KH Group Oyj, formerly Sievi Capital, was one of the first listed companies to transition from an investment company to a diversified group in its IFRS reporting as a result of a changed business strategy. This historic transformation began in the summer of 2023. As guidance and material related to IFRS conversion in this context were limited, the project team had to develop pioneering and well-founded solutions within the framework of applicable IFRS regulations.

The starting point was that the company had five portfolio companies, of which only one reported under IFRS. As part of the transition, the remaining four companies needed to be aligned with the same reporting standard. Although the companies saw the benefits of unified reporting and consolidation, there was initially concern about the increased workload and uncertainty associated with the change. It quickly became clear that the task would be complex.

A project team with deep expertise

After the start of the assignment, NIS, together with its partner Backo specializing in IFRS services, assembled a dedicated project team. The consultants had extensive experience from senior finance roles in listed companies as well as from the audit industry. The team consisted of Ville Nikulainen and Anssi Airaksinen from NIS, and Ville Jakonen and Sakari Valjakka from Backo. They worked as one unified team towards the client.

Key stakeholders in the project also included the former Sievi Capital finance and group management, as well as finance managers from all business areas. Representatives from all five portfolio companies participated from the beginning, which contributed to a better overall perspective and more efficient communication between the companies.

“The timeframe for the transformation into a diversified group was predefined and driven by the reporting date for the quarterly report following the annual general meeting. To succeed, we had to stay on both schedule and budget. In terms of quality, the requirements were obvious—it is, after all, a listed company,” says Ville Nikulainen.

Since several parts of the IFRS reporting were being carried out for the first time, close collaboration with the auditing firm was essential. This allowed the project to be structured into phases, ensuring that reporting material was reviewed and approved well in advance of the interim report publication.

Prioritization was key to a manageable execution

Although the change initially appeared extensive, in practice the workload proved to be manageable.

“We strictly prioritized the content of the transformation project. Not all changes in reporting were included in the initial timeline—some parts were moved to the year-end closing phase,” says Anssi Airaksinen.

Backo’s Ville Jakonen and Sakari Valjakka also emphasize the importance of prioritization in a project of this scale. They also highlight other success factors:

“In such a unique project, deep financial expertise, a solution-oriented approach, and close collaboration are required. In addition, a high degree of structure, effort, and the ability to ask for help at the right time are essential.”

After the project’s completion, the parent company recruited a Group Financial Controller who continues to work with the guidelines and processes developed during the project.