Tikehau Capital Sca · EURONEXT:TKO
Tikehau Capital Sca — Tikehau Capital — FY2018 Earnings Presentation
65 slides from Tikehau Capital Sca's earnings presentation, Mar 21, 2019
Slide 1: Tikehau Capital FY 2018 Results
TIKEHAU CAPITAL FY 2018 RESULTS 21 MARCH 2019 4r°@) TIKEHAU
Slide 2: Disclaimer
DISCLAIMER By viewing or receiving or reading this Presentation (as such term is defined herein) or attending any meeting where this Presentation is made, you agree to be bound by the limitations, qualifications and restrictions set out below: The existence and content of the presentation that follo
Slide 3: Disclaimer
DISCLAIMER This Presentation includes certain IFRS pro forma financial information about the Group. This pro forma financial information has been prepared on the basis of historical financial statements of the Company but has not been audited by the Group's auditors. The pro forma financial informat
Slide 4: Table of Contents
TABLE OF CONTENTS ] FY 2018 highlights Business review Financial review LF W N Strategic outlook "l a FY 2018 RESULTS PRESENTATION a Tikehau Capital P.6 Pll P.29 P.46
Slide 5: Executive Summary
EXECUTIVE SUMMARY Strong growth momentum in 2018 for Tikehau Capital y €22.0bn of Assets under Management as at 31 December 2018, up +59% in total vs 31 December 2017 and +20% excluding acquisitions y Rebalancing of the Group’s business mix well under way, in particular with the strategic acquisitio
Slide 6: FY 2018 highlights
FY 2018 highlights "l a FY 2018 RESULTS PRESENTATION a Tikehau Capital
Slide 7: Total Group AuM more than doubled in years
TOTAL GROUP AUM MORE THAN DOUBLED IN 2 YEARS Initial 2020 AuM guidance surpassed in 2018 Total Assets under Management in €bn ee 22.0 ay +0 pa 13.8 10.0 6.4 4.3 ood 2004 2012 2013 2014 2015 2016 2017 2018 Previous 2020 guidance "l a FY 2018 RESULTS PRESENTATION a Tikehau Capital 7
Slide 8: Tikehau Capital delivers on its objectives
TIKEHAU CAPITAL DELIVERS ON ITS OBJECTIVES 2018 achievements fully consistent with our strategy 2017-2020 ambition Continue expansion to become a leading alternative asset manager Strategic objectives set at the IPO 2018 achievements y Acceleration of investor base’s internationalisation, with inter
Slide 9: Human Capital
HUMAN CAPITAL Experienced and diversified teams y Agrowing experienced team - >430 FTEs at year-end, including Sofidy and ACE Management - Average experience of around 12 years FTEs by age 50 and over y Adiversified team to support innovation and growth 8% - Gender-balanced teams oe - ~70% of staff
Slide 10: Dividend
DIVIDEND Dividend proposition for an atypical year y Tikehau Capital proposes a dividend of €0.25 per share for the year 2018 — Distribution of a dividend for 2018 in spite of a negative net result Group share for the year, due to non- cash mark-to-market effects — The Group remains committed and on
Slide 11: Business review
FY 2018 RESULTS PRESENTATION Tikehau Capital Business review
Slide 12: AuM evolution in 2018
AUM EVOLUTION IN 2018 Very strong momentum for Asset Management +€8.2bn +€2.7bn +59% +20% Total AUM growth in 2018 growth excluding acquisitions 22.0 > Direct Investments y Change mainly reflects the commitments made by Tikehau Capital in the Group's funds launched during the year 13.8 +20% y Confir
Slide 13: Strong fundraising in 2018
STRONG FUNDRAISING IN 2018 AuM increase driven by and sustained fundraising and external growth m Fundraising * Sofidy = Mark-to-market noe SS y Record year for Asset = External growth aes Management fundraising at = Distributions €+4.3bn (vs +€3.1bn in 2017) Lyxor mer oa 3.9 > (0.2) (0.2) , ~ Of wh
Slide 14: Focus on Asset Management AuM
FOCUS ON ASSET MANAGEMENT AUM Record level of fundraising in 2018, driven by Private Debt Evolution of Asset Management AuM (€bn) Asset Management fundraising by business line 20.4 5% 19% \ 11.4 €(984)m ey €4.8bn AM fundraising | 7% of which + €0.8bn from TKO + €3.4bn from 3% party _ 2017 Fundraisin
