Peugeot Invest : Focus on private equity

Focus - PEUG PA - 131,4Euros

PEUGEOT INVEST

Focus on private equity

PI implemented a portfolio construction strategy with a regular annual commitment approach starting in 2014 and then formed a dedicated team. These developments have accelerated since 2017. The group has sown a lot and the value of private equity fund shares has quadrupled since then.

The PI strategy is structured around a limited number of partners with whom the group seeks to build ongoing relationships. The group invests mainly in Europe and the United States in Growth and LBO funds, mainly in the Tech and Healthcare sectors.

PI does not yet report on the performance of its investments. We modeled recent investment flows and expected distributions starting in 2021 over an 8-year period. Based on the average multiples paid and exit levels achieved in private equity over the last few years, we calculated the expected investment flows and distributions. We conclude that the group will benefit in the coming years from repayments in excess of its capital calls, unlike the last 5 years.

	M€			30/06/2021
	NAV			5 667
	NAV per share	227,4
	LTV			16%
	Gross Debt	1 013
	Market capitalization (12/01/22)			3 224

CAROLE ROZEN	FRANCOIS DIGARD
[e-mail]	[e-mail]

SponsoredParis,research12 janvier 2022

Table of contents

PI in pictures	3
A long-term presence whose value has quadrupled in 5 years	5
Growing and accelerating commitments since 2017	7
A strategy focused on growth and LBO funds in Europe and the United States	8
A "value-added" LP	11
High selectivity	11
Equity investments only	12
Cross-fertilization: a lever on investments	12
Evolution of the private equity market	13
What is the sensitivity to a drop in valuation multiples?	15
Disposals, repayments, distributions: substantial additional income	17
Update of the NAV: 45% discount	20
Risk of conflicts of interest	25
Disclaimer	25

PI in pictures

Chart 1 : 10-years PI stock price

Chart 2 : H1 GAV of PI by asset type

Real EstateOther Assets

9% 1%

Co-Investment

12%

Peugeot 1810

Investment44%

Capital

8%

Holdings

26%

Chart 3 : Historical discount and NAV over 10 years

250	60%
200	50%
150	40%
	30%
100	20%
50	10%
0	0%
NAV	Price
Discount	Linéaire (Discount)

Source of graphs: Factset, Peugeot Invest, Theia Recherche *Investments = Assets excluding Peugeot 1810

Chart 4 : Evolution of unlisted assets

3000

2500

2000

1500

1000

500

0
2010	2011	2012	2013	2014	2015	2016	2017	2018	2019 2020 H1 21
	Unlisted equity assets		Private equity		Co-investment		Real estate

Chart 5 : Listed vs. unlisted in the Investment GAV*.

2500

2000

1500

1000

500

0

2010 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 H1 21

	Total listed holdings excluding Peugeot 1810		Total unlisted assets

Chart 6 : European peers' discounts/premiums

120%
100%			Latour AB;
80%			96%
60%			3i; 53%
		Sofina; 40%
40%
20%			Kinnevick;
		18%
0%			Gimv; 9%
	GBL; -31%	Industrivarden; -9%
-20%	Wendel; -	Eurazeo; -23%
	Exor; -22%
-40%
-60%	Peugeot Invest; -45%

* Price at 12/31/21 compared to last published NAV

Focus on private equity	12/01/22 ∙ 3/26

Table 1 : Estimated NAV of Peugeot Invest as of 12/31/2021

Stellantis

Faurecia

Peugeot 1810

Lisi (total)

SEB

Safran

Orpea

CIEL

Tikehau Capital

Spie

Listed holdings

Unlisted holdings

Total equity investments

Private equity vehicles

JDE

KDP

Unlisted co-investments

Co-investment

Immobilières Dassault

Unlisted real estate assets

Real estate

Other financial assets and liabilities

Treasury

Other assets

Gross asset value of investments

Total gross revalued assets

Debt

Net asset value

Net asset value per share

Current stock price

Discount

Source: Peugeot Invest, Theia Research

Value (€M)

3 739

180

2 998

293

305

44

287

14

72

193

1 208

456

1 664

536

6

136

667

809

88

507

595

11

33

44

3 648

6 646

-1 013

5 633

226,0

124,0

45%

Chart 7 : Assets Investment* by sector (H1 21)	Chart 8: Assets Investment* by geography (H1 21)
		Automotive
Other		6%	Asia/Africa/Latin
18%		Aerospace	America
	6%
		North
			America
		Consumer	33%
		Goods
Real Estate		18%
16%
Logistics			Europe
2%
	Healthcare	51%
Services	Financial	21%
Services
7%
6%

Source: Peugeot Invest *Investments = excluding Peugeot 1810

Source: Peugeot Invest *Investments = excluding Peugeot 1810

Focus on private equity	12/01/22 ∙ 4/26

1. long-termpresence whose value has quadrupled in 5 years

Investment in private equity funds represents nearly a quarter of Peugeot Invest's unlisted assets at present. It is a major growth axis in both Europe and the United States that has been accelerating since 2017.

In addition to its long-term holdings, historically made up of listed assets, the group has increased, particularly since 2017, its equity investments in two types of commitments: co- investments and private equity funds. As we showed in our study "Peugeot Invest: A Famous Unknown", the weight of unlisted assets has doubled over the past 5 years to 58% of GAV Investments (i.e. excluding Peugeot 1810). The value of private equity units has quadrupled over the period, but their relative weight has remained stable compared to unlisted investments. In H1 2021 it represented 24% of the Group's unlisted assets.

Chart 9 : Valuation of PE funds in the NAV (€M)

Source : Peugeot Invest

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