FDCongres Beter beslissen

1. Role of PE and VC in private companies
Elderd Land
FDCongres, 22 October 2014

2. Agenda
•Gimv at a glance
•Investment strategy
•Value creation and portfolio management
ROLE OF PRIVATE EQUITY IN PORTFOLIO COMPANIES
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3. GIMV AT A GLANCE
ROLE OF PRIVATE EQUITY IN PORTFOLIO COMPANIES
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4. Gimv, a pioneer in continental Europe since 1980
ROLE OF PRIVATE EQUITY IN PORTFOLIO COMPANIES
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UNIQUE STRENGTHS & DIFFERENTIATION
•Funding from strong balance sheet, complemented with specialised co- investment funds
•Long-term active support to portfolio companies
•International reach with a local touch, strong brand & network
•Focus on value creation via 4 platforms
•Flexibility in investment instruments and exit timing, given evergreen fund structure
FACTS & FIGURES
•Listed on NYSE-Euronext Brussels
•EUR 1.8 billion AUM
•34 years of expertise in PE & VC
•99 employees in 4 offices
DIVERSIFIED PORTFOLIO

5. A pioneer in continental Europe since 1980
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EVOLUTION AUM
SHAREHOLDERS (E)
35%
27%
25%
13%
Retail Investors
VPM
International
institutionals
Belgian
institutionals
•Average return: 11.6% (33 years)
•Market cap: EUR 918 million (31/03/2014)
•Listed: NYSE-Euronext Brussels
•Free float: 73%
•Employees: 99
0
200
400
600
800
1000
1200
1400
1600
1800
2000
Investment
Partnership
Equity

6. Diversified portfolio
24%
10%
27%
15%
21%
3%
BY INVESTMENT PLATFORM
47%
22%
6%
10%
11%
2%
2%
BY GEOGRAPHY
47%
Belgium
22%
France
6%
Germany
10%
The Netherlands
11%
Rest of Europe
2%
USA
2%
Rest of the world
24%
Consumer 2020
10%
Health & Care
27%
Smart Industries
15%
Sustainable Cities
21%
3th Party Funds
3%
Other participations
14%
1%
8%
38%
34%
5%
BY VINTAGE*
* related to the year of initial investment
14%
≤ 2000
1%
2001-2003
8%
2004-2006
38%
2007-2009
34%
2010-2013
5%
≥ 2014
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ROLE OF PRIVATE EQUITY IN PORTFOLIO COMPANIES

7. The Private Equity and Venture Capital landscape … is evolving rapidly and profoundly
Gimv will be pro-active and a forerunner
in re-shaping its industry
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8. Recap on PE and VC business model
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•Closed end
•Listed
•Captive
•Grow business
•Improve operating results
•Buy & Build
•Incentivise mgt
•Timing
•Buyers universe
•Right process
•Valuation
•Deal selection
•Due diligence
•Financing
•Structuring
Raises funds from several sources
Sources investment opportunities and negotiates deals
Grows the value of the companies
Creates liquidity for the investments
ULTIMATE GOAL => TO CREATE VALUE

9. The Private Equity and Venture Capital landscape … is evolving rapidly and profoundly
•Structurally, less use of financial leverage
•Pressure on returns (in PE and VC models)
•VC-model is experiencing funding difficulties across Europe
•Increased need to specialize and deliver “real world” added value
•A number of established players are forced to reduce their ambition
•Other players disappear because of financial crisis and reshaping of financial markets
•Only the most professional and best performing teams will continue to have access to funding and best deals
Gimv will be pro-active and a forerunner in re-shaping its industry
ROLE OF PRIVATE EQUITY IN PORTFOLIO COMPANIES
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10. Gimv’s competitive advantage
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Macro-trends
Deal thesis
Investment platforms
•How to create equity value
•How does the business make money
•Aligned with Gimv’s culture & strengths
•Deal theses and sectors backed-up by positive momentum from (societal) trends
•Global – e.g. ageing, need for infrastructure
•Local networks and centres of excellence
A strategy based on specialised investment platforms
•Focus on business clusters
•Proprietary insights and deal theses
•Historical strongholds and successes
•Access to great ecosystems
•While leveraging the firm’s
•Evergreen structure
•Local presence
•PE financial discipline & VC industry knowledge/insights

