Download - Investor Presentation Kinnevik Q3 2013
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PRESENTATION OF FINANCIAL RESULTS Q3 2013
23 October 2013
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A QUARTER WITH STRONG GROWTH
Net Asset Value SEK 61.1bn, up 10% in the quarter
Mobile companies facing rapidly changing markets
Continued momentum in e-commerce assets
Zalando sales up 70 %to EUR 437m in Q2 Online 30% of Kinneviks NAV
MTG growing in all business segments
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HIGHLIGHTS THIRD QUARTER 2013
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WITH 93% OF ASSET VALUE IN MOBILE, ONLINE &
MEDIA
Telecom &
Financial Services
54%(64%)
Online
30%(17%)
Media
9%(9%)
Industry and
Other investments
7%(10%)
OUR VALUE DRIVERS
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AND A FOCUS ON GROWING MARKETS
SALES PER REGION*
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OUR VALUE DRIVERS
*Based on figures from FY 2012 but excluding Tele2 Russia
56%1%
23% 8%
10%
2%
Western Europe
North America
Latin AmericaAfrica
Eastern Europe
Asia
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TELECOM THE DIGITAL LIFESTYLE
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Millicom
Mobile business model increasingly diversified
Millicoms growth resting on four pillars
Mobile, Cable & Digital media, MFS and online
Tele2
Tele2 is uniquely positioned to capitalise on mobile dataand internet growth
Front row player within new technology 4G
Innovative products and pricing plans
TELECOM & FINANCIAL SERVICES
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TELECOM & FINANCIAL SERVICES
MILLICOM
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USD m Q3 2013 Q3 2012 Change (%)
Total revenues 1,290 1,199 +8.1
EBITDA 459 507 -9.5
EBITDA margins (%) 35.6 42.3
Mobile subscribers,
end of period (m) 48.9 46.0 +6.3
Organic growth in local currency 10%, strongest since Q4 2011
Mobile is proving resilient supported by high net adds of over 1 million in Q3
Positive developments in new business units:
Cable & Digital Media: delivering on the cross selling opportunity
MFS: Over 11% of total mobile customer base active on MFS
Online growing over 25% quarter on quarter, with tight cost control
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TELECOM & FINANCIAL SERVICES
TELE2
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SEK m Q3 2013 Q3 2012 Change (%)
Operating revenue 7,529 7,649 -2
EBITDA 1,523 1,771 -14
EBITDA margins (%) 20.3 23.2
Mobile subscribers, end
of period (m)13.2 12.6 +5
Stable customer intake for the Group
Steady operational performance in Sweden
Strong mobile customer intake in Netherlands
Robust growth in Kazakhstan
Updated guidance to reflect rapidly changing market environment
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TELECOM & FINANCIAL SERVICES
FINANCIAL SERVICES
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Market with low penetration in emerging markets Convergence between online, mobile and financial
services results in overlap with other Kinnevik focusareas
Online and mobile as medium to deliver financialservices to consumers
Bayport is Kinneviks largest investment in thefinancial services sectorThe major shareholder with 42% of the shares
Offers microcredits and financial services in Ghana,Zambia, Tanzania, Uganda, Botswana, Mozambique andColombia
Total assets USD of 440m and 265,000 customers
Milvik/BIMA is a mobile microinsurance company
Operating in Ghana, Tanzania, Senegal, Mauritius,Bangladesh, Sri Lanka and Indonesia
Insures more than five million lives
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E-COMMERCE IN KINNEVIK
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Megatrends
Distribution
networks
Assortment
Focus verticals and brands Building barriersof entry
Brand trust/
awareness
Fashion &
shoes
Generalmerchandise
Classifieds &
marketplaces
Increasing population
Increasing internet
penetration
E-commerce share of
retail market growth
High growth GDP per
capita-countries
Furniture
Economiesof scale
ONLINE
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ZALANDO
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437
257
Strongest quarter in terms of net
sales
Geographic and category
diversification continues:
> 50% of net sales outside of
Germany
> 50% of net sales outside of
shoes category
Margins continued to improve in the
first half 2013, albeit at a slower pace
due to adverse weather effects and
continued investment in growth
Net sales
(million EUR)
Q2 2012
+70%
Q2 2013
10 Country
Shops
14 Country
Shops
ONLINE
https://www.wabeco-remscheid.de/images/upload/Kontakt/Flaggen/flagge-schweden.jpghttps://www.wabeco-remscheid.de/images/upload/Kontakt/Flaggen/flagge-schweden.jpg -
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OPERATIONAL EXCELLENCE IN KEY DIMENSIONS
1 Plus 50,000 sq.m. expansion option
Fashion assortment based on four
segments
3rdparty global brands
+
3rdparty local brands
+
Distinctive private label
+
Complementary partner program
=
>1,500 brands
+
>150,000 styles
=
Zalando equals over 50 stationary
shops with an average range
of 3,000 products
Fashion Retail Technology
Logistics
4 warehouses with combined capacity
of over 250,000 sq.m.
+
3 million parcels shipped p.m.
=
Line up from Berlin to Rome
Customer Service
800,000 customer contacts p. m.
= Entire population of Frankfurt a.M.
Content Production
25,000 articles produced p.m.
= 120,000 pictures put online p.m.
Local payment systems
20+ local payment methods
7 local currencies
Team of 400+ in-house IT specialists
develops proprietary software
across entire value chain
Frontend:
Shop management software
+
Optimized mobile sites
+
iOS App & Android Apps
=> 100m visits p.m.
=
Entire population of Cologne & Munich
visit our shops daily
Backend: Content production, warehouse
logistics system, customer service
software, etc.
