Private Placement
Investor PresentationDecember 2007
»Acquisition of property assets and increase in share capital
- »Overview of FL Group
- »Financials
- »Offering details
Key highlights
ACQUISITION OF PROPERTY ASSETSPROPERTYASSETS
Key highlights of property transaction
5
»Acquisition of a diversified property portfolio from Baugur Group
- »Acquisition of 12 property companies and funds spread across Europe for ISK 53.8 bn
- »Selected assets intended to be sold back-to-back to Landic Property for ISK 13.7 bn
- »In line with increased focus on Private Equity
- »Companies with a leading market position, generating strong cash flows
- » K hi aupt ng B k an has provid de da f i a rness opi i n on on t he val i uat on methdl odology
- » Purchase of property and back-to-back sale to Landic Property is subject to final consents and approvals
»A new pl f at form f h urt ergrowt h
- »Landic Property will be FL Group's platform for investments in property
- »Co-operation with leading market professionals in UK
Transaction rationale
6
Attractive characteristics
- »High quality across a mix of hotel, retail, office, leisure and residential
- »Access to leading management teams and expertise
- P ti l l t f t i t ithi th S di i k t d»Particularly strong footprint within the Scandinavian market andIceland
- »Development potential
Value creation
- »Property development
- » Tenant and yield enhancement possibilities
- »Potential for future yield compression
B f lfBeneficial for the development of FL Group
- I df i i » Increased focus on private equity
- »Diversification of assets
- »Increased stability
Landic Property | A strong diversified property company
- » Landic Property is a leading Nordic real estate company with a substantial market share in Iceland, Sweden and Denmark
- » Circa 500 properties with approximately 2.7m sqm of rental space, split into office space, retail, industrial and hotels
- »Assets valued at over ISK 400 bn
- »More than 3,800 lease agreements
- »Over 270 employees
- » Largest investment by value. FL Group is acquiring a 39 8% holding in the compan 39.8% holding in the company
- » A key strategic asset for FL Group
- »A platform for further growth
- » Valuable experience in deals with a property angle
Landic Property | A strong diversified property company
- » Strong tenant base includes both governmental bodies, leading retail companies, airlines and banks:
- » Swedish Police Dep y artment and Stockholm Count
- »Hagar, Magasin, Illum
- »TeliaSonera, Nordea, LM Ericsson
- »Scandinavian Airlines
- »Hilton Nordica Hotel
- » Diversified asset portfolio:
- »Revenues for 2008 estimated approx. ISK 30 bn
- »78% of rental income outside of Iceland
- » 10 lar gest properties account for only 20% of revenues
- » Favourable valuation:
- » Valuation represents a pro-forma estimated 2007 yield of approx. 8% (excl. Keops development)
- » Double overhead cost structure and hi gh expenses in relation to acquisition and integration of Keops
- »Nordic peers are trading in a yield range of 4.3-7.9%
- »Valuation in line with Keops transaction this summer
8
y Council Kringlan (Reykjavík, Iceland)
Haninge Söderbymalm (Haninge, Sweden)
