Tikehau Capital Sca · EURONEXT:TKO
Tikehau Capital Sca — Tikehau Capital — H1 2020 Earnings Presentation
57 slides from Tikehau Capital Sca's earnings presentation, Sep 17, 2020
Slide 1: Tikehau Capital H1 2020 Results
TIKEHAU CAPITAL H1 2020 RESULTS 17 SEPTEMBER 2020
Slide 2: Disclaimer
DISCLAIMER By viewing or receiving or reading this Presentation (as such term is defined herein) or This Presentation contains forward looking statements about the Group and its attending any meeting where this Presentation is made, you agree to be bound by subsidiaries. These statements include fin
Slide 3: Disclaimer
DISCLAIMER This Presentation includes certain IFRS pro forma financial information about the investors, which will reduce returns and, in the aggregate, are expected to be Group. This pro forma financial information has been prepared on the basis of substantial. Actual returns will be substantially
Slide 4: Table of Contents
TABLE OF CONTENTS 1 H1 2020 highlights p. 5 3 Financial review p. 24 2 Operating review p. 12 4 Outlook p. 41 H1 2020 RESULTS PRESENTATION Tikehau Capital 4
Slide 5: H1 2020 highlights
1 H1 2020 highlights H1 2020 RESULTS PRESENTATION Tikehau Capital 5
Slide 6: Executive Summary
EXECUTIVE SUMMARY Tikehau Capital delivers on its growth strategy €25.7bn of Group Assets under Management at end-June 2020, +9.8% over 12 months and stable over H1, despite an unprecedented complex and uncertain context AuM and Solid fundraising momentum with +€1.1bn of net new money for the Asset
Slide 7: H1 2020 Key Figures
H1 2020 KEY FIGURES Group AuM (€bn) Fee-paying AuM (€bn) +9.8% +16.7% 25.8 25.7 20.3 19.9 23.4 17.4 30/06/2019 31/12/2019 30/06/2020 30/06/2019 31/12/2019 30/06/2020 Asset Management net operating profit (€m) Net profit, Group share (€m) 97.2 28.6 +39.5% 20.5 9.2 (81.4) (240.9) 30/06/2018 30/06/2019
Slide 8: A Growth and Profitable Asset Management Story
A GROWTH AND PROFITABLE ASSET MANAGEMENT STORY Tikehau Capital is on track to deliver on its targets (1) (2) AuM AuM from International clients Management fee rate €7.8bn 94bps €25.7bn x3.7 +23bps 71bps x2.6 €10bn €2.1bn Pre-IPO Pre-IPO Pre-IPO 30 June 2020 30 June 2020 30 June 2020 31 Dec. 2016 31
Slide 9: Human Capital
HUMAN CAPITAL Experienced and diversified teams Experienced and committed team FTEs by age 570 FTEs at Group level at end-June 2020 50 and over 14% 20-29 Gender-balanced staff, across 27 nationalities, with 24% 14 years of average experience Management’s skin in the game (44% of Tikehau Capital) 40-
Slide 10: ESG: At the Heart of Tikehau Capital's Strategy
ESG: AT THE HEART OF TIKEHAU CAPITAL’S STRATEGY Strong ESG set-up, convictions and recognition Sustainability-themed & impact investing Address societal challenges while generating competitive financial returns for investors Recognition A+ rating (Confirmed in July 2020) Provide financing to compani
Slide 11: Confirmation of Group's Mid-Term Guidance
CONFIRMATION OF GROUP’S MID-TERM GUIDANCE The Group is on track to deliver its organic guidance >€35bn of total AuM by 2022 of operating profit for Asset Management >€100m activities by 2022 of investment portfolio comprised of 65-75% investments within Tikehau Capital funds run rate return on capit
Slide 12: Operating review
2 Operating review H1 2020 RESULTS PRESENTATION Tikehau Capital 12
Slide 13: H1 2020 Operating Highlights
H1 2020 OPERATING HIGHLIGHTS GROUP Private debt Real Assets Private equity Capital Markets Strategies In the absence of flagship Final closing of the value-add Solid fundraising across PE Resilience over the first half, in funds, further progress made strategy and ongoing growth funds and expansion
