FPCI NextStage Championnes III
Investing in the growth of innovative SMEs
Why investing in Private Equity?
1- INVESTING IN THE REAL ECONOMY 2 - CREATE JOBS 3 - ACCELERATE GROWTH
Private equity plays a major role in the financing of French economy and allows companies’ development. It contributes to maintaining and reinforcing the industrial framework in the territories
In 2017, Private equity actors invested €11,5 Bn in France.
Private equity contributes to the creation of jobs in France.Between 2012 and 2017, on a France Invest sample, companies supported by private equity created 209,724 net jobs
The 3,137 French companies sample supported by French private equity represents €216Bn in 2017, which amounts for 1/5 of cumulated revenues of CAC40 groups for the same period.In 2017, the revenue of these companies rose 5,3%. For 5 years (2012 – 2017), the average annual activity growth is higher than the French nominal GDP and close to OECD’s countries nominal GDP.
Private Equity is an asset class which, in return for a blockage period and capital risk, allows to respond to 3 main objectives:
Private Equity“France Invest” Sample
FRANCE INVEST / EY June 30th 2017 – “Performance nette des acteurs francais du capital investissement à la fin 2017”*Performance on 15 CAC indexes with reinvested dividends (SME Method), Credit Suisse Hedge Funds Index, Prequin Real Estate.
France Invest – December 14th 2018 – CROISSANCE ET CREATION D’EMPLOIS DANS LES ENTREPRISES ACCOMPAGNEES PAR LES ACTEURS FRANCAIS DU CAPITAL INVESTISSEMENT
France Invest – April 3rd, 2018 – (2017) – “Activité des acteurs Francais du Capital Investissement”
French Nominal GDP*
OECD Nominal
GDP*
France Invest Sample
3137 companies
FPCI NextStage Championnes III - September 2019
A brief history of NextStage AM
NextStage AM created by founding partners Grégoire Sentilhesand Jean-David Haas
enters the capital of NextStage AM
Partners Nicolas de Saint Etienne, Vincent Bazi, and associates Aloys de Fontaines, and Michael Strauss-Kahn arrive
enters the capital of NextStage AM
4 associésgérants
74,8%
12,6%
12,6%
FIP & FCPI FPCI NEXTSTAGE SCA
Target ticket : €2.5m
Target ticket : €6m
EV : €10 to €40m
Rev. : €5 to €50m
Target ticket :€10 to €20m
EV : €25 to €200m
Rev : €10 to 500m
R e t a i l I nst i tut io n a l L o n g - t e r m ins t i tut io n a l
3 0 ve h ic le s
€420m2 ve h ic le s
€96m1 ve h ic le
216€m
€732m collected s ince inception, invested in 34 vehicles.
• €732 M raised since inception• 31 professionals • 71 unlisted investments • 32 unlisted SMEs in the portfolio
Launch of NextStage
Arrival of Senior Partners Pascal
Macioce and Craig Vachon
Arrival of Associate Julien Potier and
Senior Partner Jean-Marc Moriani
2002 2008-2009 2011-2012 2012 2015 2018- 2019
FPCI NextStage Championnes III - September 2019
4
The team – NextStage AM
Grégoire SentilhesChairman
Citizen Entrepreneur and G20 YEA president
Jean-David HaasCEO and co-founder
Nicolas de Saint-EtienneManaging Partner
Private Equity team
Vincent BaziManaging Partner
Listed investment Team
Four partners
Jean-Marc Moriani, (61 yo)Senior Partner
Former CEO of Crédit Lyonnais Americas &
Deputy CEO of Natixis
Pascal Macioce (63 yo)Senior Partner
Former CEO of EY EMEIA In charge of Audit, Advisory, Legal and Fiscal transactions at Arthur Andersen
Guy Craig Vachon (55 yo)Senior Partner – Based in California
CFO of AnchorFree, CEO of Authentec(Bought by Apple in 2012)
Harvard teacher (business/organization)
Three senior partners
Marie-Léa SouryAssociate
4 years of investment experience
Arthur VignerasSenior Associate
5 years of investment experience
Aloys de FontainesInvestment Director
11 years of investment experience
Julien PotierInvestment Director
11 years of investment experience
