CONSOLIDATED AUDITED FINANCIAL RESULTS FOR THE YEAR ENDED 31 MARCH 2024 AND PROPOSED DIVIDEND

CHAIRMAN’S COMMENTARY

Dear Shareholder,

Overview

During the past year we have seen interest rates and inflation starting to decline in some major economies with available liquidity from the private and banking sectors for capital investments showing early signs of improvement, however the costs thereof remain high. Reinet’s portfolio remains well positioned to manage through these challenges with sufficient liquid resources on hand.

Capital invested during the year amounted to some € 128 million, which was mostly in respect of funds managed by Trilantic Capital Partners, TruArc Partners and Coatue.

Reinet has cash resources of some € 357 million and access to additional funds by way of additional borrowing facilities to meet investment obligations and other opportunities as they arise.

Since its inception in 2008, Reinet has generated an annual return of 8.3 per cent for its investors based on the Reinet share price, with the underlying net asset value reflecting an 8.8 per cent compounded increase since March 2009.

Results

At 31 March 2024, Reinet’s net asset value amounted to some € 6.2 billion, an increase of € 464 million or 8.1 per cent from 31 March 2023. The increase reflects the increase in value of Pension Insurance Corporation together with the receipt of significant dividends from both Pension Insurance Corporation and British American Tobacco, offset primarily by a decrease in the share price of British American Tobacco. The strengthening of sterling against the euro in the year also contributed to the positive results.

Business developments

Pension Insurance Corporation’s adjusted own funds increased from £ 5.9 billion to £ 6.3 billion over the last year with new business premiums increasing from £ 4.1 billion to £ 6.9 billion mainly due to the conclusion of the largest ever UK bulk annuity transaction in respect of a buy-in with the Trustees of two schemes sponsored by RSA Group. The board of Pension Insurance Corporation proposed an inaugural dividend of 7.5 pence per ordinary share which was paid to shareholders in May 2023. Reinet’s share of this dividend amounted to some £ 50 million. In April 2024, the shareholders of Pension Insurance Corporation approved a second dividend of 11 pence per ordinary share which was paid to shareholders in May 2024. Reinet’s share of this second dividend amounted to some £ 73 million.

The investment in British American Tobacco decreased in value in the year due to its share price decreasing from £ 28.41 at 31 March 2023 to £ 24.06 at 31 March 2024. At the British American Tobacco annual general meeting in April 2024, shareholders approved a dividend increase of 2 per cent to £ 2.36 per share. British American Tobacco continues to follow its strategic path to ‘A Better Tomorrow’ which means it is committed to building a smokeless world by migrating its cigarette consumers actively, sustainably and responsibly to reduced risk, smokeless alternatives. Its board and leadership team remain focused on securing long-term, sustainable value creation and have set a target of 50 per cent of revenue from ‘non-combustibles’ by 2035.

TruArc continues to pursue new opportunities and in early 2024, launched the TruArc Structured Opportunities Fund, a fund seeking to deliver flexible capital to middle market entities in North America, also predominantly in the Speciality Manufacturing and Business Services sectors, by investing across the capitalisation from structured debt to non-control equity. Reinet committed some € 17 million to TruArc Structured Opportunities Fund as part of the first close and expects to commit further amounts at subsequent closings. Reinet’s total outstanding commitment to TruArc managed funds now stands at € 122 million, with some € 330 million invested to date.

In 2009, Reinet announced its decision to invest in the private equity management business formerly owned by Lehman Brothers, the business was subsequently renamed Trilantic Capital Partners. As Reinet’s first private equity fund investment, uninvested limited partner commitments were taken over in respect of Trilantic Capital Partners’ Fund IV North America and Fund IV Europe. 15 years later, practically all underlying investments in these two funds have been realised. Over the years, Reinet has invested in a total of six funds managed by Trilantic Capital Partners, with € 517 million invested, € 597million distributed and a remaining carrying value of € 443 million. During the past year, total capital distributions of € 55 million were received and capital contributions of € 23 million paid.

The Coatue Structured Funds continue to focus on privately negotiated structured financing transactions using their sector experience and platform resources to source these proprietary transactions. Coatue seeks to employ a strategy that will opportunistically fund both offensive and defensive transactions, predominantly in the US technology sector. Reinet invested an additional € 20 million during the year, with a total outstanding commitment of € 209 million.

Dividend

The Board of Directors of Reinet Investments Manager S.A. proposes a dividend of € 0.35 per share, payable in September 2024. This represents a 16.67 per cent increase from last year.

