Eurazeo Paris Ord

Good morning. Good morning, everyone. It is my pleasure with Philippe Audouin to welcome you all to Eurazeo's 2020 full year results. Remember, remember it was almost exactly a year ago that we met, physically, just as we were all going into lockdown. What a year it's been. An exceptional year for everyone. A very difficult year for many. Quite a remarkable year for us, Eurazeo. The most amazing thing for me has been to see how our teams and our companies have stepped up to the challenge. It's been a real source of pride to see how mobilized they've all been, how our team rallied together. And our companies have been fantastic as they seized the opportunities to transform the way they work, accelerating their digitalization, proving again how privileged we are to be their partners. All of this has paid off. Our NAV net asset value at 85.4 euro per share is at an all-time high. We raised more funds from third parties than ever before to reach 22 billion euro in assets under management. So as you'll see over the next half hour, 2020 has really confirmed that we are on the right trajectory to meet all our targets. And this gives us confidence for the future. So let's start. Last year, we accelerated our strategy on every front, developing assets management, keeping ESG at the very heart of everything we do, and focusing intently on the most promising sectors, especially tech and healthcare. Let me take those three points in order. First, we have developed predictable recurring revenues and scale from asset management. Our AUM have tripled in the last three years. Second, our decision to put ESG at the heart of our strategy is proving decisive today. Our new O-plus program launched last September is the most ambitious ESG program, reducing the risk in our business and positioning us to create significant value for our stakeholders. And third, in our investment choices, we have successfully anticipated long-term trends and thus positioned Eurasio as ultra-relevant in the current environment. Tech and healthcare now represent 60% of our private equity AUM, and the rest of the portfolio has also been steered into growing segments like consumer premium product or financial and business services. What our successes last year showed is one very important thing. The right choices pay off over time. As you know, over the last few years, we've been concentrating a lot of our firepower on building up our strengths in certain sectors, notably tech, digital and health. And look at the numbers now. In only three years, we've multiplied by 15 our digital assets and by five the health-related assets in our AUM, while AUM itself grew threefold from five to 15 billion. That very strong grounding in digital and health meant that we were exceptionally well positioned when the pandemic hit. Looking forward, we know that this focus will continue to be the right strategy as we prepare to navigate the post-COVID world. Our key figures for 2020 are a real endorsement of the medium-term trajectory we laid out during our latest Capital Market Day. 2020, assets under management grew another 16% organically to €21.8 billion, with a record €2.9 billion in new funds raised over the course of the year. Our recurring revenues grew by 13, and our fee-related earnings margin improved again thanks to our operating leverage. We also created substantial value for our shareholders in the second half. Our NAV rose more than 20% and was up overall 6.3% over the full year. Finally, we continue to have a healthy asset rotation, both in acquisition and exits, with a very strong rebound in activity during the second half. Our growth rate has been strong because our foundations are stronger than ever. With 300 people in 10 offices around the world, we now operate through dedicated investment teams, each focused on their markets. Representing about 73% of our AUM, we are one of the most prominent private equity investment managers in Europe and one of the few to operate across the full spectrum from venture to upper mid-cap. Our expertise in private debt is well recognized with a solid positioning in the profitable small mid-cap space. And we have been seeding our activities in real assets for a few years now. The team has created an outstanding track record with some very successful exits, as you saw. As I said earlier, 2020 was a remarkable year of growth for Eurazeo. We are on track to double our assets under management within five to seven years, depending on market conditions and cycles. In 2020, our AUM continued to grow organically at a brisk pace, with another year of 16% growth, just like last year. What's more, we think this trend will continue because of the positive market outlook, our strong fundraising ability and momentum, and the scaling of our investment division. That makes us very confident. The growth of our AUM has been supported by record fundraising, 2.9 billion, I said, in 2020. This is up 19%. This is all third-party money, and it's a real and very tangible endorsement of our strategy from our investment partner. We thank them for that. All the Eurazeo funds currently being raised contributed to this excellent momentum. So what did we do in 2020? The capital raised in venture and growth exceeded 700 million in 2020, almost three times more than in 2019, thanks to the successful launch of Eurazeo Growth 3. Eurazeo has been chosen by the French insurers to manage a half a billion fund as the go-to investor in French healthcare, a role we already play in French tech, as you know. The Eurazeo China Acceleration Fund, in partnership with CIC, Chinese