Slide 1: Full Year Results 31 December 2020
FULL YEAR RESULTS 31 December 2020
Slide 2: Disclaimer
Disclaimer NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR presentation. recommendation that any person should subscribe for or purchase any INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA The Company or any member, employee, counsel, officer, director, securities of the Company. OTHER THAN TO PERS
Slide 3: Contents
Contents 1 Overview # 2 Purpose, vision & strategy # 3 Results # 4 Portfolio review # 5 Summary # © IP GROUP PLC 2021 | 2
Slide 4: Overview
Overview RECORD FINANCIALS PORTFOLIO OUTLOOK FOR 2021 £1.3bn 125.3pps £1.1bn Hard NAV 107.8pps £190m Record return (FY19: -£74m) £1.1bn Continued strong activity in 2019 2020 Raised by portfolio portfolio (FY19: £430m) £191m Well positioned to benefit from Record cash realisations (140% increase) st
Slide 5: Purpose, vision & strategy
02 Purpose, vision & strategy Evolving GREAT IDEAS into WORLD-CHANGING businesses
Slide 6: Purpose, vision and strategy
Purpose, vision and strategy PURPOSE VISION STRATEGY © IP GROUP PLC 2021 | 5
Slide 7: Group overview
Group overview SECTOR- COUNTRY- FOCUSED FOCUSED THIRD PARTY CAPITAL £371m 33% £80m £350m £59m 5% £15m Third party investors UK £65m £1.0bn 6% £56m A$100m advisory £213m £393m £7m 19% 35% 1% Graphics not to scale © IP GROUP PLC 2021 | 6 %s reflect proportion of £1.1bn portfolio value attributable to
Slide 8: 20 years of impact investing
20 years of impact investing © IP GROUP PLC 2021 | 7
Slide 9: Long-term trends in HNAV/share and share price
Long-term trends in HNAV/share and share price Share price HNAV per share 125 119 55 22 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 ‘Hard’ NAV or HNAV reflects Net Assets/Total Equity less goodwill and intangibles © IP GROUP PLC 2021 | 8 Data points as a
Slide 10: Long-term trends in portfolio investment/divestment
Long-term trends in portfolio investment/divestment 200.0 200.0 Net (inv)/exits 150.0 150.0 Investments 100.0 100.0 Realisations 50.0 50.0 - - (50.0) (50.0) (100.0) (100.0) (150.0) (150.0) 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017* 2018 2019 2020 * In addition, in 20
Slide 11: Results
03 Results Evolving GREAT IDEAS into WORLD-CHANGING businesses
Slide 12: Results: HNAV per share waterfall
Results: HNAV per share waterfall 0.5 1.3 2.0 5.1 125.3 0.9 0.4 7.9 7.8 107.8 Opening Strategic Life Sciences Deeptech Cleantech United States Carry accrual Net overheads Other P&L Closing Opportunities items © IP GROUP PLC 2021 | 11
Slide 13: Results: net overheads
Results: net overheads** Net overheads Year on Year Comparison: Net overheads as % Hard NAV*: £22.6m £21.6m 2.2% £0.2m 2.0% £0.5m £1.7m £1.3m 1.8% £4.0m 1.6% £3.9m 1.4% China Aus 1.2% US UK 1.0% £14.7m £12.9m 2017*** 2018 2019 2020 AIS 2019 2020 UK 1.5% 1.2% £3.0m £2.0m US 7.6% 6.9% 2019 2020 Austra
Slide 14: Results: net assets
Results: net assets What’s in a share? Hard NAV £1.3bn ~13% Cash, Loan and Other Net Assets 16p £1,163m 32p Portfolio Cash and deposits £1,046m Other Loan ~26% Hard NAV Other 32p 125pps Portfolio 8p 4p £270m 3p £195m 2p 3p Other Top 20 (£17m) (£34m) (£83m) (£67m) 25p FY 2019 FY 2020 © IP GROUP PLC 2
Slide 15: Results: cash flows
Results: cash flows Opening Closing 270.3 Gross 194.9 270.3 EIB facility (82.5) (67.3) Net 112.4 203.0 194.9 (21.6) 191.0 (16.9) (11.9) 6.6 (71.8) Opening gross Overheads Debt & interest Acqns, WC/other US funding Investment * Realisations Closing gross * Includes fund investment © IP GROUP PLC 2021
Slide 16: Capital allocation framework
Capital allocation framework ORGANIC MANAGE RETURNS TO GROWTH GEARING SHAREHOLDERS Allocate capital to achieve: • Group primarily equity funded but • Significant steps taken towards • impact alongside attractive financial use appropriate debt cashflow sustainability returns • Ensure servicing requir
Slide 17: Portfolio review
04 Portfolio review Evolving GREAT IDEAS into WORLD-CHANGING businesses
