capman building successful businessescapman.studio.crasman.fi/pub/files/old_imports/... · return...

CapMan – Building successful businesses

European Listed Private Equity Event 2014

Paris 2 & 3 October 2014

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

• Recent developments

• Business environment

• Activity and results January - June

2014

2 2 & 3 October, 2014www.capman.com

CapMan in figures

3 www.capman.com

25 years of experience

€3.1 bn in assets under management

5 investment partnerships

31 companies and 60 real estate investments

Over 120 fund investors

110 employees

Listed in Helsinki Stock Exchange in 2001

Private equity fund manager in the Nordic

countries and Russia

2 & 3 October, 2014

Investment managersInvestment companies

Two models for listed private equity

2 & 3 October, 20144 www.capman.com

CapMan’s business model – the best of both worlds


Investment

company

Investment

managerHybrid model

• Investments are noted on

the balance sheet

• The investment manager is

separate from the listed

entity

• NAV = the central

valuation metric

• Manages funds for a fee

• Receives carried interest

from funds along with the

investment team

Diversified income

streams

Fees provide a

stable earnings

base

Retains upside

through own fund

investments

Return potential is based on the value creation of portfolio

companies and real estate

3.

2.

1.

2 & 3 October, 2014www.capman.com

+Operating profitAdditional income

from own fund

investments€63.0 million

Fund commitments

€26.8 million

Fee incomeCovers operating

expenses

In balance

6

*illustrative figure based on Q2 figures, see slide 25

Carried interest10-20% of the

fund’s cash flow after

hurdle

- Operating expenses

* Other CapMan investment areas do not make new investments.

Entrepreneurial investment partnerships*

Business Development and

Investor Relations

CapMan Real Estate

21 investment

professionals in

Helsinki, Stockholm

and London

CapMan Russia

10 investment

professionals in

Moscow

CapMan Public

Market

2 investment

professionals in

Stockholm

CapMan Buyout

15 investment

professionals in

Helsinki and

Stockholm

Finance, Back Office, Legal, IT

and Human Resources

CapMan Credit

3 investment

professionals in

Stockholm

CEO

Management Group

CapMan Platform, approx. 30 professionals

CapMan Purchasing Scheme

(CaPS)

Organisation

2 & 3 October, 2014www.capman.com7

Dedicated teams and funds

• Small and mid-

sized buyouts in

Finland, Sweden

and Norway

• Unique ability to

build Nordic

companies

• 77 investments

• 54 exits with

gross return of

2.7x and 34 %

gross IRR

• Growth financing

for Russian SMEs

• 41 investments

• 30 exits with

gross return of

2.0x

• Gross return of

4.6x and 41 %

gross IRR from

the previous Fund

• Listed Nordic

small and mid

cap companies

• 6 investments

• 3 exits with ross

IRR 51.9% (vs.

14 % for the

benchmark index)

• Opportunity-

driven

investments with

value add

approach in

Finland and the

Nordics

• 33 transactions in

Finland, Sweden

and Denmark

• Gross 2.0x equity

multiple

• Gross IRR of

54%.

• Subordinated

debt for Nordic

SMEs

• 54 investments

• 40 exits with

gross return of

1.6x and 16 %

gross IRR

8 www.capman.com 2 & 3 October, 2014

Specialist in office,

retail, residential &

hotel properties

Non-strategic sectors

tapping into Russia’s

fast-growing middle

class

Mezzanine and

untraded loans in

Nordic

mid-sized companies

Nordic control

investments in mid-

sized companies.

25 years and 10 funds

Activist investor in

mid-cap public

companies

*30 June 2014

Track record

200

100

ExitEntry

100

260

Entry Exit

29 real estate

exits

87* private equity

exits

IRR 54%IRR 31%

Average holding

period 5.5 years

Average holding

period 1.8 years

*Buyout, Russia & Public Market

9

Investment areas and portfolios


31 portfolio companies 60 real estate investments

€5.2 bnNet sales

500* tenants

40,000personnel

686 000 m²*Lettable space

*) Situation 30.3.2014

Unique CapMan purchasing scheme (CaPS)

