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May 2018
Kistefos ASCompany update
Disclaimer
2
• This presentation has been prepared by Kistefos AS (THE «Company») for information purposes only. The presentation does not constitute an offering of securities of the Company or any affiliated company thereof
• The distribution of this presentation may, in certain jurisdictions, be restricted by law. Persons in possession of this presentation arerequired to inform themselves about and to observe any such restrictions. No action has beed taken or will be taken in any jurisdiction by the Company that would permit the possession or distribution of this presentation in any country or jurisdiction where spescific action for that purpose is required
• Unless otherwise indicated, the information contained in this presentation is current as of the date hereof. Neither the publication nor distribution of this presentation shall under any circumstances create any implication that there has been no change in the Company`saffairs since the date hereof or that the information in the presentation is correct as of any time since its date. The Company does not assume anyobligation to update or revise any of the information set out herein.
• This presentation may include certain forward-looking statements, estimates, predictions, influences and projections with respect to anticipatedfuture prefomance and as to the market for products or services which may reflect various assumptions made by the management of the Company. These assumptions may or may not prove to be correct and no representation is made as to the accuracy of such statements, estimates, projections, predictions and influences. These statements and forecasts involve risk and uncertainty because they relate to events and depend on cicumstancesthat will occur in the future. The information and options contained in this presentation are subject to change without notice and the Company assumes no responsibility or obligation to update publicly or review any of the forward-looking statements contained herein.
• No representation or warranty (expresed or implied) is made as to, and no reliance should be placed on, the fairness, accuracy or completeness of theinformation contained herein. Accordingly neither the Company nor any of its directors or employees will accept liability whatsoever arising directlyor indirectly from the use of this presentation
KISTEFOS OVERVIEW ADVANZIA BANK APPENDIXOTHER PORTFOLIO
COMPANIES FINANCIALS
3
Kistefos in brief
Kistefos AS was established in 1998 when Mr. Christen Sveaas merged his various investment vehicles into one company
Kistefos has major investments in financial services, telecommunications, IT, commercial real estate development, logistics, offshore services and various financial investments
Value creation is achieved through financial and industrial expertise in core sectors and active ownership – investments range from start-ups to mature companies and the investment mandate is flexible with respect to horizon and asset classes
Experienced team and strong owner with proven track record in value creation and executing successful transactions across sectors
Kistefos’ investment portfolio is mainly focused towards Europe, and is managed from Oslo, Norway
The Company
Christen SveaasFounder, chairman and owner
Founder & owner Christen Sveaas has more than 35 years of
experience with investment companies
Mr. Sveaas has had several board positions, including Treschow-Fritzøe AS, Board member of Stolt-Nielsen SA, Orkla ASA, SkipsKredittforeningen AS, Vestenfjeldske Bykreditt AS, Tschudi & Eitzen Shipping AS, and he has served as senior advisor to EQT, Sweden
Mr. Sveaas is presently Executive Chairman of Kistefos AS and A/S Kistefos Træsliberi, Vice Chairman of the board of The Kistefos Museum Foundation and Chairman of Anders Sveaas' Allmennyttige Fond, a Norwegian charitable foundation. He is member of Dean's Council’s Executive Committee, Harvard Kennedy School, Boston, USA
Mr. Sveaas is a member of Tate International Council, and is a founding member of theMetropolitan Museum International Council. Further, he is a Global Patron of Art Basel
Mr. Sveaas is educated at University of St. Gallen, Switzerland. Lic. Oec. HSG; equivalent to an MBA
4
55%
22%
23%
Portfolio market value of NOK ~6 billion per December 31, 2017
Portfolio values (December 31, 2017)* Comments
Kistefos currently has influential stake in a portfolio of a dozen, plus a few financial investments with smaller stakes
Total portfolio market values of NOKbn ~6 as of 31 December 2017 using Kistefos’ internal valuations
Advanzia valuation is based on a price-to-earnings multiple equal to the average of a peer group consisting of Bank Norwegian, Komplett Bank, Nordax Bank, Resurs Bank and TF Bank as of 31 December 2017, which read a 12.1x on a consensus 2017e basis
The value of the investment in Viking Supply Ships is based on prevalent vessel broker values relative to book values
Valuation of other portfolio companies are based on internal valuations
Interest bearing debt of NOKbn ~1.6 and cash and cash equivalents of NOKbn 0.5 brings value adjusted equity to NOKbn 4.9
Based on bond covenant reporting as of 31 December 2017, the market-adjusted equity is NOKbn 4.0 (65%)
NOKbn ~6
Financials
Technology and services
Logistics & Offshore services
