HGCapital Trust PLC · LSE:HGT
HGCapital Trust — FY2007 Earnings Presentation
31 slides from HGCapital Trust's earnings presentation, March 2008
Slide 1: Full Year Results to 31 December 2007
Full Year Results to HgCapital Trust ple 31 December 2007 HgCapital }
Slide 2: Introduction
Introduction Records realisations exceed new investment. New investment still active, with focus on performance improvement and defensible Strong growth in netassots “and good medium term prospects. spaces. Portfolio sound with good growth and prospects. Cashed up to exploit opportunities.
Slide 3: Financial highlights
Financial highlights At 31 December 2007 At 31 December 2006 % change Assets Net assets (£'000) 238,817 187,135 27.6% Net assets per share 948.2p 743.0p 27.6% Share price (mid-market) 775.0p 731.0p 6.0% Discount (%) 18.3% 1.6% Year ended Year ended % change 31 December 2007 31 December 2006 Revenue
Slide 4: Performance — total return
Performance — total return Consistent long-term performance and out performance of both the index and quoted peers 1 year to 3 years to 5 years to 7 years to 10 years to 31-December-07 _31-December-07 31-December-07 _31-December-07 _ 31-December-07 Net asset value 30.0% 27.2% 25.3% 14.7% 16.1% Share
Slide 5: Attribution Analysis of Movement in NAV
Attribution Analysis of Movement in NAV Record realisations and underlying earnings growth from the portfolio have driven value £7000 Opening net asset value as at 1 January 2007 187,135 Gross revenue 12,129 Expenditure (4,028) Taxation (2,418) Dividend paid (3,526) Realised proceeds in excess of bo
Slide 6: Principal realised and unrealised movements in NAV
Principal realised and unrealised movements in NAV Schenck Blue Minerva Hofmann Guildford The Sanctuary Addison Hirschmann Forex gains Doc Morris Clarion Other & Gilts Hoseasons WET Clinphone Axiom Elite FTSA @ Net unrealised appreciation of investments £m O Realised proceeds in excess of 31 Decembe
Slide 7: Investments
Investments £51 million selectively deployed Investment Cost Enterprise Company Sector Activity Deal type Geography £m Value 'm New BMFCO (Fabory) Services Distributor of indistrial fasteners Buyout Benelux 10.9 € 345 Atlas Energy Services E-learning products for the oil and gas industry Buyout UK 8
Slide 8: Full realisations
Full realisations ) tee A record year for realisations Cost Proceeds 2007 return Multiple of Company Sector Exit route £m (14)£m__(4) £m IRR%_ Original Cost*** Schenck Industrials Financial sale 11.7 34.0 22.3 83% 2.9 Blue Minerva (IRIS) TMT Financial sale 3.0 17.7 14.7 63% 3.6 Hirschmann Industrial
Slide 9: Partial realisations
Partial realisations Cost Proceeds 2007 return Multiple of Company Sector Exit route £m (i)£m_—_(1) £m IRR%_ Original Cost* Xtx (va Xyratex) * TMT Quoted share sale 19 5.0 34 32% 2.25x Addison TMT Recapitalisation 4.2 5.4 1.2 35% 2.0x Rolfe & Nolan TMT Recapitalisation 0.2 2.1 1.9 40% 2.2x Voyage (f
Slide 10: Events since the end of the Year
Events since the end of the Year * New investment by the Healthcare team in a €327 million buyout of Casa Reha, one of the leading German private nursing home groups. HgCapital Trust invested €13.4 million. * Sold The Sanctuary Spa, Xtx, PRA International and Clarion with proceeds of £38.9 million c
Slide 11: NAV Analysis
NAV Analysis 65% invested following a strong period of realisation. Cash resources available to exploit new opportunities At 31 December 2007 At 31 December 2006 £m % £m % Unlisted investments 147.9 61.9 134.3 71.8 Listed investments 6.5 2.7 14.2 7.6 Cash/Government securities 79.8 33.4 36.6 19.5 Ot
Slide 12: Portfolio — Top investments by value
Portfolio — Top 20 represent over 90% by value Strong earnings growth continues. % of invested Holding value Holding value portfolio Cumulative Investment Sector at 31/12/2006 at31/12/2007 31/12/2007 value% Reason for Change £m £m 1 VISMA TMT 12.3 13.8 8.9% 8.9% Foreign exchange movements 2 The Sanc
Slide 13: Valuation Basis and Vintage
Vintage Year: Valuation Basis and Vintage A young portfolio, with nearly half still at cost Quoted Net assets 4% 3% Written down T% Third Party 10% Earnings 28% Cost 48% As at 31°! December 2007 Pre 2001* 2002 10% 26% *Includes 7.5% relating to The Sanctuary Spa, which has been sold post the period
Slide 14: Sector Coverage of Investments
Sector Coverage of Investments A well diversified portfolio Renewable energy 2% Services 17% TMT 29% Consumer & Leisure 22% Industrials 22% Healthcare 7% By value As at 31% December 2007 Renewable PE energy TMT 12 Services Consumer & Leisure 6 Industrials 9 Healthcare 7 By number 14
Slide 15: Geography / Stage
Geography / Stage Increasing exposure to Continental Europe and a focus on buy-outs Nordic E Region 2 14% ° North America UK 45% Germany 24% By geography Note: Analysis by value As at 31° December 2007 Funds 1% Expansion 10% Renewable energy 2% Venture 1% Buy-out 86% By stage 15
Slide 16: HgCapital Strategy and Tactics
