C Segment information
 
Finnvera’s segment information is based on the company’s internal division into business areas and on the organisational structure. Client enterprises have been divided into business areas according to their size and the need for financing at their development stage. A service concept has been devised for each business area. Finnvera’s segments are locally operating small enterprises, enterprises on the domestic market, enterprises seeking growth and internationalisation, export financing, export credit financing, and venture capital investments.

The clients of the segment for local small enterprises are locally operating enterprises that have fewer than 10 employees. This segment offers financial services for the start-up and development of enterprises in cooperation with regional enterprise services and other providers of financing.

The clients of the segment for enterprises on the domestic market are SMEs and, on special grounds, large corporates. The clientele includes companies engaged in production and in services. In cooperation with other providers of financing, financial solutions are provided especially for the development and growth needs of enterprises and for transfers of business to the next generation.

The clients of the segment for enterprises seeking growth and internationalisation are SMEs and midcap companies1 that have a growth strategy based on internationalisation. Some clients already engage in exports on the international market, while others are still starting out on this development path. In general, these enterprises also use the services of other organisations providing services for growth enterprises (Business Finland and Centres for Economic Development, Transport and the Environment) and make use of the services offered by Finnvera for export financing.

The export financing segment consists of financing for export credit guarantees and export credits. The clients are exporters operating in Finland, generally classified as large corporates, as well as domestic and foreign providers of financing for these. In addition, the segment includes Finnvera’s subsidiary Finnish Export Credit Ltd. The subsidiary provides financing for export credits and export financing based on tax agreements and administers the interest equalisation system for officially supported export credits and domestic ship financing in accordance with the OECD Arrangement. Finnvera has official Export Credit Agency (ECA) status.

The segment for venture capital investments consists of the Group’s venture capital investment activities. Venture capital investments are classified as assets available for sale because, in accordance with the Government’s policy outlines, the Group gives up its venture capital investment activities. The companies engaged in venture capital investments are the subsidiaries Veraventure Ltd and ERDF-Seed Fund Ltd. ERDF-Seed Fund Ltd is considered to be among disposal groups classified as held for sale. In the financial period 2017, Veraventure Ltd gave up its venture capital investment activities by selling its investments. Due to the sale of the majority holding to a buyer outside the company in the financial period 2016, Seed Fund Vera Ltd’s figures are no longer included in the segment figures for 2017. During 2017, Seed Fund Vera Ltd merged with the Innovestor Kasvurahasto I Ky fund. At the end of the financial period 2017, Finnvera had a 19.71 (19.99) per cent holding in the above-mentioned fund, and its holding is presented in Finnvera plc’s long-term assets available for sale.

Income and expenses are allocated to each segment when they are deemed to fall within that segment, or allocation is carried out on the basis of internal accounting rules. All income and expenses have been allocated to segments. There is no notable intra-segment business.

Assessment of the profitability of Finnvera’s segments is based on the operating profit. The assets and liabilities of segments are valued according to the principles for drawing up the financial statements.

The Finnvera Group has operations only in Finland and its clientele consists of a wide spectrum of clients in various sectors.

 
1 Midcap = A national definition included in the Government’s commitment to compensate Finnvera plc for credit and guarantee losses. The term refers to an enterprise that is larger than the definition of an SME applied by the EU. Its turnover may not exceed EUR 300 million in the most recent financial statements adopted by the enterprise. If the enterprise has drawn up consolidated financial statements, the turnover is taken from them.
 
C1 Consolidated income statement by segments
 
(EUR 1,000) Locally operating small companies SMEs focusing on the domestic markets SMEs seeking growth and internation-alisation Export financing Venture capital financing Eliminations Total
Finnvera Group              
1–12/2017              
Net interest income 8,715 21,214 9,435 6,719 343   46,426
Net fee and commission income 6,080 19,911 12,951 88,163 -1   127,105
Gains and losses from financial instruments carried at fair value 383 245 445 -6,984 6,434   524
Net income from investments 0 135 0 63 0   198
Other operating income 105 144 84 8,787 849 -9,312 657
Administrative expenses 8,725 13,138 9,375 13,699 1,398 -3,261 43,073
Depreciation and amortization on tangible and intangible assets 158 739 328 573 2   1,800
Other operating expenses 817 898 553 6,783 49 -6,354 2,744
Net impairment loss on loans, guarantees and export credit guarantee losses 1,930 4,671 8,312 3,494 181   18,588
Impairment losses on other financial assets             0
Operating profit 3,654 22,205 4,347 72,199 5,995 303 108,705
Income tax expense 0 0 0 1,118 993   2,111
Profit for the period 3,654 22,205 4,347 71,081 5,002 303 106,593
1–12/2016              
Net interest income 8,533 22,547 7,138 10,649 1,422 0 50,290
Net fee and commission income 5,213 20,799 14,210 103,730 -2 0 143,949
Gains and losses from financial instruments carried at fair value -43 -788 -48 2,601 -10,485 0 -8,762
Net income from investments 0 20 0 0 275 0 296
Other operating income 150 399 235 13,490 13,437 -15,265 12,445
Administrative expenses 9,133 13,309 8,907 13,665 4,447 -5,551 43,911
Depreciation and amortization on tangible and intangible assets 220 1,142 496 468 13 0 2,339
Other operating expenses 1,196 1,455 832 22,404 683 -11,493 15,078
Net impairment loss on loans, guarantees and export credit guarantee losses 1,465 363 7,857 56,209 -192 0 65,702
Impairment losses on other financial assets 0 0 0 0 1,932 0 1,932
Operating profit 1,840 26,708 3,443 37,724 -2,237 1,778 69,256
Income tax expense 0 0 0 -36 993 0 958
Profit for the period 1,840 26,708 3,443 37,760 -3,230 1,778 70,214
               
Finnvera plc              
1–12/2017              
Net interest income 8,715 21,214 9,435 147     39,512
Net fee and commission income 6,080 19,911 12,951 87,499     126,442
Gains and losses from financial instruments carried at fair value 383 245 445 -102     972
Net income from investments 0 135 0 63     198
Other operating income 105 144 84 2,482     2,814
Administrative expenses 8,725 13,138 9,375 11,186     42,425
Depreciation and amortization on tangible and intangible assets 158 739 328 573     1,798
Other operating expenses 817 898 553 6,783     9,050
Net impairment loss on loans, guarantees and export credit guarantee losses 1,930 4,671 8,312 3,494     18,407
Operating profit 3,654 22,205 4,347 68,054     98,260
Income tax expense 0 0 0 0     0
Profit for the period 3,654 22,205 4,347 68,054     98,260
1–12/2016              
Net interest income 8,533 22,547 7,138 5,544     43,762
Net fee and commission income 5,213 20,799 14,210 92,794     133,016
Gains and losses from financial instruments carried at fair value -43 -788 -48 140     -739
Net income from investments 0 20 0 0     20
Other operating income 150 399 235 244     1,028
Administrative expenses 9,133 13,309 8,907 8,798     40,148
Depreciation and amortization on tangible and intangible assets 220 1,142 496 468     2,326
Other operating expenses 1,196 1,455 832 666     4,150
Net impairment loss on loans, guarantees and export credit guarantee losses 1,465 363 7,857 56,120     65,805
Operating profit 1,840 26,708 3,443 32,667     64,658
Income tax expense 0 0 0       0
Profit for the period 1,840 26,708 3,443 32,667     64,659