CapMan Group IR roadshow presentationcapman.studio.crasman.fi/pub/files/old_imports/... · 39...

CapMan Group IR roadshow presentation

New York, 8-11 October 2012

Lennart Simonsen – CEO and Senior Partner

Jerome Bouix – Senior Partner

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 expressions are forward-looking statements. By their nature, forward-looking

statements involve risks and uncertainties because they relate to events and depend on circumstances that will occur in the future. Therefore, actual results may differ materially

from the results that are expressed or implied by these forward-looking statements. CapMan Plc assumes no obligation to update such forward-looking statements except as

required by mandatory law. Nothing in this presentation constitutes investment advice or an offer to sell or the solicitation of an offer to buy any securities or otherwise to engage in

any investment activity.

Contents • CapMan at a glance

• Business environment

• Activity and results January – June

2012

CapMan Group IR roadshow presentation 2 8-11 October 2012

CapMan at a glance

• Unique private equity fund manager listed on Nasdaq

OMX Helsinki (trading symbol: CPMBV)

• Leading player in an attractive market:

• More than 20 years’ experience from Nordic

and Russian private equity

• Strong local presence and market coverage

• Approx. 65 investment professionals

and 40 service professionals in platform

• 58% ownership among partners and LPs


4

Management Company Business Private Equity Fund Management

Fund Investment Business Investments from CapMan’s own balance

sheet into funds under its management

Management Fees Based on the amount of

capital under management

Carried Interest 10-20% of the fund’s cash flow

when the fund is in carry

Return of Fund Investments

CapMan’s attractive earnings model

Fundraising

Exits

Valuation of peers

Currency fluctuations

Portfolio company development

Valuation of other industry

M&A transactions

Preliminary exit negotiations

Exits

Capital returned to

investors + hurdle rate

CapMan Group IR roadshow presentation 8-11 October 2012

External valuations in real estate

Four key investment partnerships

• Nordic mid-market

companies

• Team of 20

investment

professionals in

Helsinki, Stockholm

and Oslo

• Capital under

management

€1.1bn

• Growth financing in

Russian SMEs with

minority positions

• Team of 10

investment

professionals in

Moscow

• Capital under

management

€108m

• Listed Nordic small

and mid cap

companies

• Significant owner

with Board seat

• Team of 4

investment

professionals in

Stockholm

• Capital under

management

€132m

• Commercial and

hotel properties,

and property

development targets

• Team of 20

investment

professionals in

Helsinki and

Stockholm

• Capital under

management

€1.4bn

CapMan

Real Estate

CapMan

Russia

CapMan

Public Market

CapMan

Buyout


Unique presence in Finland, Sweden, Norway and Russia

Active owner and developer of portfolio companies

Active owner of portfolio companies and real estate

CapMan

Buyout

CapMan

Russia

CapMan

Public Market

CapMan

Real Estate

39 portfolio companies and 57 real estate properties

€5.9 billion 41,100 680,000 m²

net sales* personnel lettable area


* 2011 figures

6 8-11 October 2012

Unique CapMan Purchasing Scheme CaPS drives down

costs in portfolio companies

7

• CaPS has tendered 31 categories in Finland and 7 in Sweden

• Significant cost reductions:

– Savings of over €6m p.a for portfolio companies

– For example €1.3m in annual savings for Tokmanni

• Improved payment terms

• Exceptionally high quality service level for CaPS members

• A dedicated team within CapMan

www.capman.com/caps

8-11 October 2012 CapMan Group IR roadshow presentation

• €6.5bn raised since 1990

• 118* target companies and 88 properties over 22 years

• EBITDA growth of 33% (CAGR) between 2009 and 2011E**

• 77* portfolio company exits (3 x gross) and 28 property exits (2 x

gross)

• Buyout net IRR of 17% over 22 years

Proven track record

* Excluding Technology and Life Science ; ** Buyout only

8-11 October 2012 8 CapMan Group IR roadshow presentation

Fundraising

Investments

Development

Value creation

Demonstrated value creation capability


100

300

0

50

100

150

200

250

300

350

Value at investment Value at exit

Portfolio company investments

100

200

0

50

100

150

200

250

300

350

Value at investment Value at exit

Real estate investments

IRR 55% IRR 32%

Average holding period

5.4 years

Average holding period

1.7 years

*

**

* 77 exits by Buyout, Russia and Public Market funds (equity). Incl. dividends, interest income and sales revenue. Incl. exits made by Norum and by Alliance

ScanEast Fund in Russia. Indexed (time of investment =100).

** 28 exits from CapMan Real Estate I and CapMan Real Estate II funds and 3 exits by NEP Partners. The figures have been calculated for the invested equity

capital (equity and bond) incl. net rental income. Indexed (time of investment =100).