Slide 14: Group AuM Evolution in H1 2020
GROUP AUM | EVOLUTION IN H1 2020 GROUP +9.8% Group AuM over the last twelve months (+€2.3bn) +9.8% +9.8% +13.2% LTM LTM Asset Management 25.8 = 25.7 AuM growth AuM growth 23.4 2.2 1.7 Direct Investments Direct 2.1 Change mainly reflects new commitments in Tikehau Capital’s funds, Investments market
Slide 15: Focus on Asset Management AuM
FOCUS ON ASSET MANAGEMENT AUM AM Strong diversified fundraising in H1, further improving the Group’s revenue mix Asset management fundraising by quarter, and asset class €bn €150m €65m 1.2 €520m 1.1 Real Assets and Private Equity 0.6 0.6 0.6 account for 0.5 €1.1bn 80% of H1 2020 €350m AM fundraising
Slide 16: Asset Management Investor Base at End-June 2020
ASSET MANAGEMENT INVESTOR BASE AT END-JUNE 20 AM Tikehau Capital keeps expanding and internationalizing its investor base Asset management AuM by investor origin H1 2020 3rd party fundraising by origin 32% Fundraising from international investor accounts for RoW, 3% +2 pts 36% of total asset managem
Slide 17: Tikehau Capital's Funds Deployment
TIKEHAU CAPITAL’S FUNDS DEPLOYMENT AM Total deployments by Tikehau Capital’s closed-end funds €0.8bn invested during H1 2020 on the Group’s closed end funds, down compared to the same period last year, 1.5 mainly reflecting the Group’s cautious approach during the Covid-19 outbreak -€0.7bn 1.2 108 c
Slide 18: Tikehau Capital Deployment
TIKEHAU CAPITAL DEPLOYMENT AM Screenings and execution in H1 2020 show maintained high selectivity Real Assets team Private Debt team(1) Private Equity team (TKO + Sofidy)(4) 177 screened deals 1,315 screened deals 426 screened deals 56 screening 9 firm offers 64 firm offers committees 8 closed 27 c
Slide 19: Private Debt Activity in H1: Close Monitoring and Support of Portfolio Companies
PRIVATE DEBT ACTIVITY IN H1: CLOSE MONITORING AM AND SUPPORT OF THE PORTFOLIO COMPANIES Close support provided by Tikehau Capital to its portfolio companies, helping them to monitor the evolution of the situation and emerge from the crisis with the means to seize opportunities Close contact with por
Slide 20: Tikehau Capital Provides Capital to Finance Growth and Support Value Creation
TIKEHAU CAPITAL PROVIDES CAPITAL TO FINANCE AM GROWTH AND SUPPORT VALUE CREATION Unique set-up to support high-potential companies in the wake of the unprecedented economic shockwaves caused by the Covid-19 outbreak Bring Patient Capital 5 pillars of Value Creation Partnership Support international
Slide 21: How Tikehau Capital Deploys Its Value Creation Capabilities
HOW DOES TIKEHAU CAPITAL DEPLOY ITS VALUE AM CREATION CAPABILITIES FOR ITS PORTFOLIO COMPANIES ? Support International Expansion Provide Access to Tikehau Platform TKO supports Dove Vivo in its organic expansion in TKO Real Estate owns retail chains shops which are France & Spain potential business
Slide 22: TKS: One of a Kind Partnership (1/2)
TKS: ONE OF A KIND PARTNERSHIP (1/2) AM Founded in Founded in 2001 2004 450 Customers serving pharma, med tech, biotech and Early stage CPGs €1.5bn IPO TKS I med-tech & life science in March 2017 Global Office Presence companies & with 17 offices on six of the seven continents AI, Digital TKS IIA He
Slide 23: TKS: One of a Kind Partnership (2/2)