Investment Corporation, and BNP Paribas, raised a first range of 200 million euros. Finally, private funds continue to grow 75% increase in the amount that we raised in 2020. These are just a few examples of our strong momentum. And it's only the beginning because for 2021-2022, we will be raising our sights even higher with several ambitious flagship funds and many bespoke funds on the road. So as you see, we have the right strategies, the right products, and a very powerful organization strengthened by the acquisition of the remaining 30% of ID Invest. We are all set to deliver as we move forward. So how have we achieved this? Most importantly, we've made some clear choices in key sectors over the last years, like financial services, consumer premium, asset management, insurance, and of course, tech and healthcare. Today, we are one of the leading tech investors in France and in Europe. This track record explains the success of our current fundraising in this segment, with Eurasio Gross Fund No. 3 on track to reach its target by the end of the first half of €1 billion, hopefully even more. It's a similar story in healthcare, with skills and know-how built across several segments of the market, from biotech to larger, more established companies, and a great track record. So let me remind you, it's been 1.2 billion euros invested over the last decades, a bit more, 12-15 years, in more than 70 companies with great returns, just in healthcare. This all means... that we are now the right player in Europe to invest in the right sectors in the years to come. So on the next slide, Another long-term factor that has been very central to our strategy is ESG. And you know that because we've been pioneers here ever since our first ESG report 20 years ago. And we are still acting as pioneers today thanks to OPLOS, our ambitious science-based new plan. Above all, we are different. This is because ESG for us is not a matter of setting up an isolated impact fund alongside our more traditional strategies. It's exactly the opposite. At Eurasio, we have put ESG at the very heart of everything we do, both in terms of our investment targets and in terms of our investment processes. Our leadership in this has been recognized by specialists in the ESG world, and I'm very proud of this. In 2020, we received the highest honor, A+, in all the relevant categories for UN PRI. And we are the only private market listed company included in the top five ESG index families. Now we are aiming even higher. I'm proud to say that Oplus has no equivalent in our industry in two of its key components. Fighting climate change through achieving net zero emission by 2040 with a science-based target approach that we are the only one in the financial industry to have embraced. And second, promoting a more inclusive economy, which benefits all our stakeholders. If fundraising is our fuel and ESG our roadmap, the deal activity has been our engine, and that has been racing ahead, especially in the second half. In private equity, our focus on tech and growth continues. So 50% of our new investment in 2020 were focused on tech or tech-enabled companies. They ranged across the spectrum from venture companies through growth to buyouts, and they drew on our know-how, especially on payments and SaaS software as a service businesses. You can see this on the slide. In debt, we recorded very strong deal activity in H2, building a high-quality portfolio. This fast pace of deployment means that we should see an acceleration of the next fundraising cycle for private debt. And in real assets, we seized some value opportunities aiming high, notably in France and in the UK. We've seen some good asset rotation, very successful exits last year. On the next slide, representing a billion four of exits in 2020. But as you can see here, the performance has been extremely good with top-notch IR between 20% and 70%. annual IR returns on those exits. This means that we are fully in line with our exit plan announced during our capital market day in November and further evidence the quality and the maturity of our portfolio in each of our division. This momentum is set to continue in 2021 with an ambitious exit plan for several of the group's assets. Let me take two examples of recent exits. Iberchem for Eurazeo Capital, the upper mid-cap, and C2Z for Eurazeo Real Assets. As you can see, the value creation here mainly came from our ability to transform and accelerate our companies. We are a value-add partner, attracting the best entrepreneurs by helping them go from good to great, bringing more capabilities, operating resources, networks and a global footprint across four continents. TechIberchem, an investment of only three years. It was mainly through strong execution, delivering organic growth in emerging markets, and of course, you know, selling at the right time to a strategic buyer that we made the returns that you can see here. With C2S, we built a fantastic platform of clinics in France. On top of the organic growth that we had, the team added enormous value through acquisition and turnaround and significant investment in equipment in those clinics. So enormous work on the operation, which led to an exit to a strategic buyer with very strong return. In both cases, it was basically a case of making the right investment choices for good assets at inception, picking up the pace for transformation and growth. This is essential. And finally, taking advantage of market momentum to make the strategic decision to exit. I'll now hand over to Philippe, who is going to take you through our financial for 2020.

