Quest for Growth NV · EURONEXT:QFG
Quest for Growth NV — H1 2003-2004 Earnings Presentation
42 slides from Quest for Growth NV's earnings presentation, Jan 22, 2004
Slide 1: Half yearly results December 31, 2003
Quest for Growth Half yearly results December 31, 2003 Press Conference & Analyst meeting January 22, 2004 1
Slide 2: Agenda
Agenda • Introduction • Results & performance QfG • Comments on quoted portfolio • Comments on unquoted portfolio • Economic environment • Q&A 2
Slide 3: Upcoming events - EGMs
Upcoming events - EGMs • EGM’s on January 16 & February 9 9Audit committee becomes statutory body organised within bylaws 9Change in rights for preferential shares: 20 % of excess return over 5% on NAV to be distributed amongst preferential shareholders • Frans Theeuwes appointed board member and ch
Slide 4: Agenda
Agenda • Introduction • Results & performance QfG • Comments on quoted portfolio • Comments on unquoted portfolio • Economic environment • Q&A 4
Slide 5: Valuation Quest for Growth
Valuation QUEST FOR GROWTH Market Price Net asset value/share 31/12/2003 31/12/2003 30/09/2003 30/06/2003 share: 6.50 euro 9.95 euro * 9.39 euro 8.53 euro warrant: 0.53 euro * If all warran ts were exercis ed at € 8.00 p er s h are, th e n et as s et valu e p er s h are wou ld b e € 8.98 5
Slide 6: QfG Balance Sheet at December 31, 2003
QfG Balance Sheet at December 31, 2003 6
Slide 7: QfG Income Statement at December 31, 2003
QfG Income Statement at December 31, 2003 7
Slide 8: Profit/(loss) contribution by investment category
Quest for Growth profit/(loss) contribution by investment category (€ m) H1 2002 - 2003 H1 2003 - 2004 2003 - 2004 H1 H1 Q1 Q2 Quoted unquoted : (2.40) 0.24 0.96 (0.72) Unquoted : (2.28) (0.07) 0.04 (0.11) VC Funds : (1.42) (0.19) (0.06) (0.13) Total unquoted : (6.10) (0.02) 0.94 (0.96) Quoted portf
Slide 9: Performance of QfG NAV compared to Market Indices
Performance of QfG NAV compared to Market Indices to December 31st, 2003 9
Slide 10: QfG shares compared to the markets
QfG shares compared to the markets 10
Slide 11: Share price discount to intrinsic value is moderating
Quest for Growth share price discount to intrinsic value is moderating, but remains high 11
Slide 12: QfG's fund structure at December 31, 2003
QfG’s fund structure at December 31st, 2003 12
Slide 13: Evolution of QfG fund structure
0 20 40 60 80 100 120 140 160 Oct-98 Jan-99 Apr-99 Jul-99 Oct-99 Jan-00 Apr-00 Jul-00 Oct-00 Jan-01 Apr-01 Jul-01 Oct-01 Jan-02 Evolution of QfG fund structure Apr-02 Jul-02 Quest for Growth Fund Structure Cash Oct-02 Quoted Unquoted Jan-03 Commitments Apr-03 Jul-03 Oct-03 13
Slide 14: Distribution of the portfolio by sector
Distribution of the portfolio by sector December 31st, 2003 14
Slide 15: Sector split evolution (quoted companies)
Sector split evolution (quoted companies) 15
Slide 16: Distribution of the portfolio by geography
Distribution of the portfolio by geography Invested part of the portfolio by country at December 31st, 2003 16
Slide 17: Agenda
Agenda • Introduction • Results & performance QfG • Comments on quoted portfolio • Comments on unquoted portfolio • Economic environment • Q&A 17
Slide 18: Performance of quoted investments
Performance of quoted investments 18
Slide 19: Valuations of tech shares are high
Valuations (P/E during the last ten years, excluding the peak years, for the S&P technology shares) are high Low Average High dec/03 Comm Equip 19,7 29,1 44,3 35,7 PC hardware 12,9 21,8 38 26,6 Semis 15,2 29,2 57,1 39,7 Software 20 31,6 64,8 41 All tech 20 28,6 44,2 36,6 Source: UBS/ Factset • On a
Slide 20: S&P Tech earning growth estimates
S&P Tech earning growth estimates: 1Q q/q 1Q y/y 2003 y/y 2004 y/y sales -8% 48% 40% 36% earnings -6% 10% 6% 10% •These expectations are doable with an pick up in IT spent and an economic recovery •The consensus estimates for the software industry are still below historical averages 20
Slide 21: CIO surveys in December clearly improved
CIO surveys in December clearly improved CIOs more optimistic on global economy, own firm’s prospects and the global outlook for IT spending Pricing is firming (both for software and hardware), less so for IT services Shift from maintenance spent to project spent Positive outlook for network
Slide 22: Forecasted enterprise IT spending
Forecasted enterprise IT spending Citigroup 22
Slide 23: Agenda
Agenda • Introduction • Results & performance QfG • Comments on quoted portfolio • Comments on unquoted portfolio • Economic environment • Q&A 23
Slide 24: Direct investments in unquoted companies
Direct investments in unquoted companies Valuation in EUR (incl. Exch. Rate 30/06/2003 30/09/2003 31/12/2003 Comments variations) Angiosonics 0 0 0 The company is only a shell company. Cyclacel N/A N/A 1.418.840 New investment - cfr. Infra Equator 99.834 47.889 44.181 Heavy dilution after last finan
Slide 25: Investments in Venture Funds
Investments in Venture Funds Valuation in EUR (incl. Exch. Rate variations) 30/06/2003 30/09/2003 31/12/2003 Capital call Dividend Kiwi Ventura Serviços I 770.217 725.423 725.423 0 0 Netfund Europe 176.138 176.138 168.595 0 0 Schroder Ventures LSF II 1.273.550 1.291.868 1.127.455 45.775 0 Ventech II
