Slide 1: Half-yearly results
Half-yearly results 30 June 2020
Slide 2: Disclaimer
Disclaimer NOT FOR DISTRIBUTION OR RELEASE, DIRECTLY OR in this presentation is correct as of any date subsequent to the date of this which section 85 of the Financial Services and Markets Act 2000 of the INDIRECTLY, IN OR INTO THE UNITED STATES OF AMERICA presentation. UK (“FSMA”) applies and shoul
Slide 3: Contents
Contents 1 Overview # 2 Context # 3 Results # 4 Portfolio # 5 Outlook # 6 Summary © IP GROUP PLC 2020 | 2
Slide 4: Overview
Overview Results • Return on Hard NAV1 of £14.2m (including net overheads) • Hard NAV2 of £1.2bn or 108.8p per share (FY19: £1.2bn or 107.8p) • Record realisations of £113.7m (FY19: £79.5m), exceeding portfolio investment of £36.9m • Gross cash/net cash of £245.3m / £170.5m (FY19: £195m / £112m) • I
Slide 5: Context
02 Context Evolving GREAT IDEAS into WORLD-CHANGING businesses
Slide 6: Context: purpose, vision and strategy
Context: purpose, vision and strategy PURPOSE VISION INTELLECTUAL FINANCIAL HUMAN CAPITAL CAPITAL CAPITAL © IP GROUP PLC 2020 | 5
Slide 7: Context: Business units
Context: Business units UK-based sector funds Multi-sector country-focused funds £193m £331m £98m £68m* £6m £300m Strategic opportunities Managing balance Managing sheet capital third-party capital £278m Cross-fund resources Specialist corporate Intellectual property Executive search advisory, finan
Slide 8: Context: Long-term trends in HNAV/share and share price
Context: Long-term trends in HNAV/share and share price Share price 'Hard' NAV per share 109 55 67 22 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 HY 2020 ‘Hard’ NAV or HNAV reflects Net Assets/Total Equity less goodwill, intangibles and the Oxford Equity Righ
Slide 9: Context: Long-term trends in portfolio investment/divestment
Context: Long-term trends in portfolio investment/divestment 150.0 150.0 Investments 100.0 100.0 Realisations 50.0 Net (inv)/exits 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 H1 2020 *In addition, in 201
Slide 10: Results
03 Results
Slide 11: Results: Hard NAV per share waterfall
Results: Hard NAV per share waterfall 2.3 0.6 4.3 4.6 0.6 1.0 0.6 108.8 107.8 Opening Ceres Power Carry accrual Private FV Private FV Other net private Net overheads Other P&L items Closing gains > £1m reductions gains & FX > £1m © IP GROUP PLC 2020 | 10
Slide 12: Results: Ceres Power
Results: Ceres Power Fair value movement year-to-date £52.9m* Realised TOTAL year-to-date VALUE 7.0x £125.9m £127.5M* Fair value as at 31 December 2019 £74.6m Unrealised AGGREGATE £1.6m* INVESTMENT Unrealised £18.3M £1.6m* * As of 20 July 2020 © IP GROUP PLC 2020 | 11
Slide 13: Results: net assets
Results: net assets Portfolio Cash and deposits Other Hard NAV Loan £1.2bn 109pps Other Portfolio £1,025m £1,046m Ceres Istesso ONT 60pps £195m £245m Gross Cash (£17m) (£39m) (£83m) (£75m) FY 2019 HY 2020 © IP GROUP PLC 2020 | 12
Slide 14: Results: cash flows
Results: cash flows Opening Closing 245.3 Gross 194.9 245.3 EIB facility (82.5) (74.8) Net 112.4 170.5 194.9 (10.4) 113.7 (8.4) (13.4) 7.6 (38.7) Opening gross Overheads Debt & interest Acqns, WC/other US funding Investment * Realisations Closing gross * Includes fund investment © IP GROUP PLC 2020
Slide 15: Portfolio
O ipgroup Portfolio
Slide 16: Portfolio summary
