HGCapital Trust PLC · LSE:HGT
HGCapital Trust — FY2015 Earnings Presentation
25 slides from HGCapital Trust's earnings presentation, March 2016
Slide 1: 2015 Full Year Results Presentation
2015 Full Year Results Presentation March 2016 This document accompanies the Annual Report & Accounts for the year ended 31 December 2015 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 re
Slide 2: Contents
HgCAPITAL CONTENTS TRUST PLC PAGE Financial highlights 3 Portfolio metrics 4 Funds Status 5 The last 10 Years 6 Investment Strategy 10 2015 Activity 11 Case Studies - A new acquisition: EidosMedia 12 - A minority sale and longer term hold decision : JLA 13 - An exit: Teamsystem 14 Current Portfolio
Slide 3: Financial Highlights
FINANCIAL STRONG TRADING RESULTS DRIVING POSITIVE PERFORMANCE OVER THE YEAR HIGHLIGHTS Year-end NAV per share of £14.20, net assets of £530 million +14% Driven by strong trading, realisation activity and increased comparable ratings Hg6 is performing well, leading to an increased carried inter
Slide 4: Portfolio Metrics: Top 20 Buyouts
PORTFOLIO TOP 20 BUYOUTS (87%) METRICS Aggregate sales of £2.3 billion and profits of £517 million, average margins of 23% +10% Consistent double-digit performance in many of our larger companies including Visma, IRIS,TeamSystem, P&I, JLA and Zenith Average growth Top 20 has grown revenues consi
Slide 5: Funds Status: HGT Commitments
FUNDS STATUS HGT COMMITMENTS as at 29 February 2016 HGT Value of unrealised Trust Commitment Investment Outstanding investments Gross Fund Multiple Fund Size Period Co-invest Invested commitments Year (m) (£m) % of fund (Years) (£m) % (£m) (£m) % Unrealised Realised Total Hg5 (£) 2006 950 108 12.5 0
Slide 6: The Last 10 Years: 2006-2008 Net Sellers
THE LAST 10 2006 – 2008: NET SELLERS YEARS Strong outperformance over public markets as we harvested the portfolio 120 Hg5 Fully invested across 12 buyouts (2006-2008), 10 now exited, 2 remaining investments, overall portfolio valued at 2.1x 100 £0.9 billion fund 80 raised 2006 HGT made a £120m
Slide 7: The Last 10 Years: 2009-2013 Net Investors
THE LAST 2009 – 2013: NET INVESTORS 10 YEARS Solid growth but lagged public markets as they recovered from lows and we put significant cash to work. 120 Fully invested across 19 buyouts, 8 now partially or fully exited Hg6 at 2.4x, overall portfolio valued at 1.7x 100 £1.9 billion fund HGT commi
Slide 8: The Last 10 Years: 2014-2016 Balanced Cash Flow
THE LAST 2014 – 2016: CASH FLOW BALANCED BETWEEN INVESTING AND REALISING 10 YEARS Strong performance of Hg6 and Mercury vintages over this period reflected in valuations 100 HGT commitment of £200m, 60% invested across 9 buyouts remaining commitment expected to be invested 80 Hg7 over the next 18
Slide 9: The Last 10 Years: Performance Ahead of Public Markets
THE LAST 10 A STRONG PERIOD OF PERFORMANCE BOTH IN NET ASSET VALUE AND SHARE YEARS PRICE TERMS, SIGNIFICANTLY AHEAD OF PUBLIC MARKETS NAV per share Share price FTSE All-Share 10 year CAGR as at 31 (%) (%) (%) December 2015 11.2% p.a. 9.4% p.a. 5.6% p.a. NAV growth not correlated to public market i
Slide 10: Our Investment Strategy
OUR A REMINDER… INVESTMENT Focus on investing behind business models in sub-sectors we know well and believe have the ability to STRATEGY grow across market cycles… and are attractive to future buyers DEEP SECTOR BUSINESS MODEL ATTRIBUTES KNOWLEDGE Core sub-sectors B2B Product or service is busine
Slide 11: Investment Activity
INVESTMENT SIGNIFICANT INVESTMENT AND REALISATION ACTIVITY OVER 2015 AND BEYOND ACTIVITY £65m invested and £64m returned in 2015 £111m £123m 11 6 6 over a third invested on behalf of the returned to the new or further full or partial recapitalisations of the portfolio has Trust Trust investments rea
Slide 12: Case Study: EidosMedia, New Investment
CASE STUDY: EIDOSMEDIA NEW Supporting the Founder of a clear industry champion INVESTMENT in vertical publishing software EidosMedia displays many of the business model characteristics that we look for: a provider of high quality, business-critical software; a loyal customer base; consistent r
