ICG plc · LSE:ICG
ICG — Intermediate Capital Group — Investor Day (November 2021)
49 slides from ICG's investor day presentation, Nov 18, 2021
Slide 1: ICG Asia Investor Day 2021
2021 Investor Day ICG Asia Investor Day 18 NOVEMBER 2021 PRIVATE AND CONFIDENTIAL
Slide 2: Agenda
Agenda Introduction Wooseok Jun, Head of Asia pacific Asia strategy overview Wooseok Jun, Head of Asia pacific Fund performance Wooseok Jun, Head of Asia pacific Everlight exit James Giannas, Associate Director Asset performance Fiona Newton, Associate & Aman Sharma, Associate Director Ellen Kim, As
Slide 3: Asia strategy overview
Asia strategy overview WOOSEOK JUN, HEAD OF ASIA PACIFIC PRIVATE AND CONFIDENTIAL
Slide 4: ICG Asia – a year in review
ICG Asia – a year in review Strong visibility to $1bn target with 5 LPs in Asia IV fundraise late stage of DD $243m invested in three deals LTM, Strong deployment $1.7bn pipeline looking forwards Continued robust performance across fund Resilient portfolio III & IV assets Everlight 4.5x return, furt
Slide 5: Fund IV new investments
Fund IV new investments $116m Malaysia Consumer Staples $243m $67m Korea E-Commerce Invested Korea $61m High-end tech manufacturing Source: ICG as at 30 September 2021 PRIVATE AND CONFIDENTIAL 5
Slide 6: Market overview
Market overview Relationships more important Buoyant private markets than ever Deal activity accelerated through Local presence is essential 2021 Increase in non-vanilla situations Valuations at all time highs Banks becoming more selective in Some opportunistic activity in leverage provi
Slide 7: Strong GDP rebound in Asia
Strong GDP rebound in Asia GDP outlook 2020-2026 Share of world GDP Emerging Asia US EU UK % Asia EU US 40 140 135 35 130 125 120 30 115 110 25 105 100 20 95 90 15 2019 2020 2021 2022 2023 2024 2025 2026 2000 2002 2004 2006 2008 2010 2012 2014 2016 2018 2020 2022 2024 2026 Source: IMF World Economic
Slide 8: Deal activity is accelerating
Deal activity is accelerating USD mn 130 350 300 Average Deal size (USD mn) 110 250 Number of deals 200 90 150 100 70 50 Q4 2019 Q1 2020 Q2 2020 Q3 2020 Q4 2020 Q1 2021 Q2 2021 Q3 2021 Number of deals Average Deal Size (USD mn) Source: Preqin, November 2021. Buyout, add-on and merger transactions in
Slide 9: Despite market uncertainties
Despite market uncertainties PRIVATE AND CONFIDENTIAL 9
Slide 10: Asia IV ideally placed to target the market
Asia IV ideally placed to target the market 100% 90% Equity 80% Cumulative Investment Cost 70% 60% Structured Notes 50% 40% 30% Junior Mezzanine 20% 10% Senior Mezzanine 0% Senior Debt Risk Adjusted Classification Downside Protection Stable regions Flexible approach Source: Graphs above are reflecti
Slide 11: Rich opportunity set across all three pillars
Rich opportunity set across all three pillars CORPORATE OPPORTUNITY SPONSORED LBO Family owners, founders and Significant number of companies in LBO activity has rebounded strongly management teams re-evaluating financial stress following crisis priorities following crisis Tapering of govern
Slide 12: Strategy fundamentals remain strong
Strategy fundamentals remain strong 19 year track record Local presence 4 local offices Flexible Well suited to complex markets investment Focus on downside protection approach 15 local investment executives Specialised team Support from ICG’s platform Source: ICG as at 30 September 2021
Slide 13: Fund performance
Fund performance WOOSEOK JUN, HEAD OF ASIA PACIFIC PRIVATE AND CONFIDENTIAL
Slide 14: Asia III year in review
Asia III Asia IV Year in review Realisations • Everlight exit for 5.6x MM 2.9x • Realised returns of 2.9x MM Realised MM • ~100% realised on invested cost Strong market for exits Asia • Favourable market conditions for exits 90% III • Yudo IPO expected within the next 12 months DPI • Significant fur
