RNS Number : 1974B
European Capital Limited
12 August 2008
European Capital Limited
First Floor, Dorey Court, Admiral Park
St. Peter Port, Guernsey GY1 6HJ
FOR IMMEDIATE RELEASE
12 August 2008
CONTACT:
John Erickson, Dir., European Capital Financial Services (Guernsey) Limited: +1 (301) 951-6122
Tom McHale, Dir., European Capital Financial Services Limited: +1 (301) 951-6122
Justin Cressall, Equity Capital Markets, European Capital Financial Services Limited: +1 (301) 951-6122
EUROPEAN CAPITAL DECLARES EUR0.16 Q3 2008 DIVIDEND, REPORTS EUR0.14 NOI AND REALISED EARNINGS IN Q2 2008
St. Peter Port, Guernsey - 12 August 2008 - European Capital Limited (LSE: ECAS) ("European Capital") announced today its third quarter
2008 dividend and its results for the second quarter of 2008.
THIRD QUARTER 2008 DIVIDEND DECLARATION
European Capital's Board of Directors has declared a third quarter 2008 dividend of EUR0.16 per share to record holders as of 26 September
2008, payable on 24 October 2008. This is a 23% increase over the third quarter 2007 dividend of EUR0.13 per share and is in line with the
dividend guidance announced at the time of its results announcement for 2007. European Capital has now paid or declared a total of EUR89.5
million in dividends since its May 2007 initial public offering ("IPO").
2008 DIVIDEND GUIDANCE
European Capital reiterates its 2008 dividend forecast of EUR0.62 per share, a 68% growth over post-IPO 2007 dividends of EUR0.37 per share.
The fourth quarter 2008 dividend per share is forecast to be EUR0.16 per share, a 14% increase over Q4 2007.
SHARE REPURCHASE PROGRAMME
Under the EUR30 million share repurchase programme European Capital purchased 1.6 million shares for a total of EUR9 million which are held
as treasury shares.
SECOND QUARTER 2008 RESULTS
Net Operating Income (NOI)
European Capital also announced today its results for the second quarter of 2008. NOI for the quarter decreased 22% to EUR0.14 per share,
compared to EUR0.18 per share for the second quarter of 2007.
Realised Earnings
Earnings less appreciation and depreciation ("Realised Earnings") decreased 33% to EUR0.14 per share for the second quarter of 2008,
compared to EUR0.21 per share for the second quarter of 2007. Realised Earnings return on equity at cost for the twelve months to the second
quarter of 2008 was 10%. Realised Earnings year to date to June 2008 of EUR0.46 covered 153% of the EUR0.30 per share dividend for the year
to date to June 2008.
Earnings
European Capital's Earnings for the second quarter of 2008 was a loss of EUR0.04 per share, a decrease of EUR0.31 per share from the second
quarter of 2007 Earnings of EUR0.27 per share. This loss was due primarily to EUR21 million of unrealised depreciation during the second
quarter of 2008. Earnings return on equity for the twelve months to the second quarter of 2008 was (16)%.
European Capital's net asset value ("NAV") per share at 30 June 2008 was EUR7.87, a decrease of EUR1.80 or 19% lower than the 31
December 2007 NAV per share of EUR9.67.
"With a EUR1.9 billion portfolio of 72 outstanding companies, European Capital has built an impressive and diversified portfolio which
produces excellent performance in good times and can expand individual market share in troubled times," said Malon Wilkus, Chairman of the
Board. "Our experienced investment and operations teams have done a great job of selecting investments and assisting portfolio companies in
a great variety of operational improvements. As a result, the portfolio produces excellent income and we expect significant gains in the
future."
For the second quarter of 2008, net appreciation, depreciation, gains and losses totalled EUR(20) million, consisting of EUR(19) million
of net depreciation, compared to EUR9 million of net appreciation, depreciation, gains and losses for the second quarter of 2007. The
primary components of the EUR(19) million of net depreciation for the quarter were as follows:
* EUR(11) million of net depreciation associated with the Private Finance portfolio due
primarily to a decline of the trading multiples of comparable public companies;
* EUR(7) million of net depreciation associated with SFAS 157 Market Yield Analysis,
due primarily to the widening of investment spreads;
* EUR2 million of net appreciation from foreign currency translation; and
* EUR(3) million of net depreciation on derivatives.
