S.C. Fondul Proprietatea SA · BVB:FP
S.C. Fondul Proprietatea SA — Fondul Proprietatea — Investor Day (April 2012)
60 slides from S.C. Fondul Proprietatea SA's investor day presentation, Apr 24, 2012
Slide 1: Fondul Proprietatea Analyst and Investor Days
23-24 April 2012 Analyst and Investor Days Bucharest, Romania FONDUL PROPRIETATEA This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 2: Disclaimer
1 Disclaimer This presentation is made solely to the intended recipient and should not be distributed to, or acted upon by, any other person. It is for general information only and reflects the personal views of the presenter. Nothing herein is intended to constitute advice on investment, legal or t
Slide 3: Energy Sector Trends
ENERGY SECTOR TRENDS This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 4: Romanian Electricity Market 2010-2011
SPRING 2012 ANALYST AND INVESTOR DAYS 3 Romanian Electricity Market 2010-2011 • 6% YoY increase in electricity production for 2011, from 58 TWh to 61.4 TWh • 3% YoY increase in electricity consumption for 2011, from 52 TWh to 53.7 TWh Electricity Production and Internal Consumption (TWh) OPCOM Price
Slide 5: Electricity Production
SPRING 2012 ANALYST AND INVESTOR DAYS 4 Electricity Production • Significant decrease in hydro-based electricity production in 2011 due to drought, which led to an increase in coal-based electricity production • Several wind projects completed in 2011 2011 2010 Source: National Institute of Statisti
Slide 6: Romanian Gas Market 2010-2011
SPRING 2012 ANALYST AND INVESTOR DAYS 5 Romanian Gas Market 2010-2011 • 1 % YoY decrease in gas production for 2011 to 125.1 TWh • 4% YoY increase in gas consumption for 2011, from 145 TWh to 150.8 TWh • 83% of consumption is covered by internal production Gas Production and Consumption (TWh) 2010 2
Slide 7: Gas Prices
SPRING 2012 ANALYST AND INVESTOR DAYS 6 Gas Prices 2006 – 2011 Romania Gas Prices (EUR / 1000 m³) 300.0 250.0 200.0 150.0 100.0 50.0 0.0 2006 2007 2008 2009 2010 2011 Medium size industries Medium size household 2011 Gas Prices (EUR / 1000 m³) 500.0 400.0 300.0 200.0 100.0 0.0 EU27 Bulgaria Czech Re
Slide 8: Energy Import Dependency, RO vs EU
SPRING 2012 ANALYST AND INVESTOR DAYS 7 Energy Import Dependency, RO vs EU • Romania has the lowest energy import dependency in the European Union • Energy imports taken into account: oil, electricity, gas and petroleum products Source: Eurostat, 2011 This material is intended solely for the recipie
Slide 9: Fund Information
FUND INFORMATION This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 10: The Fund – Key Facts
SPRING 2012 ANALYST AND INVESTOR DAYS 9 The Fund – Key Facts Fund Details as of 31 March 2012 Share Price and Discount Base Currency RON 0.7500 -70.0% Fund Launch Date 28 December 2005 Franklin Templeton 29 September 2010 Appointment Date 0.6500 -60.0% Listing Date 25 January 2011 0.5500 -50.0% Valu
Slide 11: The Fund Manager–Bucharest Branch and Summary of the Management Contract
SPRING 2012 ANALYST AND INVESTOR DAYS 10 The Fund Manager–Bucharest Branch and Summary of the Management Contract John Lusk Franklin Templeton Investment Management Ltd., Bucharest FTIML Director & Exec. Vice-President, Portfolio Branch acting as Sole Director and Fund Manager Operations Fees Dr Mar
Slide 12: Board of Nominees – Current Structure
SPRING 2012 ANALYST AND INVESTOR DAYS 11 Board of Nominees – Current Structure Current Members Position Current Position Sorin Mindrutescu Interim Chairman Managing Director, Oracle Romania Cristian Busu Member Director, Marfin Bank Julian Healy Member Independent non-Executive Board Director Piotr