Slide 15: Asset Management investor base
ASSET MANAGEMENT INVESTOR BASE Strong internationalisation of investor base (at constant perimeter) Expansion of international investor base in 2018 RoW aon ° en France 63% 21% 9 Europe u % 27% 2015 2016 2017 Diversified investor base at end-2018 37% 2018 (2) Other 4% — Tikehau lp, Capital Group a”
Slide 16: Tikehau Capital deployment
TIKEHAU CAPITAL DEPLOYMENT Screenings and execution in 2018 show maintained high selectivity Private Debt team \ Real Estate team Private Equity team @) 344 screened deals /.59 screened 100 screened deals (29 screened 875 screened deals /,260 screened deals vs 2017 deals vs 2017 deals vs 2017 : 9 de
Slide 17: Responsible investor approach
RESPONSIBLE INVESTOR APPROACH Environmental, social and governance criteria ("ESG") integration a) th communication ESG by design eie ESG Committee “™ ™ Regular trainings of all teams including climate issues First reporting at Group level considering TCFD! 8 cases studied in 2018 leading to 2 unpur
Slide 18: Fund deployment
FUND DEPLOYMENT Solid deployment maintained in closed-ended funds, with high level of selectivity Total deployments by Tikehau Capital’s closed-ended funds 2.2 2.4 1.9 (€on) 2016 (1) Excluding CLOs "l a ») FY 2018 RESULTS PRESENTATION LN Tikehau Capital 2017 2018 y €2.4bn invested in 2018 on closed-
Slide 19: Snapshot on our business lines
SNAPSHOT ON OUR BUSINESS LINES Q t2) .3) LIQUID STRATEGIES PRIVATE EQUITY REA ESTATE PRIVATE DEBT €8.3BN 38% OF AUM €/.6BN 34% ORAUM €2)8BN 13% OF AUM €3.38N y €22.0bn Group AuM as at 31 December 2018, up +59% over the last twelve months y Strong organic growth during the year (+€2.7bn), with contin
Slide 20: Business line update: Private Debt
BUSINESS LINE UPDATE PRIVATE DEBT €8.3bn +39% +€2.9bn ay ; ; _ 38% OF AUM AuM at 31 December 2018 AuM growth in 2018 fundraising in 2018 Investment universe Differentiation factors y Across the capital structure y Ateam of 50+ professionals - Senior loans, stretched senior, unitranche, mezzanine, pr
Slide 21: Areas of expertise in Private Debt
BUSINESS LINE UPDATE Areas of expertise in Private Debt PRIVATE DEBT Private debt platform Direct Lending Leveraged Loans AuM of €4.2bn AuM of €4.1bn © European Corporate Direct lending European ; F CLOs Direct Lending to French SMEs Leveraged loans Core European Direct Lending funds: Core Corporate
Slide 22: 2018 case studies
2018 CASE STUDIES Examples of European mid-market direct lending deals arranged by Tikehau Capital © Altafit — July 2018 y Leading low-cost fitness group in Spain with 43 clubs. ALTAFIT y €82 million first-ranking financing arranged, with 7-year maturity, within our 4" vintage of Direct Lending Fund
Slide 23: Business line update: Real Estate
BUSINESS LINE UPDATE REAP 0 ESTATE €7.6bn €2.5bn +11% +€0.3bn See AuM at 31 December 2018 AuM at 31 December 2018 AuM growth in 2018 Fundraising in 2018 (including Sofidy) (excluding Sofidy) (excluding Sofidy) (excluding Sofidy) OF AUM. Investment universe Differentiation factors y Core + and Value-
Slide 24: Case study
CASE STUDY Combination of successful fund performance and promising reinvestment REALESTATE uo Escoffier warehouses — June 2018 y Sale to Bouygues Immobilier of an asset comprising 28,840 m2 of warehouse units acquired in July 2016 by a fund managed by Tikehau IM. y First stage of a major urban site
Slide 25: Focus on Sofidy
FOCUS ON SOFIDY With €5.1bn of AuM, Sofidy is a leading real estate AM company Business & Investment universe y A leading independent real estate asset manager in France y Specialized in retail and offices, invested at 82% in France ¥ National footprint with offices in Paris, Lyon, Bordeaux, Aix-en-
Slide 26: Business line update: Private Equity
