Caledonia Investments Plc · LSE:CLDN
Caledonia Investments — H1 2025 Earnings Presentation
42 slides from Caledonia Investments's earnings presentation, Nov 26, 2024
Slide 1: Half-year results
Half-year results Six months ended 30 September 2024 www.caledonia.com
Slide 2: Cautionary statement
Cautionary statement This presentation contains certain statements that are, or may be deemed to be, forward-looking. Phrases such as "aim", "plan", "intend", “should”, "anticipate", "well-placed", "believe", "estimate", "expect", "target", "consider" and similar expressions are generally intended t
Slide 3: Caledonia: we are a long-term equity investor
Caledonia We are a long-term equity investor NAV Growth Self-managed investment company NAV total return growth since 2004 Net assets of £2.9 billion 700 Caledonia NAV TR CPIH+4.5% 600 Targeting long-term compounding real returns 500 400 CPIH +3% to +6% 300 Progressive dividend policy 200 100 Succes
Slide 4: Time well invested
Time well invested We invest in high quality companies that have the potential to generate exceptional long-term value We buy to hold, investing in companies with strong market positions and fundamentals, alongside investments in private equity funds with track records of success Team Opportunity Al
Slide 5: A well-balanced portfolio
A well-balanced portfolio Providing access to both private and public companies, diversified by sector and geography Public Companies Private Capital Funds Strategic Allocation: 30%-40% Strategic Allocation: 25%-35% Strategic Allocation: 25%-35% • Global portfolio • Direct investments focused on hig
Slide 6: Long-term outperformance
Long-term outperformance Targeting real returns and outperformance of FTSE All-Share TR • Aim to grow capital value and income over the long-term (10 years) measured in real terms • Target return of CPIH +3% to +6% over medium / long-term • Aim to outperform FTSE All-Share Total Return over 10 years
Slide 7: Half-year results
Half-year results Six months ended 30 September 2024 Half-year results 30 September 2024 6
Slide 8: Highlights
Highlights Six months ended 30 September 2024 NAVTR of +0.5%, overall performance impacted by foreign exchange headwinds of £104m, reducing NAVTR by 3.6% in the period • Public Companies +7.0% return ‒ Good performance from both portfolios reflecting global equity markets and Net assets stock select
Slide 9: Public Companies
Public Companies Six months ended 30 September 2024 Half-year results 30 September 2024 8
Slide 10: Public Companies
Public Companies High quality companies where long-term ownership will be rewarded Annualised Performance – total return £1,016m invested in 30 companies, with a bias towards resilient 15% Internal companies with high returns on capital and pricing power +12.0% targets +11.2% +10.5% Performance 10%
Slide 11: Fastenal: High quality North American distributor
Public Companies Fastenal: High quality North American distributor of industrial & construction products Initial investment: March 2020 Investment thesis: Share price ($) • Well-run supply chain distribution business • Outsourced supply chain management 90 • De-centralised business 80 Small top slic
Slide 12: Funds
Funds Six months ended 30 September 2024 Half-year results 30 September 2024 11
Slide 13: Funds
Funds Providing exposure to over 600 companies operating in North America and Asia £875m invested in 76 funds managed by 42 managers Annualised Performance – total return 63% focused on the North American lower mid market 20% buyout and 37% on Asian buyout, growth & VC funds 15% +14.1% Internal +13.
