Kinnevik Ab Class A · OMXSTO:KINV_A
Kinnevik Ab Class A — Investor Day (November 2009)
24 slides from Kinnevik Ab Class A's investor day presentation, November 2009
Slide 1: Kinnevik New Ventures Capital Markets Day November 2009
Investment A B Kinnevik KINNEVIK NEW VENTURES CAPITAL MARKETS DAY NOVEMBER 2009 HENRIK PERSSON – HEAD OF INVESTMENTS
Slide 2: Agenda
AGENDA • PURPOSE AND INVESTMENT STRATEGY • FOCUS AREAS • CURRENT INVESTMENTS • Q&A 2
Slide 3: Henrik Persson - Head of Investments
HENRIK PERSSON - HEAD OF INVESTMENTS • Head of Investments 2006- • IR and portfolio review Kinnevik 2004-2006 • IR within the Kinnevik Group 2003-2004 • HSBC Securities 1999-2003 • Business journalist/editor 1997-1999 3
Slide 4: Purpose
PURPOSE • Find new high growth markets and industries • Screen specific investment opportunities and invest early • Build network, competence and partnerships • Invest to be big • Selective opportunistic investments around our core sectors 4
Slide 5: Current Investment Focus
CURRENT INVESTMENT FOCUS • Four focus areas • Long term objective to build strong international companies in each sector MICRO FOOD/FUEL ONLINE FINANCE AFRICA 5
Slide 6: Resources for Investments in 'Emerging Phases'
RESOURCES FOR INVESTMENTS IN ’EMERGING PHASES’ • Operationally focused • Experience and reputation of building great international companies • International network of successful managers • Culture of growth, innovation and cost control • Long term horizon (‘permanent capital’) 6
Slide 7: Organisation
ORGANISATION HQ Operations • Strategy • Investment management • Screening • Product development • Investments, capital • New start-ups and allocation selective M&A 7
Slide 8: Food, Fuel…
FOOD, FUEL… Structural demand for food and biofuel driven by: • Growing population • Wealthier population • Increasing scarcity and cost of traditional energy resources • Regulation • Environmental awareness 8
Slide 9: World Development Indices
WORLD DEVELOPMENT INDICES 1950-2030 800 Energy demand 700 Carbon emissions GDP per capita 600 Grain consumption Population 500 400 300 200 100 0 9 1950 1960 1970 1980 1990 2000 2010e 2020e 2030e
Slide 10: Kinnevik Legacy
KINNEVIK LEGACY • 1936 – Founded around forestry, farming, sugar etc. • 2001 – First venture abroad by acquiring 2 Polish farms • 2004 – Invested in the first pellets factory in Latvia • 2006 – Invested in Black Earth Farming • 2007 – Sold our last farm in Sweden • 2008 – Expanded pellets factory in
Slide 11: Black Earth Farming
BLACK EARTH FARMING Cropped land 200 000 • 180,000 ha land in full ownership 150 000 • Focus on operational development 100 000 50 000 • 180,000 ha in production 2009 – 0 2006 2007 2008 2009E* 140,000 ha in 2008 Land development mix • Investment in storage – some 50% 200 000 > 2 years of cultivation
Slide 12: SIA Latgran
SIA LATGRAN • Production capacity increased Energy supply from biomass to fulfill from 75,000 to ~200,000 tones EU’s 20-20-20 directive, TWh in 2009 TWh 2005 2020 Multiple CAGR • Sourcing secured in long term Biofuels 72 326 4.5x 11% contracts Heat 395 1 045 2.6x 7% Power 80 528 6.6x 15% • Revenues
Slide 13: Poland, Ukraine, Bergvik
POLAND, UKRAINE, BERGVIK Rolnyvik, Poland • 6,700 hectares acquired in 2001-2002 • Grain production with revenues of some SEK 50m • EBIT margins around 15% excluding EU subsidies Rawagro, Ukraine • 17,000 ha – 30% acquired in June 2009 • Joint venture with local investment group TAS • 5 farms acquir
Slide 14: Microfinance
MICROFINANCE • Rapidly growing industry with large unmet needs – Still low penetration of microcredit - 130m clients of potentially 1.5 billion – $15-20bn in new equity needed over the next 5 years to sustain growth in the industry – Group microloans fairly advanced. Additional products such as insu
Slide 15: Share of Households with Bank Accounts
SHARE OF HOUSEHOLDS WITH BANK ACCOUNTS 15
Slide 16: Bayport Financial Services
BAYPORT FINANCIAL SERVICES • Pan-African microfinance company founded in 2002 by experienced entrepreneurs • Services 200,000 previously unbanked Africans • Performance 2005-2009: – CAGR 65% in loan book – CAGR 104% in net profit – Loan default rate well below 5% – Net profit margin ~18% – ROE ~50%
Slide 17: Microvest
MICROVEST • Experienced management and global network in 75 countries through its owners • Successfully managed MFI fund since 2004 – main focus on debt but also strong performance in equity investments with IRR of ~35% • Joint commitment to actively pursue co-investment opportunities – Kinnevik one
Slide 18: Online
ONLINE • We view Internet, e-commerce, classifieds, and lead generation as emerging markets • Centralized control enables a combination of strong growth and efficient cost control • Early monetization • High margins 18
Slide 19: Relevant Traffic
RELEVANT TRAFFIC • Online marketing agency SEK '000 Revenue rolling 12 months with strong presence in 200 000 Sweden, France and Spain 150 000 • Growing into Search Engine 100 000 Optimization (SEO) and 50 000 Lead Generation 0 • Platform for future 2008 Q1 2008 Q2 2008 Q3 2008 Q4 2009 Q1 2009 Q2 20
Slide 20: Early Online Investments
EARLY ONLINE INVESTMENTS • Russia’s leading c2c site - Avito • Price comparison in new markets - R2 • Russian online fantasy ice hockey & soccer game – Hockeyboss.ru Toptarif Russia Super Sports Similar Model: Similar Model: Similar Model: Russian c2c, 1m Lead generation in Russian online unique vis
Slide 21: Africa
AFRICA • Africa shows strong trends Annual real GDP growth in economic growth and 7 social and democratic 6 5 development 4 • We have made a number 3 2 of successful investments 1 and successful exits 0 2006 2007 2008 2009 2010 -1 • Increasing focus on new Sub-Saharan Africa MENA World investments 2
Slide 22: Leading Organizations for Investments in West Africa
2 LEADING ORGANIZATIONS FOR INVESTMENTS IN WEST AFRICA Legacy & Track Record Legacy & Track Record • Over 70 years of • 15 years of successful entrepreneurship and operations in Nigeria investment/operating ARM Capital • Strong regional brand and experience leading asset management Partners • Intern
Slide 23: Sum Up - Our Portfolio So Far
SUM UP – OUR PORTFOLIO SO FAR MICRO AGRI ONLINE AFRICA FINANCE Bayport Black Earth Farming Relevant Traffic Invested 2007 ARM PE Fund Invested 2006 Invested 2006 Tot Invest. SEK 121m Invested 2009 Tot Invest. SEK 531m Tot Invest. SEK 120 6% of Equity Tot Committed $15m 21% of Equity 100% of Equity C
Slide 24: Q&A
Investment A B Kinnevik Q&A KINNEVIK NEW VENTURES CAPITAL MARKETS DAY NOVEMBER 2009 24