Slide 1: Results for the year to 31 March 2021
Results for the year to 31 March 2021 13 May 2021
Slide 2: Business review
Business review Simon Borrows Chief Executive
Slide 3: A strong result exceeding our financial targets
A strong result exceeding our financial targets Year to 31 March 2021 Group Private Equity Infrastructure Total return Operating cash Total dividend Gross investment Gross investment on equity profit per share return return 22% £23m 38.5p 30% 16% NAV per share Liquidity Gearing Proprietary capital C
Slide 4: What 3i brings to the table
What 3i brings to the table As proprietary capital investors we have a long-term, Strong values Our people, responsible and institutional relationships approach. culture and network We create value through thoughtful origination, Careful disciplined A responsible investment and origination and appro
Slide 5: Responsible approach to investment
Responsible approach to investment A material lever for value creation in our portfolio A number of our portfolio companies already make a positive impact across important themes. We have supported value-accretive investments in this direction Circular economy/ Health and Transition to low sustainab
Slide 6: Careful portfolio construction
Careful portfolio construction Portfolio strategically positioned to benefit from structural growth trends Demographic change Digitisation, technological disruption and big data Globalisation Value-for-money Low carbon and circular economy 6
Slide 7: Private Equity: strong performance and focused investment activity
Private Equity Strong performance and focused investment activity Strong performance across the portfolio • 30% gross investment return • 87% of portfolio by value grew earnings in the period • Only £66m of liquidity support required by the portfolio (Audley Travel and Hans Anders) Disciplined inves
Slide 8: Strong earnings growth across the portfolio
Private Equity Strong earnings growth across the portfolio Portfolio earnings growth of top 20 PE investments1 ≥ 30% £1,105m 4 companies 20 - 29% £568m 2 companies 10 - 19% £4,991m 3 companies 0 - 9% £966m <0% £977m 1 Includes top 20 Private Equity companies by value. This represents 98% of the Priv
Slide 9: Portfolio value growth of £2.2bn predominantly performance driven
Private Equity Portfolio value growth of £2.2bn predominantly performance driven Largest value increases (>£20m)1 Largest value declines (>£20m) Value Value at Value Value at Portfolio Key driver of value Portfolio Key driver of value growth 31 Mar decline 31 Mar company movement company (excl FX) 2
Slide 10: Action – remarkable resilience in a difficult year
Private Equity Action – remarkable resilience in a difficult year 2020 +10% revenue growth1 +14% EBITDA growth1 1,716 stores 164 new stores Highlights An unbroken high growth track record Expansion across Europe continues EBITDA (€m) Netherlands Poland 395 stores, 101 stores, Sales (€m) 2 DCs 1 DC a
Slide 11: Action – update
Private Equity Action – update • Q1 trading: softer January and February due to restrictions. Strong trading in March, bringing Q1 outcome ahead of prior year • Q2 trading: much stronger P4 and early P5 than last year, good momentum for the rest of the quarter • Store openings: on track to open 300
Slide 12: Value creation | Royal Sanders (2018)
Private Equity Value creation | Royal Sanders (2018) £364m value Driving consolidation in a highly fragmented industry 2.9x money multiple1 • 3 bolt-on acquisitions since investment… • …adding customers, further international capabilities and new verticals Organic growth from existing and new custom
Slide 13: Value creation | Cirtec Medical (2017)
Private Equity Value creation | Cirtec Medical (2017) £444m value Diversification and internationalisation through acquisition • 7 bolt-on acquisitions since investment, expanding exposures to additional 2.6x money multiple1 fast-growth medical device markets and platforms • Expanded into Europe and
Slide 14: Value creation | Luqom (2017)
Private Equity Value creation | Luqom (2017) £307m value Significant international expansion, mostly organic 3.2x money multiple1 • Now active in 27 countries from 10 at initial investment • Acquisition of QLF in 2019 and Lampemesteren in 2021 will facilitate expansion in the Benelux, Eastern Europe
Slide 15: Good level of new investment in a challenging environment
Private Equity Good level of new investment in a challenging environment… Magnitude MPM Software WilsonHCG GartenHaus £124m new investment £90m new investment £61m new investment International branded, premium Global provider in recruitment Online retailer of garden buildings, and natural pet food c
Slide 16: Continued bolt-on investment activity
Private Equity …supplemented by continued bolt-on investment activity SaniSure + SaniTech West Evernex + TechnoGroup GartenHaus + Polhus US manufacturer, distributor Third-party IT equipment Online retailer of garden and integrator of single-use maintenance business in houses and related products bi
Slide 17: Creative approach to new investment in a competitive market | SaniSure
