Good afternoon, welcome to the presentation of Taaleri's first quarter 2026 results. My name is Linda Tierala, I'm heading Investor Relations here at Taaleri. Presenting today we have, as usual, our CEO, Ilkka Laurila, our CFO, Lauri Lipsanen. There's a Q&A session after the presentations, if you would like to ask a question, you may do so through the chat box in the webcast function. With that, I'm happy to hand over to Ilkka. Please go ahead.
Thank you, Linda. Before we start, it's to kind of to summarize the first quarter development is that we had a very strong quarter behind us. Overall performance improved quite significantly compared to previous year. The key drivers being mainly improved insurance service result, as well as the private asset management, especially in renewable energy. If you take a look at the highlights of the first quarter, continuing earnings grew 13% up to EUR 10.5 million. As said, it's mainly driven by Garantia's strong insurance service result, as well as the continuing earnings from the renewable energy business. Operating profit also improved significantly versus the year ago, up to EUR 2.1 million, with the nice operating profit margin improving up to 17%.
Maybe highlighting the performance of the Garantia, the insurance service result increased by 21% almost year-on-year, up to EUR 3.8 million. Insurance revenue increased 4.2% up to EUR 4.9 million, while at the same time, premiums received, which is a proxy for the cash flow, increased by 15.7%. That combined with the fact that simultaneously Garantia was able to strengthen its solvency ratio with almost 25%. Nice growth, nice improvement in cash flow, and strengthened solvency ratio and therefore also the risk position. That's from operational perspective driven by the market share increase, especially in the residential mortgage guarantees which strengthened further during the first quarter, and also in clearly increasing activity in corporate finance arrangement.
Renewable energy also grew 9.3%. Exit processes progressed quite nicely. We have lots of processes ongoing and the energy business continued preparation of those processes. Finally, two strategic initiatives were also completed. We, after the review period, we acquired majority of the Nordic Science Investments, which is the science-driven venture capital which expands our offering in that area. In addition, we've also published that we are launching our private credit strategy later on. If you take a look at our strategic priorities for this year, Garantia's captured growth potential. Like I said, it was able to increase the insurance revenue, increase the market share and at the same time also strengthening its risk position.
Private asset management also good progress in their expansion into venture capital, establishing private credit business. Then on the other hand, we also started the preparation of the next vintage renewable energy fund. As we have stated that we are selectively utilizing M&A as one of the growth engines for Taaleri, and in that area we've made that first acquisition, namely Nordic Science Investments. Which now means that with these new kind of growth adventures, we are now also involved in the venture capital and direct lending. This is a familiar slide from the Capital Markets Day.
Darker blue illustrates those that we are currently in and the lighter blue which we have said that we have ongoing processes and now let's say two of those are in the completion phase venture capital and direct lending. That will further increase our offering and expand our offering in these products and sectors. Then key figures for the first quarter, maybe focusing on the bottom side of the slide, LTM numbers. Continuing earnings LTM, almost 10% growth up to EUR 43.3 million. Revenue increase 4% up to EUR 65.2 million. Operating profit, slight decline, 4.4% versus the LTM period earlier.
On the other hand, one of our financial targets is to improve operating profit from continuing earnings, and in that we had that 26% increase on an an LTM basis. On the other hand, our investments at fair value is that EUR 226 million. If you would like to kind of give a proxy for what the shareholder gets when owns our shares. It's the operating profit from continuing earnings added with the investments at the fair value, added with the liquid assets and the accrued performance fees. That's the kind of what the shareholder of Taaleri actually owns and gets by acquiring our shares. Going through different business segments, starting with Garantia.
Expansion of the volume, it was quite nice. The insurance service result increased at 21% from the comparison period, like already said. The market share in residential mortgage guarantees increased despite that they had a quite soft housing market, and that's obviously result of the increased awareness of Garantia's product and services. On the other hand is a good proof point of the kind of the quality and the service level that they are able to provide through our customers. On the other hand, demand for the corporate guarantees strengthened by approximately 50% compared to previous quarter, meaning the Q4 2025, and that's also driven by the continuous activity with the customers.