BUSINESS LINE UPDATE PRIVATE EQUITY €? Sbn €1.2bn in Asset Management €2:8BN AuM at 31 December 2018 €1.6bn in Direct Investments 6 OF AUM, Investment universe Differentiation factors y Non-listed companies with growing and profitable fundamentals in Western Europe y Minority investments, cash out,
Slide 27: 2018 case studies
2018 CASE STUDIES Growth equity fund and energy transition fund already at work 2 NEXTEAM GROUP Ht) Nexteam — July 2018 y Nexteam is a French aerospace supplier, specialized in hard metal parts. Nexteam employs 900 FTEs in France, Poland and Romania across 8 operating sites, and generates ~150m in r
Slide 28: Business line update: Liquid Strategies
BUSINESS LINE UPDATE €3.3bn 45% AuM at 31 December 2018 AuM growth in 2018 Investment universe y High yield, investment grade corporates and subordinated financials y Primarily pan-European credit and Asian credit y Value-quality and special situations equity stocks on pan- European and US markets +
Slide 29: Financial review
IO FY 2018 RESULTS PRESENTATION Tikehau Capital Financial review 29
Slide 30: Simplified P&L
SIMPLIFIED P&L FY1 2018 net loss reflects adverse impacts from mark-to-market valuation of some investments Asset Management activities Investment activities AM revenues Operating costs AM net operating profit Investments revenues Operating costs ") Net results with associates Investments net operat
Slide 31: Asset Management activities
IO FY 2018 RESULTS PRESENTATION Tikehau Capital Asset Management activities 31
Slide 32: Group AuM overview
GROUP AUM —- OVERVIEW With €22.0bn of AuM as at 31 December 2018, Tikehau Capital’s activities are organised around 4 strategies . Private Equity @ * 2) be. +O ~ * ~ actives * (Direct SoM e < + Investments AuM) 1.6 22.0 4.2 20.4 3.3 | = 8.3 = a Do & Private Debt Real Estate Liquid Strategies Private
Slide 33: Fee-paying AuM
FEE-PAYING AUM €11.1bn of Fee-paying AuM at end-December 2018 (excluding acquisitions), up by +21% Sofidy & Non fee- +6 A% v Innes! Hulu revenue and profit SHEET, paying AuM driven amet by strong __ fundraising Future fee- momentum in Private Debt paying AuM , of” Favourable momentum mainly linked t
Slide 34: Fee-paying AuM analysis
FEE-PAYING AUM ANALYSIS Strong fee-paying base, with long durations AuM breakdown (AM activities) Non-fee paying 7% Future fee- \ | paying 19% Fee-paying 74% Fee-paying AuM by duration “) Permanent capital 6% Liquid Strategies 29% €11.1bn fee-paying Less than 3 years 5% 3 to 6 years 7 years or 21% m
Slide 35: Asset Management revenues
ASSET MANAGEMENT REVENUES Recurrent stream of Asset Management revenues following the growth in AuM Asset Management revenues 75.2 57.9 39.4 27.9 7 53.8 g 2015 2016 2017 2018 ™ Management fees & others = Performance fees & carried interests (2) (3) Average fee-paying AuM 7.6 5.2 — a g@ HH 2015 2016
Slide 36: Fee rate evolution
FEE RATE EVOLUTION Resilient fee rate across our 4 business lines and stability over time Weighted average fee rate 2) 76 76 (bps) FY 2018 management fee rate by business line 2015 2016 2017 2018 mManagement fees & others ™ Performance fees & carried interests perimeter. 8, net of distribution fees
Slide 37: Focus on AuM eligible to carried interests
FOCUS ON AUM ELIGIBLE TO CARRIED INTERESTS Strong increase in 2018 AuM eligible to carried interests AuM eligible to carried interests HE Direct Lending LD AuM eligible to carried interests and currently invested Real Estate +70% | MELE) L 3.1 AuM eligible, currently 82% : invested and above —7| 4.0
Slide 38: Asset Management profitability
ASSET MANAGEMENT PROFITABILITY Strong revenue growth and continued investment in the Asset Management platform AM revenues, operating costs & operating margin y Asset Management profitability MAM costs MAM revenue 75.2 maintained over 25% in 2018 (55.2) y Strong revenue growth of +30% in the year, d
Slide 39: 2018 acquisitions enhance TKO's profile