Michaël Strauss-KahnInvestment Director
10 years of investment experience
Jérémy Ballet Associate
5 years of investment experience
Private Equity team (2+ recruitments)
Enzo CardilloAnalyst
3 years of investment experience
Pierre-Alexandre PrigentAnalyst
4 years of investment experience
Olivier CharoussetSenior Associate
Bastien AversaAnalyst
2 years of investment experience
Listed Investment team
FPCI NextStage Championnes III - September 2019
FPCI NextStage Championnes III
The investment committee and dedicated team
10 of common experience
€332 M deployed on investments
53 supported companies
30 exits achieves since 2009Including 16 industrial exits
1 investment committee
2 non-deliberative votes
Compliance Officer and CFO
Collective decision-making
process
90+ years of cumulated SMEs
investment experience
6
3 dedicated managers
Dossier
1 associate
OR1 Investment Director
+1 Associate/Analyst
Allocated resources per dossier
1 associate
OR1 Investment
Director
« SHADOW »
FPCI NextStage Championnes III - September 2019
Investment Criteria
We select the best opportunities from among:
✓ French or European SMEs managed by a team of highly experienced entrepreneurs who are shareholders themselves
✓ All sectors and industries
✓ generating turnover between €5 million and €50 million, with strong growth
✓ with an innovative approach to their market
✓ positioned to become market leaders
✓ demonstrating a proven, scalable and profitable business model
FPCI NextStage Championnes III - September 2019
4 trends driven by the 3rd Industrial Revolution
EMOTIONAL VALUE AND CUSTOMER EXPERIENCE ECONOMYAbility to develop a strong brand image, which creates emotion and a strong customer experience
ON-DEMAND AND SHARING ECONOMYCreation of new services incorporating goods: i/ temporary provision of goods or persons, ii/ activities with recurring income and iii/ rental of services
INDUSTRIAL INTERNETAbility to achieve significant productivity gains through upstream / downstream AI integration to add value to the object
POSITIVE ECONOMY OR GREEN GROWTHCreation of sustainable wealth through regeneration of the surrounding environment
FPCI NextStage Championnes III - September 2019
A proprietary deaflow
Data 31/12/2018
3 pillars of our proprietary dealflow
134 contributions supported since 2002
The entrepreneurs recommend NextStage AM
to other entrepreneurs
The NextStage AM ecosystem
Investors, partners, entrepreneurs, private
banks, wealth managers etc.
NextStage AM partners own network
Providing strong commitment among
entrepreneurs(Citizen Entrepreneur, G20
YEA for France…)
1 2 3
300 - 400 opportunities per
annum
5-10 investments
Almost half of the opportunities are tickets between €4M and €7M
FPCI NextStage Championnes III - September 2019
Connecting the dots: Entrepreneurs-Investors Club
FPCI NextStage Championnes III - September 2019
Our growth drivers and support framework
▪ Promoting co-creation and sharing among portfolio entrepreneurs (best practices, business opportunities etc.)
▪ Entrepreneurs Club 3 times a year
« CONNECTING THE DOTS »
▪ Acceleration of digital transformation
▪ Contribution to discussions about a switch to a platform model
ACCELERATING INNOVATION
1
▪ Support in more than 300 acquisitions since 2002
▪ Successful achievement of build-up strategies
SUCCESSFUL EXTERNAL GROWTH
2
▪ Through internal growth or acquisitions in Europe, the USA, Africa and Asia
▪ Experience in trading and selling companies (US, China and Japan)
SUPPORTING INTERNATIONAL DEVELOPMENT
3
▪ Implementation of performancemanagement tools
▪ Help in logistics tools settlement
OPTIMIZED PROCESSES AND PERFORMANCE
▪ Support of 134 entrepreneur since 2002
▪ Assistance in teamstrengthening (sales, marketing, digital, financial management, etc.)
