HGCapital Trust PLC · LSE:HGT
HGCapital Trust — Shareholder Meeting (May 2022)
22 slides from HGCapital Trust's shareholder meeting presentation, May 2022
Slide 1: Get connected
HgCapital Trust plc AGM Get connected To the 2nd largest software business in Europe This document accompanies the Annual report to 31 December 2021. The information in this document contains a summary of May 2022 information set out in this report. Reference should be made to the full FY Report & A
Slide 2: HGT overview: Consistent long-term compounding growth
HGT overview: Consistent long-term compounding growth FTSE 250 investment company listed on the LSE Direct investor only committed to Hg funds A Board of 6 NEDs with a wide range of skill sets and strong focus on strategy and governance who make all decisions on commitments to Hg funds Managed by Hg
Slide 3: Key financials for 2021: Strong performance over the year
Key financials for 2021: Strong performance over the year +44% £2.0bn NAV per share (440.5p) Net assets 31 December 2020: +24% 31 December 2020: £1.3bn +40% £1.9bn Share price (420.5p) Market capitalisation 31 December 2020: +21% 31 December 2020: £1.3bn 7p 1.4% Full year Dividend Total ongoing char
Slide 4: The power of a long-term investment strategy
Key financials for 2021: The power of a long-term investment strategy 18% NAV per share and 19% share price CAGR over the past 10 years v. 8% CAGR from the FTSE All-Share generated from consistently strong trading and realisations above book value Based on HGT’s share price at 31 December 2021 and a
Slide 5: Managing liquidity – levers in place
Key financials for 2021: Managing liquidity – levers in place Available liquid resources (23% of NAV) £470m including an undrawn bank facility of £99m New equity raised over 2021 £141m via tap issuance Cash returned to HGT over 2021 £271m through exits and refinancings Invested on behalf of HGT over
Slide 6: March 2022: Q1 at a glance
31 March 2022: Q1 at a glance +4.8% £358m* Available liquid resources (18% of NAV) Share price (435.5p) including an undrawn bank facility of £250m £12m New equity raised over Q1 2022 £2.0bn via tap issuance Market capitalisation £20m Cash returned to HGT in Q1 2022 -0.6% NAV per share (433.1p) £20m
Slide 7: Trading performance has continued to drive portfolio growth
Trading performance has continued to drive portfolio growth Average EBITDA growth of the top 20 portfolio companies was 28% over the last 5 years 35% 31% 30% 27% 16% 25% 27% 24% 22% 14% 2017 2018 2019 2020 2021 LTM sales growth LTM EBITDA growth 70% of the 2021 increase in unrealised valuation was d
Slide 8: Returning cash to HGT with significant realisations at uplifts to book value
Returning cash to HGT with significant realisations at uplifts to book value Average uplift to Average multiple of Average gross IRR book value over 2021 cost over 2021 over 2021 2.4x 30% 40% In the past 10 years Hg has realised 57 investments with an average uplift to valuation of 30% Past performa
Slide 9: HGT is Hg's largest client, committed to all Hg funds
HGT is Hg’s largest client, committed to all Hg funds Pension Plans, SWFs, Endowments, Insurance Cos etc c. $40bn Hg’s portfolio Hg’s largest companies LP investor HGT’s underlying HGT provides listed listed investor access to “the free base c. £3bn float” of the $102bn EV of Hg Software “Inc” HGT p
Slide 10: Strategy Fundamentals
Strategy Fundamentals Focus on a sector with Use scale as source Overinvest in long term growth and of advantage capabilities • Be the biggest • Add deep specialisation resilience • Build IP Culture of continuous And this results from Billions - capital deployed in winning businesses improvement hug
Slide 11: You achieve 10x in the 2nd decade what it took in the 1st
“You achieve 10x in the 2nd decade what it took you to achieve in the 1st” ©©Copyright Hg2022 Copyright Hg 2022 11
Slide 12: Hg's own flywheel effect in action
Hg’s own flywheel effect in action © Copyright Hg 2022 12
Slide 13: 'Hg Inc' is the #2 largest tech firm in Europe
‘Hg Inc’ is the #2 largest tech firm in Europe If quoted, Hg would be a Generated consistent returns of +1% FTSE 100 >30% IRR company for 15 years +24% Growing revenues and profits at c.20% CAGR, 2x-3x +8% the rate of comparable quoted companies +25% +13% +6%(1) +4% +11% +11% -2% Source: Factset, Eu
Slide 14: Single strategy across three funds - broad market coverage
Single strategy across three funds - broad market coverage Entry EV €1,500MM €500MM €100MM Company maturity COMMON FEATURES Shared Investment Benefit from c. 50 person Identical investment Dedicated execution teams Integrated origination and Committee and transaction support and strategy per fund co
Slide 15: Targeting robust and resilient 'Hg sweet-spot' business models
Targeting robust and resilient ‘Hg sweet-spot’ business models BUSINESS MODEL ATTRIBUTES DEEP SECTOR KNOWLEDGE… Tax & Accounting Business critical need delivered as software or service ERP & Payroll Legal and Compliance Subscription or repeat revenue model Automation and Engineering SWEET Insurance
Slide 16: A focused 'Hg Cluster' approach
A focused ‘Hg Cluster’ approach has driven deep sub-sector knowledge As at 31 December 2021 © Copyright Hg 2022 16
Slide 17: Portfolio team capability organised around core repeatable value creation levers
Our portfolio team capability is focused on and organised around our core repeatable value creation levers © Copyright Hg 2022 17
Slide 18: Responsible Investment
Responsible Investment AA+ + UNPRI rating 100% carbon neutral since 2019 48%female 35% women in Hg’s 45% of investment executive hires 31 nationalities represented employees executive team were female in 2021/22 across Hg >$8.5m committed to date Our purpose: Trusted to improve the future of million
Slide 19: Summary and outlook
Summary and outlook Against the backdrop of COVID-19, Hg’s portfolio has performed well The overall portfolio valuations were up over 52% for the year to 31 December 2021, returning over £4 billion of liquidity to Hg investors, including £271 million to HGT We are excited about the potential of our
Slide 20: Contact
Contact For further information on HgCapital Trust plc, please visit our website: www.hgcapitaltrust.com Or contact our Investor Relations Team at: investorrelations@hgcapitaltrust.com Laura Dixon Hannah Brown +44 78 2459 2894 +44 20 8078 9144 You can also follow us: Linkedin at www.linkedin.com/com
Slide 21: Disclaimer
Disclaimer 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 WITHIN AUSTRALIA, CANADA,
Slide 22: Disclaimer
Disclaimer 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-looking terminology, inclu