HGCapital Trust PLC · LSE:HGT
HGCapital Trust — FY2020 Earnings Presentation
24 slides from HGCapital Trust's earnings presentation, March 2021
Slide 1: Get connected
Listed access to the 2nd largest software Listed access to the 4th largest software business in Europe business in Europe Get connected December 2019 To a universe of software and service businesses This document accompanies the Interim Report & Accounts for the third quarter ended 30 September 2019
Slide 2: Overview
Overview A long-term investment into unquoted software and business service companies that may otherwise be inaccessible to public market investors ▪ FTSE 250 investment company listed on the LSE ▪ Providing listed access to the 2nd largest (unquoted) software company in Europe ▪ ‘Direct’ investor o
Slide 3: HGT Performance 2020
HGT Performance 2020 A strong year for HGT with NAV per share outperforming the FTSE All-Share by > 30% ▪ c. £1.3 billion net assets +24.0% ▪ Performance primarily driven by double-digit trading and uplifts to book value at exit total return ▪ £25 million raised through tap issuance 310.3p NAV per s
Slide 4: Performance attribution
Performance attribution Majority of NAV growth from strong earnings in the unrealised portfolio valuation over 2020 Performance primarily generated from consistently strong trading 1 Including accrued income and excluding carried interest provision. 2 Before the deduction of the carried interest pro
Slide 5: Long-term track record of outperformance
Long-term track record of outperformance The HGT share price has seen compound growth of > 14% p.a. over the past 20 years v. 5% p.a. from the FTSE All-Share 1380% FTSE All-Share Index NAV per share HgCapital Share Price 1085% 298% 215% 256% 149% 146% 71% 85% 72% 24% 21% 28% -10% -3% 1 year 3 years
Slide 6: A healthy balance sheet
A healthy balance sheet Pro-forma balance sheet as at 28 February 2021 £543m (43% of NAV) commitments £102m (8% of NAV) ▪ Commitments likely to be invested liquid resources over the next 3 to 4 years (c. £155m p.a.) £200m further credit facility completed in October 2020, currently undrawn ▪ Further
Slide 7: HGT is Hg's largest client, committed to all Hg funds
HGT is Hg’s largest client, committed to all Hg funds HGT provides shareholders with access to an unquoted software portfolio that would otherwise be inaccessible to listed investors © Copyright Hg 2021 7
Slide 8: Hg is the #2 largest software and #4 largest PE firm in Europe
is the #2 largest software and #4 largest PE firm in Europe Hg Snapshot $166bn c. 10% of Hg ▪ Founded in 1990 with investment offices in London, Munich, New York -1% ▪ >$30 billion of AuM and >230 employees, > 140 investment professionals ▪ Fourth largest PE firm in Europe $60bn $57bn ▪ Specialised
Slide 9: Sustainable businesses integral to Hg's investment process
Growing sustainable businesses which are great employers is an integral part of Hg’s investment process AA++ c 30 4.5 27% 1% 1% of every fund’s carry 2020 UNPRI Average Women in Hg’s of LLP profit donated to Nationalities committed to the rating Glassdoor score executive team charity annually Hg Fou
Slide 10: A unique and dedicated portfolio team to support Hg portfolio businesses
A unique and dedicated portfolio team set up to support Hg portfolio businesses to accelerate their growth potential Promoting a culture of working together sharing Sharing best practice and resources with tailored ideas and experiences across the portfolio. In 2020: teams of technical experts, Hg w
Slide 11: Targeting robust and resilient 'Hg sweet-spot' business models
Targeting robust and resilient ‘Hg sweet-spot’ business models BUSINESS MODEL ATTRIBUTES DEEP SECTOR KNOWLEDGE… Tax & Accounting Business critical need delivered as software or service ERP & Payroll Legal and Compliance Subscription or repeat revenue model Automotive SWEET Insurance SPOT Technology
