Intermediate Capital Group plc and Intermediate Capital Managers Limited are authorised and regulated in the United Kingdom by the Financial Services Authority
ICG plc FY11 Results 1 June 2011 Intermediate Capital Group plc - - PowerPoint PPT Presentation
ICG plc FY11 Results 1 June 2011 Intermediate Capital Group plc - - PowerPoint PPT Presentation
ICG plc FY11 Results 1 June 2011 Intermediate Capital Group plc and Intermediate Capital Managers Limited are authorised and regulated in the United Kingdom by the Financial Services Authority Highlights Operational Highlights Third
Intermediate Capital Group plc 2
Highlights
- Operational Highlights
- Third party AUM up 9% to €9bn
- Strong performance across the investment portfolio
- 13 exits for 1.8x and an 18% IRR
- £1bn total of investments, £311m on behalf of ICG balance sheet
- Financial Highlights
- FMC profits of £36m, up 15% adjusted for £6.9m release
- IC profits of £154m*, up 126%, due to lower provisions and higher capital gains
- Profit9before tax of £190m*, up 79%
- Proposed final dividend of 12p (18p for the full year)
* Excluding negative impact of fair value movements of derivatives of £4m
Intermediate Capital Group plc
Market Update
Intermediate Capital Group plc 4
Record High Yield issuance
European High Yield Bond Issuance by Quarter 5,000 10,000 15,000 20,000 25,000 30,000 35,000 40,000 45,000 50,000 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 €m
Source: S&P
Intermediate Capital Group plc 5
Limited issuance of LBO senior debt
€0 €20 €40 €60 €80 €100 €120 €140 €160 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1
- Source: S&P
Intermediate Capital Group plc 6
European loan market rally continues
S&P Leverage Loan Index
60 65 70 75 80 85 90 95 100 105 J a n 9 3 M a y 9 3 S e p 9 3 J a n 9 4 M a y 9 4 S e p 9 4 J a n 9 5 M a y 9 5 S e p 9 5 J a n 9 6 M a y 9 6 S e p 9 6 J a n 9 7 M a y 9 7 S e p 9 7 J a n 9 8 M a y 9 8 S e p 9 8 J a n 9 9 M a y 9 9 S e p 9 9 J a n 9 1 M a y 9 1 S e p 9 1 J a n 9 1 1 B BB Source: S&P
Mar911
Intermediate Capital Group plc 7
No new CLOs raised
9 10.0 20.0 30.0 40.0 50.0 60.0 70.0 80.0 90.0 2003 2004 2005 2006 2007 2008 2009 2010 2011 $bn US Europe
Source: BAML
Intermediate Capital Group plc 8
US dealing with issues: Europe significantly lagging
Changes in Loan Maturity Profile since January 2009 5.7 7 933 953 990 970 17 69 51 92.2 99.2 96.5 90.1 913.2 9100 980 960 940 920 20 40 60 80 2011 2012 2013 2014 2015 2016 2017 €bn Europe US
Source: JPMorgan
Intermediate Capital Group plc 9
LBO volume at 200192004 levels
20 40 60 80 100 120 140 160 180 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1 €bn
Source: S&P
Intermediate Capital Group plc 10
7.3x 8.2x 7.7x 7.3x 7.1x 7.0x 6.8x 7.6x 8.3x 8.8x 9.7x 9.7x 8.9x 9.2x 8.0x 0.0x 2.0x 4.0x 6.0x 8.0x 10.0x 12.0x 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 Q1 Debt/EBITDA Equity/EBITDA Other/EBITDA
High prices 9 Lower credit risk
Source: S&P
Multiple of EBITDA
Intermediate Capital Group plc 11
Significant Private Equity dry powder remains
Source: Preqin
20 40 60 80 100 120 140 160 180 200 2005 2006 2007 2008 2009 2010 Q1 2011 Dry powder Funds raised
€bn
Intermediate Capital Group plc 12
ICG creates unique investment opportunities
9 200 400 600 800 1,000 1,200 1,400 2010 2011 €m
Source: ICG/S&P * Investment Company and Mezzanine Funds
Q1 Q1 9 2,000 4,000 6,000 8,000 10,000 12,000 14,000 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 €m European Mezzanine market ICG Investments*
Intermediate Capital Group plc
New Investments
Intermediate Capital Group plc 14
Unique investment opportunities
- ICG* has invested c. £1bn in FY2011, with a target return of 1.9x
£52m ICG led 9 £35m £155m £225m £80m
- ver £300m
£110m
- PE
PE ICG led PE ICG led PE
- 9
9 √ √ √ √
- * Investment Company and Mezzanine Funds
Intermediate Capital Group plc 15
Deal flow
2008 2009 2010
- New deal opportunities presented to Investment Committee
- !
