Quarterly Report • Apr 23, 2015
Quarterly Report
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Kinnevik Financial Position
| 31 Mar 2015 | 31 Dec 2014 | 31 Mar 2014 |
|---|---|---|
| 83 940 | 84 370 | 66 183 |
| 302.64 | 304.21 | 238.66 |
| 288.10 | 255.20 | 238.90 |
| -112 | 130 | 1 511 |
| SEKm | 1 Jan-31 Mar 2015 | 1 Jan-31 Mar 2014 | Full year 2014 |
|---|---|---|---|
| Net profit | -448 | 683 | 20 863 |
| Net profit per share, SEK | -1.61 | 2.50 | 75.27 |
| Change in fair value of financial assets | -228 | 868 | 19 494 |
| Dividends received | 7 | - | 2 350 |
| Investments | 596 | 469 | 1 463 |
| Divestments | 423 | 78 | 195 |
Investment AB Kinnevik (publ) Skeppsbron 18 P.O. Box 2094 SE-103 13 Stockholm, Sweden
Reg no 556047-9742 Phone +46 8 562 000 00 Fax +46 8 20 37 74 www.kinnevik.se
Dear Shareholders,
During the first quarter of 2015 we continued to execute our strategy to accelerate the growth of our most promising digital consumer businesses and to focus our efforts on the companies with the greatest potential. Most investee companies achieved solid operating performance although several experienced adverse currency movements resulting in lower than expected revenue and profit growth in their respective reporting currencies.
We continued to reallocate capital, adding to Quikr, Westwing and Saltside, and divesting a portion of our interest in Transcom. During the quarter, Rocket Internet and Zalando completed two accelerated book-built offerings of EUR 589m and EUR 436m, respectively, confirming the strong interest of leading institutional investors in becoming shareholders in our largest investee companies. In just six months, Rocket Internet and Zalando have raised EUR 3.0bln in the equity capital markets, comprising 26% of the total capital raised in the public internet space in Europe over the last ten years.
In the first quarter of 2015, Kinnevik's Net Asset Value ("NAV") was stable at SEK 84bln, or SEK 303 per share, as a SEK 2.6bln growth in the value of our Communication companies was offset by a SEK 2.8bln decline in the value of our E-commerce & Marketplaces businesses. During the period, our share price increased 13% to SEK 288.10 ending the quarter at a 5% discount to our reported NAV.
Our largest investee companies continued to deliver healthy underlying revenue growth rates, but adverse currency effects negatively impacted reported numbers particularly at Millicom and MTG.
Millicom showed organic revenue growth of 10% in local currency with an operating margin of 34%. Reported revenues increased by 22%.
At Tele2, Sweden continued to perform well with mobile service revenue growth of 5%. In Kazakhstan, customer intake improved considerably and in the Netherlands Tele2 continued to gain market share.
Zalando continued to leverage its customer base and strong technological platform to improve customer experience and launch new initiatives including curated shopping, data driven stylist tools and an open platform to increase the personalization of the shopping experience. Zalando achieved its best first quarter ever, with preliminary numbers suggesting revenue growth of 27-29% and an adjusted EBIT margin of 4-6%.
Rocket Internet was particularly active in both new business launches and in the consolidation of the food delivery market. Business launches included Vaniday, an online marketplace for beauty and wellness professionals in Brazil, and Everjobs a new job portal for fast growing economies in Asia and Africa. In food delivery, Rocket Internet established
the Global Online Takeaway Group to combine FoodPanda, its Talabat, La Nevera Roja and Pizzabo acquisitions and recently acquired a close to 40% interest in Delivery Hero. Between these acquisitions and investments into FoodPanda and HelloFresh, Rocket invested over EUR 800m in the food delivery and grocery segment during the quarter. In addition, Rocket Internet established the Philippines Internet Group, a joint venture with PLDT, to focus on the creation and development of online businesses in the Philippine market.
The merger of the five leading emerging markets fashion e-commerce companies to create Global Fashion Group (GFG) was completed and Romain Voog was appointed as GFG's new CEO. Romain brings most valuable additional e-commerce expertise to complement the outstanding work performed by our regional leaders.
MTG's net sales increased by 1% and profits were stable despite significant currency headwinds.
In the Marketplaces segment, Avito, Quikr and Saltside all progressed to adapt their customer proposition to the rapidly changing market dynamics, migrating towards "Augmented Marketplaces" i.e. device agnostic, customized platforms that support integrated services including social functionality, customized and friction-less services.
In the first quarter of 2015, we saw a continuation of the global trend we had observed during 2014, whereby fast growing digital consumer businesses continue to raise private capital for extended periods of time, deferring IPOs until a much later stage of development.
Against this market backdrop, we invested SEK 41m in Saltside, the leading online horizontal classifieds company in Sri Lanka, Bangladesh and Ghana, together with the first external investors Hillhouse Capital and Brummer & Part-
ners. Saltside is a company founded by Kinnevik in 2011, and we are particularly proud that other leading global digital investors have recognized its potential.
Following our two investments in 2014, we continued to consolidate our ownership in Quikr with a further SEK 346m investment. We are pleased with the progress that Quikr has made since our first investment over a year ago, and in particular by its ability to innovate and combine its classifieds offering with instant messaging tools.
Today we also announce a further SEK 186m investment in Westwing. Westwing is the leading European-based Home & Living inspiration e-commerce company with operations in 15 countries and 0.8 million active customers. In 2014 Westwing expanded its international presence, generated net sales of EUR 183m (66% growth over 2013) from 2.1 million orders and significantly improved its EBITDA margin.
In line with our strategy to reallocate capital to digital consumer businesses, we reduced our stake in Transcom from 32% to 7% receiving a total consideration of SEK 421m. We are pleased with the successful turnaround of Transcom of the past three years, and the continued solid performance of the company in the stock market.
Kinnevik ended the quarter with a net debt position of SEK 0.1bln in the parent company. Our private investee companies hold very significant cash positions, and in the second quarter, we expect to receive SEK 3bln in dividends from our investee companies including the Tele2 Norway disposal related extra dividend. We also expect to pay our shareholders our SEK 7.25 kronor per share dividend, amounting to a total of SEK 2bln, all such dividends being subject to AGM approvals in May 2015. Our financial position remains strong and we reiterate our guidance of net investments (gross investments minus disposals) for 2015 of up to SEK 1bln.
We look forward to seeing many of you at our May 18 Annual General Meeting.
Lorenzo Grabau Chief Executive Officer
Kinnevik is an entrepreneurial investment group focused on building digital consumer brands in four sectors: Communication, E-commerce & Marketplaces, Entertainment, and Financial Services. Approximately half of our investments by value are in the Communication and Entertainment sectors, where we own leading stakes in large, established, cash flow generating businesses. The balance of our investments is predominantly invested in the E-commerce & Marketplaces and Financial Services sectors, where we work in partnership with founders and managers to create new, fast-growing businesses, that invest significant amounts of capital to build market-leading positions in a short timeframe.
