Quest for Growth NV — Earnings Release 2014

Jan 22, 2015

Press release Leuven / 22 January 2015 / 5.40 PM

Regulated information. This press release contains information subject to the European transparency requirements imposed on listed companies..

Quest for growth

Schedule for publication

on 22 January 2015

5.40 PM press release available at www.questforgrowth.com

on 23 January 2015 11.00 AM press & analyst meeting, Capricorn Venture Partners NV, Lei 19, 3000 Leuven

Privak, fixed capital investment company established under Belgian Law

Annual results Quest for Growth

QUEST FOR GROWTH MADE A PROF IT OF € 8.7 MILL ION IN 2014 THE BOARD OF DIRE CTORS PRO POSES A NET DIVIDEN D OF € 0.70 PER ORDINARY SHARE

Key facts:

• • Return on equity per share: + 7.93 % since 31 December 2013
• • Net Asset Value per share at December 31st 2014: € 10.28 (December 31st 2013: € 10.87)
• • Net profit for the fiscal year: + € 8,712,147 (+ € 0.76 per share) against a profit of + € 18,474,284 (+ € 1.60 per share) for the previous fiscal year
• • Share price at December 31st 2014: € 7.611 (December 31st 2013: € 8.21)
• • Discount of the share price versus Net Asset Value: 25.98% at December 31st 2014 (24.4 % at December 31st 2013)
• • The board proposes to the AGM a gross dividend of € 0.72 per ordinary share (net dividend of € 0,70 per ordinary share)

Results

In 2014, Quest for Growth achieved a return on equity of 7.9% (based on 2014's profit against its net asset value after the dividend distribution at the end of the previous financial year). This performance can be qualified as good, even if it is lower than that in the two previous financial years, which each booked performance of a little over 17%. The net asset value per share amounted to 10.28 euros on 31 December 2014. Net profit in 2014 was approximately 8.7 million euros (0.76 euros per share), compared to profit of 18.5 million euros (1.60 euros per share) in 2013.

The share price closed the year at 7.61 euros, against 8.21 euros at the end of the previous year. Taking account of the dividend, overall performance of the Quest for Growth share over the past year was nearly 7%. The share price's discount against the net asset value was 26% on 31 December 2014, as opposed to 24% on 31 December 2013.

Allocation of the result

The board of directors proposes to the shareholders in general meeting that the profit balance to be allocated, in the sum of 8,700,784 euros, should be distributed. This results in a gross dividend for the ordinary shares of 0.72 euros per share (net: 0.70 per share). A balance of 11,363 euros is carried forward to the next financial year. Once approved by the AGM, the dividend will be paid on 26 March 2015.

Market environment

Following an excellent stock market year in 2013, 2014 proved somewhat more difficult, especially for European shares. The hoped-for improvement in Europe's economy did not truly emerge and, even in Germany, the euro area's stalwart in past years, there were signs of weakness. The European DJ Stoxx 600 stock market index was nonetheless able to notch up a rise of 4.4% over the full year. In Europe, small caps performed less well than large caps. The DJ Stoxx Small 200 index rose by only 2.7%.

Investments in listed companies

With estimated performance (before charges) of around 7% in 2014, a decent, if not exceptional, result was achieved in the listed share portfolio. Two of the shares invested in made a particular mark: Melexis (+67% performance) and Nemetschek (+70%). EVS (-32%), Centrotec (-22%) and Econocom (-35% until being sold) were the shares that made the most negative contribution to performance.

In 2014, four shares were sold off completely: U-Blox, Ablynx, Barco and Econocom. On the last of these shares, which disappeared entirely from the portfolio in the fourth quarter, a handsome profit was booked compared to the purchase price in 2010. The shares introduced in 2014 were FMC Corp, USU Software, TKH Group and Nibe.

Investments in unquoted companies

In line with the expectations voiced in the previous year that exit opportunities would increase, the portfolio of unlisted shares achieved a strong result in 2014. This is due to the investment in Clear2Pay, which was acquired by FIS Global. For Quest for Growth, that deal had a positive impact on its intrinsic value, of 4.7 million euros, or 0.41 euros per share. At the end of 2014, Quest for Growth invested 1 million euros in Avantium, an unlisted Dutch company operating in the area of bio-based chemicals and bioplastics. Avantium was already an indirect investment of Quest for Growth via the Capricorn Cleantech Fund. This additional direct holding is to be viewed as a co-investment with Capricorn Cleantech Fund.

