Capman Oyj Class B · OMXHEX:CAPMAN
Capman Oyj Class B — Q3 2011 Earnings Presentation
48 slides from Capman Oyj Class B's earnings presentation, Nov 3, 2011
Slide 1: CapMan result 1 January – 30 September 2011
CapMan result 1 January – 30 September 2011 3 November 2011 Certain statements included in this material, including, without limitation, statements regarding future performance of the company, expectations regarding market growth and trend projections as well as any statements preceded by the words
Slide 2: Contents
• CapMan in short Contents • Business environment • Activity and result Jan - Sep 2011 2 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 November 2011
Slide 3: CapMan
CapMan • Unique listed private equity fund manager • More than 20 years’ experience from Nordic and Russian private equity • Strong local presence and market coverage 3 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 November 2011
Slide 4: Four key investment partnerships
Four key investment partnerships CapMan CapMan CapMan CapMan Buyout Russia Public Market Real Estate • Unlisted Nordic mid- • Growth financing in • Listed Nordic small • Commercial and market companies Russian SMEs with and mid cap hotel properties, • Both equity and minority positions companies and
Slide 5: Active owner for portfolio companies and real estate
Active owner for portfolio companies and real estate CapMan CapMan CapMan CapMan Buyout Russia Public Market Real Estate 37 portfolio companies and 59 real estate targets €5.4 billion 38,700 700,000 m² net sales personnel lettable area 5 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 Novemb
Slide 6: Demonstrated capability to create value
Demonstrated capability to create value 30 September 2011 • 2.9x money back multiple for investments in portfolio companies* • IRR 36% • Average holding period 5.4 years • 1.7x money back multiple for real estate investments** • IRR 50% (equity) • Average holding period 1.4 years * 75 exits by Buyou
Slide 7: Organisation
Organisation CEO Management Group Entrepreneurial investment partnerships* CapMan CapMan CapMan Public CapMan Real Buyout Russia Market Estate CapMan Platform Sales, Marketing, Investor Finance, Back Office, Relations and Communications Legal and IT Human Resources * Other CapMan investment areas do
Slide 8: Our vision
Our vision By 2020 we are the best-performing European private equity firm 8 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 November 2011
Slide 9: Strategy
Strategy CapMan’s strategy is to combine… …the …all strengths of capabilities entrepreneurial AND within partnerships… CapMan… …to provide excellent returns to investors. 9 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 November 2011
Slide 10: Significant events Jan–Sep 2011
Significant events Jan–Sep 2011 • Q1 – New vision and mission – Updated strategy – Four key investment areas – New financial objectives • Q2 – Sale of real estate consulting business – Decision to close the Danish office • Q3 – Co-operation initiated with NEP Partners to expand real estate operation
Slide 11: Contents
• CapMan in short Contents • Business environment • Activity and result Jan - Sep 2011 11 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 November 2011
Slide 12: Investment operations
Investment operations 12 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 November 2011
Slide 13: Nordic M&A market slowed down during Q3
Nordic M&A market slowed down during Q3 • Majority of Nordic buyout deals in the mid-market category (EV < €100m) Number of buyout deals Buyout deal value in the Nordic region in the Nordic region # €bn 100 30 25 80 63 53 20 60 15 €9.5bn 40 10 20 5 0 0 2005 2006 2007 2008 2009 2010 2011 2004 2005 20
Slide 14: Leverage ratios fairly constant