Huddinge Medicinaren 19 (Huddinge Sweden)
(Huddinge, Söderbymalm 3:488 (Haninge, Sweden)
Østergade 52 (Copenhagen, Denmark)
Tulpanen 3 (Mölndal, Sweden)
Kungsängen 15:1 (Kungsängen, Sweden)
Holtagardar (Reykjavík, Iceland)
Alleen & Amager Strandvej (Copenhagen, Denmark)
Hilton Nordica Reykjavik ( yj , ) Re ykjavík, Iceland)
Other assets | Solid assets with development potential
- » Fasteignafélag Íslands (32.3%) is the parent company of Smáralind and some of the prime development plots adjacent to the Smáralind shopping mall
- » Key figures:
- »Total assets around ISK 25 bn, equity of ISK 13 bn
- »Around 63,000 sqm in the premium shopping complex of Smáralind
- » Currently 16,000 sqm are under construction at Norðurturninn with further development potential of around 100,000 sqm
- » T ld f ransaction yield ofS ld mara in dis 7.7% using next year' d s estimate d rent revenues
- » Thyrping (49 7%) is Iceland (49.7%) s' leading property development company specialising in company, in regional planning and construction. The company has ISK 8.5 bn in total assets
- » Current principal development projects are:
- »Borgartun 26, a high-profile office and service complex in the heart of Reykjavik's CBD
- » 101 Skuggi (Phase 2 and 3), a high-rise residential tower of 250 luxury apartments on the seafront in downtown Reykjavik
- » Nesgarðar, where 190 luxury apartments will be built on a prime location the north side of the town of Seltjarnarnes, adjacent to Reykjavik
- » Valuation of asset:
- » Conservative valuation assumptions: A fully leased office building in inBorgartún valued at multiples below city centre standards for new offices; e.g. Skuggahverfi valued at 20% discount to the current estimated price per sqm
-
»No specific value attributed to development pipeline and expertise
-
»Eik fasteignafelag is a property company in Iceland focusing on commercial real estate
- »The company was acquired in April 2007 by a consortium led by FL Group
- » M i fi a ngures:
- »Total assets around ISK 19 billion
- »Over 100,000 sqm are in the company's portfolio
- » Valuations
-
»Strong asset sales and rent enhancement implies favourable valuation Strong implies
-
»Two funds focusing on the booming Indian market
- » Credit turmoil in Europe and US does not appear to have impacted the Indian property market
- » Valuations
- » Funds were recently put in place and are valued at investment cost in the transaction
- »No premium payable for value created since investment
TERRA FIRMA INDIA
Other assets to be sold to Landic
- » The LXB funds are primarily invested in assets that have development potential.
- » Retail, warehousing, edge of town developments, warehousing, shopping centres, garden centres, mixed use properties and residential
- » Strong tenants, including Tesco, Morrisons, Sainsbury's and House of Fraser
- » Fund manager has an excellent track record within the UK market
WCC Europe
S
d
d
l
d
i
i
I
c
a
n
n
a
v
a
a
n
c
e
a
n |
l
d
f
l
b
f
d
d
l
f
f
Y
i
i
i
i
i
i
i
i
t
t
t
t
t
e
s
a
r
e
s
g
n
c
a
n
y
a
o
v
e
n
a
n
c
n
g
c
o
s
s,
a
n
p
r
o
v
e
p
o
e
n
a
o
r
u
u
r
e
»
i
t
t
c
o
n
r
a
c
o
n
l
f
f
l
d
d
k
h
d
l
d
T
T
l
l
d
d
h
l
i
i
i
i
i
i
i
i
i
i
i
i
