2011 general section Quest for growth ANNUAL REPORT Contents aNNUAL REPORT General SECTION Quest for growth
message to the shareholders 3
Ratios 4
Key facts 5
Portfolio 6
Holdings at December 31st 2011 6 Portfolio composition: by country 8 B by stock market 8 B by sector 8
Profile, Aim, Investment Policy 10
Strategy 12
Corporate Governance 14
Board of Directors 20
Investment Managers Report 32
investments in quoted companies 32 investments in unquoted companies 34 & venture funds
Company profiles 38
unquoted companies 38 venture capital funds 41 quoted companies 44
General information 58
Key information 62
Financial calendar 63
Glossary 64 Pursuant to the Royal Decree of November 14th 2007 regarding the obligations of issuers of financial instruments admitted to trading on a Belgian regulated market, Quest for Growth is required to publish its financial report on an annual basis. The annual financial report comprises the audited annual accounts, the annual report and the signed report of the Statutory Auditor.
The integral version of the statutory annual accounts is deposited with the National Bank of Belgium, pursuant to the articles 98 and 100 of the Company Code, together with the annual report of the Board of Directors and the audit report.
The Auditor has approved the statutory annual accounts without qualification, with explanatory paragraph.
The annual report has been written based on the situation on 23 January 2012 and as a consequence it does not take into account any changes to the structure after that date (merger Quest Management NV – Capricorn Venture Partners NV).
The annual report, the integral versions of the statutory annual accounts, as well as the audit report regarding the said annual accounts are available on the website www.questforgrowth.com and may be requested free of charge from the following address:
Quest for Growth NV Lei 19 box 3 B-3000 Leuven Belgium
Phone: +32 (0)16 28 41 28 Fax: +32 (0)16 28 41 29 E-mail: [email protected] Dr. Jos B. Peeters Mr. Antoon De Proft MESSAGE TO THE SHAREHOLDERS
Dear shareholders,
Early 2011 the economy gained momentum Yet the current difficult market conditions Following the recent merger between and it seemed as though the markets would also offer opportunities. The low valua- Quest Management and Capricorn Ven- recover from the financial crisis that struck tions and forecasts of rising operating ture Partners the latter has, as the legal three years ago. In June however, the confi- income could put the stocks in an excel- successor of Quest Management, taken dence of investors rapidly started to decline. lent position to grow in 2012. That growth over the role of managing director of The effects of the earthquake in Japan and however will depend on a number of mac- Quest for Growth. To safeguard the in- the subsequent nuclear disaster in Fuku- roeconomic factors whereby political ini- dependence of the Chairman position shima, the “Arab spring” with its negative tiatives aimed at stability in the financial within the fund, Jos B. Peeters, who in his impact on global oil prices and the fading markets will be crucial. capacity as Chairman of the management confidence of investors in Europe for a short committee of Capricorn Venture Partners term control of the debt crisis, contributed Quest for Growth invested in 2011 as the will also be responsible for the daily man- to an increasing volatility in equity markets. lead investor in one new unquoted com- agement of Quest for Growth, passed the pany, namely Cartagenia, in which a com- gavel to ADP Vision BVBA, represented by In general the quoted portfolio suffered mitment was made for € 1.25 million. Cart- Antoon De Proft. from the deterioration of the European agenia, a promising spin-off of the KUL, is stock markets. However, despite the awk- active in the development of software for We wish to thank Rene Avonts, former ward financial economic climate, several genetic laboratories. Apart from that co- CEO of Quest Management, for his years parts of our portfolio performed better than investments were made with the Capricorn of dedication to the fund. In the future the benchmark. Especially smaller stocks Cleantech Fund; the main investment here he will continue to be closely involved from the eurozone, the vast majority of the was one of nearly € 1 million in Ducatt, a with the activities of Quest for Growth as portfolio, performed weakly at the stock ex- turnaround investment in an existing Bel- a member of the board of directors. On change. Yet there were some stocks in the gian glass company that converted itself behalf of all who are involved in Quest for portfolio that could record positive annual into producing high quality glass for the Growth, we wish to thank you for your con- returns, with Econocom as best performer photovoltaic industry. fidence. We look forward to help achieve (+59%). The portfolio of unquoted compa- your investment goals also in 2012. nies was also hit by the recession. Compa- The close collaboration with the Capricorn nies in need of a capital increase were con- Cleantech Fund fits for that matter in the fronted with a strongly shrinking venture merger project between Quest Manage- capital market and a significant decline of ment NV, the managing director of Quest valuations. Despite those difficult economic for Growth, and Capricorn Venture Part- conditions some of our portfolio companies ners, announced in 2010. This project was still took important steps in their further de- completed in the beginning of 2012 and velopment. Sphere Medical for instance suc- we expect it will result in a better deal flow ceeded in November in an IPO on AIM and for unquoted companies, which we hope Dr. Jos B. Peeters ADP Vision BVBA, represented by there were some trade sales in companies in will boost the future result of Quest for Antoon De Proft which we had an indirect interest. Growth. Outgoing Chairman Incoming Chairman
ANNUAL REPORT 2011 - GENERAL SECTION l 3 RATIOS
1/01/2011 1/01/2010 1/01/2009 1/01/2008 1/01/2007 31/12/2011 31/12/2010 31/12/2009 31/12/2008 31/12/2007 Balance sheet and results (in €) Net profit (13,313,623) 20,568,083 18,076,265 (48,404,428) 620,575 Ordinary dividend 0 0 0 0 600,394 Total dividend 0 0 0 0 600,394 Net asset value (N.A.V.) after profit distribution 91,101,307(*) 106,009,655 85,441,572 67,365,307 115,769,735 Financial Assets (shares and receivables) 86,989,456 99,778,377 79,850,099 61,137,896 108,892,469 Cash at bank and in hand and term deposits 3,038,427 3,724,105 4,047,803 5,165,409 5,464,683 Total Assets 91,224,485 106,076,435 85,563,899 67,673,819 116,499,094
Numbers per ordinary share (in €) * Profit per share (1.15) 1.74 1.53 (4.11) 0.05 Gross dividend per share 0.00 0.00 0.00 0.00 0.05 Net dividend per share 0.00 0.00 0.00 0.00 0.05 NAV per share before profit distribution 7.90 8.99 7.25 5.71 9.87 NAV per share after profit distribution 7.90 8.99 7.25 5.71 9.82
Stock information Share price at year end (€) 4.75 5.31 4.65 3.15 8.40 Total number of outstanding shares 11,529,950 11,789,255 11,789,255 11,789,255 11,789,255 Number of bought-in shares 0 259,305 259,305 259,305 202,715 Number of warrants 0 0 0 0 0 Stock market volume in shares 2,269,921 2,576,476 871,476 1,447,432 2,602,058 Stock market volume (× € 1000) 12,566 12,179 3,513 9,378 26,236
Return NAV ** (12.10 %) 24.07 % 26.83 % (41.81 %) 1.8 % Net return on equity (with regard to share price at year end) 0.0 % 0.0 % 0.0 % 0.0 % 0.6 % Pay-out ratio 0.0 % 0.0 % 0.0 % 0.0 % 96.7 % Discount share price at year end with regard to NAV 38.88 % 40.95 % 35.84 % 44.87 % 14.9 %
(*) after annulment treasury shares amounting to 1,594,726 * calculated with total number of outstanding shares at year end, including bought-in shares. ** NAV return after profit distribution, taking into account capital increases (time weighted rate of return).
4 l ANNUAL REPORT 2011 - GENERAL SECTION KEY FACTS
1/01/2011 1/01/2010 1/01/2009 1/01/2008 1/01/2007 31/12/2011 31/12/2010 31/12/2009 31/12/2008 31/12/2007 Net profit / loss: (13,313,623) 20,568,083 18,076,265 (48,404,428) 620,575 Net profit / loss per share: (1.15) 1.74 1.53 (4.11) 0.05
Ordinary dividend: 0 0 0 0 600,394 Dividend to A and B shares: 0 0 0 0 0 Profit / loss carried forward: (19,303,859) (5,990,236) (26,558,319) (44,634,583) 20,993
Ordinary dividend per share (before withholding taxes): 0 0 0 0 0.05 Ordinary dividend per share (after withholding taxes): 0 0 0 0 0.05
31 December 31 December 31 December 31 December 31 December 2011 2010 2009 2008 2007 Net asset value (NAV) after profit distribution: 91,101,307 106,009,655 85,441,572 67,365,307 115,769,735(1) NAV / share after profit distribution: 7.90 8.99 7.25 5.71 9.82 Stock Price / share: 4.75 5.31 4.65 3.15 8.40 Number of Shares: 11,529,950 11,789,255 11,789,255 11,789,255 11,789,255
(1) Capital increase (+ € 19,806,547 or 2,330,182 shares at € 8.50 per share on April 30th 2007) (2) Annulment treasury shares (- € 1,594,726 for 259,305 shares on June 29th 2011)
STOCK PRICE VOLUME
90,000 7.00
80,000
6.00 70,000
60,000
5.00 50,000
O R
U 40,000 E 4.00 30,000
20,000 3.00
10,000
2.00 0
ANNUAL REPORT 2011 - GENERAL SECTION l 5 PORTfolio
FINANCIAL ASSETS BREAKDOWN DECEMBER 31ST 2011 Shares quoted companies
Company Sector / Market Number of Change since Currency Share price Valuation in € in % of Net shares 31/12/2010 Asset Value
DOCDATA Euronext Amsterdam 65,000 65,000 € 14.5000 942,500 1.03% ECONOCOM Euronext Brussels 153,663 82,493 € 15.5500 2,389,460 2.62% INIT INNOVATION Deutsche Börse 99,178 -35,822 € 14.2000 1,408,328 1.55% LEGUIDE.COM Euronext Paris 80,000 17,500 € 14.6700 1,173,600 1.29% NEMETSCHEK Deutsche Börse 140,000 -10,000 € 25.8000 3,612,000 3.96% PHARMAGEST INTERACTIVE Euronext Paris 40,000 22,750 € 44.1000 1,764,000 1.94% TRANSICS Euronext Brussels 250,000 0 € 6.2000 1,550,000 1.70% UNIT 4 Euronext Amsterdam 157,830 -37,500 € 18.3000 2,888,289 3.17%
EVS BROADCAST EQUIPM. Euronext Brussels 90,000 17,500 € 39.4900 3,554,100 3.90% LEM Holding SWX Swiss Exchange 5,210 -2,546 CHF 385.0000 1,650,090 1.81% MOBOTIX Deutsche Börse 34,968 34,968 € 22.0000 769,296 0.84%
TEVA PHARMACEUTICAL Nasdaq 60,000 -15,000 $ 40.3600 1,871,551 2.05%
35,000 35,000 € 32.1950 1,126,825 1.24% 118,000 118,000 € 7.0000 826,000 0.91% 930,031 0 £ 0.7261 808,475 0.89% UNITED DRUG Dublin 1,491,786 15,500 € 2.0500 3,058,161 3.36%
ANDRITZ AG Vienna 62,500 7,500 € 64.1000 4,006,250 4.40% ARCADIS Euronext Amsterdam 225,000 -35,000 € 12.1000 2,722,500 2.99% FAIVELEY Euronext Paris 30,000 2,500 € 48.1000 1,443,000 1.58% IMTECH Euronext Amsterdam 190,055 50,000 € 20.0150 3,803,951 4.17% 55,000 55,000 € 16.5000 907,500 1.00% 10,500 10,500 € 70.4100 739,305 0.81%
120,133 120,133 € 10.3700 1,245,779 1.37% SMA SOLAR Deutsche Börse 17,500 -12,500 € 43.1650 755,388 0.83%
CENTROTEC Deutsche Börse 73,000 -27,000 € 11.2750 823,075 0.90% UMICORE Euronext Brussels 110,000 0 € 31.8700 3,505,700 3.85% 49,345,122 54.15% Shares unquoted companies
Company Sector / Market Currency Valuation in € in % of Net Asset Value ANTERYON Technology Hardware € 1,499,027 1.64% CAPRICORN CLEANTECH CO-INVESTMENTS € 1,074,527 1.18% CARTAGENIA Software & Services € 625,001 0.69% CLEAR2PAY Software & Services € 5,570,337 6.11% IDEA AG Pharma & Biotech € 164,417 0.18% KIADIS PHARMA Pharma & Biotech € 2,374,279 2.61% MAGWEL Software & Services € 430,000 0.47% OXAGEN Ltd. Pharma & Biotech £ 5,003 0.01% PROSONIX Pharma & Biotech £ 2,605,026 2.86% SYNTAXIN Pharma & Biotech £ 2,408,925 2.64% TCLAND Pharma & Biotech € 1,499,995 1.65% 18,256,537 20.03%
6 l ANNUAL REPORT 2011 - GENERAL SECTION Investments in Venture Funds
Company Currency Last Valuation Date Valuation in € in % of Net Asset Value CAPRICORN CLEANTECH FUND € 30-09-2011 1,103,348 1.21% CAPRICORN HEALTH-TECH FUND € 30-09-2011 3,482,689 3.82% CARLYLE EUROPE TECHNOLOGY PARTNERS I € 30-09-2011 1,489,188 1.63% CARLYLE EUROPE TECHNOLOGY PARTNERS II € 30-09-2011 2,434,170 2.67% CETP LP CO-INVESTMENT € 30-09-2011 1,551,707 1.70% CETP II LP CO-INVESTMENT £ 30-09-2011 176,499 0.19% LIFE SCIENCES PARTNERS III € 30-09-2011 1,248,195 1.37% LIFE SCIENCES PARTNERS IV € 30-09-2011 617,913 0.68% SCHRODER VENTURES LSF II $ 30-06-2011 184,809 0.20% VENTECH CAPITAL 2 € 30-09-2011 702,018 0.77% VERTEX III $ 30-09-2011 1,430,570 1.57% 14,421,106 15.82%
Total Financial Assets - Shares 82,022,765 90.01% Depreciation unquoted companies -2,530,709 -2.78% Total Financial Assets – Shares after depreciation 79,492,056 87.26%
Amounts receivable companies
Company Face value in Currency Valuation in € in % of currency Net Asset Value Loan notes TCLAND Convertible loan note 500,000 € 500,000 0.55% 500,000 0.55%
Commercial paper CODRALUX 2,000,000 € 1,999,803 2.19% CODRALUX 2,000,000 € 1,998,987 2.19% DEME 2,000,000 € 1,998,788 2.19% ETEXCO 1,000,000 € 999,820 1.10% 6,997,399 7.67%
Total Financial Assets - Amounts receivable € 7,497,399 8.22%
Total Financial Assets € 86,989,456 95.48%
Cash € 3,038,427 3.33% Other Net Assets € 1,073,424 1.18% Quest for Growth - Ordinary shares - 0.00%
Total Net Asset Value € 91,101,307 100.00%
Commitments
Company Commitments Currency Commitment in € in % of Net Asset Value CAPRICORN CLEANTECH CO-INVESTMENTS 1,500,000 € 1,500,000 1.65% CAPRICORN CLEANTECH FUND 675,000 € 675,000 0.74% CAPRICORN HEALTH-TECH FUND 11,250,000 € 11,250,000 12.35% CARLYLE EUROPE TECHNOLOGY PARTNERS I 377,944 € 377,944 0.41% CARLYLE EUROPE TECHNOLOGY PARTNERS II 1,339,098 € 1,339,098 1.47% CARTAGENIA 625,001 € 625,001 0.69% LIFE SCIENCES PARTNERS III 114,219 € 114,219 0.13% LIFE SCIENCES PARTNERS IV 1,213,575 € 1,213,575 1.33% SCHRODER VENTURES LSF II 19,953 $ 15,421 0.02% VENTECH CAPITAL 2 305,571 € 305,571 0.34% VERTEX III 166,475 $ 128,661 0.14%
Total Commitments € 17,544,490 19.26%
ANNUAL REPORT 2011 - GENERAL SECTION l 7 Distribution of the invested part of the portfolio by country
Portugal
US
Switzerland
Ireland
Israel
Austria
France
Germany
United Kingdom
Netherlands
Belgium
Distribution of the invested part of the portfolio by stock market
Unquoted Loan notes Quoted - Unquoted SWX Swiss Exchange Nasdaq Dublin Vienna Euronext Paris Commercial Paper Deutsche Börse Euronext Amsterdam Euronext Brussels Venture Funds Unquoted
Distribution of the invested part of the portfolio by sector
Materials
Health Care Equipment & Services
Other sectors
Technology Hardware
Pharma & Biotech
Funds & Diversified Companies
Electrical & Engineering
Software & Services
8 l ANNUAL REPORT 2011 - GENERAL SECTION ANNUAL REPORT 2011 - GENERAL SECTION l 9 PROFILE, AIM, INVESTMENT POLICY
Quest for Growth focuses on European • Unquoted companies; • At least 80 % of the realised technology based growth companies • Companies quoted on a benefits of the fiscal year are covering such sectors as life sciences, growth market or paid out as a dividend. (Quest for information technology, software, • Venture Funds with an invest- Growth states in its Articles of semiconductors, telecom, electronics, ment policy similar to the Association that at least 90 % of new materials and special situations in Privak. the realised benefits must be other growth sectors. As at December paid out). 31st 2011, funds under management However, investments in quoted com- amounted to € 91 million. panies on a growth market can never If the Privak invests its assets in ac- exceed 50 % of the qualified invest- cordance with these rules, the taxable Quest for Growth has been listed on ments. basis will consist only of the disallowed Euronext Brussels since September 23rd expenses and abnormal or gratuitous 1998. The company is neither permitted to benefits received. In practice, the Pri- invest over 20 % of the portfolio in one vak pays almost no taxes.. The Privak, created by Royal Decree of company, nor to invest over € 6.2 mil- April 18th 1997, is an investment vehicle, lion in one company, over one year. specially tailored to provide a suitable Taxation for Belgian retail framework for investments in private On April 30th 2007 Quest for Growth investors and for legal entities equity and in growth companies. raised its capital by € 20 million. In subject to tax on legal entities accordance with the Royal Decree of The Privak is a closed-end fund under April 18th 1997, a period of 5 years is Dividend payments the regulation of the Financial Services granted to the fund to comply with the No withholding tax is due on the part and Markets Authority (FSMA) and sub- investment rules of the Privak. of the dividend that stems from the ject to specific investment and dividend capital gains on shares realised by the pay-out rules. Privak. The remaining part of the divi- Tax Benefits dend is subject to a withholding tax of 21 % and these taxes are considered as Investment rules The Privak benefits from important tax final taxes. advantages. These benefits apply only • A minimum of 50 % of the portfolio if amongst others: Capital gains must be invested in equity; Retail investors are, in principle, not • A minimum of 70 % of the portfolio • The investment rules are adhered subject to income tax on capital gains (qualified to companies subject to a normal realised upon the sale of shares of the investments) must be invested in: tax regime; Privak.
