News 05.03.2018

January–December 2017: Rettig Group continues expansion into service sector through investment in Terveystalo

Unless otherwise stated, the figures refer to 1 January–31 December 2017 and the corresponding period in 2016. All figures are audited and prepared in accordance with International Financial Reporting Standards (IFRS).

Financial highlights

  • Turnover up by 5 per cent to EUR 988 million as a result of a good performance by both Rettig ICC and Nordkalk.
  • EBITDA down by 10 per cent to EUR 111 million due to higher raw material costs for Rettig ICC.
  • EBIT includes a write-down of EUR 19 million relating to previous investments in Nordkalk’s Bunge project, and a capital gain of EUR 14 million from Rettig ICC’s sale and lease back arrangement with Warehouses De Pauw (WDP) regarding real estate in Zonhoven, Belgium.
  • Net profit down by 36 per cent to EUR 37 million as a result of the above write-down and higher raw material costs.
  • Net debt up by 40 per cent due to the investment in Terveystalo Plc.
  • Free cash flow includes the investment in Terveystalo Plc in 2017. In 2016 free cash flow included the funds from the divestment of Bore.

Tomas von Rettig, President and CEO of Rettig Group:

The main event of 2017 was our investment in Terveystalo as one of the cornerstone investors in the company’s initial public offering (IPO). Terveystalo fits well in to our group of companies as the drivers of its future earnings are uncorrelated to our other core investments, and because the company is the market leader in the structurally growing Finnish healthcare market.

Rettig Group invests in companies operating in different industries, which reduces the cyclicality and volatility of the combined group. The current portfolio includes Rettig ICC and Nordkalk, which are traditional industrial businesses, while Alandia, eQ and Terveystalo operate in the service sector.

In 2017, four of our six companies improved profitability, with our service-sector companies in particular performing well. While Rettig ICC experienced robust demand for its products, rapidly rising raw material costs meant that profitability trailed expectations. Nordkalk performed well and delivered both higher turnover and EBITDA. Profitability was supported by various internal efficiency improvement measures. The latest court decision regarding the Bunge project on Gotland was disappointing and resulted in a write-down of EUR 19 million. Nordkalk had invested in the project over a period of more than ten years.

In addition to actively developing our existing companies, we are looking at opportunities to expand into new businesses. Our focus is on high-quality companies that can deliver sustainable long-term value.

Portfolio Company highlights in 2017

Core investments

Rettig ICC improved its turnover to EUR 684 million (2016: EUR 645 million), while EBITDA declined to EUR 63 million (2016: EUR 77 million) due to increasing raw material costs, primarily for steel. In 2018, the European steel panel radiator market is expected to show stable growth and it is envisaged that raw material cost increases will level out. Perttu Louhiluoto started as CEO of Rettig ICC in November 2017.

Nordkalk improved its turnover to EUR 304 million (2016: EUR 298 million) and EBITDA to EUR 54 million (2016: EUR 52 million). The increase in turnover was largely attributable to improved results in Poland. The improvement in EBITDA was also supported by internal efficiency measures. During 2017, Nordkalk entered the growing Turkish market. The likelihood of being able to open the Bunge quarry was significantly reduced when the Swedish Supreme Administrative Court upheld the national government’s decision from August 2015 to designate several sites on northern Gotland, including Bunge, as new Natura 2000 areas. The amount of secured limestone reserves increased from 323 Mt in 2016 to 398 Mt in 2017. Nordkalk is working on several other projects in order to secure limestone reserves besides the Bunge project.

Alandia improved its net premium income to EUR 38 million (2016: EUR 30 million) and net profit to EUR 19 million (2016: EUR 15 million). The result was supported by good investment returns but impacted by tough competition in the maritime insurance market and high operating expenses. The dividend paid out in 2017 was EUR 10 million (2016: EUR 12 million). Rettig Group owns a 25 per cent stake in Alandia.

Terveystalo’s revenues increased by 26.1 per cent to EUR 690 million in 2017 (2016: EUR 547 million). Adjusted EBITA was EUR 73 million, corresponding to 10.6 per cent of revenues (10.4 per cent in 2016). A recovering Finnish economy, improved employment rate and higher consumer confidence all contributed to strong demand in corporate and private customer groups. Rettig Group owns a 10.52 per cent stake in Terveystalo.

eQ increased its net revenue by 15 per cent to EUR 41 million (2016: EUR 35 million) and its operating profit to EUR 20 million (2016: EUR 16 million). Asset Management, which is the largest segment, increased its net fee and commission income by 32 per cent, with in particular real estate and private equity asset management continuing to generate strong growth. Rettig Group owns a 10.2 per cent stake in eQ Plc.

Financial Investments

Anchor’s investment strategy was successful in 2017. Performance was good in all the sub-portfolios, both in absolute terms and compared to benchmarks. The weakening of the US dollar against the euro had a small negative effect on the return. The net asset value of the investment portfolio at end of the year was EUR 70 million (2016: EUR 57 million).

Outlook for 2018

Macroeconomic conditions, in particular the positive cycle in the construction sector, continue to be supportive. We expect the favourable economic conditions to help drive profitability in 2018. We will continue to look for opportunities to further develop our existing companies and we are actively examining opportunities to expand into new businesses.

Events after the reporting period

Rettig Group was one of the co-investors in the transaction in which DevCo Partners, a Finnish investment company, acquired a majority shareholding in Medix Biochemica in February 2018.

Annual report and financial statements for 2017 published

For more detailed information about the result for 2017, please see our annual report (pdf), financial statements (pdf) and result presentation (pdf) published today at

Financial calendar 2018

The January-March Interim Management Statement will be published on 27 April 2018, the January-June interim report on 24 August 2018 and the January-September Interim Management Statement on 30 October 2018.

Further information:
Pia Dahlqvist, Communications Director, Rettig Group
Tel. +358 (0)40 526 7813

Rettig Group is a Finnish family held investment company that creates value for generations through active and responsible ownership. Our investments include Rettig ICC (indoor climate comfort), Nordkalk (limestone), Alandia (insurance), eQ (asset management and corporate finance), Terveystalo (healthcare services) and Anchor (financial investments). Through these businesses Rettig Group is active in about 28 countries globally and employs over 4,000 people.