* Share of Kinnevik's asset value as of 31 March 2015 (figures within brackets refer to 31 March 2014)
Communication makes up 44% of Kinnevik's investments. Kinnevik's mobile companies Millicom and Tele2 have in total 70 million subscribers in 21 countries in Europe, CIS, Latin America, and Africa. Both Millicom and Tele2 are focusing on providing superior services as customers increasingly use their phones to access various data services.
| Key data (USD m)* | Jan-Mar 2015 |
Jan-Mar 2014 |
Full year 2014 |
|---|---|---|---|
| Revenue | 1 709 | 1 405 | 6 386 |
| EBITDA | 565 | 478 | 2 093 |
| Operating profit, EBIT | 227 | 236 | 924 |
| Net profit | -46 | 2 244 | 2 643 |
| Millions of mobile subscribers | 57.4 | 51.6 | 56.3 |
* Figures include UNE from August 2014
Millicom is a leading international telecommunications and media company dedicated to providing digital lifestyle services to the emerging markets in Latin America and Africa. Millicom also offers mobile financial services, various information services, entertainment, e-commerce, lead generation, and payments.
| Key data (SEK m)* | Jan-Mar 2015 |
Jan-Mar 2014 |
Full year 2014 |
|---|---|---|---|
| Revenue | 6 511 | 6 152 | 25 955 |
| EBITDA | 1 428 | 1 362 | 5 926 |
| Operating profit, EBIT | 702 | 960 | 3 490 |
| Net profit | 517 | 585 | 2 626 |
| Millions of mobile subscribers | 12.5 | 12.7 | 12.1 |
* Figures refer to continuing operations (i.e. excluding Tele2 Norway).
Tele2 is one of Europe's leading telecommunications operator offering mobile services, fixed broadband and telephony, data network services, cable TV and content services. Tele2 is focusing its strategy to become a value champion, i.e. to offer its customers the combination of low price, superior customer experience, and a challenger culture.
E-Commerce & Marketplaces makes up 48% of Kinnevik's investments. E-commerce is one of the strongest global growth trends in the world economy, and it is based on a permanent shift in consumer behaviour.
| Key data (EUR m) | Full year 2014 |
Full year 2013 |
|---|---|---|
| Revenue | 2 214 | 1 762 |
| % Growth | 26% | 52% |
| Gross profit | 959 | 715 |
| EBIT* | 82 | -109 |
| % Margin* | 3.7% | -6.2% |
* EBIT excludes equity-settled share-based compensation expenses.
Zalando operates online fashion shops in 15 European markets. The company is today the largest standalone pure online fashion player by net sales in Europe. Key drivers for Zalando's success include its expertise in fashion, retail and technology.
Rocket Internet is a company that incubates and develops e-commerce and other consumer-oriented online companies.
Global Fashion Group ("GFG") operates in 27 countries across four continents and employs over 9,500 people. GFG focuses on emerging markets and targets a EUR 630bln fashion market with over 2.5 billion people who rapidly continue to move towards online purchasing. GFG offers a wide assortment of leading international and local fashion brands, as well as a selection of internal brands. GFG invests consistently in delivering the best customer experience, including last mile delivery networks where necessary.
Home24 is a leading e-commerce retailer in the Home & Living vertical with a presence in seven European countries and in Brazil. Home24 offers the widest assortment in the industry with more than 130,000 products across several categories.
Westwing is a leading international Home & Living e-commerce shopping club offering a curated selection of home décor, interior design and furniture products. Westwing covers 15 markets across Europe, Brazil and Russia.
Launched in 2012, Lazada is the leading online shopping and selling destination for assorted merchandise in Southeast Asia, with presence in Indonesia, Malaysia, the Philippines, Singapore, Thailand and Vietnam.
Linio is the leading online general merchandise retailer in Spanish-speaking Latin America.
Konga is a leading general merchandise marketplace in Nigeria and ranks as one of the top ten websites in the country. The company was launched in 2012 and has evolved from an inventory only platform to an open marketplace.
| Key data (EUR m) | Jan-Mar 2015 |
Jan-Mar 2014 |
Full year 2014 |
|---|---|---|---|
| Revenue* | 1 197 | 1 105 | 4 967 |
| Operating profit, EBIT* | -16.4 | -0.5 | 8.6 |
| Net profit/loss | -29.4 | -4.2 | 5.4 |
* Excluding divested operations and non-recurring items.
Qliro Group is a leading e-commerce company with some of the most well-known and appreciated brands in the Nordic area.
AVITO
| Key data (RUR m) | Full year 2014 |
Full year 2013 |
|---|---|---|
| Revenue | 4 305 | 2 411 |
| % Growth | 79% | - |
| EBITDA | 2 177 | 679 |
| % Margin | 51% | 28% |
Avito is the largest online classified platform in Russia in terms of visitors and number of ads, distancing itself from its competitors.
Quikr, Saltside, Wimdu, Foodpanda, Pricepanda/Getprice, and Yell are all companies operating online marketplaces in emerging markets in Asia, Africa, CIS, and Latin America. The business model is attractive due to the high profitability that can be achieved once a market leading position has been established. A leading position creates high barriers of entry for competitors, while also improving customer experience. Economies of scale are substantial, as the model does not require the companies to hold inventory and tie up capital when growing.
Entertainment makes up 5% of Kinnevik's investments. Kinnevik's entertainment companies have operations in a total of 40 markets and has the largest broadcasting footprint in Europe in MTG.
| Key data (EUR m) | Jan-Mar 2015 |
Jan-Mar 2014 |
Full year 2014 |
|---|---|---|---|
| Revenue | 3 701 | 3 597 | 15 746 |
| Operating profit, EBIT | 415 | 301 | 1 675 |
| Net profit | 318 | 159 | 1 172 |
Modern Times Group MTG is a leading international entertainment broadcasting group with the largest geographical fooprint of TV- and radio operations in Europe.
Iroko is a subscription based video-ondemand platform with the most comprehensive catalogue of African content across the globe. Iroko has subscribers in over 100 countries.
Financial services & Other makes up 3% of Kinnevik's investments. The Financial Services companies are focused on consumer-directed financial services on emerging markets in Africa, Asia, and Latin America.
Bayport provides unsecured credit and other financial services to the formally employed mass market in Africa and Latin America.
Milvik offers, under the brand name Bima, affordable and uniquely designed life and health insurance products via mobile phones.