11. Gimv’s organisation today: Multidimensional cross country platformstrategy
•Consumer 2020 Companies with a clear vision on the needs and preferences of the future consumer
•Health & Care Health and care solutions for the ageing, health- and cost-conscious society
•Smart Industries Smart, technology enabled solutions and added value services
•Sustainable Cities Services, utilities & infrastructure with a sustainable community impact
4 platforms with dedicated and skilled team
across Gimv’s home market: Belgium, the Netherlands, France and Germany
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12. Best-in-Class Partner in Value Creation
GIMV NEXT STRATEGY
•Focused on 4 platforms
•Very pro-active deal sourcing
•Using repeatable, proven and actionable investment theses
•Active ownership, executing a mutually defined value creation plan
VALUE DRIVERS FOR PORTFOLIO COMPANIES
•Clarifying and refining strategy & business model
•International expansion
•Scaling up, buy-and-build (roll-out)
•Professionalization and operational excellence
TRANSFORMING HIGH POTENTIAL COMPANIES INTO INTERNATIONAL MARKET LEADERS
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13. Value creation and portfolio management
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14. Investment process
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(INTERNATIONAL) DEAL FLOW
“Building value through active participation”
Business building
IPO Trade Sale M&A
Sourcing Initial analysis of the Business Plan
EXPERT DUE DILIGENCE
Due diligence
Letter of Interest to analyse all aspects in depth
FAST DECISION MAKING
CLOSING
Deal making Final negotiations result in Term sheet
BOARD SEAT / OBSERVER
Business building
Solid collaboration / add Value
MAXIMIZE SHAREHOLDER VALUE
Prepare for exit
Exit horizon of 4 to 7 years on average

15. Four types of value creation for PE and VC
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Corporate governance!
(Including delivering proper incentives for management)
1
2
3
Financial Engineering Deleveraging Financial restructuring
Improve company performance
Sales growth/margin improvements
Capital utilisation
Buy and build
Requires operational know-how
Multiple arbitrage
Buy cheap, sell high
PE- financials & strategic visibility
VC- strategic relevance & technology/market risk
Financial management
Active ownership

16. Over time, the way PE and VC create value has shifted
•PE: from deleveraging, multiple arbitrage to operational value creation & growth
•VC: technology development alone not enough but market prove essential
18
22
36
51
31
46
39
31
51
32
25
0%
20%
40%
60%
80%
100%
Leverage era (1980s)
Multiple expansion
era (1990s)
Earnings growth era
(2000s)
Operational
improvement era
(2010s)
Source of Value
Operational improvement
Multiple arbitrage
Leverage
Source: BCG-IESE/Goldman Sachs
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17. ROLE OF PRIVATE EQUITY IN PORTFOLIO COMPANIES
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“Any fool can buy a company, just pay enough.
The hard and important part of our job was what we did to create shareholder value once we acquired it.”
Henry R. Kravis, Co-Founding Member of KKR
Operational value creation : the only driver that makes a difference ?