Leverage ratios fairly constant Leverage ratios in European small & mid-sized transactions* 6,0x 5.6x 4.9x 4.7x 5,0x 4.7x 4.0x 4.0x 4.0x 4,0x 3.8x 3.6x 3.8x 3.5x 3.2x 3,0x 2,0x 1,0x 0,0x 2006 2007 2008 2009 2010 1-9/2011 Debt/EBITDA Senior Debt/EBITDA * European buyouts (EV<250MEUR) Source: S&P LCD
Slide 15: The value of real estate transactions in Finland was above €1bn in Jan-Sep 2011
The value of real estate transactions in Finland was above €1bn in Jan-Sep 2011 Development of transaction value in the Finnish commercial property market €bn 8 6 4 2 0 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 1-9/2011 Source: KTI 15 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 N
Slide 16: Fundraising
Fundraising 16 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 November 2011
Slide 17: Fundraising continues to be challenging…
Fundraising continues to be challenging… Capital committed to European private equity funds $bn # funds 160 120 …and fund 140 100 sizes have 120 80 clearly 100 decreased 80 60 60 40 40 20 20 0 0 2003 2004 2005 2006 2007 2008 2009 2010 2011 Commitments # of funds Source: Preqin Quarterly Q3 2011, Oct
Slide 18: Real estate fundraising remains also highly competitive…
Real estate fundraising remains also highly competitive… Capital committed to private equity real estate funds globally $bn # funds 160 300 140 250 …but funds with 120 specific sector 100 200 or geographic 80 150 focus are most likely to 60 100 succeed 40 50 20 0 0 2003 2004 2005 2006 2007 2008 2009
Slide 19: Investors continue to be positive towards private equity
Investors continue to be positive towards private equity Global demand, 100 international institutional investors interviewed in June 2011 Investors’ long term plans towards private Time frame for next intended commitments to equity investments private equity funds 100 % 3% 9% 13 % 16 % 80 % 39 % 2%
Slide 20: Small to mid market buyouts remain most attractive for investors
Small to mid market buyouts remain most attractive for investors Global demand, 100 international institutional investors interviewed in June 2011 LPs’ fund type preferences 60 % 49 % 49 % 50 % Market areas investors seek to invest in over the 40 % next 12 months 30 % 23 % 22 % Market areas investor
Slide 21: Challenges in the private equity industry
Challenges in the private equity industry Solvency II bad news for private equity investments by insurance companies Basel III bad news for private equity investments by banks LPs are also increasingly picky in GP relationships 21 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 November 2011
Slide 22: Contents
• CapMan in short Contents • Business environment • Activity and result Jan-Sep 2011 22 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 November 2011
Slide 23: New investments in Jan-Sep 2011
New investments in Jan-Sep 2011 • New and add-on investments totalled €202.7 million • CapMan’s own investments in funds totalled €10.6 million – Majority in CapMan Buyout IX and CapMan Public Market funds • One investment has been completed after the review period Investments after review period *
Slide 24: Exits during Jan-Sep 2011
Exits during Jan-Sep 2011 • Exits and partial exits at cost totalled €224.8 million • Cash flow from exits: – To investors approx. €274 million – To CapMan approx. €26 million* Most significant exits completed in the review period Partial exit announced. *Including cashflow from Maneq funds 24 CapMa
Slide 25: Group turnover and operating profit
Group turnover and operating profit Turnover Operating profit / loss € million € million 40 38.2 30 29.7 30 21.0 25.6 20 21.0 20 15.7 11.0 11.4 10 9.2 10 8.2 6.0 4.3 4.0 4.5 0 0 1-3 1-6 1-9 1-12 1-3 1-6 1-9 1-12 2010 2011 2010 2011 25 CapMan Plc Group's Interim Report 1 Jan - 30 Sep 2011 3 November
Slide 26: Components of income and operating costs
