3i Group Plc · LSE:III
3i — Shareholder Meeting (June 2024)
49 slides from 3i's shareholder meeting presentation, Jun 27, 2024
Slide 1: Annual General Meeting
Annual General Meeting 27 June 2024
Slide 2: Safety announcement
Safety announcement The Centre’s Fire Alarm notification is in the form a female spoken voice announcement repeating the following: “Attention please, attention please. A fire has been reported within the building. Please leave the building immediately by the nearest exit. Please do not use the lift
Slide 3: Annual General Meeting
Annual General Meeting 27 June 2024
Slide 4: Introduction
Introduction David Hutchison Chairman
Slide 5: Today's agenda
Today’s agenda Introductory remarks David Hutchison Review of the year Simon Borrows Outlook Simon Borrows Q&A David Hutchison Formal business including Resolutions David Hutchison 5
Slide 6: The Board of Directors and General Counsel
The Board of Directors and General Counsel 6
Slide 7: Peter McKellar
Peter McKellar
Slide 8: Alexandra Schaapveld
Alexandra Schaapveld ai
Slide 9: Coline McConville
Coline McConville
Slide 10: Kevin Dunn
Kevin Dunn
Slide 11: Simon Borrows
Simon Borrows
Slide 12: James Hatchley
James Hatchley
Slide 13: Jasi Halai
Jasi Halai
Slide 14: Stephen Daintith
Stephen Daintith
Slide 15: Lesley Knox
Lesley Knox
Slide 16: Resilient performance in a challenging market
Resilient performance in a challenging market Year to 31 March 2024 Group Private Equity Infrastructure Total return NAV Gross investment return Gross investment return on equity per share 25% 7% 23% 2,085p Cash invested Cash income Gearing Total dividend per share £556m £113m Cash proceeds and AUM
Slide 17: Our purpose
Our purpose We generate attractive returns for our shareholders and co-investors by investing Long-term stewardship in private equity and infrastructure assets. As proprietary capital investors we have a Thematic origination long-term, responsible approach. We aim to compound value through Careful p
Slide 18: Total FY2024 dividend of 61 pence per share
Total FY2024 dividend of 61 pence per share • Our dividend policy aims to maintain or grow the dividend year-on-year subject to: ‒ maintaining our conservative balance sheet strategy ‒ careful consideration of the outlook for investments and realisations and market conditions • Second FY2024 dividen
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Slide 20: Business review
Business review Simon Borrows Chief Executive
Slide 21: Business review
Business review
Slide 22: Careful portfolio construction
Careful portfolio construction Our portfolio is positioned to offer resilience across the economic cycle Portfolio at 31 March 2024 Value-for-money, Private Label, Infrastructure and Healthcare sectors represent 87% of portfolio 22
Slide 23: Private Equity: attractive return in volatile environment
Private Equity Attractive return in volatile environment, resilient portfolio performance Strong result, driven Disciplined investment. Resilient portfolio, with primarily by Action Strong cash generation pockets of weakness • 25% gross investment • Over £1.3bn of • Defensively return for the portfo
Slide 24: Private Equity: 93% of portfolio companies by value growing earnings
Private Equity 93% of portfolio companies by value growing earnings Portfolio earnings growth of top 20 PE investments1 ≥ 30% £1,190m 4 companies 20 - 29% £14,225m 2 companies 10 - 19% £871m 3 companies 0 - 9% £1,187m 5 companies <0% £1,276m 6 companies 1 Includes top 20 Private Equity companies by
Slide 25: Private Equity: divergence in performance across the portfolio
Private Equity Divergence in performance across the portfolio; value movements principally performance driven Largest value increases (>£20m) Largest value declines (>£20m) Portfolio company Value Value at Driver of Portfolio company Value Value at Driver of growth 31 Mar value decline 31 Mar value
Slide 26: Action – strong 2023 performance
Private Equity Action – strong 2023 performance +28% +34% +16.7% 104% 303 2,566 Operating EBITDA Net sales growth LFL growth Cash conversion Stores added Total stores growth An unbroken high growth track record Expansion across Europe continues Netherlands Poland EBITDA (€m) Sales (€m) +29% CAGR Num
Slide 27: Action – a strong start to the year
Private Equity Action – a strong start to the year • Strong trading YTD to P3 (31 March 2024) ‒ Net sales of €3,004m, up 21% on PY ‒ Operating EBITDA of €397m, up 29% on PY ‒ LFL sales growth of 9.8% ‒ 42 stores added, vs 34 in PY ‒ Cash balance of €558m 27
Slide 28: 3i portfolio construction
3i portfolio construction Core PE portfolio Longer-term compounders • Our origination engine, investing with a 2x MM • Returns materially in excess of 3i’s return objective objective + • 3-4 other assets to be • ~125x MM to date on initial • Exit typically after 4-6 year investment timeframe identif
Slide 29: Compounding value | Royal Sanders (2018)
