Capman Oyj Class B · OMXHEX:CAPMAN
Capman Oyj Class B — Non-Deal Roadshow (February 2006)
64 slides from Capman Oyj Class B's roadshow presentation, Feb 10, 2006
Slide 1: CapMan – the Nordic private equity house
CapMan – the Nordic private equity house London, 9-10 February 2006 Heikki Westerlund CEO, Senior Partner mobile: +358 50 559 6580 [email protected] Jerome Bouix, Partner, Fundraising, IR & Communication tel. +358 40 820 8541 [email protected] 13 February 2006 1
Slide 2: Agenda
Agenda • CapMan today • Activity update and financials Appendices: •CapMan Private Equity •CapMan Real Estate 13 February 2006 2
Slide 3: CapMan – the Nordic private equity house
CapMan – the Nordic private equity house • Unique listed asset manager – manages third party private equity, venture capital and real estate funds – listed on Helsinki Stock Exchange since 2001 – Market cap €216 million (closing price €2.85 on 7 Feb 2006) • Two complementary business areas – private
Slide 4: Strong growth in assets under management
Strong growth in assets under management Capital under Domestic partnership Nordic presence mgmt, M€ and funds MBO LISTING 2,200 Real Estate funds 2,000 Life Science funds 1,800 Technology funds 1,600 Mezzanine funds 1,400 Buyout funds 1,200 1,000 800 600 400 200 0 90-93 94 95 96 97 98 99 00 01 02 0
Slide 5: Four investment areas in four Nordic countries
Four investment areas in four Nordic countries CapMan Private Equity, €1.7 billion CapMan Real Estate CapMan CapMan CapMan €500 million Buyout Technology Life Science • All industries • IT and • Medical • Commercial communications technology properties • Middle market equity investments • Equity inv
Slide 6: Four dedicated investment teams
Four dedicated investment teams Buyout Technology Life Science Real Estate (incl. consulting) 13 February 2006 6
Slide 7: Organisation
Organisation CapMan Plc / Board of Directors CEO Heikki Westerlund (deputy CEO Olli Liitola) Finances and Administration Fundraising, IR & Communications Olli Liitola Jerome Bouix Business Development Vesa Vanha-Honko CapMan Buyout CapMan Technology CapMan Life Science CapMan Real Estate Tuomo Raasi
Slide 8: Earnings model
Earnings model Investment objects capital Private equity Portfolio companies + profit investment Real estates = realised gains Management CapMan Private equity funds fee and carried manages managed by CapMan interest to CapMan Commitments Investors capital to funds • approximately 100 international
Slide 9: Main components of income
Main components of income Main components of income Management Carried interest Returns on direct Share of affiliated fees income fund investments from companies’ result own balance sheet Based on total Funds Funds New funds* Older funds Access Baltcap commitments or already not yet investment inves
Slide 10: Main components of income and operating expenses
Main components of income and operating expenses M€ 30 25 Share of affiliated companies' result 20 Income from investments in funds incl. fair value gains/losses of investments 15 Carried interest 10 Management fees 5 Operating expenses 0 2004 2005 -5 13 February 2006 10
Slide 11: Management fees
Management fees • Management fees accrue in the first 4-5 years on the basis of the fund size (total commitments) and after that on the basis of the fund’s remaining portfolio at cost • Typically 1.25-2.5% p.a. of the capital in the funds (total commitments/portfolio at cost) • Management fees are e
Slide 12: Carried interest income
Carried interest income • As a management company, CapMan begins to receive carried interest after the investors have regained their investment in addition to a preferred annual return, usually 6 to 8% • Carried interest is typically 20 to 25% of the fund’s cash flow through exits from its portfolio
Slide 13: Current portfolio of Finnventure V
Current portfolio of Finnventure V Fund size: €169.9 million Portfolio at cost: €112.0 million Portfolio at fair value: €119.4 million Cash flow to investors: €106.7 million (figures as per 31 Dec 2005) Buyouts (80% allocation) Technology investments (20% allocation) Further information on www.capma
