HCI Capital AG Semi-Annual Report 2010 Dr. Andreas Pres, CFO 18. August 2010
Agenda Summary Market Environment & Distribution Financial Results Outlook 2
Summary Overall economic development remains positive and better than expected over the first six months 2010 Closed-end funds market not yet on track with the overall economic recovery, only the segment of real estate funds with subtantial growth triggered by a strong demand for toprated single-tanant objects with long-term rental agreements HCI took major steps implementing the restructuring agreement Debt-to-equity swap converts liabilities of EUR 31.5 million into 5.4 million shares raising equity ratio to over 45 % and generating a profit of EUR 23 million Release from contingent liabilities of EUR 1.6 billion concluded and continued the positive trend on a half-year basis: Positive half-year result after tax: EUR 9.9 million (HY 2009: EUR -36.1 million) Liquid funds remain solid at EUR 19.5 million Investments of EUR 85.1 million in HCI funds in HY 2010 Strong progress in refunding ship funds: investors reinvest dividends amounting to EUR 33.4 million in current ship funds Placed equity in new funds came to EUR 51.7 million with ship funds remaining the strongest product segment 3
Agenda Summary Market Environment & Distribution Financial Results Outlook 4
World economic development with positive impulses Recovery of the world economy continued in the first half-year of 2010 Recovery comes faster than expected: in July 2010 IMF once again raised the estimates for growth in global production and trade to 4.6 % (April 2010: 4.2 %) and 9.0 % (April 2010: 7.0 %) respectively China`s economy remains the major driver with a growth rate in production with 11.1 % for HY 2010 Ship markets, esp. container ships, continued the turnaround in Q2 2010 437 ships reentered the business since January 2010 (as of August 2010) only 144 ships still lying idle representing 1.9 % of the global fleet Market balance for ships up to 3,000 TEU expected for 2011 / 2012 (ISL-study from March 2010) Parts of the middle segment (3,000 5,000 TEU) have already reached the balance with profitable charter rates 5
Closed end funds market showed an upward trend in Q2 2010 Invested Equity in EUR million 1,262.0 1,185.6 89.7 830.5 780.4 870.0 68.7 226.5 616.5 181.2 869.4 620.1 Q1 2009 Q2 2009 Q3 2009 Q4 2009 Q1 2010 Q2 2010 New placements (retail) Institutional investors Capital increases and reinvestments in existing funds Source: VGF Quartalszahlen Q2 2010; capital increases: Q1: ship funds, Q2: ship funds (72,9 Mio. EUR) and real estate funds (16,8 Mio. EUR) 6
Real estate funds are the driver of the increase in placed equity 1,263.9 572.5 International 860.4 691.4 Germany 600.2 260.2 169,5 175,3 111,7 121,6 139,5 225,2 141.6 83.6 Capital increases / reinvestments in existing funds New equity placements Immobilie Flugzeug Energie Schiff HY 2009 HY 2010 HY 2009 HY 2010 HY 2009 HY 2010 HY 2009 HY 2010 Source: VGF Quartalszahlen Q2 2010, invested equity in EUR million 7
Downturn of new closed-end funds issues approved by BaFin in Q1 and Q2 2010 (in EUR billion) Providers of closed-end funds have adopted to extended placement periods 1.80 1.50 1.25 1.07 Ship Aircraft Private-Equity New Energy Specialities Real Estate Q1 2009 Q4 2009 Q1 2010 Q2 2010 Source: Feri EuroRating Services AG 8
HCI Group placement volumes per segment as at 30 June 2010 (in EUR million) Total 51.7 33.4 73.1 85.1 + 16.4 % - 29.3 % Transport & Logistics 1) 49.9 + 59.3 % 46.1 33.4 79.5-7.6% 1.0 Real Estate 1.0 0 % 7.1 Life Insurance - 83.1 % 1.2 Energy & Commodities 2) 15.1-76.8 % 3.5 Thereof Structured 13.0-83.8 % Products 3) 3.0 HY 2009 HY 2010 Re-investments in closed-end ship funds 1) Ship and Aircraft 2) HCI Deepsea Oil Explorer (2009), HCI Energy 2 Solar (2010) 3) Guarantee products and certificates 9
Diversification of distribution channels as at 30 June 2010 Big banks / private banks 5.7 % (6.3 %) Savings banks 4.0 % (19.9 %) Pools 1.7% (7.3 %) Co-operative banks 17.2 % (7.6 %) IFA 71.5 % (58.9 %) Allocation of placed equity in HY 2010 in percent (figures HY 2009 in brackets), without HSC investments 10
Agenda Summary Market Environment & Distribution Financial Results Outlook 11