Slide 14: Realisations gaining momentum in North America
Funds Realisations gaining momentum in North America Portfolio maturity1 North America realisations Realisations 50 Distributions of £75m broadly split 60%/40% North America < 1 year 5% and Asia 1 - 3 years 31% 25 GBP £m 3 - 5 years 30% North America 5- 7 years 20% 0 7 years+ 14% Q1 Q2 Q3 Q4 Q1 Q2 •
Slide 15: De Cheng
De Cheng US and China based investor in life science & healthcare Background to relationship Firm overview • Founded in 2012 by Min Cui, De Cheng has deep commercial and • Venture capital firm focused on providing capital scientific expertise within the two largest healthcare markets in and strategi
Slide 16: Alpine Immune Sciences delivered 8.2x MoM return
De Cheng Alpine Immune Sciences delivered 8.2x MoM return Alpine Immune Sciences (“ALPN”) ALPN: share price ($) NASDAQ • Biopharmaceutical company focused on $70.00 immunological disorders Exit: ALPN acquired by Vertex in April • De Cheng invested in Jan 2019. Decheng’s $60.00 2024 for $4.9bn at fou
Slide 17: Private Capital
Private Capital Six months ended 30 September 2024 Half-year results 30 September 2024 16
Slide 18: Direct investments in established high quality businesses
Private Capital Direct investments in established high quality businesses £848m invested in nine predominantly UK focused companies, with % Annualised Performance – Total return five investments representing circa 90% of value 20% Performance +15.1% Internal 15% +12.8% +13.1% target • -2.8% total re
Slide 19: Private Capital: Cooke, Cobepa, Stonehage Fleming
Private Capital Good performance across the majority of the investee companies, offset by reduction in the valuation of Cooke Valuation £50m Valuation £182m Valuation £180m Return -56.4% Return +1.6% Return +7.6% Year of Investment 2018 Year of Investment 2004 Year of Investment 2019 Sector Industri
Slide 20: Private Capital: AIR-serv Europe, Liberation Group
Private Capital Good performance across the majority of the investee companies, offset by reduction in the valuation of Cooke Valuation £174m Valuation £148m Return +6.1% Return +9.1% Year of Investment 2023 Year of Investment 2016 Sector Industrials Sector Cons. Discretionary Equity Held 99.7% Equi
Slide 21: DTM: UK's leading provider of tyre management services
Private Capital DTM – UK’s leading provider of tyre management services to fleet operators Overview Business model Tyre Tyre • Independent provider of tyre manufacturers wholesalers management services to Tyre sourcing specialist fleet operators Network of service providers • HQ in Blackpool, f Lanc
Slide 22: Why we like DTM
Private Capital Why we like DTM Strong market presence Market leading proposition Impressive long-term track record National service provider Low churn in existing 15% c.15% revenue CAGR over network customer base Revenue the last 15 years CAGR Tech enabled solutions Multiple levers for growth High
Slide 23: Financial review
Financial review Half-year results 30 September 2024 22
Slide 24: Financial overview
Financial overview £2.9bn NAV – strong balance sheet with zero structural leverage 0.5% NAV return – 4.1% in local currencies £2.7bn Portfolio value – high quality, diversified portfolio £460m Liquidity – new RCF agreed, increasing available resources by £75m to £325m 4.0% Increase in interim divide
Slide 25: Investment portfolio and returns
Investment portfolio and returns Total portfolio return of 0.7% Investment movement (£m) Portfolio by Pool (£m) Net investments 3000 £50m Funds Private Capital £875m £848m 2 0 22 £2,738m 2 00 2 0 2 00 Public Companies £1,016m 2 0 2 2, 3 2, 2 Return Return Yield1 2 00 % (excl. % FX) % 2 0 Public Comp
Slide 26: Change in net asset value
Change in net asset value NAVTR of 0.5%, £104m FX headwinds reducing NAVTR by 3.6% NAV movement (£m) Total return £21m Foreign Currency Exposure (NAV) 3 00 29 30 0 96 30 0 30 0 3020 3000 2 0 -104 2,974 2,965 -12 2 0 US dollar 52% Pound sterling 38% Euro 7% Other currencies 3% 2 0 -28 2 20 2,918 -26
Slide 27: Cash & facilities
Cash & facilities Significant liquidity available Movement in net cash (£m) 300 Net investment • New £325m RCF facility £48m 2 0 agreed with three banks at 22 improved terms 2 200 - £150m to August 2029 - £175m to August 2027 0 2 Caledonia Net Cash 3 30 September 2024 2 00 £135m Caledonia Liquidity