Slide 13: Shareholders Structure
SPRING 2012 ANALYST AND INVESTOR DAYS 12 Shareholders Structure Shareholders Structure* (% Held) Evolution 100% 6% 9% 8% 11% 11% 11% 14% 20% Top Shareholders** 27% 75% 10% 9% 37% Elliott 43% 48% 13.91% Associates** 9% Percen tag e Held 31% 50% 28% City of London 9% Investment 7.21% 10% 37% 9% Manage
Slide 14: Net Asset Value
SPRING 2012 ANALYST AND INVESTOR DAYS 13 Net Asset Value NAV (RON) / Share Cumulative Performance YTD: +10.5% as at 31 March 2012 Cumulative Performance Since December 2010: +10.0% as at 31 March 2012 Dividend 1.2500 0.03141 1.1942 1.2004 1.1919 1.1951 1.1922 1.1692 1.1754 1.1625 1.1352 1.1450 1.129
Slide 15: Portfolio Management
PORTFOLIO MANAGEMENT This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 16: Portfolio Structure (I)
SPRING 2012 ANALYST AND INVESTOR DAYS 15 Portfolio Structure (I) • As of 31 March 2012, the portfolio was heavily weighted towards the electricity, oil and gas sectors (approx. 87% of the NAV), offering unique exposure to the energy sector • Acquisitions for the 12-month period ended 31 December 201
Slide 17: Portfolio Structure (II)
SPRING 2012 ANALYST AND INVESTOR DAYS 16 Portfolio Structure (II) • As of 31 December 2010, FP’s portfolio included stakes in 83 companies (28 listed and 55 unlisted), both privately held and State-owned, ranging from less than 1% to 100% • As of 31 March 2012, the portfolio included stakes in 73 co
Slide 18: FP Market Performance
SPRING 2012 ANALYST AND INVESTOR DAYS 17 FP Market Performance NAV vs. Market Capitalization (EUR bn)* FP Share Price and Free Float** 4 0.8 110% 0.7 3 90% 2.10 Unlisted 0.6 2 70% 0.11 0.5 Cash 1 50% 1.47 1.72 0.4 Listed 0 0.3 30% Jan-11 Mar-11 May-11 Jul-11 Sep-11 Nov-11 Jan-12 Mar-12 NAV Market Ca
Slide 19: Largest Holdings
SPRING 2012 ANALYST AND INVESTOR DAYS 18 Largest Holdings No. Portfolio Company Status % Stake* Majority Shareholder NAV EUR mn % in Total NAV 1 OMV Petrom Listed–SPO 2012 20% OMV 1,079.3 29.6% 2 Hidroelectrica IPO 2012 20% Romanian State 762.8 20.9% 3 Romgaz IPO 2012 15% Romanian State 278.7 7.6% 4
Slide 20: 2011–2012 SPO & IPO Timeline
SPRING 2012 ANALYST AND INVESTOR DAYS 19 2011–2012 SPO & IPO Timeline • After the expected IPOs, the weight of listed holdings will increase from 40% of NAV to 72% of NAV as of 31 March 2012 • Law 247 / 2005 specified that all state-owned companies in the Fund’s portfolio must be listed by the end o
Slide 21: General Elections (October / November 2012)
SPRING 2012 ANALYST AND INVESTOR DAYS 20 General Elections (October / November 2012) Voting intentions - March 2012 UDMR 7.0% PP-DD 16.6% PDL 18.6% USL 48.4% • The Social-Liberal Union (USL) is a political alliance formed on 5 February 2011 between three opposition parties: the Social Democratic Par
Slide 22: Disposal of the Unlisted Power and Gas Distribution Companies
SPRING 2012 ANALYST AND INVESTOR DAYS 21 Disposal of the Unlisted Power and Gas Distribution Companies • In March 2012, the Fund Manager selected Citigroup Global Markets Ltd. as exclusive intermediary to facilitate one of more transactions involving the Fund’s holdings in the unlisted power and gas
Slide 23: FP Power and Gas Distribution and Supply Stakes
SPRING 2012 ANALYST AND INVESTOR DAYS 22 FP Power and Gas Distribution and Supply Stakes The FP portfolio comprises stakes in electricity and gas distribution and supply companies across the entire industry. Ownership Structure % Ownership Romanian Electricity Market Shares (%) – 2010 Private Distri
Slide 24: Top 20 Portfolio Holdings–Dividends