Intermediate Capital Group plc
Exits
Intermediate Capital Group plc 17 Intermediate Capital Group plc 17 Intermediate Capital Group plc 17
Strong exits
1.5x 16% TBC 2007
" #
- $$
% &''
2004 Picard, Eurofarad, TeamSystem 17% 1.9x 2005 Geoservices 29% 2.0x 2006 Medica, Visma, Loyalty Partners, Pasteur Cerba, Sebia, Gerflor 19% 1.8x 2008 BI, Labco** 16% 1.4x
('$ !) *!+
* Excludes £1m capital gains on Resource Europe CLO equity ** Partial exit
- 13 investments exited, £388m of repayments, £82m of PIK and £132m* of
capital gains
Intermediate Capital Group plc
Portfolio Update
Intermediate Capital Group plc 19
Investment portfolio
Performance vs. prior year
Percentage of assets performing at or above prior year 0% 10% 20% 30% 40% 50% 60% 70% 80% Jun908 Sep908 Dec908 Mar909 Jun909 Sep909 Dec909 Mar910 Jun910 Sep910 Dec910 Mar911
Intermediate Capital Group plc 20
Top twenty assets
↑
Italy Software solutions
↑
Germany Home delivery of frozen foods Private clinic manager France
→
Electronic publisher of company information Belgium
↑
Textile rental and cleaning France
↑
Airport operator UK
↑
Inspection, certification and technological services Spain
↑
Waste management solutions provider UK
↓
Elderly care homes Sweden
↑
Speciality chemicals for the construction industry France
↑
Credit Bureau Australia
→
Patent & legal services UK
↑
Share registry and fund administration services Australia
↑
Supplier of fire protection systems and services Germany
→
PVC Flooring France
↑
Drug development and manufacturer France
↑
Provider of services and technical solutions for utilities Germany
↑
Diversified fund of senior loans Europe
n/a
Auto Equipment France
→
Tour operator Spain
↓
(
- ",
#
Intermediate Capital Group plc 21
Top ten equity assets
Patent & legal services UK
↑
PVC Flooring France
↑
Fixed satellite services USA
↑
Home delivery of frozen foods Germany
↑
Livestock identification systems France
↑
Insurance and roadside assistance UK
→
Software solutions Italy
↑
Inspection, certification and technological services Spain
↑
Food manufacturing France
↓
Share registry and fund administration services Australia
↑
(
- ",
#
Intermediate Capital Group plc 22
Trend in provisions for portfolio companies
50 100 150 200 250 H1 08 H2 08 H1 09 H2 09 H1 10 H2 10 H1 11 H2 11 £m Gross provisions Write9backs
Intermediate Capital Group plc 23 Intermediate Capital Group plc
AUM and Fund Performance
Intermediate Capital Group plc 24
Third party funds under management
1 2 3 4 5 6 7 8 9 10 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY08 FY09 FY10 FY11 €bn CFM Funds Mezz Funds
Intermediate Capital Group plc 25
Top quartile Private Equity performance
Net Money Multiple Source: ICG/Venture Economics/ThompsonOne as of 31 December 2010
!- 2nd Quartile
- Top
Quartile
- Top
Quartile .