Slide 14: Current portfolio of Finnventure IV
Current portfolio of Finnventure IV Fund size: €59.5 million Portfolio at cost: €30.5 million Portfolio at fair value: €34.0 million Cash flow to investors: €43.5 million (figures as per 31 Dec 2005) Buyouts (80% allocation) Technology investments (20% allocation) Further information on www.capman.c
Slide 15: Funds generating carried interest
Funds generating carried interest Cumulative size: €132.0 million Cumulative portfolio at cost: €45.2 million Cumulative portfolio at fair value: €53.3 million Cumulative cash flow to investors: €300.5 million Cumulative carried interest to CapMan: €46.5 million (figures as per 31 Dec 2005) Buyouts
Slide 16: Three fund categories with different return potential
Three fund categories with different return potential (31 December 2005, M€) Equity funds 500 • about €1,200 million • largest carried interest potential Mezzanine funds 1200 • about €500 million • fair carried interest potential 500 Real estate funds • about €500 million • smallest carried interest
Slide 17: CapMan's carried interest potential based on cumulative capital
CapMan’s carried interest potential based on cumulative capital €2,176.1 million (31 December 2005, M€) 6.1% The capital in the funds generating 14.1% 11.3% carried interest, €132.0 million The capital in the funds that are estimated to start generating carried interest during 2007, €246.4 million T
Slide 18: CapMan's own investments in funds
CapMan’s own investments in funds • Since 2002 CapMan has been a substantial investor in the funds it has established. • CapMan’s objective is to invest about 5-10% of the total capital in future equity funds from its own balance sheet M€ 80 50.4 70 Remaining commitments in funds, mainly in 60 - Cap
Slide 19: Share of affiliated companies' results
Share of affiliated companies’ results Access Capital Partners (47.5%) • An important financial investment for CapMan, which provides further diversification and earning potential in form of consolidated profit and carried interest • ACP has €671.7 million under management in three funds of funds an
Slide 20: CapMan's vision
CapMan’s vision Our vision is to be the preferred Nordic private equity partner for investors and entrepreneurs 13 February 2006 20
Slide 21: CapMan's values
CapMan’s values • Industrial hands-on approach – We concentrate on enhancing our portfolio companies’ business by taking actively part in developing their operations. We provide more than just financial support. • High ethics – We believe in integrity and transparency. We are a reliable partner and
Slide 22: Agenda
Agenda • CapMan today • Activity update and financials Appendices: •CapMan Private Equity •CapMan Real Estate 13 February 2006 22
Slide 23: Nordic deal flow in 2005
Nordic deal flow in 2005 By country A3 % A2 % A1 % 23 % Denmark 121 23% 9 31% 1 8% Denmark 38 % Finland 111 21% 9 31% 4 31% Finland Norway 91 18% 3 10% 3 23% Norway Sweden 194 38% 8 28% 5 38% 21 % Sweden Total 517 100% 29 100% 13 100% 18 % 23 % 29 % By team A3 % A2 % A1 % Buyout 152 29% 10 34% 5 38%
Slide 24: Investment activities at good level
Investment activities at good level Cumulative new and follow-on investments, M€ • Deal flow remained strong 140 127.3 – 517 investment proposals 116.1 120 analysed in 2005 • 8 new investments 100 90.8 – 3 buyouts – 1 buyout/tech 80 67.5 65.1 – 2 tech investments 56.1 32 – 2 life science investments
Slide 25: New investments in portfolio companies in 2005
New investments in portfolio companies in 2005 Production and distribution of poultry and Electronic document management systems. egg products. Buyout, NORWAY Technology, DENMARK Mechanical power transmission. Software testing and application development. Buyout, FINLAND Technology, FINLAND ICT Serv
Slide 26: Record year for exits