18. Create value – more than just capital
Stimulate growth
•Growth strategies: organic & inorganic growth (M&A)
•Introduce new customers, suppliers and strategic partners
Legal Support
•Support with legal issues (patent infringements, liabilities, disputes)
•Common specifics surrounding shareholder structure
•Add commercial and operational skills, complementary team
•Introduce and hire independent industry board members
•Improve corporate governance: audit, remuneration and strategy committee
MT & supervisory board
•Improve reporting (KPI, P&L, cashflow)
•Improve forecasting (modeling etc.)
•Negotiations with (venture) debt providers
Financial support
•Headhunters
•Auditors
•Investment bankers
•Industry analysts
•Entrepeneurs & industry leaders
Leverage network
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19. There is a range of portfolio activism styles…
Directive
Hands-off
Where you see it
•Turnarounds
•Certain MDs
“Do what we tell you to do”
•Leading-edge PE firms
“Let’s figure out what to do together”
Collaborative
•Traditional approach
“Do what you said you would do when we bought the company”
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Source: Bain analysis

20. Gimv investment style and portfolio relationship
ROLE OF PRIVATE EQUITY IN PORTFOLIO COMPANIES
INVESTMENT STYLE
RELATIONSHIP WITH PORTFOLIO COMPANY
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FLEXIBLE
•In choosing our holding periods
•In responding to market opportunities and entrepreneurial initiatives
DISCIPLINED
•Regarding good governance, business ethics and adherence to lean and professional processes
•“Hands on” investment process
•“Hands with” portfolio management
ENGAGED
•Pro-active
•Building value through active participation on BoD level
•High level of interaction
•Hands-with
•Agreed business plan as basis for partnership

21. CORPORATE GOVERNANCE & REPORTING - BVA ACADEMY 16/11/2012
p. 21
The PE-VC governance model: awareness, priority and structure
• Due diligence process = profound investigation on all aspects of the corporation
•Financial, legal, IP
•Strategic, commercial
•HR, management
• Set well-defined targets for the company
•100 days’ or 300 days’ action plan
•Clear business model & business plan > focus
•Disciplined routine for budget and budget reviews
• Separated powers and responsibilities
•For (each of) shareholders / (supervisory) BoD / management
•Management agreements - aligned interests
•Professionalised BoD with independent directors
•Detailed shareholders’ agreement
• Financial and management reporting structure
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22. CORPORATE GOVERNANCE & REPORTING - BVA ACADEMY 16/11/2012
p. 22
The Board of Directors has to provide the company with …
Corporate Governance: the main role of a BoD is to put an effective management in place
... a well-defined strategy with clear objectives
... the tools and resources to execute the strategy
... a system to control the use of these tools and resources
... a well- functioning management to execute this strategy
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23. Exit
•Horizon varies broadly 3-8 (?) years
•Exit timing considerations
•Market conditions (external)
•M&A market in general
•In specific market segment
•Unique asset /scarcity (internal)
•Unique technology/IP position
•Strong growth and market position
•Profitable or clear path to it
•Strategic value / attractiveness asset (internal-external)
•Large/sizeable market opportunity
•Need-to-have (~ value steps)
•Multiple buyers => create competition around asset
•Above all, companies are NOT SOLD but BOUGHT …
•… however good exit preparations definitely improve chances
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24. Exit preparation
•Formulate buyer categories: e.g. Software vendors, Telco’s,
•Identify indivual acquirors and list contacts in those firms
Map buyers universe
•What makes target so attractive: product, customers, position, etc
•What will be important to different categories and individual firms
•How does company score now on various items
Buyers rationale
•Focus on the right business aspects: nice to have vs. must have
•Focus on right buyers: bottom fishers will remain low in valuation
•Strategies for specific buy rationale’s
•Hidden pearl => create more awareness
•One buyer => create awareness and new (OEM) partnerships
Improve attractivenes (~6 months)
Awareness of AND visibility in ECO system is critical to participate in M&A activity and enhance value maximisation
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25. Our strategic approach results in real competitive advantages in our deals
Health & Care
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26. e.g. The number of people over
80 will double by 2030 and
reach 7% of total population
AGEING POPULATION
leading to increasing
H&C spending is demand
increasing, now 9% of
GDP, unsustainable
historical trend of GDP
+2% annually
CONTINUED
GROWTH with need
for structural change
e.g. New 3D imaging
techniques to guide surgeons
CONTINUOUS
TECH INNOVATIONS
e.g. Diabetes cases in Europe
are set to rise by 23% from 2010
to 2030
CHRONIC DISEASES
on the rise
Increasingly educated (80% of people online
search for healthcare related information)
PATIENTS MORE CONSCIOUS
Strong trends underline demand for H&C investments
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27. Let’s focus on Health & Care…
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Health & Care
Consumer 2020
Smart Industries
Sustainable Cities
Control
Wolf (F)
Luciad (B)
Joint control
Almaviva (F)
Xeikon (B)
Veolia (B)
Minority
Eurocept (Nl)
PlanetVeo (F)
Lampiris (B)
Itineris (B)
Early VC
Covagen (CH)
Complix (B)
Agrosavfe (B)
Co-scale (B)
VC-deals: red PE-deals: green