Components of income and operating costs 30 September 2011 € million 40 10.2 0.6 -25.4 35 Operating profit 30 €11.0 million 3.0 0.9 25 20.7 1.0 20 Profit before tax 15 2.8 €14.0 million 0.2 10 5 0 Management fees Income from real estate consulting Carried interest Other income Fair value gains and l
Slide 27: Management Company business showed positive result
Management Company business Management Company business showed positive result € million 1-9/2011 1-9/2010 2010 • Management fees decreased as 25.6 29.7 38.2 expected from the comparable Turnover period Management fees 20.7 25.2 32.9 Real estate consulting 1.0 1.2 1.6 • Carried interest relates prim
Slide 28: Management fees and carried interest
Management Company business Management fees and carried interest Management fees Carried interest € million € million 35 32.9 10 30 25.2 8 25 20.7 20 6 17.3 15 13.9 4 3.0 8.4 2.4 2.5 2.6 2.6 10 7.1 2 5 0.4 0.4 0 0 1-3 1-6 1-9 1-12 1-3 1-6 1-9 1-12 2010 2011 2010 2011 28 CapMan Plc Group's Interim Re
Slide 29: CapMan's carried interest base
Management Company business CapMan’s carried interest base 30 September 2011 Portfolios at fair value (equity) by funds’ carried interest phase, in total €1.4bn 11 % 1% 11 % Funds generating carried interest, €13.0m Funds that are expected to start generating carried interest in 2011-2012, €155.8m O
Slide 30: Analysing CapMan Equity VII A, B and Sweden
Management Company business Analysing CapMan Equity VII A, B and Sweden A Sweden B originally 65% buyout, 35% tech allocation 100% buyout Fund size ~paid in 156.7 67.0 56.5 capital, €m Capital returned to 148.0 63.6 69.1 investors, €m Remaining portfolio at fair 73.3 31.4 29.9 value, €m 30 CapMan Pl
Slide 31: Analysing CapMan Equity VII A, B and Sweden
Management Company business Analysing CapMan Equity VII A, B and Sweden 30 September 2011 • 8 companies in buyout portfolio – 3 companies have been partially exited • 9 companies in technology portfolio • Aggregate fair value of the portfolios: €134.6 million Buyout portfolio Technology portfolio Pa
Slide 32: Analysing impact of own investments and carried interest potential: CapMan Buyout VIII
Management Company Analysing impact of own investments and business Fund Investment carried interest potential: CapMan Buyout VIII business 30 September 2011 CAPMAN BUYOUT VIII In total Fund size: €440.0m Paid-in capital: €372.7m Portfolio at fair value: €242.7m Cash flow to investors: €153.1m CapMa
Slide 33: Improved result for Fund Investment business
Fund Investment business Improved result for Fund Investment business € million 1-9/2011 1-9/2010 2010 • Exits accounted for approx. Half Fair value gains/losses of fair value gains. 10.2 1.7 2.7 of investments • During Q3 fair value development Operating profit / loss 9.8 1.3 2.1 was neutral. Profi
Slide 34: Factors affecting the fair value development
Fund Investment business Factors affecting the fair value development Peer group (Nordic mid cap) trading 1-9/2011 Other factors 310 280 OMX Nordic Mid Cap 250 Financial performance of the companies 220 M&A transactions in the industry 190 160 Preliminary exit negotiations 130 100 03.01.11 03.02.11
Slide 35: Changes in fair values of investments
Fund Investment business Changes in fair values of investments • Fair values of investments (CapMan’s own investments) – Change 1-9/2011: €10.2 million or 16.8% – Change in Q3 2011: -€0.1 million or -0.1% • Exits accounted for approximately half of fair value changes year to date – In addition, the
Slide 36: Fair values of investments
Fund Investment business Fair values of investments 30 September 2011 Changes in fair values of portfolio Changes in fair values of real estate companies in 2011* targets in 2011* 13 % 7% 2% 27 % 40 % 40 % 51 % 20 % New investments New investments Fair value increased Fair value increased Fair value