Outlook

In 2023, the World Health Organisation officially declared the end of the COVID-19 pandemic however, we are faced with the ongoing Ukraine crisis, increasing unrest in the Middle East, heightened global geopolitical tensions, continuing elevated interest rates and stubborn inflation.

We will continue to seek new investment opportunities and partnerships which fulfil our objective of providing long term capital growth and to support our existing portfolio companies to be successful against the global backdrop set out above.

As with all conscientious investors we will need to generate returns for our shareholders from sustainable business practices and try to mitigate the ever-increasing risks posed by global warming. The introduction of the Corporate Sustainability Reporting Directive in the European Union will bring enhanced sustainability reporting requirements over the next few years. As we see in other parts of the world, investors and businesses will need to focus more resources on reducing their impact on the environment while promoting investment in sustainable business practices. Reinet’s two largest investments, Pension Insurance Corporation and British American Tobacco already have well developed strategies in this regard.

I would like to thank Reinet’s Directors, Board of Overseers, management and employees for their commitment to Reinet and to our partners in the investment community for their contribution to Reinet’s performance during the year.

Johann Rupert

Chairman

Reinet Investments Manager S.A.

Luxembourg, 27 May 2024

BUSINESS OVERVIEW

The Company has determined that it meets the definition of an investment entity in terms of International Financial Reporting Standards (‘IFRS’) 10. The net asset value, the income statement and the cash flow statement included in this business overview have however been presented in a more comprehensive format than required by IFRS in order to provide readers with detailed information relating to the underlying assets and liabilities.

All investments are held, either directly or indirectly, by Reinet Fund.

Information relating to current key investments AT 31 MARCH 2024

Committed

amount(1)

in millions

Remaining

committed

amount(1)

in millions

Invested

amount(2)

in millions

Realised

amount(2)

in millions

Current fair

value(1)

in millions

Total realised and unrealised value(3)

in millions

Listed investments

British American Tobacco p.l.c.

EUR

-

-

1 739

3 415

1 359

4 774

GBP

-

-

1 418

2 866

1 162

4 028

Other listed investments

EUR

-

-

127

68

93

161

USD

-

-

146

78

100

178

Unlisted investments

Pension Insurance

Corporation Group

EUR

-

-

1 315

57

3 436

3 493

Limited

GBP

-

-

1 112

50

2 938

2 988

Trilantic Capital Partners

EUR

596

95

517

597

443

1 040

Euro investment

EUR

85

19

66

149

44

193

US dollar investment(4)

USD

552

82

514

524

431

955

TruArc Partners

EUR

464

122

330

225

372

597

USD

500

132

368

253

402

655

Coatue funds

EUR

USD

 278

300

209

225

70

75

-

-

73

79

73

79

Asian private equity companies and portfolio funds

Milestone China

Opportunities funds and

EUR

-

-

130

164

13

177

management company

USD

-

-

169

185

14

199

Prescient China funds

and management

EUR

-

-

79

4

124

128

company

USD

-

-

94

4

134

138

Asia Partners funds

EUR

67

37

28

-

34

34

USD

73

40

33

-

37

37

Specialised investment funds

NanoDimension funds and co-investment

opportunities

EUR

173

47

123

62

107

169

Euro investment

EUR

–

–

4

5

–

5

US dollar investment

USD

187

51

136

68

115

183

United States land

development and

EUR

198

5

160

71

21

92

mortgages

USD

214

5

209

78

23

101

1. Calculated using year-end foreign exchange rates.
2. Calculated using actual foreign exchange rates at transaction date.
3. Total of realised proceeds and current fair value.
4. The invested amount for Trilantic Capital Partners includes an initial payment of $ 10 million.

PERFORMANCE

NET ASSET VALUE

The NAV comprises total assets less total liabilities, and equates to total equity under International Financial Reporting Standards. The increase in the NAV of € 464 million during the year reflects increases in the estimated fair value and gains realised on certain investments including Pension Insurance Corporation Group Limited (‘Pension Corporation’), other listed investments, Trilantic Capital Partners, TruArc Partners and NanoDimension funds together with dividends received from British American Tobacco p.l.c. (‘BAT’) and Pension Corporation. Offsetting these increases are decreases in the estimated fair value of certain investments including BAT, Prescient China funds and Milestone China Opportunities fund together with the dividend paid by the Company and expenses in respect of management and performance fees. Details of the Company’s NAV and details of movements in key investments can be found on pages 6 and 7 of this report.

Reinet records its assets and liabilities in euro; the strengthening of sterling and the US dollar against the euro has resulted in an overall increase in the value of certain assets and liabilities in euro terms. Applying current year-end exchange rates to the March 2023 assets and liabilities would have resulted in an increase in the March 2023 NAV of some € 129 million.