The customer management at Garantia has developed quite nicely during the last quarters, and now we are seeing the results of the customer activity. Claim expenses remained at the low level, and the combined ratio was 21.8%. Like I said, simultaneously, which is the most important thing in Garantia's case, solvency ratio, and therefore the risk position still further strengthened by almost 25%, even though the operational growth and the profitability development was good.
Then if you take a look at the investment income, from the investment operations, net total was that EUR -1.4 million, so that the P&L recognized investment income was that EUR +0.8 million, but then offset by EUR -2.3 million, investment income, meaning the fair value changes in other comprehensive income. On the graph, you can see that the premiums, on an LTM basis has increased 32% compared to 27% on a previous quarter. That's also increased, on an LTM basis quite significantly.
No major changes in the insurance portfolio split, on the other hand, investment portfolio declined EUR 9 million, which is exactly the same amount that Garantia paid during the first quarter as a dividend to the parent company. That's explaining the investment portfolio decline from EUR 166 million to EUR 157 million. Further to private asset management, starting with the renewable energy business. Nice growth, 9%, driven by SolarWind III fund, which was closed at the end of last year. The operating profit improved to EUR 2 million with the quite solid almost 29% operating margins.
Renewable energy focused during the quarter on the fund operations and the execution of the exit processes in many of the previous fund vintages and also started its preparation of the next vintage. AUM remained on that stable EUR 1.8 billion. Continuing with private asset management, continuing earnings developed positively. However, the profitability was deteriorated by the fact that there was this one-off negative impact driven by the Joensuu Biocoal project. In spite of that, in the bioindustry business, they were focusing on the value creation and the preparation of the follow-on investments and financing rounds for the existing portfolio companies.
On the other hand, good development in the real estate as well, so that the operational performance of the funds actually improved, but through increased occupancy rates, especially within the larger funds. Eden Living, our JV with the Keva, entered into financing arrangement, which obviously supports the portfolio operations going forward as well. Transaction activity also picked up, Eden Living acquired two assets in first quarter and two additional assets actually after the reporting period. Finally, the third segment, namely investments. Net income declined due to the write-off related to biocoal development. On the other hand, the total amount of the fair value of the investment remained at EUR 69 million.
That's the key driver there was the positive value change in the Transco Chile and East Wind wind farm in Texas. If you take a closer look at the investment portfolio, 72% now is categorized under the development capital. No major changes in there, and we haven't made it during the first quarter new investments in there. If you take a look at the operational development of these five development capital investments, starting with the Fintoil, as a reminder, clear majority of that is of the production is related to renewable fuels. There was the market remained on a positive side and developed quite strongly.
On the other hand, the smaller business, namely biochemicals, demand and the price for tall oil rosin and the tall oil pitch remained weak during the first quarter. If you take a look at the 2025 numbers, you can see that the revenue increase was 43% and EBITDA increased 34%. Those are obviously nice numbers in any business but especially in this kind of process industry related refinery business. Although it is fair to say that Fintoil partly still is in the ramp-up phase from the operational perspective. Toriparkki, n ice volume growth in 2025, 7% in parking volumes, and that has continued quite strong also during the first quarter, so very strong development.
You can then argue that it might be driven by the winter cold winter months, but there's also other good operational development in that business and that's also developing quite strongly. Oribalt, our wholesale business, pharmacy wholesale business in Baltics and the online pharmacy business, grew there quite rapidly and it's also picking up in 2026. Good development, operational development also within the Oribalt's business. Finally, Ren-Gas. If starting first with the macro and the market development, many countries have now implemented and continue to implement the RED III regulation and on a national level.
