Centum Investment Company Plc · NSEKE:CTUM
Centum Investment — Investor Presentation (2014)
69 slides from Centum Investment's investor presentation, 2014
Slide 1: Investor Briefing
Investor Briefing For year ended 31 March 2014
Slide 2: Agenda
Agenda 1• FY2009-14 Strategy (Centum 2.0) Update 2• Business Unit Review 3• Financial Performance 4• FY2015-19 Strategy (Centum 3.0) 5• Q&A 2
Slide 3: Our Mission
Our Mission To create real tangible wealth by providing the channel through which investors access and build extraordinary enterprises in Africa 3
Slide 4: A channel providing investors access to diversified investments
We are a channel providing investors with access to a portfolio of otherwise inaccessible, quality, diversified investments
Slide 5: Our Business
Our Business We invest across three asset classes Centum Investment Company Kes. 29.4Bn Private Equity Real Estate & Infrastructure Asset Management Kes. 14.1 Bn (49%) Kes. 10.3 Bn (17%) Kes. 5.0 Bn (34%) Third party funds – Third party funds - Centum Asset Mgrs Genesis Kes. 1.2Bn Kes. 116.3Bn As at
Slide 6: Strategy: we delivered to promise
Strategy: we delivered to promise 2009-2014 Strategic themes 2014 Position 1 Grown market capitalization by KES 18.7 Bn PERFORMANCE Constantly deliver market representing 334% growth over the period. beating returns NAV return outperformed the NSE by 19% over the period 2 Diversify by geography
Slide 7: Performance against strategy
Performance against strategy Kes. M 2010 2011 2012 2013 2014 AUM 8,972 10,756 17,551 22,891 30,121 Centum Portfolio 8,972 9,965 14,859 18,257 22,926 3rd Party funds - 791 2,692 4,634 7,195 Strategy NAV (Kes m) 6,972 8,756 11,430 15,399 20,640 Total Return (Kes. m) 926 1,784 2,675 3,969 5,240 Total r
Slide 8: Performance
Performance 288% growth in NAV, 19% outperformance to NSE 19% average outperformance against the NSE over 288% growth in NAV. Share price currently trading 5 years at a 17% premium to NAV Centum 40.00 NSE 20 Centum 40 Share price NAV Year NAV Return Outperformance Return 34.47 30 2010 56% 43% 13% 20
Slide 9: Performance
Performance 334% growth in market capitalization as at 31 March 2014 Every Shilling invested in Centum shares in 2009 was worth Kshs 4.34 on 31 March 2014 30 Book Value Mkt Cap 26.6 24.29 25 22.9 22.9 20 15 10 5.9 Mkt capitalization increase by KES 18.7 Bn 5 5.6 0 2009 2010 2011 2012 2013 2014 Jun-1
Slide 10: Diversification
Diversification 17% of the portfolio is outside Kenya. PE & REI account for 83% of the portfolio Geographical Diversification Geographical Diversification across Asset Classes 19 19 AUMs outside Kenya (31 March 2014) 14 Kenya East Africa Other SSA countries 7 QPE REI 1 23% 26% 2010 2011 2012 2013 20
Slide 11: Growth
Growth Total AUMs have grown x23, increasing from by KES 6Bn to KES 146Bn. Net Asset Value has increased by 368%, increasing from KES 6Bn to KES 23Bn Total AUMs Net Asset Value 150 Budgeted 25 Budgeted 147 23 Actual Actual 21 30 20 15 16 23 22 15 14 13 18 11 16 14 9 9 10 11 7 9 9 5 0 2010 2011 2012
Slide 12: Brand – Delivering through people
Brand – Delivering through people Attracted and retained high caliber professionals, supporting the delivery of promise • Leadership Development program – Focused on identifying, developing and retaining the crop of leaders essential to drive Centum’s strategy. • Recruited several highly qualified t
Slide 13: Brand - Key Awards
Brand - Key Awards Our passion for excellence 1. Financial Reporting Excellence (FiRe) Awards 2013 Centum won the following awards at the 2013 FiRe award ceremony; i. Overall winner East Africa ii. Overall Winner Kenya iii. Winner - Industrial Commercial & Services category iv. Winner - Listed Entit
Slide 14: Costs
Costs Maintained costs below 2.3% over the period • Prudent cost management and monitoring have ensured that costs have been maintained at below our 2.5% objective over the strategy period. Cost efficiency 2.5% 2.2% 2.0% 2.3% 1.6% 1.5% 14
