Oakley Capital Investments Ltd Registered · LSE:OCI
Oakley Capital Investments Ltd Registered — Oakley Capital Investments — H1 2019 Earnings Presentation
33 slides from Oakley Capital Investments Ltd Registered's earnings presentation, 2019
Slide 1: Results Presentation HY2019
RESULTS PRESENTATION HY2019
Slide 2: Financial Highlights
Financial Highlights Performance for the six months ending 30 June 2019 Net Asset Value NAV per share Total NAV return £651m 318p 14% 3.50 3.00 2.50 2.00 £ 1.50 1.00 0.50 0.00 Jun-09 Jun-10 Jun-11 Jun-12 Jun-13 Jun-14 Jun-15 Jun-16 Jun-17 Jun-18 Jun-19 NAV per share Dividend Share Price OAKLEY CAPIT
Slide 3: Portfolio performance & successful exits grow NAV
Portfolio performance & successful exits grow NAV 13% NAV per share increase 5p 2.25p 318p 2p 18p 18p 281p FY18 Oakley Equity Realised gains Dividend FX + Fees HY19 Funds* co-investments* Note: * Represents unrealised gains OAKLEY CAPITAL INVESTMENTS 2
Slide 4: Oakley Fund commitment drives NAV growth
Oakley Fund commitment drives NAV growth £651m NAV by investment type Oakley Fund investment £320m 156p per share Cash/other Cash/other assets assets && 24% IRR liabilities liabilities 15% 15% Debt Equity Oakley Fund Co-investment £125m £110m investment Co-investment Co-investment 49% 61p per share
Slide 5: A balanced portfolio across three distinct sectors
Fund Investment A balanced portfolio across three distinct sectors AMOS Seagull & Videotel £16.5m £20.2m North Sails EDUCATION £39.3m Schülerhilfe Debt: £61.7m £43.7m Career Partner Group CONSUMER £45.8m Time Out £71.0m Inspired Debt: £22.1m £91.2m Casa & atHome TechInsights £42.3m £13.5m Facile Eko
Slide 6: A Western Europe focused portfolio across three distinct sectors
Fund Investment A Western Europe focused portfolio across three distinct sectors FX exposure Consumer £269.5m Education £117.6m € 51% £ 23% TMT £217.4m $ 26% OAKLEY CAPITAL INVESTMENTS 5
Slide 7: High growth, conservative debt, modest valuations
Fund Investment High growth, conservative debt, modest valuations Portfolio analysis Portfolio Company Portfolio Company Portfolio Company EBITDA growth Net debt/EBITDA(1) EV/EBITDA(1) 8 5 6 59% 7 41% 39% 44% 50% 5 4 6 No. of Companies 4 No. of Companies No. of Companies 5 3 41% 4 3 2 6% 3 2 2 3% 17
Slide 8: Portfolio activity
Fund Investment Portfolio activity Investments and realisations year to date Signed Completed Completed Completed Signed £17m £18m £20m £6m £25m Investments (1) February April June March May July August Realisations Refinancing Refinancing Partial sell down £11m proceeds £16m proceeds £30m proceeds
Slide 9: Sourcing high quality companies at attractive valuations
Fund Investment Sourcing high quality companies at attractive valuations £86m new investments signed year to date EV/EBITDA 13.4x c.€100m est. EBITDA Year three 11.2x €605m EV at acquisition 2019 signed investments Peer group average OAKLEY CAPITAL INVESTMENTS 8
Slide 10: Co-investment
Co-investment Co-investment Equity Debt Where attractive to do so, OCI takes direct equity stakes in If OCI has appropriate cash levels, it will consider providing debt portfolio companies when an Oakley Fund can no longer make instruments to the portfolio companies if the returns are appropriate. f
Slide 11: Inspired update
Co-investment Inspired update Equity value €989m OCI Inspired holding at Dec 2018: £73m Pre- transaction (Dec-18) Co-investment: £42m Oakley Capital Fund II: £31m(1) 80% New investment from TA Associates, Mansour and Warburg Pincus uplift £109m returned to Oakley Capital Fund II £30m OCI proceeds OC
Slide 12: Conservative cover but avoiding excessive drag
Cash / other assets & liabilities Conservative cover but avoiding excessive drag Net cash as a % of NAV 120% 100% 97% 80% 60% 56% 40% 33% 32% 26% 24% 24% 22% 22% 18% 17% 20% 16% 2% 0% 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 OAKLEY CAPITAL INVESTMENTS 11
Slide 13: OCI reserves provide sufficient Fund IV cover
Cash / other assets & liabilities OCI reserves provide sufficient Fund IV cover Cash and outstanding OCI fund commitments(1) 350 £350.1m 300 250 £221.9m 200 £m Cash 150 100 £39.6m Debt 50 £97.5m £11.9m £2.5m 0 Fund I Fund II Fund III Fund IV Cash + co-invest debt Commitments not expected to be drawn
Slide 14: Outlook
Outlook Strong profit growth, combined with exits above book value will continue to drive returns Existing portfolio ▪ Strong performance set to continue. Inflection points reached in the two turn around investments ▪ Further liquidity events expected this year ▪ A pan-European portfolio of companie
Slide 15: Oakley Capital Private Equity
OAKLEY CAPITAL PRIVATE EQUITY
Slide 16: Oakley Capital Overview
