S.C. Fondul Proprietatea SA · BVB:FP
S.C. Fondul Proprietatea SA — Fondul Proprietatea — Investor Presentation (September 2021)
54 slides from S.C. Fondul Proprietatea SA's investor presentation, Sep 30, 2021
Slide 1: Fondul Proprietatea
fey FRANKLIN (49). TEMPLETON Fondul Proprietatea
Slide 2: Franklin Templeton – Firm Overview
Franklin Templeton – Firm Overview
Slide 3: Global investment manager
Global investment manager AMERICAS APAC EMEA 34 165+ 70+ Atlanta Baltimore Boca Raton Ahmedabad Bangalore Beijing Amsterdam Brussels Bucharest Countries Countries Offices Boston Chennai Budapest with Offices with customers worldwide Buenos Aires Hong Kong Cape Town Calgary Hyderabad Douglas Coral Ga
Slide 4: Long-term commitment
Long-term commitment South Korea Luxembourg Switzerland Australia Netherlands United States Germany Poland Austria Chile Italy South Africa Mexico Malaysia Ireland Canada India UAE Turkey Colombia Israel 1947 1954 1986 1988 1992 1995 1997 2000 2005 2009 2011 2018 1968 1985 1987 1990 1994 1996 1998 2
Slide 5: One of the world's largest independent investment managers
One of the world’s largest independent investment managers $117.6 Our AUM is diversified across asset classes (US$ billions) $xxx 650.3 $xxx523.6 $xxx 152.4 $1.5 Trillion in total assets under management 145.2 $676 Billion in institutional assets under management 58.6 AUM by Region AUM by Type 74% 1
Slide 6: Fund Information
Fund Information Is FONDUL ey FRANKLIN » TEMPLETON eel
Slide 7: History of the Fund
History of the Fund The Fund was created by the Romanian Government in 2005 as a vehicle for providing compensation to those individuals whose real assets had been abusively confiscated by the Communist regime and could not be given back in-kind – Romania is still the only country in the world that
Slide 8: Key terms of the Management Agreement April 2020 – March 2022
Key terms of the Management Agreement in force 1 April 2020 – 31 March 2022 Distribution Fees for Base Fee per Year Duration Cash Distribution 0.60% • 1.00%: 1 April 2020 – 31 March 2022 • 2 years • Discount 15% – 20%, + 0.05%, i.e. Base Fee Rate = 0.65% • Discount <15%, + additional 0.05%, i.e. Bas
Slide 9: Key terms of the upcoming Management Agreement April 2022 – March 2024
Key terms of the upcoming Management Agreement 1 April 2022 – 31 March 2024 Distribution Fees for Base Fee per Year Duration Cash Distribution • 0.45% • 2.50%: 1 April 2022 – 31 March 2023 • 2 years • 1.75%: 1 April 2023 – 31 March 2024 Consideration for Consideration for Cash Base Fee Continuation
Slide 10: Investment strategy and performance objectives
Investment strategy and performance objectives Investment Objective FP’s investment objective is the maximization of returns to shareholders and the increase of the net asset value per share via investments mainly in Romanian equities and equity-linked securities. Investment Strategy Performance Obj
Slide 11: Performance objectives
Performance objectives NAV Objective Adjusted NAV/share as at the end of the Reporting Period > NAV/share as at the end of the previous reporting period Discount Objective The discount between closing price and last reported NAV/share <= 15%, in at least 2/3 of the trading days in the Reporting Peri
Slide 12: NAV objective
NAV objective Objective Interim Monitoring – 30 September 2021 • The Adjusted NAV per share as at 31 December 2021, to be higher than • The Adjusted NAV per share at 30 September 2021 is 31.14% higher than the the NAV per share as at 31 December 2020 (RON 1.6974 per share) NAV per share at 31 Decemb
Slide 13: Discount objective
Discount objective Objective Interim Monitoring – 30 September 2021 • The discount between the closing price for each trading day on the BVB, of • In the period 1 January – 30 September 2021, discount was lower than the shares issued by the Fund and the latest reported NAV per share at 15% in at lea
Slide 14: The Alternative Investment Fund Manager
