Kinnevik Results Presentation Deck
Intro
Net Asset Value
established cohorts. Thanks to continued strong underlying performance
the write-down becomes more muted than these 35 percent, and the
valuation also benefits materially from the weakening Swedish krona.
Looking an additional six months out, on a 2023 revenue multiple basis,
the valuation is increasingly in line or at a deeper discount to the more
richly valued constituents of the peer group.
The fair value of Kinnevik's 4 percent shareholding in Village MD
amounts to SEK 3,684m, down some 14 percent from last quarter's level,
which in turn was 11 percent below the SEK fair value underpinned by
the transaction with Walgreens Boots Alliance during the fourth quarter
of 2021. As for Cityblock, the NTM revenue multiple is compressed in
line with the peer group average of 35 percent, and VillageMD remains
valued at an unchanged premium to this average NTM revenue multiple.
Also similar to Cityblock, the valuation is increasingly in line or at a deeper
discount to the more richly valued constituents of the peer group on a
2023 revenue basis, and benefits materially from a weakening Swedish
krona. The premium to the peer group average on an NTM revenue
basis is reflective of the company's structural advantage and stronger
growth trajectory stemming from the unique partnership with Walgreens
Boots Alliance.
VIRTUAL CARE
Virtual Care consists of healthcare businesses that deliver general or spe-
cialized care services through virtual channels, and leverage technology
such as Al to improve the care outcomes for their users. We benchmark
these businesses against a peer set of listed telemedicine companies,
both generalists such as Teladoc (TDOC) and Amwell (AMWL), but also
more vertical players such as Hims & Hers (HIMS) and Lifestance (LFST).
The companies in the peer set grew revenues by around 80 percent on
average in 2021 with gross margins of 40-50 percent. In 2022, the average
expected peer growth rate is closer to 35 percent, and the peer group
trades at an average 1.5x NTM revenues. Our businesses are growing
revenues at a materially higher rate with comparable gross margins, and
are better positioned for long-term growth compared to their more mature
listed peers. Virtual Care is nascent in itself and the current cohort of listed
peers largely consists of companies facing structural challenges that our
KINNEVIK
Interim Report Q2 2022
Portfolio Overview
Sustainability
unlisted companies aim to disrupt. As a consequence, our Virtual Care
companies are valued at a material premium to the peer group, at around
8-12x NTM revenues on average, more in line with SaaS benchmarks with
similar financial profiles to those of our unlisted virtual health businesses.
The fair value of Kinnevik's 5 percent shareholding in Spring Health
amounts to SEK 1,025m. The carrying value remains in line with the cap-
ital we invested into the company when it raised capital during the third
quarter of 2021, but appreciates due to the weakening Swedish krona.
The underlying valuation of the company has been adjusted downwards
to reflect the approximate 40 percent compression of the listed peer
group's average NTM revenue multiple in the quarter, but due to liquida-
tion preferences the fair value of our shareholding remains unchanged in
dollar terms. Also after this downwards adjustment, the valuation remains
at a significant but unchanged premium to the forward-looking multiples
of a peer group of telemedicine operators, justified by Spring Health's
materially higher growth rate. In relation to the NTM revenue multiples
of SaaS businesses with a similar financial profile as Spring Health's, our
valuation is at a double-digit discount.
PLATFORMS & MARKETPLACES
Our Platforms and Marketplace businesses form the most diverse group
of investments in the NAV categorization introduced last quarter. The
group spans online grocer businesses such as Mathem and Oda with
mid-30s gross margins, to pure marketplaces like Jobandtalent with
gross margins more than twice as high. Accordingly, these businesses
are valued against different peer sets. The average peer group valuation
level is around 1x NTM revenues for lower-margin e-commerce peers
and around 4x NTM revenues on average for higher margin marketplace
peers. Average peer growth rates were typically around 40-45 percent in
2021 in both ends of the margin spectrum. Our Platforms & Marketplaces
companies are in general valued in line with, or at narrow premiums to,
their respective peer group average. This is reflective of their later stage
of maturity, but also of the valuation levels that these businesses have
raised capital relative to how their listed peer groups were valued at the
time of these transactions.
The fair value of Kinnevik's 28 percent shareholding in Budbee amounts
Financial Statements
Other
to SEK 1,970m, up 40 percent excluding our SEK 115m investment in
the quarter. The valuation is in line with where Budbee raised capital in
the second quarter and is based on NTM revenue multiples inferred
from a set of logistics technology and mobility businesses such as InPost
(INPST.AS), DoorDash (DASH) and Uber (UBER). Budbee's NTM revenue
multiple is at a material premium to the peer group average, a peer group
which saw significant variance in this quarter's development of valuation
multiples - spanning 0 to 70 percent contraction. In relation to the peer
group's more richly valued constituents, such as InPost, our valuation is
at a significantly more narrow premium. These premiums are reflective
of Budbee's materially higher growth rate solidified by the company's
proven underlying EBITDA profitability.
The fair value of Kinnevik's 31 percent shareholding in Mathem
amounts to SEK 854m, which is 40 percent below the valuation at the
end of 2021, but in line with last quarter's valuation and the valuation at
which Mathem raised new equity capital in the quarter. The valuation is
based on revenue multiples of a composite peer group of inventory hold-
ing e-commerce retailers and meal kit businesses such as Zalando (ZAL.
DE), Boozt (BOOZT.ST) and HelloFresh (HFG.DE), as well as estimates of
market valuations of Ocado's (OCDO.L) retail business. The peer group's
average NTM revenue multiple contracted by almost 50 percent in the
quarter, with the bulk of this contraction occurring ahead of Mathem
raising its funding round in mid-May. The assessed valuation implies a
multiple of 1x the company's revenues during the last twelve months as
at 31 March 2022 (as disclosed on p. 12 but pro forma the acquisition of
Mat.se), but naturally takes the forward outlook into account.
The fair value of Kinnevik's 21 percent shareholding in Oda amounts
to SEK 1,118m, down 25 percent in the quarter. The valuation is based
on revenue multiples of the same composite peer group used in valuing
Mathem. The decrease in fair value is due to Oda's growth not fully offset-
ting the material peer multiple contraction in the quarter. The assessed
valuation implies a multiple of around 2x the company's revenues during
the last twelve months as at 31 March 2022 (as disclosed on p. 12), at
a significant premium to the peer group, and clearly takes the forward
outlook into account. The multiple declines to a level more in line with
key peers looking further out into the future, as Oda is expected to grow
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