3i Group Plc · LSE:III
3i — Shareholder Meeting (July 2003)
38 slides from 3i's shareholder meeting presentation, Jul 9, 2003
Slide 1: Annual General Meeting 9 July 2003
Annual General Meeting 9 July 2003 11
Slide 2: Annual General Meeting 9 July 2003
Annual General Meeting 9 July 2003 2
Slide 3: Baroness Hogg, Chairman
Baroness Hogg Chairman 3
Slide 4: Comparative returns April 2002-31 March 2003
Annual General Meeting 9 July 2003 Comparative returns 1 April 2002-31 March 2003 % 3i (23.7) FTSE All-Share (29.8) FTSE 100 (29.1) FTSE Small Cap (excluding investment companies) (33.4) MSCI Europe (37.7) Dow Jones Stoxx (41.8) FTSE techMark 100 (50.0) Note: All indices include dividends reinvested
Slide 5: Long term share price
Annual General Meeting 9 July 2003 Long term share price 3i Group 2000 FTSE 100 FTSE All Share 1800 FTSE Small Cap (exc IT) 1600 1400 1200 1000 800 600 400 200 0 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 Source: Bloomberg 55
Slide 6: Outlook
Outlook 6
Slide 7: Brian Larcombe, Chief Executive
Brian Larcombe Chief Executive 7
Slide 8: Key messages
Annual General Meeting 9 July 2003 Key messages • A tough year and a year of change • Disappointing fall in NAV, though an outperformance of benchmarks • Strong realisations, investment rebalanced • Business organised on product basis • Competitive advantages developed 88
Slide 9: 10 large investments made in year to 31 March 2003
Annual General Meeting 9 July 2003 10 large investments made in year to 31 March 2003 99
Slide 10: 10 large realisations made in year to 31 March 2003
Annual General Meeting 9 July 2003 10 large realisations made in year to 31 March 2003 10 10
Slide 11: Actions taken – organisation
Annual General Meeting 9 July 2003 Actions taken – organisation • Increased product focus • Reshaped local and product leadership • Strengthened investment processes – all products • Rebalanced network • Reduced costs 11 11
Slide 12: Strategy
Annual General Meeting 9 July 2003 Strategy • Developing the business internationally • Building a balanced investment business • Using the network as our key competitive advantage • Investing primarily in growth companies 12 12
Slide 13: Buy-outs
Annual General Meeting 9 July 2003 Buy-outs • Solid returns • Good opportunity for growth • See the market • Pick the winners • Drive the value 13 13
Slide 14: Early stage technology
Annual General Meeting 9 July 2003 Early stage technology • Focus on four key sub-sectors • More focused, more experienced teams in fewer locations • Growing interest for major corporates • Transformation of − new investment processes − portfolio management − delivery of added value 14 14
Slide 15: Growth capital
Annual General Meeting 9 July 2003 Growth capital • Clear leadership • Capitalise on regional network • Good time to invest 15 15
Slide 16: Portfolio analysis
Annual General Meeting 9 July 2003 Portfolio analysis Portfolio by value at 31 March 2003 Value 6% Buy-outs £1,927m 15% Growth capital £1,206m Early stage technology £589m Quoted £217m Total £3,939m 48% 31% Excludes co - investment funds 16 16
Slide 17: Conclusion
Annual General Meeting 9 July 2003 Conclusion ‘Cautious about the short-term outlook, confident about the quality of new investment for long term growth.’ 17 17
Slide 18: Michael Queen, Finance Director
Michael Queen Finance Director 18
Slide 19: Financial highlights
Annual General Meeting 9 July 2003 Financial highlights • Total return on opening shareholders’ funds (23.7)% • Net asset value per share 480p • Realised profits on disposal £184m • Net cash inflow £170m • Final dividend 8.6p 19 19
Slide 20: Realised profits on disposal
Annual General Meeting 9 July 2003 Realised profits on disposal 2002 2003 £m £m Total proceeds and repayments 939 976 Net realised (loss)/profit (39) 184 Equity realisations - proceeds 728 640 - net realised profit 4 164 - equity uplift over value 1% 34% 20 20
Slide 21: Unrealised value movement
Annual General Meeting 9 July 2003 Unrealised value movement £(1,165)m £m (209) (244) 48 (379) Quoted portfolio PE movement (361) Earnings growth Provisions (20) Down rounds & restructuring Other 21 21
