S.C. Fondul Proprietatea SA · BVB:FP
S.C. Fondul Proprietatea SA — Fondul Proprietatea — Q1 2014 Earnings Presentation
54 slides from S.C. Fondul Proprietatea SA's earnings presentation, May 15, 2014
Slide 1: 2014 First Quarter Results Presentation
2014 First Quarter Results Presentation 15 May 2014 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
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,
Slide 3: Fund Information
Fund Information FONDUL PROPRIETATEA
Slide 4: The Fund – Key Facts
FUND INFORMATION 3 The Fund – Key Facts Fund Details as at 30 April 2014 Distributions per Share (RON) Base Currency RON 0.09000 0.08160 Fund Launch Date 28 December 2005 Franklin Templeton Appointment Date 29 September 2010 0.06000 0.05000 0.03854 0.04089 Listing Date 25 January 2011 0.03141 0.0300
Slide 5: New Investment Management Agreement – Key terms
FUND INFORMATION 4 New Investment Management Agreement – Key terms On 28 April 2014, the Fund’s shareholders approved the new Investment Management Agreement with Franklin Templeton Investment Management Ltd. UK. The key terms are as follows • Duration of the mandate: 2 years, starting with 30 Septe
Slide 6: New Investment Policy Statement – Key terms
FUND INFORMATION 5 New Investment Policy Statement – Key terms Performance Objectives Discount objective • The discount between the closing price for each trading day of the shares issued by the Fund and the latest reported NAV per share should be equal to or lower than 15% in at least two thirds of
Slide 7: Shareholders Structure
FUND INFORMATION 6 Shareholders Structure1 Evolution (% Held) Largest Shareholders2 100% 6% 2% 2% 2% 2% 2% 2% 2% 3% 4% Elliott Associates 15.22% 9% 8% 10% 8% 9% 9% 9% 10% 10% 9% 9% 10% 9% 8% 14% 9% 9% 9% 20% Total Number of Shareholders1 8,311 27% 75% 10% 37% 9% 43% 48% 50% 52% 54% 9% 57% 58% 59% 31
Slide 8: Net Asset Value
FUND INFORMATION 7 Cumulative Performance 2013 13.29% Net Asset Value Cumulative Performance First Quarter 2014 -5.01% NAV (RON)/Share Dividend Dividend 0.03854 0.04089 1.2432 1.2436 1.2339 1.2224 1.1951 1.19221.1572 1.1688 1.15851.1568 1.1397 1.14771.1514 1.1601 1.1782 1.1610 1.1575 1.2097 1.1290 1
Slide 9: Contributors to NAV Performance for Q1 2014
FUND INFORMATION 8 Contributors to NAV Performance for Q1 2014 TOP PERFORMERS % change in NAV performance Company Status % in Total NAV1 for Q1 2014 Change in NAV per share (RON) Transelectrica SA Listed 1.2% 0.066% 0.00082 Conpet SA Listed 0.9% 0.051% 0.00064 Banca Transilvania SA Listed 0.8% 0.032
Slide 10: FP Market Valuation / Performance
FUND INFORMATION 9 FP Market Valuation / Performance NAV vs. Market Capitalization (EUR bn)1 FP Share Price2 (RON) and Discount (%) 0.9000 70% 3.30 0.8000 63% 0.7000 55% Unlisted 1.40 0.6000 48% 0.5000 40% 0.11 Net Cash and Receivables 0.4000 33% 0.3000 25% 2.44 1/11 4/11 7/11 10/11 1/12 4/12 7/12 1
Slide 11: Portfolio Performance
Portfolio Performance This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 12: Portfolio Structure – 30 April 2014
PORTFOLIO PERFORMANCE 11 Portfolio Structure – 30 April 2014 Net Cash & Net Cash & IPOs since Receivables, 3% Receivables, the start of Others, 3% 3% Banks, 2% FTIML's Electricity: mandate, Infrastructure, 3% Generation, 18% 15% Electricity & Gas: Unlisted, Transport, 43% Distribution & Listed, 39%
Slide 13: Largest Holdings by NAV
