Kuwait Projects Company Holding (k.s.c.p.) · KSE:KPROJ
Kuwait Projects Company Holding (k.s.c.p.) — Kuwait Projects Company Holding (KIPCO) — Investor Presentation (June 2010)
46 slides from Kuwait Projects Company Holding (k.s.c.p.)'s investor presentation, June 2010
Slide 1: Ready To Spring: Corporate Presentation
Ready To Spring Corporate Presentation June 2010
Slide 2: Disclaimer
Disclaimer This presentation is not an offer or invitation to subscribe for or purchase any securities. No warranty is given as to the accuracy or completeness of the information in this presentation. You must make your own independent investigation and appraisal of the business and financial condit
Slide 3: Agenda
Agenda Overview Strategy Financial Overview Valuation Annexure 3
Slide 4: KIPCO: Overview
KIPCO: Overview MENA region focused operating holding company, based in Kuwait Over 18 years track record of creating, acquiring, building and selling businesses Primary focus on banking, insurance and media sectors Rated by: Moody’s (Baa3/P-3) and S&P (BBB-/A3) One of the most actively traded stock
Slide 5: KIPCO: Ownership & Liquidity
KIPCO: Ownership & Liquidity KIPCO Share – Price & Volume Shareholding Profile: May 2010 (May 2004 –June 2010*) Treasury 90.00 1,400 Shares Retail 7.3% 80.00 1,200 Investors 70.00 7.4% 1,000 60.00 HNIs 4.3% 50.00 800 Primary Shareholder 40.00 US$ 600 1.2 (AFH 47.2% 30.00 Investment & UARES 400 Compa
Slide 6: KIPCO Group: Asset Composition
KIPCO Group: Asset Composition The KIPCO Group comprises over 60 companies across multiple sectors Financial Services Real Estate Industrial Total Assets US$ 18,214 Million Total Assets US$ 1,778 Million Total Assets US$ 1,560 Million Total Revenue US$ 1,475 Million Total Revenue US$ 114 Million Tot
Slide 7: Controlling Stakes in Principal Companies
Controlling Stakes in Principal Companies Commercial Asset Management and Insurance Media Banking Investment Banking Main 3 Entities Group’s Consolidated 56.6% 95.6% 85.5% 69.1% 60.4%4 Stakes1 Board Representa- 6 of 9 6 of 6 6 of 6 5 of 8 2 of 74 tion Market Cap2 1,565 754 312 233 Unlisted (US$ mill
Slide 8: KIPCO Group: Presence in the MENA Region
KIPCO Group: Presence in the MENA Region Activities Multi-sector Presence Across the MENA MENA Country AM/ CB IB IN ME RE IND OT Region Bahrain Kuwait GCC MENA ex GCC Oman GCC Qatar KSA Syria Lebanon UAE Tunisia Palestine Iraq Morocco Jordan Algeria Kuwait Algeria Libya Saudi Bahrain Egypt Egypt Ara
Slide 9: Agenda
Agenda Overview Strategy Financial Overview Valuation Annexure 9
Slide 10: KIPCO: Strategic Roadmap
KIPCO: Strategic Roadmap Thought leadership Strong managerial expertise Diversified revenue streams Investing in engines of growth Being first in the region Team Approach Regional Outlook Balanced Portfolio Target ROE: 20% MENA 10
Slide 11: KIPCO: Active Management
KIPCO: Active Management Key businesses – progress indicators Active Management – KIPCO Support & Action Business Then Now 1995 2009 Differentiated proposition with attachment of UGB‟s commercial banks Operating Operating Management change in 2003 / 2004 enhanced growth trajectory Margin* Margin
Slide 12: Demonstrated Track Record: Multiple Exits
Demonstrated Track Record: Multiple Exits Fully Realized Investments Unrealized/Partially Realized Listed Investments US$ million US$ million 3,564 3,306 1,707 1,001 KIPCO Capital Invested Realized Value KIPCO Capital Invested Realized and Unrealized Value Unrealized/Partially Realized Unlisted Inve