• CaPS has tendered 47 categories in Finland and 21 in Sweden

• Significant cost reductions €14,5 million p.a. in portfolio companies

• Increased payment terms

• Exceptionally high quality service level for CaPS members

• A dedicated and experienced team within CapMan


Major private equity firms in the Nordic countries and

Russia

CapMan is well-

positioned in all markets

BUYOUT

PUBLIC MARKET

Accendo Capital

Partners Oy

CREDIT

12 www.capman.com

RUSSIA

2 & 3 October, 2014

REAL ESTATE

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

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





2014


- Action programs in the most challenging portfolio companies are

being advanced

- Slow economic development of Finland and Russia is a challenge

- Fair value development in the first half of 2014 is a disappointment

Key events during the reporting period Q2 2014


- We increased the maturity of our loan portfolio

- Overall 9 new investments

- 4 exits during the review periodOur investment teams were

active

Our financing position

remained strong

We focus on value creation

- The size of CapMan Nordic Real Estate fund reached M€ 166.0,

CapMan buyout X fund M€ 245.0 and CapMan Russia II fund to

M€ 99.1 after the review period

- Fee income and operational expenses in balance

Fundraising is progressing

We aim to raise more than

€700 million.

15

Latest funds raised to date in three key investment

areas

www.capman.com 2 & 3 October, 2014

€245.0 million €166.0 million(investment capacity of

approx.

€415.0 million)

€99.1 million

Investments and exits during the first half of 2014


Funds New investments Exits

Prime Residental

PortfolioBregshamra

Bro

Yrjönkatu 17Add-on in

Amagerbrogade portfolio

syyskussacompleted after the review period

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=pEn31-kcn1gk2M&tbnid=f3bu1oT4K0g_EM:&ved=0CAUQjRw&url=http://www.codeelectricmqt.com/Sauna-Stoves_new.html&ei=CdczU_nLNeqD4ASn-YD4CA&bvm=bv.63808443,d.bGE&psig=AFQjCNHtCeTRfp9Ny_BshNQ8Qm4h6zdCwQ&ust=1395992699528772

http://www.google.com/url?sa=i&rct=j&q=&esrc=s&frm=1&source=images&cd=&cad=rja&uact=8&docid=pEn31-kcn1gk2M&tbnid=f3bu1oT4K0g_EM:&ved=0CAUQjRw&url=http://www.codeelectricmqt.com/Sauna-Stoves_new.html&ei=CdczU_nLNeqD4ASn-YD4CA&bvm=bv.63808443,d.bGE&psig=AFQjCNHtCeTRfp9Ny_BshNQ8Qm4h6zdCwQ&ust=1395992699528772





2014


Selectivity when choosing industry and location

Realistic value creation plan

Optimal capital structure

How to create returns in slow growth environment?


Growing sectors:• Well-being: health, elderly care and educational services

• Digital communications

• Leisure and tourism

• Outsourcing

Other general mega-trends:• Ageing of the population

• Urbanisation

• Green energy / environment

• Solutions to public sector malfunctions

Growth areas


Real estate trends in the Nordics:

• Migration to Copenhagen and the current housing shortage:

investments in residential properties in the centre of Copenhagen

• Companies are moving away from the city centre: office buildings

in key locations outside the Stockholm city centre with good

transport connections

Growth areas


• Growth of alternative debt market due to limited

availability of bank financing (regulation)

• Fast growing consumer-driven non-strategic

sectors

• Outsourcing, IT and health care

Growth areas


International investors are most interested in…

• 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






2014


Group turnover and operating profit

€ million€ million

24 2 & 3 October, 2014

2.0

4.04.2

3.3

1.7

2.89

0

1

1

2

2

3

3

4

4

5

1-3 1-6 1-9 1-12

2013 2014

Turnover Operating profit

www.capman.com

6.8

16.5

23.2

29.8

7.0

15.05

0

10

20

30

40

1-3 1-6 1-9 1-12

2013 2014

Breakdown of results for H1 2014

€13.7 million €13.4 million

0,0

2,0

4,0

6,0

8,0

10,0

12,0

14,0

16,0

18,0


€1.4 millionOperating profit*

€2.8 millionFair value changes

FeesOperating

expenses

In balance

25

*) includes approx. €0.1 million of other operating income

€1.1 million

Carried interest income

Analysing the carried interest potential of CapMan’s funds

Not including funds in active investment phase

CME

VII B

FM II B

FM III B

FV V

Fenno Program

FM III A CME VIIA +

KB

CMPMF

15.2 19.3 28.0 107.5

All additional exits generate

carried interest

2.3 16.6 75.7

+739 % +69% +42 %

2 & 3 October, 201426

Funds in carry Funds in technical carry (Portfolio FV exceeds the cash flow required to investors)

