic Affairs and Employment, the export financing system implemented by Finnvera in Finland is of a high standard. The international team of consultants considered that Finnvera’s management of risks and responsibilities is at an excellent level in international comparison. Finnvera manages risks both through careful analysis when granting credits and by constantly monitoring the exposure situation. Finnvera has acted in an innovative manner and, in response to demand, has introduced new products and service processes to the market.The assessment report published in March points out that, owing to the structure of Finnish industry, exports are strongly concentrated in a few sectors. This underlines the importance of Finnvera’s risk management system. Moreover, individual export transactions, such as orders for cruise vessels, may be very large.The key task is to support the Finnish exporter’s competitivenessA good example of a flexible financing solution tailored to local conditions is the project where Finnvera provided buyer credit financing for the design and delivery of a boiler plant by the Finnish company Amec Foster Wheeler Energia Oy for the world’s largest biomass-fired power plant in Middlesbrough, England.Construction of the power plant is in progress, and the plant is scheduled to begin commercial operation at the start of 2020. The 299 MW power plant will be fuelled by wood pellets and chips. Construction of the power plant is estimated to cost approximately GBP 650 million (about EUR 750 million). Finnvera’s share of the financing is roughly GBP 100 million (about EUR 115 million).The financing of biomass-fired power plants is challenging in England. One reason for this is the new type of business model. In this model, the proceeds from the plant are based on the CfD feed-in tariff used for renewable energy in the UK. The supply of fuel rests on long-term agreements. Long credit periods are another challenge for financing. The special needs associated with the project were taken into account in the financing solution of the MGT Teesside project, and the export credit agency played a pivotal role in the provision of supplementary financing.- The export credit is financed by Pension Insurance Corporation of the UK, and the credit risk associated with the power plant company is guaranteed by Finnvera. This is not a typical arrangement in a situation where an export credit agency is involved, but thanks to the solution, agreement on the power plant project was reached. We are very proud that this financing project brought Finnvera the Deal of the Year award at the international Trade Finance Awards event. It is especially important for us to support the success and competitiveness of Finnish exporters on international markets, says Executive Vice President Jussi Haarasilta of Finnvera.For more information: Finnvera to provide financing for a large biomass plant in the UKAn international assessment report gives Finnvera a good gradeLate in 2016, the Ministry of Economic Affairs and Employment commissioned a study on the responsibilities, risks and impacts involved in export financing.  The assessment was made by an international team of consultants that has solid experience of export financing. Represented on the team were two consulting firms – Antitrust&TradeRx GmbH (ATRx) and International Financial Consulting Ltd. (IFCL) – and Northumbria University.

Articles
11.04.2017
Norway – peeping out behind Sweden and focusing on the new

Norwegians don’t know all the things Finnish companies can do.Norway is seriously overshadowed by Sweden, if the indicator used is exports by Finnish companies. According to the statistics compiled by Finnish Customs, exports to Norway total about EUR 1.5 billion per year, whereas trade with Finland’s western neighbour, Sweden, is valued at nearly six billion.Companies’ enthusiasm to head for the Norwegian market has long been modest, even though Finns enjoy a good reputation in their neighbouring country.- Norwegians often turn their eyes elsewhere, not to Finland in the east. Success on the export market therefore requires local presence. Trade is based on trust. Many companies start exporting to faraway destinations, even though this involves challenges and requires a lot of money and time, says Regional Director /Norway Markus Laakkonen of Finnvera.- A company planning exports should look closer first. Surveys conducted among companies indicate that interest in neighbouring areas has increased. For instance, Norway has regularly ranked the 3rd or 4th as a destination of interest among Finnish companies, he continues.The traditional oil, gas and energy sectors have long attracted enterprises to Norway. Demand in seafaring, fishing and building has also increased lately.Norway is now looking boldly to the future. One example is the country’s strong input into electric vehicles: the Norwegian Government is planning to ban the sale of traditional diesel or petrol-fuelled cars by the year 2025.Laakkonen says that potential exists in many other sectors as well. Economic growth in Norway dipped last year, but according to forecasts, the gross domestic product will increase by about 1.7 per cent this year.Wealth also gives Norway leeway to make investments in infrastructure and health services.- Norway invests heavily in the reform of health services. Finnish healthcare companies would therefore be in great demand in Norway. Know-how and efficiency, in particular, are selling points for Finnish healthcare companies, Laakkonen points out.The blue economy is risingEven more interesting than economic growth is the increase in Norway’s population. According to population forecasts, Norway is one of the fastest growing countries in Europe.- When the population increases, new roads, transport solutions and schools are needed. This creates opportunities for Finnish companies because the natural conditions in Norway are very similar to those in Finland, says Ambassador Erik Lundberg.He believes that Norwegians are now looking to the sea, in particular.- Oil and gas supplies won’t last forever, and Norway must constantly seek new renewable energy solutions. Opportunities are seen especially in what is called the blue economy: the marine industry, the fish industry and the energy sector.The health sector is also reaching out to the sea. As one topic being studied at present in Norway, Lundberg mentions the health effects of seaweed.In Lundberg’s opinion, Finnish companies have been slow in seeking their way to Norway, because in both countries the other party is known rather poorly.- Norwegians don’t know what Finns can do, and vice versa. In numerous sectors, however, there are many points of contact and areas that would offer good opportunities for cooperation.Stiff competitionLundberg emphasises that the Nordic countries, in general, should have more cooperation. Some innovation cooperation has already been launched between universities.- For example, Slush has also been noticed in Norway, and interest in the Finnish start-up sector has risen.Except for the agricultural and food sectors, Norway is part of the EU internal market. Protectionism occurs mainly in those areas.- Norway is quite an open economy. However, it is good for a company dreaming of the Norwegian market to keep in mind that competition is fierce. One must show up well prepared, and solid trust must first be built with the locals.FACT: Norway Gross domestic product: About EUR 486 billion (2015). Finland’s gross domestic product is EUR 207 billion (2015). Gross domestic product per capita: EUR 93,270 (2015). Finland’s gross domestic product per capita is EUR 37,827 (2015). Economic growth: 1.6% (2015). Inflation: 2.3% (2015). Exports: EUR 105 billion (2015). Imports: EUR 71 billion (2015). The total value of Finnish exports to Norway in 2015 was about EUR 1.55 billion. Principal sectors: Industry and services. Norway’s main export products are oil, natural gas, machinery, metals, chemicals and fish. Currency the Norwegian Krone: The exchange rate is EUR 1 to NOK 9.16. More information about Finnvera’s export credit guarantees is available here.Sources: Ministry for Foreign Affairs, Focus Economics, Finnish CustomsRead more: The electric car boom attracted a Finnish company to Norway

Articles
11.04.2017
The electric car boom attracted a Finnish company to Norway

CEO of Parking Energy Ltd: Norwegians don’t have similar know-how in high technology.Norway’s heavy input into new technology, and especially into the development of electric vehicles, has also aroused the interest of Finnish companies working in this sector.It’s about time, too: only a handful of Finnish companies have been established in Norway. Currently, a couple of hundred Finnish companies operate locally in Norway. Despite its geographical proximity, Norway is only Finland’s 13th largest foreign trade partner.Parking Energy Ltd, specialising in the charging technology, looks to Norway with optimism. Jiri Räsänen, CEO of Parking Energy Ltd, sees huge potential on the Norwegian market.- Norway is the clear number one on the world’s electric car market, and it’s therefore only natural that we would head for the Norwegian market. With a population roughly the same as Finland, the country now has nearly 150,000 electric cars, says Jiri Räsänen, CEO of Parking Energy Ltd.One in five Norwegian cars runs on electricity, and the Norwegian Government is planning to ban the sale of traditional diesel and petrol-fuelled cars by the year 2025. For companies such as Parking Energy, the market is tens of times larger than in Finland. At present, there are only about 4,000 electric cars in Finland.Communication worksThe Helsinki-based company is also attracted by Norway’s purchasing power and the long-lasting building boom.- From our perspective, the situation is excellent, as there doesn’t seem to be as much competition in new products as there is in the traditional fields. Know-how of high technology is not quite the same as in Finland; nor is the corporate culture in the service sector as wide as, for instance, in Sweden, Räsänen explains.He feels that the Finnish company has been received well in Norway. Exports have been facilitated by the fact that a few other Finnish companies specialising in the recharging of electric cars have already acted as trailblazers.- So far the country has seemed very straightforward. It’s been easy in Norway to get to talk with the local decision-makers and representatives of the electricity sector. Dealing with the authorities is surprisingly similar to that in Finland, and contacts on the whole are very uncomplicated, Räsänen says.- Norway complies with the EU Directives on many issues, but owing to the Norwegian bedrock, electrical earthing is slightly different from elsewhere in Europe. With the exception of this minor hitch, we haven’t had any problems entering the market, he continues.FACT: Norway Gross domestic product: About EUR 486 billion (2015). Finland’s gross domestic product is EUR 207 billion (2015) Gross domestic product per capita: EUR 93,270 (2015). Finland’s gross domestic product per capita is EUR 37,827 (2015). Economic growth: 1.6% (2015). Inflation: 2.3% (2015). Exports: EUR 105 billion (2015). Imports: EUR 71 billion (2015). The total value of Finnish exports to Norway in 2015 was about EUR 1.55 billion. Principal sectors: Industry and services. Norway’s main export products are oil, natural gas, machinery, metals, chemicals and fish. Currency the Norwegian Krone: The exchange rate is EUR 1 to NOK 9.16. More information about Finnvera’s export credit guarantees is available here.Sources: Ministry for Foreign Affairs, Focus Economics, Finnish CustomsRead more: Norway - peeping out behind Sweden and focusing on the new

Press Releases
07.04.2017
Finnvera’s Annual General Meeting: Pentti Hakkarainen to chair the Board of Directors – new members on the Board of Directors and Supervisory Board

On 7 April 2017, Finnvera’s Annual General Meeting elected new members to the company’s Board of Directors and Supervisory Board.Pentti Hakkarainen, Member of the Supervisory Board, ECB Banking Supervision, was elected to serve as the new Chairman of the Board of Directors. Pekka Timonen, Director General, continues as the First Vice Chairman.The Second Vice Chairman is Terhi Järvikare, Director General, who was elected to the Board as a new member.Ritva Laukkanen, MBA, was also elected to the Board as a new member.The members continuing on the Board of Directors are Kirsi Komi, LL.M., Pirkko Rantanen-Kervinen, B.Sc. (Econ.), and Antti Zitting, Enterprise Counsellor.Antti Rantakangas, Member of Parliament, continues as Chairman of Finnvera’s Supervisory Board and Krista Kiuru, Member of Parliament, continues as Vice Chairman.The new members elected to the Supervisory Board are Pia Björkbacka, Adviser, Trade and Industrial Policy, andOlli Rantanen, Head of Legal Services.The members continuing on the Supervisory Board are Eeva-Johanna Eloranta, Member of Parliament, Lasse Hautala, Member of Parliament, Laura Huhtasaari, Member of Parliament, Timo Kalli, Member of Parliament, Kari Kulmala, Member of Parliament, Leila Kurki, Senior Adviser, Kari Luoto, Managing Director, Veli-Matti Mattila, Chief Economist, Ville Niinistö, Member of Parliament, Carita Orlando, CEO, Eero Suutari, Member of Parliament, Christel Tjeder, II Vice Chairman, Tommi Toivola, Senior Adviser, and Sofia Vikman, Member of Parliament.The Annual General Meeting adopted the Consolidated Financial Statements and the Parent Company’s Financial Statements for the period 1 January–31 December 2016, discharged the Supervisory Board, the Board of Directors and the Chief Executive Officer from liability, and approved the proposal made by the Board of Directors for the use of the parent company’s profits.KPMG Oy Ab was re-elected Finnvera’s regular auditor with Juha-Pekka Mylén, Authorised Public Accountant, as the principal auditor.Inquiries:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Risto Huopaniemi, Senior Vice President, Legal Affairs and Administration, tel. +358 29 460 2520

Articles
20.03.2017
A financier’s forecast: Five countries to get special attention from companies

India’s telecommunications sector is experiencing aggressive competition. Finnvera believes that export companies will set their sights this year on five countries, in particular.Among the new, opening markets, the greatest demand will focus on Argentina and Iran. In addition, demand for Finnvera’s guarantees is predicted to increase in India and Mexico. The fifth country on the list is Russia.In these countries, investments associated with the modernisation of infrastructure, in particular, will provide export opportunities for Finnish companies as well.- In India, for instance, export credit guarantees at their best exceeded 600 million euros, but exports have been declining during the past three years, says Senior Adviser Outi Homanen of Finnvera, who specialises in Asia.- However, it has been gratifying to note during the past six months that demand is picking up.She points out that Iran is in a different position from the rest of the quintet. The country is still subject to broad sanctions that hinder exports and restrict the financing of exports. Sanctions against Russia are not as restricting in this regard.Finnvera guarantees export credits granted to foreign companies so that Finnish enterprises can trade with them. One contract may involve hundreds of millions of euros. According to Homanen, Finnvera is needed especially when the repayment period of export credits is too long for the bank’s risk-taking.- In other respects too, the importance of guarantee institutions has risen in the 2010s. Banks are still cautious after the last economic crisis, Homanen explains.Demand for Finnvera’s export credit guarantees and special guarantees rose last year by 50 per cent, to almost EUR 15 billion. Demand for export credits, in turn, increased by as much as 74 per cent, to EUR 12.5 billion. In particular, the increased demand was driven by shipyards and the telecommunications and forest sectors.Risk assessments also on siteWith respect to export credit guarantees, Finnvera’s task is to understand what is happening on the market, while also assessing risks. Some risk assessments are conducted on site.Last year, Finnvera’s representatives together with client enterprises in the telecommunications sector alone visited India, Russia, Nigeria, Dubai, Mexico, Argentina and Brazil.In India, telecommunications operators have seen a fivefold increase in 3G and 4G customers within a few years. New competitors have emerged among the operators, such as the extremely aggressively campaigning Reliance Jio, which has operated in India for about a year.Reliance Jio was one reason why Finnvera and Nokia set off on a joint trip to India last autumn.- India has always been an extremely competed and price sensitive market. With many people, the volumes are large. Major investments for operators are now underway in India. For instance, the 3G network is being updated to a 4G network. Such situations often require discussions on financing, which Finnvera is also asked to attend, says Finance Manager Antti Saviaho, who is responsible for the telecommunications sector in Finnvera.However, not all local operators need export credit agencies.- Internationally large players often have access to their own financing options, Saviaho points out.During the visit last autumn, Finnvera met about half a dozen Nokia customers. Some of them were old customers, some newer acquaintances.- We had good meetings together with the exporter, and we got much additional information about the market situation in India. We actually met all of the operators, and it was interesting to note that they all saw the market situation and the related big changes in a slightly different way.According to Gergely Abraham, responsible for Asia Regional Treasury & Structured Finance at Nokia, Finnvera’s presence in the target country benefits all parties.- It is often vital for Nokia’s local customers and pivotal for Nokia’s competitiveness in terms of financing. In a way this is a question of highly efficient door-to-door marketing, which helps us to meet all the principal parties to the contract, Abraham says.FACT: This is how export financing operates Finnvera strives to ensure the competitiveness of Finnish companies on the export market by providing exporters and their financiers with an export financing system that is of the same level as in Finland’s main competitor countries. The buyer benefits from competitive financing terms. With regard to export credit guarantees, Finnvera’s task is to understand what is happening on the market. Trips taken together with clients help Finnvera to assess risks, improve Finnvera’s recognisability and promote Finnish exports. The service model is the same for all large exporters in various sectors. For granting export credit guarantees, countries are classified into eight categories on the basis of their assessed credit quality. Export credit guarantee activities are regulated by a number of international rules and agreements. Finnvera’s authorisation to provide export financing was raised at the turn of the year. The authorisation to grant export credit guarantees rose from EUR 19 billion to EUR 27 billion, while the authorisation to finance export credits and to provide interest equalisation rose from EUR 13 billion to EUR 22 billion. Each financing decision is always based on careful assessment and analysis. In addition, Finnvera assesses its portfolio on a regular basis. So far, operations have generated nearly EUR 1.8 billion in buffers to cover any losses that might be realised in the future. Read more about export credit guarantees hereRead more about export credits hereRead more about export credit guarantee products here

News
13.03.2017
Finnvera deepens cooperation with the European Investment Advisory Hub

 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 2531valtteri.vento@finnvera.fiwww.esir.fi

Press Releases
03.03.2017
Corrections to the Finnvera Group’s Financial Statements, the Report of the Board of Directors and the Statement on the Corporate Governance and Steering System

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)

Press Releases
28.02.2017
Financial Statements of the Finnvera Group 1 January–31 December 2016

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)

Articles
17.02.2017
Dubai thirsts for health and technology services

Stiff competition but almost endlessly opportunities on the marketDubai and Abu Dhabi of the United Arab Emirates (UAE) attract a growing number of Finnish enterprises. There is demand especially in the health and technology sectors.- The United Arab Emirates is a peaceful, stable and fairly predictable market area. Dubai and Abu Dhabi have great plans involving large sums of money, says Senior Adviser Jarkko Haapiainen of Finnvera.One of the most important plans concerns the generation of energy.One of the ten largest crude oil producers, the UAE plans to produce 75 per cent of its energy cleanly by the year 2050. Meeting this target requires the adoption of new technologies.According to Haapiainen, Dubai, in particular, is already dependent on imports of high technology.The health sector, in turn, is growing in the wake of health tourism.Dubai has the aim of becoming a leading health tourism city by 2021. At the same time, westernised lifestyles have brought with them lifestyle-related diseases. In consequence, the main goal of the UAE’s national agenda is preventive medicine.Build your networks firstAt present, the United Arab Emirates is Finland’s second largest export market in the Middle East, closely behind Saudi Arabia. About 50 Finnish companies have a registered office in the UAE. In addition, many Finnish companies operate there through local agents.Laura Strandberg, Finance Manager at Finnvera, cautions against rushing to the market in Dubai without good relations. Competition is truly tough because everyone wants their piece of gold in the Middle East.- Before breaking through in Dubai, a company must build a comprehensive network of relations. Building a network calls for patience and may easily take a couple of years. Relationships cannot be created by e-mail.Good partnerships are also needed for navigating through the local legislation, which is amended frequently. Credit insurance and the need for financing both before and during delivery are accentuated, since payment periods are long and the cash flow may be put to test.- On this type of market, it is essential to know the legislation. For example, at least 51 per cent of the ownership of a foreign company must be in local hands. However, a company owned entirely by foreigners can be established in an area known as a free zone. A local distributor is then needed for sales, Strandberg explains.Despite legal intricacies and competition, the United Arab Emirates have much potential, especially for Finnish SMEs.- There is plenty of supply, but at the same time everyone acts as a trailblazer for others. As an area, Dubai operates a bit like Singapore in the Far East. It’s a positive place for foreign operators.The situation in the Middle East is constantly changing. Having shed some of its economic sanctions, Iran is stepping up competition over investments. Qatar also has its own plans, especially for attracting tourists. In five years, Qatar will host the FIFA World Cup in football.The local distributor plays a key roleFootbalance, a company making custom insoles, launched exports to Dubai a little over a year ago.- Dubai is a really interesting market area because of the big money there, says Erkki Hakkala, founder of Footbalance.The first thing that Footbalance did was to draw up a comprehensive marketing plan with a local distributor; this helped the company to get started. The distributor was also helpful in building relations.- Among other things, we learned that setting up one’s own subsidiary is absolutely not what you do at first, Hakkala explains.According to Hakkala, cultural differences have also given rise to amusing situations, as the conversation culture in Dubai is very different from the Finnish one.- At one business meeting, for example, we spent all day touring with our local hosts. We went sightseeing and were offered a dinner with the whole local family. Only in the wee hours of the morning did we start talking about business.Hakkala still sees great potential for growth in Dubai and in the rest of the Emirates. At present, Footbalance has gained a foothold in two of the largest shopping malls in Dubai as well as in Abu Dhabi.- The situation looks good. The Emirates is a place where big opportunities may open really quickly. Help for getting started is available from the local Finnish community and expert organisations, Hakkala advises.FACT: United Arab EmiratesFinnvera has classified the United Arab Emirates into country category 2/7, which means good credit quality. Gross domestic product: About EUR 367 billion (2014). Finland’s gross domestic product is EUR 207 billion (2015). Gross domestic product per capita: EUR 39,579 (2014). Finland’s gross domestic product per capita is EUR 37,827 (2015). Economic growth: 3.1% (2015). Inflation: 3.6% (2015). Exports: EUR 349 billion (2014). Imports: EUR 225 billion (2014). Finland’s exports of goods to the UAE totalled EUR 263 million in 2016. Principal sectors: Services, tourism, construction and oil production. The UAE is among the ten largest producers of crude oil. The daily output is about 3.2 million barrels. Currency, the Dirham: The exchange rate is EUR 1 to AED 3.67. More information about Finnvera’s export credit guarantees is available here.Sources: Ministry for Foreign Affairs, Focus Economics, Finnish CustomsText: Pi Mäkilä

Press Releases
13.02.2017
Growth in sight – company acquisitions as accelerators for growth arouse interest

 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

Press Releases
16.12.2016
Finnvera to sell most of its holding in Seed Fund Vera Ltd

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

Press Releases
24.11.2016
Finnvera’s seminar discussed the State’s role in promoting exports

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

News
10.11.2016
Finnish companies need guarantees for over a hundred countries

Companies should pay attention to economic sanctions and currency shortages in some export destinations.In recent years, Finnish enterprises have been active in finding new export destinations where they need various financing arrangements.Finnvera has financial commitments or guarantee applications pertaining to 102 countries. As many as half of these are classified as exotic. Raija Rissanen, Vice President, Country and Bank Risks at Finnvera bases her definition of an exotic country on distance, culture and differences in operating environment.The new destinations have also aroused many questions that companies hope to have answered by financial institutions. In particular, the questions apply to economic sanctions and currency shortages.“These are fairly new issues for companies. If a company wants a pre-payment from the buyer, it’s worth considering which channels to use for the transfer. Banks do not accept money from all countries. Now there are also more and more countries that have profitable enterprises but cannot get foreign currency for paying their import invoices,” Rissanen lists.As examples of emerging economies that suffer from sanctions, Rissanen mentions Cuba and Myanmar. These countries have invested heavily in tourism. Russia and Iran are more traditional export destinations that are also subject to economic sanctions.Currency shortages, in turn, plague Nigeria, Egypt and Venezuela. Previously, Argentina also suffered from the same problem.Even though Finnvera has financial commitments in more than a hundred countries, Rissanen still finds many potential destinations where Finns are conspicuous by their absence.“For instance, the financial situation is good in small countries of the Caribbean and Asia.”Major changes in destinationsCommitments as such do not tell the whole truth about the destinations of Finnish exports. Rather, they indicate the priorities of guarantee and financing needs.There have been many changes in export financing since the start of the millennium. Apart from the emergence of exotic countries, virtually the whole top of the list has changed.“At the turn of the millennium the list was topped by China, Thailand and the Philippines. Now, Russia, Brazil and the USA are there. India and Turkey are also rising,” Eeva-Maija Pietikäinen, Head of Trade Finance, lists.In her view, the reasons are clear. China arranges the financing of orders itself, and Russia’s country exposure has accumulated after the mid-2000s. The rise of the United States, in turn, is an indication of large ship orders.“Exposure statistics reflect large projects that show in our records for years. Most of our commitments concern buyer credits. This means that the credit is granted directly to the Finnish exporter’s buyer-customer abroad. The bank provides the financing and Finnvera shares the risk with the bank,” Pietikäinen explains.“Such credits are often worth tens or even hundreds of millions euros,” she continues.The greatest figures are derived from telecommunications, orders for various machines and equipment, shipbuilding, the forest and energy industries, but the role of SMEs is accentuated in the number of transactions.According to Pietikäinen, to protect their sales receivables, companies use credit insurance and letters of credit for the smallest transactions SMEs have not yet found the newest countries where the economy is booming.“SMEs export mostly to European countries where companies must turn to private providers of credit insurance. EU legislation prohibits Finnvera from granting credit insurance for exports to European countries and a few countries outside Europe. From our point of view, Russia is the most active credit insurance market for SMEs,” says Pietikäinen.Finnvera’s outstanding guarantee commitments for export financing amount to EUR 16.5 billion.FACT: Protection mechanisms for SMEs It pays for SMEs to use secured payment terms when doing business, or to protect their sales receivables, in order to avoid credit losses. The most common protection mechanisms are credit insurance, letters of credit and the Bill of Exchange Guarantee. Credit insurance: Finnvera grants credit insurance directly to the export company. The exporter signs an agreement with Finnvera. The insurance is suited to continuous, short-term trading.EU legislation prohibits Finnvera from granting credit insurance for exports to European countries and a few countries outside Europe. See the list here.If the risks are realised, the insurance includes a self-risk portion of ten per cent. The company can seek compensation after a payment delay of 90 days provided that the claim is uncontested.Credit insurance also suits small transactions: For example, Finnvera has credit limits of EUR 10,000.Letter of credit: A letter of credit means that the buyer-customer’s bank undertakes in writing to pay the purchase price to the seller, i.e. the bank issues the letter of credit. Similarly, the seller has an agreement with its own bank, which confirms the letter of credit. The bank, in turn, can share the risk associated with a foreign bank with Finnvera by applying for Finnvera’s Letter of Credit Guarantee. In all cases, the exporter does not necessarily know that a Letter of Credit Guarantee has been used.Bill of Exchange Guarantee: A Bill of Exchange Guarantee is ideal for fairly small capital goods transactions and continuous exports.The bill of exchange serves both the exporter and the buyer because the exporter is paid in cash while the buyer is given payment time. Finnvera’s Bill of Exchange Guarantee, in turn, protects the bank from any credit losses that might arise.The exporter applies for the guarantee from Finnvera and submits credit data and financial statements on both the buyer and the guarantor, if any, over the past three to four years.It is essential that the financing is planned well in advance before the export transaction. In this way it is possible to select the payment method that suits each deal.Read more about the Credit Risk Guarantee and the Export Receivables GuaranteeAlso, read more about the Bill of Exchange GuaranteeSee Finnvera’s country categories hereText: Kimmo Koivikko

News
04.11.2016
Changes in Finnvera’s country risk classification: Argentina upgraded, Brazil downgraded

As a result of Argentina’s favourable prospects, the country’s risk classification has been upgraded to category 6/7. After an absence of 15 years, Argentina has returned to the international financial market. The new Government appointed late last year has settled the country’s old debt disputes and has been quick to launch political and economic reforms that lean towards the market economy.“Argentina’s economic situation is still fragile after a long period of economic isolation, but the direction is right. Thanks to recent developments, the country is again eligible for guarantees. The country’s economy is expected to show an upturn next year and the political situation is likely to remain relatively stable, although getting the entire economy onto a sustainable basis will still take time,” Senior Adviser Mika Relander reflects.Difficulties in the Brazilian economy are seen as greater risks, and the country’s risk classification has therefore been downgraded to 5. The slowdown of the Brazilian economy is already in its fifth consecutive year, and together with the political crisis, the outlook has remained uncertain. However, the worst is believed to be over in Brazil, and the economy is predicted to grow slightly next year. The new Government is also expected to make proposals for measures to invigorate the economy.“In the longer term, Brazil is a strong and diverse economy that has the prerequisites for emerging from the recession through domestic demand. However, to achieve stronger growth, Brazil needs both structural reforms and a favourable price trend for commodities important to the country’s exports,” Relander says.Brazil is Finnvera’s third largest market with a country exposure of about two billion euros.Country classification has an impact on the collateral requirements set by Finnvera for financing export trade. In its operations, Finnvera complies with the minimum premium rates determined by the country category.Finnvera takes an active part in the activities of the OECD group of country risk experts, which classifies countries at least once a year.See Finnvera’s country classification map.Additional information:Mika Relander, Senior Adviser, tel. +358 29 460 2725

Articles
02.11.2016
Companies strive to keep trade relations alive in Russia

A theme year may bring new opportunities for the cleantech sector. An upturn in the economy is anticipated.After the dismal past year, Finnish companies are anxiously awaiting positive signals from Russia.During this autumn, individual enterprises have actually had better news to report, but the road to the peak years is still long.Trade between Finland and Russia hit some sort of rock bottom last year, when exports fell by nearly one third on the previous year, to EUR 3.2 billion. In the best years of this millennium, the value of goods crossing Finland’s eastern border exceeded EUR 7.5 billion.According to Finnvera’s experts, the most positive feature of the Russian economy is that the bottom has been reached. Forecasting institutions predict that the economy will grow by about one per cent next year. Growth is fuelled by global oil prices, which also affect the rouble.“Inflation has slowed down and industrial production shows an upswing. In addition, Russia is experiencing a real tourist boom from Asia,” Senior Adviser Outi Homanen lists.In the same breath, she points out that the political situation adds uncertainty to forecasts.Timo Pietiläinen, Head of Finnvera’s Representative Office in Russia, has been surprised at how ready Russians have been to compromise on their own standard of living.In his view, a real change would require an annual growth rate of over three per cent.“Investments are virtually frozen. No economic reforms have been made. These are big problems in the long term,” Pietiläinen says.Pietiläinen is based in St. Petersburg, so he is well aware of Russian investment needs.Finnish companies are able to sell machinery and equipment, for example, to the food industry and agriculture. In addition, Russia needs subcontractors for the maritime industry.“Next year will be the Year of the Environment in Russia, which will open doors for cleantech companies. Otherwise demand focuses on fairly traditional sectors. However, it is possible to export products profitably from here to the Western market if labour and costs are in the local currency, but income is received in a foreign currency,” Pietiläinen believes.As good examples he mentions enterprises that have become established in Russia and specialise in the wood processing and building products industries.Present at difficult timesOn 20 October, the Finnish-Russian Chamber of Commerce held a Finnish Business event in Moscow, where 67 Finnish companies and business organisations were present. In all, the event was attended by about 400 guests.According to Executive Vice President Jussi Haarasilta of Finnvera, one message of the event was that Finnish companies strive to keep trade relations alive even in difficult times.“Russians are really cautious in their investments. Our exposure has decreased and we have good opportunities to help Finnish enterprises. The largest sectors from Finnvera’s perspective are ICT and the forest industry,” Haarasilta explains.Homanen shares Haarasilta’s view. Companies engaged in business with Russia know the local customs and trading partners well. There are few newcomers.“We receive inquiries but projects proceed very slowly,” Outi Homanen says.She recommends credit insurance for short-term trading.“Guarantees are granted for good buyers even though payment defaults have increased. We’re careful when determining the buyer’s creditworthiness.”Timo Pietiläinen also underlines the importance of having an expert on Russia if a Finnish company wants to do business with Russians.“It pays to ensure that the expert has up-to-date information. Know-how is quickly outdated,” Pietiläinen says.FACT: Russia Finnvera’s country risk category for Russia is 4/7, i.e. decreased credit quality. Credit insurance and medium-term and long-term export credit guarantees can be granted for Russia, taking into account the sanctions imposed by the EU. Gross domestic product: Approximately EUR 1,078 billion. Finland’s gross domestic product is EUR 207 billion. Gross domestic product per capita: EUR 7,501. Finland’s gross domestic product per capita is EUR 37,827. Economic growth: -3.7% (2015). The forecast for the current year is -0.9%–1.8%. Consensus forecast for next year +1.0%. Inflation: 12.9%. Exports: EUR 472 billion. Finland’s imports from Russia totalled EUR 6.0 billion. 73% of this were energy products. Imports: EUR 292 billion. Finland’s exports to Russia totalled EUR 3.2 billion. The largest group consisted of chemical substances and products (24.4%). Principal sectors: Agriculture (about 5% of the GDP), industry (about 40% of the GDP, including the coal, oil, gas, mining, chemical and metal industries) and services (about 55% of the GDP, including trade, repair services, real estate agencies and leasing services). Currency, the Rouble: The exchange rate is 1 euro to 68.6 roubles. More information about Finnvera’s export credit guarantees is available here.Sources: Statistics Finland, World Bank, Focus Economics, Finnish Customs.Text: Kimmo Koivikko

News
31.10.2016
Deputy CEO Topi Vesteri of Finnvera to continue as President of the Berne Union

Topi Vesteri, Deputy CEO of Finnvera, was re-elected President of the Berne Union – the International Union of Credit and Investment Insurers.The selection was made at the Annual General Meeting of the Berne Union in Lisbon. Chief Operations Officer Mandisi Nkuhlu of ECIC SA, the Export Credit Insurance Corporation of South Africa, was elected Vice-President.The Berne Union members include both State-owned export credit agencies and private and multilateral insurers of credit and political risks. The 82 members represent 73 countries, which together account for 90 per cent of the world’s population.In 2015, the Berne Union’s member organisations insured export transactions for a total of over USD 1.8 trillion.“The world trade volumes reported by WTO fell by 13 per cent between 2014 and 2015. The reason is the drop in raw material prices and the consequent highly cautious investment atmosphere. The increased geopolitical risks and economic sanctions have also had an impact on declining trade volumes. However, the volume of the Berne Union members fell considerably less, only by seven per cent. I consider this an indication of the Union members’ balancing role in world trade,” Topi Vesteri says.Since the onset of the financial crisis in 2008, the Berne Union members have provided USD 35 billion for indemnifying export companies and financing banks against risks.“However, when the premiums charged for risk-taking and the recovery of the claims paid are taken into account, the operations are profitable,” Vesteri points out.Additional information:Topi Vesteri, Deputy CEO, tel. +358 29 460 2676

Press Releases
27.10.2016
Trade relations between Finland and Iran to strengthen

Finland and Iran have signed a Memorandum of Understanding, which is the first step in efforts to facilitate the financing of Finnish companies’ export projects.For Finland, the memorandum was signed by Executive Vice President Jussi Haarasilta of Finnvera. The signing ceremony took place during the visit to Iran by the President of the Republic Sauli Niinistö.Haarasilta anticipates that Finnish companies will gradually have better export opportunities to Iran.“Following the dismantling of economic sanctions, Finnvera has already provided guarantees for trade with Iran. For us to be able to contribute to the financing of increasingly large business deals, both Finland and Iran must show strong commitment. The signing of the Memorandum of Understanding is an important step on this path. For this we are glad. Finnvera’s mission is to promote the exports of both small and large Finnish enterprises and to secure a competitive export financing system.”Haarasilta sees export opportunities for Finnish companies in several industries.“Cleantech, the bioeconomy and mining technology are good examples of industries important to Iranians where Finns have solid expertise. Infrastructure projects also have potential for Finland,” he assesses.Haarasilta points out, however, that monetary transactions with Iran still involve challenges.“An export company planning to do business in Iran should contact the bank and Finnvera as early as possible,” he stresses.Additional information: Jussi Haarasilta, tel. +358 29 460 2601Photo: The Memorandum of Understanding was signed in Tehran by Jussi Haarasilta (Finnvera) and Mohammad Khazaee (Organization for Investment, Economic and Technical Assistance of Iran). Photo credit: Juhani Kandell/Office of the President of the Republic

Articles
13.10.2016
SMEs should secure their sales receivables more effectively

Credit insurance and letters of credit help avert unnecessary credit losses, especially on exotic export markets.Most SMEs engaged in exports have rather weak protection against potential credit losses.According to the latest SME Barometer Survey, 15 per cent of export companies use credit insurance to secure their sales receivables. Nine per cent of respondents relied on letters of credit with payment time, while the same percentage used letters of credit at sight.Respondents were allowed to tick more than one answer to questions about financial instruments in export trade. Nearly 6,000 SMEs responded to the barometer published in mid-September. One in five engaged in exports or business abroad. Eeva-Maija Pietikäinen, Head of Trade Finance at Finnvera, recommends that SMEs secure their sales receivables, especially in what are known as exotic countries.“Credit insurance is the simplest means of protection and particularly well suited to continuous, short-term trading. We are also able to provide one-off policies, that is, insurance for a single transaction – something very important for small actors,” Pietikäinen says.Finnvera can grant credit insurance only for countries that are not encompassed by the EU rules on State subsidies.The insurance also includes a self-risk portion of ten per cent and the receivables must be uncontested.“The company can apply for compensation from Finnvera when the payment is 90 days overdue,” Pietikäinen explains.Dozens of destinationsA letter of credit is also suitable for protecting companies in short-term transactions. In a letter of credit, the buyer-customer’s bank undertakes in writing to pay the purchase price to the seller.Pietikäinen sees it as a challenge that some countries do not necessarily have a bank that could assume the responsibility for a letter of credit.“One answer is to use pre-payment, which means that at least some of the purchase price is paid upfront. This procedure can be applied, in particular, in the most exotic countries,” Pietikäinen says.Finnvera has commitments in 90 countries, half of which are classified as exotic.Raija Rissanen, Vice President, Country and Bank Risks, at Finnvera, bases her definition of an exotic country on distance, culture and differences in operating environment. The most exotic destinations where Finnish companies export their products backed by Finnvera’s guarantees include Burkina Faso, Trinidad & Tobago, and Malawi.Besides countries in Africa and South and Central America, the list contains countries in Asia and the Middle East.“Most of our commitments concern buyer credits. This means that the credit is granted directly to the Finnish exporter’s buyer-customer abroad. The bank provides the financing and Finnvera shares the risk with the bank. Such credits are often worth over a hundred million euros. Credit insurance and letters of credit are typically used for smaller transactions,” Rissanen explains.FACT: Protection mechanisms for SMEs It pays for SMEs to use secured payment terms when doing business, or to protect their sales receivables, in order to avoid credit losses. The most common protection mechanisms are credit insurance, letters of credit and the Bill of Exchange Guarantee. Credit insurance: Finnvera grants credit insurance directly to the export company. The exporter signs an agreement with Finnvera. The insurance is suited to continuous, short-term trading.EU legislation prohibits Finnvera from granting credit insurance for exports to European countries and a few countries outside Europe. See the list here.If the risks are realised, the insurance includes a self-risk portion of ten per cent. The company can seek compensation after a payment delay of 90 days provided that the claim is uncontested.Credit insurance also suits small transactions: For example, Finnvera has credit limits of EUR 10,000.Letter of credit: A letter of credit means that the buyer-customer’s bank undertakes in writing to pay the purchase price to the seller, i.e. the bank issues the letter of credit. Similarly, the seller has an agreement with its own bank, which confirms the letter of credit. The bank, in turn, can share the risk associated with a foreign bank with Finnvera by applying for Finnvera’s Letter of Credit Guarantee. In all cases, the exporter does not necessarily know that a Letter of Credit Guarantee has been used.Bill of Exchange Guarantee: A Bill of Exchange Guarantee is ideal for fairly small capital goods transactions and continuous exports.The bill of exchange serves both the exporter and the buyer because the exporter is paid in cash while the buyer is given payment time. Finnvera’s Bill of Exchange Guarantee, in turn, protects the bank from any credit losses that might arise.The exporter applies for the guarantee from Finnvera and submits credit data and financial statements on both the buyer and the guarantor, if any, over the past three to four years.It is essential that the financing is planned well in advance before the export transaction. In this way it is possible to select the payment method that suits each deal.Read more about the Credit Risk Guarantee and the Export Receivables GuaranteeAlso, read more about the Bill of Exchange GuaranteeText: Kimmo Koivikko

Articles
27.09.2016
Environmental impact assessment is an important part of export financing

A review of environmental risks also benefits Finnish export enterprises.Finnvera conducts an environmental review of all export projects undertaken by Finnish enterprises where the financial institution’s liabilities exceed EUR 10 million and the repayment period of the loan is at least two years.The recommendations have come from the OECD, and all OECD export credit agencies comply with them.When conducting an environmental review, Finnvera’s experts strive to ensure that the foreign investor adheres to the host country’s local legislation and meets international standards. The investor bears the principal responsibility for the background study. According to Lauri Etelämäki, Environmental Adviser at Finnvera, a review of environmental risks is standard practice and, at the same time, an advantage to Finnish export enterprises as it helps to avoid unnecessary damage to reputation.“Exporters are helpful and give us information about the investment. Sensitive areas involving, for instance, poor population groups or endangered plant or animal species, may exist anywhere in the world,” Etelämäki says.An environmental review encompasses the whole project even when export financing applies only to an individual delivery of equipment.Virve Tulenheimo, Finnvera’s second Environmental Adviser, emphasises that on the whole, an investment is not turned down because of environmental assessment.“The financier has the right to set terms for the credit agreement. Projects are so large that the investor usually wants to get things right,” Tulenheimo points out.Four different categoriesThere are four categories for environmental assessment: Categories A, B, C and non-project.Finnvera receives a few Category A projects per year. Category A means that the investment may involve significant environmental and social risks in the host country.“Examples are pulp mill projects, power plants and mines established abroad. In general, Finnish companies deliver larger sets of equipment for mills and plants,” Tulenheimo explains.She says that it takes months to assess a Category A project.-    “We also make an effort to visit the project site. The final guarantee decision won’t be made until afterwards,” says Tulenheimo.The small number of Category A environmental reviews indicates that Finnish companies have not gained access to large international industry investments. As a rule, companies use export credit guarantees as protection against potential credit losses.“It has been quieter in recent years. On the other hand, projects are increasingly massive. Ships and oil rigs have been excluded from the review, but we plan to include them in the future,” Etelämäki explains.The second highest environmental category, or Category B, includes, among others, power plants of less than 140 megawatts. Hospitals and mobile phone manufacturing plants are examples of Category C. Finnvera conducts 5 to 10 reviews for Category B per year and dozens of reviews for Category C.“Category B is the most difficult to assess, because the background materials are diverse. Projects in Category C have minor environmental impacts and don’t require background studies,” says Tulenheimo.The fourth environmental category, non-project, has a misleading name. It generally consists of replacement investments.Text: Kimmo KoivikkoFACT: What classification? By using export credit guarantees, exporters and providers of financing for exports usually want to protect themselves against credit losses that may arise when a foreign customer is granted payment time. If needed, it is also easier to arrange financing for a foreign customer to purchase the product if Finnvera covers some of the credit risks Finnvera grants guarantees for countries with adequate credit standing and assesses the creditworthiness of buyers and guarantors If Finnvera’s liabilities for guarantees exceed EUR 10 million or the loan repayment period is at least two years, the project always undergoes an environmental and social impact review In general, Finnvera’s project review encompasses the whole project even when export financing is granted, for instance, for an individual delivery of equipment The owner of the project company or the main supplier for the project is responsible for ensuring that the background studies are made or commissioned. The applicant for export financing is responsible for supplying the information to Finnvera Projects are divided into four categories: A, B, C and non-project Categories A and B: The applicant must provide Finnvera with a report of the assessment of environmental and social impacts. In Category A, impacts are assessed more broadly C and non-project: No background studies are needed A prerequisite for granting financing for Category A projects is that the information on environmental and social impacts is published 30 days before Finnvera signs the agreement on export financing. The relevant parties are asked to give their consent for publication. Read more about export credit guarantees.

