Kinnevik Ab Class A · OMXSTO:KINV_A
Kinnevik Ab Class A — Q2 2011 Earnings Presentation
27 slides from Kinnevik Ab Class A's earnings presentation, August 2011
Slide 1: Presentation of Financial Results Q2 2011
PRESENTATION OF FINANCIAL RESULTS Q2 2011
Slide 2: Highlights Second Quarter 2011
HIGHLIGHTS SECOND QUARTER 2011 SEKm NET ASSET VALUE 70 000 • NAV SEK 58,770m up SEK 1,024m in the quarter 60 000 50 000 • Korsnäs EBIT SEK 178 million 40 000 30 000 • Strong growth and high margins in telecom and media 20 000 10 000 • Committed to invest SEK 901 million in online in Q2 Q2/07Q2/08Q2/
Slide 3: One Share - Sixty Markets
ONE SHARE - SIXTY MARKETS SALES PER REGION – Average annual return of 20% last 30 years 3
Slide 4: The Kinnevik Portfolio
THE KINNEVIK PORTFOLIO PAPER & TELECOMMUNICATION MEDIA PACKAGING AND SERVICES ONLINE AGRICULTURE AND MICROFINANCING RENEWABLE ENERGY RawAgro 4
Slide 5: Korsnäs
PAPER & PACKAGING KORSNÄS SEK m Q2 2011 Q2 2010 Change (%) Total revenues 2044 2003 2% EBIT 178 243 -27% EBIT margins 8,8% 12,1% Production (Ktonnes) 256 237 Deliveries (Ktonnes) 250 252 • World’s 2nd largest liquid packaging board producer • Premium segment producer of folding carton board • Demand
Slide 6: Telecommunication and Services
OUR VALUE DRIVERS TELECOMMUNICATION AND SERVICES • Strong market positions in high growth markets – Scandinavia - Latin America – Russia & Kazakhstan - Africa • Excellent execution – Building strong brands – Focus on sales, marketing and distribution to high ARPU customers – Divesting towers in Afri
Slide 7: Millicom
TELECOMMUNICATION AND SERVICES MILLICOM USD m Q2 2011 Q2 2010 Change % Total revenues 1 120 977 15 EBITDA 513 464 11 EBITDA margins 45.8 % 47.5 % Subscribers, end of 41.3 36.7 period (m) • Further improvement in ARPU, with positive growth in both Central and South America • Continued VAS development
Slide 8: Tele2
TELECOMMUNICATION AND SERVICES TELE2 SEK m Q2 2011 Q2 2010 change % Operating revenue 9 998 10 539 -5 EBITDA 2 711 2 687 1 EBITDA margins 27 % 26 % Mobile subscribers, end 28.9 24.8 of period (m) • Russia – record EBITDA contribution of SEK 1,115m in the quarter • Nordic - Robust mobile revenue grow
Slide 9: Transcom
TELECOMMUNICATION AND SERVICES TRANSCOM EUR m Q2 2011 Q2 2010 Change % Operating revenue 134.3 148.8 -10 EBIT -26.8 3.7 neg EBIT margin (%) neg 2.5 • Reported profit impacted by significant restructuring program. Objectives: - Adjust delivery infrastructure to current level of revenues - Reduce work
Slide 10: Media
OUR VALUE DRIVERS MEDIA • TV dominant brand building vehicle for advertisers • Strong market positions and brands • 125 million daily TV viewers in 31 markets • Scandinavia • Eastern Europe • Start-up in Ghana - Africa • Balance between advertising and pay-TV revenues • 17 million daily Metro reader
Slide 11: Modern Times Group MTG
MEDIA MODERN TIMES GROUP MTG SEK m Q2 2011 Q2 2010 Change (%) Total revenues 3 531 3 413 3 Total operating profit 681 698 -3 (EBIT) EBIT margins 19 % 20 % • Record Q2 sales and operating profits, with stable margins despite investments in future growth • Performing well operationally & delivering on
Slide 12: Metro
MEDIA METRO EUR m Q2 2011 Q2 2010 change Operating revenue 54.8 46.8 17 % Total operating profit (EBIT) 6.7 2.6 Net profit 2.8 0.5 • Sweden improved EBIT by EUR 1.1m to EUR 4.4m • Offer received from TF1 for Metro France, which has been reclassified as assets-held-for-sale and discontinued operation
Slide 13: Online
OUR VALUE DRIVERS ONLINE • Consumer online stands out in opportunity and scale • Growth in e-commerce is one of the strongest trends in the world economy • grows 5x as fast as traditional retail • potential for increased profitability, as eCommerce scales very well • lion share of growth still goes
Slide 14: Kinnevik's Online Businesses
OUR VALUE DRIVERS KINNEVIK’S ONLINE BUSINESSES Company Total investment Fair value end-June Ownership stake (%) (SEKm) (SEKm) CDON 4641) 578 22.6 Avito 285 336 52 Rocket & portfolio companies 1 126 1 768 vary Other 405 122 vary 1) The value of dividend received from MTG and acquisition of additional
