ANNUAL REPORT 2021
KEY FIGURES AT GLANCE
Key Figures
in CHF 1,000 | 1.1.-31.12.2021 | 1.1.-31.12.2020 |
Total operating income | 13,239 | 9,831 |
Income from management services | 5,766 | 5,331 |
Income from investment property | 3,888 | 3,608 |
Share of results of associated companies | 3,474 | 684 |
Other income | 111 | 208 |
Administrative expense | -9,546 | -10,092 |
Personnel expense | -5,636 | -6,176 |
General expense | -3,910 | -3,916 |
Earnings before depreciation, valuation adjustments, provisions, interest and taxes | 3,693 | -261 |
Depreciation, valuation adjustments and provisions | -212 | 1,897 |
Earnings before interest and taxes (EBIT) | 3,481 | 1,636 |
Finance result, net (financial income, financial expense, market value adjustment) | 2,756 | -9,857 |
Net result from continued operations before taxes | 6,237 | -8,221 |
Income taxes | -336 | -523 |
Net result from continued operations | 5,901 | -8,744 |
Net result from discontinued operations | - | -1,941 |
Net result | 5,901 | -10,685 |
attributable to shareholders of Valartis Group AG | 5,190 | -8,385 |
attributable to non-controlling interests | 711 | -2,300 |
in CHF 1,000 | 31.12.2021 | 31.12.2020 |
Total assets | 173,368 | 172,708 |
Current assets | 50,419 | 76,084 |
Non-current assets | 122,949 | 96,624 |
Non-current assets classified as held for sale | - | 0 |
Total liabilities | 56,088 | 65,335 |
Current liabilities | 16,071 | 24,632 |
Non-current liabilities | 40,017 | 40,703 |
Total shareholdersʼ equity (including non-controlling interests) | 117,280 | 107,373 |
Equity capital quota, in per cent | 67.6 | 62.2 |
Staff (full-time equivalents, FTE) | 68.0 | 69.5 |
Closing price of VLRT share, in CHF | 13.80 | 9.00 |
Equity of Shareholders per share, in CHF | 25.93 | 23.94 |
CONTENTS
2 LETTER TO SHAREHOLDERS
5 MANAGEMENT REPORT
5
Business performance
6
6
The financial situation of Valartis Group Employees of Valartis Group
6
6
7
7
8
Carrying out a risk assessment Business development Balance sheet Significant events Outlook
9 STRATEGY AND OBJECTIVES
12 CORPORATE SUSTAINABILITY
15 RISK MANAGEMENT OF VALARTIS GROUP
16 CORPORATE GOVERNANCE
26 COMPENSATION REPORT
26
27
Foreword by the Chairman of the Compensation Committee Compensation Committee: Organisation, Tasks and Responsibilities
27
28
Compensation principles for the Board of Directors, the Executive Management and employees Determination of the compensation
28
31
32
Compensation of the Board of Directors Compensation of Executive Management Compensation of employees
32
Long Term Incentive Programme
33 35
Overview: Loans, shares and options held by members of the Board of Directors and Executive Management
Auditor's Report on the Compensation Report
37 VALARTIS GROUP CONSOLIDATED FINANCIAL STATEMENTS
38 39
Consolidated income statement
Consolidated statement of comprehensive income
40 Consolidated statement of financial position
42
Consolidated statement of changes in equity
44 Consolidated cash flow statement
47
Notes to the consolidated financial statements
106 Auditor's Report on the consolidated financial statements
110 FINANCIAL STATEMENTS VALARTIS GROUP AG
110 Income statement of Valartis Group AG
111 Statement of financial position of Valartis Group AG
112 Notes to the financial statements
121 Proposal of the Board of Directors to the General Meeting of Shareholders
122 Statutory Auditor's Report on the financial statements
125 Valartis Group AG registered share
126 Addresses and imprint
This annual report is also published in German, whereby the English version is binding. The Annual Report 2021 is available online and in a pdf version (http://www.valartisgroup.ch/en/#geschaeftsberichte).
TO OUR SHAREHOLDERS
Dear Shareholders
ACTIVITIES IN 2021
Gustav Stenbolt,
Chairman and Delegate of the Board of Directors
The business development was very positive in 2021 with opera-tional businesses performing in line with expectations. According to International Financial Reporting Standards ("IFRS"), Valartis Group reports a net profit of CHF 5.9 million (previous year: net loss of CHF 10.7 million) due to increased operational activities, reduction of costs and improved market conditions as the global economy recovered after almost two years of the pandemic. The operating businesses developed well thanks to the successful completion of several transactions and projects, with income from management services increasing by 8 per cent compared to the previous year. The contribution of associated companies in-creased to CHF 3.5 million (previous year: gain of CHF 0.7 million) thanks to a successful year at Banque Cramer as well as at our shipping investments. Overall, operating income increased by 35 per cent and operating expenses were lower by 5 per cent thanks to efficient cost control measures. As a result, the earnings be-fore interest and taxes ("EBIT") were a gain of CHF 3.5 million (previous year: gain of CHF 1.6 million).