SPRING 2012 ANALYST AND INVESTOR DAYS 23 Top 20 Portfolio Holdings–Dividends 2011 Dividend 2012 FP Net 2011 FP Net Top 20 Holdings* 2011 Profit** 2010 Profit Payout % Dividend Dividend 1 Hidroelectrica n/a 292.37 90% n/a 52.5 2 OMV Petrom 3,685.61 2,189.70 46% 353.1 201.6 3 Romgaz n/a 651.20 110% n/
Slide 25: Corporate Governance Code for SOEs
SPRING 2012 ANALYST AND INVESTOR DAYS 24 Corporate Governance Code for SOEs Main Provisions of the Corporate Governance Code • The Romanian Government approved on 30 November 2011 an Emergency Government Ordinance 109/2011 regarding the corporate governance of State Owned Enterprises with the follow
Slide 26: Hidroelectrica
SPRING 2012 ANALYST AND INVESTOR DAYS 25 Hidroelectrica Themes • IPO—should take place by the end of Financial results October 2012. Consortium of investment Prelim. banks selected. mil. RON 2009 2010 2011 • Long term bilateral contracts—under Sales 2,421 3,274 2,999 negotiation. At stake there is a
Slide 27: Romgaz
SPRING 2012 ANALYST AND INVESTOR DAYS 26 Romgaz Themes • IPO—Consortium of investment banks Financial results selected, engagement letter signed, Prelim. preparation underway, expected 3Q 2012 mil. RON 2009 2010 2011 • Gas price liberalization—Government to Sales 3,562 4,124 4,357 present a liberali
Slide 28: Nuclearelectrica
SPRING 2012 ANALYST AND INVESTOR DAYS 27 Nuclearelectrica Themes Financial results • IPO—should take place by the end of mil. November 2012. Consortium of RON 2010 2011* 2012** investment banks to submit offers by 21 May 2012 Sales 1,540 1,641 1,793 • Budget allocations for heavy water— Operating st
Slide 29: CE Oltenia
SPRING 2012 ANALYST AND INVESTOR DAYS 28 CE Oltenia Themes • Merger – the final GSM approval of the merger SNLO 11.5% of CE Craiova, CE Turceni, CE Rovinari and SNLO is to take place on 27th of April CE Craiova CE Turceni 21.3% 42.2% • CE Oltenia highlights: -Installed capacity: 3,750 MWh -15 lignit
Slide 30: ENEL
SPRING 2012 ANALYST AND INVESTOR DAYS 29 ENEL • Business is regulated. Tariffs are set by a regulatory agency (ANRE) which allows the company to earn 10% return on the Regulated Asset Base. Current regulatory period ends in 2012 • There has been no change in distribution tariffs for 2012 • PUT optio
Slide 31: GDF SUEZ Energy Romania
SPRING 2012 ANALYST AND INVESTOR DAYS 30 GDF SUEZ Energy Romania Consolidated numbers (supply and distribution) • It is the largest domestic gas distributor and the biggest mil. RON 2008 2009 2010 2011* gas supplier on the regulated market, enjoying a strong position on the competitive market as wel
Slide 32: Update on Ongoing Litigations
UPDATE ON ONGOING LITIGATIONS This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 33: Update on Ongoing Litigations
SPRING 2012 ANALYST AND INVESTOR DAYS 32 Update on Ongoing Litigations •More than 100 cases ongoing involving the Fund as claimant or defendant, with primarily 4 types of counterparties: – Portfolio Companies – Romanian State – Shareholders – Individuals who are unhappy with compensation received fr
Slide 34: Corporate Actions
CORPORATE ACTIONS This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 35: Secondary Listing: WSE Recommendation (I)
SPRING 2012 ANALYST AND INVESTOR DAYS 34 Secondary Listing: WSE Recommendation (I) On 4 April 2012, the Fund’s shareholders: • Approved in principle the secondary listing of the Fund on the Warsaw Stock Exchange • Approved an instruction to the Franklin Templeton Investment Management Ltd Bucharest
Slide 36: Secondary Listing: WSE Recommendation (II)