Slide 15: Key metrics
Key metrics KPI 2010 2011 2012 2013 2014 Return on Equity 56% 37% 9% 18% 42% Earnings per Share (Kes Group) 1.64 3.44 1.79 3.77 4.23 NAV per Share (Kes) 13.76 18.86 20.57 24.25 34.47 Gearing - 16% 5% 20% 23% Cost Efficiency 2.2% 2.0% 1.6% 2.3% 1.5% Liquidity (Kes Bn) 2.1 0.2 1.5 2.7 1.5 Bond Covenan
Slide 16: Transition from Passive to Active Investor
Transition from Passive to Active Investor We established operational subsidiaries to drive growth Company Comments • Athena Properties was established to manage Centum's real estate developments as well as those of third party clients. • The Athena team has over 100 year cumulative real estate deve
Slide 17: Dividend Payout
Dividend Payout In line with our 2009-2014 strategy, the directors do not recommend a dividend for the year ended 31 March 2014 • In line with our 2009-2014 strategy, we do not propose the payment of any dividend in the current year. • Over the strategy period, we have outperformed the market by an
Slide 18: Agenda
Agenda 1• FY2009-14 Strategy (Centum 2.0) Update 2• Business Unit Review 3• Financial Performance 4• FY2015-19 Strategy (Centum 3.0) 5• Q&A 18
Slide 19: Business Unit Review
2) Business Unit Review a• Private Equity b• Real Estate & Infrastructure c• Quoted Private Equity 19
Slide 20: a) Private Equity
a) Private Equity Private Equity Portfolio Companies 20
Slide 21: PE Portfolio Evolution
PE Portfolio Evolution 292% growth in PE Portfolio since 2009 Fair Value Attribution PE Portfolio Value (KES bn) 14.1 14 0.5 13 1.1 10.5 8.6 12 7.6 2.0 11 14.1 5.5 0.1 10 9 10.5 8 FV March Additions Earnings Multiples Share FV March 2010 2011 2012 2013 2014 2013 Mvt Mvt Price Mvt 2014 Fair Value Mov
Slide 22: Drivers of Return
Drivers of Return PE has successfully driven and executed major value creation activities within existing investee companies that resulted in a 116% and 346% increase in dividend income and value uplift in the year Company Comments • Acquired a 35% stake in January 2013. Dividend yield of 13% realiz
Slide 23: Portfolio Allocation
Portfolio Allocation 75% of PE portfolio allocated to Beverages and Financial Services. 64% of the portfolio valuation based on Multiples Allocation by Sector Valuation Basis 10% 4% 18% 15% 38% 14% 64% 37% Beverages Financial Services Multiples Recent Price Automotive Other Trading Price NAV Valuati
Slide 24: Business Unit Review
2) Business Unit Review a• Private Equity b• Real Estate & Infrastructure c• Quoted Private Equity 24
Slide 25: Real Estate & Infrastructure
Real Estate & Infrastructure Real Estate Portfolio Companies Project & Development Management Service Company Real Estate Development Companies 25
Slide 26: Real Estate Portfolio Evolution and NAV Return
Real Estate Portfolio Evolution and NAV Return Real Estate portfolio value (KES bn) Portfolio Value Attribution (KES bn) 11 0.1 12 0.4 10 10 8 6.0 8 6 5 6 4 11.0 4 3 4 2 5.2 2 0 0 0 2010 2011 2012 2013 2014 Opening Additions Fair Realized Disposals Closing Portfolio Value Gains Portfolio RE&I NAV re
Slide 27: b) Real Estate & Infrastructure
b) Real Estate & Infrastructure i• Athena Properties ii • Two Rivers iii• Pearl Marina iv • Other update 27
Slide 28: Athena Properties Limited
i) Athena Properties Limited • East Africa’s top real estate development firm, with a key focus on large scale mixed use developments. • Our goal is to become Sub-Saharan Africa lifestyle developer of choice VISION • We offer highly regarded complete suite of end to end solutions To be Sub Saharan A
Slide 29: Athena Properties – Crafting real estate strategies
Athena Properties – Crafting real estate strategies for Centum and for third parties Athena’s goal is to develop several large scale mixed use developments over the next strategy period • Track record – Athena has been able to attract a pool of highly qualified professionals who have been instrument
Slide 30: Two Rivers