* Kistefos valuation. ** as of 31 December 20175
~6.0
1.6 0.5
~4.9
Portfolio marketvalue
Int. bearing debt Cash and cashequivalents
Value adjustedequity
Gross and net market values (NOKbn)
Company Description Industry Ownership
Advanzia Bank S.A. (“Advanzia”) is a credit card bank based in Luxembourg, offering no-fee credit cards and deposit accounts to customers within the EU. Germany is the main market, additional markets include France, Austria and Luxemburg
Financials
Viking Supply Ships (“VSS”) has world leading expertise in operations in areas with ice and extreme weather conditions
Offshore services
Western Bulk Chartering (“WBC”) is one of the world’s leading logistics operators in the Handymax and Supramax market
Logistics
Oslo Airport City was established in 2016 by a consortium of experienced entrepreneurs in real estate and land development by purchasing several prime located land areas in the Gardermoen area outside of Oslo. Built around the previous Kistefos companies of Bergmoen and Gardermoen Forum
Real estate
1881 Group owns Opplysningen 1881 and Digitale Medier 1881, which combined is the leading Norwegian provider of personal and corporate directory services via phone, SMS, web and mobile applications
TMT
The key investments are diversified across sectors and provide liquidity through dividends or potential for realization
60.3%
78.6%
75.0%
27.0%
100%
6
Company Description Industry Ownership
NextGenTel provides fixed and mobile internet communications direct to consumer and to small businesses segments
Promon is a Norwegian technology company specializing in securing software applications within the cyber-security segment. Promon focuses on solutions that are incorporated into applications, and can recognize and prevent attacks without human intervention - so-called RASP (Runtime Application Self Protection) technology
TradeIX is rewiring trade finance by providing the most connected and secure platform infrastructure for banks, asset managers, B2B networks and value added service providers. Built on distributed ledger technology, the platform’s applications, developer tools, and core protocol represent the dawn of the “internet of trade”
The company provides trade finance solutions on its platform unlocking billions of working capital that has not yet been accessed by financial institutions or alternative funders
The San Francisco based company provides cloud based phone services that adds a second line to mobile phones, tablets and computers with the simplicity of an app
Strong TMT track record with a portfolio of exciting investments
30.4%
26.7%
47.1%
25.0%
7
An active 2017 with both exits and new investments
8
April 2017 The Norwegian Competition
authority (“NCA”) approved the announced sale of Phonero to Telia
Kistefos’ remaining share was 20% at the time, post the initial divestment in 2015 to Norvestor
The sale released NOKm 400 to Kistefos, a multiple to cost of 2.7x since 2015
September 2017 Kistefos owned ~31% of the
shares in Infront pre-IPO
The IPO was closed late September and valued Infront at NOKm 498 pre-money
Kistefos controlled ~8.9% of the total shares outstanding post the transaction
January 2018 In January 2018, VSS
successfully negotiated a restructuring with the banks with adjusted loan terms, including reduced instalments and interest payments until the first quarter of 2020
As part of the restructuring, Kistefos invested SEKm 98 in a rights issue raising SEKm 123 in total proceeds
August 2017 Kistefos subscribed for NOKm
~80 in Insr’s private placement in connection with the acquisition of NemiForsikring, giving an ownership of ~9% post money
September 2017 All operational subsidiaries
divested
Liquidation process started
Small positive cash effect for Kistefos
November 2017 Issued NOKm 600 bond issue
(“KIST05”) in November 2017
The net proceeds from the placement was used to partly repurchase KIST04 and for general corporate purposes providing Kistefos with an extended maturity profile
Major events since January 2017
October 2017 Kistefos purchased shares in
NextGenTel for approximately NOKm 98
After the purchase Kistefos controls ~25% of the total shares outstanding
In April 2018, Nextgentelagreed to sell Kvantel to Broadcom for around NOKm250
December 2017 Kistefos AS divested all the
remaining ~2.3m shares in Infront at a price of NOK 24,5 per share, with gross proceeds of NOKm 57
Nov./Dec. 2017 Kistefos purchased ~3.1m and
1m shares in Sevan Marine ASA during November and December 2017, respectively
After the latest purchase, Kistefos controls 11.2% of the shares outstanding (~5.8m shares in total)
Kist05 Bond Issue
A proven track record of successful exits…
Company Kistefos Ownership Exit year Gross Exit value
(Kistefos’ share)Multiple to cost* Description
31% 2017 NOKm 170 5.7x Infront offers electronic trading solutions and real-time market data, news and
analytics covering over 50 exchanges worldwide Listed on Oslo Børs September, 2017
57% 2016 NOKm 392 1.8x Holder of ~1,000,000 sq.m. of land close to Oslo Airport Sold to a consortium of investors with a reinvestment of NOKm 205 for a continued
ownership
20% 2016 NOKm 400 2.7x Sold to Telia Company AB Subject to approval from Competition Authority
57% 2015 NOKm 750 10.7x Second largest business telecom provider in the Norwegian market Sold to Norvestor, with re-investment of NOKm 152 for a continued 20.1% ownership
