3i Group Plc · LSE:III
3i — H1 2001 Earnings Presentation
41 slides from 3i's earnings presentation, Nov 23, 2000
Slide 1: Interim Results
Interim Results 23 November 2000
Slide 2: Operating Review
Brian Larcombe Operating Review www.3i.com/investor
Slide 3: Highlights
Highlights % Return on opening shareholders’ funds Total Return £1.0bn - 3.7 MSCI Pan Euro Index Return on opening - 2.7 FTSE 100 Index shareholders’ funds 20% - 15.0 TechMARK 100 Index Interim Dividend 4.9p + 6.5% 20.1 3i Investment £0.9bn + 70% -15 -10 -5 0 5 10 15 20
Slide 4: Economy and quoted markets
Economy and quoted markets Economy Quoted markets ! Conflicting views ! Main indices " negative returns ! UK and continental European Barometers " lower business ! Technology markets confidence " volatile in period " companies more " falls since 30 optimistic about September own prospects
Slide 5: Venture capital markets
Venture capital markets Funds raised Investment US $bn 150 ! Global private equity survey 100 ! Move to early stage 50 investment 0 ! New entrants 1995 1996 1997 1998 1999 Source: 3i Global Private Equity Review 2000
Slide 6: UK
UK Total invested year Total invested six months No of investments £m No Objective: maintain leadership 1000 950 900 850 800 750 700 650 ! Investment 600 550 " £511m + 56% 500 450 " 239 investments 400 350 300 250 ! 12 IPOs 200 150 100 50 0 -50 1996 1997 1998 1999 2000 30-Sep-99 30-Sep-00 Year to 31
Slide 7: Continental Europe
Continental Europe Total invested year Total invested six months Objective: 20% of portfolio No of investments £m No 450 250 ! Growth by 400 200 acquisitions and 350 organic 300 150 250 200 ! Investment 150 100 " £352m + 79% 100 50 " 185 investments 50 0 0 1996 1997 1998 1999 2000 30-Sep-99 30-Sep-0
Slide 8: Technology investment
Technology investment Total invested year Objective: 30% + of portfolio Total invested six months No of investments £m No 700 450 400 600 ! Investment 350 500 " £559m + 113% 300 400 250 " 313 investments 300 200 150 200 ! 49% of portfolio 100 100 50 0 0 1996 1997 1998 1999 2000 30-Sep-99 30-Sep-00 !
Slide 9: International development
International development Objective: Develop significant businesses in USA and Asia Pacific USA Asia Pacific ! Leading venture capital ! Continued development market in Singapore " Focus on fast growth ! 3i exceeding targets companies ! Co-investing with top- tier US venture capital ! Japanese restr
Slide 10: Funds under management
Funds under management Objective: Build unquoted funds in line with investment assets Unquoted funds under management Quoted funds under management 2.3 2.3 £bn £bn 1.3 1.5 1.3 0.5 0.5 0.8 0.4 0.4 0.5 0.5 30-Sep-00 1996 1997 1998 1999 2000 30-Sep-00 1996 1997 1998 1999 2000 As at 31 March As at 31 Ma
Slide 11: Acquisitions update
Acquisitions update ! Technologieholding " Successful integration ! SFK Finance " Leading Finnish venture capital firm " Re-branded as 3i Finland ! Bank Austria TFV " Austrian specialist high tech venture capital investor " Re-branded as 3i Austria
Slide 12: Financial Review
Michael Queen Financial Review www.3i.com/investor
Slide 13: Financial highlights
Financial highlights Total Return £1.0bn Return on opening shareholders’ funds 20% Unrealised value growth £712m Net realised profits £302m + 421% Revenue profit after tax £69m - 1% Net asset value 1011p + 19% Investment £902m + 70% Interim dividend 4.9p + 6.5%
Slide 14: Total return
Total return Return by sector Return by region £m £m Technology 1,102 UK 909 investments Continental 174 Europe Other Rest of World (56) investments (62) Foreign Exchange 13 1,040 1,040
Slide 15: Total return
Total return £m £m Revenue profit after tax 69 Capital Profits " Realised capital profits 302 " Unrealised value growth 712 1,014 Other (43) Total return 1,040
Slide 16: Revenue profit
Revenue profit Period ended 30 September 1999 2000 £m £m Income from investments 127 127 Fees received 24 35 Net treasury interest payable (37) (39) Costs (42) (52) Profit before tax 72 71 Tax (2) (2) Profit after tax 70 69
Slide 17: Capital profits
Capital profits £m Realised capital profits Unrealised value growth 1200 1014 1000 800 712 600 400 243 200 185 302 0 58 1999 2000
Slide 18: Unrealised value growth
Unrealised value growth Quoted portfolio IPOs & takeovers Unquoted equity Joint ventures & other Loans & prefs £m 900 800 700 780 600 500 400 300 200 100 212 0 -98 -57 -125 -100 -200
Slide 19: Investment assets
Investment assets £6.9bn 22% 25% 5% 8% 21% 19% Quoted technology equity Quoted non-technology equity Unquoted technology equity Unquoted non-technology equity Technology loans & prefs Non-technology loans & prefs