The Alternative Investment Fund Manager Local functions Portfolio Legal and Investor Fund Corporate Public Client Dealer Management Company Relations & Accounting Accounting Relations Services & Investment Secretary Corporate Research Strategy Central functions Trading and Regulatory Risk Portfolio
Slide 15: Board of Nominees – Members
Board of Nominees – Members Position in BoN Current Position Mandate Until Independent non-Executive Ilinca von Derenthall Chairperson 25 November 2023 Board Director Independent non-Executive Mark H. Gitenstein Member 29 September 2022 Board Director Independent non-Executive Chaiperson of the Audi
Slide 16: Key facts
Key facts Fund details1 FP Adjusted share price7 and NAV (RON) Fund details1 RON USD NAV 12.26 bn 2.88 bn2 2.2 NAV/Share 2.0812 0.48792 Price/Share 1.8100 0.42442 1.9 Price/GDR 88.722 20.80 1.7 Market Capitalization as at 30 September 2021 10.67 bn 2.50 bn3 1.4 (Discount)/Premium per share as at 30
Slide 17: Shareholder structure
Shareholder structure Evolution (% Held)1 2% 2% 3% 3% 6% 6% 10% 10% 8% 9% 10% 10% 6% 4% 3% 14% 12% 12% 14% 14% 10% 3% 18% 3% 3% 3% 5% 6% 20% 3% 3% 3% 3% 3% 3% 14% 54% 25% 3% 17% 16% 43% 22% 14% 13% 55% 53% 11% 12% 15% 14% 14% 16% 6% 28% 28% 26% 25% 23% 22% 18% 17% 16% 31% 37% 34% 35% 30% 9% 27% 28%
Slide 18: Market valuation/performance
Market valuation/performance FP Adjusted Share Price3 (RON) vs. NAV vs. Market Capitalization (USD bn)1 Discount/Premium (%) 2.88 Discount to Unlisted 6% 1.90 Portfolio – 16.74% 1.61 -6% 1.32 -17% 2.27 -29% Unlisted 1.03 0.73 -41% 2.50 0.44 -52% Net Cash and 0.15 -64% 0.12 Receivables 1/11 2/12 3/13
Slide 19: NAV, Share price and GDR performance
NAV, Share price and GDR performance Since Q3 9mo Performance 2011 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 2021 Inception2 NAV (RON) (0.47)% 8.91% 13.29% 1.39% (0.60)% 7.33% 13.10% 19.94% 31.23% 2.21% 11.85% 32.45% 220.14% Cumulative Share Price (30.32)% 38.30% 61.34% 14.53% (4.06)% 4.90%
Slide 20: Portfolio
Portfolio — 7 = ie %
Slide 21: Portfolio structure as at 30 September 2021 (I)
Portfolio structure as at 30 September 2021 (I) Listed vs Unlisted By Sector 2% 1% 4% 4% 8% 17% 11% 59% 15% 79% Unlisted Listed Net Cash & receivables Power Utilities: Generation Infrastructure Oil & Gas Heavy industry Aluminium Power & Gas Utilities: Distribution & Supply Net Cash & Receivables • A
Slide 22: Portfolio structure as at 30 September 2021 (II)
Portfolio structure as at 30 September 2021 (II) Listed Companies Unlisted Companies By Controlling Ownership 0.1% 1.5% 0.7% 0.4% 2.2% 4.0% 1.7% 4.8% 4.9% 27.8% 6.1% 16.9% 79.1% 68.2% 59.0% 14.8% OMV Petrom Alro Romaero Others Hidroelectrica ENEL companies State Controlled Entities Engie Romania Buc
Slide 23: Largest holdings by NAV
Largest holdings by NAV NAV as at % in NAV Majority % FP 30 September 2021 as at Portfolio company Status shareholder stake1 (USD mn) 30 September 2021 Hidroelectrica Unlisted Romanian State 19.9% 1,695.9 59.0% OMV Petrom Listed OMV 7.0% 424.7 14.8% Engie Romania Unlisted Engie 12.0% 141.6 4.9% Buch
Slide 24: Top portfolio holdings – 9mo Net profits
Top portfolio holdings – 9mo Net profits Net profit (RON mn) Portfolio company 9mo 2020 9mo 2021 % change Hidroelectrica 1,264.2 2,566.8 103.0% OMV Petrom 826.3 1,676.0 102.8% Bucharest Airports (49.6) 35.3 171.2% Constanta Port 124.3 144.0 15.8% Alro 273.4 (24.7) (109.0)% Total 2,438.6 4,397.4 80.3
Slide 25: Top 10 portfolio holdings – Net profits
Top 10 portfolio holdings – Net profits Net profit (RON mn) Top 10 holdings1 2016 2017 2018 2019 2020 Hidroelectrica 1,227.7 1,296.5 1,939.3 1,386.5 1,443.2 OMV Petrom 1,037.7 2,489.3 4,077.8 3,634.6 1,291.0 Engie Romania 384.9 342.6 428.7 385.2 492.8 Bucharest Airports 224.7 290.7 371.8 359.6 (146.
Slide 26: State controlled companies – Net profits
State controlled companies – Net profits Net profit (RON mn) Portfolio company 2016 2017 2018 2019 2020 Hidroelectrica 1,227.7 1,296.5 1,939.3 1,386.5 1,443.2 Bucharest Airports 224.7 290.7 371.8 359.6 (146.4) Salrom 27.4 81.1 76.4 77.0 11.5 Constanta Port 36.8 79.7 75.7 108.2 130.3 CE Oltenia (139.