i
i
t
t
t
t
t
t
t
t
t
t
u
r
m
o
n
n
a
n
c
a
a
n
c
r
e
m
a
r
e
s
a
s
m
p
a
c
e
r
a
n
s
a
c
o
n
v
o
u
m
e
s
a
n
»
l
h
h
l
h
k
h
h
U
K
i
i
t
t
t
t
p
r
c
n
g
a
o
u
g
e
s
s
s
o
a
n
m
a
r
e
s
s
u
c
a
s
e
,
f
f
f
O
l
d
b
b-
h
d
l
i
i
i
i
t
t
t
t
t
p
p
o
r
n
e
s
o
r
c
o
n
s
o
a
o
n
o
a
n
m
e
r
o
s
s
e
c
o
r
s,
s
c
a
s
e
e
o
p
m
e
n
u
u
u
u
v
» |
U
K |
f
f
S
d
l
l
i
i
i
i
i
i
i
i
i
t
t
t
t
t
t
t
t
g
n
c
a
n
r
e
u
c
o
n
n
v
o
u
m
e
o
p
r
o
p
e
r
y
r
a
n
s
a
c
o
n
s,
r
e
s
u
n
g
n
u
n
c
e
r
a
n
y
»
l
d
b-
i
i
t
t
t
a
s
o
y
e
m
o
v
e
m
e
n
s
n
s
o
m
e
s
u
s
e
c
o
r
s
I
d
d
f
f
b
l
f
i
i
i
i
i
t
t
t
t
n
c
r
e
a
s
e
p
r
c
n
g
e
r
e
n
a
o
n
e
e
e
n
c
a
s
s
e
s
o
a
s
s
e
s
w
» |
C
l
i
E
t
t
o
n
n
e
n
a
u
r
o
p
e |
A
f
i
i
i
t
t
t
t
t
r
a
c
v
e
p
r
c
n
g
o
p
r
o
p
e
r
y
a
s
s
e
s
»
l
k
l
d
(
h
l
l
V
i
i
i
i
i
i
i
t
t
t
t
t
t
a
u
e
c
r
e
a
o
n
o
p
p
o
r
u
n
e
s
a
s
m
a
r
e
s
a
r
e
n
e
r
n
a
o
n
a
s
e
e
g
s
o
p
p
n
g
m
a
s
»
)
l
I
i
t
n
a
y
f
f
Y
l
d
h
d
d
b
h
h
l
d
E
i
i
i
i
i
i
t
t
t
t
t
e
m
o
e
m
e
n
s
a
e
e
r
e
g
e
o
g
r
a
p
m
e
m
o
e
m
e
n
s
n
a
s
e
r
n
v
v
y
y,
w
v
»
E
u
r
o
p
e |
d
I
i
n
a |
P
f
d
l
l
d
h
i
i
i
t
t
t
t
t
t
r
o
p
e
r
y
u
n
a
m
e
n
a
s
a
r
e
s
r
o
n
g
p
r
m
a
r
y
s
u
p
p
o
r
e
s
r
o
n
g
e
c
o
n
o
m
c
g
r
o
w
»
,
f
k
h
h
l
S
i
i
i
i
i
i
t
t
t
t
t
g
n
c
a
n
o
p
p
o
r
u
n
e
s
n
m
a
r
e
s
s
u
c
a
s
o
e
s
»
M
k
l
d
f
U
S
d
E
d
d
f
f
l
i
i
i
i
i
t
t
t
t
a
r
e
n
s
u
a
e
r
o
m
a
n
u
r
o
p
e
a
n
c
r
e
c
u
e
s
» |
CORPORATE OVERVIEW
FIG ~ 50% of total assets
15
- » Strategic stakes in banks, insurance companies and other financial institutions g ,p
- » Management of holdings where FL Group is a reference shareholder
- »Shareholdings in excess of 20%
- »Board representation
- »Active involvement in strategy and development
PRIVATE EQUITY ~ 25% of total assets
- »LBO, MBO, public-to-private and special situations
- » Investment in seasoned companies within mature industries, with strong cash flows and good management
- »Flexibility of investing in listed companies with good value and buyout potential
- »An opportunistic view on time horizon and geography
- »Targeting IRR's of 20%+
CAPITAL MARKETS
25% f t t l t ~ 25% of total assets
- »Proprietary trading in shares, bonds and currency with a short to medium term investment horizon
- »Manage risk in FL Group's portfolio through hedging
- »Execution of transactions for other business units of FL Group
- »CM has responsibility for larger listed investments including Commerzbank, Finnair and Aktiv Kapital
- »Active ownership approach
FIG
FIG | Key highlights
- » Managing strategic investments within banking, financials and insurance
- »Glitnir bank and Tryggingamidstodin are key assets
- »New opportunities are constantly being explored
- » Actively influencing investments and strategy development through board representations and ownership
- » Continue focusing on long term strategic investments in banking, insurance and other financials
- » Drive further expansions of current investments both organically and through M&A where true synergies are captured
- »Challenging market conditions are revealing new opportunities
Glitnir
18
Quick facts
- » FL Group has 32% holding in Glitnir worth approximately ISK 109 bn