Slide 13: KIPCO: Looking Ahead
KIPCO: Looking Ahead Strengthen capital base Deeper & faster regionalisation Integration & standardization Existing Businesses Simplification of Organizational design Group structure Focus on Financial Services Execute & operationalise emerging KIPCO Strategy core business New Invest
Slide 14: KIPCO: Progress on Emerging Business
KIPCO: Progress on Emerging Business Aims to establish savings and pension business in the region to capitalize on the opportunity offered by positive demographic trends People aged above 65 years expected to increase from 11 million in 2000 to 32 million by 2030 and 70 million by 2050 Savings &
Slide 15: Agenda
Agenda Overview Strategy Financial Overview Valuation Annexure 15
Slide 16: KIPCO (Consolidated): Key Financials
KIPCO (Consolidated): Key Financials Net Income Consolidated Assets 482 US$ million US$ billion 294 321 234 19.3 18.6 18.6 18.2 210 14.9 161 56 84 24 21 32 5 16 2007* 2008 2009 Q1 2009 Q1 2010 2007 2008 2009 Q1 2009 Q1 2010 * KIPCO reported US$1,819 million net income in 2007 out of which US$1,585 m
Slide 17: KIPCO Core Companies: Financial Performance
KIPCO Core Companies: Financial Performance Burgan Bank: Net Interest Income Burgan Bank: Net Profit US$ million US$ million 355 310 292 261 237 162 178 289 85 84 75 55 129 17 78 22 38 6 2007 2008 2009 Q1 2009 Q1 2010 2007 2008 2009 Q1 2009 Q1 2010 Provisions against assets United Gulf Bank: Investm
Slide 18: KIPCO Core Companies: Financial Performance
KIPCO Core Companies: Financial Performance Gulf Insurance Company: Gross Premium Written Gulf Insurance Company: Net Profit US$ million US$ million 29 339 302 25 23 258 16 7 107 18 9 9 97 1 13 8 2007 2008 2009 Q1 2009 Q1 2010 2007* 2008 2009 Q1 2009 Q1 2010 * Reported Net Profit for 2007: US$131 mi
Slide 19: KIPCO (Parent): Debt & Bank Placements Profile
KIPCO (Parent): Debt & Bank Placements Profile Debt Type: Mar 2010 Debt Maturity Profile: Mar 2010 KD Bonds Amount Debt Maturity % 8.5% (US$ million) <1 year 245 15% 1-2 years 645 40% Term Loan 42.0% 2-4 years 101 6% >4 years 630 39% MTN Total 1,622 100% 49.5% Average Debt Maturity 3.3 years Placeme
Slide 20: KIPCO (Parent): Debt Metrics
KIPCO (Parent): Debt Metrics (US$ million) Financial March 31, Dec 31, 2008 Dec 31, 2009 Targets 2010 Cash & Cash Equivalents 381 1,093 950 Gross Debt 1,025 1,694 1,622 Shareholders‟ Equity 1,933 1,942 1,878 Gross Parent Debt / Shareholders‟ Equity <2.5x 0.53x 0.87x 0.86x Estimated Investment Portfo
Slide 21: Agenda
Agenda Overview Strategy Financial Overview Valuation Annexure 21
Slide 22: KIPCO: Net Asset Value (NAV)
KIPCO: Net Asset Value (NAV) NAV Position* 6 120% 99% 100% 90% 5 76% 80% 45% 55% 60% 4 46% 40% 32% US$ 3 20% 6% (7%) 8% 0% (6%) 2 (28%) (12%) (36%) (25%) (28%) (20)% (35%) (27%) (29%) (46%) (47%) (37%)(40)% 1 (40%) (60%) (62%) (51%) (60)% - (80)% Q1-07 Q2-07 Q3-07 Q4-07 Q1-08 Q2-08 Q3-08 Q4-08 Q1-09
Slide 23: KIPCO: TSR and BVPS
KIPCO: TSR and BVPS Total Shareholders’ Return (Share Price Return and Dividend Yield) Growth Last 13 years (since rights issue) Last 5 years 257 241 88 72 169 65 169 53 1996 2009 2004 2009 Adjusted Share Price (US cents) Cumulative Dividend (US cents) Note: KIPCO had declared stock dividend of 10%
Slide 24: Why KIPCO?