PORTFOLIO PERFORMANCE 12 Largest Holdings by NAV Majority NAV % in NAV as at 30 April 2014 as at No. Portfolio Company Status Shareholder % Stake1 (EUR mn) 30 April 2014 1 OMV Petrom SA Listed OMV 19.0% 1,100.0 33.3 2 Hidroelectrica SA Insolvency Romanian State 19.9% 473.0 14.3 3 Romgaz SA Listed Ro
Slide 14: SPO & IPO Transactions
PORTFOLIO PERFORMANCE 13 SPO & IPO Transactions Completed Transactions Offering Market Value Investment Company Transaction Seller Stake (EUR mn) Consortium Selected Comments BCR, Swiss Capital, Intercapital Transelectrica SPO Romanian State 15.0% 37.61 Completed in March 2012 Invest Raiffeisen, Woo
Slide 15: Government SPO & IPO Calendar for FP's Holdings
PORTFOLIO PERFORMANCE 14 Government SPO & IPO Calendar for FP’s Holdings Future IPOs and Privatizations Market Value Investment Consortium Company Official Timeline1 FP Expectations Offering Stake (EUR mn) Seller Selected Delayed by the Hidroelectrica IPO – June 2014 15.0% 355.82 New Shares Morgan S
Slide 16: Update on Hidroelectrica
PORTFOLIO PERFORMANCE 15 Update on Hidroelectrica Status: Pre-tax profit (RON mn) • Positive 2013 preliminary results: revenues of RON 3,260 mn and pre-tax profits of RON 902 mn 902 600 642 683 • Starting 25th of February 2014 the company is run by 481 Remus Borza as judicial administrator and Gabri
Slide 17: Top 20 Portfolio Holdings – Key Financials
PORTFOLIO PERFORMANCE 16 Top 20 Portfolio Holdings – Key Financials EBITDA (RON mn) Net Profit (RON mn) Top 20 Holdings1 2010 2011 2012 2013 2010 2011 2012 2013 1 OMV Petrom SA 5,301.9 7,524.3 8,270.2 8,781.8 2,189.7 3,758.6 3,946.1 4,820.9 2 Hidroelectrica SA 1,349.94 873.6 4 707.34 1,955.04 292.3
Slide 18: State Owned Companies – Key Financials
PORTFOLIO PERFORMANCE 17 State Owned Companies – Key Financials EBITDA (RON mn) Net Profit (RON mn) Company 2011 2012 2013 2011 2012 2013 Hidroelectrica SA 873.6³ 707.3³ 1,955.0³ 6.5 (508.0) 719.0³ Romgaz SA 1,884.8 2,126.6 2,181.0 1,031.8 1,244.1 995.6 Complexul Energetic Oltenia SA1 57.8 409.8⁴ 54
Slide 19: Board/Management Share Option Plan
PORTFOLIO PERFORMANCE 18 Board/Management Share Option Plan • Variable remuneration to board/management based on annual share price performance. Dividend distributions are taken into account when determining total performance • Each year, board/management is awarded a fixed number of share options w
Slide 20: Aligning Shareholder Interests - Transelectrica
PORTFOLIO PERFORMANCE 19 Aligning Shareholder Interests - Transelectrica • Variable remuneration scheme for the management team, whereas the share price performance (adjusted for dividends) determines the value of the shadow options each year • The shadow options are given on an annual basis to each
Slide 21: Lack of Restructuring – CE Oltenia
PORTFOLIO PERFORMANCE 20 Lack of Restructuring – CE Oltenia Financial Information RON mn 2011¹ 2012² 2013³ Operating Revenues 4,026.4 3,347.1 4,278.3 Operating Profit 347.9 44.5 (28.0) Net Profit 179.8 118.3 4.6 Employees NA⁴ 18,761 18,850 30 November 2012 30 November 2013 31 March 2014 Portfolio Co
Slide 22: Changes in Taxation
PORTFOLIO PERFORMANCE 21 Changes in Taxation Tax on Existing Special Infrastructure Assets • According to Government Emergency Ordinance 102/2013, the Romanian Government has introduced a new tax on existing special infrastructure assets, which will apply to most of the companies in the Fund’s portf
Slide 23: Calendar of the Gradual Elimination of the Regulated Gas Prices