Private Equity Creative approach to new investment in a competitive market | Sanisure The bioprocessing Creating the SaniSure opportunity platform • Attractive market, underpinned • Bioprocessing platform created in by strong growth drivers 2019 through the merger of Cellon, • Few investment opportu
Slide 18: Infrastructure
Infrastructure Resilient performance and good cash contribution to the Group Good performance across portfolios • 16% gross investment return • Good contribution from 3iN, with 20% share price appreciation and £26m of dividend income • US portfolio performing well, with £74m of cash proceeds receive
Slide 19: Scandlines
Scandlines Solid despite significant disruption to leisure traffic from Covid-19 • Gross investment return of £25m, or 6% of opening value • Profitable through the pandemic despite restrictions – freight volumes stable – travel restrictions between Germany and Scandinavia continue to impact leisure
Slide 20: Financial review
Financial review Julia Wilson Group Finance Director
Slide 21: Total return on equity of 22% demonstrating portfolio strength
Total return on equity of 22% demonstrating portfolio strength NAV per share (pence) 1100 243 (19) (13) 4 (41) 1000 (35) 947 900 804 4 800 700 600 31-Mar-20 Realised Value growth Net carry Pension Other1 FX 2 Dividends 31-Mar-21 profits payable NAV per share up 18% to 947 pence 1 Other includes port
Slide 22: Increase in values reflects structural growth
Private Equity Increase in values reflects structural growth Value movement by basis (£ million) 1,067 Action performance 135 Action multiple 788 Performance increases 1 (252) Performance decreases1 408 Multiple 113 Quoted (101) DCF 3 Other £2.2bn value increase driven by a combination of performanc
Slide 23: Action performance at least as good as peers
Private Equity Action performance at least as good as peers 45x 40x Five Below, 36.8x 35x 30x 25x Dollarama Inc., 22.2x 20x Costco, 19.8x Average, 19.4x Ollie's, 17.4x Grocery Outlet, 17.4x 15x Dollar General, 12.6x 10x B&M, 9.3x 5x Mar-20 Apr-20 May-20 Jun-20 Jul-20 Aug-20 Sep-20 Oct-20 Nov-20 Dec-
Slide 24: Action – resilience in a very challenging 2020
Private Equity Action – resilience in a very challenging 2020 Source: Action capital markets seminar, 18 March 2021 24
Slide 25: Action – approach to valuation
Private Equity Action – approach to valuation Enterprise value (post discount) €12.62bn €11.26bn • Run-rate earnings of €682m including €10.25bn €10.25bn some adjustment for Covid-19 effects • 18.5x (Sep-20: 18.0x) multiple post discount. Increase reflects strong performance in the year • Triangulat
Slide 26: Increase in values reflects structural growth
Private Equity Increase in values reflects structural growth Value movement by basis (£ million) 1,067 Action performance 135 Action multiple 788 Performance increases1 (252) Performance decreases1 408 Multiple 113 Quoted (101) DCF 3 Other £2.2bn value increase driven by a combination of performance
Slide 27: LTM valuation multiples compared to the peer set
Private Equity LTM valuation multiples compared to the peer set1 Valuation mutliple Peer set average 1 Valuation multiples used for 21 companies valued on an earnings basis compared to 3i comparable set of peer companies. 27
Slide 28: Good performance and resilience reflected in valuation approach
Private Equity Good performance and resilience reflected in valuation approach Good recovery since the Continued challenges Strong performance throughout pandemic lifting of initial lockdowns (less than 5% of portfolio value) Tato • Substantially all valued on December LTM • Maintainable earnings •
Slide 29: Private Equity: strong performance and good rate of investment
Private Equity Strong performance and good rate of investment Year to 31 March £ million 2021 2020 Gross investment return 1,936 352 % of opening portfolio 30% 6% Realisations 114 8481 Cash investment 508 1,0621 Year to 31 March £ million 2021 2020 New investment 275 413 Portfolio support 66 10 Furt
Slide 30: Infrastructure: strong performance from 3iN
Infrastructure Strong performance from 3iN Year to 31 March £ million 2021 2020 3iN 132 (76) Regional Rail 30 10 Smarte Carte (4) (22) Other funds 10 (4) Portfolio revaluation 168 (92) Gross investment return 16% (4)% Realisation proceeds 104 - Cash income 67 78 30
Slide 31: Scandlines: solid performance despite travel restrictions
Scandlines Solid performance despite travel restrictions Year to 31 March £ million 2021 2020 Gross investment return 25 5 % of opening portfolio 6% 1% Year to 31 March £million 2021 2020 Valuation 435 429 31
Slide 32: Operating cash profit provides resilience
Operating cash profit provides resilience Year to 31 March £ million 2021 2020 Private Equity 64 45 Infrastructure 67 78 Scandlines − 37 Cash income 131 160 Operating cash expenses1 (108) (120) Operating cash profit 23 40 Objective is to at least break even 1 Cash operating expenses include operatin
Slide 33: Strong balance sheet and conservative capital management