Thank you, Virginie. Good morning, ladies and gentlemen. Let me first summarize the highlights of 2020. Eurasio's performance was very robust in 2020 in an extremely challenging environment. Our asset management activity continues to thrive, bringing more power and more recurring revenues for the group. The investment activity benefited from the sharp rebound in H2. Our portfolio companies proved to be very resilient, excluding the travel and leisure sector, with our tech companies performing particularly well. These elements resulted in a significant growth of our net asset value in H2 and for the full year 2020. And finally, our balance sheet remains very robust. Let's start first with asset management, which pursued its rapid expansion in 2020. Thanks to our all-time high fundraising levels over the last two years, management fees grew 13% to reach €234 million in 2020. As we announced during our Capital Market Day last November, the profitability on fee-related earnings is rising thanks to our improved operating leverage, which is up 4 points over the last four years. We expect this trend to continue and that our FRE margin will eventually reach a benchmark level of 35 to 40%. However, please bear in mind that this margin improvement will be primarily driven by fundraising cycles and thus will not be linear. Annual performance fees were mainly driven by the accelerated exits in H2 amounting to 48 million euros. Significant performance fees should kick in in the near future thanks to our important exit pipelines for 2021 and 2022. The value of our asset management activity now stands at 1.4 billion euros. This figure results primarily from a healthy 23% value creation in 2020, driven by, on one hand, the substantial increase in AUM and FRE we just talked about, And on the other hand, the revaluation of our stake in the platform IM Global, in line with the partial sale we announced a few weeks ago, which valued our 72% stake in IM Global at €250 million. The value of our asset management activity also reflects the acquisition of the remaining 30% stake in ID Invest, which is now fully integrated. The investment activity enjoyed a sharp rebound in H2, with a contribution of plus 580 million euros. This was due to the successful exit Virginie highlighted earlier, notably Iberchem and Farfetch, as well as a change in fair value of our tech growth companies. H2 also saw a reversal of some negative impact recording in H1 following the successful agreement on world strides debt restructuring. As a result, our investment activity delivered a positive result, a positive contribution of €191 million in 2020, up from €100 million the previous year. Taking a closer look at our portfolio, you'll see a very good performance in 2020 against a challenging environment. Last year, we split our companies into four groups, ranking them from those least impacted by the pandemic, Category 1, 2 and 3, all together representing 90% of our total net asset value, to the most severely hit, Category 4. Our tech growth companies, which are mostly digital native, performed particularly well in 2020. On average, their revenues grew plus 45%, with some companies even recording triple-digit increases. The other companies in the first three categories saw their economic EBITDA increase overall by plus 5% in 2020 and even rising plus 8% in H2O. We achieve this thanks to the strengths of the company themselves, but also thanks to the hard work and commitment of both the company's management teams and Euraseo's teams. The fourth category, more exposed to travel and leisure, saw revenue drop, hitting their EBITDA. Despite this, the cash situation in the remaining assets in this category is adequate at the moment, and we consider there is a real potential for a rebound when the health situation improves. On the next slide, an important point that I'd like to make here is that the top three categories, those least exposed to the pandemic, represent about 90% of our total net asset value and deliver the combined 30% increase in net asset value over the year. Concerning our valuation methodology, we have remained consistent and have applied the IPEF guidelines. For the gross tech companies, when applicable, we have aligned the valuations based on the last financing round. For the other companies from Category 1 to 3, as recommended by the IPEF guidelines, we have applied multiples on recurring earnings in most cases. Part of the value creation also stems from the exit we made at the end of 2020, Farfetch, Iberchem and C2S. These three exits have been done at higher valuation than what we had in our last published NAV and brought an additional €4.6 per share of value, or one third of the total value creation we recorded in H2. On top of that, We've been very conservative in our valuation for Category 4 assets, which we cut by more than 50%. Europecar has been fully written down, and we sold the entire remaining stake in Europecar a month ago. For Wall Street, we have fully