TKS: ONE OF A KIND PARTNERSHIP (2/2) AM SPRIM’s expertise Examples of TKS portfolio companies Digital Health Strategy & Innovation Virtual and Hybrid Trial Solutions SPRIM expertise comes from deep scientific knowledge across medical areas. It integrates scientific rigor, commercial insights and Pat
Slide 24: Financial review
3 Financial review H1 2020 RESULTS PRESENTATION Tikehau Capital 24
Slide 25: Simplified Consolidated P&L
SIMPLIFIED CONSOLIDATED P&L GROUP in €m H1 2020 H1 2019 Δ (€m) Δ (%) Asset AM revenues 88.3 75.9 +12.4 +16.3% Management Operating costs (59.7) (55.4) (4.3) +7.7% activities AM net operating profit 28.6 20.5 +8.1 +39.5% AM net operating margin (%) 32.4% 27.0% +5.4pts Investment revenues (77.2) 157.7
Slide 26: Asset Management activities
3.1 Asset Management activities H1 2020 RESULTS PRESENTATION Tikehau Capital 26
Slide 27: Group AuM Overview by Asset Class
GROUP AUM | OVERVIEW BY ASSET CLASS GROUP Capital Direct Private Private Real Real Liquid Private Private AM Group 1 Debt Debt + 2 Estate Assets + 3 Markets Strategies + 4 Equity Equity = activities + Investments = AuM Strategies AuM 25.7 2.3 24.0 3.8 0.7 1.7 9.6 0.2 2.2 1.6 0.7 3.6 8.3 8.9 21.8 0.6
Slide 28: Strong Compounding Effect of Tikehau Capital Investments in Its Own Funds
STRONG COMPOUNDING EFFECT OF TIKEHAU CAPITAL AM INVESTMENTS IN ITS OWN FUNDS AuM breakdown between 3rd party investors and TKO Third Party AuM TKO commitments Undrawn €0.6bn 0.3 24.0 21.2 €2.2bn 0.5 +0.4 2.2 18.5 0.2 1.8 Drawn 0.5 1.3 €1.5bn 13.2 +2.4 21.8 1.3 0.2 19.4 0.7 (in €bn) 17.2 0.7 €2.2bn 1
Slide 29: Fee-Paying AuM Evolution in H1 2020
FEE-PAYING AUM EVOLUTION IN H1 2020 AM €20.3bn of fee-paying AuM as of 30 June 2020, up +17% over the last twelve months +13% +2% 24.0 23.6 Total AM AuM 21.2 1.0 1.1 2.7 Fee-paying AuM growth over H1 2020 2.6 Non fee-paying AuM 1.1 reflects solid fundraising in Private Equity and Real Estate (mainly
Slide 30: Fee-Paying AuM Analysis at End-June 2020
FEE-PAYING AUM ANALYSIS AT END-JUNE 2020 AM High fee-paying base, with long duration on closed-end funds AuM breakdown (AM activities) Fee-paying AuM by duration 30 June 2020 30 June 2020 Non-fee paying Permanent 4% Capital Markets Future fee-paying 11% €1.0bn Strategies 5% €2.7bn 19% 7 years or mor
Slide 31: Asset Management Revenues
ASSET MANAGEMENT REVENUES AM Asset Management revenues grew much faster than AuM over H1 2020 Asset Management revenues Management fees & others(1) Management fees growth of 16% in H1 2020 Performance fees & carried interests 88.3 €1.2m of performance fees and carried +16% interests generated in H1
Slide 32: Fee Rate Evolution
FEE RATE EVOLUTION AM Tikehau Capital’s strategy aims at improving its fee-generation profile 30 Jun. 2019 31 Dec. 2019 30 Jun. 2020 % AM AuM Bps % AM AuM Bps % AM AuM Bps Real Assets 39% 99 bps 39% 110 bps 39% 107 bps Private Debt 34% 69 bps 37% 73 bps 33% 79 bps Capital Markets Strategies 19% 53 b
Slide 33: +4% Growth in AuM Eligible to Carried Interests
+4% GROWTH IN AUM ELIGIBLE TO CARRIED INTERESTS AM Slight increase in H1 2020 AuM eligible to carried interests AuM eligible to carried interests is growing at a faster pace than Group AuM The Group’s operating leverage does not rely on short-term 9.0 carried interests, which should contribute to pr
Slide 34: Asset Management Profitability
ASSET MANAGEMENT PROFITABILITY AM Strong increase in profit contribution from the Group’s Asset Management perimeter Thanks to the combination of strong revenue growth and controlled cost evolution, NOPAM margin increases year-over-year by more than +540bps to 32.4% NOPAM1 margin evolution x3.1 €28.
