3i Group Plc · LSE:III
3i — Shareholder Meeting (July 2006)
72 slides from 3i's shareholder meeting presentation, Jul 12, 2006
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Slide 2: Annual General Meeting
Annual General Meeting 12 July 2006 2
Slide 3: Baroness Hogg, Chairman
Baroness Hogg Chairman 3
Slide 4: The Board of Directors
The Board of Directors 4
Slide 5: Dr Peter Mihatsch
Dr Peter Mihatsch 5
Slide 6: Christine Morin-Postel
Christine Morin-Postel 6
Slide 7: Michael Queen
Michael Queen 7
Slide 8: Danny Rosenkranz
Danny Rosenkranz 8
Slide 9: Tony Brierley
Tony Brierley 9
Slide 10: Philip Yea
Philip Yea 10
Slide 11: Simon Ball
Simon Ball 11
Slide 12: Oliver Stocken
Oliver Stocken 12
Slide 13: Fred Steingraber
Fred Steingraber 13
Slide 14: Sir Robert Smith
Sir Robert Smith 14
Slide 15: Robert Swannell
Robert Swannell 15
Slide 16: Chairman's quote on strong position in a buoyant market
“A Detailed strong position quote titlein a buoyant market enabled the here Quote name/source Group to deliver a return of £831 million for the year. In addition, good progress has been made towards achieving our vision.” 16
Slide 17: Share price since flotation
Share price since flotation 2000 3i Group 1800 FTSE All Share 1600 1400 1200 1000 800 600 400 200 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 17
Slide 18: Return of capital to shareholders
Return of capital to shareholders • Amount – £700m • Method – bonus issue of listed B shares • EGM to follow 18
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Slide 20: Simon Ball, Finance Director
Simon Ball Finance Director 20
Slide 21: Financial performance headlines
Financial performance headlines 2006 2005 (as restated) • Total return £831m £501m • Return on opening shareholders’ funds 22.5% 15.2% • Gross portfolio return 24.4% 16.7% • Realised profits £576m £250m • Realisation proceeds £2,207m £1,302m • New investment £1,110m £755m • Net asset value per share
Slide 22: Portfolio value and gross returns by business line
Portfolio value and gross returns by business line Portfolio by value £4,317m* £4,139m* UK 2006 2005 Buyouts (as restated) 35% 35% Gross portfolio return 24.4% 16.7% Buyouts 29.4% 20.2% 31% 30% Growth Capital 26.4% 23.2% Continental Growth Venture Capital Europe 17.1% 11.1% Capital SMI 18.2% 6.8% 20
Slide 23: Investment
Investment £1,110m • 58UKnew investments Buyouts 41% • Largest ten account for 46% £755m • Average size €22m – Buyouts €55m* 45% – Growth Capital €30m** Continental Growth – Venture Capital €5m** Europe Capital 45% 35% Venture Capital 14% 19% US 1% * Buyouts average new investment excluding 2006 200
Slide 24: A selection of investments
A selection of investments Buyouts National Car Parks UK Transport management £96m Giochi Preziosi Italy Toy retailer and wholesaler £61m Carema Nordic Elderly care £36m Growth Capital I2 UK Infrastructure investment fund £79m Boxer TV-Access Nordic Digital TV distributor £60m Hayley Conference Cent
Slide 25: Realisations
Realisations £2,207m • 474 realisations UK (278 SMI) Buyouts • Uplift over value 35% 40% • Portfolio turn by value 38% £1,302m • IPOs on 9 different markets Continental Growth 39% Europe Capital 39% 34% 9% Venture 12% Capital 12% 15% 2006 2005 SMI Venture Capital Growth Capital Buyouts 25
Slide 26: Realisation highlights
Realisation highlights 3i Money IRR Buyouts proceeds multiple % Yellow Brick Road Europe Telephone directories publisher £129m 4.2 110 Betapharm Germany Generic prescription drugs £105m 2.1 48 Travelex UK Foreign currency services £93m 9.2 59 Growth Capital Petrofac UK Oil and gas services £116m 5.2
Slide 27: Net portfolio and total return
Net portfolio and total return 2005 2006 (as restated) £m £m Gross portfolio return 1,053 24.4% 727 16.7% Fund management fees 24 30 Net carried interest 15 (64) Operating expenses (211) (177) Net portfolio return 881 20.4% 516 11.8% Net interest payable (17) (42) Exchange movements 47 13 Movement i
Slide 28: Net cash flow
Net cash flow 2006 2005 £m £m Cash invested (1,068) (719) Net realisation proceeds 2,213 1,287 Net investment cash flow 1,145 568 Portfolio income, operating expenses and other (42) (50) Net cash inflow before dividend 1,103 518 Ordinary dividend (86) (85) Return of capital (467) - Net cash inflow 5
Slide 29: Balance sheet
Balance sheet 2006 2005 £m (as restated) £m Investment assets 4,139 4,317 Other net liabilities (77) (73) 4,062 4,244 Net borrowings 56 545 Shareholders’ funds 4,006 3,699 4,062 4,244 Gearing 1% 15% 29
Slide 30: Return of capital 2005/06
Return of capital 2005/06 • £500m approved at July 2005 EGM • Special dividend of £245m paid last summer • £222m applied to buy-backs at average price of 734p per share • Renewal of buyback authority to provide flexibility 30
Slide 31: Financial summary