- Top
Quartile &!
- Top
Quartile $-!
- Top
Quartile
1.3x 1.7x 1.6x 1.2x 1.3x 1.4x 0.70x 0.90x 1.10x 1.30x 1.50x 1.70x 1.90x 1998 2000 2003 2006 2008 2008 Net Money Multiple ICG Top Quartile PE
Intermediate Capital Group plc 26
Credit Fund Management performance
Leveraged loans
ICG Senior Secured Loan Performance* vs. Credit Suisse Western European Loan Index
* Composite of all discretionary market value funds managed by ICG
ICG Loan Default Rate vs. S&P Speculative Grade* Default Rate
Source: ICG, S&P, last update as at December 2010 Source: ICG per 31 March 2011
./) 0) 0/) !) !/) ) /) ) /) ) /) ) /) ) /) 12/ &2. 3'2. 12. &20 3'20 120 &2! 3'2! 12! &2 3'2 12 &2 3'2 12 &2 ICG Marketvalue Loan Composite CS Western European Loan Index0% 2% 4% 6% 8% 10% 12% 14% 16% 2003 2004 2005 2006 2007 2008 2009 2010 LTM 31/03/11 ICG Loans default rate S&P Loan default rate
Intermediate Capital Group plc 27
Credit Fund Management performance
High Yield
0% 1% 2% 3% 4% 5% 6% 7% 8% 2003 2004 2005 2006 2007 2008 2009 2010 LTM 31/03/11 S&P HY default rate ICG Bonds default rate
ICG High Yield Composite* vs. Merrill Lynch High Yield Index (HEAG) ICG High Yield Default Rate vs. S&P High Yield Default Rate
Source: ICG, S&P Source: ICG per 31 March 2011
0/) !/) /) /) /) /) /) 4/) //) ./) 0/) !/) /) /) 1 2 & 2 3'2 1 2 & 2 3'2 1 2 & 2 3'2 1 2 & 24 3'24 1 24 & 2/ 3'2/ 1 2/ & 2. 3'2. 1 2. & 20 3'20 1 20 & 2! 3'2! 1 2! & 2 3'2 1 2 & 2 3'2 1 2 & 2 ML High Yield Index ICG High Yield CompositeIntermediate Capital Group plc 28
Fund management priorities
- Sales team
- Grow core business
- ICG Europe V
- ICG High Yield Bond Fund and European Loan Fund
- Develop new opportunities
- Longbow
Intermediate Capital Group plc
Financial Overview
Intermediate Capital Group plc 30
Segmental reporting
5/* 6 .0*0 /4* 78 5..*06 8.3 24.8 (273.1) (57.5) 10.0 189.9 * (55.3) 6.0 80.2 /*! !.* 77+ 0.1 77.1 (161.8) (60.7) 3.4 209.7 !* (40.3) 1.9 76.4 (3.8) 101.3 (70.9) (67.0) 11.0 179.8 /* (50.0) 4.1 81.8 FVM derivatives Admin expenses Impairments Net capital gains Div & other income Net Interest Income Admin expenses Other income
- &7
Fee income
- &
- &%
&% &% 9
* Excluding FMV Derivatives
Intermediate Capital Group plc 31
:. !:4 .. . !!