Press Releases
13.09.2016
Companies’ perceptions of the availability of financing at a low level – financing on offer for profitable projects

The number of growth-oriented SMEs has increased since last spring, and the number of enterprises with a strong desire to grow has already reached the level that prevailed before the-financial crisis. Yet problems exist in the application for financing.The positive trend observed already last spring has continued and among SMEs, economic expectations for the near future are considerably more optimistic than before. The same trend is also visible in growth orientation: 11 per cent of enterprises already say that they have a strong desire to grow while 39 per cent seek growth according to their possibilities.Internationalisation is seen as the key avenue for growth. The number of SMEs with a strong desire to grow has already reached the level that prevailed before the financial crisis.The availability of external financing has not changed. Slightly more SMEs than before plan to apply for financing within the next year. On the other hand, one in ten respondents reported that they would have needed financing during the past 12 months but had not applied for it. Nor has the will to apply for internationalisation financing risen at the same rate as growth orientation.“About 80 per cent of enterprises that had applied for financing said that the terms or availability of financing had no negative impact on the implementation of projects. Since as many as one in ten do not apply for financing because they assume that availability, in particular, is poor, we must communicate to SMEs ever more clearly that financing is indeed available for profitable projects,” says Katja Keitaanniemi, Executive Vice President, SMEs at Finnvera.However, a positive signal of the functioning of the financial market is that 46 per cent of the enterprises that had not applied for financing – despite their needs – reported that they had in any case implemented their project according to plans.Expectations for exports and investments on the riseThe respondents to the SME Barometer Survey also have positive expectations for exports, and exports are assumed to increase steeply in all sectors. Financing is now sought for investments slightly more often than before, while the number of applications for working capital has decreased.The Federation of Finnish Enterprises, Finnvera and the Ministry of Employment and the Economy jointly conduct an SME Barometer Survey twice a year. The goal is to study the operations and economic environment of small and medium-sized enterprises. The barometer for autumn 2016 is based on responses from over 6,000 SMEs.SME Survey on The Federation of Finnish Enterprises websiteAdditional information:Katja Keitaanniemi, Executive Vice President, SMEs, tel. +358 29 460 2888Jonna Myllykangas, Communications Officer, tel. +358 29 460 2740

Press Releases
09.09.2016
Finnvera to provide financing for a large biomass plant in the UK

The world’s largest power plant fuelled solely by biomass will be built near the town of Middlesbrough, England. The circulating fluidised bed boiler and the flue gas cleaning system are delivered by Amec Foster Wheeler Energia Oy. Finnvera’s contribution to the financing of the project is GBP 100 million, or roughly EUR 120 million.The construction of the power plant is estimated to cost approximately GBP 650 million, or about EUR 780 million.Preliminary construction work for the MGT Teesside plant will begin within the next few months. Commercial operations are due to start during the first quarter of 2020.  The 299 MW power plant will be fuelled solely by clean wood pellets and chips.“We’re glad of this opportunity to contribute to the export of Finnish renewable energy technology. Finland has solid expertise in this type of renewable energy technology. Elsewhere in the world – surprisingly– it is still often perceived as something new,” says Tuukka Andersén, Vice President and Head of Underwriting at Finnvera.“Finnvera’s participation in the project enabled long-term financing of 15 years. This is a key factor if a project of this type is to succeed,” he adds.Jaakko Riiali, VP, Commercial Operations at Amec Foster Wheeler Energia Oy, the company delivering the power plant boiler, sees the project as a good bridgehead for large biomass boilers of the power company class in Central Europe. In addition, the project serves as an example for more northern countries as well, showing that biomass as well as fossil fuels can be used to fuel large baseload plants. “Finnvera’s inclusion in the financial arrangements gave stability to the negotiations and made it considerably easier to reach an agreement on project financing,” Riiali says.Fuel from responsibly managed forestsIn order to ensure the sustainability of fuel supply, the biomass-fuelled power plant uses fuel acquired from FSC Forest Management certified forest areas. FSC certification guarantees that the fuel is derived from responsibly managed forests.The price paid by the British government for electricity produced using clean biomass is considerably higher than the normal price of electricity. The purpose is to support the attainment of the targets set by the UK Government and the European Union for CO2 emissions and to promote the objective of reducing coal combustion at both small and large power generation units.Additional information:Tuukka Andersén, Vice President, Head of Underwriting, Finnvera, tel. +358 29 460 2688Jaakko Riiali, VP, Commercial Operations, Amec Foster Wheeler Energia Oy, tel. +358 40 585 1590

News
07.09.2016
Investments by internationalising enterprises finally on the rise

After a long decline, investments by enterprises seeking growth on international markets seem to have picked up in the first half of the year. The information is based on applications for financing that Finnvera has processed during the first six months of the year.“I think this is a good signal showing that enterprises feel more confident about investing. The change is particularly significant because the growth is based on intangible investments, such as research and development, and on various corporate reorganisations,” says Katja Keitaanniemi, Executive Vice President, SMEs.Intangible investments have in recent years accounted for 2 to 3 per cent of internationalising enterprises’ projects financed by Finnvera. However, during the first half of the current year, their share almost doubled. The amount of financing needed for corporate reorganisations also nearly doubled when compared against previous years.Keitaanniemi stresses the importance of intangible investments for developing long-term competitiveness.“When operating on international markets, Finland’s problem has been the relatively small company size, which means that the resources available are also small. When the company size increases, there are more opportunities to invest in international growth.“No single region or sector explains the growth in investments. The probable reason is therefore an increase in general investment activity,” Keitaanniemi presumes.The surveys conducted by the Federation of Finnish Financial Services and the Confederation of Finnish Industries also corroborate the positive trend. Despite the increase in investments, the working capital required by growth is still the greatest single need for Finnvera’s financing.Links:Growth > InvestmentsGrowth > Business operations abroadFill in the contact request form

News
31.08.2016
Good networks are priceless in Iran

Contacts helped a health technology company to find a retailer. Outotec, in turn, has been doing business in Iran for over 40 years.Networks and contacts may be important in Finland, but in Iran they can be the lifeline of success.NewIcon, a Kuopio-based company specialising in automation solutions for medicine supply, was able to sign their first contract in Iran thanks to a good retailer. The following contracts also largely depend on the local retailer.According to Marketing Director Jori-Matti Savolainen of Kuopio-based NewIcon, good contacts helped the company to find the right retailer in Iran.“We were warned that everything proceeds slowly in Iran – especially as our customers are hospitals, that is, the public sector – and so we were surprised at how straightforward everything has been in comparison to other Middle Eastern countries,” says Jori-Matti Savolainen, Marketing Director of NewIcon.The company from Kuopio has customers the world over, for instance in Russia, Poland, Israel, the United Kingdom, the United Arab Emirates, Denmark and Sweden. However, most of the roughly EUR 5.5 million in turnover still comes from Finland.NewIcon can thank the Chairman of the company’s Advisory Board for finding the retailer.“Through the retailer’s contacts, our CEO was invited to Iran, to get to know our end customers. They were impressed that he actually came. At the turn of the year, we invited a delegation to Finland and showed them around at other health technology companies, too,” Savolainen reminisces.He is amazed at how much the Iranians know about Finland.“Thanks to Nokia, Finnish technology is appreciated. Our contacts also know of top-class Finnish surgeons we have never even heard of,” Savolainen says.In Iran for decadesThe history of Outotec, a listed company, differs somewhat from NewIcon. The company has been in Iran since 1973 – 43 years now.Adel Hattab, Executive Vice President, Markets Unit at Outotec, says that conducting business in Iran requires much time and presence.Adel Hattab, Executive Vice President, Markets Unit, says that their customers appreciate the fact that Outotec did not leave Iran even in hard times.“We have been open with respect to Iran and everything is done with security first. The trade embargo was a difficult period. We have big teams ensuring that we don’t sell anything inappropriate,” Hattab explains.Outotec’s projects are associated with the concentration processes of raw materials and the refining of metals. The company designs, builds and maintains equipment.Having visited Iran dozens of times, Hattab says that Iranians value interaction and bilateral relations.“They are demanding negotiation partners and shrewd in seeking good deals for themselves. People need to be known at all levels, including political decision-makers. As customers, Iranians are loyal,” Hattab lists.Savolainen of NewIcon agrees with Hattab’s characterisations. The Marketing Director says that their company has also had tough contract negotiations with their retailer.There are other differences in the business environment as well.“Patience is required in Iran and aggressive selling does not work. You need to talk about this and that with people. The first day you talk about sports and the family. It’s not until there’s a suitable moment on the second day when you start talking business,” Savolainen explains.Hitches in money transactionsAt NewIcon, assessment of the risks in the Iran deals was more about sufficient resources and economic risks.However, both Savolainen and Hattab name a risk that is shared by all companies: financing.“Investments don’t live up to their potential when the financial market is not functional. I hope that the bank system would recover and reach the same stage on average as elsewhere. Customers have big problems with letters of credit,” Hattab points out.He continues that the willingness of Western banks to take risks also depends on the United States’ attitudes towards Iran.Jori-Matti Savolainen of NewIcon advises Finnish companies to conduct their business in euros. Nor is it good to rely on any particular bank.“In Iran you should monitor which bank handles foreign transactions at any single time,” Savolainen advises.Text: Kimmo KoivikkoMore information:Credit risks in export tradeCountry classification

Articles
23.08.2016
The owner is the determining factor

Different factors explain the success of small and large enterprises. According to studies, the company’s management is the most important factor for an SME. A large enterprise, in turn, has access to wider markets for management recruitment and, for instance, the option of transferring operations from one country to another to gain cost benefits. In consequence, for a large enterprise, the single factor having the highest correlation with the company’s success is simply its line of business. Since we at Finnvera have the opportunity to follow the stories of thousands of different enterprises and to observe the cause and effect relationships contributing to a company’s success – or sometimes, sad to say, its failure – I would claim that the owner is even more important for an SME than the management. Of course, these two are often the same person. But even when they aren’t, the owner has more direct influence over management selection and may intervene in the company’s day-to-day operations more than the owners of large corporations do. A good or a bad owner can be critical even for a large corporation – an example might be the revival of the Turku shipyard after its Korean owner was replaced by a German owner – but for an SME, the owner almost always has an absolutely pivotal role in the development and success of the Enterprise. Finnvera provides financing for over a thousand transfers of ownership each year. Statistics on the age structure of entrepreneurs reveal that the need for transfers of business to the next generation, and for business acquisitions, will continue at an exceptionally high level even for the next ten years. Surveys indicate that the principal bottlenecks are the matching of suitable buyers and sellers, accurate value determination and issues pertaining to taxation and law. Financing follows next. Together with enterprise organisations, Finnvera works actively to help eliminate all these bottlenecks. Throughout the country, we organise numerous events where buyers, sellers, experts in various fields and financiers can meet each other. Our goal is to ensure that as many enterprises as possible, after having been brought by their current owners along their own unique paths to this point in time, will find a good new owner who has the resources and the desire to continue in the future to the next success story! Pauli HeikkiläCEORead more about Finnvera's financing for transfers of ownership.

Articles
16.08.2016
The Silk Road is a good reason to take a look at Kazakhstan

Next year Kazakhstan will also host the Specialised Expo 2017. Protection of sales receivables is important.Finland may have a long land border with Russia, but it cannot rival with Kazakhstan in Central Asia.The border shared by Kazakhstan and Russia is no less than 6,500 kilometres long, and the border with China is measures 1,500 kilometres. The former Soviet republic is the world’s largest landlocked country, whose most famous ‘resident’ is probably the bumbling TV reporter Borat created by comedian Sacha Baron Cohen.Yet laughs end abruptly when the Silk Road is mentioned. Under China’s leadership, the ancient trade route is seeing a new prosperity, and Kazakhstan has a central location as a transit country.China has invested much prestige and tens of billions of euros to give new life to the Silk Road. An indication of the massive scale of the project, known as ‘One Belt, One Road’, is the fact that the Silk Road connects 64 countries covering an area that is home to 4.4 billion people.The aim is to create frequent train and airline connections as well as a road network between Europe and Asia.“China acts as the engine. Since the projects are really big, it may prove difficult for Finnish companies to get a foot in the door. Working as a subcontractor might be a more suitable role,” says Outi Homanen, Senior Adviser at Finnvera.Foreign companies are needed at least when planning and implementing infrastructure, transport, logistics, and information and communications technology.Homanen continues the list for Kazakhstan.“Kazakhstan has identified sustainable development as its goal, and the government supports renewable energy projects, for example. In addition, know-how in cleantech, education and mining attracts interest,” she explains.Next year in the spotlightIn other respects, too, Finnish companies should take a closer look at Kazakhstan. The reason is the Specialised Expo 2017 to be held next year in Astana.Finland will have its own pavilion at the event. More information on this topic is available here.“Participation in the Expo will entail much positive visibility and new opportunities for Finland, especially in the cleantech sector,” Homanen believes.Despite the Expo and the opportunities brought by the Silk Road, Finnvera classifies Kazakhstan as a high-risk country.The decline in oil prices has almost halved export revenue and inflation is soaring at over ten per cent. The value of the currency collapsed last year but is now more stable. The difficult financial situation has also accentuated the role of State-owned companies.Partly for these reasons, Finnish companies are not a familiar sight in Kazakhstan.“The business environment is challenging. It may therefore be difficult to predict how companies will behave. In general, timetables stretch. On the other hand, cash may be found if there is an urgency. It is highly important to protect receivables, and we recommend that letters of credit be used,” says Homanen describing the situation.A letter of credit is a written undertaking given by the buyer’s bank for the payment of the purchase price to the seller.Homanen also mentions the political situation as an additional question mark. Kazakhstan has only had one president, Nursultan Nazarbayev.“It’s very uncertain what will happen after him. One must be prepared for major changes,” Homanen muses.FACT: Kazakhstan in figuresFinnvera’s country risk category for Kazakhstan is 6/7. Kazakhstan is an important exporter of oil and gas. The country is also rich in other natural resources. The country’s indebtedness has increased in step with the collapse of oil prices, which weakens the income flow.Kazakhstan’s political situation is currently relatively stable. Finnvera’s country exposure is about EUR 10 million. When assessing country risk categories, Finnvera cooperates with the OECD group of country risk experts.Kazakhstan is currently a member of the World Trade Organization (WTO).Gross domestic product: EUR 110 billion (2015). In 2014, the GDP was EUR 185 billion. Finland’s gross domestic product is EUR 207 billion (2015).Gross domestic product per capita: EUR 6,230 (2015). In 2014, the gross domestic product per capita was EUR 10,600. Finland’s gross domestic product per capita is EUR 37,827 (2015).Economic growth: Forecast 0.1–0.7% (2016). The growth rate was 1% in 2015 and 4.3% in 2014.Inflation: 13.6% (2015).Exports: About USD 46 billion (2015).Imports: About USD 30 billion (2015).Principal sectors: Oil and gas industry, ore and metal industry. Kazakhstan is a Top 20 oil producer country. Oil production averages around 1.5–1.6 million barrels per day, or roughly the same as Norway. The world’s average oil production is 80 million barrels per day.Currency, the Tenge: The exchange rate is 1 euro to 376 tenges.Finnish citizens can travel to Kazakhstan without a visa when they stay for a maximum of 15 days. The visa waiver is limited in time and expires at the end of next year.More information about Finnvera’s export credit guarantees is available here.Sources: Statistics Finland, World Bank, IMF, Asian Dev Bank, Focus Economics.Text: Kimmo Koivikko

Press Releases
11.08.2016
The Finnvera Group Half Year Report 1 January–30 June 2016

A marked rise in Finnvera’s authorisations – performance slightly negativeDuring the period under review, the maximum amounts of export credits and export credit guarantees that Finnvera is authorised to grant were raised through legislative amendments. The main reasons behind the need to raise the authorisations were the steep rise in ship financing within the past few years and the increase in the volume of export projects undertaken for telecommunications and the forest industry. The Group’s performance for the first six months of the year was EUR 7 million in the red, owing to losses and provisions for losses in export credit guarantees. The negative result for the first six months of the year does not affect the realisation of the cumulative self-sustainability of Finnvera’s export credit guarantee activities.The need for funding increased alongside the greater demand for export financing sevices. The fixed-rate bond of EUR one billion issued by Finnvera in April was the company’s first euro-denominated bond with a maturity of ten years.In April, Finnvera and enterprise organisations launched a joint campaign to speed up transfers of ownership in SMEs. Various activation measures are applied to increase enterprises’ awareness of issues such as valuation and taxation. During the first half of the year, transfers of ownership financed by Finnvera showed a rise of 17 per cent when measured in euros.In line with the Government Programme, Finnvera introduced a new debt-based mezzanine financing product onto the market: the Growth Loan. The new product is intended for financing SMEs and midcap companies in major growth and internationalisation projects.Business operations and the financial trendDuring the period under review, demand for Finnvera’s export and special guarantees and export credits rose steeply on the previous year: 50 per cent and 90 per cent, respectively. In contrast, demand for SME and midcap financing fell by 17 per cent on the previous year.Although the demand for export and special guarantees rose, the offers given by Finnvera for export credit and special guarantees and for export credits fell by 76 per cent and 87 per cent, respectively. The reason for this was that some of the projects or their credit agreements were still being negotiated at the end of June. The amount of loans and guarantees granted to SMEs and midcap companies fell by 11 per cent when compared against the first half of 2015. Finnvera Group 1 Jan-30 June 2016 1 Jan-30 June 2015 Change % Offered financing, MEUR           Loans and guarantees 483 541 -11 %     Export credit guarantees and special guarantees 1 226 5 124 -76 %     Export credits 477 3 601 -87 %           30 June 2016 30 June 2015 Change % Outstanding commitments, MEUR           Loans and guarantees 2 322 2 285 2 %     Export credit guarantees and special guarantees 16 896 17 436 -3 %     Export credits 4 718 4 240 11 %           1 Jan-30 June 2016 1 Jan-30 June 2015 Change % Net Interest income both fee and commission income and expenses, MEUR 93 102 -8 % Operating profit, MEUR -7 56 -113 % Profit for the period, MEUR -7 55 -113 %           30 June 2016 30 June 2015 Change % Balance sheet total, MEUR 9 166 8 418 9 % Equity; MEUR 1 116 1 121 0 %   - of which non-restricted reserves, MEUR 865 871 -1 %           30 June 2016 30 June 2015 Change % points Equity ratio, % 12,2 % 13,3 % -1,1 % Capital adequacy, Tier 2, % 18,9 % 19,6 % -0,7 % Cost-income ratio, % 30,6 % 28,3 % 2,3 % The Finnvera Group’s financial performance for January–June showed a loss of EUR 7 million, as against a profit of EUR 55 million the year before. The result was EUR 62 million less than for the first six months of 2015.The principal factors affecting the negative result during the first half of the year were the increased losses and provisions for losses recognised by the parent company, Finnvera plc, for export credit guarantees. Losses on export credit guarantees and provisions for losses together amounted to EUR 66 million (2 million). During the period under review it emerged that the Brazilian Oi S.A. Group poses a risk that, if realised, might cause a loss that is currently estimated at about EUR 55 million. In consequence, the provisions for losses were increased during the period. Provisions for losses are current estimates. Their amount may still change considerably as more detailed information is obtained.The result of EUR -7 million recorded for the parent company, Finnvera plc, during the first half of the year (56 million), was broken down as follows: Large Corporates, EUR -17 million (48 million); SMEs, EUR 10 million (8 million).During the 17 years that the company has been in operation, the Group’s performance has been positive for all financial periods and, since the early 2009, for all six-month periods, until the recently ended period of January–June 2016. The parent company’s export credit guarantee activities have also been cumulatively self-sustainable throughout the company’s operations, even considering the negative result for January–June. Finnvera Group H1/2016 H1/2015 Change Change *2015   MEUR MEUR MEUR % MEUR Net Interest income 27 28 -2 -6 56 Fee and commission income and expenses (net) 67 73 -7 -9 141 Gains/losses from items carried at fair value -10 -6 4 63 -21 Administrative expenses -22 -22 0 1 -44 Other operating expenses -3 -3 0 -5 -6 Impairment losses, guarantee losses -65 -14 51 352 -15 Loans and domestic guarantees -15 -72 -57 -79 -87 Credit loss compensation from the State 15 60 -45 -74 83 Export credit guarantees and special guarantees -66 -2 64 - -10 Operating profit -7 56 -63 -113 114 Profit for the period -7 55 -62 -113 111 Outlook for financingIt is expected that demand for export credit guarantees and financing provided by Finnvera will continue to increase. Measured in euros, demand will probably continue to focus on cruise vessels, telecommunications and forestry. An internationally competitive export financing system plays an important role in these sectors, owing to the large scale of individual investments.New export markets have opened up, for instance, in Iran and Argentina. With opening markets, public financing sources, such as Finnvera’s export credit guarantees, are important for the realisation of export transactions. Among countries where Finnvera is exposed to risk, the situation in Brazil, Turkey and Russia is expected to remain uncertain. This will pose challenges to enterprises operating in these countries. On the other hand, Brazil’s and Russia’s weakened local currencies reinforce the operating conditions of export companies active in these countries. This may boost interest in investments and may provide export opportunities for Finnish businesses. The result of the British referendum on exiting the EU is likely to cause uncertainty in Europe for several years.During the first half of 2016, demand for Finnera’s SME financing was slower than a year ago. The financing granted was also at a lower level than the year before. During the first half of the year, Finnvera prepared the adoption of the Growth Loan, a new mezzanine financing product, and was getting ready to serve as an intermediary organisation for the European Fund for Strategic Investments. Together with the recently adopted programme on transfers of ownership, these developments are likely to increase the demand for and granting of financing in the latter half of the year.According to the estimate made in early 2016, the financial performance for the current year is likely to fall below that  for 2015. The negative result for the first six months of the year does not affect the realisation of the cumulative self-sustainability of Finnvera’s export credit guarantee activities.CEO Pauli Heikkilä:“Finnvera’s exposure figures have risen higher than ever before, and it is expected that demand for export credit guarantees and financing provided by Finnvera will continue to increase. It is important to ensure the functioning of our export financing system so that Finnish companies can compete over export deals on equally good financing terms as their competitors.With respect to SME financing, the growth in the volume of enterprise acquisitions has been gratifying. We shall continue our efforts to encourage transfers of ownership; the greater the number of companies that continue their operations, the better it is for the overall economy of Finland. New owners often bring development ideas and the wish to grow.The Team Finland network is under intense development. Improvement of the joint domestic service model will continue for the rest of the year. So far the feedback from customers within the scope of the service has been positive. Team Finland cooperation will get a boost in practice with the impending move of Finnvera, Finpro, Tekes and Finnish Industry Investment to joint premises in Team Finland House, in the Ruoholahti district of Helsinki.Finnvera’s statutory mission is to bear some of the credit risks that are inevitable in all export transactions. Some of these risks were realised during the first six months of the current year.”Half Year Report 1 Jan - 30 June 2016 (PDF)Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400 Ulla Hagman, Senior Vice President, CFO, tel. +358 29 460 2458

News
31.05.2016
The new financing model proves to be an immediate hit

During its first year, Finnvera’s Start Guarantee attracted applications for 1,600 financing projects. An entrepreneur considers the guarantee convenient for start-ups.Both banks and entrepreneurs have found Finnvera’s Start Guarantee, which has been in use for a little over a year.According to Team Leader Leena Waarna, banks have submitted applications for Start Guarantees to Finnvera for 1,600 financing projects.The bank applies for the Start Guarantee on behalf of the entrepreneur. In other words, the entrepreneur only deals directly with his own bank. Finnvera’s guarantee coverage can be at most 80 %. However, the total sum of Start Guarantees granted to one enterprise may not exceed EUR 80,000.“The Start Guarantee is also well suited for smaller projects, for instance from 30,000 to 50,000 euros in size. Therefore, entrepreneurs should not be discouraged even if they don’t have proper collateral for the bank,” Waarna says.She encourages starting entrepreneurs to contact local advisory services first. They have information, for instance, on competition in both the region and the sector involved.Companies’ initial costs and financing needs vary widely.A few tens of thousand euros is enough for the initial working capital for example in the service sector, whereas considerably more money is needed for investments in projects involving production.“Entrepreneurs are generally pretty good at calculating their expenses in advance. In contrast, turnover forecasts are easily over-optimistic. It is expected that turnover will start to accumulate quickly, and payment schedules are drawn up accordingly,” Waarna says.“Realistic overall calculations and correctly dimensioned credit with its repayment periods help the fledgling entrepreneur to avoid the worst pitfalls,” she continues.A faster startTuure Parkkinen, an entrepreneur from Helsinki, praises the Start Guarantee lavishly.“The Start Guarantee was unusually easy because the bank filed the application for us. From the entrepreneur’s perspective, there was little red tape. In the end, we decided to withdraw 25,000 euros,” Parkkinen reminisces.Together with his partners, he founded ResQ Club late last November. Using the digital service developed by the enterprise, consumers receive information on food that is about to go to waste in restaurants, bakeries, cafés and hotels.The service gives consumers the opportunity to buy food at discounts exceeding even 50 per cent. Restaurants, in turn, can reduce their waste.Parkkinen says that the founders had little savings when establishing their enterprise.“Even if we ourselves worked without pay, some expenses are inevitable at the start. Now we were able to kick off more quickly.”From the very start, ResQ Club’s services have attracted interest among both investors and consumers.With private individuals and venture capitalists as new investors, the company issued a financing call of over 300,000 euros. At the same time, ResQ Club announced that the service is also being launched in Sweden.The service has about 20,000 registered users and 150 partner suppliers.FACT: What’s a Start Guarantee? The Start Guarantee is intended for start-ups and enterprises that are no more than three years old. The enterprise must be owned by private individuals. The Start Guarantee is particularly well suited for small-scale financing, especially if the entrepreneur has insufficient collateral for the bank. Finnvera’s guarantee coverage is at most 80 per cent. The total amount of Start Guarantees granted to an enterprise cannot exceed 80,000 euros, in which case the maximum loan sought from a bank under the Start Guarantee is 100,000 euros. For collateral, the principal shareholders lodge special guarantee undertakings that must cover at least 25% of Finnvera’s guarantee sum. The enterprise presents the financing application to its own bank. Thereafter, the bank assesses the credibility of the business and checks the calculations and the applicants’ creditworthiness before granting financing. The bank submits the application for the Start Guarantee to Finnvera on behalf of the enterprise. The Start Guarantee is intended especially for the working capital and investment needs of start-up enterprises. It cannot be used for financing company acquisitions or purchases of business premises. The Start Guarantee may also be one part of the enterprise’s aggregate of loans. The maximum repayment period for loans under the Start Guarantee is ten years. More information about the Start Guarantee is available here.More financing solutions for setting up a company are found here.Text: Kimmo Koivikko

Press Releases
27.05.2016
Argentina opening up after 15 years – new export opportunities for Finnish companies

In South America, the Argentinian economy is gradually opening up for foreign business again. Finnvera’s experts see opportunities for Finnish companies in Argentina.Argentina’s economy collapsed at the turn of the millennium and, owing to unpaid debts, the country remained outside international financial markets for many years. However, the new conservative administration has taken quick action to resolve any unsettled disputes with Argentina’s creditors. In consequence, the country is gradually able to renew its relations with international providers of financing. The new Government has also lifted the restrictions on foreign trade.According to Jussi Haarasilta, Executive Vice President at Finnvera, Argentina is gradually becoming a potential export country for Finnish companies.“Necessary reforms were neglected during Argentina’s long period of isolation. For instance, the infrastructure is in urgent need of development, and that’s where Finns might well have a lot to offer in the coming years. This could mean, for example, telecommunication and electricity networks, mining, wood processing and the construction of harbours,” Haarasilta lists.“In short, the traditional Finnish export portfolio is well suited to Argentina’s future needs.”Haarasilta stresses that with its population of 43 million, Argentina is now becoming an attractive market for many companies.“Competition will be stiff for certain,” he predicts.“Realisation of large projects calls for financing, which in turn requires that the counterparty is creditworthy. Argentina was outside export credit guarantees for years. At present, Finnvera can support the financing of trade and is investigating how to guarantee long-term credits,” Haarasilta says.“It pays to look into partners’ backgrounds”Many companies have already contacted Finnvera to inquire about the situation in Argentina. Senior Adviser Mika Relander visited Argentina recently and underlines that even if Argentina offers promising opportunities, companies considering business there should still exercise caution.“The operating environment continues to involve risks, especially in the public sector, as the country’s economy is still rather weak and will require many long-term reforms. Good examples are the large subsidies for electricity and petrol prices that need to be dismantled before the public economy can be balanced.”“Otherwise, too, it pays to investigate customers’ solvency and the partners’ backgrounds in advance together with Finnvera,” Relander says.However, according to Relander, Finnvera always strives to seek and tailor financing solutions that would make the export transaction possible.“Still, in the case of Argentina, we also need to be rather cautious,” he adds.Additional information:Jussi Haarasilta, tel. +358 29 460 2601, jussi.haarasilta (at) finnvera.fiMika Relander, tel. +358 29 460 2725, mika.relander (at) finnvera.fi

Articles
26.05.2016
A growth entrepreneur’s tip for a good team: Don’t hire your course mate

Recruiting the right people and the owners’ capacity to take risks are crucial for a company’s growth.Everyone makes mistakes, but you should learn from them, growth entrepreneur Lennu Keinänen urges.Keinänen says that he himself has stepped on all possible mines, from market analyses to financing. Despite that, he has taken part in founding nine enterprises. Of these, the best known is Paytrail, a provider of online payment services. The Danish company Nets acquired 80 per cent of the enterprise two years ago.However, Keinänen identifies the team and its importance as the biggest mine.“Team members must have  sufficiently diverse backgrounds. It’s not necessarily a good idea to hire your course mate,” Keinänen points out.In his view, building the right team can start once the entrepreneur understands what he or she is actually doing.“Corporate culture must be created first. In the end, culture is shaped only through people, but its desired state must be known so that the entrepreneur can make the right recruitment choices.”Despite his young age, Keinänen has already been an entrepreneur for 20 years. He set up his first enterprise, in Kuopio, at the age of 15. Growth, internationalisation and financing are all interlinked. Growth has always been at the core of Keinänen’s enterprises as well.“Growth calls for bigger thinking, that is, leaving one’s own sandbox. One of the worst things is underfunding. Growth is always more expensive than you had originally thought,” says Keinänen.He agrees with Kim Väisänen, a successful entrepreneur who says that a company has only one crisis and that is the cash crisis.From bikinis to a growth trackStudies indicate that young people are eager to start their own enterprises. Young entrepreneurs have recently gained visibility otherwise, too, with the selection of the Young Entrepreneur of the Year in Jyväskylä last Friday.Last year this recognition went to Varusteleka, which has also sought growth outside Finland.One of the finalists this year was Biancaneve of Tampere, a maker of individual sports garments. Biancaneva was ranked third in the national competition. Entrepreneur Elina Loueranta acknowledges that she has also stepped on various mines.“My dream was only to make clothes. At first I didn’t even calculate any profit margins,” Loueranta says.The awakening came three years ago at a growth camp where other companies were making plans for internationalisation. “We were so small next to the others. One company was selling a million screws to Russia and we were talking about bikinis. We were asked if we really believed that we could grow and become international. It didn’t occur to me to answer that each bikini cost 600 euros,” Loueranta recalls.Not even all of the team members believed in growth. The entrepreneur says that one team member aroused doubt in the others, too.Intervening in the situation required a lot, but it was necessary.“I stood up from behind the sewing machine and started to look at the big picture,” Loueranta says.With its turnover of about half a million euros, Biancaneve is living a strong growth phase. This summer, the company is launching a webcam service that will allow customers to order Biancaneve’s tailored bikinis from anywhere in the world.At present, growth is brought by a luxury-focused sportswear collection designed for women. The marketing of this product line also takes the entrepreneur outside Finland.“We wanted to go abroad and we were asked whether we were ready to travel. Now this has come to pass. Relations can only be created face to face,” Loueranta concludes.FACT: Ways to break the glass ceiling on growthAccording to research, one out of five enterprises has hit the glass ceiling on growth.The main factors keeping a glass ceiling on growth are sales and marketing skills, the availability of competent staff, the acquisition of financing and the capacity of owners to take risks.Growth entrepreneurs believe that the glass ceiling can be broken if the management or the owners have sufficient capacity to take risks. That is the most important single way. Other important ways are product and service innovations, sales and marketing expertise, the availability of competent personnel and customer demand.Obtaining adequate financial resources is another tool for breaking the glass ceiling.This information is based on the Growth Enterprise Survey, conducted by the Kauppalehti business periodical and sent to 715 entrepreneurs, of whom 92 responded.There are several financing solutions for working capital needs and for starting business abroad.Text: Kimmo Koivikko

Press Releases
20.05.2016
Finnvera to speed up the financing of small export transactions

For its own part, Finnvera wants to ease the financing of smaller export transactions carried out by enterprises. The first step is the new Bill of Exchange Guarantee, which is best suited to transactions of less than two million euros.Finnish exports are concentrated in a few sectors and are dominated by large corporations. SMEs account for only about 15 per cent of the total value of exports.“It is evident that Finland needs more SME exporters. In general, simpler financing options should be available for small export deals. Complex credit documents and their high costs are often obstacles to financing the smallest transactions. The first product we are launching is the Bill of Exchange Guarantee, where we have considerably relaxed our requirements for both the exporter and the bank. We’ll continue making our services increasingly responsive in order to help Finnish exporters in their sales efforts,” says Executive Vice President Jussi Haarasilta.A bill of exchange is a traditional means of paymentThe use of bills of exchange has gradually increased in foreign trade in recent years. The bill of exchange serves both the exporter and the buyer because the exporter is paid in cash while the buyer is given payment time. Finnvera’s Bill of Exchange Guarantee, in turn, protects the bank from any credit losses that might arise. Compared to a loan agreement, for example, a bill of exchange is a quick and cheap payment instrument.“Our new Bill of Exchange Guarantee requires no security for small transactions of under two million euros. We trimmed the contents of the guarantee agreement and simplified pricing. We also cover risks stemming from the application of laws and regulations on bills of exchange that have been passed in various countries. We want to boost transactions of this size class in particular by increasing flexibility in our guarantee terms associated with export bills of exchange,” Team Leader Eeva-Maija Pietikäinen explains.The exporter applies for the guarantee from Finnvera and submits credit data and financial statements on both the buyer and the guarantor, if any, over the past two to three years. Additional information is requested, if necessary. Finnvera always makes guarantee decisions individually for each project.Finding the right kind of payment method requires cooperation with the exporter, the exporter’s bank and Finnvera. It is essential that the financing is planned well in advance before the conclusion of the export transaction. In this way it is possible to select the payment method that suits each export deal. This is important particularly for bills of exchange because not all countries use them as a means of payment.Additional information:Jussi Haarasilta, Executive Vice President, tel. +358 29 460 2601Eeva-Maija Pietikäinen, Team Leader, tel. +358 29 460 2674Products > Export Credit Guarantees > Bill of Exchange Guarantee

Articles
17.05.2016
Change is good

Marju Silander, Managing Director of the Women Entrepreneurs of Finland, sees many solutions for improving the state of the economy. One key factor is to seek growth through internationalisation and transfers of ownership.Finnish working life and enterprise structure have been in turmoil in recent years. Marju Silander, herself an entrepreneur by background, has been on the front line of this restructuring. Prior to her appointment as Managing Director of the Women Entrepreneurs of Finland, Silander had earned her stripes, among others, at the Regional Organisation of Enterprises in Helsinki.“We have changed from a Finland of large corporations to a Finland of micro-enterprises.”According to Silander, Finnish legislation is still living in the time of large corporations even though the current Government strives to revise the structures of working life and to dismantle unnecessary regulation.“Most jobs are created in small and micro-enterprises. By following the Think Small First principle of the EU, Finland Ltd could be brought to the present day,” Silander ponders.Small enterprises face a new situationSilander is concerned about the lack of international growth. Economic growth centring on Europe does not seem to trickle to Finland.“Small enterprises face the challenge of how to reach the international growth market. A strong domestic market is not enough to stop the spiral of increasing government debt: in practice we are sitting at the same table circulating money from one purse to another,” Silander summarises the situation.She believes that technology-driven industries, in particular, have growth potential. Sustainable development and the circular economy, ageing of the population and the health and wellness boom offer diverse opportunities for creating new products and services for the international market. Younger entrepreneur generations also have the enthusiasm to venture out into the world.“It’s no longer necessary to think that first we’ll establish a company and then we’ll go international. Instead, there can be a bigger picture from the very start,” Silander says.Being an entrepreneur has become attractive: young entrepreneurs are increasingly eager to seize the opportunity to build exactly the kind of life they have dreamed for themselves.“In addition to the cultural shift, the many years of entrepreneur training given by educational institutions and entrepreneur organisations are finally starting to bear fruit,” Silander rejoices.Transfers of ownership add momentum to Finnish work life Internationalisation is not an option for all entrepreneurs. Certain local services cannot be globalised or digitised, and boosts for business must be sought through other means. Silander says that transfers of ownership are a pivotal tool for growth in the Finnish economy.“At present we have more than 80,000 entrepreneurs over 55 years of age. Nearly one third of them have announced that they will wind up their business when they retire. It is also known that, in general, one transfer of ownership affects on average four people. This means that many jobs are in the danger zone,” Silander ponders.Lack of information is one reason why there are so few transfers of ownership.“Especially sole entrepreneurs are often too modest when putting a value on their enterprise. As a trade association within the Federation of Finnish Enterprises, we also conduct serious dialogue with Finnvera about how we could make entrepreneurs understand the realisable value of their enterprises so that they can continue to offer jobs in the future as well,” Silander explains.She mentions a case where a woman entrepreneur was about to wind up her enterprise for good, but decided in the end to ask for advice about selling the enterprise. The outcome was that the entrepreneur was able to supplement her pension income with a profit of nearly 10,000 euros by splitting up the company’s inventories and operations into packages ready to buy.“In a way, we squander our assets if no deals are made. Entrepreneurs should feel proud and pleased for having created something that is useful for others, too,” says Silander.Finding the right partner is rewardingFor a starting entrepreneur, buying an existing enterprise is an excellent way to pick up speed quickly. The entrepreneur does not need to start from scratch, since networks, premises and processes are already available. In fact, persons who have become entrepreneurs by buying an enterprise are on average more satisfied with being an entrepreneur and feel that they have made a go of it.According to Silander, buyers’ knowledge of company acquisitions is also scanty.“Many people come to Enterprise Agencies with their own ideas. If the idea isn’t viable, it could be proposed that a development partner be sought in an existing enterprise,” Silander suggests.When a novel idea is combined with an operating enterprise, the result may be something brand new. Earning money on the basis of one’s own idea will then take less time and, on the other hand, the idea may also be refined in the process.What’s more, transfers of ownership are an excellent way to expand existing business operations.“When two enterprises are put together, the result may sometimes be greater than two. It would be really valuable to get people together at an earlier stage instead of waiting until the enterprise has suffered from years of underdevelopment,” Silander sums up.Silander compares selling an enterprise to selling a home: usually everyone selling their home makes sure that they get as good a price as possible when closing the sale. She urges entrepreneurs to keep this philosophy in mind at every stage of developing their companies. Quotes “Finland is such a small country that cooperation is extremely important. We cannot waste time by arguing among ourselves; instead, we must stand as a united Finland against China, Germany or Sweden.” “If the only plumber in the village closes up shop, it should be in the interest of towns and municipalities to look for a new entrepreneur in the locality rather than letting operations cease and allowing residents’ basic services to decline.” “Business Infrastructure Analysis, which is a public service provided free of charge, is an excellent way of keeping abreast of a company’s development potential and value. It would be good if every company were given a kind of ‘annual inspection’ at certain stages of the life cycle.”Text: Noora Puro Photo: Heidi Strengell

Articles
12.05.2016
A tip for growth companies: abroad the use of money doubles

It often comes as a surprise when sales lag behind expectations. An entrepreneur’s advice is to seek local partners.Growth companies entering international markets badly underestimate their need for financing.There are many reasons for this.The most common reason is that the business launches organised by enterprises abroad are in fact much more expensive and more time-consuming than had originally been planned.The discrepancy between plans and reality is explained, among others, by unexpected turns of event and more sluggish sales of products or services on targeted markets.“The costs are always at least twice as much, and the need for external financing three times greater than what had been planned. When drawing up their budgets, companies are slightly overoptimistic. The fact is that an enterprise must get loads of visibility on the consumer market. Achieving credibility in business between companies takes time,” says Titta Mantila, Vice President, SME Financing at Finnvera.She heads the Growth and Internationalisation Team at Finnvera.According to Mantila, Finnish companies are told repeatedly about the importance of sales skills. However, skills in financing and economics should not be underestimated.Shareholders’ equity should account for almost one third of the total need for financing. Additionally, it would be good to think about what happens to the company if everything goes wrong abroad. In other words, risk tolerance.“Nor does it hurt to learn about the target countries and their business culture,” Mantila continues.There are no major differences in the financing needs of growth companies and companies with a slower growth pace. Working capital is the most common reason for seeking external sources of financing.With growth companies, everything is just a lot bigger. The financing granted to a growth company by Finnvera is on average about EUR 400,000.“No one can set up an international business with 100,000. Companies turn to us to obtain financing for expanding their own organisation, recruitment, sales and marketing, and for launching on international markets,” Mantila lists.She says that, for instance, Finnvera can offer several financing solutions for working capital needs and starting business abroad.Seek partners Katja Lindy-Wilkinson, Marketing Director of Picote Oy Ltd and CEO of Picote Solutions Inc., admits that a perpetual shortage of resources has also slowed down the growth of the company based in Porvoo, Finland.The company renovates drainage pipes and develops and manufactures pipe lining tools, and has been able to forge ahead abroad in step with financial resources.“Equipment sales abroad began in 2012. Our German partner wanted to become a reseller, and that gave us a good start,” Lindy-Wilkinson reminisces.Today, foreign buyers account for 88 per cent of Picote’s equipment sales. The company, with a turnover exceeding six million euros, has 19 resellers around the world.Lindy-Wilkinson, who has lived in the United States for years, says that resellers are supported in many ways in their efforts to succeed. In return, resellers bring added value with their knowledge of the local markets.“The chances of success are much better if you find local partners. It’s also worth remembering that there are many Finnish expatriates living all over the world. We, too, hired a Finnish consultant in the USA. That person was an excellent support for us,” Lindy-Wilkinson says.FACT: Does the lack of money slow down growth? According to companies, the main factors keeping a glass ceiling on growth are sales and marketing skills, the availability of competent staff, the acquisition of financing and the capacity of owners to take risks. During the first months of the current year, Finnvera’s financing for enterprises exceeded 300 million euros. Growth companies accounted for 49 per cent of this. Despite their potential, not all companies seeking solid growth have a long, economically profitable history behind them. In consequence, their rating may not be high enough. Rating affects the price and availability of money. The rule of thumb is that loan financing must be accompanied by a sufficient amount of equity. It can be considered that 30 per cent is a sufficient amount. Text: Kimmo Koivikko

News
04.05.2016
The Growth Loan for faster growth and internationalisation

At the beginning of April, Finnvera’s selection of financing services was supplemented with a new loan product, the Growth Loan.Kalle Åström, Program Manager at Finnvera’s SME Unit, for what types of projects is the Growth Loan designed?– The Growth Loan is intended for financing SMEs and midcap companies in major growth and internationalisation projects or corporate reorganisation. The idea is that the loan would attract financiers operating on market terms to invest in projects where risks are high but profitability and effectiveness are deemed to be good.Who can apply for a Growth Loan?– Finnvera’s Growth Loan may be granted to SMEs and midcap companies that have been in operation for over three years. The loan is not suited for the very start of business or for small projects. In these situations, some other financing product we provide may be the solution; for instance, Finnvera’s Start Guarantee, where the bank submits the guarantee application to Finnvera on behalf of its customer.The Growth Loan is a debt-based mezzanine financing product that combines the features of both equity and debt financing. The company’s self-financing portion must always be at least 20% and the share contributed to the total financing by financiers other than Finnvera must be at least 50%.The Growth Loan is granted for each project on a case-by-case basis. Project profitability and eligibility for financing are assessed together with other financiers.Read more: Growth Loan

