Kinnevik makes high investments in FY16, proposes increased dividend

During the fourth quarter of 2016, Kinnevik said that its NAV decreased by 3 percent to 72.4 billion Swedish krona (8.13 billion dollars) or 263 Swedish krona (29.54 dollars) per share. Kinnevik's Board of Directors recommends an ordinary dividend of 8 Swedish krona (0.90 dollar) per share for 2016, an increase of 3.2 percent.

“In 2016, Kinnevik combined a high level of investment activity with a significant cash return to our shareholders. We added two new digital consumer-focused companies to our portfolio, Betterment and Babylon, and invested in our existing companies to support their growth and profitability. We returned 7.1billion Swedish krona to our shareholders through our ordinary dividend and a share redemption programme and in addition, executed a 500 million Swedish krona share buyback programme, said acting CEO and CFO Joakim Andersson in a press release.

Kinnevik’s core businesses report positive momentum

The Group’s leading business, Zalando had preliminary fourth quarter revenue growth of 25-26 percent and an EBIT margin of 7.5-9.5 percent. For the full year, Zalando delivered preliminary revenue growth of 23 percent and an EBIT margin of 5.6-6.2 percent.

The company said, Millicom’s largest market Latin America reported cable and mobile data revenue growth of 6 percent and 17 percent respectively during the fourth quarter, and the adjusted EBITDA margin amounted to 36 percent for the group. Organic service revenues grew 1.2 percent for the full year 2016, with an adjusted EBITDA margin of 36percent.

Global Fashion Group with operations across 24 markets and having Lamoda, Dafti, namshi, Zalora and The Iconic businesses under its fold saw number of active customers grow by 20 percent, totaling 9.1 million, NMV growth amounted to 22 percent and net revenue growth of 16 percent in Q3 2016. Adjusted EBITDA margin amounted to 13 percent, an improvement of 15 percentage points compared to Q3 2015. The company said, its successful closing of the 330million euros (351 million dolars) funding round in Q3 2016 and announced divestments in India, Thailand and Vietnam substantially strengthened GFG’s financial position.

Rocket Internet said that its larger portfolio companies continued to grow revenues and reduce losses on their path to profitability. Aggregate GMV amounted to 1.9 billion euros (2.02 billion dollars) and net revenues to 1.6billion euros (1.71 billion dollars) during the first nine months of 2016, a growth of 35 percent and 31 percent, respectively. The company said, aggregate adjusted EBITDA margin for the larger portfolio companies amounted to -18 percent, an improvement of 17 percentage points compared to the same period 2015.

Qliro Group’s fourth quarter gross margin increased by 4.2 percentage points to 18.7 percent, primarily driven by Nelly’s focus on private label and continued efforts with the assortment strategy, along with Qliro Financial Services’ continued increase in earnings. Home24 operating in seven core markets in Europe and Brazil said that its active customers increased by 6 percent, while revenues amounted to 54 million euros (57 million dollars) during the third quarter, largely fat compared to the previous year, while profitability improved substantially from an adjusted EBITDA margin of -35 percent in the third quarter 2015 to -17 percent in the third quarter 2016, an 18 percentage points improvement.

Westwing catering to 14 markets across Europe, Brazil and Russia said active customers increased by 7percent and GMV increased by 27 percent and amounted to 60 million euros (63 million dollars) in the third quarter. Revenues increased by 23 percent and the adjusted EBITDA margin improved by 14 percentage points to -11 percent.

Other businesses under Kinnevik also performed well

Launched in 2012, Linio an online shopping and selling destination in Spanish speaking Latin America with a presence in Argentina, Chile, Colombia, Mexico, Peru and Venezuela ran a successful Black Friday campaign, with improved traffic and engagement from both new and existing customers across markets.

Konga, the general merchandise marketplace in Nigeria saw the number of customers with more than four purchases increased by over 60 percent compared to the same period last year.

Tele2 grew fourth quarter revenues by 18 percent and achieved an EBITDA margin of 18 percent for the fourth quarter and 19 percent for the full year. Revenue growth for the full year amounted to 5 percent. MTG reported an organic revenue growth of 8 percent and an EBIT margin of 11percent for the fourth quarter. For the full year, MTG had organic revenue growth of 5percent and an EBIT margin of 8 percent.

Other developments during the year under review

On December 7, 2016, the Board of Directors announced that Lorenzo Grabau was leaving Kinnevik with immediate effect. Joakim Andersson was appointed acting CEO. Also on 5 December 2016, Stina Andersson, Investment Director, left Kinnevik to join Tele2 as Executive Vice President Strategy & Business Development.

Picture:Zalando