ii) Two Rivers Key Facts ̶ 102 Acres ̶ Located in the Diplomatic Blue Zone near the UN Complex ̶ 851,000M2 approved bulk ̶ Phase 1 construction in progress ̶ Two Rivers mall is the anchor development 30
Slide 31: Two Rivers Development - Update
Two Rivers Development - Update Development • Infrastructure construction on track – Permanent infrastructure to be commissioned in June 2015 • In finalization stages of the sale of 54,600 m2 (over 580,000 sq ft) bulk rights to developers Funding • We have signed investment commitments from two inst
Slide 32: Two Rivers Mall
Two Rivers Mall Key Facts ̶ 900,000 sq.ft total GLA comprising of : 670,000 sq.ft retail GLA 230,000 sq.ft office GLA ̶ Over 160 retail outlets ̶ Over 3,600 parking bays Opening October 2015 32
Slide 33: Carrefour – Two Rivers Mall Anchor Tenant
Carrefour – Two Rivers Mall Anchor Tenant 4th 10,105 Stores 364,795 Largest retail group in the International multi-format, Employees worldwide world, with 1,421 Hypermarkets multichannel and multi-local retailer 110,000 sq.ft 34 Countries Committed retail space in Two a major player in global retai
Slide 34: Two Rivers Mall – 50% let by value
Two Rivers Mall – 50% let by value of which 45% is reserved by international name brands Everything under one roof … - Food beverage and entertainment - Over 25% taken up by new and existing F&B offers, providing signature restaurant, fine dining, casual dining and QSRs - Indoor and outdoor entertai
Slide 35: Two Rivers Mall – 50% let by value
Two Rivers Mall – 50% let by value of which 45% is reserved by international name brands Everything under one roof… - Jewelers and accessories - Leading local and international brands for men and women - Home zone - A home zone introducing a 43,000 sq ft home furniture and lifestyle sub anchor and a
Slide 36: Two Rivers - Other Development Components
Two Rivers - Other Development Components Two Rivers has generated significant market interest and attracted investments partners for: i. 3 star hotel • We have attracted a high quality development partners for the construction and operation of the 3 star hotel • Construction to commence in Septembe
Slide 37: Pearl Marina
iii) Pearl Marina Key Facts ̶ 361 Acres on Lake Victoria ̶ Over 3.8km of lake frontage - ideal for waterfront development ̶ Attractive site with variety of flora and fauna ̶ Additional 40 acres lakefront prime land acquired in the year. ̶ Looking to acquire additional strategic land parcels in FY201
Slide 38: Pearl Marina – Vision
Pearl Marina – Vision To develop a premium world-class destination address recognized as the number one tourism destination in East Africa and beyond The development has competitive advantage, as there is no other development of its kind in Eastern Africa Pearl Marina will have unparalleled waterfro
Slide 39: Pearl Marina – Prestigious residential villas in Phase 1
Pearl Marina – Prestigious residential villas in Phase 1 Pearl Marina phase one will break ground in August 2014 and will involve the development of residential villas and related infrastructure. The villas will provide: – the most prestigious and most sort after mix of villas. – lifestyle product t
Slide 40: Pearl Marina – 4 Br Villas
Pearl Marina – 4 Br Villas Signature state of the art 4 bedroom villas on the lake front uniquely designed to offer ultimate privacy and tranquility Will provide expansive views across the lake Home Owners will choose from a range of three different finishes 40
Slide 41: Pearl Marina – 3 Br Villas
Pearl Marina – 3 Br Villas Luxury three bedroom homes set in clusters of 5-8 units Exquisitely and contemporary designed green homes with stunning views of lake Victoria Each cluster compound will provide a swimming pool, gazebo, kids play area and landscaped section Designs should be based on susta
Slide 42: Pearl Marina – 2 Br Villas
Pearl Marina – 2 Br Villas Luxury two bedroom residences set in unique blocks with naturally landscaped areas Home owners will have the attractive opportunity to enroll them to a rental pool 42