Slide 18: Portfolio performance summary
Portfolio performance summary Life Sciences Top 20 holdings Focus £371m Deeptech Other 10% £393m Cleantech £1.1bn1 16% US 74% £7m £65m Australasia £59m £213m Strategic Opps 2020 portfolio fair value movements/Return on Opening portfolio 23% £227m £231m 27% 2 29% 44% £85m £83m 3% £54m 6% 8% (13)% £7m
Slide 19: Top 20 Holdings & fair value movement in 2020
Top 20 Holdings & fair value movement in 2020 Previously in Top20 Fair value change Realisations £340.3m Ceres Power Holdings plc £53.4m £128.0m Autifony Therapeutics Limited (£8.4m) - Yoyo Wallet Limited (£6.7m) - £85.6m Creavo Medical Technologies Limited (£6.2m) - £76.6m PsiOxus Therapeutics Limi
Slide 20: Oxford Nanopore Technologies
Oxford Nanopore Technologies Significant technical Strong growth continues SARS-COV-2 test cases progress $72m 20 $45m $24m https://nanoporetech.com/about- $6m us/news/new-nanopore- $1m sequencing-chemistry-developers- 2015 2016 2017 2018 2019 hands-set-deliver-q20-99-raw-read • Strong, five year re
Slide 21: Parkwalk
Parkwalk Market-leading growth EIS manager Contributor to IP Group* £m AUM (£m) 351 2.3 303 1.7 1.6 220 161 86 (0.1) 2016 2017 2018 2019 2020 2017 2018 2019 2020 Exciting pipeline of opportunities 22.4% 19.3% PW% FD PW% FD Electric Motors & Genetic data analysis & First institutional fund Controller
Slide 22: Summary
05 Summary Evolving GREAT IDEAS into WORLD-CHANGING businesses
Slide 23: Summary
Summary Record financials • £190m return on HNAV and £191m of cash exits • £1.3bn HNAV including £270m gross cash • Maiden dividend of 1pps Impact-focused, maturing portfolio • Highly aligned to SDGs • Portfolio companies raised £1.1bn, three ‘unicorns’ now created 2021 outlook • Good progress to da
Slide 24: Appendices
Appendices
Slide 25: Board
1 - Board Sir Douglas Flint Mike Townend Dr Elaine Sullivan Non-executive Chairman Chief Investment Officer Non-executive Director Previously Group Chairman of HSBC, spent 15 years as HSBC’s Group Finance Director, joining Capital markets background 27 years’ international pharmaceutical industry fr
Slide 26: IP Group's history
2 - IP Group’s history Launch of NE Tech IP Venture Fund II Acquisition of Touchstone Fund 2013 Innovations Flotation 2010 2017 Main market & 2003 name change Exited holding in 2006 Ceres Power 2020 Acquisition of Acquisition of Parkwalk Incorporated as Advisors Acquires Launch of IP Venture Agreeme
Slide 27: Shareholder register (above 2% holders)
3 - Shareholder register (above 2% holders) Shareholder % holding Railways Pension Scheme 15.3% Baillie Gifford 4.9% Lansdowne Partners 4.6% Liontrust Sustainable Investments 4.2% Blackrock 4.2% Imperial College 4.2% Odey Asset Management 3.1% Schroder Investment Management 3.1% Legal & General Inve
Slide 28: Approach to impact and ESG
4 - Approach to impact and ESG PURPOSE: IMPACT AS A PLC AS A RESPONSIBLE • Impact measured against • Materiality assessment INVESTOR SDG framework • Non-financial KPI • Ethical Investment framework • Particular focus on transition • New reporting frameworks • Ethics Committee established to net zero
Slide 29: HNAV per share waterfall
5 - HNAV per share waterfall 0.5 2.0 3.9 0.9 125.3 1.3 1.4 3.7 5.0 7.2 107.8 Opening Oxford Ceres Power Hinge Health Carry accrual Other net Other net US Portfolio Net Other P&L Closing Nanopore private gains quoted gains overheads items © IP GROUP PLC 2021 | 28
Slide 30: Life Sciences Portfolio
6 - Life Sciences Portfolio £392.5m £85.6m Closing FV FV movement £85.1m £42.1m £39.4m £(22.7)m £30.2m £313.5m £(13.6)m £24.7m £22.9m £19.0m Opening Invested Realised Other Fair value Closing £12.3m £11.0m movement £4.5m £4.2m 2020 Key Events • Hinge Health closed $300m series D round at $2.7bn valu
Slide 31: Deeptech portfolio