SHARE BUYBACK PROGRAMME

As at 31 March 2024, there was no share buyback programme in progress.

The Company repurchased 14 151 395 ordinary shares between November 2018 and May 2022 under five share buyback programmes. The cost of the ordinary shares repurchased amounted to € 222 million, plus transaction costs.

Details of each completed share buyback programme to date can be found in note 8 to the consolidated financial statements.

All ordinary shares repurchased are held as treasury shares.

NET ASSET VALUE PER SHARE

The NAV per share of the Company is calculated by dividing the NAV by the number of shares outstanding (excluding treasury shares) of 181 790 891 (31 March 2023: 181 790 891).

31 March 2024

31 March 2023

Shares in issue

195 942 286

195 942 286

Treasury shares

(14 151 395)

(14 151 395)

Net shares

181 790 891

181 790 891

€ m

€ m

NAV (see page 4)

6 184

5 720

€ per share

€ per share

NAV per share

34.02

31.46

SHARE PRICE

The Company’s indicative share price as quoted on the Luxembourg Stock Exchange increased by 18.1 per cent in the year from € 18.80 at 31 March 2023 to € 22.20 at 31 March 2024, with the highest trade being at € 23.00 during the year. The total shareholder return since inception (taking into account the initial price of € 7.1945 and including dividends paid) is 8.3 per cent per annum. The growth in NAV, including dividends paid, reflects an 8.8 per cent compounded increase since March 2009. The Company’s ordinary shares are listed on the Luxembourg Stock Exchange, Euronext Amsterdam and the Johannesburg Stock Exchange; the listing on the Johannesburg Stock Exchange is a secondary listing.

Share prices as at 31 March 2024 and 31 March 2023 were as follows:

31 March 2024

31 March 2023

ZAR

EUR

ZAR

EUR

Luxembourg

-

22.20

-

18.80

Amsterdam

-

22.20

-

19.00

Johannesburg

458.23

-

365.06

-

GLOBAL MARKETS BACKDROP

During the year, global markets continued to be impacted by the effects of the Ukraine crisis, turmoil in the Middle East, high interest rates and inflation. Whilst inflation has started to fall, high prices continue to put significant pressure on households and consumers as many central banks hold interest rates at current levels to mitigate the inflation concerns. The extent and impact of these factors remain uncertain.

Reinet has no direct exposure to Russia, Ukraine or the Middle East through its underlying investments or banking relationships and has not experienced any significant direct impacts in respect of interest rate fluctuations or inflation. Reinet has various banking relationships with highly rated institutions, and a well-diversified approach to cash and liquidity management.

Reinet continues to value its investments in line with the International Private Equity and Venture Capital Valuation (‘IPEV’) guidelines and its approved valuation procedures and methodologies. All investment valuations have been prepared using latest available data, including exchange rates and listed share prices as at 31 March 2024. Discussions have taken place with fund managers and investee companies to determine any significant changes in value and any impacts related to the various geo-political areas of conflict, volatility in stock and currency markets, interest rates, inflation and exposure to certain financial institutions. Future valuations will take into account any new impacts of the above, which could affect the valuation of underlying investments.

INVESTMENTS

Reinet seeks, through a range of investment structures, to build partnerships with other investors, specialised fund managers and entrepreneurs to find and develop opportunities for long-term value creation for its shareholders.

Since its formation in 2008, Reinet has invested some € 3.7 billion and at 31 March 2024 committed to provide further funding of € 559 million to its current investments. Details of the funding commitments outstanding are given in the table on page 21 of this report. New commitments during the year under review amounted to € 61 million, and a total of € 128 million was funded during the year.

LISTED INVESTMENTS

BRITISH AMERICAN TOBACCO P.L.C.

The investment in BAT remains one of Reinet’s largest investments and is kept under constant review, considering the company’s performance, the industry outlook, cash flows from dividends, stock market performance, volatility and liquidity.

Luc Jobin, Chairman, and Tadeu Marroco, Chief Executive, writing in the BAT annual report for 2023 commented:

Luc Jobin: ‘Our strategy and purpose were discussed extensively during 2023. The result of these discussions was the decision to provide greater clarity on what we mean by ‘A Better Tomorrow’. It means we are committed to building a smokeless world. This is a commitment to migrate our cigarette consumers actively, sustainably and responsibly to reduced risk, smokeless alternatives. We believe that growth within the smokeless category will be driven by sustained investment in our brands and targeted innovation to respond to evolving consumer preferences and tastes. While sustained volatility and uncertainty will continue to present challenges, we believe BAT remains well-positioned and resilient. We are diversified by category, price point and geography. Our smokeless portfolio has been designed to take advantage of sectorial shifts and our people are highly engaged with a track record of delivery during uncertain times. BAT’s board and leadership team remain focused on securing long-term, sustainable value creation, by nurturing BAT’s culture, building our brands and delivering ‘A Better Tomorrow’ for our stakeholders.’