Slide 35: Investment activities
3.2 Investment activities H1 2020 RESULTS PRESENTATION Tikehau Capital 35
Slide 36: Portfolio Revenues
PORTFOLIO REVENUES INVEST H1 2020 revenues adversely impacted by unrealized change in fair value (-€143.3m) Revenues from the investment portfolio impacted by change in fair value, of which €(143.3)m is unrealized − Q1 2020 unrealized change in fair value reached €(287.5)m, partially offset by Q2 po
Slide 37: Key balance sheet items
3.3 Key balance sheet items H1 2020 RESULTS PRESENTATION Tikehau Capital 37
Slide 38: Consolidated Balance Sheet
CONSOLIDATED BALANCE SHEET GROUP Very solid financial structure, supporting the Group’s strategy BBB- / stable outlook credit rating assigned by Fitch Ratings to Tikehau Capital in January 2019 Robust equity structure supporting the business model in €m 30-Jun-20 31-Dec-19 ∆ — €2.8bn of shareholders
Slide 39: Tikehau Capital's Investment Portfolio
TIKEHAU CAPITAL’S INVESTMENT PORTFOLIO GROUP Active rotation of the investment portfolio in H1 2020 # of investments 205 206 210 2,447 2,336 2,371 Net investments of €152m over the half-year, including 823 • Further investment in TKO funds, with capital 911 1,260 being called as funds are deployed 3
Slide 40: Details of the Investment Portfolio – 30 June 2020
DETAILS OF THE INVESTMENT PORTFOLIO – 30 JUNE 2020 GROUP A well diversified investment portfolio, geared in priority towards TKO funds 2,371 1 investment > €50m €397m 396 10 investments between €10m and €50m Non-listed investments 92 investments < €10m Direct 823 31 Other listed investments in
Slide 41: Outlook
4 Outlook H1 2020 RESULTS PRESENTATION Tikehau Capital 41
Slide 42: Tikehau Capital Is Well-Positioned to Navigate the Cycle
TIKEHAU CAPITAL IS WELL-POSITIONED TO NAVIGATE THE CYCLE The Covid-19 outbreak has raised …that Tikehau Capital has been anticipating specific risks… with the building of the right set-up Value creation in asset management is A diversified exposure to complementary asset 1 switching from asset alloc
Slide 43: Fundraising Pipeline
FUNDRAISING PIPELINE Combination fundraising of flagship funds and launch of additional strategies Drive further diversification of the client base (institutional and retail) Capital Markets Private debt Real Assets Private equity Strategies Grow new Grow current Fixed vintages of Continued developm
Slide 44: Solid Track Record in Accretive and Value-Creating M&A Operations
SOLID TRACK RECORD IN TERMS OF OPPORTUNISTIC ACCRETIVE AND VALUE-CREATING M&A OPERATIONS Culture Value creation Strategic Accretion M&A deals carried out by Tikehau Capital, and main benefits associated with each transaction AuM at International Business mix Expand product Client base Asset category
Slide 45: Outlook and Guidance
OUTLOOK AND GUIDANCE Tikehau Capital is on track to deliver its targets A very strong start to Q3 2020 with +€1.6bn added in July 2020: − Private Equity: first closing of €630 (including €230m from TKO balance sheet) for Ace Management (Ace Aéro Partenaires) − Private Debt: • First closing of TDL V
Slide 46: Q&A session
5 Q&A session H1 2020 RESULTS PRESENTATION Tikehau Capital 46
Slide 47: Appendices
6 Appendices H1 2020 RESULTS PRESENTATION Tikehau Capital 47
Slide 48: Total AuM Has Increased by +33% per Year Since 2016