10 l ANNUAL REPORT 2011 - GENERAL SECTION Taxation for Belgian investors Capital gains who are subject to corporate Capital gains realised on the shares income tax of the Privak will normally be subject to corporate income tax at the rate of Dividend payments 33.99 %. Capital losses are not tax de- A withholding tax of 21 % is due on ductible. However, it should be noted the dividend that is distributed by the that since the Privak distributes almost Privak. However, no withholding tax all of its benefits, capital gains remain is due on the part of the dividend that limited. stems from capital gains realised. Investment policy Distributed dividends will be eligi- ble for Dividend-Received Deduction Quest for Growth invests in growth (DRD). There is neither a minimum companies. The Privak structure al- participation condition nor a minimum lows paying out realised capital gains holding period in the capital of the Is- on equity tax-free. The largest part suer to benefit from the DRD. Moreo- of the portfolio is invested in growth ver, the participation in the Privak must companies listed on European stock not necessarily be booked as financial exchanges (Euronext, London Stock fixed asset to benefit from the DRD. Exchange, Deutsche Börse etc) and other regulated markets. The dividends distributed by the Pri- vak, will only be eligible for DRD to the The balance will be invested in un- extent that they stem from dividends quoted companies working towards that give right to DRD or exempt capi- an introduction to a stock exchange or tal gains on shares satisfying article trade sale. Investments in start-ups or 192 BITC. Income that stems from divi- early stage companies are allowed but dends that do not give right to DRD or will be exceptional. interest, will be fully subject to corpo- rate income tax at the rate of 33.99 %. Therefore, the Privak will allocate its dividends in function of the source of the distributed income.
ANNUAL REPORT 2011 - GENERAL SECTION l 11 Quest for Growth is a public Privak (pri- tor: for instance, cleantech enterprises can STRATEGY vate equity Bevak) which aims at investing be found in the sectors (renewable) energy in high-growth companies. Our goal is to and (new) materials. But numerous other achieve capital gains which can be distrib- kinds of companies acting in different sec- uted to the shareholders as dividends with- tors such as engineering, soft- or hardware out withholding tax being due. more and more frequently focus upon the cleantech aspect of their business. Today, Bearing this target in mind, Quest for cleantech makes up for approx. 50 % of Growth screens sectors that are expected Quest for Growth’s quoted portfolio. to grow faster than others. The selected sectors are regularly evaluated and - if nec- Within the retained sectors or themes essary - adjusted. Most sectors first experi- and their respective segments, Quest for ence a period of growth, before the growth Growth attempts to identify prospective decreases and are frequently followed by “winners” among quoted companies as well consolidation when the sector has estab- as private companies. lished itself. At its start-up in 1998, Quest for Growth - apart from biotechnology - pri- With unquoted companies, Quest for marily focused on information technology Growth specifically seeks for opportunities and telecommunication. Currently, the within the “later stage” segment. Rather interest in biotechnology is still the same, than providing seed money (i.e. starting as small-sized, strongly growing biotech capital) or finance start-ups, Quest for companies play an increasingly important Growth seeks for companies that already role in the development of new medicines exhibit a certain positive development: and correlate with large pharmaceutical companies which hold a marketable prod- companies which provide an interesting uct or are just about to. Companies that exit channel. On the other hand, the inter- develop a business plan which should rel- est in telecom companies - and particularly atively soon result in a positive cash-flow in operators - has significantly decreased are preferred. Exceptions are biotech com- as telecommunication is increasingly con- panies, which have specific dynamics and sidered “utility” and the sector has already require significant capital already in early heavily consolidated. Information technol- stages, but also allow for faster exits. When ogy, however, must be treated in a far more initially investing in an unquoted company, differentiated way. Some “internet” com- Quest for Growth will always inquire the re- panies which were founded around the turn alistic chance of an exit following the initial of the century feature a stable cash-flow by investment. Both an initial public offering now. However, they frequently do not gain (IPO) as well as an acquisition (trade sale) their competitive edge by technological can provide for liquidity. However, every advantage but by deploying a specific busi- once in a while Quest for Growth still de- ness model or, for instance, highly efficient cides to initially invest into a company which logistics. On the other hand, there are still is obviously far from an exit and intends sev- a large number of innovative young enter- eral more rounds of financing. These are prises which focus on developing state-of- companies with exceptional potential and the-art hard- and software in the field of where a first, rather limited investment is ICT. most of all considered as an entrance ticket to later stage financing rounds. Quest for Over the past years, particularly cleantech Growth will often repeatedly invest in the or environmentally compatible technology same company, but will confine to capital became an attractive “investment theme” expenditures that in total do not exceed 5 in Quest for Growth’s investment universe. % of the entire portfolio. For initial invest- As it crosses traditional sector allocations, ments, Quest for Growth thus estimates the cleantech is more of a theme than a sec- expected future capital demand and bears
12 l ANNUAL REPORT 2011 - GENERAL SECTION the respective findings in mind when it de- for private equity investments and thereby based on a thorough analysis: important fines the initial investment amount. This further improve the future results of Quest criteria are the estimated growth and the approach is essential for being able to still for Growth. price-earnings-ratio. The majority of shares “follow” subsequent fund raising, i.e. to still within the portfolio are small and medium- hold sufficient investment opportunities to Apart from direct investments in unquoted sized companies and - with respect to their not be diluted. Also, Quest for Growth tries companies, Quest for Growth also invests in dimension - match well with the unquoted to avoid holdings in unquoted companies other funds that follow an investment strat- portfolio. Quest for Growth is very con- below 0.5 % of its own capital. Evaluations, egy similar to its own. Quest for Growth cerned about being in regular and personal negotiations and decisions to invest into a first of all selects these funds as to their contact with those companies’ manage- private company as well as the related se- managers’ quality, but also takes potential ments. Apart from medium-sized compa- quels constitute a work-intensive process strategic added value into account. The re- nies, Quest for Growth will occasionally which bears rapidly accumulating costs for spective added value may, for instance, be a also invest in large companies. This is par- smaller transactions. focus onto a geographic market which is of ticularly relevant for the portfolio’s man- interest for Quest for Growth, but in which agement in practice: due to their higher From a geographical point of view, Quest it is not well represented. Co-investment liquidity, short-term adjustments can be for Growth mainly aims at European com- rights - which allow Quest for Growth to di- made quicker by means of larger market panies. Non-European enterprises must rectly invest into the underlying companies capitalizations. Quest for Growth rarely feature an explicit relation to Europe. This of the respective fund - occasionally may uses derivative products. The purchase of enables Quest Management NV, the asset also constitute attractive added value for index put options occasionally serves to re- manager, to efficiently follow the portfolio fund investments. duce dependency from the general stock companies closely. The investment strategy for publicly traded market atmosphere. In turn, the issuance companies is largely similar to the one ap- of call options for individual shares of the In addition to direct investments in unlisted plied to unquoted enterprises. As far as portfolio at times serves to possibly improve companies, Quest for Growth also invests in the terms of sectors and geography are the portfolio’s rate of return. other funds that use an investment strategy concerned the respective interest is nearly that closely matches the investment strat- equal. Also, the managed concentration Quest for Growth mainly invests in Euro- egy of Quest for Growth itself. Quest for limit – exceptionally one single portfolio land limiting its foreign exchange risks. Growth selected these funds based on the company may amount to more than Significant exchange risks of large holdings quality of their managers, but also looked 5 % of the net asset value - is the same. expressed in a currency little correlating to at potential strategic value. This added Compared to the unquoted portfolio, the Euro, are largely covered by forward agree- value is for example the focus of the third quoted portfolio can react quicker to poten- ments. fund in a geographic market, which is in- tial developments in the selected sectors. teresting for Quest for Growth, but which The quoted portfolio can be managed much they themselves represent less well and the more dynamically; with unquoted compa- acquisition of co-investment rights which nies, both the investment as well as the Quest for Growth itself directly invests in disinvestment is a highly time-consuming the underlying businesses. process. Besides that, minority sharehold- Quest for Growth has also committed to in- ers can usually not force an exit. As exam- vest over a period of 5 years 15 million euro ple the recently added focus on cleantech in the Capricorn Health-tech Fund. This de- may serve: it is already significantly present cision fits in with the announced intention to within the quoted portfolio, however it is merge Quest Management NV, the current far less present in the unquoted portfolio. managing director of Quest for Growth, and On the other hand, highly innovative niche Capricorn Venture Partners NV, a specialist players are almost exclusively found in pri- in investing in unquoted companies, active vate companies, as they are still too small in the same sectors as Quest for Growth, and risky to go public. namely Cleantech, Health-tech and ICT. The proposed merger is particularly impor- 100 % of Quest for Growth’s quoted port- tant for Quest for Growth because this con- folio is managed actively; benchmarks are centration of forces will lead to a higher deal exclusively applied with hindsight to de- flow, both qualitatively and quantitatively, termine the performance. Stock picking is
ANNUAL REPORT 2011 - GENERAL SECTION l 13 CORPORATE GOVERNANCE STATEMENT
Corporate governance is a term for busi- governance. The provisions are recom- The Act of 6 April 2010 to reinforce cor- ness management. Within the world of mendations that set out how the princi- porate governance in listed companies re- business, the term is used for the manner ples are applied in practice. Companies quires those undertakings to indicate the in which the business is to be managed are expected to fulfill these provisions or code that they apply in relation to corpo- properly, efficiently and responsibly. It to explain why it is that they do not do rate governance. It also has to be stated mainly covers the relations with the most so in light of their own particular circum- where the code in question can be con- important stakeholders in the business, stances. The Code is based on the “com- sulted. If the company does not fully com- such as the owners (shareholders), em- ply or explain” principle. The flexibility this ply with the corporate governance code, it ployees, customers and society as a whole. principle offers has been opted for, rather has to state which parts of the code it does than requiring strict compliance with a de- not apply and why. Amendments to the In 2004, the Corporate Governance Com- tailed list of rules, in order that adequate companies legislation have made a num- mission published the first edition of the account can be taken of the specific fea- ber of corporate governance principles Belgian Corporate Governance Code for tures of different companies, such as their compulsory. These statutory provisions listed companies. size, their shareholder structure, their cannot be deviated from and the “com- business, risk profile and management ply or explain” principle is not applicable. On 12 March 2009, the second edition of structure. In certain cases, companies Companies are now under an obligation to the Belgian Corporate Governance Code may therefore deviate from the Code’s include a corporate governance statement was published. The revised Code was the provisions provided they give a cogent and a remuneration report in their annual result of work carried out by the Corpo- explanation for doing so. Each company report. The report also has to include a de- rate Governance Commission, chaired by determines what is to be regarded as best scription of the most-important features Herman Daems. The 2009 Code takes into practice in its given situation and provides of the company’s internal control and risk account the European and Belgian rules explanations for its choices in its Corpo- management systems, in conjunction with in relation to corporate governance, de- rate Governance Statement. Smaller com- the financial reporting procedure. velopments in codes and best practices in panies, for instance, may view certain pro- the field of corporate governance in other visions are being disproportionate or of Quest for Growth complies with virtually EU member states and the expectations less relevance. Moreover, holding compa- all of the provisions set out in the 2009 expressed by society and stakeholders nies and investment companies may have Code and in some respects goes further against a background of wide-sweeping a different management structure, which than required by the provisions. The Cor- change in the wake of the financial and may affect how relevant certain provisions porate Governance Charter may be con- economic crisis. are. Companies that give valid reasons for sulted on the Quest for Growth website at why they do not adhere to the Code in www.questforgrowth.com. Quest for Growth follows the Belgian Cor- their Corporate Governance Statements porate Governance Code 2009. can still be deemed to be in compliance with the Code. The provisions are sup- The Code sets out principles, provisions plemented with guidelines, which act and guidelines. There are nine principles as guidance on how companies apply or constituting the pillars of good corporate interpret the Code’s provisions.
14 l ANNUAL REPORT 2011 - GENERAL SECTION Quest for Growth’s audit committee has • identifying and rectifying incorrect approved an explanation of its implemen- data; instituting measures to prevent tation of internal control and risk manage- identified errors recurring in the ment mechanisms, as drawn up by Quest future; Brief explanation of a Management in execution of its duties as • guarantees for the continuity number of provisions in managing director. The most important of the reporting by means of the corporate governance features of its internal control and risk clear contractual arrangements, code that Quest for management systems are set out in the laying down responsibilities and Growth complies with in following: documenting processes; a particular manner or • increasing operational efficiency; which Quest for Growth • internal and external transparency. deviates from Internal Control
The daily management of Quest for Risk Management Growth is entrusted to Quest Manage- ment NV. The board of directors closely monitors The board of directors of Quest for the principal risks that the company is ex- Growth, and in particular its audit com- posed to. For Quest for Growth, risk man- mittee, exercise supervision of: agement is an important given. The main • the quality and integrity of the risks are market risk (fluctuations on the internal control, the bookkeeping and stock market and liquidity risk) and, with the financial reporting process of the respect to unlisted companies, the risk of company; non-performance, which implies a valu- THE COMPANY APPLIES • the financial reporting and other ation risk. Other managed risks concern A CLEAR GOVERNANCE financial information that is provided mainly foreign currency positions and op- STRUCTURE to the shareholders by the company; erating risks. • organisation of the internal control in relation to the company’s The board of directors is reported to on a bookkeeping and financial monthly basis by Quest Management on transactions and compliance with the the entire portfolio, the cash positions and laws incumbent on the company. the debt positions. This reporting places the board of directors in a position to ex- As managing director, Quest Management ercise effective control over the diversified NV has set up a number of procedures to portfolio and cash positions. The positions ensure the quality and integrity of the are discussed each quarter by the board of company’s financial reporting. These pro- directors and adjusted where necessary. cedures are enshrined in the procedural books of Quest for Growth and Quest Management, and are updated as and when required. The most important characteristics and/or objectives of the internal control system employed by Quest Management are: • the availability of accurate financial and management information; • protecting the company’s assets; • supervision of compliance with the laws that the company is subject to; • fraud prevention; • enhancing the quality of reporting;
ANNUAL REPORT 2011 - GENERAL SECTION l 15 The agenda of each board meeting is made director. Directors each individually have available to each of the members prior to access to the company’s secretary. the meeting, together with the underlying Mr Marc Pauwels acts as secretary to the documentation and resolution proposals. audit committee as a delegate of Quest The draft minutes of each meeting are sent Management NV. Each of the directors has to all the members several days later for individual access to the audit committee’s THE COMPANY HAS AN examination and completion of any gaps. secretary. EFFECTIVE, EFFICIENT The final draft minutes are discussed and BOARD OF DIRECTORS, approved at the next board meeting. WHICH TAKES DECISIONS Mr René Avonts acts as the secretary to IN THE INTERESTS OF THE the board of directors in his capacity as the COMPANY permanent representative of Quest Man- agement NV, the company’s managing
Each director arranges his personal and monitors situations or transactions car- business interests so that direct and in- ried out by the company in which any direct interests and conflicts with the of the following parties or legal entities company are ruled out. Transactions has a direct or indirect interest: between the company and its directors • the management company; require to take place at arm’s length. • persons having a connection to the The board of directors issues a policy management company; for relevant transactions and other con- • directors, managers and EACH DIRECTOR DEMON- tractual links between the company, in- persons responsible for the daily STRATES INTEGRITY AND cluding its associated undertakings, and management of Quest for Growth DEVOTION TO THE TASK its directors that do not otherwise fall or the management company. under the statutory rules on conflicts of interests. Directors, managers and persons re- sponsible for the daily management of This authority is conferred by the board Quest for Growth or the management of directors on the audit committee. company are bound by an ethical code Above all, the audit committee closely of conduct.
The members of the board of directors are appointed for a period of 3 years. They are re-elected following an evaluation by the board of directors, led by the chairman. In this respect, the chairman consults sepa- rately with each of the individual directors. THE COMPANY HAS A RIGOROUS, TRANSPARENT The non-executive directors evaluate in- PROCEDURE FOR teraction with the managing director on APPOINTING AND an annual basis. To this end, they meet EVALUATING ITS BOARD at least once a year in the absence of the AND ITS MEMBERS managing director.