Slide 15: CDON
ONLINE CDON SEK m Q2 2011 Q2 2010 Change (%) Total revenues 689 458 51 Total operating profit 19.1 27.9 -32 (EBIT) EBIT margins 2.8% 6.1% • Strong sales growth across all segments & each segment profitable in Q2 despite ongoing investments • Operating profit of SEK 19.1 (27.9) m & 2.8% operating mar
Slide 16: Classified Experience – Russia and Ukraine
ONLINE CLASSIFIED EXPERIENCE – RUSSIA AND UKRAINE • The number one site for online classifieds in Russia • Among top 10 sites in .ru-net, >10 million unique visitors/month • Recently entered Ukraine 16 • Kinnevik owns 52% of Avito
Slide 17: Online Shoes and Fashion in Three Continents
ONLINE ONLINE SHOES AND FASHION IN THREE CONTINENTS • Kinnevik has invested SEK 1,126 million in Rocket Internet and portfolio companies • The largest part within online shoes and fashion in three continents • Double digit growth expected in online fashion market • Zalando – online shoes and fashion
Slide 18: Focus on E-commerce - Continued
ONLINE FOCUS ON E-COMMERCE - CONTINUED • Groupon – group discount worldwide – 43 countries and 7000 employees – 83 million subscribers and revenues of USD 700 million in 2010 – Kinnevik owns around 1% • Wimdu – community market place for private accomodation – Over 10,000 accomodations in more than
Slide 19: Microfinancing
OUR VALUE DRIVERS MICROFINANCING Company Total investment Fair value end-June Ownership stake (%) (SEKm) (SEKm) Bayport 329 308 37 Other 31 24 vary Investment rationale • A market with low penetration - 130m clients of potentially 1.5 billion • Access to traditional banking services very limited • F
Slide 20: Bayport
MICROFINANCING BAYPORT • Offers micro credits and financial services in Ghana, Uganda, Zambia, Tanzania and Botswana • Ghana and Zambia are the largest markets • Operations expanded to Colombia in first quarter 2011 • Pay-roll deduction model - 250,000 customers • Total assets USD 250m – growth of a
Slide 21: Agriculture & Renewable Energy
OUR VALUE DRIVERS AGRICULTURE & RENEWABLE ENERGY Company Total investment Fair value end-June Ownership stake (%) (SEKm) (SEKm) AGRICULTURE Black Earth Farming 659 752 24.9 Rolnyvik 174 250 100 Rawagro 33 21 30 RENEWABLE ENERGY Vireo 18 18 75 Sia Latgran 129 263 75 Investment rationale • The world p
Slide 22: Black Earth Farming Latgran
AGRICULTURE & RENEWABLE ENERGY BLACK EARTH FARMING • Black Earth Farming is the largest investment within agriculture • 328,000 hectares of land • 2011 focus to increase yields and continue to improve the efficiency of the operations • 235k hectares of commercial crops planted for 2011 harvest LATGR
Slide 23: Profit and Loss
FINANCIALS PROFIT AND LOSS SEK m Q 2 2011 Q2 2010 Total revenues 2 160 2 080 Operating profit 167 233 Changes in fair value including dividends received 2 410 1 681 Net interest expense -63 -27 Profit before tax 2 514 1 887 Tax -24 -56 Net income 2 490 1 831 23
Slide 24: Kinnevik's Balance Sheet 30 June 2011
FINANCIALS KINNEVIK’S BALANCE SHEET 30 JUNE 2011 • Strong financial position • Kinnevik’s net debt amounts to SEK 5.0 bn (including interest bearing financial assets of SEK 0.2 bn) – SEK 4.9 bn against Korsnäs - high leverage to maximise returns – SEK 0.3 bn against Listed Holdings of SEK 49.7 bn –
Slide 25: Kinnevik's See-Through P&L Development
FINANCIALS KINNEVIK’S SEE-THROUGH P&L DEVELOPMENT (SEK m) EBIT-margin 40 000 20% 30 000 15% 20 000 10% 10 000 5% 0 0% Q3 08 Q4 08 Q1 09 Q2 09 Q3 09 Q4 09 Q1 10 Q2 10 Q3 10 Q4 10 Q1 11 Q2 11 Revenues EBIT EBIT margin • Sales up by 5 % to SEK 18.2 bn compared to Q2 2010 • EBIT up 6 % to SEK 3.1 bn com
Slide 26: Focus Going Forward
FOCUS GOING FORWARD Telecom & services : – Maintain strong market positions in growing markets – Capture data market – Focus on innovation and new successful services Media – Changing distribution models - stay ahead of the market – More focus on media house Online, microfinancing, agriculture and r
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