Tadeu Marroco: ‘During 2023, the underlying strengths of BAT were reflected in our performance, despite a challenging environment. While total group revenue declined 1.3 per cent, revenue at constant currency was up 1.6 per cent despite the negative impact due to the sale of Russia and Belarus partway through the year. There was another strong performance from our ‘New Categories’ which are now profitable at the category contribution level, driven by higher revenue (up 15.6 per cent, or 17.8 per cent on a constant currency basis). We currently have 24 million consumers of ‘Non-Combustible’ products and revenue from these products now accounts for 16.5 per cent of group revenue. As a business, we are committed to becoming a predominantly smokeless business, targeting 50 per cent of our revenue from ‘Non-Combustibles’ by 2035. We are an organisation ready to deliver, with operational excellence and an ability to flexibly manage our capital allocation decisions for the benefit of all stakeholders.’

During the year under review, dividend income recorded from BAT amounted to € 130 million (£ 112 million), being BAT’s second, third and fourth 2023 quarterly dividends, together with the first 2024 quarterly dividend of some € 33 million (£ 28 million) with a record date of 22 March 2024. The first 2024 quarterly dividend was paid on 2 May 2024 and has been included as a receivable in the NAV as at 31 March 2024, due to the record date falling within this financial year.

Reinet holds 48.3 million shares in BAT (31 March 2023: 48.3 million), representing some 2.16 per cent of BAT’s issued share capital.

The value of Reinet’s investment in BAT amounted to € 1 359 million at 31 March 2024 (31 March 2023: € 1 561 million), being some 22.0 per cent of Reinet’s NAV. The decrease in value reflects the decrease in the BAT share price on the London Stock Exchange from £ 28.41 at 31 March 2023 to £ 24.06 at 31 March 2024 offset by the strengthening of sterling against the euro during the year.

Further information on BAT is available in its combined Annual and Sustainability report at www.bat.com.

OTHER LISTED INVESTMENTS

Other listed investments comprised:

31 March 2024

31 March 2023

€ m

€ m

Grab Holdings Limited

31

29

Cartesian Therapeutics, Inc. *

1

2

Soho China Limited

3

7

SPDR Gold shares

44

39

Twist Bioscience Corporation

14

6

93

83

*formerly Selecta Biosciences Inc.

GRAB HOLDINGS LIMITED

Grab Holdings Limited (‘Grab’) is a leading superapp platform in Southeast Asia, providing everyday services that matter to consumers, including food deliveries, mobility and the e-wallet segment of financial services. Grab offers a wide range of on-demand services across 480 cities in eight countries.

Reinet holds 10 573 666 shares in Grab with a market value of € 31 million (31 March 2023: € 29 million). The increase in value mainly reflects the increase in the share price during the year.

Further information on Grab is available at www.grab.com.

CARTESIAN THERAPEUTICS, INC.

In November 2023, Selecta Biosciences, Inc. merged with Cartesian Therapeutics, Inc. (‘Cartesian’), a clinical-stage biotechnology company pioneering RNA cell therapies for autoimmune diseases. The combined company is now known as Cartesian Therapeutics, Inc. and its Nasdaq ticker symbol changed to ‘RNAC’.

Cartesian is also a portfolio company of the NanoDimension funds.

Reinet holds 1 395 460 shares with a market value of € 1 million as at 31 March 2024 (31 March 2023: € 2 million). The decrease in value mainly reflects the decrease in the share price during the year.

Further information on Cartesian is available at www.cartesiantherapeutics.com.

SOHO CHINA LIMITED

Soho China Limited (‘Soho’) is a Chinese office developer focused on developing and leasing properties in the central business districts of Beijing and Shanghai. Soho developments are known for their modern architecture, with designs from architects such as Zaha Hadid and Japanese architect Kengo Kuma.

Reinet holds 47 million shares with a market value of € 3 million as at 31 March 2024 (31 March 2023: € 7 million). The decrease in value mainly reflects the decrease in the share price during the year.

Further information on Soho is available at www.sohochina.com.

SPDR GOLD SHARES

SPDR Gold shares (‘GLD’) is the largest physically backed gold exchange traded fund in the world. Over the long term, gold can provide a hedge against inflation and offer some protection against value changes in turbulent economic and political times.