The most important was that the Bundestag in Germany published that they are implementing this, that will have obviously a positive impact for the Ren-Gas business but also on the other hand should support Fintoil's business as well. First project in Tampere is ready to build stage, the other or the next three projects also are progressing quite nicely in that they already have environmental permits. As a reminder, as a Ren-Gas case, it's dependent on the offtake agreement, then the next phase after the offtake agreement is the financing of the projects, then it is on a financial investment decision phase. It's time to hand over to Lauri, who will walk you through with the latest financial development.
Thank you, Ilkka. Hi, my name is Lauri Lipsanen, Taaleri's Group CFO. Although Ilkka already present some key financials, I'll deep down those a bit. Yes. Taaleri has four sources of revenue, of which continuing earnings create a strong foundation for profitability, whilst other revenue sources have been fluctuating through the historical period. In Q1, the revenue in total was EUR 12.6 million, driven by private asset management and Garantia, as stated already by Ilkka, whilst other revenue components were immaterial. You can see from the chart that net income from investment operations was only EUR 0.2 million, mainly because the fact that high volatility in both equity markets and interest rates, coupled with the biocoal development investment write-down, limited the incurring income from investments.
Biocoal impacted on the cost base and in total the biocoal related impact for the Q1 result was EUR -1.7 million. As a result, operating profit ended up to EUR 2.1 million. However, when compared to the prior year, we can see that operating profit increased by EUR 1.6 million to EUR 2.1 million, mainly driven by the strong performance in Garantia and renewable energy. Net income from investment operations, the delta was positive by EUR 1.4 million. As in Q1 2025, the investment result was burdened by the high market turbulence year ago. The expenses, excluding biocoal expenses, that has mainly been impacted by the aforementioned biocoal write-downs.
Here you can see on the left-hand side that the continuing earnings development in terms of revenue has been fairly stable, whereas other than continuing earnings have been fluctuating. The fluctuation behind the other than continuing earnings have been largely driven by the net investment income. For instance, in Q1 2025, as stated, there was high market turbulence, and in Q3 2025, it was positively impacted by material positive fair value changes. This fluctuation in other than continuing earnings has also impacted in operating profit, being the key driver behind the fluctuation in terms of EBIT. The composition of revenue is more balanced when we look those on a LTM basis. Growth in continuing earnings have been 10%, whilst other than continuing earnings have been slightly declining.
In terms of operating profit, profitability has declined slightly, mainly driven by those other than continuing earnings, which have been impacted on an LTM basis by the performance fees of EUR 2 million or EUR 1.8 million in more detail booked for Q4 2024. This year, a lack of new performance fees recognized and lower investment income are the main drivers why total operating profit has declined recently. It should be, however, emphasized, like Ilkka said, that operating profits from continuing earnings have been developing positively trend-wise. An outlook for Garantia. Despite weak development of the Finnish housing market has continued, Garantia's insurance revenue has increased by 6% on an LTM basis. The insurance service result has remained fairly stable in proportion to the insurance revenue. As a result, total operating profit of Garantia has been increasing on an LTM basis.
When adding, the full result, other comprehensive income, covering Garantia's, all fair value changes, the profit profitability has been quite stable. This is how the reported P&L looks like. However, the underlying performance has been stronger. On the left-hand side, you can see that, with black bars, the cash-based premiums received has increased by 32% on an LTM basis, driven by strengthened, market position and increase in sales. Sales volumes in, residence and mortgage guarantees, whilst the revenue shown in light gray have increased with the delay due to IFRS, accounting principles.
On the right-hand side, you can see that our combined annual ratio was strong again in Q1, and the claims ratio was close to zero, mostly because of the positive changes in estimated claims that have incurred during the previous financial years. Here you can see on the left-hand side, Garantia return on equity at fair value. It was again excellent in Q1, and the solvency ratio has remained strong. Garantia paid half the dividend of EUR 80 million in March to the parent company, Taaleri Plc. A couple of words regarding private asset management, c ontinuing earnings have been growing by 18% on an LTM basis, mostly driven by the final closing of Taaleri III that took place in Q4. However, when you look the profitability development, the trend has been slightly declining recently.