7000 8000 9000 10000 Mar910 New Mezzanine Realisations Mezzanine New CFM Realisations CFM FX Mar911 €bm
Third party AUM
- Third party AUM up due to CFM inflow (Eos Loan Fund 1)
Intermediate Capital Group plc 32
Third party fee income
10 20 30 40 50 60 FY 08 FY 09 FY 10 FY 11 £m Mezzanine Funds CFM Funds
Intermediate Capital Group plc 33
Mezzanine and Growth Capital Funds
Third party fee income
- #
- #
- 4.5
0.0 13.7 0.0 ; 5.4 0.0 5.7 0.0 $'
- 19.4
1.3 10.2 2.7 $'; 1.8 0.0 2.3 0.0 <' * * * *0
- ICG European Fund 06 now in realisation phase
&=7 9
Intermediate Capital Group plc 34
Credit funds
Fee income
9 3.8 37'
- 6.7
12.8 37'%
- &>7
6.7 7.3 %77 0.4 9 <' *0 4*
- &-
9
- #
- #
Intermediate Capital Group plc 35
* /* * /*4 */ * 5 10 15 20 25 30 35 40 45 50 FY10* Fee income Other income Incentive Schemes Operating Costs FY 11 £m
Fund Management Company
- Profit before tax of £35.9m
Intermediate Capital Group plc 36
- Profit before tax and fair value adjustments at £154.2m
Investment Company
.*! 0*. 4* * */ * .0*! * /*4
20 40 60 80 100 120 140 160 FY 10 NII Div & other income Incentive schemes Operating Expenses Impairment Net Capital Gains FV derivatives FY 11 £m
Intermediate Capital Group plc 37
Net interest income analysis
50 100 150 200 250 300 FY 10 FY 11 £m Interest Income Interest Expense
- NII at £180m, 14% lower driven by lower average investment portfolio (£2.6bn vs
£2.8bn), last year’s provisions and the exits of large PIK assets (Marken, Medica, Sebia,Visma,TBC)
Intermediate Capital Group plc 38
Long terms provisions
0% 1% 2% 3% 4% 5% 6% 7% 8% 9% 10% 11% 12% FY 95 FY 96 FY 97 FY 98 FY 99 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11
- Net provisions (as a % of opening book) back to historical levels
Average pre9crisis: 2.4%
Intermediate Capital Group plc 39
Operating costs
(Excluding incentive schemes)
5 10 15 20 25 30 35 40 45 50 FY 08 FY 09 FY 10 FY 11 H2 10 H1 11 H2 11 £m Salaries Administrative costs One off charge re 20 Old Broad St lease
- Operating costs impacted by one off impact of 20 Old Broad St lease
Intermediate Capital Group plc 40
P&L impact of FY10 awards
2 4 6 8 10 12 14 FY 10 FY11 FY12 FY13 FY14 FY15 £m FY 10 Deferred share awards FY 10 Cash Bonus
*.
- One year’s awards expensed over number of years
- Aggregate charge is 30% of cash profit
Intermediate Capital Group plc 41
Incentive schemes excluding MTIS on capital gains
- &
- FY10 Awards
9.6 5.9 3.7 FY11 Awards 10.9 8.7 2.2 <' */ 4*. /*
- #
'
- '%8
* 2 *
- #
- &
- 9
* MTIS on rolled interest and shares options
Intermediate Capital Group plc 42
Balance Sheet
&% 9 729 785 ? ,> 2,575 2,718 1'' (76) (30) 2,499 2,678 %%'@ - :/ :!4 (A 1,248 1,494 2,499 2,678 $ 10.8% 7.2% $ 100% 127% B-' 2,033 2,223 ?C4C 506 &% 9
Intermediate Capital Group plc 43
Debt maturity profile
Securitisation Private Placements Revolver £450/295m Facility
100 200 300 400 500 600 700 H1 12 H2 12 H1 13 H2 13 H1 14 H2 14 2015 2016 2017 2019 2024 £m
Intermediate Capital Group plc 44
Gearing vs. Equity and PIK as a % of portfolio
50% 100% 150% 200% 250% 300% FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY 11 10% 20% 30% 40% 50% Gearing (LHS) Equity and PIK as % of portfolio (RHS)
Intermediate Capital Group plc 45
Cash core income
* adjusted for FV movements of derivatives held for hedging and £5.7m negative impact of Old Broad Street lease ** Net of MTIS
20 40 60 80 100 120 FY 08 FY 09 FY 10 FY 11 H2 10 H1 11 H2 11 £m
%''D +78 £195.3m ,'88 £(101.3)m ' £70.9m ,;E88 £(126.9)m 'E'88 £68.2m % £106.7m
