Slide 1: Annual General Meeting 6 July 2005
Annual General Meeting 6 July 2005 1
Slide 2: Annual general meeting 6 July 2005
Annual general meeting 6 July 2005 2
Slide 3: Baroness Hogg, Chairman
Baroness Hogg Chairman 3
Slide 4: The Board of Directors
The Board of Directors 4
Slide 5: Sir Robert Smith
Sir Robert Smith 5
Slide 6: Christine Morin-Postel
Christine Morin-Postel 6
Slide 7: Michael Queen
Michael Queen 7
Slide 8: Danny Rosenkranz
Danny Rosenkranz 8
Slide 9: Tony Brierley
Tony Brierley 9
Slide 10: Philip Yea
Philip Yea 10
Slide 11: Simon Ball
Simon Ball 11
Slide 12: Oliver Stocken
Oliver Stocken 12
Slide 13: Dr Peter Mihatsch
Dr Peter Mihatsch 13
Slide 14: Fred Steingraber
Fred Steingraber 14
Slide 15: Rod Perry
Rod Perry 15
Slide 16: A year of progress on many fronts
Annual General Meeting 6 July 2005 “A year of progress on many fronts.” 16
Slide 17: Comparative return
Annual General Meeting 6 July 2005 Comparative return 1 year 15.9% 15.6% 3 years 0.5% 2.0% 5 years -4.7% 3i return (NAV + dividend) -1.4% FTSE All-Share Comparison of 3i’s compound annual return (net asset value plus dividends reinvested) with the FTSE All-Share total return index for the year to 31
Slide 18: Share price since flotation
Annual General Meeting 6 July 2005 Share price since flotation 3i Group FTSE 100 FTSE All Share 2000.0 1800.0 1600.0 1400.0 1200.0 1000.0 800.0 600.0 400.0 200.0 0.0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 Source: Datastream 18
Slide 19: £500m return of capital to shareholders
Annual General Meeting 6 July 2005 £500m return of capital to shareholders • Special dividend 40.7 pence per share • Share buyback programme circa £250m 19
Slide 20: Annual General Meeting 6 July 2005
Annual General Meeting 6 July 2005 20
Slide 21: Philip Yea, Chief Executive
Philip Yea Chief Executive 21
Slide 22: Vision
Annual General Meeting 6 July 2005 Vision 3i shall be the private equity firm of choice • Operating on a world-wide scale • Producing consistent market beating returns • Acknowledged for our partnership style • Winning through our unparalleled resources 22
Slide 23: Our return goals over the cycle
Annual General Meeting 6 July 2005 Our return goals over the cycle Cash to cash Cycle Vintage year % returns pa volatility volatility Buyouts 20% +/- 5 +/- 10 Growth Capital 20% +/- 3 +/- 7 Venture Capital 35% +/- 10 +/- 20 23
Slide 24: The team
Annual General Meeting 6 July 2005 The team Jonathan Russell Michael Queen Jo Taylor Paul Waller Chris Rowlands Rod Perry Simon Ball Denise Collis Tony Brierley 24
Slide 25: Performance highlights – year to 31 March 2005
Annual General Meeting 6 July 2005 Performance highlights – year to 31 March 2005 • A total return of £512m − 15.9% on opening shareholders’ funds • Realisations of £1.3bn − £1.7bn including co-investment funds • Investment of £755m − £962m including co-investment funds • International business now
Slide 26: Portfolio value and gross returns by business line
Annual General Meeting 6 July 2005 Portfolio value and gross returns by business line Portfolio by value £4,301m* 2005 2004 Buyouts 36% Buyouts 22% 25% Growth Capital 24% 23% Venture Capital 11% 5% Growth Capital 29% SMI 7% 17% Venture Capital 17% Gross portfolio return 18% 19% SMI 18% *Excludes co-
Slide 27: World-wide scale
Annual General Meeting 6 July 2005 World-wide scale Trend in international portfolio value Asian development % 50 48% • China (Shanghai opening) 42% 40 34% 37% • India (MD recruited) 30 29% • Japan 22% 20 • Direct and through 10 relationships 0 2000 2001 2002 2003 2004 2005 Year to 31 March 27
Slide 28: Buyouts
Annual General Meeting 6 July 2005 Buyouts • The market • 3i • Strategy 28
Slide 29: Growth Capital
Annual General Meeting 6 July 2005 Growth Capital • The market • 3i • Strategy 29
Slide 30: Venture Capital
Annual General Meeting 6 July 2005 Venture Capital • The market • 3i • Strategy 30
Slide 31: Current activity
Annual General Meeting 6 July 2005 Current activity • Good start to 2005/2006 • Healthy forward pipeline 31
Slide 32: Annual General Meeting 6 July 2005
Annual General Meeting 6 July 2005 32