Slide 28: Share buybacks and communications
Share buybacks and communications Share price undervalues the quality of our portfolio and long-term track record It is important that our shareholders benefit from the long-term increase in NAV • Share price discount to NAV is 35.7%1 which we believe Annualised NAVTR and TSR undervalues the quality
Slide 29: Increasing flexibility for share buybacks
Increasing flexibility for share buybacks Seeking approval from independent shareholders Circular seeking an uncapped Rule 9 Waiver, to allow us to continue to buy back shares Uncapped Rule 9 Waiver Cayzer family concert party Independent Shareholders • Approval sought from • Supportive of managemen
Slide 30: Summary
Summary Half-year results 30 September 2024 29
Slide 31: Summary
Summary 1 The diverse and resilient portfolio remains well placed to deliver target returns over the long term both in terms of dividend and net asset growth for shareholders 2 The essence of long-term investing is the ability to endure shorter-term fluctuations and maintain a focus on achieving sus
Slide 32: Q&A
Q&A Half-year results 30 September 2024 31
Slide 33: Appendix
Appendix Half-year results 30 September 2024 32
Slide 34: A well-balanced portfolio
A well-balanced portfolio Diversified by sector and geography Provides shareholders with access to companies operating across diverse sectors with global exposure Geography (Headquartered) Sector Industrials Industrials 26% Consumer discretionary 13% Includes Private Capital investments Information
Slide 35: Private Capital portfolio as at September 2024
Private Capital Portfolio as at 30 September 2024 3 years 5 years 10 years Value Annualised Returns 15.1% 12.8% 13.1% First 30 Sept Portfolio (£m) Invested 2024 Sector 1 Cobepa 2004 181.6 Distribution Industrials 44% Consumer discretionary 24% Stonehage Fleming 2019 180.2 Financials 21% Other sector
Slide 36: Public Companies – Capital portfolio
Public Companies – Capital portfolio Top holdings as at 30 September 2024 Value 3 years 5 years 10 years First 30 Sept Top Holdings (£m) Invested 2024 Annualised Returns 6.4% 12.0% 11.2% Oracle 2014 96.4 Sector Microsoft 2014 81.2 Distribution Information technology 31% Watsco1 2017 56.2 Industrials
Slide 37: Public Companies – Income portfolio
Public Companies – Income portfolio Top holdings as at 30 September 2024 3 years 5 years 10 years Value Annualised Returns 6.6% 6.9% 5.4% First 30 Sept Yield2 Top Holdings (£m) Invested 2024 % Annualised Yield 3.8% 4.2% 4.1% National Grid 2015 21.4 6.1 Sector Unilever 2019 19.8 3.3 Distribution Cons
Slide 38: Funds top holdings
Funds Top holdings as at 30 September 2024 3 years 5 years 10 years Value First 30 Sept Annualised Returns 8.0% 13.1% 14.1% Top Holdings (£m) Invested 2024 HighVista Strategies1 2013 129.1 Strategy Axiom Asia funds 2012 72.7 Decheng funds 2015 57.3 Asia Alternatives funds 2012 38.5 N America buyout
Slide 39: Statement of Financial Position
Statement of Financial Position Six months ended 30 September 2024 Investment £m 31 Mar 24 Investments Realisations income 1 Total return 30 Sept 24 Pool Public Companies 949.8 80.7 (68.0) (13.1) 66.2 1,015.6 Private Capital2 820.3 79.2 (15.0) (12.8) (23.6) 848.1 Funds 926.3 66.7 (94.1) (2.2) (22.1)
Slide 40: Summary of Comprehensive Income
Summary of Comprehensive Income Six months ended 30 September 2024 30 Sept 24 30 Sept 23 £m £m Revenue Capital Total Revenue Capital Total Investment income – portfolio 29.4 - 29.4 33.8 - 33.8 Net (loss) / gains on fair value investments – portfolio1 - (8.9) (8.9) - 95.3 95.3 Total return 29.4 (8.9)
Slide 41: Further information
Further information If you have any questions, or to request a meeting, please contact us in the following ways: • Send an email to: investorrelations@caledonia.com • Call us on tel: 020 7802 8080 • Website: www.caledonia.com • The Company’s ordinary shares are premium listed on the L E under ED L:
Slide 42: Caledonia Investments plc
Caledonia Investments plc Cayzer House 30 Buckingham Gate London SW1E 6NN Tel: +44 20 7802 8080 Web: www.caledonia.com © Caledonia Investments plc 2024. Caledonia Investments, Time Well Invested and the sealion guardant are registered trademarks.
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