Articles
27.04.2016
Young people are increasingly entrepreneurial

Interview of Joonas Mikkilä, Organization Manager at the Federation of Finnish EnterprisesFederation of Finnish Enterprises’ survey reveals: University students, in particular, have embraced entrepreneurship. One out of five students sees being an entrepreneur as a probable career direction.How has interest in entrepreneurship developed among young people?JOONAS MIKKILÄ: Attitudes are undergoing a major generational shift. In consequence, the young people entering the labour market now are increasingly entrepreneurial. According to the Global Entrepreneurship Monitor survey, in 2015 as many as 20 per cent of young people between 18 and 24 years of age deemed that they would set up an enterprise within the next three years. At the turn of the millennium, only a few per cent of the same age bracket thought in this way.How actively do Finnish young people start enterprises when compared against young people in other countries?JM: Fairly actively. About five per cent of working Finns under 30 years of age work as entrepreneurs. In the rest of the Nordic countries, the ratio of young people working as entrepreneurs is 2–4 per cent. The EU average is about seven per cent.How are young people encouraged to become entrepreneurs in Finland and what kind of mentoring is available?JM: The development of entrepreneur training in basic and upper secondary education has been one of the focal points of Finnish education policy since the 1990s. The results are now becoming clearly visible. Universities have also gradually realised the importance of entrepreneur education for strengthening young people’s skills on the labour market. University students themselves have also established communities that promote growth enterprise culture on campuses.The association Suomen Yrityskummit provides mentoring for young entrepreneurs. Enterprise Agencies, in turn, give high-quality enterprise consulting to people planning to start a business. Business accelerators, operating in connection with universities and regional development companies, provide services for those seeking faster growth. Our Young Entrepreneurs programme aims to offer peer support and ready-made networks for starting entrepreneurs.What are the biggest challenges facing a young entrepreneur?JM: Apart from financing, many young entrepreneurs seeking to expand their operations are concerned about the risks involved in employing people. The significant increase in the number of one-person firms in the 2000s is an indication of the high threshold for hiring others and the rigidity of our labour markets. In certain sectors, the amount of regulation and administrative oddities also causes concern. How is financing arranged?JM: Getting financing from a bank is currently challenging for a starting entrepreneur who has little capital. However, supplementary financing from Finnvera and Tekes has helped to ease the situation. New crowdfunding forms are also becoming clearly more popular.  How could young people be inspired to buy already existing companies?JM: Persons who engage in entrepreneur training and consulting must communicate to young people that continuing the operation of existing companies is an excellent channel to entrepreneurship. As entrepreneurs age, these opportunities will be available increasingly often in the coming years.  Additional information:www.yrityssuomi.fiwww.uusyrityskeskukset.fiwww.yrittajat.fiwww.nuoretyrittajat.fiwww.yrityskummit.fiwww.nuoriyrittajyys.fiwww.yes-keskus.fiPhoto: Jaakko Översti

News
19.04.2016
Crisis awareness has increased – companies seek protection against Russian risks

Finnish exports to Russia fell by one-third, but inquiries about Finnvera’s guarantees come in steadily.Lower oil prices, the weak rouble and the sanctions imposed in consequence of the Ukrainian crisis have cramped Finnish companies’ exports to Russia.According to customs statistics for last year, exports to Russia plummeted by 32 per cent, to EUR 3.2 billion. The first months of the current year have not changed this trend.The last time when exports fell below four billion euros was in 2003. At the same time, Russia has dropped to rank fifth among the most important export markets.As a counterbalance to the gloomy news, enterprises have fortunately woken up to the situation.According to Jussi Haarasilta, Executive Vice President at Finnvera, companies’ crisis awareness has increased and they more actively seek to protect their claims.“We want to advance Finnish companies’ opportunities to engage in export trade. We will therefore continue to grant guarantees for exports to Russia, but we will observe how larger transactions, in particular, affect the level of total exposure,” says Haarasilta.Outstanding commitments have remained steadily around 1.5 billion. This accounts for a little less than ten per cent of total outstanding commitments.“Even now we have dozens of clients that export to Russia. There is a constant flow of inquiries about guarantees. Immediately after the sanctions were imposed, many companies hurried for guarantees, but not all projects have proceeded,” says Haarasilta.Know your partner’s backgroundMost of Finnvera’s guarantee commitments involve the exports of large corporations. According to the Finnish-Russian Chamber of Commerce, hundreds of companies carry out regular exports to Russia.“We grant short-term credit insurance for good buyers, but since the outbreak of the crisis, payment defaults have increased. We are particular about the buyer’s creditworthiness. In large projects that require credits, export credit financing is often channelled through a bank that is backing the Russian buyer,” Haarasilta explains.He advises companies to investigate their trading partners’ background.“Who is the buyer and the actual owner of the company making the purchase. The seller may start to pursue the issue too easily, without verifying the background.”Russia’s economy will continue to slip this year. The IMF’s forecast for the change in the GDP is -1.8 per cent. The situation caused by the sanctions adds to economic uncertainty.“The weak economic situation has caused a cut in imports. This means that many important investments or supplies for maintenance are sorely needed. This may gradually be seen in demand for imports in some sectors,” Haarasilta believes.Finnvera has many tools for financing and guarantees that companies can use in their exports. More information about the various alternatives is available at: www.finnvera.fi/eng > Export.Text: Kimmo Koivikko

Press Releases
19.04.2016
Survey: Only half of all Finnish SMEs keep an eye on enterprise value

Half of all decision-makers in Finnish SMEs follow changes in the value of their enterprises. Less than half of all Finnish SMEs have made preparations for ownership changes. These are some of the findings of a survey conducted among Finnish SMEs.Each year thousands of companies find themselves in a situation where they have to find a new owner for their business. Despite this, more than half (56%) of them have not made any plans for the situation. Retention of value is a particularly low priority in companies with the smallest number of employees and the lowest turnover.- It should definitely be a greater concern. Making sure that the company retains its value should be a top priority and the owner should also develop the business operations throughout the company’s life cycle. This helps to ensure that the company is in good shape when a new owner has to be found, says Katja Keitaanniemi, Executive Vice President, SMEs at Finnvera.Finnvera, the Federation of Finnish Enterprises and the Ministry of Employment and the Economy jointly conduct the SME Barometer Survey twice a year. In this year’s survey the respondents were specifically asked about changes in ownership. About 6,000 SMEs took part in the spring 2016 barometer and the findings on ownership changes are based on the responses provided by them.Boosting growth through company acquisitionsEven though company acquisitions may be a good way of expanding business, some 80 per cent of all SMEs taking part in the survey said that they are not interested in acquiring other companies or business operations. However, strongly growth-oriented companies see more opportunities in this area and about 40 per cent of them said that they would be interested in such acquisitions.- From the perspective of growth, acquiring an existing company would open up new opportunities and it might also be smarter economically than organic growth. A company acquisition is also a good idea for new entrepreneurs because that would give them a well-tested business concept for further development, explains Anssi Kujala, Deputy Managing Director of the Federation of Finnish Enterprises.The Yrityspörssi website of the Federation of Finnish Enterprises is a place where companies are sold and acquired. It is Finland’s largest market place for SMEs and nearly 25,000 people interested in company acquisitions check the ads on the site each month. Yrityspörssi now also provides basic information about valuation, business practices, financing and taxation. In addition to the nationwide Yrityspörssi, there are also ten regional Yrityspörssi websites.Further information: Katja Keitaanniemi, Executive Vice President, SMEs, Finnvera plc, tel. 029 460 2888 Anssi Kujala, Deputy Managing Director, Federation of Finnish Enterprises, tel. 0400 567 925Finnvera provides financing for the start, growth and internationalisation of enterprises and guarantees against risks arising from exports. Finnvera strengthens the operating potential and competitiveness of Finnish enterprises by offering loans, guarantees and other services associated with the financing of exports. The risks included in financing are shared between Finnvera and other providers of financing. Finnvera is a specialised financing company owned by the State of Finland and it is the official Export Credit Agency (ECA) of Finland. https://www.finnvera.fi/eng/ https://www.finnvera.fi/eng/Finnvera/Media/Media The Federation of Finnish Enterprises promotes the interests of small and medium sized enterprises in Finland. With a membership of more than 115,000, 400 local associations, 20 regional organisations and 63 branch organisations we are Finland’s largest business federation. Self-employed individuals account for half of our members, while the other half consists of employer enterprises. Our members provide employment for about 650,000 people. Further information: http://www.yrittajat.fi/en-GB/. http://www.yritysporssi.fi/en

Press Releases
11.04.2016
Brazil continues to provide export opportunities for Finnish companies

Brazil is expected to play a major role for Finnish exports in the coming years as well. Despite the current economic difficulties, it is believed that Brazil will continue to offer business opportunities in many of the strong sectors of the Finnish export industry.According to Jussi Haarasilta, Executive Vice President at Finnvera, Brazil is an important and, above all, growing market from the viewpoint of Finnish enterprises.“Brazil’s devalued currency, the real, stimulates demand in the export-oriented sector of wood processing and pulp manufacture. Moreover, the great potential in the country’s bioenergy and cleantech sectors is finally being realised and, as we know, Finland has volumes of first-rate expertise in these fields,” says Haarasilta.“In addition, Brazil has made extensive investments in telecommunications, which has also benefited Finnish enterprises.”Haarasilta says that Brazil’s economy of 200 million people would also have great demand for consumer goods.“The consumer market will certainly experience vigorous growth in the future. So far Finland’s exports to Brazil have focused on capital goods and, at least yet, Finland has not been able to profit from the consumption potential of the growing middle class.”Economic recession is hoped to remain shortJussi Haarasilta judges that Brazil’s economic problems and domestic policy crisis inevitably make an impact on the business environment of foreign enterprises in Brazil, at least to some extent.“It is clear that more caution and deliberation than normally is advisable when planning business deals in Brazil. However, I’d like to stress that despite the current problems, Brazil has many good enterprises and sectors that can serve as trading partners,” he says.“In the longer term, Brazil still has much potential as an export country for Finland, and sales to Brazil could be much higher than at present. We naturally hope that the recession of the Brazilian economy will be as short-lived as possible.”According to Haarasilta, Finnvera for its part is willing to support Finnish companies’ export efforts in Brazil as well, but keeps a close eye on the development of the country’s economy.“The more contracts Finnish export companies can win, the better it is for the whole of Finland.”Finvera’s guarantees for exports to Brazil account for the third highest country exposure among all countries. Apart from Finnish companies’ active efforts in Brazil, the exposure is explained by the fact that individual transactions in Brazil often have a very high monetary value.Additional information:Jussi Haarasilta, Executive Vice President, tel. +358 50 346 95 37

Press Releases
08.04.2016
Finnvera’s authorisation to provide export financing was raised

The ceilings for the Finnvera Group's export credits and export credit guarantees have been raised. The Finnvera Group can continue to provide Finnish export companies with internationally competitive financial arrangements for their export transactions. The legislative amendments will enter into force on 15 April 2016.The authorisation to grant export credits will rise from EUR 7 billion to EUR 13 billion, while the authorisation to grant export credit guarantees will rise from EUR 17 billion to EUR 19 billion. The authorisation to provide interest equalisation will also increase, from EUR 7 billion to EUR 13 billion. The purpose of the increases is to improve the competitiveness of Finnish companies engaged in the exports of capital goods and to enhance their opportunities to secure export contracts.– “Long-term financing plays an important role in negotiations for export-related purchase agreements. Bank regulation has affected banks’ possibilities to finance long loan periods. For this reason, Finnish Export Credit Ltd is needed in large financial arrangements. Some individual large export deals have increased our exposures close to their maximum limits. The increases in the authorisations enable Finnvera to participate in financial arrangements for Finnish companies’ export transactions and for their foreign buyers in the coming years as well,” says CEO Pauli Heikkilä.The parent company Finnvera’s total commitments for export credit guarantees and special guarantees amounted to EUR 17.4 billion at the end of December 2015. The outstanding commitments for export credit guarantees in accordance with the ceiling laid down by law totalled EUR 14.2 billion. The outstanding export credits and ship credits granted by the subsidiary Finnish Export Credit totalled EUR 4.2 billion. The granting of export and ship credits always requires an export credit guarantee. In other words, the risks associated with the project are covered with an export credit guarantee. According to the goal of economic self-sustainability set for Finnvera’s operations, the income received from the company’s operations must, in the long run, cover the company’s operating expenses. The self-sustainability of export financing has been realised over Finnvera’s history of 17 years, and Finnvera’s operations have not caused any costs to the State.Finnvera acquires the funds needed for credits from the market, by issuing State-guaranteed notes. The maximum amount of loans guaranteed by the State was raised from EUR 9 billion to EUR 15 billion. Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Jussi Haarasilta, Executive Vice President, tel. +358 29 460 2601

Press Releases
23.03.2016
Finnvera’s Annual General Meeting: New members appointed to Finnvera's Supervisory Board - No changes in the composition of the Board of Directors

On 23 March 2016, Finnvera's Annual General Meeting elected new members to the company's Supervisory Board. No changes were made to the composition of the Board of Directors.The new members of the Supervisory Board are Laura Huhtasaari, Timo Kalli, Krista Kiuru, Kari Kulmala, Ville Niinistö and Eero Suutari, Members of Parliament; and Kari Luoto, Managing Director; Carita Orlando, Managing Director; and Christel Tjeder, Second Vice Chairman.Antti Rantakangas, Member of Parliament was elected Chairman and Krista Kiuru, Member of Parliament Vice Chairman of the Supervisory Board. Eeva-Johanna Eloranta, Member of Parliament; Mika Harjunen, Information Security Manager; Lasse Hautala, Member of Parliament; Olli Koski, Chief Economist; Leila Kurki, Senior Adviser; Veli-Matti Mattila, Chief Economist; Tommi Toivola, Senior Adviser; and Sofia Vikman, Member of Parliament will continue as members of the Supervisory Board.Markku Pohjola, B.Sc (Econ.), will continue as Chairman, Pekka Timonen, Director General, as First Vice Chairman and Marianna Uotinen, Specialist Counsel, as Second Vice Chairman of Finnvera's Board of Directors. The following persons will continue as Board members: Kirsi Komi, LL.M.; Pirkko Rantanen-Kervinen, B.Sc (Econ.); Harri Sailas, B.Sc (Econ.); and Antti Zitting, Chairman of the Board.The Annual General Meeting adopted the Consolidated Financial Statements and the Parent Company’s Financial Statements for the period 1 January–31 December 2015, discharged the Supervisory Board, the Board of Directors and the Chief Executive Officer from liability, and approved the proposal made by the Board of Directors for the use of the parent company’s profits.KPMG Oy Ab was re-elected Finnvera’s regular auditor with Juha-Pekka Mylén, Authorised Public Accountant, as the principal auditor.Further information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Risto Huopaniemi, Senior Vice President, Administration, Legal Affairs and Administration tel. +358 29 460 2520

News
18.03.2016
Finland and Cuba agreed on debt adjustment

A bilateral agreement pertaining to the State Guarantee Fund’s arrears of EUR 37.8 million from Cuba was signed in Havana on 17 March 2016. The arrears stem from export credit guarantees granted 30 years ago.The agreement was signed by Under-Secretary of State Pirkko Hämäläinen and Vice President of the Council of Ministers of Cuba Ricardo Cabrisas Ruiz. The bilateral agreement complements the arrears clearance negotiated in Paris on 10–12 December 2015. According to the agreement, Cuba repays the principal and contractual interest, in total EUR 7.7 million, within 18 years. The late interest that has accumulated is cancelled. However, cancellation of the late interest requires that Cuba repays the principal and interest as agreed. In summer 2015, Cuba paid its old, short-term arrears associated with trade finance contracts. The agreement now concluded continues this favourable trend.An important step for trade between Finland and CubaThe agreement that has now been signed is an important step for promoting trade between Finland and Cuba.  “Finnvera has already made guarantees available for small export transactions with Cuba and keeps a close eye on the country’s development as a potential trading partner,” says Senior Adviser Mika Relander.The State Guarantee Fund is organised under the Ministry of Employment and the Economy. Its receivables stem from export credit guarantees granted by Finnvera’s predecessors. Finnvera manages the receivables on behalf of the fund.Additional information:Mika Relander, Senior Adviser, tel. +358 29 460 2725

Press Releases
29.02.2016
Q4 and Financial Statements for the Finnvera Group 1 January–31 December 2015

A variable and record-breaking yearCompared against the previous year, the world economy gained a little momentum in 2015. However, the economy did not develop steadily; instead, situations and divergent estimates varied throughout the year. The subdued outlook for exports and low spirits on the domestic market kept the demand for SME financing for investments modest. In contrast, financing for working capital and credits for changes of ownership were in great demand. In exports, shipbuilding orders were the biggest single factor increasing the demand for financing. Finnvera’s contribution was also needed in some other large export projects.Business operations and the financial trend In 2015, Finnvera’s offers for export credit guarantees increased by 28 per cent, while offers to finance export credits rose by 46 per cent on the previous year. The volume of loans and guarantees granted to SMEs and enterprises larger than the SME definition applied by the EU was 19 per cent greater than the year before. Finnvera Group     1 Jan–31 Dec 2015  1 Jan–31 Dec 2014  Change % Offered financing           Loans and guarantees 906 MEUR 763 MEUR 19%     Export credit guarantees and special guarantees  6 760 MEUR 5 274 MEUR 28%     Export credits 4 131 MEUR 2 829 MEUR 46%   31 Dec 2015 31 Dec 2014 Change Outstanding commitments       Loans and guarantees 2 285 MEUR 2 378 MEUR -4%      Export credit guarantees and special guarantees  17 436 MEUR 12 600 MEUR 38%      Export credits 4 240 MEUR 3 330 MEUR 27%   1 Jan–31 Dec 2015 1 Jan–31 Dec 2014 Change % Net interest income and fee and commission income and expenses (net)  197 MEUR 189 MEUR 4% Operating profit 114 MEUR 101 MEUR 13% Profit for the period 111 MEUR 100 MEUR 11%   31 Dec 2015 31 Dec 2014 Change %-point Equity ratio 13.3% 15.2% -1.9% Capital adequacy, Tier 2  19.6% 18.6% 1% Cost-income ratio 28.3% 25.9% 2.4% The profit for the last quarter of 2015 was EUR 5 million. The figure was two thirds, or EUR 46 million, less than the profit for the previous quarter (51 million). The main factors affecting the smaller profit were the impairment losses on receivables and guarantee losses, which doubled and were EUR 33 million more than in the previous quarter. The increase in the impairment losses on receivables and guarantee losses between the two quarters was partly due to the reversal and reduction of impairment losses and provisions for losses, which took place in the previous quarter.The profit for the Group in 2015 was EUR 111 million (100 million). This was 11 per cent better than the year before. The main factor improving the financial performance was the decrease of 57 per cent, or EUR 19 million, in impairment losses   on receivables and guarantee losses. In addition, the increase of 8 per cent in the net interest income and the rise of 3 per cent in the net value of fee and commission income and expenses improved the financial performance.The profit of the parent company, Finnvera plc, in 2015 stood at EUR 95 million (92 million). This was 3 per cent more than the year before. When divided between the business areas, the parent company’s financial performance was as follows: the profit for export financing was EUR 82 million (96 million) and that for SME financing EUR 38 million (6 million). In addition, the impairment losses recognised on investments, EUR 25 million (9 million), had an impact on the parent company’s profit. Finnvera Group Q4/2015 Q3/2015 Change Q4/2014 Change *2015 *2014 Change Profit for the period MEUR MEUR % MEUR % MEUR MEUR % Net interest income 13 15 -12 10 35 56 52 8 Fee and commission income and expenses (net) 34 34 -1 35 -4 141 137 3 Gains/losses from items carried at fair velue -13 -2 - 4 - -21 -10 108 Other operating income 2 0 - 0 - 2 2 43 Administrative expenses -12 -9 32 -11 9 -44 -41 8 Impairment losses, guarantee losses -17 16 201 -9 84 -15 -34 -57     Loans and guarantees -21 6 444 -26 -22 -87 -105 -18     Credit loss compensation from the State 13 9 42 18 -28 83 64 30     Export credit guarantees and special guarantees -9 1 927 -1 - -10 8 232 Operating profit 5 53 -90 27 -81 114 101 13 Profit for the period 5 51 -90 25 -80 111 100 11 Outlook for financingEconomic growth and investments are likely to remain at a low level in 2016, and SME financing continues to focus on working capital needs. However, it is expected that the increase in changes of ownership and the investments disclosed by large corporations will have a positive effect on the demand for SME financing. In addition, Finnvera’s new mandates and financing products support the rise in the volume of SME financing.Financing solutions offered to buyers will continue to play a pivotal role in exports of capital goods sold by large   corporations. It is expected that the demand for export credit guarantees and export credits will decline slightly from the previous year if no individual major orders are placed in 2016. Ships, telecommunications and the forest industry are still anticipated to account for the bulk of demand associated with large corporations’ exports.According to the current estimate, the Finnvera Group’s financial performance for 2016 is likely to fall below that for 2015. 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:“The new tasks assigned to us added momentum to the year and increased the demand for our financing. We granted markedly more financing to SMEs than the year before. This rise was mainly attributable to our new mandates and to a positive   trend in changes of ownership. However, investments did not pick up yet; instead, SME financing continued to be needed mainly for working capital.The total value of offers pertaining to exports was record high. The orders for ships that followed the ownership arrangements    of the Turku shipyard, an event important from the point of view of industrial history, were the absolute highlight of the year and were also visible in our export financing. To provide financing for the buyer, export credit guarantees or, possibly, pre-delivery financing are needed in practice almost always for major shipbuilding projects. In consequence, ship financing will account for an exceptionally large share, or about one third, of our current commitments. The shipyard is an important employer in the Turku region and also has several hundreds of sub-contractors giving work to tens of thousands of  people.”Financial Statements 2015 (PDF)Statement on the Corporate Governance and Steering System 2015 (PDF)Additional information: Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400 Ulla Hagman, Senior Vice President, CFO, tel. +358 29 460 2458Distribution NASDAQ OMX Helsinki Oy London Stock Exchange The principal media www.finnvera.fiFinnvera publishes its Annual Report for 2015 as an electronic document on the company’s website in Finnish and English during week 10. The Annual Report also includes the Corporate Responsibility Report. The half year report 1 Jan–31 June of the company will be published on 11 August 2016.

Press Releases
25.02.2016
Finnvera supports Finnish exporters’ trading in Iran

Finnvera has revised its country policy for Iran after the EU’s economic sanctions were lifted in January. This means that Finnvera can begin to grant export credit guarantees for exports from Finland to Iran. Because of the sanctions, it is almost ten years since export credit guarantees were last granted for Iran.Since the economic sanctions were lifted, Finnish companies have shown interest in the Iranian markets.“We are ready to receive guarantee applications for exports. Our task is to support Finnish export companies in their efforts to secure contracts in Iran,” says Executive Vice President Jussi Haarasilta.According to Haarasilta, financing on new markets typically opens first between governments or banks. When more experience is gained, it becomes more common to provide financing for companies.Iran is a wealthy country and thereby a large market. This creates great potential for exports. Haarasilta assesses that, for instance, the modernisation of Iran’s basic infrastructure could bring opportunities for Finnish exporters.“Of course, it must be remembered that competition over contracts will be fierce. Many other countries have their eye on the Iranian markets, and the export credit agencies of several states have also relaxed their policies on Iran after the sanctions were cancelled.”“A challenging business environment”Jussi Haarasilta underlines that although trade with Iran will be easier once the sanctions have been suspended, projects should be prepared carefully in advance.“On the whole, the business environment is challenging but I encourage companies to explore business opportunities.”Haarasilta points out that some of the sanctions caused by the nuclear programme are still in force. Human rights sanctions remain in force, too, Haarasilta stresses.He also underlines that each export project is always assessed on a case-by-case basis at Finnvera.Iran is the world’s 18th largest economy. The International Monetary Fund (IMF) has predicted a growth rate of about four per cent for the Iranian economy in the coming years. Read more about Finnvera’s export credit guarantees and country policy.Additional information:Jussi Haarasilta, Executive Vice President, tel. +358 29 460 2601, jussi.haarasilta (at) finnvera.fi

Press Releases
16.02.2016
Internationalisation is the key to growth – SMEs have high expectations for growth in exports

Economic outlook for SMEs shows improvement. The desire for growth remains strong and export volume is expected to increase sharply. In the near future, SMEs will see a bit of light at the end of the tunnel for the first time in a long while. This positive outlook is reflected in the desire for growth, with more enterprises than before being growth-oriented: 9 per cent of enterprises report being strongly growth-oriented, while 36 per cent plan for growth wherever possible.SMEs are looking for growth on the international market and, according to the survey, export volume is expected to rise above current levels within the next year. A positive sign in all sectors is the increase in plans for internationalisation financing.However, outside financing is still being sought primarily for working capital, even though the investment percentage in strongly growth-oriented enterprises is already showing a slight increase. There have been no changes in the availability of financing compared to the results from last autumn. In any case, there are signs that the terms of financing are becoming more favourable, as over 80 per cent of the SMEs seeking financing stated that the availability of financing was not an obstacle to realising projects."Improvement of the economic situation in the euro zone can be clearly seen in higher expectations concerning the demand for export goods. The export share of Finnish SMEs is currently below the EU average, so it's of the utmost importance to find the internationalisation potential behind the Barometer results," says Finnvera's CEO Pauli Heikkilä.The Federation of Finnish Enterprises, Finnvera and the Ministry of Employment and the Economy jointly conduct the SME Barometer Survey twice a year. The aim is to examine the operations and economic operating environment of small and medium-sized enterprises. The spring 2016 Barometer Survey is based on the responses submitted by 6,000 SMEs.SME Survey on The Federation of Finnish Enterprises websiteFurther information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Jonna Myllykangas, Communications Officer, tel. +358 29 460 2740

Press Releases
01.02.2016
Demand for export credits, new mandates and ownership arrangements gave momentum to 2015 for Finnvera

The economic situation posed challenges both to enterprises operating on the domestic market and to export companies. As in the previous year, continued uncertainty in the global economy dampened companies’ willingness to invest, make growth plans and take risks.However, a positive feature was the upswing in companies’ ownership arrangements, the first since 2012. It is estimated that Finnvera is involved in every third company acquisition. Otherwise, despite the improved investment expectations of SMEs, there was no change of course in the allocation of financing. It is four years since investments accounted for a larger share of financing offered to SMEs than working capital.Long-term financing played an important role in negotiations for export-related purchase agreements. Banks were still cautious when financing transactions requiring long repayment periods; in consequence, the role of Finnish Export Credit, in particular, was emphasised. Institutional investors participated in loan arrangements on credit markets slightly more than before but, owing to investors’ expectations for returns, demand and supply did not meet in export credits, with a few exceptions.In international comparison, Finland has well-functioning financial markets, and good projects receive financing from banks. However, the definition of a good project is more demanding than before. “Companies must have credible plans, a good balance sheet structure and adequate collateral. Finnvera is needed as a co-financier in projects especially at the start of enterprise activities and in various situations of change. Internationally, the impact of bank regulation is seen the most in demand for Finnvera’s export financing,” says CEO Pauli Heikkilä.A positive trend in ownership arrangementsIn 2015, Finnvera granted a total of EUR 1,116 million in financing to SMEs and to companies larger than the SME definition used by the EU. Of the financing granted, over 50 per cent was used to finance working capital. Loans and domestic guarantees accounted for EUR 906 million of the financing; this was 19 per cent more than the year before. The factors contributing to this increase included the mandate granted to Finnvera at the start of 2015 to provide financing for companies larger than SMEs, the increase in changes of ownership, and the restructuring of financing granted earlier. The value of guarantees granted to SMEs for exports totalled EUR 210 million, or 13 per cent less than the year before. In 2015, about 950 enterprises received financing for ownership changes. The total sum was EUR 116 million.At the end of 2015, outstanding commitments for SME financing totalled EUR 2.7 billion.The volume of offers for export credit guarantees increasedThe value of export credit guarantees and special guarantees offered rose by 30 per cent, to a total of EUR 6,550 million. Western banks think carefully before granting credits with long repayment periods, especially when they exceed five years. This underlines the importance of the Finnvera Group’s financing. Offers pertaining to the financing of export credits totalled EUR 4,131 million. This is nearly 50 per cent more than the year before. At annual level, the value of export credits offered was the greatest in Finnvera’s history.In total, 88 per cent of the export credit guarantees offered concerned the traditional sectors of Finnish capital goods exports, such as shipbuilding, telecommunications and the forest industry.At the end of 2015, outstanding commitments for export financing totalled EUR 17.0 billion.Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Finnvera publishes the financial statements for the period 1 January to 31 December 2015 on 26 February 2016 and the Annual Report during week 10.

News
18.12.2015
New export credit rules for coal fired power plants

OECD Participants to the Arrangement on Officially Supported Export Credits have agreed new rules on coal-fired power plants, including restrictions on export credits for the least efficient coal-fired power plants.The new agreement will remove support for large super and sub-critical coal-fired power plants, while allowing support for smaller sub-critical plants in poorer, developing countries. “After two years of intense negotiations, the agreement represents a first important step towards aligning export credit policies with climate change objectives to achieve lower emissions”, says Pekka Karkovirta, vice president for international relations in Finland’s export credit agency Finnvera and Chairman of the Participants to the Arrangement.The private sector is expected to follow suit in with the now agreed public sector agreement, which could mean increasing the emission cuts in the future. The new agreement will also improve the competitive position of the Finnish high technology.The 2015 United Nations Climate Change Conference in Paris negotiated a global agreement on reduction of climate change. The agreement was accepted by 196 countries and parties. The agreement sets a goal of limiting global warming to less than 2 degrees Celsius with an additional commitment to pursue efforts to limit the warming to 1.5 degrees. Finnish scholars and specialists have stated that Finland will benefit from the reduction of global warming economically. Finnish cleantech companies have developed technological solutions to curb emissions. We believe that global demand for Finnish cleantech companies will increase in the future.Finnvera supports exports of new clean tech technologiesThe OECD agreement on restricting financial support for certain coal fired power plants together with the UN agreement on restrictions of global warming is expected to enhance the competitiveness of technologically advanced Finnish companies in global trade. Finnvera will take an active role in financing Finnish technology exports to secure that the ambitious goal to limit global warming will be secured. Cleantech projects can benefit from export credits and guarantees with repayment periods up to 18 years.

News
17.12.2015
Finnvera revised its country risk classification

Finnvera monitors 140 political risk countries and classifies them into country risk categories 0–7, with category 0 as the lowest country risk rating. Country risk categories are reviewed by region once a year in cooperation with the other OECD members. At the latest meeting, it was time to update the classifications of countries in Latin America, the Caribbean, and Western and Central Africa. It was consequently decided that two countries would be upgraded in a better category and three countries downgraded in a weaker category.Despite the slowdown in global economic growth, the economies of many countries in the regions now considered have continued to grow, though some opposite trends have also occurred. Especially in countries that are dependent on the exports of oil and other raw materials, the economy has taken a negative turn as income from exports has shrunk. Despite the gloomier economic outlook, political and social stability has largely continued to evolve in a positive way.Brazil’s country risk category downgraded from 3 to 4Brazil’s economic growth has been slowing down for the fourth consecutive year and corruption scandals have fuelled a political crisis. In consequence, the outlook of South America’s largest economy is now clearly weaker than before. The prolonged political stalemate, faltering domestic demand, the falling prices of raw materials important for the country’s exports, and the inability to carry out the necessary structural reforms for achieving economic growth mean that Brazil’s prospects will remain negative in the coming years as well. In the longer term, however, Brazil is a large, strong and diverse economy that still has all the prerequisites for emerging from the recession and thriving. With its exposure of over EUR 1.8 billion, Brazil accounts for the third highest country exposure for Finnvera.Ghana’s country risk category downgraded from 5 to 6Concern over Ghana’s economic situation has continued for a long time. The country’s public debt has increased, economic growth is sluggish and the value of the currency see-saws. The economy is also burdened by low raw material prices. Ghana’s financing costs are high and currency reserves low. However, the political situation is stable, and the IMF and the World Bank have a strong presence in Ghana. Support by international financial institutions creates prerequisites for improving the situation in the future.The country risk categories of Benin and Ivory Coast upgraded from 7 to 6Benin is a politically stable country whose economy is expected to grow in the coming years. The central government debt is relatively low, and the focus in the coming years will be on making important structural changes and improving the business environment. Benin’s main trading partner is Nigeria, whose problems are reflected in Benin as well.Ivory Coast’s economic growth is very strong, as much as 7 per cent annually. The outlook for the near future is bright, the infrastructure is constantly being improved and effort is made to develop the business environment. The political situation is calm and creates a basis for long-range development.El Salvador’s country risk category downgraded from 4 to 5The country’s economic trend has steadily deteriorated at the same time as disagreements in internal politics make it more difficult to carry out the necessary structural reforms. However, El Salvador’s business environment is still at a reasonable level, and the revival of the U.S. economy promises better times for El Salvador’s economic prospects, too.Gradual opening of export credit guarantees for CubaFor many years, Finnvera has not granted export credit guarantees for Cuba. In September, Finnvera made Cuba eligible for short-term letters of credit guarantees after the country had repaid its short-term debts to Finnvera. The improvement of relations between Cuba and the United States has contributed to positive developments in Cuba. The launching of medium-term guarantees requires that Cuba and its creditors agree on the multilateral rescheduling of debts. Finland also has claims in Cuba.The situation in Iran is monitored closelyAn agreement in Iran’s nuclear programme negotiations was reached in summer. This started a process that, if successful, would bring Iran into the global economy. Economic sanctions are still in force and Iran is required to comply with the agreement closely under the supervision of the International Atomic Energy Agency (IAEA). For as long as the sanctions are in force, Finnvera cannot grant export credit guarantees for Iran. If the situation changes, the possibilities for making export credit guarantees available for Iran will be reconsidered. The lifting of sanctions will begin when the IAEA verifies that Iran complies with the agreement.

News
19.11.2015
OECD reached agreement on officially supported export credits on coal-fired power plants

OECD Participants to the Arrangement on Officially Supported Export Credits have agreed new rules on official support for coal-fired power plants, including restrictions on official export credits for the least efficient coal-fired power plants.“After two years of intense negotiations, the agreement represents a first important step towards aligning export credit policies with climate change objectives to achieve lower emissions”, says Pekka Karkovirta, vice president for international relations in Finland’s export credit agency Finnvera and Chairman of the Participants to the Arrangement.The new agreement, or rather, the new climate sector understanding under the  Arrangement on Officially Supported Export Credits, will remove support for large super and sub-critical coal-fired power plants, while allowing support for smaller sub-critical plants in poorer, developing countries.The private sector is expected to follow suit with the now agreed public sector agreement, which will mean leveraging the emission cuts in the future.“The new agreement is not seen to hinder the Finnish export industries, on the contrary it is more likely to improve the competitive position of the Finnish high technology coal power plant solutions”, says Pekka Karkovirta.The new Climate Sector understanding will be set in force on and as from 1st January 2017.The Participants to the Arrangement on Officially Supported Export Credits are: Australia, Canada, the European Union, Korea, Japan, New Zealand, Norway, the United States and Switzerland.For further information, please contact:Pekka Karkovirta, Vice President, International Relations, tel. +358 (0)29 460 2768In OECD website: http://www.oecd.org/newsroom/statement-from-participants-to-the-arrangement-on-officially-supported-export-credits.htm

News
25.09.2015
KPA Unicon opened an export window to Africa

KPA Unicon, a company based in Pieksämäki, Finland, opened an export window to South Africa and will deliver a boiler plant worth about ten million euros. Financial arrangements were very important for the success of the export Project.KPA Unicon specialises in the delivery of tailored and modular boiler plants on a turnkey basis.  In accordance with a recently signed contract, KPA Unicon will deliver a boiler plant to the South African subsidiary of ArcelorMittal, the world’s leading steel and mining company. KPA Unicon has about twenty years of experience of export projects. When trade with Russia began to wane, new markets had to be found. “We succeeded because we have a good product and can give a similar plant, delivered to the same global corporation, as a reference,” says Mikko Marttala, CFO of KPA Unicon.According to Marttala, this deal will bring vast amounts of credibility for the future. He stresses that, when entering a developing market, it is worth hiring an agent who knows the local actors. The biggest fear of the locals is that the foreign operator comes in and does everything in the Western style. “To be able to enter a new market, a company must have a systematic approach and be tenacious in its development work. The very first thing to do is to go to a trade fair where new contacts can be made. Patience is needed: for each successful deal there are certainly twenty failures. Much time must also be spent on site, because no deal can be concluded from Finland.”Customer financing opens doorsSelling equipment means engineers talking about screws and mechanical properties. Marttala has discovered that when financing is also discussed in the sales setting with the buyer, one gets a seat at the same table with the persons who actually decide on the deals. “A financing offer combined with sales opens doors and is really an important factor. At the same time the seller learns to understand the customer’s business better.”For new potential customers, financiers should be contacted at once in order to determine what financial arrangements would be possible. “This is what we do, and at the same time we also take a closer look at customer risks. Anyone can learn export financing; the more pertinent question is perhaps whether one has the time to concentrate on it.”Alongside selling, for some years KPA Unicon has offered its customers financing solutions worked out together with banks and Finnvera. “Today, financing begins to be a prerequisite for entering any competitive bidding at all. We often hear grumblings that Finnish companies cannot match, say, German companies. We can, but we just have to make a slight effort and learn to master this aspect of export trade as well.”In recent years, Finnvera has paid special attention to financing expertise needed for the exports and internationalisation of SMEs. “For the third year in a row, we have arranged the SME Export Finance Programme where we cooperate with banks to provide information about financing options available for enterprises that engage in exports. The aim is to give companies tangible solutions that they can use when making tenders to customers abroad. It pays for the exporter to find out about financing in good time and to discuss the matter with banks and Finnvera. Before making our decision, we conduct background studies pertaining to the project, for instance, on country risks and the buyer’s creditworthiness,” Finance Manager Otto Lindstedt of Finnvera explains.Exports as a precondition for existenceA couple of years ago, exports accounted for 99 per cent of KPA Unicon’s turnover, but now the figure is smaller. The company believes that imports to Russia and the rest of the CIS countries will revive.“In terms of risks, our situation is now healthier because we had to start looking for new markets. Once the decision is made, results start to appear. Our future target is that one third of our turnover comes from Finland, one third from the CIS countries and one third from other export markets. A precondition for our existence is that we have exports,” Marttala sums up.Marttala encourages exporters to discard the “I sell, you buy” thinking and contemplate what they could do together with the customer. “The more we see ourselves as partners, the better.”Read about Finnvera’s SME Export Finance Programme

Press Releases
08.09.2015
Positive energy – SMEs still growth-oriented

SMEs see the future as being perhaps a bit brighter, and the protracted economic uncertainty has not reduced their desire for growth. Outside financing is being sought for not only working capital, but now also enterprise development.Compared to the results of last spring’s SME Barometer Survey, the economic expectations of enterprises have taken a turn for the better. Nearly one out of every three SMEs expects the economic situation to improve in the next 12 months. Also where investments are concerned, the expectations are slightly better than before, even though the trend remained on the minus side.Despite the unstable economic situation, SMEs’ desire for growth and internationalisation is still moderate: 8 per cent of enterprises report being strongly growth-oriented, while 34 per cent plan for growth wherever possible.There has been no change in the availability of outside financing and SMEs intend on applying for it slightly more than before. Interest in outside financing has grown, particularly among strongly growth-oriented companies. Even though the desire to invest is currently weak, there are signs of an upturn. Financing is primarily being sought for working capital, and one key reason that enterprises seek outside financing is to develop their operations.- According to the autumn SME Barometer Survey, interest in obtaining internationalisation financing has dropped in all sectors, while, on the other hand, strongly growth-oriented enterprises show a clear desire to expand by internationalising. Right now, the most important thing is to line up needs and offerings and make sure that not a single profitable project falls outside our network of Team Finland organisations, says Finnvera CEO Pauli Heikkilä.The Federation of Finnish Enterprises, Finnvera and the Ministry of Employment and the Economy jointly conduct the SME Barometer Survey twice a year. The aim is to examine the operations and economic operating environment of small and medium-sized enterprises. The autumn 2015 Barometer Survey is based on the responses submitted by more than 6,500 SMEs.

News
28.08.2015
Team Finland boosts its services to entrepreneurs

The Team Finland network is developing its domestic services. The aim is to simplify companies' access to the network's services and to improve the smoothness of service. Prime Minister Juha Sipilä has today appointed a new Steering Group for the network, with Mr. Risto Siilasmaa as Vice Chairman.Team Finland network is developing its domestic services. Thanks to the new service model, the network organizations can now serve companies in an unbroken chain, without referring them from one organization to another. The first changes visible to Finnish companies are one common telephone service number and an online contact form. The new services were introduced on Thursday, August 27, 2015."The idea underlying Team Finland's new domestic service model is simple: a company gets all the services it needs from a single service point. In other words, the company does not need to learn the division of tasks between public organizations in order to obtain the services they provide. Instead of dallying over complex administrative structures, we must direct our attention towards conquering new markets and building new growth. This calls for a Finnish team spirit – which is exactly what Team Finland is all about," says Mr. Olli Rehn, Minister of Economic Affairs.Service is improved by more focused customer service and tighter cooperation between the organisations in managing customer relationship. Each customer company will get a service team which, according to the customer's needs, combines the expertise of different organizations. The team makes a service proposal for the customer and takes care of the customer's changing needs. Regional activities are carried out in cooperation with local actors, including regional development agencies, chambers of commerce and the Federation of Finnish Enterprises. Due to the new service model, the entrepreneur need not know the details about the services provided by different organisations."There is a demand for Finnish expertise worldwide. The duty of the State is to ensure that the operating environment for companies is good. Well-functioning internationalization services are an integral element in this," Ms. Lenita Toivakka, Minister for Foreign Trade and Development, points out.Prime Minister Juha Sipilä has appointed Risto Siilasmaa, Chairman of the Board of Nokia Corporation and F-Secure Corporation, to act as Vice Chairman of the Team Finland Steering Group. Prime Minister Sipilä himself serves as Chairman of the Steering Group. The following persons were appointed as members of the Steering Group: Ilkka Kivimäki, Partner, Inventure Oy; Nina Kopola, President and CEO, Suominen Corporation; Päivi Leiwo, Chairman of the Board, Oilon Oy; Paula Salastie, CEO, Teknos Group Oy; Paula Lehtomäki, State Secretary, Prime Minister's Office; Peter Stenlund, Secretary of State, Ministry for Foreign Affairs; Jari Gustafsson, Permanent Secretary, Ministry of Employment and the Economy (as of October 1, 2015); and Anita Lehikoinen, Permanent Secretary, Ministry of Education and Culture."We will continue developing the Team Finland network in line with the Government Programme. We want to help even more new, internationally competitive companies to reach the global markets. At the same time, we will steer the internationalization service providers to ever closer cooperation," states Prime Minister Juha Sipilä.The Steering Group is appointed for the duration of Government's term, it is responsible for target setting and the strategic steering of the network. Its composition ensures good interaction between the business world and government.Team Finland network brings together all government-funded players providing internationalisation services for companies, working to attract foreign direct investments to Finland, and promoting Finland's country brand. The core of the network comprises of the Ministry of Employment and the Economy, the Ministry for Foreign Affairs, the Ministry of Education and Culture, and the publicly funded organisations under their supervision that offer internationalisation services.Team Finland's common telephone service number is +358 295 020 510. The contact form for the companies is available at https://www.tekes.fi/team-finland-yhteydenotto/More information Anna-Kaisa Heikkinen, Special Adviser to the Prime Minister (International Affairs), tel. +358 40 7483 867, Prime Minister's Office; Jannika Ranta, Special Adviser to the Minister of Economic Affairs, tel. +358 29 504 7165, Ministry of Employment and the Economy; Marja Koskela, Diplomatic Adviser to the Minister for Foreign Trade and Development, tel. +358 295 350 633, Ministry for Foreign Affairs. Requests for interviews of Risto Siilasmaa, Vice Chairman of the Team Finland Steering Group, please contact Mari-Kaisa Brander, Communications Manager, tel. +358 40 131 3388, Prime Minister's Office.

