Interim Results. 23 November 2000

Transcription

1 Interim Results 23 November 2000

2 Brian Larcombe Operating Review

3 Highlights % Return on opening shareholders funds Total Return 1.0bn MSCI Pan Euro Index Return on opening shareholders funds 20% FTSE 100 Index TechMARK 100 Index Interim Dividend 4.9p + 6.5% i Investment 0.9bn + 70%

4 Economy and quoted markets Economy! Conflicting views! UK and continental European Barometers " lower business confidence " companies more optimistic about own prospects Quoted markets! Main indices " negative returns! Technology markets " volatile in period " falls since 30 September

5 Venture capital markets! Global private equity survey Funds raised US $bn Investment! Move to early stage investment 50! New entrants Source: 3i Global Private Equity Review 2000

6 UK Objective: maintain leadership Total invested year Total invested six months m No of investments No ! Investment " 511m + 56% " 239 investments! 12 IPOs Year to 31 March Includes unquoted funds 30-Sep Sep-00-50

7 Continental Europe Objective: 20% of portfolio! Growth by acquisitions and organic Total invested year Total invested six months No of investments m No ! Investment " 352m + 79% " 185 investments ! 21% of portfolio Year to 31 March 30-Sep Sep-00 Includes unquoted funds

8 Technology investment Objective: 30% + of portfolio Total invested year Total invested six months No of investments m No ! Investment " 559m + 113% " 313 investments ! 49% of portfolio ! 24 IPOs Year to 31 March 30-Sep Sep-00 0 Includes unquoted funds

9 International development Objective: Develop significant businesses in USA and Asia Pacific USA! Leading venture capital market! 3i exceeding targets! Co-investing with toptier US venture capital firms Asia Pacific! Continued development in Singapore " Focus on fast growth companies! Japanese restructuring " Buy-out opportunities! Global network benefits

10 Funds under management Objective: Build unquoted funds in line with investment assets Unquoted funds under management Quoted funds under management bn bn As at 31 March Sep As at 31 March Sep-00

11 Acquisitions update! Technologieholding " Successful integration! SFK Finance " Leading Finnish venture capital firm " Re-branded as 3i Finland! Bank Austria TFV " Austrian specialist high tech venture capital investor " Re-branded as 3i Austria

12 Michael Queen Financial Review

13 Financial highlights Total Return 1.0bn Return on opening shareholders funds 20% Unrealised value growth 712m Net realised profits 302m + 421% Revenue profit after tax 69m -1% Net asset value 1011p + 19% Investment 902m + 70% Interim dividend 4.9p + 6.5%

14 Total return Return by sector m Technology 1,102 investments Other investments (62) Return by region m UK 909 Continental 174 Europe Rest of World (56) Foreign Exchange 13 1,040 1,040

15 Total return Revenue profit after tax Capital Profits " Realised capital profits " Unrealised value growth Other Total return m m 69 1,014 (43) 1,040

16 Revenue profit Income from investments Fees received Net treasury interest payable Costs Profit before tax Tax Profit after tax Period ended 30 September m m (37) (39) (42) (52) (2) (2) 70 69

17 Capital profits m Realised capital profits Unrealised value growth

18 Unrealised value growth m Quoted portfolio IPOs & takeovers Unquoted equity Joint ventures & other Loans & prefs

19 Investment assets 5% 22% 25% 6.9bn 21% 19% 8% Quoted technology equity Unquoted technology equity Technology loans & prefs Quoted non-technology equity Unquoted non-technology equity Non-technology loans & prefs

20 Valuations: Quoted tech market impact TECHMARK ALL-SHARE NEUER MARKT APR MAY JUN JUL AUG SEP OCT NOV Source: DATASTREAM

21 Equity realisations m Sales proceeds Profit over cost Profit over opening value 400% % % % Six months to 30 September

22 Strong record of realisations % Uplift over valuation on sale of equity investments Year to 31 March 30-Sep Sep-00

23 Investment m i Third party unquoted funds Six months to 30 September

24 Investment - net cash flow m UK Continental Other Europe International 3i Group Excludes unquoted funds

25 Balance sheet m Shareholders' funds m Investment assets Net borrowings Other net assets 5, % 6,197 6, % 7,153 1,167 1, Mar Sep Mar Sep-00

26 Comparative return After 5 Years 23.6% After 7 Years 15.9% 15.3% 14.9% 14.7% 14.2% 24.8% After 10 Years 13.2% 16.4% 20.6% 3i FTSE 100 FTSE AllShare FTSE SmallCap

27 Dividends per share Pence Interim Final Sep-00

28 Financial highlights! Strong total return! Good growth in quoted technology investments! Strong realised profits! Strong balance sheet to fund future growth

29 Brian Larcombe Strategic Update

30 International growth update Good progress 50% of offices outside UK 50% of investment staff outside UK 50% of new investment outside UK 50% of investment assets outside UK 2000

31 International growth update Good progress 50% of offices outside UK 50% of investment staff outside UK 50% of new investment outside UK 50% of investment assets outside UK 2000

32 International growth update Good progress 50% of offices outside UK 50% of investment staff outside UK 50% of new investment outside UK 50% of investment assets outside UK 2000

33 International growth update Good progress 50% of offices outside UK 50% of investment staff outside UK 50% of new investment outside UK 50% of investment assets outside UK

34 International growth update Good progress 50% of offices outside UK 50% of investment staff outside UK 50% of new investment outside UK 50% of investment assets outside UK

35 International network across 3 continents Operating from 12 countries Europe USA Asia Pacific Aberdeen, Amsterdam, Barcelona, Berlin, Birmingham, Bologna, Boston, Bristol, Cambridge, Dusseldorf, Edinburgh, Frankfurt, Glasgow, Hamburg, Helsinki, Leeds, Leipzig, Liverpool, London, Lyon, Madrid, Manchester. Milan, Munich, Nantes, Newcastle, Nottingham, Padua, Palo Alto, Paris, Reading, Singapore, Stuttgart, Tokyo, Vienna, Watford, Zurich

36 Strategic objectives! To achieve a leading position in each of the major venture capital markets " Europe " USA # UK - maintain leading market position # Continent - build to 30% + of portfolio by 2006 # Build to 10% + of portfolio by 2006 " Asia Pacific # Build to 5% + of portfolio by 2006

37 Key messages! Strong financial results! Continue to grow business! Clear strategic focus

38 Moving to the stock markets, we have seen a sharp correction in the technology sector over the last two months and, as we all know, significant mark downs earlier this week. A correction in the markets is not something new to 3i and it will take away some of the excesses we were seeing in our market at the start of the year. In this respect, the correction is a healthy change for us. It will not dampen our enthusiasm for investing in technology companies because these will continue to provide the highest growth potential. That has not changed. And neither will our general approach to investment where we look to back strong management teams and a clear business strategy.

39 Moving to the stock markets, we have seen a sharp correction in the technology sector over the last two months and, as we all know, significant mark downs earlier this week. A correction in the markets is not something new to 3i and it will take away some of the excesses we were seeing in our market at the start of the year. In this respect, the correction is a healthy change for us. It will not dampen our enthusiasm for investing in technology companies because these will continue to provide the highest growth potential. That has not changed. And neither will our general approach to investment where we look to back strong management teams and a clear business strategy. 25 May 2000

40 Investor relations website 3i

41 3i Group plc is an authorised institution under the Banking Act 1987 and is regulated in the conduct of investment business by the FSA 23 November 2000