Annual Report 2012

Economic responsibility

Finnish Industry Investment's operations must be profitable over the long-term.

As a government-owned company, Finnish Industry Investment has a special mandate and follows the Finnish government's ownership steering policies in its operations. The policy objectives are based on the best possible overall social and economic result, which is primarily evaluated on the basis of how the company achieves its service mission and the costs that this incurs. The government's ownership steering policy focuses on increasing ownership value in a sustainable and responsible manner, taking all stakeholders into account.

FII's operations must be profitable over the long-term, meaning that the real value of the capital invested in the company must increase. FII’s operations have been profitable when reviewed over the whole period of operation.

Over the whole 17 years of operation, FII has posted profits after taxes amounting to €184 million and losses totalling €71 million. The cumulative total of €470 million of investments in FII by the Finnish government has grown into €575 million in shareholders’ equity. Calculated over the whole period of operation, the average return on investment to the government has remained above the set target, at approx. 3.5%. The continuity and growth of investment operations have been secured with governmental equity investments as well as with financing from the company’s own income.

Continuity and growth of investment activities

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Key figures
2012 2011 2010 2009 2008 2007
Group's investments and commitments, m€ 718.60 669.90 666.90 603.30 559.40 459.30
Portfolio companies, directly and through funds 510.00 486.00 480.00 462.00 438.00 438.00
Consolidated profit/loss, m€ 7.30 -12.60 -6.20 -11.60 -23.80 48.10
Shareholder's equity 567.40 510.00 522.60 528.80 390.50 414.30
New commitments during financial year 57.10 78.00 105.80 64.60 152.10 180.90
Governmental equity investments in FII, since 1995 470.00 420.00 420.00 420  269.80 269.80

Economic impacts

Finnish Industry Investment's direct economic impacts comprise direct investments and capital calls paid to portfolio companies and funds, payments to suppliers of goods and services, personnel expenses, taxes paid and investments. FII also makes small donations to charitable bodies. The direct economic impacts on stakeholders are illustrated in the table.

Capital flows by stakeholder group, € thousands
2012 2011 2010
Portfolio companies Direct investments paid -24,610.95 -48,036.28 -52,637.49
Repayments of direct investments and sales proceeds 7,593.51 11,998.21 3,553.12
Portfolio funds Capital calls paid to funds -57,512.72 -57,955.53 -60,427.22
Repayments of principle and profit shares from funds 28,597.91 40,992.26 28,078.23
Suppliers of goods and services Other operating expenses -2,326.95 -2,515.68 -2,460.97
Personnel Salaries and fees 2,800.24 -2,374.34 -2,386.04
Pension expenses 471.10 -425.19 -389.45
Other personnel expenses 118.06 -113.96 -110.05
Personnel expenses, total 3.39 -2,913.49 -2,885.57
Public sector Direct taxes 0.00 -519.31 20.20
Charitable bodies Donations given -2.10 -1.90 -4.34
Shareholders Dividends paid to owners 0.00 0.00 0.00
Investments Investments in tangible and intangible assets -649.72 -66.89 0.00

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Responsibility