HgCapital Strategy and Tactics ¢ Mid-market Strategy e Pan-regional ¢ Broad market coverage ¢ Sector-focused ¢ Proactive management and support } ¢ Heavily resourced relative to funds under management Tactics 16
Slide 17: Investment Prospects
Investment Prospects A challenging environment but patience will be rewarded There are deals to do but discipline and patience is required. Debt market conditions are challenging, but thus far manageable for the mid- market. e We have completed 4 new investments, 3 exits and 1 recap since the onset
Slide 18: Portfolio Outlook
Portfolio Outlook In good shape and growing * Delivering strong year on year earnings growth and cash flow with clarity of strategy. ¢ High level of involvement with management and current emphasis on growing the existing portfolio. In tough times good companies win. ¢ Realisations expected to slow
Slide 19: HgCapital Update
HgCapital Update Growth and change Nic Humphries appointed Chief Executive as lan Armitage moves to Chairman. ¢ Hg§5, our current fund is 60% invested; we expect to be fundraising in H2 2008. Continued investment in our business, both people and infrastructure. Increased headcount from 70 to 75 in t
Slide 20: Conclusion
Conclusion e 2007 continued historic out performance. A healthy portfolio, with cash resources available to exploit buying opportunities. ¢ Portfolio in good shape and producing strong growth in profit and cash flow. ¢ Prospects for a strong vintage of new investment. 20
Slide 21: Appendices
Appendices 21
Slide 22: Ten Year Total Return Performance
Ten Year Total Return Performance Performance over 10 Years (total return) 600 550 500 450 400 350 300 | 250 | 200 150 + 100 50 1 - - Dec-97 Dec-98 Dec-99 Dec-00 Dec-01 Dec-02 Dec-03 Dec-04 Dec-05 Dec-06 Dec-07 Performance Index exe PRICE ===NAV =F TSE ALL SHARE ==" FTSE Small CAP 22
Slide 23: Performance of Private Equity Funds over Years (Share Price Total Return)
Performance of Private Equity Funds over 5 Years (Share Price Total Return) _— HgCapital — Electra —— Standard Life ——F&c — Graphite Dunedin ~~ Candover — SVG Capital — 3i Group —— Pantheon Dec-02 Apr-03 | Aug-03 Dec-03 © Apr-04 ~ Aug-04 ~ Dec-04 ~ Apr-05 © Aug-05 © Dec-05 Apr-06 ~ Aug-06 © Dec-06 ©
Slide 24: Performance of Private Equity Funds over Years (Share Price Total Return)
Performance of Private Equity Funds over 10 Years (Share Price Total Return) 500 400 - — HgCapital — SVG Capital ~~~ Candover an —— Pantheon — Electra 200 | — Graphite — 3i Group 400 | Dunedin T T ——T rr T T rr ae if i oJ f-2) =) = a fs) x pred o y (7) f-7) 2) i) (—) r—) S (—) —) i) eo o °o oO °o o
Slide 25: Portfolio: December 2007
Portfolio: 31 December 2007 Year of Residualcost Valuation Portfolio Cum. Investment investment Sector Location £000 £000 value% Value% 1 VISMA Holdings 2006 TMT Nordic region 13,268 13,812 8.9% 8.9% 2 The Sanctuary Spa Holdings Ltd 1995 Consumer & Leisure UK 631 11,628 7.5% 16.4% 3 BMFCO UA (t/a Fa
Slide 26: Portfolio: December 2007
Portfolio: 31 December 2007 Year of Residual Valuation Portfolio Cum. Investment investment Sector Location cost £000 £000 value% Value % 21 FTSA Holdings Ltd 2004 Industrials North America 6,813 1,961 1.3% 93.3% 22 PRA International Inc 2002 Healthcare Benelux 1,478 1,789 1.2% 94.5% 23 Classic Copy
Slide 27: Portfolio by Sector: December 2007
Portfolio by Sector: 31 December 2007 Residual Cost Valuation TMT Investments Year Stage Geography Valuation Basis £'000 £'000 Portfolio % VISMA Holdings 2006 Nordic region Cost 13,268 13,812 8.9% Clarion Events Holdings Ltd 2004 UK Eamings 4,965 7,594 4.9% Addison Luxembourg SA 2005 Germany Eamings
Slide 28: Portfolio by Sector: December 2007
Portfolio by Sector: 31 December 2007 Residual Cost Valuation Industrials Investments Year Stage Geography _ Valuation Basis £000 £'000 Portfolio % Hofmann M.M. SA 2005 Germany Third party transaction 4747 10774 7.0% Mondo Minerals Co-op 2007 Nordic region Cost 7004 7358 4.8% SLV Electronik SARL 200
Slide 29: Portfolio by Sector: December 2007
Portfolio by Sector: 31 December 2007 Residual cost Valuation Services Year Stage Geography Valuation Basis £'000 £'000 ‘Portfolio % BMFCO UA (t/a Fabory) 2007 Benelux Cost 10,874 41,428 74% Atlas Energy Group Ltd 2007 UK Cost 8,153 8,153 5.3% SHL Group Holdings 1 Ltd (formerly Surrey) 2006 UK Cost
Slide 30: Principal realised and unrealised movements in NAV during the year
Principal realised and unrealised movements in NAV during the year ended 31 December 2007 Realised proceeds vs book value Unrealised appreciation Total £'m £'m £'m Schenk 20.5 0.3 20.8 Blue Minerva 10.4 1.4 11.8 Hofmann 6.1 6.1 Guildford 4.9 0.9 5.8 Sanctuary 5.5 5.5 Addison 5.2 5.2 Hirschmann 44 0.
Slide 31: Disclaimer
Disclaimer HgCapital’s communications are only directed at market counterparties and intermediate customers. HgCapital acts for its investors and for no one else in relation to its business. It will not advise, provide services to or be responsible for providing customer protections to any other per