Invoice
Prepayment
ZALANDO
http://www.healthhulahoop.com.au/images/logo-cheque.jpghttp://upload.wikimedia.org/wikipedia/de/b/b1/ELV_Logo.svg -
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AVITO
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Avito is the no1 general online classified inRussia
Avito is one of 5 Russian sites with over 100m
page views per day and one of the largest online
classifieds in the world
Freemium monetization has commenced for real Revenues H1 2013 SEK 204m
All focus is on increasing monetization and
growing in new categories including services,
real-estate, jobs and transport
ONLINE
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ONLINE
E-COMMERCE IN EMERGING MARKETS
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Afr ica
Middle East
South East
Asia
Russia & CIS
Latin America
India
Strong macroeconomic environment
Mobile penetration and affordable smartphones support shift to online
Strong growth in E-commerce
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ONLINE
CDON GROUP
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Growth and margin improvements in three of four business segments
Strong growth and strengthened market positions for the Sports & Health andFashion segments
Sports & Health segment continues to deliver solid profitability
Continued inventory reduction within the entertainment segment. CDON.comshowed underlying operating profit in the quarter
SEK m Q3 2013 Q3 2012 Change (%)
Total revenues 946.6 953.3 -0.4
Operating profit
(EBIT)*-17.9 2.6
EBIT margins -1.9 0.3
* Excluding non-recurring costs and divested operations
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Ownership Fair value as per 30 September 2013 Change in fair value
Investment (SEK m)
Direct
Owner-
ship
Indirect
equity
interest Total
Invested
amount
Direct
ownership
Indirectly
held Total
Q3
2013
First nine
months of
2013
Zalando 36% 36% 7,916 11,249 11,249 923 1,989
Avito 18% 14% 31% 336 820 634 1,454 220 531
Bigfoot I - Dafiti, Lamoda, partly
Namshi and Jabong27% 8% 35% 1,536 1,489 152 1,641 54 89
Dafiti 27% 518
Lamoda 29% 512
Jabong, Namshi and cash mixed 503
Bigfoot II - The Iconic, Zalora,
partly Zando and Jumia30% 10% 40% 930 434 434 -3 -448
Home24 23% 12% 35% 791 596 7 603 112 -168
Wimdu 20% 14% 34% 275 260 37 297 -2 5
BigCommerce - Lazada, Linio,
partly Namshi15% 13% 27% 427 332 7 339 -2 -102
Rocket Internet with other
portfolio companiesmixed mixed mixed -1,309 584 878 1,462 32 -141
Other unlisted online
companies mixed mixed mixed 512 335 335 -6 4
Total unlisted online
investments11,414 16,099 1,715 17,814 1,328 1,759
CDON Group 25.1% 25.1% 646 589 589 -5 -203
Total onli ne inves tmen ts 12,060 16,688 1,715 18,403 1,323 1,556
Note: Rocket Internet companies not adjusted for potential dilution from stock option plans
ONLINE
ONLINE HOLDINGS
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VALUATION OF UNLISTED ONLINE HOLDINGS
PREFERENCE STRUCTURE
Sales multiples according to peer average, discounted to consider factors such asprofitability and geographical market
Investments in Rocket Internet are structured such that invested amounts are
repaid first in case of realisation
Also, amounts recently invested have preference over amounts invested earlier
Indirect shares via Rocket Internet have generally been invested early. Atcompany valuations below value in latest financing round, fair value of these
shares are therefore generally lower16
SEK million
Basis for
Fair Value
Direct
Ownership
Indirect
Ownership
Fair Value
Direct
Fair Value
Indirect
Affected by
Preference
Structure
Zalando GmbH Sales multiple: 2.0x 36% 11 249 Yes
Avito Sales multiple: 9.9x 18% 14% 820 634 No
Bigfoot I Sales multiple: 1.4-2.0x 27% 8% 1 489 152 Yes
Bigfoot II Sales multiple: 1.4x 30% 10% 434 - Yes
Home24 Sales multiple: 1.0x 23% 12% 596 7 YesWimdu Sales multiple: 2.5x 20% 14% 260 37 Yes
BigCommerce Sales multiple: 0.8-1.3x 15% 13% 332 7 Yes
ONLINE
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OUR VALUE DRIVERS
MEDIA
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Consumer behaviour has changedfundamentally and forever
MTG has a strong content portfoliowith established market positions and
powerful brands
Video is the growth driver
MTGx established to acceleratedigital growth
18.8 million daily Metro readers young and urban
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MEDIA
MODERN TIMES GROUP
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Sales growth across the board
All five business segments reported local currency sales growth
Investing in momentum
Content, digital and geographical expansion
Strong cash generation
Focus on operational excellence and financial efficiency
Strong balance sheet enables continued investment
SEK m Q3 2013 Q3 2012 Change (%)
Total revenues 3,204 2,940 +9
Operating profit
(EBIT)*162 288 -44
EBIT margins* 5% 10%
* Before associates
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FINANCIALS
KINNEVIK HAS A STRONG BALANCE SHEET
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Net debt in parent company per 30
September SEK 1bn
In order to have financial flexibility in
the Parent Company, the goal is to
have no or a low leverage.
Cash and available credit facilities per
30 September SEK 7.2bn0%
2%
4%
6%
8%
10%
12%
12-Q1 12-Q2 12-Q3 12-Q4 13-Q1 13-Q2 13-Q3
NET DEBT TO GROSS ASSET VALUE
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CONCLUDING REMARKS
Kinnevik is uniquely positioned to service the digital consumer
Mobile companies facing rapidly changing market environment
Strong traction across online assets
Media investments in content and reach
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