Slide 1: Results for the year to 31 March 2024
Results for the year to 31 March 2024 9 May 2024
Slide 2: Business review
Business review Simon Borrows Chief Executive
Slide 3: Resilient performance in a challenging market
Resilient performance in a challenging market Year to 31 March 2024 Group Private Equity Infrastructure Total return NAV Gross investment return Gross investment return on equity per share 25% 7% 23% 2,085p Cash invested Cash income Gearing Total dividend per share £556m £113m Cash proceeds and AUM
Slide 4: Careful portfolio construction
Careful portfolio construction Our portfolio is positioned to offer resilience across the economic cycle Portfolio at 31 March 2024 Value-for-money, Private Label, Infrastructure and Healthcare sectors represent 87% of portfolio 4
Slide 5: Private Equity: attractive return in volatile environment
Private Equity Attractive return in volatile environment, resilient portfolio performance Strong result, driven Disciplined investment. Resilient portfolio, with primarily by Action Strong cash generation pockets of weakness • 25% gross investment • £556m of proprietary capital • Defensively positio
Slide 6: Portfolio earnings growth of top 20 PE investments
Private Equity 93% of portfolio companies by value growing earnings Portfolio earnings growth of top 20 PE investments1 ≥ 30% £1,190m 4 companies 20 - 29% £14,225m 2 companies 10 - 19% £871m 3 companies 0 - 9% £1,187m 5 companies <0% £1,276m 6 companies 1 Includes top 20 Private Equity companies by
Slide 7: Divergence in performance across the portfolio
Private Equity Divergence in performance across the portfolio; value movements principally performance driven Largest value increases (>£20m) Largest value declines (>£20m) Portfolio company Value Value at Driver of Portfolio company Value Value at Driver of growth 31 Mar value decline 31 Mar value
Slide 8: Action – strong 2023 performance
Private Equity Action – strong 2023 performance +28% +34% +16.7% 104% 303 2,566 Operating EBITDA Net sales growth LFL growth Cash conversion Stores added Total stores growth An unbroken high growth track record Expansion across Europe continues Netherlands Poland EBITDA (€m) Sales (€m) +29% CAGR Num
Slide 9: Action – a strong start to the year
Private Equity Action – a strong start to the year • Strong trading YTD to P3 (31 March 2024) ‒ Net sales of €3,004m, up 21% on PY ‒ Operating EBITDA of €397m, up 29% on PY ‒ LFL sales growth of 9.8% ‒ 42 stores added, vs 34 in PY ‒ Cash balance of €558m • Week 18 data (5 May 2024) confirms strong t
Slide 10: 3i portfolio construction
3i portfolio construction Core PE portfolio Longer-term compounders • Our origination engine, investing with a 2x MM • Returns materially in excess of 3i’s return objective objective + • 3-4 other assets to be • ~125x MM to date on initial • Exit typically after 4-6 year investment timeframe identif
Slide 11: Compounding value | Royal Sanders
Private Equity Compounding value | Royal Sanders (2018) Royal Sanders can continue to compound growth over the longer term 3.5x Revenue growth since • Winning customer portfolio investment • End-market with attractive organic growth opportunity £231m • Strong operational discipline and cost efficien
Slide 12: Platform assets continued to grow through acquisitions
Private Equity Many of our platform assets continued to grow through acquisitions + + + + + Etagis Triseal Quadrix £38m proprietary Self funded Self funded Self funded Self funded capital investment 12
Slide 13: Over £1.3bn of cash proceeds and distributions
Private Equity Over £1.3bn of cash proceeds and distributions from the portfolio £762m proceeds from pro-rata share redemption and £375m dividends £109m distributions following a refinancing £42m refinancing and other proceeds 13
Slide 14: nexeye – successful realisation announced in April