Portfolio summary £6m £20m ONT Top 20 holdings Life Sciences excl. ONT £68m Focus 12% £258m Other £98m Technology Cleantech 1 16% £973m £193m US 72% Australasia £331m Strategic Opps £45.4m 2020 net fair value movements £34.9m £29.4m £4.7m £5.3m £0.1m £0.2m (£2.9m) (£6.1m) (£11.8m) Life Sciences Tech
Slide 17: Oxford Nanopore Technologies
Oxford Nanopore Technologies STRONG GROWTH CONTINUES SIGNIFICANT IMPACT OF COVID-19 Booked orders $125m $61m 5 $25m $1m $7m 2015 2016 2017 2018 2019* STRATEGIC MOVE INTO DIAGNOSTICS OUTLOOK – KEY VALUE DRIVERS Growing Improved revenues margins Increased New market share opportunities * 2019 reflects
Slide 18: Life Sciences Portfolio (Excl. ONT)
Life Sciences Portfolio (Excl. ONT) £31.0m £330.9m £(7.1)m £4.7m £20.0m £10.4m £7.8m £313.2m £7.0m £6.2m £5.7m £5.1m £1.1m Opening Invested Realised Fair value Closing movement £(1.1)m H1 2020 Key Events • $25m investment in Inivata by NeoGenomics Inc. and option to £(3.5)m purchase • Hinge Health c
Slide 19: Technology Portfolio
Technology Portfolio £36.8m £(3.0)m £4.2m £203.6m 25 £(11.7)m £23.6m £193.1m Opening Invested Realised Fair value Closing £6.9m £6.4m movement £5.3m £1.9m £1.9m £1.4m £1.0m H1 2020 Key Events • Featurespace £30m funding round led by Merian Chrysalis at uplift despite Covid. £(4.3)m • Garrison valuat
Slide 20: Cleantech Portfolio
Cleantech Portfolio £50.0m £123.1m £3.3m £48.7m £98.3m £(73.4)m £45.4m Opening Invested Realised Fair value Closing movement 42 £7.7m £7.4m H1 2020 Key Events £5.6m • Ceres Power strong price performance and sale of the majority £3.9m of our holding by end July for £125.9m proceeds, realising a £1.0
Slide 21: US & Australasia: early-stage, but promising developments
US & Australasia: early-stage, but promising developments Source: portfolio company materials © IP GROUP PLC 2020 | 20
Slide 22: Outlook
05 Outlook Evolving GREAT IDEAS into WORLD-CHANGING businesses
Slide 23: Outlook: financial
Outlook: financial Business unit by age of company1 Australasia Return US Strategic Opportunities Time Cleantech Tech Life 0% 20% 40% 60% 80% 100% Investment Growth / < 5 years 5-8 years > 8 years harvest • Venture portfolio funds typically • The larger, specialist funds (Tech • Third-party institut
Slide 24: Outlook: Impact, ESG and responsible investing
Outlook: Impact, ESG and responsible investing IMPACT ESG RESPONSIBLE INVESTING • Impact is a natural driver of • Released first ESG report Appointment of Chair of Ethics scientific research • Diversity: 30% club Committee, Professor Gordon • Portfolio companies have had commitment & Investing in Cl
Slide 25: Summary
06 Summary Evolving GREAT IDEAS into WORLD-CHANGING businesses
Slide 26: Summary
Summary • NAV growth and cash-flow positive in the period • LamPORE a significant, positive development for Oxford Nanopore • Weight of portfolio by value now entering realisation phase • Opportunities to grow AuM across geographies, stages and sectors by leveraging balance sheet © IP GROUP PLC 2020
Slide 27: Appendix
Appendix
Slide 28: 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 29: 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 Sale of majority of 2006 equity in Ceres Power 2020 Acquisition of Acquisition of Parkwalk Incorporated as Advisors Acquires Launch of IP Ven
Slide 30: Top Holdings & fair value movement in HY 2020