PORTFOLIO PERFORMANCE 22 Calendar of the Gradual Elimination of the Regulated Gas Prices Non-household consumers Internal production price Starting date Convergence degree % (RON/MWh) Final price growth 01.12.2012 35 49.0 5 01.04.2013 40 55.3 5 01.07.2013 47 63.4 5 01.10.2013 51 68.3 3 Annual growth
Slide 24: Calendar of the Gradual Elimination of the Regulated Gas Prices
PORTFOLIO PERFORMANCE 23 Calendar of the Gradual Elimination of the Regulated Gas Prices Household consumers Internal production price Starting date Convergence degree % (RON/MWh) Final price growth 01.12.2012 3 45.7 0 01.04.2013 33 45.7 0 01.07.2013 36 48.5 8 01.10.2013 37 49.8 2 Annual growth of t
Slide 25: Calendar of the Gradual Elimination of the Regulated Gas Prices
PORTFOLIO PERFORMANCE 24 Calendar of the Gradual Elimination of the Regulated Gas Prices Household consumers Internal production price Starting date Convergence degree % (RON/MWh) Final price growth 01.01.2016 56 67.1 3 01.04.2016 60 71.7 3 01.07.2016 64 76.5 3 01.10.2016 66 78.5 3 Annual growth of
Slide 26: Corporate Actions
Corporate Actions This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 27: Buy-Back Programs
CORPORATE ACTIONS 26 Buy-Back Programs No. of shares to be Approved Average Share repurchased / Program Period Status Price Range Price Broker Cancellation of Shares % of the Fund’s (RON / Share) (RON / share) issued share capital Wood & Effective as of First May–Sept 2011 Finalized 240.3 mn / 1.74%
Slide 28: Buy-Back Program – Average Daily Trading
CORPORATE ACTIONS 27 Buy-Back Program – Average Daily Trading Average Daily Turnover in April 2014 (EUR mn) London GDRs BVB 4.54 1.66 0.12 1.04 0.33 0.27 0.25 0.20 0.17 0.16 0.48 Banca FP BRD Romgaz OMV SIF Oltenia Transgaz SIF SIF Moldova SIF Banat Transilvania Transilvania Crisana Third Buy-Back P
Slide 29: Secondary Listing on the LSE – Plan
CORPORATE ACTIONS 28 Secondary Listing on the LSE – Plan Fungible trading between London and Bucharest is expected to be achieved via the use of Depositary Interests (“DIs”) in the UK. In this regard, a UK-based registrar and depository would bridge the London and Bucharest markets by holding Shares
Slide 30: Secondary Listing on the LSE – Institutions
CORPORATE ACTIONS 29 Secondary Listing on the LSE – Institutions Consortium Member Consortium Member Consortium Member SWISS CAPITAL Romanian Advisor Romanian Advisor Sole UK Financial Adviser Auditor Local PR Agency Legal Advisor International PR Agency TBC This material is intended solely for the
Slide 31: Return of Capital – RON 0.05/Share Cash Distribution
CORPORATE ACTIONS 30 Return of Capital – RON 0.05/Share Cash Distribution Status • The actual payment shall start 30 days after the date on which the decrease of the share capital is effective, namely after two main legal conditions are met: Expiry of a two months term after the publication of the
Slide 32: Dividend Income – Top 20 Portfolio Companies
CORPORATE ACTIONS 31 Dividend Income – Top 20 Portfolio Companies DIVIDEND PAYOUT % FP NET DIVIDEND Top 20 Holdings1 2013 2012 2011 2010 2014 20136 2012 2011 1 OMV Petrom SA2 36 40 47 46 331.4 319.0 353.1 201.6 2 Hidroelectrica SA — — — — — — 52.5 3 Romgaz SA 99 85 91 109 148.5 158.9 140.6 106.0 4 E
Slide 33: Investor Relations – Upcoming Events
CORPORATE ACTIONS 32 Investor Relations – Upcoming Events 25-27 June 2014 2014 U.K. Road-show Analyst and London, England 4 June 2014 Investor Days Mamaia, Romania 21 May 2014 Erste SEE Conference Bucharest, Romania More information about the Fund can be found on the website www.fondulproprietatea.r