"Although we invested EUR152 million in six transactions this quarter, we are being very selective as evidenced by our closing ratio
declining from our 5% historical average to about 4% during the second quarter," said Ira Wagner, President of European Capital Financial
Services Limited ("ECFS"). "In addition to macroeconomic conditions softening, the liquidity crisis is also causing the volume of leveraged
buyouts in the market to decline and although we have achieved excellent market coverage in our target markets, we intend to be extremely
selective over the next few quarters."
As of 30 June 2008, loans with a fair value of EUR13 million were on non-accrual. The EUR13 million fair value of non-accruing loans
represented 0.8% of total loans at fair value as of 30 June 2008, compared to no non-accrual loans at fair value as of 31 December 2007.
"We are pleased with the credit quality of our portfolio," stated John Erickson, Director of European Capital Financial Services
(Guernsey) Limited. "Our non-accrual loans were less than 1% of total loans at fair value as at 30 June 2008. Also the average debt to
EBITDA of the portfolio had declined to 6.1x, which is in line with current market leverage levels. We have a highly diversified portfolio
that will continue to perform well even if the economy falters."
Since inception, European Capital has earned a 15% compounded annual return, including interest, dividends, fees and net gains, on 31
realisations of senior debt, subordinated debt and equity investments, totalling EUR1.2 billion of committed capital. These realisations
represent 36% of all amounts invested by European Capital since inception.
THIRD PARTY VALUATION OF PORTFOLIO INVESTMENTS
European Capital's Board of Directors is ultimately responsible for determining the fair value of European Capital's portfolio investments
on a quarterly basis in good faith. In that regard, the Board retains independent third party valuation firms to assist it by having the
third party valuation firms regularly perform certain procedures that the Board identifies and requests the respective third party firms to
perform on a predetermined selection of the Board's fair value determinations ("Procedures"). The Board of Directors may also obtain
valuation assistance from such firms on other portfolio investments. Representatives from the valuation firms also attend European Capital's
quarterly valuation meetings and provide their respective quarterly reports to the Audit Committee of the Board of Directors. Each quarter,
the third party valuation firms will perform Procedures on European Capital's determination of the fair value of all portfolio company
investments that have been both portfolio companies for at least one year and that have a fair value in excess of EUR10 million, in accordance with European Capital's valuation procedures.
European Capital's Board of Directors engaged two valuation firms, Houlihan Lokey Howard & Zukin Financial Advisors Inc. ("Houlihan
Lokey") and Duff & Phelps, LLC ("Duff & Phelps") to perform Procedures on European Capital's fair value determination for the second quarter
of 2008. Houlihan Lokey and Duff & Phelps are both leading international valuation firms. For the quarter ended 30 June 2008, Houlihan Lokey
performed its Procedures on 7 portfolio company investments, with a fair value of EUR345 million. The value is approximately 18% of the fair
value of European Capital's total investments as of 30 June 2008. Duff & Phelps performed its Procedures on valuations on an additional 23
portfolio company investments, with a fair value of EUR739 million as of the period end. This value is approximately 38% of the fair value
of European Capital's total investments as at 30 June 2008. For the last four quarters, third party valuation firms performed Procedures on
an aggregate of 92 portfolio company investments totalling EUR3.2 billion in fair value as of their respective valuation dates, in accordance with European Capital's valuation
procedures. For those portfolio company investments on which each valuation firm has performed Procedures during each applicable period,
using the scope of review set forth by European Capital's Board of Directors and in accordance with European Capital's valuation procedures,
the Board of Directors has made a fair value determination for such investments that is within each valuation firm's aggregate range of fair
value for the investments. Additionally, in connection with its review, Duff & Phelps also concluded that the aggregate range of fair value
determined by the Board of Directors for the investments that it performed Procedures was not unreasonable.
