CapMan Oyj Class B · OMXHEX:CAPMAN
CapMan Oyj Class B — Q1 2010 Earnings Presentation
45 slides from CapMan Oyj Class B's earnings presentation, May 7, 2010
Slide 1: CapMan Plc Group's Interim Report 1 January – 31 March 2010
CapMan Plc Group’s Interim Report 1 January – 31 March 2010 Heikki Westerlund, CEO, CapMan Plc 7 May 2010
Slide 2: Contents
• CapMan p in short • Market environment Contents • Q1 activity and result • Ownership and management changes 2 7 May 2010 CapMan IR presentation May 2010
Slide 3: Specialised listed alternative asset manager
Specialised listed alternative asset manager • Manages third party private equity and real estate funds with total capital of €3.6 bn • Local presence in Nordic countries and Russia • Listed in Helsinki Stock Exchange g since 2001 • Market cap €147.5 million (30 Apr 2010, incl. A shares) C M B rolli
Slide 4: One stop shop for investors investing in the Nordic countries and Russia
One stop shop for investors investing in the Nordic countries and Russia Six independent investment partnerships with dedicated funds CapMan CapMan CapMan CapMan CapMan CapMan Buyout Technology Life Science Russia Public Market Real Estate • Manufacturing, • Expansion and • Medical • Industrial and
Slide 5: Active owner for portfolio companies and real estate
Active owner for portfolio companies and real estate • 62 p portfolio companies p – total turnover of €5.9 billion in 2009 – approx. 40,000 employees • 60 real estate investments 5 7 May 2010 CapMan IR presentation May 2010
Slide 6: CapMan Plc priorities in 2010
CapMan Plc priorities in 2010 To deliver a clearly better result than in 2009 To continue strengthening the balance sheet To develop p and consolidate CapMan’s p investment culture To create strong base for future fundraising To leverage market opportunities in CapMan’s operations To further develop
Slide 7: Contents
• CapMan p in short • Market environment Contents • Q1 activity and result • Ownership and management changes Fundraising 7 7 May 2010 CapMan IR presentation May 2010
Slide 8: In 2009 a dramatic drop in European fundraising and deal activity
Fundraising In 2009 a dramatic drop in European fundraising and deal activity… activity • Record high fundraising 2005 – 2008 gives PE industry massive dry powder. • In recession focus has been in developing portfolio companies. €bn 120 112 100 83 82 80 72 73 X -84% 71 60 54 48 47 X-61% 61% 40 37 40
Slide 9: Although the general atmosphere has improved
…and and although the general atmosphere has improved improved… • General views – Private equity model works – growth and change needed – Private equity continues to be preferred asset class – but not loved one! • Investment expectations – Deal volume low but better than in 2009 – P i expectations P
Slide 10: Slow fundraising market continued in Q1 2010
Fundraising …slow slow fundraising market continued in Q1 2010 2010. • Fundraising g continues to be challenging g g with p prolonged g time to close funds. • on avarage 19 months in Q1 2010 (16 months in 2008) • Fundraising for CapMan Buyout IX and CapMan Mezzanine V funds continues. • evaluation o
Slide 11: Surveys show fundraising would pick up in 2010
Fundraising However, recent surveys show encouraging news that fundraising would pick pick-up up in 2010 • Small/mid-market buyout and distressed PE funds are considered to be the most attractive tt ti products d t by b investors. i t Time frame for next intended PE Amount of capital LPs plan to com
Slide 12: Transaction activity in the Nordics is increasing
Transaction activity in the Nordics is increasing • Full year activity figures for 2010 expected to be clearly above 2009. • Volume of deal flow has risen across all CapMan investment areas. Buyout deal value in Nordic region Number of buyout deals in Nordic region $bn # 30 100 25 80 20 60 15 40 10
