3i Capital Markets Seminar 23 September 2020
Agenda and introduction Simon Borrows Chief Executive 2
Indicative agenda 14.00- Agenda and introduction Simon Borrows 14.10 Chief Executive 14.10- Our approach to ESG and Simon Borrows 14.50 Responsible Investment Chief Executive Q&A 14.50- Evernex Rémi Carnimolla 15.30 Q&A Partner, Managing Director France 15.30- SaniSure (Bioprocessing platform) Richard Relyea 16.10 Q&A Partner, Managing Director North America 3
3i’s approach to ESG and responsible investment Simon Borrows Chief Executive 4
Our sustainability strategy is defined by three key priorities 1. Invest responsibly 2. Recruit and develop a diverse pool of talent For more information: 3i.com/sustainability/sustainability-reports- 3. Act as a good corporate citizen library/2020/ 5
Our values are at the core of how we operate Ambition Rigour and energy Focus on generating value for all our Clarity of vision supported by practical execution stakeholders Thorough analysis leading to clear decision Strive for excellence and continuous making and effective implementation improvement High levels of energy, strong work ethic and effective team working Accountability Integrity Doing the “right thing” even when difficult Personal collective responsibility for protecting and enhancing 3i’s assets and reputation Relationships built on trust, candour and respect An ownership mentality in managing costs, resources and investments An aversion to building hierarchy 6
Our sustainability strategy is supported by robust governance Board of Directors Oversight and overall responsibility for our sustainability strategy Chief Executive Day-to-day responsibility exercised through a number of committees Executive Committee Overall approach and people management Investment Committee Responsible Investment Policy and portfolio monitoring Risk Committee Risk management and compliance 7
Transparency and disclosure are important to our approach Disclosures since 2017 Disclosures since 2006 Rated ‘B’ in 2019 assessment Signatories since 2011 Member of several sustainability indices Rated ‘A’ in the 2020 assessment 8
Approach to responsible investment Our Reponsible Investment Policy has been in place for over a decade Our RI policy applies to all investments. We invest only in businesses which are committed to: Fair and safe The environment working conditions Business integrity Good governance Specific exclusion list for “no go” sectors. Referral list for further IC consideration. For more information: 3i.com/sustainability/sustainability-policies/ 9
Approach to responsible investment Focus on strong governance to drive best practice across “E” and “S” • Defined purpose aligned with strategy, values and culture • Clear accountability and Board terms of reference Board and • Senior 3i executive or independent chairman culture • Balance of execs and non-execs with relevant functional or sector expertise • Separate Audit and Remuneration Committees where practical • Strong finance function and CFO Compliance • Robust compliance function, processes and procedures and control • High quality financial reporting with bespoke KPIs environment • Preference for Big 4 audit firm • Robust IT systems and infrastructure IT • Comprehensive cyber security policies, processes and testing 10
Approach to responsible investment Systematic ESG screening of the portfolio pre and post investment Proprietary ESG assessment tool provides framework to consider ESG risks and opportunities in each potential investment and to develop detailed remediation and value creation plans. ESG assessment revisited every six months for each of our portfolio companies as part of regular monitoring. 11
Approach to responsible investment Typical factors assessed in pre-investment and ongoing screening E Eg: pollution, waste, loss of diversity or habitat • Environmental • Energy / carbon management • Land impacts / quality management system Example ESG risk summary • Compliance • Climate change / extreme • Waste management weather S Eg: human rights, slavery, child labour • Company workforce • Supply chain Eg: weak or absent corporate policies G • Company policies and procedures • Health & safety management systems • Anti-bribery and corruption • IT / cyber security 12
ESG as an investment opportunity Renewable power generation has been an important focus for 3iN Total installed capacity of 993MW across three investments, set to grow with long development pipeline Energy from waste and Generator of electricity Renewable energy waste management from landfill gas and development and coal mine methane operating company 13
