TIDMIII
RNS Number : 1274N
3i Group PLC
28 January 2021
28 January 2021
3i Group plc
FY2021 Q3 performance update
Another resilient quarter from the 3i investment portfolio
* Increase in NAV per share to 936 pence (30 September
2020: 905 pence) despite the negative translation
effect of sterling strengthening in the quarter
(GBP156 million)
* Total return of 18.7% for the nine months to 31
December 2020 and 92% of our top 20 Private Equity
portfolio by value grew last 12 month ("LTM")
earnings to September 2020
* Good sales, EBITDA and cash generation for Action in
2020 despite significant Covid-19 disruption
* Continued very strong performance in portfolio
companies operating in the consumer, e-commerce,
healthcare and business services sectors
* Completed a new Private Equity investment in MPM and
three bolt-on acquisitions for GartenHaus, Havea and
Cirtec Medical. Signed a further bolt-on acquisition
for Royal Sanders
* Good share price performance from 3i Infrastructure
plc ("3iN") in the quarter
Simon Borrows, Chief Executive, commented:
"3i delivered another solid performance in the quarter ending 31
December 2020. Both our Private Equity and Infrastructure teams
have continued to perform well. Our Private Equity portfolio
continues to benefit from secular growth trends, with 92% of our
top 20 investments by value growing LTM earnings to September 2020,
with particularly strong performances in our high growth
investments. This was another decent quarter from Action which has
bounced back very strongly after each lockdown interruption."
Private Equity
Portfolio performance and valuation at 31 December 2020
The Private Equity portfolio continued to demonstrate resilient
performance in the third quarter of FY2021 despite the return of
significant disruption caused by the reintroduction of lockdowns
and other Covid-19 related restrictions throughout Europe and the
UK.
Recognising the particular interest of investors regarding how
these additional lockdown measures have impacted the performance of
Action, we are providing more information in this Q3 performance
update than we ordinarily would do, noting that Action's 2020 year
end audit is not yet complete. A more detailed update on its
audited financial performance will be provided as usual at a
separate Capital Markets Seminar in March.
In the financial year ending 3 January 2021, Action generated
revenue growth of just over 10% and opened 164 new stores, taking
its total to 1,716 stores across eight countries. Provisional
EBITDA, subject to audit, in 2020 was EUR616 million, 14% ahead of
2019. Action generated strong cash flow over the year, finishing
with cash of EUR590 million after the repayment of the outstanding
RCF balance. Despite the periods of major disruption due to country
lockdowns in March, April, May and again in November and December,
like-for-like ("LFL") performance over 52 weeks came in at -1.4%
with the Netherlands, Germany, Poland and Luxembourg all trading
well ahead of their budgets in both LFL and EBITDA for the
year.
Action started 2020 very strongly and traded ahead of budget for
the first two months of the year. However, the spring lockdowns
resulted in an EBITDA shortfall to budget of around EUR85 million
by the beginning of May. This shortfall reduced to less than EUR15
million through very strong trading from May to the end of October.
At this point, the further winter lockdown measures commencing in
November reduced EBITDA against budget by a further EUR34 million,
leading to an annual result c. EUR49 million below budget. Very
strong trading in France, Belgium and Poland in December resulted
in excellent sell through of all seasonal categories and closing
stocks below 2019 levels.
The Action results for 2020 incorporate a 53(rd) week this year.
This was a short trading week, with a significant number of Action
stores closed or restricted to selling essential items. This extra
week contributed around EUR7 million of EBITDA. The cash balance
reduced by EUR38 million primarily as a result of a 5(th) quarterly
interest payment.
At 31 December 2020, our valuation methodology for Action
remained unchanged, reflecting run-rate earnings at 3 January 2021,
a post discount run-rate multiple of 18.0x and the capital
structure at Action's year end. The reduction in new store openings
as a result of the pandemic from 230 in 2019 to 164 in 2020 led to
a reduction in the EBITDA run-rate adjustment of EUR25 million to
EUR35 million.
The lockdown situation across Europe is fluid and Action's
current trading position is again affected by restrictions in a
number of countries. In France, Belgium, Poland and Luxembourg
stores are open and selling the full catalogue, while most German
stores and all Austrian and Czech stores are open but selling
essential items only. Action has now implemented a Click &
Collect facility for non-essential items in stores in Germany and
Austria. All stores in the Netherlands have been completely closed
since the second half of December 2020. We expect lockdown
restrictions will be a headwind for Action's Q1 2021, but we are
planning for a very strong recovery as restrictions are lifted.
