Chrysalis Investments Limited · LSE:CHRY
Chrysalis Investments — FY2024 Earnings Presentation
26 slides from Chrysalis Investments's earnings presentation, January 2025
Slide 1: 2024 Full Year Results Presentation
2024 Full Year Results Presentation For professional investors in the UK only January 2025
Slide 2: Important information
Important information This document has been prepared for information purposes only by Chrysalis Investment Partners LLP in its capacity as investment adviser Neither this document nor any copy of it may be taken or transmitted into or distributed in any member state of the European (the “Investment
Slide 3: Key Risks
Key Risks The following risks are a non-exhaustive list of risks associated with the Company. Investors should take independent v. Portfolio Construction – ensuring that the portfolio remains sufficiently diversified and that the Company’s holdings financial advice prior to investing in the Company:
Slide 4: Full year highlights
Chrysalis Investments Full year highlights 141.26P – FY24 NAVPS INCREASE OF 4.9% 3.99P – 4Q24 NAV DECLINE OF 2.7% £54M PROCEEDS FROM REALISATIONS Starling and Klarna were the primary drivers wefox and FX were the primary detractors £45m was realized from Graphcore and £9m from Wise 22% REVENUE GROWT
Slide 5: NAV progression through FY24
NAV progression through FY24 Strong performances from Starling and Klarna were key NAV drivers NAV per share movement between September 2023 and September 2024 (pence) Starling’s valuation rose due to less weighting being placed on Increase Decrease Total valuation metrics calibrated to the 190 seco
Slide 6: Current Portfolio
Current Portfolio Our three largest assets now represent 59% of NAV Chrysalis Portfolio as at 30th September 2024 Secret Escapes Wise Net Cash Starling is currently the largest 3.0% 0.2% 5.2% InfoSum holding in the portfolio at 30.3% 3.6% wefox Starling The top three assets (Starling, Smart 4.3% 30.
Slide 7: Robust growth and materially improved profitability
Robust growth and materially improved profitability We continue to focus on growth with profitability Portfolio revenue growth rate versus portfolio PBT (FY24 vs FY23)* Over the last twelve months, the 140.0 50% 132.1 45% weighted average growth rate of sales 45% 120.0 in the portfolio was 22% 40% T
Slide 8: Strategic Considerations
Strategic Considerations
Slide 9: Strategic considerations
Strategic considerations We believe there are two primary aims we should be targeting to generate shareholder value: 2. 1. How do we maximise How do we sustainably value of portfolio close the discount? companies? • Short-term, this is likely to be the most • This should help to drive NAV ps and thu
Slide 10: Closing the discount (1)
Closing the discount (1) Share buy-back (SBB) has supported significant value generation We believe the SBB has driven significant value by helping to close the discount, delivering high ROCE £31m Spent on Implied SBB ROCE of c140% • £31m spent on SBB to 7 Jan 25 • Share price on 7 Jan 25 of 105.2p
Slide 11: Closing the discount (2)
Closing the discount (2) More liquidity, appears to negatively correlate with discount In the immediate sector, there is a Growth investment trusts, discount vs unquoted exposure strong negative correlation between 10% discount and liquidity; as liquidity rises, the discount narrows EWI USA 0% This
Slide 12: Maximising value (1)
Maximising value (1) Growth is rare…! We took the index constituents of Number of S&P 500 companies compounding at 10% sales growth per annum over 10 years the S&P500 index at the beginning c90% of value 80 delivered since of 2015 74 Salesforce Market Value ($bn) IPO has been in 70 last 10 years Of
Slide 13: Maximising value (2)
Maximising value (2) Nearly all value in tech companies is created in the outer years Value progression of representative Tech companies started in the last 30 years ($ trillion) 3.0 Nearly all of the value in technology companies is created in the outer years, long after they are founded 2.5 94% of
Slide 14: Maximising value (3)
Maximising value (3) Our largest assets are at a key stage in their development Our four largest assets currently represent c69% of NAV Three of these assets were founded % of NAV: 30.3% approximately 10 years ago and are Founded: 2014 % of NAV: 14.7% Founded: 2014 now at a key stage in their Valuat
Slide 15: Maximising value (4): Klarna case study
Maximising value (4) Klarna case study Value progression of Klarna since inception ($ billion) Klarna was founded in 2005 50 2025 IPO: 10 years from inception, the = Chrysalis investment point $20-25bn? company achieved a valuation of 45 Year 10: $2.25bn $2.25bn 40 In 2021, Klarna’s valuation peaked
Slide 16: Company Section
Company Section
Slide 17: Starling Bank
Starling Bank Continuing to perform well Revenue and PBT progression (£m) 682.2 Raman Bhatia was appointed as CEO in 700 March 2024. Raman was previously CEO of 600 OVO and the Head of Digital Banking at HSBC 500 452.8 Engine by Starling (‘Engine’) announced two contract wins last year and the 400 p
Slide 18: Klarna
Klarna Continues to grow strongly and is at an inflection point of profitability Klarna – Potential Revenue and EBITDA progression over 5 years (USD bn) Klarna has demonstrated solid growth YTD which has, importantly, driven strong 8.0 profit progression ($64m in 1H24) 7.0 7.9 Several strategic part
Slide 19: Smart Pension
Smart Pension Mansion House accelerant Major restructuring completed in early Potential Exit EBITDA progression SPMT only FY24-30 (£m) 2024, puts business on track for profit FY24 exit ARR c£48m; Exit EBITDA positive 90 Significant opportunity for growth, likely Exit AUM c£6.4bn accelerated by Mansi
Slide 20: Brandtech
Brandtech M&A has provided scale, and the integration is now largely complete Revenue progression (USD millions) Brandtech acquired Jellyfish in June 2023 and the integration of the asset has been 1200 the key focus for management Strong progress has been made in recent 1000 months, which materially
Slide 21: Outlook
Outlook
Slide 22: Increasingly optimistic
Chrysalis Investments Increasingly optimistic CORE PORTFOLIO HAS SIGNIFICANT OPPORTUNITIES ON-GOING PROGRESS TOWARDS PROFITABILITY AN IMPROVED BACKDROP The core portfolio remains well positioned to continue There has been significant progress made over the We are beginning to witness increased level
Slide 23: Appendix
Appendix
Slide 24: NAV progression since IPO
NAV progression since IPO Recent NAV performance has been stable Quarterly NAV per share performance since IPO (pence) 260 The NAV per share increased by 4.9% 240 over the year to 141.26p 220 Since December 2022, the NAV per share has increased by 10.1% (from 200 128.26p) 180 The NAV per share has i
Slide 25: Market context
Market context We have witnessed increased M&A activity and liquidity in the secondary market IPO activity by region FY19-FY23 ($bn) The market backdrop seems to be 350 improving and is in a more 300 favourable position than 1H22 250 This is partially reflected in an 200 US 150 Europe improvement in
Slide 26: Valuation progression of major core assets
Valuation progression of major core assets The recent trend for many of our largest assets is positive Valuation progression for Top 6 assets versus NASDAQ 100 (benchmarked as at December 2021) Valuations for certain key assets have picked up Source: Chrysalis Investments Limited, Bloomberg to Septe