Financial highlights for the quarter are as follows:
EUROPEAN CAPITAL
LIMITED
CONSOLIDATED BALANCE
SHEETS
As at 30 June 2008, 31 December 2007 and 30
June 2007
(in
thousands)
30 June 2008 31 December 2007 30 June 2008 30 June 2007 30 June
2008
(unaudited) Versus (unaudited) Versus
31 December 2007 30 June
2007
EUR EUR EUR % EUR EUR
%
Assets
Investments at fair value
(cost basis of EUR2,221,531, EUR1,942,928 EUR1,925,696 EUR17,232 1% EUR1,607,020 EUR335,908
21%
EUR1,968,468 and EUR1,587,174,
respectively)
Cash and cash equivalents 6,993 2,575 4,418 172% 7,349 (356)
-5%
Restricted cash 57,810 30,214 27,596 91% 67,938 (10,128)
-15%
Other 26,412 9,558 16,854 176% 11,163 15,249
137%
Total assets EUR2,034,143 EUR1,968,043 EUR66,100 3% EUR1,693,470 EUR340,673
20%
Liabilities and Shareholders'
Equity
Debt (maturing within one year
EUR609,595, EUR793,237 and EUR1,169,432 EUR896,157 EUR273,275 30% EUR606,774 EUR562,658
93%
EUR2,196, respectively)
Due to European Capital
Financial Services (Guernsey) 5,607 718 4,889 681% 5,352 255
5%
Limited
Accrued dividends payable 16,022 15,171 851 6% 10,836 5,186
48%
Other 2,795 8,377 (5,582) -67% 6,648 (3,853)
-58%
Total liabilities 1,193,856 920,423 273,433 30% 629,610 564,246
90%
Commitments and contingencies
Shareholders' equity:
Ordinary shares (nil par
value, authorised) to issue
unlimited number of shares
108,364 and 106,813, 108,364
and 108,364 outstanding, - 1,030,888 (1,030,888) -100% 1,030,371 (1,030,371)
-100%
respectively)
Other reserve 1,021,519 - 1,021,519 NM - 1,021,519
NM
Undistributed net realised 54,594 37,235 17,359 47% 14,542 40,052
275%
earnings
Net unrealised foreign
currency (depreciation) (58,102) (28,391) (29,711) 105% 1,456 (59,558)
NM
appreciation
Net unrealised
(depreciation) (177,724) 7,888 (185,612) NM 17,491 (195,215)
NM
appreciationof investments
Total shareholders' equity 840,287 1,047,620 (207,333) -20% 1,063,860 (223,573)
-21%
Total liabilities and EUR2,034,143 EUR1,968,043 EUR66,100 3% EUR1,693,470 EUR340,673
20%
shareholders'
equity
NM = Not Meaningful
EUROPEAN CAPITAL
LIMITED
CONSOLIDATED STATEMENTS OF
OPERATIONS
Three and Six Months Ended 30 June 2008 and
2007
(in thousands, except per share
data)
(unaudited)
Three Months Ended Three Months Ended Six Months Ended Six Months
Ended
30 June 2008 30 June 2007 30 June 2008 30 June 2008 30 June 2007 30 June 2008
Versus 2007 Versus 2007
EUR EUR EUR % EUR EUR EUR
%
OPERATING INCOME:
Interest and dividend income EUR46,607 EUR39,680 EUR6,927 17% EUR100,053 EUR73,962 EUR26,091
35%
Fee and other income 47 1,737 (1,690) -97% 368 5,027 (4,659)
-93%
Total operating 46,654 41,417 5,237 13% 100,421 78,989 21,432
27%
income
OPERATING EXPENSES:
Interest 18,963 8,264 10,699 129% 34,992 15,204 19,788
130%
Management fee and reimbursed
expenses 10,019 9,373 646 7% 19,440 20,739 (1,299)
-6%
Incentive fee - 5,115 (5,115) -100% - 5,115 (5,115)
-100%
General and administrative 2,266 1,831 435 24% 4,418 3,361 1,057
31%
Total operating 31,248 24,583 6,665 27% 58,850 44,419 14,431
32%
expenses
OPERATING INCOME BEFORE INCOME
TAXES 15,406 16,834 (1,428) -8% 41,571 34,570 7,001
20%
Provision for income taxes (89) (35) (54) 154% (170) (179) 9
5%
NET OPERATING INCOME 15,317 16,799 (1,482) -9% 41,401 34,391 7,010
20%
Net foreign currency gain 143 869 (726) -84% 8,721 3,155 5,566
176%
Net (loss) gain on investments (461) 2,321 (2,782) -120% (487) 2,321 (2,808)
-121%
TOTAL NET REALISED EARNINGS
14,999 19,989 (4,990) -25% 49,635 39,867 9,768