TOTAL AUM HAS INCREASED BY +33% PER YEAR SINCE 2016 Group AuM target is to exceed €35bn in 2022 (1) Total Assets under Management in €bn CAGR: +29% p.a >35 >27.5 25.8 22.0 13.8 10.0 6.4 3.0 4.3 1.6 2004 2012 2013 2014 2015 2016 2017 2018 2019 2020 2022 2022 Inception of Acquisition of Opening of Ope
Slide 49: H1 2020 Group AuM Evolution
H1 2020 GROUP AUM EVOLUTION Half-year Group AuM evolution Fundraising Distributions Market effects H1 2020 fundraising amounted to +€0.9bn, reflecting: Asset Management (+€1.1bn): fundraising was +1.3 driven by Private Equity and Real Estate +1.2 (accounting for 80% of total) Net ∆ +1.0 +0.2 Direct
Slide 50: Focus on TKO Funds
FOCUS ON TKO FUNDS INVEST Unrealized change in fair value impacting contribution of TKO funds Contribution of TKO funds to H1 2020 revenues DWS +7 (6) TKO funds TKO listed REITs (11) (€17m) 31.2 +31% 18.9 23.9 31.2 HDL - Assystem (5) vs 30/06/2019 0.2 H1 2018 H1 2019 H1 2020 (61) (48.3) Eurazeo Othe
Slide 51: Business Line Update: Private Equity
BUSINESS LINE UPDATE PRIVATE EQUITY Areas of expertise Key figures Growth and expansion Equity to Entrepreneurs €2.3bn of Assets under Management Thematic expertise in partnership with large international corporates B2B Macro Trends +14% AuM growth over H1 2020 Aerospace Energy transition Tech-enabl
Slide 52: TKO's Approach to Private Equity
TKO’S APPROACH TO PRIVATE EQUITY PRIVATE EQUITY Growth Equity: growing an emerging segment with attractive returns Growth Equity: a differentiated approach to private equity Track record Growth and expansion capital for founders / entrepreneurs Tikehau Capital is active in this segment since 2005 On
Slide 53: Business Line Update: Private Debt
BUSINESS LINE UPDATE PRIVATE DEBT Key figures Areas of expertise Investment universe & key features Direct Lending Senior loans, stretched senior, €8.3bn of Assets under Management European Corporate Direct unitranche, mezzanine, preferred equity lending to French Targeted companies with revenues Di
Slide 54: Business Line Update: Real Assets
BUSINESS LINE UPDATE REAL ASSETS Key figures A comprehensive Real Estate platform €9.6bn of Assets under Management Strategy Core+ Value-Add (TREO 2018) Core / Core+ Retail clients / HNWI / Institutional +4% AuM growth over H1 2020 Clients Institutional investors / Family Offices investors Universe
Slide 55: Business Line Update: Capital Markets Strategies
BUSINESS LINE UPDATE CAPITAL MARKETS STRATEGIES Key figures Investment universe ESG label awarded to 10 TKO funds Open-ended funds and managed LuxFLAG ESG label has been €3.8bn of Assets under Management accounts (High Yield, Investment Grade corporates, Subordinated financials) awarded to 10 open-e
Slide 56: Contacts
CONTACTS Paris London Amsterdam Brussels Luxembourg 32, rue de Monceau 30 St. Mary Axe ITO Tower - Gustav Mahlerplein 104 IT Tower, Avenue Louise 480 4ème étage 75008 Paris London EC3A 8BF 1082 MA Amsterdam 1050 Brussels 37A avenue J-F Kennedy FRANCE UK NETHERLANDS BELGIUM L-1855, Luxembourg Phone:
Slide 57: Tikehau Capital
The information contained in this presentation is confidential and is for the exclusive use of the original listed recipient(s). The contents of this presentation are for TIKEHAU CAPITAL informational purposes only, and should not be regarded as an offer to sell or a solicitation of an offer to buy