returned on our initial investment of €215 million and only kept in our net asset value the €41 million additional investment we made last summer. CREP and Planet have also been cautiously valued. As always, these valuations have been reviewed by our auditors, PwC and Mazars, for the process, and by two independent appraisal firms, Sorgem and Duff & Phelps, for the value itself. All these figures leave significant upside potential for the future. Looking at our portfolio from a different angle, I'd like to highlight that all of our business units across the board grew significantly in value in 2020. Tegros was an abuse winner in the pandemic. Driven by the global shift to digital, it delivered the most outstanding performance this year with a plus 37% increase in net asset value, following an already strong plus 30% in 2019. Real Assets saw a strong uplift of 26%, notably thanks to the sale of C2S at the end of the year, which boosted its ANAV. The other divisions also turned in very good performance, especially in H2. Looking at the overall P&L, our net result is down at minus 160 million euros for the full year. But after our publication of minus 390 million euros in H1, H2 was very strong, showing a positive plus 230 million euros net profit. I'd like to point out that without Europecar and Wallstreet, our annual net result would have been positive at plus €217 million, more than two times our 2019 result. This reflects how well the rest of the portfolio has held up through the COVID-19 pandemic. On a more global view, net asset value, Eurazeo's key indicator, increased significantly last year, driven by a plus 21% surge in H2, resulting in a plus 6.3% gain for the full year. As Virginie highlighted, this results in a new all-time high of 85.4 Eurazeo per share. Our NAV may be at a new high, but we are nonetheless remaining cautious in calculating such a figure. As you know, our valuation methodology has always been conservative. And so exits tend to crystallize hidden value in our net asset value. On average, exits have resulted in an uplift of around 32% to the previously posted NAV over the last five years. This held true in 2020. As I said earlier, the four successful exits added 4.6 euros per share to the last published NAV. These exits at the end of 2020 are just the first steps of the ambitious exit program we announced at our Capital Market Day last November. This exit path will support value creation for the coming two years. As you can see, there are a number of profoundly positive factors driving our long-term outlook. The steady increase in net asset value, the growing share of our recurring revenues, and the prospect for our current exit program. Despite this, the pandemic has caused our share price discount to NAV to widen again at last for the moment. Based on yesterday's share price, the discount to NAV was 29%. That's a sharp diversion from the favourable long-term trend, which has seen its steadily decline on the three-year average from 31% in 2011 to 12% in 2019. What is important to note here is that the factors driving these long-term trends of discount reduction remain as relevant as ever for Euraseo. A more diversified portfolio geared toward high-growth companies, a very consistent track record, and fast-growing recurring revenues from the asset management activity. And we can notice that in 2020, our third-party revenues already covered close to 90% of our OPEX. Turning now to our balance sheet. In the current volatile context, we have maintained a very solid financial position, which gives us significant headroom going forward. Our current net cash position stands at €345 million at the beginning of March and our €1.5 revolving credit facility is fully undrawn and therefore fully available. On top of that, we expect in the coming months about €360 million of cash, notably from the sale of C2S and the stake in IM Global. These two operations have both been signed but not yet closed. Note that in line with our ESG commitment, our revolving credit facility was the first financing in Europe to include ESG close, and more recently, we also secured the first Unitranche ESG LBO financing. On top of this financial capacity, We have also the benefit of 4 billion euros in dry powder, our hand-drawn commitment from our limited partners, allowing us to seize investment opportunities. To finish, a word on dividends. Euraseo has always distributed dividends to its shareholders, with a distribution rising an average 7% per year from 2003 to 2018. Last year, as you know, following the French government's recommendation, we suspended the payout. However, this year, it is our intention to resume distribution, and we will propose a dividend of the same amount as was proposed last year, 1.5 euros per share, a 20% increase over the last dividend paid. Finally, all this has materialized into a strong year for Eurazeo, and this coming year is going to be also exciting. Thank you for your attention, and I will now hand back to Virginie.