29.9% 2015 NOKm 461 6.7x Provides consumer loans and credit cards to Norwegian clients through a no-branch,
fully digital distribution model Sold to Resurs Bank, yielding a strong return to Kistefos
100% 2015 NOKm 218 1.6x Chinese private equity fund investing in Chinese companies with exposure to domestic growth across a wide range of sectors and industries
100% 2013 NOKm 317 3.7x Sells directory listings and banner advertising on www.1881.no Spin-off from Opplysningen 1881 ultimo 2010 Sold to Amedia AS, yielding a strong return to Kistefos
100% 2012 NOKm 140 n/a Owns and operates seven large North Sea barges in the offshore markets for
construction, windmill projects and decommissioning Fleet sold to Ugland Shipping AS, yielding a strong return to Kistefos
CNEI
9 * Including dividends
317
2,914
273
21
750
187
394
10
461
72
154
10
218
34
13
2013 2014 2015 2016 2017 SUM
…has released significant liquidity over the past five years…
Realized investments (NOKm) Comments
Divestments of NOKbn ~2.9 since 2013 within IT/telecom, shipping & offshore, finance and real estate
During 2017, close to NOKm 600 has been realized (mainly sale of remaining part of Phonero and IPO and sale of shares in Infront in September/December 2017)CNEI
10
5678
37 45 30
30
179*
87
162
61
198
728
13
46
66
2013 2014 2015 2016 2017
Opplysningen 1881 Advanzia Western Bulk Viking Supply Ships Phonero
…combined with solid annual dividends from the portfolio…
Dividend history – portfolio companies (NOKm) Comments
Advanzia is the primary source of dividends, and has demonstrated strong dividend capacity since 2013 (paid out EURm 95 in period 2013-17 on 100% basis. Net profit after tax of EURm 172 in the same period)
Opplysningen 1881 has a history of strong and consistent free cash flow with NOKm 246 in dividends to Kistefos since 2013 – strong dividend capacity expected to continue
Western Bulk and Viking Supply Ships have contributed with NOKm 336 in dividends since 2013
Kistefos will continue to keep investments contributing with dividends to the parent company
292
342
236
207
91
5y avg. NOKm ~234m
11 * Including EUR 12m in capital reduction (on 100% basis)
497
332
300
300
614668
668
328 392
1,151
1,325
381
839
1,055
800680
200
600
YE 2013 YE 2014 YE 2015 YE 2016 YE 2017
KIST01 KIST02 KIST03 KIST04 KIST05 Bank Net debt
…has kept net interest-bearing debt at a comfortable level
Outstanding debt in Kistefos AS (NOKm) Comments
Current interest bearing debt consists primarily of unsecured bond debt
The nominal amount of KIST04 is NOKm1,000, but the company has repurchased NOKm 320 giving a net balance YE 2017 of NOKm 680
KIST01, KIST02 and KIST03 were repaid at maturity
NOKm 300 bank financing is debt in a subsidiary with share pledge in Advanzia Bank and guarantee from Kistefos AS
1,592
668
1,100
1,580
1,439
12
KISTEFOS OVERVIEW ADVANZIA BANK APPENDIXOTHER PORTFOLIO COMPANIES FINANCIALS
13
n.a. 97 160164
226 306 405499 605 732 890
1170 119410%
20% 23% 26%34%
40%48% 44% 41% 40%
2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 2016 2017 Q1'2018/LTM
Advanzia Bank – a consistent growth story…
Advanzia Bank S.A (“Advanzia”) is a Luxembourg-based fully digital bank incorporated in 2005 focusing on the European market
Current product offering comprises revolving no-fee Mastercard Gold credit cards for B2C and B2B, traditional deposit accounts as well as professional card services forbanks and financial institutions
Highly scalable business model with no physical branches – characterized by attractive interest margins, cost efficient operations and moderate credit losses
EEA cross-border banking license granted from the CSSF – current operations in Luxembourg, Germany, France and Austria (entering Spain during 2018)
Impressive track-record of delivering ~40% ROE
The bank’s growth in Germany is superior compared to the general market growth and the bank has become the largest issuer of revolving MasterCard credit cards in the country
Company description Ownership overview
60,3%
7,8%4,9%
15,0%
12,0%
Skips AS Tudor (Wilhelmsen)
Sundt AS
Founders
Seed investors and other
Advanzia Bank
commences banking
operations
Advanzia enters France
Advanzia enters AustriaAdvanzia managed
well through the financial crisis, while lowering funding costs
Acquisition of French customer
loan portfolio
14
Entering Spanish market
Net loans (EURm) ROE(%)
50100
150194
246327
425
529
642
772
940
1 2291 284
-4-8
-6
26
913
21
28
36
40
4750
'06 '07 '08 '09 '10 '11 '12 '13 '14 '15 '16 '17 Q1'18/LTM
…providing an impressive and consistent value creation over more than a decade
Financial developments – 2006-Q1 2018 Comments
Advanzia Bank is Kistefos’ most important investment
Kistefos has been the majority shareholder since 2006 and has been instrumental in the long-term focus and development of the bank
Through active ownership including industry expertise and the right management, Advanzia has managed impressive and consistent value creation through economic cycles
Strong and consistent growth with loan growth CAGR of 26% since 2010
Loan losses of 4.0% in Q1’18 (annualized), down from 4.5% and 4.1% in Q1’17 and Q4’17, respectively
15
Gross loan balance (EURm) Net profit (EURm)
Loan growth from 2010 (CAGR)
26%
33%
Net Profit growth from 2010 (CAGR)
~725,300 active credit card customers
Present since 2006
A snapshot of Advanzia Bank S.A.