| SEK m | Book value 2015 31 Mar |
Fair value 2015 31 Mar |
Fair value 2014 31 Dec |
Fair value 2014 31 Mar |
Change Q1 2015 2) |
Total return Q1 2015 |
|---|---|---|---|---|---|---|
| Millicom | 23 553 | 23 553 | 22 039 | 24 915 | 1 514 | 7% |
| Tele2 | 13 970 | 13 970 | 12 865 | 10 867 | 1 105 | 9% |
| Total Communication | 37 523 | 37 523 | 34 904 | 35 782 | 2 619 | 8% |
| Zalando | 16 896 | 16 896 | 19 030 | 12 143 | -2 134 | -11% |
| Rocket Internet | 9 270 | 9 270 | 10 620 | 1 204 | -1 350 | -13% |
| Global Fashion Group 1) | 5 928 | 5 928 | 6 092 | 1 979 | -164 | |
| Home and Living (incl. Home24, Westwing) | 1 491 | 1 491 3) | 1 305 | 913 | 186 | |
| Qliro Group | 673 | 673 | 737 | 584 | -64 | -9% |
| Other E-commerce 1) | 1 669 | 1 669 3) | 1 272 | 872 | 397 | |
| Avito | 2 597 | 2 597 | 2 298 | 2 186 | 299 | |
| Quikr | 814 | 814 | 425 | 254 | 389 | |
| Other Marketplaces | 558 | 729 3) | 1 075 | 781 | -346 | |
| Total E-commerce & Marketplaces | 39 896 | 40 067 | 42 854 | 20 916 | -2 787 | -8% |
| MTG | 3 566 | 3 566 | 3 358 | 4 078 | 208 | 6% |
| Other | 415 | 474 3) | 567 | 1 072 | -93 | |
| Total Entertainment | 3 981 | 4 040 | 3 925 | 5 150 | 115 | 3% |
| Bayport | 1 140 | 1 140 | 1 032 | 860 | 108 | |
| Transcom | 159 | 159 | 494 | 510 | -335 | 17% |
| Black Earth Farming | 215 | 215 | 151 | 298 | 64 | 42% |
| Other | 876 | 908 | 880 | 1 156 | 28 | |
| Total Financial Services & Other | 2 390 | 2 422 | 2 557 | 2 824 | -135 | 13% |
| Net cash in the Parent Company | 420 | 420 | 130 | 1 632 | 290 | |
| Debt, unpaid investments/divestments | -532 | -532 | 0 | -121 | -532 | |
| Total Equity/Net asset value | 83 677 | 83 940 | 84 370 | 66 183 | -430 | 0% |
| Net asset value per share | 302.64 | 304.21 | 238.66 | -1.57 | ||
| Closing price, class B share, SEK | 288.10 | 255.20 | 238.90 | 32.90 | 13% |
1) Comparable periods adjusted for transactions related to the merger of Global Fashion Group.
2) Including investments/divestments.
3) For split see page 13.
The Board of Directors proposes that the Annual General Meeting resolves payment of a dividend of SEK 7.25 per share for 2014 corresponding to an increase of 3.6% compared with 2013.
The Boards of Directors of Millicom, Tele2 and MTG have proposed to each respective company's Annual General Meetings in May that dividends be resolved according to the following:
| proposed to be paid from listed holdings | Amount (SEK m) | |
|---|---|---|
| Millicom | 861 1) | |
| Tele2 | SEK 4.85 per share | 657 |
| MTG | SEK 11.00 per share | 149 |
| Total expected ordinary dividends | 1 667 | |
| Tele2, extra dividend | SEK 10.00 per share | 1 355 |
| Total expected dividends | 3 022 | |
| Proposed dividend to Kinnevik's shareholders | ||
| Ordinary dividend | SEK 7.25 per share | 2 011 |
| Total proposed dividend | 2 011 |
1) Based on a currency rate SEK/USD of 8.62.
As at 31 March 2015 Kinnevik had a net debt position in the parent company of SEK 0.1bln.
Kinnevik aims to pay an annual dividend growing in line with dividends received from investee companies and the cashflow generated from investment activities. Kinnevik will make share buybacks when the shares trade at a significant discount to their intrinsic value, as perceived by Kinnevik, and the company has net cash.
| Investment (SEK m) | Jan-Mar 2015 |
|---|---|
| Quikr | 346 |
| Westwing | 186 |
| Saltside | 41 |
| Other | 23 |
| Total | 596 |
| Divestment (SEK m) | Jan-Mar 2015 |
| Transcom | 421 |
| Other | 2 |
| Total | 423 |
| Net Investments (SEK m) | 173 |
In the first quarter, Kinnevik invested USD 40m in Quikr, EUR 20m in Westwing and USD 5m in Saltside. Other minor investments accumulated to SEK 23m, and total investments hence amounted to SEK 596m in the first quarter. During the quarter, Kinnevik also divested a 24.5% interest in Transcom and the consideration thereof amounted to SEK 421m. Other minor divestments accumulated to SEK 2m, and total divestments hence amounted to SEK 423m in the first quarter. Kinnevik's net investment activity in the first quarter amounted to SEK 173m.
For the full year 2015 Kinnevik expects its net investments (gross investments net of divestments) to amount to SEK 1.0bln.
| Investment (SEK m) | Kinnevik ownership |
Accumulated net invested amount |
Fair value 31 Mar 2015 |
Change in fair value and dividends received Jan-Mar 2015 5 |
Valuation method |
|---|---|---|---|---|---|
| Global Fashion Group 1, 2 | 25% | 3 484 | 5 928 | -164 | Latest transaction |
| Home & Living | |||||
| Home24 4 | 20% | 796 | 810 | -25 | Sales multiple |
| Westwing 4 | 17% | 360 | 577 | 12 | Sales multiple |
| Other | Mixed | 57 | 104 | 11 | Mixed |
| Other E-commerce | |||||
| Lazada 1, 3 | 9% | 502 | 526 | -30 | Sales multiple |
| Linio 1, 3, 4 | 9% | 150 | 162 | -21 | Sales multiple |
| Konga | 41% | 209 | 323 | 31 | Latest transaction |
| Other 1, 2 | Mixed | 886 | 658 | -8 | Mixed |
| Marketplaces | |||||
| Avito | 31% | 438 | 2 597 | 299 | EBITDA multiple |
| Quikr | 18% | 708 | 814 | 43 | Latest transactions 6 |
| Saltside | 61% | 195 | 195 | 0 | Latest transactions 6 |
| Wimdu 4 | 27% | 367 | 370 | -11 | Sales multiple |
| Other | Mixed | 233 | 164 | 45 | Mixed |
| Total E-commerce & Marketplaces | 8 384 | 13 228 | 181 | ||
| Iroko | 18% | 52 | 70 | 5 | Latest transaction |
| Metro | 100% | 992 | 347 | -114 | DCF |
| Other | Mixed | 58 | 57 | 1 | Mixed |
| Total Entertainment | 1 103 | 474 | -108 | ||
| Bayport | 31% | 467 | 1 140 | 108 | Latest transaction |
| Milvik/Bima | 38% | 84 | 227 | 21 | Latest transaction |
| Rolnyvik | 100% | 174 | 250 | - | DCF |
| Other | Mixed | 594 | 341 | 13 | Mixed |
| Total Financial Services & Other | 1 319 | 1 958 | 142 | ||
| Total Unlisted Assets | 10 806 | 15 660 | 215 |
1) Invested amount and comparable periods have been adjusted pro forma for transactions related to the merger of Global Fashion Group.
2) Accumulated net invested amount includes value of share distributions received from Rocket Internet.
3) Lazada and Linio are reported on separate lines following the spin-off of shares in Lazada from BigCommerce.
4) Ownership not adjusted for employee stock option plans and employee equity at subsidiary level.
5) Including change in fair value and dividends received relating to subsidiaries which are consolidated into the group's financial statements.
6) Equivalent to invested amount.
At the end of March, Kinnevik's unlisted assets were valued at a total of SEK 15,660m, to be compared with an accumulated invested amount (net after dividends received) of SEK 10,806m. The unrealised change in fair value amounted to a profit of SEK 215m in the first quarter (including change of assessed value of subsidiaries when calculating net asset value), as specified in the table on the previous page.