16 l ANNUAL REPORT 2011 - GENERAL SECTION THE BOARD OF DIRECTORS SETS UP SPECIALIST COMMITTEES
The Corporate Governance Code recom- The Audit Committee are not under an obligation to set up a com- mends that specialist committees should be pensation committee within their board of set up at the level of the board of directors: an The Quest for Growth audit committee directors but, if they do not, the duties allot- audit committee, a compensation commit- meets only twice a year, which is less than ted to the compensation committee have tee and an appointments committee. Under set down in the code; it also meets when- to be carried out by the board of directors, its articles of association, Quest for Growth ever a meeting appears necessary. In prin- on condition that the company has at least provides only for an audit committee. ciple, meetings of the audit committee one independent director and, if the chair- take place before the board of directors man of the board of directors is an execu- The board of directors has decided not approves the half-yearly and annual figures. tive member, he does not chair that body to set up compensation or appointments Once the company requires to report un- when it acts in its capacity as a compensa- committees. This decision is in line with the der IFRS, the audit committee will meet tion committee. company’s simplified structure and contrib- quarterly, four times a year, or whenever a utes to keeping the company’s cost struc- meeting appears necessary. ture down. Within the board of directors, there is an investment committee The board of directors of that decides on all direct invest- Quest for Growth carries out ments in unlisted undertakings the responsibilities that would (until 26 April 2011). fall to be carried out by a compensation committee. The investment committee has delegated powers to an internal investment commit- Each listed company sets up a compensa- tee of the managing director as regards co- tion committee within its board of direc- investment decisions of up to EUR 500,000 tors. However, listed companies that fulfil via funds and for follow-on investments of at least two of the following three criteria up to 50% of already existing investments on a consolidated basis: up to a cumulative value of EUR 3,000,000. • average workforce of fewer than The chairman of the investment committee 250 during the accounting period in does nevertheless have a right of evocation question, and may at any time decide not to submit • balance sheet total of EUR 43,000,000 proposals to the investment committee. or less, • annual net turnover of EUR 50,000,000 or less,
ANNUAL REPORT 2011 - GENERAL SECTION l 17 Remuneration of directors board of directors. The board of directors fixes the remuneration paid for executing Remuneration of non-executive directors these duties. For the purposes of deliber- ating and resolving on the fee for carrying The non-executive directors that are in- out the duties of managing director, the dependent directors receive annual fixed company must first go through the pro- emoluments of seven thousand, five hun- cedure set forth in subsections 2 and 3 of dred euros (EUR 7,500.00). In addition, for section 524 of the Companies Code. THE COMPANY SETS DOWN each meeting of the board of directors, the Hence, the resolution must first be sub- A CLEAR STRUCTURE audit committee and the investment com- mitted for assessment by a committee FOR THE EXECUTIVE mittee which they attend, they receive a of three independent directors, assisted MANAGEMENT fee of five hundred euros (EUR 500.00). If by one or more independent experts. The they are independent directors, the chair- board of directors, acting in its capacity men of the investment committee and the as the compensation committee, entered audit committee receive an emolument of into an agreement with Quest Manage- seven hundred and fifty euros (EUR 750.00) ment on 15 March 2010 for performance for each meeting of the audit commit- of the duties of managing director. The tee and investment committee that they remuneration for execution of these du- attend (resolution of the annual general ties for the period from 1 April 2010 to 31 meeting of 15 March 2007). For accounting March 2012 amounts to EUR 1,500,000 per THE COMPANY period 2011, the following payments have annum. The total management fee for the REMUNERATES THE been accorded to non-executive directors: year 2011 amounted to EUR 1,500,000. DIRECTORS AND MEMBERS OF THE EXECUTIVE Auxilium Keerbergen BVBA, represented € 12,705 The managing director’s emoluments MANAGEMENT IN A FAIR by Mr. Frans Theeuwes can be limited on the basis of an overall Pamica NV, represented by € 11,495 AND RESPONSIBLE MANNER Mr. Michel Akkermans cost ratio of 3.5% of the net book value. Tacan BVBA, represented by € 9,075 In addition to the management fee, this Mr. Johan Tack expenditure also covers all other operat- Gengest BVBA, represented by € 8,500 ing expenses, such as the custodian’s fee, Mr. Rudi Mariën the bookkeeping costs, directors’ fees, Bergendal & co SPRL, represented by € 10,285 Count Diego du Monceau de Bergendal the costs for periodic reporting, audit, etc. Regine Slagmulder BVBA, represented € 10,890 Should the upper limit be exceeded, meas- by Prof. Regine Slagmulder ures must be considered in joint consulta- Axxis BVBA, represented by € 10,890 Mr. Philippe de Vicq de Cumptich tion between Quest Management and the ADP Vision BVBA, represented by € 10,890 independent directors that are designed to Mr. Antoon De Proft enable the company to bring the cost ratio Baron Bernard de Gerlache de Gomery €9,000 back below the 3.5% maximum limit. The overall cost ratio calculated for account- Koenraad Debackere waived all emolu- ing period 2011 amounted to 1.72 % of the ments as an independent director. equity figure at the end of the previous period before profit distributions. On the Remuneration of executive directors basis of the equity at the end of the current accounting period, the overall cost ratio The board of directors delegates the daily amounts to 2.00 %. management of the company to one or more directors chosen from the direc- tors appointed from a list of nominations put forward by the holders of the class A shares. They bear the title of managing di- rector. Quest Management NV has been appointed as managing director by the
18 l ANNUAL REPORT 2011 - GENERAL SECTION A duty of notification arises whenever cer- tain percentages of the total voting rights are exceeded or dropped below. The statu- tory thresholds are fixed at 5% of the vot- THE COMPANY ENGAGES ing rights, 10%, 15%, etc. There are 5% IN DIALOGUE WITH ITS bands in each case. Any party exceeding SHAREHOLDERS AND a threshold requires to give notice at the POTENTIAL SHAREHOLDERS time the threshold is exceeded or dropped BASED ON A MUTUAL below. UNDERSTANDING OF EACH PARTY’S OBJECTIVES AND Up to 31 December 2011, Quest for Growth EXPECTATIONS received three notifications:
Name and address % (*) Number of Date of shares threshold crossing Federale Participatie- en investeringsmaatschappij Dexia Insurance Belgium NV Livingstonelaan 6 12.09 % 1,393,855 20/10/2011 1000 Brussels Belgium Laxey Partners Limited 4th Floor, Derby House 64 Athol Street 9.86 % 1,162,349 17/09/2010 Douglas, Isle of Man IM1 1JD United Kingdom Financial & Investment Group, Ltd. 111 Cass Street, Traverse City 5.07 % 584,614 13/07/2011 Michigan 49684 USA
(*) percentage based on the number of shares outstanding at the date of the threshold crossing.
On 11 January 2012 Quest for Growth NV The requisite percentage of shares that a received a notification from Laxey Part- shareholder or shareholders have to own ners Ltd., from which appears that since in order to be able to call a general meet- 10 January 2012 Laxey Partners Ltd. no ing may not represent more than 5% of longer holds voting securities or voting the share capital. In accordance with the rights in Quest for Growth. company’s articles of association and the Companies Code (section 532), Quest for On the same day Quest for Growth NV also Growth follows the rule that shareholders received a notification from the Financial & possessing more than 20% of the shares Investment Management Group, Ltd, from may call a general meeting. More than 5% which appears that the Financial & Invest- is regarded as less appropriate given the ment Management Group, Ltd crossed the relatively modest scope of the business: threshold of 10% voting rights on 10 Janu- organising extraordinary general meetings ary 2012 and held 14.08% voting securities could incur significant financial expense or voting rights on that day. having a negative impact on the results achieved by the fund.
ANNUAL REPORT 2011 - GENERAL SECTION l 19 THE BOARD OF DIRECTORS
In accordance with the Articles of Associ- Directors whose terms of office have ex- ation of Quest for Growth, the manage- pired may be re-appointed. ment of the company is entrusted to the Board of Directors. The members of the Board of Directors in function during the financial year or part The Board of Directors is composed of of it are named below, together with the at least eleven members with the maxi- expiry of their current term of office. mum number of members set to fifteen. Composition, The holders of Class A and Class B shares On December 31st 2011 the Board of appointments and each have the right to put forward a list of Quest for Growth was composed of twelve prospective directors. The General Mee- members. expiry of term ting elects four directors from each list. of office The holders of ordinary shares have the Four Independent Directors sit on the right to put forward the names of one or Board of Quest for Growth. The criterion more prospective directors. The General of independence is based on Article 526ter Meeting may elect a maximum of seven of the Belgian Companies Code. directors from that list.
The General Meeting of Shareholders ap- points Board members for a period that must not exceed three years. Date on which the term of office expires: at the end of the General Meeting that assesses the results for the financial Proposed by year ending on shareholders December 31st of class Chairman Jos B. Peeters 2014 A Managing Quest Management NV represented by René 2014 A Director Avonts, managing director
Director ADP Vision BVBA (1) represented by 2014 Ordinary Antoon De Proft Director Auxilium Keerbergen BVBA represented by 2014 B Frans Theeuwes Director Axxis BVBA (1) represented by 2014 Ordinary Philippe de Vicq de Cumptich Director Baron Bernard de Gerlache 2014 Ordinary de Gomery (1) Director De Meiboom NV represented by 2014 B Edward Claeys Director Euro Invest Management NV represented by 2014 A Prof. Philippe Haspeslagh Director Gengest BVBA represented by Rudi Mariën 2014 A Director Pamica NV represented by 2014 B Michel Akkermans Director Regine Slagmulder BVBA (1) represented by 2014 Ordinary Prof. Regine Slagmulder Director Dirk Vanderschrick 2014 B
(1) Independent Director
20 l ANNUAL REPORT 2011 - GENERAL SECTION The Board of Directors met 7 times this year. 24/01/2011 26/04/2011 25/07/2011 29/07/2011 24/10/2011 14/11/2011 23/12/2011 Jos B. Peeters P P P P P P P Quest Management NV P P P A P P P René Avonts Euro Invest Management NV P A A A A A P De Meiboom NV Tacan BVBA A A A A N N N Johan Tack (until 5 October 2011) Bergendal & Co SPRL P A A A N N N Count Diego du Monceau de Bergendal (until 5 October 2011) Dirk Vanderschrick P P A A P P P Auxilium Keerbergen BVBA P P P A P P A Frans Theeuwes De Meiboom NV P P A A P P A Edward Claeys Gengest BVBA P P A A A P A Rudi Mariën Pamica NV P P P P P P A Michel Akkermans Koenraad Debackere (until 5 October 2011) A A A A N N N ADP Vision BVBA N O O O P P P Antoon De Proft (since 5 October 2011) Date on which Regine Slagmulder BVBA the term of N O A A P P P office expires: at Regine Slagmulder (since 5 October 2011) the end of the General Meeting Axxis BVBA N O O O P P P that assesses Philippe de Vicq de Cumptich (since 5 October 2011) the results for the financial Proposed by year ending on shareholders Baron Bernard de Gerlache de Gomery (since 5 October 2011) N N O O P P P December 31st of class AP = present A = absent O = Observer N = no longer or not yet director Chairman Jos B. Peeters 2014 A Managing Quest Management NV represented by René 2014 A Director Avonts, managing director The Audit Committee met twice this year. 24/01/2011 25/07/2011
(1) Tacan BVBA Director ADP Vision BVBA represented by 2014 Ordinary V V Antoon De Proft Johan Tack (until 5 October 2011) Bergendal & Co SPRL Director Auxilium Keerbergen BVBA represented by 2014 B A V Frans Theeuwes Count Diego du Monceau de Bergendal (until 5 October 2011)
(1) Auxilium Keerbergen BVBA Director Axxis BVBA represented by 2014 Ordinary A A Philippe de Vicq de Cumptich Frans Theeuwes Axxis BVBA Director Baron Bernard de Gerlache 2014 Ordinary N O de Gomery (1) Philippe de Vicq de Cumptich (since 5 October 2011) ADP Vision BVBA Director De Meiboom NV represented by 2014 B N O Edward Claeys Antoon De Proft (since 5 October 2011) Director Euro Invest Management NV represented by 2014 A Baron Bernard de Gerlache de Gomery (since 5 October 2011) N O Prof. Philippe Haspeslagh P = present A = absent O = Observer N = no longer or not yet director Director Gengest BVBA represented by Rudi Mariën 2014 A Director Pamica NV represented by 2014 B Michel Akkermans Director Regine Slagmulder BVBA (1) represented by 2014 Ordinary Prof. Regine Slagmulder Director Dirk Vanderschrick 2014 B
(1) Independent Director
ANNUALANNUAL REPORTREPORT 20112011 -- GENERALGENERAL SECTIONSECTION l 21 QUEST MANAGEMENT NV ADP VISION BVBA MANAGING DIRECTOR - REPRESENTED INDEPENDENT DIRECTOR - DR. JOS. B. PEETERS BY MR RENÉ AVONTS - MANAGING REPRESENTED BY CHAIRMAN DIRECTOR MR ANTOON DE PROFT
Jos B. Peeters is the founder and managing Quest Management NV, the managing di- Antoon De Proft graduated as a civil en- partner of Capricorn Venture Partners NV, rector of Quest for Growth NV, carries out gineer at the University of Leuven (KUL). a Leuven based venture capital company. due diligence investigations, recommends He started his career in Silicon Valley as an He was Managing Director of BeneVent investment and divestment decisions, mon- application engineer and he has remained Management NV for seven years, a ven- itors and produces valuation overviews of internationally active ever since. He spent ture capital operation associated with the the portfolio. the largest part of his career with ICOS Kredietbank-Almanij Group. Previously he Vision Systems, a world leader in the mar- worked for the international technology- René Avonts graduated as a commercial ket for semiconductor component inspec- based consulting group PA Technology engineer from the University of Leuven tion. Firstly, as Vice President for Market- and the Bell Telephone Manufacturing in 1970 and started his career in the IT di- ing and Sales, he was responsible for the Company, which is now part of Alcatel. Dr vision of Paribas Belgium. He joined the start up and development of the interna- Peeters holds a PhD in Physics from the International Division in 1972 and became tional distribution network, focussing on University of Leuven. He has also been head of that Department in 1985. He was Asia. Afterwards, as CEO, he was respon- Chairman of the European Venture Capi- elected member of the Executive Commit- sible for the further expansion of the com- tal Association (EVCA) and co-founder of tee and Director in 1995 with responsibility pany, including the start up of two new EASDAQ, the pan-European stock market for Capital Markets and Corporate Bank- business units, acquisitions in for instance for growth stocks. He is currently direc- ing. In 1998, he became a member of the Germany and China and finally the sale to tor of EASDAQ NV, which runs a plat- Executive Committee of Artesia Bank and KLA-Tencor. Mr. De Proft is the founder form for secondary share trading under Bacob, in charge of Financial Markets and of ADP Vision bvba, a company providing the name of Equiduct. Furthermore he is Investment Banking, as well as chairman of management consultancy for technology member of the Global Advisory Board of Artesia Securities, the group’s equity bro- companies. He serves on several boards of the London Business School, Fellow of ker, that was renamed Dexia Securities fol- companies and organisations, including as the Hogenheuvelcollege and Chairman of lowing the acquisition of Artesia by Dexia in chairman of IMEC, the largest independent [email protected], both from the KU 2001. He left the bank in March 2002 at the research centre in nanotechnology and as Leuven. time of the legal merger between Dexia and director of Barco, a world leader in display Artesia. He was subsequently appointed Di- technology. rector and CFO of Elex NV: the reference shareholder of for example Melexis, Xfabs and EPIQ. René Avonts joined Quest Man- agement NV as managing director in Sep- tember 2003 and he has been a Director of Quest for Growth since its IPO in 1998.
22 l ANNUAL REPORT 2011 - GENERAL SECTION AXXIS BVBA BARON BERNARD AUXILIUM KEERBERGEN BVBA INDEPENDENT DIRECTOR - DIRECTOR - REPRESENTED BY REPRESENTED BY DE GERLACHE DE GOMERY MR FRANS THEEUWES MR PHILIPPE DE VICQ DE CUMPTICH INDEPENDENT DIRECTOR
Frans Theeuwes graduated in commerce Philippe de Vicq obtained degrees of Mas- Baron Bernard de Gerlache de Gomery and finance from UFSIA Antwerp. He ter in Law (K.U.Leuven), Management holds the degree of Doctor of Law from the was an accountant audit partner at KPMG (Vlerick School), and Bachelor in Philoso- Catholic University of Leuven (UCL) and and professor at the AHH (presently part phy (K.U.Leuven). He was an investment obtained a Masters of Business Adminis- of Lessius Hogeschool). He was auditor manager for 10 years with Investco, the tration degree at the Boston University. of banks, insurance companies, as well investment company of the Almanij-Kredi- After a career at the Bank of Brussels and as commercial and high-tech companies etbank Groep. Then he worked for 15 years at the Bank of Benelux, he was a manag- quoted on the Belgian and French stock at Gevaert, an investor in both quoted and ing partner at the Comptoir d’Escompte exchanges and the auditor of affiliated unquoted companies, where he climbed de Belgique (1985-1990) and became the companies of US, UK and Japanese mul- to managing director. From 2005 to 2010 managing director of Groupe Sipef (1990- tinationals. Consequently, he is familiar he was managing director of KBC Private 1997). He is the managing director of Belfi- with US GAAP, IAS, UK GAAP, and local Equity. He has gained board experience cor S.A., a financial company specialized in accounting standards. Mr Theeuwes is an at a large number of companies such as fusions and acquisitions, investments and Independent Director on local Boards of Mobistar, Unie van Redding- en Sleep- advising companies. He serves as a director national and international non-profit or- dienst, LVD, Remy Claeys Aluminium, at several quoted companies (Sipef, Texaf, ganisations. Gemma Frisius and many others, start-ups Floridienne,...), where he sits on the audit as well as more mature companies. He is and/or remuneration committee. He is also currently independent director or mem- a director of Belgian companies such as ber of the advisory board at a number of SIAT and ITB-TRADETECH. He is the chair- industrial and financial companies, among man of Editions Dupuis S.A. and a direc- which De Eik, NIBC, Uitgeverij Lannoo, tor of the “Société belge d’investissement Drukkerij Lannoo, Boston Millennia Part- dans les pays en voie de développement ners. (BIO)” where he also sits on the investment committee. As a frigate reserve captain, he commanded several fleets and was chair- man of the “Association Royale des Offi- ciers de Réserve de la Marine”. As former chairman of the Belgian African Chamber of Commerce, he still sits on their board, and he also serves as a director of several charity organisations
ANNUAL REPORT 2011 - GENERAL SECTION l 23 DE MEIBOOM NV EURO INVEST MANAGEMENT NV GENGEST BVBA DIRECTOR - REPRESENTED BY DIRECTOR - REPRESENTED BY DIRECTOR - REPRESENTED BY MR EDWARD CLAEYS PROF. PHILIPPE HASPESLAGH MR RUDI MARIËN
Since 2003 Edward Claeys has been ac- Philippe Haspeslagh is the Dean of the Rudi Mariën holds a degree in Pharma- tive in the ERP and e-commerce sector for Vlerick Leuven Gent Management School. ceutical Sciences from the University of small and medium businesses. In addition Previously, he was a professor at INSEAD, Ghent, and specializes in clinical biology. to being Managing Director of Software where he held the Paul Desmarais Chair in He was a co-founder of Innogenetics. Mr Developments NV (SDE) and Natch.be. He “Active Ownership”. He earlier taught as Mariën has been the founder, shareholder, is also active within the Board of Directors a guest lecturer at the Harvard Business and Managing Director of several clinical of Capital@Rent, the Investment Holding School and the Stanford Business School, reference laboratories, including Barc NV, Cennini NV and De Meiboom NV. and was Chief of Cabinet for the Belgian a leading international centralised clinical Minister of Agriculture and of Small and laboratory, dedicated to pharmaceutical Medium Enterprises. His research covers studies. He was also a reference share- the areas of Mergers and Acquisitions, Cor- holder and Chairman of Innogenetics. porate Strategy, Managing for Value and Moreover he is CEO of Gengest Bvba and Corporate Governance. Philippe Hasp- Biovest ComVa. Through his manage- eslagh is the founder of INSEAD’s Interna- ment company, Gengest Bvba, Mr Mariën tional Directors’ Forum and also Chairman has board mandates in different quoted of Dujardin Foods NV, Quest Management (Devgen NV, Quest for Growth NV) and NV and Capricorn Venture Partners NV. unquoted biotech companies. Finally, Mr Furthermore, he is a Board member of Mariën was vice-president of Cerba Euro- Vandemoortele SA and of Governance for pean Lab and is a member of the American Owners LLP, and a non-executive partner Association for Clinical Chemistry. in Procuritas, which is a management buy- out fund.