HQ ~42,900 active credit card customers
Present since 2012
~37,000 active credit card customers
Present since 2015
805kActive credit cards
EUR 1,284mGross loan balance
EUR ~1,470
Avg. outstanding
17.4%Credit card yield
(YTD)
EUR ~4,350
Avg. credit limit
37%/21.5%1
Cost/Income ratio (YTD)
40%ROE
(LTM)
15.1%Tier1 ratio
(incl. interim profit)
Size
Risk
Perf
orm
ance
Solid
ity
Key figures (Q1’18)
16
Entering Spain in 2018
1) Incl. /excl. customer acquisition costs
378445
525614
758 805
24 25 27 31 33 34
2013 2014 2015 2016 2017 Q1'2018Active credit card ('000) Depositors ('000)
Stellar financial history with controlled and profitable growth
Key financial figures Comments
Advanzia has delivered strong growth combined with high margins and profitability, while maintaining a strong balance sheet
High customer acquisition costs implies higher potential underlying profits, as CAC can be cut to boost profits significantly
High credit card yield of ~17-18% and decreasing funding costs
Low cost/income in the mid 30s
Deposits are the primary source of funding and are adjusted according to prevalent liquidity needs
Active cards1 and deposit customers Net loan balance (EURm)
Net interest income (EURm) & NIM (%) Profitability
Cost/income ratio (%) Capital adequacy
1) 2017 number includes portfolio acquired in France in H1 for an amount of EURm 6317
499 605 732 8901 170 1 19430
3741
49
59 9023,3% 21,4% 20,9% 21,7%
31,4% 30%
2013 2014 2015 2016 2017 Q1'2018Value adj. Net loan balanceNet loan balance growth (%, YoY)
34,2% 32,0% 33,6%36,2%
38,6% 38,5%
20,8% 19,7% 20,6% 21,5% 23,2% 22,7%
2013 2014 2015 2016 2017 Q1'2018 LTMCost/income ratio (%) Cost/income ratio excl. acq. (%)
2128
3640
47 50
11 13 1520
26 28
34%40%
48%44%
41% 40%
2013 2014 2015 2016 2017 Q1'2018 LTMNet profit Customer acq. cost ROE (%)
16,1%
11,2% 10,9% 10,4% 10,5%13,0%
1,0% 2,7% 2,2% 2,8%1,2%1,5%
1,3% 0,9%0,9%
16,1%
12,2%
15,0%13,8% 14,2%
15,1%
2013 2014 2015 2016 2017 Q1'2018CET1 Interim profit T1 capital
72 91
111 133
163
17,0% 17,0% 17,1% 16,8% 16,2%
2013 2014 2015 2016 2017Net interest income (EURm) NIM (%), credit cards
KISTEFOS OVERVIEW ADVANZIA BANK APPENDIXOTHER PORTFOLIO COMPANIES FINANCIALS
18
Western Bulk Chartering
Company description Key financials and ownership structure
Western Bulk Chartering AS (“Western Bulk”) Western Bulk Chartering is a global dry bulk operator with an untraditional business model; Asset light, trading-oriented and decentralized, with risk management as a key component
The Company is a major operator of Supramax and large Handysizetonnage, and is currently operating 140-150 vessels
Western Bulk matches cargo with vessels in all market conditions; leasing vessels from various vessel owners and transporting cargo for a large number of customers worldwide
The company has a strong brand name and excellent customer relationships in diversified segments
The dry bulk shipping market saw an improvement in freight rates, and the Baltic Supramax Index (BSI) reached the highest rate since 2014, with the USD 12,000/d barrier breached for the first time since March 2014
During 2017, Western Bulk has rebuilt its market position and after a particularly strong fourth quarter in 2017, further profit growth is expected in 2018
USDm* 2015 2016 2017Revenues (T/C basis) 522,0 314,8 500,3Net TC 44,5 4,4 40,5EBITDA 9,1 -19,2 8,3Result after-tax 7,2 -20,1 4,3
Total assets 117,3 98,6 101,4Book equity 47,1 13,8 20,2
Ojada9.2%
Other 15.8%
Kistefos 75.0%
*Adjustments: FY 2016 annual result is excluding USDm -16.9 in losses, write-offs, provisions, and other impairment charges with no cash effect. FY 2015 figures are excluding USDm -23.3 in write-off1) Source: Bloomberg
Baltic Exchange Dry Index 1)
0
200
400
600
800
1 000
1 200
1 400
1 600
1 800
2 000
jan.16 apr.16 jul.16 okt.16 jan.17 apr.17 jul.17 okt.17 jan.18 apr.18
19
USD
Viking Supply Ships A/S
Company description Key financials
Viking Supply Ships (“VSS”) has world leading expertise in operations in areas with ice and extreme weather conditions
VSS owns three AHTS ice-breakers and four AHTS ice class vessels customized for operations in harsh and icy environments, whereof two ice class vessel are laid up due to the market conditions within the offshore services sector
In addition, the company owns five PSVs and one regular AHTS, all of which are laid up due to the market conditions within the offshore services sector