Reinet holds 230 000 shares with a market value of € 44 million as at 31 March 2024 (31 March 2023: € 39 million). The increase in value mainly reflects the increase in the value of gold during the year.

Further information on GLD is available at www.spdrgoldshares.com/usa.

TWIST BIOSCIENCE CORPORATION

Twist Bioscience Corporation (‘Twist’) is involved in the fields of medicine, agriculture, industrial chemicals and data storage, by using synthetic DNA tools, and has created a revolutionary silicon-based DNA synthesis platform that offers precision at a scale otherwise unavailable.

Reinet holds 444 497 shares in Twist with a market value of € 14 million (31 March 2023: € 6 million). The increase in value mainly reflects the increase in the share price during the year.

Further information on Twist is available at www.twistbioscience.com.

UNLISTED INVESTMENTS

Unlisted investments are carried at their estimated fair value. In determining fair value, Reinet Fund Manager S.A. (the ‘Fund Manager’) relies on audited and unaudited financial statements of investee companies, management reports and valuations provided by third-party experts. Valuation methodologies applied include the NAV of investment funds, discounted cash flow models and comparable valuation multiples, as appropriate. The third-party valuation reports and key assumptions used within these reports are reviewed by the external auditors.

PENSION INSURANCE CORPORATION GROUP LIMITED

Pension Corporation’s wholly-owned subsidiary, Pension Insurance Corporation plc (‘Pension Insurance Corporation’), is a leading provider in the UK pension risk transfer market.

During 2023, Pension Insurance Corporation concluded new business with premiums of £ 6.9 billion (2022: £ 4.1 billion).

At 31 December 2023, Pension Corporation reported it held £ 46.8 billion in assets (31 December 2022: £ 41.2 billion) and insurance liabilities amounted to £ 41.2 billion (31 December 2022: £ 33.7 billion). The increase in value of both assets and liabilities is due to new business written, partly offset by payments made to policyholders.

To date, Pension Insurance Corporation has insured 339 900 pension fund members (31 December 2022: 302 200). Clients include FTSE 100 companies, multinationals and the public sector.

Pension Insurance Corporation has a total of £ 1.8 billion (31 December 2022: £ 1.6 billion) Tier 2 subordinated notes and £ 450 million (31 December 2022: £ 450 million) Tier 1 restricted notes outstanding. In September 2023, Fitch affirmed its Insurer Financial Strength rating at A+ (Strong) and Long-Term Issuer Default rating at A. The reported Solvency II capital ratio as at 31 December 2023 was 211 per cent (31 December 2022: 225 per cent).

During 2023, Pension Corporation paid an inaugural dividend of 7.5 pence per ordinary share. Reinet’s share of the dividend amounting to some € 57 million (£ 50 million) was received in May 2023.

In April 2024, the shareholders of Pension Corporation approved a dividend of 11.0 pence per ordinary share. Reinet’s share of the dividend amounting to some € 85 million (£ 73 million) was received in May 2024. Reinet has not recorded a receivable as at 31 March 2024, as the approval date falls outside this financial year.

Reinet’s shareholding in Pension Corporation remained at 49.5 per cent in the year under review.

Tracy Blackwell, Chief Executive Officer and Dom Veney, Chief Financial Officer of Pension Insurance Corporation, commented:

Reinet’s investment in Pension Corporation is carried at an estimated fair value of € 3 436 million at 31 March 2024 (31 March 2023: € 2 787 million). This value takes into account Pension Corporation’s adjusted equity own funds value at 31 December 2023 of £ 6.3 billion (31 December 2022: £ 5.9 billion), corresponding valuation multiples drawn from industry data for a selected UK insurance peer group as at 31 March 2024, and a discount of 10 per cent which takes into account the illiquid nature of Reinet’s investment.

The investment in Pension Corporation increased in value by € 649 million which includes an increase of some € 340 million in respect of the increase in market multiples following a generally strong public market performance for the peer group over the 12 months, together with an increase of some € 210 million due to the movement on Pension Corporation’s adjusted equity own funds value from 31 December 2022 to 31 December 2023 and some € 100 million due to the strengthening of sterling against the euro in the year under review.

The investment in Pension Corporation represents some 55.6 per cent of Reinet’s NAV at 31 March 2024, compared to 48.7 per cent at 31 March 2023.

Pension Corporation believes sustainability is fundamental to the delivery of its purpose to pay policyholders now and for decades to come. Its sustainability strategy includes: continuing to build a secure and sustainable business; to carry on leading as a responsible corporate citizen; and to keep on driving long-term value growth. It has four distinct pillars which ensure alignment of its corporate strategy and actions to its purpose: l