Venture capital funds

The result from investments in venture capital funds was also positive in 2014. An important positive contribution came from the funds of LSP (Life Science Partners). The price of Prosensa, one of their holdings, made a strong recovery in 2014 and, in November, this was followed by an offer for the company, with a premium of 55% over the latest price. The increased valuations in Capricorn Healthtech Fund also had a positive impact, due in part to market flotations by Mainstay Medical and Nexstim.

Capricorn ICT Arkiv raised its subscribed capital from 15 million euros to 33.2 million euros in 2014, further to which Quest for Growth increased its share in the fund's subscribed capital from 9 million to 11.5 million euros. The most recent investment by Capricorn ICT Arkiv is FEops, which is a spin-off from the University of Ghent focusing on the pre-operative planning of cardiovascular implants based on a patient-specific 3D model.

Prospects

The economic indicators from the past few months show that Europe is continuing to flounder whereas the US economy remains strong. The average forecast price/earnings ratio of the shares in the portfolio has further increased to more than 15.5, compared to a little over 15 a year ago. The interest rate in Europe has fallen to a hitherto unseen lowpoint, making shares relatively more attractive. If this environment of low, but positive, growth and low interest rates continues, further rises in the stock market are possible, albeit there are no expectations of very high returns.

After the sale of Clear2Pay, additional exits from the remaining direct investments in unlisted companies continue to be possible if the market environment for acquisitions and flotations remains favourable. The timing of such exits is very difficult to predict. In 2015, Capricorn ICT Arkiv will endeavour to further develop a portfolio of promising, innovative companies. For Capricorn Health-tech Fund, we are expecting two further new investments in 2015. Further co-investments with the Capricorn funds also continue to be a possibility.

The General Assembly will take place on 19 March 2015 in Leuven.

Total shareholders return ( 31/12/2011 – 31/12/2014)

Discount of the share price versus the net asset value until 31 December 2014

Results from 31/12/2005 until 31/12/2014

1. Balance sheet	2014 31 December	2013 31 December	2012 31 December	2011 31 December	2010 31 December
ASSETS
Fixed assets	110,414,970	120,264,108	104,265,373	86,989,456	99,778,377
Formation expenses	0	0	0	0	0
Financial assets	110,414,970	120,264,108	104,265,373	86,898,456	99,778,377
Shares	98,488,620	106,950,253	100,625,585	79,492,057	93,078,608
Amounts receivable	11,926,350	13,313,854	3,639,788	7,497,399	6,699,769
Current assets	8,229,318	5,083,517	2,632,925	4,203,529	6,298,058
Amounts receivable in more than one year	1,399,479	666,305	0	0	885,932
Trade receivables	1,399,479	666,305	0	0	0
Other receivables	0	0	0	0	885,932
Amounts receivable within one year	150,425	70,187	689,618	1,165,102	98,934
Trade receivables	0	0	0	0	0
Other receivables	150,425	70,187	689,618	1,165,102	98,934
Short term investments	0	0	0	0	1,376,910
Own shares	0	0	0	0	1,376,910
Term deposits	0	0	0	0	0
Cash at bank and in hand	6,670,317	4,280,362	1,867,036	3,038,427	3,724,105
Deferred charges and accrued income	15,192	66,662	76,271	31,501	212,177
TOTAL ASSETS	118,650,383	125,347,624	106,898,298	91,224,485	106,076,435
LIABILITIES
Capital and reserves	109,848,623	109,837,261	106,803,118	91,101,307	106,009,655
Issued capital	109,748,742	109,748,742	109,748,742	109,748,742	109,748,742
Reserves	0	0	656,423	656,423	2,251,148
Reserves not available for distribution	0	0	0	0	1,376,910
Reserves available for distribution	0	0	656,423	656,423	874,239
Profit carried forward	99,881	88,518	0	0	0
Loss carried forward	0	0	(3,602,048)	(19,303,859)	(5,990,236)
Amount payable	8,801,760	15,510,364	95,180	123,179	66,779
Amounts payable within one year	8,745,601	15,478,430	43,405	105,882	66,291
Financial debts	0	0	0	0	0
Trade debts	0	0	4,971	55,358	7,865
Taxes	162	346	447	432	70
Dividends to be paid for the fiscal year	8,700,784	15,440,141	0	0	0
Other amounts payable	44,655	37,944	37,987	50,092	58,356
Accrued charges and deferred income	56,159	31,933	51,775	17,297	488