2018 ACQUISITIONS ENHANCE TKO’S PROFILE Sofidy and ACE transactions are accretive on all metrics TKO publis TKO pe int Pro forma ) \pameieieina aaa emememememnnnnnn 1 Total Assets Under Management (€bn Fee-Paying AuM (€bn. | Management fees?) (bps 1 1 22.0 8lbps 1 ! 1 C408) <> 1 1 ! 1 69 I bps I 1 1
Slide 40: Investment activities
IO FY 2018 RESULTS PRESENTATION Tikehau Capital Investment activities 40
Slide 41: Evolution of Direct Investments AuM
EVOLUTION OF DIRECT INVESTMENTS AUM A year marked by several funds launches, with corresponding TKO balance sheet commitments y Evolution reflects mostly heightened balance sheet commitments in Tikehau Capital funds, for a total of €0.5bn - Enhances the alignment of interests between Tikehau Capital
Slide 42: Investment revenues
INVESTMENT REVENUES 2018 revenues adversely impacted by changes in fair value, mainly related to listed assets Main contributions in 2018 387.3 y TKOfunds y Naturex y Claranet y DWS 99.2 _ y Eurazeo & 80.6 Non-cash impact, of which (134)m linked to listed assets 2015 2016 2017 2018 = Change in fair
Slide 43: Key balance sheet items
IO FY 2018 RESULTS PRESENTATION Tikehau Capital Key balance sheet items 43
Slide 44: Consolidated balance sheet
CONSOLIDATED BALANCE SHEET Very solid financial structure, supporting the Group’s strategy BBB- / stable outlook credit rating assigned by Fitch Ratings to Tikehau Capital in January 2019 Investment portfolio 2,083 1,565 +518 Cash & cash equivalents” 463 975 (612) Other current & non-current assets
Slide 45: Tikehau Capital's investment portfolio
TIKEHAU CAPITAL’S INVESTMENT PORTFOLIO Continuous deployment consistent with allocation policy y €779m investments vs. €214m of exits # of investments 137 A over the period y €906m invested by Tikehau Capital in its AM strategies at end December 2018 255 Top 5 Investment positions y Eurazeo €444m y
Slide 46: Strategic Outlook
IO FY 2018 RESULTS PRESENTATION Tikehau Capital Strategic Outlook 46
Slide 47: Strategic summary
STRATEGIC SUMMARY Growth, profitability, value creation Growing markets Profitable model y Tikehau Capital is positioned on y An increasing operating y A strong balance increasingly growing asset classes leverage in Asset Management invested in TKO funds: ~ Strong tailwinds for alternative ~ The con
Slide 48: Structural tailwinds for alternative AM
Markets STRUCTURAL TAILWINDS FOR ALTERNATIVE AM ii y After a decade of solid growth, alternative assets have become a key component in investors’ portfolios globally; y During the Global Financial Crisis, a diversified portfolio across the private capital asset classes outperformed public markets; y
Slide 49: Strong momentum ahead for alternatives
Markets STRONG MOMENTUM AHEAD FOR ALTERNATIVES i Continued growth in AUM and strong revenue generation y Tikehau Capital is positioned on growing and profitable markets. In 2022, alternatives should account for: 16% of global AUM 44% of global AM revenue Global AuM by product Global revenue by produ
Slide 50: Value will be captured differently
Markets VALUE WILL BE CAPTURED DIFFERENTLY = Our conviction: strong asset base will be needed to deliver performance Value creation is switching from asset allocation to asset picking Key success factors to achieve relevant asset picking y During the last 10 years of easy monetary policies - valuati
Slide 51: Favourable business mix rebalancing
FAVOURABLE BUSINESS MIX REBALANCING Focus on high fee-generating strategies Fundraising pipeline Fee profile Model Target IRR(%) + 5th vintage of Direct Lending funds, mandates Private debt * Ongoing fundraising for Leveraged Loans funds + Launch of a 5th CLO Direct Lending: ~120bps Leveraged Loans:
Slide 52: Levers for long-term profitable growth
LEVERS FOR LONG-TERM PROFITABLE GROWTH TKO’s model evolution is already under way y Rebalance business mix with increased contribution from Private Equity and Real Estate, generating above-average management fees y Increase AuM in higher fee-generating strategies in Private Debt and Liquid Strategie