At the end of December 2014, the global e-commerce group Global Fashion Group ("GFG") received the final rulings by fiscal authorities and antritrust approvals required for the combination of subsidiary shares in Bigfoot I and Bigfoot II (including Dafiti, Jabong, Lamoda, Namshi and Zalora). For the purpose of the establishment of GFG, the five companies were valued according to their last funding rounds, resulting in a valuation of EUR 2.7bln for the combined entity. In March 2015, GFG raised an additional EUR 32m in primary capital at the EUR 2.7bln valuation. Since the merger was all in stock and the March funding round was relatively small and sourced from existing investors, neither have been used as basis for determining the fair value of GFG in Kinnevik's accounts. As in previous quarters, Kinnevik's valuation has instead been based on the EUR 2.4bln valuation (adjusted for subsequent financing to EUR 2.5bln) implied by the May 2014 distribution from Rocket Internet to its shareholders of shares in Bigfoot I and Bigfoot II as well as cash. The valuation implies an average sales multiple of 3.0x based on GFG's last 12 months historical pro forma sales.
As in previous quarters, sales multiple valuations have been applied for the companies listed in the table below. The sales multiples for the companies' listed peers have been relatively stable during the first quarter.
| Company | 31 Mar 2015 * |
31 Dec 2014 * |
Adjusted multiple ** |
|---|---|---|---|
| Home24 | 1.6 | 1.7 | No |
| Westwing | 1.6 | 1.6 | Yes |
| Lazada | 2.0 | 1.9 | No |
| Linio | 1.5 | 1.6 | No |
| Wimdu | 2.5 | 2.6 | Yes |
* Sales multiple, last 12 months historical sales.
** Sales multiple has been adjusted as per 31 March to reflect factors such as lower profitability than peer group. See Note 5 for further details.
As a consequence of the continued positive development in Home24 and Westwing, the discount to the peer group average sales multiple applied in Kinnevik's valuations as at 31 March 2015 has only been marginally adjusted for Westwing and left unadjusted for Home24.
Lazada and Linio are undergoing a shift from an inventory based business model into a marketplace model, where third party products are sold on the companies' platforms. Revenues from this model only include the provision that Lazada and Linio receives. To reflect the ongoing shift in business model in the valuation of each company, sales multiples for two different peer groups have been applied in relation to the revenue contribution of each business model. The weighted average multiple applied on the respective company's last 12 months historical sales was 2.0x for Lazada and 1.5x for Linio.
The valuation of Avito has as in the previous quarter been based on the average EBITDA multiple of a group of comparable companies. As at 31 March 2015, an EBITDA multiple of 22x was applied on the company's last publicly available 12 months EBITDA (ending on 31 December 2014). The EBITDA multiple applied in the previous quarter was 24x. The valuation results in a total equity value of SEK 8.3bln compared with SEK 7.3bln as at 31 December 2014. The increase in value is explained by the appreciation of the Russian Ruble against the Swedish Krona and the company's continued strong performance, which has offset the decrease in the applied multiple. When determining the assessed fair value of Avito, Kinnevik has considered the transaction made in Avito warrants in February 2014, but considered that the size of the trade (1.7% of the total capital in the company) is too small to be applied to Kinnevik's shareholding in Avito. If the SEK transaction price had been applied as fair value in Kinnevik's financial statements, the book value of Kinnevik's shareholding would have been SEK 1.1bln higher as at 31 March 2015.
The valuation of Quikr has been based on the value of each respective series of shares implied by three respective financing rounds during 2014 and 2015. When determining the fair value of Quikr, Kinnevik has not ascribed its entire shareholding the value implied by the funding round completed in the first quarter of 2015 due to liquidation preference.
For Konga, Bayport and Milvik/Bima, the valuations as at 31 March 2015 have been based on the latest transaction at arm's length. For each of these companies, the latest transaction at arm's length consists of financing rounds, with participation from both new and existing investors.
| Investment (SEK m) | Valuation in latest transaction |
Implied value Kinnevik's stake |
Fair value Kinnevik's stake |
Difference | Nature of latest transaction |
|---|---|---|---|---|---|
| Global Fashion Group | 25 570 | 6 498 | 5 928 | 570 | New share issue |
| Home24 | 7 586 | 1 537 | 810 | 727 | New share issue |
| Westwing | 4 441 | 734 | 577 | 157 | New share issue |
| Lazada | 9 262 | 876 | 526 | 350 | New share issue |
| Linio | 2 451 | 231 | 162 | 69 | New share issue |
| Avito | 11 709 | 3 681 | 2 597 | 1 084 | Sale of warrants |
| Quikr | 7 790 | 1 378 | 814 | 564 | New share issue |
| Saltside | 977 | 594 | 195 | 399 | New share issue |
| Other | 16 410 | 2 121 | 1 619 | 502 | New share issues |
| Total E-commerce & Marketplaces | 17 650 | 13 228 | 4 422 |
A number of Kinnevik's E-commerce & Marketplaces portfolio companies have issued new shares to external investors at price levels that exceed Kinnevik's recognized assessed fair values. Since the newly issued shares have higher preference over the portfolio companies' assets in the event of liquidation or sale than Kinnevik's shares have, i.e. in case of a lower valuation of the companies in a sale or liquidation Kinnevik would not receive proceeds pro-rata to its shareholding, Kinnevik does not consider these price levels as a relevant base for assessing the fair values in the accounts.
As specified in the above table, the total difference between fair values in Kinnevik's books and implied valuations as per the latest new share issues with higher preference than Kinnevik's shares, and other transactions, amounted to SEK 4.4bln applied to Kinnevik's shareholdings as at 31 March 2015.
For further information about valuation principles and assumptions, please see Note 5.
| Past 30 years | 17% |
|---|---|
| Past 10 years | 20% |
| Past 5 years | 21% |
| Past 12 months | 24% |
Total return is calculated on the assumption that shareholders have reinvested all cash dividends and dividends in kind into the Kinnevik share.
| Average annual return (IRR) | 1 year | 5 years |
|---|---|---|
| Communication | 9% | 8% |
| E-commerce & Marketplaces | 84% | 46% |
| Entertainment | -18% | -8% |
| Financial services & Other | 10% | 11% |
| Total portfolio | 32% | 13% |
IRR is based on fair values at the beginning and end of the respective period, includes cash and non-cash dividends and is calculated on a SEK basis.
| Note | 2015 1 Jan 31 Mar |
2014 1 Jan 31 Mar |
2014 Full year |
|---|---|---|---|
| 5 | -228 | 868 | 19 494 |
| 6 | 7 | 0 | 2 350 |
| 290 | 334 | 1 245 | |
| -145 | -193 | -571 | |
| -239 | -266 | -1 057 | |
| 6 | 7 | 57 | |
| -142 | -59 | -637 | |
| 4 | -451 | 691 | 20 881 |
| 11 | -4 | -27 | |
| -440 | 687 | 20 854 | |
| -8 | -4 | 9 | |
| -448 | 683 | 20 863 | |
| -446 | 694 | 20 891 | |
| -2 | -11 | -28 | |
| -1.61 | 2,50 | 75.33 | |
| -1.61 | 2,50 | 75.27 | |
| 277 359 896 | 277 318 298 | 277 343 257 | |
| 277 492 755 | 277 568 302 | 277 529 845 | |
The change in fair value of financial assets amounted to a loss of SEK 228m (profit of SEK 868m) for the first quarter of which a loss of SEK 553m (profit of 977) was related to listed holdings and a profit of SEK 325m (loss of 109) was related to unlisted holdings, see note 5 for further details.
