Capman Oyj Class B · OMXHEX:CAPMAN
Capman Oyj Class B — Q3 2014 Earnings Presentation
42 slides from Capman Oyj Class B's earnings presentation, Nov 6, 2014
Slide 1: CapMan Group's result for January – September 2014
CapMan Group’s result for January – September 2014 Helsinki 6 November 2014 Heikki Westerlund – CEO, Senior Partner Niko Haavisto – CFO Certain statements included in this material, including, without limitation, statements regarding future performance of the company, expectations regarding market g
Slide 2: Contents
• Review period highlights and events Contents after the review period • Business environment • Result for January – September 2014 • Additional slides 2 CapMan Group’s result for January–September 2014 6 November 2014
Slide 3: Review period highlights and events after the review period
Review period highlights and events after the review period + Balance between fees and expenses − Fair value development did not meet our expectations – action programmes + Strategic initiatives are progressing: continue - Collaboration with Elite Asset Management − Business environment remains chal
Slide 4: Fundraising in our three key investment areas is progressing
Fundraising in our three key investment areas is progressing Fundraising in our Nordic real estate fund continues: €190,6 million (investment capacity of approx. €476,5 million) Fundraising completed in two key investment areas: • Focus in value creation • Development and €245.0 million €99.1 millio
Slide 5: Changes in the organisation
Changes in the organisation • CapMan Buyout X was closed at EUR 245.0 million • CapMan Buyout focused their resources in Stockholm and Helsinki • Markus Sjöholm was nominated as Head of CapMan Buyout and member of CapMan Plc’s Management Group • Oslo office was closed • A new office was opened in Lo
Slide 6: Strategic Initiatives
Strategic Initiatives Examples: 1 Widen customer base • Cooperation with Elite Asset Management 2 Objective: • Several international Capitalise our investment in investors in CapMan Nordic fundraising Profitable Real Estate fund fee growth • External fundraising projects ongoing 3 Take a larger shar
Slide 7: Investments and exits Q3 2014
Investments and exits Q3 2014 Funds New investments Exits Bregshamra Prime Add-on to Mäntsälä Plaza Presto Apelsinen 4 Yrjönkatu 17 Bro Residential Amagerbrogade logistic centre Portfolio portfolio completed after the review period 7 CapMan Group’s result for January–September 2014 6 November 2014
Slide 8: Contents
• Review period highlights and events Contents after the review period • Business environment • Result for January – September 2014 • Additional slides 8 CapMan Group’s result for January–September 2014 6 November 2014
Slide 9: Minor changes in the business environment over recent months
Minor changes in the business environment over recent months Differences in market Prolonged slow and negative economic growth in development Europe. Growth forecast for Russia has decreased. Access to bank financing improved for companies Improved access to and real estate as a result of bank compe
Slide 10: Growth forecasts differ between countries
Growth forecasts differ between countries GDP forecasts: 2014: 0.8 %* 2015: 1.1 % The Nordic countries are growing faster than the Euro area 2014: -0.4 %* 2014: 0.5 %** Finland is lagging 2014: 2.0 %* 2015: 0.6 % 2015: 2.2 % 2015: 0.3 % behind other Nordic countries 2014: 2.0 %* Growth in Russia is
Slide 11: EV/EBITDA multiples of listed companies came down during Q3 2014
EV/EBITDA multiples of listed companies came down during Q3 2014 EV/LTM EBITDA for OMX Nordic 40 Index Relative Performance (%) Change Q3 2014 -4,7% 120 OMX Nordic 40 Index 115 110 105 100 95 90 85 11 CapMan Group’s result for January–September 2014 6 November 2014
Slide 12: Investment operations
Investment operations
Slide 13: Nordic buyout market continued active
Nordic buyout market continued active Number of buyout deals in the Nordic region Buyout deal value in the Nordic region € bn # 100 30 25 80 56* 60 20 60 15 €7,1* bn €8,9 40 10 bn 20 5 0 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q3 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q3 2014 2014 FY /
Slide 14: Leverage ratios in buyouts edge higher
Leverage ratios in buyouts edge higher Average leverage in European small and mid-sized buyouts* 6,0x 4,7x 4,5x 5,0x 4,0x 3,0x Increased bank competition 2,0x Active bond market 1,0x 0,0x 2006 2007 2008 2009 2010 2011 2012 2013 Q3 2014 Debt/EBITDA Senior debt/EBITDA *European Buyouts (less than €250
Slide 15: The proportion of alternative financing in European buyouts is on the rise