Slide 13: Signs of recovery in senior LBO loans
Signs of recovery in senior LBO loans • Situation improved already in Q4 2009 for mid-sized deals, and currently bank financing for Nordic buyouts, M&A and real estate investments is available. • Attractive business for banks. Annual European p senior loan volume Monthly y European p senior loan vol
Slide 14: Equity ratios increased
Equity ratios increased • Bank financing back to 2006 levels. • However, very limited availability of mezzanine or other junior financing. Equity contributions in European buyouts 60 % 52 4% 52.4% 50 % 40 % 33.6% 30 % 20 % 10 % 0% 2002 2003 2004 2005 2006 2007 2008 2009 Q1/2010 Average equity contri
Slide 15: Leverage ratios back to levels seen in early 2000s
Leverage ratios back to levels seen in early 2000s Leverage ratios in small & mid-sized European buyouts (EV<250MEUR) 6.0x 56 5.6x 4.9x 5.0x 4.7x 4.7x 4.4x 4.6x 4 0x 4.0x 4 0x 4.0x 4 0x 4.0x 3.9x 3.9x 3 9 4.0x 3.8x 3.7x 3.5x 3.6x 3.4x 3.1x 3.2x 3.0x 2.0x 1.0x 0.0x 2002 2003 2004 2005 2006 2007 2008
Slide 16: Number of deals in European growth financing relatively stable
Number of deals in European growth financing relatively stable • The value of European growth financing has been fairly stable at approx approx. €1.1 €1 1 bn per quarter since Q1 2009. Value of growth financing transactions in Europe Number of growth financing transactions in Europe €bn # 14 500 412
Slide 17: Nordic IPO market has slowly picked up in 2010
Nordic IPO market has slowly picked up in 2010 • Altogether 44 IPOs in the US and Europe in Q1 2010 – only two in Q1 2009 2009. • In Europe London Stock Exchange the most active IPO (5 IPOs in Q1 2010). • Already six IPOs in Nordic Exchanges in 2010* • In I addition dditi severall listing li ti appl
Slide 18: AIFMD (Directive on Alternative Investment Fund Managers)
AIFMD (Directive on Alternative Investment Fund Managers) Process Content Challenges • First and widely criticised • Mandatory authorisation to all • Wide scope version AIFMD published on AIF management companies (one size fits all) 30 April 2009 by EU • Transparency requirements • Open to various C
Slide 19: Contents
• CapMan p in short • Market environment Contents • Q1 activity and result • Ownership and management changes 19 7 May 2010 CapMan IR presentation May 2010
Slide 20: CapMan main events in 2010
CapMan main events in 2010 Investments Exits CapMan p Plc 7 final and 1 partial exit from 6 portfolio company investments portfolio companies 3 fundraising projects 1 real estate investments 1 exit it ffrom reall estate t t investment i t t • Fundraising for CapMan Buyout IX continues • Preparations
Slide 21: Main components of income
Main components of income Fund Investment Management Company business Business Returns on direct Real estate Management fees Carried interest fund investments from consulting own balance sheet • Based on original fund size • CapMan begins to receive • CapMan Plc’s • CapMan invests in its future (tot
Slide 22: Group turnover and operating profit
Group turnover and operating profit • +41% increase in turnover attributable to increase in management fees and carried interest. • In addition, positive fair value development contributed to improvement in operating profit. Turnover Operating profit € million € million 40 10 36.3 30 5 4.3 26.3 0.1
Slide 23: Profitability development Q2 2008 – Q1 2010
Profitability development Q2 2008 – Q1 2010 € million 8 6 5.0 4.3 4 33 3.3 31 3.1 2.2 2.0 2.0 2.3 2 0.5 0 -0.4 -0.8 -2 -1.3 -4 -3.7 -4 4.7 7 -6 -8 -10 -9 9.6 6 -10.0 10 0 -12 Q2/2008 Q3/2008 Q4/2008 Q1/2009 Q2/2009 Q3/2009 Q4/2009 Q1/2010 Operating profit / loss Profit / loss after taxes 23 7 May 20