STRENGTHEN GOVERNANCE AND TEAMS AROUND THE ENTREPRENEUR
4 5
FPCI NextStage Championnes III - September 2019
Evolution of Our ESG Commitments Since 2008
2008
Gaïa Index annual report for ESG monitoring of listed shareholdings
Signing of the UN-sponsoredPrinciples for Responsible Investment (PRI)
Support by PWC in the annual review of ESG practices of the portfolio companies and publication of results in a dedicated annual report
Commitment to the "G20 of Entrepreneurs", "Citizen Entrepreneurs" and "France 2020"
Expansion Capital Active Investor Reporting
▪ An investment strategy that aims to grow companies that create jobs and growth
▪ An entrepreneur-investor approach: systematic presence on the board, awareness of ESG issues among participants
▪ Implementation of KPIs within investments
2012 2017
A few ESG indicatorsOverall ESG approach
Source: NextStage AM PwC 2017 Report
of the portfolio companies’ staff are
long-term employees (permanent contracts)
92%of the portfolio companies have
signed shareholder agreements
incorporating an ESG commitment
clause
100%
of the companies surveyed have
formalized a set of values that structure
their business and culture
73%of companies in the
portfolio have established collective measures for
aligning employee interests with the
company's results beyond legal obligations
33%
FPCI NextStage Championnes III - September 2019
Investment Approach
Types of operations Financing of growth and transmission projects
Entry investment tickets €4 million to €7 million (sweet spot at €6 million) with reinvestment possibilities
Equity investments Minority or majority equity with little or no leverage
Participation in governance bodies Systematic
Divestment strategy Corporate, IPOs, financial
FPCI NextStage Championnes III - September 2019
Structure – NextStage Championnes III
Fund NextStage Championnes III
Management company NextStage AM
Type FPCI (Professional Capital Investment Fund, or Retail Venture Capital Fund)
Size €100 million (hard cap 120€m)
Minimum investment €1 million
Hurdle rate 7%
Carried Interest 20%
Management fees (annual)2% total amount invested during the investment period, as determined at the close of the investment period
Organizational expenses 1%
Auditor KPMG
Depositary SGSS
Counsel Dechert
First Closing (expected) H2 2019
Duration 8 years (extendable to 10)
Investment period Maximum 5 years
FPCI NextStage Championnes III - September 2019
Focus on the value creation of the Championnes II FPCIAbout the 9 exits realised as of 12/31/2018
1 Calculation of multiples based on various indicators (EBITDA, turnover, gross margin)Data as of 06/30/2018 on FPCI NextStage Championnes II exits
Analysis of value creation for the Championnes II FPCI
+25%
+162%Lever n°1GROWTH
6,4xAvg. multiple
at entry
7,9xAvg. multiple at
exit
65 M€Avg. turnover at
exit25 M€
Avg. turnover at
entry
Lever n°2MULTIPLE
214
92
199
-58
448
1
EV at entry Multiple effect Activity growth Debt effect EV at exit
FPCI NextStage Championnes III - September 2019
Our track record – FPCI Championnes II
Past performance is no guarantee of future results and performance is not constant over time.
Emotional value and quality of experience On-demand and sharing economy Industrial internet Positive economy and green growth
1st quartile its in
category 1
1 Net IRR capital growth funds launched since1987, as of end 2018Sources : France Invest 2017, 25e édition,27 juin 2019, Performance nette des acteurs français du capital-investissement à fin 2018, for the FPCI NextStage Championnes II internal source
Companies Fund trend Development strategy AR at entry AR at exit AR increaseStaff at entry
Staff at exit
Staff growth Entry date Exit dateInvestment
periodPrimary
operationInvestment
ticketExit Multiple IRR
Companies leaving the FCPR K€
Integration of innovationInternational development
13 200 k€ 36 100 k€ + 173% 72 89 + 24% 6/26/09 6/21/12 3,0 years 4 229 Corporate 1,3x +9,1%
Integration of innovationInternational development
36 800 k€ 69 800 k€ + 90% 115 170 + 48% 6/25/10 4/7/14 3,8 years ✓ 4 759 Corporate 2,9x +33,1%
External growthTeambuilding