The proportion of alternative financing in European buyouts is on the rise Buyout funding sources The proportion of alternative financing in Middle Market LBOs in Europe 90% 85% 80% 90% 83% 80% 70% 69% 70% 60% 51% 60% 50% 48% 54% 50% 46% 40% 40% Bank only deals US 30% 31% Europe 30% 20% Deals includ
Slide 16: The Finnish real estate market clearly picked up
The Finnish real estate market clearly picked up Development of transaction volumes in the Finnish commercial property market €bn 8 Portion of international buyers 6 increased significantly €2.9 €2.4 bn 4 bn Record volume since 2 2008 0 2001 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 Q3/
Slide 17: Transaction volumes are increasing in Sweden
Transaction volumes are increasing in Sweden SEK bn Real estate transaction volumes in 2014 20 18 16 14 12 10 8 6 4 2 0 Jan Feb March April May June July Aug Sep 2013 2014 Source: Pangea Property Partners Q3 2014 17 CapMan Group’s result for January–September 2014 6 November 2014
Slide 18: Investors' interests are changing
Investors’ interests are changing There is demand for… • funds generating annual cash flow • products clearly exceeding the risk-free interest rate, but with moderate risk • regions with reasonable growth prospects and other favourable environmental factors 18 CapMan Group’s result for January–Septe
Slide 19: Essential to find the right growth areas in real estate
Essential to find the right growth areas in real estate • Companies are moving away from the city • Migration to Copenhagen and the current centre: office buildings in key locations outside housing shortage: investments in the Stockholm city centre with good transport residential properties in the c
Slide 20: Contents
• Review period highlights and events Contents after the review period • Business environment • Result for January – September 2014 • Additional slides 20 CapMan Group’s result for January–September 2014 6 November 2014
Slide 21: Group turnover and operating profit
Group turnover and operating profit Turnover Operating profit € million € million 5 4.2 40 4.0 4 29.8 4 3.3 30 3 2.89 23.2 23.1,2 3 2.29 20 2.0 16.5 2 1.7 15.05 2 10 1 6.8 7.0 1 0 0 1-3 1-6 1-9 1-12 1-3 1-6 1-9 1-12 2013 2014 2013 2014 21 CapMan Group’s result for January–September 2014 6 November 2
Slide 22: Breakdown of results
Breakdown of results 30 September 2014 milj. euroa 25 Turnover Operating profit 1.6 -1.1 -20.0 € 2.2 million 21.5 includes a non- 20 recurring expense of €0.8 million 15 10 5 0 Fees Fair value changes of investments Carried interest income Operative expenses 22 CapMan Group’s result for January–Sept
Slide 23: The operating profit of the Management Company business improved
The operating profit of the Management Company business improved € million 1-9/14 1-9/13 Fees increased slightly due to management fees accrued from new funds Turnover 23.1 23.2 established. Fees 21.5 20.3 Carried interest 1.6 2.9 -19.7 -22.6 The minimum level of earnings per share Operating expense
Slide 24: Analysing the carried interest potential of CapMan's funds
Analysing the carried interest potential of CapMan’s funds Funds in carry Funds in technical carry (Portfolio FV exceeds the cash flow required to investors) CME FV V FM III A CME VIIA + CMPMF VII B Fenno Program KB FM II B FM III B Portfolio at fair 16.5 22.6 25.1 96.3 value (€m) Additional cash 2.
Slide 25: The result of Fund Investment business did not meet our expectations
The result of Fund Investment business did not meet our expectations € million 1–9/2014 1–9/2013 Decrease of 1.5% in fair values in Fair value gains/losses of investments -1.1 3.8 Jan-September 2014. Operating expenses -0,3 -0,3 Operating profit / loss -1.4 3.5 The negative development during the Pr
Slide 26: Changes in fair value fallen short of objectives
Changes in fair value fallen short of objectives M€ 60.7 3.6 -4.5 -1.0 Balance as of Positive Negative Fair value Q3 2014 impact impact changes Q1-Q3 2014 -1.5%) 26 CapMan Group’s result for January–September 2014 6 November 2014
Slide 27: Fair values of CapMan's own fund investments by year
Fair values of CapMan’s own fund investments by year of the funds establishment Fair value/year of establishment 2001-2004 8% 2009-2013 31 % 2005-2006 38 % 2007-2008 23 % 27 CapMan Group’s result for January–September 2014 6 November 2014
Slide 28: Fair value changes of investments
Fair value changes of investments 30 September 2014 Fair value changes of 46 portfolio Fair value changes of 60 real estate companies in 2014* investments in 2014 * 3% 12 % 17 % 24 % 35 % 33 % 26 % 50 % New investments Fair value increased Fair value same as 31.12.2013 Fair value decreased *Exits ar
Slide 29: Fund investments and commitments totalled €89.0 million