Private Equity Compounding value | Royal Sanders (2018) Royal Sanders can continue to compound growth over the longer term 3.5x Revenue growth since • Winning customer portfolio investment • End-market with attractive organic growth opportunity £231m • Strong operational discipline and cost efficien
Slide 30: Platform assets growing through acquisitions
Private Equity Many of our platform assets continued to grow through acquisitions + + + + + Etagis Triseal Quadrix 30
Slide 31: Over £1.3bn of cash proceeds and distributions
Private Equity Over £1.3bn of cash proceeds and distributions from the portfolio £762m proceeds from pro-rata share redemption and £375m dividends £109m distributions following a refinancing £42m refinancing and other proceeds 31
Slide 32: nexeye (2017) | successful realisation announced
Private Equity nexeye (2017) | successful realisation announced in April nexeye transformed into leading European provider of value-for-money eye care • strengthened and developed organisation • acquisition and roll-out of eyes + more in Germany • investment in existing and new stores • built best-i
Slide 33: Infrastructure: portfolios performing strongly
Infrastructure Portfolios performing strongly with positive correlation to inflation Portfolios continue to Good cash income Well positioned to perform strongly and growth in AUM deliver growth over the cycle • 7% gross investment • £113m cash income • Broadly counter- return, with 3iN share from fe
Slide 34: 3i's science-based targets approved in March 2024
3i’s science-based targets were approved in March 2024 Our targets cover our own operations and our portfolio Scope 1 and 2 Scope 3 (own operations) (financed emissions - targets cover 82% of activities by invested capital as of FY2023) 3i is committed to: 3i commits to reduce its absolute Scope 1 a
Slide 35: Outlook
Outlook
Slide 36: Action: high-return capital allocation
Action: high-return capital allocation >£1.1bn further investment in Action over the last five years delivering 41% average returns2 March 2019 March 2024 £2,731m £14,158m 3iG stake value 3iG stake value +£11,427m 3iG stake value 44.3% 54.8% gross gross ownership ownership ~33% net ow nership1 53.2%
Slide 37: 3i has significant long-term potential
3i has significant long-term potential Permanent capital. Long-term, sustainable approach Thematic approach to investment with exposure to long-term secular growth trends Proven model, underpinned by robust processes, patience and price discipline Active management of portfolio companies with signif
Slide 38: Strong returns to shareholders since the restructuring in 2012
Strong returns to shareholders since the restructuring in 2012 NAV and cumulative dividend growth Share price and dividend growth Total shareholder return index 2 27% 29% CAGR CAGR 20% CAGR 367 367 2,876 2,220 2,085 279 179 1 100 FY2012 FY2024 29 Jun 12 30 Apr 24 29 Jun 12 30 Apr 24 Cumulative divid
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Slide 40: The Resolutions
The Resolutions
Slide 41: Resolutions commentary
Resolutions commentary • 16 ordinary resolutions • 4 special resolutions • Normal annual business 41
Slide 42: Questions
Questions 42
Slide 43: Poll card
Poll card AGM poll card The Board recommends you vote FOR resolutions 1 to 20 Resolutions For Against Abstain Resolutions For Against Abstain 1 To receive and consider the Company‘s Accounts for the year to 31 March 2024 and the Directors’ and Auditor's reports. 2 To approve the Directors’ remunerat
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Slide 45: Resolutions 1-3
Resolutions 1 - 3 1. That the Company’s accounts and the reports of the Directors and the Auditor for the year to 31 March 2024 be and are hereby approved 2. That the Directors’ remuneration report for the year to 31 March 2024 be and is hereby approved 3. To declare a dividend of 34.50p per ordinar
Slide 46: Resolutions 4-8
Resolutions 4 - 8 4. That Mr S A Borrows be and he is hereby reappointed as a Director of the Company 5. That Mr S W Daintith and he is hereby reappointed as a Director of the Company 6. That Ms J H Halai be and she is hereby reappointed as a Director of the Company 7. That Mr J G Hatchley be and he
Slide 47: Resolutions 9-14
Resolutions 9 - 14 9. That Ms L M S Knox be and she is hereby reappointed as a Director of the Company 10.That Ms C L McConville be and she is hereby reappointed as a Director of the Company 11.That Mr P A McKellar be and he is hereby reappointed as a Director of the Company 12.That Ms A Schaapveld
Slide 48: Resolutions 15-20
Resolutions 15 - 20 15.To authorise the Company to make political donations (other than to political parties) or incur political expenditure not exceeding £20,000 during the period until the end of next year’s Annual General Meeting 16.To renew the Directors’ authority to allot shares 17.To renew th
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