24 l ANNUAL REPORT 2011 - GENERAL SECTION REGINE SLAGMULDER BVBA MR DIRK VANDERSCHRICK PAMICA NV INDEPENDENT DIRECTOR DIRECTOR - REPRESENTED BY REPRESENTED BY DIRECTOR MR MICHEL AKKERMANS PROF. REGINE SLAGMULDER
Michel Akkermans is a Civil Electrotech- Regine Slagmulder is Partner and Full Dirk Vanderschrick has a degree in Com- nical Engineer and also holds a special Professor management accounting & mercial and Financial Sciences and also degree in Business Economics, both from control at the Vlerick Leuven Gent Man- obtained a Masters of Business Admin- the University of Leuven. Michel Akker- agement School, where she is also head istration degree from the University of mans is currently CEO and Chairman of of the Competence Center Accounting & Leuven. Since 1987 Dirk Vanderschrick Clear2Pay, a software technology com- Finance. She is a guest professor at the has held various financial and manage- pany specialising in payment solutions. Faculty of Economics and Business Ad- ment positions at Arthur Anderson, Chase Michel holds Board positions at a number minstration of the Ghent University too. Handelsbank, BACOB, Artesia and Dexia. of companies among which Agfa-Gevaert Beforehand she worked as strategy prac- As member of the Executive Committee NV and as Chairman of RealDolmen tice consultant at McKinsey & Company. of Dexia Bank he was responsible for the She was previously joined to INSEAD as financial markets (2004-2007). He subse- fullltime professor and to the Tilburg Uni- quently became COO. Since April 2009 versity as professor in management ac- he has been CFO and Deputy CEO of Dexia counting. Regine Slagmulder graduated Insurance Belgium. From 2007 until 2010 as civil electrotechnical engineer and as he represented the Belgian banking sector business engineer at the Ghent Univer- in the Board of Directors at SWIFT. He has sity, after which she obtained a PhD in Board mandates in different Belgian and Management at the Vlerick School. For Luxemburg companies among which DIB her research activities she was joined as a Invest, DIS Finance, DELP Invest, Dexia Re, Research Fellow to INSEAD, Boston Uni- Dexia Life & Pensions, Capricorn Health- versity (USA) and the P. Drucker Graduate Tech Fund and the Irish companies Eurco Management Center of Claremont Uni- Ltd and Eurco Re. Since 2011 he is also a versity (USA). Her research and teaching Board member at the direct insurer Co- activities are focused on performance, risk rona. and governance.
ANNUAL REPORT 2011 - GENERAL SECTION l 25 The Board of Directors appoints a Chair- the person chairing the meeting has the man from amongst the Board mem- casting vote. The company is validly bers, who are nominated by the holders represented by the Managing Director of Class A shares. and a Director acting jointly.
For the Board of Directors to deliber- The company is also validly represented ate at least half its members must be by three Directors acting jointly, at least present or represented and at least two two of whom must have been elected Class A directors and two Class B direc- on a proposal from the holders of Class tors must be present or represented. If A or B shares. Within the terms of their Operation this quorum is not reached, a new meet- mandates, the company is validly bound ing may be convened at which the items by special proxies. on the agenda of the earlier meeting may be validly discussed and decided For day-to-day management issues, the upon if at least four Directors are pre- company is validly represented only by sent or represented. Where the law the Managing Director and a director permits, resolutions of the Board may acting together. They may jointly del- be passed by written agreement of the egate their powers for particular and members. All decisions by the Board specific matters to an agent, regardless of Directors must be taken by a major- of whether or not that agent is a share- ity of the votes present. Blank or invalid holder or a Director. votes are not counted as cast votes and
The Board of Directors met seven times during the fiscal year. Besides recurring tasks such as approving the quarterly re- ports, the semi annual and the annual re- port the Board also covered other topics such as the investment policy, compliance to the legal boundaries regarding invest- ment obligations and restrictions, corpo- rate governance, developments regarding IFRS, the annulment of treasury shares, possible strategic partnerships and other Meetings strategic matters. Certain Board members were unable to attend all Board meetings and were represented in such instances.
26 l ANNUAL REPORT 2011 - GENERAL SECTION Remuneration Day-to-day management
Independent Directors receive a fixed an- nual remuneration of seven thousand five The Board of Directors delegates the the Audit Committee controls any com- hundred euros (€ 7,500.00). In addition to day-to-day management of the com- pany transaction or any situation where this they receive a remuneration of five pany to one or more Directors selected one of the following persons or legal hundred euros (€ 500.00) for every Board from the Directors proposed by the hol- entities either has a direct or indirect meeting, Audit Committee or Investment ders of class A shares. They have the ti- interest: Committee meeting they attend. When tle of Managing Director and the Board they are Independent Directors, the chair- of Directors determines the remunera- • The management company or the men of the Investment and the Audit Com- tion for that position. depository bank; mittee receive a remuneration of seven • Persons linked to the management hundred and fifty euros (€ 750.00) for every The Board has appointed Quest Ma- company or the depository bank; Investment or Audit Committee meeting nagement NV as the Managing Direc- • Board members, Directors and they attend (decision made at the AGM of tor. The day-to-day management is persons responsible for the day- March 15th 2007). organised in such a way that it is super- to-day management of Quest vised by the Audit Committee on behalf for Growth, the management Normal and justified expenses that Direc- of the Board of Directors. In particular, company or the depository bank. tors can claim to have made in the execu- tion of their function will be reimbursed and are taken into account under the gen- eral expenses. The Board of Directors has entrusted the day-to-day management of the com- For this fiscal year the attendance fees pany to Quest Management NV. Quest amount to € 93,730. Management was created in 1998 as an independent investment manager specia- As an Independent Director Koenraad lising in managing portfolios of emerging Debackere abstains from all fees. technology and life-sciences growth mar- ket stocks. The four Directors nominated by the hold- ers of Class A shares with the exception of Quest Management is represented on the TACAN BVBA and the two Directors rep- Board of Directors of Quest for Growth by resenting strategic shareholders receive Managing Director Mr René Avonts. no fee. At the end of the financial year the Quest Ma- nagement staff consisted of the Managing Director and seven employees (5.2 FTE).
ANNUAL REPORT 2011 - GENERAL SECTION l 27 KERNCIJFERS
Katrin Geyskens Els Hubloux Member of the Management Member of the Management René Avonts Committee - Senior Investment Committee - Senior Investment Managing Director Manager Manager
René Avonts graduated from the Univer- After graduating as a Commercial Engi- Els Hubloux holds a civil engineering de- sity of Leuven in 1970 where he studied neer (‘Handels- en Bedrijfs-economisch gree and an MBA from the V.U.Brussels, commercial engineering and started his Ingenieur’) at the Catholic University of Belgium. She started her career at the career in the IT division of Paribas Belgium. Leuven K.U.Leuven (Belgium), Katrin R&D department of the pharmaceutical He joined the international division in 1972 started her career in 1993 as a financial companies Abbott and Merck. She subse- and became head of that department in analyst at CERA Bank (currently KBC Bank) quently joined KBC Securities as a financial 1985. He was elected member of the exec- in Belgium. In June 1997, she obtained an analyst and went on to be an investment utive committee and director in 1995 with MBA degree from the University of Chi- manager at KBC Private Equity. responsibility over capital markets and cago Booth School of Business. During her corporate banking. In 1998, he became MBA, Katrin worked an internship at the Els joined Quest Management NV in July a member of the executive committee of Equities Division of Merrill Lynch, London. 2007. Artesia Bank and Bacob, in charge of fi- Following this, she worked as a Manage- nancial markets and investment banking, ment Consultant for A.T.Kearney through- as well as chairman of Artesia Securities, out Europe and South-Africa. In 2000, she the group’s equity broker, which was re- was involved with the start-up of a Benelux named Dexia Securities after the acquisi- Venture Services firm. tion of Artesia by Dexia in 2001. He left the bank in March 2002 at the time of the Katrin joined Quest Management mid- legal merger between Dexia and Artesia. 2001 as an Investment Manager, respon- He was subsequently appointed director sible for the fund’s investments in private and CFO of Elex NV: the reference share- technology companies and venture funds. holder of amongst others Melexis, Xfabs and EPIQ.
René has been a Director of Quest for Growth since 1998 and joined Quest Man- agement NV in September 2003.
28 l ANNUAL REPORT 2011 - GENERAL SECTION Yves Vaneerdewegh Member of the Management Marc Pauwels Committee - Senior Investment Member of the Management Manager Committee - Fund Administrator
Yves Vaneerdewegh is a commercial Marc Pauwels studied economics (with a engineer and certified EFFAS financial specialisation in accountancy) in Brussels. analyst (European Federation of Finan- Following this, he obtained a degree at cial Analysts’ Societies). Yves represents the “fiscale hogeschool” in Brussels. Marc fifteen years of experience as a financial worked as a tax advisor, before joining the analyst and portfolio manager for mainly former CERA Bank in Leuven, where – for European small and mid cap companies. two years – he was responsible for report- He previously worked for Hamburg Man- ing on the “Risk Weighting Capital Assets nheimer NV (Munich Re Group) Brussels Ratio” to the Belgian Banking, Finance (1993 - 1997) as a financial analyst (mainly and Insurance Commission. He was then Belgian and Dutch equity) and then joined made responsible for the administration Puilaetco Private Bankers NV as a senior and accountancy of the investment funds portfolio manager. promoted by the bank.
Yves joined Quest Management NV in Marc joined Quest Management NV in February 2005. October 1998.
ANNUAL REPORT 2011 - GENERAL SECTION l 29 Reporting and auditing
By decision of the EGM of February 2004, The Board of Directors notices all mem- • Supervision of the transaction costs later altered by the EGM of March 15th bers of the Audit Committee meet the re- for equity transactions; 2007, the already existing Audit Commit- quirements of independency and expertise • Supervision of internal control tee became a statutory body of the Board in the area of accounting and auditing, as procedures; of Directors. foreseen by the company law. • Monitoring of risk.
The Audit Committee consists of a maxi- In principle, the Audit Committee meets mum of four members of the Board of twice a year and may be convened at any Klynveld Peat Marwick Goerdeler Bedrijfs- Directors, the majority of who are Inde- time deemed necessary. revisoren Burg. CV, represented by Mr Erik pendent Directors. The Audit Commit- Clinck, has been appointed Statutory Au- tee appoints a Chairman from among its The Audit Committee met two times dur- ditor. It has been charged with examining members and the Chairman must be an ing the previous fiscal year. The meetings the financial figures, the annual accounts Independent Director. took place prior to the meetings of the and the compliance of operations to be Board of Directors on the approval of the mentioned in the annual accounts with The Audit Committee reports to the Board annual report of the previous fiscal year the provisions of the Companies Code, the of Directors regularly or at least once a and the semi-annual report. provisions as set out in the Royal Decree of year. April 18th 1997 and the Articles of Associa- The following subjects were discussed: tion of the company. The principle task of the Audit Commit- tee is to assist the Board of Directors in its • Audit Committee Charter; Pursuant to the Annual General Meeting supervisory tasks by verifying: • Corporate governance charter; of March 18th 2010, the Auditors are ac- • Financial report and annual report for corded a yearly remuneration of € 7,452 + • the quality and integrity of the the fiscal year ending on December € 164 of IBR contributions (excluding VAT). company’s auditing, accounting and 31st 2010; The Auditor has been appointed for a pe- financial reporting procedures; • Semi-annual report 2011 riod of three years expiring at the end of • the financial reports and other • Possible application of International the Annual General Meeting for the finan- financial information provided by the Accounting Standards (IFRS); cial year ending December 31st 2012. company to shareholders; • Compliance to the investment rules • the company’s systems of internal as set out in article 41 of the Royal controls regarding accounting, Decree of April 18th 1997; financial transactions and compliance • Supervision of remunerations paid with the legislation to which the to companies that are professionally company is subject. linked with the Auditor; • Supervision of the application The Audit Committee has unlimited and of the management agreement direct access to all information and per- between Quest for Growth and Quest sonnel with information pertinent to the Management and supervision of the proper performance of its duties and can general cost ratio; dispose of all resources necessary to per- form its tasks. The company is expected to maintain free and open communication Chairman Regine Slagmulder BVBA (1) represented by Prof. Regine Slagmulder with the auditors and the management of Auxilium Keerbergen BVBA represented by Mr. Frans Theeuwes the corporation. Baron Bernard de Gerlache de Gomery (1)
(1) Independent Director
30 l ANNUAL REPORT 2011 - GENERAL SECTION ANNUAL REPORT 2011 - GENERAL SECTION l 31 INVESTMENT MANAGERS REPORT
quoted shares. A year earlier, seven out 2011. But the MAC Global Solar Energy in- of eight shares already formed part of the dex dropped by as much as 64% (in euros). portfolio and on average they tended to perform well. Only the French internet After the sale of the well-performing share Leguide.com dropped very consid- Roche and the strongly diminished Ablynx erably (by nearly 50%). Econocom was the shares, only Teva remains in the “Pharma best performing share in the portfolio and & Biotech” sector. On the other hand, also the share on the Brussels stock ex- there has been an increase in investments change that rose sharpest, with a return in “Medical Services & Equipment”. In of nearly 60%. The Dutch Docdata share 2011, United Drug maintained its position Investments in is a newcomer in the portfolio. Docdata well with a +2% return. Stratec Biomedi- quoted companies provides e-commerce services and makes cal also did well but profit was taken on equipment for document security. The the share because of a rather high valu- share is marked by a strong growth in ation. Gerresheimer and Nexus AG were 2011 was a weak year for most share mar- profit and a low valuation. acquired. Gerresheimer makes special kets and movements on the market were packaging for the pharmaceutical sector. strongly driven by macroeconomic factors In “Technology Hardware”, EVS and The price/earnings ratio of the share is and developments connected with the LEM remain the most important posi- exactly half the level of what it was when debt crisis of banks and public authorities. tions. In Germany, Mobotix was added introduced on the stock exchange in 2007. Alongside a number of rating reductions to the portfolio. This company operates Nexus AG is a small business that is clearly for state loans in Europe, the USA lost its worldwide manufacturing innovative cam- expanding its market share in the “Hospi- triple A rating in 2011. It is therefore with era systems and in recent years it rose on tal Information Systems” sector. some surprise that we find that the perfor- average by 40% per annum. mance of S&P500, the main index for the Within the “Electrical & Engineering” American stock exchange, scored 0.0%! The cyclical “Semiconductors” sec- and “Materials” sectors, investment is Most of the other main stock exchanges tor has in recent years hardly been rep- mainly in shares coming under the heading worldwide did much worse. On average, resented in the portfolio, and this will “cleantech”. Preference is given in particu- European shares dropped by more than remain so. However, since last summer a lar to companies that respond positively 10%. Germany, the economic mainstay of not insignificant new position was taken to the trend towards more investment in the eurozone, could not escape this nega- up in the Belgian Melexis company, a niche energy efficiency. Examples are the intro- tive trend and the DAX index fell by 15%. player in semiconductors and sensors for duced Schaltbau and Kendrion shares. An- the car industry. As a result of the fear of dritz, Arcadis, Imtech and Umicore remain The “favourable wind” for Quest for recession, the share had dropped sharply heavyweights in the portfolio. The most Growth’s shares portfolio of the past two and the market totally ignored the com- successful “exit” of the year was Pfeiffer years has turned. The major part of the pany’s strong points such as the trend to Vacuum. The share was in the portfolio for portfolio consists of minor securities from expand to more electronic systems in cars less than 2.5 years and in that period it had the eurozone. This type of shares dropped and “greener” cars, the excellent profit- generated a 140% return. by nearly 20% on average in 2011. IT and ability of the company and the consistent cleantech were rather weak sectors. How- compensation of the shareholders. The The weighting of the quoted shares port- ever, the losses in the portfolio were not sector also includes shares in solar energy. folio in the overall portfolio of Quest for dramatic and the quoted shares portfolio In 2011, this was one of the most maligned Growth dropped from 60% to 54% in 2011. diminished by less than 15% (after profits areas of investment because due to over- A number of positions in major stock ex- of over 25% in 2010 and over 60% in 2009). capacity the prices of all products in the change capitalisations (KPN, Roche and value chain dropped sharply. Quest for Hewlett-Packard) were sold in the sum- At the end of 2011 “Software & Ser- Growth only retained a minor position in mer. These had been bought at the time vices” is the most important sector in the SMA Solar which, however, fell by 35% in because stock picking in small caps was
32 l ANNUAL REPORT 2011 - GENERAL SECTION somewhat more difficult and to have a Top 10 holdings wider buffer of easily cashable positions.
country sector/activity % NAV 31/12/11 The shares added to the portfolio, seven in total, are exclusively “small & mid caps”. Andritz Austria plant engineering for hydro power, pulp & paper, ... 4.4% These are mainly small dynamic businesses Imtech Netherlands technical services in electrical & mechanical engineering 4.2% that have shown that they can also grow Nemetschek Germany architecture-engineering-construction (AEC) software 4.0% in difficult economic circumstances, e.g. EVS Belgium digital image-processing systems for TV broadcasters 3.9% by gaining in market share. Examples of Umicore Belgium materials technology 3.8% this are Mobotix, Docdata, Schaltbau and United Drug Ireland healthcare services 3.4% Nexus. At the end of 2011, just over 80% Unit4 Netherlands business software 3.2% of the listed shares portfolio consisted of Arcadis Netherlands engineering consultancy 3.0% companies with a market capitalisation of Econocom Belgium IT infrastructure management 2.6% less than € 2.5 billion. The number of posi- Teva Israel generic and branded pharmaceuticals 2.1% tions in the portfolio remained unchanged at 26, thus maintaining the desired focus.