Fund investments and commitments totalled €89.0 million €m Majority of investments and commitments in buyout funds 60 50 40 30 20 10 0 Buyout, 53% Credit, 7% Russia, 8% Public Market, Real Estate, Other, 12% Access, 4% 5% 11% • Investments in fair value, in total €60.7 million (lower part of the bar
Slide 30: Financial objectives
Financial objectives We believe that private equity remains a growth industry, and CapMan continues to exploit growth opportunities especially in its key investment areas. Objectives Realised 1-9/2014 Performance Return on equity over 20% p.a. Return on equity 1.4% Capital structure Equity ratio at
Slide 31: CapMan's dividend distribution history is excellent
CapMan’s dividend distribution history is excellent Dividends as a portion of the result and dividend per share 90% 78% 80% 18 80% 70% 16 16 67% 67% 70% 14 60% 12 12 12 50% 10 40% 8 30% 7 7 6 20% 4 4 4 10% 2 0 0 0% 0 2005 2006 2007 2008 2009 2010 2011 2012 2013 Dividend/Share (cents) Dividend/Share
Slide 32: CapMan maintains its outlook estimate for 2014
CapMan maintains its outlook estimate for 2014 We estimate our earnings per share to improve significantly from the level achieved in 2013 primarily due to increasing operating profit. 32 CapMan Group’s result for January–September 2014 6 November 2014
Slide 33: Basis for Outlook specified
Basis for Outlook specified: • Our fees will cover our expenses before possible non-recurring expenses related to acquisitions or larger development projects. • CapMan receives carried interest income from funds as a result of a completed exit in the event that the fund already is in carry or will e
Slide 34: IR calendar and IR team
IR calendar and IR team IR calendar 2015 IR team Heikki Westerlund, CEO, Senior Partner Tel. +358 207 207 504 Financial Statements 2014 [email protected] 5 Feb 2015 Q1 2015 result Niko Haavisto, CFO 7 May 2015 Tel. +358 207 207 583 [email protected] Q2 2015 result 6 August 2015 Jer
Slide 35: Contents
• Review period highlights and events Contents after the review period • Business environment • Result for January – June 2014 • Additional slides 35 CapMan Group’s result for January–September 2014 6 November 2014
Slide 36: Return potential is based on the value creation of portfolio companies and real estate
Return potential is based on the value creation of portfolio companies and real estate An earnings model with several sources of income 1. Predictable fee income cover the expenses of CapMan’s organisation A free investment organisation for shareholders A stable, long-term source of income Additiona
Slide 37: Demonstrated value creation capability
Demonstrated value creation capability Portfolio company investments Real estate investments 300 350 260* 300 250 250 200 IRR 31% IRR 54% 200** 200 Average holding period Average holding period 150 5.5 years 1.8 years 150 100 100 100 100 50 50 0 0 Value at investment Value at exit Value at investmen
Slide 38: Group Income Statement, IFRS
Group Income Statement, IFRS € million 1-9/14 1-9/13 Turnover 23.1 23.2 Fees 21.5 20.3 Carried interest 1.6 2.9 Other operating income 0.2 0.0 Operating expenses -20.0 -22.9 Fair value gains of investments -1.1 3.8 Operating profit 2.2 4.2 Financial income and expenses -1.1 -0.1 Share of associated
Slide 39: Group Balance Sheet – Assets, IFRS
Group Balance Sheet – Assets, IFRS € thousands 30.9.14 30.9.13 Tangible assets 256 294 Goodwill 6,204 6,204 Other intangible assets 816 1,153 Investments in associated companies 9,091 10,060 Investments at fair value through profit and loss Investments in funds 60,669 73,954 Other financial assets 1
Slide 40: Group Balance Sheet – Total equity and liabilities, IFRS
Group Balance Sheet – Total equity and liabilities, IFRS € thousands 30.9.14 30.9.13 Share capital 772 772 Share premium account 38,968 38,968 Other reserves 27,041 38,814 Translation difference 123 -28 Retained earnings -3,766 3,289 Total equity 63,138 81,815 Deferred income tax liabilities 1,814 2
Slide 41: Key figures as of 30 September 2014
Key figures as of 30 September 2014 30.9.14 30.9.13 Earnings per share, cents 0.0 2.4 Diluted, cents 0.0 2.4 Shareholders' equity / share, cents* 73.3 96.9 Share issue adjusted number of shares 86,121,272 84,255,467 Number of shares at the end of period 86,316,766 84,281,766 Number of shares outstan
Slide 42: CapMan Plc's largest shareholders
CapMan Plc’s largest shareholders 30 September 2014 Share of all Share of all shares % voting rights % Gimv NV*** 9.9% 6.2% Ilmarinen Mutual Pension Insurance Company 8.3% 5.2% Oy Inventiainvest Ab + (Ari Tolppanen**) 8.1% 19.4% Joensuun Kauppa ja Kone 4.4% 2.8% Winsome Oy + Tuomo Raasio* 4.4% 8.4%