Private Equity nexeye (2017) | successful realisation announced in April nexeye transformed into leading European provider of value-for-money eye care • strengthened and developed organisation • acquisition and roll-out of eyes + more in Germany • investment in existing and new stores • built best-i
Slide 15: Infrastructure
Infrastructure Portfolios performing strongly with positive correlation to inflation Portfolios continue to Good cash income Well positioned to deliver perform strongly and growth in AUM growth over the cycle • 7% gross investment return, • £113m cash income from • Broadly counter-cyclical and with
Slide 16: 3i's science-based targets were approved in March 2024
3i’s science-based targets were approved in March 2024 Our targets cover our own operations and our portfolio Scope 1 and 2 Scope 3 (own operations) (financed emissions - targets cover 82% of activities by invested capital as of FY2023) 3i is committed to: 3i commits to reduce its absolute Scope 1 a
Slide 17: Financial review
Financial review James Hatchley Group Finance Director
Slide 18: Total return on equity of 23% for the financial year
Total return on equity of 23% for the financial year NAV per share (pence) 1 2 NAV per share up 19% to 2,085 pence 1 FX net of derivatives. 2 Other includes portfolio income, third-party fee income and operating costs. 18
Slide 19: Strong value growth against macroeconomic headwinds
Strong value growth against a backdrop of persistent macroeconomic headwinds £3.9bn value increase driven by Action's performance Value movement by basis excluding FX (£ million) Action PE performance increases1 PE performance decreases1 Multiples Quoted Scandlines DCF Other Portfolio value of £21.6
Slide 20: Action valuation basis unchanged
Private Equity Action valuation basis unchanged Enterprise value (post discount) • LTM operating EBITDA to P3 2024 of €1,703m • LTM run-rate EBITDA earnings of €1,848m • Net debt of €3,986m at 31 March 2024 • 18.5x (Mar-23: 18.5x) multiple post discount • 3i equity stake increased to 54.8% (Mar-23:
Slide 21: Action – peer group multiples support 18.5x multiple
Private Equity Action – peer group multiples support 18.5x run-rate EBITDA multiple for Action EV / LTM EBITDA EV / NTM EBITDA Costco, 29.1x Costco, 26.7x Dollarama Inc., 20.2x Dollarama, 19.0x Five Below, 18.1x Ollie’s, 16.3x Five Below, 15.8x Avg, 15.5x Ollie’s, 15.2x Avg, 14.2x Dollar General, 12
Slide 22: Valuation multiples compare favourably to peer sets
Private Equity Valuation multiples continue to compare favourably to average multiples for peer sets1 Only two companies have valuation marks above their peer set averages. All multiples are within peer set ranges 1 Valuation multiples used for assets valued on an earnings basis compared to a peer g
Slide 23: Private Equity: good overall portfolio performance
Private Equity Good overall portfolio performance Year to 31 March 2024 2023 £ million Gross investment return 4,059 4,966 1 of which foreign exchange (341) 622 GIR % of opening portfolio 25% 40% Realisations 866 857 Cash investment 556 381 31 March 31 March £ million 2024 2023 Portfolio Value 19,62
Slide 24: Portfolio leverage is moderate
Private Equity Portfolio leverage is moderate Ratio of total net debt to earnings Debt maturity (% of fair value) Action Excluding Action Mar-231 Sep-231 Mar-241 2025 2026 2027 >=2028 Over 70% of PE portfolio term debt hedged against interest rate risk 1 This represents 91% (Sep-23: 93%, Mar-23: 92%
Slide 25: Carried interest liability reduced in the year
Private Equity Carried interest liability reduced in the year Year to 31 March 2024 2023 £ million Income statement Carried interest receivable – 4 Carried interest payable (262) (392) Net total expense (262) (388) £ million 31 March 2024 31 March 2023 Balance sheet Carried interest receivable 5 6 C
Slide 26: GIR dilution from Action carried interest payable reduced