The prospects for investment in shares re- Transactions 2011 main uncertain but the low valuation of the shares in the portfolio is grounds for IN OUT IN OUT confidence: the average expected price/ JANUARY KPN JULY Schaltbau Pfeiffer Vacuum earnings ratio is about 10.5. These com- FEBRUARY AUGUST Melexis Roche panies, however, operate in sectors char- acterised by long-term growth trends. MARCH Wacker Chemie Hewlett- Phoenix Solar SEPTEMBER Mobotix Packard Moreover, the companies in the portfolio APRIL Stratec have a healthy financial structure: there OCTOBER Kendrion Accell Group Biomedical is a net cash position in as many as 11 of MAY Ablynx the 26 companies and none of them have NOVEMBER Gerresheimer Wacker Chemie a rate of debt of more than 2 (net debt in JUNE Docdata DECEMBER Nexus AG relation to EBITDA).
The profiles and key figures of all compa- nies invested in on 31 December 2011 can Expected price/earnings ratio of the companies in the portfolio on 31 December 2011: be found in the “Company Profiles” chap- ter further in the annual report.
17
16
15
14
13
12
11
10 P/E 9
8
7
6 P I U D o I Q S D J F M e S N A r c G U D J E L E N A n D J T K U C M o T L 5 n m e E M a c c V e r a h e e n e m n e e f i t h o M g u i v
G v n n a t S d r e c m x u i t S S S i t A n a l e b e a n i c a r m d d t
T e T T r i t 4 e d q s l t c r o o i d
e o H r i x i a o s O X O X O X l S - i c d h s i s e u ti t b
c z t o o r e o a e A D R h s
t s y s o a o a D x l a e g l d n c . c e t m u h c r u e i e r o i n m 6 0 6 0 S s e d m g m t k g e 0 - 0 r a l e
x 2 0 F i n .
ANNUAL REPORT 2011 - GENERAL SECTION l 33 Investments in unquoted companies and venture funds
Status of the Venture Capital Market Evolution of European venture capital investment activity by amount
Index Q1 2007=100 According to EVCA PEREP statistics, in the 250 Early-stage first 3 quarters of 2011, €1.7 billion was raised Later-stage dedicated to venture capital (early stage, late 200 stage, balanced) compared to €2.6 billion during the same period in 2010. In Q1-Q3 150 of 2011, 13 independent European venture funds had final closings with the average 100 fund size being just below € 90 million. Of these funds, about 47% is earmarked for ICT 50 investments, 37% goes to energy & environ- ment and 15% to life sciences. 0 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3
Many VC funds are today showing nega- 2007 2008 2009 2010 2011 tive returns to their investors which is Source: EVCA/PEREP_Analytics adversely affecting fundraising and the inflow of money to venture capital. On the whole, venture capital is no more than 4% of the average institutional portfo- lio. Furthermore, the asset class is facing Evolution of European venture capital investment activity by number of companies
Index Q1 2007=100 new regulatory challenges. The European 450 Commission is reviewing regulation for Early-stage 400 occupational pension schemes, in a move Later-stage 350 that could precipitate a flight away from long-term asset classes, while Solvency II, 300 now in the implementation phase, could 250 require insurers to apply a punitive risk 200 weighting to private equity investments. 150
However, it is encouraging that many gov- 100 ernments across Europe as well as the Eu- 50 ropean Commission are starting to realize 0 that the venture capital industry plays a Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 Q4 Q1 Q2 Q3 key role in the growth agendas and that a 2007 2008 2009 2010 2011 well-functioning venture capital market is Source: EVCA/PEREP_Analytics key to spur innovation and growth.
34 l ANNUAL REPORT 2011 - GENERAL SECTION balance sheets and the availability of low- power and connectivity as well as interest credit. According to EVCA PEREP hardware electronics and devices that Divestments of European statistics, in Q1-Q3 of 2011, 280 private enable the collection, distribution, private equity backed equity backed European companies were analysis and display of information or companies in Q1-Q3 2011 exited by a trade sale, in comparison to data including digital media 281 over the same period of 2010 (with a • Software as a Service (SaaS) – a Sale to Divestment by Management Other Means total of 367 for the full 2010). Twelve Eu- SaaS oriented business model has (MBO) 3% 8% ropean private equity backed companies now become almost the standard for Sale to Divestment by Financial Trade Sale were exited by the stock market in Q1-Q3 software companies and we expect to Institution 22% Divestment by 2% Public Offering 2011 (versus 57 in 2010). see more (re)financings 4% Sale to Divestment by • Health-tech: will focus on human Another PE Write-Off Player Repayment of 12% health-technology, which comprise 13% Silent Partnership Repayment of 27% View on 2012 a diverse range of products and Principal Loans 9% Source: EVCA/PEREP_Analytics services in the following sub- In 2012, challenges will be all over the sectors: biopharmaceutical and place. The impact of the uncertain eco- pharmaceutical drugs, vaccines, nomic environment is becoming very pal- medical devices, medical imaging, pable on the venture capital side with an diagnostics, (research) equipment From an investment perspective, during overall lack of investor confidence. Both and functional food ingredients. the first 3 quarters of 2011, 2075 com- investors as well as portfolio companies • Cleantech: the focus on cleantech panies received venture funding (seed, are very prudent in their budgets for 2012. from the previous years is here to stay start-up or later stage) for a total amount This will lead to overall fewer and smaller trying to make the most of limited of €2.2 billion; the average investment investments with an increased risk- resources and a never ending quest per company thus being just above €1 awareness away from early stages, lower for efficiency million. valuations and longer decision making processes. Priority will be given to com- Furthermore, we expect to see a continu- Venture capital as an asset class is per- panies with traction and/or led by a serial ation of the ‘super angel’ and microcap VC forming mostly through M&A versus entrepreneur. funds investing in capital efficient startups, IPOs despite some high-profile IPOs such often Internet-related. A number of these as Groupon and LinkedIn. Still 2011 was From a sector perspective, we expect the start-ups will come back to the market for rather disappointing for dealmakers with following investment themes to be further additional financing in the coming year, total M&A volume ending at less than in explored: filling the pipeline for general early stage 2010. Bankers and lawyers are pointing VC funds. to Europe’s sovereign debt crisis as the • Enabling ICT technologies: these main culprit. They claim that Europe’s technologies relate to the use of woes crippled the confidence of company software algorithms, the growing executives to do deals despite cash-laden availability and ubiquity of computing
ANNUAL REPORT 2011 - GENERAL SECTION l 35 Update on Quest for Growth’s a front runner in the production of tailor unquoted portfolio made glass especially designed to optimize solar energy transmission for photovoltaic New and follow-on investments modules. EpiGaN, a spin-off company of imec, develops, produces and commercial- On October 5th, Quest for Growth an- ises epitaxial materials for power electron- nounces its first investment in Cartagenia, ics, more specifically GaN-on-silicon wafers. a private company developing and market- ing software for the worldwide market of Exits – trade sale, IPO genetic labs. Quest for Growth led a € 2.2 million financing round, taking up € 1.25 On the exit side, there was one IPO and million next to the existing investors PMV/ some trade sales in the indirect holdings. Vinnof, the Gemma Frisius Fund and the Unfortunately, the harsh environment founders of Cartagenia. Cartagenia deliv- also had an impact on Quest for Growth’s ers diagnostic knowledge, software and private portfolio. The positive contribution database systems, and related services to of the exits was countered by deprecia- enable genetic labs and clinicians to per- tions that had to be taken for companies form clinically relevant genetic analyses that did not achieve their targets and/or quickly and efficiently, and allow them found it difficult to raise additional funds. to offer patients and carers high quality In November, Sphere Medical success- genetic interpretation and counseling. At fully raised £ 14 million in an IPO on AIM. the end of 2008, Bert Coessens and Steven The company issued 15,135,135 new Van Vooren founded Cartagenia as a spin- shares priced at 92,5 pence per share. off company from K.U.L., the University of The enlarged issued share capital stood at Leuven. Herman Verrelst, an experienced 36,805,644, valuing the company at £ 34 software entrepreneur co-invested at the million. Peel Hunt acted as nominated ad- incorporation and joined the team as CEO. viser and broker to Sphere Medical. Cartagenia being an innovative start-up with a SaaS offering on the crossroads of A number of trade sales happened in healthcare and ICT fits perfectly in Quest Quest for Growth’s holdings through for Growth’s venture strategy. funds. Examples are transactions such as the sale of The Mill, a video content busi- Furthermore, through its stake in the Cap- ness for global brands and advertising ricorn Health-tech Fund, Quest for Growth agencies, from CETP I to Barclays Private now holds indirect investments in Sequana Equity. Furthermore, OffiSyncCorpora- Medical and Nexstim. Sequana Medical is tion, the leading provider of social solu- a Swiss medical device company. Its first tions to the Microsoft environment, includ- therapeutic product, the ALFApump® Sys- ing Outlook, Office and SharePoint and a tem, is a new solution to manage ascites holding of Vertex III was acquired by Jive which can occur as a symptom of advanced Software. This acquisition will combine liver disease, certain cancers or congestive Jive’s powerful platform with OffiSync’s heart failure. Nexstim, an Helsinki based leading Microsoft integration products to company, develops, manufactures and deliver a breakthrough in how companies markets Navigated Brain Stimulation de- embrace social to transform the way they vices for clinical use and scientific research. work.Furthermore, Ariba, Inc., the lead- ing provider of collaborative business Through last year’s co-investment agree- commerce solutions acquired b-process, a ment with the Capricorn Cleantech Fund, privately-held provider of France’s largest Quest for Growth invested in Ducatt and electronic invoice network and one of the EpiGAN in 2011. Ducatt is a dedicated so- largest e-invoicing networks in Europe and lar flat glass company aiming to become a portfolio company of Ventech II.
36 l ANNUAL REPORT 2011 - GENERAL SECTION ANNUAL REPORT 2011 - GENERAL SECTION l 37 Company profiles Unquoted companies
ANTERYON CAPRICORN CLEANTECH CARTAGENIA CO-INVESTMENTS Private investors acquired Anteryon, At the end of 2008, Bert Coessens and the former optics division of Philips, in Through last year’s co-investment Steven Van Vooren founded Cartage- 2006. Anteryon designs and produces agreement with the Capricorn Clean- nia as a spin-off company from K.U.L., the highest quality, smallest and low- tech Fund, an investment was made the University of Leuven. Herman est costs micro-optics and refractive- in February in Ducatt NV, a new com- Verrelst, an experienced software en- optics enabling wafer-based produc- pany in the Capricorn Cleantech Fund trepreneur co-invested at the incor- tion, packaging and integration of portfolio. Ducatt is a Belgian company poration and joined the team as CEO. optics with light sensors and light and a spin out of Emgo NV, a 50/50 Cartagenia develops and markets its sources. Anteryon’s unique, proven joint venture between Osram and “BENCH” software solutions that are and patented WaferOptics technol- Philips Lighting. From the existing targeting the fast growing market of ogy revolutionizes the production of company specialized in the produc- genetic diagnosis. Cartagenia sup- micro-optics for miniature camera tion of glass balloons for light bulbs ports genetic labs and clinicians with and laser projection modules. Wafer- and glass tubes, the balloon factory the management and interpretation scale production enables extensive is being split off and converted into of genetic patient information. At miniaturization and cost saving, while a high-quality production facility for present, applications focus mostly on using the same wafer format as the speciality glass for photovoltaic ap- the area of constitutional congenital CMOS image sensor industry allows plications. abnormalities. for a full integration of sensor and op- tics production, which vastly simpli- Through the same co-investment www.cartagenia.com. fies the camera module supply chain. agreement an investment was made Anteryon has manufacturing facilities in June in EpiGaN, a spin-off of Imec, in Eindhoven and China. aiming to start up the production of GaN-on-silicon. GaN-on-Si (in full: gal- www.anteryon.com lium nitride-on-silicon) is considered to be a key technology in the sector of renewable energy. Think about more efficient power supplies or inverters for solar energy and greener trans- portation technologies with a smaller ecological footprint.
www.capricorn.be
38 l ANNUAL REPORT 2011 - GENERAL SECTION CLEAR2PAY IDEA AG MAGWEL
Clear2Pay is a payments modernisa- IDEA is a product-oriented company Magwel is the leader in 3D co-simula- tion company that actively supports that was founded in 1993 from the tion and extraction EDA solutions for many global financial institutions to Technical University of Munich. The ICs. Its unique, patented technology meet their payments unification goals company is located in the Munich co-simulates 3D drift-diffusion models through its pure SOA Open Payment Technology Centre. The basis of for the semiconductor with Maxwell’s Framework (OPF). Headquartered in IDEA’s patented technology Trans- equations for metal interconnect. Brussels, Belgium, the company fa- fersome® are carriers which allow the Leading semiconductor vendors use cilitates banks and financial organiza- tions in their provision of payments selective transport of certain drugs Magwel tools to characterize active services, whether they be Card, ACH, through the skin. . and passive devices and critical inter- Branch, Bulk, High Care or Interna- connect. Magwel is privately held and tional payment transactions. Clear- www.idea-ag.de is headquartered in Leuven, Belgium. 2Pay’s innovative technology helps to reduce transactions processing costs, www.magwel.com and to deliver new, compelling pay- ment services in a competitive way. Functions embrace payments origi- nation, reporting, linkage with back- office processing systems, clearing, netting and settlement. In addition the company offers a range of value added payment technology solutions and services such as e-Banking, the Open Test Platform, ChargeBack, Strategic Consultancy and Payments Training through a dedicated Acad- emy. Clients include global and major KIADIS PHARMA regional financial institutions such as ING, Banco Santander, Crédit Agri- Kiadis Pharma is a Dutch biophar- cole, MasterCard, BNP Paribas, The maceutical company that develops Federal Reserve, NETS (Denmark), products for the treatment of cancer. The People Bank of China (PBOC), ATIR, the most advanced product, Bank of East Asia, Rabobank, The Co- enables a life-saving bone marrow operative Financial Services and Com- transplant for leukaemia patients monwealth Bank. Clear2Pay operates for whom there is no suitable donor. out of Belgium, France, the Nether- Investors are, among others, Life lands, Poland, Spain, United King- Science Partners and Alta Partners. dom, United States, Australia, China, Singapore and currently employs over www.kiadis.com 1100 staff. www.clear2pay.com
ANNUAL REPORT 2011 - GENERAL SECTION l 39 OXAGEN PLC SYNTAXIN
Oxagen focuses on developing a Syntaxin Ltd is a biopharmaceutical pipeline of novel drugs to treat in- company that focuses on the research flammatory diseases. The company and development of new drugs. The was established in April 1997. Oxa- company’s pipeline is based on the gen is based in Milton Park, south of operation of powerful pharmaceutical Oxford, UK. properties of some bacterial proteins, particularly exotoxins. Syntaxin was set www.oxagen.co.uk up in 2005 as a spin out of the UK Health Protection Agency. Investors are, among others, Abingworth, Life Science Partners, SR-One (GSK) and Johnson & Johnson Development Company.
www.syntaxin.com
PROSONIX TcLAND EXPRESSION
Prosonix Ltd is a world leader in the TcLand Expression SA was incor- field of developing and marketing reg- porated in 2002 as a spin-off from istered value-added ultrasonic solu- INSERM/ITERT in Nantes, France - a tions. The company, which is located major European research and clinical centre in transplantation and immunol- in Oxford (UK), focuses on the devel- ogy. The company is presently a leader opment of drugs for the treatment in the development of gene expres- of COPD and asthma. Investors are, sion biomarkers in transplantation and among others, Gilde, Entrepreneurs auto-immune disorders. Investors are, Fund and Ventech. among others, Auriga Partners (Paris, France), Beviguen (Paris, France), www.prosonix.co.uk Debiopharm (Lausanne, Switzerland) and Genzyme Corporation (Boston, USA).
www.tcland-expression.com
40 l ANNUAL REPORT 2011 - GENERAL SECTION Company profiles Venture capital funds
CAPRICORN CLEANTECH FUND CARLYLE EUROPE LSP III & LSP IV TECHNOLOGY PARTNERS Capricorn Cleantech Fund is a ven- (CETP I en CETP II) Life Sciences Partners (LSP) is a lead- ture capital fund investing in com- ing independent European venture panies that are active in the fields of Carlyle Europe Technology Partners is capital firm, providing private equity renewable energy, energy efficiency, managed by subsidiaries of the Carlyle financing to early- to mid-stage life- water purification, clean air, materi- Group, which is one of the leading and science companies. Since the late als recycling such as bio fuels or other most experienced global private equity 1980s, LSP’s management has in- bio-based materials and products, etc. companies. CETP focuses on investing vested in a large number of highly in- The fund has € 112 million to invest in European companies, mainly in the novative enterprises, many of which and is managed by Capricorn Venture technology, media and telecommu- have grown to become leaders of the Partners. nications sectors. The fund focuses global life-science industry. With € on both buyouts, whereby potential 450 million under management and Quest for Growth has already invested portfolio companies can bear debt fi- offices in Amsterdam, Munich and € 1,125,000 of a total investment com- nancing, and the investment of equity Boston, LSP is one of Europe’s largest mitment of € 2,500,000. capital in companies with existing in- and most experienced specialist life- come, regardless of whether they are science investors. already profitable (“later stage ven- ture”). Quest for Growth co-invested in many of CETP’s portfolio companies through Carlyle Europe Technology Partners co-investment, LP.