Slide 20: Valuations: Quoted tech market impact
Valuations: Quoted tech market impact 110 TECHMARK ALL-SHARE NEUER MARKT 100 90 80 70 60 50 APR MAY JUN JUL AUG SEP OCT NOV Source: DATASTREAM
Slide 21: Equity realisations
Equity realisations £m Sales proceeds Profit over cost Profit over opening value 400% 713 79% 570 290% 314 280 39% 208 78 1999 2000 Six months to 30 September
Slide 22: Strong record of realisations
Strong record of realisations 90 % Uplift over valuation on sale of equity investments 80 83 70 79 60 50 61 40 53 41 42 30 39 20 10 0 1996 1997 1998 1999 2000 - 99 - 00 ep p -S - Se Year to 31 March 30 30
Slide 23: Investment
Investment £m 3i Third party unquoted funds 800 201 700 600 500 132 400 701 300 200 400 100 0 1999 2000 Six months to 30 September
Slide 24: Investment - net cash flow
Investment - net cash flow £m 450 350 250 362 150 170 50 30 -50 162 -150 -250 UK Continental Other 3i Group Europe International Excludes unquoted funds
Slide 25: Balance sheet
Balance sheet £m Shareholders' funds £m Investment assets Net borrowings Other net assets + 20% 6,197 + 14% 5,174 7,153 6,301 1,167 87 1,043 40 31-Mar-00 30-Sep-00 31-Mar-00 30-Sep-00
Slide 26: Comparative return
Comparative return After 5 Years 23.6% 15.9% 15.3% 14.9% After 7 Years 24.8% 14.7% 14.2% 13.2% 3i After 10 Years 20.6% FTSE 100 16.4% FTSE AllShare FTSE SmallCap
Slide 27: Dividends per share
Dividends per share Pence Interim Final 7.8 7.0 6.4 5.7 5.0 4.4 4.3 4.6 4.9 3.5 3.9 2.8 3.1 1995 1996 1997 1998 1999 2000 30-Sep-00
Slide 28: Financial highlights
Financial highlights ! Strong total return ! Good growth in quoted technology investments ! Strong realised profits ! Strong balance sheet to fund future growth
Slide 29: Strategic Update
Brian Larcombe Strategic Update www.3i.com/investor
Slide 30: International growth update
International growth update Good progress 50% of investment assets outside UK 50% of new investment outside UK 50% of investment staff outside UK 50% of offices outside UK 2000
Slide 31: International growth update
International growth update Good progress 50% of investment assets outside UK 50% of new investment outside UK 50% of investment staff outside UK 50% of offices outside UK 2000
Slide 32: International growth update
International growth update Good progress 50% of investment assets outside UK 50% of new investment outside UK 50% of investment staff outside UK 50% of offices outside UK 2000
Slide 33: International growth update
International growth update Good progress 50% of investment assets outside UK 50% of new investment outside UK 50% of investment staff outside UK 50% of offices outside UK 2000 2003
Slide 34: International growth update
International growth update Good progress 50% of investment assets outside UK 50% of new investment outside UK 50% of investment staff outside UK 50% of offices outside UK 2000 2003 2006
Slide 35: International network across 3 continents
International network across 3 continents Operating from 12 countries … Europe USA Asia Pacific Aberdeen, Amsterdam, Barcelona, Berlin, Birmingham, Bologna, Boston, Bristol, Cambridge, Dusseldorf, Edinburgh, Frankfurt, Glasgow, Hamburg, Helsinki, Leeds, Leipzig, Liverpool, London, Lyon, Madrid, Manc
Slide 36: Strategic objectives
Strategic objectives ! To achieve a leading position in each of the major venture capital markets " Europe # UK - maintain leading market position # Continent - build to 30% + of portfolio by 2006 " USA # Build to 10% + of portfolio by 2006 " Asia Pacific # Build to 5% + of portfolio by 2006
Slide 37: Key messages
Key messages ! Strong financial results ! Continue to grow business ! Clear strategic focus
Slide 38: Management comment on technology market correction
“Moving to the stock markets, we have seen a sharp correction in the technology sector over the last two months and, as we all know, significant mark downs earlier this week. A correction in the markets is not something new to 3i and it will take away some of the excesses we were seeing in our marke
Slide 39: Management comment on technology market correction
“Moving to the stock markets, we have seen a sharp correction in the technology sector over the last two months and, as we all know, significant mark downs earlier this week. A correction in the markets is not something new to 3i and it will take away some of the excesses we were seeing in our marke
Slide 40: Investor relations website
Investor relations website 3i www.3i.com/investor
Slide 41: www.3i.com/investor
www.3i.com/investor 3i Group plc is an authorised institution under the Banking Act 1987 and is regulated in the conduct of investment business by the FSA 23 November 2000