Slide 34: Fondul Proprietatea – 2014 Analyst and Investor Days
CORPORATE ACTIONS 33 Fondul Proprietatea – 2014 Analyst and Investor Days Bucharest / Mamaia, Constanta Wednesday, 25 June 2014 8:45 a.m. Pick-up from Radisson and transfer to Nuclearelectrica Power Plant in Cernavoda 11:00 a.m. – 12.45 p.m. Presentation and visit of Nuclearelectrica Power Plant 1:3
Slide 35: Fondul Proprietatea – 2014 Analyst and Investor Days
CORPORATE ACTIONS 34 Fondul Proprietatea – 2014 Analyst and Investor Days Mamaia, Constanta Thursday, 26 June 2014 8:30 a.m. Registration and Breakfast Welcome – Dr. Mark Mobius (Executive Chairman, Templeton Emerging Markets Group) and 8:50 – 9:00 am Grzegorz Konieczny (CEO and Fund Manager of Fond
Slide 36: Fondul Proprietatea – 2014 Analyst and Investor Days
CORPORATE ACTIONS 35 Fondul Proprietatea – 2014 Analyst and Investor Days Mamaia, Constanta Thursday, 26 June 2014 12:45 – 1:10 p.m. Energy Department , Privatization Office – Presentation and Q&A Gabriel Dumitrascu, Director 1.10 – 2:00 p.m. Lunch Fondul Proprietatea – Presentation and Q&A 2:00 – 2
Slide 37: Fondul Proprietatea – 2014 Analyst and Investor Days
CORPORATE ACTIONS 36 Fondul Proprietatea – 2014 Analyst and Investor Days Mamaia, Constanta Friday, 27 June 2014 9:00 a.m. – 4:00 p.m. One-on-one meetings with portfolio companies 1:00 – 2:00 p.m. Lunch 7:00 p.m. Dinner Companies OMV Petrom Hidroelectrica Romgaz CE Oltenia Electrica Transelectrica C
Slide 38: Q1 2014 Results
Q1 2014 Results This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 39: Income Statement – Under Romanian Accounting Regulations
Q1 2014 RESULTS 38 Income Statement – Under Romanian Accounting Regulations RON 31 March 2013 (Unaudited) 31 March 2014 (Unaudited) Revenues from Current Activity, Out of Which: 11,911,903 135,208,280 Interest Income 10,516,873 3,657,724 Reversal of Impairment Adjustments & Provisions 221,417 16,199
Slide 40: Condensed Statement of Comprehensive Income – Under IAS 34
Q1 2014 RESULTS 39 Condensed Statement of Comprehensive Income – Under IAS 34 (IFRS) RON 31 March 2013 (restated) 31 March 2014 Interest Income 10,516,874 3,657,724 Reversal of Impairment Losses on Dividends Receivables, Net - 9,598 Net Gain from Equity Instruments at Fair Value through Profit or Lo
Slide 41: Balance Sheet – Under Romanian Accounting Regulations
Q1 2014 RESULTS 40 Balance Sheet – Under Romanian Accounting Regulations RON 31 December 2013 (Audited) 31 March 2014 (Unaudited) Intangible Assets 760,113 711,393 Financial Assets 10,490,629,476 9,823,748,714 Non-Current Assets – Total 10,491,389,589 9,824,460,107 Current Assets – Total 454,118,237
Slide 42: Condensed Statement of Financial Position – Under IAS 34 (IFRS)
Q1 2014 RESULTS 41 Condensed Statement of Financial Position – Under IAS 34 (IFRS) RON 31 December 2013 (restated) 31 March 2014 Assets Cash And Current Accounts 5,552,477 1,271,008 Deposits With Banks 232,110,013 144,153,768 Treasury Bills 129,887,375 204,510,336 Government Bonds 83,748,146 84,589,
Slide 43: Appendix - Update on Top Holdings
Appendix - Update on Top Holdings This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 44: OMV Petrom