CAPRICORN HEALTH-TECH FUND
Capricorn Health-tech Fund is a ven- ture capital fund investing in com- panies that are active in the fields of biopharmaceuticals, medical technol- ogy, diagnostics and functional food. The fund has € 42 million to invest and is managed by Capricorn Venture Partners.
Quest for Growth has already invested € 3,750,000 as part of a total invest- ment round of € 15,000,000.
ANNUAL REPORT 2011 - GENERAL SECTION l 41 SCHRODER VENTURES VENTECH CAPITAL 2 VERTEX III INTERNATIONAL LIFE SCIENCES FUND II (ILSF II) Ventech Capital 2 is a € 112 million Vertex III is the third venture capital French venture fund based in Paris fund for investments in Israeli and SV Life Sciences provides finance to that has been active since July 2000. Israel-related technology companies businesses at all stages of develop- Ventech II is an early-stage investor, established by the Vertex Group. The ment and across the human life sci- investing in technology and life sci- Fund’s objective is to achieve superior ences sector. These sectors range ences companies that are either in the long-term capital appreciation for its from biotechnology & pharmaceuti- process of being formed or recently investors by targeting high-growth cals to medical devices & instruments, started up. Ventech invests in the in- companies with unique technology to healthcare information technology formation technology sector, with a and strong management teams that and services. SV Life Sciences cur- particular emphasis on new-genera- can adapt to rapidly growing mar- rently advises or manages five funds tion networks, software applications, kets. Vertex Israel Venture Capital with capital commitments of approxi- online activities, the internet and was founded in 1997 to capitalise on mately $ 1.4 billion, which primarily mobile telephony, as well as services, emerging technology in Israel and it invest amounts of between $ 1m and commerce and the media. In the life is headquartered in Tel-Aviv with rep- $ 20m in North America and Europe. sciences sector, they particularly focus resentatives in Europe, the U.S., Sin- SVLSF II closed in 1999 with total on applied genomics. The fund is now gapore and Japan. Vertex invests in commitments of $ 280 million (plus $ fully invested in number of lines and Israeli and Israeli-related high technol- 30 million of co-investments commit- will only do follow-on investments. ogy companies in the early stages of ted by partners and individuals affili- development in the areas of informa- ated with SVLS). tion networking, communications and subsystems, components, imaging, enterprise software and other leading emerging technologies.
42 l ANNUAL REPORT 2011 - GENERAL SECTION ANNUAL REPORT 2011 - GENERAL SECTION l 43 Quoted companies
ANDRITZ ARCADIS
Andritz is an engineering company that provides high-tech Arcadis is an engineering consultancy company active in four production systems and related services for selected indus- segments: environment, water, infrastructure and buildings. tries. The group focuses on five business areas: “Pulp and Environment includes consulting on environmental policy, Paper” provides technology to produce pulp used for paper, environmental impact assessments, investigation of soil board and fibreboard and machines for tissue production. and groundwater contamination and remediation projects. “Hydro Power” is a supplier of turnkey electromechanical The Water segment provides solutions to optimally manage equipment for hydro power plants and this business area water resources, in areas such as drinking water, wastewa- also includes large-scale pumps. “Metals” installs plants for ter and river & coastal management. In Infrastructure, the the production of steel and non-ferrous products and metal company designs and manages the construction of roads, forming. “Environment and Process” covers products for railways, waterways, dikes, harbors, power plants, industrial mechanical and thermal solid/liquid separation for munici- parks, etc. Buildings activities are related to the develop- palities and mining and steel industries. “Feed and Bio fuels” ment of office, industrial and government facilities. Arcadis supplies equipment for the production of animal feed and Aqumen FM, a joint venture with Carillion, is active in facility wood/bio fuel pelleting. management. The company was founded in 1888 as Verenig- ing Nederlandse Heidemaatschappij (Heidemij) to develop land. In 1995 Heidemij was quoted in Amsterdam and in 1997 the company changed its name into Arcadis.
Stock market data Stock market data Stock price at December 31st 2011 64.10 EUR Stock price at December 31st 2011 12.10 EUR Market capitalisation at December 31st 2011 3,333 m EUR Market capitalisation at December 31st 2011 869 m EUR Performance in 2011 -4.4 % (in EUR) Performance in 2011 -28.5 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth 22.9 % 11.7 % Estimated sales growth 0.3 % 13.4 % Estimated earnings per share growth 21.6 % 13.7 % Estimated earnings per share growth 2.9 % 12.5 % Operational margin 6.98 % 7.04 % Operational margin 7.02 % 6.85 % Return on equity 25.10 % 24.85 % Return on equity 17.69 % 17.34 % Estimated price earnings 15.2x 13.3x Estimated price earnings 10.1x 9.0x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
Andritz Ag (EUR) ARCADIS N.V. (EUR)
80 19
18 75
17
70 16
65 15
14 60
13
55 12
50 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 11 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
44 l ANNUAL REPORT 2011 - GENERAL SECTION CENTROTEC SUSTAINABLE AG DOCDATA
Centrotec Sustainable AG is specialised in energy-efficient DOCData N.V. is active in two lines of business: the e- technology for buildings. The group comprises four business commerce service company Docdata and the technology segments. Gas Flue Systems includes products such as plastic company IAI Industrial Systems. The e-commerce company gas flue systems for condensing boilers, technical roof prod- Docdata provides support services for the e-commerce in- ucts and advanced composites. Climate Systems’ main prod- dustry, mainly fulfillment services for large internet retailers uct groups are: heat recovery ventilation systems, air heaters, (bol.com, Zalando, ...). The fulfillment business takes care of heating systems for wall or floor installation, heating systems the collection, warehousing and packaging of e-commerce based on renewable energies (solar thermal, heat pumps goods. IAI Industrial Systems provides automated systems and biomass) and climate systems for commercial proper- that use laser and optical technology, for applications such ties. Brands include Wolf, Brink and Ned Air. The subsidiary as securing and personalising of security documents. The medimondi AG includes Medical Technology & Engineering company is headquartered in Waalwijk, the Netherlands. Plastics. The listed 26 % owned subsidiary Centrosolar Group is active in photovoltaic solar modules systems for roofs and solar glass and PV mounting systems.
Stock market data Stock market data Stock price at December 31st 2011 11.28 EUR Stock price at December 31st 2011 14.50 EUR Market capitalisation at December 31st 2011 195 m EUR Market capitalisation at December 31st 2011 102 m EUR Performance in 2011 -29.2 % (in EUR) Performance in 2011 69.0 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth 8.4 % 4.5 % Estimated sales growth 24.3 % 10.8 % Estimated earnings per share growth - - Estimated earnings per share growth 19.0 % 42.9 % Operational margin 4.85 % 7.36 % Operational margin 7.03 % 8.72 % Return on equity - 12.93 % Return on equity 22.91 % 27.60 % Estimated price earnings - 8.5x Estimated price earnings 14.0x 9.8x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
DOCDATA N.V. (EUR) Centrotec Sustainable AG (EUR) 15 26
24 14
22 13
20 12
18
11 16
10 14
12 9
10 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 8 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
ANNUAL REPORT 2011 - GENERAL SECTION l 45 ECONOCOM EVS BROADCAST EQUIPMENT
Econocom is a service provider specialising in IT and tel- EVS Broadcast Equipment was founded in 1994 by Laurent ecommunications infrastructure management for the cor- Minguet, Pierre L’Hoest and Michel Counson and listed on porate segment. Econocom has 4 fields of expertise: IT Fi- the Brussels Stock Exchange in October 1998. EVS is the nancial Services provides leasing of IT and telecom fleets, leader in digital image-processing systems for live mobile enhanced by administrative management of the installed production of television broadcasts. EVS provides integrated infrastructure. Managed Services includes IT support ser- production systems which manage the entire work process, vices for distributed computing infrastructures, including from acquiring video signals from the cameras through outsourcing, maintenance and consulting. Products and to distributing the images, including editing and archiv- Solutions distributes a wide range of IT hardware and solu- ing them. EVS’ flagship product is the XT server. The EVS tions. Telecom Services offers solutions to make IT systems product range is compatible with High Definition Television mobile. The group is active in eight European countries and (HDTV) standards. EVS’ 41 % owned subsidiary XDS (“ex- operates a service centre in Morocco. change Digital Cinema”) produces high definition servers (CineStore) for the digital cinema market.
Stock market data Stock market data Stock price at December 31st 2011 15.55 EUR Stock price at December 31st 2011 39.49 EUR Market capitalisation at December 31st 2011 407 m EUR Market capitalisation at December 31st 2011 538 m EUR Performance in 2011 58.9 % (in EUR) Performance in 2011 -12.2 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth 48.5 % 2.3 % Estimated sales growth -2.2 % 15.6 % Estimated earnings per share growth 8.3 % 29.4 % Estimated earnings per share growth -6.2 % 19.7 % Operational margin 3.79 % 4.57 % Operational margin 44.11 % 48.17 % Return on equity 22.08 % 23.82 % Return on equity 57.57 % 62.68 % Estimated price earnings 11.7x 9.1x Estimated price earnings 15.1x 12.6x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
Econocom Group S.A. (EUR) EVS Broadcast Equipment S.A. (EUR)
18 50
17 48
16 46
15 44
14 42
13 40
12 38
11 36
10 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 34 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
46 l ANNUAL REPORT 2011 - GENERAL SECTION FAIVELEY GERRESHEIMER
The Faiveley Group is a supplier of technical railway systems Gerresheimer produces specialty products made of glass and and services, offering a wide range of products in seven cat- plastic, primarily for the pharma & life science industry. Its egories: air conditioning, on-board doors, platform doors businesses are split into 4 divisions: The Tubular Glass divi- & gates, braking systems, couplers, power/information & sion comprises glass tubes, ampoules, cartridges and prefil- control (electronics and electro-mecanics) and customer lable syringe systems. The Plastic Systems division includes services. In 1919 Etablissement Louis Faiveley was created, plastic containers (e.g. for eye drops, tablets and powders) which was a pioneer in pantographs (devices that collects and medical plastic systems (e.g. inhalers, injection pens). electric current from overhead lines). In 2004 SabWabco was The Moulded Glass division offers medicine bottles and jars. acquired and in 2008 Faiveley SA bought out the minority The division also sells specially manufactured glass products shares in Faiveley Transport. for cosmetics and food and beverages. Life Science Research focuses on special products for pharma R&D and laboratory use. The origins of our Group go back to the glass factory founded by Ferdinand Heye in 1864 in Gerresheim, a suburb of Düsseldorf. The company was effectively acquired by In- vestcorp/JP Morgan in 2000, delisted in 2003, sold to Black- stone in 2004 and re-appeared on the stock market through an IPO in 2007.
Stock market data Stock market data Stock price at December 31st 2011 48.10 EUR Stock price at December 31st 2011 32.20 EUR Market capitalisation at December 31st 2011 693 m EUR Market capitalisation at December 31st 2011 1,011 m EUR Performance in 2011 -20.1 % (in EUR) Performance in 2011 -0.9 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth -1.2 % 3.3 % Estimated sales growth 7.6 % 5.5 % Estimated earnings per share growth -10.9 % 11.1 % Estimated earnings per share growth 25.1 % 6.6 % Operational margin 12.94 % 13.38 % Operational margin 10.79 % 11.57 % Return on equity 13.85 % 13.63 % Return on equity 14.49 % 14.24 % Estimated price earnings 10.3x 9.2x Estimated price earnings 13.2x 12.4x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
Gerresheimer AG (EUR) Faiveley Transport S.A. (EUR) 37 75
70 36
65 35
60 34
55 33
50 32
45 31
40 30
35 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 29 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
ANNUAL REPORT 2011 - GENERAL SECTION l 47 IMTECH INIT INNOV IN TRAFFIC SYSTEMS
Imtech is a European technical services provider in the fields Init (Innovation in Traffic Systems) is active in the area of of electrical engineering, ICT and mechanical engineering. telematics and electronic fare collection systems for public Activities cover the entire value chain from design, consul- transport. Its products assist transportation companies in tancy, engineering and implementation (installation) to making public transport more attractive, faster and more maintenance services and maintenance management. Im- efficient. As a turnkey supplier, Init provides integrated hard- tech is active in different market segments such as buildings, ware and software solutions, including products for the con- care & cure, industry, marine and infra & traffic, in each of trol center (intermodal transport control system-ICTS), for which a substantial portion of the revenue is related to en- communication and for vehicles (on-board computer, elec- ergy & environment. The Internatio-Müller conglomerate, tronic ticketing, automatic passenger counting, ...). Other which had been established in 1970 as the result of a merger activities include telematics for the automotive industry between the trading and shipping concerns Internatio (1863) (CarMedialab) and the personnel planning software Perdis and Müller (1878), decided in the nineties to focus on techni- (id systeme). INIT was founded in 1983 by Dr.-Ing. Gottfried cal solutions and changed its name into Imtech in 2001. Greschner as a university spin-off. The company is headquar- tered in Karlsruhe, Germany.
Stock market data Stock market data Stock price at December 31st 2011 20.02 EUR Stock price at December 31st 2011 14.20 EUR Market capitalisation at December 31st 2011 1,856 m EUR Market capitalisation at December 31st 2011 143 m EUR Performance in 2011 -27.7 % (in EUR) Performance in 2011 -2.2 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth 11.5 % 4.5 % Estimated sales growth 3.0 % 18.5 % Estimated earnings per share growth 2.4 % 9.9 % Estimated earnings per share growth 8.0 % 29.6 % Operational margin 5.25 % 5.25 % Operational margin 18.97 % 20.77 % Return on equity 19.57 % 19.51 % Return on equity - - Estimated price earnings 9.8x 8.9x Estimated price earnings 13.1x 10.1x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
Imtech N.V. (EUR) init innovation in traffic systems AG (EUR)
30 20
28 19
26 18
24 17
22 16
20 15
18 14
16 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 13 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
48 l ANNUAL REPORT 2011 - GENERAL SECTION KENDRION LEGUIDE.COM
Kendrion N.V. develops advanced electromagnetic solutions. LeGuide.com is a publisher of online shopping guides, com- The operations are organized into four market-focused busi- parison websites, shopping search engines and platforms ness units: Industrial Magnetic Systems produces systems for for consumer ratings. Websites include LeGuide.com (on- applications such as mechanical engineering, door-locking line shopping guide), LeGuide.net (shopping search engine), systems, medical equipment and beverage dispensers; In- dooyoo.com (social shopping guide), Webmarchand.com dustrial Drive Systems includes electromagnetic brakes and (shopping directory), Mercamania.es and Antag.de. The CPC- clutches for robotics, process automation & machinery; Pas- based (cost per click) business model accounts for most of the senger Car Systems develops solutions for specific customer group’s revenue, while other revenues include advertising, applications in the automotive industry; Commercial Vehicle sponsored links, etc. The company is present in 14 European Systems (Linnig) manufactures components and cooling sys- countries (France, Belgium, Luxemburg, Switzerland, Ger- tems for buses, trucks and special vehicles. Kendrion started many, Austria, the United Kingdom, Ireland, Spain, Italy, the out in 1859 under the name Schuttersveld. The electromag- Netherlands, Sweden, Denmark and Poland) and in 9 differ- netic activities started in 1911 when Wilhelm Binder founded ent languages. The company was founded in 1998 and has his own company, which was sold to Schuttersveld in 1997. offices in Paris and Berlin. The company name was changed to Kendrion in 2001.
Stock market data Stock market data Stock price at December 31st 2011 16.50 EUR Stock price at December 31st 2011 14.67 EUR Market capitalisation at December 31st 2011 190 m EUR Market capitalisation at December 31st 2011 51 m EUR Performance in 2011 17.6 % (in EUR) Performance in 2011 -49.4 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth 20.7 % 12.5 % Estimated sales growth 4.7 % 2.9 % Estimated earnings per share growth 23.1 % 24.9 % Estimated earnings per share growth -33.5 % -17.5 % Operational margin 11.01 % 11.69 % Operational margin 27.27 % 23.40 % Return on equity 24.98 % 26.64 % Return on equity 11.34 % 8.56 % Estimated price earnings 9.1x 7.3x Estimated price earnings 11.6x 14.1x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
LeGuide.com S.A. (EUR) Kendrion N.V. (EUR) 35 19.5
19.0
18.5 30
18.0
17.5 25
17.0
16.5 20
16.0
15.5 15
15.0
14.5 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 10 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
ANNUAL REPORT 2011 - GENERAL SECTION l 49 LEM HOLDING MELEXIS
LEM produces components for power electronics. Its core Melexis Microelectronic Integrated Systems NV is a mixed products are transducers for measuring electrical parameters signal semiconductor manufacturer. Its products include hall like current and voltage. LEM’s transducers are used in appli- effect or magnetic sensors (Triaxis brand), pressure & ac- cations such as railway, motor drives, power supplies, AC/DC celeration sensors (based on MEMS), wireless communica- converters and wind and solar power generation. The prod- tion ICs (RF and RFID), actuators (for motor control and LIN ucts provide more control, more reliable energy and better bus systems) and optical sensors. Melexis’ products are pri- energy efficiency. LEM reports two business segments: The marily used in automotive electronics systems, where they Industrial segment includes the businesses Industry, Traction help to improve fuel efficiency, safety and comfort. Melexis and Energy & Automation. In the Automotive segments, also uses it core competence to supply ICs and sensors to solutions have been developed for battery management and consumer, medical and industrial markets. Melexis adopts a electrical motor controls. Liaisons Electroniques-Mecaniques fabless model. It is headquartered in Ieper, Belgium and has LEM SA was founded in 1972. The group has production other important facilities in Tessenderlo (Belgium), Sofia plants in Geneva (Switzerland), Machida (Japan) and Beijing (Bulgaria) and Erfurt (Germany). In October 1997, Melexis (China). had its IPO on the EASDAQ Stock exchange.
