Oakley Capital Investments Ltd Registered · LSE:OCI
Oakley Capital Investments Ltd Registered — Oakley Capital Investments — H1 2021 Earnings Presentation
46 slides from Oakley Capital Investments Ltd Registered's earnings presentation, Sep 9, 2021
Slide 1: Interim Results 2021
CC Oakley Capital Investments INTERIM RESULTS 2021
Slide 2: Strong earnings growth drives total NAV return of 11%
Strong earnings growth from a digitally-focused portfolio drives total NAV return of 11%. 2
Slide 3: Financial highlights for the period
Financial highlights for the period Performance for the six months ending 30 June 2021 % Total NAV return Net Asset Value NAV per share 6-month total NAV return £804m 445p +11% Cash Dividend 5-year CAGR £172m £223m 11.8x 2.25p +17% OAKLEY CAPITAL INVESTMENTS 3
Slide 4: A pattern of sustained NAV growth
A pattern of sustained NAV growth 5.00 +25% 4.50 4.45 4.00 3.50 3.56 3.00 3.18 £ 2.50 2.59 2.31 2.00 2.15 1.95 1.91 1.80 1.82 1.74 1.50 1.00 0.50 0.00 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 Jun-20 Jun-21 Net Asset Value per share Share Price OAKLEY CAPITAL INVESTMENTS 4
Slide 5: NAV key performance drivers
NAV key performance drivers POSITIVE IMPACT NEGATIVE IMPACT EBITDA Multiple COVID-19 FX growth expansion impact movements 35% 12.3x 7 4.3% Average LTM Average Portfolio companies EV/EBITDA £:€ EBITDA growth lagged expectations NAV FX Exposure 52% 38% 11% +45 pence +15 pence -4 pence -14 pence NAV pe
Slide 6: Exploring the OCI Assets
EXPLORING THE OCI ASSETS INVESTOR MEET COMPANY
Slide 7: NAV breakdown by asset
NAV breakdown by asset £172m Total Investments £766m June-2021 (£134m) Cash June-2021 £172m Other Assets/(Liabilities) (£134m) June-2021 Net Asset Value £804m June-2021 OAKLEY CAPITAL INVESTMENTS 7
Slide 8: Cash vs commitments
Cash vs commitments Total Investments £766m June-2021 Cash June-2021 £172m Other Assets/(Liabilities) (£134m) June-2021 Outstanding Commitments £243m(1) £438m June-2021 (1) Expected commitments to be drawn OAKLEY CAPITAL INVESTMENTS 8
Slide 9: Fund vs direct investment
Fund vs direct investment £766 million total investments Direct Oakley investment Fund investment £151m £615m North Sails Time Out Equity Debt OAKLEY CAPITAL INVESTMENTS 9
Slide 10: Balanced by sector and company
Balanced by sector and company Total equity investments EDUCATION CONSUMER TECHNOLOGY 21 Portfolio companies Note: Chart represents OCI’s look-through exposure via the Funds and direct equity investments OAKLEY CAPITAL INVESTMENTS 10 10
Slide 11: Investing in digital disruption
Investing in digital disruption Total equity investments Digital businesses c. 70% of the portfolio delivers products or services digitally Note: Chart represents OCI’s look-through exposure via the Funds and direct equity investments OAKLEY CAPITAL INVESTMENTS 11
Slide 12: High-quality and recurring revenue streams
High-quality and recurring revenue streams Total equity investments Subscription-based revenues c. 75% of the portfolio has subscription-based or recurring revenues Note: Chart represents OCI’s look-through exposure via the Funds and direct equity investments OAKLEY CAPITAL INVESTMENTS 12
Slide 13: Strong performance sustained in spite of COVID-19
Strong performance sustained in spite of COVID-19 Total equity investments Significant impact Modest impact Expectations met or exceeded 14 out of 21 Portfolio companies are trading at or above pre-COVID budgets Note: Chart represents OCI’s look-through exposure via the Funds and direct equity inves
Slide 14: Investment Strategy & Activity
INVESTMENT STRATEGY & ACTIVITY INVESTOR MEET COMPANY
Slide 15: Repeatable investment strategy
Repeatable investment strategy ORIGINATION ACTIVE MANAGEMENT INVESTMENT THEMES Unique business founder network Proven value drivers including Investing behind accelerating provides privileged access to off- transformational M&A. megatrends. market opportunities. Adoption of internet and cloud soluti
Slide 16: Creating value through buy-and-build