In January 2018, VSS successfully negotiated a restructuring agreement with the banks with adjusted loan terms, including reduced installments and interest payments until the first quarter of 2020
As part of the restructuring, VSS raised SEK 123 million in new equity, of which Kistefos invested SEK 98 million
Despite the current weak market conditions, there are however positive indications that activity levels within VSS core areas as the Barents Sea, Russia and Canada will increase in 2018, which will be of significant importance for VSS
SEKm 2013 2014 2015 2016 2017 Q1 2018Net sales 1,138 1,897 1,114 760 331 84EBITDA 270 695 293 160 -184 -34Profit after tax -359 200 -440 -406 -332 -85
Total assets 4,884 5,260 4,117 3,693 2,558 2,892Book equity 1,749 2,042 1,386 1,440 971 1,011Net Debt 2,269 2,245 2,139 1,654 1,714 1,718Equity ratio 36% 39% 34% 39% 38% 35%
Folke Patriksson; 10,5%
Lindén Urnes Jenny; 1,7%
Others; 9,2%
Kistefos *; 78,6%
*Ownership Indirectly through Viking Invest AS and Odin Viking SPV AS
Ownership structure (share of votes)
20 Kistefos has no guarantees or commitments for VSS’ debt or obligations
1881 Group AS
Company description Key financials
The wholly-owned 1881 Group AS is comprised of Opplysningen 1881 and Digitale Medier 1881 AS. The latter was re-acquired from Amedia in December 2016, after initially being sold to Amedia in 2013
Opplysningen 1881 AS is the leading Norwegian provider of directory services via phone and SMS
Digitale Medier 1881 AS is one of the largest providers of directory services online
Combined, 1881 Group is the leading Norwegian provider of personal and company directory services with more than 130 years of history
Opplysningen continues to deliver strong cash conversion and provides Kistefos with solid annual dividends
Volumes are declining as expected, and in line with the general market conditions for its services
Initiatives are undertaken to provide new services in the combined company in order to capitalize on one of the strongest Norwegian brands, and 1881 Group AS is considered to be an ideal platform for additional acquisitions within the industry
Opplysningen 1881 ASNOKm 2011 2012 2013 2014 2015* 2016
Revenue 480 444 421 344 291 270EBITDA 158 143 165 112 94 87EBITDA margin(%) 32.9 32.2 39.2 32.6 32.3 32.3Profit after tax* 90 91 111 73 45 35
* For 2015, profit after tax, equity and total assets are affected by the merger between Opplysningen 1881 AS and its parent company Telecom Holding AS. The merger resulted in the booking of intangible assets in Opplysningen with corresponding, non-cash effect, depreciations.
Digitale Medier 1881 ASNOKm 2011 2012 2013 2014 2015 2016
Revenue 183 190 200 199 192 183EBITDA 15 34 42 42 43 45EBITDA margin (%) 8.2 17.9 21.0 21.1 22.4 24.6Profit after tax 6 23 31 30 27 35
1881 Group AS (Opplysningen 1881 AS and Digitale Medier 1881 AS)NOKm 2017
Revenue 373EBITDA 108EBITDA margin (%) 29%Profit after tax 15
21
27%
57%
Oslo Airport City
Company description Property illustration
Oslo Airport City (“OAC”) controls more than 1,000,000 sq.m. of land for commercial property development purposes, next to Oslo Airport (“OSL”)
OAC has partnered up with Vedal, one of Norway’s leading commercial developers, which will be responsible for the development and completion of future projects
Experienced management team – previous projects include, amongst other, the development of Bjørvika, Oslo
Commercial properties will include a mix of office space, hotels/conference centers as well as logistic properties in separate areas
The first project is expected to initiate within the next 2 years
Due to its location, increasing traffic figures and expansion plans, we expect OSL to attract a number of commercial players to Oslo Airport City over the next years
Ownership structure and 2016 realization
Sale
Ownership Gross proceeds Performance
NOKm 392
1.8xMultiple to cost
Pre-sale ownershipPost-sale ownership
22
Company Description Industry Ownership
Kappa Bioscience develops and sells ultra high purity synthetic K2 (MK-7), a vitamin for both bone and heart health
Kappa Bioscience focuses on the worldwide food supplement and fortified food markets, where vitamin K2 is currently gaining stronger momentum
Med Tech
Lumarine is a producer of lumpfish with production facilities in Tømmervåg, Møre og Romsdal