Other operating expenses includes an impairment of intangible fixed assets of SEK 141m within Metro.
| 2015 1 Jan 31 Mar |
2014 1 Jan 31 Mar |
2014 Full year |
|
|---|---|---|---|
| Net profit/loss for the period | -448 | 683 | 20 863 |
| OTHER COMPREHENSIVE INCOME | |||
| Items that may be reclassified to profit and loss | |||
| Translation differences | 15 | -25 | 11 |
| Cash flow hedging | |||
| -gains/losses during the period | -5 | -15 | -47 |
| Total items that will be reclassified to profit and loss | 10 | -40 | -36 |
| TOTAL OTHER COMPREHENSIVE INCOME FOR THE PERIOD | 10 | -40 | -36 |
| TOTAL COMPREHENSIVE INCOME FOR THE PERIOD | -438 | 643 | 20 827 |
| Total comprehensive income for the period attributable to: | |||
| Equityholders of the Parent Company | -435 | 651 | 20 853 |
| Non-controlling interest | -3 | -8 | -26 |
| 2015 1 Jan |
2014 1 Jan |
2014 | ||
|---|---|---|---|---|
| Note | 31 Mar | 31 Mar | Full year | |
| Dividends received | 6 | 7 | 0 | 1 400 |
| Cash flow from operating subsidiaries operations | -88 | -58 | -76 | |
| Cash flow from operating costs within investment operation | -45 | -39 | -185 | |
| Cash flow from operations before interest net and income taxes | -126 | -97 | 1 139 | |
| Interest, received | 3 | 11 | 17 | |
| Interest, paid | -12 | -11 | -44 | |
| Income taxes, paid | 0 | 0 | -7 | |
| Cash flow from operations | -135 | -97 | 1 105 | |
| Acquisition of subsidiaries | 0 | - | -7 | |
| Investments in shares and other securities | -110 | -658 | -1 574 | |
| Sale of shares and other securities | 521 | -5 | 61 | |
| Other | -2 | -5 | -70 | |
| Cash flow from investing activities | 409 | -668 | -1 590 | |
| Change in interest bearing loans | 16 | 4 | 48 | |
| Dividend paid to equity holders of the Parent company | - | - | -1 941 | |
| Contribution from holders of non-controlling interest | 289 | - | 10 | |
| Other | 0 | -10 | -5 | |
| Cash flow from financing activities | 305 | -6 | -1 888 | |
| Cash flow for the period | 579 | -771 | -2 373 | |
| Cash and short term investments, opening balance | 1 594 | 3 967 | 3 967 | |
| Cash and short term investments, closing balance | 2 173 | 3 196 | 1 594 | |
| SUPPLEMENTARY CASH FLOW INFORMATION | ||||
| Investments in shares and other securities | 5 | -552 | -469 | -1 342 |
| Non-cash investments | 0 | 0 | 71 | |
| Current period investments, paid after period end | 531 | 25 | 0 | |
| Prior period investments, paid in current period | -89 | -214 | -303 | |
| Investments in shares and other securities | -110 | -658 | -1 574 |
| Note | 2015 31 Mar |
2014 31 Mar |
2014 31 Dec |
|
|---|---|---|---|---|
| ASSETS | ||||
| Fixed assets | ||||
| Intangible fixed assets | 148 | 740 | 293 | |
| Tangible fixed assets | 333 | 320 | 335 | |
| Financial assets accounted at fair value through profit and loss | 5 | 83 160 | 62 917 | 83 259 |
| Other fixed assets | 11 | 62 | 26 | |
| Total fixed assets | 83 652 | 64 039 | 83 913 | |
| Other current assets | 468 | 595 | 558 | |
| Short-term investments | 7 | 1 031 | 2 675 | 1 311 |
| Cash and cash equivalents | 7 | 1 142 | 521 | 283 |
| TOTAL ASSETS | 86 293 | 67 830 | 86 065 | |
| SHAREHOLDERS' EQUITY AND LIABILITIES | ||||
| Shareholders' equity attributable to equityholders of the Parent Company |
83 677 | 65 929 | 84 176 | |
| Shareholders' equity attributable to non controlling interest | 316 | 35 | 30 | |
| Interest-bearing liabilities, long-term | 7 | 1 292 | 1 253 | 1 289 |
| Interest-bearing liabilities, short-term | 7 | 9 | 4 | 9 |
| Non interest-bearing liabilities | 999 | 609 | 561 | |
| TOTAL EQUITY AND LIABILITIES | 86 293 | 67 830 | 86 065 |
| 2015 1 Jan |
2014 1 Jan |
2014 | |
|---|---|---|---|
| 31 Mar | 31 Mar | Full year | |
| Equity, opening balance | 84 176 | 65 319 | 65 319 |
| Total comprehensive income for the period | -438 | 643 | 20 827 |
| Contribution from non-controlling interest | 289 | - | 10 |
| Acquisition from non-controlling interest | -35 | - | - |
| Dividend paid to owners of non-controlling interest | 0 | - | -5 |
| Dividend paid to shareholders of the Parent company | 0 | - | -1 941 |
| Effect of employee share saving programme | 1 | 2 | -4 |
| Equity, closing amount | 83 993 | 65 964 | 84 206 |
| Equity attributable to the shareholders of the Parent Company | 83 677 | 65 929 | 84 176 |
| Equity attributable to non-controlling interest | 316 | 35 | 30 |
| 2015 | 2014 | 2014 | ||
|---|---|---|---|---|
| Note | 31 Mar | 31 Mar | 31 Dec | |
| Debt/equity ratio | 0.02 | 0.02 | 0.02 | |
| Equity ratio | 97% | 97% | 98% | |
| Net cash/(Net debt) including debt unpaid investments | 7 | 458 | 1 841 | 402 |
| Debt/equity ratio | Interest-bearing liabilities including interest-bearing provisions divided by shareholders' equity. |
|---|---|
| Equity ratio | Shareholders' equity including non-controlling interest as percentage of total assets. |
| Net cash/(net debt) | Interest bearing receivables, short-term investments and cash and cash equivalents less interest bearing liabilities including interest-bearing provisions and net debt unpaid investments/divest ments. |
| Total return | Change in market price and dividends paid assuming that shareholders have reinvested all cash dividends and dividends in kind into the company's share. |
| Internal rate of return, IRR | Return based on fair value at the beginning and end of the respective period, includes cash di vidends and dividends in kind and is calculated on a SEK basis. |
The consolidated financial statements are prepared in accordance with the International Financial Reporting Standards (IFRS), as adopted by the EU. This report was prepared in accordance with the Annual Accounts Act and IAS 34, Interim Financial Reporting.
The accounting principles and calculation methods applied in this report are the same as those described in the 2014 Annual Report.
The Group's financing and management of financial risks is centralized within Kinnevik's finance function and is conducted on the basis of a Finance policy established by the Board of Directors. The Group's operational risks are primarily evaluated and managed within the particular business area and then reported to the Kinnevik Board.