Press Releases
13.08.2015
The Finnvera Group’s Interim Report for January-June 2015

An eventful start of the year for FinnveraFinnvera’s mandates and tasks have expanded on several occasions during last year and the current year. In the period under review, it became possible for Finnvera to guarantee the refinancing of export credits granted by banks. This arrangement promotes the acquisition of funds for financing exports.A new guarantee, known as the Start Guarantee, was taken into use in April. It is intended for the financing of starting enterprises that have been in business for no more than three years. Demand for the guarantee, which is given for a loan granted by a bank, has been brisk. Within three months, over 400 enterprises have been granted these guarantees, for a total sum of almost EUR 20 million. Improvements to the provision of financing have been implemented in all enterprise size categories. Since the beginning of this year, when certain conditions are met, Finnvera has been able to provide a growth enterprise a loan of at most EUR 2 million without collateral in order to finance growth.In line with the Government Programme public actors are still given the task of offsetting shortcomings that exist in enterprise financing on the commercial market. During the summer and early autumn, Finnvera will work under the Ministry of Employment and the Economy to prepare new measures for implementing the Government Programme.Business operations and the financial trendDuring the first half of the year, the volume of export credit guarantee offers given by Finnvera was over four times greater than in the first six months of 2014. As concerns financing offers for export credits, the figure was nearly three times greater. The volume of loans and guarantees granted to SMEs and enterprises larger than the SME definition applied by the EU was 34 per cent greater than the year before.The Finnvera Group’s profit for January–June came to EUR 55 million (34 million). This was EUR 20 million more than for the first six months of 2014. The main factors improving the financial performance were the decreases in impairment losses on receivables and guarantee losses, as well as the increase in the fee and commission income of the parent company, Finnvera plc.The profit of the parent company, Finnvera plc, stood at EUR 56 million (40 million). The Group companies and associated companies had an effect of EUR -1 million on the profit (-5 million). Venture capital investments accounted for EUR -6 million of this effect (-7 million). Interest equalisation and the financing of export credits by Finnish Export Credit Ltd accounted for EUR 5 million (1 million).The parent company’s export financing and SME financing showed a profit: the separate result for export credit guarantees and special guarantees came to EUR 46 million (31 million), while the profit for loans and guarantees in SME financing was EUR 10 million (4 million).In accordance with IAS 8 standard, an adjustment affecting the previous financial periods has been made in the Finnvera Group’s financial statements for January–June 2015. Owing to a system error in the accrual of income from export credit guarantees and expenses from reinsurance, the sums recognised on the income statement had been too small. Correspondingly, the sums for guarantee premiums and reinsurance premiums paid in advance and shown on the balance sheet had been too large. The adjustment had an effect of EUR 53 million on the equity attributable to the parent company on the balance sheet as per 31 December 2014 and 30 June 2015. The effect on the net value of fee and commission income and expenses for the reference period 1 January–30 June 2014 was EUR 43 thousand (Notes to the accounts 1).ezembedOutlook for demand for financingDuring the first half of 2015, demand for Finnvera’s SME financing was considerably livelier than it was a year ago. The value of the applications increased by 44 per cent. Above all, the growth was attributable to Finnvera’s wider mandates, such as the possibility to finance enterprises larger than SMEs and to subscribe bonds. The SME financing volume is also expected to remain on high level during the latter half of the year.Individual large projects increased the demand for export financing, which was more than triple the figure for the corresponding period the year before. Demand for export credit guarantees is expected to remain brisk in Finland. However, the worldwide demand for guarantees has shown signs of decline in many countries because banks have increasingly often started once again to provide financing for large export transactions and, on the other hand, because investments have been falling, especially in the energy sector.CEO Pauli Heikkilä:'“For us, the first six months of the year were busy as concerns both demand for financing and the granting of financing. Thanks to our ever wider range of financing opportunities, we were able to participate in many financial arrangements. For instance, we completed our first bond subscription during the period under review. Our anchor role ensured that financing could be arranged for the total investment of over 100 million euros by Kotkamills. We are also participating in the financial arrangements for the bioproduct mill to be constructed in Äänekoski by Metsä Group. To facilitate equipment purchases from Finland, we provide guarantees for about half, or 400 million euros, of the debt needed for the project. Apart from Finnvera, six commercial banks, the Swedish Export Credits Guarantee Board (EKN) and the European Investment Bank are participating in the arrangements.”Additional information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finance and IT, tel. +358 29 460 2458Interim Report for January-June 2015 (PDF)

Press Releases
08.06.2015
Finnvera involved in a major forest industry investment

Finnvera is participating in the financial arrangements for the world’s first bioproduct mill, to be constructed by Metsä Group in Äänekoski, Finland. Valued at EUR 1.2 billion, the investment project is the largest ever carried out by the forest industry in Finland.To facilitate equipment purchases from Finland, Finnvera provides guarantees for about half, or EUR 400 million, of the debt needed for the project. Apart from Finnvera, six commercial banks, the Swedish Export Credits Guarantee Board (EKN) and the European Investment Bank are also participating in the financial arrangements.Last summer Finnvera was authorised to offer export credit guarantees for financing investments that are made in Finland and generate, or otherwise benefit, exports. Previously, export credit guarantees could only be used to facilitate financial arrangements for transactions abroad and to meet exporters’ needs for working capital and performance bonds. Another objective of the legislative amendment was to balance the competitive standing of Finnish equipment suppliers vis-à-vis their foreign counterparts.“Metsä Group’s investment satisfies the criteria defined for our new mandate, and we were able to participate in the project financing with our export credit guarantee. The project will have a positive impact on Finnish exports, as it is expected to boost exports by EUR 0.5 billion annually. The investment also has substantial effects on employment,” says Executive Vice President Topi Vesteri, who is responsible for export financing in Finnvera.“Our project is based on a careful overall assessment of the profitability of the pulp business and the long-term market situation. Financing is a central element of the whole project, and the fact that both Finnvera and the State of Finland are participating in sharing the financing risk significantly reduced the limit load of commercial banks. The loan guaranteed by Finnvera is an important component of overall financing. Conforming to the OECD terms, the loan has sufficiently long maturity and in general offers competitive terms. Finnvera plays one of the key roles in the financing package,” says Kari Jordan, President and CEO of Metsä Group.According to Jordan, the goal in equipment purchases was to ensure that the technology, delivery reliability and commercial terms were the best available. It is positive that the leading technology suppliers for the pulp industry are companies operating in Finland. For its part, the amendment made to the Act on the State’s Export Credit Guarantees enabled the high percentage of domestic equipment deliveries.“It is important that Finland has a competitive organisation promoting exports and an operating model that levels the playing field between companies operating in Finland and their competitors. Here Finnvera is doing good work, and the amendment made to the Act on the State’s Export Credit Guarantees in 2014 is an example of dynamic development to secure the prerequisites for exports,” says Kari Jordan.Construction of the mill has begun. It is scheduled to be in operation by the end of 2017.Additional information:Topi Vesteri, Executive Vice President, tel. +358 29 460 2676Image: Metsä Group

Press Releases
29.04.2015
The Finnvera Group's Interim Report for January-March 2015

Demand for financing revived despite uncertaintyFrom the perspective of the economy, the first quarter of 2015 was varied. Despite unstable and negative economic outlook, the weakening of the euro brought a little light to export enterprises. SME financing was sought actively, and Finnvera strove to meet enterprises’ expectations through its wider range of financing possibilities. The great majority of enterprises can obtain financing for profitable projects even though banks have introduced more stringent requirements for loans and collateral. Thanks to some major individual projects, the total demand for export credit guarantees, expressed in euros, was many times greater than during the same period a year ago. Finnvera’s risks pertaining to Russia have increased. The company continues to grant export credit guarantees for Finnish exporters’ projects in Russia, but the Russian counterparty's credit standing is examined increasingly carefully. The exposure trend and repayment times are monitored.Business operations and the financial trendIn January–March, the value of offers given by Finnvera for export transactions was over three times greater than the year before. Loans and guarantees granted to SMEs and – by virtue of the authorisation received by Finnvera at the start of 2015 – to enterprises larger than the EU’s definition of an SME increased by over 40 per cent on the figure for the previous year.The Finnvera Group’s financial performance in January–March came to EUR 26 million, or EUR 19 million more than during the corresponding period the year before (8 million). The main factors improving the performance were the decrease in impairment losses on receivables and in guarantee losses, as well as profits on items carried at fair value. The profit of the parent company, Finnvera plc, stood at EUR 26 million (10 million). The subsidiaries and associated companies had an impact of EUR 1 million on the Group’s profit (-3 million). Venture capital investments accounted for EUR -0.5 million (-3.3 million) of this impact. Interest equalisation and financing of export credits by Finnish Export Credit Ltd accounted for EUR 1.1 million (0.7 million).The parent company’s export financing and SME financing showed a profit: the separate result for export credit guarantees and special guarantees came to EUR 24 million (5 million) while the profit for credits and guarantees in SME financing was EUR 0.3 million (5 million). The parent company’s result included a surplus of EUR 2 million (0.2 million) from export credit financing.The Group’s key figures on 31 March 2015 (31 December 2014)•    Equity ratio                      13.9% (14.4%)         •    Capital adequacy, Tier 2     18.1% (18.6%)     •    Cost-income ratio              24.1% (25.7%)    Outlook for financingDuring the first quarter of 2015, demand for Finnvera’s SME financing was livelier than during the same period a year ago. The total sum of applications for financing increased by nearly 50 per cent. The deal flow in financing for growth and internationalisation is likely to remain good, and some signs of recovery are also visible in the subcontracting chains of large enterprises. However, most of the demand for SME financing still focuses on working capital; this would indicate that the investment level will remain low. Demand for export financing is rising when compared to the previous year. Owing to ownership arrangements in the shipyard industry, demand for ship financing will increase. Another consideration contributing to the higher demand for export credit guarantees is the fact that Finnvera can now provide financing for large enterprises’ domestic projects targeted at exports. Demand for guarantees to finance transactions in Russia has been very brisk in early 2015 despite the fact that Finnish exports to Russia have shrunk. Finnvera estimates that the Russian share of the total exposure will not increase.CEO Pauli Heikkilä:“The international market has improved although the prospects for the Finnish economy are unclear. Finnvera’s financing possibilities have been expanded in various ways. For instance, Finnvera can now subscribe bonds, finance domestic investments benefiting exports, and provide financing for larger enterprises than before. An indication of this was that demand for financing during the first quarter clearly exceeded the figure for the year before. A welcome feature was that, after a long time, enterprises also sought financing for some fairly large investments, although most of the demand still focused on working capital needs. In the challenging financial situation, banks require more self-financing from enterprises, which may make it more difficult for enterprises to obtain financing. It would therefore be important to strengthen the equity of Finnish enterprises.”Additional information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finance and IT, tel. +358 29 460 2458Interim report Q1 2015 (PDF)

News
24.04.2015
Finnvera’s Refinancing Guarantee facilitates financing arrangements for exports

It is now possible for Finnvera to guarantee the refinancing of export credits granted by banks to buyers. The arrangement promotes the acquisition of funds for financing exports. The change in Export Guarantee Act will enter into force on 1 May 2015.The Refinancing Guarantee is a separate guarantee used to arrange financing for export trade. Its purpose is to facilitate the funding of export credits granted to buyers. Finnvera can grant the guarantee, for instance, to an institutional investor that refinances an export credit given by a bank. The guarantee can also be utilised in the financing of domestic investments that benefit exports. In most cases, the guarantee is associated with one export credit, but it can also be used in a situation where the bank refinances several export credits.“The adoption of the new guarantee stimulates the operations of the financial market and the private financing of exports. It allows banks to finance some of their export and ship credits by acquiring the necessary funds from the market with the help of the Refinancing Guarantee. The guarantee arrangement also reduces our own need for funding,” CEO Pauli Heikkilä says.The guarantee helps to develop the Finnish export financing system further, increasing its competitiveness. Similar arrangements are already in use in many of our reference countries, such as Germany, Denmark and the Netherlands.Additional information: Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400

News
23.04.2015
Export credit guarantees protect Finnish enterprises against risks in Russia

Russia’s economic situation creates uncertainty for Finnish enterprises’ exports to Russia. Demand for Finnvera’s export credit guarantees for business in Russia increased in early 2015.Russian banks and enterprises do not currently have the same access to financing on the international market as before, and enterprises’ capacity to meet their financial obligations has weakened. Higher credit loss risks also hinder Finnish enterprises’ exports to Russia According to Finnvera, Finnish export enterprises’ demand for export credit guarantees for Russia has increased in early 2015.Raisioagro Ltd, a Finnish manufacturer of animal feeds, has exported its products to Russia since the 1990s and has used Finnvera’s credit insurance since the early 2000s.Sales Director Erik Norrgård of Raisioagro explains that successful trading in Russia requires, in particular, trust between the seller and the buyer. Personal relations are very important. Thanks to its long experience, Raisioagro has managed to find reliable and well-established partners in Russia, but the company also has experience of situations where the buyer has not paid as agreed.“In the first case, payments were made as agreed for a fairly long time, but when the volumes of goods increased, payment transactions ceased. This was followed by long explanations and promises and, in the end, the buyer’s bankruptcy. In the second case, the company’s excessive growth depleted the company’s liquidity. The management changed and the end result was the same: payments ceased and the company went bankrupt,” Norrgård says.When the buyers’ insolvency became evident, Finnvera’s export credit guarantees eased Raisioagro’s situation. On the basis of the guarantees, Raisioagro was paid compensation for the sales receivables it did not repatriate.Creditworthiness of Russian enterprises under closer scrutinyAccording to Finnvera’s Claims Adviser Tarja Junno, Finnvera received about 30 claims for compensation in 2014. In the current year, the figure so far is about ten. At present, most of the claims are associated with Russian buyers.“As a rule, the reason behind a claim is the buyer’s insolvency or reluctance to pay. Often the exporter has said that the reason for the buyer’s default on payments is Russia’s economic situation,” Junno says.Eeva-Maija Pietikäinen, Team Leader, Finance, at Finnvera, says that, for an enterprise engaged in foreign trade, consideration of buyer risks and the buyer’s solvency is part of risk management. In the case of weak buyers, advance payments or otherwise secure payment terms are recommended.“If payment time is granted, insuring credit risks is part of risk management. In other words, it can be compared to property insurance. Unprotected risks may become fatal for the enterprise’s cash flow and profitability,” Pietikäinen cautions.Finnvera has tightened its guarantee policy vis-à-vis Russia, and the exposure trend and repayment times of transactions with Russian partners will be monitored closely. Export credit guarantees continue to be granted, but Finnvera will thoroughly investigate Russian buyers’ creditworthiness and will pay particular attention to buyers’ capacity to withstand fluctuations in the exchange rate of the rouble and in interest rates.In addition, Finnvera checks that the buyer companies and their owners are not on the list of EU sanctions. Exporters are requested to provide assurance that the products exported are not under export restrictions and that the necessary export permits are in order.Differences in corporate culture and legislation create challengesAccording to Erik Norrgård, exports to Russia are complicated by the Russian corporate culture, where it is very difficult to obtain access to companies’ managers. In addition, the rapid growth and indebtedness of companies pose risks to commerce. Norrgård characterises Russian legislation as challenging.“Information is splintered and, for instance, different customs districts may apply differing practices. It may also be difficult to obtain accurate information about the buyer company’s actual situation, since especially smaller undertakings are not necessarily used to being asked to show their financial statements,” Norrgård says.Despite the challenging economic situation in Russia, Raisioagro plans to increase its sales there. More than before, however, the company will make use of its familiar contacts and will focus on existing agreements.Norrgård recommends that enterprises planning exports to Russia take out guarantees. It is also advisable to prepare thoroughly for the initial investigation and for any barriers to sales that might exist. Norrgård says that restrictions posed by the customs and other authorities often come unexpectedly and at a short notice.“It’s good to be prepared for the fact that, in particular, buyers associated with primary production do not necessarily buy anything without some sort of a limit. The risk must always be weighed case-by-case. The Russians are a proud people, and it is good for neighbours across the border to recognise these realities for commerce. Especially in these times, Finnvera and other additional assistance are needed in exports to Russia.”Export credit guarantee: By using export credit guarantees, exporters and providers of financing for exports can protect themselves against credit losses that may arise when a foreign customer is granted payment time. If needed, it is also easier to arrange financing to a foreign customer for purchasing the export product when Finnvera covers the credit risk. Finnvera grants guarantees for countries with sufficient credit standing and assesses the creditworthiness of buyers and guarantors. The risks covered by export credit guarantees can be commercial, such as bankruptcy or reluctance to pay, or political, i.e. associated with the buyer’s country. Apart from the receivables, the guarantees also cover costs arising from recovery. Claims for compensation are submitted in writing, either as a free-form application or on the claims form provided by Finnvera. Once the application has arrived , Finnvera starts the claims process to determine whether the general guarantee terms and the terms of the guarantee agreement, such as the prescribed times for filing the claim and the completion of export declarations, have been met.

Press Releases
10.04.2015
Harri Sailas and Antti Zitting elected to Finnvera Board

On 9 April 2015, Finnvera’s Annual General Meeting elected new members to the company’s Supervisory Board and Board of Directors.Composition of the Supervisory BoardThe new members on the Supervisory Board are Mika Harjunen, Information Security Manager; Ann-Louise Laaksonen, Vice Chair; Veli-Matti Mattila, Chief Economist; Hanna Sarkkinen, M.A; and, Senior Adviser, Financing.Johannes Koskinen, Member of Parliament, will continue as Chairman of the Supervisory Board, and Lauri Heikkilä, Member of Parliament, as Vice Chairman. Paula Aikio-Tallgren, Entrepreneur; Eeva-Johanna Eloranta, Member of Parliament; Lasse Hautala, Member of Parliament; Olli Koski, Chief Economist; Leila Kurki, Employment Policy Expert; Esko Kurvinen, Member of Parliament; Anna Lavikkala, Labour Market Director; Lea Mäkipää, Member of Parliament; Antti Rantakangas, Member of Parliament; Osmo Soininvaara, Member of Parliament; and Sofia Vikman, Member of Parliament, will continue as members of the Supervisory Board.Composition of the Board of DirectorsThe new members on the Board of Directors are Harri Sailas, B.Sc (Econ.), and Antti Zitting, Chairman of the Board.Markku Pohjola, B.Sc (Econ.), will continue as Chairman: Pekka Timonen, Director General, as First Vice Chair; and Marianna Uotinen, Specialist Counsel, as Second Vice Chair of Finnvera's Board of Directors. Kirsi Komi, LL.M.; and Pirkko Rantanen-Kervinen, B.Sc (Econ.) will continue as Board members.Financial Statements 2014 and distribution of profitsThe Annual General Meeting adopted the Consolidated Financial Statements and the Parent Company’s Financial Statements (link) for the period 1 January–31 December 2014, discharged the Supervisory Board, the Board of Directors and the Chief Executive Officer from liability, and approved the proposal made by the Board of Directors for the use of the parent company’s profits.Election of the auditorKPMG Oy Ab was re-elected Finnvera’s regular auditor with Juha-Pekka Mylén, Authorised Public Accountant, as the principal auditor.Further information:Pauli Heikkilä, CEO, tel. +358 (0)29 460 2400Risto Huopaniemi, Senior Vice President, Administration, tel. +358 (0)29 460 2520

Press Releases
25.03.2015
Finnvera continues to grant export credit guarantees for exports to Russia – the exposure trend is being monitored

Finnvera grants export credit guarantees for Finnish exporters’ transactions in Russia. The exposure trend and repayment times are monitored closely.The country classification determined by the OECD member countries for Russia has been downgraded from 3/7 to 4/7. The country classification is based on an assessment of the country’s economic situation and ability to meet its financial obligations. A downgraded country class raises export companies’ guarantee premiums. Risks in export credit guarantee operations have increased, for instance, because it has become more difficult for Russian banks and enterprises to obtain financing from international markets.Finnvera will continue to grant export credit guarantees for exports to Russia, but the Russian counterparty's credit standing is examined increasingly carefully. Before a guarantee decision is made, it is ensured that financing has been arranged for the exports, the bank providing the financing is known, and the current sanctions do not restrict the arrangement of financing or the granting of the guarantee. As part of risk management, Finnvera will monitor the development of outstanding commitments. At the end of 2014, Russia accounted for 7 per cent of all outstanding commitments. Demand for export credit guarantees for transactions in Russia increased in early 2015. The trend in Finnvera’s exposure vis-à-vis Russia will also be taken into account in the overall assessment of large projects worth several tens of millions euros.“Finnvera monitors the exposure trend and the repayment times of credits. Since a large share of the current commitments for Russia will be paid back within the next few years, there will constantly be room for new commitments,” says Pauli Heikkilä, CEO of Finnvera.Additional information: Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Topi Vesteri, Executive Vice President, tel. +358 29 460 2676

Press Releases
27.02.2015
Financial Statements of the Finnvera Group for the fourth quarter and 1 January–31 December 2014

Finnvera’s possibilities to provide financing improved markedlyThe Finnish financial market was marked by diffuse economic prospects and the effects of tightening bank regulation, which were felt, in particular, in the credit terms and credit margins of the weakest borrowers. Demand for financing focused heavily on working capital, and there were very few investment projects. The government greatly improved Finnvera’s possibilities to provide public financing.The Group’s financial trend The Finnvera Group’s profit for the year 2014 was EUR 101 million, or 27 million euros more than the year before (75 million). The main factor improving the performance was the decrease of 47 per cent in impairment losses on receivables and in guarantee losses, totalling EUR 34 million (64 million). In addition, financial performance was improved by the reduction of administrative expenses by 5 per cent, to EUR 41 million (43 million) and the increase of 3 per cent in the net value of fee and commission income and expenses, totalling EUR 138 million (134 million). Correspondingly, the performance was encumbered, among other factors, by the lower net interest income, EUR 52 million (56 million), due to a fall in interest levels and in the amount of outstanding credits in SME financing. Moreover, losses on venture capital investments and on the recognition of derivatives and liabilities at fair value totalled EUR 10 million (2 million). The financial performance of the parent company, Finnvera plc, in 2014 came to EUR 94 million (69 million).The Group’s operating profit amounted to EUR 102 million (75 million) and was broken down as follows: EUR 6 million for SME financing (7 million) and EUR 104 million for export financing (74 million). The operating profit from venture capital investments was EUR 7 million in the red (5 million).The Finnvera Group’s profit for the last quarter of 2014 was EUR 25 million, or clearly less than for the third quarter (42 million). The main factors affecting the smaller profit were the impairment losses on receivables and guarantee losses, which nearly doubled and were EUR 19 million more than in the third quarter.Within the past few years, Finnvera’s outstanding commitments and their risk levels have risen significantly. However, in 2014 the outstanding commitments for SME financing fell and the risk level did not rise any longer. The outstanding commitments for export financing increased in 2014 but, as in the case of SME financing, the risk level did not rise. Nevertheless, the risk levels are still high, as evidenced by the considerable impairment losses and guarantee losses in SME financing in recent years, even though the impairment losses on receivables and guarantee losses in 2014 were below the figures for 2013. In export financing, no major losses have been recorded in recent years or in 2014. The estimated provisions for losses in export financing were reduced in 2014 when compared against the provisions for losses in the financial statements for 2013.The extent and risk level of Finnvera’s outstanding commitments will have a significant impact on its financial performance and long-term economic self-sustainability in the coming years. In examining the financial performance, it is important to note that, at the end of December 2014, Finnvera’s total commitments for export credit guarantees and special guarantees amounted to EUR 12.6 billion and the commitments for credits and guarantees in SME financing, as well as guarantee receivables, stood at EUR 2.4 billion. Seen against these commitments, the net profit building a loss buffer on the balance sheet is now about 0.7 per cent at the annual level and the equity 6 per cent.The group’s key figures on 31 December 2014 (31 December 2013) Capital adequacy, Tier2 18.6% (16.9) Cost/income ratio 25.7% (27.0) Equity ratio 14.4% (18.4) Outlook for financingThe U.S. economy has got a foothold on the growth path, but economic growth in the euro area is stagnating. In Russia, the sanctions focusing on the country’s economy, the falling oil prices and the change in the political direction caused financial difficulties for the country in late 2014. The situation will affect the demand for Finnvera’s export financing and the company’s risk position in an essential way if the current uncertain political and financial situation continues. Finnvera’s financing plays an increasingly central role in the conclusion of export transactions. Despite this, it is expected that the demand for export financing will decrease further from the previous year, as uncertainty keeps the volume of investments small. Finnvera’s possibilities to provide financing for large enterprises’ domestic projects intended for exports will become concrete when Finnvera can participate in investment projects undertaken by the export industry in Finland.The slow economic growth and the low investment level will keep the demand for SME financing moderate in 2015. However, according to Finnvera’s estimate, the new mandates received by the company and, for its part, the regulation of banks may increase the overall level of demand. Most financing needs are still associated with working capital.The uncertainty of the economy makes it difficult to predict financial performance. The materialisation of large individual export credit guarantee claims may considerably weaken the projected situation. According to the current estimate, the Finnvera Group’s financial performance for 2015 is likely to be somewhat weaker than that for 2014.CEO Pauli Heikkilä:“The government greatly improved Finnvera’s possibilities to provide public financing. Thanks to the amendments made to legislation and commitments, we can increase our risk-taking in both SME financing and export financing. Financing through bonds, guaranteeing large enterprises’ domestic investments relating to exports, and the possibility to provide financing for enterprises larger than the SME definition applied by the EU, diversified our selection of means. Once the bill on the refinancing guarantee is passed, we can state that, in terms of authorisations and financial instruments, we are on the same level as our principal reference countries, such as Sweden and Germany.One of our goals is to identify growth companies and encourage them to grow internationally. With respect to enterprises operating on the domestic market, our principle is to share risks so that a bank or some other private provider of financing, such as an insurance company, is the principal source of financing. In particular, we focus our financing on situations of change within companies and on the financing needed by start-up enterprises during establishment. We continue our efforts to ensure that our financing has the maximum impact and is allocated to the most important uses in view of industrial policy.Financial Statements 2014 (PDF)Statement on the Corporate Governance and Steering System 2014 (PDF)Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458DISTRIBUTIONNASDAQ OMX Helsinki OyOslo Børs ASALondon Stock ExchangeThe principal mediawww.finnvera.fiFinnvera publishes its Annual Report for 2014 as an electronic document on the company’s website in the week 11 in Finnish, English and as a summary in Swedish. The Annual Report also includes the Corporate Responsibility Report.

News
23.02.2015
Breaking into the South American drilling market with the help of Team Finland LetsGrow

Arctic Drilling Company is looking for new markets in Chile. To accelerate its internationalisation process, the company has participated to the Team Finland LetsGrow financing programme.Founded in 2004, Arctic Drilling Company (ADC) provides drilling services, such as sampling and measuring, and develops machinery for surface and underground drilling. The company's products and services are mostly used in mineral exploration. ADC's customers include some of the largest mining companies in the world, such as LKAB, Anglo-American, Agnico-Eagle and FQM. The company's factory is located in Rovaniemi, Finland.ADC employs almost 80 people, and its turnover has been growing steadily; last year the company's turnover was approximately EUR 10 million. The company's primary markets for drilling services are the Nordic countries."Competition in the Nordic countries is fierce, as the volume of work and prices have dropped in the last two years. Chile is a rapidly growing market area at the moment", explains Aleksi Autti, ADC's Head of Exports."We are looking to grow through export trade. Our main goal is to secure a share of the Chilean market, make our operating model better suited to the international domain and invest in the manufacture and sales of drilling machinery in specific markets. LetsGrow seemed well suited for these purposes."The Team Finland LetsGrow financing programme is based on the premise that Finnvera grants an unsecured loan, Tekes provides grant for innovation services and Finpro provides advice on growth and internationalisation.According to Autti, the LetsGrow funding and advice bundle is an important tool for businesses that are looking to invest in growth. Businesses are more likely to apply for funding if they can get a comprehensive financing service for promoting export trade from the same source.ADC strives to stand out from the competition by investing in next-generation drilling machinery. The machines are automated and move independently, which makes them safer and more efficient than conventional drilling machines. ADC invests in quality, environmental friendliness and safety, which is evidenced by the company's ISO9001, ISO14001 and OHSAS18001 certification. Arctic Drilling Company is the first Nordic company in its field to be given these certificates."In five years' time, ADC will be operating not just in the Nordic countries but also in at least three other market areas on a permanent basis, and the company will be one of the biggest employers in Rovaniemi."Text: Kaj Nordgren, TekesPhoto: Arctic Drilling Company

Press Releases
10.02.2015
Eager to internationalise – the availability of financing isn’t an obstacle

SMEs are planning to apply for internationalisation financing despite the record weak economic outlook. The availability of financing is considered to be good.Economic expectations have undergone a major change compared against the survey done last autumn. The balance figure is negative for the first time since 2009, and 28 per cent of the respondents assessed that the downward trend of the economy will continue for the next 12 months.From the perspective of financing, a positive feature in this spring’s SME Barometer Survey is that enterprises are willing to apply for internationalisation financing. Plans to apply for financing have risen in all sectors. Aside from the internationalisation expectations, the willingness to grow is also reasonably good despite economic uncertainty: seven per cent of enterprises say that they have a strong desire to grow and 35 per cent plan to grow according to their possibilities.SMEs perceive that providers of financing have set stricter requirements for collateral and expect companies to provide larger shares of self-financing. In general, however, financing is not seen as a problem, and over 80 per cent of the respondents say that the availability of financing has not affected the implementation of projects.“Last year, enterprises fell short of their growth targets mainly because of weak demand and stiffer competition. The business cycles may be unfavourable, but the markets still exist, and the winners on the markets are those who develop their competitiveness. Growth enterprises now need all possible support to gain a foothold on international markets. This is where we want to make an impact through financing, in cooperation with the other Team Finland organisations,” says CEO Pauli Heikkilä of Finnvera.Improved financing options for FinnveraDemand for outside financing will decline slightly during the next 12 months. Companies are cautious about investments and seek financing mainly for working capital.Finnvera’s possibilities to finance different-sized enterprises improved markedly at the start of the current year. Finnvera’s range of tools is now considerably wider than before, especially in terms of encouraging investments and financing growth.“We can now also finance enterprises larger than SMEs. On the other hand, small enterprises will be able to get loans of up to 50,000 euros directly from Finnvera. When business is profitable, we are increasingly better equipped to contribute to financing growth,” Heikkilä says.The Federation of Finnish Enterprises, Finnvera and the Ministry of Employment and the Economy jointly conduct an SME Barometer Survey twice a year. The goal is to study the operations and economic environment of small and medium-sized enterprises. The barometer for spring 2015 is based on responses from over 4,400 SMEs.Hela SMF-barometer (på finska)Arbets och näringsministeriet: Konjunkturbilden för tillväxtorienterade SMF-företag positivare än för andraAdditional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Jonna Myllykangas, Communications Officer, tel. +358 29 460 2740Finnvera 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, venture capital investments 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.

News
30.01.2015
Finnvera will be able to provide short-term export credit guarantees for exports to Greece until 30 June 2015

Based on its own risk assessments, Finnvera may continue to provide short-term export credit guarantees for exports to Greece until 30 June 2015. The special status of Greece among the EU Member States is based on the decision of the EU Commission to continue to exclude Greece from the list of countries for which Finnvera cannot provide short-term export credit guarantees (risk period less than two years) in a normal market situation. The Commission decision will remain in effect until 30 June 2015.Under the Communication on short-term export credit insurance, which is based on the EU competition legislation and which entered into force in 2013, public credit insurance institutions may not guarantee marketable risks (risks that private insurance companies are prepared to guarantee).According to the Communication, in a normal market situation, Finnvera may not provide guarantees with a risk period of less than two years (manufacturing + credit repayment period) to following countries: EU Member States (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom) Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland, United States of America The EU Commission has also granted Finland an exemption concerning short-term export guarantees to all countries listed above. Read more

News
28.01.2015
2014 – A year of divergent events

Information on Finnvera’s operations in 2014The year 2014 started on a more positive note than the past years, but political crises blurred the outlook again. The cautious and anticipatory atmosphere caused by the general economic situation was reflected in the operations of companies and, through client enterprises, in Finnvera’s operations. Fortunately, the prospects reported by many client enterprises at the turn of the year seemed to have improved again slightly.The Finnish financial markets operated better than some individual opinions would suggest but were still unusually polarised in 2014. In particular, smaller companies reported financing difficulties in cases where the company’s balance sheet structure had weakened. Demand for export financing remained at a high level. Finnvera’s opportunities to provide financing for enterprises were increased through both legal amendments and Government decisions, especially during the latter half of 2014.“Finland needs new businesses and new growth enterprises, and we facilitate the creation of these success stories by using our improved financing opportunities,” says CEO Pauli Heikkilä.Working capital neededIn 2014, Finnvera’s financing for SMEs totalled EUR 1.0 billion, which was about one fifth more than in 2013. Some of this increase was due to the rescheduling of financing granted previously. The bulk of the financing granted, or 49 per cent, was used to finance working capital. Less financing than the year before was needed for company reorganisations and investments. The sectors that received the most financing were industry, services to business, and trade and consumer services.At the end of 2014, outstanding commitments for SME financing totalled EUR 2.8 billion.The volume of offers for export credit guarantees increasedThe volume of guarantee offers given increased by about half on the previous year, to EUR 5.0 billion. The growth was partly explained by the fact that some agreement negotiations associated with exports, which had still been in progress the year before, were brought to a conclusion in 2014.In total, 88 per cent of the guarantees offered concerned the traditional sectors of Finnish capital goods exports, such as shipbuilding, telecommunications and the forest industry. Seen against the previous year, the most rapid growth was recorded in offers given for exports to industrialised countries and Latin American countries. Their combined share was 86 per cent. The largest volumes of guarantees were offered for the United States, Finland and Germany.At the end of 2014, outstanding commitments for export financing totalled EUR 12.2 billion.Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Finnvera publishes the financial statements for the period 1 January to 31 December 2014 on 27 February 2015 and the Annual Report during week 11.

Press Releases
27.01.2015
Finnvera's portfolio companies received EUR 15 million from business angels

Business angel investments are rapidly increasing in Finland. Finnvera's venture capital portfolio companies received a total of EUR 15 million in business angel investments in 2014.The investments made by individuals (business angels) in the portfolio companies of the Seed Fund Vera, which is administered by Finnvera's venture capital investments, increased for a fifth successive year.  In 2014, the fund made a total of EUR 14.3 million in initial and follow-on investments in 72 early-stage companies.  There were a total of 133 companies in the fund's portfolio at the end of last year.  About one third of the portfolio companies also received business angel investments totalling EUR 15 million.  For the first time, the amount of angel investments exceeded the investments made by the fund.Business angels make investments totalling between EUR 40 and 50 million in Finland each year.'In proportion to the annual volume of business angel investments, one can say that Finnvera plays an important role in the channelling of angel financing in early-stage companies,' says Leo Houtsonen, who is responsible for Finnvera's venture capital investments.In euro terms, the business angel investments made in Finnvera's venture capital portfolio companies almost quadrupled between 2009 and 2014. The average size of an investment was about EUR 60,000 and investments were made by a total of 201 business angels.  A total of 253 investments were made during the year. Finnvera will make direct investments in innovative early-stage companies until the end of 2017.Further information: Leo Houtsonen, Finnvera plc, tel.  +358 (0)29 460 2733, leo.houtsonen (at) finnvera.fi

News
27.01.2015
Kasvu Open helps companies' growth dreams come true

The nationwide Kasvu Open 2015 business competition has started. It provides companies with free support and coaching for promoting growth and renewal.Kasvu Open ('Growth Open') is an effective growth-coaching process, in which each participating company has a chance to develop its operations and business idea with experts. In 2015, growth-coaching will be provided on more than 20 regional or sectoral growth paths. A total of 455 companies will be able to join the coaching process and 80 of them will be selected to the Kasvu Open final, which will take place on 22 and 23 October.'Finnvera was also involved in the Kasvu Open process last year as a partner and a provider of coaching. Judging by the feedback received from companies, Kasvu Open provides concrete tools for growth. You rarely have the chance to test your own ideas before such a diverse group of experts. On the other hand, this is also a great opportunity for us at Finnvera to get close to Finnish growth companies,' explains Titta Mantila, Finnvera's Director of Finance.Applications for Start up and Start again series can be submitted until 30 June on the website of Kasvu Open. The Start again series is intended for companies seeking renewal. Companies are supported by a total of 910 experts representing different business sectors, who offer their services for Kasvu Open free of charge.'Kasvu Open provides a comprehensive package of business and financing expertise and the aim is to help your company to succeed,' says Titta Mantila, encouraging enterprises to take part.Finnvera, together with Nordea and Sonera, is the main partner of the Kasvu Open competition.Further information: Uljas Valkeinen, Director of Kasvu Open, tel. +358 (0)50 568 8555http://www.kasvuopen.fi http://www.kasvuopen.fi/osallistu

Press Releases
19.01.2015
Finnvera now in a better position to provide financing for Finnish companies

Changes introduced at the start of 2015 mean better financing opportunities for companies of different sizes, make the financing more effective and improve companies' competitiveness.  Finnvera can now increase its risk-taking, especially in the financing of start-up and growth companies and companies expanding their international operations.Finnvera can grant credits to SMEs that have profitable business operations but that have difficulty getting all the necessary financing from banks.From the start of 2015 Finnvera has also been able to provide financing for larger companies. The changes were introduced because while there is a broad range of public financing options available for Finnish companies meeting the EU criterion of an SME, companies that are only slightly larger have much fewer options.  For example, a growth-oriented company can quickly exceed the limit of 250 employees laid out in the EU definition.  With a new three-year mandate, Finnvera will be able to provide financing for companies that are important for the Finnish economy and that have a turnover of up to EUR 300 million.Moreover, the scope of the Act on the State's Export Credit Guarantees was widened on 1 September 2014. Under the amendment, which applies to investments made in Finland, Finnvera may provide the party making the investment or the suppliers with financing when the investment helps to boost exports.  The new provisions do not involve any upper limit to company size or time limit.Improvements for companies of all sizesIn the future, small companies can get larger credits directly from Finnvera because the amount of micro-financing has been increased from EUR 35,000 to EUR 50,000.  This change also has a major impact on thousands of existing Finnvera customers.As regards larger companies, Finnvera normally shares the financing risks with banks on an equal basis. However in high-impact projects and in the financing of contracts, Finnvera may make a larger financing contribution.  Finnvera can now provide financing with lower amount of collateral than before.  If a company has sufficiently strong financial standing, even collateral-free growth financing is possible.  In investment projects, Finnvera can also provide financing with longer repayment periods than banks.These reforms and the wider financing powers help Finnvera to assist companies to get started, to grow and to expand internationally.– We want to find the companies that would otherwise not find us but which we can help to become more competitive by offering them financing solutions. The new powers will make this much easier.  The reforms have given us tools that organisations doing the same tasks in other countries already have.  In the current economic situation, we want to encourage companies to make investments and to seek new growth. Not a single profitable project should fail because of insufficient financing, says Pauli Heikkilä, Finnvera's CEO.Finnvera has made a favourable financing decision in about 80 per cent of the applications it has received from SMEs. In 2014, SME financing applications totalled 21,677 (+7%) and had a value of EUR 1,408 million (+1%).Further information: CEO Pauli Heikkilä, tel. +358 (0)29 460 2400

News
19.11.2014
Built environment specialist Rapal goes global with Team Finland LetsGrow

The company Rapal seeks strong international growth in several markets. The growth is accelerated through Team Finland LetsGrow finansing programme.Established in the early 1990s, Rapal specialises in consulting services and software for developing working and living environments. The firm, which is wholly staff owned, helps companies develop the working environment to meet changes in working practice, and to save office costs and to draw up reliable infrastructure cost estimates.Modern work is location-independent and current offices are not necessarily designed with this in mind. In the best case scenarios Rapal can achieve a triple win situation. Employees can be free to decide for themselves the best place to do the job, the company can save office costs and the environmental load can be reduced through less commuting and business travel.“Through our software and consulting services Rapal's aim is to verify and assess the impact of developing the working environment in monetary, carbon footprint, employee satisfaction and wellbeing terms,” says CEO Tuomas Kaarlehto.Growth in the United States and Central EuropeRapal is seeking international growth through the Team Finland LetsGrow finansing programme, where Finnvera offers unsecured loans, Tekes provides funding for securing expert services and Finpro advice for internationalizing.“Our cash flow and equity are in good shape. Money has been set aside in our books for capturing new markets. The loan from Finnvera, obtained through the LetsGrow programme, is an excellent way to share the risks involved in internationalisation and provides some financial breathing room, which is especially useful in these economically tough times. The Tekes funding has been used, among other things, for marketing research in Central Europe and China.”Rapal's office is located in Leppävaara in Espoo, and the company has a subsidiary in the US in San Francisco. The group has about 70 employees. Turnover has been steadily rising since the company was established and annual growth stands at around 15 per cent. The company's customer base is made up of government and large corporations in various sectors. The largest client of the California based subsidiary is the biotechnology company Genentech.“The United States is our most important market. It can be really difficult, but it is definitely the most productive. We are also currently looking into the potential in Central Europe, because we believe our products have a clear market there.”www.letsgrow.fiKaj Nordgren, TekesPhoto: Rapal

Press Releases
30.10.2014
The Finnvera Group’s Interim Report for January–September 2014

More tools and authorisations for enterprise financingThanks to legislative amendments and Government decisions, Finnvera has gained important additional authorisations to participate in the financing of projects undertaken by both SMEs and export companies.Finnvera can increase risk-taking in the financing of SMEs because the compensation paid by the State of Finland to Finnvera will cover a greater share of potential losses in Southern Finland as well. In export financing, the statutory ceilings for export credit guarantees and export credits have been raised markedly. The new financing instruments include the option to subscribe to bonds issued by SMEs, the joint Team Finland LetsGrow financing programme of Finnvera, Finpro and Tekes, and the possibility to guarantee domestic investments associated with exports.Russia’s weakened economy and the sanctions and retaliatory sanctions that have stemmed from the Russo-Ukrainian crisis have strained Finnish companies engaged in trade with Russia. The sluggish economy and the low investment level were reflected in the demand for financing.Business operations and the financial trendThe euro sum of the loan and guarantee offers given to SMEs in January–September was slightly higher than during the corresponding period the year before. Many of the offers continued to be associated with working capital or with the rearrangement of financing granted earlier. The amount of offers given for the financing of export trade was almost one third higher than at the same time the year before.The Finnvera Group’s profit for January–September was EUR 76 million. This was 8 per cent more than for the first nine months of 2013 (71 million). The main factors affecting the improved performance were lower administrative expenses than last year, the increase in net interest income and fee and commission income, and decreased guarantee losses and loss provisions in export credit guarantee and special guarantee operations. Underlying the increase of the fee and commission income were some individual major export credit guarantees that came into effect and the general rise in risk premiums on the market. In contrast, the improved performance was weighed down by impairment losses on receivables in SME financing and by losses from venture capital investments, both of which were greater than the year before.The financial performance of export financing and SME financing by the parent company, Finnvera plc, came to EUR 85 million, or EUR 11 million more than during the corresponding period the year before (74 million). Finnvera plc’s profit for export financing was EUR 79 million (63 million) and that for credits and guarantees in SME financing EUR 4 million (11 million).The Group’s key figures on 30 September 2014 Equity ratio 15.9 per cent (19.3 per cent/30 September 2013) Capital adequacy, Tier 2 18.2 per cent (16.9 per cent/30 September 2013) Cost-income ratio 25.3 per cent (25.1 per cent/30 September 2013) Outlook for financingThe economy has started to revive in the United States, but in Europe growth continues to be sluggish. Political turmoil in the Middle East maintains the overall uncertainty. Owing to the dispute between Russia and Ukraine, uncertainty about the financing of transactions to Russia, a market important to Finnish exporters, will continue.Banks are very cautious when funding transactions in Russia, as banks operating in the EU must also consider the existing and anticipated sanctions posed by the United States. In Finland, SMEs and medium-sized enterprises encounter increasing difficulties in financing export trade, as banks are directing their export finance services to projects that are more profitable to banks, which in practice means major companies and their larger transactions.The decision on the ownership of the Turku shipyard, reached in September, and the new orders publicised at the same time, mean that Finnvera’s commitments pertaining to shipbuilding contracts will rise. The authorisation to guarantee debt financing for domestic investments associated with exports, which came into effect at the beginning of September, has aroused much interest among export companies and Finnvera’s financing partners. It seems that this opportunity given to Finnvera to share risks can be a significant boost to decisions concerning new investments, and investments to replace ageing production capacity, within the export industry. The reform may also promote individual infrastructure investments serving the export industry, as well as domestic deliveries of equipment and services for these projects.Finnvera does not expect the demand for SME financing to reach a very high level during the final months of the current year. The factors contributing to this situation include the pessimistic economic outlook, an unusually low investment level and, in part, the regulations posed on banks. Increasingly often, SMEs need financing for working capital.According to the current estimate, the Finnvera Group’s financial performance for 2014 is likely to reach at least the same level as in 2013. A similar estimate made early in 2014 expected the financial performance to fall below that in 2013. The uncertainty factors associated with economic trends and if more risks materialise than has been anticipated, the situation may weaken considerably from what is projected.CEO Pauli Heikkilä:“During the past couple of years, and especially this year, the government has greatly improved Finnvera’s possibilities to provide public financing. Thanks to the amendments made to legislation and commitments, we can increase our risk-taking in both SME financing and export financing. The possibility to subscribe bonds issued by SMEs and to guarantee large enterprises’ domestic investments relating to exports diversified our selection of instruments. It would be essential, as of the beginning of next year, to implement the financing possibility for enterprises larger than the SME definition applied by the EU so that measures such as the possibility to subscribe bonds could be utilised in our enterprise financing. I also hope that the legislative proposal for what are known as refinancing guarantees will be presented before the end of the year. After these changes we can state that, in terms of authorisations and financial instruments, we are on the same level as our principal competitor countries. The consequences of recent events complicate the operations of Finnish companies engaged in exports to Russia.For this reason, the turnover of an SME may have fallen considerably. We can offer financing to strengthen the working capital of SMEs that are encountering difficulties because of the crisis. We also continue to grant export credit guarantees for exports to the Russian market. We comply with the sanctions approved in the EU and we assess our possibilities to participate in projects on a case-by-case basis, in keeping with our normal criteria.Finnvera also continues to provide venture capital investments for innovative start-up enterprises. Owing to the decisions made on the division of tasks between public actors, we shall gradually give up venture capital investments within the next few years.”Interim Report 1 January–30 September 2014 (PDF)Additional information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458

News
22.09.2014
SME Export Financing - learning by doing

There is export financing available, but do you know how to take advantage of all the alternatives? Finnvera's SME Export Finance Programme offers information and practical tools for the financing of exports.The programme is aimed at Finnish SMEs engaged in direct exports. Its objective is to familiarise companies with export financing solutions. The programme is also suitable for larger enterprises, which need basic information on export financing."SMEs aren't always familiar with financing and payment solutions involving exports and internationalisation. The right solutions promote negotiations and can be a decisive factor in winning bids. According to the companies that have participated in our programme, the best things they took away from it were the new ideas on financing solutions for concrete export projects," explains Finnvera Senior Adviser Erno Ihto.The free programme is offered in close co-operation with banks operating in Finland. A one-day Export Finance Workshop will be held for each participant enterprise by Finnvera and a bank chosen by the enterprise.  Seminars on export finance will also be held for the programme participants.Enterprises are chosen based on applications. The enterprise chosen for the programme: must have a profitable business; has already concluded its first export deals; and wants to grow by increasing exports.Apply for the autumn programme group by no later than 31 October 2014!Read more on the SME Export Finance Programme page or request additional information from our telephone service at +358 (0)29 460 2580.

