Kinnevik Ab Class A · OMXSTO:KINV_A
Kinnevik Ab Class A — Investor Presentation (May 2025)
34 slides from Kinnevik Ab Class A's investor presentation, May 2025
Slide 1: Deep Dive on the Valuations of Our Private Companies
Deep Dive on the Valuations of Our Private Companies Deep Dive on the VALUATIONS OF OUR May 2025 PRIVATE COMPANIES May 2025
Slide 2: Contents
Contents 1. Our Framework & Process Deep Dive on the Valuations of Our Private Companies Regulatory Framework Quarterly Process Main Valuation Drivers 2. Company Performance & Outlook Investee Expectations May 2025 Impact of Changes in Expectations 3. Public Peer Sets Public Market Bench
Slide 3: Our Framework & Process
Deep Dive on the Valuations of Our Private Companies Section 1 & PROCESS OUR FRAMEWORK May 2025
Slide 4: Our valuations rely on IFRS 13 and the IPEV Guidelines, with a robust review process
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Our valuations rely on IFRS 13 and the IPEV Guidelines, with a robust review process led by our Audit & Sustainability Committee and external auditors Our Framework & Process Adhering to Public & Private Market Best Practice As a publi
Slide 5: Our approach to valuations born out of the post-pandemic environment
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Our approach to valuations has been born out of the post-pandemic environment and the completion of our transformation with a record-high private share of our portfolio Key Considerations Private Company Valuations Quarterly Reassessment
Slide 6: Main Valuation Drivers
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 This presentation covers the main short-term valuation drivers to help ensure their dynamics are well understood, as well as a guide to how we report our valuations in our interim reports Main Valuation Drivers Covered in This Presentati
Slide 7: Company Performance & Outlook
Deep Dive on the Valuations of Our Private Companies Section 2 COMPANY & OUTLOOK PERFORMANCE May 2025
Slide 8: Our valuations are based on our expectations on our investees
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Our valuations are based on our expectations on our investees, in turn based on several inputs and analyses beyond a company’s own budget and business plan Investee Expectations Key Sources of Input Performance Monthly reports typicall
Slide 9: Improved accuracy in gauging investees' shorter-term financial performance
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 With a more mature portfolio and a more robust process, we have improved our accuracy in gauging our investees’ shorter-term financial performance Investee Expectations Past & Current Financial Performance Core Companies Last 12 Next 12
Slide 10: Quarter-on-quarter change in next twelve months' financial outlook
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 The quarter-on-quarter change in the next twelve months’ financial outlook is affected by reforecasts in each quarter, and cannot always be extrapolated Impact of Changes in Expectations Illustrative Example, Key Metrics & Quarterly Reve
Slide 11: Public Peer Sets
Deep Dive on the Valuations of Our Private Companies Section 3 PUBLIC PEER SETS May 2025
Slide 12: Valuation level of comparable public businesses is a key parameter
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 The valuation level of comparable public businesses is a key parameter in valuing our private companies, and peer groups are construed and maintained based on several considerations Public Market Valuation Benchmarks Peer Group Construct
Slide 13: No software businesses growing by more than 30% in public markets
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 With few IPOs and a push towards maturity, there are no software businesses growing by more than 30% available in public markets – hence we often lack peers with a similar financial profile Evolution of Revenue Multiples Public Software
Slide 14: High-growth, low-profit software businesses trade at premiums
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 As a result – high-growth, low-profit software businesses continue to trade at meaningful premiums to low-growth, high-profit businesses Software Growth/Profitability Quadrants Median Metrics by Quadrant, Above/Below Median Growth/Profit
Slide 15: Calibrating Against Public Multiples
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Within our most important business models – Software and Digital Health – calibration of multiples can be accurately undertaken through quantitative models of growth and profit margins Calibrating Against Public Multiples Financial Profi
Slide 16: The 'Rule of X' explained >60% of variance in software multiples
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 The ‘Rule of X’ explained >60% of the variance in software multiples at end of Q1 ‘25, with growth being 3.6x more important than profit margins for profitable public software companies Software Correlation of Multiples to Growth & Profi
Slide 17: We triangulate valuations against public peers using regressions