Slide 15: Realisations to date
Asia III Asia IV Realisations to date 35% Realised Gross IRR 25% 21% 44% Gross IRR Gross IRR Gross IRR 2.9x Realised Gross MM 1.5x 1.5x 5.6x Gross MM Gross MM Gross MM Strong underlying $62m $91m $380m performance on Total Return Total Return Total Return existing portfolio Source: ICG as at 30 Sept
Slide 16: Forecast returns show significant further upside
Asia III Asia IV Forecast returns show significant further upside 22% Everlight 5.0x 4.0x Forecast Gross IRR 3.0x Yudo Coreapuff Money Multiple 2.0x PSB Academy Cura 2.3x Forecast Gross MM TIME PGT RSEA 1.0x Significant further value accretion expected 5% 10% 20% 30% 50% 100% before exits Realised F
Slide 17: Portfolio resilience through diversification
Asia III Asia IV Portfolio resilience through diversification Instrument Diversification Sector Diversification $1,000m +11% $900m +30% +10% $800m +5% +3% Strong Upside Potential $700m Unrealised Return $600m Inherently Resilient Sectors $500m $400m Equity $300m Structured Notes Realised $200m Retur
Slide 18: Asia IV year in review
Asia III Asia IV Year in review Strong early deployment • 3 new investments 45% • 45% invested Invested • Several live opportunities in the pipeline Asia Team build out • 4 new hires 15 IV • Sourcing firepower boosted across Asia Team Members Fund performance • Unrealised value of $300m $300m • Valu
Slide 19: Strong deployment so far
Asia III Asia IV Strong deployment so far Consumer Malaysia staples Consumer discretionary Korea $243m Industrial Korea Amounts are inclusive of ICG co-invest PRIVATE AND CONFIDENTIAL 19
Slide 20: Excellent Fund performance
Excellent Fund performance Fund Status Vintage Commitments Gross MM Gross IRR Asia I Unrealised 2005 $500m 1.8 x 16% Asia II Unrealised 2008 $600m 1.8 x 14% Asia III Unrealised 2014 $691m 2.0 x 22% Asia IV Investing 2020 $545m (Current) 1.3 x 56% Portfolio Value Growth (LTM) +$168m 1.8x 2.0x Gross M
Slide 21: Key highlights
Key highlights Value locked in through exits 2.9x ICAP III Realised MM Excellent portfolio 2.3x performance ICAP III Forecast Gross MM Asia Strong early deployment 45% ICAP IV Invested Expanding team 15 Team members PRIVATE AND CONFIDENTIAL 21
Slide 22: Everlight exit
Everlight exit JAMES GIANNAS, ASSOCIATE DIRECTOR PRIVATE AND CONFIDENTIAL
Slide 23: Everlight investment overview
ICG Asia Pacific Fund III US$84m Company description Entry EBITDA • #1 teleradiology player in UK/Ireland, Australia/NZ A$8m • Market leading proprietary technology platform connecting a global pool of Entry Senior LTV Ratio radiologists to over-run hospitals constantly short of supply Invested 1.6x
Slide 24: Everlight Covid-19 impact and ICG value creation
ICG Asia Pacific Fund III Covid-19 impact and mitigation • Everlight was significantly impacted as Covid-19 lockdowns reduced volumes, however the impact was mitigated by the partially variable cost-based and Board driven cost-saving initiatives led by ICG • ICG paused the exit process in Mar-20 and
Slide 25: Asset performance
Asset performance FIONA NEWTON, ASSOCIATE & AMAN SHARMA, ASSOCIATE DIRECTOR ELLEN KIM, ASSOCIATE DIRECTOR & HANSOO KIM, VICE PRESIDENT KHEE HONG GOH, VICE PRESIDENT PRIVATE AND CONFIDENTIAL
Slide 26: RSEA investment overview
ICG Asia Pacific Fund III US$77m Company description Entry EBITDA • Leading specialist safety products and workwear distributor in Australia. A$19m • Omni-channel provider (instore, online, on-site) servicing B2B & B2C customers. Entry Senior LTV Ratio Invested • RSEA also operates a road safety equ