Slide 24: Result of Management Company business
Management Company business Result of Management Company business • Turnover and profit increased clearly following the increase in management fees and carried interest income. • Profitability at a good level. Operating profit of Management Company business € million 10 € million 1-3/2010 1-3/2009 2
Slide 25: Management fees and carried interest
Management Company business Management fees and carried interest • Management fees were up +14% compared to comparable period. This increase was attributable to the fees paid by CapMan Buyout IX. • Carried interest totalled €2.4 million following the exit from financial administration services compa
Slide 26: Large medium-term carried interest potential
Management Company business Large medium-term carried interest potential • CapMan Equity VII A, B and Sweden as well as Finnmezzanine III A and B funds are expected to start generating carried interest during 2010-2011. • We consider it unlikely that CapMan Real Estate I would generate new carried i
Slide 27: Impact of own investments and carried interest potential: CapMan Equity VII
Analysing impact of own investments and carried interest potential: CapMan Equity VII 31 March 2010, € million CAPMAN EQUITY VII A B C SWEDEN IN TOTAL Fund size: €156.7m €56.5m €23.1m €67.0m €303.3m Paid-in capital vs. Fund size: 96% 100% 82% 96% 96% Portfolio at cost vs. Paid-in capital: 65% 68% 61
Slide 28: Impact of own investments and carried interest potential: CapMan Buyout VIII
Analysing impact of own investments and carried interest potential: CapMan Buyout VIII 31 March 2010, € million CAPMAN BUYOUT VIII In total Fund size: €440.0m Paid-in capital vs. Fund size: 78% Portfolio at cost vs. Paid Paid-in in capital: 86% Portfolio at fair value vs. Portfolio at cost: 90% CapM
Slide 29: Result of Fund Investment business
Fund Investment business Result of Fund Investment business • Positive developments in fair value of our investments strengthened during the quarter, and as a result Fund Investment business was profitable. • Fair values increased by 1.9% during Q1 2010. • Fair value changes have no impact on Group’
Slide 30: Fund investments and commitments
Fund Investment business Fund investments and commitments 31 March 2010 • The amount of remaining commitments was significantly lower than the year earlier due to the sales of commitments announced in summer 2009 and the investments made after Q1 2009. • CapMan invests in future funds 1–5% of origin
Slide 31: CapMan's own fund investments
Fund Investment business CapMan’s CapMan s own fund investments Key funds based on the size of original commitments 1. CapMan Buyout VIII €37.5 million, of which 78% paid in 2. CapMan Equity VII €16 million, of which 96% paid in 3. CapMan Buyout IX €13 million, of which 69% paid in 4 4. C M Life Cap
Slide 32: Key holdings for CapMan Plc through its fund investments
Fund Investment business Key holdings for CapMan Plc through its fund investments N sales Net l ini 2009 EBITA in i 2009 € million € million 1. 183.1 10.1 2. 346.0 18.8 3. 136.4* 9.8* 4 4. 601 2 601.2 23 9 23.9 5. 264.4 7.1 6. 77.5 / 43.7 9.6 / 5.2 7. 49.9 11.5 8. 35.5 0.9 9. 91.5 -3.4 10. 54.1 3.1
Slide 33: Share of associated companies' result: Access Capital Partners
Share of associated companies’ result: Access Capital Partners 31 March 2010 • Leading manager and advisor of Asset under management by Access European private equity funds of funds • Team of 31 professionals in Paris, € million Brussels, Munich and London 3,000 p • CapMan’s ownershipp 35%% 2,500 •
Slide 34: Key figures
