HCI Capital AG Annual Report 2010 Dr. Andreas Pres, CFO 28 March 2011
Agenda Summary Market Environment & Distribution Financial Results Outlook 2
Summary Global economy regained momentum in 2010 stronger than expected Nevertheless, closed-end funds market keeps on suffering from negative effects subsequent to financial market crisis all in all the market has not yet recovered Investments of EUR 127.2 million in HCI funds in 2010 including ship funds reinvestments of EUR 47.1 million ship funds remain HCI s strongest product segment Financial year 2010 with positive result, financial ratios significantly improved - major steps implementing the restructuring agreement were conducted: Consolidated result after tax amounts to EUR 5.0 million Increase in consolidated equity to EUR 46.1 million raising equity ratio to 43.4 % Decrease in contingent liabilities by EUR 1.6 billion to EUR 43 million Improvement of placement result and an at least balanced consolidated net result expected for 2011 3
Agenda Summary Market Environment & Distribution Financial Results Outlook 4
Global economic growth rates rebound 2010 figures much better than expected Annual growth rates of global production and trade (2007-2012) 12 % 8 % 4 % 5.3 % 7.4 % 2.8 % 2.9 % 5.0 % 12.0 % 7.1 % 6.8 % 4.4 % 4.5 % 0 % - 4 % - 8 % - 12 % - 0.6 % - 10.7 % 2007 2008 2009 Forecast 2010 2011 2012 Global production Global trade Source: IMF World Economic Outlook Database - October 2010, World Economic Outlook Update January 2011 5
Container ship fleet regains momentum significant decrease of ships lying idle Number of ships 600 500 400 300 200 Size (TEU) 7,500 + 5,000 7,499 3,000 4,999 2,000 2,999 1,000 1,999 500-999 100 0 J F M A M J J A S O N D J F M A M J J A S O N D J F 2009 2010 2011 Source: Alphaliner February 2011 6
and correspondingly substantial increase of charter rates since end of 2009 50 in USD thousand 40 30 20 10 97 99 01 03 05 07 09 11 2,500 TEU (cranes) 3,500 TEU (without cranes) 2,750 TEU (without cranes) 4,400 TEU (without cranes) Source: Clarkson Research Services Ltd.: Shipping Intelligence Network, January 2011; charter rates for container ships 6 12 months 7
Bulker and tanker markets remain volatile Baltic Dry Index (BDI) 12,000 10,000 8,000 6,000 4,000 2,000 0 2006 2007 2008 2009 2010 2011 Baltic Dirty Tanker Index (BDTI) 2,500 2,000 1,500 1,000 500 0 2006 2007 2008 2009 2010 2011 Bulker markets under pressure due to natural catastrophe (Australia), insolvency of Korea Lines and large order book Tanker markets volatile due to political developments in North Africa and large order book 8
Development of equity capital placed in the closed-end funds market 2006-2010 12 10 8 9.78 Invested equity capital in EUR billion 10.38 8.32 6 4 5.14 5.84 0.29 0.62 4.93 2 0 2006 2007 2008 2009 2010 New placements (retail) Institutional investors Capital increases and reinvestments in existing funds Source: VGF Branchenzahlen Geschlossene Fonds 2009, 2010 9
German real estate funds dominated the total placement result in 2010 2,466.0 2,347.3 1,352.9 723.1 International Germany 996.3 1,113.1 1,624.2 428.4 607.1 547.2 832.2 742.7 285.6 Capital increases / reinvestments in existing funds 710.7 New placements Real Estate Aircraft Energy Ship 2009 2010 2009 2010 2009 2010 2009 2010 Source: VGF Branchenzahlen Geschlossene Fonds 2010; equity capital placed in EUR million (closed-end funds sectors in total) 10
HCI Group placement volumes per segment as at 31 December 2010 (in EUR million) Total 80.0 132.7 47,1 47.2 127.2 125.8 6.9-4.1 % - 36.4 % Transport & 88.2 6.9 95.1 + 25.8 % Logistics 1) 72.5 47.1 119.6-17.8 % 1.1 Real Estate 2) 1.6 45.5 % 12.5 Life Insurance - 90.4 % 1.2 Energy & 24.0-80.0 % Commodities 3) 4.8 Thereof Structured 20.5-85.0 % Products 4) 3.1 2009 2010 Re-investments in existing funds Investments by ship managers amounting to 24.4 EUR million (2010) and respectively 2.4 EUR million (2009) 1) Ship and Aircraft 2) incl. EUR 0,1 million re-investments in 2010 3) HCI Deepsea Oil Explorer (2009), HCI Energy 1 Solar (2009), HCI Energy 2 Solar (2010) 4) Guarantee products and certificates 11
Diversification of distribution channels * as at 31 December 2010 Big banks / private banks 2.4 % (6.7 %) Savings banks 4.9 % (20.3 %) Pools 2.6% (6.8 %) Co-operative banks 13.7 % (13.0 %) IFA 76.4 % (53.2 %) * Allocation of equity capital placed in 2010 in percent (figures 2009 in brackets), without HSC investments and equity capital invested by ship managers 12
Agenda Summary Market Environment & Distribution Financial Results Outlook 13
Consolidated P&L Financial year 2010 (in EUR million) Revenues Other Bestands- Change oper. verände- in inventories income rungen Cost of purchased services EBIT Financial result EBT Taxes Net income 36.8 Personnel expenses Depr.** Other. oper. exp. 3.7-0.1-5.7 Hammonia Reederei Ordering companies Teilankaufskonzept KG efonds 5.3 9.3 21.8 0.4-20,5-20.5-0.9 Results of joint ventures and associated companies at equity: 7.9 10.5 0.2-2.8 0-1.8 6.2 4.4 0.6 5.0-23.0 45.5* Asset Management Sales and Design *) previous year s figures **) Depreciation, amortization and impairment of property, plant and equipment and intangible assets -24.3* -51.3* After Sales Services -55.8* Others 14