That is due to the fact that, for instance, the Q3 2025 LTM operating profit was boosted by the aforementioned performance fee of EUR 1.8 million booked in Q4 2024. There is also a slight negative gap between Q4 2025 and Q1 2026, and that is mainly related to the biocoal related receivable write-downs. Fair value of the investment segment investment portfolio declined by one and a half million euros, and that was mainly driven by the two drivers. First, biocoal impact of EUR -0.9 million, and secondly, the Alisa Pankki's fair value change of EUR -1.2 million or 34%. To recap, in this table, the fair value might deviate from the balance sheet value depending on the basis of accounting.
Specifically in this table, what is visible is the difference between Turun Toriparkki's fair value of EUR 16.4 million and the balance sheet value of EUR 10.3 million. As a side note, this balance sheet value declined by EUR 0.5 million during Q1 due to the fact that Turun Toriparkki distributed funds by EUR 0.6 million to Taaleri Plc. Last, let's have a short outlook on Taaleri's balance sheet. Both assets total and equity ratio remain strong. Asset total were EUR 304 million, and equity ratio 73%. The value of total investments declined by EUR 9 million, which was mainly related to the fact that Garantia distributed the dividend, first dividend tranche of EUR 9 million.
Total liquidity was EUR 56 million at the quarter end, including the unused revolving credit facility of EUR 30 million and the overdraft facility of EUR 10 million. The total liquidity was further strengthened this week as we signed the long-term loan agreement of EUR 30 million enabling flexible implementation of strategic initiatives. After the quarter end, Taaleri has distributed the first dividend tranche of EUR 4.2 million in April, and second tranche will be paid in October. Now Ilkka will present an outlook for 2026.
Thank you. No major changes in the outlook, starting with the private asset management. Renewable energy business continuing earnings expected to decline compared to 2025, due to the subsequent management fees which were recognized in 2025. In addition, there's a lot of planned exits like explained, which obviously then will have a impact on the fee base when they are executed. Then, with the other funds, private asset management business is the further development of the new products, which are according to our updated strategy, will further deteriorate the profitability of the other private asset management business. There the operating profit is expected to remain negative for this year as well.
Garantia insurance revenue expected to grow in 2026, and profitability of the insurance operation expected to remain stable. On the other hand, it's quite obvious how the investment operations will develop. In Garantia's case, it's very much dependent on the overall market development in the equity markets, as well, especially in the interest rates development and the market. In the investment segment, operating profit in 2026 will depend obviously as well pretty much on how the fair values will change within the different development capital investments. On the other hand, fund investments as well as the other investments.
Obviously, if we would have a major exits there or the exits overall, that will also have a significant impact on the investment segment's result. On the other group, which is basically most of that business relates to our cost structure, that is expected to remain approximately at the level of the previous year, and therefore, giving us supporting our scalability of the growth. That's the highlights and the development of the first quarter, I think we have time for the Q&A.
Thank you for the presentation. Yes, now you have an opportunity to ask questions, and you may do so through the box in the webcast platform. For those of you following the presentation here live, please wait for the microphone before you ask your question. The first question comes from Sauli Vilén from Inderes. Please go ahead.
Yes. Thank you. About the new EUR 30 million credit line you took can you like open up more, like why exactly did you do it since you obviously won't need it to your day-to-day operations and you already have lots of flexibility already, like EUR 40 million or so in just the credit facilities?
Well, like said, that is to support our liquidity and obviously if there is opportunities, then obviously that enables us to grasp those opportunities. Just as a reminder that the other EUR 30 million is actually revolving credit facility, which is a bit kind of different from the structure perspective.
Just to be clear, you can use these both at the same [crosstalk] time, right?
Yes. Simultaneous, yes.
Yes. Great. About your fundraising, like if we roll back historically, Aktia played kind of a big role in your distribution when we think about the previous vintages you raised. Now you are about to enter a new phase when you raise simultaneously several funds. How you see your distribution capabilities at the moment, and do you still see need for a partner to fill in some gaps on that field?