Slide 12: Focusing on "Hg Clusters" driving deep sub-sector knowledge
Focusing on “Hg Clusters” driving deep sub-sector knowledge © Copyright Hg 2021 12
Slide 13: The HGT portfolio in 2021
The HGT portfolio in 2021 High growth companies with resilient and defensive characteristics continuing to perform in a challenging environment “Sometimes, it’s the small things that make the biggest difference. For example, automating those dull tasks that nobody likes to do”. David Toms, Hg © Copy
Slide 14: LTM trading by cluster
LTM trading by cluster LTM Reported Revenue Growth by Cluster LTM Reported EBITDA Growth by Cluster 6,000 2,000 5.5% 5,000 13.8% 11.6% 1,600 5.9% 30.8% 13.3% 20.4% 4,000 Millions (£) Millions (£) 11.9% 31.6% 1,200 16.6% 3,000 22.8% 800 30.3% 2,000 400 1,000 14.8% 25.5% - - December 2019 December 202
Slide 15: Hg has continued to selectively invest in companies tracked for many years
Hg has continued to selectively invest in companies tracked for many years… A record year for investment, with £4.5bn deployed by Hg including £403m by HGT into 15 businesses with continued transactions into 2021 39% Average 20% of NAV invested p.a. over the past 10 years 26% 15% 20% 25% 18% 20% 14%
Slide 16: ...and return cash to HGT
…and return cash to HGT A record year for realisations, with £4.2bn returned to clients by Hg including £364m to HGT 35% 38% Average 24% 36% of NAV p.a. realised over past 10 years 25% 15% 23% 19% 18% 15% 13% £62m £80m £66m £83m £64m £135m £224m £272m £117m £364m £43m 2011 2012 2013 2014 2015 2016 2
Slide 17: Significant realisations at uplifts to book value
… with significant realisations at uplifts to book value 2020 COMPLETED 2021 Average 50% 22% 55% 26% 86% 40% 73% 18% uplift to book value 5.5x over 2020 4.3x Average 3.5x multiple of 3.0x 3.1x 2.8x 2.8x cost over 2.5x 2020 Average 31% gross IRR over 2020 £193m £139m £26m £15m £11m £11m £22m 29% IRR
Slide 18: Summary and outlook
Summary and outlook Robust double-digit growth continues to underpin a resilient portfolio ▪ Against the backdrop of COVID-19, Hg’s portfolio has performed well and contributed positively to stakeholders’ livelihoods and retirements. ▪ The overall portfolio valuations were up over 25% for the year t
Slide 19: Appendices
Listed access to the 4th largest software business in Europe December 2019 Appendices This document accompanies the Interim Report & Accounts for the third quarter ended 30 September 2019 and contains a summary of information set out in that document. Reference should be made to the full and Interim
Slide 20: A focus on Western Europe with experience building transatlantic businesses
A focus on Western Europe with experience building transatlantic businesses Benevity Geomatikk Visma Intelerad Citation IT Relation Transatlantic Prophix CaseWare Commify businesses A-Plan MediFox Sovos Achilles Access Mein Auto Lyniate Allocate Azets Warweg Gen-II Argus Media IRIS F24 Litera Evalua
Slide 21: A single strategy across three funds
A single strategy across three funds - delivering broad market coverage Strategy Lower-mid market Mid-market Upper mid-market Target enterprise value €100 - 500 million €500 - €1,500 million >€1,500 million Target investment equity €50 - 200 million €200 - 600 million >€600 million COMMON FEATURES S
Slide 22: Contact
Appendix Contact For further information on HgCapital Trust plc, please visit our website: www.hgcapitaltrust.com Or contact our Investor Relations Team at: investorrelations@hgcapitaltrust.com Laura Dixon Hannah Brown +44 78 2459 2894 +44 20 8078 9144 You can also follow us: Linkedin at www.linkedi
Slide 23: Disclaimer
Appendix 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
Slide 24: Disclaimer
Appendix 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 terminol