Financial summary • Total return of 22.5% • Exceptional level of realisations • Cash flow to support further return of £700m to shareholders • Good growth in high quality investment 31
Slide 32: Proposed return of capital – rationale and quantum
Proposed return of capital – rationale and quantum • Target gearing ratio of 30%-40% across the cycle • March 2005, 15% gearing - up to £500m return of capital approved • March 2006, 1% gearing - proposal to return a further £700m 32
Slide 33: Proposed return of capital – method
Proposed return of capital – method • Bonus issue of listed “B” shares • One B share for each ordinary share • Expected offers of 127p for each B share • Consolidation of ordinary shares (11 new ordinary shares for 13 existing ordinary shares) 33
Slide 34: Proposed return of capital – key dates
Proposed return of capital – key dates • 14 July 2006 – Forms of election to be received by registrars – Last day of dealing for existing ordinary shares • 17 July 2006 – Dealings commence in consolidated ordinary shares and B shares • 27 July 2006 – Cash proceeds distributed in respect of the Initi
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Slide 36: Philip Yea, Chief Executive
Philip Yea Chief Executive 36
Slide 37: Our vision
Our vision 3i shall be the private equity firm of choice • Operating on a world-wide scale • Producing consistent market beating returns • Acknowledged for our partnership style • Winning through our unparalleled resources 37
Slide 38: Our strategy
Our strategy • To invest in high-return assets • To grow our assets and those we manage on behalf of third parties • To extend our international reach, directly and through investing in funds • To use our balance sheet and resources to develop existing and new business lines • To continue to build o
Slide 39: Investing in high return assets
Investing in high return assets Target cash Gross portfolio returns to cash returns 2006 2005 Buyouts 20% 29% 20% Growth Capital 20% 26% 23% Venture Capital 25% 17% 11% 39
Slide 40: To grow our assets – owned and managed
To grow our assets – owned and managed • Buyouts – Mid-market positioning – Eurofund V • Growth Capital – Average deal size quadrupled in two years – Asian investment tripled – US Growth capital team up and running • Infrastructure • Venture Capital – Increase late stage focus 40
Slide 41: Extending our international reach – Asia - directly
Extending our international reach – Asia - directly Beijing Shanghai Mumbai Hong Kong Singapore 41
Slide 42: Extending our international reach – Asia - indirectly
Extending our international reach – Asia - indirectly Selective investments in 3rd party funds: CDH – Beijing Vogo – Seoul MKS – Tokyo Beijing Shanghai Mumbai Hong Kong Singapore 42
Slide 43: Extending our international reach
Extending our international reach International portfolio value as percentage of total % 60 58% 50 48% 42% 40 37% 34% 30 29% 22% 20 10 0 2000 2001 2002 2003 2004 2005 2006 As at 31 March 43
Slide 44: To use our balance sheet and resources
To use our balance sheet and resources Existing business lines • Finance new offices • Market entry strategies New business lines • Infrastructure • Others as appropriate 44
Slide 45: Building on our one company culture
Building on our one company culture Business line expertise Creating value Sector knowledge Local knowledge 45
Slide 46: Outlook
Outlook “Since the year end, we have continued to invest well and generate high levels of realisations.” 46
Slide 47: Summary
Summary • Good set of results • Detailed strategy for the future • Motivation high • Good start to the year 47
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Slide 49: Roger Perkin, Ernst & Young
Roger Perkin Ernst & Young 49
Slide 50: The Resolutions
The Resolutions 50
Slide 51: Resolutions commentary
Resolutions commentary • AGM – 15 resolutions on regular annual business – Political donations – Co-investment schemes – On-market purchases of shares • EGM – Return of capital 51
Slide 52: Questions
Questions 52
Slide 53: Two poll cards
Two poll cards Annual General Meeting Poll Card Resolutions For Against Abstain Report and Accounts, Remuneration report. Declaration of dividend Reappointment of Mme C J M Morin-Postel. Reappointment of Mr M J Queen. Reappointment of Mr F D Rosenkranz. Reappointment of Auditors. COlN/ OD) a] a] wl
Slide 54: Resolution 1: Receive accounts and reports
Resolution 1 Proxy votes lodged for this Resolution: 97.48% For, 0.12% Discretionary, 1.87% Abstain and 0.53% Against “THAT the Company’s Accounts for the year to 31 March 2006 and the Directors’ report, the Auditors’ report and the auditable part of the Directors’ remuneration report be and they ar
Slide 55: Resolution 2: Remuneration report