Yes, we are looking for partners as well. On the other hand, as a reminder, two-thirds of the AUM came from the international LPs. That's the clear maturity, and hopefully that will also grow in the future when the fund sizes will grow. On the other hand, we have, like you said, built the capability to in-house now we have a good people and good team, which is ready for the further fundraising in renewable energy and also obviously in other fund strategies.
Continuing on that about the SolarWind IV, you said that you are now building the capability to launch the fundraising. Should we expect the fundraising to launch during H2?
We haven't stated the exact time, as you see from the corporate structure changes, we have started the preparation for the next vintage, but we haven't stated the exact timeline and when we will kick off with the fundraising. The preparation have started because lots of the capacity in SolarWind III has already been invested, and that's why we made started the legal structural changes at the beginning of this year.
Finally on the Canadian bio plant or the. Can you walk us through the decision-making process, like why you decided not to continue? Obviously, it relates to the Joensuu, I guess.
Yeah, that relates to Joensuu. Joensuu did have been a kind of the POC for the Canadian project, especially from the technological perspective. Basically you need a raw material, you need a technology, and you need a customers. Now obviously it proved that the technology that was utilized in Joensuu has had a quite significant issues, which obviously had a impact for the biocoal project in Joensuu. That then further after analyzing other technological opportunities globally in a biocoal, we made a conclusion that at the moment there is no such technology that we would like to proceed with, and made a conclusion to discontinue our Canadian operations as well.
Okay. Thank you.
Hi, it's Patrick Campbell from Nordea. Going back to Garantia, the combined ratio was clearly lower on a year-on-year basis and also quarter-on-quarter, which is a positive. How should we think about Garantia's combined ratio going forward, assuming that more exposure is taken on the corporate side?
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Yeah. We expect that to remain at great level as it has been. Of course, there will be fluctuation driven by IFRS changes, and of course, nobody knows that what's gonna happen with the claims, but the expectation is that it remains at a really good level.
All right. Thank you. Maybe could you explain some of the concrete measures that are contributing to Garantia's overperformance, considering that the market has been quite weak?
Yeah. Well, happy to do so. I think the key driver there is that, which is part of our strategy as we, as we communicated, or Garantia strategy in this case, as we communicated in our capital markets day that the increase the awareness, continued activity with the customers, are finally bearing fruit. That's the. I think that's one of the key drivers in there. We are seeing kind of continuous increase in the customer activity. It doesn't mean that the Garantia has made any changes when it comes to the risk-taking. They continue. I think the key thing to understand is that the key criteria in that business is to keep up the discipline risk management and the risk position, and that also strengthened that during the first quarter. I think it's all about the customers and developing products and the services so that, so that we can see the increase in the customer activity.
All right. Thank you. Maybe going on to the new initiatives, private credit and venture capital, could you maybe break down the vision behind these initiatives, and when do you expect these to kind of start supporting other private asset management?
Well, the vision obviously is that it is our strategy, like we said, that we are kind of selectively going to expand to new strategies during the strategy periods, and they are now two that we have selected at this stage. The vision obviously with the NSI, first of all, is to, like we said, is to grow significantly in the next vintage. We see that with this science-driven deep tech venture capital investments.
It is quite niche, and there's a clear demand on the LP side, so that we have a strong belief that we are able to grow both international as well as the scale of the business significantly with the next vintage and then go further with the further vintages. With the private credit, well, maybe starting with the market. Obviously, I think everybody that follows the financial media have seen the turmoil on that market, but I would like to highlight that that turmoil is related to U.S. markets, which has its specific features. It's the evergreens, listed evergreen structures.
Lots of insurance float flowing through to private credit business and that has created, let's say, unnormal risk-taking position within the funds, which kind of has tilted the, let's say, the risk management of those funds in the U.S. market. That combined with the fact that lots of that financing has been flowing to different SaaS businesses, which have been also focus areas of the buyout funds during the several years, and that's obviously now distorted by the and disrupted by the AI. There's several kind of components, evergreen structure combined with the kind of not so liquid assets, and then the kind of the businesses that they have been financing.