SPRING 2012 ANALYST AND INVESTOR DAYS 35 Secondary Listing: WSE Recommendation (II) Progress to Date: • Fund Manager made the recommendation to list on the Warsaw Stock Exchange • Initiated selection process for Investment Bank/Consortium to sponsor the secondary listing • Meetings with Investment B
Slide 37: Fondul Proprietatea: 14th largest company on the WSE
SPRING 2012 ANALYST AND INVESTOR DAYS 36 Fondul Proprietatea: 14th largest company on the WSE Largest Companies Listed on the Warsaw Stock Exchange (WIG – 20) Company Market Capitalisation (EUR* billion) PKOBP 10.18 PEKAO 9.91 PGE 8.72 KGHM 6.98 PZU 6.73 PGNIG 5.70 TPSA 5.51 PKN Orlen 3.89 BRE 2.89
Slide 38: Buyback Programs
SPRING 2012 ANALYST AND INVESTOR DAYS 37 Buyback Programs Update on Completed and Proposed Buy Back Programs: • 240.3 million shares equivalent to 1.74% of the Fund’s issued share capital were bought back as at 30 September 2011, at an average price of RON 0.4994, for a total amount of RON 120.3 mil
Slide 39: Buyback Programme vs. Dividend distribution (I)
SPRING 2012 ANALYST AND INVESTOR DAYS 38 Buyback Programme vs. Dividend distribution (I) Funding sources (+) A Cash & cash equivalents (Cash, Bank deposits and RON 469.2m as at 31 March 2012 Government securities) Receivables RON 51.5m as at 31 March 2012 2011 net cash dividends from portfolio compa
Slide 40: Buyback Programme vs. Dividend distribution (II)
SPRING 2012 ANALYST AND INVESTOR DAYS 39 Buyback Programme vs. Dividend distribution (II) Buyback programme considerations: • Potential positive impact on NAV per share, due to the discount of share price to NAV (50.2% as at 31 March 2012) and on share price and earnings per share. Any increase in N
Slide 41: Taxation of the Fund
SPRING 2012 ANALYST AND INVESTOR DAYS 40 Taxation of the Fund Portfolio Company Dividend Effective Tax Rates Romanian Investments Other EU Investments >10% held for >2 years 0% 0% Otherwise 16% 16% 95% of gross dividend income received at 0% tax rate in 2011. Portfolio Company Capital Gains Effectiv
Slide 42: 2012 Upcoming Events
2012 UPCOMING EVENTS This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 43: 2012 Upcoming Events
SPRING 2012 ANALYST AND INVESTOR DAYS 42 2012 Upcoming Events Date Event 25 April 2012 Annual Shareholders Meeting – Romania 15 May 2012 Q1 - 2012 Report and Conference Call 17 May 2012 Romania Capital Markets Investor Symposium in London 22 May 2012 Romania Capital Markets Investor Symposium in New
Slide 44: Agenda of the EGM and OGM – 25 April 2012
SPRING 2012 ANALYST AND INVESTOR DAYS 43 Agenda of the EGM and OGM – 25 April 2012 1] Approval to buy-back 1.1 billion shares or 7.9% of the subscribed shares at a price between RON 0.2 to RON 1.5, subject to cash availability. Shares repurchased will be cancelled 2] Approval of the 2011 financial s
Slide 45: Appendix A – Distribution companies
APPENDIX A – Distribution companies This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 46: Distribution and Supply Assets
SPRING 2012 ANALYST AND INVESTOR DAYS 45 A Unique and Attractive Opportunity 1 Unique Portfolio • The FP assets provide a unique opportunity to investors to gain a foothold in the utilities industry in Romania • Significant portfolio which delivered over 150TWh energy in 2010 • Balanced and attracti
Slide 47: Appendix B – Taxes
APPENDIX B – Taxes This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 48: Romanian Taxation of Investors
SPRING 2012 ANALYST AND INVESTOR DAYS 47 Romanian Taxation of Investors Country where investor is Romanian Dividend Withholding Tax Romanian Capital Gains Tax tax resident Without tax residence With tax residence Without tax residence With tax residence certificate certificate certificate certificat