Slide 13: Case Study: JLA, Longer Hold
CASE STUDY: JLA LONGER HOLD 1.8x returned in cash and total return currently 3.5x, with significant further potential The Services team had known JLA for some time previous to the 2010 acquisition. It displays many of the business model characteristics that we look for including: sustained organic
Slide 14: Case Study: TeamSystem, Partial Exit
CASE STUDY: TEAMSYSTEM PARTIAL EXIT 1.8x return achieved despite challenging economic backdrop during ownership In 2010, having known TeamSystem for many years, HgCapital sought to apply its experience of business-critical back office software in Northern Europe to a less developed market. TeamSyste
Slide 15: Portfolio Review: Trading Performance Overview
PORTFOLIO TRADING PERFORMANCE OVERVIEW OF TOP 20 BUYOUT INVESTMENTS (87%) REVIEW Aggregate sales of £2.3 billion and profits of £517 million, average margins of 23% Year of Investment Pre-2010 2010 - 2012 2013 - 2014 2015 STRONG PERFORMANCE 74% BY VALUE £333m LOWER GROWTH 3% BY VALUE, £12m INVESTING
Slide 16: Portfolio Review: Portfolio Snapshot
PORTFOLIO PORTFOLIO SNAPSHOT REVIEW 25% MATURING INVESTMENTS Exit plans developed to realise value over the next 18 months ACTIVE LONGER HOLDS Conscious decision to hold great businesses for longer which exhibit consistent 35% strong growth with significant market 25% opportunities NEWER INVESTMENTS
Slide 17: Portfolio Review: An Active Start to 2016
PORTFOLIO AN ACTIVE START TO 2016 REVIEW An estimated £48m invested and £59m realised so far in 2016 INVESTMENTS EXITS Sovos Compliance TMT TeamSystem TMT US based, leading global provider of regulatory Italian based, leading provider of regulatory driven tax compliance software software products to
Slide 18: Outlook & Prospects, Conclusion
OUTLOOK & PROSPECTS CONCLUSION Confidence in a portfolio with strong earnings and cash generation driving further NAV value The portfolio continues to trade strongly, delivering double digit revenue and EBITDA growth. We remain confident that we have constructed a strong portfolio of sustainable g
Slide 19: Appendix Contents
APPENDIX CONTENTS PAGE Top 20 buyout companies 20 Renewable energy investments 22 Contact 23 Sector expert investors supporting management to grow industry champions © Copyright 2016 HgCapital 19
Slide 20: Buyout Portfolio (Top 10)
BUYOUT PORTFOLIO APPENDIX The top 10 buy-out investments represent 65% of the portfolio value Residual Total Portfolio Cumulative Change in Year of Cost valuation value value value over Investment investment Sector Location £’000 £’000 % % 2015 1 Visma1 2014 TMT Nordic Region 53,659 62,894 12.1% 12.
Slide 21: Buyout Portfolio (11-20)
BUYOUT PORTFOLIO APPENDIX The top 20 buy-out investments represent 87% of the portfolio value Residual Total Portfolio Cumulative Change in Year of Cost valuation value value value over Investment investment Sector Location £’000 £’000 % % 2015 11 Radius 2013 Services UK 17,966 17,378 3.3% 68.7% 1
Slide 22: Renewable Energy Fund Investments
RENEWABLE ENERGY FUND INVESTMENTS APPENDIX High quality European renewable energy projects currently representing 3% of NAV The Trust is invested via limited partnership interests in HgCapital’s two Renewable Energy Funds, RPP1 (2006) and RPP2 (2010) Exposure to renewable power assets anticipate
Slide 23: 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 24: Disclaimer
HgCAPITAL DISCLAIMER TRUST PLC NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR WITHIN THE UNITED STATES OR TO “US PERSONS” (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR INTO OR WITHI
Slide 25: Disclaimer
HgCAPITAL DISCLAIMER TRUST PLC These materials include statements that are, or may be deemed to be, "forward-looking statements" which are based on current expectations and projections about future events. In some cases, these forward-looking statements may be identified by the use of forward-lookin