Slide 27: RSEA Covid-19 impact and mitigation
ICG Asia Pacific Fund III Covid-19 impact and mitigation • RSEA was positively impacted by Covid19, with one-off Covid19 PPE sales boosting revenue by +A$100m through FY20/21. • Worked closely with the Australian Government after being appointed to the Federal Government’s Covid-19 Response Team. •
Slide 28: SCF investment overview
ICG Asia Pacific Fund II Company description Entry EBITDA A$14.7m • Leading Australian supplier of specialised and standard shipping containers for rail cargo and liquid transport, storage and portable accommodation. • Total fleet of 13,000 containers across 7 depots and is the #1 supplier to the ra
Slide 29: SCF trading update
ICG Asia Pacific Fund II Trading update Gross container capital (A$m) ROCC (%) 17.0% 16.8% 17.1% 163 129 140 FY19A FY20A LTM Sep-21A FY19A FY20A LTM Sep-21A Utilisation (%) Senior debt and leverage (x) 60 2.2x 50 1.9x 2.0x 40 1.3x 30 1.2x 74% 80% 0.9x 73% 20 10 - FY19A FY20A LTM Sep-21A FY19A FY20A
Slide 30: SCF earnings and process update
ICG Asia Pacific Fund II Earnings and process update EBITDA Refinance • In Nov-21, we successfully secured debt facilities including growth facilities to support the upcoming process 3.1 • We also returned A$58.5m of ICG mezzanine to fund and co-investors to bring overall returns to date to 0.8x MoM
Slide 31: Yudo investment overview
ICG Asia Pacific Fund III Company description Entry EBITDA US$70m • Yudo is the global #1 producer of hot runner systems (“HRS”), which are mission critical parts for plastic injection moulding • Dominant market position in Asia, where the HRS market is the largest and the fastest growing in the wor
Slide 32: Yudo Covid-19 impact and value creation
ICG Asia Pacific Fund III Covid-19 impact and mitigation • Yudo was initially impacted by COVID-19 in 1Q20, however, the Company quickly rebounded since April 2020 as it quickly reacted to COVID-19 and implemented extensive restructuring measures • Meaningful workforce reduction took place in China
Slide 33: TIME Education investment overview
ICG Asia Pacific Fund III US$107m Company description Entry EBITDA • Time Education is a specialist education tutoring company in South Korea US$16m • #1 player (c.20% market share) in the premium/offline k-12 tutoring segment, with the leading admission track record to top universities Invested Ent
Slide 34: TIME Covid-19 impact and value creation
ICG Asia Pacific Fund III Covid-19 impact and mitigation • In response to the severe COVID-19 impact in March 2020 led by strict implementation of social distancing measures and delayed school openings in Korea, TIME immediately implemented a full-scale restructuring including closure of unprofitabl
Slide 35: Coreapuff investment overview
ICG Asia Pacific Fund III US$68m Company description Entry EBITDA • Coreapuff is the number one producer of make-up puffs in Korea • 21% market share (1.8x larger than #2-4 players) US$9m • Sustainable competitive advantage: only provider to a diversified customer base Entry Senior LTV Ratio Investe
Slide 36: Coreapuff Covid-19 impact and value creation
ICG Asia Pacific Fund III Covid-19 impact and mitigation • 2020 revenue decreased by 11% due to pandemic (reduced use of make-ups with masks covering faces) • No fundamental changes to people’s make-up behaviours; recovery expected along with vaccination in progress • +59% and +510% year-on-year rev
Slide 37: PSB Academy investment overview
ICG Asia Pacific Fund III Company description Entry EBITDA US$10m • PSB Academy (‘PSB’) is one of the three leading providers of private tertiary education in Singapore • More than 10k of local (~50%) and international (~50%) students in over 70 programs US$96m Invested Entry Senior LTV Ratio • Pres