16 900 k€ 55 500 k€ + 228% 175 530 + 203% 6/28/11 5/2/16 4,9 years ✓ 6 351 Corporate 2,5x +26,7%
Integration of innovationInternational development
12 700 k€ 31 600 k€ + 149% 53 77 + 45% 6/12/12 6/26/14 2,1 years 3 000 Corporate 1,7x +29,5%
External growthIntegration of innovation
65 000 k€ 273 000 k€ + 320% 40 220 + 450% 3/26/13 10/26/17 4,7 years ✓ 5 587 Corporate 2,1x +19,9%
Integration of innovationInternational development
45 600 k€ 47 300 k€ + 4% 435 438 + 1% 6/14/13 11/17/16 3,5 years ✓ 1 250 Management 1,7x +17,6%
External growthTeambuilding
18 600 k€ 41 300 k€ + 122% 93 200 + 115% 7/26/13 11/30/17 4,4 years 6 286 Corporate 2,0x +18,9%
Integration of innovationInternational development
1 700 k€ 3 900 k€ + 129% 15 26 + 73% 11/3/14 9/30/16 1,9 years ✓ 920 B Series 2,1x +48,8%
External growthIntegration of innovation
13 000 k€ 26 700 k€ + 105% 120 215 + 79% 12/12/14 12/12/17 3,0 years ✓ 3 251 Management 2,0x +29,5%
External growth 83 800k€ 49 300 k€ -41% 450 219 -51% 4/10/13 04/25/19 6,1 years 6 458 Secondary 1,0x -0,6%
External growthInternational development
16 200 k€ 23 800k€ +47% 120 175 +45% 10/9/14 07/23/19 3,8 years 3 040 Secondary 1,4x +7,9%
Average 29 409 k€ 59 845 k€ 153 218 3,8 years 4 099 1,9x +19,8%
19,8% Gross IRR
8,3% net IRR
FPCI NextStage Championnes III - September 2019
From investment in territories, to international development
Headquarters
Local offices
FPCI NextStage Championnes III - September 2019
Key figures
Presentation
Founded in 2003, Cap Cinéma is a company specialized in the use of movie theaters and film projection (movie theatermanagement).
NextStage AM Investment thesis
▪ quality entrepreneur with real experience in the field▪ scalable model▪ market conducive to external growth▪ historically proven profitability▪ realistic business model and good buyout opportunities at
exit
Development focus
Organic and external growth: opening of 5 to 7 new multiplexes to achieve a maximum group of 20 multiplexes.
Source
Entrepreneur
Supported by:
With a degree in Economic Sciences, PhilippeDejust started his entrepreneurial adventure in1985 with the company Pixy photo, where he’sbeen in charge of developing a network of stores inFrance for 7 years. Then he joined La Centrale(school supplies) for 2 years before handling themanagement of the Blois Cinema in 1994, afterwhat he created Cap Cinéma.
Philippe DejustCEO
1st investment
July 2013
Vehicles involvedCACEIS FIP Axe Ouest2 / CACEIS FIP Région Ouest / FIP Pluriel
Ouest 4 / SG FIP Axe Ouest 2 / FCPR Championnes II / FCPR Rendment / FIP Rendement / FIP Rendement 2021
20multiplexes
+122%turnover between
2012 and 2017
89movie theaters
5thmultiplex operator
in France
2017 turnover
€41.3m +107employees
Emotional value economy
MINORITY
Overview Entrepreneur profile
FPCI NextStage Championnes III - September 2019
Value creation
Investment thesisNextStage’s contribution
Exit detail
▪ Only player in TOP 10 in 10 years despite a mature environment
▪ Differentiating model (construction cost approach / offers innovative services)
▪ Strong and profitable internal growth capacity (offer meeting the unserved market players’ needs)
▪ Strong project pipeline
▪ Support / financing of a structuring acquisition to double in size and become the 4th largest player in the market
▪ Structuration of financial reporting and support in team growth (CFO, Communications, etc.)
▪ Delibaration and arbitration in order to optimize value creation.
▪ Establishment of an international competitive process with industrial actors and funds
▪ Selection of a pair of investment bankers to cover the spectrum
▪ Support for VDD and financial negotiation
▪ Selection of CGR (highlight of the strategic interest helping them to become #1)
Income statement (M€) Entry Exit
as at 12/31 2012 pre-money 2017 actual
Revenue 18.7 43.3
EBITDA 3.1 8.2
in % of revenue 17% 19%
EBIT 3.2 7.3
in % of revenue 17% 17%
Net debt 17.5 51.2
EV 37.8 117.9
TV 20.3 66.6
in x EBITDA 12.14x 14.46x
in x EBIT 11.66x 16.25x
Number of employees 93 200
Purchaser
Created in 1966, CGR is the leading French operator in terms of number of implantation in the cinema industry. The group currently operates 72 movie theaters in France.