Slide 49: Romanian Taxation of Investors
SPRING 2012 ANALYST AND INVESTOR DAYS 48 Romanian Taxation of Investors Country where investor is Romanian Dividend Withholding Tax Romanian Capital Gains Tax tax resident Without tax residence With tax residence Without tax residence With tax residence certificate certificate certificate certificat
Slide 50: Gross Book Value and NAV – Listed Companies
SPRING 2012 ANALYST AND INVESTOR DAYS 49 Gross Book Value and NAV – Listed Companies Company Gross Book Value (RON)* NAV as at 31 December 2011 (RON) Alcom SA 471,052 2,766,719 Alro SA 176,479,575 236,875,320 Azomures SA 22,840,151 79,015,589 Banca Transilvania 56,051,342 45,984,712 BRD – Groupe Soc
Slide 51: Gross Book Value and NAV – Listed Companies
SPRING 2012 ANALYST AND INVESTOR DAYS 50 Gross Book Value and NAV – Listed Companies Company Gross Book Value (RON)* NAV as at 31 December 2011 (RON) Romaero SA 58,533,949 13,838,340 Romplumb SA 19,249,219 - Severnav SA 14,014,409 2,070,144 Telerom Proiect SA 236,083 49,731 Transelectrica SA 262,614
Slide 52: Gross Book Value and NAV – Unlisted Companies
SPRING 2012 ANALYST AND INVESTOR DAYS 51 Gross Book Value and NAV – Unlisted Companies Company Gross Book Value (RON)* NAV as at 31 December 2011 (RON) Aeroportul International Mihail Kogalniceanu Constanta SA 1,490,898 2,494,257 Aeroportul International Timisoara – Traian 2,652,588 7,817,689 Vuia S
Slide 53: Gross Book Value and NAV – Unlisted Companies
SPRING 2012 ANALYST AND INVESTOR DAYS 52 Gross Book Value and NAV – Unlisted Companies NAV value as at 31 December 2011 Company Gross Book Value (RON)* (RON) E.ON Gaz Distributie SA 37,470,244 115,571,013 E.ON Moldova Distributie SA 131,073,011 220,765,398 Electrica Distributie Muntenia Nord SA 165,
Slide 54: Gross Book Value and NAV – Unlisted Companies
SPRING 2012 ANALYST AND INVESTOR DAYS 53 Gross Book Value and NAV– Unlisted Companies Company Gross Book Value (RON)* NAV as at 31 December 2011 (RON) Romgaz SA 416,301,444 1,220,241,044 Salubriserv SA 207,601 7,580,400 Simtex SA 3,059,858 - Societatea Nationala a Sarii SA 76,347,715 86,791,391 Worl
Slide 55: Appendix C – Update on Litigations
APPENDIX C – Update on Litigations This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 56: Litigations with Portfolio Companies
SPRING 2012 ANALYST AND INVESTOR DAYS 55 Litigations with Portfolio Companies Romgaz donation: Other cases: • In August 2010 the Romanian Government enacted •Cases against five companies (representing more than an Ordinance giving the “possibility” to Romgaz to 25% of the NAV of the Fund) to block t
Slide 57: Litigations with the Romanian State
SPRING 2012 ANALYST AND INVESTOR DAYS 56 Litigations with the Romanian State Since the Fund’s inception, there have been a series of litigations with the Romanian State to rectify failure by the State to properly transfer to the Fund certain assets, specified in the legislation creating the Fund, in
Slide 58: Litigations with Shareholders
SPRING 2012 ANALYST AND INVESTOR DAYS 57 Litigations with Shareholders • Most cases involve Ioana Sfiraiala. She claims alleged breach by the Fund’s previous management of a requirement to publish a draft Constitutive Act in the Official Gazette with the first calling notice of the Fund’s 6 Septembe
Slide 59: Thank You!
THANK YOU! This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.
Slide 60: For further information please contact
For further information please contact: investor.relations@fondulproprietatea.ro This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not intended for public use.