HGCapital Trust PLC · LSE:HGT
HGCapital Trust — H1 2013 Earnings Presentation
29 slides from HGCapital Trust's earnings presentation, June 2013
Slide 1: HgCapital Trust plc Interim Results June 2013
HgCapital Trust plc Interim Results June 2013 This document accompanies the Interim Report & Accounts for the six months ended 30 June 2013 and contains a summary of information set out in that document. Reference should be made to the full Report & Accounts rather than relying on this summary. The
Slide 2: Contents
HgCapital Contents Trust plc PAGE Overview 3 Financial highlights 4 Buyout portfolio review 5 Renewable energy 9 Conclusion 10 Appendices 12 Sector expert investors supporting management to grow industry champions © Copyright 2013 HgCapital 2
Slide 3: Overview Six months to 30 June 2013
Overview Six months to 30 June 2013 Top 20 buyouts (90% of the portfolio) continues to see solid growth Consistent and encouraging growth from the majority of investments Decision to write-down under performing investments has materially impacted the half year - Lumesse and NetNames are experien
Slide 4: Financial Highlights
Financial HgCapital Trust plc Highlights Six months to 30 June 2013 Diluted NAV per share total return -2.2% to 1,173p; net assets of £438 million Share price performance +13.6%; market cap £423 million Sales and EBITDA growth from top 20 buyouts of 8% and 5% respectively over the last 12 mont
Slide 5: Portfolio Review: Key drivers of valuation change
Portfolio Key drivers of valuation change Review Six months to 30 June 2013 VALUATION CHANGE IN SIX MONTHS COMPANY PRINCIPAL DRIVER OF CHANGE IN VALUATION TO 30 JUNE 2013 Largest increases ATC +£4.2m Exit secured at an uplift to Dec 2012 carrying value Sporting Index +£3.0m Strong growth year-on-yea
Slide 6: Trading Performance of Top 20 Buyout Investments
Portfolio Trading Performance of Top 20 Buyout Investments Review 90% of the portfolio value as at 30 June 2013 FURTHER INVESTMENT IMPACTING STRONG PROFIT GROWTH SHORT-TERM PROFIT GROWTH (56% OF THE TOP 20 BY VALUE, £152M) (12% OF THE TOP 20 BY VALUE, £31M) BEHIND PLAN STABLE, LOW GROWTH (9% OF TOP
Slide 7: New investment activity
Portfolio New investment activity Review £35m invested in 3 companies in growing markets with highly attractive business models The TMT team agreed the acquisition of e-conomic, a Denmark based leading provider of SME SaaS accountancy services in Europe for an EV of £77.0 million. The Trust’s shar
Slide 8: Realisations
Portfolio Realisations Review £47m returned to the Trust to August 2013 as interest in the portfolio remains strong Both trade and financial buyers continue to express interest in acquiring a number of our portfolio companies, as a result of their growth and market positions as has been demonstrat
Slide 9: Renewable Energy Fund Investments
Renewable Renewable Energy Fund Investments Energy Delivering inflation‐protected and non‐GDP linked revenue streams The Trust is invested via limited partnership interests in HgCapital’s two Renewable Energy Funds, RPP1 (2006) and RPP2 (2010) RPP gives investors exposure to renewable power asse
Slide 10: Conclusion: Outlook & Prospects
Conclusion HgCapital ‐ Outlook & Prospects August 2013 We have already started to make a number of new investments and based on our current pipeline, we would expect to complete more new investments over the next six months A clear area of focus is on the existing portfolio. We are happy with th
Slide 11: The Trust continues to deliver long term growth
Conclusion The Trust continues to deliver long term growth Outperforming the FTSE by 2.5x over the last 10 years on a total return basis TOTAL RETURN* SHARE PRICE PERFORMANCE OVER TEN YEARS +19.4% p.a 10 year share price total return of +19.4% p.a. for the Trust vs. +9.0% p.a. for the FTSE All-Sha
Slide 12: Appendices Contents
Appendices Contents PAGE Total return long-term performance 13 Realised and unrealised movements in the portfolio 14 Top 20 trading performance 15 Top 20 valuation and gearing 16 Top 20 buyout portfolio 17 Portfolio analysis 19 NAV movements and attribution analysis 20 Liquid resources and commitmen
Slide 13: Total Return
Appendix Total Return As at 30 June 2013 £1,000 invested 10 years ago in HgCapital Trust would now be worth £5,867 on a total return basis H1 2013 1 YEAR 3 YEARS 5 YEARS 7 YEARS 10 YEARS % % % P.A. % P.A. % P.A. % P.A. Share price 13.6 28.2 14.4 8.2 11.0 19.4 NAV per share (diluted) (2.2) 4.9 9.5 4.