Slide 33: Simon Ball, Finance Director
Simon Ball Finance Director 33
Slide 34: Financial performance highlights
Annual General Meeting 6 July 2005 Financial performance highlights • Total return £512m • Total return on opening shareholders’ funds 15.9% • Final dividend 9.3p • Net asset value per share 603p • Realisation proceeds £1.3bn − Including co-investment funds £1.7bn • Realised profits on disposal £260
Slide 35: Total return
Annual General Meeting 6 July 2005 2004 Total return 2005 (as restated) £m £m Realised profits on disposal of investments 260 228 Unrealised profits on revaluation of investments 270 336 Portfolio income 232 199 Gross portfolio return 762 18% 763 19% Fund management fee income 30 35 Carried interest
Slide 36: Investment
Annual General Meeting 6 July 2005 Investment • 67 new investments UK 44% Buyouts 45% • 56% outside UK • Top 10 investments account for 33% Growth 35% Continental Europe 45% Capital • Average new completed investment size − Buyouts £18m* Venture 19% Capital − Growth Capital £7m US 7% Asia 4% − Ventu
Slide 37: Realisations
Annual General Meeting 6 July 2005 Realisations UK 69% Buyouts 39% • 443 realisations • 12 IPOs from six different markets Growth • Top 10 account for 39% of 34% Capital proceeds Continental • Equity uplift over value 40% 28% Venture 12% Europe Capital • Portfolio turn by value 24% SMI 15% US & Asia
Slide 38: Balance sheet
Annual General Meeting 6 July 2005 Balance sheet 2004 2005 (as restated) £m £m Investment assets 4,301 4,326 Other net assets/(liabilities) (138) (160) 4,163 4,166 Net borrowings 526 936 Shareholders’ funds 3,637 3,230 4,163 4,166 Gearing 14% 29% 38
Slide 39: Return of capital to shareholders
Annual General Meeting 6 July 2005 Return of capital to shareholders • Intention to return £500m to shareholders • Pro-forma gearing at 31 March 2005 reflecting return of capital: 34% • Enhancing total return to shareholders • Through: − A special dividend of approximately £250m (40.7p per share) −
Slide 40: Financial summary
Annual General Meeting 6 July 2005 Financial summary A business that: • Has delivered gross returns over 20% for the second year in Buyouts and Growth Capital • Has improved Venture Capital returns (11%) • Is seeing the benefits of a more focused approach • Has generated positive cash flow of £433m,
Slide 41: Annual General Meeting 6 July 2005
Annual General Meeting 6 July 2005 41
Slide 42: Roger Perkin, Ernst & Young
Roger Perkin Ernst & Young 42
Slide 43: Resolutions commentary
Annual General Meeting 6 July 2005 Resolutions commentary • AGM − Political donations − Limit on directors’ fees • EGM − Special dividend − On-market purchase of shares 43
Slide 44: Resolution 1: Receive accounts and reports
Annual General Meeting 6 July 2005 Resolution 1 Proxy votes lodged for this Resolution: 97.84% For, 0.18% Discretionary, 1.80% Abstain and 0.18% Against “THAT the Company’s Accounts for the year ended 31 March 2005 and the Directors’ report and Auditors’ report thereon be and they are hereby receive
Slide 45: Resolution 2: Approve remuneration report
Annual General Meeting 6 July 2005 Resolution 2 Proxy votes lodged for this Resolution: 97.42% For, 0.18% Discretionary, 1.60% Abstain and 0.80% Against “THAT the Directors’ remuneration report for the year ended 31 March 2005 be and it is hereby approved” 45
Slide 46: Resolution 3: Final dividend of 9.3 pence
Annual General Meeting 6 July 2005 Resolution 3 Proxy votes lodged for this Resolution: 99.81% For, 0.18% Discretionary, 0.01% Abstain and 0.04% Against “THAT a final dividend of 9.3 pence per share be and it is hereby declared, payable to those shareholders whose names appeared on the Register of M
Slide 47: Resolution 4: Reappoint Mr S P Ball
Annual General Meeting 6 July 2005 Resolution 4 Proxy votes lodged for this Resolution: 99.69% For, 0.19% Discretionary, 0.04% Abstain and 0.08% Against “THAT Mr S P Ball be and he is hereby reappointed as a Director of the Company” 47
Slide 48: Resolution 5: Reappoint Dr P Mihatsch
