Investor Presentation Kinnevik Q3 2013

8/12/2019 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

2

HIGHLIGHTS THIRD QUARTER 2013


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3

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*

4

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

5

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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MILLICOM

6

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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TELE2

7

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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FINANCIAL SERVICES

8

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
http://www.bimamobile.com/


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E-COMMERCE IN KINNEVIK

9

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

10

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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11

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

12

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

13

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

14

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

15


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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

17

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

18

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

19

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

20


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Documents

Investor Presentation Kinnevik Q3 2013