Oakley Capital Overview An Investment Adviser consistently delivering outperformance RETURNS SOURCING CONSISTENCY ▪ Realised returns of 3.1x ▪ Sector and regional ▪ Returns and sourcing have and 47% gross IRR expertise been maintained over: ▪ Generated across 17 ▪ Deal-generating o Time (12 years) i
Slide 17: Key Oakley themes
Key Oakley themes ENTREPRENEUR REPEAT PLAYS COMPLEXITY BUY & BUILD PARTNERS Recent examples: + + + OAKLEY CAPITAL INVESTMENTS 16
Slide 18: Oakley's toolkit enables us to build value in the portfolio
Oakley’s toolkit enables us to build value in the portfolio PORTFOLIO EXAMPLES ▪ Building winning teams ▪ Subscription models ▪ Pricing & customer LTV ▪ Marketing efficiency ▪ Buy & build OAKLEY CAPITAL INVESTMENTS 17
Slide 19: Track record of high returns from investments over the cycle
Track record of high returns from investments over the cycle >100% Emesa Parship Elite Group 80% Daisy Group plc Verivox I 60% Damovo Realised Gross Facile IRR 47% Intergenia II Verivox II 40% Host Europe Gros IRR Inspired I HEG Intergenia I Headland Media 20% 0% Monument -20% Broadstone -40% Oct-06
Slide 20: Sector expertise
Sector expertise Proven track-record in three core sectors CONSUMER TMT EDUCATION Oakley’s core concentration is Originally investing in hosting and A sector with very attractive Digital Consumer, with the focus telecoms space, Oakley’s experience fundamentals, Education has grown to being on market
Slide 21: Appendix 1: Narrowing the Discount
APPENDIX 1 NARROWING THE DISCOUNT
Slide 22: Narrowing the NAV discount (1)
Narrowing the NAV discount (1) Topic Status Comment Prevent NAV dilution “Going forward the Board does not intend to issue equity or sell stock from treasury at a discount to NAV” Message repeated in three public announcements, reiterated in 2018 full year report Alignment of interest OCI Board and
Slide 23: Narrowing the NAV discount (2)
Narrowing the NAV discount (2) Topic Status Comment Share liquidity & Since start of IR programme in 2017, 75% of the register has traded shareholder concentration 2019 YTD volume: 134m shares +49% Avg daily volume: 782k Top ten holders 71% (today) vs 91% (start of 2017) Gold standard listing Listin
Slide 24: Appendix 2: Fees
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Slide 25: Fees
Fees Oakley Funds On commitment for a 5 year period post Fund inception; Management fee 2% thereafter 2% on capital invested Performance fee 20% On returns above a 8% pa hurdle rate Co-investment On investments held directly by OCI. OCI makes direct Management fee 2% From 01 January 2020, management
Slide 26: Appendix 3: Fund Structure & the Investment Team
APPENDIX 3 FUND STRUCTURE & THE INVESTMENT TEAM
Slide 27: Oakley Capital Investments (OCI)
Oakley Capital Investments (OCI) Total Capital L.P.s Oakley Capital Investments Committed €2bn €1.1bn Equity and Debt Co-Investments Oakley Funds (I, II, III & IV) Private Equity Funds Portfolio Companies Portfolio Companies Investment Adviser OAKLEY CAPITAL INVESTMENTS 26
Slide 28: Structure
Structure The Administrative Agent The Company The Investment Adviser Oakley Capital Oakley Capital Investments Oakley Capital Manager Limited Limited Limited About OCML About OCI About OCL Oakley Capital Manager Limited (the OCI is a closed-e nded investment company Oakley Capital Limited (“Oakley”
Slide 29: Leadership team of experienced investment and operational professionals
Leadership team of experienced investment and operational professionals… Peter Dubens David Till Alex Collins David Brickell Managing Partner Senior Partner Partner Partner Joined Oakley: at inception Joined Oakley: at inception Joined Oakley: September 2007 Joined Oakley: September 2013 ▪ >20 years
Slide 30: Appendix 4: Underlying Portfolio Company Valuations
APPENDIX 4 UNDERLYING PORTFOLIO COMPANY VALUATIONS
Slide 31: Overview of OCI's underlying investments
Overview of OCI’s underlying investments Fund Investments Sector Location Year of Investment Residual Cost Fair Value Fund I Time Out Consumer Global 2010 £48.3m £35.2m OCI's proportionate allocation of Fund I investments (on a look through basis) £35.2m Other Assets and Liabilities (£3.2m) Fund I O
Slide 32: Disclaimer and important information
Disclaimer and important information ▪ These presentation materials (the “Presentation”), which is confidential and may not be reproduced in whole or in part, nor m ay any of its contents be disclosed to any third party without the prior written consent of Oakley Capital Limited, is for information
Slide 33: Mintflower Place, 3 rd Floor 8 Par-la-Ville Road Hamilton
Mintflower Place, 3rd Floor 8 Par-la-Ville Road Hamilton HM08 Bermuda T: +44 (0) 20 7766 6900 E: investorrelations@oakleycapital.com
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