Slide 26: Investment into private European companies declined in 2003
Investment into private European companies still has declined in 2003 U.S. Equity Investment Overall Investment • Preliminary results show that in 2003 641 high-tech companies from Europe and Israel raised a total of €2,75 European billion Equity in venture capital funding. Investment • 2003 funding
Slide 27: Life sciences receive about one third of the financing
Life sciences receive about one third of the financing European venture capital investment, by industry segment Information Services Other Companies Healthcare Services 4% 4% 1% Medical IS 1% Semiconductors 5% Biopharmaceuticals 27% U.S. Medical Equity Devices Investment 6% Overall Investment Electr
Slide 28: Deals and amount invested in European venture-backed IT companies
Number of deals and amount invested (€M) in European venture-backed IT companies 601 € 3.500 600 496 € 3.000 441 3.433 € 2.500 393 388 400 328 316 € 2.000 3.187 2.978 255 € 1.500 1.906 1.734 213 181 1.397 168 200 1.210 € 1.000 127 118 674 398 746 € 500 322 359 527 €0 0 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01
Slide 29: Deals and amount invested in European venture-backed healthcare companies
Number of deals and amount invested (€M) in European venture-backed healthcare companies 123 117 120 101 € 1,000 93 89 95 100 € 835 81 79 € 750 € 713 € 710 73 73 80 65 64 € 525 60 € 501 € 483 51 € 500 € 439 € 422 € 435 € 359 40 € 322 € 263 € 242 € 250 20 €0 0 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02
Slide 30: Venture capitalists concentrating on current portfolio companies
Venture capitalists are still mostly concentrating on their current portfolio companies 700 Initial vs. follow-on financing rounds 600 500 400 300 200 100 0 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 Initial Financings Follow-on Financings Source: VentureOne/Ernst & Young 30
Slide 31: Pre-money valuations seem to have bottomed out
Pre-money valuations seem to have bottomed out Median pre-money valuation of European € 10 venture-backed companies (€M) €8 € 7,0 € 7,0 € 7,6 € 6,3 € 6,0 € 5,7 €6 € 5,1 € 5,0 € 6,0 € 5,1 €4 € 4,5 € 4,0 € 4,0 €2 €0 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 Source: VentureOne/Er
Slide 32: Are venture-backed IPOs coming back?
Are venture-backed IPOs coming back? € 4,000 European venture-backed IPO activity 70 60 € 3,000 50 40 € 2,000 30 20 € 1,000 10 €0 0 2Q00 3Q00 4Q00 1Q01 2Q01 3Q01 4Q01 1Q02 2Q02 3Q02 4Q02 1Q03 2Q03 Amount Raised (€M) Number of IPOs Source: VentureOne/Ernst & Young 32
Slide 33: Fund raising is still subdued
Fund raising is still subdued European funds raised for venture capital, € 50.000 private equity and buyout investment (€M) € 40.000 € 30.000 € 20.000 € 10.000 €0 1998 1999 2000 2001 2002 1H03 Venture Capital Private Equity Buyout Source: VentureOne/Ernst & Young 33
Slide 34: Life Sciences: No Growth in Private Equity finance or IPOs
Privak Life Sciences: No Growth in Private Equity finance or IPO’s in the last 3 years Worldwide investments (In $ ‘000) - Biotech venture IPO Follow -on Other Total 40000 30000 20000 10000 0 1999 2000 2001 2002 2003 34
Slide 35: Life Sciences: Overall investment flow is to the US
Life Sciences: Overall investment flow is to the US Worldwide investments (In $ ‘000) - Biotech 12000 10000 8000 venture 6000 IPO follow-on other 4000 2000 0 Global US Europe 35
Slide 36: New pre-IPO investment in December 2003: Cyclacel
New pre-IPO investment in December 2003 Cyclacel Cyclacel is a biopharmaceutical company that designs and develops small molecule drugs that act on key cell cycle regulators to stop uncontrolled cell division in cancer and other diseases involving abnormal cell proliferation Most advanced is CYC
Slide 37: Agenda
Agenda • Introduction • Results & performance QfG • Comments on quoted portfolio • Comments on unquoted portfolio • Economic environment • Q&A 37
Slide 38: OECD Composite Leading Economic Indicators are improving
OECD Composite Leading Economic Indicators are improving OECD Composite Leading Indicators for November 2003 (issued January 9, 2004) 38
Slide 39: The German Ifo Institute survey supports this
The German Ifo Institute survey supports this German businesses increasingly optimistic about the situation in 6 months time 39
Slide 40: Euro – U.S. dollar Exchange Rate
Euro – U.S. dollar Exchange Rate Euro-US Dollar Exchange Rate 1.30 1.25 1.20 1.15 1.10 1.05 1.00 0.95 0.90 0.85 0.80 08/12/2000 08/03/2001 08/06/2001 08/09/2001 08/12/2001 08/03/2002 08/06/2002 08/09/2002 08/12/2002 08/03/2003 08/06/2003 08/09/2003 08/12/2003 The U.S. government’s need for financing
Slide 41: Agenda
Agenda • Introduction • Results & performance QfG • Comments on quoted portfolio • Comments on unquoted portfolio • Economic environment • Q&A 41
Slide 42: Thank you for your attention!
Thank you for your attention! 42
Quest for Growth — H1 2003-2004 Earnings Presentation on 6ix