- »Strong foothold in the Nordic region
- » Strong position globally in three niche sectors: Sustainable energy, Offshore Service Vessels and Seafood
Glitnir's key figures for Q3 2007
- »ISK 2,766 billion total assets
- » ISK 342 billion market capitalization (as of 7 Dec-07) p ( )»
- 24.1% ROE in 9M 2007
- »32.8% avg. ROE past 5 years
Recent developments
- »Turbulent market in recent months
- » Glitnir has no exposure to subprime mortgages but its share price is down 19% during Q4 2007
- » Investors have underweighted investments in banks 0 5g during these turbulent times
- » FL Group believes that Glitnir will continue to deliver strong results in the coming years
Opportunities
- »Strengthen foothold in existing core markets
- » Focus on integration and efficiency
- » Further expansion of the bank both organically and through M&A
- » Growth driven by Corporate & Investment Banking, Capital Markets and Investment Management
ROE and EPS, 2001-2007
Tryggingamidstodin (TM)
19
- »FL Group has 99.1% holding in TM worth c. ISK 50 bn
- » Tender offer period ended on 28 November Deal is N i t d t ti t d li t i offer on November. subject to confirmation from the Icelandic FSA
- »TM has 24% market share in the Icelandic market
- » TM acquired the Norwegian insurance company Nemi Forsikring in 2006, its first international acquisition
TM's key figures for Q3 2007
- » TM recorded a loss of ISK 555 m, mostly explained by lower financial income and one-off items
- » Premiums for own account amounting to ISK 2.7 bn, 58% growth YoY
- »Claims for own account amounting to ISK 2.4 bn
- »Adjusted combined ratio 106% 5,000
Recent Developments
- » TM has decreased its market exposure to equities during Q4
- » Positive development in combined ratio in recent 1,000 quarters, but the ratio is still too high, target <100%
- » Next steps to improve the profitability of the insurance operation being taken, i.e. focusing on loss making insurance classes and reinsurance policy
Quick facts Opportunities
- »Good potential in the Icelandic operation
- » Nemi expected to continue to deliver strong organic growth
- »Nemi a platform for further Nordic growth
- » Co-operation between TM and Nemi has created opportunities
Rationale for acquisition of TM
PRIVATE EQUITY
Private Equity | Key highlights
S
t
t
r
a
e
g
y |
E
d
l
d
l
d
b
l
d
i
i
i
t
t
t
t
t
e
c
e
a
n
e
a
e
e
r
a
g
e
o
s
n
e
s
n
g
a
o
n
g
s
e
s
r
o
n
g
m
a
n
a
g
e
m
e
n
x
u
v
u
y
u
v
»
b
l
h
d
l
l
h
d
i
i
i
i
i
i
i
t
t
t
t
t
e
a
m
s
n
e
s
a
s
e
c
o
m
p
a
n
e
s
g
e
n
e
r
a
y
w
n
m
a
u
r
e
n
u
s
r
e
s
d
d
f
f
h
h
d
d
l
l
f
f
M
M
E
U
R
3
3
0
0
0
0
E
U
R
1
1
5
5
0
0
0
0
i
i
t
t
t
c
a
p
o
c
u
s
w
e
r
e
a
r
g
e
e
a
s
z
e
r
a
n
g
e
s
r
o
m
m
o
m
»
,
l
i
t
e
n
e
r
p
r
s
e
v
a
u
e
k
k
l
d
h
h
d
l
T
i
i
i
i
i
i
t
t
t
a
e
m
n
o
r
y
s
a
e
s
n
s
e
c
o
m
p
a
n
e
s
w
c
a
r
e
s
e
e
n
a
s
g
o
o
v
a
u
e
»
/
/
d
h
b
l
i
i
i
t
t
t
t
t
o
p
p
p
p
o
r
u
n
e
s
a
n
o
r
a
v
e
u
y
y
o
u
p
p
o
e
n
a
O
d
f
h
f
l
b
l
h
i
i
i
i
i
i
i
t
t
t
t
t
p
p
o
r
u
n
s
c
n
u
s
r
y
o
c
u
s
w
a
e
x
e
m
e
o
r
z
o
n
» |
k
C
t
t
u
r
r
e
n
m
a
r
e |
k
h
l
l
b
d
C
i
i
i
i
i
i
i
t
t
t
t
t
t
t
u
r
r
e
n
m
a
r
e
s
c
a
e
n
g
n
g
u
p
r
o
v
e
s
n