Creating value through buy-and-build Bolt-on acquisitions in 2021 + + + Establishing the largest Transforming Ocean into a Providing access to the independent software diversified software platform for fast-growing ‘clean beauty’ platform in Iberia the maritime industry segment OAKLEY CAPITAL INVEST
Slide 17: Continuing to acquire high-quality assets
Continuing to acquire high-quality assets Four platform investments in the period IDEALISTA DEXTERS ICP EDUCATION ECOMMERCE ONE Technology Consumer Education OAKLEY CAPITAL INVESTMENTS 17
Slide 18: Oakley's origination strategy continues to deliver
Oakley’s origination strategy continues to deliver ECOMMERCE ONE: Securing a quality asset in a high-demand sector 1 Target sector 2 Sourced via Oakley network 3 Acquired at a single digit EBITDA multiple OAKLEY CAPITAL INVESTMENTS 18
Slide 19: Governance & Closing the Discount
GOVERNANCE & CLOSING THE DISCOUNT INVESTOR MEET COMPANY
Slide 20: Integrating ESG to build stronger businesses
Integrating ESG to build stronger businesses Oakley’s progress to date: ESG due diligence is a key part of every investment process Launched dedicated ESG reporting platform used by all portfolio companies Onboarded >70% of portfolio companies to new ESG processes Cyber security roadmap developed fo
Slide 21: Closing the discount
Closing the discount GOVERNANCE LIQUIDITY ACCESSIBILITY Share issuance Shareholder concentration Investor materials Alignment of interest Share trading volume Profile and communication Share buy-back Appropriate listing Report quarterly NAV programme Board composition ESG Monetise direct investments
Slide 22: Sustaining NAV growth
Sustaining NAV growth Outlook EARNINGS GROWTH Tech-focused portfolio continues to benefit from accelerating megatrends CASH Well-placed to meet its commitments to the Oakley Funds as they make new investments ACTIVITY Strong prospects for investments and realisations OAKLEY CAPITAL INVESTMENTS 22
Slide 23: Appendix: New Investments
APPENDIX NEW INVESTMENTS INVESTOR MEET COMPANY
Slide 24: New investment: idealista
New investment: idealista BUSINESS DESCRIPTION ► Leading Southern European real estate portal ► Market leading position in Spain and Portugal ► Growing presence in Italy strengthened by acquisition of Casa.it in September 20 ► Supports c.40k real estate agents ► 38 million unique visitors per month
Slide 25: New investment: Dexters
New investment: Dexters BUSINESS DESCRIPTION ► London’s leading independent Chartered Surveyors and Estate Agents ► Founded in 1993, Dexters has now grown to 87 branches across Greater London ► Majority of Dexters revenues come from lettings and related property management services ► Dexters current
Slide 26: New investment: ICP Education
New investment: ICP Education BUSINESS DESCRIPTION ► Leading independent group of UK nurseries ► Formed in 2016, originally as two separate businesses, ICP nurseries and Cresswell, which were combined in 2020 ► One of the largest groups in the UK, serving nearly 6000 children across 44 nurseries, pr
Slide 27: New investment: ECOMMERCE ONE
New investment: ECOMMERCE ONE BUSINESS DESCRIPTION ► ECOMMERCE ONE comprises Afterbuy and DreamRobot, two leading providers of e-commerce software in the German-speaking region ► Comprehensive suite of Software as a Service (SaaS) solutions for small to mid-sized online merchants selling their produ
Slide 28: Appendix: Portfolio Company Overview
APPENDIX PORTFOLIO COMPANY OVERVIEW INVESTOR MEET COMPANY
Slide 29: Technology – Portfolio companies
Technology – Portfolio companies WebPros idealista Facile TechInsights Grupo Primavera Location: Switzerland / USA Location: Southern Europe Location: Italy Location: Canada Location: Spain Investment date: Feb-20 Investment date: Jan-21 Investment date: Jun-18 Investment date: May-17 Investment dat
Slide 30: Technology – Portfolio companies
Technology – Portfolio companies Contabo 7NXT Daisy atHome ECOMMERCE ONE Location: Germany Location: Germany Location: UK Location: Luxembourg Location: Germany Investment date: Oct-19 Investment date: Oct-20 Investment date: Jul-15 Investment date: Jan-17 Investment date: May-21 Fund: IV Fund: Orig
Slide 31: Education – Portfolio companies