The Group has established a model for risk management, the aims of which are to identify, control and reduce risks. The identified risks and how they are managed are reported to the Kinnevik Board on a quarterly basis.
Kinnevik is exposed to financial risks mainly in respect of changes in the value of the stock portfolio, changes in market interest rates, exchange rate risks, liquidity and refinancing risks and counterparty risks.
The Group is also exposed to political risks since the companies Kinnevik has invested in have a substantial part of their operations in emerging markets such as Latin America, Sub-Saharan Africa, Russia and Eastern Europe.
For a more detailed description of the Company's risks and risk management, refer to the Board of Directors' report and Note 26 of the 2014 Annual Report.
Related party transactions for the period are of the same character as the transactions described in the 2014 Annual Report.
| 2015 Jan-Mar |
2014 Jan-Mar |
|||||
|---|---|---|---|---|---|---|
| Operating subsidiaries |
Investment operation |
Total | Operating subsidiaries |
Investment operation |
Total | |
| Change in fair value of financial assets | -228 | -228 | 2 | 866 | 868 | |
| Dividends received | 7 | 7 | 0 | |||
| Revenue | 290 | 290 | 334 | 334 | ||
| Cost of goods and services sold | -145 | -145 | -193 | -193 | ||
| Selling and administration costs | -192 | -47 | -239 | -214 | -52 | -266 |
| Other operating income and expenses | -136 | -136 | -52 | -52 | ||
| Operating profit/loss | -176 | -275 | -451 | -123 | 814 | 691 |
| Financial net | 8 | 3 | 11 | -2 | -2 | -4 |
| Profit/loss before taxes | -168 | -272 | -440 | -125 | 812 | 687 |
Operating subsidiaries includes Metro, Vireo Energy, Rolnyvik, Saltside Technologies, AVI and G3 Good Governance Group.
Kinnevik's unlisted holdings are valued using IFRS 13 and the International Private Equity and Venture Capital Valuation Guidelines, whereby a collective assessment is made to establish the valuation method that is most suitable for each individual holding. Firstly, it is considered whether any recent transactions have been made at arm's length in the companies. For new share issues, consideration is taken to if the newly issued shares have better preference to the company's assets than earlier issued shares if the company is being liquidated or sold. For companies where no or few recent arm's length transactions have been performed, a valuation is conducted by applying relevant multiples to the company's historical and forecast key figures, such as sales, profit, equity, or a valuation based on future cash flows. When performing a valuation based on multiples, consideration is given to potential adjustments due to, for example, difference in size, historic growth, profitability and geographic market between the current company and the group of comparable companies.
Work to measure Kinnevik's unlisted holdings at fair value is performed by the financial department and based on financial information reported from each holding. The correctness of the financial information received is ensured through continuous contacts with management of each holding, monthly reviews of the accounts, as well as internal audits performed by auditors engaged by Kinnevik. Prior to decisions being made about the valuation method to be applied for each holding, and the most suitable peers with which to compare the holding, the financial department obtains information and views from the investment team, as well as external sources of information. Information and opinions on applicable methods and groups of comparable companies are also obtained periodically from well-renowned, valuation companies in the market. The results from the valuation is discussed firstly with the CEO and the Chairman of the Audit Committee, following which a draft is sent to all members of the Audit Committee, who each quarter analyze and discuss the outcome before it is approved at a meeting attended by the company's external auditors.
Below is a summary of the valuation methods applied in the accounts as per 31 March 2015:
| Company | Valuation method | Valuation assumptions |
|---|---|---|
| Global Fashion Group ("GFG") |
Valuation based on latest transaction at arm's length; the Rocket Internet distribution of cash and shares in Bigfoot I and Bigfoot II to its shareholders in May 2014. The transaction valued all shares in GFG at EUR 2.4bln (adjusted to EUR 2.5bln for financing subsequent to the transaction). |
|
| Home24 | Valuation based on sales multiples for a group of comparable companies, including, among others, Amazon, Zalando and AO World. |
Last 12 months sales Multiple: 1.6x |
| The valuation also considers the preferential rights Kinnevik's shares have in case of liquidation or sale of the entire company. |
| Company | Valuation method | Valuation assumptions |
|---|---|---|
| Westwing | Valuation based on sales multiples for a group of comparable companies including, among others, Amazon, Zalando and AO World. |
12 months historical sales Multiple: 1.6x |
| The average sales multiple for the peer group has been reduced for factors like lower profitability and company size. |
||
| The valuation also considers the preferential rights Kinnevik's shares have in case of liquidation or sale of the entire company. |
||
| Lazada | Valuation based on sales multiples, weighted for the contribution of sales from the company's different business models; marketplace and inventory based sales. The peer group for the inventory based model includes, among others, Amazon, CDON, JD.com and AO World. The peer group for the marketplace model includes, among others, MercadoLibre and eBay. |
12 months historical sales Multiple: 2.0x |
| The valuation also considers the preferential rights Kinnevik's shares have in case of liquidation or sale of the entire company. |
||
| Linio | Valuation based on sales multiples, weighted for the contribution of sales from the company's different business models; marketplace and inventory based sales. The peer group for the inventory based model includes, among others, Amazon, CDON, JD.com and AO World. The peer group for the marketplace model includes, among others, MercadoLibre and eBay. |
12 months historical sales Multiple: 1.5x |
| The valuation also considers the preferential rights Kinnevik's shares have in case of liquidation or sale of the entire company. |
||
| Konga | Valuation based on latest transaction at arm's length; fundraising in Q1 2013. The transaction valued all shares in Konga at USD 92m (adjusted for fundrai sing subsequent to the transaction). |
|
| Avito | Valuation based on EBITDA multiples for a group of comparable companies, including, among others, Autohome, Infoedge India and Yandex. |
12 months historical EBITDA (as per 31 December 2014) Multiple: 22x |
| Quikr | Valuation based on latest transactions at arm's length in each series of sha res; fundraisings in Q1 and Q3 2014, and Q1 2015. |
|
| Wimdu | Valuation based on sales multiples for a group of comparable companies, including, among others, HomeAway, Priceline, Expedia and Tripadvisor. The average sales multiple in the peer group has been reduced for factors like lower profitability and company size. |
Last 12 months sales Multiple: 2.5x |
| The valuation also considers the preferential rights KInnevik's shares have in case of liquidation or sale of the entire company. |
||
| Bayport | Valuation based on latest transaction at arm's length; fundraisning in Q1 2014. The transaction valued all shares in Bayport at USD 431m. |
|
| Milvik/Bima | Valuation based on latest transaction at arm's length; fundraising in Q3 2014. The transaction valued all shares in Milvik/Bima at USD 66m (adjusted for financing subsequent to the transaction). |
For the companies in the table above that are valued based on multiples (i.e. Home24, Westwing, Lazada, Linio, Avito and Wimdu), an increase in the multiple by 10% would have increased estimated fair value by SEK 271m. Similarly, a decrease in the multiple by 10% would have decreased estimated fair value by SEK 319m.
When establishing the fair value of other financial instruments, methods that in every individual case are assumed to provide the best estimation of fair value have been used. For assets and liabilities maturing within one year, a nominal value adjusted for interest payments and premiums is assumed to provide a good approximation to fair value.