Intermediate Capital Group plc 46
Financial outlook
- Stable fee income
- New funds will compensate for one9off catch up on junior fees in FY11
- Further realisations
- Capital Gains
- Realisation of PIK
- Reduction in NII as book contracts slightly and price of debt increases
Additional new investments but remain unpredictable
- Provisions expected to trend down further on a year on year basis
Intermediate Capital Group plc
Conclusion
Intermediate Capital Group plc
Appendix
Intermediate Capital Group plc 49
Refinancing problem lies ahead
€0 €10 €20 €30 €40 €50 €60 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 # ;56 European CLOs Total Funded Amount by End of Reinvestment Period European Maturing LBO Senior Debt
!"#!$$%&!$$'()*+),)
European CLOs Funded Amount by End of Reinvestment Period vs. European Maturing LBO Senior Debt
Intermediate Capital Group plc 50
Top ten PIK assets
Airport operator UK
↑
Private clinic manager France
→
Credit Bureau Australia
→
Share registry and fund administration services Australia
↑
Security services Italy
↑
Electronic publisher of company information Belgium
↑
Cinema owner and operator Australia
↑
Catering Services UK
↑
Drug development and manufacturer France
↑
Elderly care homes Sweden
↑
(
- ",
#
Intermediate Capital Group plc 51
Gains on investments
Realised gains 127.2 78.0 Unrealised gains 6.2 20.0 <' *4 !* MTIS (31.0) (21.7) 1 *4 0*.
- #
- #
9
Intermediate Capital Group plc 52
Impairments
Mezzanine and equity investment Gross impairment 89.8 180.4 Recoveries (18.9) (18.5) 1 0* .*
- #
- #
9
Intermediate Capital Group plc 53
Capital account
9300 9200 9100 100 200 300 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY10 FY11 £m Provisions Provision write9backs Capital Gains
Intermediate Capital Group plc 54
New lending vs. repayments*
*6 months moving average
200 400 600 800 1000 1200 1400 Mar9 06 Jun9 06 Sep9 06 Dec9 06 Mar9 07 Jun9 07 Sep9 07 Dec9 07 Mar9 08 Jun9 08 Sep9 08 Dec9 08 Mar9 09 Jun9 09 Sep9 09 Dec9 09 Mar9 10 Jun9 10 Sep9 10 Dec9 10 Mar9 11 New Lending Repayments £m
Intermediate Capital Group plc 55
Fee income
Mezzanine Fund Management fee income 32.4 34.6 Credit Fund Management fee income 23.7 14.0 <%-7 /.* 4!*. Investment Company fee income 25.7 27.8 <'7 !*! 0.*4
- #
- #
9
Intermediate Capital Group plc 56
Mezzanine and Minority Equity Funds
Fee income
5 10 15 20 25 30 35 40 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY 10 FY11 £m Management fees Carried interest
Intermediate Capital Group plc 57
Credit Funds
Fee income analysis
5 10 15 20 25 FY 00 FY 01 FY 02 FY 03 FY 04 FY 05 FY 06 FY 07 FY 08 FY 09 FY10 FY11 £m Senior fees Junior fees Performance fees
Intermediate Capital Group plc 58
Pre9tax profits, earnings per share & dividends
+7+'-" £190.1m £105.7m +7 £186.3m £105.8m 17 £128.1m £81.7m
- 32.6p
25.0p B 18.0p 17.0p
- #
- #
Intermediate Capital Group plc 59
Capacity of mezzanine funds
200 400 600 800 1000 1200 1400 1600 1800 MF 2000 MF 2003 EF 2006 ICAP 2005 IMP 2008 RF 2008 ICAP 2008 €m
Initial Size Current Assets
Fully invested Investing
Note: RF 2008 and EF2006 excludes Eos debt
Intermediate Capital Group plc 60
Mezzanine and Growth Capital Funds
Fee structure
- 20 % of 20
- ver 8
1.25% on invested 92% Nov92011 €1.25bn €1.75bn EF06 25 % of 20
- ver 8
2.0% on invested 83% Apr92008 $0.3bn $0.3bn ICAP 05 100% 100% 84% ) 1.5% on invested 1.5% on invested 1.5% on invested &7 40 % of 20
- ver 8
28% of 20
- ver 8
20 % of 20
- ver 8
- Sep92003
€0.31bn €0.39bn EF00 Sep92006 €0.67bn €1.42bn EF03 Feb92010 €0.13bn €0.13bn IMP08 7