That's not the case in the Europe, and even much less in the Nordics, and that's where we see the opportunity. Nordic market is in a completely different position. It's very bank centralized and bank-dominated market, especially here in Finland, and there we see clear opportunity, especially now when we kind of hopefully see that the European LP capital flow will remain in European market and demand therefore for that sort of fund and strategy will continue to strengthen here in the Nordics and in the Europe. That's why we entered into that market now. I think the timing from the Nordic perspective is actually quite good at the moment.
Great. Thank you. Then maybe a final question, going to renewable energy. You obviously have a few funds in the exit phase. What are you kind of seeing in the market, and when should we kind of expect exits to materialize?
Well, they will materialize when there is a buyer and the seller find the common place and put the names on the paper. You never know, it's impossible to budget the kind of this sort of process. There's lots of activity, and let's say that. Slightly, you can be more positive continuously because I think the overall transaction market is developing positively, and we are seeing more and more activity in the market. That's also one of the reasons why we have such a lots of activity in that area.
Thank you. That's all from me.
Yes. Hi. It's still Sauli from Inderes still. Continuing on the older wind funds, you obviously have close to EUR 20 million or so receivables on those, so a lot of stake in that sense. Can you talk about the, like, the outlook on those specific assets in Finland? On the other hand, interest rates have gone up, which is should be negative. At the other hand, I guess the electricity market outlook in Finland has become kind of better because of the data center boom taking more gathering more speed, et cetera. How do you see the that market developed if you compare it the current situation for, like, six months ago or so?
I think the net-net is slightly positive, t here's a lot of different factors that are moving in different directions. Obviously, like you said, there's this lots of data center investments which have been published lately, although not ready yet, but obviously in a few years' time will increase demand significantly. On the other hand, there's lots of projects in wind and solar and also in batteries that are in a ready-to-build phase that they are able to support then the demand if the demand increases. I think the net-net is that it is slightly positive and that's also why we are seeing increased activity in the market, also in the transaction market.
A couple of housekeeping ones. Any idea when you will close the NSI? I guess it's due to the Finnish Financial Authority to decide.
Let's hope that as soon as possible. It's the authority's approval that defines the actual date.
On the Garantia, you mentioned the corporate. I think you said the, what's the word? Interest or so has grown 50% year-on-year, but your portfolio is flat. Were you talking about inquiries or?
Yes.
Okay
Inquiries.
Yes, clear. Finally about the Forest Fund III, you obviously have the, like a tail in that on the performance fee at least, United Bankers' Forest funds had gone through the roof, There should be kind of high chance you receive some fees there. When was the deadline for that again?
Well, I can't actually remember the exact deadline. I don't know if you have it in your mind. There's nothing to, let's say, publish at this stage on that area, and that's not, let's say, not fully linked to the value development of the assets.
Okay. That's clear. Thanks.
Thank you.
I'd just like to remind you that if you would like to ask a question, you can do so through the webcast function. There are some questions here online. The first one is regarding the credit facility, if you could just provide a bit more information on what the impact will be on the return on capital and on the balance sheet efficiency.
Well, this is pure speculation.
Mm.
Obviously when you have more loans in your balance sheet, and if you're able to generate profits from that, it should improve your return on equity.
Great. Thank you. Then, there's a question on Garantia. You mentioned in Q4 that Garantia had some international projects. What's the development in Garantia's international business, and are there any new contracts?
Well, we haven't. We will not publish every contract that we will have in internationally. Let's put it that way, that the activity is there and there is a clear demand for Garantia services also in that area.
Great. Thank you. If there are no further questions at this point, it's my pleasure to thank the people presenting, then also wish you a wonderful rest of the afternoon.
Thank you, and have a nice Vappu.
Thanks a lot.