Kinnevik Results Presentation Deck
Intro
Net Asset Value
CHIEF EXECUTIVE'S REVIEW
Kinnevik's Q2 Results
Our Net Asset Value amounted to SEK 61.1 bn or SEK 218 per
share at the end of the second quarter of 2022, down by SEK
6.7bn or 10 percent from where we ended the first quarter.
The downward valuation trend faced by public growth
assets during the first quarter continued without abatement
during the second quarter. The pandemic winners are typi-
cally facing the most valuation pressure, as evident in the
stock market's valuations of companies in sectors such as
non-specialized virtual health, e-commerce, and streaming
services. We continue to seek to reflect changes in valuation
levels of publicly listed peers when valuing our unlisted bu-
sinesses. On average, we have decreased our valuation of
each individual company by around 30 percent this quarter.
Due to a handful of transactions undertaken in this valuation
environment, significant currency tailwinds, and the effect of
customary downside protection provisions in some of our
investments, the reported fair value of our unlisted portfolio
decreased by a more muted 7 percent. You find a detailed
description of the current valuations of our unlisted invest-
ments in Note 4.
In May, we divested around a quarter of our shares in Tele2
KINNEVIK
Portfolio Overview
Dear Shareholders, as we close out the first half of 2022, our environment is radically different
to where we were one year ago. The aftermath of the covid pandemic with inflationary pressure,
challenged supply chains and rising interest rates, exacerbated by the war in Europe, has put strong
pressure on the valuations in our pocket of growth equity markets. Whereas we last year highlighted
that multiple expansion was supporting our net asset value, we now face a significant reversal of that
trend. With our long-term view on business building and our strong financial position, we are firmly
focused on supporting our most promising companies through this downturn, and on continuously
taking stock of the investment opportunities emerging in the prevailing market environment. With this
said, the correction in the economic environment is likely to have a negative impact on those of our
companies that are less resilient.
Interim Report - Q2 2022
Sustainability
for a total consideration of SEK 6.0bn which, together with
dividends received from Tele2, takes our net cash balance at
the end of the second quarter to SEK 13.6bn. The additional
financial strength secured at a time of market uncertainty
not only ensures that we have a net cash runway through
2024 at our current pace of investment of around SEK 5bn
per year. It also provides us with increased flexibility to time
our deployment of capital, and ability to act on attractive
opportunities as they emerge.
The Importance of the S-Curve
It seems clear that the market downturn will be more long-
lasting than perhaps expected at the beginning of the year.
At Kinnevik, we take comfort in the fact that we have a strong
balance sheet and are able to take a more long-term view
than most other investors. We are also pleased that many of
our largest and most important investments took advantage
of the benign market conditions of the past to extend their
runways. In aggregate, our companies raised more than
SEK 50bn in fresh capital last year, making many of them
less vulnerable to the medium-term fundraising market. We
estimate that investees corresponding to almost 50 percent
Financial Statements
Other
of our unlisted fair value have runways extending into 2024
and beyond, and less than 10 percent have cash runway that
ends during 2022. With this in mind, we are continuously
assessing how the weaker macro outlook could affect each of
our companies individually, and refrain from issuing generic
and dogmatic advice on how they should value growth versus
profitability in the short term. The general ebb of capital will
undoubtedly have a more fundamental impact on many of our
businesses that have shorter runways, and there will be cases
where we opt to realize losses of capital instead of financing
businesses that we do not believe have a high risk-adjusted
potential to be long-term successful.
What also helps us absorb the impact of deteriorating
market conditions are the strides we have made in building
a portfolio of a balanced set of companies spread across
the typical business S-curve in terms of growth and time to
cash flow profitability. This is not only a result of investing at
different stages of maturity, but also by financing the growth
of many of our younger businesses through consistent follow-
on investments.
At the right-hand side of our portfolio's maturity spectrum,
we find e.g. Jobandtalent, the workforce marketplace that
matches workers with temporary employment. The company
was growing revenues at 130 percent annually while being
profitable at an EBITDA level when we invested at the end of
last year. Since then, the company has continued to perform
strongly and expects to double revenues also in 2022.
At the other end of the curve, we find Omnipresent,
a more recent investment in an earlier stage of growth.
Omnipresent provides client-focused, tech-enabled business
solutions combined with personalized expertise to support
hiring people globally in more than 160 countries. When
Kinnevik led the round in March of this year, it was on the
back of Omnipresent growing revenues by 25x during 2021.
While the new market environment clearly has an impact on
Omnipresent, it also provides opportunities. Many companies
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