Lumpfish is used in fish farming facilities to combat the Salmon parasite sea lice Fish Farming
OstomyCure is a Medical Technology company that has developed a revolutionary technology involving a titanium implant solution with lid which is intended to replace conventional ileostomies
OstomyCure’s technology called the TIES system (Transcutaneous Implant Evacuation System), received CE marking in 2016
Med Tech
Sevan Marine ASA is a specialized marine engineering and design house The company pioneered the cylindrical hull as a cost effective alternative to traditional ship-
shaped, turret offshore moored designs The innovative, geostationary design avoids the need for a costly turret while allowing for a
larger number of risers and the flexibility for future tie-ins. In total, 11 units has been constructed and the company has over 35 years of accumulated
operational experience
Offshore design
Portfolio overview – other direct investments
55.0%
94.9%
68.5%
23
11.2%
KISTEFOS OVERVIEW ADVANZIA BANK APPENDIXOTHER PORTFOLIO COMPANIES FINANCIALS
24
Net income in 2017 was negatively affected by a write down of shares in a subsidiary of NOK 715 million following a value adjustment of shares in VSS
The company has a strong liquidity position YE 2017 of NOKm 525
Moderate leverage following the issue of KIST05 – NIBD/total assets of 30% and NIBD/value adjusted equity of 21%
Kistefos AS – Key financials
Key financials – Kistefos AS Comments
Key credit metrics
46% 47%
59%52%
37%30% 32%
9%
23%30%
2013 2014 2015 2016 2017
Book equity ratio NIBD/total assets
P&L (NOKm) 2013 2014 2015 2016 2017
Operating results -64 -68 -87 -118 -77
Income from subs and ass. companies 355 161 955 423 413
Net Gains/value change (losses) 50 36 13 -566 -737
Net interest -104 -121 -117 -76 -109
Other Financial 2 190 91 -2 -2
Net income 258 220 873 -343 -499
Balance sheet (NOKm) 2013 2014 2015 2016 2017
Investments in subsidiaries 1,925 2,586 2,309 2,330 2,203
Total fixed assets 2,549 2,783 2,376 2,919 2,440
Total stock-in-trade and receivables 250 134 944 408 280
Shares and other financial instruments 784 827 580 130 195
Cash and cash equivalents 288 267 287 261 525
Total Assets 3,871 4,011 4,187 3,717 3,440
Total Equity 1,780 1,874 2,472 1,927 1,258Interest-bearing debt 1,439 1,552 668 1,100 1,580Non-interest-bearing debt 652 585 1,048 690 602
Key ratios and metrics
Book equity ratio 46% 47% 59% 52% 37%
IBD/total assets 37% 39% 16% 30% 46%
NIBD/total assets 30% 32% 9% 23% 30%
25
Kistefos Group – Key financials
Key financials – group consolidated Comments
The Kistefos Group’s revenue increased by NOKm 1,197 y-o-y, from NOKm 8,180 to NOKm 9,377
The operating result (EBIT) for the year was NOKm 205, an improvement of NOK 566 y-o-y (NOKm -361 in 2016)
The increase in the Group’s revenue and operating result is is due to significantly higher rate levels and freight revenues in Western Bulk and strong growth in Advanzia Bank's revenues and earnings
Group cash of NOKm 1,057 per YE 2017
Growth in total assets from 2015 to 2016 was significantly affected by the first time consolidation of Advanzia Bank, adding ~NOKm 10,000 to overall balance sheet
P&L (NOKm) 2013 2014 2015 2016 2017
Total operating income 10,488 12,120 12,241 8,180 9,377
EBITDA 635 714 973 84 490
EBIT 304 515 560 -361 205
Net financial items -538 -259 61 -436 188
Net income -317 253 557 -857 341
Balance sheet (NOKm) 2013 2014 2015 2016 2017
Total fixed assets 4,788 5,489 5,273 3,675 3,420
Other current assets 2,446 2,995 2,143 12,518 18,354
Cash & cash equivalents 1,392 1,521 980 863 1,057 Total assets 8,625 10,005 8,396 17,056 22,831
Total equity 2,533 2,628 2,908 2,070 2,209
Interest-bearing debt 4,563 5,173 3,701 3,517 4,032
Non interest-bearing debt 1,530 2,204 1,787 11,468 16,590
1) The Group’s financials for the first half of 2016 have been restated to include Advanzia Bank. Advanzia Bank was consolidated into theGroup with full year effect for the first time in the fourth quarter of 2016
26
Kistefos investment approach
Agile
Balanced portfolio
Active ownership
Pragmatic and opportunistic approach Flexible mandate, e.g., in terms of sector, geography, ticket size and holding period
(evergreen) Capture windows of opportunity through swift decision-making
Main focus on influential stakes to create value through active ownership, typically with board representation and strong focus on both operational and strategic activities.