25%
Net foreign currency
appreciation (depreciation) 1,722 4,906 (3,184) -65% (29,711) 1,124 (30,835)
NM
Net (depreciation)
appreciation of investments (21,129) 840 (21,969) NM (185,612) 11,853 (197,465)
NM
(DECREASE) INCREASE IN NET
ASSETS RESULTING FROM
OPERATIONS ("EARNINGS")
EUR(4,408) EUR25,735 EUR(30,143) -117% EUR(165,688) EUR52,844 EUR(218,532)
-414%
NET OPERATING INCOME PER
SHARE:
Basic & Diluted EUR0.14 EUR0.18 EUR(0.04) -22% EUR0.38 EUR0.41 EUR(0.03)
-7%
NET REALISED EARNINGS PER
SHARE:
Basic & Diluted EUR0.14 EUR0.21 EUR(0.07) -33% EUR0.46 EUR0.47 EUR(0.01)
-2%
NET EARNINGS PER SHARE:
Basic & Diluted EUR(0.04) EUR0.27 EUR(0.31) -115% EUR(1.53) EUR0.62 EUR(2.15)
-347%
WEIGHTED AVERAGE NUMBER OF
SHARES OUTSTANDING:
Basic & Diluted 107,855 94,247 13,608 14% 108,109 84,677 23,432
28%
DIVIDENDS DECLARED PER SHARE EUR0.15 EUR0.10 EUR0.05 50% EUR0.30 EUR0.31 EUR(0.01)
-3%
NM = Not Meaningful
EUROPEAN CAPITAL
LIMITED
OTHER FINANCIAL
INFORMATION
Three Months Ended 30 June 2008, 31 March 2008 and 30 June
2007
(in thousands, except per share
data)
(unaudited)
Q2 Q1 Q2 2008 Versus Q2 Q2 2008 Versus
2008 2008 Q1 2008 2007 Q2 2007
EUR EUR EUR % EUR EUR %
New Investments:
Senior Debt EUR - EUR 1,035 EUR(1,035) -100% EUR 330,409 EUR(330,409) -100%
Subordinated Debt 152,115 164,037 (11,922) -7% 292,994 (140,879) -48%
Preferred Equity - 3,072 (3,072) -100% 74,879 (74,879) -100%
Common Equity - 115 (115) -100% 2,072 (2,072) -100%
CDO/CLO Investments - - - - 6,510 (6,510) -100%
Total EUR 152,115 EUR 168,259 EUR (16,144) -10% EUR 706,864 EUR (554,749) -78%
European Capital EUR - EUR - EUR - - EUR 420,636 EUR(420,636) -100%
Sponsored Buyouts
Financing for Sponsored 149,266 152,949 (3,683) -2% 194,719 (45,453) -23%
Buyouts
Add-on Financing for 2,849 14,000 (11,151) -80% 15,471 (12,622) -82%
Acquisitions
Add-on Financing for - 1,310 (1,310) -100% 69,528 (69,528) NM
Recapitalisations
CDO/CLO Investments - - - - 6,510 (6,510) -100%
Total EUR 152,115 EUR 168,259 EUR (16,144) -10% EUR 706,864 EUR (554,749) -78%
Realisations:
Senior Loan Refinancings EUR - EUR - EUR - - EUR 214,032 EUR(214,032) -100%
Principal Prepayments 20,889 83,580 (62,691) -75% 85,634 (64,745) -76%
Payment of Accrued
Payment-in-kind Interest
and Dividends and Original
Issue Discount 1,920 6,503 (4,583) -70% 5,894 (3,974) -67%
Sale of Equity Investments 16 24,664 (24,648) -100% 2,322 (2,306) -99%
Total EUR 22,825 EUR 114,747 EUR (91,922) -80% EUR 307,882 EUR (285,057) -93%
Appreciation, Depreciation,
Gains and Losses:
Gross Gains EUR - EUR - EUR - - EUR2,321 EUR(2,321) -100%
Gross Losses (461) (26) (435) NM - (461) NM
Portfolio (Losses) Gains (461) (26) (435) NM 2,321 (2,782) -120%
Net Gains for Foreign
Currency Translation 143 8,576 (8,433) -98% 869 (726) -84%
Total Gains and Losses (318) 8,550 (8,868) -104% 3,190 (3,508) -110%
Gross Appreciation at 12, 8
and 6 Portfolio Companies 30,005 19,683 10,322 52% 13,491 16,514 122%
Gross Depreciation at 18, 42
and 2 Portfolio Companies (51,134) (184,166) 133,032 72% (12,651) (38,483) -304%
Current Portfolio Net
(Depreciation) Appreciation (21,129) (164,483) 143,354 87% 840 (21,969) NM
Net Appreciation
(Depreciation) 1,722 (31,432) 33,154 105% 4,906 (3,184) -65%
for Foreign Currency
Translation
Total (Depreciation) (19,407) (195,915) 176,508 90% 5,746 (25,153) -438%
Appreciation
Net Gains, Losses,
Appreciation EUR (19,725) EUR (187,365) EUR 167,640 89% EUR 8,936 EUR (28,661) -321%
and Depreciation
Other Financial Data:
Net Asset Value per Share EUR 7.87 EUR 8.03 EUR (0.16) -2% EUR 9.82 EUR (1.95) -20%
Financial Liabilities at EUR 1,169,432 EUR 948,582 EUR 220,850 23% EUR 606,774 EUR 562,658 93%
Cost
Financial Liabilities at EUR 1,130,154 EUR 915,303 EUR 214,851 23% NA NA NA
Fair Value
Market Capitalisation EUR 661,171 EUR 653,435 EUR 7,736 1% EUR 1,146,491 EUR(485,320) -42%
Total Enterprise Value EUR 1,823,610 EUR 1,562,276 EUR 261,334 17% EUR 1,745,916 EUR77,694 4%
Credit Quality:
Weighted Average Effective
Interest Rate on Debt 11.6% 12.6% 12.0%
Investments
Loans on Non-Accrual at Cost EUR42,892 EUR 21,165 EUR21,727 103% EUR 20,000 EUR22,892 114%
Loans on Non-Accrual at Fair EUR 13,351 EUR 4,290 EUR 9,061 211% EUR 10,672 EUR 2,679 25%
Value
Past Due Loans at Cost EUR - EUR - EUR - - EUR - EUR - -
Past Due and Non-Accrual
Loans at Cost as a 2.4% 1.3% 1.6%
Percentage
of Total Loans
Past Due and Non-Accrual
Loans at Fair Value as a 0.8% 0.3% 0.9%
Percentage of Total Loans
Number of Portfolio
Companies 2 1 1
on Non- Accrual and Past Due
Return on Equity:
LTM Net Operating Income
Return on Average Equity at 9.0% 9.7% 9.5%
Cost
LTM Realised Earnings Return
on Average Equity at Cost 9.8% 10.8% 10.5%
LTM Earnings Return on -15.7% -12.8% 13.3%
Average Equity
Current Quarter Net
Operating
Income Return on Average
Equity at Cost Annualised 6.0% 10.1% 7.5%
Current Quarter Realised
EarningsReturn on Average
Equity at Cost Annualised
5.9% 13.4% 8.8%
Current Quarter Earnings
Return on Average Equity -2.1% -67.3% 11.3%
Annualised
Dividends:
Dividend Coverage (Realised
Earnings per Basic 1.07 x 2.13 x 2.10 x
Share/Dividend per Share)
Dividend Payout Ratio
(Dividend
per Share/Realised Earnings
per Basic Share) 0.93 x 0.47 x 0.48 x
LTM Dividend Coverage
(Realised Earnings per Basic
Share/Dividend per Share)
1.64 x NA NA
LTM Dividend Payout Ratio
(Dividend per Share/Realised
Earnings per Basic Share)
0.61 x NA NA
Dividends Declared EUR 16,022 EUR 15,171 EUR851 6% EUR 10,836 EUR5,186 48%
NM = Not Meaningful
NA = Not Applicable
The following table summarises the current GAAP cost and fair value of our investments as of 30 June 2008 and the amount that we
currently anticipate realising on settlement or maturity of these investments, or "Realisable Value":
Asset Class Cost Basis Fair Value Realisable Value Difference Between
Realisable Value and
Fair Value
(in thousands)
Private Finance EUR 2,196,182 EUR 1,925,070 EUR 2,020,829 EUR 95,759
Structured Products 24,165 13,161 24,165 11,004
Derivatives, net 1,184 4,697 4,697 -
Total EUR 2,221,531 EUR 1,942,928 EUR 2,049,691 EUR 106,763
USE OF NON-GAAP FINANCIAL INFORMATION
In addition to the results presented in accordance with GAAP, this press release includes realisable value, a non-GAAP financial measure
that management uses in its internal analysis of results, and believes may be informative to investors gauging the quality of the Company's
assets and financial performance from a long-term perspective, identifying trends in its results and providing meaningful period-to-period
comparisons. Realisable value is defined as the future value that European Capital currently anticipates realising on the settlement or
maturity of its investments. It does not represent current fair value or net present value. European Capital believes that this non-GAAP
financial measure provides information useful to investors because the Company generally intends to hold its assets to settlement or