Record year for exits Cumulative final and partial exits and mezzanine loan instalments at cost, M€ 118.7 • Exit markets favourable 120 107.2 • 19 full exits and several 100 partial exits made in 2005 – 11 buyout exits 80 – 4 tech exits 69.7 – 4 life science exits 60.8 60 • Carried interest income t
Slide 27: Exits from portfolio companies in 2005
Exits from portfolio companies in 2005 Buyout, DENMARK Buyout, FINLAND Buyout, FINLAND** Buyout, FINLAND Buyout, FINLAND Technology, SWEDEN Technology, FINLAND, partial Life Science, SWEDEN Technology, FINLAND Life Science, SWEDEN Technology, FINLAND Buyout, FINLAND Buyout, NORWAY Buyout, FINLAND Bu
Slide 28: Top European fund performance
Top European fund performance (31 December 2005) 400 • 74 exits by equity funds 350 • Acquisition price indexed 300 (date of investment = 100) • The value of investments has 250 on average increased by 200 3.8 times 380 • IRR 55% 150 • Average holding period 100 4.1 years 50 100 0 Investment Realisa
Slide 29: Value creation drivers in exited buyouts
Value creation drivers in exited buyouts* 450 400 350 99 300 13 36 250 200 397 149 150 100 50 100 0 Entry Net sales Profitability Debt reduction Strategic position Exit value (multiple effect) * Indexed, based on 39 fully realized buyout investments. 13 February 2006 29
Slide 30: Active fundraising continues
Active fundraising continues • CapMan Buyout VIII held first closing in November 2005 at €312 million – target size €375 million • Fundraising for CapMan Life Science IV started – target size €100 million • Fundraising preparations for CapMan Technology IX started • Continued support from Nordic inv
Slide 31: Income statement
Income statement 2004 2004 M€ 2001 2002 2003 FAS IFRS 2005 Turnover 13.1 20.0 18.7 28.1 28.1 28.7 Management fees 8.6 15.9 17.8 17.8 17.8 20.3 Carried interest 3.9 3.0 0.2 9.1 9.1 6.6 Income of investments in funds - - - - 0.2 0.5 Share of the the affiliated companies result 0.5 0.6 0.3 0.4 - - Fair
Slide 32: Key ratios
Key ratios (key ratios for 2001 are based on the balance sheet as at 31 December) M€ 2004 2004 2001 2002 2003 FAS IFRS 2005 Earnings/ share, € 0.34 0.05 0.02 0.08 0.06 0.09 Diluted, € 0.32 0.04 0.02 0.08 0.06 0.09 Shareholder’ equity/ share, € 0.92 0.71 0.61 0.64 0.59 0.64 Dividend/ share, € 0.26 0.
Slide 33: Turnover, operating profit and profit for the financial year
Turnover, operating profit and profit for the financial year M€ 30 25 20 Turnover 15 Operating profit 10 5 Profit for the financial year/period 0 2001* 2002 2003 2004 2004 2005 FAS IFRS * Excl. capital gain of €18 million from the sale of Sampo plc shares. 13 February 2006 33
Slide 34: Equity ratio, ROE and ROI, %
Equity ratio, ROE and ROI, % % % 100 80 80 60 60 40 40 20 20 0 0 2001 2002 2003 2004 2004 2005 2001 2002 2003 2004 2004 2005 FAS IFRS FAS IFRS Equity ratio, % Return on equity, % Return on investment, % 13 February 2006 34
Slide 35: Share price development (12 months rolling)
Share price development (12 months rolling) € 3.3 3.1 CapMan B 2.9 2.7 2.5 2.3 2.1 CapMan 1.9 2000A/B warrants 1.7 1.5 1.3 07/02/05 07/03/05 07/04/05 07/05/05 07/06/05 07/07/05 07/08/05 07/09/05 07/10/05 07/11/05 07/12/05 07/01/06 13 February 2006 35
Slide 36: Relative performance: CapMan B vs. OMX Helsinki
Relative performance: CapMan B vs. OMX Helsinki (12 months rolling) 35 30 Relative OMX Helsinki 25 20 15 10 Relative CapMan B 5 7 0 -5 -10 -15 07/02/05 07/03/05 07/04/05 07/05/05 07/06/05 07/07/05 07/08/05 07/09/05 07/10/05 07/11/05 07/12/05 07/01/06 07/02/06 13 February 2006 36
Slide 37: Distribution of ownership
Distribution of ownership (31 December 2005, M€) 22 % 27% 45 % 5% 51% 2% 17 % 22% 5% 4% Management and employees Companies In nominee register Financial and insurance companies Other owners Public associations Households Non-profit organisations Internationals investors Nominee register 13 February
Slide 38: CapMan Plc's largest shareholders
CapMan Plc’s 12 largest shareholders 30 January 2006 Shares % Votes % Aristo Invest Oy* + Ari Tolppanen** 13.2 % 21.7 % Geldegal Oy* + Olli Liitola** 7.0 % 11.4 % Winsome Oy* + Tuomo Raasio** 7.0 % 11.4 % Vesasco Oy* (Vesa Vanha-Honko***) 7.0 % 11.4 % Heiwes Oy* + Heikki Westerlund** 5.2 % 7.2 % Nov