FUTURE DEVELOPEMENTS
The Valartis Group will focus on successfully developing existing and new profitable, cash-producing activities. A bottom-up ap-proach was applied over the past years, based on strategies to become operationally profitable and to gear development initia-tives and services accordingly. The focus of activities in 2022 will be on the successful management of Valartis Group's strategic projects in collaboration with EPH European Property Holdings PLC ("EPH") and the Valartis German Residential Health Care Fund. The business activities of ENR Russia Invest SA ("ENR") and the successful management of the Group's participations will be a challenge in the light of the latest developments in Ukraine and its impact on the Russian and global economy.
Valartis Group continued to actively manage its business activi-ties and participations in 2021:
Valartis Group continues to hold a 63.2 per cent participation in ENR. At Petrovsky Fort, the business developed well in 2021. To-tal vacancies in the building reduced to 8 per cent (20 per cent at year-end 2020). The optimisation programme at the two retail floors to realign the tenant mix and to introduce new service fo-cused retail tenants in the building progressed well and vacan-cies on these floors reduced. Regular ongoing improvements and capex programmes continue.
At Kaluga Flower Holding LLC, the greenhouses are nearing full capacity utilisation with 23.5 of 25.4 hectares in productive use. Flower growing, cutting and sales developed well in 2021 and the client portfolio includes most major Russian retail and wholesale groups and many smaller clients.
On the real estate advisory side, Valartis Group successfully sup-ported the acquisition of the real estate and commercial compa-ny Société de lʼHôtel des Trois Couronnes, à Vevey, SA operating a prestigious hotel palace in a historical building located on the border of Lake Geneva.
On the asset management side, EPH focused on the successful integration and operation of its recent real estate acquisitions and continued the refurbishment of Lasallestrasse 1, an office building in Vienna originally built in 1993. The property is already 100 per cent leased out and will be occupied once the construc-tion work has been completed, expected to be finalised in the middle of 2022.
EPH has significantly increased the total value of its investment properties in recent years, with about two-thirds now located in Europe. At the beginning of 2022, EPH, in line with its investment strategy, also moved its registered head office to Cyprus.
Valartis Group as external asset manager of EPH is supporting the EPH transactions, organising the refinancing of its real es-tate assets, the development of EPH capital structures, manag-ing its properties and its investor relations (Valartis Group has managed EPH's assets since its incorporation). From 2019, Valartis Group has also built up a team of asset management professionals in Germany and Austria, who are responsible for managing EPH's European assets.
As initiator, investor as well as investment advisor, Valartis Group advises and develops the Luxembourg based Fund Valartis German Residential Health Care Fund. The growth of an aging population in Germany and demographic shifts are factors in Germany which lead to increasing higher demand for senior care home offerings and care services. The properties in the fund are leased out for 20 to 25 years to reputable tenants/operators which take care of the nursing services for residents. These oper-
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ators are large, experienced and reliable organisations which op-erate a series of buildings in the health care and senior citizen sector.
Fortunately, the Fund has not faced any negative impact result-ing from the COVID-19 pandemic thanks to the protective meas-ures taken by all the operators. In addition, the German govern-ment protects nursing home operators against loss of revenues and higher costs related to necessary COVID-19 measures. As a result, rental income remained stable.
On banking activities, Valartis Group holds a stake of 25 per cent in Norinvest Holding SA, the parent company of Banque Cramer Cie SA, Geneva, Switzerland. In 2021, Banque Cramer has suc-cessfully been able to find a niche as a profitable small Swiss pri-vate bank.
On the shipping side, our joint-venture investments in multi-pur-pose vessels benefited in 2021 from record high daily time char-ter rates not seen in the last decade. This has positively impacted the profitability of these investments. To further benefit from this general trend in the shipping industry, the Group has invested through a new joint venture in a mid-size container cargo vessel.
VALARTIS GROUP TODAY
The business model continues to be based on our core compe-tencies i.e. financial services, real estate management and in-vestments. We continue to look for new or add on investments, especially if they will increase our cash flows. Our main focus in-dustries remain financial services and real estate projects, but we will also consider opportunities in other industries. At the end of 2021, Valartis Group employed 68 people (68 Full-Time Equivalents ("FTE") across the Group in the real estate manage-ment, in marketing, leasing and maintenance businesses - previ-ous year: 70 employees (69.5 FTE).
TODAY AND TOMORROWʼS PRIORITIES
The 2022 financial year will continue to present us with challenges and opportunities. A key success factor in our businesses continues to be the rapid and successful development of new profitable and cash generative activities and the further development of existing projects and the launch of innovative investment products and services.
Since February 2022, the operating environment has changed in Russia, particularly with regards to imports/exports and currency conversions. Valartis Group's exposure to Russia is through its in-vestment in ENR. ENR's operational businesses in Russia continue to operate at levels comparable to those before the conflict had started. Currently, no material remedial actions are required to sus-tain these businesses in the Russian domestic market. ENRʼs main challenges relate to currency conversions and capital controls andENR will examine possible actions to mitigate these challenges as best possible in a rapidly changing environment.
THANK YOU
We would like to take this opportunity to express our special appreciation and gratitude to our employees for their continued loyalty. We thank the shareholders of Valartis Group AG for their loyalty and understanding. We are confident that Valartis Group is well prepared for future challenges and sustained corporate success.
Fribourg, Switzerland, 4 April 2022
Gustav Stenbolt, Chairman and Delegate of the Board of Directors
VALARTIS GROUP ANNUAL REPORT 2021
|LETTER TO SHAREHOLDERS
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Valartis Group AG published this content on 05 April 2022 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 05 April 2022 05:07:04 UTC.