Portfolio at fair

value (€m)

Additional cash

flow to investors

required (€m)

Portfolio

companies

Fair value

exceeding cash

flow (%)

www.capman.com

Exited after the review period

Other notable investments in our portfolio

27

Fund Portfolio

company

Investment year Turnover

2013

Personnel

2013

Ownership

CMB VIII 2007 €291.7m 968 86.01%

CMB VIII 2008 €221.0m 866 70.24%

CMB IX 2011 €161.8m 142 78.71%

CMB IX 2010 €116.0m 2 061 76.28%

CMB IX 2010 €37.2m 107 80.70%

CMB IX 2013 €126.6m 426 44.64%

PMF 2010 €865.3m 6 666 4.14%

PMF 2009 €487.4m 6 546 22.76%

PMF 2011 €865.3m 2 688 6.30%


Changes in fair value fallen short of objectives

M€

-3.1

1.14.2

63.0

Balance as of

H1 2014

Positive

impact

Negative

impact

Fair value changes

H1 2014 (+2,2 %)

www.capman.com28

STRICTLY CONFIDENTIAL

Actual exit multiples vs. previous CapMan valuations

1,3x

1,7x1,8x

2,5x

3,1x

0,0x

0,5x

1,0x

1,5x

2,0x

2,5x

3,0x

3,5x

3 yrs before exit 2 yrs before exit 1 year before exit Last valuation beforeexit

At exit

Average grossmultiple

25 buyout exits completed between 2004 – 2014 from investments made since 2000. Comparison between actual exit multiples and

CapMan valuations prior to the actual exit.

29 www.capman.com

Fund investments and commitments totalled

€89.8 million

0

10

20

30

40

50

60

Buyout, 51% Credit, 8% Russia, 8% Public Market,6%

Real Estate,11%

Other, 12% Access, 4%

Majority of investments and commitments in buyout funds€m

• Investments in fair value, in total €63.0 million (lower part of the bar)

• Remaining commitments, in total €26.8 million (upper part of the bar)


Financial objectives

Objectives Realised 1-6/2014

Performance Return on equity over 20% p.a. Return on equity 5.9%

Capital structure Equity ratio at least 60% Equity ratio 57.4%

Dividend policy Pay-out ratio at least 50% of the net profit A dividend of €0.04 per share for 2013

We believe that private equity remains a growth industry,

and CapMan continues to exploit growth opportunities

especially in its key investment areas.


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

Basis for Outlook:

• 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 enter carry due to the exit. Our current

portfolio holds several investments, which we are ready to exit during 2014.

• The fair value development of our own fund investments will have a substantial

impact on our overall result in 2014. We expect disparity in the development of individual

portfolio companies and real estate also during 2014 depending on their industry and

geographical location. In addition, our portfolio companies and real estate are also

influenced by various other factors, among others the general development of industries

and local economies, valuation multiples of peer companies and exchange rates.


CapMan’s ownership

21 %

14%

65%

*Shareholding among the 200 largest shareholders.

30.6.2014

Management and

personnel*

(hold 51% of votes)

Finnish

institutions and

households

Nominee registered

shareholders


CapMan Plc’s largest shareholders

*Employed by CapMan.

** CapMan employee who exercises controlling power in the aforementioned company but who does not own CapMan shares directly.

*** Flagging notice 30 December 2013.

30 June 2014


Share of all

shares %

Share of all

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%

Varma Mutual Pension Insurance Company 4.3% 2.7%

Vesasco Oy 3.8% 2.4%

Åbo Akademi University foundation 3.5% 2.2%

Heiwes + Heikki Westerlund* 3.4% 10.3%

Geldegal Oy** + Mom Invest Oy** + Olli Liitola* 2.9% 9.3%

10 largest shareholders, in total 53.0% 68.9%

IR calendar and IR team

IR calendar 2014 IR team

Heikki Westerlund, CEO, Senior Partner

Tel. +358 207 207 504

[email protected]

Niko Haavisto, CFO

Tel. +358 207 207 583

[email protected]

Jerome Bouix, Head of Business Development and Investor

Relations, Senior Partner

Tel. +358 207 207 558

[email protected]

Hanna Hinkkanen, Communications Officer

Tel.+358 207 207 585

[email protected]

36 2 & 3 October, 2014

Q3 2014 result

6 Nov 2014

www.capman.com

capman building successful businessescapman.studio.crasman.fi/pub/files/old_imports/... · return...

Documents