Education – Portfolio companies IU Group Schülerhilfe ICP Education Ocean Technologies Grp ACE Education Location: Germany Location: Germany Location: UK Location: Norway / UK Location: France Investment date: Jan-18 Investment date: Jul-17 Investment date: Jun-21 Investment date: Jun-19 Investment
Slide 32: Consumer – Portfolio companies
Consumer – Portfolio companies North Sails Time Out Wishcard Technologies WindStar Medical Location: Global Location: Global Location: Germany Location: Germany Investment date: Mar-14 Investment date: Nov-10 Investment date: Sep-19 Investment date: Oct-20 Fund: II & OCI Fund: I & OCI Fund: IV Fund:
Slide 33: Consumer – Portfolio companies
Consumer – Portfolio companies Iconic BrandCo Dexters Location: Italy / UK & Japan Location: UK Investment date: Aug-19/Mar-20 Investment date: Feb-21 Fund: III Fund: IV Open cost: £16.3m Open cost: £13.4m Valuation: £16.5m Valuation: £14.7m Alessi is an iconic design Founded in 1993 as a brand with
Slide 34: Continued growth, conservative debt, modest valuations
Continued growth, conservative debt, modest valuations Portfolio analysis 35% Avg LTM EBITDA Growth(1) 3.5x Avg Net Debt/EBITDA(2) 12.3x Avg Valuation Multiple(3) Portfolio Company LTM Portfolio Company Portfolio Company EBITDA growth(1) Net debt/EBITDA(2) EV/EBITDA(3) 8 10 12 50% 39% 39% 44% 53% 8
Slide 35: Appendix: Direct Investments
APPENDIX DIRECT INVESTMENTS INVESTOR MEET COMPANY
Slide 36: Direct investments
Direct investments Fair Value Fair Value 30 June 2021 30 June 2020 Time Out Equity £40.1m £26.6m Daisy Direct debt Realised £16.4m North Sails Direct debt £110.9m £96.0m Fund Facilities Other £6.9m £12.6m Total direct investments £157.9m £151.6m OAKLEY CAPITAL INVESTMENTS 36
Slide 37: Appendix: Governance Programme
APPENDIX GOVERNANCE PROGRAMME INVESTOR MEET COMPANY
Slide 38: Discount to NAV – Past
Discount to NAV – Past Areas addressed Concern Remediation Discounted share issuance ▪ In 2018 Board announced commitment to not issue equity or sell stock from treasury at a discount to NAV Alignment of interest ▪ OCI Board and Oakley Partners hold over 10% of OCI shares vs 1% in 2017 Returning cas
Slide 39: Discount to NAV – Present
Discount to NAV – Present Areas being addressed Concern Detail Remediation Direct investments ▪ Exposed to the underperforming assets ▪ Realise direct investments over the short to ▪ Raises conflict of interest concerns medium term ▪ Drag on performance ▪ Outstanding loan notes with Time Out and Dai
Slide 40: Appendix: Fees
APPENDIX FEES INVESTOR MEET COMPANY
Slide 41: KID fees explained
KID fees explained ONGOING COSTS INCIDENTAL COSTS Management Performance Carried OCI expenses fees fees interests The annual cost of The annual cost of Historic performance Carried interests are managing investments OCI operations, fees accrued on direct the performance costs in the Oakley Funds. in
Slide 42: Appendix: Fund Valuations
APPENDIX FUND VALUATIONS INVESTOR MEET COMPANY
Slide 43: Overview of OCI's underlying investments (1)
Overview of OCI’s underlying investments (1) Year of Fund Investments Sector Location Residual Cost Fair Value Investment Origin Fund Origin Fund 7NXT Technology Germany 2020 £10.3m £13.9m Origin Fund ECOMMERCE ONE Technology Germany 2021 £5.8m £5.8m OCI’s proportionate allocation of Origin Fund inv
Slide 44: Overview of OCI's underlying investments (2)
Overview of OCI’s underlying investments (2) Year of Fund Investments Sector Location Residual Cost Fair Value Investment Fund I Fund I Time Out Consumer Global 2010 £57.9m £32.9m OCI's proportionate allocation of Fund I investments (on a look-through basis) £32.9m Other Assets and Liabilities (£3.5
Slide 45: Disclaimer and important information
Disclaimer and important information ▪ This presentation (the “Presentation”) is being communicated on a confidential basis and may not be reproduced in whole or in part, nor may its contents be disclosed to any third party without the prior written consent of Oakley Capital Limited. This Presentati
Slide 46: Contact details
www.oakleycapitalinvestments.com investorrelations@oakleycapital.com
Oakley Capital Investments — H1 2021 Earnings Presentation on 6ix