Resolution 2 Proxy votes lodged for this Resolution: 96.43% For, 0.13% Discretionary, 2.26% Abstain and 1.18% Against “THAT the Directors’ remuneration report for the year to 31 March 2006 be and it is hereby approved” 55
Slide 56: Resolution 3: Final dividend
Resolution 3 Proxy votes lodged for this Resolution: 99.51% For, 0.12% Discretionary, 0.10% Abstain and 0.27% Against “THAT a final dividend of 9.7 pence per share be and it is hereby declared, payable to those shareholders whose names appeared on the Register of Members at close of business on 23 J
Slide 57: Resolution 4: Reappoint Mme Morin-Postel
Resolution 4 Proxy votes lodged for this Resolution: 98.87% For, 0.23% Discretionary, 0.08% Abstain and 0.82% Against “THAT Mme C J M Morin-Postel be and she is hereby reappointed as a Director of the Company” 57
Slide 58: Resolution 5: Reappoint Mr Queen
Resolution 5 Proxy votes lodged for this Resolution: 99.47% For, 0.14% Discretionary, 0.08% Abstain and 0.31% Against “THAT Mr M J Queen be and he is hereby reappointed as a Director of the Company” 58
Slide 59: Resolution 6: Reappoint Mr Rosenkranz
Resolution 6 Proxy votes lodged for this Resolution: 98.86% For, 0.23% Discretionary, 0.08% Abstain and 0.83% Against “THAT Mr F D Rosenkranz be and he is hereby reappointed as a Director of the Company” 59
Slide 60: Resolution 7: Reappoint Ernst & Young as auditors
Resolution 7 Proxy votes lodged for this Resolution: 98.62% For, 0.13% Discretionary, 0.07% Abstain and 1.18% Against “THAT Ernst & Young LLP be and they are hereby reappointed as Auditors of the Company to hold office until the conclusion of the next General Meeting at which Accounts are laid befor
Slide 61: Resolution 8: Auditors' remuneration
Resolution 8 Proxy votes lodged for this Resolution: 98.64% For, 0.13% Discretionary, 0.06% Abstain and 1.17% Against “THAT the Board be and it is hereby authorised to fix the Auditors’ remuneration” 61
Slide 62: Resolution 9: Political expenditure authority
Resolution 9 Proxy votes lodged for this Resolution: 97.46% For, 0.13% Discretionary, 0.16% Abstain and 2.25% Against To renew the Company’s authority to incur political expenditure (The full text of this Resolution is set out in the Notice of AGM) 62
Slide 63: Resolution 10: 3i plc political expenditure authority
Resolution 10 Proxy votes lodged for this Resolution: 97.44% For, 0.13% Discretionary, 0.16% Abstain and 2.27% Against To renew the authority of 3i plc to incur political expenditure (The full text of this Resolution is set out in the Notice of AGM) 63
Slide 64: Resolution 11: Directors' co-investment arrangements
Resolution 11 Proxy votes lodged for this Resolution: 97.83% For, 0.13% Discretionary, 1.20% Abstain and 0.84% Against “THAT executive Directors be and they are hereby authorised to participate in the co-investment arrangements described in the notes relating to this Resolution 11 set out in the Not
Slide 65: Resolution 12: Employee Trust share limit
Resolution 12 Proxy votes lodged for this Resolution: 96.22% For, 0.13% Discretionary, 3.23% Abstain and 0.42% Against To authorise an increase in the limit on the number of shares which may be held by The 3i Group Employee Trust from 2.5% to 5% of the company’s issued share capital (The full text o
Slide 66: Resolution 13: Authority to allot shares
Resolution 13 Proxy votes lodged for this Resolution: 98.06% For, 0.13% Discretionary, 0.07% Abstain and 1.74% Against To renew the Directors' authority to allot shares (The full text of this Resolution is set out in the Notice of AGM) 66
Slide 67: Resolution 14: Authority to allot shares for cash
Resolution 14 Proxy votes lodged for this Resolution: 99.39% For, 0.15% Discretionary, 0.04% Abstain and 0.42% Against Special Resolution To renew the Directors' authority to allot shares for cash (The full text of this Resolution is set out in the Notice of AGM) 67
Slide 68: Resolution 15: Authority to purchase own shares
Resolution 15 Proxy votes lodged for this Resolution: 99.50% For, 0.13% Discretionary, 0.06% Abstain and 0.31% Against Special Resolution To renew the Company's authority to purchase its own shares (The full text of this Resolution is set out in the Notice of AGM) 68
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Slide 70: Commencement of Extraordinary General Meeting
Commencement of Extraordinary General Meeting 70
Slide 71: Special Resolution: B share issue and share consolidation
Proxy votes lodged for this Resolution: 96.13% For, 0.28% Discretionary, 3.34% Abstain and 0.25% Against Special Resolution B share issue, share capital consolidation, authority for market purchases of B shares and amendment to Articles of Association. (The full text of this Resolution is set out in
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