CapMan Oyj Class B · OMXHEX:CAPMAN
CapMan Oyj Class B — H1 2015 Earnings Presentation
41 slides from CapMan Oyj Class B's earnings presentation, Aug 6, 2015
Slide 1: CapMan Group's result for January–June 2015
CapMan Group’s result for January–June 2015 Heikki Westerlund, CEO Niko Haavisto, CFO Helsinki, 6 August 2015
Slide 2: Disclaimer
Disclaimer 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 ”expect”, ”believe”, ”foresee” or similar express
Slide 3: Contents
Contents • Main events during the review period and strategy implementation • Business environment • Result for January–June 2015
Slide 4: Major events during the review period
Major events during the review period CapMan acquired 28.7% of shares in Norvestia Carried interest from exits from Symbio, Silex and Access Service business as a new growth area CapMan Nordic Real Estate: final closing, five new investments and the first exit Funds signed agreed to exit Cederroth –
Slide 5: CapMan's operational and earnings model
CapMan’s operational and earnings model 1. Partnerships 2. Services 3. Investments • Autonomous Partnerships • Services offered both • Investments from responsible for internally and externally CapMan’s own balance investment activity • Global Fund sheet • CapMan’s ownership Advisory 30–100 % • CapM
Slide 6: Norvestia as CapMan's fifth investment area within three investment styles
Norvestia as CapMan’s fifth investment area within three investment styles Majority investments Minority investments Credit investments 6 CapMan Group results January – June 2015 6 August 2015
Slide 7: Norvestia as part of CapMan's long term strategy
Norvestia as part of CapMan’s long term strategy CapMan utilises private Evergreen structure CapMan is an active 1. anchor owner 2. equity growth 3. enables a wide variety Rationale opportunities of investments CapMan facilitates the growth of Minority investments are a growing More and flexible too
Slide 8: Priorities for 2015 – current progress
Priorities for 2015 – current progress Utilise growth opportunities Expand customer base to new 1 in the growing private equity market 4 customer groups and develop new fund models Focus on value creation in Finalise fundraising in the CapMan 2 portfolio companies and real estate 5 Nordic Real Estat
Slide 9: New investments in 2015
New investments in 2015 CapMan Nordic Real Estate CapMan Mezzanine V CapMan Russia II BROEN Vesterbrogade 80 Sundmolen Finsensvej 86 Ruoholahdenk. 4 9 CapMan Group results January – June 2015 6 August 2015
Slide 10: Exits in 2015 and their income and cash flow impact for CapMan
Exits in 2015 and their income and cash flow impact for CapMan Impact on income Cash flow from exit Symbio €1 mn €1.2 mn Silex €1.5 mn €2 mn Access (fund of €0.2 mn €0.2 mn fund) Result impact has been accounted for Cederroth in fair value changes during the holding €8 mn (around Q3 2015) period Res
Slide 11: Contents
Contents • Main events during the review period and strategy implementation • Business environment • Result for January–June 2015
Slide 12: Business environment
Business environment Stock market drivers also influence the private equity market High valuation levels, but few other options available for investors hunting for yield Uneven growth prospects for different markets Good access to financing and ultra low interest levels Growing demand for real estat
Slide 13: The Nordic buyout market has slowed down from last year
The Nordic buyout market has slowed down from last year partially due to an active IPO market Number of buyout deals in Buyout deal value in the the Nordic region Nordic region # Bn € 100 25 80 20 60 15 40 40 10 20 5 €4.1mn 0 0 2007 2008 2009 2010 2011 2012 2013 2014 2015 2007 2008 2009 2010 2011 20
Slide 14: Growth forecasts differ between countries
Growth forecasts differ between countries 2015: 1.8% Overall, the Nordic countries 2016: 2.1% are growing faster than the Euro area Russia's economic situation remains highly uncertain 2015: 1.5% 2015: 0.3% 2016: 1.6% 2016: 1.0% 2015: -3.5% 2016: 0.2% 2015: 2.5% Source: European Commission European
Slide 15: Growth of leverage ratios in buyouts has stalled
Growth of leverage ratios in buyouts has stalled 6.0x 4.8x 5.0x 4.6x Increased bank 4.0x competition 3.0x Active bond market 2.0x Attractive interest 1.0x rate environment 0.0x 2007 2008 2009 2010 2011 2012 2013 2014 1-6/2015 Debt/EBITDA Senior debt/EBITDA European Buyouts (EV<€250 million) Source:
Slide 16: The role of alternative debt funds as a financing option for European SMEs
The role of alternative debt funds as a financing option for European SMEs is growing in importance Mezzanine-debt market in Europe European businesses relies on bank financing… Total investments p.a. (2011-2013 average) France Other 34% Bank financing UK 55% Corporate DACH bonds 11% Nordics …while
Slide 17: The Finnish real estate market grew from the first quarter of 2015
The Finnish real estate market grew from the first quarter of 2015 due to two large ownership arrangements Transaction volumes in the Finnish commercial property market 8 6 4 €2.6 bn 2 0 2003 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 1-6 2015 Domestic buyer International buyer Source: KTI, J
Slide 18: Sweden's property market grew significantly in Q2
Sweden’s property market grew significantly in Q2 Real estate investment volumes in Sweden Real estate investment volumes in Denmark € bn € bn 16 5 14 4 12 10 3 8 €6.8 bn 6 2 €1.6 bn 4 1 2 0 0 2013 2014 2015 2013 2014 2015 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Source: CBRE Market View Nordic Investment Q1 & Q2 20
Slide 19: Copenhagen's real estate market is active
Transaction volume by property type (2014) Copenhagen’s real estate market is active Other 5% • Real estate investments in Copenhagen reached five-year record levels in 2014 (€3 bn Office 34% in total) Residential 28% • The shortage of residential properties in Copenhagen creates many possibilities
Slide 20: Record exit activity in Europe
Record exit activity in Europe # Buyout exits in Europe Mrd. € Exit routes Q1 2014 Others 900 35 Sale to 5% Sale to management Trade sale 800 2% 30 financial 20% 700 institution 9% 25 600 500 20 400 15 300 Sale to private 10 equity 200 25% 5 100 0 0 Public offering 2010 2011 2012 2013 2014 Q1 2015 3
Slide 21: Contents
Contents • Main events during the review period and strategy implementation • Business environment • Result for January–June 2015
Slide 22: Group turnover and operating profit
Group turnover and operating profit € million Turnover € million Operating profit 50 7 6.4 39.5 6 40 5 30 4 23.1 2.8 3.0 3 20 2.2 15.0 15.7 1.7 2 10 7.0 7.3 0.9 1 0 0 1-3 1-6 1-9 1-12 1-3 1-6 1-9 1-12 2014 2015 2014 2015 22 CapMan Group results January – June 2015 6 August 2015
Slide 23: Breakdown of results in Jan–June 2015
Breakdown of results in Jan–June 2015 € million 18.0 1.3 -13.0 2.0 0.1 16.0 14.0 13.3 12.0 10.0 8.0 6.0 Turnover 3.7 4.0 2.0 Adjusted operating profit 0.0 €3.7 million Fees Fair value changes of investments Carried interest income (net) Operating expenses (adjusted for a total Other operating income
Slide 24: Management Company business grew as a result of carried interest income
Management Company business grew as a result of carried interest income € million 1-6/2015 1-6/2014 Turnover 15.7 15.0 Fees 13.3 13.6 Carried interest from the exit Carried interest 2.5 1.4 from Symbio, Silex and Access Operating expenses -14.0 -13.1 Operating expenses included €0.7 million in non-r
Slide 25: Analysing the carried interest potential of CapMan's funds
Analysing the carried interest potential of CapMan’s funds Residential FundsDevelopment in technical carry Funds in carry (Portfolio FV exceeds the cash flow required to investors) • CME VII A, B, KB • CM PMF • FM III A, B Portfolio at Additional Fair value Additional receivables based on possible a
Slide 26: The Fund Investment business had a positive result impact
The Fund Investment business had a positive result impact € million 1-6/2015 1-6/2014 Fair value gains of The fair value change was investments 1.3 1.1 + €0,9 million Operating expenses -0.2 -0.2 The fair value change of Operating profit 0.9 Norvestia was + €0,4 million 1.2 Profit 0.8 0.3 26 CapMan
Slide 27: Fair value change below target
Fair value change below target M€ 56.5 + 1.6% 0.9 3.1 -2.2 Balance as of Fair value changes Positive Negative Q2 2015 H1 2015 impact impact (+1.6%) 27 CapMan Group results January – June 2015 6 August 2015
Slide 28: Fair values of CapMan's own fund investments by year of establishment