2017 turnover : €31.7m
Emotional value economy
MINORITY
CompanyInvest. ticket
Multiple IRRInvest.
duration
Company exited venture capital fund (FCPR) €m
6.3 2.0x 19.6% 3 years
FPCI NextStage Championnes III - September 2019
Key figuresOverview
Presentation
Independent specialist in the distribution of automotive parts and spare parts (LV, ULV, heavy goods vehicles, agricultural public works, etc.), positioned in two product families: ▪ starters/alternators (or rotating machines)▪ braking and ground connection systems
Investment thesis
▪ team of experienced, recognized entrepreneurs▪ effective strategy enabling the company to continuously
outperform its market (esp. in a difficult environment)▪ specialist position, meaning that it does not have to be a
head-on competitor of existing players in the sector▪ setting up a structured company, organized around
customer service and innovation▪ solid plans for growth
Development focus
Structuring an offer for Amazon, sourcing external growth operations, defining new reporting formats
2017 turnover
€69.8m
+55employees
Supported by: MINORITY
Jean started his career in the automotive sector asa garage manager. After that, he moved on topositions as technical manager and then as salesmanager within companies in the automotivedistribution sector. He founded ACR System in1999 and approached Autec to pool their skills.
+90%turnover between
2016 and 2017
70,000product references
9distribution sites in
France
Jean RousseauCEO
29Major listed
manufacturers
source
Primary1st investment
July 2010
Vehicles involvedFCPR NextStage Championnes II / FIP Transmission 2006-2007 /
FIP Référence 2008 / FIP Sélection
Industrial internet
Entrepreneur profile
FPCI NextStage Championnes III - September 2019
Value Creation
Purchaser
Autodis group: a major player in spare parts distribution and independent repair.
2018 revenue: €1.2bn
* Value creation by EBITDA growth is calculated with an EBITDA adjustment of +€1.6m as the accounting EBITDA does not consider the strong impact of the move on profitability in 2013
Investment thesisNextStage’s contribution
Exit detail
▪ French leader in the distribution of brake parts and starters/alternators
▪ One of the 1st platforms to communicate in EDI and be integrated into its customers' ERP systems
▪ Creation of a new national network capable of serving customers within 4 hours
▪ Structuring a Factor vs. traditional medium-term credit
▪ Hiring of the CFO and design of the new reporting format
▪ Sourcing of external growth operations
▪ Support in structuring an offer for Amazon
▪ Implementation of a competitive process with industrial actors
▪ Selection of the Autodistribution group accompanied by TowerbrookCapital
▪ Rationale for acquisition : to have an automated national platform able to deliver its customers within 4 hours (theirs was inadequate)
Income statement (€m) Entry Exit
as at 12/31 2009 figures 2013 figures (realized)
Revenue 37.2 69.8
EBITDA 3.6 6.6
in % of revenue 10% 7%
EBIT 3.4 3.6
in % of revenue 9% 5%
Net debt 2.2 8.8
EV 23.6 57.0
TV 21.4 48.2
in x EBITDA 6.49x 11.33x
in x EBIT 6.85x 15.93x
Number of employees 115 170
Industrial internet
MINORITY
CompanyInvest. ticket
Multiple IRRInvest.
duration
Company exited venture capital fund (FCPR) €m
4.8 2.9x 33.8% 4 years
FPCI NextStage Championnes III - September 2019
Entrepreneur profile
Positive and green growth economy
Presentation
Founded in 2009, GreenFlex created the concept of
SS2D, which proposes that companies include sustainable
development in their strategies. The company
has 2 areas of expertise:
• consulting : strategy and operational advice (action plan, etc.)
• financing : Technology and Energy
Investment thesis
• the only leasing company positioned on the reduction of energy costs
• leader in a “Blue Ocean” activity: SS2D
• strong growth and a profitable company from the outset
• international growth opportunities
• maturation of the business model
Development focus
Organic growth : acceleration of thedevelopment of the group and its restructuring.Acceleration of international development.