Slide 38: PSB Covid-19 impact and value creation
ICG Asia Pacific Fund III Covid-19 impact and mitigation • In the first half of 2021, the school experienced positive momentum in its domestic student recruitment, as well as in international markets such as China and Indonesia. • Covid-19 is still negatively impacting some of the key international
Slide 39: Asia IV deployment
Asia IV deployment MUN HAO HO, CEO TF VALUE MART & KHEE HONG GOH, VICE PRESIDENT JON IN-CHON, CEO TMON & HANSOO KIM, VICE PRESIDENT ELLEN KIM, ASSOCIATE DIRECTOR PRIVATE AND CONFIDENTIAL
Slide 40: TF Valuemart investment overview
ICG Asia Pacific Fund IV Company description Entry EBITDA US$23m • TF Valuemart (“TFV”) is a leading hypermarket chain across Malaysia, • Stores located largely in tier 2/3 cities where modern trade channels are underpenetrated, and the population is still being served by traditional wet US$116m Inv
Slide 41: TFV Covid-19 impact and value creation
ICG Asia Pacific Fund IV Covid-19 impact and mitigation • Existing TFV operations have been largely unaffected by Covid-19 • All the company’s hypermarkets remained open for business throughout various lockdowns in Malaysia. • TFV opened five new stores in 2020 and the company is on track to open an
Slide 42: Tmon investment overview
ICG Asia Pacific Fund IV Company description CY20 GWM1,2 US$2.9bn • Tmon operates a leading e-commerce platform in South Korea which specializes in limited time discount deals in broad categories, including daily supplies, foods, apparels, electronics, tickets, etc. US$67m Invested CY20 Gross Billin
Slide 43: Tmon Covid-19 impact and value creation
ICG Asia Pacific Fund IV Covid-19 impact and mitigation • Driven by the rise of “Untact Economy”, the e-commerce market in Korea is growing faster during Covid situation • Tmon’s transaction volume has increased from KRW 3.1trn in 2019 to KRW 3.4trn in 2020 • Approximately 10% of monthly users incre
Slide 44: JamesTech investment overview
ICG Asia Pacific Fund IV KRW 105m Company description Entry EBITDA • JamesTech is Korea’s leading manufacturer of industrial thermistors, temperature-control sensor devices, which are mainly applied to home KRW 14.0bn appliances, electronics and automobiles including electric vehicles (“EV”) Investe
Slide 45: JamesTech Covid-19 impact and value creation
ICG Asia Pacific Fund IV Covid-19 impact and mitigation • June-2021 LTM revenue and EBITDA have recorded YoY growth of 41.1% and 86.2%, respectively • Accelerated growth is due to the increased demands for premium home appliances during Covid-19 • While Covid-19 impact on its production lines has be
Slide 46: Pipeline
Pipeline WOOSEOK JUN, HEAD OF ASIA PACIFIC PRIVATE AND CONFIDENTIAL
Slide 47: Pipeline and opportunities
Pipeline and opportunities >$1.7bn Pipeline 16 Opportunities Australia & Hong Kong & 4 Deals $490m 5 Deals $400m New Zealand Korea Japan $250m 3 Deals Southeast Asia $620m 4 Deals Transaction Near Term Deals Geography Size ($’m) Industry Deal Specifics1 Project Pathway Singapore/Australia 300 Health
Slide 48: 2021 Investor Day Q&A
2021 Investor Day Q&A WOOSEOK JUN, HEAD OF ASIA PACIFIC MILO LIN, HEAD OF SOUTH EAST ASIA RYAN SHELSWELL, HEAD OF AUSTRALIA & NEW ZEALAND PRIVATE AND CONFIDENTIAL
Slide 49: Disclaimer
Disclaimer For institutional/professional/accredited investors only. This is a marketing material This document is being provided to you by the subsidiaries or affiliates of Intermediate Capital Group plc (“ICG”, and together with their respective directors, officers, employees, partners, members, s
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