3 – Top 20 Holdings & fair value movement in HY 2020 Life Sciences Technology Total £257.7m IPG FV IPG FV IPG % of Category No No No (£m) (£m) FV(£m) total £82.6m Top 20 10 466.4 9 214.2 19 680.6 67.3% Multi-sector 1 16.6 1.6% platforms Total 20 697.2 68.9% Life Sciences Total % 46.1% 21.2% £50.0m £
Slide 31: Parkwalk
4 - Parkwalk Multi-award winner Tier-one university partners One of the UK’s leading EIS growth fund managers backing technologies from UK universities • Complementary model for capital and sourcing • Strong UK ‘Golden Triangle’ presence • AUM now £306m • Over 299 investments into 126 companies Rece
Slide 32: Shareholder register (above 2% holders)
5 - Shareholder register (above 2% holders) Shareholder % holding Railways Pension Scheme 15.3% Invesco 13.7% Lansdowne Partners 8.3% Imperial College 5.2% Ballie Gifford 4.8% Lombard Odier 4.0% Schroder Investment Management 2.9% Legal & General Investment Management 2.5% Telstra Super 2.5% Liontru
Slide 33: Summary income statement
6 – Summary income statement 2020 HY (£m) 2019 HY (£m) A Core business Movement in portfolio value including funds 31.2 (36.0) Income 3.0 3.8 Overhead (incl. incentives) (13.3) (15.5) Net operating costs (10.3) (11.7) Incentive costs including carry accrual (non-cash) (7.3) 2.7 Consolidated portfoli
Slide 34: Portfolio valuation approach
7 – Portfolio valuation approach Quoted HY 2020 FY 2019 HY 2019 3% 9% 2% 11% 8% Recent 19% 5% 24% financing 20% (<12 months) 8% Recent financing (>12 months) Other 20% 48% 24% 44% valuation methods 55% Debt • Group seeks to use observable market data as the primary basis for determining asset fair v
Slide 35: Capital allocation framework
8 – Capital allocation framework The Group’s current capital allocation framework can be summarised as follows: ORGANIC MANAGE RETURNS TO GROWTH GEARING SHAREHOLDERS • Allocate capital to sectors and • Expect Group to be primarily equity • Group has taken significant recent steps geographies to achi
Slide 36: EIB debt repayment profile
9 – 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 Facility
Slide 37: Portfolio Reconciliation; Net & Gross
10 – Portfolio Reconciliation; Net & Gross Number IPG FV (£m) ONT 1 257.7 Life sciences exc. ONT 37 330.9 Technology 38 192.9 Cleantech 13 98.3 Multisector 2 19.5 Total UK 91 899.3 US 27 68.1 Australasia 10 5.7 Net portfolio 973.1 De minimis & organic 12.7 Attributable to third parties/revenue share
Slide 38: News from the top ten companies
11 – News from the top ten companies Company Group fair value/ Recent news flow shareholding • Raises £48.4m of new capital in addition to the £29.3m raised in Jan • Launches and partners with UK Govt. on LamPORE – rapid, low cost, scalable assay for detection of SARS-CoV-2 £257.7m • Involvement in
Slide 39: News from the top ten companies (cont.)
12 – News from the top ten companies (cont.) Company Group fair value/ Recent news flow shareholding • Ultraleap technology integrated in systems by Varjo Technologies and Pimax (consumer VR) • Joins The Khronos Group, an open consortium of leading hardware & software companies creating advanced acc
Slide 40: Ceres Power: £1m to £1bn in less than 8 years
13 – Ceres Power: £1m to £1bn in less than 8 years1 • c£126m (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 41: 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 London EC4N 8AF world-changing businesses. We achieve this by systematically helping to create, build and suppor