Press Releases
09.09.2014
Weak economic situation has not dampened the willingness to grow – financing is still available for growth companies

No change in companies' willingness to expand even though growth expectations have dropped substantially.  There has been a slight increase in demand for financing. However, instead of funding for investments, companies are continuing to seek financing for working capital.The weak economic situation has not dampened the enterprises' willingness to grow: One SME in ten says that it is strongly oriented towards growth, while 37 per cent of the companies say that their aim is to grow within their limits.- It is now important to ensure that no profitable project fails because of the lack of financing.  We are actively seeking growth-oriented companies and we are involved in a large number of national projects targeting growth companies.  One of them is the Team Finland LetsGrow financing programme in which we offer financing without collateral, explains Finnvera's CEO Pauli Heikkilä.After a positive period in spring, companies' expectations about their future investments have turned negative.  About one in five of all SMEs plan to seek financing during the next 12 months, focusing on the acquisition of working capital rather than on obtaining funding for investments.    The proportion of enterprises planning to seek financing is, however, three percent higher than in the spring survey.  The interest in outside financing has grown, especially among strongly growth-oriented companies.Even though, according to the survey, there has not been any change in overall availability of financing, three quarters of all enterprises say that the financing terms have become stricter.Finnvera can continue to participate in the financing of projects in Russia The crisis in Ukraine has created uncertainty in the trade with Russia. The sanctions already in place have also had an impact on the operations of the banks financing the trade. Finnvera is closely monitoring the situation.Russia has been the biggest market for Finnvera's export credit guarantees and a target country for our internationalisation financing. Finnvera can still provide coverage for political and commercial risks for new projects in Russia to the extent that the export product in question or the Russian customer is not subject to EU sanctions.  The chances to take part in the projects are always assessed on a case-by-case basis. - Finnvera may also offer financing for working capital for those SMEs that have suffered as a result of the recent events in Russia. Finnvera's role becomes more important when companies find it difficult to obtain private funding or when there is a temporary weakening in their finances as a result of the overall economic situation, Pauli Heikkilä says.The Federation of Finnish Enterprises, Finnvera and the Ministry of Employment and the Economy jointly conduct the SME Barometer Survey twice a year. The aim is to examine the operations and economic operating environment of small and medium-sized enterprises. The autumn 2014 Barometer Survey is based on the responses submitted by more than 5,800 SMEs.Further information:Pauli Heikkilä, CEO, tel. +358 (0)29 460 2400Jonna Myllykangas, Communications Officer, tel. +358 (0)29 460 2740

Press Releases
25.08.2014
Export credit guarantees now also available for domestic export-related investments

Also large Finnish industrial companies can now get export credit guarantees for domestic industrial investments in machinery and equipment that benefit or help to create new export business. Investment loans will be granted and funded by commercial banks. The change in Export Guarantee Act will enter into force on 1 September 2014.Under the new rules, Finnvera can be a party to financing arrangements in domestic investments that benefit exports. This will make it much easier for Finnish companies competing with foreign equipment suppliers to offer their products for investments of export industries in Finland. Eligible investments can include factory projects, projects aimed at improving the level of processing, and projects involving logistics and other areas of infrastructure that help to improve the operating prerequisites and competitiveness of export companies. Similar credit guarantee arrangements are already in use in many countries competing with Finland, such as Denmark and Italy.– Until now, Finnvera has not been able to provide credit guarantees for domestic projects of large companies. It has been more economical to purchase the necessary machinery and equipment from foreign suppliers as this has allowed the companies to make use of the export credit guarantees provided by the export credit agencies in countries where the suppliers are operating. As a result, Finnish suppliers may have lost contracts to their competitors. Our ability to also provide export credit guarantees to Finnish suppliers’ deliveries strengthens the competitive position of domestic equipment suppliers and promotes employment in Finland, explains Pauli Heikkilä, CEO of Finnvera. Until now, Finnvera's export credit guarantees have been used to facilitate the financing arrangements of export contracts. Companies have also been able to use export credit guarantees for insuring export receivables, bonding and financing during manufacturing. Finnvera already has a range of domestic financing products for investments by SMEs.Under the export credit guarantee scheme, Finnvera can guarantee long-term bank credits obtained by the buyers and thereby share the credit risks with the bank. In domestic export industry investments, the guarantee issued by Finnvera may not, as a rule, exceed 80 per cent of the amount of credit or 50 per cent of debt financing of the project.– Extending the Act on the State's Export Credit Guarantees to cover domestic business of export companies puts the companies on equal footing with their foreign competitors. Until now, only export credit agencies of other countries have been able to take part in the financing of investments in Finland, explains Jorma Turunen, Director General of the Federation of Finnish Technology Industries.The increased export financing authorisation granted to Finnvera and the ability to guarantee domestic investments contribute to Finnish equipment producers and export companies being able to operate and invest in Finland and to sell their products from Finland.Further information:Pauli Heikkilä, CEO, tel. +358 (0)29 460 2400  Topi Vesteri, Executive Vice President, tel. +358 (0)29 460 2676

News
19.08.2014
Finnvera is restructuring its customer service

 We are restructuring our customer service so that we can better meet the needs of different customer groups.Finnvera is restructuring its customer service by concentrating expertise in key areas and by reorganising some of the functions. This will ensure more focused and quicker customer service.Some of the matters now handled by regional offices will in the future be the responsibility of the Service Center.  The responsibilities of the Service Center will include small enterprise customers and change situations faced by customers in their financing. Ritva Reittu, Head of Service Center, will be responsible for the operations of the Service Center.In the future, all Finnvera's services for growth companies and companies seeking to expand their international business will be available in a single unit.  This will allow us to concentrate our expertise in key areas and to better meet the financing needs of these particular customers. Titta Mantila, Vice President, will head the Growth and internationalisation team.Finnvera's offices will continue to operate as before but there will be changes to the regional division.  From 1 September 2014, Finnvera's regions will be as follows: Southern Finland (Regional Director Markus Laakkonen); Central Finland (Regional Director Juha Ketola); Southwest Finland (Regional Director Seija Pelkonen); Southeast Finland (Regional Director Mirjam Sarkki); Savo-Karelia (Regional Director Hannu Puhakka); Ostrobothnia (Regional Director Kari Hytönen); and Northern Finland (Regional Director Pauli Piilma).You can also contact our online service and telephone service in all parts of Finland. The customer service for our export financing will continue to operate as before.Further information: Pauli Heikkilä, CEO, tel. +358 (0)29 460 2400 Finnvera's regions and offices from 1 September 2014Southern Finland: HelsinkiSouthwest Finland: Turku, PoriSoutheast Finland: Lahti, Mikkeli, LappeenrantaCentral Finland: Tampere, JyväskyläOstrobothnia: Vaasa, SeinäjokiSavo-Karelia: Joensuu, KuopioNorthern Finland: Oulu, Kajaani, Rovaniemi

Press Releases
14.08.2014
The Finnvera Group’s Interim Report for January–June 2014

A substantial increase in the authority to grant export credit guarantees and export creditsFinnvera received substantially more authority for export financing during the Q2/2014 period. The maximum amount of export credit guarantees rose by EUR 4.5 billion to EUR 17 billion and the maximum amount of financing for export credits increased by EUR 4.0 billion to EUR 7.0 billion. Finnvera now has better possibilities to supplement the private financial markets with regard to financing arrangements for SMEs and for export transactions that require long-term financing. Finnvera also received the possibility to subscribe to SME bonds, thereby strengthening Finnvera’s operational possibilities.During the period under review, demand for Finnvera’s financing was slightly lower than in the first quarter of the year. Financial markets functioned reasonably well in Finland in the first half of the year. The greatest impediments to arranging financing for companies were unprofitable activities and insufficient equity.  Business operations and financial trend            The euro value of the loan and guarantee offers given to SMEs in JanuaryJune increased by 10 per cent on the same period in 2013. As in 2013, most of the offers involved working capital. In contrast, the amount of offers given for export financing fell by one-third in comparison to the first half of the previous year.The Finnvera Group’s profit for JanuaryJune was EUR 34 million. This was EUR 10 million less than the profit for the corresponding period in the previous year (44 million). The most important factors decreasing the profits were the increase in the impairment losses on receivables and guarantee losses incurred by the parent company Finnvera plc, and losses on venture capital investments for items carried at fair value. At the same time, the downturn in profits was partially offset by higher fee and commission income and lower administrative expenses than in the corresponding period of 2013.The profit of the parent company Finnvera plc amounted to EUR 40 million, or EUR 7 million less than the year before (46 million). The parent company’s profit for export credit and special guarantee activities was EUR 31 million (39 million), while the result for credit and guarantee operations related to SME financing was EUR 4 million (8 million).The Group’s key figures on 30 June 2014 Equity ratio 16.5 per cent (17.9) Capital adequacy 18.5 per cent (16.5) Cost-income ratio 25.8 per cent (29.5) Outlook for financingDuring the latter half of the year, demand for SME financing will probably remain at moderate levels, a result of uncertain economic prospects and investments that are lower than normal. SMEs need financing for working capital and the rescheduling of existing credits.The situation in Russia causes uncertainty in the financing of the exports and trade. Current sanctions and the threat of further sanctions and countermeasures by Russia impede the operation of banks. In practice, banks in the EU region will have to take account of the existing sanctions issued by the United States, and those anticipated, because they have operating licences in the US and extensive payment transactions denominated in the US dollar. Businesses in Russia are finding it more difficult to obtain financing. This situation has impacted on the demand for Finnvera’s short-term guarantees, which is lower than in the corresponding period during 2013 in terms of both numbers and value. The value of guarantees applied for capital goods exports in January–June was only about half of the preceding year’s figure although new orders received by Finnish industry have shown an upward trend during the first six months of the year. Finnvera expects the demand for export guarantees to revive in the latter half of the year. The outstanding commitments for export credit guarantees include some cases where credit rearrangement may become necessary or where the risk of loss has increased during the spring.CEO Pauli Heikkilä:“The amendments made to the Act on the State’s Export Credit Guarantees in June increased the maximum amounts of Finnvera’s export credit guarantees and export credits. When exports from Finland return to a growth track, we will be well prepared, alongside banks, to participate in the arrangement of financing for the international customers of Finnish export companies. We obtain the funds needed to finance export credits and SMEs from the capital markets. In April, we successfully launched a EUR 500 million bond, which is the largest bond to date for our acquisition of funds.We can still provide coverage for political and commercial risks incurred by Finnish exporters for projects carried out in Russia. We abide by the sanctions approved by the EU and assess our possibilities to participate in projects on a case-by-case basis according to our normal criteria.One of our targets is to identify growth companies and encourage them to grow internationally. In order to accelerate this process, together with Tekes and Finpro, we started the Team Finland LetsGrow project, which provides financing and advisory services to help companies implement their internationalisation plans. The LetsGrow programme allows Finnvera, for the first time ever, to offer unsecured financing on a broad basis.”Additional information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458Interim report 1 January-30 June 2014 (PDF)

News
03.07.2014
Finnvera joins The Montreal Group

Finnvera has become a member of The Montreal Group, a global forum for state-owned development banks focused on micro, small and medium-sized enterprises. The Montreal Group has now eight members from eight different countries around the world: Canada, Brazil, France, China, Mexico, India, Russia and Finland. The Group’s name is derived from the city in which it was founded – Montreal, Canada – in 2012.The objective of The Montreal Group is to foster international co-operation and networking and to share best practices and knowledge between members. The Group provides a neutral, global platform for mutual learning and for the exchange of experience and expertise among the members. In 2014/2015 the members are focusing on three key topics: portfolio risk management, green financing and debt guarantees.“We believe that Finnvera could give a Nordic point of view to the discussions in The Montreal Group and could also give an input to developing SME financing. On the other hand, the membership offers Finnvera an excellent possibility to network, benchmark and capture global trends in SME financing in order to better support the Finnish SMEs seeking growth from global markets”, says Annamarja Paloheimo, Senior Vice President from Finnvera. Mrs. Paloheimo was elected to the Board of Directors of The Montreal Group in the last Annual Meeting held in Rio de Janeiro in April 2014.“Finnvera is a versatile financing company whose business model is well known around the world. Finnvera’s contribution to the Group will be a great asset and we can all learn much from them”, quotes Michel Bergeron, Chairman of The Montreal Group.“I can attest to the fact that all the members at the Rio Annual Meeting were delighted with the confirmation of Finnvera’s membership”, added Sandra D. Péloquin, Secretary General for The Montreal Group.For additional information on The Montreal Group, kindly visit the homepages: www.themontrealgroup.org/en/home.htmlTeam Finnvera together with executives of The Montreal Group in the Annual Meeting in Rio de Janeiro. From left: Erno Ihto and Eeva-Maija Pietikäinen from Finnvera, Sandra D. Péloquin (Secretary General for The Montreal Group), Annamarja Paloheimo from Finnvera and Michel Bergeron (Chairman of the Board of The Montreal Group).

Press Releases
27.06.2014
Increased authority for Finnvera to grant export financing

Finnvera will in future have better possibilities to participate in the export-related financing arrangements of Finnish companies. The maximum amounts for issuing export credit guarantees and financing export credits will increase markedly. The legal amendments enter into force on 1 July 2014.The maximum amount for issuing export credit guarantees will rise from EUR 12.5 billion to EUR 17 billion and the maximum amount of financing from EUR 3 billion to EUR 7 billion. These changes ensure that Finnvera can supplement private financial markets in the financing of export transactions pertaining to capital goods. It is important that Finnish export companies can offer competitive export financing to their clients and can submit tenders on terms equal to those of exporters in competitor countries.“The financial crisis has changed the conditions under which export deals are won, and exporters both in Finland and in competitor countries need public financing arrangements increasingly often. Exports of capital goods involve large credits with long repayment periods, and it is especially difficult today to acquire bank financing for them without Finnvera’s involvement. The increase in limits will guarantee that Finnvera has the capability to facilitate the exports of Finnish companies and participate in the financial arrangements of foreign buyers,” says CEO Pauli Heikkilä.Finnvera facilitates exports of Finnish companies by guaranteeing credits obtained by foreign buyers from a bank. Finnvera’s subsidiary, Finnish Export Credit Ltd, can finance export credits arranged by a bank. Finnvera’s outstanding commitments for export credit guarantees and special guarantees amounted to EUR 11.6 billion at the end of March 2014. Finnish Export Credit Ltd has financed export credits and ship credits for a total amount of EUR 1.8 billion.A proposal presented to Parliament would enable Finnvera to guarantee domestic investments related to exports. It is expected that the associated legal amendment will enter into force in the autumn of 2014 at the latest.Additional information: Pauli Heikkilä, CEO, tel. +358 29 460 2400

Press Releases
30.04.2014
The Finnvera Group’s Interim Report for January-March 2014

Recovery in the demand for financing hampered by political crisesDuring the first quarter of 2014, the Finnish financial markets performed better than statements presented in public would suggest. There are occasional blind spots but private providers of funding are well able to meet the demand for financing for credible growth investments, partly with help from Finnvera. However, companies that have several loss-making years behind them and not enough equity are facing major problems. The crisis between Ukraine and Russia has a negative impact on the economies of both countries. At the end of the period under review, Russia accounted for Finnvera’s third biggest country exposure (EUR 879 million). With the weakening of the Russian economy and a decline in Finnish exports, there has also been a slight decrease in Finnvera’s exposure involving Russia recently. Finnvera continues to provide Finnish exporters with financing for trade with Russia. However, developments are being monitored closely and Finnvera is also prepared for higher risks. Finnvera’s exposure involving Ukraine totalled four million euros and at the moment no new guarantees can be provided for export transactions to that country.Business operations and financial trendThe euro value of the loan and guarantee offers given to SMEs in JanuaryMarch increased by 15 per cent from the same period in 2013. As in 2013, most of them were associated with the need for working capital. Some of the credit agreement negotiations connected with export transactions that were still uncompleted last year were concluded and as a result, the number of export financing offers increased by 81 per cent from the first quarter of 2013.The Finnvera Group’s profit for JanuaryMarch was EUR 8 million. This was EUR 22 million less than the profit for the corresponding period in the previous year (30 million). The most important factors pushing the profits downwards were the increase in the impairment losses on receivables and guarantee losses incurred by the parent company Finnvera plc as well as a decline in net interest income. At the same time, the weakening in profits was partially offset by higher fee and commission income and lower administrative expenses.The profit from the parent company Finnvera plc’s export financing and SME financing amounted to EUR 10 million, or EUR 21 million less than a year earlier (31 million). Export financing, or the separate result of export credit guarantee and special guarantee operations laid down in section 4 of the Act on the State Guarantee Fund, showed a profit of EUR 5 million (21 million), while the profit for SME credit and guarantee operations amounted to EUR 5 million (11 million).The Group’s key figures on 31 March 2014 (31 March 2013) Equity ratio 18.8% (20.1%) Capital adequacy 17.9% (16.0%) Expense-income ratio 25.1% (28.3%) Outlook for financingDuring the early part of the year, demand for SME financing will remain at a moderate level, a result of uncertain economic prospects and the low level of investments. Most of the financing needs are associated with working capital and the rescheduling of existing credits.Finnish exports have continued to decline during the early months of the year and there are no clear signs of any upturn. As a result of the crisis in Ukraine, there is also an exceptional degree of uncertainty in the economic situation. Economic growth in Russia had already slowed down before the crisis and as a result of the crisis, the prospects seem to be getting even weaker. The state of Russia’s banking and financing system and the economic sanctions will also make it more difficult for companies to get financing in Russia, which will have a direct impact on Finnish exports to Russia. Changes in banking regulation, risks in target countries, slow economic growth and stiffer export competition, accentuating the financing solutions offered to the buyer, help to maintain demand for export credit guarantees and export credits.CEO Pauli Heikkilä:“There are many reports showing that financing for credible growth investments is available in Finland. The situation becomes more difficult when financing is sought for continuing unprofitable operations. In such cases, the providers of financing require that the company has adequate plans for restructuring its operations. For start-up enterprises, difficulties arise if they lack capital of their own for the project. Because the economic outlook remains unclear, banks require a higher proportion of self-financing. Companies that can meet this requirement can also acquire debt financing. The most important consideration is to encourage equity investments in Finnish companies.Significant increases in Finnvera’s financial powers regarding SMEs and export companies were put forward in the Government’s 2013 supplementary budget and in this spring’s discussion on spending limits. If implemented, these measures will further improve Finnvera’s possibilities to complement the availability of financing from the private market. It is also important that Finnish export companies have access to competitive export financing so that they can submit tenders on the same terms as the exporters in competitor countries.”Additional information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458Interim report Q1 2014 (PDF)

Press Releases
29.04.2014
Team Finland LetsGrow - financing programme for SMEs seeking international growth

Under the Team Finland LetsGrow financing programme, companies can receive loans from Finnvera for investments and working capital, grants from Tekes for innovation services and advice from Finpro for international growth.The programme is intended for growth-seeking SMEs with good financial standing and a turnover between 5 and 50 million euro. The companies selected for the programme must have a business plan aimed at strong international growth, an innovative and competitive product or service and a competent and committed team ready to meet the growth targets.The aim is to ensure that the SMEs with the most promising growth potential and internationalisation prospects can find financing for their growth plans. We encourage companies to improve their know-how, build their competitive edge, expand their market share and invest in growth-enhancing projects.The programme will open for applications at the end of May.Customer-oriented operating modelTeam Finland actors are encouraged to show initiative and regenerative spirit in the development of the spearhead projects. We - Finnvera, Finpro and Tekes - are doing this together now, learning from each others' operating practices and focusing our efforts so that we can work for the benefit of our customer companies. The joint programme also acts as the pilot project for the development of Team Finland services.In accordance with the joint objectives of the actors in the Team Finland network, the Team Finland LetsGrow financing programme aims to provide a clear, flexible and customer-oriented one-stop model. Under the programme, companies can get services boosting their international growth that are tailored to their needs from Finnvera, Tekes and Finpro. The applications are processed jointly by the actors who also monitor and support the progress of the companies accepted to the programme.Learn more about the programme at: www.letsgrow.fiFurther information:Laura StrandbergProgramme Managerlaura.strandberg@finnvera.fi+358 (0)40 343 3410

Press Releases
16.04.2014
New members appointed to Finnvera's Supervisory Board - No changes in the composition of the Board of Directors

On 16 April 2014, Finnvera's Annual General Meeting elected new members to the company's Supervisory Board. No changes were made to the composition of the Board of Directors.Composition of the Supervisory BoardThe new members of the Supervisory Board are Olli Koski, Head of Industrial Affairs and Chief Economist; and Timo Saranpää, Chairman of the Board.Johannes Koskinen, Member of Parliament, will continue as Chairman of the Supervisory Board, and Lauri Heikkilä, Member of Parliament, as Vice Chairman. The following persons will continue as members of the Supervisory Board: Paula Aikio-Tallgren, entrepreneur; Kaija Erjanti, Head of Division; Helena Hakkarainen, Finance Manager; Lasse Hautala, Member of Parliament; Miapetra Kumpula-Natri, Member of Parliament; Leila Kurki, Senior Adviser; Esko Kurvinen, Member of Parliament; Anna Lavikkala, Director, Labour Market; Jari Myllykoski, Member of Parliament; Lea Mäkipää, Member of Parliament; Antti Rantakangas, Member of Parliament; Osmo Soininvaara, Member of Parliament; Sofia Vikman, Member of Parliament; and Antti Zitting, Chairman of the Board.Composition of the Board of DirectorsMarkku Pohjola, B.Sc (Econ.), will continue as Chairman, Pekka Timonen, Director General, as First Vice Chair and Marianna Uotinen, Specialist Counsel, as Second Vice Chair of Finnvera's Board of Directors. The following persons will continue as Board members: Kirsi Komi, LL.M.; Vesa Luhtanen, CEO; Risto Paaermaa, LL.Lic.; and Pirkko Rantanen-Kervinen, B.Sc (Econ.).Financial Statements 2013 and distribution of profitsThe Annual General Meeting also adopted the Consolidated Financial Statements and the Parent Company’s Financial Statements for the period 1 January–31 December 2013, discharged the Supervisory Board, the Board of Directors and the Chief Executive Officer from liability, and approved the proposal made by the Board of Directors for the use of the parent company’s profits.Election of the auditorKPMG Oy Ab will continue to serve as Finnvera’s regular auditor. The principal auditor is Juha-Pekka Mylén, Authorised Public Accountant.Further information:Pauli Heikkilä, CEO, tel. +358 (0)29 460 2400Risto Huopaniemi, Senior Vice President, Administration, tel. +358 (0)29 460 2520

Press Releases
16.04.2014
Vapaavuori at Finnvera's Annual General Meeting: The situation in Ukraine will affect the companies' willingness to invest

Minister of Economic Affairs Jan Vapaavuori said today at the Annual General Meeting of Finnvera that, in the beginning of the year, financing by Finnvera for SMEs has increased by nearly 20 per cent compared to the same period a year earlier.– There's a positive tone to be seen in the investments. The situation in Ukraine, however, will inevitably affect the atmosphere, and hence also the willingness and courage to make investments both at home and abroad. Finnvera has still been able to make a financial contribution in 84 per cent of the applications, which reflects the fact that there are some good projects about, says Minister Vapaavuori.Significant increases in Finnvera's financial powers have been put forward in the Government's 2013 supplementary budget and the spring spending limits regarding SMEs and export companies alike. If implemented, such measures will further improve Finnvera's possibilities to complement the availability of financing in the private market.Continued Financing for Trade with RussiaRussia is Finnvera's third largest country of commitment. The total exposure in Russia is around one billion euros.– Finnvera continues to provide export credit guarantees and financing for projects in Russia. Due to the increased level of risk we cannot grant any funding for exports to Ukraine, says CEO Pauli Heikkilä.Further information:Petri Peltonen, Director General, Ministry of Employment and the Economy, tel. +358 (0)29 506 3662Pauli Heikkilä, CEO, Finnvera, tel. +358 (0)29 460 2400

News
14.04.2014
Finnvera sold its share in the investment fund Teknoventure

Finnvera has sold its holding in the investment fund Teknoventure Oy to Oulu ICT and Osuuskunta PPO. Teknoventure makes investments in later stage companies based in Northern Finland.After the sale, Oulu ICT and PPO each have a holding of 24.2 per cent in the company. As a result of the ownership arrangements, the investment fund will become privately funded, which will provide it with more opportunities.  At the moment, the investment fund has a capital of about EUR 16 million. The aim of Oulu ICT and PPO is to increase the fund's capital to EUR 30 million in the future.Teknoventure Oy was established in 1994 and it makes investments in later stage companies based in Northern Finland. The fund has made investments in nearly 20 enterprises in different sectors. The fund is managed by Teknoventure Management Oy, a management company based in Oulu.Finnvera plc is selling its shares in the company as part of the reorganisation of the state-run venture capital operations.Further information:Pauli Piilma, Regional Director, Finnvera plc, tel. +358 40 848 9583Mauri Visuri, Managing Director, Teknoventure Oy, tel. +358 40 865 7946Kati Peltomaa, Managing Director, Osuuskunta PPO, tel. +358 44 729 1220Jari P. Tuovinen, Managing Director, Oulu ICT Oy, tel.  +358 44 313 4505Established in 1994, Teknoventure Oy is a company (evergreen fund) making venture capital investments in enterprises with the aim of ensuring that the growth of the enterprises will also boost the value of the investments.

Press Releases
12.03.2014
Finnvera guarantees and Finnish Export Credit finances an export credit facility for Etihad Etisalat Company (”Mobily”) of Saudi Arabia

Finnvera guarantees a buyer credit that is used to finance deliveries of telecommunications equipment from Nokia Solutions and Networks to Etihad Etisalat Company ("Mobily") in Saudi Arabia.The guaranteed credit is at most USD 280 million. Finnvera's guarantee covers 95 per cent of the credit. The holder of Finnvera's guarantee is Deutsche Bank AG. Finnish Export Credit finances the credit. The first equivalent export credit facility of USD 325 million was arranged in July 2013. In addition to Deutsche Bank, the credit is being arranged by Crédit Agricole CIB and Société Générale."For Finnish companies dealing in capital goods, it is crucial that the Finnish export credit system is able to, through Finnish export financing system provided by Finnvera and Finnish Export Credit, offer buyer financing on a par with that offered by any competing country. In this specific case, the Swedish  Export Credits Guarantee Board (EKN) and Swedish Export Credit Corporation (SEK) entered into a similar financing arrangement for deals with a Swedish equipment supplier competing with NSN.  In such tight competition, the availability and terms of financing affects whether equipment suppliers win bids as well as market share," explains Finnvera's Executive Vice President Topi Vesteri.Etihad Etisalat Company (”Mobily”) is Saudi Arabia's leading telecommunications operator. Mobily's goal is to expand and enhance 3G and 4G networks in Saudi Arabia during the period of 2014-2016.Further information:Topi Vesteri, Executive Vice President , tel. +358 (0)29 460 2676 Tuukka Andersén, Vice President, Head of Underwriting, tel. +358 (0)29 460 2688

Press Releases
28.02.2014
Financial Statements of the Finnvera Group for the fourth quarter and 1 January–31 December 2013

Demand focused on the working capital needs of SMEs and on exportsThe investments of SMEs remained low in 2013. Financing was mainly needed for working capital and for the rescheduling of existing credits. Demand for export financing was concentrated in a few sectors. Utilising the new export credit system, Finnvera was able to meet export companies’ financing needs.Business operations and financial trendFinnvera granted domestic loans and guarantees to SMEs totalling EUR 756 million, which is 11 per cent less than in 2012. The amount of export credit guarantees and special guarantees offered declined by 36 per cent from the previous year, totalling EUR 3,398 million. Direct venture capital investments amounted to EUR 16 million, and they were offered to a total of 85 enterprises.The Finnvera Group’s profit for the year 2013 was EUR 75 million (53 million), or EUR 21 million more than the year before. The main factors contributing to the improved performance were the increase in the parent company Finnvera plc’s fee and commission income in export financing and the decrease in impairment losses on receivables and guarantee losses in SME financing. In contrast, the decrease in the net interest income, caused by lower interest rates and a reduction of the outstanding credits for SME financing, had a negative effect on the profit. The profit of the parent company, Finnvera plc, in 2013 stood at EUR 69 million (56 million).The Group’s operating profit was EUR 75 million (54 million). The profit was divided between the business areas as follows: The operating profit of SME Financing was EUR 7 million (–4 million) while that of Export Financing was EUR 74 million (62 million). The result for Venture Capital Investments was EUR 5 million in the red (-3 million).The Finnvera Group’s profit for the last quarter of 2013 came to EUR 3 million. The profit was markedly, or EUR 24 million, smaller than the profit for the third quarter. The factors contributing to the weaker performance during the last quarter included especially the impairment losses on receivables and guarantee losses, which at EUR 35 million were higher than in the previous quarter.Within the past few years, Finnvera’s outstanding commitments and their risk levels have risen significantly. Risk levels continued to rise in 2013 as well. The rise in risk levels is reflected in SME financing, for instance, as poorer risk ratings for client enterprises and as an increase in the relative share of non-performing receivables and payment delays. Another indication of the higher risk level is that, in recent years, the impairment losses on receivables and guarantee losses materialised in SME financing have been greater than in the past, although in 2013 impairment losses and guarantee losses were smaller than the year before. In export financing, no major losses have been recorded in recent years or in 2013, and no major increases have been made in provisions for losses in proportion to the outstanding commitments.The group’s key figures on 31 December 2013 (31 December 2012) Capital adequacy 17.6% (16.3) Cost/income ratio 27.0% (27.6) Equity ratio 18.4% (20.3). Future prospects and impending risksThe unclear economic outlook and a cautious attitude to investments will keep the demand for SME financing low, at least during the first few months of the year. New projects take off slowly, because it is difficult to make decisions on investments and financing concerning risky projects, especially during a recession. Weak signals of recovery are more frequent than before, but any appreciable revival of Finnish exports is still on a shaky foundation. As a result, Finnvera's export financing solutions are important for the competitiveness of Finnish export companies. Demand for export credits and export credit guarantees is maintained by risks in buyers’ countries, the slow economic growth and stiffer competition on export markets, where financing solutions available to the buyer gain added weight.According to the current estimate, the Finnvera Group’s financial performance for 2014 is likely to fall below that for 2013. The uncertainty factors associated with economic trends make it difficult to predict the financial performance. If the materialisation of risks is more widespread than anticipated, the situation may weaken considerably.CEO Pauli Heikkilä:“In Finland, the economic situation was still in the doldrums in 2013. This was affected by a lack of investments as well as Finland’s industrial structure and the weakening of competitiveness, both of which were reflected in Finnish exports. Some signs of revival were visible on the world market, and in their wake some of our client enterprises did remarkably well.For their part, financial markets have adapted to changes brought about by regulation, and bank financing still functions reasonably well in Finland. On the other hand, banks have altered their strategies, which can be seen, for example, as stricter security and self-financing requirements. The pricing of risks has also been adjusted. The result is that the margins of new bank credits have widened. According to surveys conducted, the smallest SMEs perceive that the availability of financing has declined the most; however, the principal reasons for financing difficulties have been a falling turnover and weak profitability.Thanks to the measures taken in line with the Government Programme, Finnvera now has better opportunities for financing SMEs and applying enterprise analysis to make realistic assessments of their potential for profitable business. During spring 2014, the Government will probably decide on Finnvera’s authorisation to grant export financing. Ensuring sufficient authorisation would be pivotal for capital goods exporters. In addition, the Government is likely to decide whether Finnvera is given the task of subscribing to bonds issued by SMEs.”Financial Statements 2013 (PDF)Statement on the Corporate Governance and Steering System (PDF)Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458DISTRIBUTIONNASDAQ OMX Helsinki OyOslo Børs ASAThe principal mediawww.finnvera.fiFinnvera publishes its Annual Report for 2013 as an electronic document on the company’s website in the week 11. The Annual Report also includes the Corporate Responsibility Report.

News
05.02.2014
Finnvera to participate in financing Wärtsilä's power plant projects in Indonesia

Finnvera is providing export credit guarantees for buyer credits financing Wärtsilä power plants for Indonesia.The guaranteed credits total EUR 160 million and have a loan period of 12 years. The beneficiary of the guarantees will be Standard Chartered Bank. Finnish Export Credit Ltd, a Finnvera subsidiary, is funding the credits provided by the bank for PT Perusahaan Listrik Negara (Persero) (PLN), the Indonesian government-owned electricity company.– In the export of capital goods the competition between equipment suppliers is very tough.  In addition to Wärtsilä, a total of 30 other companies competed for the Arun power plant project and five of the offers, nearly all of which came from Wärtsilä's main competitors, reached the final round. Long-term export credit financing was an absolute requirement of PLN, which means that without the participation of Finnvera, Wärtsilä could not even have submitted a tender. PLN made an overall assessment of the buyer credit and power plant tenders. According to Wärtsilä, Finnvera's ability to provide long-term export credit financing through Finnish Export Credit Ltd and its quick and clear procedures were the main factors that led the customer to select Wärtsilä's power plant engines, which will be built in Vaasa. This project is a good example of a contract in which a guarantee and export credit solution offered by Finnish actors provides a basis for long-term buyer credit at competitive prices and helps the exporter to win the contract, explains Executive Vice President Topi Vesteri who is responsible for export financing in Finnvera.Wärtsilä will supply a total of 35 Wärtsilä 34SG gas engines for power plants to be built for PLN. The power plants will have a combined output of 339 MW and they will supply electricity for more than 150,000 households. One of the plants, the Arun power plant, will be built in Lhokseumawe in the Aceh district in northern Sumatra, while the other one will be constructed in Bangkanai in the Kalimantan region on the island of Borneo.  Both areas need reliable power supply capacity, which the two plants will help to secure.Further information:Topi Vesteri, Executive Vice President +358 29 460 2676

Press Releases
20.01.2014
Finnvera provides subsidy for business development in Russia

Despite slow economic growth in Russia, Finnish companies have actively sought project subsidy offered by the Ministry of Employment and the Economy. Applied for through Finnvera, project subsidy was granted to some thirty companies in 2013.The increased interest of Finnish companies is evident in the constantly rising number of project subsidy applications. Last year, 30 companies were granted subsidy, with a total of over 200 companies receiving subsidy since the beginning of 2003. The aid granted by the Ministry of Employment and the Economy is intended to provide support for SME internationalisation projects in Russia. Finnvera serves projects in an advisory capacity and support is applied for through Finnvera. In the final supplementary budget of 2013, Finnish Parliament made an allocation, which can be used to fund 30-40 new projects in 2014."Project subsidy has turned out to be a very functional form of support," explains Timo Pietiläinen, Head of Finnvera's Representative Office in St. Petersburg. "Approximately half of the companies that received the subsidy over the past two years have gone on to start up production or establish a representative office in Russia," he continues.Finnish SMEs can apply for subsidy to finance preliminary studies for establishment projects aimed at Russia, such as market or competition analyses, or actual feasibility studies, as well as, for example, the drafting of a business plan. Subsidy can also be granted to cover specialist services or the training of Russian employees during the start-up phase. The subsidy amount can be no more than half of a project's total costs."The goal of these projects should be to launch production or service operations in Russia – in other words, the subsidy can't be used only for the promotion of exports," explains Pietiläinen.Further information:Head of Representative Office in St. Petersburg Timo Pietiläinen, Finnvera plc, tel. +7 921 0969 304Financing Manager Jari Mehto, Finnvera plc, tel. +358 29 460 2536Read more: http://finnvera.fi/eng/Exports-and-internationalisation/Seeking-international-growth/International-business-operations/State-subsidy-for-internationalisation-projects-of-SMEs-in-Russia

News
20.12.2013
Finnvera will be able to provide short-term export credit guarantees for exports to Greece until 31 December 2014

Based on its own risk assessments, Finnvera may continue to provide short-term export credit guarantees for exports to Greece until the end of 2014. The special status of Greece among the EU Member States is based on the decision of the EU Commission to continue to exclude Greece from the list of countries for which Finnvera cannot provide short-term export credit guarantees (risk period less than two years) in a normal market situation. The Commission decision will remain in effect until 31 December 2014.Under the Communication on short-term export credit insurance, which is based on the EU competition legislation and which entered into force in 2013, public credit insurance institutions may not guarantee marketable risks (risks that private insurance companies are prepared to guarantee).According to the Communication, in a normal market situation, Finnvera may not provide guarantees with a risk period of less than two years (manufacturing + credit repayment period) to following countries: EU Member States (Austria, Belgium, Bulgaria, Croatia, Cyprus, Czech Republic, Denmark, Estonia, France, Germany, Greece, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom) Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland, United States of America The EU Commission has also granted Finland an exemption concerning short-term export guarantees to all countries listed above. Read more

News
18.12.2013
Enterprises still facing barriers in financing – signs of an improvement also on the horizon

Medium-sized and large enterprises have increasingly acquired new financing during the past twelve months. At the same time, according to the survey, the proportion of enterprises failing in, or giving up, their intentions to raise financing appears to have increased. This is made apparent in the report on the Business Finance Survey 2013.About every fifth small and medium-sized enterprise and about every tenth large business reported having experienced some types of problems related to the acquisition of finance. Those enterprises whose profitability or turnover had weakened in the preceding 12-month period encountered, in relative terms, the greatest difficulties in accessing finance.Enterprises' assessments of the availability of financing over the next 12 months are quite favourable: nearly 80% of the enterprises surveyed estimate that their chances of obtaining financing will either remain unchanged or improve. The intentions are to acquire relatively more financing for machinery, equipment and intangible investments and less for working capital needs, among other things.The results of the survey point to diversification in corporate financing structures. More large businesses than before raised financing by issuance of commercial paper and bonds. Micro enterprises, for their part, relied more widely on private equity financing. Financing options made available by finance companies also increased their relative popularity.Margins particularly for large and medium-sized enterprises widenedAccording to the survey, the tightening of financing terms and conditions has continued over the past twelve months. Over half of the medium-sized and large enterprises that had acquired new credit witnessed a widening of loan margins. Contractual terms, ie financing covenants, in turn, tightened for smaller enterprises. Additional credit-related costs increased for every third enterprise that had obtained new credit.Valuation of collateral assets and collateral requirements have remained unchanged for the bulk of enterprises. However, prices for commercial guarantees, in particular, have risen.Average time of payment of bills to enterprises ranges from three to four weeksNearly every other small and medium-sized enterprise reports a lengthening of average times of payment of bills by their business clients. The average time of payment of bills by their clients is 18–27 days. The prolongation of time taken to pay bills has increased financing needs in the case of every other small and medium-sized enterprise.Introduction of electronic billing continued at a brisk paceThe proportion of enterprises using electronic billing is growing rapidly. About 90% of large businesses already use electronic billing. The bulk of small and medium-sized enterprises have also introduced electronic bills.The Business Finance Survey 2013 is a comprehensive overall review of the corporate sector's financing situation. The survey was carried out in September–October 2013, drawing responses from 3,661 enterprises. Organisations participating in administering the survey were the Confederation of Finnish Industries EK, the Federation of Finnish Financial Services, Finnvera plc (a State owned specialised financing company and the official Export Credit Agency of Finland), the Federation of Finnish Enterprises, the Bank of Finland and the Ministry of Employment and the Economy, and it was conducted by IROResearch Oy.The report on the Business Finance Survey 2013 (in Finnish only) is posted as a flash version (recommended) on the Bank of Finland website:http://www.suomenpankki.fi/fi/julkaisut/selvitykset_ja_raportit/rahoituskyselyt/Pages/default.aspxIn addition to nation-wide survey results provided in the report, results with respect to the regional centres for economic development, transport and the environment (ELY centres) will also be published in the Toimiala Online database maintained by the Ministry of Employment and the Economy.Further informationJukka Vauhkonen, Economist, Bank of Finland, jukka.vauhkonen@bof.fi, tel. +358 10 831 2111.Tommi Toivola, Senior Advisor, Confederation of Finnish Industries EK, tommi.toivola@ek.fi, tel. +358 9 4202 3292

Press Releases
15.11.2013
The Finnvera Group's Interim Report for January-September 2013

Financing is available – demand is weakBank financing in Finland is still functioning reasonably well, but bank collateral and self-financing requirements and financing prices have increased. The demand for financing by SMEs was still affected by a lack of investments. Although in Finnvera there was a great deal done in working capital financing and the restructuring of previous financing arrangements, euro-currency demand was weak. The overall decline in Finnish exports was not felt in the demand for export financing, which was greater than the demand for the same period in the previous year. Business operations and financial trendThe value of financing offers given to SMEs in January-September dropped 12 per cent from the same period in the previous year. More financing applications involving exports were received than in the previous year, but the number of offers given was nearly 10 per cent lower. Credit agreements for some of the applications were still under negotiation.The Finnvera Group’s profit was EUR 71 million, which is significantly better than for the same period in the previous year (30 million). This improvement in the Group's profit was mostly due to an increase in the parent company's (Finnvera plc) fee and commission income as well as a decrease in the net impairment loss on financial assets. Correspondingly, the improvement in profit was reduced by a decline in net interest income.In the parent company Finnvera plc both export financing and SME financing showed a profit: The profit for export financing was EUR 63 million (45 million) and for domestic credits and guarantees EUR 11 million (-10 million). The subsidiaries and associated companies had an impact of EUR -3 million on the Group's profit (-4).The group’s key figures on 30 September 2013 (30 September 2012) Capital adequacy 17.3% (15.8) Cost/income ratio 25.1% (27.6) Equity ratio 19.3% (23.4).    OutlooksUncertainty in the global economy is dampening the desire to invest, make growth plans and take risks. This can be seen in the modest demand for SME financing. Public debate, particularly that concerning the poor availability of SME financing, further increases the feeling among businesses that investment conditions are less than ideal. Ensuring the financing of financially viable projects is Finnvera's primary task, something which is carried out effectively even in an economically challenging time.The outlook for an industry concentrated on the export of Finnish capital goods remains dim. The demand for Finnvera’s export credit guarantees and credits will, however, stay at the currently high level, because, just as is done in competing countries, businesses are working to win deals by offering comprehensive solutions, which also include the long-term financing required by buyers.According to the current estimate, the Finnvera Group's financial performance for 2013 is expected to improve over that for 2012. If realised, individual risks can have a considerably detrimental impact on performance.CEO Pauli Heikkilä:"Despite a certain degree of uncertainty, the general global economic situation is showing signs of a gradual recovery.  Due to the industrial structure and a decline in competitiveness, the situation for Finland is not yet as promising. Although there has not been any growth in Finnish exports this year, the demand for Finnvera's export credit guarantees and credits has remained high, which is a result of tighter bank regulations.Government preparations include several development projects concerning Finnvera’s services. These include the possibility of Finnvera to mark SME bonds, increase the authorisations for export credit guarantees and export credits, implement a refinancing guarantee and finance domestic investments made by major corporations. The decision regarding these will be made at the end of the year."Interim Report (PDF)Additional information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458

News
11.10.2013
Export credits from NEFCO for environmentally-friendly projects

Nordic Environment Finance Corporation (NEFCO) will begin offering export credits for small-scale projects with environmental benefits in Russia, the Ukraine and Belarus. The export credits are intended for Nordic companies export deliveries valued at EUR 0.5-5 million. Nordic export credit agencies are involved in the financing model to share the risks by granting export credit guarantees.For a Finnish exporter, the buyer credit arrangement means that their foreign client can receive an export credit from NEFCO to finance the purchase of Finnish goods. The exporter will get the contract price on cash terms, whereas Finnvera's export credit guarantee enables NEFCO to grant the export credit. To be eligible for financing, the foreign client needs to be creditworthy.Finnvera and NEFCO provide additional information on financing and its preconditions. The exporters are encouraged to contact Finnvera and NEFCO early on in a project.Finnvera plc, Export financingEeva-Maija Pietikäinen, Head of Trade Finance, tel. +358 (0)29 460 2674Otto Lindstedt, Senior Adviser, tel. +358 (0)29 460 2706   NEFCO:Maria Maliniemi, Investment Manager, tel. +358 (0)50 539 4428Kari Homanen, Vice President, tel. +358 (0)50 311 1047www.finnvera.fiwww.nefco.orgThe Nordic Environment Finance Corporation (NEFCO) is an international financial institution. It was founded in 1990 by the governments of the five Nordic countries and its headquarters are located in Helsinki. The goal of NEFCO is to participate in the realisation of cost-effective environmental projects in Eastern Europe, primarily in regions neighbouring the Nordic countries. Priority is given to projects that cut greenhouse gas emissions, improve the ecological state of the Baltic Sea or mitigate the release of toxic pollutants. NEFCO has financed a wide range of environmental projects in Eastern European countries, such as Russia, Belarus and the Ukraine.