Private Equity GIR dilution from Action carried interest payable reduced significantly since March 2023 March March 2023 2024 Gross holding in Action 52.9% 54.8% Further investment in FY24 £455m Action carry dilution on GIR (approximately) 8% 3% Net holding in Action (post carry dilution) 48.9% 53.2
Slide 27: Infrastructure and Scandlines
Infrastructure and Scandlines Good performance in the year Year to 31 March 2024 2023 £ million Infrastructure gross investment return 99 86 Unrealised profits on revaluations1 72 23 Dividend and interest income from the portfolio 46 47 GIR % of opening portfolio 7% 6% £ million 31 March 2024 31 Mar
Slide 28: Operating cash position
Operating cash position Objective to at least break even Year to 31 March 2024 2023 £ million Private Equity 456 351 Of which Action dividend 375 325 Infrastructure 113 107 Scandlines 25 39 Cash income 594 497 Operating cash expenses1 (127) (133) Operating cash profit 467 364 1 Operating cash expens
Slide 29: Simple balance sheet and conservative capital management
Simple balance sheet and conservative capital management • Portfolio value £21,636m • High quality, well constructed portfolio • Gross cash, with good counterparty diversification £396m • c.89% held in AAA-rated money market funds • Gross fixed term debt made up of bonds expiring 2029, 2032 and 2040
Slide 30: Net asset exposure by currency
Net asset exposure by currency (in £m) Foreign exchange Hedging Total Net assets by currency 31 March 2024 movements gain (excl hedging) FY2023 501 122 623 FY2024 (432) 116 (316) Net assets: £20,170m • Foreign exchange hedging programme maintained at €2.6bn (incl. Scandlines) and $1.2bn ‒ partial re
Slide 31: Total FY2024 dividend of 61 pence per share
Total FY2024 dividend of 61 pence per share • Our dividend policy aims to maintain or grow the dividend year-on-year subject to: ‒ maintaining our conservative balance sheet strategy ‒ careful consideration of the outlook for investments and realisations and market conditions • Second FY2024 dividen
Slide 32: Closing remarks
Closing remarks Simon Borrows Chief Executive
Slide 33: Action: high-return capital allocation
Action: high-return capital allocation >£1.1bn further investment in Action over the last five years delivering 41% average returns2 March 2019 March 2024 £2,731m £14,158m 3iG stake value 3iG stake value +£11,427m 3iG stake value 44.3% 54.8% gross gross ownership ownership ~33% net ownership1 53.2%
Slide 34: 3i has significant long-term potential
3i has significant long-term potential Permanent capital. Long-term, sustainable approach Thematic approach to investment with exposure to long-term secular growth trends Proven model, underpinned by robust processes, patience and price discipline Active management of portfolio companies with signif
Slide 35: Strong returns to shareholders since the 2012 restructuring
Strong returns to shareholders since the restructuring in 2012 NAV and cumulative dividend growth Share price and dividend growth Total shareholder return index2 27% 29% CAGR CAGR 20% CAGR 367 367 2,876 2,220 2,085 279 179 1 100 FY2012 FY2024 29 Jun 12 30 Apr 24 29 Jun 12 30 Apr 24 Cumulative divide
Slide 36: Additional information
Additional information
Slide 37: Q4 NAV increased from 2,034 pence to 2,085 pence
Q4 NAV increased from 2,034 pence to 2,085 pence NAV per share (pence) 1 1 FX net of derivatives. 2. Other includes portfolio income, third-party fee income and operating costs. 37
Slide 38: 3i Group large investments
3i Group 20 large investments Valuation Valuation Investment Business description March 2024 March 2023 (£m) (£m) Action General merchandise discount retailer 14,158 11,188 3i Infrastructure plc Quoted investment company, investing in infrastructure 879 841 Cirtec Medical Outsourced medical device m
Slide 39: Private Equity portfolio by value at 31 March 2024
Private Equity portfolio by value at 31 March 2024 By location (%) By sector (%) Portfolio of 36 investments1 1 The case count excludes legacy insolvent assets. 39
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