Slide 39: CapMan's financial objectives
CapMan’s financial objectives • Average capital growth of funds under management by at least 15% per annum • Fund performance in the top quartile of all European private equity investors • Increase CapMan's own investments in its future private equity funds to 5–10% of total fund size • Return on eq
Slide 40: IR contacts
IR contacts Heikki Westerlund, CEO, Senior Partner tel. +358 9 6155 8304 [email protected] Jerome Bouix, Partner, Fundraising, IR & Communications tel. +358 9 6155 8358 [email protected] Mari Reponen, Communications Manager tel. +358 9 6155 8322 [email protected] 13 February 2
Slide 41: Agenda
Agenda • CapMan today • Activity update and financials Appendices: •CapMan Private Equity •CapMan Real Estate 13 February 2006 41
Slide 42: Positioning of buyout players in the Nordic market
Positioning of buyout players in the Nordic market Deal size focus Apax CVC Permira >M€250 EQT Nordic Capital Bridgepoint Altor Industri Kapital Triton M€50 - 250 3i ABN AMRO Axcel Ratos Segulah Accent Ferd Polaris Procuritas Sponsor <M€50 MB Funds Reiten FSN Capital Domestic Nordic Nordic and Pan E
Slide 43: Buyout investment strategy
Buyout investment strategy • Target companies with core Nordic presence and with strong potential for further regional or international expansion • Control investments in companies with enterprise values typically between €50 - 250 million (€10 - 50 million equity per transaction) • Mature industrie
Slide 44: Buyout portfolio and exits by industry segment
Buyout portfolio and exits by industry segment, all investments included Retail & Services Manufacturing Portfolio Exits KOSAN TEKNOVA BROEN ARMATUR 13 February 2006 44
Slide 45: Buyout portfolio and exits by industry segment (excl. NPEP)
Buyout portfolio and exits by industry segment, investments by NPEP not included Retail & Services Manufacturing Portfolio Exits 13 February 2006 45
Slide 46: CapMan's exited buyout investments
CapMan’s exited buyout investments (31 December 2005) 450 • 39 exits by equity funds 400 • Acquisition price indexed 350 (date of investment = 100) 300 • The value of investments has on average increased by 250 4.0 times 200 400 • IRR 40% 150 • Average holding period 100 4.8 years 50 100 0 Investmen
Slide 47: Case example: value creation in Eltel Networks
Case example: value creation in Eltel Networks Deal background CapMan’s role Exit • Eltel Networks (former IVO • As the majority owner, • The company was at the end of Transmission Engineering) CapMan actively participated 2004 successfully sold to was a non-core subsidiary of in the strategic decis
Slide 48: Positioning of technology players in the Nordic market
Positioning of technology players in the Nordic market Industrifonden Capital under management for tech investments M€ IT Provider Nordic Venture Partners 3i 300 Vaekstfonden Eqvitec 200 Innovationskapital Northzone Brainheart Four Seasons SEB Teknoinvest Slottsbacken Ledstiernan Nexit 100 Televentu
Slide 49: Technology portfolio and exits by stage
Technology portfolio and exits by stage Early-growth Later-growth Buy-build/consolidation (rapidly evolving companies) (established companies) (M&A and restructuring) Portfolio Exits 13 February 2006 49
Slide 50: Technology portfolio and exits by industry segment
Technology portfolio and exits by industry segment Industrial Business Consumer Services Applications Infrastructure 13 February 2006 50
Slide 51: CapMan's exited technology investments
CapMan’s exited technology investments (31 December 2005) 450 • 30 exits by equity funds 400 • Acquisition price indexed 350 (date of investment = 100) 300 • The value of investments has on average increased by 250 4.4 times 440 200 • IRR 133% 150 • Average holding period 3.3 years 100 50 100 0 Inve
Slide 52: Case example: value creation in Setec Oy 1(2)
