9 July 2024
PRESENTATION OF
KINNEVIK'S
FIRST HALF OF 2024
H1 2024: AGENDA
Agenda
- Key Events of the Quarter
- Tele2 Divestment & Extraordinary Cash Distribution
- Development in Core Growth Companies
- NAV Pressure From e-Commerce
- Financial Update
- Financial Position
- Net Asset Value Development
- Private Company Valuations
- Our 2024 Priorities
- Q&A
Today's Presenters
Georgi Ganev | Samuel Sjöström | Torun Litzén |
CEO | CFO | Director Corporate Communications |
2
H1 2024
Section 1
KEY EVENTS OF THE QUARTER
9 July 2024
3
H1 2024: KEY EVENTS OF THE QUARTER
With the Tele2 divestment and extraordinary cash distribution, we have completed our strategic transformation into a growth-focused investment firm
Key Events of the Quarter
-
NAV of SEK 39.3bn or SEK 140 per share, down 5% Q/Q
Unlisted portfolio down 7% driven primarily by portfolio-wide multiple contraction
Core growth companies - Mews, Spring Health, Cityblock, Pleo, TravelPerk - down 5% relative to public benchmarks down 13%
Step #2 of Tele2 divestment completed, SEK 9.4bn net proceeds in the quarter - Extraordinary cash distribution of SEK 6.4bn or 23 per share
Total shareholder distributions of SEK 88bn since 2018
Net cash of SEK 13.5bn pro forma full Tele2 divestment - Disciplined capital allocation with deployment focused on companies showing the strongest proof-points,accelerating the portfolio's share of capital invested in our highest- conviction companies
Acquired SEK 177m in secondary shares in Cityblock - a company that reached USD 1bn in revenue during 2023, doubling from 2021
Participated in Recursion's USD 200m new issue with a SEK 103m investment due to the company's significant progress, with five assets in the clinic, seven clinical read-outs expected over the next 18 months, and several major partnerships announced
SEK 198m invested into Oda, financing committed in connection with the company's merger with Mathem
2024 AGM | Portfolio Transformation | USD 200m Capital Raise |
SEK 6.4bn Cash Distribution | Tele2 Divestment | |
Chris Gibson | ||
CEO & Co-Founder |
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H1 2024: KEY EVENTS OF THE QUARTER
Step #2 of Tele2 divestment and our SEK 6.4bn extraordinary cash distribution completed during Q2, step #3 expected to close during the third quarter
Tele2 Divestment
Steps & Key Parameters (SEK)
Step & Timing | Shares Sold | Stake Sold | Stake Retained | Net Proceeds | Conditions | Completion | ||||||
to iliad/NJJ | to iliad/NJJ | by Kinnevik | to Kinnevik | to Close | ||||||||
Step #1 | 31.3m B Shares | 4.5% of Capital | 15.3% of Capital | 2,840m | None | |||||||
3.5% of Votes | 32.6% of Votes | |||||||||||
Step #2 | 14.2m A Shares | 14.3% of Capital | 0.9% of Capital | 9,391m | FDI Approval | |||||||
85.5m B Shares | 25.3% of Votes | 7.3% of Votes | ||||||||||
Kinnevik AGM & SEK 6.4bn Extraordinary Cash Distribution
Tele2 Dividend Received | 23m | - | ||||
0.9% of Capital | EC Merger Control | |||||
Step #3 | 6.5m A Shares | Fully Exited | 637m | and/or A Share | During Q3 | |
7.3% of Votes | ||||||
Reclassification | ||||||
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H1 2024: KEY EVENTS OF THE QUARTER
2024 to date, our core companies have delivered on operational expectations as a group, and now represent almost half of our portfolio value from 2% in Q4 2020
Core Growth Companies
Portfolio Concentration
Core Growth Companies Share of Total Portfolio Value
50%
45%
40%
35%
30%
25%
20%
15%
10%
5%
Q4 '20 | Q2 '24 |
Operating Performance 2024 To Date
Jan-May Actuals vs Expectations in Q4 2023
+62% | ||
+60% | ||
Our Core Growth | ||
+29pp | Companies | |
+26pp | ||
Growth | EBITDA Margin | |
Y/Y Improvement |
Expectation in Q4 2023 | Actual | |
Note: | Averages are weighted by fair value. | 6 |
H1 2024: KEY EVENTS OF THE QUARTER
Another quarter of NAV pressure from e-Commerce leading to low-point in share of portfolio - focus on profitability improvements and capital efficiency
NAV Pressure From e-Commerce