e
r
e
s
n
g
o
p
p
o
r
u
n
e
s
»
k
d
f
b
l
l
P
i
i
i
t
t
t
t
t
t
r
v
a
e
e
q
u
y
m
a
r
e
e
x
p
e
c
e
o
o
p
e
n
u
u
p
p
o
n
m
o
r
e
a
v
o
u
r
a
e
v
a
u
a
o
n
s
» |
f
F
t
u
u
r
e
o
c
u
s |
l
h
d
f
A
i
i
i
i
i
i
t
t
t
t
t
t
t
c
v
e
n
v
o
v
e
m
e
n
n
e
a
c
n
v
e
s
m
e
n
p
r
o
v
n
g
s
u
p
p
o
r
o
r
m
a
n
a
g
e
m
e
n
o
»
b
l
d
l
d
i
i
i
i
t
t
e
x
e
c
u
e
u
s
n
e
s
s
p
a
n
s
a
n
p
a
n
n
e
a
c
q
u
s
o
n
s
G
l
b
h
d
b
d
F
L
i
i
i
i
i
t
t
t
r
o
u
p
s
n
c
r
e
a
s
n
g
y
e
n
g
a
p
p
r
o
a
c
e
y
n
v
e
s
o
r
s
a
n
m
a
n
a
g
e
m
e
n
e
a
m
s
»
i
i
i
i
t
t
t
t
t
o
p
a
r
c
p
a
e
n
r
a
n
s
a
c
o
n
s
h
l
l
b
f
T
i
i
i
i
i
t
t
t
t
t
t
t
e
e
a
m
s
c
u
r
r
e
n
y
e
v
a
u
a
n
g
a
n
u
m
e
r
o
n
v
e
s
m
e
n
o
p
p
o
r
u
n
e
s
»
W
l
l
l
l
d
k
k
d
d
f
h
h
k
d
d
i
i
i
i
i
i
t
t
t
t
t
t
t
t
t
t
t
t
t
e
e
q
u
p
p
e
o
a
e
a
v
a
n
a
g
e
o
e
c
u
r
r
e
n
m
a
r
e
c
o
n
o
n
s
» |
40% holding
49% holding
CAPITAL MARKETS
Strategy »
- Profit from short to medium term price movements in capital markets
- » Focus on risk management with respect to risk-return and liquidity and maximizing ris k-ad d juste d returns
- »Stake building and disposals for Private Equity and FIG
- »Manage risk in FL Group's portfolio through hedging
Current market
- » Consistent in avoiding risk correlation with other business units
- »Icelandic equities holdings kept low and short trading in banking/brokerage/airline stocks
- S f l t k di l f AMR i diffi lt k t i t»Successul sake disposals o in a difficult mar et environmen
- »Block sale of 8%. Market risk on remaining position was hedged out simultaneously
- » Use of risk has been low lately as markets lack direction and few conviction buy cases have appeared
Development » Continue active involvement on our investments
Capital Markets | Risk Management practices
» Members of the Capital Markets desk have the authority to conclude transactions in listed securities up to a fixed limit per security / transaction
- » The trading mandate for Capital Markets is based on a Value-at-Risk hard limit
- » The combined risk of the desk's positions as measured by 1-Day 99% Value-at-Risk may not exceed a fixed limit
- »The 1-Day 99% Value-at-Risk shall be measured following industry standards
- »Risk guidelines are also in place to address liquidity and concentration risk
- » Risk is actively monitored with respect to the risk covenants in place place – reports available in the morning of each day measuring market risk and liquidity risk
- »Manage risk in FL Group's portfolio through active hedging
FINANCIALS
Company financials
- » Financial performance of the company has been very strong in recent years
- » Market turbulence in recent months has significantly impaired this year's results
- » Diversification of income sources is already underway with emphasis on reducing impact of market fluctuations on P&L:
- »Increased Private Equity activity
- »Consolidation of TM
- » Possible equity method accounting of key strategic assets
- »Fund management revenues
- » Increased focus on operational efficiency:
- »Copenhagen office closed
- »Operational rational cost will decrease in 2008
I
S
K
l
l
i
io
m
n |
F
Y
2
0
0
5 |
F
Y
2
0
0
6 |
9
M
2
0
0
7 |
|
|
|
|
In
in
tm
t
ve