Why KIPCO? KIPCO Today : Strong Underlying Fundamentals Gateway to One-stop access to MENA with proven ability to capitalise on regional MENA potential Experienced Senior management team has been working together for nearly two Management Team decades Shareholder Support Major shareholder - Al Futto
Slide 25: Annexure
Finan Vou
Slide 26: Agenda: Annexure 1 Management team
Agenda Overview Strategy Financial Overview Valuation Annexure 1 : Management team 26
Slide 27: KIPCO: Executive Management
KIPCO: Executive Management Joined KIPCO Board in 1990 Joined KIPCO in 1990; Board and committee Recipient of Arab Bankers Association of North member of American University of Kuwait, MIT, America Achievement Award (2005) Harvard and the Forsyth Institute Faisal Hamad Al Ayyar Samer Subhi Kha
Slide 28: Agenda: Annexure 2 Core companies
Agenda Overview Strategy Financial Overview Valuation Annexure 2 : Core companies 28
Slide 29: Burgan Bank (BB): Overview
Burgan Bank (BB): Overview Overview > Kuwait Based Commercial Bank with a growing regional presence > Wide range of Retail, Corporate and Treasury products > Listed on the Kuwait Stock Exchange > BBB+ rating from S&P and A2 rating from Moody‟s > KIPCO Group Holds 56.8% Stake (as on Mar 31, 2010) > F
Slide 30: BB: Strongly Capitalised
BB: Strongly Capitalised Burgan Bank Key Subsidiaries Regionalisation benefit visible in increased operating Name Market Market Country % Position Cap (US$ Stake profit million)1 CAR is adequate (15.9%) as of Mar 31, 2010 with Jordan # 3 bank in 512 Jordan 51% total provisions of US$78 million i
Slide 31: BB: Regionalisation
BB: Regionalisation Burgan Bank transforming into a regional financial powerhouse with enhanced presence in Jordan, Iraq and Algeria Total Assets Operating Profit Net Profit US$ million % Growth US$ million % Growth US$ million % Growth 60% 48% 15% 109% -15% 18% 37% -11% 8% 4% 7% 7% 4,226 181 102 15
Slide 32: BB: NPA- Cyclical & Not Structural
BB: NPA- Cyclical & Not Structural BB NPA Trend NPA(US$ million) NPA cycle in 2008-10 similar to one in NPA Ratio (Percentage) 1,094 1,036 2000-02 251 204 189 169 167 Loan Loss Reserves (against Loans and 119 120 108 11.0% 11.8% 6.3% 6.0% 6.1% 88 10.0% 9.0% Advances to Customers) created during
Slide 33: United Gulf Bank: Overview
United Gulf Bank: Overview Overview > Bahrain Based Wholesale Investment Bank/ AMIB Holding Company > Widened AMIB network to tap regional potential > Listed on the Kuwait and Bahrain Stock Exchanges > Credit rating of Baa3/P3 FSR D+ from Moody‟s and BBB+ from Capital Intelligence > KIPCO Group Hold
Slide 34: Gulf Insurance Company (GIC): Overview
Gulf Insurance Company (GIC): Overview Overview > Multi-line insurance provider with a presence across the MENA Region > Network of 50 branches across the region > Presence in 7 Countries through Subsidiaries > Market leader in Kuwait for nine consecutive years > Market leadership positions in Bahra
Slide 35: GIC: Regionalisation Reaping Benefits
GIC: Regionalisation Reaping Benefits Gross Premiums Written Net Premiums Written Key Performance Indicators US$ million US$ million Q1 Q1 ^KG: -8.8% KG: -0.4% 2008 2009 KG: 2.0% KG: -1.4% 2009 2010 RG: 37.5% RG: 23.8% RG: 55.0% RG: 3.8% Reinsurance Ratio 51% 46% 38% 43% 182 339 148 302 Expense Rati