Case example: value creation in Setec Oy 1(2) Net Sales, MEUR 67,4 • Smart cards and high-security identity products (e.g. passports, 70 58,5 ID cards, SIM cards, magnetic stripe and chip cards) 60 50,7 • Market leader in biometric passports and ID cards 50 45,9 • Investment MEUR 2.9 (CM funds total
Slide 53: Case example: value creation in Setec Oy 2(2)
Case example: value creation in Setec Oy 2(2) Initial investment rationale • Increasing demand for high-security ID products and payment cards • Nordic Market leader especially in ID-products • Solid customer base and products as basis for substantial margin improvement and increased sales • Majorit
Slide 54: Life science investment focus
Life science investment focus • within Medical Technology • primary focus is on regulated, medical procedure-driven, innovative products with potential for strong growth and attractive reimbursement • Life Science team aims to build companies which develop products that provide an improved healthcar
Slide 55: Investment focus of major life science investors within medical technology
Investment focus of major life science investors within medical technology Opportunistic Medical Diversified Dedicated Medical Technology Approach Approach Technology Approach Large Investor Deal size Health Growth Sofinnova 3i Cap Capital Heidelberg 100% Innovation Global Life Innova- SLS Early Cap
Slide 56: Life Science portfolio and exits
Life Science portfolio and exits Medical Technology Portfolio Exits * * Investment in Vicore Pharma was not a med tech investment but a drug dicovery investment. 13 February 2006 56
Slide 57: CapMan's exited life science investments
CapMan’s exited life science investments (31 December 2005) 350 • 7 exits by equity funds • Acquisition price indexed 300 (date of investment = 100) 250 • The value of investments has on average increased by 200 3.2 times 150 320 • IRR 163% • Average holding period 100 3.7 years 50 100 0 Investment
Slide 58: Case example: value creation in Entific Medical Systems AB
Case example: value creation in Entific Medical Systems AB Business • Bone Anchored Hearing Aid Implants and Facial Rehabilitation Initial Investment Date: May 1999 • Technology is based on principal of Osseointegration - titanium Exit Date: February 2005 implants integrated with living bone tissue
Slide 59: Agenda
Agenda • CapMan today • Activity update and financials Appendices: • CapMan Private Equity • CapMan Real Estate 13 February 2006 59
Slide 60: CapMan Real Estate
CapMan Real Estate • CapMan expanded its operations into private equity real estate funds on 20 June 2005 • A €500 million fund, CapMan Real Estate I was established with 9 Finnish institutional investors • Reasons behind the business expansion: – Customer demand – Fit to CapMan strategy 13 February
Slide 61: Positioning of real estate players in Finland
Positioning of real estate players in Finland Market value of properties, M€ Varma Pension Insurance Company > 1,500 Ilmarinen Pension Insurance Company Tapiola Insurance Group Local Government 500 – 1,500 Pensions Institution VVO* Sponda Plc YH- asunnot** Kapiteeli* Sato Citycon Plc Pension Fennia
Slide 62: Real estate investment strategy
Real estate investment strategy • Main focus on office properties and core+ properties with medium risk/return profile – investment in more opportunistic targets with higher return potential also possible • Geographical focus is in the Helsinki Metropolitan area • Investments diversified by size, ge
Slide 63: Current real estate portfolio by risk/return profile
Current real estate portfolio by risk/return profile Portfolio 1 2 3 4 5 Core Brondan- Bulevardin Bulevardin Korkeavuoren- Korkeavuo- kulma Keittohuone Wiinanpolttimo katu 32 renkatu 34 6 7 8 9 10 11 Value Added Eliel Saarisen Espoon Espoon Espoon Helsingin tie 2 Keilaranta 5 Keilaranta 7 Tietäjänti
Slide 64: Location of Initial Portfolio Properties
Location of Initial Portfolio Properties Core 1 1 1 Value added 16 6 13 3 7 17 Opportunistic 6 11 6 11 12 12 9 10 1 9 0 8 7 7 1 151 5 4 5 14 14 14 2 3 13 February 2006 64