Press Releases
10.09.2013
SMEs feel that financing terms have gotten stricter

Company financing needs are more focused on working capital than ever before.  According to a survey conducted this spring, the need for working capital has increased four percentage points. Particularly in the trade sector, investments are being put on hold, as only 10% of sector SMEs considering financing state that they intend to use the financing for investment purposes. Conversely, there are encouraging signs in industrial financing plans, as financing will be sought more frequently for expansion investments and development projects. This was revealed in this autumn's SME Barometer Survey.The interest of extremely growth-oriented companies in outside financing has increased slightly. Over half of these intend on taking outside financing in the next 12 months. This represents an increase of 6 percentage points over the previous survey.- "In Finland, there are still very few companies planning to take financing that state that they will use it for internationalising. We're worried about this, because, on the international export market, financing is one of the factors used in competing for orders, and there seems to be a much stronger internationalisation of SMEs in, for example, Sweden and Denmark. Our SME Export Finance Programme provides SMEs with information on these financing opportunities," explains Chief Executive Officer Pauli Heikkilä.More self-financing requiredAccording to the survey, the availability of financing has not, as a whole, become more difficult. However, over 40% of the Barometer Survey respondents which took financing feel that the credit policies of financing providers have gotten stricter and the financial market situation is reflected in financing terms either very much or quite a lot. In addition to tightening guarantee requirements and an increase in loan margins, companies seeking financing must also come up with an even higher percentage of self-financing. Regardless of the industry, nearly one out of every three companies stated that the requirements for self financing have gotten tougher.- "Both in Finnvera's experience and according to the Survey results, there hasn't been any appreciable change in the availability of bank financing, despite stricter terms. However, for companies in weak financial condition, getting financing has become more difficult and the requirement for self-financing is much stricter. There are a lot of payment term arrangements being made," says Heikkilä.The Federation of Finnish Enterprises, Finnvera and Ministry of Employment and the Economy jointly conduct the SME Barometer Survey twice a year. The purpose of the survey is to examine the operations and financial operating environment of small and medium-sized enterprises. The autumn 2013 Barometer Survey is based on the responses submitted by over 5,300 SMEs.SME Barometer Survey on Federation of Finnish Enterprises website (in Finnish)Further information:Chief Executive Officer Pauli Heikkilä, tel. +358 (0)29 460 2400Communications Manager Kaisa Sailas, tel. +358 (0)29 460 2422

News
26.08.2013
Team Finland joins forces with Slush to bring together international investors and Finnish start-ups

Aim to accelerate investments into Finnish companies and highlight Finland as the most interesting location for start-up companiesEurope’s largest start-up and investor event Slush invites the most promising companies from Northern Europe, Russia and beyond to meet with top-tier investors and media. Slush takes place on November 13-14th, 2013 at the Cable Factory in Helsinki, Finland. Team Finland partners up with Slush with participation from Finnish Industry Investment, Tekes, Finnvera and Invest in Finland. Furthermore, the international investor event Enterprise Finland Venture Forum will be merged with Slush this year.Slush targets both start-ups and later-stage companies. Leading venture capitalists looking for investment opportunities worth tens of millions of euros are expected to attend the event. Also active business angels and experienced serial entrepreneurs will be attending. Through efficient networking Slush will connect companies with the most potential financiers. There will be 100 company pitches and 3000 meetings between start-ups and investors during the two days. Sectors covered include not only ICT but also knowledge-intensive sectors more widely, such as cleantech and life sciences.Team Finland’s role is to promote the internationalisation of Finnish companies and foreign direct investment into Finland. At Slush, Team Finland aims to accelerate investments into Finnish companies and raise the image of Finland as the most interesting start-up location in the world.In 2012, Slush attracted 3500 attendees from 30 countries: 600 companies, 300 investors with more than 30 billion euros worth of venture capital, and 150 representatives from some of the world's top media. In 2013, Slush aims at 5000 attendees with 1000 companies from Northern Europe, Russia and beyond.For more information:Petri Laine, Finnvera, +358 400 777 458, petri.laine (at) finnvera.fiJuhana Nurmio, Slush, juhana.nurmio (at) slush.fiwww.slush.fi www.team.finland.fi

Press Releases
16.08.2013
The Finnvera Group’s Interim Report for January–June 2013

Demand for financing focused on small-scale projects and exportsWhen compared against the rest of Europe, financing has been available reasonably well in Finland, even though the price of financing and the requirements for collateral have risen. During the period under review, however, demand for Finnvera’s SME financing on the whole was slow. The financing needs of SMEs during the first half of the year were unusually low and continued to centre on working capital. The decline in Finland’s total exports did not affect the demand for export financing, which reached a higher level than in the year before.Business operations and financial trendThe value of financing offers given to SMEs in January–June fell by 13 per cent when compared against the first half of 2012. During the first six months of 2013, applications for financing pertaining to exports increased on the previous year, but the offers given declined by 10 per cent because the credit agreements for some of the applications are still under negotiation. The Finnvera Group’s profit was EUR 44 million, or clearly more than the profit for the first half of 2012 (19 million).The main factors improving the Group’s financial performance were the increase in the parent company’s fee and commission income and the decrease in net impairment loss on financial assets.In the parent company, Finnvera plc, both export financing and SME financing showed a profit: The profit for export financing was EUR 39 million (28 million) and that for domestic credits and guarantees was EUR 8 million (-4 million). The subsidiaries and associated companies had an impact of EUR -2 million on the Group’s profit (-5 million).The Group’s key figures on 30 June 2013 (30 June 2012) Capital adequacy 16.5 per cent (15.7) Cost/income ratio 29.5 per cent (29.5) Equity ratio 17.9 per cent (23.7). Outlook for the Rest of the YearAn indication of the sluggish economy is that SMEs are reluctant to invest, and their demand for financing focuses on working capital. It is commonplace to rearrange financing and reschedule payments. Companies in the weakest economic position find it more difficult to acquire financing. As these companies are already vulnerable, they will have even fewer possibilities to pull through the difficult times.It is expected that the demand for export credits and export credit guarantees during the second half of the year will remain at the same level as the year before. A major factor affecting the demand is the continuing uncertainty on the banking and financial markets. For this reason, it is increasingly common for buyers to expect a financing offer in connection with export transactions.The uncertain economic trend makes it more difficult to predict Finnvera’s financial performance. However, according to the current estimate, the Finnvera Group’s financial performance for 2013 is predicted to improve on that for 2012, whereas in the Interim Report for January-March 2013, financial performance was expected to remain at the same level as in 2012. CEO Pauli Heikkilä: “The change in the State’s commitment to compensate for credit and guarantee losses will enable Finnvera to take greater risks in the financing of start-up enterprises and enterprises seeking growth and internationalisation. For its own part, Finnvera strives to ensure that SMEs with prerequisites for profitable business can arrange financing for their good projects. We are also looking for new financing models together with the Ministry of Employment and the Economy. For instance, we have investigated the possibilities of crowdfunding for SMEs. In this respect, decisions on Finnvera’s potential role will probably be made during the coming autumn.”Additional information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458Interim Report Q2, 2013 (PDF)

News
23.07.2013
Competitive bidding starts for a cooperative contract of the InnOta project

Senate Properties have issued a contract notice for an office building in the Otaniemi technology area of Espoo, Finland. New parts of the building will mainly be built of wood. Theoretical area for the new and renovated parts of the building is ca. 10,000 square metres.The new office premises will be jointly used by Finnvera, Finpro, the Finnish Funding Agency for Technology and Innovation Tekes and the Geological Survey of Finland GTK. When completed, the building complex will diversely cater to the needs of its users as service organisations, enabling new, more customer-oriented ways of working.The form of the contract complies to the spearhead cooperative project model of Senate Properties that combines the strengths of management, alliance and fixed-price contracting. The contractor selected will act as the main contractor of the project and manage the other contractors involved as subcontractors.Applications for the bidding now issued shall be delivered to Senate Properties by August 23, 2013. Three contractors will be chosen to participate in the negotiated procedure. After negotiations they will receive the final contract tender by October 25, 2013.A design competition organized as a public procurement procedure has started for the project. The competition will end in November 2013. The future contractor will be involved in the design competition so that their representative will participate in the evaluation of the design suggestions. Contractor's assignment will start in December 2013.The competition and the contracting assignment will be carried out in Finnish, and all applications and materials will be submitted in Finnish. Designers outside Finland may partner with Finnish agencies to take part in the competition.According to a preliminary schedule, the construction of the project will commence in the autumn of 2014, and completed premises will be handed over to the new occupants in October 2016.Construction project in brief Renovation and new building, theoretical area ca. 10,000 m2 Developer: Senate Properties Developer's consulting engineer: A-Insinöörit Rakennuttaminen Oy Main occupants: Finnpro, Finnvera, Tekes and GTK Construction starts autumn 2014, hand-over autumn 2016 Working environment for ca. 600 employees Innovation objectives include wood-construction expertise, working environments, green building, energy and eco efficiency, life-cycle efficiency, sustainability. For further information, please contact:Senate Properties, Jonni Laitto, Construction ManagerTel. + 358 205 811 752, jonni.laitto@senaatti.fiA-Insinöörit Rakennuttaminen Oy, Harri Ilomäki, Consulting Engineer Tel. +358 207 911 684, harri.ilomaki@ains.fiLink to notice: http://www.hankintailmoitukset.fi/fi/notice/view/2013-016901/

Press Releases
27.05.2013
Finnvera prepared to assist in ship investments resulting from the Sulphur Directive

The EU Sulphur Directive will enter into force in 2015, and Finnish shipping companies must convert or modernise their fleet to meet the stricter requirements. So far Finnvera’s ship guarantees have been granted for vessels ordered to Finland from a shipyard operating in Finland, but in the future the Act on the State’s Ship Guarantees can also be applied to vessels purchased abroad or to the conversion, repair or renovation of vessels abroad.The granting of a Ship Guarantee is based on project-specific risk assessment. Security, such as a ship mortgage, must be provided for the financing. A Ship Guarantee can be granted when sufficient commercial financing is not available for the project.According to the EU rules on State aid, a loan cannot exceed 80 per cent of the purchase price and the Ship Guarantee cannot exceed 80 per cent of the loan sum. In consequence, Finnvera’s maximum commitment in ship investments is 64 per cent of the purchase price.When a Ship Guarantee is granted for vessels or vessel conversions purchased abroad, the project must have sufficient Finnish interest. When considering Finnish interest, attention is paid, for instance, to the following: the vessel will sail under the Finnish flag; the shipping company is Finnish; the vessel will transport goods to serve Finland’s foreign trade; and the vessel will employ Finnish seafarers.“The need to expand the use of Ship Guarantees has mainly come up with regard to cargo ships, which have not been built in Finland for a long time. If these environment-friendly vessels utilise Finnish know-how and technology, this will strengthen the Finnish interest of the acquisition. However, as the primary alternative, effort must be made to use the financing provided by the export credit agency of the shipyard’s home country,” says Executive Vice President Topi Vesteri, responsible for Finnvera’s export financing.Additional information: Executive Vice President Topi Vesteri, tel. +358 29 460 2676

Press Releases
24.05.2013
The Finnvera Group’s Interim Report for January–March 2013

Finnvera’s capacity to take risks in SME financing increasedFinnvera will be even more active in providing financing for the working capital and investments of SMEs. Cooperation is conducted with banks and insurance companies whose business is affected by the increased regulation. Additional risk-taking in keeping with the Government Programme is directed so as to meet the needs of companies aiming at growth and internationalisation, as well as the needs of start-up companies. As of the start of the current year, the State will compensate Finnvera for a greater share, or 75 per cent, of any losses that may arise from financing granted to these companies. The compensation remains otherwise unchanged, gradated according to the division into assisted areas. In practice, the increased capacity to take risks means that Finnvera can account for a larger share of financing granted to enterprises striving to enter international markets. At the same time, the principles of self-financing and risk-sharing required in projects of various types have been specified to make them nationally uniform.Business operations and financial trendThe value of financing offers given by Finnvera for exports during January–March was four per cent less than the year before. The value of the financing offers given to SMEs was one fifth less than during the corresponding period last year. The number of financing applications was bigger than the year before. However, the average size of projects was smaller.Investment decisions made by Finnvera’s Venture Capital Investments in January–March increased on the previous year. The private investor network, which comprised about 250 business angels at the end of 2012, will be transferred to the private Finnish Business Angels Network (FiBAN) during 2013.The Finnvera Group’s profit in January–March was EUR 30 million. The profit was nearly one third greater than during the corresponding period last year (23 million).The main factors contributing to the improved performance were the increase in the parent company’s fee and commission income and the decrease in impairment losses on receivables and guarantee losses in SME financing.Export financing accounted for EUR 21 million (14 million) of the Group’s profit, while domestic credit and guarantee operations accounted for EUR 11 million (9 million). The Group companies and associated companies had an effect of EUR -2 million on the profit (0.3 million).The Group’s key figures on 31 March 2013 Capital adequacy 16.0 per cent (15.7) Cost/income ratio 28.3 per cent (28.1) Equity ratio 20.1 per cent (24.7).            Outlook for the rest of the yearThe effects of bank regulation restrict banks’ participation in the financing of enterprises and raise the price paid for financing. These factors, together with the low level of investments, will keep the demand for SME financing at a moderate level.It is likely that the decline in export demand is reflected in reduced demand for export credit guarantees and export credits. However, Finnvera’s role will be even more important for export financing.Finnvera's Q1 result was clearly better than in the corresponding period last year. Due to the financial insecurity and the high risks attached to Finnvera's commitments, however, the result for 2013 will probably be similar to the result last year. If materialised, individual risks may weaken the result considerably.CEO Pauli Heikkilä:“The sluggish economy and the low level of investments were reflected in the demand for our financing products during the first quarter. The fact that investments remained slight clearly reduced the need for both domestic and export financing.The number of applications we received from SMEs was five per cent more than during the first quarter of 2012, but their total sum declined by 14 per cent. This indicates that financing was needed largely for working capital and very little for investments. Demand for export credit guarantees and export credits was fairly brisk and only slightly less than the year before. It is typical that demand for export financing varies in step with individual major capital goods transactions.The Ministry of Employment and the Economy has redefined the division of labour concerning the State’s venture capital investments, and Finnvera will gradually exit from venture capital investments. Direct investments in innovative start-up enterprises through Seed Fund Vera Ltd will continue until 2017.”Additional information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458Interim Report 1 January - 31 March 2013 (PDF)

News
23.05.2013
Design competition for innovative wood construction starts in Finland

Senate Properties has announced a design competition to build new, innovative office premises to the Otaniemi technology area in Espoo, Finland.A project initially named InnOta aims at constructing flexible office premises to be shared by Finnvera, Finpro, the Finnish Funding Agency for Technology and Innovation Tekes, and the Geological Survey of Finland GTK. New premises will cater for the versatile needs of these organisations while enabling new ways of working for their employees. The future building must be of high quality in terms of life-cycle economy, urban planning, and architecture. Selected design group is required to present special expertise in wood construction, among other skills.The design competition is organized as a public procurement procedure by invitation according to the rules of the Finnish Association of Architects SAFA. Design groups willing to enter the competition can submit their applications by August 16, 2013. The competition starts September 16 and ends November 9, 2013. Results will be announced by March 2014.New InnOta will be built so that it is eventually joined with the existing Geological Survey of Finland GTK building. According to a preliminary schedule, the construction of the project will commence in September or October 2014, and it will be handed over to the new occupants in October 2016. The total volume of both renovation and new construction amounts to circa 14,500 gross square metres with a cost estimate of EUR 35.5 million.Shared premises improve Team Finland's servicesInnOta's new section will become an epitome of wood construction. Wooden office buildings of this calibre are still few in Finland. Innovative objectives set for its design include promoting industrial wood construction, new concepts of working environments and workplace management, modern traffic arrangements, and smart parking.Tekes, Finnvera and Finpro are central agents in the Team Finland exports-promotion model. Moving into shared premises will make innovation funding cooperation and internationalisation easier. A common space and a wide selection of services establish confidence for both Finnish and foreign companies. InnOta will function as a flexible, efficient one-stop shop for the customers served by all of the Team Finland organisations.A showcase of wood construction InnOta will be located in Otaniemi, Espoo, very close to the Aalto University and the Technical Research Centre of Finland VTT. Urban plan for the area was approved by the Espoo City planning board on May 15, 2013. Finnish Ministry of Employment and the Economy, Aalto University, and City of Espoo launched an extensive long-term development programme for the wood construction and timber industry already in 2012. One of the objectives of this programme is to form Otaniemi, Keilaniemi and Tapiola districts into a versatile showcase of Finnish wood construction know-how.Construction project in brief Total area of renovation and new wooden structures 14,500 gsm Developer: Senate Properties Main occupants: Finnpro, Finnvera, Tekes and GTK Joined with existing GTK premises Construction starts autumn 2014, handover autumn 2016 Working environment for ca. 600 employees Cost estimate EUR 35.5 million Location: Espoo, Otaniemi, Betonimiehenkuja 4 Innovation objectives include wood-construction expertise, new working environment and workplace management, green building, energy and eco efficiency, sustainability. Link to Simap Europe site:http://ted.europa.eu/udl?uri=TED:NOTICE:167428-2013:TEXT:FI:HTML&src=0For further information, please contact:Senate PropertiesOlavi Hiekka, Director of Business Area Ministries and Special PremisesTel. +358 205 811 400olavi.hiekka (at) senaatti.fiJonni Laitto, Construction ManagerTel. + 358 205 811 752jonni.laitto (at) senaatti.fiSenate Properties' role as the Finnish government's internal property expert is to provide premises and associated services for the government efficiently and responsibly. Our services provide comprehensive coverage of premises-needs from letting them to expert services at the strategic level. We are a reliable partner in all property solutions and services, producing working environments that motivate and help succeed and flourish. We provide a space with solutions.

News
21.05.2013
Finnvera's Portfolio Company PowerKiss and Powermat to Unite

Two Rivals of Wireless Power Become One PowerhousePowermat and PowerKiss – two of the pioneers and leaders of the wireless power industry - today announced that they have entered into a definitive agreement to combine their companies under the Powermat Technologies umbrella.“Wireless charging industry and business are growing very fast globally. I’m very pleased that the two leading wireless power companies PowerKiss and Powermat Technologies are uniting their businesses. With combined forces Powermat is able to become de facto player in the wireless industry” said Keith Bonnici, investment manager of Finnvera Venture Capital. Finnvera invested in PowerKiss early 2010.Today’s news offers the promise of settling the issue of conflicting standards within the wireless power industry. In the past, Powermat and PowerKiss had backed incompatible standards, and today both are committed to the same PMA standard, which also enjoys the backing of AT&T, Procter & Gamble, Starbucks and many others.Powermat has deployed over 1,500 charging spots in the US in places such as leading airports, coffee shops, malls and arenas. In Europe, PowerKiss has overseen the installation of over 1,000 charging spots in airports, hotels and cafés, and recently announced wireless charging at select McDonalds Europe locations. By combining forces, the companies aim to enable a consistent wireless charging experience for mobile people across the globe.“With our on-the-go lifestyles, keeping our devices powered and ready at all times has become the biggest unmet consumer need. Uniting forces behind a common standard ensures that consumers will be able to avail themselves of the widest possible ecosystem of public places where they can recharge,” said Ran Poliakine, CEO of Powermat. “Very soon consumers will be able to access wireless power seamlessly as they move between home, office, coffee shop, car and airport. PowerKiss shares our dream of a wireless world, and has the creativity and exceptional capabilities needed to help transform this dream into reality.”“PowerKiss recently became members of the PMA – enticed by its unique digital-layer, remote management capability and remarkable industry momentum. Today we are going ‘all-in’ and are very excited to combine forces with Powermat,” said Mats Wolontis, CEO of PowerKiss. “Powermat has excellent knowhow in this industry and the drive to make things happen. Our two companies have a remarkably similar vision for wireless power, and have labored in parallel to make it a reality. Along the way we made different and incompatible technological choices, and this is exactly the right time to resolve these. From now on we will operate as one company, one powerhouse deploying a common technology and supporting one single standard. We can’t wait to show the world what we can do together.”Additional information:Keith Bonnici, Finnvera Venture Capital, +358 40 179 9584

News
20.05.2013
Finnvera recognised as the ‘Best Early Stage Fund of the Year’ by European business angels

Finnvera’s Venture Capital Investments received the ‘Best Early Stage Fund of the Year’ award at the Annual Congress of EBAN – The European Trade Association for Business Angels, Seed Funds and other Early Stage Market Players. Finnvera was recognised for its active and, on the European scale, wide-ranging early stage investments and co-investments with business angels. EBAN held its Annual Congress in Vienna on 13 and 14 May.Finnish business angels have received positive attention within EBAN in recent years: Ari Korhonen was recognised as the Business Angel of the Year in 2009 and the Finnish Business Angels Network FiBAN was selected as the Business Angel Network of the Year in 2012.  EBAN consists of over a hundred business angel networks and funds in the EU Member States, elsewhere in Europe, and in Russia and Turkey. Finnvera has been a member of EBAN since 2008, after it had launched the InvestorExtra service targeted at private investors.On the basis of a survey conducted among EBAN members in 2012, the network was estimated to comprise about 26,000 business angels. Measured by the number of investments, Finnish business angels were the fourth most active in Europe, after their counterparts in the United Kingdom, Spain and France.Finnvera continues to invest actively in start-up enterprises. Direct investments will continue until the end of 2017.Additional information:Leo Houtsonen, Finnvera’s Venture Capital Investments, tel. +358 400 379 252

News
29.04.2013
Growth starts with a fresh idea – Finnvera’s 200th investment was made in Icebridge Ltd

Finnvera made its 200th investment in a new way of thinking about familiar things. Icebridge Ltd of Tuusula developed a non-electric cooling method for airline food catering.Seed Fund Vera Ltd, managed by Finnvera, has made investments in innovative, early-stage enterprises since 2006. During the past eight years, over 1,500 projects have been reviewed, leading to investments in 200 enterprises. Finnvera’s Venture Capital Investments is Finland’s leading early-stage venture capitalist. Aside from its own investments, it has collected over 200 million euros of private capital for its portfolio companies.“We have gone through about 200 projects per year. The pace has been intense, and some excellent exits indicate that we have also been successful,” says Seed Fund Vera’s Managing Director Leo Houtsonen, who is responsible for Finnvera’s Venture Capital Investments.Can the features of a refrigerator or a freezer be achieved without electricity?Icebridge Ltd has developed a non-electric cooling system that can be used to chill the food served on airplanes. By means of technology utilising dry ice, food can be kept cool for 24 hours. This means that food for the return flight, too, can be packed at the airport of departure.“Dry ice is widely used for cooling in-flight food. However, Icebridge has discovered a completely new way of using it, and as an investor, we believe that this technology will enable airline companies to achieve considerable savings in catering costs,” Houtsonen continues.“Our products have global markets and in the future, our solutions can be applied to other sectors besides airline traffic. We are able to provide reliable and safe temperature control without electricity.  It’s great to have Finnvera with us to generate growth for this purely Finnish innovation,” says Jukka Hämäläinen, CEO of Icebridge.Investments in start-ups to continueFinnvera continues to invest in start-up growth enterprises. In keeping with the policy outlined by the Ministry of Employment and the Economy in early April 2013, Finnvera will continue its direct investments until the end of 2017. After this, initial investments will no longer be made. The assets available will be used to ensure the continued operations of the portfolio companies. In accordance with this policy, Tekes will launch investment fund activities targeted at start-up enterprises during 2014.The InvestorExtra service directed at private investors, which Finnvera introduced in 2008, gathered together 250 business angels interested in early-stage investment.  The service provided private investors with a vantage point to the field of early-stage enterprise activities.“The public actor’s role is to be there to launch new activities and to create new practices so that operations can be privatised,” says Leo Houtsonen.During 2013, the service package designed for business angels will be transferred to the private Finnish Business Angels Network (FiBAN).Additional information:Finnvera plc, Leo Houtsonen, tel: +358 400 379 252Icebridge Ltd, Jukka Hämäläinen, tel. +358 50 313 6600 

Press Releases
26.04.2013
New members on Finnvera’s Supervisory Board and Board of Directors

On 26 April 2013, Finnvera’s Annual General Meeting elected new members to the company’s Supervisory Board and Board of Directors.Composition of the Supervisory BoardThe new members on the Supervisory Board are Helena Hakkarainen, Finance Manager (representative of Finnvera’s personnel), Anna Lavikkala, Director, Labour Market, Lea Mäkipää, Member of Parliament, and Antti Zitting, Chairman of the Board.Johannes Koskinen, Member of Parliament, will continue as Chairman of the Supervisory Board, and Lauri Heikkilä, Member of Parliament, will continue as Vice Chairman. The members continuing on the Supervisory Board are: Paula Aikio-Tallgren, Entrepreneur; Kaija Erjanti, Head of Division; Lasse Hautala, Member of Parliament; Miapetra Kumpula-Natri, Member of Parliament; Leila Kurki, Senior Adviser; Esko Kurvinen, Member of Parliament; Kasperi Launis, Chairman; Jari Myllykoski, Member of Parliament; Antti Rantakangas, Member of Parliament; Osmo Soininvaara, Member of Parliament; Timo Vallittu, Chairman; and Sofia Vikman, Member of Parliament.Composition of the Board of DirectorsMarkku Pohjola, B.Sc (Econ.) was elected Chairman of Finnvera’s Board of Directors. The new regular members are Kirsi Komi, LL.M., Vesa Luhtanen, CEO, Pirkko Rantanen-Kervinen, B.Sc (Econ.), Pekka Timonen, Director General (First Vice Chair) and Marianna Uotinen, Specialist Counsel (Second Vice Chair). Risto Paaermaa, LL.Lic., will continue as a Board member.The Annual General Meeting amended the Articles of Association so that deputy members are no longer elected to the Board of Directors.Financial Statements 2012 and the distribution of profitsThe Annual General Meeting also adopted the Consolidated Financial Statements and the Parent Company’s Financial Statements for the period 1 January–31 December 2012, discharged the Supervisory Board, the Board of Directors and the Chief Executive Officer from liability, and approved the proposal made by the Board of Directors for the use of the parent company’s profits.Election of the auditorKPMG Oy Ab will continue to serve as Finnvera’s regular auditor. The principal auditor is Juha-Pekka Mylén, Authorised Public Accountant.Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Risto Huopaniemi, General Counsel, Administration, tel. +358 29 460 2520

News
05.04.2013
A new cooperation model improves the financing options available for small export transactions

Finnvera has revised the reinsurance agreement signed with Office du Ducroire (ODL), the Luxembourg Export Credit Agency, in 2000. The revision improves the financing options available for small export transactions. Thanks to the revised agreement between Finnvera and the ODL, Northstar Europe S.A. of Luxembourg, a company specialising in the financing of small-scale European exports, can now provide financing for the export trade of Finnish enterprises as well.Finnvera has well-functioning export credit guarantee products for guaranteeing small export transactions, but the feedback received by Finnvera from its clients indicate that not enough financing has been available. Northstar Europe has recognised problems in the availability of financing even more widely and specialises in the financing of small export transactions. The ODL provides the primary guarantee for the financing granted by Northstar Europe. Finnvera can reinsure the ODL’s export credit guarantee, thereby making it possible to arrange financing for a Finnish export company.By being able to offer ready-made financial arrangements to foreign buyers, companies can improve their competitiveness in international export trade. The typical loans granted by Northstar Europe are between 0.5 and 5 million euros. The maximum repayment period is five years. Northstar Europe S.A. is a subsidiary of Northstar Trade Finance Inc. of Canada. The company has made corresponding arrangements with many other European export credit agencies. The parent company Northstar Trade Finance has a similar arrangement with the export credit agencies of Canada and the USA.www.northstareurope.eu

Press Releases
05.04.2013
Finnvera and Indekon invested in simulation technology

Finnvera and Indekon have made an investment in MeVEA Ltd, a company developing simulator products in Lappeenranta, Finland.The simulation technology developed by MeVEA enables the production of software and hardware that simulate the real circumstances. When this technology is utilised, for instance, in product development, the manoeuvrability and operation of equipment under manufacture can be tested directly with the user during the design phase. This yields important information about the characteristics of the equipment in terms of product development.The technology developed by the company can also be used in training simulators, dynamics software and in various motion platforms and maintenance services.“The aim is to use the capital obtained during the financing round to give MeVEA a boost for brisk growth and international markets. There is ample potential and the feedback received from customers is promising,” says Manager Matti Eskelinen of Finnvera’s Venture Capital Investments.“MeVEA is a highly interesting company that has already proceeded far on its own resources. We believe in sound cooperation with Finnvera for developing MeVEA. The investment also serves as strong proof of the importance of a regional fund in enterprise development,” says Juha Turunen, Investment Director at Innofinance Oy, which manages the Indekon Fund.“We have launched an international growth programme that aims at substantial growth. We strive to become undisputed technology and market leaders in product development for heavy machinery and equipment and in the simulation of dynamics. In the near future, we will focus heavily on commercialising the development work already done. This will also be reflected in the company’s turnover and personnel strength,” Managing Director Tero Eskola of MeVEA predicts.MeVEA was established in 2005 to commercialise the simulation technology developed by a research group working at Lappeenranta University of Technology. The company’s principal customers are manufacturers of work equipment and machinery on the international market.Additional information:Managing Director Tero Eskola, MeVEA Ltd, +358 50 015 0003Investment Director Juha Turunen, Innofinance Oy, +358 40 74 75 076Manager Matti Eskelinen, Finnvera’s Venture Capital Investments, +358 29 460 2731Finnvera's Venture Capital InvestmentsFinnvera plc, the State-owned specialised financing company, provides financing for the start, growth and internationalisation of enterprises and for protection against export risks. Finnvera reinforces the capacity and competitiveness of Finnish enterprises by offering loans, domestic guarantees and export credit guarantees. In addition, Finnvera’s subsidiaries make venture capital investments through funds or as direct investments. Direct investments are made in innovative start-up enterprises.www.finnvera.fiIndekon Oy / Innofinance OyThe fund’s objective is to promote regional enterprise together with other bodies developing enterprise financing and business in the same region. The fund makes investments, without sectoral restrictions, in SMEs carrying out business in the region. The fund participates in corporate arrangements and changes of generation that aim at creating and maintaining solid, entrepreneur-based and successful business in the region. Innofinance is a venture capital investment company that operates through its funds and also makes direct venture capital investments in SMEs with good growth potential.www.innofinance.fiMeVEA Ltd provides its customers with solutions for improving product development and user training. The company’s business is based on special know-how in real-time simulation of dynamics and virtual engineering. The broad scope of expertise enables almost any type of application, thus meeting the needs of the most demanding customers.www.mevea.com

News
22.03.2013
Finland was granted permission to insure short-term exports to Western industrialised countries under specific conditions

Finnvera has been given a limited option, available until the end of 2015, to guarantee export transactions with a credit period of under two years for the following countries: the EU Member States except Greece (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, France, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom) Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland and the United States of America On 6 March 2013 the European Commission granted Finnvera permission to insure short-term exports to the above-mentioned countries in the following cases, where the Commission sees a market failure. when the applicant is an SME with a total annual export turnover of at most two million euros; when credit insurance is sought for a single export transaction which has a risk period of at least 181 days and at most two years. Finnvera can only insure transactions in cases where a private insurer has denied cover. If the export transaction meets the above-mentioned condition 1 OR 2, and a private credit insurer is unable to cover the risk, the exporter may apply for insurance from Finnvera. Finnvera assesses the buyer’s creditworthiness according to its normal risk appraisal practice.The permission is valid until the end of 2015.The permission does not apply to Greece where, according to the Commission’s assessment, a general market failure prevails. Finnvera can therefore insure exports to Greece after careful risk assessment even when the conditions of the temporary permission are not fulfilled.Read also: Export > Export Credit Guarantees > International co-operation > European UnionAdditional information:Eeva-Maija Pietikäinen, Team Leader, tel. +358 29 460 2674 Taru Eskelinen, Senior Adviser, tel. +358 29 460 2670 Pekka Karkovirta, Vice President, tel. +358 29 460 2768The European Commission’s press release:http://europa.eu/rapid/press-release_IP-13-193_en.htm

Press Releases
15.03.2013
Financial Statements of the Finnvera Group 1 January–31 December 2012

Growing and internationalising enterprises the core of the strategy Early in 2012, Finnvera’s operations underwent an external and independent international evaluation. In the main, the company’s operations received excellent marks in the evaluation, especially when compared to corresponding organisations abroad. The evaluation also provided good material for developing Finnvera’s operations. Finnvera’s revised strategy reflects the conclusions of the evaluation, as well as the issues recorded for Finnvera in the Government Programme. A central feature of the strategy is the increasingly strong support that Finnvera’s operations give to the industrial policy of the Government of Finland, where growing and internationalising enterprises are a core element.Business operations and financial trendThe amount of export credit guarantees and special guarantees offered rose by 41 per cent on the previous year, to EUR 5,351 million. Demand for export credits was also brisk. In SME financing, the amount of credits and domestic guarantees shrank by 13 per cent, to EUR 853 million. The amount of direct equity investments increased on the previous year.The Finnvera Group’s profit for the year 2012 was EUR 53 million, or 11 per cent less than the year before. The main reasons underlying the decline in profit were higher credit risks in Finnvera plc’s SME financing and the consequent write-downs and provisions for losses, and the decrease in profits for items carried at fair value.Export financing accounted for EUR 62 million of the parent company’s profit of EUR 56 million, while SME financing accounted for EUR -6 million. The subsidiaries and associated companies had an impact of EUR -3 million on the Group’s profit.The Group’s profit for October–December was EUR 23 million, or more than double the profit for the third quarter, EUR 11 million. The profit for the fourth quarter accounted for over 40 per cent of the profit for the whole year. During the fourth quarter, the impairment losses on receivables and guarantee losses were clearly smaller than during the previous quarter. At the end of December, the Finnvera Group’s capital adequacy ratio was 15.9 per cent, or 0.4 percentage points better than a year ago. The Group’s cost-to-income ratio improved by 1.6 percentage points on the previous year and was 27.6 per cent. The Group’s equity ratio declined by 4.4 percentage points and stood at 20.3 per cent at the end of December. Future prospects and impending risks Economic growth is expected to be slow in Finland this year. Sluggish growth and banks’ possibly even stricter criteria for lending may make the financial position of companies, in particular SMEs, more difficult. This may increase the demand for Finnvera’s services. On the other hand, the continued low level of investments will reduce the need for financing. Credit risks will remain high. Demand for export financing varies depending on individual major capital goods transactions. In the short term, losses arising from Finnvera’s outstanding export credit guarantees are estimated to be low, but because of risk concentrations, the situation may change rapidly.The uncertainty factors associated with economic trends make it more difficult to predict Finnvera’s financial performance. According to the current estimate, the Finnvera Group’s financial performance for 2013 is likely to remain at the same level as in 2012. If materialised, individual risks may weaken the result considerably.CEO Pauli Heikkilä:The year 2012 was characterised by continued volatility in the world economy, which is why the uncertain economic trend persisted throughout the year.In Finnvera’s view, the situation on the corporate finance market in Finland, as in the other Nordic countries, is better and more stable than in Southern and Central Europe. However, the measures already decided for regulating the operations of banks, and the issues still under discussion, had an impact on the availability of financing. Banks have the need to manage their balance sheets, which is why the arrangement of credits, especially new, large and long-term ones, became more cumbersome. For SMEs, in many cases this meant more expensive debt financing and more stringent requirements for collateral.The operating environment is challenging for companies because of intense competition. It is likely that the unstable economic situation, particularly in the euro area, will continue. This may further delay the investment decisions of both domestic enterprises and their customers abroad.Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458Read the Annual Report

Press Releases
13.03.2013
Business Angels invested over 14 million in potential growth enterprises

Business angels have become an important factor for new business and jobs in Finland.The ICT and mobile sectors attract the greatest interest.The Finnish Business Angels Network (FiBAN) and Finnvera have collected statistical data on investments made by private investors in early-stage potential growth enterprises in Finland in 2012. The resulting statistics are the most extensive collected to date in the Nordic countries. They highlight the importance of business angels as investors in early-stage growth enterprises in Finland.The typical investment was made through a private investor’s investment company, as a syndicated investment with other business angels. The ICT sector accounted for half of all portfolio companies. Other important sectors included the mobile business, health care and health care technology. Investments were divided evenly between initial investments and follow-on investments. Enterprises at the seed stage received somewhat less investments than slightly more mature enterprises, because half of all investments were follow-on investments. In 2012 the number of exits was 30; more than half of them yielded a profit. The respondents had completed on average 1.3 exits during their business angel careers; thus, they can be considered experienced business angels.The internationally high response rate (ca. 23%) is an indication of the membership’s commitment and high motivation to develop business angel activities. The business angels who responded to the survey were very active in 2012. Their investments totalled over EUR 14 million. There were 2.5 investments per person and the average investment was relatively large; the mean was about EUR 60,000 and the median about EUR 30,000. Sweat equity contributions were also common. They were made in about one in four investments.Business angel investments had a substantial impact on the creation of new business, and thereby new jobs, in Finland. In the future it would be important to foster learning among inexperienced business angels and, in general, to promote successful exits.In brief: Respondents: 99 business angels. Investments in euros: Over EUR 14 million. Syndicated investments: 70%. Type of investment: Initial investments: 50% vs. follow-on investments 50%. Growth stage of the portfolio company: Seed stage: 23%, Startup 38% and Early growth 39% Exits: More than half yielded a profit. Additional informationManaging Director Jan Oker-Blom, FiBANjan@fiban.org+358 40 551 7551Managing Director Leo Houtsonen, Veraventure Oyleo.houtsonen@finnvera.fi+358 29 460 2733Finnish Business Angels Network (FiBAN)FiBAN is a national, non-profit association of private investors that aims to improve the possibilities for private persons to invest in unlisted potential growth enterprises. The activities are based on the wish to advance the development of Finnish business and the creation of new jobs through potential growth enterprises.   A non-profit association of private investors Over 270 approved business angel members; at present, more than a hundred portfolio companies A national interest group for private investors FiBAN’s objective is to create a solid foundation for the network of business angels and to offer a place where angel investors and growth enterprises can meet. The purpose is to strengthen and develop the profession of private venture capitalists, i.e. business angels. In addition, FiBAN helps entrepreneurs to build growth enterprises by training and supporting cooperation with investment institutions. The association represents private investors at the European Business Angels Network (EBAN), where it was granted the “Business Angel Network of the Year” award for 2012.http://www.fiban.orgFinnvera's Venture Capital InvestmentsFinnvera plc, the State-owned specialised financing company, provides financing for the start, growth and internationalisation of enterprises and for protection against export risks. Finnvera reinforces the capacity and competitiveness of Finnish enterprises by offering loans, domestic guarantees and export credit guarantees. In addition, Finnvera’s subsidiaries make venture capital investments through funds or as direct investments. Direct investments are made in innovative start-up enterprises. At the end of 2012, Finnveras’ Venture Capital Investments had a portfolio of 138 such enterprises. Finnvera’s investments in these enterprises totalled 75.3 million euros, while private investments totalled 145.8 million euros.In 2012, Finnvera’s Venture Capital Investments made initial investments in 23 enterprises and follow-on investments in 41 enterprises. The total sum invested was 15.7 million euros. Two out of three of these enterprises had received investments from business angels, in total EUR 10 million from 115 angels. About 30 per cent of the angels who had made investments together with Finnvera were members of either Finnvera’s or FiBAN’s angel networks.  