- =
- '
75% 26% ) 1.5% on invested 1.5% on committed equity &7 Oct92011 €0.64bn €0.84bn RF08 April92013 $0.6bn $0.6bn ICAP 08 7
- =
Intermediate Capital Group plc 61
Segmental reporting
* 0 *0 04*. 78 0*0 (7.5) 73.6 (64.7) (28.7) 2.6 107.2 /* (20.5) 0.8 34.9 /* !* 77+ 8.5 69.4 (53.1) (33.0) 1.4 95.0 .* (23.3) 1.1 39.1 (12.3) 31.9 (17.8) (34.0) 9.7 84.8 * (26.7) 3.0 42.7 FVM derivatives Admin expenses Impairments Net capital gains Div & other income Net Interest Income Admin expenses Other income
- &7
Fee income
- &
- ?
? ? 9
* Excluding FMV Derivatives
Intermediate Capital Group plc 62
Disclaimer
Important Notice The materials being provided to you are intended only for informational purposes and convenient reference and may not be relied upon for any purpose. This information is not intended to provide, and should not be relied upon, for accounting, legal, tax advice or investment recommendations. You should consult your tax, legal, accounting or other advisors about the issues discussed herein. Although information has been obtained from and is based upon sources that Intermediate Capital Group plc ("ICG plc") considers reliable, we do not guarantee its accuracy and it may be incomplete
- r condensed. All opinions, projections and estimates constitute the judgement of the authors as of the date of the document and are subject to
change without notice. ICG plc excludes all liability and therefore accepts no responsibility for any loss (whether direct or indirect) arising for any action taken or not taken by anyone using the information contained therein. These materials are not intended as an offer or solicitation with respect to the purchase or sale of any security or investment interest and may not be relied upon in evaluating the merits of investing in these securities or investment interests. These materials are not intended for distribution to,
- r use by any person or entity in any jurisdiction or country where such distribution or use would be contrary to local law or regulation.
Neither ICG plc or any of its affiliates makes any representation or warranty, express or implied as to the accuracy or completeness of the information contained herein, and nothing contained herein shall be relied upon as a promise or representation whether as to past or future performance. These materials (including their contents) are confidential, being for use only by the persons to whom they are issued. Distribution of these materials to any person other than the person to whom this information was originally delivered and to such person’s advisors is unauthorised and any reproduction of these materials, in whole or in part, or the disclosure of any of their contents, without the prior consent of ICG plc or its affiliates is prohibited. This communication is limited to and directed to those persons invited to the presentation. It is therefore only directed at professional clients, as defined by the Financial Services Authority. Any other persons should not seek to rely upon the information contained herein. Collective investment schemes referred to herein are not regulated for the purposes of the UK’s Financial Services and Markets Act 2000 and are not available to members
- f the general public.
ICG plc is authorised and regulated in the United Kingdom by the Financial Services Authority. Intermediate Capital Managers Limited is a wholly9
- wned subsidiary of ICG plc and is also authorised and regulated in the United Kingdom by the Financial Services Authority.