Financial results and highlights Q3 2018 MCI Capital & Private Equity Managers Warsaw, 26 November 2018
Agenda 1. Exits summary 2018 2. Financial results of MCI Capital 3. Financial results of Private Equity Managers 4. Investment Funds 5. Outlook 2019 2
1. Exits summary 2018 Announced exits till the date of publication of the report and dividends amounted to almost PLN 670 M PLN 592.5 M – sale of shares in portfolio companies PLN 76.8 M – received dividends Value of exits to the 35% 35% total value of funds’ This is a proof of high liquidity of the portfolio that gives a portfolio significant room for future investments. Most significant exits announced : Reve venue ue : : PLN 157 M Date of sale: May 2018 IRR : : 22% Sector: Diagnostic laboratories Fund : d : MCI.EV Dividends and VC exits Investment strategy: Digital transformation There were two exits in VC portfolio in 2018: o Genomed Reve venue ue : : PLN 165 M Date of sale: May 2018 IRR : : 70% o ZdroweGeny.pl Sector: Fintech Fund : d : MCI.TV Investment strategy: Digital disruption Funds from MCI Group have received dividends from ABC Data, Indeks and ATM; in Reve venue ue : : PLN 255 M Date of sale: June 2018* total PLN 76.8 M IRR : : 40% Sector: Fintech Fund : d : MCI.EV Investment strategy: Digital disruption * Expected closing of the transaction – December 2018 (approval of Polish Financial Supervision Authority) 3
2. Financial results for the period 1-3Q 2018 MCI Capital 1,365 2,313 1,999 1,160 M PLN M PLN M PLN M PLN Investment Certificates Funds’ Assets Funds’ Net Asset Value Net Asset Value (NAV) in MCI’s Balance Sheet 110 21.94 70 17% M PLN PLN M PLN Investment Profit Net Asset per share Net Debt/Assets Net Profit 4
3. Financial results for the period 1-3Q 2018 PEM 2,313 1,999 10 285 M PLN M PLN M PLN M PLN Funds’ Assets Funds’ Net Asset Value Profit before tax New Investments 39 7.2% 11.9% 7.4% M PLN Gross IRR MCI.TV Gross IRR MCI.CV Gross IRR MCI.EV Profit from management LTM LTM LTM 5
3. Financial results for the period 1-3Q 2018 PEM Net asset value (M PLN) subject to management fee and share (%) Margin nominal (M PLN) including success fee and percentage according to the groups of investors. (%) according to the groups of investors. 1 600 30 1,9% 72% 1 400 25 1 200 20 1 000 800 15 600 23% 10 400 1,1% 5 200 2% 2,9% 1% 1% 1,5% 1,2% 0 0 MCI HNWI KFK Fundus/TFI Other MCI HNWI KFK Funds/TFI Other (institutions) (institutions) MCI provides approximately 72% of assets under management and 78% of margin, which Share in marigin (%) according to the groups of investors determines the stability of the current results of PEM SA Capital Group despite the difficult market conditions in Poland. 3% 1% 1% EV TV CV IV HVP TOTAL Annual Margin / NAV 1,5% 1,8% 1,9% 3,8% 0,0% 1,8% (including success fee) 15% - MCI 2,0% 3,2% 2,4% 5,0% n/a 1,9% - MCI 2,6% 1,4% 1,5% n/a n/a 1,1% - HNWI - HNWI n/a n/a n/a 5,0% 0,0% 2,9% - KFK - KFK 4,1% 1,5% 1,4% n/a n/a 1,5% - Funds/TFI - Funds/TFI 1,4% 1,4% 1,9% n/a n/a 1,2% - Other (institutions) - Other (institutions) 80% 6 6
Gross assets value 2008-2018 4. Funds / MCI.TechVentures 1.0 3Q 2018 (PLN M) 1 200 10y fund IRR: 1 000 19.6% Fund Managers : Tomasz Danis / Key exits, last 6 years 800 Tomasz Czechowicz/ exits valued at PLN 700M 600 Krzysztof Konopiński 400 MCI.TechVentures 1.0 focuses on investments in fast- 200 growing companies from the Investment: 2008 Investment: 2015 Investment: 0 CEE and Western Europe, with Exit: 2016 2010 Exit : 2018 2008 2018 aim to get a 3-5x cash-on-cash CoC: 3.6x CoC: 11x primary, Exit: 2012 refund. 3.5x secondary IRR: 70% CoC: 4.1x IRR: 46% IRR: 174% Exit value: Interest areas: marketplace, Exit value: PLN 270M Geographic presence: PLN 165M Exit value: fintech/insurtech, SaaS, AI. PLN 162M Key investment thesis: o Digital disruption Other Investment: 2010 countries Investment: 2010 Investment: 2013 o Digital adoption 61% Exit: 2015 39% Recapitalization: 2017 Partial exit: 2015 Poland o Digital ecosystem CoC: 5.7x CoC: 17.8x Coc: 3,5x IRR: >60% IRR: 37% IRR: >90% Gross assets value Portfolio (PLN M) (958 PLN M) Based on 3Q 2018 data COUNTR CUMULATED PARTIAL WAN Liabilities : Raiffeisen VALUE Y MODEL / FIELD PURCHASE PRICE EXIT credit line, Alior, retail eCommerce 67 233 Morele/Pigu PL / LT Return rate (%), series A bonds Marketplace IL 109 149 Gett Answear eCommerce PL 43 114 123 Frisco PL eCommerce 40 69 KupiVIP 85 59 RU eCommerce Tatilbudur TR 48 39 Marketplace Travelata 28 42 RU Marketplace 59% Marketinvoice 41 32 UK Fintech • MCI: 51% Telematics PL 38 Fintech 4 40 835 8% • HNWI: 49% UK / PL 28 30 Azimo Fintech 16% 26 10% right to AsGoodAsNew 19 eCommerce DE 1Y 3Y 5Y remission per year 32 17 Windeln.de 80 DE eCommerce DE Gry online 25 Gamedesire 12 Geewa Gry online PL 16 7 7 7
