Taaleri Q1'25 preview: In anticipation of the fall strategy update

Translation: Original published in Finnish on 04/25/2925 at 07:25 am EEST

Taaleri will publish its Q1 result on Tuesday at 08:00 am EEST. New flow has been very quiet in the quarter, and the Q1 report should not offer any surprises in terms of figures. Investors are currently in a "wait-and-see mode" regarding Taaleri, as the critical fundraising and the sale of old wind funds are in the final stages. In addition, the company is undergoing a strategy update, the results of which will be heard in more detail in the fall. Regarding the strategy, the expectation is that the company would take a more active approach to unlock the significant value of its parts.

No large non-recurring fees in the reporting period

Taaleri’s revenue is usually a rather poor indicator of the development of the group’s business operations, as most of the investment income that fluctuates by quarter is also reflected in revenue. We recommend focusing on the development of the individual segments. At group level, we expect Taaleri's revenue to be 11.4 MEUR. Revenue is almost entirely continuous, as there were no major non-recurring fees in the reporting period. Due to the lack of non-recurring fees, profitability will also remain moderate in absolute terms, at  3.0 MEUR.

Focus on selling the SolarWind 3 fund

The revenue of private equity funds grows clearly from the comparison period to 7.1 MEUR (Q1’24: 6.0 MEUR) due to the growth of the SolarWind 3 fund and the real estate mandate received from Keva. Revenue is entirely recurring, and in our understanding, no performance fees are allocated to the beginning of the year. In Renewable Energy, the main focus is on the progress of fundraising for the critical SolarWind 3 fund. Fundraising is coming to an end in June, and there is still a long way to go to reach the target level. Increased capital market uncertainty is likely to be poisonous for new sales, and, therefore, it would be important for the company to succeed in increasing the fund size during the first half of the year. We have not heard anything about the sale of old wind funds, and we believe their sales process may also have slowed down due to market uncertainty.

With the reporting change that came into effect at the beginning of the year, the profitability of the Private equity funds segment has clearly increased (group overheads are fully visible in the Other segment), and the segment is generating a good result (Q1’25e: 1.4 MEUR). Other private equity funds are still in the red, but Renewable Energy is already nicely profitable.

Garantia continues to perform strongly in a difficult market

We expect Garantia's insurance premium income to be flat, as well as the guaranty insurance portfolio (the group bond guarantee took place in April). We expect claims costs to remain moderate and, therefore, the company should once again report a good insurance service result (2.9 MEUR). Investment income will be subdued in the review period due to the turmoil in the capital market.

Any information about the strategy process would be welcomed

Taaleri has provided quite precise segment-specific outlooks for the current year, and we do not expect any changes to them in the Q1 report. Taaleri is currently undergoing strategic work and has announced that it will hold a CMD in the fall. We feel the current strategy has not succeeded in unlocking the significant value in the company's parts, and the strategy update should aim to unlock the value of the parts in one way or another. A key question in the strategy is the significant biotech investments on its own balance sheet, the volume of which has clearly fallen short of previous plans, and whose market prospects have also generally weakened. Obviously, we will not get specific plans for the strategy update in the context of the results, but any comments in this regard will naturally be of interest. We discussed the company's strategic options in our previous report.