Focus on balancing the portfolio between cash-flow generating and early-stage investments with high potential
Commitment and track
record
Proven track record and long-term commitment as an owner has made us an attractive partner on multiple cases
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• Moderate gearing – strong asset backing
Portfolio has proven robust even in adverse market conditions
Strong track record of value creation and cash flow generation
Well-positioned to take advantage of attractive opportunities with a flexible approach and long-term commitment to portfolio companies
Summary
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KISTEFOS OVERVIEW ADVANZIA BANK APPENDIXOTHER PORTFOLIO COMPANIES FINANCIALS
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Simplified legal structure
78.6% 75.0% 27%
100% 100%
100%
100% 60.3%100%
100%100%
Not consolidated in the Kistefos Group
Consolidated in the Kistefos Group
Kistefos AS
Viking Supply Ships
AB
Viking Supply
Ships A/S
Kistefos Equity
Holdings AS
Kistefos Eiendom AS
Oslo Airport City
Kistefos Venture
Capital AS
1881 Group AS
Advanzia Holding AS
Advanzia Bank S.A.
Viking Invest AS
Trans-Atlantic AB
Western Bulk
CharteringAS
100%
Kistefos Equity
Operations AS
OtherNextGenTel
25.02%
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Debt overview
78,6%
75%
100%
100%
100%
100%
100%Debt:KIST04: NOKm 680 (net)KIST05: NOKm 600
Kistefos AS
Viking Supply Ships
AB
Viking Supply
Ships A/S
Kistefos Equity
Holdings AS
Kistefos Venture
Capital AS1881 Group AS
Advanzia Holding AS
Viking Invest AS
Western Bulk
CharteringAS
100%
Kistefos Equity
Operations AS
Total NOKm 300 total debt Term loan maturing in September-19• Share pledge in Advanzia Bank shares• Distribution restrictions (allowing up to EUR 25m p.a.) • Guarantee from Kistefos AS
100% Total NOKm 170 of debt in 1881 Group AS YE 2017. Outstanding NOKm 150 per end of April-18 «Soft» guarantee from Kistefos AS
Total USDm 32 of debt NOKm 300 unsecured bond loan, maturing in April
2019 Bank credit facility of USDm 6, undrawn as of
31.12.2017. Secured with a pledge over WB’s account receivables and bank accounts and a guarantee from Kistefos AS
Total USDm ~210 of bank debt, all maturing in March 2020
100%
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Prior to joining Kistefos in 2015, Bengt A. Rem was CEO in Arctic Partners. His previous experience includes Executive Vice President & CFO as well as other leading positions in the industrial investment company Aker ASA, Head of the Department Responsible for Financial Instruments on the Oslo Stock Exchange and state authorized accountant in Arthur Andersen & Co
Holds a MSc in Business Administration and Finance from the Norwegian Business School (BI) and is a state authorized public accountant from the Norwegian School of Economics and Business Administration (NHH)
Represented on the boards of: Advanzia Bank S.A., Viking Supply Ships AB, Western Bulk Chartering AS and Oslo Airport City AS
Management & key investment team
Bengt A. RemCEO
Erik BorgenInvestment Director
Gunnar JacobsenInvestment Director
Prior to joining Kistefos, Mr. Jacobsen was CEO of BlueCom, a Norwegian telco company targeting primarily the residential market. His previous experience includes senior project management in Catch Communications, and different roles in Telenor
Holds a MSc in Marketing and Management as well as Corporate Finance from the Norwegian School of Management (BI) Represents Kistefos AS on the following boards: Opplysningen 1881 AS, Digitale Medier 1881 AS, Kappa AS, Atex Group, Infront
ASA, Alliance Venture Spring
• Prior to joining Kistefos in 2016, Mr. Borgen was a partner at the private equity firm HitecVision. His previous experience includes partner at Arctic Securities AS including other positions in Morgan Stanley and Perella Weinberg Partners
• Holds an MSc in finance from the Norwegian School of Economics (NHH)• Represents Kistefos on the following boards: Western Bulk Chartering AS, Viking Supply Ships AB, and Rognkallen AS
Prior to joining Kistefos in 2017, Nils Are Karstad Lysø was the CEO of the Norwegian National Opera & Ballet in Oslo. His previous experience includes Executive Vice President in the industrial investment company Aker ASA, CEO of Moods of Norway and partner at management consulting firm McKinsey & Company
Mr. Lysø holds a MSc in Business Administration and Finance from the Norwegian School of Management (BI)Nils Are Karstad Lysø
CFO
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Kistefos Board of Directors
Christen SveaasExecutive Chairman and
Owner of Kistefos AS
Christen Sveaas is the founder and sole owner of Kistefos Mr. Sveaas has held several board positions including chairman of the Board at Treschow-Fritzøe AS, Board member of Stolt-Nielsen SA (NYSE listed), Orkla ASA,