Slide 43: Pearl Marina – Club House
Pearl Marina – Club House Will have conference facilities, bar, lounge, kids play area & swimming pool. A wide range of activities including sports, yacht, spa, tennis, cycling, swimming, fishing, basket ball, mini-soccer and kids play areas 43
Slide 44: Pearl Marina – Cluster Concept
Pearl Marina – Cluster Concept Each cluster will have 5-8 villas, a swimming pool, gazebo, kids play area and naturally landscaped section. The cluster concept will offer complete privacy and unmatched tranquility Set to introduce the finest living experience in Uganda that is second to none. Each h
Slide 45: Pearl Marina – Other development components
Pearl Marina – Other development components School • We are in advanced discussions with an international school brand. The school will be developed in Phase 1(b) of the development. • The school will offer international curriculum and will be a day and boarding school Hospital • In discussions with
Slide 46: Other updates – Investment in Broll East Africa
iv) Other updates – Investment in Broll East Africa Broll East Africa – Joint-venture between Centum (30%) and Broll Property Group(70%) Invested in joint venture with Broll Property Group, the largest commercial property services group in Africa, in the establishment of Broll East Africa. Partnersh
Slide 47: Business Unit Review
2) Business Unit Review a• Private Equity b• Real Estate & Infrastructure c• Quoted Private Equity 47
Slide 48: Consistently outperformed the NSE
Consistently outperformed the NSE QPE consistently outperformed the NSE over the 5 years and delivered on average outperformance of 18% over the 5 years Centum Year QPE/CAM Return NSE 20 Return Outperformance 2010 56% 43% 13% 2011 10% -4% 14% 2012 0% -13% 13% 2013 53% 44% 9% 2014 43% 2% 41% Geometri
Slide 49: CAM Track Record
CAM Track Record 240% return in less than 5 years 300.0% 250.0% 200.0% Cummulative Return 150.0% 100.0% 50.0% 0.0% Apr. Jun. Aug. Oct. Dec. Feb. Apr. Jun. Aug. Oct. Dec. Feb. Apr. Jun. Aug. Oct. Dec. Feb. Apr. Jun. Aug. Oct. Dec. Feb. Apr. Jun. Aug. Oct. Dec. Feb. 09 09 09 09 09 10 10 10 10 10 10 11
Slide 50: QPE record KES 1.8Bn return in FY2014
QPE has grown from managing our liquidity Delivered a record breaking KES 1.8Bn return in FY2014 6.0 0.3 0.6 5.0 1.8Bn 0.7 0.2 4.0 0.2 0.1 5.2 3.0 3.7 2.0 Opening Dividends Interest Other income Realized Unrealized Net cash Closing Portfolio gains gains movement Portfolio 50
Slide 51: Portfolio Allocation
Portfolio Allocation 74% of QPE portfolio allocated to Equities. 63% of the portfolio is outside Kenya Allocation by Assets Allocation by Geography Kenya East Africa Other SSA countries 26% 23% 37% 74% Quoted Securities Bonds 40% 51
Slide 52: Our chosen space
Our chosen space We play in all the major Sub-Saharan Africa Markets TUNISIA Mediterranean Sea Canary Islands MOROCCO (SPAIN) LIBYA ALGERIA EGYPT WESTERN SAHARA MAURITANIA MALI NIGER CHAD SENEGAL GAMBIA BURKINA SUDAN DJIBOUTI GUINEA BISSAU GUINEA BENIN NIGERIA SOMALIA TOGO ETHIOPIA IVORY SIERRA LEON
Slide 53: Our Product Offering
Our Product Offering We have several vehicles to attract 3rd party funds 1. Segregated funds 2. Private wealth 4. Collective 3. Cash Management management management Investment Schemes • Professional • Planning and • Treasury & • Pooled management of management of liquidity investment institutional
Slide 54: The Collective Investment Scheme (CIS)
The Collective Investment Scheme (CIS) ..a uniquely differentiated CIS with a SSA scope Umbrella Fund, Themed to capture the Africa rising Centum Africa CIS opportunity Africa Money Africa Fixed Africa Balanced Africa Equities Markets Fund Income Fund Fund Fund Sub funds; tailored to suit different
Slide 55: Agenda
Agenda 1• FY2009-14 Strategy (Centum 2.0) Update 2• Business Unit Review 3• Financial Performance 4• FY2015-19 Strategy (Centum 3.0) 5• Q&A 55
Slide 56: Group Statement of Comprehensive income