Press Releases
29.01.2013
The roller coaster effect coloured 2012

Overview of Finnvera’s operations in 2012Fluctuations in the operating environment were reflected in companies’ business, and in their financing needs, during the past year. Among SMEs, demand for Finnvera’s financing focused on working capital and delivery security for trading more than on investments. The volume of financing granted to SMEs was less than the year before. Demand for export financing, especially export credits, was brisk. International financing arrangements between several financiers became more difficult to organise. This clearly increased the number of applications for export credit guarantees.“As in the previous year, the euro crisis and uncertainty in the world economy characterised 2012. The roller coaster effect is an apt description for the two-fold year: during the first six months, the situation looked better than the year before in some sectors, but signs of uncertainty increased again in the second half of the year. In most cases, the Finnish banking market still functioned well, but owing to the regulation of banks, stricter requirements for issuing new credits could be discerned both at home and internationally. We are closely monitoring trends in the financing provided by banks for SMEs. Working together with banks, our goal is to ensure that financing can be arranged for the development and growth of companies’ business”, says CEO Pauli Heikkilä.In 2012, Finnvera provided EUR 853 million in financing for enterprises’ domestic operations; this was 13 per cent less than the year before.The volume of new venture capital investments increased slightly on the previous year, totalling EUR 17 million (15 million).The uncertain economy increased offers for export credit guaranteesOffers given for export credit guarantees and special guarantees totalled EUR 5.4 billion; this was 41 per cent more than in 2011. In total, 83 per cent of the guarantees offered concerned the traditional sectors of Finnish capital goods exports, such as telecommunications and the energy, forest and shipbuilding industries. Besides Finland, the most guarantees were offered for exports to the United States and Russia.“Apart from seasonal variation in competitive bidding for individual capital goods transactions, another reason underlying the increase in offers for export credit guarantees was the uncertain situation on the international financing market. In particular, it has become more difficult to obtain large export credits; this increased demand for both export credit guarantees and export credits.”The permanent system for funding export credits was launchedThrough its subsidiary, Finnish Export Credit, Finnvera helps to arrange financing for foreign customers who purchase Finnish capital goods. The system for funding export credits, based on Finnvera’s own acquisition of funds, was taken into use during the year under review. Finnvera acquires the funds needed for export credits and SME credits from the market. The funds are obtained using an EMTN (Euro Medium Term Note) loan programme, which is guaranteed by the State and has the highest credit ratings. The first bonds under the programme were floated on the international capital market in October.Future prospectsIn Finnvera’s view, 2013 will continue to be challenging in many respects. If problems persist in the euro zone, the situation will be more serious and difficult to predict. It is therefore expected that the period of slow growth will continue in Finland in 2013.Sluggish economic growth and banks’ stricter lending practices owing to regulation make it challenging for many companies to arrange financing. SMEs still need financing for working capital, while export companies need more sources of funds for arranging long-term export credits. The low level of investments reduces the demand for financing; on the other hand, banks hope to see Finnvera participating increasingly often in financing projects, to share risks with them.Finnvera’s financial statements and online annual report for 2012 will be published on the company’s website www.finnvera.fi on 15 March 2013.Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Annamarja Paloheimo, Senior Vice President, tel. +358 29 460 2539

Press Releases
24.01.2013
International venture capitalists meet with Finnish growth companies

Enterprise Finland Venture Forum takes place today in Espoo, Finland.Finnish Industry Investment, Tekes and Finnvera, in co-operation with Technopolis, have invited international venture capitalists to meet with the most promising Finnish growth companies at Enterprise Finland Venture Forum. During the day, 26 hand-picked companies present themselves to international and Finnish investors, after which the companies and investors will continue discussions in pre-scheduled one-to-one meetings.”The Finnish innovation organisations aim to pave the way for Finnish growth companies to raise finance internationally in addition to Finnish sources. Enterprise Finland Venture Forum offers an efficient day for companies and investors to meet”, says Henri Grundstén, Director at Finnish Industry Investment.International investors have become increasingly active in the Finnish market in the past couple of years. In both 2011 and 2012, international investors supplied 60 million euros of investments into Finnish companies. According to preliminary data, in 2012, international capital exceeded domestic investments into Finnish companies. For example, the Norwegian Northzone Ventures has a keen eye on venture opportunities in Finland.  “So far we have invested in a couple of exciting opportunities, and we are looking to further expand our portfolio with promising companies.  Enterprise Finland Venture Forum is a great event that we are looking forward to every year", says Bjørn Stray, General Partner at Northzone.Pekka Soini, Director General of Tekes, will give the opening remarks at the event. Other key-note speakers include Bruce Oreck, U.S. Ambassador to Finland, and Sampo Ahonen, CEO of Beneq. Beneq received a 25 million euro investment from the Russian RUSNANO in 2012. Enterprise Finland Venture Forum is part of the Enterprise Finland service concept. There are 40 venture capitalists attending the event, of which approximately half are foreign. For more information (incl. the list of the presenting companies), please visit http://www.efvf.fi/.For further information, please contact:Henri Grundstén, Finnish Industry Investment Ltd, tel: +358 50 431 0840, e-mail: henri.grundsten(a)industryinvestment.comFinnish Industry Investment Ltd is a government-owned investment company that promotes Finnish business, employment and economic growth through venture capital and private equity investments. The investments of Finnish Industry Investment amount to 700 million euros. www.industryinvestment.comTekes, the Finnish Funding Agency for Technology and Innovation is the most important public funding organisation for research, development and innovation in Finland. Tekes invests annually around EUR 600 million towards innovative projects aimed at growth, internationalisation, generating new know-how and new kinds of products, processes and service or business concepts. www.tekes.fiFinnvera provides financing for the start, growth and internationalisation of enterprise operations and for hedging against export risks. We strengthen the operating potential and competitiveness of Finnish enterprises by offering loans, domestic guarantees, and export credit guarantees. Risks included in financing are shared between Finnvera and other providers of financing. Finnvera is a specialised financing company owned by the State of Finland and it has an official Export Credit Agency (ECA) status. www.finnvera.fiTechnopolis Plc is a listed real estate company that specializes in leasing space and providing services. Its core business idea is to combine business support services with modern, flexible, multi-user business environments. There are approximately 22,000 people and almost 1,400 companies and organizations in Technopolis premises in Finland, Russia, and Estonia. The company’s net sales for 2011 totaled EUR 92.8 million, and its EBITDA was EUR 47.5 million. The Technopolis Plc share (TPS1V) is listed on NASDAQ OMX Helsinki. http://www.technopolis.fi/

News
22.01.2013
Closer cooperation between Finnvera's Venture Capital Investments and FiBAN

Finnvera’s Venture Capital Investments and the Finnish Business Angels Network FiBAN have signed an agreement on closer cooperation between Finland’s two large networks of business angels.The free-of-charge InvestorExtra service launched by Finnvera in 2008 has expanded into a network of over 240 registered business angels. During this time, more than 300 start-up enterprises have been presented to the network as potential targets for investment. Alongside the establishment of FiBAN, the private business angel sector has become organised and has evolved rapidly during the past two years. In consequence, Finnvera decided to end the registration of new members for its own service at the end of 2012. A public actor must be active when operations are launched but must step aside when the private sector has the capacity to provide the same services.Enterprises have been presented to business angels at a total of 29 ExtraEvents. Finnvera will still organise the events in 2013 in cooperation with FiBAN so that, after the events on 29 January and 12 March, invitations will only be sent to FiBAN’s members. FiBAN has made an offer to the business angels of InvestorExtra that would enable them to join FiBAN without a joining fee.The cooperation agreement is a continuation of the operating model that evolved during 2012. FiBAN’s members have been invited to ExtraEvents since the beginning of 2012. Eight events were organised last year. In all, 64 enterprises that had applied for a business angel investment were selected for presentation at these events. The number of applicants totalled 208, of which 117 came through Finnvera’s application channel and 91 through FiBAN. The applications are reviewed by a jury of four business angels. Since August, the jury has consisted of FiBAN’s members. On average 40–50 business angels attended each event arranged in 2012. The presentations also included 25 enterprises from Finnvera’s own deal flow, from Vigo Accelerators, and from the NIY programme of Tekes targeted at young innovative growth enterprises.Since the start of 2013, Finnvera has no longer taken applications for business angel investments. Applications for angel investments can now be filed through FiBAN.About FiBANFiBAN’s membership has grown rapidly, exceeding 250 members in January. At present, FiBAN’s database has about one hundred enterprises seeking financing from angels. It is estimated that the deal flow could reach 300 this year.According to a survey conducted among business angels, the total value of investments made through the network during the first six months of 2012 exceeded 3.5 million euros. The rapid growth of membership and the tax incentive that business angels have been able to receive since the start of 2013 give reason to expect that investments made this year will reach at least 10 million euros.About Finnvera’s Venture Capital InvestmentsIn 2012, Finnvera’s Venture Capital Investments made initial investments in 23 enterprises and further investments in 41 enterprises. The total sum invested was 15.7 million euros. The investments made by business angels in these enterprises totalled 9.8 million euros.  This was 13 per cent more than the investments made by business angels in Finnvera’s targets in 2011. Investments by angels were included in two-thirds of Finnvera’s investments. In total 115 business angels made 183 investments; thus, the average angel investment was roughly 53,000 euros.At the end of 2012, Finnveras’ Venture Capital Investments had a portfolio of 138 enterprises. Finnvera’s investments in these enterprises totalled 75.3 million euros, while private investments totalled 145.8 million euros.Additional information:Leo Houtsonen, Finnvera’s Venture Capital Investments, +358 29 460 2733Jan D. Oker-Blom, FiBAN, +358 40 551 7551www.fiban.org

News
17.01.2013
Revised EU rules on short-term credit insurance for industrialised countries

Finnvera’s temporary permission to insure short-term exports to Western industrialised countries expired at the end of 2012. The EU has published a Communication, updated on 19 December 2012, which restricts short-term export credit insurance by public export-credit insurers in areas where private credit insurance companies provide insurance cover. On the basis of this Communication, Finnvera has applied for new temporary permission to insure transactions in limited cases.The new legislation on short-term credit insurance will be in force from 1 January 2013 to 31 December 2018. The basic legal principle remains the same. Public export-credit insurers are not allowed to provide insurance for risks of under two years in the following countries: the EU Member States, Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland and the United States of America. Exemptions from this principle may be granted in certain exceptional cases.Finland has applied for a new exemption concerning the following cases identified by the Commission as areas of market failure: when the applicant is a Finnish SME with a total annual export turnover of at most two million euros; when the insurance applies to a single risk/transaction of over 180 days. The Commission has decided to remove Greece from the list of marketable risk countries, published in the new Communication, temporarily until the end of 2013.Information from the Commission, 8 January 2013

Press Releases
22.11.2012
The Finnvera Group’s Interim Report for January–September 2012

The best credit ratings for Finnvera's acquisition of fundsFinnvera’s loan programme of three billion euros received the best possible ratings from two credit rating agencies: Moody’s (Aaa) and Standard & Poor’s (AAA). The ratings correspond to the ratings assigned to the State of Finland for its long-term funding. Finnvera’s loan programme is guaranteed by the State of Finland and is used for acquiring funds from the market for financing both SMEs and export credits.Business operations and financial trendThe value of financing offers given by Finnvera for exports during January–September was four per cent less than the year before but more than double the value of offers given during the corresponding period in 2010. The number of financing offers given for SMEs declined slightly, and the value of the offers was about one fifth less than during the corresponding period last year.In Finnvera’s venture capital investments, the value of initial investments made in January–September increased on the figure for the same period in 2011. Moreover, 53 new business angels joined Finnvera’s network of business angels during the period under review, bringing the total to 232. Demand for services offered by Finnish Export Credit Ltd was brisk, while the value of offers remained at the same level as last year. The Group’s profit for the third quarter was EUR 11 million, or clearly better than the result for the second quarter. The profit accounted for over one third of the profit of EUR 30 million recorded for January–September. The nine-month profit that was clearly less than in 2011 is explained by increased credit risks in SME financing and the resulting impairment losses and provisions for losses.The Group’s net interest income and the net sum of fee and commission income and expenses increased in January–September by 10 per cent on the previous year. In January–September, administrative expenses remained more or less unchanged from the previous year, but impairment losses on receivables and guarantee losses increased by over 40 per cent. Owing to the losses recorded, SME financing showed a negative result for January–September. Export financing showed a profit.The Group companies and associated companies had an effect of EUR -4 million on the profit. At the end of September, the Finnvera Group’s capital adequacy ratio was 15.8 per cent, or 0.5 percentage points better than a year ago. The Group’s cost/income ratio improved by 0.4 percentage points on the previous year and was 27.6 per cent. The Group’s equity ratio declined by 3.5 percentage points and stood at 23.4 per cent at the end of September. Outlook for the rest of the yearDemand for SME financing is not expected to change significantly during the rest of 2012. The sluggish economy will not encourage investments or company reorganisations; in this respect, demand will thus remain moderate. Demand for financing will still focus on working capital and on the arrangement of delivery security enabling transactions.Demand for Finnvera’s export credit guarantees and export credits is likely to continue fairly active despite the downturn in exports. The underlying factors are the increased awareness of risks and the banks’ need to reduce the share of long-term credits on their balance sheets. Finnvera’s guarantees and financing are likely to play a greater role for Finnish exports.The uncertain economic trend makes it more difficult to predict Finnvera’s financial performance. According to current estimates, the financial performance of both the Group and the parent company is expected to fall below that for 2011. If materialised, individual risks may weaken the result considerably.CEO Pauli Heikkilä:The debt crisis in the euro zone and the uncertainty of the global economy have continued to weaken the overall economic situation when compared against the first six months of the current year. This has been reflected as caution especially in the investments of SMEs. Another indication is that most of the financing we have offered to SMEs has been needed for working capital. Demand for export credit guarantees has been high both in Finland and internationally. However, only some of the planned export transactions materialise in the end.Finnvera issued the first notes under the Euro Medium Term Note programme to the international capital market at the end of October. This funding enables us to finance export credits for buyers of Finnish capital goods. The scheme helps to ensure the competitive standing of Finnish export companies because, in most cases, securing an export contract also requires the arrangement of long-term financing for the buyer.The Ministry of Employment and the Economy has stated that venture capital investments for start-up enterprises with growth potential will be transferred from Finnvera to Tekes at the latest in January 2014. Finnvera will focus on providing SMEs with loans and domestic guarantees, as well as export credits and export credit guarantees for export financing. The funds needed for this purpose are acquired from the market.Additional information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458Terhi Kannisto, Communications Officer, tel. +358 29 460 2860A PDF version of this news releaseInterim Report 1 January - 30 September 2012 (PDF)

News
15.11.2012
Pekka Karkovirta of Finnvera to chair two export credit working parties within the OECD

On Monday, 12 November 2012, Pekka Karkovirta, Vice President, International Relations, of Finnvera, was elected Chairman of two working parties discussing export credit issues within the OECD. The following persons were elected Vice Chairs: David Drysdale (USA); Mariane Sondergaard-Jensen (Denmark); Seidai Nakamura (Japan); Luc de Bool (the Netherlands); and Dirk Terweduwe (Belgium).When guaranteeing or financing officially supported export credits, OECD Members comply with the terms of the Arrangement on Officially Supported Export Credits. The Arrangement aims to prevent competition with export credit terms.Financing terms are developed and discussed under the auspices of the Participants to the Arrangement on Officially Supported Export Credits. The OECD Working Party on Export Credits and Credit Guarantees discusses topics such as the environmental impact of projects financed using export credits, anti-bribery measures, and conditions for sustainable lending. The working parties usually meet three times a year. They gather both the authorities responsible for export credits and the representatives of guarantee and credit institutions around the same table.The latest addition made to the Arrangement was a Sector Understanding on Export Credits for Renewable Energy, Climate Change and Water Projects reached in June. Accordingly, OECD Members can offer longer repayment periods in projects that mitigate climate change.  The key topics for the next years will be funding issues for export credits, the minimum interest rates for officially supported credits, and the involvement of emerging markets outside the OECD in the work pertaining to export credits.

Press Releases
05.11.2012
Finnvera to participate in the financing of the sister ship ordered by TUI Cruises from the STX Finland Turku shipyard

STX Finland Oy and the German shipping company TUI Cruises GmbH have signed a contract for the construction of a sister ship to the cruise ship ordered a year ago. Finnvera is the guarantor for the post-delivery buyer credit to be financed through Citibank and Finnish Export Credit Ltd.The guarantee granted by Finnvera covers 95 per cent of the approximately EUR 360 million buyer credit. The loan period is 12 years from the delivery of the vessel. The beneficiary under Finnvera’s guarantee is the credit arranger, Citibank with Finnvera’s subsidiary Finnish Export Credit Ltd providing financing for the credit.“In connection with ship building contracts, the buyer practically always requires that long-term post-delivery export credit financing is committed before the contract is signed. Finnish companies’ competitiveness in capital goods exports is supported by a scheme where Finnvera grants the export credit guarantee and Finnish Export Credit Ltd provides financing for  the export credit granted to the buyer by the bank," explains Topi Vesteri, Finnvera’s Executive Vice President.This export credit financing scheme has been in use since the beginning of 2009, that is, from the onset of the financial market crisis.The sister ship is expected to be delivered from STX Finland Oy's Turku shipyard in May 2015. The impact on employment is estimated at 5,500 person-years of employment.The capacity of the 98,000 GRT cruise ship is 2,500 passengers, and its length is about 295 metres.TUI Cruises GmbH shipping company is a joint venture of TUI AG (a leading European tour operator) and Royal Caribbean International (the world’s second largest cruise line operator).Additional information:Topi Vesteri, Executive Vice President, Export Financing, tel. +358 29 460 2676

Press Releases
03.10.2012
AAA ratings for Finnvera's loan programme

The credit rating agencies Moody’s and Standard & Poor’s have confirmed the best possible ratings for Finnvera's Medium Term Note programme.The ratings correspond to the ratings assigned to the State of Finland for its long-term funding. The rating given by Moody’s to Finnvera is Aaa (stable outlook) and that given by Standard & Poor’s is AAA (negative outlook). Finnvera uses the MTN programme to acquire funds from the market for financing both SMEs and export credits.The export credit scheme is intended for the arrangement of financing for customers who buy Finnish capital goods. The scheme helps to ensure the competitive standing of Finnish export companies because, in most cases, securing an export contract also requires the arrangement of long-term financing for the buyer. In line with the scheme, a Finnish or foreign bank arranges a long-term credit on the OECD terms for the buyer. This may be transferred to Finnish Export Credit Ltd, a subsidiary of Finnvera’s, for financing. The arrangement always includes Finnvera’s export credit guarantee.Finnvera initiated the funding of export credits yesterday on 2 October 2012 by signing the Medium Term Note programme with five banks operating on the international market. It is estimated that the first notes under the MTN programme will be issued this autumn. The programme replaces a temporary scheme based on the State’s funding, which had been in use since 2009.Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Topi Vesteri, Executive Vice President, tel. +358 29 460 2676Ulla Hagman, Chief Financial Officer, Finance and IT, tel. +358 29 460 2458

News
14.09.2012
New EU legislation prepared for export credit insurance with a risk period of under two years

The European Commission has published a draft for a new Communication that will regulate short-term export credit insurance as of the beginning of 2013. Both corporations and private individuals can comment on the draft Communication. Comments can be made until 21 September 2012 on the Commission website:http://ec.europa.eu/competition/consultations/2012_short_term_export_credit/index_en.htmlThe purpose of the rules is to prevent competition distortions on the internal market. Nor should there be competition between private and public export credit insurers. In consequence, the Commission specifies the operating sectors where private credit insurers are able to meet the demand.The basic principle underlying the current legislation remains unchanged in the draft: public actors may not insure exports to certain Western industrialised countries when the risk period is under two years. The list of countries given in the draft is the same as at present, i.e. the Member States of the European Union, Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland and the United States of America.According to the draft, the possibilities of departing from this basic definition are very limited. Exceptions are possible if The European Commission decides to remove a country from the list of marketable risk countries (as was already done by the Commission this year for Greece) A Member State demonstrates a market failure and is therefore granted exemption to act in a specific sector, which may be: exports by SMEs having a total export turnover not exceeding EUR 2 million individual risks of over 180 days other very weighty reasons. After the public consultation, the Commission will formulate the final text for the Communication and will publish it by the end of the year. The Communication will enter into force at the beginning of 2013.Additional information is provided at Finnvera by:Benita Salenius, Head of Team, tel. 029 460 2715Taru Eskelinen, Senior Adviser, tel. 029 460 2670

Press Releases
17.08.2012
The Finnvera Group’s Interim Report for January–June 2012 - Demand for financing continued to focus on exports and working capital

During January–June, demand for export credit guarantees and special guarantees increased clearly when compared against the corresponding period in 2011. Demand for SME financing was lower than during the first six months of last year.Offers pertaining to export transactions declined by 14 per cent on the previous year. Similarly, offers for SME financing were about one fifth less than during the first half of 2011.Losses in SME financing increased significantly on the previous year owing to write-downs and provisions for losses made because of greater credit risks. Losses from export financing continued to be low. Export financing attained a positive result during the period under review, whereas SME financing was in the red.Key figures for 1 January–30 June 2012 Loans, domestic guarantees and export guarantees granted (SME financing): EUR 492 million (H1/2011: EUR 572 million) Export credit guarantees and special guarantees granted: EUR 2,037 million (H1/2011: EUR 2,332 million) Outstanding commitments for SME financing: EUR 3,150 million (12/2011: EUR 3,149 million) Outstanding commitments for export financing: EUR 11,040 million (12/2011: EUR 10,256 million) The Finnvera Group’s financial performance: EUR 19 million (H1/2011: EUR 28 million) Finnvera plc’s financial performance: EUR 24 million (H1/2011: EUR 23 million) The Finnvera Group’s losses, impairment losses and provisions: EUR 58 million (H1/2011: EUR 42 million) CEO Pauli Heikkilä:The first half of 2012 was twofold. The situation of many of our client companies was better than a year ago but, on the other hand, factors such as the prolonged euro crisis has caused uncertainty about the future. Companies were cautious, especially when starting investments. Demand for Finnvera’s SME financing focused on the financing of working capital and was slightly lower than the year before. In contrast, international problems associated with the availability of financing clearly increased the number of applications for export financing. Demand was high not only for export credit guarantees but also for export credits. In venture capital investments, private investments in Finnvera’s targets increased. More private investors also joined the business angel network.Financial trend The Finnvera Group’s financial performance was clearly weaker than during the first half of 2011.In January–June, the Finnvera Group’s profit came to EUR 19 million, or EUR 9 million less than the year before (28 million).The main factor affecting the result was the loss shown by the subsidiaries’ venture capital investments. The Group companies and associated companies together had an effect of EUR -4 million on the financial performance (5 million).The parent company Finnvera plc’s profit for January–June came to EUR 24 million, or nearly the same as the year before (23 million). Impairment losses on receivables and guarantee losses increased significantly during the period under review, or about EUR 11 million, but this was offset by an almost equal increase in fee and commission income.Outlook for the Rest of the YearThe uncertain economic outlook has to some extent increased the number of SMEs that find it difficult for their business to attain the goals relating to turnover and profitability required by debt management. The more stringent situation on the financial market and the revised, stricter regulation of banks may also weaken the financial position of some SMEs.The recovery of exports is likely to continue slower than anticipated. The export transactions carried out have had a lower domestic content than before. The economic trends of countries important for Finnish exports have a significant impact on the demand for export financing.Uncertain economic trends make it difficult to estimate Finnvera’s future financial performance. According to the current estimate, the parent company’s financial performance for this year is expected to remain at last year’s level, whereas the Group’s financial performance is likely to be weaker than in 2011. Significant uncertainty factors pertain to the result of venture capital investments. If materialised, individual risks in export financing and SME financing may weaken the financial performance considerably.Interim Report 1 January-30 June 2012 (PDF)Additional information:Pauli Heikkilä, CEO, tel. +358 29 460 2400Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458Kaisa Sailas, Communications Manager, tel. +358 29 460 2422

News
26.06.2012
Acquisition of financing by enterprises at a good level

The number of enterprises that have acquired new external financing from private sources is, on average, slightly higher than in recent years. On the other hand, there are somewhat fewer enterprises that have tapped public sources for new financing than in recent years, on average. This information appears from the report on the Business Finance Survey 2012.Major differences between enterprises in access to financeFinancing problems encountered by micro enterprises of less than ten employees are as much as three-fold compared with large businesses. In addition, financing problems of micro enterprises as well as small and medium-sized enterprises (SMEs) are, on average, pronouncedly more severe than those of large businesses.The bulk of micro and small enterprises with financing problems received no external funds at allAlmost half of micro enterprises and more than 40% of small enterprises facing financing problems received no external funding at all. For more than 80% of these, business continuity was either at risk or business could be continued only in a manner materially divergent from what had been envisaged.Wider margins on loans to large businessesFor large businesses, the changed financing situation has been reflected mainly in wider margins on new loans (lending rate less reference rate). More than 60% of large businesses that had raised new financing reported a widening of their margins.Enterprises increasingly rely on banks for financingA higher proportion of enterprises than previously cite banks as their main source of finance. This change applies especially to large businesses. More diversified financing structures for enterprises would be justified in a situation where the long-term growth outlook for the Finnish economy is deteriorating and where, owing to tightening bank regulation, the importance of other channels of finance may increase.Electronic billing moves aheadMore than half of medium-sized and large businesses, a third of small enterprises and a fifth of micro enterprises have migrated to electronic billing. There are still efficiency gains to be reaped from electronic billing in a considerable number of enterprises.The Business Finance Survey 2012 is a comprehensive overall review of the corporate sector's financing situation. The survey was carried out in April 2012, drawing responses from 3,531 enterprises. The survey was organised under the aegis of the Confederation of Finnish Industries EK, the Federation of Finnish Financial Services, Finnvera plc (a State owned specialised financing company and the official Export Credit Agency of Finland), the Federation of Finnish Enterprises, the Bank of Finland and the Ministry of Employment and the Economy, and was conducted by IROResearch Oy. The report on the Business Finance Survey 2012 (in Finnish only) is posted as a flash version (recommended) on the Bank of Finland website:http://www.suomenpankki.fi/fi/julkaisut/selvitykset_ja_raportit/rahoituskyselyt/Pages/default.aspxReport in PDF format (PDF, in Finnish)In addition to nation-wide survey results provided in the report, results in respect of regional centres for economic development, transport and the environment (ELY centres) will also be published in the Toimiala Online database maintained by the Ministry of Employment and the Economy, www.toimialaonline.fi.Further informationJukka Vauhkonen, Economist, Bank of Finland, jukka.vauhkonen@bof.fi, tel. +358 10 831 2111.Tommi Toivola, Senior Advisor, Confederation of Finnish Industries EK, tommi.toivola@ek.fi, tel. +358 9 4202 3292.

News
14.06.2012
Temporary permission for Finnvera to insure short-term exports to Western industrialised countries under strict conditions

The European Commission has granted Finnvera permission to insure short-term exports to Western industrialised countries. These exports can be insured only in two cases where the Commission identified shortcomings on the market: when the applicant is a Finnish SME with a total annual export turnover of at most two million euros; when the risk is associated with a single export transaction which is not covered under a portfolio insurance from private insurers or when the risk includes pre-delivery risk. Finnvera can only insure transactions in cases where a private insurer has denied cover. Finnvera assesses the buyer’s creditworthiness according to its normal risk appraisal practice.The permission is valid until the end of 2012, after which the Union’s current framework of rules will be replaced by a new one.The temporary permission applies to following countries: EU countries except for Greece (Austria, Bulgaria, Belgium, Cyprus, Czech Republic, Denmark, Estonia, Finland, France, Germany, Hungary, Italy, Ireland, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom) Australia, Canada, Iceland, Japan, New Zealand, Norway, Switzerland, USA Read also: Export > Export Credit Guarantees > International co-operation > European UnionAdditional information:Senior Adviser Taru Eskelinen, +358 29 460 2670Vice President Eeva-Maija Pietikäinen, +358 29 460 2674Head of Trade Finance Benita Salenius, +358 29 460 2715The European Commission’s press release on this topic:http://europa.eu/rapid/pressReleasesAction.do?reference=IP/12/593&format=HTML&aged=0&language=EN&guiLanguage=en

Press Releases
25.05.2012
Financing needed for exports and working capital

The Finnvera Group’s Interim Report for 1 January–31 March 2012Key figures for the first quarter of 2012 Loans and domestic guarantees granted: EUR 197 million (Q1/2011: EUR 221 million) Export credit guarantees, export guarantees and special guarantees granted: EUR 601 million (Q1/2011: EUR 598 million) Outstanding commitments for SME financing: EUR 3,169 million (12/2011: EUR 3,149 million) Outstanding commitments for export financing: EUR 9,915 million (12/2011: EUR 10,256 million) The Finnvera Group’s financial performance: EUR 23 million (Q1/2011: EUR 10 million) Finnvera plc’s financial performance: EUR 23 million (Q1/2011: EUR 11 million) Impairment losses on Finnvera plc’s receivables and guarantee losses: EUR 14 million (Q1/2011: EUR 23 million) During the period under review, demand for export credit guarantees and special guarantees rose to EUR 1.5 billion, which was 65 per cent more than during the corresponding period in 2011. In contrast, demand for SME financing was 18 per cent lower than during the first quarter of 2011.“Seasonal variation and some individual large export projects under negotiation had an impact on the demand for export financing. In SME financing, the sluggish economy and the low level of investments reduced demand and the volumes of financing granted. From the perspective of SMEs, bank financing is working well in Finland, but when it comes to export financing, banks are more cautious and hope that Finnvera would increasingly often participate in financing projects to share the risk with banks. The new model for financing export credits will also be put into use during the current year,” says CEO Pauli Heikkilä.The total value of offers pertaining to exports was more or less at the same level as during the corresponding period the year before. The total value of loans and domestic guarantees granted was 11 per cent less than during the first quarter of 2011.The volume of venture capital investments was at the same level as the year before. In contrast, the business angel network expanded markedly during the period under review.Financial trendThe Finnvera Group’s profit came to EUR 23 million, or EUR 13 million more than during the first quarter of 2011. The parent company’s profit was EUR 23 million (11 million). The main factors contributing to the better result were smaller impairment losses on receivables in SME financing and decreased guarantee losses.Export financing accounted for EUR 14 million of the profit. In export financing, no major losses were recorded and no major increases were made in provisions for losses. The profit from domestic credit and guarantee operations was EUR 9.0 million.Future prospects and impending risksDemand for SME financing is likely to remain at a low level throughout the year. The focus will probably still be on financing for working capital and for the needs of export trading. SMEs have expressed more interest in financing services for export trade; one factor contributing to this trend is Finnvera’s SME Export Finance Programme.The outlook for the world economy includes many uncertainties. However, demand for export financing is estimated to continue brisk.According to the current estimate, Finnvera’s financial performance for this year is likely to remain at the same level as in 2011. If more risks materialise at the same time as the economy dips, the estimated profit may diminish considerably.Interim Report 1 January - 31 March 2012 (PDF)Additional information:Pauli Heikkilä, Chief Executive Officer, tel. +358 29 460 2400Topi Vesteri, Executive Vice President, tel. +358 29 460 2676Annamarja Paloheimo, Senior Vice President, tel. +358 29 460 2539Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 29 460 2458

News
30.04.2012
Finnvera is now able to grant short-term export credit guarantees for exports to Greece

By virtue of the Communication issued by the European Commission on short-term export credit insurance, it has not been possible to grant short-term export credit guarantees (risk period under two years) for exports to countries listed as marketable risk countries. In its amended Communication of 20 April, the Commission has now excluded Greece from the list of marketable risk countries. This means that, based on its own risk assessment, Finnvera will also be able to grant short-term export credit guarantees for export projects to Greece. Finnvera will pay special attention to the exporter’s experiences of payments and will require up-to-date information on the buyer for credit risk assessment. The Communication on short-term export credit insurance, based on EU competition legislation, entered into force in 1997. The Communication prohibits public export credit insurers from guaranteeing marketable risks, i.e. risks that private insurance companies are ready to guarantee.According to the amended Communication, in a normal market situation, Finnvera cannot grant guarantees with a risk period of under two years (manufacturing + credit repayment period) for exports to the following countries: the EU Member States except Greece (Austria, Belgium, Bulgaria, Cyprus, Czech Republic, Denmark, Estonia, France, Germany, Hungary, Ireland, Italy, Latvia, Lithuania, Luxembourg, Malta, Netherlands, Poland, Portugal, Romania, Slovakia, Slovenia, Spain, Sweden, United Kingdom) Australia Canada Iceland Japan New Zealand Norway Switzerland United States of America

Press Releases
04.04.2012
Markku Pohjola new chair of Finnvera’s Board of Directors

On 30 March 2012, Finnvera’s Annual General Meeting elected new members to the company’s Supervisory Board and Board of Directors. The new chair of the Board of Directors is Markku Pohjola, B.Sc. (Econ.), previously Deputy Group CEO of Nordea.Composition of the Supervisory BoardNew members in the Supervisory Board are Paula Aikio-Tallgren, entrepreneur; Lauri Heikkilä, Member of Parliament; Miapetra Kumpula-Natri, Member of Parliament; Esko Kurvinen, Member of Parliament; Kasperi Launis, Chairman; Liisa Mariapori, entrepreneur; Antti Rantakangas, Member of Parliament; Osmo Soininvaara, Member of Parliament; and Sofia Vikman, Member of Parliament.Johannes Koskinen, Member of Parliament, was re-elected Chairman of the Supervisory Board, and Lauri Heikkilä, Member of Parliament, was elected Vice Chairman. The following individuals will continue as members of the Supervisory Board: Kaija Erjanti, Head of Financial Markets; Lasse Hautala, Member of Parliament; Leila Kurki, Senior Adviser; Jari Myllykoski, Member of Parliament; Tapio Mäkeläinen, Director, Labour Market; Hannele Pohjola, Director, Innovation and Growth Policy; Olli Rantanen, Attorney at Law; and Timo Vallittu, Chairman.Composition of the Board of DirectorsMarkku Pohjola, M.Sc. (Econ.), was elected new chairman of the Board of Directors. Risto Paaermaa, Industrial Counsellor, and Kristina Sarjo, Financial Counsellor, were elected First and Second Vice Chairman, respectively. New regular members elected for the Board are Johanna Ala-Nikkola, Commercial Counsellor; Leila Helaakoski, Director; and Petri Vanhala, Chairman.Re-elected members are Marjaana Aarnikka, Commercial Counsellor; Timo Kekkonen, Director; and Timo Lindholm, Director.Elected deputy members are Elise Pekkala, Deputy Director General, and Heikki Solttila, Financial Counsellor.Financial statements 2011 and distribution of profitsThe Annual General Meeting also adopted the Consolidated Financial Statements and the Parent Company’s Financial Statements for the period 1 January–31December 2011, released the Board of Directors and the Managing Director from liability, and approved the proposal made by the Board of Directors for the distribution of the parent company’s profit.Elected auditorKPMG Oy Ab was elected regular auditor with Raija-Leena Hankonen, Authorised Public Accountant, as the principal auditor. The decision will remain in effect until the currently ongoing tender process for auditors has been finalised.Additional information:Pauli Heikkilä, Managing Director, tel. 020 460 7321Risto Huopaniemi, Senior Vice President, Administration, tel. 020 460 7261

Press Releases
20.03.2012
Higher risk levels for outstanding commitments - Financial Statements of the Finnvera Group 1 January–31 December 2011

For Finnvera’s SME financing, 2011 was a busier year than 2010, and the volume of financing offered increased considerably on the previous year. Similarly, the value of offers given for export credit guarantees and special guarantees was over one and a half times more than in 2010. Losses from SME financing were about one fifth greater than the year before; this reduced the parent company’s profit. Losses from export financing remained low. As in the previous year, the financial performance of the Finnvera Group and that of the parent company were still clearly in the black.In 2011, Finnvera’s financing for enterprises’ domestic operations amounted to EUR 977 million (914 million). The value of export credit guarantees and special guarantees offered totalled EUR 3,796 million (2,380 million).“Investments continued to be low, and working capital accounted for over half of the SME financing offered. The number of export credit guarantees that came into effect rose steeply, increasing the company’s fee and commission income. For this reason, despite higher credit losses, the financial performance for the year remained at a good level, when seen as a whole,” says Managing Director Pauli Heikkilä.Financial performanceThe Finnvera Group’s profit was EUR 64 million, or one million euros better than the year before. The main factors improving the result were changes in the fair value of venture capital investments and an increase in the net interest income. The increase in the parent company’s credit and guarantee losses had a negative effect on the result.Export financing accounted for EUR 54 million of the parent company’s profit of EUR 58 million (66 million). The rest of the profit came from the cancellation of a subordinated loan because of the loss shown by Finnvera’s subsidiary, Seed Fund Vera Ltd, in 2010.Bankruptcies and restructuring remained at a high level in Finland. Owing to the credit losses materialised, and the parent company’s additional self-risk portion of EUR 6 million in loss compensation, the result for SME financing was zero.Credit losses increased by bankruptciesCredit and guarantee losses in SME financing and impairment losses on receivables totalled EUR 83 million (68 million) before the State’s credit loss compensation. This was 21 per cent more than in 2010. The credit loss compensation received from the State was EUR 32 million (25).Losses on export credit guarantees and special guarantees, as well as provisions for losses, remained low, at EUR 4 million (5 million).Increased outstanding commitments and higher risk levelsWithin the past few years, Finnvera’s outstanding commitments and their risk levels have risen significantly. This is reflected in SME financing, for instance, as poorer risk ratings for client enterprises and as an increase in the relative share of non-performing receivables and payment delays. The higher risk level for outstanding commitments was also seen in the losses recorded for SME financing in 2011; these were clearly greater than in 2010. In export financing, outstanding commitments have more than doubled within four years. However, no major losses were recorded and no major increases were made in provisions for losses in export financing during the year.Capital adequacyAt the end of 2011, the capital adequacy ratio of the Finnvera Group was 15.5 per cent (14.6). According to the target set, the capital adequacy ratio should be at least 12 per cent. Finnvera plc’s capital adequacy was 15.2 per cent (14.5).Future prospectsRestlessness on the financial market and uncertain prospects for the world economy will slow down economic growth in Finland, too. SMEs will still need financing for working capital. Companies’ low level of investments reduces the demand for Finnvera’s financing, whereas banks would like to see Finnvera participating increasingly often in financing projects, to share risks with them.The uncertainty on the financial market, triggered by the high debt rates of developed economies, has darkened the future expectations of export companies. The new instrument for financing export credits granted by banks is likely to increase Finnvera’s share of buyer credit arrangements. Demand for export financing is greatly influenced by development trends in the economies of Finland’s key export countries, such as Sweden, Russia and Germany, and Finland’s own competitiveness.The uncertainty factors associated with economic trends make it more difficult to predict Finnvera’s financial performance. According to the current estimate, the financial performance for 2012 is likely to fall below that for 2011.For the first time, Finnvera publishes its Annual Report as an electronic document on the company’s website. The Annual Report consists of the Annual Review and Financial Review published previously as separate reports. The Annual Report also includes the Corporate Responsibility Report.Read the Annual Report: www.finnvera.fi/annualreport2011Additional information:Pauli Heikkilä, Managing Director, tel. +358 20 460 7321Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 20 460 7409

Press Releases
26.01.2012
Financing for the working capital of SMEs and export credit guarantees for long-term financial arrangements

Information on Finnvera’s operations in 2011The year just ended was busier than 2010 for SME financing, with demand increasing by 13 per cent. In contrast, demand for export credit guarantees and special guarantees in 2011 was nearly one third less than in 2010. Apart from seasonal changes in individual capital goods transactions, uncertainty factors postponing investment decisions also contributed to the decline. The number of Finnvera’s financing offers increased, especially in export financing, owing to the brisk demand for export credit guarantees in 2010.“Signs of growth were really in the air in spring 2011 but then something happened during the summer and the market atmosphere changed completely. The euro crisis dominated the news in autumn, but enterprise financing continued almost normally in Finland and there was no significant weakening in the real economy. Banks operating in Finland and Finnvera together provided even slightly more financing for enterprises than in 2010,” says Pauli Heikkilä, Managing Director of Finnvera, recapitulating last year’s events.SMEs needed working capitalIn 2011, Finnvera provided EUR 866 million in financing for enterprises’ domestic operations; this was 3 per cent more than the year before. Owing to the economic situation, companies have also faced other types of financial challenges; for many, counter-cyclical financing has been one solution. The volume of counter-cyclical financing granted exceeded the figure for 2010 by well over a half: in total, 410 enterprises received EUR 173 million. Finnvera can still offer counter-cyclical financing until the end of 2012.Many offers for export credit guarantees from Finnvera Offers given for export credit guarantees and special guarantees totalled EUR 3.9 billion; this was over one and a half times more than in 2010 (2.4 billion). Telecommunications accounted for 28 per cent of all guarantee offers given. Among individual countries, the most guarantees were granted for exports to Uruguay, Germany, South Africa and Russia. The increase in guarantee offers in a situation where the number of applications fell indicates that negotiations in capital goods exports take time. The first contact with Finnvera is taken several months, even years before the deal comes through.“Uncertainty and slowing down of economic growth were reflected in Finnvera as shrinking demand for export credit guarantees in 2011. The downturn in the availability of long-term financing for exports was another factor contributing to the fall in demand. It seems that, owing to the situation on the financial market and the changes in regulatory practices, the role of banks is shifting from the provision of long-term financing towards the arrangement of large export credits,” Heikkilä says.New tools for export financingAt the start of this year, Finnvera began to finance export credits. The new export financing system helps to ensure the competitive standing of Finnish export companies. The system is intended for arranging long-term financing for foreign customers who buy Finnish capital goods.Finnvera has launched a new SME Export Finance Programme for small and medium-sized enterprises. The programme is intended for SMEs that engage actively in direct exports. Together with banks, Finnvera gives them a practical opportunity to learn about payment methods and various financial arrangements for exports. The companies for the programme are selected on the basis of applications. The first application period will end on 24 February 2012.Future prospectsRestlessness on the financial market and uncertain prospects for the world economy will slow down economic growth in Finland, too. According to the current year’s first statistics, demand for Finnvera’s financing for working capital among SMEs remains. Close cooperation between Finnvera and banks ensures that SMEs with prerequisites for profitable business will receive financing even during a period of low economic activity.The uncertainty on the financial market, triggered by the high debt rates of developed economies, has darkened the future expectations of export companies. The new model for financing export credits granted by banks is likely to increase Finnvera’s share of buyer credit arrangements.Finnvera’s financial statements and annual report for 2011 will be published on 20 March 2012 on the company's website www.finnvera.fi.Additional information:Pauli Heikkilä, Managing Director, tel. +358 20 460 7321Topi Vesteri, Executive Vice President, tel. +358 20 460 7238 (Financing of exports)Annamarja Paloheimo, Senior Vice President, tel. +358 020 460 7267 (SME financing)

Press Releases
18.01.2012
Applications can now be submitted for the SME Export Finance Programme

In cooperation with banks, Finnvera provides Finnish SMEs with a new kind of opportunity to learn about export financing arrangements. The SME Export Finance Programme is intended for SMEs that engage actively in direct exports. The programme has a practical approach and concentrates on each company’s own export transactions.The companies for the programme will be selected on the basis of applications. In the first phase, about 15 companies can take part in the programme. The programme is suited to SMEs whose business is profitable and rests on a sound foundation. These companies will already have some experience of exports and want to grow by increasing direct exports. Moreover, they believe that competitiveness on the export market can be improved through customer financing solutions.On the international export market, financing is one of the factors used by manufacturers to compete for orders. If two equal companies are competing for the same transaction, financing may decide the winning supplier.“Cooperating with banks, Finnvera works actively to provide export financing solutions for SMEs. The new programme is one way for SMEs to obtain information on financing options for export transactions and, at the same time, to find suitable financing solutions for themselves,” says Senior Vice President Annamarja Paloheimo, responsible for SME financing at Finnvera.The programme seeks to improve the skills of SMEs to acquire financing for export transactions, thereby increasing exports. Cooperation between the company, the bank and Finnvera on real export transactions is the central feature of the programme. Private banks always have the main role in providing financing for export transactions, while Finnvera acts as a guarantor in the arrangements.Other programme partners are Fintra and the International Chamber of Commerce ICC.The application period for the SME Export Finance Programme is open from 17 January to 24 February 2012. In the first phase of the programme, the goal is to enrol medium-sized enterprises that manufacture investment goods, such as machinery, equipment and production lines. More information about the programme and the application form in finnish is available on Finnvera’s website at www.finnvera.fi (Vienti > Vientikaupan rahoitus -ohjelma).Additional information:Annamarja Paloheimo, Senior Vice President, tel. +358 20 460 7267Erno Ihto, Senior Adviser, tel. +358 20 460 7295

