HGCapital Trust PLC · LSE:HGT
HGCapital Trust — FY2024 Earnings Presentation
32 slides from HGCapital Trust's earnings presentation, March 2025
Slide 1: 2024 full year results: Get connected
2024 full year results Get connected to a universe of software and services businesses This document accompanies the annual report and accounts to 31 December 2024. The information in this document contains a summary of information set out in this report. References in this document to HgCapital Tru
Slide 2: HgCapital Trust ("HgT")
HgCapital Trust (“HgT”) HgT is a FTSE 250 investment company listed on the main market of the London Stock Exchange and managed by Hg, Europe’s largest software investor1 £2.5bn market cap Investment strategy focused on profitable and growing Resilient business +20.5% p.a. models with highly compani
Slide 3: Hg: 30+ year track record, >$75bn AUM
30+ year #1 track record of investing Private equity tech investor globally1 >$75bn >$160bn assets under management portfolio enterprise value 6 >400 Offices in London, Munich, employees including >250 New York, San Francisco, Paris investment and other As at 31 December 2024; adjusted pro forma for
Slide 4: HgT is Hg's largest client, committed to all Hg funds
HgT is Hg’s largest client, Pension Sovereign Wealth Endowments and insurance plans Funds companies committed to all Hg funds HgT provides listed access to “the free float” of >$160bn EV of Hg HgT’s underlying Hg’s largest Software “Inc” >$75bn Hg’s portfolio shareholder base LP investor AUM compani
Slide 5: Targeting robust and resilient 'Hg sweet-spot' business models
Targeting robust and resilient ‘Hg sweet-spot’ business models Company maturity Business model Focus on end- Typical equity investment of attributes market clusters >€100m Tax & Accounting Business critical software ERP & Payroll or service Legal and Compliance Subscription / repeat Automation and E
Slide 6: Focused 'Hg Cluster' approach has driven deep sub-sector knowledge
Focused ‘Hg Cluster’ approach has driven deep sub-sector knowledge Tax & Accounting >20 years ERP & Payroll >20 years Legal & Regulatory >17 years Automation & Engineering >15 years Technology Services >14 years Fintech >11 years Healthcare IT >10 years Insurance >10 years Note: Hg portfolio at 31 D
Slide 7: Operational expertise across a wide range of areas
We have operational expertise across a wide range of areas, reflecting where we see repeat value creation opportunities Growth Tech, Product, Cyber Data and AI Projects Support Talent • Sales • R&D and tech platform • BI, warehousing, snowballs • First 100-days, onboarding • C-Suite team effectivene
Slide 8: Examples of the projects we've helped deliver in the last year
Examples of the projects we’ve helped deliver in the last year Data monetisation R&D optimisation Account grading: CaPDB Business systems Built new data products to Removed ~$10m R&D Built account grading model to An accelerated assessment of enhance customer offering, synergies and secured top incr
Slide 9: Why invest in software?
Why invest in software?
Slide 10: Demographics is destiny
Demographics is destiny… Long-term decline in working age population is expected to drive up cost of labour and increase software adoption OECD working age population (m) Relationship between labour cost and software spend 950 2022: 1,800 900 All time high R2=0.80 1,600 United States Software and Se
Slide 11: Driving above-market earnings growth for software companies
…driving above-market earnings growth for software companies 900 EPS Software 800 700 600 500 400 300 Market 200 100 0 2005 2007 2009 2011 2013 2015 2017 2019 2021 2023 Past performance is not a reliable indicator of future results 11 Note: Based on IGV ETF (tracks c. 100 US tech companies, mainly s
Slide 12: Software companies are staying private for longer
Software companies are staying private for longer Median Market Value of Tech Initial Public Offerings by year, $m 5,000 4,500 1980-1990s 2000s 2010-2020s Median IPO valuation of c.$100-150m Median IPO valuation of $300-600m Median IPO valuation of $600m-$1bn+ 4,000 Opportunities for private tech Op
Slide 13: Europe's fragmented market structure provides broad opportunities in private software
Europe’s fragmented market structure provides a broad range of opportunities in the private software space Europe: Tax & Accounting segment leaders US: Tax & Accounting segment leaders >50% of the top 40 European <20% of the top 40 US software software companies are private1 companies are private1 N
Slide 14: HgT provides listed access to the free float of >$160bn EV of Hg's portfolio
HgT provides listed access to “the free float” of >$160bn EV of Hg’s portfolio of private software and services businesses 10% $288bn 19% >$160bn 4% 13% Revenue $45bn 6% 7% $34bn growth 4% $12bn $17bn EV $5bn Source: Factset, Europe tech firm EVs and Hg’s EV reported as at 31 December 2024. FY23 LTM
Slide 15: HgT 2024 results
HgT 2024 results
Slide 16: Compounding growth: the power of a long-term investment strategy
Compounding growth: the power of a long-term investment strategy Both HgT’s share price and net asset value per share have consistently outperformed the FTSE All-Share Index over the long-term 2024 performance +25.7% +10.4% Share price total NAV total return return 1 3 5 10 20 year years years years
Slide 17: Strong trading remains the key driver of performance
Strong trading remains the key driver of performance At 31 December 2024. 17 Past performance is not a reliable indicator of future results.