Group Statement of Comprehensive income 23% increase in PBT, 22% increase in PAT Kes. m FY2014 FY2013 Var Dividend income 460 301 53% • 25% improvement in income due to improved Portfolio performance Interest income 218 223 (2%) Other income 279 89 213% • Increase in portfolio costs on account of gr
Slide 57: Group Statement of Financial Position
Group Statement of Financial Position 56% growth in total assets as at 31 March 2014 Assets (Kes M.) FY2014 FY2013 Liabilities (Kes M.) FY2014 FY2013 Investment property 10,845 5,456 Borrowings 5,492 4,150 Equipment & Intangibles 1,049 49 Payables and accruals 1,840 289 Investment in associates 3,90
Slide 58: Cash flow Statement
Cash flow Statement Kes M 2014 2013 Internally generated funds: 3,550 2,167 Investing activities: Equity & Investment Property (4,776) (3,753) Equipment & intangibles (18) (27) (4,794) (3,780) Financing Activities: Net Proceeds from borrowings - 3,150 Dividends paid to shareholders (45) (2) Interest
Slide 59: Company statement of comprehensive income
Company statement of comprehensive income Kes. mc FY2014 FY2013 Var Dividend income 1,789 283 531% Interest income 40 108 -63% • Increased dividend income from Other income 11 80 -86% investment portfolio and subsidiaries Realized gains 149 1,433 -90% • Improvement in performance & Unrealized gains
Slide 60: Balance Sheet
Balance Sheet Assets Liabilities & Shareholder Capital Kes M. 2014 2013 Kes M. 2014 2013 Investment in Borrowings 5,492 4,150 8,159 3,442 subsidiaries Payables and accruals 326 230 Equipment & Intangibles - 46 Unclaimed dividends 29 33 Investment in associates 6,594 6,153 Current tax liability 28 19
Slide 61: Agenda
Agenda 1• FY2009-14 Strategy (Centum 2.0) Update 2• Business Unit Review 3• Financial Performance 4• FY2015-19 Strategy (Centum 3.0) 5• Q&A 61
Slide 62: Our Strategic Objectives 5 Years Ago vs. Today
Our Strategic Objectives 5 Years Ago vs. Today: Summary of Key Changes CENTUM 2.0 CENTUM 3.0 Developed three business units, with PE Focus will be placed on 8 priority sectors Focus having no specific sector focus Active promoter and developer of investment Portfolio manager looking for growth Appro
Slide 63: Sector Growth
Sector Growth Real Estate Energy Agriculture Real estate sector has been Research shows energy demand Best fit is in integrating growing quickly for the last 5 yrs. will outstrip supply for next 20 primary production with Sector growth years: tariffs likely to remain processing. The demand for affor
Slide 64: Sector Growth (cont’d)
Sector Growth (cont’d) FMCG ICT Africa’s middle class is expected In Kenya, ICT grew by an Sector growth to be more than 40% by 2020 estimated 20% annually from By 2020, >50% of African 1999-2009. households will have disposable There are more mobile money income, rising from 85M to accounts than ba
Slide 65: FY2015-19 Strategic themes
FY2015-19 Strategic themes 1 RETURN • Generate 35%+ annualized return over the strategic period • Develop, scale and grow investment capabilities in the 8 new 2 sectors, Agriculture, Education & Health, Energy, Financial FOCUS Services, FMCG and ICT and further grow our existing Real Estate investme
Slide 66: Funding
Funding Centum 3.0 strategy will be largely funded through internally generated funds and shall retain the zero-dividend policy for the FY2014/19 Period Project Development Growth Phase Mature Growth Centum’s internally generated Equity investment by financial Debt funding to unlock equity. funds th
Slide 67: Agenda
Agenda 1• FY2009-14 Strategy (Centum 2.0) Update 2• Business Unit Review 3• Financial Performance 4• FY2015-19 Strategy (Centum 3.0) 5• Q&A 67
Slide 68: CENTUM
© CENTUM
Slide 69: Centum Investment Company Ltd. contact details
Centum Investment Company Ltd. Tel +254 20 316303 International House, Mobile +254 722 205339 5th Flr. Mama Ngina St. Fax +254 20 223223 PO Box 10518-00100 Email info@centum.co.ke Nairobi, Kenya www.centum.co.ke 69
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