s
en
co
m
e |
2
1,
9
5
8 |
2
3,
9
5
6 |
3,
5
2
0
- |
Ne
d
de
inc
i
ies
iva
ive
t
t
t
om
e,
se
cu
r
a
n
r
s |
1,
2
7
0 |
8
5
4 |
2,
9
4
4 |
In
inc
te
t
re
s
om
e |
2,
2
5
8
- |
4,
9
4
8
- |
1
1,
2
5
2
- |
In
te
t e
re
s
xp
en
se
s |
6
2
1
- |
2,
3
7
1
- |
5,
7
1
3 |
/
fo
ha
los
Ne
ig
in
t
re
n e
xc
ng
e
g
a
s |
2
0,
3
4
9 |
1
7,
4
9
1 |
6,
1
1
5
- |
Op
ing
t
er
a
e
xp
en
se
s |
1,
6
2
5
- |
2,
1
7
7
- |
3,
0
9
8
- |
f
fo
Pr
i
be
in
t
ta
o
re
co
m
e
x |
1
8,
6
9
7 |
1
4,
7
2
0 |
9,
2
1
3
- |
Inc
ta
om
e
x |
3,
2
9
2
- |
2,
6
3
1 |
5,
1
9
3 |
d
(
)
D
isc
inu
io
t
t
t
on
e
op
er
a
ns
ne |
1,
8
4
6 |
2
7,
2
0
8 |
0 |
Pr
f
fo
he
i
t
t
o
r
y
ea
r |
1
2
1
7,
5 |
4
4,
9
5
5 |
4,
0
2
0
- |
Financial strength
30
- » Transaction and equity increase changes balance sheet significantly
- hl b»Share capital increases by 49%
- » FL Group secured ISK 45 bn long-term financing
- » A part of the financing will be used to repay A of the will to Total liabilitiesthe Company's short-term debt
- » Strong financial position
- »Total equity of ISK 180 bn
- »Total assets of ISK 440 bn
- »Cash and cash equivalents of circa ISK 35 bn
- » Equity ratio to increase to approximately 41%
I
S
K
i
l
l
io
m
n |
2
0
0
6 |
/
3
0
0
9 |
/
3
0
1
1
e |
|
|
|
|
l a
To
ta
ts
ss
e |
2
6
2,
8
7
1 |
3
6
9,
4
4
0 |
4
4
0,
0
0
0 |
Ca
Ca
h,
len
d
d
d
d
h
iva
ic
ts
ts
tr
t
te
te
s
s
eq
eq
u
u v
a
e
a
an
re
es
s
c
ca
ca
s
s
, |
6,
6,
9
9
4
5
5
5
5 |
6,
6,
4
9
9
1
5
5 |
3
0
0
0
5, |
L
d
is
i
ies
te
t
se
cu
r |
1
6
6,
9
6
0 |
2
3
4,
4
3
2 |
|
l
d
Un
is
i
ies
te
t
se
cu
r |
1
4,
2
0
1 |
3
1,
7
7
7 |
|
|
|
|
|
To
l e
i
ta
ty
q
u |
1
4
2,
6
6
7 |
1
4
9,
1
8
7 |
1
8
0,
0
0
0 |
|
1
1
2
2
0
0,
1
1
9
9
5
5 |
2
2
2
2
0
0,
2
2
5
5
3
3 |
2
2
6
6
0
0,
0
0
0
0
0
0 |
30/11 numbers are pro-forma estimates for FL Group including TM's 30/9 numbers
Refinancing strengthens maturity profile
- » Refinancing of the company will improve the maturity profile considerably
- » FL Group will continue to work on its funding to further enhance its maturity profile
Funding and capital structure
- »Capital structure and funding options differ substantially between business units
- » Primary objectives of funding policy is to:
- »Minimise maturity mismatch between assets and liabilities
- »Diversify funding sources to fulfil the needs of each business unit
- » Maintain a healthy balance of cash or cash instruments and have liquid assets to cover maturing liabilities for the next 12 months
SUMMARY
»Financial strength increased
- »Equity of ISK 180 bn and cash of ISK 35 bn
- » Opportunities in current market conditions can be better exploited with a strong equity base
34
»Solid asset base
- »High quality assets in the portfolio
- »Property assets complement current asset base very well
- »A new platform investment positioned for growth
»Operational improvements
»Operating expenses will decrease next year
» B tt d k t i k etter manag ed maret ris
»Decreased market exposure on high beta sectors
»Strong investment platform going forward
- »Operations run from London and Reykjavik
- »Rigorous risk and capital management
OFFERING INFORMATION
Private placement
I
s
s
u
e
r
: |
F
L
G
h
h
f
f.
r
o
u
p |
M
a
n
a
g
e
r
: |
f.