4. Funds / MCI.EuroVentures 1.0 3Q 2018 Investment certificates ROI (%), Fund Managers: Key exits seria N Tomasz Czechowicz/Maciej Kowalski MCI.EuroVentures 1.0 19,0% invests in medium-sized digital market or digital ecosystem leaders, with EBITDA at EUR 3-30M; with preference for the Sector: laboratory Sector: Internet, media following industries: diagnostics, biotech Investment: 2014 13,5% o TMT, Investment: 2015 Exit: 2016 o retail i consumer, Exit: 2018 CoC: 2.5 x 10,4% IRR: 22% IRR: 60% o financial services, o transport and logistics, ** o B2B services and software, Region: Poland, CEE. 1,5% Sector : telecommunication Sector: fintech Carried out investments may take the form of buy-outs or Investment: 2014 Investment: 2015 managerial buyouts, leveraged buyouts, pre-IPO Exit : 2015 Exit: 2018 transactions and P2P (investments in undervalued public 3M 9M 1Y 3Y CoC: 1.1x CoC: 3.1x companies with withdrawal from the stock exchange). IRR: 19% IRR: 40% Track record ROI (%), Gross assets Portfolio (PLN M) series N (1.079 PLN M) 12,9% PARTIAL CUMULATED WAN: Liabilities : VALUE COUNTRY PURCHASE PRICE EXIT Alior, retail bonds 230.2 46.3 220.6 PL 9,1% PL 85 252.7 185 3,9% PL 122.0 171.9 117.1 77,9 117.8 HU • MCI: 96% • HNWI: 4% 2014 2015 2016 2016 2017 100.6 42.5 TR 75.3 894 10% right to remission per PL 65,3 69.0 -6,1% year 140.0* PL *transaction will be closed in 4Q 2018 8 8 ** estimated time of transaction closure – December 2018 (KNF approval)
4. Funds / MCI.CreditVentures 1H 2018 Investment certificates ROI (%), Fund Manager Key exits seria N Krzysztof Konopiński MCI.CreditVentures MCI.CreditVentures is a subordinated debt fund of the 2nd 16,7% lien and mezzanine type. It invests in companies that operate or have assets in the CEE countries, with an emphasis on Poland. o Depending on the allocation between the 2nd lien and Sector: agriculture Sector: e-commerce mezzanine instruments, the expected rate of return of Investment: 2015 Investment: 2017 the net fund is between 5% and 7% per annum. Exit: 2017 Partial exit: 2018 7,4% IRR: 15% o Fund performance in the first three quarters of 2018 6,2% slightly above the expected rate of return due to the undervalued sale in the Genomed share register. 1,5% o The structure of deposits output at the end of Q'2018 places the expected rate of return 2018 in the range of 5% and 7%. 3M 9M (YTD) 12M 3Y o Getting out of the debt investment in Lifebrain and selling the Genomed shares in 1H’18 Gross assets Portfolio (PLN M) Track record ROI (%) (209 PLN M) COUNTR FUNDS PARTIAL INTERESTS WAN: Liabilities : VALUE Y INVESTED REPAYMENTS RECEIVED 7,1% 6,6% 6,2% 50.0 20.0 5.5 29.9 PL 0 BG 45.0 5.4 45.9 1.4 2,3% PL 21.3 0 1.0 24.1 • MCI: 80% • Financial 3.8 0 0.3 LT 4.0 institutions 11% 2016 2015 2016 2017 2018 • HNWI: 9% 4.0 0 PL 0 4.6 57.5 PL 20… 9 9
4. Funds / Internet Ventures 3Q 2018 New capital in portfolio companies Fund Manager Exits InternetVentures 2017-2018 Tomasz Danis mGenerator Commitment seed & startup Fund Investment: 2015 PLN 10M Investment : 2014 Investment: 2014 PLN 2.0M equity Investments and exits venture debt Exit: 2018 Exit: 2018 Exit: 2015-2016 PLN 2.7M grant RPO PLN 60M invested in 18 CoC: 3.8x (6x on initial CoC: n/a CoC : n/a PLN 1.0M grant G2B IRR: n/a companies capital) IRR: n/a Exit value: n/a Exit value : n/a IRR: 500+% By Q3 2018, the fund Exit value: returned approximately 50% PLN 23M of the capital invested 3 complete exits o PLN 2.9M equity PLN 200k loan 1 loan payback o 1 dividend o Years 2019-2020 – exit activities intensification Most promising companies IV 2016 Comparision Cloud gaming Multichannel Platform for short- Band + telemedical Platform/ engine + platform; Netflix contact-center term apartments service Communication insurance for games (SaaS) cloud sercives rental (Marketplace) (IoT + SaaS) and PR tool purchase (SaaS) (SaaS) (Marketplace) 10 10 10
5. Outlook MCI 2019 OUTLOOK - DISCUSSION Fundrasing o Commitment Fund -> Year of Hard Work o Captive Fundraising -> Going International o Traditional Market -> Focus on institutional investors Exits o Record Gross Pipeline o Conversion of Gross to Net Realized Portfolio o Ahead of 2016 – 2018 J-Courve effect ? o Conservative valuation approach (iZettle case valuation vs exit) New Investments o Focus on digital LBO deals in CEE EUR 25-50M ticket with 3x expected CoC o Strong pipeline in Poland and resources in place 11 11
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