28. Health & Care value creation strategies
Biotech HealthCare Services Medtech
Development projects with well
defined value creating milestones
• We invest in disruptive
technologies
• with good chances to yield a
transaction with pharma
Product engines with multiple shots
on goal
From early to mid stage (seed
investments included in Flanders)
• Buy & build in the mid-market
• Regional pre-consolidation
• Growth acceleration in new
healthcare delivery models
• Participate in new integrated
care models
• Partner with family owned
businesses
• (partial) Privatization
• Value chain optimization
Disruptive technologies
• at least animal data
• close to CE-mark
Next generation products
• incremental technology
improvements: more
complementary with existing
technologies
Growth acceleration
• initial revenues
• clear sales/distribution model
• growth capital and buy-outs
• buy & build on top of existing
business
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29. INVESTMENT DETAILS
COMPANY STRATEGY & OUTLOOK
INVESTMENT RATIONALE
www.eurocept.nl
ROLE OF PRIVATE EQUITY IN PORTFOLIO COMPANIES
Eurocept
• Investment of Gimv and Gimv Health & Care Fund, minority position
• Eurocept wants to build a leading position in the Netherlands and entering new
markets by complementing organic growth with a careful buy-and-build strategy.
• Growth focused on broadening product portfolio and entering new geographies
• Trend to out-patient medical treatment and direct-to-patient distribution offers
excellent growth opportunities
• Integrated model of specialty pharma and medical homecare offers clear synergies
• Eurocept is a well established player and well positioned to take lead in market
consolidation and taking on new therapeutic areas
Eurocept, established in 2001 in Ankeveen, offers a unique combination of specialty pharma products
(Pharmaceuticals) and medical homecare services (Homecare). Focus on high-value prescription drugs for
chronic diseases where by both divisions target the same medical specialist groups (prescribers) and offer
integrated care offering of the product (medicine, nutrition etc), the delivery and application (medical device
and nursing service) as well the monitoring (data and therapy compliance) of the patient at home.
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30. Concluding statements
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31. Concluding comments
•Gimv fundamental focus on growth opportunities through real value creation in portfolio
•In-depth knowledge of the sectors is key
•…to find & assess the right deals
•…to build the equity story and pay a competitive/fair price
•and to create value in the portfolio
•Gimv combines VC skills and PE skills into one team.
•Discipline in operational and strategy execution
•Nature to develop and maintain industry knowledge and ecosystem
•Portfolio management focused on creating sustainable value
•Clear equity story defined upfront including organic vs. non-organic growth
•Disciplined execution, maintaining flexibility and engaged partnership
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33. CONTACT
Belgium
Gimv nv
Karel Oomsstraat 37
2018 Antwerpen
T +32 3 290 21 00
The Netherlands
Gimv Nederland Holding BV
Lange Voorhout 9
2514 EA Den Haag
T +31 70 3 618 618
France
Gimv France SAS
38, avenue Hoche
75008 Paris
T +33 1 58 36 45 60
Germany
Gimv
Promenadeplatz 12
80333 München
T +49 89 442 327 50
Elderd Land
Partner
elderd.land@gimv.com
M: +31 6 53 76 41 07