APPENDIX 43 OMV Petrom RON mn 2011 (audited) 2012 (audited) 2013 Tangible assets 26,334.28 28,512.59 30,659.38 Non-current assets - Total 31,021.51 32,776.65 34,559.89 Current assets - Total 36,488.44 38,144.62 40,046.87 Short term liabilities 6,093.39 6,002.01 5,167.14 Long term liabilities 9,287.0
Slide 45: Hidroelectrica
APPENDIX 44 Hidroelectrica RON mn 2011 (audited) 2012 (audited) 2013 Tangible assets 20,272.68 19,848.03 NA Non-current assets - Total 20,339.08 19,913.70 19,065 Current assets - Total 611.86 410.20 465 Advance payments 11.39 2.15 NA Short term liabilities 2,639.16 2,611.20 NA Long term liabilities
Slide 46: Romgaz
APPENDIX 45 Romgaz RON mn 2011 (audited) 2012 (audited) 2013 (audited) Tangible assets 6,364.47 5,880.770 5,767.27 Non-current assets - Total 6,643.88 6,190.31 6,246.16 Current assets - Total 4,066.44 4,214.65 4,231.01 Short term liabilities 973.53 574.07 761.77 Long term liabilities 573.17 486.14 4
Slide 47: Enel Distributie Banat
APPENDIX 46 Enel Distributie Banat RON mn 2011 (audited) 2012 (audited) 2013 (audited) Tangible assets 1,745.58 1,766.75 1,762.64 Non-current assets - Total 1,773.41 1,800.54 1,794.67 Current assets - Total 631.43 805.47 1,040.91 Advance payments 0.19 0.19 0.35 Short term liabilities 208.42 216.62 2
Slide 48: Enel Distributie Muntenia
APPENDIX 47 Enel Distributie Muntenia RON mn 2011 (audited) 2012 (audited) 2013 (audited) Tangible assets 2,818.90 3,506.96 3,502.93 Non-current assets - Total 2,836.32 3,532.46 3,522.84 Current assets - Total 1,603.40 1,597.01 1,941.52 Advance payments 0.17 0.43 0.61 Short term liabilities 522.97 4
Slide 49: GDF Suez Energy Romania
APPENDIX 48 GDF Suez Energy Romania RON mn 2011 (audited) 2012 (audited) 2013 (audited) Tangible assets 2,597.26 2,761.10 3,087.40 Non-current assets - Total 2,764.89 2,963.48 3,245.67 Current assets - Total 1,380.63 1,815.49 1,734.75 Short term liabilities 793.05 1,015.42 941.13 Long term liabiliti
Slide 50: Enel Distributie Dobrogea
APPENDIX 49 Enel Distributie Dobrogea RON mn 2011 (audited) 2012 (audited) 2013 (audited) Tangible assets 1,512.48 1,578.60 1,603.74 Non-current assets - Total 1,540.80 1,612.90 1,636.44 Current assets - Total 291.02 439.86 542.79 Advance payments 0.14 0.27 0.40 Short term liabilities 250.57 335.73
Slide 51: E.ON Moldova Distributie
APPENDIX 50 E.ON Moldova Distributie RON mn 2011 (audited) 2012 (audited) 2013 (audited)¹ Tangible assets 2,074.28 2,103.53 1,893.31 Non-current assets - Total 2,086.03 2,115.99 1,909.52 Current assets - Total 318.80 336.35 492.86 Advance payments 0.13 0.16 5.61 Short term liabilities 169.13 108.76
Slide 52: CE Oltenia
APPENDIX 51 CE Oltenia RON mn 2012 (audited) 2013 (audited)¹ Tangible assets 6,832.38 6,948.96 Non-current assets - Total 6,859.13 6,970.10 Current assets - Total 1,433.83 1,579.01 Advance payments 47.82 47.52 Short term liabilities 883.90 912.36 Long term liabilities 1,534.84 1,647.84 Shareholders’
Slide 53: Electrica Distributie Muntenia Nord
APPENDIX 52 Electrica Distributie Muntenia Nord RON mn 2011 2012 2013 Tangible assets 1,567.82 1,622.88 1,697.02 Non-current assets - Total 1,589.17 1,649.03 1,730.39 Current assets - Total 346.76 462.08 506.76 Advance payments 0.55 0.43 0.19 Short term liabilities 157.75 150.10 156.98 Long term lia
Slide 54: Fondul Proprietatea – Franklin Templeton Bucharest Branch
Fondul Proprietatea Franklin Templeton Investment Management UK Bucharest Branch Premium Point Buzesti Street 78-80, 7th-8th floor 1st District 011017 Bucharest Romania This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.