Supported by:
An entrepreneur, trained in IT, a specialist inBusiness Development, management and ITLeasing, he has created several companiesand held positions as CEO in France andabroad, in international high-tech and IT leasemanagement companies.
Frédéric Rodriguez
CEO
MINORITY
Overview Key figures
Source
Primary1st investment
March 2013
Vehicles involvedFCPR Championnes II / FCPI CAP 2017 ISF / FCPI CAP 2017 IR / FCPI ISF CAP 2018 / FIP Sélection
+450%revenue growth
between 2016 and 2017
18,000energy-saving action
plans
2017 revenue
€273 million
8external growth
transactions
+180employees
3,400daily users
FPCI NextStage Championnes III - September 2019
Value creation
Investment thesisNextStage’s contribution
Exit detail
▪ A pioneering player, offering an innovative, global and fully integrated service approach around the reduction of energy bills;
▪ Establishment of a portfolio of first-class clients;
▪ A model generating growth and continuous profitability since its creation;
▪ Support with the acquisition of technological bricks to strengthen its leadership in environmental data mining;
▪ Support with internal structuring in order to support development (key recruits).
▪ Support with international deployment
▪ Implementation of a competitive process, interested to a leading bank, aiming to guarantee the liquidity of NextStage AM’s funds
▪ Support for the entrepreneur in the preparation and negotiations for the industrial exit of the group
ACQUIRER
Among the six largest oil companies in the world. Present in 130 countries with more than 100,000 employees, the group operates more than 16,000 service stations throughout the world.
2017 turnover : €172 bn
Positive and green growth economy
MINORITY
CompanyInvest. ticket
Multiple IRRInvest.
duration
Company exited venture capital fund (FCPR) €m
5.6 2.0x 22.1% 4 years
FPCI NextStage Championnes III - September 2019
The opportunity to invest in SMEs and:
Conclusion
✓ access a market segment that offers many investment opportunities and strong growth potential
✓ benefit from the expertise of a team that has been stable for 10 years with a track record above the market average and a proven ability to bring SMEs to the "Next-Stage" and increase their strategic value
✓ take advantage of the value creation resulting from an entrepreneurial approach and an “off the beaten track” dealflow that together make it possible to carry out many primary deals and exits via corporate acquisition
FPCI NextStage Championnes III - September 2019
Disclaimer FPCI Championnes III
THIS DOCUMENT IS FOR THE EXCLUSIVE USE OF PROFESSIONAL INVESTORS TO WHOM IT HAS BEEN ADDRESSED BY NEXTSTAGE AM ITS CONTENT CAN NOT BE DISCLOSED TO THEIR CLIENTS OR ANY OTHER THIRD PARTY.
This presentation regarding NextStage Championnes III (the "Fund") is made on a confidential basis to a limited number of investors.The information contained in this presentation does not address the risk factors and other matters relating to an investment in the Fund. They are of a preliminary nature,subject to modification and correction, and no one should avail themselves of them.
The Fund will be a Professional Private Equity Fund (FPCI) structured under French law and open exclusively to professional and investors.
In accordance with the applicable French regulations, the Fund's units may only be subscribed or acquired by professional clients are defined under MIFID.
No guarantee can be given that the Fund's return on investment objectives will be met or that the amounts invested will be repaid.
This presentation does not constitute, and may not be used for the purposes of, an offer of shares or an invitation to participate in the Fund by any person in any jurisdictionin which such offer or invitation would not be permitted or in which the person seeking to make such an offer or invitation would not be permitted to do so or to a person whois prohibited from making such an offer or invitation. It is the responsibility of potential investors to ensure compliance with the laws and regulations of any related jurisdictionwith a request to participate in the Fund, including obtaining any required governmental or other approvals, and any other formality required in this territory.
The information contained in this presentation represents the appreciation and interpretation of NextStage AM's information at the date of this presentation. Some of theinformation contained in this presentation was obtained from published sources prepared by third parties. Neither NextStage AM nor any other person shall be held liablewith regards to the accuracy or completeness of this information.
FPCI NextStage Championnes III - September 2019
19, avenue George V75008 Paris – FranceOffice : +33 1 44 29 99 [email protected]
FPCI NextStage Championnes III - September 2019
http://www.nextstage.com/mailto:[email protected]