Slide 53: Key enablers for profitable development
2 KEY ENABLERS FOR PROFITABLE DEVELOPMENT Model A strong and growing AM platform, supported by a robust balance sheet Enablers Asset Management Platform 2 key enablers to: * Enhance fundraising and investment * Increase revenue and profit generation Strong balance sheet FY 2018 RESULTS PRESENTATION
Slide 54: A global geographic footprint
Model A GLOBAL GEOGRAPHIC FOOTPRINT = A hardly replicable strategic asset to capture growth Paris Madrid London Brussels Milan y Staff: 357 (incl. Sofidy & ACE) ¥ Staff: 6 y Staff: 39 y Staff: 6 y Staff: 8 y Headquarter y Dedicated teams: Private y Regulated by the FCA y Dedicated teams: Private y D
Slide 55: Strong balance sheet: a key differentiator
STRONG BALANCE SHEET: A KEY DIFFERENTIATOR Tikehau Capital has one the strongest equity base in its universe 2.3 (2) "l a FY 2018 RESULTS PRESENTATION a Tikehau Capital Shareholders’ equity, Group share ?(allin €bn!) ar 2017/2018) 5.7 76 O ARES 1.2 a) OAKTREE Balance sheet 55
Slide 56: Balance sheet is key to align interests
Balance sheet BALANCE SHEET IS KEY TO ALIGN INTERESTS Alignment of interests at the very core of Tikehau Capital’s DNA Since Tikehau Capital’s inception y Long-term perspective y Strategy aimed at creating value for shareholders With 37% ownership, management is #1 shareholder of the listed company
Slide 57: Balance sheet: a performance multiplier
Balance sheet BALANCE SHEET: A PERFORMANCE MULTIPLIER Group’s balance sheet at the heart of Asset Management growth and value creation Fundraising Investment Local sourcing Client proximity y Core know-how on mid-market opportunities y Positive structural tailwinds for alternative assets y 4compleme
Slide 58: Financial business model
FINANCIAL BUSINESS MODEL Expectation of balance sheet allocation of assets on a medium-to-long term basis Objective Private Debt Investment in Real Estate Tikehau Capital’s funds Private Equity Liquid Strategies Management fees Carried interests Performance fees Increase capital distribution Platfor
Slide 59: Evolution of investment portfolio
Balance sheet EVOLUTION OF INVESTMENT PORTFOLIO 65-75% allocation target should be reached in 2022 y Balance sheet exposure to Tikehau Capital’s fund will gradually increase in line with Group’s target y This strategy will generate greater visibility on Operating profit from Investment Activities 2,
Slide 60: Value creation model
VALUE CREATION MODEL TKO shareholders are exposed to 3 powerful engines of revenue and profit generation Growing Assets under Management Performance of Tikehau Capital funds PERFORMANCE Asset Management FEES / CARRIED Asset Management Activities INTERESTS) Activities Investment Activities DIVIDENDS,
Slide 61: 2022 Outlook
2022 OUTLOOK A profitable growth story in alternative asset management 2022 targets (organic) Favourable Relevant Stron structural global AM balance bee ‘ market trends platform Improved Operating foes / business mix leverage Interests FY 2018 RESULTS PRESENTATION "l a a Tikehau Capital >€35bn » +60
Slide 62: Tikehau Capital in 2022
TIKEHAU CAPITAL IN 2022 Stronger and more profitable Total Asset under Management in €bn AM Net operating profit (€m) >€35bn >€1 00m 22.0 20 : 3.5 (1.0) Uh 2015 2016 2017 2018 Previous 5 2015 2016 2017 2018 New 2022 "l a ») FY 2018 RESULTS PRESENTATION LN Tikehau Capital 62
Slide 63: Q&A session
< FY 2018 RESULTS PRESENTATION Tikehau Capital Q&A session 63
Slide 64: Contacts
CONTACTS Paris 32, rue de Monceau 75008 Paris FRANCE, Phone: +33 1 40 06 26 26 Seoul 43Fl, Three IFC 10 Gukjegeumyung-ro, Youngdeungpo-gu Seoul, 07326 KOREA Phone: +82 2 6138 4331 New York 412 West 15th St. 18th Floor New York, NY 10011 UNITED STATES. Phone: +1 (917) 434-9234. London Brussels Madrid
Slide 65: Tikehau Capital
TIKEHAU CAPITAL 32, rue de Monceau - 75008 Paris - France Phone: +33 1 40 06 26 26 Fax: +33 1 40 06 09 37