ESG as an investment opportunity 3iN: ESVAGT is supporting the growth of the offshore wind industry Emergency rescue and response vessels for offshore energy industry and service operation vessels for offshore wind industry We have supported ESVAGT to become market leader in the offshore wind segment with c.40% market share today. Offshore wind segment forecast to contribute almost 55% of ESVAGT’s 2020 pro-forma earnings compared to around 16% at acquisition in 2015. 14
ESG as an investment opportunity 3i: ATESTEO and the electrification of the drivetrain International transmission testing specialist, realised for a 4.8x cash return in 2017 During our period of ownership, we supported investments that led to a more than fivefold increase in the share of e- mobility as a percentage of ATESTEO’s total testing business, which reached c.25% at the time of exit. 15
ESG as an investment opportunity 3i: Scandlines has invested in a modern and clean fleet Ferry operator between Germany and Denmark 3i has supported investments to reduce Scandlines ’ impact on the environment, including • Hybrid propulsion system on all passenger ferries • State-of-the-art scrubbers to reduce particulates emissions • New thrusters to reduce noise and vibration, as well as GHG emissions • Installation of a new 30-metre high rotor sail on one ferry to provide supplementary propulsion 16
ESG as an investment opportunity Synergistic management of risks and opportunities: plastics roundtable Forum for portfolio Product manufacturers Retailer companies to discuss plastics circular economy strategy and to share ideas for innovative solutions. Knowledge sharing Packaging Waste management continues as our portfolio manufacturer and recycling companies innovate in this field, creating synergies over time. 17
Good corporate citizenship Our £5m Covid-19 charitable fund • Funded from carried interest and performance fees payable to staff • Additional to regular charitable giving • Objective Alleviate poverty and its consequences • Charities dedicated to: food provision, education, domestic violence, advancement Areas of of minorities and disadvantaged groups, community development, mental health focus • Charity committee set up to identify and diligence beneficiaries • £2m for immediate relief Deployment • £3m for longer-term recovery/rebuilding initiatives 18
Today’s speakers Rémi Carnimolla Richard Relyea Partner, Managing Director Partner, Managing Director France North America Joined 3i in 2007 and was appointed co- head of 3i’s Joined 3i in 2003 and was appointed Managing Director of France in 2011. North America Private Equity team in 2015. Based in Paris. Based in New York. 19
Our approach to ESG and Responsible Investment Q&A 20
Evernex Rémi Carnimolla
3i in France • 3i has been investing in France for 30+ years (1984) • 8 investment professionals • Core expansion country for Action, Basic-Fit, BoConcept, Lampenwelt, and other 3i portfolio companies Current portfolio Selected previous investments 2011- 2018 Fastening 2010 - 2013 systems manufacturer Calibration services 2017 – Natural consumer healthcare 2019 - Critical IT lifecycle management services (food supplements and natural hygiene) 2010 - 2014 2003 - 2007 Private clinics Public transport operator 22
Update on Havea (ex Ponroy) Sales x 2 3 acquisitions since 3i’s investment: 7% organic growth, 10% organic EBITDA growth Backed by solid LT trends (naturality, well being etc) Resilience during the Covid-19 situation 23
Evernex, a “3i deal” • Angles built over several years with the current management team and Long-term Evernex’s founder: 3i was invested in Evernex company in the 90’s origination • Identification of “Third Party Maintenance” as a white spot by the 3i B&TS team Sector and 2 targets had been explored in the US knowledge • Strong advisor / BLN (Don Doctor, ex-CEO of SMS, #2 player in the US) BLN / • Seasoned board members: O. Delrieu (ex-Trescal), O. de Puymorin (ex-Arkadin) Governance and M. Lamboley (ex-Keolis) • Pre- emptive approach on Evernex in 2018 on an “off - market” basis Differentiation in • Competitors lacked our transatlantic footprint and ecosystem in the TPM industry the mid-market • Execution agility with full 3i underwriting to secure the deal • Early identification of a pipeline of significant synergetic buy & build Consolidation opportunities, some of them activable in the short term agenda (Storex & Technogroup already identified) 24
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