50 %

20 %

11 %

5 %

5 % 5 %

4 %

Pension funds Insurance companies

Funds of funds Banks

Public sector institutions Others

CapMan

Diverse LP base High share of repeat investors

Excellent fundraising capabilities

Based on capital under management as of 31 December 2011


62 %

10 %

14 %

10 % 4 %

6 or more 4-5 2-3 One CapMan

Are

investor

in six or

more

funds

Internal sales & marketing team of four, complemented by

advisors outside the Nordic countries

Major Nordic private equity firms

11

BUYOUT

RUSSIA

CapMan is well-

positioned on all

markets

REAL ESTATE

PUBLIC MARKET

Accendo Capital

Partners Oy


http://www.oresund.se/index.html

Organisation

CEO

Management Group

CapMan Platform

* Other CapMan investment areas do not make new investments.

Entrepreneurial investment partnerships*

Sales, Marketing, Investor

Relations and Communications

CapMan Real

Estate

CapMan

Russia

CapMan Public

Market

CapMan

Buyout

Finance, Back Office,

Legal and IT Human Resources





2012


Nordic and Russian private equity

market and investment

operations

14 8-11 October 2012 CapMan Group IR roadshow presentation

• Forecast annual GDP growth 2.1–

3.4%*

• Low government debt levels –

budget deficits and debt below UK,

France, Germany

• Healthy banks – high scores in

the EU stress test and minimal

sovereign debt crisis exposure**

• Attractive culture for private

equity investing

• 9,700 medium sized companies

in Finland, Sweden, Norway

• Sweden and Finland in top 4 in

Global Competitiveness

Rankings***

• Sweden, Norway and Finland in

top 4 for reliance on

professional management***

• Multiple paths to superior value

creation, incl. Nordic expansion

through buy and build

Unique Nordic middle market opportunity

* IMF 11/2011 for period 2012–2015. ** European Banking Authority 7/2011. ***World Economic Forum 2011–2012


Attractive business environment Ample investment opportunities

USD 54.8bn in capital under

management over the past 10

years

More than USD 16.4bn available

in dry powder

14% of all European private equity

investments

USD 5bn in total* (0.58% of GDP)

Nordic private equity markets

Sources: EVCA 2011 Annual Report, SVCA, NVCA, Preqin 2011

*Sweden, Norway and Finland


Landscape Nordic private equity investments

in 2011

Activity Capital under management

Healthcare and retail are attractive

sectors

Mature PE market with players

in all Nordic countries

Healthy banks

More than 50 mid-market deals

annually

Consumer spending power

tripled since 2000

WTO membership and

continuation of structural

reforms and deregulation

Healthy sovereign economy

with public debt 9% of GDP

Low levels of (old) housing

with housing debt only 3% of

GDP

Low unemployment and highly

educated population

Retail – Russia is the largest and fastest

growing retail market

Food – Fast food penetration at 10-30%

of European/Western levels

Healthcare – Healthcare spending is

only half of EU levels as a % of GDP

Construction – Massive state

infrastructure programs totaling $80-

100bn

Telecoms – Broadband penetration in

Russia is at year 2000 European levels

and growing very fast

The Russia opportunity

Sources: Eurostat, Rosstat, WHO, AC&M Consulting


Favourable business environment SME Opportunities

Fundraising

18 8-11 October 2012 CapMan Group IR roadshow presentation

0

20

40

60

80

100

120

0

20

40

60

80

100

120

140

160

2006 2007 2008 2009 2010 2011 H1 2012

Commitments Funds (#)

$ Bn Funds (#)

Fundraising remains challenging

Source: The Preqin Quarterly Private Equity Q2, July 2012

Capital commitments to European private equity funds


59

$33.3

bn

Global real estate fundraising falters

Source: Preqin Quarterly, Private Equity Real Estate Q2 2012, July 2012


0

50

100

150

200

250

300

0

20

40

60

80

100

120

140

160

2003 2004 2005 2006 2007 2008 2009 2010 2011 H1 2012

Capital commitments to real estate funds globally

Commitment Funds (#)

Funds (#)

60

$18.3

bn

$ Bn

Investor appetite

49 %

23 %

19 % 16 %

13 % 11 % 10 % 9 % 9 %

49 %

25 %

14 %

22 %

9 %

18 % 15 %

8 % 8 %

0 %

10 %

20 %

30 %

40 %

50 %

60 %

Small to mid-market buyout

Venture Capital

Secondaries funds

Growth Distressed PE

Fund of funds

Large to mega buyout

Other Mezzanine

Areas of the market investors view as presenting the best opportunities

Areas of the market investors are seeking to invest in over the next 12 months

• Small to mid cap buyout remains the most attractive opportunity

Source: Preqin Investor Outlook: Private Equity H2 2012


We commenced fundraising in three key

investment areas in Q1 2012.

We expect first closings by year end

and aim to raise more than €700 million

during the ongoing fundraising round.