Thank you, Philippe. Exciting ahead of us is predicting Philippe. 2020 has confirmed with success, despite very volatile and complex environment, our ability to reach our ambition and follow on our trajectory. We demonstrated the resilience and the strength of the portfolio in a year of intense crisis. We confirmed our ability to raise funds year after year. We created value through successful exits. and we invested in the right sectors to create value for the years to come. We're exactly where we wanted to be when we launched our diversification strategy several years ago, and now all the lights are green for further growth. So now what's next? What are we looking at? Our intention is to roll out high-potential investment strategies, and I'll name a few, just a few examples, but where we're really concentrating our energy. The green economy, all sizes and shapes, including sustainable infrastructure, smart cities, and decarbonization. We already have three funds on the road and a dedicated team for that. Tech and healthcare will continue to be a very important focus for us as we've built it over the last 10 years and will continue to work on building the future European champions in those sectors. And we will continue to leverage, accelerate even, our European fertile landscape of SMEs, identifying and building tomorrow's leaders with real international potential. That's what we like to do. That's what we've proven to be able to do as well. On all these fronts, we have a head start with the expertise and the maturity required to really make the difference. We have a strong fundraising program for the next two years. We've explained this in detail at the last Capital Market Day. But for some of the main highlights, this includes the tale of existing programs in gross debt and private funds. Then successor funds in lower mid-cap and upper mid-cap investment strategy. and the first third-party funds in real estate, brands, and our newly formed sustainable infrastructure team. Our strategic plan on fundraising is now to extend our leadership in France, expand in Europe, build a franchise in the U.S., and sign key partnerships in Asia. What's more, the accelerated acquisition of the remaining 30% of ID Invest this year has really allowed us to simplify and strengthen the organization, meaning that we can now invest ahead of the curve as one team. The beginning of the year is very promising. During the first three months, and in some cases just the first two months, we delivered on all aspects of our 2021 roadmap. We are accelerating our disposal plan, I think you know you get that, with nearly a billion euros already sold, notably in growth, venture and real assets at the beginning of the year. we will continue the fundraising momentum. At the end of February, early March, it's been 600 million raised year-to-date in two months. And we will continue to build scalable expertise thanks to the success of our past investments and the reputation of our teams. So we were strong during the crisis. We have... We believe everything it takes to be even stronger with strong tailwinds in the future. Our anticipated trajectory of doubling AUM over five to seven years is confirmed. Fundraising has already accelerated in 2020, and there's more to come. good start of the year for 2021. We have a high-quality portfolio, which means you should soon expect to see some significant exits that will crystallize value and accelerate our asset rotation. We're going for growth like this because we have one overriding objective. We aim to create value for our shareholders through the combination of growing recurring long-term revenue streams stronger capital gain linked to bigger, better, and more international deal flow, and a dynamic distribution policy with the firm intention to raise the dividend in the next years and increase shareholder remuneration. Thank you for your careful listening. And now is Philippe very much open to your question. Thank you.