2. Income statement	Fiscal year 2014	Fiscal year 2013	Fiscal year 2012	Fiscal year 2011	Fiscal year 2010
Operating income and charges
Gross operating income	9,605,175	18,769,640	16,549,688	(13,327,578)	21,373,611
Realised gains/losses on shares	11,254,192	15,008,104	822,772	1,975,022	14,229,612
Unrealised gains/losses on shares	(876,639)	3,468,769	15,799,482	(15,131,517)	7,108,393
Result from option transactions	14,000	80,840	46,758	60,200	254,920
Realised results from Forward currency rate agreements	(739,794)	236,355	(76,147)	(37,391)	(457,777)
Unrealised results from Forward currency rate agreements	(46,584)	(24,428)	(43,177)	(193,893)	238,462
Other operating charges	(1,930,404)	(1,994,093)	(1,988,074)	(1,904,226)	(1,973,725)
Management fee	(1,432,944)	(1,464,878)	(1,473,230)	(1,500,000)	(1,610,959)
Custodian fee	(53,264)	(52,926)	(44,011)	(45,323)	(43,940)
Statutory Auditors fee	(12,464)	(12,270)	(9,767)	(11,680)	(9,183)
Printing and publication costs	(62,662)	(75,552)	(101,118)	(76,974)	(64,155)
Annual tax on Collective Investment sche mes	(101,599)	(103,065)	(72,881)	(84,808)	(67,763)
Directors fees	(188,750)	(207,550)	(204,770)	(93,730)	(72,398)
Advisory fees	(17,252)	(7,049)	(19,645)	(17,852)	(34,683)
Others	(61,468)	(70,803)	(62,652)	(73,859)	(70,602)
Operating Profit/Loss	7,674,771	16,775,548	14,561,614	(15,231,804)	19,399,928
Financial income	1,234,652	1,648,886	1,646,024	1,770,100	1,394,583
Financial charges	(197,246)	49,749	(505,741)	148,442	(226,358)
Amounts written off own shares*	(0)	(0)	0	217,816	171,141
Amounts written off other current assets	(74,695)	254,103	(383,871)	(0)	(0)
Others	(122,552)	(204,354)	(121,868)	(69,373)	(397,350)
Profit/Loss on ordinary activities, before taxes	8,712,176	18,474,183	15,701,897	(13,313,262)	20,568,153
Income taxes	(29)	(101)	(86)	(362)	(70)
Profit/Loss for the period	8,712,147	18,474,284	15,701,811	(13,313,623)	20,568,083
Profit / Loss for the period, after taxes, per share	0.76	1.60	1.36	(1.15)	1.74

*Reversal of impairment on treasury shares before annulment on June 29th 2011

3. Profit distribution	Fiscal year 2014	Fiscal year 2013	Fiscal year 2012	Fiscal year 2011	Fiscal year 2010
Profit to be appropriated	8,800,665	14,872,236
Loss to be appropriated			(3,602,048)	(19,303,859)	(5,990,236)
Profit to be appropriated for the period	8,712,147	18,474,284	15,701,811		20,568,083
Loss to be appropriated for the period				(13,313,623)
Profit/loss brought forward	88,518	(3,602,048)	(19,303,859)	(5,990,236)	(26,558,319)
Transfers from capital and reserves	0	656,423
From reserves	0	656,423
Transfers to capital and reserves
To other reserves
Profit/loss to be carried forward	99,881	88,518	(3,602,048)	(19,303,859)	(5,990,236)
Profit to be carried forward	99,881	88,518
Loss to be carried forward			(3,602,048)	(19,303,859)	(5,990,236)
Distribution of profit	8,700,784	15,440,141
Dividends	8,700,784	15,440,141

4. Report of the statutory auditor

The statutory auditor, Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren – Réviseurs d'Entreprises, represented by Mr. Erik Clinck, has issued an unqualified audit opinion on the financial statements of the fiscal year 2013 and has confirmed that the accounting data included in this annual announcement does not include any apparent inconsistencies with the financial statements.

The annual financial report including the audited annual accounts, the annual report, the statement on the true and fair view of the annual accounts and the fair overview in the annual report by the responsible persons and the report of the Statutory Auditor shall be available as from February 16th 2015, on request at the registered office: Lei 19 box 3, 3000 Leuven, Belgium.

QUEST FOR GROWTH NV Privak, fixed capital investment company established under Belgian Law Lei 19, box 3 B-3000 Leuven - Phone: +32 (0)16 28 41 28 - Fax: +32 (0)16 28 41 29