Strong balance sheet and conservative capital management £10,408m • High quality, resilient portfolio £225m • Gross cash held centrally with no material restrictions • Gross debt made up of 2023, 2032 and the new £400m bond £975m expiring in 2040 £500m • Undrawn RCF, maturity extended to March 2026
Slide 34: 10% increase in proposed total dividend
10% increase in proposed total dividend reflecting good performance in a challenging year 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 a
Slide 35: Outlook
Outlook Simon Borrows Chief Executive
Slide 36: Strong outlook for FY2022 despite the pandemic
Strong outlook for FY2022 despite the pandemic • Strong result for the year exceeded our financial targets • Increased dividend to reflect strong value growth • Cautious financial policy at Group and portfolio company level underpins resilience • High quality portfolio, strategically positioned to b
Slide 37: Additional information
Additional information
Slide 38: Our business model
Our business model Delivering sustainable returns over the cycle What we offer Value creation Who benefits ➔ Conservative balance sheet management ➔ Tight grip on operating costs Expertise ➔ Operating cash profit Access to capital BLN 1 Shareholders Invest Active partnership Portfolio Reputation com
Slide 39: Responsible approach to investment
Responsible approach to investment Our RI policy has been in place for over a decade Our RI policy applies to all investments. We invest only in businesses which are committed to: Fair and safe The environment working conditions Business integrity Good governance Note: a summary of our Responsible I
Slide 40: Q4 NAV increased from 936 pence to 947 pence
Q4 NAV increased from 936 pence to 947 pence NAV per share (pence) 1050 71 (9) (1) (33) 1000 (17) 950 947 936 900 1 31-Dec-20 Value growth Net carry payable Pension Fx Dividends 31-Mar-21 1 Fx movement net of derivatives. 40
Slide 41: 20 large investments
20 large investments Investment Business description Valuation Valuation Mar 21 (£m) Mar 20 (£m) Action General merchandise discount retailer 4,566 3,536 3i Infrastructure plc Quoted investment company, investing in infrastructure 797 665 Cirtec Medical Outsourced medical device manufacturing 444 30
Slide 42: Group investment portfolio
Group investment portfolio Portfolio value at 31 March 2021 (£m) Portfolio value at 31 March 2020 (£m) 612 394 362 435 429 452 797 665 4,566 3,536 745 281 2,062 1,472 829 869 Action 2013-2016 Private Equity Action 2013-2016 Private Equity 2016-2019 Private Equity 2019-2022 Private Equity 2016-2019 P
Slide 43: Private Equity portfolio by value
Private Equity portfolio by value By office location (%) By sector (%) 1% 13% 12% 8% 9% 63% 10% 52% 8% 6% 18% Netherlands France Action (Consumer) Consumer Germany UK Industrials B&TS* US Others Healthcare Portfolio of 33 investments (31 March 2020: 32) * Business and Technology Services. 43
Slide 44: Net asset exposure by currency
Net asset exposure by currency 2% Net assets Change Change Currency £m YTD £m 14% 16% Sterling 1,254 n/a - Euro1 6,237 3.9% (247) US dollar 1,489 11.3% (142) Danish krone 162 3.5% (5) 68% Other 22 n/a (2) Sterling/non-revaluing Euro Total 9,164 (396) US dollar Danish krone 1% movement in euro = £62
Slide 45: Top assets continue to show good earnings growth
Private Equity Top 20 assets continue to show good earnings growth 3i carrying value at 31 March 2021 (£ million) Number of 3 companies: 4,991 7 4 2 4 977 966 1,105 568 <0% 0-9% 10-19% 20 - 29% ≥30% Last 12 months’ adjusted earnings growth1 1 Includes top 20 Private Equity companies by value. This r
Slide 46: Portfolio leverage
Private Equity Portfolio leverage Ratio of total net debt to earnings1 by 3i carrying value at 31 March 2021 (£ million) 5,392 931 535 383 335 - 146 <1x 1 - 2x 2 - 3x 3 - 4x 4 - 5x 5 - 6x >6x 3.9x leverage across the whole portfolio 1 This represents 88% of the Private Equity portfolio by value. Quo
Slide 47: Proprietary capital and external funds
Private Equity Proprietary capital and external funds Vintage1 Proprietary capital value at 31 March 20212 Vintage money multiple at 31 March 20213 Buyouts 2010-2012 £1,569m 10.2x Growth 2010-2012 £16m 2.1x 2013-2016 £829m 2.1x 2016-2019 £2,062m 1.4x 2019-2022 £745m 1.1x Other4 £3,593m n/a Total pro
Slide 48: Carried interest payable reduction a result of carry paid
Private Equity Carried interest payable reduction a result of carry paid in the period Year to 31 March 2021 2020 £ million Income statement Carried interest receivable (3) 79 Carried interest payable (173) (63) Net total (expense)/return (176) 16 Year to 31 March 2021 2020 £million Balance sheet Ca
Slide 49: Infrastructure: AUM of £4.9 billion at March 2021
Infrastructure AUM of £4.9 billion at 31 March 2021 AUM by fund or strategy (%) 6 7 3i Infrastructure plc 3i Managed Infrastructure Acquisitions LP 10 3i European Operational Projects Fund 5 53 BIIF 3i India Infrastructure Fund 19 3i Managed accounts US Infrastructure AUM increased by £504m in the y
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