22

Active fundraising round ongoing





2012


Breakdown of results 30 June 2012


Management fees Other income

Fair value gains and losses of investments

Financial income and expense

Share of associated companies’ result

Operating costs

Profit before tax

€2.4 million

Operating profit

€1.9 million

0

2

4

6

8

10

12

14

16

18

20

12.4 0.8

3.8 0.2

-0.1 0.6

€ million

Other operating income

-15.4

Management Company profitability

€ million 1-6/2012 1-6/2011

Turnover 13.2 15.7

Management fees 12.4 13.9

Real estate consulting 0.0 1.0

Carried interest 0.0 0.4

Other income 0.8 0.5

Operating expenses -15.2 -17.3

Operating profit / loss -1.7 -0.9

Profit / loss -1.8 -0.5

Management Company

business

Management fees decreased as

expected due to exits

Approx. €1m in carried interest

income reported in August 2012

Operating expenses decreased as

expected from the comparable

period.

Operating expenses included an

impairment loss of €0.5m due to

CapMan’s sale of a 4% stake in

Access Capital Partners Group SA.


Positive result from fund investment business

€ million 1-6/2012 1-6/2011

Fair value gains/losses of

investments 3.8 10.3

Operating profit 3.6 10.1

Profit for the period 3.7 9.4

Fund Investment

business

Increase of above 5% in fair

values between January and June

2012.

Fair value gains are attributable to

the value creation effort and

financial performance of portfolio

companies, and peer group

valuations.


Fund investments and commitments

totalled €97.5 million

0

10

20

30

40

50

60

Buyout, 59% Russia, 5% Public Market, 5%

Real Estate, 7% Other, 17% Access, 7%

Majority of investments and commitments in buyout funds €m

Fund Investment

business


• Investments in fair value, in total €75.9 million (lower part of the bar)

• Remaining commitments, in total €21.7 million (upper part of the bar)

27 8-11 October 2012

Long-term financing completed

• CapMan signed a refinancing agreement with a Finnish bank

in 2012.

– €30 million in senior debt

– €15 million long-term revolving credit facility

• The arrangement replaces the previous bank loan facility.

• The average maturity of outstanding loans was extended by four

years.

CapMan is committed to maintaining our role as a major investor

also in our new funds, and this refinincing agreement preserves our

operational leeway.


Group Balance Sheet – IFRS

€ thousands 30.6.12

Tangible assets 389

Goodwill 6,204

Other intangible assets 1,774

Investments in associated companies 9,133

Investments at fair value through profit and loss

Investments in funds 75,893

Other financial assets 116

Receivables 19,977

Deferred income tax assets 4,497

Non-current assets 117,983

Trade and other receivables 9,161

Other financial assets at fair value

through profit and loss 373

Cash and bank 3,972

Current assets 13,506

Non-current assets held for sale 3,000

TOTAL ASSETS 134,489


€ thousands 30.6.12

Share capital 772

Share premium account 38,968

Other reserves 38,814

Translation difference 43

Retained earnings 3,673

Capital attributable the Company's equity

holders 82,270

Total equity 82,270

Deferred income tax liabilities 2,421

Interest-bearing loans and borrowings 26,492

Other liabilities 1,185

Non-current liabilities 30,098

Trade and other payables 13,121

Interest-bearing loans and borrowings 9,000

Current income tax liabilities 0

Current liabilities 22,121

Total liabilities 52,291

TOTAL EQUITY AND LIABILITIES 134,489

Management fees are charged in advance twice p.a. on

January 1st and July 1st . Other reserves include hybrid bond of €29.0m.

CapMan guidance – 2012 result


• CapMan’s next major fundraising rounds will take place in 2012. The development of

the company’s current year management fees will depend on the timing of exits

made from current funds and the size and timing of new funds to be established.

• Our operating expenses will continue to decline as a result of the various efficiency

enhancement measures that have been taken. Due to our fundraising efforts,

management fees will not fully cover operating expenses until the new funds

currently in the process of being established reach an adequate size.

• The fair value of CapMan’s fund investments developed favourably during the

review period. We believe that our portfolio companies are well-positioned to

continue performing well in this respect during the rest of the year, which would

have a positive effect on the fair value development of our fund investments.

• The Group’s overall result for 2012 will mainly depend on whether funds already

generating carried interest are able to conduct new exits, whether new funds will

transfer to carry, and on how the value of investments develops in funds where

CapMan is a substantial investor.

• Due to the difficulty of forecasting these developments and their timing, CapMan will

not issue guidance on its result for the full year.

30 8-11 October 2012

Our core values

High ethics

Dedication

Active ownership

Our vision

By 2020 we are

the best-performing European private

equity firm


IR calendar and IR team

IR calendar 2012 IR team

Q3 Results

1 Nov 2012

Lennart Simonsen, CEO, Senior Partner

Tel. +358 207 207 567

[email protected]

Jerome Bouix, Head of Sales, Marketing, Investor

Relations and Communications, Senior Partner

Tel. +358 207 207 558

[email protected]

Niko Haavisto, CFO

Tel. +358 207 207 583

[email protected]

Linda Tierala, IR Officer

Tel. +358 20 720 7651

[email protected]


mailto:[email protected]

mailto:[email protected]

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