K
h
B
k
h
i
t
a
p
n
g
a
n
u |
f
f
d
O
t
e
r
e
o
: |
l
d
f
A
i
i
i
t
t
m
e
g
r
o
u
p
o
n
v
e
s
o
r
s |
P
i
r
c
e
: |
h
I
S
K
1
1
4
4
7
7
p
e
r
s
a
r
e |
f
h
f
f
d
N
o
o
s
a
r
e
s
o
e
r
e
: |
h
6
8
0
2
7
2
1
0
9
s
a
r
e
s
,
, |
O
f
f
i
t
e
r
n
g
a
m
o
u
n
: |
I
S
K
b
l
l
1
0
i
i
o
n |
E
d
b
l
*
t
p
a
n
a
o
e
x
: |
I
S
K
1
b
l
l
5
i
i
o
n |
M
b
i
i
i
i
t
n
m
m
s
s
c
r
p
o
n
u
u
: |
I
S
K
l
l
5
i
i
m
o
n |
b
d
S
i
i
i
t
u
s
c
r
p
o
n
p
e
r
o
: |
b
1
4
D
2
0
0
7
e
c
e
m
e
r |
A
l
l
l
l
d
d
f
f
A
i
i
i
i
i
i
i
i
t
t
t
t
t
t
o
o
c
c
a
a
o
o
n
n
a
a
n
n
n
n
o
o
c
c
a
a
o
o
n
n
: |
b
b
1
7
D
D
2
0
0
7
e
e
c
c
e
e
m
m
e
e
r
r |
L
f
h
i
i
t
s
n
g
o
s
a
r
e
s
: |
D
b
2
7
2
0
0
7
e
c
e
m
e
r |
P
t
a
m
e
n
y
: |
4
J
2
0
0
8
a
n
a
r
u
y |
M
k
k
k
k
i
i
t
t
a
r
e
m
a
n
g
: |
K
h
&
L
d
d
b
b
k
k
i
i
i
t
a
p
n
g
a
n
s
a
n
u |
Disclaimer
38
The information contained in this presentation was obtained from FL Group hf. (FL Group) and other sources and has not been independently verified by Kaupthing Bank hf. (Kaupthing Bank). Any statement contained in this presentation that refers to FL G ' roups esti d mate or antii d c patedfuture results or future acti ii v t es are f d orwar looking statements which reflect the Group's current analysis of existing trends, information and plans. These forward-looking statements are subject to a number of risks and uncertainties that could cause actual results to differ materially depending on factors such as the availability of resources, the timing and effect of regulatory actions and other factors. FL Group does not undertake the obligation to update or alter these forward-looking statementsbeyond its duties as an issuer of listed securities on the OMX Nordic Exchange in Reykjavik Reykjavik, Iceland Iceland.
Neither FL Group nor Kaupthing Bank nor any of their direct or indirect holding companies or shareholders, subsidiaries, associated undertakings or controlling persons, nor any of their respective directors, officers, partners, employees, agents, representatives or advisers makes any representation or warranty, expressed or implied, as to the accuracy, reliability or completeness of the information contained in this presentation or otherwise made available nor as to the reasonableness of any assumption contained herein or therein and any liability in relation thereto (including in respect of direct, indirect or consequential loss or damage) is expressly disclaimed. Nothing contained herein or therein is, or shall be relied upon as, a promise or representation whether as to the past or the future.
This presentation does not constitute an offer, solicitation or invitation for the sale or purchase of the securities of FL Group. K thi aup ng B k an is acting for FL Group and not the recii t p en of this present ti a on and the recei t p of this presentation by any recipient is not to be taken as constituting the giving of investment advice by Kaupthing Bank.