Slide 14: Realised and unrealised movements in investment portfolio
Appendix Realised and unrealised movements in investment portfolio (including accrued interest) for six month period ended 30 June 2013 Sector expert investors supporting management to grow industry champions © Copyright 2013 HgCapital 14
Slide 15: Trading Performance of Top 20 Buyout Investments
Appendix Trading Performance of Top 20 Buyout Investments Twelve months to 30 June 2013 SALES +8% p.a. Over 90% by value of the top 20 buyouts saw sales growth over the last 12 months Combined sales of £2.3 billion 36% by value of the top 20 buyout companies have increased sales by >10% p.a. E
Slide 16: Valuation and Gearing - Top 20 Buyout Investments
Appendix Valuation and Gearing ‐ Top 20 Buyout Investments Twelve months to 30 June 2013 EBITDA MULTIPLE 10.8x Valuation multiple unchanged from 2012 year end at 10.8x Multiple reflects - Growth companies - Ratings of market comps DEBT TO EBITDA RATIO 3.9x Gearing levels slightly up from 3.7x
Slide 17: Buyout Investment Portfolio (Top 10)
Appendix Buyout Investment Portfolio The top 10 buy‐out investments represent 65% of the portfolio value RESIDUAL TOTAL PORTFOLIO CUM. CHANGE YEAR OF COST VALUATION(1) VALUE VALUE IN VALUE INVESTMENT INVESTMENT SECTOR LOCATION £’000 £’000 % % OVER 12M 1 2006 TMT Nordic Region 701 32,841 10.8% 10.8%
Slide 18: Buyout Investment Portfolio (Top 20)
Appendix Buyout Investment Portfolio The top 20 buy‐out investments represent 90% of the portfolio value RESIDUAL TOTAL PORTFOLIO CUM. CHANGE IN YEAR OF COST VALUATION(1) VALUE VALUE VALUE INVESTMENT INVESTMENT SECTOR LOCATION £’000 £’000 % % OVER 12M 11 2009 TMT UK 5,738 11,450 3.8% 68.7% Ï 12 2007
Slide 19: HgCapital Trust plc Portfolio Analysis
Appendix HgCapital Trust plc Portfolio Analysis As at 30 June 2013 * Representing aggregate realised proceeds and unrealised valuations of an investment Sector expert investors supporting management to grow industry champions © Copyright 2013 HgCapital 19
Slide 20: Analysis of NAV movements
Appendix Analysis of NAV movements For six months ended 30 June 2013 Sector expert investors supporting management to grow industry champions © Copyright 2013 HgCapital 20
Slide 21: Attribution analysis of unrealised movements in the portfolio
Appendix Attribution analysis of unrealised movements in the portfolio (including accrued interest movement of £4.3m) for six months to 30 June 2013 Sector expert investors supporting management to grow industry champions © Copyright 2013 HgCapital 21
Slide 22: Liquid Resources and Outstanding Commitments
Appendix Liquid Resources and Outstanding Commitments Multiple levers in place to manage the balance sheet AS AT 30 JUN 2013 AS AT 31 DEC 2012 £m % of NAV £m % of NAV HgCapital 7(1) 200.0 45.7% - - HgCapital 6(1) 67.2 15.4% 64.5 14.8% HgCapital Mercury 54.6 12.5% 55.3 12.6% Hg RPP2 (2) 19.2 4.4% 22.
Slide 23: HgCapital - The Manager
Appendix HgCapital – The Manager Delivering sustainable growth across all market cycles Mid-market private equity firm with £5.6 billion AUM, primarily focused on Northern Europe Deep sector focus across healthcare, industrials, services, TMT and renewable energy - Mid-market, control buyouts ac
Slide 24: A deep sector focus to pick sustainable growth sub-sectors
Appendix A deep sector focus to pick sustainable growth sub‐sectors Seek to make multiple investments in high quality companies with attractive business models Within each identified sub-sector, HgCapital targets growth businesses with proven business model characteristics: Product or service is b
Slide 25: Investments in different sectors share similar characteristics
A number of our investments in different sectors share similar Appendix characteristics TMT SERVICES INDUSTRIALS HEALTHCARE Recurring / repeat revenue 3 3 3 3 Protected revenue model 3 3 3 3 1,000s of customers 3 3 3 3 Potential >30% EBITDA margins 3 3 3 3 Non-discretionary item 3 3 3 3 Critical ser
Slide 26: The Manager - Investment Strategy
Appendix The Manager – Investment Strategy Value creation from picking growth & driving operational improvements VALUE CREATION ANALYSIS: MUST 4, HgCAPITAL 5 AND HgCAPITAL 6 REALISED PORTFOLIO 3.0x 0.2x 2.5x MULTIPLE OF ORIGINAL COST (x) 0.5x Portfolio deleverages: Multiple 2.0x expansion offset by
Slide 27: Contact
Appendix Contact For further information on HgCapital Trust plc, please visit our website: www.hgcapitaltrust.com Or contact Laura Dixon +44 (0)20 7089 7888 investorrelations@hgcapitaltrust.com For more information on Listed Private Equity, please visit the LPEQ website www.lpeq.com Sector expert in
Slide 28: Disclaimer
HgCapital Disclaimer Trust plc This document accompanies the Interim Report and Accounts for the six months ended 30 June 2013 and contains a summary of the information set out in that document. Reference should be made to the full Report and Accounts rather than relying on this summary. It does not
Slide 29: Disclaimer
HgCapital Disclaimer Trust plc Forward-looking statements are not guarantees of future performance. A number of important factors could cause actual results or outcomes to differ materially from those expressed, projected or implied in any forward- looking statements. No one undertakes publicly to u