Kinnevik Results Presentation Deck
Intro
Net Asset Value
VALUE-BASED CARE
Value-Based Care consists of care delivery companies that take risk
and reward on patient health outcomes. This stands in contrast to care
delivery businesses that charge patients and payers on a fee-for-service
basis. Value-based care enjoys strong secular tailwinds, and companies
employing this business model has therefore historically been valued at
a significant premium to fee-for-service businesses.
During the last two quarters, our investments' most comparable pu-
blic peers One Medical (ONEM), Signify (SGFY), and Oak Street Health
(OSH), have all been subject to takeover offers. This causes a challenge
in triangulating appropriate valuation levels for our businesses. We
mitigate some of this through two measures. Firstly, we reference more
traditional healthcare businesses such as United Health (UNH) and Humana
(HUM) in our calibrations. Secondly, we expand our valuation multiples
more cautiously than what we have observed in the limited number of
public value-based care businesses in the quarter. In order to relate our
value-based care investments to more traditional healthcare businesses,
we increasingly focus on capital efficiency metrics (revenue growth plus
EBITDA margins) when calibrating our valuation multiples (as depicted in
the scatter chart on the right-hand side). For Transcarent, a business with
structurally higher gross margins, we benchmark our valuation against
higher-margin healthcare technology businesses.
Cityblock grew considerably faster than its public peers in 2022, and
is now focused on improving margins by consolidating its footprint where
its care model is proving the strongest results. At the same time, Cityblock
is expanding into geographies where the population faces health and
social challenges that can be alleviated by Cityblock's partnership-driven
strategy and high-touch care model. The company is funded to break-even,
having raised nearly USD 600m in 2021. Our valuation corresponds to an
NTM revenue multiple in line with where One Medical was taken private,
and at a discount to where Oak Street ended the quarter.
VillageMD is integrating its acquisition of Summit Health, and is per-
forming in line with plan. The combined company is growing revenues
at around 35 percent and is expected to be EBITDA profitable in 2023.
We value the business in line with where it raised equity in late 2022 to
finance the acquisition of Summit Health, corresponding to an unchanged
10-15 percent premium to the revenue multiple used in valuing Cityblock.
KINNEVIK
Interim Report Q1 2023
Portfolio Overview
Value-Based Care
Revenue Growth (2022)
Gross Margin (2022)
EV/NTM R
EV/NTM R (Q/Q Change)
Note:
4x
3x
2x
Sustainability
1x
Our
Investees
10%
45%
14%
3.5x
+5%
Peer
Average
45%
Equity Value (Q/Q Change)
+11%
+47%
"Peer Top Quartile" data points are the average metrics of the top quartile peers in terms of revenue multiple
"Revenue Growth (2022)" pro forma Village MD's acquisition of Summit Health
19%
2.5x
+35%
Peer Top
Quartile
20%
49%
27%
3.5x
+55%
+74%
EV/NTM Revenue and Capital Efficiency (Revenue Growth plus EBITDA Margin)
Key Public Benchmarks as at Quarter-End (Excluding Transcarent's Healthcare Technology Peers)
Financial Statements
• Value Based Care
30%
30%
+10%
Unlisted Portfolio Weight
. Traditional Care Providers
Other
Fair Value Change (Q/Q)
40%
50%
60%
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