Annual General Meeting 6 July 2005 Resolution 5 Proxy votes lodged for this Resolution: 99.66% For, 0.19% Discretionary, 0.05% Abstain and 0.1% Against “THAT Dr P Mihatsch be and he is hereby reappointed as a Director of the Company” 48
Slide 49: Resolution 6: Reappoint Sir Robert Smith
Annual General Meeting 6 July 2005 Resolution 6 Proxy votes lodged for this Resolution: 99.56% For, 0.19% Discretionary, 0.04% Abstain and 0.21% Against “THAT Sir Robert Smith be and he is hereby reappointed as a Director of the Company” 49
Slide 50: Resolution 7: Reappoint Mr F G Steingraber
Annual General Meeting 6 July 2005 Resolution 7 Proxy votes lodged for this Resolution: 99.53% For, 0.19% Discretionary, 0.05% Abstain and 0.23% Against “THAT Mr F G Steingraber be and he is hereby reappointed as a Director of the Company” 50
Slide 51: Resolution 8: Reappoint Mr O H J Stocken
Annual General Meeting 6 July 2005 Resolution 8 Proxy votes lodged for this Resolution: 99.35% For, 0.19% Discretionary, 0.04% Abstain and 0.42% Against “THAT Mr O H J Stocken be and he is hereby reappointed as a Director of the Company” 51
Slide 52: Resolution 9: Reappoint Ernst & Young as auditors
Annual General Meeting 6 July 2005 Resolution 9 Proxy votes lodged for this Resolution: 99.52% For, 0.18% Discretionary, 0.03% Abstain and 0.27% Against “THAT Ernst & Young LLP be and they are hereby reappointed as Auditors of the Company to hold office until the conclusion of the next General Meeti
Slide 53: Resolution 10: Authorise auditors' remuneration
Annual General Meeting 6 July 2005 Resolution 10 Proxy votes lodged for this Resolution: 99.56% For, 0.18% Discretionary, 0.03% Abstain and 0.23% Against “THAT the Board be and it is hereby authorised to fix the Auditors’ remuneration” 53
Slide 54: Resolution 11: Increase limit on directors' fees
Annual General Meeting 6 July 2005 Resolution 11 Proxy votes lodged for this Resolution: 99.14% For, 0.18% Discretionary, 0.09% Abstain and 0.59% Against “THAT the limit on the aggregate of all fees paid to Directors pursuant to Article 97 of the Company’s Articles of Association (excluding amounts
Slide 55: Resolution 12: Political expenditure authority
Annual General Meeting 6 July 2005 Resolution 12 Proxy votes lodged for this Resolution: 97.73% For, 0.18% Discretionary, 0.08% Abstain and 2.01% Against To renew the Company’s authority to incur political expenditure (The full text of this Resolution is set out in the Notice of AGM) 55
Slide 56: Resolution 13: 3i plc political expenditure authority
Annual General Meeting 6 July 2005 Resolution 13 Proxy votes lodged for this Resolution: 97.72% For, 0.18% Discretionary, 0.08% Abstain and 2.02% Against To renew the authority of 3i plc to incur political expenditure (The full text of this Resolution is set out in the Notice of AGM) 56
Slide 57: Annual General Meeting 6 July 2005
Annual General Meeting 6 July 2005 57
Slide 58: Commencement of Extraordinary General Meeting
Commencement of Extraordinary General Meeting 58
Slide 59: EGM Resolutions
EGM Resolutions 59
Slide 60: EGM Resolution 1: Consolidate share capital
Extraordinary General Annual General Meeting Meeting 6 July6 2005 July 2005 Resolution 1 Proxy votes lodged for this Resolution: 99.17% For, 0.12% Discretionary, 0.01% Abstain and 0.70% Against To consolidate the authorised and issued share capital of the Company into ordinary shares of 53⅛ pence ea
Slide 61: EGM Resolution 2: Market purchases of own shares
Extraordinary General Annual General Meeting Meeting 6 July6 2005 July 2005 Resolution 2 Proxy votes lodged for this Resolution: 99.82% For, 0.13% Discretionary, 0.01% Abstain and 0.04% Against Special Resolution To authorise the Company to make market purchases of its own shares (The full text of t
Slide 62: EGM Resolution 3: Amend Articles of Association
Extraordinary General Annual General Meeting Meeting 6 July6 2005 July 2005 Resolution 3 Proxy votes lodged for this Resolution: 99.80% For, 0.13% Discretionary, 0.03% Abstain and 0.40% Against Special Resolution To amend the Company’s Articles of Association (The full text of this Resolution is set
Slide 63: Annual General Meeting 6 July 2005
Annual General Meeting 6 July 2005 63