Operational result and one-off effects Financial year 2010 (in EUR million) Compensation claim of banks for the release from contingent liabilities (net present value) -8.5 CALL option HAMMONIA Adjusted operational result 0.6 Revaluation HAMMONIA 3.3 6.3-1.7 Depreciation efonds Operating result of affiliated companies / joint ventures Legal & consulting expenses related to restructuring -3.9 Bank fee -2.6-3.8 Other neutralized items EBIT -1.8 23.5 Profit from debt equity swap -6.6-3.4 Other neutralized items Residual financial result 1.2 0.6 4.4 5.0 EBT Taxes Consolidated net result Operational result Financial result 15
Segment Report 2010 vs. 2009 EBIT by segment in EUR million Design & Sales After Sales Services Asset Management Segments total Other / Holding HCI Group 20 10 10.8 10.2 13.7 10.3 0-6.6* ) -1.8 10-16.9-13.6-12.6-11.7-12.1 20-24.3* ) 30 2009 2010 *) Adjustment of 2,9 million EUR in FY09 due to reclassification of fees relating to life insurance funds (previously shown among financial result) 16
Consolidated cash flow 01 January 2010 31 December 2010 (in EUR million) Losses (+) / gains (-) from associated companies 5.0-7.9 Cash flow from operating activities Cash and cash equivalents as at 31 December 2010 18.3 EUR million Net changes in cash and cash equivalents Consolidated net income for the period -0.2-0.9-4.0 Cash flows from investing activities 0.6-5.6 Others Increase (-) in working capital -2.2 Cash flows from financing activities -55.8* 14.9* 42.3* 1.0* 2.4* -6.6* -1.6* -5.8* *) previous year s figures (2009) 17
Consolidated balance sheet as at 31 December 2010 (in EUR million) Assets Equity and Liabilities 31 December 2009 31 December 2010 Equity Ratio 31 December 2009 35 9 39 2 1 Intangible Assets 1 Property, plant and equipment 1 3 Financial assets Other non-current financial assets Receivables and other current assets Inventory and other assets 43 33 23 Cash and cash equivalents 18 0 Deferred taxes 1 2 7 46 5 48 4 43.4 % 29.4 % Equity 3 4 112 106 106 112 Debt Provisions Other payables Deferred taxes 2 33 36 37 18
Contingencies and other financial commitments as at 31 December 2010 31 December 2010 31 December 2009 EUR million EUR million USD million EUR million EUR million USD million Guarantees 30 23 9 1,122 314 1,158 Placement Guarantees 13 0 17 497 224 392 Acquisition commitments 0 0 0 36 7 44 Total 43 1,655 Add. Contingencies 172 IV HGB amounts to 21-40 million EUR Rate of exchange as at 31 December 2010: EUR / USD 1.338 19
Agenda Summary Market Environment & Distribution Financial Results Outlook 20
Outlook 2011 Conclusion of HCI Group s financial restructuring strengthens HCI s rating, stimulates existing and new business relationships and provides financial flexibility for the initiation of new products New products in 2011 mainly focused on ships and real estate; new products ahead: Ship funds, especially container ships, are expected to regain attractiveness for investors first new container ship fund HCI JPO Leo scheduled for the second quarter 2011 Broadening of real estate product offering planned, starting with HCI Berlin Airport Center in April 2011 Outlook on business results for 2011: Clear increase in new placement volume compared to 2010 An at least balanced consolidated net result 21
Thank you for your attention 22
Disclaimer The information contained in this document has not been independently verified and no representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. This document contains various forward looking statements which reflect management s current views with respect to certain future events and financial performance. A number of factors could cause actual results to differ materially from those projected or implied in such statements. This document does not constitute, or form part of, an offer or invitation to purchase any shares and neither it nor part of it shall form the basis of, or be relied upon in connection with, any contract or commitment whatsoever. This material is given in conjunction with an oral presentation and should not be taken out of context. By receiving this document, each investor is deemed to represent that (i) if in the United Kingdom, it is a person who has professional experience in matters relating to investments falling within Article 19 of the Financial Services and Markets Act 2000 (Financial Promotion) Order 2005 and (ii) if falling outside the United Kingdom, it is a sophisticated investor and possesses sufficient professional investment expertise to understand the risks involved in the offering. HCI Capital AG Burchardstraße 8 D-20095 Hamburg www.hci-capital.de hci@hci-capital.de 23