Information is provided in this note per class of financial instruments that are valued at fair value in the balance sheet, distributed in the levels stated below:
Level 1: Fair value established based on listed prices in an active market for the same instrument.
Level 2: Fair value established based on valuation techniques with observable market data, either directly (as a price) or indirectly (derived from a price) and not included in Level 1.
Level 3: Fair value established using valuation techniques, with significant input from data that is not observable in the market.
| 2015 1 Jan 31 Mar |
2014 1 Jan 31 Mar |
2014 Full year |
|
|---|---|---|---|
| Black Earth Farming | 64 | -39 | -185 |
| Millicom | 1 514 | 700 | -2 176 |
| MTG | 208 | -420 | -1 140 |
| Qliro Group | -64 | -203 | -289 |
| Rocket Internet2) | -1 350 | - | 2 842 |
| Seamless | 19 | -68 | -147 |
| Tele2 | 1 104 | 1 003 | 3 001 |
| Transcom | 86 | 4 | 1 |
| Zalando2) | -2 134 | - | 3 547 |
| Total Listed assets | -553 | 977 | 5 454 |
| Avito | 299 | -109 | - |
| Bayport | 108 | 1 | 174 |
| Global Fashion Group1) | -164 | -17 | 2 945 |
| Home24 | -25 | 15 | 150 |
| Iroko | 5 | 6 | 14 |
| Konga | 31 | - | 41 |
| Lazada1) | -30 | -8 | 110 |
| Linio1) | -21 | - | 10 |
| Milvik/BIMA | 21 | 4 | 96 |
| Quikr | 43 | - | 64 |
| Rocket Internet2) | - | -14 | 6 557 |
| Westwing | 12 | 2 | 162 |
| Wimdu | -11 | - | 20 |
| Zalando2) | - | 7 | 3 347 |
| Other | 57 | 4 | 350 |
| Total Unlisted assets | 325 | -109 | 14 040 |
| Total | -228 | 868 | 19 494 |
1) Comparable periods have been adjusted for restucturing relating to merger of Global Fashion Group and spin-off of assets within Big-Commcerce.
2) Rocket Internet and Zalando have been reclassified from Unlisted assets to Listed assets as a result of IPOs in October 2014. Changes in fair value up until IPO have been included in Unlisted assets and changes thereafter in Listed assets.
| 31 Mar 2015 (listed companies) |
||||||
|---|---|---|---|---|---|---|
| Class A shares |
Class B | shares Capital/Votes (%) | 2015 31 Mar |
2014 31 Mar |
2014 31 Dec |
|
| Black Earth Farming | 51 811 828 | - | 24.9/24.9 | 215 | 298 | 151 |
| Millicom | 37 835 438 | - | 37.8/37.8 | 23 553 | 24 915 | 22 039 |
| MTG | 4 461 691 | 9 042 165 | 20.3/48.0 | 3 566 | 4 078 | 3 358 |
| Qliro Group | 42 613 642 | - | 28.5/28.5 | 673 | 584 | 737 |
| Rocket Internet2) | 21 716 964 | - | 13.2/13.2 | 9 270 | - | 10 620 |
| Seamless | 4 232 585 | - | 10.1/10.1 | 67 | 124 | 48 |
| Tele2 | 18 430 192 | 117 065 945 | 30.4/48.0 | 13 970 | 10 867 | 12 865 |
| Transcom | 1 929 285 | - | 7.4/7.4 | 159 | 510 | 494 |
| Zalando2) | 78 427 800 | - | 32.0/32.0 | 16 896 | - | 19 030 |
| Total Listed assets | 68 369 | 41 376 | 69 342 | |||
| Avito | 31/31 | 2 597 | 2 186 | 2 298 | ||
| Bayport | 31/31 | 1 140 | 860 | 1 032 | ||
| Global Fashion Group1) | 25/25 | 5 928 | 1 935 | 6 092 | ||
| Home24 | 20/20 | 810 | 694 | 833 | ||
| Iroko | 18/18 | 70 | 42 | 50 | ||
| Konga | 41/41 | 323 | 156 | 292 | ||
| Lazada1) | 9/9 | 526 | 362 | 555 | ||
| Linio1) | 9/9 | 162 | 173 | 184 | ||
| Milvik/BIMA | 38/38 | 227 | 114 | 206 | ||
| Quikr | 18/18 | 814 | 254 | 425 | ||
| Rocket Internet2) | N/A | - | 1 204 | - | ||
| Westwing | 17/17 | 577 | 219 | 379 | ||
| Wimdu | 27/27 | 370 | 358 | 381 | ||
| Zalando2) | N/A | - | 12 143 | - | ||
| Other | 1 247 | 841 | 1 190 | |||
| Total Unlisted assets | 14 791 | 21 541 | 13 917 | |||
| Total | 83 160 | 62 917 | 83 259 |
1) Comparable periods have been adjusted for restucturing relating to merger of Global Fashion Group and spin-off of assets within Big-Commcerce.
2) Rocket Internet and Zalando have been reclassified from Unlisted assets to Listed assets as a result of IPOs in October 2014.
| 2015 1 Jan 31 Mar |
2014 1 Jan 31 Mar |
2014 Full year |
|
|---|---|---|---|
| Qliro Group | - | - | 241 |
| Seamless | - | - | 3 |
| Total Listed assets | - | - | 244 |
| Avito | - | 98 | 102 |
| Bayport | - | 23 | 23 |
| Global Fashion Group1) | - | 32 | 276 |
| Home24 | 2 | - | 3 |
| Iroko | 15 | - | - |
| Konga | - | - | 95 |
| Lazada1) | - | - 2 | 72 |
| Milvik/BIMA | - | 64 | 64 |
| Quikr | 346 | 254 | 362 |
| Westwing | 186 | - | - |
| Wimdu | - | - | 2 |
| Other | 3 | - | 99 |
| Total Unlisted assets | 552 | 469 | 1 098 |
| Total | 552 | 469 | 1 342 |
1) Comparable periods have been adjusted for restucturing relating to merger of Global Fashion Group and spin-off of assets within Big-Commcerce.
| 2015 1 Jan 31 Mar |
2014 1 Jan 31 Mar |
2014 Full year |
|
|---|---|---|---|
| Opening balance | 13 917 | 21 178 | 21 178 |
| Investments | 552 | 469 | 1 098 |
| Distribution of shares in Bigfoot I and Bigfoot II | - | - | 950 |
| Reclassifications1) | - | 77 | -23 149 |
| Change in fair value1) | 325 | -109 | 14 040 |
| Disposals | -3 | -78 | -195 |
| Exchange gain/loss and other | - | 4 | -5 |
| Closing balance | 14 791 | 21 541 | 13 917 |
1) Rocket Internet and Zalando have been reclassified from Unlisted assets to Listed assets as a result of IPOs in October 2014. Changes in fair value up until IPO have been included in Unlisted assets (Level 3).
| 1 Jan 31 Mar |
2014 1 Jan 31 Mar |
2014 Full year |
|
|---|---|---|---|
| Millicom | - | - | 662 |
| Tele2 | - | - | 596 |
| MTG | - | - | 142 |
| Rocket Internet, shares in Bigfoot I and Bigfoot II | - | - | 950 |
| Other | 7 | - | - |
| Total dividends received | 7 | - | 2 350 |
| Of which cash dividends | 7 | - | 1 400 |
Kinnevik's total interest bearing assets amounted to SEK 2,291m as at 31 March 2015. The short term deposits of SEK 1,031m were split between Swedish money market funds with high credit quality with no restrictions on accessibility. The total amount of interest-bearing liabilities was SEK 1,301m and including the debt for unpaid investments of SEK 532m, Kinnevik was in a net cash position of SEK 458m as at 31 March 2015 (SEK 402m as at 31 December 2014).