APPENDICIES
PRIVATE EQUITY INVESTMENTS
- » Refresco is the largest manufacturer of private label fruit juices and soft drinks in Europe
- »FL Group led an investor consortium that acquired Refresco from 3i in 2006
- » A successful buy and build strategy led by FL Group has been implemented since the acquisition
- » Strategic acquisitions have enlarged the company significantly, with four acquisitions completed in 2007
- »Sales of c. EUR 1.2 billion with EBITDA margin of 9-10% expected for 2007
- » A twofold strategy for Refresco is being executed:
- »Organic growth
- »F th dd i iti Further add on acquisitions
-
» The goal is to more than double the business again within two to three years and become a clear leader in the private label beverage sector
-
» Co-founded by FL Group at the start of the year, Geysir Green Energy has emerged as a leading participant in the geothermal industry
- »The company has received great international attention
- » Company's investments include:
- »A 32%stake in Hitaveita Sudurnejsa, a power producer and utility in Iceland
- » All of shares in Iceland Drilling gg , the world's leader in geothermal drillin g
- » A leading stake in geothermal developers Enex (71%), Enex China (33%) and Exorka (65%) .
-
»A 20% stake in Western Geopower, a listed Canadian company
-
» House of Fraser is a leading retailer of designer brands
-
»Sells through 60 department stores throughout the UK and Ireland
-
» Currently operates under the brands House of Fraser, Rackhams, Army y, , & Navy, Beatties, Jenners and Binns
- » Acquired in November 2006, teamed up with experienced retail investors, including Baugur and Don McCarthy
- »Acquired 15% stake in the transaction
- » The new management team has successfully restructured the business
-
»On budget in a very depressed retail market
-
» In May, FL Group invested USD 50 million in four active US-based real estate development y, p p projects alongside Bayrock Group.
- Trump Soho: The development of a 46 storey 5 star hotel condominium in Soho, Manhattan, in partnership with Donald Trump and the Sapir organization. Construction is now up to the top floors. Sales for the lower 3/4 of the property have started at an average sale price of c. \$3,000 sq/ft. Completion expected Q4 2008
- Trump Lauderdale: The development of a 5 star hotel condominium in partnership with Donald Trump situated on Fort Lauderdale beach. Construction is now up to the top floor. Sales are to re-start in the winter with a new sales campaign led by a recently hired top 10 broker. The project is currently over 70% sold. Completion expected q4 2008
Whitestone New York: The development of 13 acres of land located along the east river in Whitestone, Queens. Bayrock Group plans to build a number of luxury homes and town homes on this land
- Camelback: The development of a 5 star hotel and residential condominium in Phoenix. The property was recently refinanced providing working capital of \$8m p g gp
-
Midtown Miami: In July, FL Group and Bayrock Group announced their first joint venture investment taking a 40% stake in 500,000 square meters site in Midtown Miami
-
»A leading company in aviation and tourism in the Nordics
- »Operation of main assets is going well
-
» I t ti f th i i i ll d t i t d t Integration o the companies is going well an d cost savings are expec eto continue to drive profitability
-
»The second largest brewery in the Nordic region
- » Royal Unibrew enjoys strong organic growth rates due to mix of attractive products and geographies geographies
- » The company comprises three breweries in Denmark, one in Lithuania, one brewery and one soft drinks business in Latvia as well as three breweries in Poland
- »The company has over 2,200 employees
- » The company has an EV of c. EUR 720m and forecast FY07 sales of c.EUR 517m
- » Share price has decreased significantly recently following a profit warning, according to management mainly due to oneoff items
- » Has a strong position in selected niches/markets, and business model remains highly cash generative
Private Equity | Inspired Gaming Group
- » IGG is the leading worldwide player in Open Server Based Gaming (Open SBGTM) and is also the leading provider of analogue and Open SBGTM machines in the UK for the leisure and gaming markets
- »IGG manages over 107,000 machines across the UK
- » IGG h i h b f bi UK li i l di G l Bi has contracts with a number of big UK clients including ala Bingo and William Hill
- » IGG is looking to consolidate further its foot print of machines whilst developing the software presence to third parties
- » Aim is to consolidate further the machines business to establish a leading footprint of networked machines
- » FL Group approached the company with an offer to take private at 385p per share on 23 Aug and it was announced that we had made an approach on 7 Sept The EV including costs is £417m Sept.