7 - Deeptech portfolio £212.5m £36.8m Closing FV FV movement £6.6m 36 £(4.9)m £8.7m £23.6m £202.1m £14.8m £14.4m £9.8m £7.8m Opening Invested Realised Fair value Closing £6.4m movement £4.9m £1.0m 2020 Key Events • Mirriad announced contract with a US-based “tier one media giant”, and completed a £2
Slide 32: Cleantech Portfolio
8 - Cleantech Portfolio £53.4m £123.0m £10.0m Closing FV FV movement £58.8m £(131.4)m £54.2m £2.9m Opening Invested Realised Other Fair value Closing £15.0m movement 2020 Key Events • Ceres Power strong price performance and sale of full IP Group holding £4.9m generating proceeds of £128m, realising
Slide 33: North America Portfolio
9 - North America Portfolio £18.2m Closing FV £4.7m £(5.4)m £15.4m FV movement £(1.3)m £9.4m £64.5m £10.9m £10.8m £57.1m Opening Invested Other Fair value Third-party Closing movement funding £3.7m 2020 Key Events • MOBILion closed a $35m Series B funding round to expand its product portfolio, and a
Slide 34: Australia & New Zealand Portfolio
10 - Australia & New Zealand Portfolio £1.9m £7.3m £0.3m Closing FV £1.7m £3.4m £1.4m £3.6m Opening Invested Fair value Closing movement 2020 Key Events • AMSL Aero unveiled the worlds most efficient eVTOL vehicle in November £0.2m alongside their partnership with Australian air ambulance company, C
Slide 35: Summary income statement
11 – Summary income statement 2020 (£m) 2019 (£m) A Core business Movement in portfolio value including funds 228.0 (44.6) Income 6.2 8.6 Overhead (incl. incentives) (27.8) (31.2) Net operating costs (21.6) (22.6) Incentive costs including carry accrual (non-cash) (17.2) (1.0) Consolidated portfolio
Slide 36: Portfolio valuation approach
12 – Portfolio valuation approach FY 2020 FY 2019 Quoted Recent financing 3% 7% 2% 11% (<9 months) 19% Recent financing 23% (>9 months) Other valuation methods 57% 41% Debt 10% 27% • Group seeks to use observable market data as the primary basis for determining asset fair values where possible (bid
Slide 37: EIB debt repayment profile
13 – EIB debt repayment profile 18.0 80.0 16.0 70.0 14.0 60.0 Debt repayments per annum 6.3 6.3 6.3 6.3 12.0 50.0 Debt facility 10.0 40.0 8.0 3.2 3.2 3.2 3.2 30.0 6.3 6.0 6.3 20.0 4.0 6.0 6.0 6.0 6.0 2.0 10.0 3.2 3.1 1.8 0.0 0.0 2020 2021 2022 2023 2024 2025 2026 IP Group Facility Touchstone Facilit
Slide 38: Portfolio Reconciliation: Gross to net
14 – Portfolio Reconciliation: Gross to net Number IPG FV (£m) Life sciences 40 392.5 Deeptech 36 212.5 Cleantech 12 58.8 Strategic 4 370.6 Total UK 92 1,034.4 US 27 64.5 Australasia 12 7.3 De minimis & organic 77 11.9 Net portfolio 208 1,118.1 Attributable to third parties/revenue share n/a 44.6 To
Slide 39: News from the top ten companies
15 – News from the top ten companies Company Group fair value/ Recent news flow shareholding • Raises £84.4m of new capital, bringing total for the year to £162.1m. • Launches LamPORE test for the detection of SARS-CoV-2; initial order of 450k tests. £340.3m • Involvement in genomic surveillance of
Slide 40: News from the top ten companies (cont.)
16 – News from the top ten companies (cont.) Company Group fair value/ Recent news flow shareholding • Exceeded order forecasts during the year, reflecting the imminent emergence of mass market augmented reality products. £26.1m • Counts eight of the world’s top ten tech and social media companies a
Slide 41: Ceres Power: £1m to £1bn in less than 8 years
17 – Ceres Power: £1m to £1bn in less than 8 years1 • c£128m (total proceeds) = 7x multiple and gross realised and unrealised IRR of c48% • The Ceres proceeds more than “repay” all of the investments in the Cleantech portfolio. • Rescued & supported the world’s leading fuel cell technology company w
Slide 42: Evolving great ideas into world-changing businesses
EVOLVING GREAT IDEAS INTO WORLD-CHANGING BUSINESSES. The Walbrook Building 25 Walbrook IP Group was set up with a mission to evolve great ideas, mainly from our partner universities, into world-changing businesses. London EC4N 8AF We achieve thisbusinesses. world-changing by systematically helpingth