Kinnevik AB

Good morning, I'm Hanna Björk, Director of Corporate Communication. Welcome to the presentation of Sinevik's Q3 results. Let me introduce our CEO, Helen Saxon, and our interim CFO, Kasper Sjöstrand. Helena will start with the summer of the quarter, our net asset value development, and the key events in the portfolio. Kasper will then take you through portfolio performance and valuation. And Helena will close with our strategic priorities ahead. After the presentation, we will open up for questions. With that, I hand over to you, Helena.

Thank you, Hanna, and hello everyone, and very welcome to this Q3 call, my first as CEO of Kynnevik. I want to start by saying how grateful I am for the warm welcome from the team, our board, our portfolio companies, and too many of you that are on the line today. Let me kick off the presentation by making a few comments on my first two months here at Skeppsbron. I have started by getting to know the team, the companies and engaging with our stakeholders. I have been struck by the interest in our future and the strength of the team and the portfolio. I'm very proud to be part of this company and its next chapter. Moving over to the headlines. Our net asset value landed at 29.8 billion at the end of the quarter, equivalent to 108 krona per share, up 1% since Q2. We invested 165 million krona and divested 183 million, ending the quarter at a net cash position of 7.4 billion. Our unlisted companies delivered a total return of 1% and the Kinnevik B-Share delivered a total shareholder return of 19% in the quarter. Turning over to valuation, this graph shows the development since Q2, broken down into its different drivers. And as we can see, our net asset value development this quarter was stable, supported by growth and currency. Multiples impacted NAV negatively, and this is somewhat softer than public peer development would suggest. I will explain why. But first of all, I want to underline that there has been no change in the valuation process. We value each company against a broad peer group and its respective outlook, as we always have. In this quarterly valuation, we updated forward growth expectations in a few of our larger companies, and that held back multiples relative to listed peers. Peer groups set the valuation range for each company, but how they are each positioned within that range depends on the specific company growth and profitability outlook. This quarter, it meant valuations for a few of the growth companies did not follow peers fully. Kaspar will add color to that later in the presentation. We also wrote down our climate tech holdings, mainly Stegra, which we now hold at zero value. Partly offsetting this, Enveda and Tannum Health's strong founding rounds of course lifted their value by approximately 30% in the quarter. Let me move over to three key events in the quarter. Firstly, Kynnevik invested 12 million krona in Swedish health tech company Tandem, which raised 100 million dollars in the quarter. Tandem is a complete AI medical assistant integrated with 130 medical records in 14 European countries. The US biotech company Enveda, which is 9% of our portfolio, raised 311 million US dollars and is advancing three clinical programs for eczema, obesity and irritable bowel syndrome. Kinnevik invested 5 million dollars and now owns 11% of the company, which is valued at 1.8 billion US dollars. and Veda will use the additional capital to scale its AI-enabled platform focused on identifying new chemistry for drug development. Citiblock, which is 6% of our portfolio and operates a value-based care model for especially vulnerable patients in the US, acquired Homeward Health in the quarter. This transaction was an all-stock transaction, diluting our ownership to 8%. The acquisition will bring growth, strategic benefits, and synergies going forward. Citiblock has announced that its annualized revenue will now reach some 2.2 billion US dollars, and they will be serving almost 200,000 patients in the US. With that, I'm handing over to our interim CFO, Kasper Sjöstrand. Please, Kasper.

Thank you, Elena, and good morning, everyone. Let's turn to the valuation changes in the quarter for our 10 largest companies, which make up 75% of our portfolio. Our two largest holdings, Spring Health and PERC, both continued to grow strongly, while our fair values were broadly unchanged in the quarter. As we mentioned in the second quarter, pro forma for the Alma acquisition, Spring Health has forward revenues of around $1 billion at maintained profitability. In the quarter, earnings growth and currency contributed positively, offset by dilution. Our multiple was broadly unchanged as we did not follow the health tech re-rating in full. However, spring health continues to be valued at a premium to its health tech peer group and at a discount to its key listed peer as last quarter. PERC was also broadly unchanged. Growth and currency tailwinds were offset by lower multiples as both transactional software peers and its key listed peer declined in the quarter. PERC has communicated that it is approaching $400 million in annualized revenue after growing an impressive 48% in 2025. That is roughly double the level reported at the time of its January 2025 funding round. As Helena already mentioned, Enveda and Tandem Health both raised new rounds in September, which lifted their values by 30-35%. We have supported Enveda over several rounds since our first investment in 2023, and the company now has three drug candidates in clinical trials. In Tandem Health, we invested our pro-rata share on a fully diluted basis. and we look forward to supporting the company as it builds an AI-native clinic operating system. Muse, Oviva and Pleo decreased in value. For Muse and Oviva, updated forward growth expectations held multiples back relative to peers, although both companies continued to grow at high rates with focus on profitability. For Pleo, the decline mainly reflected lower peer multiples. Finally, Betterment, Citiblock and InstaBee all continued to grow, with little net change in fair value. For Betterment and Citiblock, growth was offset by lower multiples, while InstaBee's growth and cash flow lifted its value, though multiples were flat. Across the private portfolio as a whole, value was up 1% in the quarter to 22.5 billion SEK. Health and Bio added 400 million SEK, mainly from Enveda's financing round, and emerging companies added another 300 million, driven by Tandem Health. Together, they offset declines of around 200 million each in software, mainly MUSE and PLEO, and in other investments and partnership funds, which includes write-downs in our climate tech portfolio. Before getting into the quarter's peer developments, let me briefly cover how our companies compare with those peers. Over the last 12 months, our health and bio and software companies grew revenues by over 30%, including acquisitions. That is two to three times as fast as the broader listed peer groups. However, profitability is lower. EBITDA margins are around break-even in health and bio, and still negative in software, against 20-25% for peers. That reflects where our companies are in their development. They are earlier on the growth curve and still growing into the cost structures, while their peers are larger and more mature. The gap is, however, narrowing, with combined EBITDA margins up 7% so far this year. These differences are also why our multiples don't simply mirror those of our peers. We anchor our valuations in broad peer groups, but adjust for growth, profitability, and scale, which is worth keeping in mind as we look at how peers moved in the quarter. It was a mixed picture across subsectors. Health tech and vertical software pairs re-rated by around 10% and 5% on a median basis, while transactional software and value-based care pairs declined by around 12% and 16%. In subsectors where pairs declined, our multiples followed, with PERC falling less than its pairs, and PLEO and Citiblock somewhat more. Where pairs increased, updated forward growth expectations in a few companies, such as Muse and Oviva, meant we didn't follow in full. Finally, currency. With around three quarters of our private portfolio in US dollars and a quarter in euros, the weaker krona added 3% to portfolio value in the quarter. With that, I'll hand it back to Helena for some concluding remarks.