Slide 18: Continued strong trading from "Rule of 40+" portfolio
Continued strong trading from “Rule of 40+” portfolio Rule of 40+: 12% organic revenue growth and 34% EBITDA margins for the top 20 companies (76% of portfolio) 19% 23% 34% LTM revenue growth1 LTM EBITDA growth1,2 EBITDA margin2 At 31 December 2024. 1. LTM revenue and EBITDA growth including M&A. 2.
Slide 19: Continued realisation activity despite a challenging environment for exits
Continued realisation activity despite a challenging environment for private equity exits Consistent record of generating liquidity across cycles £508m of realisations in 2024 (22% of opening NAV) Average uplift to carrying value of 15% 45% 39% £98m 40% £92m 35% £51m 30% £50m 25% 24% 22% 22% Average
Slide 20: Increased activity in 2024 reflects an improving investment environment
Increased activity in 2024 reflects an improving investment environment Nine new companies added to the portfolio, and significant further investment in existing portfolio to drive future growth and finance accretive M&A opportunities £126m £114m £606m invested in 2024 (2023: £74m), including £75m £
Slide 21: Case study
A leading cloud-based platform platform that transforms the way enterprises automate, collaborate and report in real-time on critical risk, audit and compliance workflows. The company was founded in 2014, “by auditors, for auditors”, but has since leveraged its highly modern, modular platform to exp
Slide 22: Robust portfolio balance sheets with below market gearing
Robust portfolio balance sheets with below market gearing: >70% equity in capital structures EMEA market Proactive debt extension, with no meaningful maturities for ~2 average1 2 years3 26.1x £15.5bn 50% 72% Maturity equity equity EV/EBITDA extended during (Dec 2023: 26.1x) 2024 £12.1bn Relates to P
Slide 23: Hg's robust balance sheet supports future investment activity (1/2)
Hg’s robust balance sheet supports future investment activity (1/2) Outstanding commitments profile, Q4 2024 HgT’s “toolbox” to manage liquidity across market cycles • Fund commitments: foundation of investment strategy providing exposure to all Hg investments • Co-investment: option, without obliga
Slide 24: HgT's robust balance sheet supports future investment activity (2/2)
HgT’s robust balance sheet supports future investment activity (2/2) Including post-period commitment of $1bn to Hg Saturn 4 to be invested over the next three to four years Pro-forma outstanding commitments1 HgT’s “toolbox” to manage liquidity across market cycles • Fund commitments: foundation of
Slide 25: Outlook
Outlook Resilient trading performance underpinned by mission-critical nature of products and services provided by portfolio companies Improving deal environment and increased Hg Investment Committee activity is supportive of further investment activity We continue to focus on consistency of realisat
Slide 26: Further resources
Further resources Hg portfolio Hg 2024: A Year in Review Orbit: an Hg podcast HgT website: https://www.hgcapitaltrust.com/ Hg website: https://hgcapital.com/ HgT LinkedIn: https://www.linkedin.com/company/hgcapital-trust-plc Orbit podcast: https://hgcapital.com/insights/orbit-podcast Hg insights: ht
Slide 27: Appendices
Appendices
Slide 28: Top 10 portfolio companies (56.4% of the total portfolio)
Top 10 portfolio companies (56.4% of the total portfolio) % Company Cluster Location Description Portfolio • Provides business-critical software to SMEs and the public sector in the Benelux and Nordic regions, providing c.1.9m Tax & Accounting/ Scandinavia enterprise customers with accounting; resou
Slide 29: Portfolio diversified by cluster, vintage and geography
Portfolio diversified by cluster, vintage and geography Hg cluster by value Investment vintage by value Geographic spread by value Healthcare IT Automation & DACH Technology 5% Engineering 10% Services Pre-2021 UK 3% 5% 26% 2024 Other Europe 32% 30% 10% Fintech Tax & Accounting 7% 31% Insurance 8% 2
Slide 30: Contact
Contact For further information on HgCapital Trust plc, please visit our website: www.hgcapitaltrust.com Or contact our Investor Relations Team at: investorrelations@hgcapital.com Laura Dixon +44 78 2459 2894 George Crowe +44 20 8152 5880 Barty Bodilly +44 7467 992412 You can also follow us: Linkedi
Slide 31: Disclaimer
Disclaimer NOT FOR RELEASE, PUBLICATION OR DISTRIBUTION, DIRECTLY OR INDIRECTLY, IN WHOLE OR IN PART, INTO OR WITHIN THE UNITED STATES OR TO “US PERSONS” (AS DEFINED IN REGULATION S UNDER THE UNITED STATES SECURITIES ACT OF 1933, AS AMENDED (THE “SECURITIES ACT”) OR INTO OR WITHIN AUSTRALIA, CANADA,
Slide 32: Disclaimer
Disclaimer These materials include statements that are, or may be deemed to be, "forward-looking statements" which are based on current expectations and projections about future events. In some cases, these forward- looking statements may be identified by the use of forward-looking terminology, incl