Three e-commerce investees facing | Declining Share of Portfolio | Declining Average Revenue Growth |
significant challenges over the last two years | Instabee, Job&Talent and Oda/Mathem Share of Growth Portfolio Value | Instabee, Job&Talent and Oda/Mathem |
- Oda/Mathem, Job&Talent and Instabee |
Growth down from 77% in 2021, to 2% in 2024E
Share of Growth Portfolio down from 16% at Q2 2022 peak, down to 7% today
15.0%
+77%
- New CEO and team at Oda/Mathem post merger, with efficiency program and reduction in headcount
12.5%
+65%
Implementing proven Norwegian logistics solution on Swedish fulfilment centre
SEK 198m in financing provided in Q2, committed in end of 2023 merger
10.0%
7.5%
- Job&Talent facing significant slow-down in growth in 2023-24 as e-commerce demand came down and remained muted
Strong but not commensurate profitability improvements over the last quarters
5.0%
+2%
2.5%
(6)%
- Instabee has struggled over past quarters, operations now stabilized with new equity
financing during the quarter without | Q4 '21 | Q2 '24 | 2021 | 2022 | 2023 | 2024E |
participation from Kinnevik |
Note: | All financial metrics are Kinnevik estimates and may be meaningfully lower than company budgets, plans and forecasts. Averages are weighted by fair value. | 7 |
H1 2024
Section 2
FINANCIAL UPDATE
9 July 2024
8
H1 2024: FINANCIAL UPDATE
SEK 12.8bn net cash position after 6.4bn extraordinary cash distribution, capital deployment expected to increase towards second half of 2024
Financial Position
- SEK 1,108m invested in H1 '24, primarily into core companies Mews (419m), Cityblock (177m) and Pleo (29m), and into newer venture Recursion (103m)
SEK 198m in financing provided to Oda as part of commitment at merger
- First two steps of Tele2 transaction with net proceeds of SEK 12.3bn completed
Includes SEK 23m dividend received in the quarter on third step's perimeter
- Record date for SEK 6.4bn extraordinary cash distribution in late June
-
Ending Q2 with SEK 12.8bn in net cash (13.5bn pro forma third step of Tele2 exit)
Treasury net >SEK 300m in H1 '24 - Deployment expected to increase in H2 '24, remaining patient and selective
- Long-term capital allocation framework at upcoming October CMD
Change in Net Cash
YTD and Pro Forma Step 3 of Tele2 Exit (SEKbn)
+12.3 | +0.1 | (6.4) | |||||
12.8 | +0.6 | 13.5 | |||||
7.9 | (1.1) | ||||||
Q4 2023 | Investments | Divestments | Other | Extraordinary | Q2 2024 | Tele2 | Pro Forma |
Cash Distribution | Step 3 |
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H1 2024: FINANCIAL UPDATE
NAV down 5% when adding back extraordinary cash distribution, driven by significant multiple contraction in part offset by core company performance
Net Asset Value
- NAV down 4.7% to SEK 39.3bn or 140 per share
- Net cash of SEK 12.8bn or 46 per share, 13.5bn or 48 per share pro forma third step of Tele2 exit
- Public investments excluding Tele2 amounting to SEK 1.1bn or 4 per share (down 21% Q/Q)
- Unlisted portfolio down 7%, amounting to SEK 25.7bn or 91 per share (down 6% Q/Q when adding net investments)
Priced transactions (primary and secondary) in 57% of the private portfolio by value over the last twelve months, on average priced in line with our valuations in each respective preceding quarter
Since end of 2022, 74% of the private portfolio transacted in at valuation levels on average 2% above our preceding assessments
- Core growth companies down 5% to SEK 12.6bn or 45 per share
Now representing 47% of portfolio excluding Tele2
Expected to grow portfolio share further through continued operational performance, amplified by executing on near-term capital allocation priorities
Growth Portfolio Value Change by Category
Q/Q (SEKbn)
28.6 | (0.3) | (0.7) | (1.4) | +0.6 | 26.8 |
Q1 2024 | Public Companies | Core Companies | Other Companies | Net Investments | Q2 2024 |
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Kinnevik AB published this content on 09 July 2024 and is solely responsible for the information contained therein. Distributed by Public, unedited and unaltered, on 09 July 2024 06:39:10 UTC.