maturity, and there may be material differences between the GAAP fair values of its investments and the amounts the Company expects to
realise on settlement or maturity. This is primarily because the current lack of liquidity in the financial markets has caused investment spreads between the cost of funds and investment income to widen
significantly on investments, resulting in current fair values under Statement of Financial Accounting Standards No. 157 that are materially
lower than what the Company currently anticipates realising on settlement or maturity. European Capital believes that providing investors
with realisable value in addition to the related GAAP fair value gives investors greater transparency to the information used by management
in its financial operational decision-making. Although European Capital believes that this non-GAAP financial measure enhances investors'
understanding of its business and performance, realisable value should not be considered as an alternative to GAAP basis financial measures.
A reconciliation of non-GAAP realisable value to GAAP fair value is set out above.
EUROPEAN CAPITAL LIMITED
STATIC POOL INFORMATION
Portfolio Statistics for Investments Made in Each of the Following Years
(in thousands)
Portfolio statistics (1) (10) 2005 2006 2007 2008 Aggregate
Internal Rate of Return - All 15.6% 7.7% 10.5% 13.7% 10.1%
Investments - Realisable Value
(2) (9)
Internal Rate of Return - All 15.6% 5.1% 3.8% 12.6% 6.4%
Investments (3) (9)
Internal Rate of Return - 29.1% 5.3% (7.9)% (69.5)% 2.9%
Equity Investments only (3)
(9) (11)
Original Investments and EUR 240,461 EUR 1,211,838 EUR 1,496,747 EUR 293,007 EUR 3,242,053
Commitments (9)
Total Exits and Prepayments of EUR 125,659 EUR 672,835 EUR 343,617 EUR 1,989 EUR 1,144,100
Original Investments (9)
Total Interest, Dividends and EUR 42,994 EUR 123,727 EUR 75,975 EUR 2,907 EUR 245,603
Fees Collected (9)
Total Net Gains on Investments EUR 202 EUR 3,666 EUR - EUR - EUR 3,868
Current Cost of Investments EUR 128,398 EUR 579,446 EUR 1,217,508 EUR 294,995 EUR 2,220,347
(12)
Current Fair Value of EUR 140,707 EUR 442,420 EUR 1,066,275 EUR 288,827 EUR 1,938,229
Investments (12)
Current Fair Value of 7.3% 22.8% 55.0% 14.9% 100.0%
Investments as a % of Total
Investments at Fair Value (12)
Net Appreciation EUR 12,323 EUR (91,023) EUR (92,732) EUR (1,805) EUR (173,237)
(Depreciation) (13)
Non-Accruing Loans at Cost EUR - EUR 42,892 EUR - EUR - EUR 42,892
Non-Accruing Loans at Fair EUR - EUR 13,351 EUR - EUR - EUR 13,351
Value
Equity Interest at Fair Value EUR 31,545 EUR 162,093 EUR 152,663 EUR 1,529 EUR 347,830
Debt to EBITDA (4) (5) 5.5 5.7 6.5 5.7 6.1
Interest Coverage (4) 2.6 2.7 2.7 2.3 2.6
Debt Service Coverage (4) 1.8 2.0 2.1 2.2 2.1
Average Age of Companies 130 89 43 32 58
Ownership Percentage 15.0% 34.5% 15.5% 0.1% 17.6%
Average Sales (6) EUR 295,485 EUR 486,928 EUR 291,613 EUR 163,415 EUR 318,478
Average EBITDA (7) EUR 49,957 EUR 76,468 EUR 48,465 EUR 28,235 EUR 52,127
Average EBITDA margin (7) 16.9% 15.7% 16.6% 17.3% 16.4%
Total Sales (6) EUR 1,532,277 EUR 13,383,529 EUR 18,125,335 EUR 1,482,269 EUR 34,523,410
Total EBITDA (7) EUR 333,157 EUR 2,276,649 EUR 2,721,112 EUR 259,262 EUR 5,590,180
% Senior Loans (8) -% 22.8% 31.5% -% 22.4%
% Loans with Lien (8) 100.0% 100.0% 100.0% 100.0% 100.0%
(1) Static pool classification is based on the year the initial investment was made. Subsequent add-on investments are included in
the static pool year of the original investment.