Stock market data Stock market data Stock price at December 31st 2011 385.00 EUR Stock price at December 31st 2011 10.37 EUR Market capitalisation at December 31st 2011 365 m EUR Market capitalisation at December 31st 2011 448 m EUR Performance in 2011 -27.8 % (in EUR) Performance in 2011 -18.3 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth -24.2 % 7.3 % Estimated sales growth 5.0 % 6.3 % Estimated earnings per share growth -46.2 % 36.8 % Estimated earnings per share growth -8.4 % 7.5 % Operational margin 12.26 % 16.17 % Operational margin 23.00 % 23.00 % Return on equity 22.68 % 28.40 % Return on equity 37.05 % 32.76 % Estimated price earnings 21.1x 15.4x Estimated price earnings 10.1x 9.4x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
LEM Holding S.A. (CHF) Melexis N.V. (EUR) 14
600 13
550 12
500 11
450 10
400 9
350 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 8 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
50 l ANNUAL REPORT 2011 - GENERAL SECTION MOBOTIX NEMETSCHEK
MOBOTIX AG develops, manufactures and markets profes- Nemetschek is a software vendor in the architecture-engi- sional network cameras. It supplies digital high-resolution neering-construction (AEC) field. It provides products for the and network-based digital video security systems. The com- complete life cycle of buildings, from design through con- pany offers cameras, software, home automation and ac- struction to management. For the Design phase, the com- cessories. Mobotix operates in Langmeil & New York. The pany supplies computer-aided-design (CAD) software for ar- company was founded by Ralf Hinkel in 1999 and is head- chitects and civil and construction engineers. Main products quartered in Langmeil, Germany. are Allplan Architecture, VectorWorks and Graphisoft. The business unit Build provides ERP solutions and technical ap- plications for construction companies. Thirdly, the company offers software solutions for facility and commercial real es- tate management (Manage). Multimedia (Maxon) includes software in the field of visualisation and animation. The company was founded in 1963 by Prof. Georg Nemetschek, listed on the stock exchange in 1999 and acquired Hungarian competitor Graphisoft in the beginning of 2007.
Stock market data Stock market data Stock price at December 31st 2011 22.00 EUR Stock price at December 31st 2011 25.80 EUR Market capitalisation at December 31st 2011 292 m EUR Market capitalisation at December 31st 2011 248 m EUR Performance in 2011 27.7 % (in EUR) Performance in 2011 -16.6 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth 35.9 % 33.8 % Estimated sales growth 9.5 % 5.7 % Estimated earnings per share growth 58.2 % 27.5 % Estimated earnings per share growth 3.8 % 10.7 % Operational margin 26.20 % 24.83 % Operational margin 18.23 % 18.75 % Return on equity 35.42 % 35.17 % Return on equity 23.72 % 22.97 % Estimated price earnings 22.1x 17.3x Estimated price earnings 9.9x 8.9x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
Nemetschek AG (EUR) MOBOTIX AG (EUR) 36 24
23 34
22 32
21 30
20
28 19
26 18
17 24
16 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 22 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
ANNUAL REPORT 2011 - GENERAL SECTION l 51 NEXUS PHARMAGEST INTERACTIVE
Nexus AG is a provider of information technology in the Pharmagest Interactive develops management software health care system. It structures recording and evaluation packages for pharmacies and the pharmaceutical industry. of medical and nursing data and support hospitals, reha- In France, the LGPI (“Logiciel de Gestion à Portail Integré”) bilitation clinics and long-term care institutions in improving solution is considered as a standard in pharmacies, enabling their work processes. The group has two business fields, stock management, optimisation of orders, data exchange, Healthcare Software and Healthcare Service. The company pricing policy optimisation, management of loyalty cards, is headquartered in Villingen-Schwenningen, Germany. etc. The activities for pharmacies in Belgium and Luxem- bourg include the Sabco Optimum-Ultimate products. To the pharmaceutical industry (“e-Labos”) the group offers communication and online advertising services. The sub- sidiary Malta Informatique offers IT for nursing homes (“EHPADs”), such as the Titan software platform. The com- pany was founded in 1996 and is headquartered in Villers- les-Nancy, France.
Stock market data Stock market data Stock price at December 31st 2011 7.00 EUR Stock price at December 31st 2011 44.10 EUR Market capitalisation at December 31st 2011 100 m EUR Market capitalisation at December 31st 2011 134 m EUR Performance in 2011 55.6 % (in EUR) Performance in 2011 -4.1 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth 21.4 % 21.9 % Estimated sales growth 8.1 % 4.0 % Estimated earnings per share growth - 42.1 % Estimated earnings per share growth 18.5 % 6.5 % Operational margin 9.01 % 11.01 % Operational margin 18.59 % 19.03 % Return on equity - - Return on equity 21.10 % 19.43 % Estimated price earnings 18.4 x 13.0x Estimated price earnings 10.7x 10.0x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
Nexus AG (EUR) Pharmagest Interactive (EUR)
7.5 50
49
7.0 48
47 6.5 46
45 6.0 44
43 5.5 42
5.0 41
40
4.5 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 39 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
52 l ANNUAL REPORT 2011 - GENERAL SECTION SCHALTBAU HOLDING SMA SOLAR TECHNOLOGY AG
Schaltbau Holding AG is engaged in developing, manufactur- SMA Solar Technology AG develops and sells solar power ing and distribution high quality components and systems inverters, which perform the conversion of the variable direct for transportation technology and for the investment goods current (DC) generated by a solar module into grid-accepta- industry. Its business activities is divided into 3 divisions: Mo- ble alterating current (AC). Within the Photovoltaic Technol- bile Transportation Technology, Stationary Transportation ogy division, its Sunny Boy branded inverters are suitable Technology & Components. The company was founded in for use in small and mid-range PV systems (up to 20 kW). 1929 and is headquartered in München, Germany.. Sunny Mini Central devices are suited for mid-range systems from 15 kW. Sunny Tower and Sunny Central are installed as central inverters for large scale PV systems and open- field plants. Two smaller divisions are Railways Technology and Electronic Manufacturing, of which the latter produces mainly for internal demand. SMA was founded in 1981 by Günther Cramer, Peter Drews and Reiner Wettlaufer in Kas- sel. Since June 2008, the company is listed on the Frankfurt Stock Exchange.
Stock market data Stock market data Stock price at December 31st 2011 70.41 EUR Stock price at December 31st 2011 43.17 EUR Market capitalisation at December 31st 2011 144 m EUR Market capitalisation at December 31st 2011 1,498 m EUR Performance in 2011 24.8 % (in EUR) Performance in 2011 -35.3 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth 12.4 % 0.1 % Estimated sales growth -17.2 % -4.9 % Estimated earnings per share growth 38.4 % -13.9 % Estimated earnings per share growth -51.7 % -14.3 % Operational margin 9.37 % 8.52 % Operational margin 15.68 % 14.10 % Return on equity 33.12 % 23.09 % Return on equity 21.77 % 16.97 % Estimated price earnings 7.8x 9.1x Estimated price earnings 8.5x 9.9x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
SMA Solar Technology AG (EUR) Schaltbau Holding AG (EUR) 90 85
80 80
75 70
70 60
65 50
60 40
55 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 30 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
ANNUAL REPORT 2011 - GENERAL SECTION l 53 SPHERE MEDICAL TEVA PHARMACEUTICAL
Sphere Medical Holding plc is developing highly innovative Teva Pharmaceutical Industries Ltd. is a global pharmaceuti- monitoring products to provide clinical and economic ben- cal company that develops, produces and markets generic efits in the critical care environment. This patented tech- drugs covering all major treatment categories. It also has a nology enables the minimally invasive, real time measure- significant growing branded pharmaceutical portfolio, includ- ment of clinical chemistry parameters and therapeutic drug ing Copaxone for multiple sclerosis and Azilect for Parkinson’s concentrations, giving healthcare professionals quickly and disease, respiratory products and women’s health products. accurately the required information to more effectively man- Teva’s global presence covers North America, Europe, Latin age therapy and optimise patient outcomes. Sphere Medical America, Asia and Israel. It has direct operations in more than was founded in 2002 and is based in Cambridge, UK 60 countries, including 38 finished dosage pharmaceutical manufacturing sites in 17 countries, 15 generic R&D centers operating mostly within certain manufacturing sites and 21 AP manufacturing sites around the world. Teva Pharmaceuticals Industries Ltd. was incorporated in Israel on February 13, 1944, and is the successor to a number of Israeli corporations, the oldest of which was established in 1901. It is headquartered in Petach Tikva, Israel.
Stock market data Stock market data Stock price at December 31st 2011 78.50 EUR Stock price at December 31st 2011 40.36 EUR Market capitalisation at December 31st 2011 35 m EUR Market capitalisation at December 31st 2011 29,109 m EUR Performance in 2011 - (in EUR) Performance in 2011 -21.0 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth - 1590.5 % Estimated sales growth 17.4 % 19.7 % Estimated earnings per share growth - - Estimated earnings per share growth 12.9 % 12.9 % Operational margin - - Operational margin 28.41 % 27.57 % Return on equity - - Return on equity 18.64 % 18.21 % Estimated price earnings - - Estimated price earnings 8.1x 7.2x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
Sphere Medical Holding PLC (GBP) Teva Pharmaceutical Industries Ltd. (ILS)
1.00
200 0.95
190
0.90 180
0.85 170
160 0.80
150 0.75 140
0.70 okt 11 nov 11 dec 11 130 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
54 l ANNUAL REPORT 2011 - GENERAL SECTION TRANSICS UMICORE
Transics is a provider of fleet management systems (FMS) or Umicore is a materials technology group with four business telematics for truck and transport fleets. Transics’ FMS hard- areas: The Catalysis group is one of the world’s largest manu- ware or on-board computers (OBC), with the Laura Plus and facturers of automotive emission control catalysts. This seg- Quattro Plus brand names, registers information relating to ment also includes precious metals chemistry. Energy Ma- both the vehicle and driver. The subsidiary DIS provides digi- terials produces cobalt and specialty materials, electro-optic tal tachographs to register rest and driving times. Software materials, thin film products and fuel cells. Applications for includes TMS, used for reporting and analysis, and TFM to these products include rechargeable batteries and photo- access real-time information. Transics provides subscription voltaics. Performance Materials includes building products, based services such as software and hardware maintenance, electroplating, platinum engineered materials, technical GPRS communication and navigation. The Field Services materials, zinc chemicals + the 40% stake in Element Six team manages project implementation and consultancy. The Abrasives. Recycling is the world’s largest recycler and refiner company was founded in 1990 by Walter Mastelinck and Lud- of complex materials containing precious metals. Precious wig Lemenu. In May 2006 the Carlyle Group acquired 80% of metals management (trading, leasing, hedging, ...), battery the company and this was followed by an IPO in June 2007. recycling and jewellery & industrial metals are also included in this segment.
Stock market data Stock market data Stock price at December 31st 2011 6.20 EUR Stock price at December 31st 2011 31.87 EUR Market capitalisation at December 31st 2011 50 m EUR Market capitalisation at December 31st 2011 3,824 m EUR Performance in 2011 3.2 % (in EUR) Performance in 2011 -16.0 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth 18.5 % 7.1 % Estimated sales growth 28.7 % 3.7 % Estimated earnings per share growth 41.9 % 25.1 % Estimated earnings per share growth 14.7 % -1.9 % Operational margin 11.61 % 12.75 % Operational margin 3.29 % 3.05 % Return on equity 7.66 % 8.74 % Return on equity 17.87 % 15.89 % Estimated price earnings 14.1x 11.3x Estimated price earnings 12.0x 12.2x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
Umicore S.A. (EUR) Transics International N.V. (EUR) 42 8.0
40
7.5 38
36
7.0 34
32 6.5 30
6.0 28
26
5.5 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 24 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
ANNUAL REPORT 2011 - GENERAL SECTION l 55 UNIT 4 UNITED DRUG
Unit 4 is an international software company that is headquar- United Drug is a healthcare services provider, operating tered in the Netherlands (Sliedrecht) and has been listed on through 3 divisions. Healthcare Supply Chain combines all the Amsterdam stock exchange since 1998. The company is logistics operations of the group, i.e pharma wholesale, active in business software, selling licenses, maintenance and pre-wholesale (contract distribution outsourcing) and sales services for software to control, support and optimise various and marketing of medical and scientific equipment and con- business processes and to improve business operations. Its sumables. Sales, Marketing & Medical, operating through main international product is Agresso Business World. Coda, Ashfield In2Focus, specialises in recruiting and employing acquired in 2008, provides financial management solutions, contract sales representatives and nursing professionals on designed to meet the needs of financial directors and finance behalf of pharmaceutical companies. This division also in- departments. In the Benelux and some other countries, Unit cludes related services such as medical and regulatory ser- 4 Agresso delivers business software to small and medium- vices, healthcare communication and consultancy and event sized enterprises (SME) and specific sectors. The group sold management. Packaging & Specialty Services includes con- its “Internet & Security” division in early 2007. tract packaging of pharmaceuticals, provision of flu/ travel vaccines and direct to home healthcare.
Stock market data Stock market data Stock price at December 31st 2011 18.30 EUR Stock price at December 31st 2011 2.05 EUR Market capitalisation at December 31st 2011 536 m EUR Market capitalisation at December 31st 2011 489 m EUR Performance in 2011 -23.7 % (in EUR) Performance in 2011 1.8 % (in EUR) Financial data* 2011 2012 Financial data* 2011 2012 Estimated sales growth 9.3 % 3.3 % Estimated sales growth 1.2 % 1.8 % Estimated earnings per share growth 16.5 % 7.3 % Estimated earnings per share growth 0.0 % 5.7 % Operational margin 10.46 % 12.32 % Operational margin 3.57 % 3.77 % Return on equity 22.31 % 22.06% Return on equity 14.47 % 14.41 % Estimated price earnings 10.3x 9.6x Estimated price earnings 9.0x 8.5x * Consensus estimates FACTSET at December 31st 2011 * Consensus estimates FACTSET at December 31st 2011
United Drug PLC (EUR) Unit 4 Agresso N.V. (EUR) 2.50 28
2.40 26
2.30 24
2.20
22
2.10
20 2.00
18 1.90
16 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11 1.80 dec 10 jan 11 feb 11 mrt 11 apr 11 mei 11 jun 11 jul 11 aug 11 sep 11 okt 11 nov 11 dec 11
56 l ANNUAL REPORT 2011 - GENERAL SECTION Explanatory notes to Stock market data and financial data. Stock price on December 31 2011: Closing price of the stock in local currency on the last trading day of 2009.
Market capitalisation on December 31 2011: Stock market capitalisation of the company, in euros, on the last trading day of 2011. Market capitalisation is calculated as the total number of shares outstanding multiplied by the stock price.
Performance in 2011: Total share performance of the stock in local currency, being the increase of the stock price plus the dividend yield (reinvested).
Estimated sales growth: Percentage rise of the estimated sales (turnover) of the year compared to the previous year.
Estimated earnings per share growth: Percentage rise of the estimated earnings per share of the year compared to the previous year. Earnings per share is generally calculated by analysts as net profit, possibly corrected for non recurring elements, divided by the average number of outstanding shares of the year.
Operating margin: Estimated operating profit (or profit before financial income and costs and before taxes), possibly corrected for non recurring items, divided by the estimated sales (turnover) of the year.
Return on equity: Estimated earnings per share of the year, divided by the average estimated equity per share of the year. This ratio is an indicator for the profitability of the company.
Estimated earnings per share ratio: Stock price at December 31st 2011 divided by the estimated earnings per share of the year.
All financial data are based on the database of Factset, which calculates consensus figures based on collected estimates from analysts. The estimates are not necessarily in accordance with possible estimates from the company involved. All figures are as estimated on December 31st 2011.
Performance in 2011 as calculated by Bloomberg.