Consolidated P&L as at 30 June 2010 (in EUR million) Change in inventories Revenues Other oper. income Cost of purchased services 20.7 Personnel expenses Depr.** Other. oper. exp. 2.6 0.4 1.7 0.1-2.9-10.2 Results of associated companies at equity EBIT Financial result EBT Tax Net income 11.0-0.4 12.5 9.9 0.0 9.9 6.7-11.2-0.4-2.6 24.0* -10.7* -31.1* -36.1* Asset Management Design & Distribution After Sales Services Others *) previous year s HY figures **) Depreciation, amortisation and impairment of property, plant and equipment and intangible assets 12
Operational result and one-off effects in the HY 2010-result (in EUR million) Compensation claim of banks for the release from contingent liabilities (net present value) -8.6 2.7 adjusted operational result Other neutralized items* -2.6 Bank fee EBIT as at 30 June 2010-2.7-2.6 22.9 debt revaluation effect -1,8 residual financial result taxes 9.9 9.9 EBT as at 30 June 2010 consolidated net result as at 30 June 2010 Operational result Financial result *) (e.g. impairments, appreciation, restructuring expense) 13
Segment Report HY 2010 vs. HY 2009 EBIT by segment in EUR million Design & Sales After Sales Services Asset Management Segments total Other / Holding HCI Group 10 5 0 5-9.9-2.7 5.7 5.4 0.2 1.2-4.0 3.9-6.7-6.5-10.7-2.6 10 15 HY 2009 HY 2010 14
Consolidated cash flow as at 30 June 2010 (in EUR million) 9.9 0.4-9.5 Consolidated net income for the period Losses (+) / gains (-) from associated companies Others Increase (-) in working capital -3.0-2.2 Cash flow from operating activities Cash flows from investing activities 0.9 Cash and cash equivalents at end of 6M 19.5 EUR m -1.6-2.9 Cash flows from financing activities Net changes in cash and cash equivalents -36.1* 3.2* 31.3* 3.8* 2.2* -3.2* -5.6* -6.6* *) previous year s HY figures 15
Consolidated balance sheet as at 30 June 2010 (in EUR million) Assets Equity and Liabilities 31 December 2009 30 June 2010 Equity Ratio 31 December 2009 2 1 Intangible Assets Property, plant and equipment 35 35 Financial assets 2 1 44 39.7 % 29.4 % Equity 33 9 9 39 Other non-current financial assets Receivables and other current assets 42 13 Debt 36 5 Provisions 2 3 Inventory and other assets 45 2 Other payables 23 Cash and cash equivalents 19 0 Deferred taxes 1 4 Deferred taxes 4 112 111 111 112 37 16
Debt-to-equity swap: impact on consolidated balance sheet (in EUR million) Equity and liabilities as at 31 March 2010 Equity and liabilities as at 30 June 2010 before D / E-Swap after D / E-Swap *) 34 35 44 13 5 Equity Financial liabilities Provisions 51 6 5 Equity increase thereof direct effect: (5 Increase of subscribed capital) (2 Increase of capital reserve) 2 34 45 Other payables 45 4 109 Equity ratio : 31 % Defered taxes 4 4 111 111 Equity ratio : 40 % Equity ratio : 46 % 17
Debt-to-equity swap: impact on shareholder structure before D / E-Swap 24,000,000 Shares after D / E-Swap 29,354,116 Shares 37.23 % 40.80 % MPC Döhle HSH Nordbank Trustee Free Float 30.44 % 33.36 % 21.97 % 15.51 % 17.96 % 2.73 % 18
Contingencies and other financial commitments as at 30 June 2010 and after release of contingent liabilities After full release from contingent liabilities 30 June 2010 31 December 2009 EUR million EUR million USD million EUR million EUR million USD million EUR million EUR million USD million Guarantees 34 34 0 549 215 408 1,122 314 1,158 Placement Guarantees 14 0 17 116 28 107 497 224 392 Acquisition commitments 0 0 0 207 42 203 36 7 44 Summe 48 million 870 million Add. Contingencies 172 IV HGB amounts to 20-60 million EUR 1.7 billion Rate of exchange as at 30 June 2010: EUR / USD 1.2241 19
Agenda Summary Market Environment & Distribution Financial Results Outlook 20
Outlook 2010 Conclusion of HCI Group s financial restructuring strengthens HCI s rating and stimulate existing and new business relationships Release from contigent liabilities concluded Liabilities converted into equity substantially improve financial ratios With the recovery of overall economy and in the light of substantial strategic steps HCI has already taken we expect for 2010: placement volume at least on previous year s level and positive 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