Slide 36: Orbit Showtime (PMGL): Overview
Orbit Showtime (PMGL): Overview Overview > Premium Pay TV operator in MENA region > Market leading technology includes integrated DVR & subscription VOD > Showtime and Orbit merged w.e.f . Aug 1, 2009 to form Panther Media Group Limited (PMGL) > Subscriber base of 464k at Mar 31, 2010 > Present acro
Slide 37: Agenda: Annexure 3 Key companies
Agenda Overview Strategy Financial Overview Valuation Annexure 3 : Key companies 37
Slide 38: KIPCO Group Companies
KIPCO Group Companies Burgan Bank is one of Kuwait’s leading commercial banks. United Gulf Bank (UGB) is KIPCO’s investment banking Burgan has 21 branches in Kuwait and one of the biggest ATM operation based in Bahrain. Offering a range of commercial and networks in the country. Burgan is one of the
Slide 39: KIPCO Group Companies (cont'd)
KIPCO Group Companies (cont‟d) The United Industries Company (UIC) is KIPCO’s industrial The Qurain Petrochemicals Industries Company (QPIC) is one holding company. UIC has holdings in a variety of industrial of the leading private investors in petrochemical projects both sectors including stakes in
Slide 40: Agenda: Annexure 4 Per Share Return
Agenda Overview Strategy Financial Overview Valuation Annexure 4 : Per Share Return 40
Slide 41: KIPCO: Per Share Return
KIPCO: Per Share Return KIPCO EPS KIPCO Book Value Cents per share Cents per share 186 230 181 182 17 15 13 72 78 8 2005 2006 2007 2008 2009 2005 2006 2007 2008 2009 KIPCO DPS KIPCO ROE Cents per share Per cent 31 78.6% 17 21.6% 14 17.9% 9 9 8.4% 4.4% 2005 2006 2007* 2008 2009^ 2005 2006 2007 2008 2
Slide 42: Agenda: Annexure 5 Regional Outlook
Agenda Overview Strategy Financial Overview Valuation Annexure 5 : Regional Outlook 42
Slide 43: MENA Region: Favourable Business Environment
MENA Region: Favourable Business Environment 5th Largest Population in the World (2009) Syria Tunisia Iraq Population (million) Morocco Lebanon #1 #2 #3 #4 #5 #6 #10 #11 #22 Jordan 1,335 1,199 Kuwait Algeria Bahrain Libya Egypt Qatar 498 UAE 307 284 Saudi 191 141 128 62 Arabia Oman GCC China India E
Slide 44: GCC Region: Weathering the Downturn
GCC Region: Weathering the Downturn US$ billion Current Account Surplus …through a headwind of accumulated 260 210 current account surplus of ~ US$974 190 168 133 billion (2004-09) of GCC countries… 89 57 GDP / Capita (2009) …high per capita income of GCC countries (In US$) as is a strong indicator
Slide 45: Kuwait: Improving Economic Sentiment
Kuwait: Improving Economic Sentiment Improved GDP Forecasts Improved GDP Growth Forecasts 2010 Growth % 2010-14 CAGR % IMF projects Kuwait‟s real GDP to grow at 3.1% in 2010 as against its forecast of 2.4% a year ago S&P projects real GDP to increase by 3.5% in 2010 and EIU projects the same at
Slide 46: Kuwait: Improved Political & Economic Scenario
Kuwait: Improved Political & Economic Scenario Roots of democracy deepening - Parliament standstill now over leading to improved political sentiment and firm decision making on growth plans Capital Market Law passed by the National Assembly which calls for setting up a Capital Market Authority t
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