Slide 37: Fund investments and commitments totalled €91.6 million
Fund Investment business Fund investments and commitments totalled €91.6 million €m Majority of investments and commitments in buyout funds 60 50 40 30 20 10 0 Buyout, 59% Russia, 5% Public Market, Real Estate, 7% Other, 18% Access, 7% 4% • Investments in fair value, in total €67.7 million (lower pa
Slide 38: Key holdings for CapMan through own fund investments
Fund Investment business Key holdings for CapMan through own fund investments 30 September 2011 Company Business Net sales, Personnel** Fund(s) Investment M€* year Toiletries, household, CMB VIII wound care, and 240.4 800 2008 CMM IV healthcare products Technical laminates and protective 294.4 1,003
Slide 39: Financial objectives
Financial objectives We believe that private equity remains a growth industry, and CapMan continues to exploit growth opportunities especially in its key investment areas. Growth will be a natural outcome of high performance. Objectives Realised 1-9/2011 Performance Return on equity over 20% p.a. Re
Slide 40: CapMan guidance – 2011 result
CapMan guidance – 2011 result • Our guidance remains unchanged. We expect operating profit for 2011 to exceed the 2010 operating profit, mainly as a result of positive development in CapMan’s own fund investments. Operating profit in 2010 was €6.3 million excluding non-recurring items. • Our guidanc
Slide 41: IR calendar and IR team
IR calendar and IR team IR calendar 2012 IR team Financial Statements Bulletin 2011 Lennart Simonsen, CEO, Senior Partner Tel. +358 207 207 567 3 February 2012 lennart.simonsen@capman.com AGM 14 March 2012, Helsinki Jerome Bouix, Head of Sales, Marketing, Investor Relations and Communications, Senio
Slide 42: Additional slides
Additional slides
Slide 43: Key figures as of 30 September 2011
Key figures as of 30 September 2011 30 Sep ‘11 30 Sep ‘10 31 Dec ‘10 Earnings per share, cents* 10.1 5.9 17.7 Diluted, cents 9.9 5.9 17.7 Shareholders' equity / share, cents** 103.3 94.4 107.7 Share issue adjusted number of shares 84,255,467 84,255,467 84,255,467 Number of shares at the end of perio
Slide 44: Group Income Statement
Group Income Statement € million 1-9/11 1-9/10 1-12/10 Turnover 25.6 29.7 38.2 Management fees 20.7 25.2 32.9 Carried interest 3.0 2.6 2.6 Real Estate consulting 1.0 1.2 1.6 Other income 0.9 0.7 1.1 Other operating income 0.6 0.1 23.0 Operating expenses -25.4 -25.4 -42.8 Fair value gains / losses of
Slide 45: Group Balance Sheet – Assets, IFRS
Group Balance Sheet – Assets, IFRS € thousands 30 Sep ‘11 30 Sep ’10 31 Dec ‘10 Tangible assets 467 609 602 Goodwill 6,204 10,245 6,406 Other intangible assets 1,995 2,514 2,424 Investments in associated companies 9,068 8,003 6,400 Investments at fair value through profit and loss Investments in fun
Slide 46: Group Balance Sheet – Total equity and liabilities, IFRS
Group Balance Sheet – Total equity and liabilities, IFRS € thousands 30 Sep ‘11 30 Sep ‘10 31 Dec ’10 Share capital 772 772 772 Share premium account 38,968 38,968 38,968 Other reserves 38,679 38,678 38,679 Translation difference 70 -79 69 Retained earnings 8,582 1,210 12,241 Capital attributable th
Slide 47: CapMan's ownership
CapMan’s ownership 10 October 2011 6% 25 % 22 % 25 % 22 % 18 % 29 % 53 % Nominee registered and foreign shareholders Management and employees of CapMan* Corporations Other shareholders Households Nominee registered shareholders Non-profit and public sector institutions Financial and insurance corpor
Slide 48: CapMan Plc's largest shareholders
CapMan Plc’s largest shareholders 10 October 2011 Share of all shares % Share of all voting rights % Ilmarinen Mutual Pension Insurance Company 8.5% 5.2% Aristo Invest Oy + Ari Tolppanen* 8.3% 20.8% Winsome Oy + Tuomo Raasio* 4.5% 8.1% Varma Mutual Pension Insurance Company 4.4% 2.7% Vesasco Oy 4.0%