Key figures • Target equity ratio at least 50%, realised 53% • Target ROE over 25% p.a, realised 18% p.a. 31.3.10 31.3.09 31.12.09 Earnings per share, cents* 3.3 -5.5 -3.0 Diluted, cents 3.3 -5.5 -3.0 Shareholders' equity / share, cents** 90.0 89.5 94.2 Share issue adjusted number of shares 84 281 7
Slide 35: Financial objectives
Financial objectives Objective Q1/2010 Average growth of capital under 3.6% growth y-on-y to 31 Mar 2010. Growth management at least 15% p.a. Average growth 30.4% in 2004 2004-2009. 2009. Return on equity over 25% p.a. Return on equity 18.1% p.a. Profitability Equity fund performance above 15% Net r
Slide 36: Future outlook
Future outlook Fund Investment Management Company business B i Business Returns on direct Management fees Carried interest fund investments from + real estate consulting g own balance sheet • Management fees and • Exit negotiation are underway in respect of a • We expect a neutral trend in income fr
Slide 37: Contents
• CapMan p in short • Market environment Contents • Q1 activity and result • Ownership and management changes 37 7 May 2010 CapMan IR presentation May 2010
Slide 38: Share price development
Share price development – CapMan, CapMan OMXH, OMXH LPX Europe 260 % 240 % 220 % CapMan 200 % 180 % OMX Helsinki All Share PI 160 % 140 % LPX Europe 120 % 100 % 80 % 1 Apr 1 May 1 Jun 1 Jul 1 Aug 1 Sep 1 Oct 1 Nov 1 Dec 1 Jan 1 Feb 1 Mar 1 Apr 1 May 09 09 09 09 09 09 09 09 09 10 10 10 10 10 38 7 May
Slide 39: CapMan's ownership
CapMan’s CapMan s ownership 31 March 2010, % of share capital or votes By number of shares By voting rights 22 % 30 % 36 % 38 % 17 % 6% 28 % 23 % Management and personnel Management and personnel C M P CapMan Partners t B B.V. V (senior ( i partners) t ) CapMan Partners B.V. (senior partners) Nomine
Slide 40: Management and Board
Management and Board CEO, Deputy CEO and CFO Lennart Simonsen Jerome Bouix Niko Haavisto CEO starting at 1 June Deputy CEO since CFO since 2010, Senior Partner 1 October 2009, 26 April 2010 S i Partner, Senior P t j i d joined CapMan in 2000 CapMan Plc Board of Directors Heikki Westerlund Teuvo Salm
Slide 41: Analysts following CapMan and IR schedule
Analysts following CapMan and IR schedule Analysts following CapMan IR schedule Cazenove, London 7 May 2010 Christopher Brown Q1 Result Tel. +44 ((0)) 20 7155 8145 Pohjola Bank Plc 10 May 2010 Suvi Kosonen Carnegie lunch seminar, Helsinki Tel. +358 10 252 4359 Nordea 17 May 2010 Martti Larjo Roadsho
Slide 42: Additional slides
• Group p incomes statement • Group balance sheet - assets Additional slides • Group balance sheet - equity and liabilities 42 7 May 2010 CapMan IR presentation May 2010
Slide 43: Group Income Statement
Group Income Statement € million 1–3/10 1–3/09 1–12/09 Turnover 11.4 8.1 36.3 Management fees 8.4 7.4 33.3 Carried interest 24 2.4 00 0.0 00 0.0 Real Estate consulting 0.4 0.6 2.4 Other income 0.2 0.1 0.6 Oth operating Other ti income i 01 0.1 00 0.0 01 0.1 Operating expenses -8.3 -8.4 -33.0 Fair va
Slide 44: Group balance sheet – Assets, IFRS
Group balance sheet – Assets, Assets IFRS € thousands 31.3.10 31.3.09 31.12.09 Tangible assets 768 1,065 838 Goodwill 10,245 10,985 10,245 Other intangible assets 2,830 3,205 2,972 Investments in associated companies 7,336 3,435 6,547 Investments at fair value through profit and loss Investments in
Slide 45: Group balance sheet – Total equity and liabilities, IFRS
Group balance sheet – Total equity and liabilities liabilities, IFRS € thousands 31.3.10 31.3.09 31.12.09 Share capital 772 772 772 Share premium account 38,968 38,968 38,968 Other reserves 38,546 33,829 37,347 Translation difference -328 -750 -392 Retained earnings -2,315 -198 1,097 Capital attribu