3i Group plc · LSE:III
3i — H1 2002 Earnings Presentation
23 slides from 3i's earnings presentation, Oct 30, 2001
Slide 1: Interim results to 30 September 2001
Interim results to 30 September 2001 1
Slide 2: Interim results 30 September 2001
Interim results 30 September 2001 30 October 2001 2
Slide 3: Why presentation today?
Interim results to 30 September 2001 Brian Larcombe Why presentation today? • Organisational changes − balanced investment and portfolio resources − stronger specialised teams − sector and product responsibilities − lower staffing needs • Interim results 3
Slide 4: Key messages
Interim results to 30 September 2001 Brian Larcombe Key messages • Tough economic and market conditions • Confident in our strategy • Management actions and organisational changes • Strength of market leadership and finances 4
Slide 5: Financial highlights
Interim results to 30 September 2001 Brian Larcombe Financial highlights • Net asset value reduced by 22.6% • Maintained revenue profits, after reorganisation costs • Maintained interim dividend • Satisfactory cash flow • Investment of £600m 5
Slide 6: 3i relative performance
Interim results to 30 September 2001 Brian Larcombe 3i relative performance % - 22.1 3i - 12.5 FTSE All-Share - 24.1 FTSE Small Cap (ex IT) - 40.2 FTSE techMARK 100 - 50.1 Neuer Markt Indices for six months to 30 September 2001 6
Slide 7: Market conditions
Interim results to 30 September 2001 Brian Larcombe Market conditions Private equity (buy-outs) Venture (technology) • Reduced deal volumes • Fewer risk takers • Pricing now changing • Focus on portfolio Growth capital • Increasing demand 7
Slide 8: 3i response to market conditions
Interim results to 30 September 2001 Brian Larcombe 3i response to market conditions • Strategy • Investment policy • Management actions 8
Slide 9: Strategy
Interim results to 30 September 2001 Brian Larcombe Strategy • Objective − to be the leading international venture capital company • Strategy − the best network − value for 3i and its portfolio − a balanced business 9
Slide 10: Investment policy
Interim results to 30 September 2001 Brian Larcombe Investment policy • Growth companies will deliver the returns • Commitment to supporting winners • Sector focus • Attractive opportunities in MBOs and growth capital 10
Slide 11: Management actions
Interim results to 30 September 2001 Brian Larcombe Management actions • Stronger industry sector teams • Focus on larger offices - some office closures • Re-balancing new investment resources and job cuts • Strengthening portfolio management • Executive director responsibilities • Organisational an
Slide 12: Financial review
Michael Queen Financial review 12
Slide 13: Financial highlights
Interim results to 30 September 2001 Michael Queen - Financial review Financial highlights Total return -22.1% Interim dividend unchanged 4.9p Net asset value 631p Out-performance of FTSE SmallCap and FTSE techMARK 100 Valuation reductions driven by stock markets Investment and realisations lower St
Slide 14: Total return
Interim results to 30 September 2001 Michael Queen - Financial review Total return £m £m Revenue profit after tax 69 Capital profits - Realised capital profits (5) - Unrealised value movement (1,060) (1,065) Goodwill - charged to capital reserve (72) Other (29) Total return (1,097) 14
Slide 15: Revenue
Interim results to 30 September 2001 Michael Queen - Financial review Revenue Period ended 30 September 2000 2001 £m £m Income from investments 127 146 Fees 35 32 Net interest payable (39) (33) Costs (52) (72) Goodwill - (2) Profit before tax 71 71 Tax (2) (2) Profit after tax 69 69 15
Slide 16: Realised capital profits
Interim results to 30 September 2001 Michael Queen - Financial review Realised capital profits • Net realised capital profit − total realisations £(5)m − equity realisations £8m • Equity portfolio realised − total 13% − quoted 31% − unquoted 5% • £525m of equity proceeds realised in a falling stock
Slide 17: Unrealised value movement
Interim results to 30 September 2001 Michael Queen - Financial review Unrealised value movement £(1,060)m £m Quoted portfolio -430 PE movement Earnings growth -314 Provisions JV and others 50 -252 -114 17
Slide 18: Investment
Interim results to 30 September 2001 Michael Queen - Financial review Investment £m 1000 902 800 201 Fund co-investment 600 600 3i investment 102 400 701 498 200 0 2000 2001 Period ended 30 September 18
Slide 19: Net cash flow
Interim results to 30 September 2001 Michael Queen - Financial review Net cash flow £m Investment (498) Return flow 613 Net investment cash flow 115 Acquisition of Atle (330) Other (5) Net cash outflow (220) 19
Slide 20: Balance sheet
Interim results to 30 September 2001 Michael Queen - Financial review Balance sheet £m £m 6,071 4,973 5,170 3,854 Gearing Gearing 22% 34% 1,098 1,316 Portfolio and Shareholders' Net borrowings Portfolio and Shareholders' Net borrowings other net assets funds other net assets funds 31 March 2001 30 S
Slide 21: Funds under management
Interim results to 30 September 2001 Michael Queen - Financial review Funds under management Unquoted funds under management Quoted funds under management £bn £bn 2.3 2.1 2.0 1.5 1.3 0.9 0.8 0.7 0.5 0.5 0.5 0.4 1997 1998 1999 2000 2001 30 Sep 1997 1998 1999 2000 2001 30 Sep 2001 2001 as at 31 March
Slide 22: Long-term performance - total return
Interim results to 30 September 2001 Michael Queen - Financial review Long-term performance - total return 3 Years 8.3% 2.4% 1.3% 3i 5.7% FTSE AllShare FTSE 100 5 Years 8.9% FTSE SmallCap (ex IT) 6.5% 7.1% 2.8% 7 Years 11.7% 9.9% 10.5% 5.8% 10 Years 13.8% 10.1% 22
Slide 23: Interim results to 30 September 2001
Interim results to 30 September 2001 23