Slide 27: Corporate Actions
Corporate Actions FONDUL @. FRANKLIN -° TEMPLETON
Slide 28: Distributions to shareholders
Distributions to shareholders Annual distributions to shareholders (RON mn) 1,124.3 552.7 507.7 1,499.0 1,778.5 923.6 1,190.8 1,743.7 1,870.6 1,081.3 1,483.0 1,098.9 25.4% 29% 2,000 18.3% 21.9% 17.5% 18.3% 23% 1,500 583.1 600.0 832.5 15.5% 1,121.5 14.8% 17% 10.5% 812.6 1,000 236.6 181.5 484.4 258.3
Slide 29: Special Dividend distributions in 2021
Special Dividend distributions in 2021 RON 0.0720 gross dividend per share1 RON 0.0700 gross dividend per share2 Main dates related to the RON 0.0720 Main dates related to the RON 0.0700 gross dividend per share distribution1 gross dividend per share distribution2 • NAV Ex-Date: 29 April 2021 • NAV
Slide 30: Cash distributions to shareholders
Cash distributions to shareholders Gross Cash Net Cash distribution distribution Distribution Financial year Paid in (RON/share) (RON/share) 2008-2009 Dividend 2010 0.08160 0.06854 (aggregate) Dividend 2010 2011 0.03141 0.02638 Dividend 2011 2012 0.03854 0.03237 Dividend 2012 2013 0.04089 0.03435 Re
Slide 31: Buy-back programs
Buy – back programs No. of shares (to be) repurchased/ Average % of the Fund’s share price Cancellation Program Period Status issued share capital (RON/share) Broker of shares1 The cancellation of shares will 1 Jan – Auerbach Grayson, Twelfth Ongoing 800.00 mn/11.10% 1.65972 be subject to shareholde
Slide 32: Past buy-back programs
Past buy – back programs No. of shares repurchased % of the Fund’s Average share price Program (mn shares) issued share capital1 (RON/share) Broker First 240.30 1.74% 0.4994 Wood & Co. Second 1,100.95 7.99% 0.8743 Wood & Co., BCR Third 252.86 1.84% 0.8123 Raiffeisen Fourth 990.86 7.19% 1.0557 Raiffe
Slide 33: Annual dividend income – Top 10 portfolio companies
Annual dividend income – Top 10 portfolio companies Dividend Payout (%) FP Net Dividend (RON mn) Top 10 Holdings1 2016 2017 2018 2019 2020 2017 2018 2019 2020 2021 Hidroelectrica 90 90 90 90 90 206.6 226.2 358.7 250.0 256.6 OMV Petrom 94 46 38 48 100 106.8 107.6 145.3 166.8 88.9 Engie Romania 30 50
Slide 34: Total dividend income from portfolio companies
Total dividend income from portfolio companies FP Net Dividend (RON mn) 2013 2014 2015 2016 2017 2018 2019 2020 2021 Total Dividends from Listed Companies (RON mn) 373.9 538.6 251.5 36.0 148.1 199.6 223.0 200.2 117.011 Total Dividends from Unlisted Companies (RON mn) 275.81 143.5 315.9 315.2 404.5 3
Slide 35: Summary
Summary Investor Relations The Alternative Investment Fund Manager will continue to proactively engage with current and prospective investors in the Fund. The Fund is one of the largest listed funds in the The Fund’s long-term objective is increasing the Given the large discount to NAV, the Alternat
Slide 36: Top Holdings
Top Holdings FONDUL @ FRANKLIN PROPRIETATEA » TEMPLETON
Slide 37: Hidroelectrica – Introduction (I)
Hidroelectrica – Introduction (I) Quick facts Shareholding structure • 100% hydro electricity producer 80% Sector Type • Installed capacity: 6,372 MW • Top electricity generator in the country. Electricity Unlisted Producer • Market share: 20% 2012 2013 2014 2015 2016 2017 2018 2019 2020 Weight in N
Slide 38: Hidroelectrica – Introduction (II)
Hidroelectrica – Introduction (II) Net income and Foregone profits (RON mn) vs. Annual production (TWh) and Average number of employees 19.6 14.7 12.1 14.8 18.4 16.1 17.6 14.0 17.2 15.2 14.9 5,237 5,218 5,115 4,172 3,711 3,448 3,272 3,297 3,305 3,368 3,719 390 213 113 81 237 174 1,939 1,573 282 680
Slide 39: Hidroelectrica – Update
Hidroelectrica – Update 9mo 2021 results: • According to the management, in the first 9 months of 2021 the company’s performance was as follows compared to the similar period of 2020: – Turnover of RON 4,688.3 mn, up 70%, – EBITDA of RON 3,612.8 mn, up 87%, – Operating profit of RON 3,116.7 mn, up 1
Slide 40: OMV Petrom – Introduction
OMV Petrom – Introduction Quick facts Shareholding structure 21% Sector Type Integrated Oil Listed 51% 7% Integrated oil & gas company and the largest & Gas company in Romania 21% Weight in NAV1 FP stake1 Refinery with annual capacity of 4.5 mn tons, Nelson Complexity Index of 11.4, the highest Mini
Slide 41: OMV Petrom – Update
OMV Petrom – Update In the January – September 2021 period: • Consolidated sales revenues increased compared to the same period of 2020, mainly due to higher sales of petroleum products, in terms of both prices and volumes, and partially offset by lower sales volumes of natural gas and electricity.