Slide 22: Balance sheet
Annual General Meeting 9 July 2003 Balance sheet 2002 2003 £m £m Investment assets 5,109 3,939 Other net assets/(liabilities) 23 10 5,132 3,949 Net borrowings 1,187 1,013 Shareholders’ funds 3,945 2,936 5,132 3,949 Gearing 30% 35% 22 22
Slide 23: Net cash flow – long-term trend
Annual General Meeting 9 July 2003 Net cash flow – long-term trend £m 2000 Cash inflow Cash outflow 1500 Net cash flow 1000 500 0 -500 -1000 -1500 -2000 1992 1993 1994 1995 1996 1997 1998 1999 2000 2001 2002 2003 for year to 31 March 23 23
Slide 24: Dividend history
Annual General Meeting 9 July 2003 Dividend history pence 14 13.0 13.0 13.5 12.2 12 11.3 10.3 10 9.2 8.1 8 7.2 6 4 2 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 Interim Final 24 24
Slide 25: Financial summary
Annual General Meeting 9 July 2003 Financial summary • Strong realisations, good portfolio income, cost reduction • Total return affected by stock market falls and technology sector weakness • Strong balance sheet • Continued record of longer term outperformance • Proposed dividend increase 25 25
Slide 26: Annual General Meeting 9 July 2003
Annual General Meeting 9 July 2003 26 26
Slide 27: Nigel Jones, Ernst & Young
Nigel Jones Ernst & Young 27
Slide 28: Resolution 1
Annual General Meeting 9 July 2003 Resolution 1 “THAT the Company’s Accounts for the year ended 31 March 2003 and the Directors’ report and Auditors’ report thereon be and they are hereby received and considered” Proxy votes lodged for this Resolution: 98.43% For, 0.05% Against and 1.52% Discretiona
Slide 29: Resolution 2
Annual General Meeting 9 July 2003 Resolution 2 “THAT the Directors’ Remuneration report for the year ended 31 March 2003 be and it is hereby approved” Proxy votes lodged for this Resolution: 90.28% For, 8.07% Against and 1.65% Discretionary 29 29
Slide 30: Resolution 3
Annual General Meeting 9 July 2003 Resolution 3 “THAT a final dividend of 8.6 pence per share net be and it is hereby declared, payable to those shareholders whose names appeared on the Register of Members at close of business on 20 June 2003” Proxy votes lodged for this Resolution: 98.51% For, 0.00
Slide 31: Resolution 4
Annual General Meeting 9 July 2003 Resolution 4 “THAT Mme C J M Morin-Postel be and she is hereby reappointed as a Director of the Company” Proxy votes lodged for this Resolution: 97.98% For, 0.49% Against and 1.53% Discretionary 31 31
Slide 32: Resolution 5
Annual General Meeting 9 July 2003 Resolution 5 “THAT Mr M M Gagen be and he is hereby reappointed as a Director of the Company” Proxy votes lodged for this Resolution: 97.91% For, 0.56% Against and 1.53% Discretionary 32 32
Slide 33: Resolution 6
Annual General Meeting 9 July 2003 Resolution 6 “THAT Mr M J Queen be and he is hereby reappointed as a Director of the Company” Proxy votes lodged for this Resolution: 97.92% For, 0.56% Against and 1.52% Discretionary 33 33
Slide 34: Resolution 7
Annual General Meeting 9 July 2003 Resolution 7 “THAT Mr F D Rosenkranz be and he is hereby reappointed as a Director of the Company” Proxy votes lodged for this Resolution: 97.94% For, 0.53% Against and 1.53% Discretionary 34 34
Slide 35: Resolution 8
Annual General Meeting 9 July 2003 Resolution 8 “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 before the Members” Proxy votes lodged for this Resolution: 97.44% For, 0.7
Slide 36: Resolution 9
Annual General Meeting 9 July 2003 Resolution 9 “THAT the Board be and it is hereby authorised to fix the Auditors’ remuneration” Proxy votes lodged for this Resolution: 98.30% For, 0.20% Against and 1.50% Discretionary 36 36
Slide 37: Resolution 10 Special Resolution
Annual General Meeting 9 July 2003 Resolution 10 Special Resolution To authorise the purchase of own shares by the Company (The full text of this Resolution is set out in the Notice of Meeting) Proxy votes lodged for this Resolution: 98.47% For, 0.03% Against and 1.50% Discretionary 37 37
Slide 38: Annual General Meeting 9 July 2003
Annual General Meeting 9 July 2003 38 38