Royal Sanders, Cirtec Medical, Luqom and Tato continued to
generate strong earnings growth and cash in the third quarter and
are well positioned to maintain this performance into the final
quarter of FY2021. The Basic-Fit share price increased by 48% in
the quarter, despite the significant disruption caused by enforced
gym closures. Our most recent new investments in MPM and GartenHaus
and further investment in SaniSure are performing well and in line
with our expectations.
Measures and initiatives put in place to mitigate the disruption
caused by Covid-19 restrictions have enabled our portfolio
companies in the retail sector (Hans Anders and BoConcept) to
maintain a steady level of trading in the quarter. Following signs
of a gradual recovery in the Asian automotive market, Formel D and
Q Holding's automotive business saw more stable trading in the
period, although market conditions are expected to remain
challenging in Q1 2021.
The travel sector remains very challenging. Audley Travel saw an
uptick in bookings from November following positive news on
Covid-19 vaccines, but the extensive travel restrictions mean that
significant uncertainty remains. Arrivia has been relatively
resilient throughout the pandemic to date, largely due to the
nature of its recurring membership business. However, no cruise
sailings and a low level of resort vacations are expected to impact
performance in the first half of 2021.
Private Equity investments and realisations
Private Equity Investment
investment Type Business description Date GBPm
---------------------------- ------------- --------------------------------------- --------------- ---------------
An international leader in branded,
MPM New premium and natural pet food December 2020 124
Provider of experiential tailor-made
Audley Travel Further (1) travel November 2020 46
Leading online retailer of garden
buildings, sheds, saunas and related
products in Germany,
GartenHaus Further (1) Austria, Switzerland and Netherlands December 2020 13
============================ ============= ======================================= =============== ===============
Action Further General merchandise discount retailer December 2020 9
Total Q3 FY2021 investment 192
----------------------------------------------------------------------------------------------------- ---------------
H1 FY2021 investment 231
----------------------------------------------------------------------------------------------------- ---------------
Total investment as at
31 December 2020 423
----------------------------------------------------------------------------------------------------- ---------------
1 Net of subsequent return of funding in Q3 FY2021.
In December 2020, we completed the GBP124 million new investment
in MPM, our second new investment in FY2021.
We have continued to grow portfolio value through our
buy-and-build strategy. Following our new investment in GartenHaus
in September, we invested a further GBP16 million to support the
acquisition of Polhus, a leading online retailer of garden houses
and related products based in Sweden. GartenHaus also returned GBP3
million of its funding in the quarter.
In addition, and with no funding from 3i, Havea completed the
acquisition Laudavie, which owns Calmosine, the French specialist
in children's food supplements, and Cirtec Medical acquired
NovelCath, a fast-growing catheter-based delivery systems
manufacturer based in Minnesota. At the end of December 2020, Royal
Sanders signed the acquisition of Royal Herkel, a private label and
contract manufacturing producer of nutritional supplements, medical
devices, pharmaceutical and cosmetic products based in the
Netherlands.
In November 2020, we invested a further GBP49 million of capital
to support Audley Travel through this difficult trading period,
GBP3 million of which was subsequently returned following
investment by other shareholders. In December 2020, we purchased a
small equity stake in Action for GBP9 million.
In the quarter, we received total Private Equity realisation
proceeds of GBP28 million, including GBP17 million from the sale of
Navayuga, GBP10 million of further proceeds from the sale of Kinolt
and GBP1 million of other deferred consideration.
Infrastructure
3iN's share price performed well in the quarter, closing up 6%
at 307.5 pence (30 September 2020: 289 pence), valuing 3i's 30%
stake at GBP828 million (30 September 2020: GBP778 million). We
also recognised dividend income of GBP13 million from 3iN in the
period. 3iN completed the acquisition of further stakes in their
existing Dutch PPP projects and overall the 3iN portfolio has
continued to demonstrate its resilience.
In the period, we received proceeds of GBP30 million from the
sale of our stake in Krishnapatnam Port.
Scandlines
Scandlines' performance was stable in the period, with freight
volumes remaining close to 2019 levels. New travel restrictions
were put in place in September 2020 between Germany and
Scandinavia, which resulted in a reduction in both leisure
travellers and border shop customers from the solid levels seen in
the latter half of the summer. Our core DCF valuation assumptions
remain consistent with the September 2020 valuation.