(2) Assumes investments are exited based on Realisable Value that is anticipated to be received upon settlement or maturity.
(3) Assumes investments are exited at current US GAAP fair value.
(4) These amounts do not include investments in which we own only equity.
(5) For portfolio companies with a nominal EBITDA amount, the portfolio company's maximum debt leverage is limited to 15 times
EBITDA.
(6) Sales of the most recent twelve months, or when appropriate, the forecasted twelve months.
(7) EBITDA of the most recent twelve months, or when appropriate, the forecasted twelve months.
(8) As a percentage of our total debt investments.
(9) Non euro-denominated amounts are retranslated at the exchange rate ruling at the date of original investment.
(10) Non euro-denominated balances, other than those referred to in (9), are retranslated at the exchange rate ruling at the balance
sheet date.
(11) Excludes equity investments that are the result of conversions of debt and warrants received with the issuance of debt.
(12) Excludes derivative instruments.
(13) Balance Sheet appreciation (depreciation) of investments excluding foreign exchange revaluation.
A summary of European Capital's dividend history post IPO and forecast follows. For more information, please visit our website at
www.EuropeanCapital.com or call our Investor Relations Department at +44 (0) 207 539 7100.
Year and Quarter Dividend % Change of Regular Total % Change of Total
Dividend Over Prior Dividend Over Prior
Year Year
Total 2007 to Q2 2008 EUR0.67
2008 EUR0.62 68% EUR0.62 68%
Q4 Forecast EUR0.16 14%
Q3 Declared EUR0.16 23%
Q2 EUR0.15 50%
Q1 EUR0.15 N/A
2007 EUR0.37 N/A EUR0.37 N/A
Q4 EUR0.14
Q3 EUR0.13
Q2 (IPO = 10 May 2007) EUR0.10
SHAREHOLDER CALL
European Capital invites shareholders, analysts and other interested persons to attend the European Capital Shareholder Call on
Wednesday 13 August at 14:30 BST (9:30 EST). Callers within the UK can dial +44 (0)800 62 66 06. Other callers from within Europe should
dial +44 (0)129 648 0100. Callers within the United States should dial +1 (866) 804 8688. The access code for callers is 107 754.
Point your browser to www.EuropeanCapital.com and click on the Q2 2008 Shareholder Call Slide Show button.
BEFORE THE CALL:
REVIEW SLIDE PRESENTATION IN ADVANCE OF THE SHAREHOLDER CALL
The quarterly shareholder presentation includes a slide presentation to accompany the call that participants may download and print prior to
the call. You may wish to take the time to review the slides in advance of the Shareholder Call.
DURING THE CALL:
VIEW STREAMING SLIDE PRESENTATION DURING THE SHAREHOLDER CALL
During the Shareholder Call you may watch and listen to the webcast or listen to the Shareholder Call by phone and step through the slides
at your own pace.
AFTER THE CALL:
LISTEN AND VIEW AUDIO SLIDE PRESENTATION AFTER THE CALL
The audio of the Shareholder Call combined with the slide presentation will be made available after the call on 13 August on our website
www.EuropeanCapital.com.
AUDIO ONLY PRESENTATION AVAILABLE AFTER THE SHAREHOLDER CALL:
There will be a phone recording available from 1:00 BST Thursday 14 August until 1:00 BST Wednesday 27 August. If you are interested in
hearing the recording of the presentation, please dial +44 (0)800 032 9687 or +44 (0)207 136 9233. The access code for callers is
66482260.