Kinnevik's total credit facilities (including issued bonds) amounted to SEK 7,169m as at 31 March 2015 whereof SEK 5,800m related to a revolving credit facility and SEK 1,200m related to a bond. The utilization of the credit facilities was SEK 1,238m. The Group's available liquidity, including short-term deposits and available unutilized credit facilities, totaled SEK 8,028m at 31 March 2015 (SEK 7,524m).
| 2015 31 Mar |
2014 31 Mar |
2014 31 Dec |
|
|---|---|---|---|
| Interest-bearing long-term assets | |||
| Other interest-bearing assets | 110 | 23 | 106 |
| 110 | 23 | 106 | |
| Interest-bearing short-term assets | |||
| Short-term investments | 1 031 | 2 675 | 1 311 |
| Cash and cash equivalents | 1 142 | 521 | 283 |
| Other interest-bearing assets | 8 | 0 | 0 |
| 2 181 | 3 196 | 1 594 | |
| Total interest-bearing assets | 2 291 | 3 219 | 1 700 |
| Interest-bearing long-term liabilities | |||
| Liabilities to credit institutions | 71 | 28 | 70 |
| Capital markets issues | 1 200 | 1 200 | 1 200 |
| Accrued borrowing cost | -14 | -21 | -16 |
| Other interest-bearing liabilities | 35 | 46 | 35 |
| 1 292 | 1 253 | 1 289 | |
| Interest-bearing short-term liabilities | |||
| Liabilities to credit institutions | 9 | 4 | 9 |
| 9 | 4 | 9 | |
| Total interest-bearing liabilities | 1 301 | 1 257 | 1 298 |
| Net interest bearing assets | 990 | 1 962 | 402 |
| Debt, unpaid investments/divestments | -532 | -121 | - |
| Net cash/(Net debt) including debt unpaid investments | 458 | 1 841 | 402 |
The outstanding loans carry an interest rate of Stibor or similar base rate with an average margin of 1.8%. All bank loans have variable interest rates (up to 3 months) while financing from the capital markets vary between 1 to 12 months for the loans under the commercial paper program and 5 years fixed for the outstanding bond (as per date of issue).
As at 31 March 2015, the average remaining tenor was 2.7 years for all credit facilities including the bond (excluding one unutilized extension option for one year related to the Group's SEK 5.800m credit facility). As at 31 March 2015, Kinnevik had not provided any security for any of its outstanding loans.
| 2015 1 Jan 31 Mar |
2014 1 Jan 31 Mar |
2014 Full year |
|
|---|---|---|---|
| Revenue | 2 | 5 | 22 |
| Administration costs | -47 | -45 | -221 |
| Other operating income | 0 | 1 | 27 |
| Operating loss | -45 | -39 | -172 |
| Dividends received | 3 500* | - | 2 070 |
| Result from financial assets | 0 | - | -694 |
| Net interest income/expense | -9 | 112 | 416 |
| Profit/loss after financial items | 3 446 | 73 | 1 620 |
| Group contribution | 0 | - | -649 |
| Profit/loss before taxes | 3 446 | 73 | 971 |
| Taxes | 0 | 0 | 14 |
| Net profit/loss for the period | 3 446 | 73 | 985 |
| Total comprehensive income for the period | 3 446 | 73 | 985 |
* Dividends received from subsidiaries
| 2015 | 2014 | 2014 | |
|---|---|---|---|
| 31 Mar | 31 Mar | 31 Dec | |
| ASSETS | |||
| Tangible fixed assets | 3 | 4 | 3 |
| Financial fixed assets | 64 865 | 50 249 | 64 516 |
| Short-term receivables | 279 | 15 | 328 |
| Short-term investments | 986 | 2 653 | 1 284 |
| Cash and cash equivalents | 279 | 97 | 77 |
| TOTAL ASSETS | 66 412 | 53 018 | 66 208 |
| SHAREHOLDERS' EQUITY AND LIABILITIES | |||
| Equity | 47 632 | 45 220 | 44 185 |
| Provisions | 29 | 30 | 29 |
| Long-term liabilities | 9 325 | 5 167 | 12 555 |
| Short-term liabilities | 9 426 | 2 601 | 9 439 |
| TOTAL SHAREHOLDERS' EQUITY AND LIABLITIES | 66 412 | 53 018 | 66 208 |
The Parent Company's liquidity, including short-term investments and unutilized credit facilities, totalled SEK 7,195m at 31 March 2015 and SEK 7,300m at 31 December 2014. The Parent Company's interest bearing external liabilities amounted to SEK m 1,211 (1,209) on the same dates. Investments in tangible fixed assets amounted to SEK 0m (0) during the period.
Distribution by class of shares on 31 March 2015 was as follows:
| Registered number of shares | 277 768 190 | 659 091 998 | 27 777 |
|---|---|---|---|
| Class B shares in own custody | 408 294 | 408 294 | 41 |
| Outstanding Class B shares, 1 vote each | 234 990 584 | 234 990 584 | 23 499 |
| Outstanding Class A shares, 10 votes each | 42 369 312 | 423 693 120 | 4 237 |
| Number of shares | Number of votes | Par value (SEK 000s) |
The total number of votes for outstanding shares in the Company amounted at 31 March 2015 to 658,683,704 excluding 408,294 class B treasury shares. The Board has authorization to repurchase up to a maximum of 10% of all shares in the Company over 12 months. The Board has not used the authorization during 2014 or 2015. There are no convertibles or warrants in issue.
The Annual General Meeting will be held on 18 May 2015 at 10.00 am at Hotell Rival, Mariatorget 3 in Stockholm. Further details on how and when to register are published on Kinnevik's website, www.kinnevik.se.
The Board of Directors has proposed a cash dividend of 7.25 (7.00) per share to be paid to the shareholders.
Reporting dates for 2015: 22 July Interim Report January-June 23 October Interim Report January-September
Stockholm 23 April 2015
Lorenzo Grabau President and Chief Executive Officer
This interim report has not been subject to specific review by the Company's auditors.
Kinnevik discloses the information provided herein pursuant to the Securities Market Act (Sw. lagen om värdepappersmarknaden (2007:528)). The information was submitted for publication at 8.00 CET on 23 April 2015.
Kinnevik is an entrepreneurial investment group focused on building digital consumer brands in four sectors: Communication, Ecommerce & Marketplaces, Entertainment, and Financial Services. We work in partnership with talented founders and managers to create, invest in and lead fast growing digital businesses both in developed and developing countries.
Kinnevik was founded in 1936 by the Stenbeck, Klingspor and von Horn families.
Kinnevik's shares are listed on Nasdaq OMX Stockholm's list for large cap companies under the ticker codes KINV A and KINV B.
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