SkipsKredittforeningen AS, Vestenfjeldske Bykreditt AS, Tschudi & Eitzen Shipping AS, and he has served as senior advisor to EQT, Stockholm, Sweden Mr. Sveaas is presently Executive Chairman of Kistefos AS and A/S Kistefos Træsliberi, Vice Chairman of the board of The Kistefos Museum Foundation and
Chairman of Anders Sveaas' Allmennyttige Fond, a Norwegian charitable foundation. He is member of Dean's Council’s Executive Committee, Harvard Kennedy School, Boston, USA
Mr. Sveaas is educated at University of St. Gallen, Switzerland. Lic. Oec. HSG; equivalent to an MBA
Erik WahlstrømMember since 1989
Erik Wahlstrøm has practiced law since 1976, served as member of several public law commissions, lectured in tax-law and published several publications. He has previously been chairman of the Norwegian Shareholder Association and the Norwegian Taxpayer Association
Mr. Wahlstrøm is the chairman of the Kistefos-Museum and serves as member of board of AS Kistefos Træsliberi and Anders Sveaas' Allmennyttige Fond a Norwegian charitable foundation
Tom RuudMember since 2010
Tom Ruud served as CEO of Kistefos Group for the period 2013-2015. Before joining Kistefos Ruud was a member of the Group Executive management of the UmoeGroup. Prior to that Ruud was a member of the Group Executive management of Nordea bank AB in Stockholm, the largest Nordic financial services group. Before that Ruud was the Group President and CEO of Kreditkassen and Group President and CEO of Aker Norcem, both major listed Norwegian companies at that time. Ruud has been chairman or board member in a large number of listed and private companies and organizations both in Norway and internationally over the past 30 years. Tom Ruud is currently a Board Member of Kistefos AS and Advanzia Bank S.A.
Tom Ruud is a Civil Engineer from Norwegian University of Science and Technology (1974)
Martin Reimers is a Professor in Applied Mathematics at the University of Oslo (UiO). He was educated at the Norwegian University of Science and Technology (NTNU) and at the University of California, Berkeley. He holds an MSc (Sivilingeniør) degree in Industrial Mathematics and a PhD in Applied Mathematics from UiO.
Dr. Reimers has worked in applied mathematics and computer science since 1996; as a research scientist at SINTEF, as a senior research scientist at the Norwegian startup-company SimSurgery AS and as a Professor at the Centre of Mathematics for Applications (CMA), a Centre of Excellence at the UiO. He is currently a Professor at the Department of Mathematics at UiO, and chairman of the board of Fridtjof Eiendom AS, a privately held real estate companyMartin Reimers
BoD member since 2011
Ragnhild Wiborg has over 30 years of experience from the financial markets and has an extensive network both within the international and Nordic business communities. She is non-executive director of several Nordic Stock Exchange listed companies; RECSilicon ASA, Borregaard ASA, Gränges AB, Intrum Justitia AB, Skandiabanken ASA, EAM Solar and I.M. Skaugen ASA. Ms. Wiborg was previously partner, owner and fund manager in Consepio, Wiborg Kapitalförvaltning, CIO and portfolio manager in Odin Fund Management and has held several positions within Investment Banking in the Nordic and UK capital markets; Pareto Securities, ABG Sundal Collier, First Chicago (now JPMorgan) and Scandinavian Bank (now SEB)
Ragnhild Wiborg has a BSc in Economics and International Business from Stockholm School of Economics and Master from Fundacao Getulio Vargas (Sao Paulo, Brazil)Ragnhild Wiborg
BoD member since 2014
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Kistefos – other activities
Examples of other activities
Kistefos-Museet is located about one hour drive from Oslo. The object of the museum is to run the industry museum and engage in research relating to the industrial activities of A/S Kistefos Træsliberi. The museum has also developed one of the biggest contemporary sculpture parks in Europe. Kistefos AS is the main sponsor for the museum, and will contribute to funding for construction of the new museum building. The building is scheduled to be finished 2019
2nd Chance is a staffing company that recruits its candidates from the populations where people need a second chance, and has a philosophy that the school of life is the most important asset a person might have. Kistefos started investing in 2nd Chance in 2016
Kistefos Public Service Fellowship Fund was established in 2007 to provide financial assistance to Norwegian students taking master’s degrees in public administration at Harvard Kennedy School in the USA
Kistefos African Public Service Fellowship was established in 2015 and will provide African students funding to take a masters degree at Harvard Kennedy School
«Castor & Pullox», sculpture at the Kistefos-Museeum. Artist: Tony Cragg. Photo: Frederic Boudin / Kistefos-Museet
Harvard Kennedy School, USA
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Visiting address: Dokkveien 1, N-0250 Oslo, Norway Tel: +47 23 11 70 00 Fax: +47 23 11 70 01 Email: [email protected]
Photo credit: Frédéric Boudin / Kistefos-Museet35