For further information or questions, please do not hesitate to call our Investor Relations Department at +44 (0)207 539 7100 or send an
email to IR@EuropeanCapital.com.
ABOUT EUROPEAN CAPITAL
European Capital is a publicly traded investment company for pan-European equity, mezzanine and senior debt investments with current
capital resources of approximately EUR2.4 billion ($3.8 billion). It is managed by European Capital Financial Services (Guernsey) Limited
("ECFSG"), a wholly-owned affiliate of American Capital, Ltd. ECFSG, together with its wholly owned subsidiary European Capital Financial
Services Ltd ("ECFS"), is referred to as the "Investment Manager". ECFS has offices in Paris, London, Frankfurt and Madrid. As of 30 June
2008 the Investment Manager had 41 investment professionals and 63 support staff.
European Capital invests in and sponsors management and employee buyouts, invests in private equity buyouts and provides capital
directly to private and public companies headquartered primarily in Europe. European Capital generally invests between EUR5 million and
EUR500 million per transaction in equity, mezzanine debt and senior debt to fund growth, acquisitions and recapitalisations.
The investment objective of European Capital is to provide investors with dividend income and the potential for share value appreciation
by investing in debt and equity investments in private and public companies headquartered primarily in Europe.
European Capital seeks to achieve this through pursuing the following types of investments:
European Capital One Stop Buyouts*
Through our One Stop Buyouts*, European Capital provides equity, mezzanine debt and senior debt as the lead investor in the buyout of
private and public companies.
Mezzanine Direct with Sponsors
European Capital provides one stop financing of subordinated debt and equity financing for buyouts sponsored by private equity firms
where European Capital is either the sole or lead mezzanine debt investor.
Syndicated Mezzanine and Senior Debt
European Capital provides mezzanine financing for buyouts sponsored by private equity firms where European Capital is neither the sole
nor lead mezzanine or senior debt investor.
Direct Investments
European Capital provides debt and equity financing directly to private and public companies, which is used for growth, acquisitions or
recapitalisations, and investing in structured finance vehicles.
Companies interested in learning more about European Capital's flexible financing should contact Jean Eichenlaub at + 33 (0)1 40 68 06
66 in Paris, Nathalie Faure Beaulieu at + 44 (0)20 7539 7000 in London, Robert von Finckenstein at +49 (0) 69 71 71 297-0 in Frankfurt, or
Luis Felipe Castellanos at +(34) 91 423 27 60 in Madrid, or visit the website at www.EuropeanCapital.com.
ABOUT AMERICAN CAPITAL
American Capital (Nasdaq: ACAS), with $20 billion in capital resources under management, is the only private equity fund and the largest
alternative asset management company in the S&P 500. American Capital, both directly and through its global asset management business,
originates, underwrites and manages investments in private equity, leveraged finance, real estate and structured products. American Capital
and its affiliates invest from $5 million to $800 million per company in North America and EUR5 million to EUR500 million per company in
Europe. American Capital was founded in 1986 and currently has 12 offices in the U.S. and Europe. For further information, please refer to
www.AmericanCapital.com
IMPORTANT DISCLOSURES
This document may contain "forward-looking statements". By their nature, forward-looking statements involve risk and uncertainty because
they relate to future events and circumstances. Many of these risks and uncertainties relate to factors beyond European Capital's control or
which cannot be estimated precisely. These factors include, but are not limited to, uncertainties associated with the timing of transaction
closings, changes in interest rates, availability of transactions, changes in regional, national or international economic conditions, and
changes in the conditions of the industries in which European Capital has made investments. Actual outcomes and results may therefore differ
materially from any outcomes or results expressed or implied by any such forward-looking statements.
Performance data quoted above represents past performance of European Capital. Past performance does not guarantee future results and
the investment return and principal value of an investment in European Capital will likely fluctuate. Consequently, an investor's shares,
when sold, may be worth more or less than their original cost. Additionally, European Capital's current performance may be lower or higher
than the performance data quoted above.
Nothing in this document is intended to be a profit forecast.
This information is provided by RNS
The company news service from the London Stock Exchange
END
IR QLLFFVVBEBBF
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