Press Releases
29.12.2011
Finnvera to start financing export credits

Finnvera plc will start financing export credits at the beginning of 2012. The objective of the new export financing model is to ensure the competitiveness of Finnish exporters. The model is intended for the arrangement of financing for foreign customers who purchase Finnish capital goods. The President of the Republic of Finland approved the bills concerning the model on 29 December 2011.Finnvera acquires the funds needed for export credits by issuing debt instruments and commercial papers guaranteed by the State of Finland. Finnvera grants the credits through its subsidiary, Finnish Export Credit Ltd.“In the increasingly challenging market environment, it is highly important to ensure the competitive standing of Finnish exporters. The export credit transfer model that is now available for Finnish exporters has already been applied in our principal competitor countries for providing long-term financing for buyers of capital goods. The new system will level the playing field between Finnish exporters and their foreign competitors,” says Executive Vice President Topi Vesteri, responsible for export financing at Finnvera.In trade negotiations, a Finnish exporter can inform the buyer of Finnvera’s guarantee and buyer credit services, thereby making it easier to complete the export transaction. The application for financing export credits must be submitted to Finnvera before the sales contract is signed.Banks continue to have an important role in the arrangement of financing for export transactions because the bank negotiates the terms of the buyer credit and administrates the credit. The bank selected by the buyer arranges a long-term export credit on the OECD terms, which can then be transferred to Finnish Export Credit for financing. The buyer credit arrangement is always backed by Finnvera’s export credit guarantee. Finnvera makes the decisions on export credits and export credit guarantees in accordance with its normal criteria.As of the beginning of 2012, Finnvera’s Export Financing Unit will serve as the ‘onestop shop’ for all export financing services provided by Finnvera and the Finnish Export Credit.Additional information:Topi Vesteri, Executive Vice President, Finnvera, tel. +358 400 702 002Pauli Heikkilä, Managing Director, Finnvera, tel. +358 20 460 7321Anita Muona, Managing Director, Finnish Export Credit, tel. +358 40 706 7138

Press Releases
21.12.2011
Counter-cyclical financing for enterprises to continue

Finnvera can continue to grant counter-cyclical financing until the end of 2012. Counter-cyclical financing is intended for companies with no more than 1,000 people that have difficulties in obtaining financing because of the weaker economic outlook and unstable financial markets. It can be granted to companies deemed to have the prerequisites for profitable business once the economic situation improves.“Since the economic outlook is uncertain, it is highly justified to continue counter-cyclical financing. Special measures will be needed if the availability of financing from the private market becomes more difficult. Many SMEs have yet to recover fully from the previous recession. Thus, enterprises may find themselves in a rapidly declining situation if economic growth slows down dramatically in Finland. Counter-cyclical financing has been an efficient tool, and about 1,200 enterprises have already made use of it,” says Senior Vice President Annamarja Paloheimo, responsible for Finnvera’s financing for SMEs.An enterprise may utilise counter-cyclical financing to ensure its liquidity or to finance an investment boosting its competitiveness. It is also suitable for financing company acquisitions or for meeting the financing needs of a newly-founded, growth-oriented enterprise. Before the financing decision, Finnvera determines whether the enterprise has prerequisites for profitable business when the economic situation improves. Additional funding from other principal financiers or the rescheduling of claims is also required before financing can be granted.“In autumn 2010, the OECD conducted a survey where our clients were asked about the effects of the counter-cyclical financing they had received on their business. About 40 per cent of the respondents said that the financing had saved their company from bankruptcy,” Paloheimo underlines.Finnvera has granted counter-cyclical financing since 6 March 2009, for a total of EUR 470 million. When granting Counter-cyclical Loans and Guarantees, Finnvera can take greater risks than normally, owing to the State’s raised compensation for losses. The State’s compensation for any losses incurred by Finnvera in counter-cyclical financing is higher than the compensation for losses in other financing products.Counter-cyclical LoanCounter-cyclical GuaranteeAdditional information:Annamarja Paloheimo, Senior Vice President, Finnvera, tel. +358 20 460 7267

Press Releases
23.11.2011
Demand for SME financing rose by over 10 per cent – offers for export credit guarantees doubled

The Finnvera Group’s Interim Report for January–September 2011Key figures for January–September 2011 Loans and domestic guarantees offered: EUR 672 million (Q3/2010: 634 million) Export credit guarantees, export guarantees and special guarantees offered: EUR 3,295 million (Q3/2010: 1,545 million) Outstanding commitments in domestic financing: EUR 3,085 million (6/2011: 3,111 million) Outstanding commitments in export financing: EUR 10,187 million (6/2011: 9,549 million) The Finnvera Group’s profit: EUR 48 million (Q3/2010: 45 million) Finnvera plc’s profit: EUR 42 million (Q3/2010: 49 million) The Finnvera Group’s impairment losses on receivables and guarantee losses: EUR 44 million (Q3/2010: 35 million) The needs of SMEs to obtain financing for working capital and the slight increase in investments raised the demand for Finnvera’s financing in January–September. Demand was 13 per cent higher than a year ago.  “Today, companies are in very different situations. Many haven’t had time to acquire strong economic buffers after the downturn of 2009. In addition, the prospects for financial markets and the world economy are uncertain. In the current economic situation, the decision made by the Cabinet Committee on Economic Policy to continue counter-cyclical financing next year is highly justified,” says Pauli Heikkilä, Managing Director of Finnvera.The loans and guarantees for domestic financing granted by Finnvera totalled EUR 672 million, or 6 per cent more than a year ago. The amount of counter-cyclical financing granted nearly doubled: in all, 307 enterprises received a total of EUR 148 million.Heikkilä says that it has become more difficult to secure long-term, large export credits on the market. “This change is apparently permanent. One side effect of the Basel III regulatory framework, which was revised in the aftermath of the financial crisis, seems to be that, increasingly often, the role of banks is to arrange large export credits. A new permanent export credit transfer model is under preparation in Finland to improve the competitiveness of capital goods exporters. Adoption of the model requires legislative amendments, which are scheduled to come into force early next year,” Heikkilä says.The total value of export credit guarantees, export guarantees and special guarantees offered by Finnvera was EUR 3,295 million. The total sum of offers more than doubled on the sum for the first nine months of 2010. Financing was granted for projects in the traditional export sectors, such as telecommunications, energy and the forest industry.Financial trendIn January–September, the Finnvera Group’s profit came to EUR 48 million (45 million), or EUR 3 million more than during the same period in 2010. The parent company Finnvera plc’s profit was EUR 42 million, as against EUR 49 million the year before. Both domestic financing and export financing showed a positive result.Seen against the previous year, the main factors having a positive effect on the result were the appreciation of the subsidiaries’ venture capital investments, the increase in the parent company’s net interest income following the rise in the general interest level, and the increase in fee and commission income. The main factors decreasing the result were the parent company’s greater credit and guarantee losses calculated after the State’s compensation for losses.In domestic financing, the parent company’s losses, impairment losses, and provisions for credit and guarantee losses amounted to EUR 61 million (44 million). Of this sum, EUR 67 million was credit and guarantee losses materialised, EUR 4 million was cancellations of losses recorded earlier, and EUR 2 million was decreases in impairment losses on receivables and in provisions. Compensation by the State and the European Regional Development Fund (ERDF) for the losses materialised totalled EUR 21 million (16 million).No major losses were recorded in export financing during the period under review, and no major increases were made in provisions for losses. Losses on export credit guarantees and special guarantees amounted to EUR 4 million (6 million) during the period under review.On 30 September 2011, the parent company’s capital adequacy stood at 14.9 per cent and that of the Group at 15.3 per cent.Foreseeable risks and future prospectsRestlessness on the financial market and uncertain prospects for the world economy will slow down economic growth in Finland, too. The cautious growth in industrial investments is likely to halt almost completely, as the export prospects of companies are declining.So far, demand for Finnvera’s SME financing has not increased on a larger scale, with the exception of counter-cyclical financing. Some enterprises are preparing for a declining economic trend; in consequence, financing for working capital is in greater demand than before.Economic uncertainty will continue to reduce demand for exports, as well as demand for export credit guarantees. Because of the lack of trust on the market and stricter regulations imposed on banks, banks must raise their capital adequacy. This is mostly done by reducing long-term lending, which means that long-term financing will become a bottleneck when financing is arranged for exports. In Finland, measures are taken to improve the availability of financing by introducing a new export credit transfer model. In the new model, Finnvera acquires funds from the market by using State guarantees, and Finnvera’s subsidiary, Finnish Export Credit Ltd, uses these funds to finance bank-arranged credits to companies. The proposals for this type of financing are currently discussed by Parliament.The number of bankruptcies and companies in distress, as well as Finnvera’s credit losses, may increase during the last quarter of the year if economic growth comes to a halt.Finnvera’s profit for the current year is estimated to be lower than in 2010. However, if more risks materialise at the same time as the economy dips, the estimated profit may shrink considerably.Additional information:Pauli Heikkilä, Managing Director, tel. +358 20 460 7321Topi Vesteri, Executive Vice President, tel. +358 20 460 7238 (Financing of exports)Veijo Ojala, Executive Vice President, tel. +358 20 460 7405 (Domestic financing)Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 20 460 7409Interim Report for January-September 2011 (PDF)Information on Finnvera's operations in 2011 will be published on 26 January 2012. The financial statements and report on operations for 2010 will be published on Finnvera’s website on 20 March 2012.

News
15.11.2011
Credit financing to improve the competitiveness of capital goods exporters

The Government of Finland has decided to enhance the options available for exporters of capital goods – in practice, large Finnish companies – when arranging financing for foreign buyers. A new permanent export credit transfer model was approved by the Cabinet Committee on Economic Policy in September. Adoption of the model will require legislative amendments, and the Government will present a Bill to this effect to Parliament. The amendments are scheduled to enter into force at the start of 2012.According to the new permanent export credit transfer model, Finnvera’s subsidiary, Finnish Export Credit Ltd, will finance export credits arranged by commercial banks while the parent company, Finnvera, is responsible for the necessary acquisition of funds and liquidity management. The acquisition of funds is guaranteed by the State.The objective is to ensure the competitiveness of Finnish export companies by improving arrangements for financing. Banks would still have a pivotal role in the new model. In the model, the credits granted by Finnish Export Credit are used for financing long-term export credits (a minimum of two years) arranged by a Finnish or foreign bank on the OECD terms. The arrangement always includes an export credit guarantee granted by Finnvera.The total outstanding credits granted for export financing may not exceed EUR 3 billionThe current Finnish model for export financing is not competitive when compared against our principal competitor countries. The financing system based on export credit guarantees and interest equalisation involves problems stemming from the fact that commercial banks have fewer opportunities to provide long-term export financing, for instance, because of the new Basel III regulatory framework that will enter into force within a few years.“Lack of trust between banks has diminished their possibilities to grant long-term export financing. For this reason, the financing model now planned will be taken into use at the right time,” says Executive Vice President Topi Vesteri, responsible for export financing at Finnvera.Additional information:Pauli Heikkilä, Managing Director, tel.  +358 20 460 7321Topi Vesteri, Executive Vice President, tel. +358 20 460 7238.Ulla Hagman, Senior Vice President, Finances and IT, tel.  +358 20 460 7409Jyrki Wirtavuori, Managing Director, Finnish Export Credit, tel. +358 20 460 3502

News
14.11.2011
Finnvera, Tekes and ELY Centres now exchange information on clients

Three providers of public enterprise services – Finnvera, Tekes, and the Centres for Economic Development, Transport and the Environment (ELY Centres) – have begun to exchange information on their clients. The goal is to improve, speed up and harmonise the services provided for enterprises. At the same time, there will be less overlapping work in the various organisations.The exchange of information between Finnvera, Tekes and the ELY Centres applies to strictly restricted data and takes place through an electronic system developed specifically for this purpose. Among the information exchanged are data on contact persons, the client’s service history, the support granted, financing, risk classification, and on the client’s adjusted financial statements.All exchange of information is based on confidentiality and secrecy. The bank secrecy pertaining to information obtained from Finnvera applies likewise to all recipients of information.The Act on the Customer Data System for Enterprise Services entered into force on 15 December 2010. The Act enables public providers of financing and other public actors to widen their scope of cooperation when sharing customer data.Tekes, Finnvera and the ELY Centres are included in the MEE Group, which consists of the Ministry of Employment and the Economy and over 30 organisations under it.Additional information:Jukka Suokas, Vice President, Finnvera, tel. +358 20 460 7406Leena Tonttila, Finance Manager, Finnvera, tel. +358 20 460 7247Markus Laakkonen, Head of Leagal Services, Finnvera, tel. +358 20 460 3401

Press Releases
25.10.2011
Appointments at Finnvera

Finnvera’s Supervisory Board decided on organisational changes on 4 October 2011. Based on this decision, Finnvera’s Board of Directors made the following appointments on 20 October 2011.Domestic Regional Financing and Financing for Growth and Internationalisation are merged to form one unit responsible for Finnvera’s business areas engaged in SME financing and for the preparation of the related credit decisions. Finnvera’s Board of Directors has appointed Annamarja Paloheimo (47), LL.M., as Senior Vice President responsible for the new Unit of Financing for SMEs and Internationalisation. Paloheimo has served as Senior Vice President at Finnvera since 2006 and has been responsible for financing for growth and internationalisation.Executive Vice President Veijo Ojala, responsible for domestic financing, will retire at the beginning of January after having reached the pensionable age. Executive Vice President Topi Vesteri continues to answer for export financing and acts as the Managing Director’s first deputy.Finnvera’s Board of Directors has appointed Merja Välimäki (49), M.Sc. (Economics & Business Administration), as Chief Audit Executive of the Audit and Assesment Unit. The unit is responsible for internal auditing and for evaluating and developing the quality system. Välimäki has served as Internal Audit Manager at Finnvera since 2007.Annamarja Paloheimo reports to Managing Director Pauli Heikkilä, and Merja Välimäki reports to the Board of Directors.The organisational changes and the associated appointments will become effective as of the beginning of 2012.Additional information: Pauli Heikkilä, Managing Director , tel. +358 20 460 7321

News
10.10.2011
Next year Finnvera can no longer insure short-term export transactions to Western industrialised countries

This year Finnvera can still grant guarantees for export transactions to EU Member States and other Western industrialised countries when the payment term is under two years. The European Commission’s temporary permission is in force until the end of 2011. Extension of this permission cannot be sought.All credit insurance agreements made by virtue of the temporary permission expire automatically on 31 December 2011. We encourage our clients who have such credit insurance agreements to be prepared for the change and to be active in seeking insurance cover from the private sector.In this respect, 2012 will be a problematic year for Finnish export companies. Finnvera has made this message clear to the European Commission.Finnvera has commissioned a study to chart the overall situation of the Finland’s private credit insurance market. The results of the ongoing study are expected in November. The Commission has launched its own study of the credit insurance market so as to be able to revise the Communication on short-term export credit insurance during 2012.Finnvera can continue to insure export transactions to Western industrialised countries provided that the payment term is two years or longer. For other countries, such as Russia, credit insurance is granted as usual, regardless of the payment term.Additional information:Eeva-Maija Pietikäinen, Vice President, tel. +358 20 460 7279 Taru Eskelinen, Senior Adviser, tel. +358 20 460 7126 Benita Salenius, Senior Adviser, Head of Team, tel. +358 20 460 7342

News
06.10.2011
The Foreign Ministry’s support to SMEs for project preparation in Russia to cease after 2011

An SME planning to expand its business to Russia has been able to receive support from the Foreign Ministry for project preparation. For budgetary reasons, this support will no longer be granted after 2011.The Finnish Ministry for Foreign Affairs has supported the development of cooperation between Finland and Russia by financing project studies conducted by Finnish SMEs since 2003. Finnvera has served as an expert and a liaison organisation in projects financed by the Ministry.In line with the Government Programme, the appropriations allocated for neighbouring area cooperation in the State Budget will decrease during this Government’s term of office.The Foreign Ministry’s support to Finnish SMEs for project preparation in Russia will cease after 2011. The cessation of support will not affect projects that have already received a favourable support decision. The appropriation for the current year still has approximately 400,000 euros available for support. Applications for support addressed to Finnvera are processed in the order of their arrival.Between 2003 and 2011, the Foreign Ministry has granted a total of over 5 million euros for project preparation. This support has helped about 180 enterprises to start business in Russia. Apart from project studies, the support has been used for compiling business plans, training, and for the acquisition of expert services. The Nordic Project Fund (Nopef) and the Centres for Economic Development, Transport and the Environment (ELY Centres) continue to grant support for project studies of this type (Nopef, http://www.nopef.com/; ELY Centres, http://www.ely-keskus.fi/).Additional information:Finnvera plcFinancing Manager Jari Mehto, tel. +358 20 460 7248

Press Releases
30.09.2011
Finnvera covering export credit financing for Montes del Plata pulp mill project in Uruguay

The 12-year USD 900 million export credit guaranteed by Finnvera will be used to finance deliveries from Finland by Andritz Oy and Pöyry Finland Oy for the pulp mill project in Uruguay.Funding for the credit guaranteed by Finnvera will be provided by Finnish Export Credit Ltd. The borrower is Celulosa y Energía Punta Pereira S.A., a joint venture that operates the Montes del Plata pulp mill and was established by the Chilean forest company Arauco and Stora Enso. The holder of Finnvera’s guarantee is Fortis Bank, which also acts as the agent for the credit. The total debt financing of about USD 1.35 billion is implemented in cooperation with the Inter-American Development Bank. The commercial banks participating in the arrangement are BNP Paribas, DnB NOR, Nordea and Santander.Andritz Oy serves as the principal supplier of equipment for the project, while Pöyry Finland Oy is responsible for planning and project management services. The Finnish supplies will have an employment impact of about 1,000 person-years.It is common for buyers to require that Finnish exporters have Finnvera’s export credit guarantee even before submitting a tender, and often a guarantee is a prerequisite for concluding a deal. The guarantee arrangement promotes the business of Finnish export companies and benefits the Finnish economy.The latest technology in useThe pulp mill will be built in the Punta Pereira free trade zone in Uruguay. The mill is the largest private industrial investment in Uruguay’s history and an important milestone for the country’s forest industry. The mill project uses state-of-the-art technology for pulp mills and is grounded in the best available technical solutions and environmental protection practices.Production at the Montes del Plata pulp mill will rely on cultivated eucalyptus raw material. The project will create new jobs and well-being: Estimates indicate that the mill will have an impact of 0.8 per cent on Uruguay’s gross domestic product during the construction phase, and once the production starts, the impact will be two per cent.The mill is scheduled to begin operations during the first half of 2013. Its production capacity will be 1.3 million tonnes of pulp per year.Additional information:Topi Vesteri, Executive Vice President, tel. +358 20 460 7238

Press Releases
28.09.2011
Finnvera guarantees a buyer credit for TUI Cruises

STX Finland Oy and TUI Cruises GmbH of Germany have signed a contract on the building of a cruise vessel. Finnvera is participating in the project by guaranteeing a post-delivery buyer credit. Funding for the credit guaranteed by Finnvera will be provided by Finnish Export Credit Ltd. Finnvera's guarantee covers 95 per cent of the buyer credit of about EUR 360 million. The loan period is 12 years from the delivery of the vessel. The holder of Finnvera’s guarantee will be a bank to be separately chosen, who will transfer the credit for funding to Finnish Export Credit Ltd. The arrangement utilises the temporary programme for funding of export credits. “It is common for buyers to require that Finnish exporters have Finnvera’s export credit guarantee even before submitting a tender, and often a guarantee is a prerequisite for concluding a deal. The guarantee arrangement promotes the business of a Finnish export company and also benefits the Finnish economy,” says Executive Vice President Topi Vesteri, who is responsible for export financing in Finnvera.The vessel will be completed by STX Finland’s Turku shipyard in spring 2014, and its impact on employment is estimated to be 5,500 person-years. The cruise vessel of 97,000 gross register tons will have capacity for 2,500 passengers. The vessel length will be about 295 metres. TUI Cruises GmbH is owned in equal parts by the European travel giant TUI AG and Royal Caribbean Cruises, the world’s second largest cruise shipping company. The contract now signed includes an option for a corresponding sister vessel. Ordering a second vessel requires the approval of the owners of TUI Cruises. Additional information:Topi Vesteri, Executive Vice President, tel. +358 20 460 7238

Press Releases
30.08.2011
Greater demand for Finnvera’s domestic financing – lesser demand in export financing

Press release on the Finnvera Group’s Interim Report for 1 January–30 June 2011In January–June, demand for Finnvera’s domestic financing was clearly greater (11%) than during the corresponding period the year before. In contrast, demand for export credit guarantees and special guarantees fell by almost half. The decline was partly caused by seasonal variation in capital goods acquisitions but also by uncertainty factors that delayed investment decisions. However, the number of financing offers given by Finnvera rose during the first half of the year in both domestic and export financing. The credit and guarantee losses realised in domestic financing totalled EUR 48 million. No major losses were recorded in export financing during the period under review. The financial performance was positive both for export and special guarantee operations and for domestic financing.Key figures 1 January–30 June 2011 Loans and domestic guarantees granted: EUR 518 million (Q2/2010: EUR 470 million) Export credit guarantees, export guarantees and special guarantees granted: EUR 2,386 million (Q2/2010: EUR 1,072 million) Outstanding commitments for domestic financing: EUR 3,111 million (12/2010: EUR 3,079 million) Outstanding commitments for export financing: EUR 9,549 million (12/2010: EUR 8,927 million) The Finnvera Group’s financial performance: EUR 32 million (Q2/2010: EUR 26 million) Finnvera plc’s financial performance: EUR 27 million (Q2/2010: EUR 30 million) Finnvera plc’s losses, impairment losses and provisions: EUR 42 million (Q2/2010: EUR 36 million) “The greater demand for domestic financing stemmed from SMEs’ increased need for working capital and a slight upturn in investments. Our offers for loans and domestic guarantees increased by 10 per cent on the figure a year ago, and the volume of counter-cyclical financing offered nearly tripled. A total of EUR 115 million in counter-cyclical financing was granted to 235 enterprises. The cautious rise in investments last spring may have died down during summer, but if the current restlessness on financial markets continues, demand for our domestic financing may continue to increase during the second half of the year, especially if it becomes more difficult to obtain financing on private markets,” says Finnvera’s Managing Director Pauli Heikkilä, projecting into the future.According to Heikkilä, counter-cyclical financing has been an efficient tool during the downturn, and nearly 1,100 enterprises have already made use of it. Finnvera can still grant counter-cyclical financing until the end of this year.“With the present uncertain economic outlook, it would be highly justified to continue counter-cyclical financing next year as well,” Heikkilä says.The guarantees offered by Finnvera for export trade came to EUR 2.4 billion during the first six months of the year. The total sum of offers more than doubled on the sum for the first half of 2010, whereas the number of offers given was about one third less. The traditional export sectors, such as telecommunications, the forest industry and ship financing, dominated export projects.“Customs statistics show that the growth in Finnish exports came almost to a halt in June. The low demand for our export financing throughout spring was advance warning of this. Introduction of the export financing scheme mentioned in the Government Programme and increased risk-taking would be of primary importance for the competitiveness of Finland and Finnish export companies,” Heikkilä stresses.The number of Finnvera’s clients continued to rise and was 29,719 at the end of June (29,060). Financial trendThe financial performance of the Finnvera Group for January–June was EUR 32 million (26 million), or over EUR 6 million better than during the corresponding period in 2010. The profit of the parent company, Finnvera plc, stood at EUR 27 million (EUR 30 million).Export financing accounted for EUR 23 million of the profit. Despite large-scale commitments and risk concentrations, no major individual claims materialised during the period. The profit from domestic credit and guarantee operations was EUR 0.3 million, as there were more bankruptcies among Finnvera’s client enterprises than a year ago.In domestic financing, the parent company’s losses and provisions for credit and guarantee losses amounted to EUR 40 million (30 million). Of this sum, credit and guarantee losses materialised accounted for EUR 48 million, cancellations of losses recorded earlier for EUR 3 million, and decreases in impairment losses on receivables and in provisions for EUR 5 million. Compensation by the State and the ERDF for the losses materialised totalled EUR 13 million (9 million).At the end of June, the parent company’s capital adequacy was 14.3 per cent (14.3) and that for the Group 15.1 per cent (14.8).Outlook for the rest of the yearMany SMEs have yet to recover fully from the previous recession. Thus, enterprises’ situation will quickly become more difficult if economic growth slows down dramatically in Finland.The growth in export demand was sluggish throughout the first half of the year because debt problems in the United States and Europe, and the consequent uncertainty factors have delayed investment decisions. The uncertain economic outlook, combined with the cost competitiveness problems burdening some sectors of our export industry, is likely to weaken the growth prospects of exports and thereby also the demand for export credit guarantees.Finnvera’s profit for the current year is estimated to remain at the same level as in 2010. If there is a downturn in the economy and more risks materialise than have been anticipated, financial performance may dwindle considerably.Interim Report 1 January-30 June 2011 (PDF)Additional information:Pauli Heikkilä, Managing Director, tel. +358 20 460 7321Topi Vesteri, Executive Vice President, tel. +358 20 460 7238 (Financing of exports)Veijo Ojala, Executive Vice President, tel. +358 20 460 7405 (Domestic financing)Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 20 460 7409

News
26.08.2011
New OECD minimum premium rates for export credits also apply to commercial risks

As of 1 September 2011, when pricing export credits, Finnvera and the other OECD Export Credit Agencies (ECAs) will take into account the new minimum premium rates agreed within the OECD.The OECD premium agreement levels the playing field among the ECAs with regard to pricing. The OECD ECAs have adhered to the minimum premium rates for political and sovereign risks since 1999. The new minimum premium rates will encompass commercial risks as well. The minimum rates are based on the risk classification of the country and the obligor (buyer, borrower or guarantor). Finnvera has used a premium system based on corporate and bank risk classification since 2006. The new OECD minimum premium rates will be taken into account as one element of setting the premium. The minimum rates may not be undercut when granting medium and long-term guarantees (repayment period of 2 years or more) in foreign risk-taking, i.e. buyer credit, credit risk, letter of credit and bank risk guarantees.A short description of the new premium agreement is available on the OECD-website (Information note on the recently agreed changes to the rules on minimum premium for officially supported export credits).The changes resulting from the agreement will be incorporated into the OECD Arrangement on Officially Supported Export Credits. The current Arrangement text is available on the OECD-website.Additional information:OECD Arrangement:Eeva-Maija Pietikäinen, Vice President, Export Credit Guarantees, International Relations, tel. +358 020 460 7279Taru Eskelinen, Senior Adviser, Export Credit Guarantees, International Relations, tel. +358 20 460 7126Pricing of individual transactions:Advisors/Export Credit Guarantee Underwriting, tel. +358 20 460 11

News
11.07.2011
Finnvera receives €17.5 million of ERDF funding for venture capital investments

The programmes of the European Regional Development Fund (ERDF) have granted Finnvera €17.5 million for venture capital investment operations. The decision was made by the Ministry of Employment and the Economy. Through the ERDF funding, Finnvera can continue start-up stage investment operations within its existing scope and cater for the funding needs of Finnish start-up enterprises.  Finnvera makes venture capital investments in innovative start-up enterprises seeking growth and internationalisation. The investments will be made through Finnvera's subsidiary, Seed Fund Vera Oy. "In most cases, Finnvera is the first equity investor in an enterprise as, aside from business angels, Finland has very few private venture capital investors who focus on investing in start-up enterprises. Private venture capital investors prefer investing in growth enterprises that have already shown their skills in internationalisation. Finnvera can take a higher risk, and we meet this demand for start-up stage funding through our venture capital investments," says Leo Houtsonen, Managing Director, responsible for Finnvera's venture capital investment operations. Finnvera established the start-up enterprise fund six years ago. So far, the assets in the fund have originated from the Finnish Government and institutional investors. Approximately €68 million in total has been invested in 165 enterprises. The investments are minority investments, which means that the fund's ownership in enterprises typically varies from 10% to 40%. The average investment is around €360,000. Through investments, Finnvera has a positive impact on the establishment, growth and internationalisation of Finnish growth companies, and on creating new jobs. For further information, please contact: Erkki Välttilä, Investment Manager, tel. +358 20460 3580 Mikko Paakkanen, Lawyer, tel. +358 20460 3983 Sanna Hynynen, Controller, tel. +358 20460 3985www.finnvera.fi > Venture Capital Investments

Press Releases
24.05.2011
Financing offered by Finnvera increased during the first quarter

Press release on the Finnvera Group’s Interim Report for 1 January–31 March 2011Key figures for the first quarter of 2011 Loans and domestic guarantees granted: EUR 221 million (Q1/2010: EUR 211 million) Export credit guarantees, export guarantees and special guarantees granted: EUR 598 million (Q1/2010: EUR 422 million) Outstanding commitments for domestic financing: EUR 3,082 million (12/2010: EUR 3,079 million) Outstanding commitments for export financing: EUR 8,813 million (12/2010: EUR 8,927 million) The Finnvera Group’s financial performance: EUR 10 million (Q1/2010: EUR 13 million) Finnvera plc’s financial performance: EUR 11 million (Q1/2010: EUR 13 million) Impairment losses on Finnvera plc’s receivables and guarantee losses: EUR 23 million (Q1/2010: EUR 18 million) In January–March, demand for Finnvera’s domestic financing increased by nearly one fifth on the corresponding period the year before. In contrast, demand for export credit guarantees and special guarantees was over one third less than a year ago. The decline was caused partly by the return of markets to the normal state and partly by seasonal variation in large, individual capital goods transactions.“We granted clearly more loans and domestic guarantees than during the first quarter of 2010. Financing continued to be needed mostly for working capital. This indicated that SMEs were still cautious about investing. The total volume of counter-cyclical financing nearly tripled. During the first quarter, it was granted to about 100 enterprises. The volume of export credit guarantees offered was about 40 per cent more than the year before: the projects concerned the main export sectors, such as telecommunications, the forest industry and power generation,” says Finnvera’s Managing Director Pauli Heikkilä. Financial trendIn January–March, the Finnvera Group’s profit came to EUR 10 million (13 million), or over EUR 2 million less than during the first three months of 2010. The profit of the parent company, Finnvera plc, stood at EUR 11 million (EUR 13 million).Export financing brought in a profit of EUR 12 million. Despite large-scale commitments and risk concentrations, no major individual claims materialised during the period. Domestic financing showed a loss of EUR 1 million because, despite the overall economic improvement, the number of bankruptcies among Finnvera’s client enterprises was greater than a year ago.In domestic financing, the parent company’s losses, impairment losses and provisions for credits and guarantees amounted to EUR 23 million (17 million). This sum consisted of credit and guarantee losses materialised, EUR 24 million (13 million); cancellations of losses recorded earlier, EUR 1 million (1 million); and impairment losses and provisions for losses, EUR 0.5 million (5 million).Foreseeable risks and future prospectsDemand for financing among SMEs has gained momentum in early 2011, and the growth is expected to continue as investments increase. At the same time, the number of bankruptcies among enterprises in difficulties has risen, and Finnvera may therefore sustain more credit losses as the year progresses.Export credit guarantees are in demand not only for exports to the traditional countries with political risks but also, for instance, for large individual projects in industrialised countries. There is also continued demand for long-term financing for the exports of capital goods. The private market for short-term credit insurance still has shortcomings, especially with respect to export projects carried out by SMEs and payment terms exceeding six months.The temporary model of providing funding for export credits, based on the acquisition of funds by the State, will cease at the end of June this year. In its programme, the next Government will probably take a stand as to whether a permanent model of providing funding for export credits, based on Finnvera’s acquisition of funds, should be created in Finland, as proposed by the Export Financing 2011 working group. In this model, banks could arrange export credits and transfer them to the balance sheet of Finnvera’s subsidiary, Finnish Export Credit Ltd.According to the current estimate, Finnvera’s profit for 2011 is likely to be less than in 2010. However, if more risks materialise than has been anticipated, the situation may weaken.Interim Report 1 January - 31 March (PDF)Additional information:Pauli Heikkilä, Managing Director, tel. +358 20 460 7321Topi Vesteri, Executive Vice President, tel. +358 20 460 7238Veijo Ojala, Executive Vice President, tel. +358 20 460 7405Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 20 460 7409

Press Releases
05.05.2011
Finnvera’s venture capital investments under one brand

Finnvera makes venture capital investments in starting, innovative enterprises and in regional funds. The investments are carried out through subsidiary companies.“Finnvera and Finnish Industry Investment have a clear division of labour in venture capital investments, with no overlapping. However, we have used different names for Finnvera’s venture capital investments, and this has posed a challenge when communicating with customers and stakeholders. For this reason, we’ll stop using our subsidiaries’ names in our communications and will use only one name and brand – ‘Finnvera’s venture capital investments’ – for all activities in this sector,” says Pauli Heikkilä, Managing Director of Finnvera.The new brand will involve no other changes for the operations of Finnvera’s subsidiaries Veraventure Ltd and Seed Fund Vera Ltd, which have been responsible for the company’s venture capital investments.The website for venture capital investments has been incorporated the finnvera.fi pages (www.finnvera.fi/eng/Venture-Capital-Investments). The site also includes SijoittajaExtra, a password-protected extranet service for business angels.The goal of Finnvera’s venture capital investments is to enable, start and accelerate the growth and internationalisation of early-stage enterprises.“We are also developing a business angel network intended for private investors. The aim is to present enterprises as interesting investment targets for other financiers or industrial partners as well,” Heikkilä adds.By investing in regional funds, Finnvera works together with other actors to promote the financing options available for growth enterprises and to further regional industrial policy.In accordance with the division of labour agreed, Finnish Industry Investment Ltd is responsible for subsequent co-investments with private investors on commercial grounds and for major investments in funds.Additional information:Leo Houtsonen, Managing Director (Veraventure Ltd and Seed Fund Vera Ltd), tel. +358 20 460 3980

Press Releases
08.04.2011
New members for Finnvera’s Supervisory Board and Board of Directors

At its meeting on 8 April 2011, Finnvera’s Annual General Meeting elected new members to the company’s Supervisory Board and Board of Directors.The new members on the Supervisory Board are Maria Bäck, First Vice Chairman (The Finnish Association of Business School Graduates), Jari Myllykoski, Bargaining Officer (The Finnish Metalworkers' Union), Timo Leppänen, Managing Director (Kajaanin Tilitaito Oy) and Olli Rantanen, Legal Counsel, Documentation (Finnvera).Johannes Koskinen, Member of Parliament, was re-elected Chairman of the Supervisory Board. Kyösti Karjula, Member of Parliament was re-elected First Vice Chairman and Reijo Paajanen, Member of Parliament, Second Vice Chairman. The following members continue on the Supervisory Board:  Kaija Erjanti, Head of Financial Markets; Lasse Hautala, Member of Parliament; Anna-Maja Henriksson, Member of Parliament; Sinikka Hurskainen, Member of Parliament; Leila Kurki, Senior Adviser; Tapio Mäkeläinen, Director, Labour Market; Ville Niinistö, Member of Parliament; Petri Pihlajaniemi, Member of Parliament; Hannele Pohjola, Director, Innovation and Growth Policy; Tuomo Puumala Member of Parliament and Timo Vallittu, Chairman.The new regular member elected for the Board is Marjaana Aarnikka, Programme Director (Ministry of Employment and the Economy).Kalle J. Korhonen, Under-Secretary of State, continues to chair the Board of Directors. The First Vice Chairman is Heikki Solttila, Financial Counsellor, and the Second Vice Chairman is Esko Hamilo, Under-Secretary of State. The following Board members were re-elected: Pirkko-Liisa Hyttinen, Business Director; Timo Kekkonen, Director; Timo Lindholm, Director and Janne Metsämäki, Head of Unit, Economic and Industrial Policy.Elise Pekkala, Deputy Director General; and Kristina Sarjo, Financial Counsellor; continue as deputy members.The Annual General Meeting also adopted the Consolidated Financial Statements and the Parent Company’s Financial Statements for the period 1 January–31 December 2010, and approved the proposal made by the Board of Directors for the use of the parent company’s profit for the financial year.KPMG Oy Ab was elected as regular auditor with Raija-Leena Hankonen, Authorised Public Accountant, as the principal auditor.Additional information:Pauli Heikkilä, Managing Director, tel. +358 20 460 7321Risto Huopaniemi, Senior Vice President, Administration tel. +358 20 460 7261

News
06.04.2011
Finnvera and Inter-American Investment Corporation sign MOU

The Finnish Export Credit Agency Finnvera and Inter-American Investment Corporation IIC, a multilateral financial institution and Member of the Inter-American Development Bank (IDB) Group have signed a Memorandum of Understanding in Calgary, Canada during the Annual Meeting of IDB in March 2011. Both institutions wish to strengthen their relationship in implementing projects with Finnish companies in Latin America and the Caribbean.The IIC´s mission is to promote the economic development of its regional member countries by encouraging the establishment, expansion and modernization of private enterprises, particularly enterprises of small and medium size. IIC has granted loans in many sectors of industry important to Finland, such as chemicals, energy, education, healthcare, wood, pulp and paper among others. IIC offers companies loans, credit guarantees and equity and quasi-equity investments to companies. Besides financial services IIC can offer technical advice to improve financial, environmental, and business management.IIC has local presence and deep understanding of markets in Latin American region. Participating in financing arrangements together with IIC gives Finnvera an advantage in assessing risks in Latin American countries, and thus enhances Finnvera´s possibilities to support Finnish companies businesses in the region.Additional information:Ms. Raija Rissanen, Vice President Research, tel. +358 204 7276Mr. Markku Olli, Senior Adviser, Latin America and Caribbean, tel. +358 204 7271IIC Website

Press Releases
22.03.2011
Revival of the economy improved Finnvera’s financial performance

Financial Statements of the Finnvera Group 1 January–31 December 2010Owing to the low level of investments, demand for Finnvera’s domestic financing was nearly one third less than the year before. In contrast, demand was brisk for export credit guarantees for large export projects where the repayment period is over seven years. Thanks to the upward trend in the economy, losses in domestic financing were smaller than in 2009 and the financial performance of domestic operations rose from the red to the black despite greater risk-taking during the year. Nor were any major losses recorded in export financing. Seen as a whole, the financial performance for the year was clearly better than in 2009.In 2010, Finnvera provided EUR 914 million in financing for enterprises’ domestic operations; this was 24 per cent less than the year before. Offers for export credit guarantees and special guarantees amounted to EUR 2.4 billion (4.4 billion).Financial performanceThe Finnvera Group’s profit for 2010 totalled EUR 63 million, or EUR 45 million more than the year before. The factors having the greatest impact on the improved result were the increase of EUR 18 million in fee and commission income and the decrease of EUR 15 million in credit and guarantee losses remaining after the State’s compensation for losses.Out of the parent company’s profit of EUR 66 million (24 million), domestic financing accounted for EUR 11 million (-9 million) and export financing for EUR 55 million (33 million). “Our outstanding commitments have been rising in the last few years. This has increased the amount of fee and commission income,” says Managing Director Pauli Heikkilä. Smaller losses than the year beforeCredit and guarantee losses in domestic financing and impairment losses on receivables totalled EUR 68 million (85 million) before the State’s credit loss compensation. This was 20 per cent less than in 2009. The losses were about 2 per cent of the outstanding commitments. In 2008 and 2009 they had been around 3 per cent. The State’s compensation for credit losses totalled EUR 25 million (32 million).Claims paid on export credit guarantees and special guarantees were still low, totalling EUR 14 million (5 million). Losses and provisions for losses in export credit guarantee and special guarantee operations came to EUR 5 million (10 million).The number of bankruptcies in Finland declined by 13 per cent during the period under review, but the number of Finnvera’s clients that filed a petition for bankruptcy was almost the same as in 2009.Finnvera plc’s outstanding credits and guarantees in domestic financing totalled EUR 2,796 million (2,671 million) at year’s end. Outstanding commitments arising from export credit guarantees (current commitments and offers given together) totalled EUR 8,930 million (EUR 9,665 million).Increased risk-takingIn recent years, Finnvera has increased its risk-taking both in the financing of companies’ domestic operations and in the financing of export trade.In domestic financing, counter-cyclical financing has increased both outstanding commitments and the risk level. An estimated 70 per cent of financing is without protective security. In 2000, the corresponding share of commitments without protective security was 55 per cent. At year’s end, non-performing credits accounted for 3.6 per cent of outstanding commitments. Three years earlier this figure had been 2.9 per cent. Payments that had been in default less than three months accounted for 2.0 per cent of outstanding commitments.In recent years, exports covered by Finnvera’s export financing have accounted for an increasing share of all exports. The decline in total exports also affected the increase in this relative share in 2009. Exports covered by export credit guarantees accounted for 5.8 per cent (5.1) of total exports. The share of exports to countries with political risk was 9.5 per cent (8.0). The biggest business sectors in export financing were telecommunications, ship financing, and the forest industry. These sectors accounted for 89 per cent of all corporate commitments at the end of 2010.Capital adequacyAt the end of 2010, the Finnvera Group’s capital adequacy ratio was 14.6 per cent (15.0). The goal is to keep capital adequacy at a minimum of 12 per cent. Finnvera plc’s capital adequacy was 14.5 per cent (14.4).Future prospectsAs companies have made few investments, demand for domestic financing has been exceptionally sluggish.“If there is an upturn in the volume of investments, demand for financing is expected to pick up already during spring. Owing to changes of generation, the number of company reorganisations among SMEs is expected to rise. Demand for export financing is likely to remain at the same level as before. At the same time, the volume of existing commitments is decreasing, and therefore the total commitments are not expected to rise,” Pauli Heikkilä says.According to the current estimate, the financial performance for 2011 is likely to fall below that for 2010. If more risks materialise than has been anticipated, the financial performance may differ considerably from that projected.Annual Review 2010 (PDF)Financial Review 2010 (PDF)Additional information:Pauli Heikkilä, Managing Director, tel. +358 20 460 7321Ulla Hagman, Senior Vice President, Finances and IT, tel. +358 20 460 7409

Press Releases
09.02.2011
Finnvera’s counter-cyclical financing: ideal for investments

Finnvera can still grant counter-cyclical financing to companies until the end of the current year. Last year, demand for counter-cyclical financing fell from the figure for 2009 because companies had little need for financing associated with investments and working capital. The terms of counter-cyclical financing have now been revised; thanks to increased flexibility, the product is better suited to financing the working capital required by investments and growth.“There is the risk that the low level of investments by companies in Finland will thwart the economy’s growth potential. Counter-cyclical financing is a way of boosting new investments. After these revisions, our counter-cyclical financing is also an excellent instrument for financing investments,” says Executive Vice President Veijo Ojala of Finnvera.The terms of Finnvera’s Counter-cyclical Loan and Guarantee have been revised by extending the loan and guarantee period from six years to ten years. The shortest loan and guarantee period is two years.“We extended the repayment times of Counter-cyclical Loans and Guarantees to make it more feasible to finance long-term investments.”Counter-cyclical financing can be granted to companies that have fewer than 2,000 employees. The companies must also have the prerequisites for profitable business. Another condition is that the other financiers are also ready to provide additional financing or to reschedule their claims. This ensures comprehensive financing for companies.Most of the counter-cyclical financing granted so far has been used for working capital needs; less financing has been sought for investments. The metal industry has accounted for about one third of the total sum. A typical target enterprise has been a machine shop engaged in subcontracting and partial deliveries. The wood product industry is also a major client for this type of financing, and sawmills are a typical client segment.At present, the average sums of Counter-cyclical Loans and Guarantees have been clearly higher than during the recession of the 1990s, since now it has also been possible to grant counter-cyclical financing to companies larger than SMEs.Finnvera’s counter-cyclical financing was introduced on 6 March 2009, at the height of the financial and economic crisis. In autumn 2010, the OECD conducted a survey where our clients were asked how the counter-cyclical financing that they had received had affected their business. About 40 per cent of the respondents said that the financing had saved their company from bankruptcy.Additional information:Veijo Ojala, Executive Vice President, tel. +358 20 460 7405