Slide 42: Engie Romania – Introduction
Engie Romania – Introduction Quick facts Shareholding structure Sector Power & Gas Utilities Romania Gas Holding (Engie affiliate) 51% Type Unlisted Ministry of Energy 37% Weight in NAV1 4.9% FP stake1 RON 604 mn (USD 142 mn) Fondul Proprietatea 12% RON mn2 2011 2012 2013 2014 2015 2016 2017 2018 20
Slide 43: Bucharest Airports – Introduction
Bucharest Airports – Introduction Quick facts Shareholding structure 80% Sector Type Infrastructure Unlisted 20% Weight in NAV1 FP stake1 Ministry of Fondul Transport and Proprietatea Infrastructure 4.8% RON 592 mn (USD 139 mn) • Operates the 2 airports in Bucharest, which serviced in 2019 almost 64
Slide 44: Bucharest Airports – Update
Bucharest Airports – Update Financials 2016 2017 2018 2019 2020 9mo 2020 9mo 2021 % y.o.y. Operating revenues (mn RON) 754.7 890.9 992.6 1,066.6 405.6 304.3 386.6 27.0% Operating result (mn RON) 263.6 337.6 445.9 399.0 (178.0) (57.5) 37.5 165.2% Net Income/Loss (mn RON) 224.7 290.7 371.8 359.6 (146.
Slide 45: Constanta Ports – Introduction
Constanta Ports – Introduction Quick facts Shareholding structure Law 80% Sector Type • The Ports law was enacted in December 2017. • The law mandates the establishment under the Competition Infrastructure Unlisted Council of a Supervisory Board with quite broad powers such as oversight of key decis
Slide 46: Constanta Ports – Update
Constanta Ports – Update 9mo 9mo Financials 2016 2017 2018 2019 2020 2020 2021 % y.o.y. Operating revenues (RON mn) 314.0 330.5 345.2 369.0 398.8 257.8 311.8 20.9% Operating profit (RON mn) 54.8 93.8 95.8 117.0 145.9 133.5 156.3 17.1% Net income (RON mn) 36.8 79.7 75.7 108.2 130.3 124.3 144.0 15.8%
Slide 47: ENEL Distribution companies – Introduction
ENEL Distribution companies – Introduction • New regulatory period started in 2019 until 2024: initial E-Distributie E-Distributie E-Distributie RRR set at 5.7% was modified in March 2019 at 6.9% Quick facts Shareholding structure Banat Muntenia Dobrogea and was in effect until April 2020. Subsequen
Slide 48: Enel Group companies – Update
Enel Group companies – Update On 4 November, Enel S.p.A. published nine months 2021 financial results for the global group. For Romania, the Group reported: EBITDA • EUR 98 million for the infrastructure and • EUR 58 million for the retail segment networks’ segment (distribution), 2.0% lower (supply
Slide 49: Salrom – Introduction
Salrom – Introduction Quick facts Shareholding structure • Sole salt producer in Romania having the concession licenses for about 10% of geological reserves, economically proven. Sector Type • 20 years concession agreement to operate 5 Salt mining 51% 49% underground salt mines and 4 brine fields gr
Slide 50: Active Management
y » - ii —— Active Management FONDUL — @ FRANKLIN,
Slide 51: Active management – Board members
Active management – Board members FT investment team attended 181 GSMs and 126 Board meetings in the first 9 months of 2021 No. of Board No. Board members No. Portfolio company % FP stake1 % in Total NAV1 members2 recommended by FP2 1 Hidroelectrica 19.9% 59.0% 7 1 2 OMV Petrom 7.0% 14.8% 9 1 3 Buch
Slide 52: Disclaimer (I)
Disclaimer (I) 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
Slide 53: Disclaimer (II)
Disclaimer (II) In addition, the list of investor rights can be found in the Constitutive Act, available on the Fund’s website, in the Corporate Governance section, here: https://www.fondulproprietatea.ro/about-fund/fund-overview/corporate-governance. The price of shares and income from them can go
Slide 54: Thank You
Fondul Proprietatea Premium Point Buzesti Street 76-80, 1st District Bucharest 011017 www.fondulproprietatea.ro Thank You
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