ANNUAL REPORT 2011 - GENERAL SECTION l 57 GENERAL INFORMATION
GENERAL INFORMATION ninety-eight, and published in the Rid- two thousand and one under the num- ABOUT THE COMPANY ers to the Belgian Official Gazette on ber 20010110-533. the following nineteenth of September The Articles of Association were Name, legal form and under the number 980919-328. amended by deed passed before No- registered office The Articles of Association were tary Luc Hertecant, in Overijse, on the amended by deed passed before Nota- nineteenth of September two thou- The company is a public limited com- ry Eric Spruyt in Brussels on the twen- sand and two and published in the pany trading under the name of “Quest ty-second of July nineteen hundred Riders to the Belgian Official Gazette for Growth”. It is incorporated as an and ninety-eight, and published in the on the twenty-ninth of October two investment company with a fixed capi- Riders to the Belgian Official Gazette thousand and two under the number tal for investment in listed and unlisted on the following nineteenth of Sep- 0132476. companies, hereinafter called “the tember under the number 980919-327. The Articles of Association were Privak” (Private Equity Bevak). The A deed amending the Articles of Asso- amended by deed passed before No- company’s registered office is situ- ciation including a decision to increase tary Luc Hertecant, in Overijse, on the ated at Lei 19, box 3, B-3000 Leuven. the capital was drawn up before Nota- ninth of February two thousand and The company is registered in Belgium ry Eric Spruyt in Brussels on the twen- four and published in the Riders to the under Leuven trade register number ty-fifth of August, nineteen hundred Belgian Official Gazette on the twenty- 99 856 and company registration num- and ninety-eight, and published in the second of April two thousand and four ber 0462.938.834. Riders to the under the number 0062076. Belgian Official Gazette on the follow- The Articles of Association were amend- Formation, changes to the Articles ing twenty-fifth of November under ed by deed passed before Notary Luc of Association, duration the number 981125-302. Hertecant, in Overijse, on the fifteenth The Articles of Association were of September two thousand and five The company was incorporated in the amended by deed passed before No- and published in the Riders to the Bel- form of a public limited company (NV/ tary Hans Berquin in Brussels on the gian Official Gazette on the eighth of SA) by deed passed before Notary twenty-second of September nine- November two thousand and five under Hans Berquin in Brussels on the ninth teen hundred and ninety-eight, and the number 20051108-160566. of June, nineteen hundred and ninety- published in the Riders to the Belgian The Articles of Association were eight, and published in the Riders to Official Gazette on the following elev- amended by deed passed before No- the Belgian Official Gazette of the fol- enth of November under the number tary Eric Spruyt, in Brussels, on the lowing twenty-fourth of June under 981111-003. eighth of November two thousand and the number 980624-595. The Articles of Association were five and published in the Belgian Offi- amended by deed passed before No- cial Gazette on the ninth of December The Articles of Association were tary Eric Spruyt on the seventeenth two thousand and five under the num- amended by deed passed before No- of September two thousand, and pub- ber 20051209-178235. tary Hans Berquin in Brussels on the lished in the Riders to the Belgian Of- The Articles of Association were thirtieth of June nineteen hundred and ficial Gazette on the tenth of January amended by deed passed before No-
58 l ANNUAL REPORT 2011 - GENERAL SECTION tary Luc Hertecant, in Overijse, on the Consultation of company including but not limited to the sectors tenth of November two thousand and documents of medicine and health, biotechnology, five and published in the Belgian Offi- information technology, software and cial Gazette on the ninth of December The company’s Articles of Association electronics and new materials. two thousand and five under the num- are available from the Registry of the ber 20051209-178236. Commercial Court at Leuven. The an- Furthermore, the company may inci- The Articles of Association were nual accounts of the Company are filed dentally keep liquid funds in the form amended by deed passed before No- with the National Bank of Belgium. of savings accounts, investments at tary Peter Van Melkebeke, in Brussels, These documents, as well as the an- notice or short term investment certif- on the thirtieth of April two thousand nual, interim and quarterly reports and icates. From the second year of opera- and seven and published in the Belgian all published information intended for tions onwards, such liquid funds shall Official Gazette on the seventh of June shareholders, can also be obtained at in principle be limited to ten percent two thousand and seven under the the company’s registered office. The (10 %) of the assets unless a special number 20070607-081034. company‘s annual report is sent each decision by the Board of Directors The Articles of Association were last year to all registered shareholders and temporarily authorises a higher per- amended by deed passed before No- other persons who request it. centage. tary Luc Hertecant, in Overijse, on the seventeenth of March two thou- Day-to-day management is carried sand and eleven and published in the Company objectives out by Quest Management NV, acting Belgian Official Gazette on the fifth of as the Managing Director. April two thousand and eleven under The objects of the Privak are the col- the number 20110405-0051186 . lective investment of funds collected from the public pursuant to the Royal General meeting The company is established for an in- Decree of the eighteenth of April nine- definite period and shall commence teen hundred and ninety-seven in The General Meeting shall be held on trading on the date of its formation. listed and unlisted growth companies the third Thursday of March at 11am. and funds with a similar objective to Where that date falls on a public holi- the Privak. It shall be governed in its day, the meeting shall take place on Financial year and audit investment policy by the aforesaid the next working day. The AGM for the Royal Decree and by the provisions in accounting year starting January 1st The Company’s financial year begins these Articles of Association and the 2011 and ending December 31st 2011 on January 1st and ends on December prospectus published with regard to will take place on March 15th 2012. 31st. The annual accounts are audited the issue of shares to the public. by Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren Burg. CV, represent- The Privak shall focus its investment ed by Mr Erik Clinck, Prins Boudewijn- policy on investment in growth indus- laan 24D, B-2550 Kontich. tries in various sectors of the economy,
ANNUAL REPORT 2011 - GENERAL SECTION l 59 GENERAL INFORMATION ABOUT THE COMPANY’S CAPITAL
Issued capital of the Company On September 15th 2005, the capital was The subscribed capital of the Company reduced by 53,629,955 EUR to 63,597,611 is 109,748,742 EUR and is represented by The Company was incorporated on June 9th EUR by means of a capital reduction to 11,529,950 ordinary shares, 750 A shares 1998 with share capital of 201,000,000 BEF clear incurred losses. The number of shares and 250 B shares without nominal value. through the issue of 200,000 ordinary sha- remained unchanged. res, 750 A shares and 250 B shares. All ordinary shares have the same rights On November 8th 2005, the share capi- and privileges, represent the same fractio- On June 30th 1998, the share capital was tal was increased by 32,344,584 EUR to nal value of the capital of the Company and increased by 367,000,000 BEF up to 95,942,195 EUR by exercising warrants and are fully paid-up. All of these ordinary sha- 568,000,000 BEF through the issue of creating 4,043,073 new ordinary shares. res have the same voting rights, dividend 367,000 ordinary shares. entitlements and rights to the liquidation On November 10th 2005, the share ca- surplus. On July 22nd 1998, the share capital was pital was reduced by 6,000,000 EUR to increased by 140,000,000 BEF up to 89,942,195 EUR by creating an available The holders of Class A and Class B shares 708,000,000 BEF through the issue of reserve of 6,000,000 EUR. The number of will receive a preference dividend. That pre- 140,000 ordinary shares. shares remained unchanged. ference dividend will be paid out from part of the net profit that exceeds the amount On September 22nd 1998, the share capital On April 30th 2007, the share capital was in- necessary to pay all shareholders a dividend was increased by 2,000,000,000 BEF up to creased by 19,806,547 EUR to 109,748,742 equal to the return of a risk-free investment 2,708,000,000 BEF through a public offer EUR by creating 2,330,182 new ordinary based on a reference index (Bund – 10 years), to subscribe for 2,000,000 new ordinary shares. increased by a 1.5 % nominal risk premium, shares. calculated on the basis of the net asset va- On June 29th 2011 259,305 ordinary shares lue as expressed on the balance sheet (af- On November 17th 2000, the share capi- and the corresponding non-distributable ter profit appropriation) at the beginning tal was increased by 50,098,000 EUR to reserves amounting to € 1,594,725.25 were of the financial year to which the dividend 117,227,566 EUR through a public offer to annulled. By reducing the number of shares, relates. The reference index (Bund – 10 years subscribe for 2,708,000 new ordinary sha- the net asset value per share increased by – Bloomberg code=GDBR10) for a given fi- res. approximately € 0.06. nancial year is determined and presented to
EvolutionEvoluti oCompanyn Comp capitalany c andapi tReservesal and Reserves
117,227,566 109,748,742 109,748,742 109,748,742 109,748,742 109,748,742 120,000,000 1,702,806 816,811 1,205,768 1,376,910 4,297,194 1,434,337 1,045,380 874,239 656,423 95,942,195 89,942,195 100,000,000 6,000,000
80,000,000 67,129,567 63,597,611 60,000,000
40,000,000
14,080,352 17,550,862 20,000,000 4,982,660
0
Issued capital Reserves available for distribution Reserves not available for distribution
60 l ANNUAL REPORT 2011 - GENERAL SECTION the Annual General Meeting each year by company, upon exercise of the right during The authorisation given to the Board of the Board of Directors on the day of the An- the exercise period, against payment of Directors to purchase own shares expired nual General Meeting that deliberates over the strike price of € 8.5 per ordinary share. on October 30th 2008. The share buy-back the results of the previous fiscal year. Of that 2,106,555 new ordinary shares were issued programme was not renewed. surplus amount, twenty percent (20 %) will upon exercise of preferential subscription be paid out to holders of Class A and Class B rights. The remaining 223,627 new ordinary The Extraordinary General Meeting of shares as preference dividends. The remai- shares were issued in an open tranche. March 17th 2011 approved a mandate in fa- ning eighty percent (80 %) will be distributed vour of the Board of Directors to annul the equally among all shareholders. If the capital own shares the Company has repurchased. is increased during the year, the new capital Share buy-back On June 29th 259,305 ordinary shares and contributed will be included in the calcula- the corresponding non-distributable reser- tion on a pro rata temporis basis. The Extraordinary General Meeting of ves amounting to € 1,594,725.25 were an- March 15th 2007 decided to authorise the nulled. By reducing the number of shares, Board of Directors to acquire the Com- the net asset value per share increased by Authorised capital of the company pany’s own shares – for the Company’s ac- approximately € 0.06. count under the conditions stipulated by the The updated text of the Articles of Associa- Belgian Companies Code – the combined tion as at March 17th 2011 explicitly permits fractional value of which was not more than Information on share ownership the Board of Directors to increase the share ten per cent (10 %) of the issued capital, for capital on one or more occasions by a maxi- a minimum price of six euros (€ 6.00) per The following shareholders have notified mum amount of € 109,748,742. share and a maximum price of twelve euros the Company of their interest of 5 % or (€ 12.00) per share. This authorisation ap- more in the Company This authorisation is granted for a period of plied for a period of eighteen (18) months, five years, with effect from publication of effective from publication of the decision On 11 January 2012 Quest for Growth NV the deed of capital increase of the Company of this EGM in the Riders to the Belgian Of- received a notification from Laxey Partners on March 17th 2011, published in the Riders ficial Gazette (April 1st 2007). The Board Ltd., from which appears that since 10 Ja- to the Belgian Official Gazette. It can be of Directors could dispose of the shares so nuary 2012 Laxey Partners Ltd. no longer renewed one or more times, for a maximum purchased, either directly or through the holds voting securities or voting rights in period of five years on each occasion. intermediary of a person acting in his or her Quest for Growth. own name, but for account of the Company, The General Meeting may increase or re- at a price within the range determined for On the same day Quest for Growth NV also duce the subscribed capital. In the event the authorisation to purchase own shares. received a notification from the Financial & of an increase in capital by issuing shares Own shares were purchased without redu- Investment Management Group, Ltd, from in return for a contribution in cash, it is not cing the capital, but by forming an unavai- which appears that the Financial & Invest- possible to deviate from the priority right of lable reserve equal to the value at which the ment Management Group, Ltd crossed the the existing shareholders. acquired shares were recorded in the inven- threshold of 10% voting rights on 10 Janu- tory. The voting right associated with these ary 2012 and held 14.08% voting securities shares were suspended for as long as the or voting rights on that day. Warrants and rights shares were in the Company’s possession.
5,416,000 warrants were issued on Sep- Name and address Number of shares % (*) Date of threshold crossing th tember 26 2002. Each warrant entitled Federale Participatie- en investeringsmaatschappij 1,393,855 12.09 % 20/10/2011 the holder to subscribe to one new ordinary Dexia Insurance Belgium NV share of the company, upon exercise of the Livingstonelaan 6 1000 Brussels warrant during one of the exercise periods, Belgium against payment of the strike price of € 8 Laxey Partners Limited 1,162,349 9.86 % 17/09/2010 per ordinary share. 4,043,073 warrants have 4th Floor, Derby House 64 Athol Street been converted into new ordinary shares. Douglas, Isle of Man IM1 1JD United Kingdom 9,320,728 rights were issued on April 10th Financial & Investment Group, Ltd. 584,614 5.07 % 13/07/2011 111 Cass Street, Traverse City 2007. Four rights entitled the holder to Michigan 49684 subscribe to one new ordinary share of the USA (*) percentage based on the number of shares outstanding at the date of the threshold crossing. ANNUAL REPORT 2011 - GENERAL SECTION l 61 KEY INFORMATION
Board of Directors Dr. Jos B. Peeters, Chairman Quest Management NV, Managing Director, represented by Mr. René Avonts, Managing Director ADP Vision BVBA, Director, represented by Mr. Antoon De Proft Auxilium Keerbergen BVBA, Director, represented by Mr. Frans Theeuwes Axxis BVBA, Director, represented by Mr. Philippe de Vicq de Cumptich Baron Bernard de Gerlache de Gomery, Director De Meiboom NV, Director, represented by Mr Edward Claeys Euro Invest Management NV, Director, represented by Prof. Philippe Haspeslagh Gengest BVBA, Director, represented by Mr. Rudi Mariën Pamica NV, Director, represented by Mr. Michel Akkermans Regine Slagmulder BVBA, represented by Prof. Regine Slagmulder Mr. Dirk Vanderschrick, Director Audit Committee Regine Slagmulder BVBA, Chairman, represented by Prof. Regine Slagmulder Auxilium Keerbergen BVBA, represented by Mr Frans Theeuwes Baron Bernard de Gerlache de Gomery Managing Director Quest Management NV, Lei 19 box 2, B-3000 Leuven, represented by Mr. René Avonts Auditors Klynveld Peat Marwick Goerdeler Bedrijfsrevisoren Burg. CV, represented by Mr. Erik Clinck, Prins Boudewijnlaan 24d, B-2550 Kontich Depositary bank DEXIA BANK BELGIUM, Pachecolaan 44, B-1000 Brussels Incorporation June 9th, 1998 Official listing September 23rd, 1998 on Euronext Brussels Security number ISIN: BE0003730448 Stock Price Bloomberg: QFG BB Equity Reuters: QUFG.BR Telekurs: 950524 Company reports published quarterly, the next quarterly report will be published in April 2011 Estimated published every first Saturday of the month in De Tijd and in L’Echo, Moneytalk and on the website Net Asset Value www.questforgrowth.com
62 l ANNUAL REPORT 2011 - GENERAL SECTION FINANCIAL CALENDAR
Shareholders’ meetings Annual General Meeting March 15th 2012 Annual General Meeting March 21th 2013
Publieke aankondigingen Results Q1 April 26th 2012 Results H1 July 26th 2012 Results Q3 October 25th 2012 Results FY January 24th 2013
Analyst meetings April 27th 2012 11.00 am & Press conferences July 27th 2012 11.00 am October 26th 2012 11.00 am January 25th 2013 11.00 am
Publication of Net Asset Value 2012 N.A.V. 31 Jan 28 Feb 31 Mar 30 Apr 31 May 30 Jun 31 Jul 31 Aug 30 Sep 31 Oct 30 Nov 31 Dec QfG Website 3 Feb 2 Mar 4 Apr 4 May 6 Jun 4 Jul 3 Aug 5 Sep 3 Oct 7 Nov 5 Dec 4 Jan MoneyTalk 9 Feb 8 Mar 5 Apr 10 May 7 Jun 5 Jul 9 Aug 6 Sep 4 Oct 8 Nov 6 Dec 10 Jan De Tijd 4 Feb 3 Mar 7 Apr 5 May 9 Jun 7 Jul 4 Aug 8 Sep 6 Oct 10 Nov 8 Dec 5 Jan L'Echo 4 Feb 3 Mar 7 Apr 5 May 9 Jun 7 Jul 4 Aug 8 Sep 6 Oct 10 Nov 8 Dec 5 Jan Publication NAV on QfG website after 5.40 PM
ANNUAL REPORT 2011 - GENERAL SECTION l 63 GLOSSARY
Bevak A Belgian collective investment scheme, which is established in the form of a closed-end investment company. Depository bank holds all the assets of the privak • Is responsible for the payment of the purchased financial instruments • Handles the delivery of sold financial instruments and the reception of the purchased securities • Will take care of the dividend and interest payments on portfolio assets Due diligence is the independent investigation of a company, its management team, and its prospects for success by an investor before funding is approved. It is usually intensive and thorough. It customarily includes verifications of statements made in the business plan, and studies of the company's product and market, material, contracts, facilities, real pro- perty owned, subsidiaries, lawsuits, insurance, patents and other intellectual property rights, licenses and permits, and tax status. Growth stocks stocks issued by companies that are expected to grow fast and create a healthy return on investment for their investors. IPO or "Initial Public Offering" is the registered public offering of securities of an issuer to the public for the first time. ISD or "Investment Services Directive"; European Directive of 10 May 1993 liberating the investment services in the securities field. This directive introduces the European passport for investment firms. Net income net income is defined in the Royal Decree of 18 April 1997 as the net profit of the year, excluding depreciation of holdings, reduction of depreciation and unrealised capital gains. At least 80 % of the net income of the privak must be paid out as a dividend. Privak a listed private equity bevak, governed by the Royal decree of 18 April 1997, and designed for investments in growth companies and in securities, which are not listed. Privak-decree the Royal decree of 18 April 1997 on collective investment schemes for investments in unquoted companies and growth companies. Private placement The offer and sale of securities not involving a 'public offering'. The definition of 'public offering' varies from country to country. Typically, a private placement implies that the stock will be placed with only a limited number of mainly institutional investors. Qualifying financial Financial instruments which are defined as such by the Privak-decree instruments • Shares and assimilated financial instruments; • Bonds and other debt instruments; • Other negotiable securities by which the above mentioned financial instruments can be purchased or obtained in exchange; • Call or put options on the above mentioned financial instruments, on condition that the underlying asset is a qualifying holding; • Units in collective investments schemes. Qualifying holdings According to the Privak-decree qualifying holdings are • Qualifying financial instruments, issued by unquoted companies; • Qualifying financial instruments, issued by growth companies; • Shares or units, issued by other collective investment schemes or holding companies with an investment policy which is in essence compatible to that of the privak itself. RDT’s “Revenues Définitivement Taxés”. Shareholders, normally subject to Belgian Corporation tax, are not taxed on dividends for 95 % of the amount of the dividend if: • They are holding at least 5 % of the company which pays the dividend or • If the acquisition value of the holding represents at least 50 million BEF; • The company that pays out the dividend has committed in its Articles of Association to pay out at least 90 % of distributable profits. Unquoted companies companies whose shares are not listed or traded on an official stock exchange, a regulated market nor on another organised, recognised market. Venture capital is money invested in a company at high risk to the investor, usually in situations in which the company is unable to secure needed funds from traditional lending sources, such as a commercial loan from a bank. Venture capital can be invested through the purchase of stock (equity), by making a loan (debt), or through the combination of the two. Venture capital investors require a very high rate of return and thus only invest in companies with good prospects for rapid growth.
64 l ANNUAL REPORT 2011 - GENERAL SECTION QUEST FOR GROWTH NV Privak, fixed capital investment company established under Belgian Law
Lei 19, box 3 B-3000 Leuven Phone: +32 (0)16 28 41 28 Fax: +32 (0)16 28 41 29 www.questforgrowth.com [email protected]