Top 10 investments by value at 31 December 2020
Valuation Valuation
Valuation Valuation Sep-20 Dec-20
basis currency GBPm GBPm Activity in the quarter
---------------- ----------- ----------- ---------- ---------- --------------------------------------
Action Earnings EUR 4,269 4,426
----------- ----------- ---------- ---------- --------------------------------------
3iN Quoted GBP 778 828
----------- ----------- ---------- ---------- --------------------------------------
Scandlines DCF EUR 452 456
----------- ----------- ---------- ---------- --------------------------------------
Completed acquisition of NovelCath in
Cirtec Medical Earnings USD 374 379 December 2020
----------- ----------- ---------- ---------- --------------------------------------
Royal Sanders Earnings EUR 294 349
----------- ----------- ---------- ---------- --------------------------------------
Tato Earnings GBP 247 308
----------- ----------- ---------- ---------- --------------------------------------
Evernex Earnings EUR 296 292
----------- ----------- ---------- ---------- --------------------------------------
Hans Anders Earnings EUR 272 270
----------- ----------- ---------- ---------- --------------------------------------
WP Earnings EUR 260 267
----------- ----------- ---------- ---------- --------------------------------------
Completed acquisition of Laudavie in
Havea Earnings EUR 253 247 November 2020
----------- ----------- ---------- ---------- --------------------------------------
The 10 investments in the table above comprise 78% (30 September
2020: 78%) of the total Proprietary Capital portfolio value of
GBP10,048 million (30 September 2020: GBP9,578 million).
Total return and NAV position
We recognised a net GBP156 million loss on foreign exchange in
the quarter, as both the euro and US dollar weakened against
sterling. As at 31 December 2020, 69% of the Group's net assets
were in euro and 14% were in US dollar. Based on that, a 1%
movement in the euro and US dollar would result in a total return
movement of GBP62 million and GBP13 million respectively, net of
any hedging. The diluted NAV per share increased to 936 pence (30
September 2020: 905 pence) or 918.5 pence after deducting the 17.5
pence per share first FY2021 dividend, which was paid on 13 January
2021.
Balance sheet
At 31 December 2020, gross debt was GBP975 million (30 September
2020: GBP975 million), net debt was GBP559 million and gearing
6.2%. The first FY2021 dividend of GBP169 million (or 17.5 pence
per share) was paid on 13 January 2021. At the end of December
2020, we increased our RCF from GBP400 million to GBP500 million
and extended its maturity to 2026. The RCF is undrawn and, together
with cash of GBP416 million, provided liquidity of GBP916 million
at 31 December 2020.
- ENDS -
Notes
1. Balance sheet values are stated net of foreign exchange translation. Where applicable, the
GBP equivalents at 31 December 2020 in this update have been calculated at a currency exchange
rate of EUR1.1171: GBP1 and $1.3669: GBP1 respectively.
2. At 31 December 2020 3i had 966 million diluted shares.
3. Action was valued using a post discount run-rate EBITDA multiple of 18.0x based on its run-rate
earnings to
3 January 2021.
For further information, please contact:
Silvia Santoro
Group Investor Relations Director
Tel: 020 7975 3258
Kathryn van der Kroft
Communications Director
Tel: 020 7975 3021
About 3i Group
3i is a leading international investment manager focused on
mid-market Private Equity and Infrastructure. Our core investment
markets are northern Europe and North America. For further
information, please visit: www.3i.com .
All statements in this performance update relate to the three
month period ended 31 December 2020 unless otherwise stated. The
financial information is unaudited and is presented on 3i's
non-GAAP Investment basis in order to provide users with the most
appropriate description of the drivers of 3i's performance. Net
asset value ("NAV") and total return are the same on the Investment
basis and on an IFRS basis. Details of the differences between 3i's
consolidated financial statements prepared on an IFRS basis and
under the Investment basis are provided in the 2020 Annual report
and accounts. There have been no material changes to the financial
position of 3i from the end of this quarter to the date of this
announcement.
This information is provided by RNS, the news service of the
London Stock Exchange. RNS is approved by the Financial Conduct
Authority to act as a Primary Information Provider in the United
Kingdom. Terms and conditions relating to the use and distribution
of this information may apply. For further information, please
contact rns@lseg.com or visit www.rns.com.
RNS may use your IP address to confirm compliance with the terms
and conditions, to analyse how you engage with the information
contained in this communication, and to share such analysis on an
anonymised basis with others as part of our commercial services.
For further information about how RNS and the London Stock Exchange
use the personal data you provide us, please see our Privacy
Policy.
END
TSTFLFIALVIDFIL
(END) Dow Jones Newswires
January 28, 2021 02:00 ET (07:00 GMT)
3i (LSE:III)
Gráfica de Acción Histórica
De Mar 2024 a Abr 2024
3i (LSE:III)
Gráfica de Acción Histórica
De Abr 2023 a Abr 2024