Fair values of CapMan’s own fund investments by year of the funds establishment Fair value/year of establishment 2001-2004 6% 2009-2014 33% 2005-2006 39% 2007-2008 22% 28 CapMan Group results January – June 2015 6 August 2015
Slide 29: Fair value changes of investments in Jan–June 2015
Fair value changes of investments in Jan–June 2015 Fair value changes of 51 portfolio companies Fair value changes of 61 real estate in 2015* investments in 2015* 12% 4% 1% 8% 11% 35% 49% 80% New investments Fair value increased Fair value same as 31 December 2014 *Exits are not included in the calc
Slide 30: Fair value change of Norvestia
Fair value change of Norvestia • Book value of CapMan’s • In addition to investments in its own funds, investment in Norvestia 12.5.2015 €44.3 mn CapMan owns 28.7% of the shares in Norvestia Plc. • CapMan’s share of Norvestia’s • CapMan acquired 21.7% of the shares in adjusted NAV 30.6.2015 €44.7 mn
Slide 31: Investments and commitments totalled €129.1 million
Investments and commitments totalled €129.1 million € million Fund investments 60 50 40 30 20 10 0 Buyout, 34% Real Estate, Russia, 5% Credit, 4% Others, 11% Funds of funds, Norvestia, 35% 9% 2% Investments in fair value, in total €101.2 million Remaining commitments, in total €27,9 million 31 CapMa
Slide 32: Financial targets
Financial targets Target Performance 1-6/2015 Profitability Return on equity of over 20 % Return on equity 7.3% p.a. Capital structure Equity ratio of 45–60 % Equity ratio 41.5% Payout ratio of at Dividend policy least 60 % of earnings per share 0.06 € for 2014 32 CapMan Group results January – June
Slide 33: CapMan maintains its outlook estimate for 2015
CapMan maintains its outlook estimate for 2015: We estimate our earnings per share to improve from the level achieved in 2014.
Slide 34: Basis for outlook
Basis for outlook • CapMan receives carried interest income from funds as a result of a completed exit in the event that the fund already is in carry or will enter carry due to the exit. Our current portfolio holds several investments, which we expect to exit during 2015. The most significant exits
Slide 35: IR calendar and IR team
IR calendar and IR team IR Calendar 2015 IR team Heikki Westerlund, CEO, Senior Partner Tel. +358 207 207 504 heikki.westerlund@capman.com Q2 2015 result 6 August 2015 Q3 2015 result Niko Haavisto, CFO Tel. +358 207 207 583 5 November 2015 niko.haavisto@capman.com Linda Tierala, Manager, Communicati
Slide 36: Contents
Contents • Main events during the review period and strategy implementation • Business environment • Result for January–June 2015 • Attachments
Slide 37: Group Income Statement, IFRS
Group Income Statement, IFRS € million 1-6/15 1-6/14 Turnover 15.8 15.0 Fees 13.3 13.6 Carried interest 2.5 1.4 Other operating income 0.1 0.1 Operating expenses -14.2 -13.5 Fair value changes of investments 1.3 1.1 Operating profit 3.0 2.7 Financial income and expenses -1.0 -0.8 Share of the income
Slide 38: Group Balance Sheet – Assets, IFRS
Group Balance Sheet – Assets, IFRS € thousands 30.6.2015 30.6.2014 Tangible assets 218 264 Goodwill 6,204 6,204 Other intangible assets 618 897 Investments accounted for using the equity method 9,123 9,275 Investments at fair value through profit and loss Investments in funds 56,511 62,966 Other fin
Slide 39: Group Balance Sheet – Total equity and liabilities, IFRS
Group Balance Sheet – Total equity and liabilities, IFRS € thousands 31.6.2015 30.6.2014 Share capital 772 772 Share premium account 38,968 38,968 Other reserves 27,175 27,041 Translation difference 84 141 Retained earnings -4,855 -2,572 Total equity 62,144 64,350 Deferred income tax liabilities 1,9
Slide 40: Key figures
Key figures 31.6.2015 30.6.2014 2.0 1.7 Earnings per share, cents Diluted, cents 2.0 1.7 Shareholders' equity / share, cents * 72.0 74.8 Share issue adjusted number of shares 86,290,467 86,033,855 Number of shares at the end of period 86,316,766 86,316,766 Number of shares outstanding 86,290,467 86,
Slide 41: CapMan Plc's largest shareholders 30 June 2015
CapMan Plc’s largest shareholders 30 June 2015 Shares of all shares, % Shares of all voting rights, % Gimv NV*** 9.9% 6.2% Ilmarinen Mutual Pension Insurance Company 8.3% 5.2% Oy Inventiainvest Ab + (Ari Tolppanen**) 8.1% 19.4% Winsome Oy + Tuomo Raasio* 4.4% 8.4% Varma Mutual Pension Insurance Comp