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 We triangulate our valuations against public peers drawing on these patterns, making regressions of gross profit multiples against growth rates and profitability margins Software & Healthcare Technology Gross Profit Multiples Rule of X (
Slide 18: Transaction Valuations
Deep Dive on the Valuations of Our Private Companies Section 4 VALUATIONS TRANSACTION May 2025
Slide 19: Private growth equity markets have stabilized
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Private growth equity markets have stabilized, but a large glut of matured businesses awaiting IPO or M&A have led to the time between funding rounds to be extended State of Private Growth Equity Markets Select Data Points AI-Fueled Tran
Slide 20: Transaction Valuations Compared to NAV
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 During 2024 and Q1 ‘25, 75% of our private portfolio by value has been transacted in at valuations exceeding our preceding NAV by 13% on a value-weighted average basis Transaction Valuations Compared to NAV Private Market Investors Corro
Slide 21: Transaction Calibration Considerations
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Several factors needs to be considered when translating transaction valuations to underlying enterprise valuations of entire companies Transaction Calibration Considerations Main Parameters Primary or Insiders or Preferential Business Fi
Slide 22: Liquidation Preferences
Deep Dive on the Valuations of Our Private Companies Section 5 LIQUIDATION PREFERENCES May 2025
Slide 23: Liquidation preferences are a venture and growth industry standard
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Liquidation preferences are (unfortunately) a venture and growth industry standard, and our portfolio is (fortunately) mainly exposed to its most simple variety Liquidation Preferences What Are They? In general terms, liquidation prefe
Slide 24: Liquidation preferences can skew allocations relative to pro rata share
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Liquidation preferences can skew allocations meaningfully relative to an investor’s pro rata share (i.e. its ownership stake multiplied by a company’s total equity value) Liquidation Preferences Illustrative Investor Allocation in a Rank
Slide 25: Impact of liquidation preferences on our NAV has come down over time
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 The impact of liquidation preferences on our NAV has come down over time as a result of growing underlying equity valuations and divestments of tail assets Liquidation Preferences Impact on NAV, SEKm and % of Private Portfolio Value 3,00
Slide 26: Currency Effects
Deep Dive on the Valuations of Our Private Companies Section 6 CURRENCY EFFECTS May 2025
Slide 27: Private portfolio dominated by euro and US dollar exposure
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Our private portfolio is dominated by euro and US dollar exposure, but the number of mono- currency businesses have declined significantly as our companies expand internationally Currencies in the Private Portfolio Indicative by Company:
Slide 28: Note 4: Our Reporting
Deep Dive on the Valuations of Our Private Companies Section 7 NOTE 4: OUR REPORTING May 2025
Slide 29: Note 4 reporting: description of principles
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Description of principles and Select data points referenced Introductory text, highlighting the processes, amended typically only in in the introductory text key considerations of the quarter connection with new financial years 29
Slide 30: Note 4 reporting: change in fair value
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Change in investee Underlying change and peer multiples in price per share (see p. 10) on a revenue basis Actual and expected growth relative to public peers Change in fair value, adjusted for investments and divestments Includes effects
Slide 31: Note 4 reporting: transactions, liquidation preferences, currency
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Share of portfolio value transacted in over the last twelve months (and covered in the top-left chart) Valuation levels in transactions occurring over the last twelve months compared to each preceding NAV statement (see p. 18-21) Based o
Slide 32: Note 4 reporting: peer multiples and transaction timing
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Time of most recent primary or Same metrics as explained on p. 30 secondary equity transaction Data explaining 60-70% of variance in public multiples Same principles as explained on p. 30 32
Slide 33: Note 4 reporting: valuation changes and peer list
DEEP DIVE ON THE VALUATIONS OF OUR PRIVATE COMPANIES: MAY 2025 Key information on the quarter’s valuation changes Link to spreadsheet with full list of public valuation peers Change in fair value, adjusted for investments and divestments Scatter chart showing valuation levels relative to revenue gro
Slide 34: Kinnevik
Kinnevik