Annual Report 2013

Economic impact and responsibility

Profitability 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. The challenging nature of the business environment has in recent years also been reflected in the company’s financial result. FII’s operations have been profitable when reviewed over the whole period of operation.

Alongside financial returns, FII attempts to create a positive impact on the economy. The impact can be seen in the growth in companies and employment, a well-functioning risk capital market as well as in the renewal of economic structures.

The whole 18 years of FII's operation:

  • FII has posted profits after taxes amounting to €184 million and losses totalling €79 million.
  • The cumulative total of €470 million of investments in FII by the Finnish government has grown into €560 million in shareholders’ equity. 
  • Calculated over the whole period of operation, the average return on investment to the government has been positive, at approx. 3%.

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 (31 Dec 2013)

Key figures
2013 2012 2011 2010 2009 2008 2007
Group's investments and commitments, m€ 763 719 670 667 603 559 459
Portfolio companies, directly and through funds 510 510 486 480 462 438 438
Consolidated profit/loss, m€ -8 7 -13 -6 -12 -24 48
Shareholder's equity 560 567 510 523 529 391 414
New commitments during financial year 130 57 78 106 65 152 181
Governmental equity investments in FII, since 1995 470 470 420 420 420 270 270

Economic impacts through capital flows

FII'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
2013 2012 2011 2010
Portfolio companies Direct investments paid -36,965 -24,611 -48,036 -52,637
Repayments of direct investments and sales proceeds 7,673 7,594 11,998 3,553
Portfolio funds Capital calls paid to funds -43,927 -57,513 -57,956 -60,427
Repayments of principle and profit shares from funds 54,406 28,598 40,992 28,078
Suppliers of goods and services Other operating expenses 2,563 2,327 2,516 2,461
Personnel Salaries and fees 2,855 2,800 2,374 2,386
Pension expenses 459 471 425 389
Other personnel expenses 162 118 114 110
Personnel expenses, total 3,476 3,389 2,913 2,886
Public sector Direct taxes 0 0 519 20
Charitable bodies Donations given 2 2 2 4
Shareholders Dividends paid to owners 0 0 0 0
Investments Investments in tangible and intangible assets 21 650 67 0

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Annual Report

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Responsibility