Centum Investment Company Plc · NSEKE:CTUM
Centum Investment — FY2016 Earnings Presentation
39 slides from Centum Investment's earnings presentation, Jun 8, 2016
Slide 1: Investor Briefing
Investor Briefing Group Results for Financial Year Ended 31st March 2016 8 June 2016
Slide 2: Performance Overview
Performance Overview Group CEO: James Mworia 2
Slide 3: Group's Vision, Mission and Strategy
Group’s Vision: “To Be Africa’s Foremost Investment Channel” Our Mission: To create real tangible wealth by providing the channel through which investors access and build extraordinary enterprises in Africa” Our Strategy: “To develop investment grade opportunities of scale across 8 key sectors” 3
Slide 4: Performance Highlights for FY 2016
Performance Highlights for FY 2016 Centum 3.0 Strategic Objectives Achievements in FY 2016 • Generate 35% annualised return • Delivered return of 23% vs. NSE 20 Index between FY2014 and 2019 return of -24% over the same period RETURN • Consistently outperform the market • 25% yoy growth in Group pro
Slide 5: Portfolio Overview
Portfolio Overview Total Assets (end March 2016) - KES 51.5 bn Investment portfolio of 47.6 bn, analysed per sector as follows: Real Estate Financial FMCG Power Agribusiness Others Marketable Healthcare Education Services Securities KES 17.1 bn KES 9.3 bn KES 9.2 bn KES 3.1 bn KES 0.1 bn KES 5.7 bn
Slide 6: Group's Economic Contribution
Group’s Economic Contribution 1 3 Foreign Direct Investment Employment KES 13.9 bn 8,474 Foreign capital attracted to Employees directly employed by Centum projects as new Group or in our 23 portfolio investment companies Centum equity/exit proceeds representing 9% of total 2015 FDI Group’s Contribu
Slide 7: Real Estate: Two Rivers Development Journey
Portfolio Highlights Real Estate: Two Rivers Development Journey Two Rivers Masterplan Centum acquires 102 acres of land in 2011 the diplomatic blue zone in Runda/Gigiri Centum undertakes project development activities on Two Rivers Development Limited (TRDL), including • Development feasibility stu
Slide 8: Real Estate: Two Rivers Investment Structure
Portfolio Highlights Real Estate: Two Rivers Investment Structure 58% equity stake 39% equity stake 3 % equity stake USD 70 mn USD 5 mn 100% equity stake Two Rivers Development 50% equity stake 50% equity stake Two Rivers Lifestyle Centre USD 63 mn Project Finance Debt: USD 60 Mn Implied equity valu
Slide 9: Real Estate: Two Rivers Update
Portfolio Highlights Real Estate: Two Rivers Update • In final stages of completion of Two Rivers Lifestyle Centre comprising premier retail and lifestyle offerings, Lifestyle with gross lettable area of over 67,000 m2 and 21,000 m2 of commercial office space. Centre • 130 tenants, including 18 inte
Slide 10: Real Estate: Vipingo – Kilifi, Kenya
Portfolio Highlights Real Estate: Vipingo – Kilifi, Kenya • 10,254 acres planned for mixed use development anchored by industrial zone – Industrial plots of 20 acres to be zoned out and fully serviced – Residential and commercial developments planned, as well as medical and educational facilities •
Slide 11: Real Estate: Pearl Marina- Garuga, Uganda
Portfolio Highlights Real Estate: Pearl Marina- Garuga, Uganda • 385 acre mixed use development with 1.3 km of lake frontage • Designs for phase 1 (41 acres) completed – Comprises 54 apartments, 48 villas, hotel, clubhouse and marina • Construction of 8 show house villas commenced • Solar power solu
Slide 12: Financial Services: Sidian Bank
Portfolio Highlights Financial Services: Sidian Bank • Injected KES 1 bn in the bank via rights issue FY 2015 Key Performance Metrics – Shareholding increased from 67% to 74% Return on Assets (%) 2.7% • Significant strengthening of senior Total Assets (KES bn) 18.96 management capacity as a key prio
Slide 13: Financial Services: Zohari Leasing
Portfolio Highlights Financial Services: Zohari Leasing • Zohari Leasing Limited is a wholly owned subsidiary established in March 2016 • Greenfield, highly scalable opportunity in line with Centum 3.0 investment thesis • Leverage Group ability to obtain funding at attractive rates for deployment in
Slide 14: FMCG: Almasi and King Beverage
Portfolio Highlights FMCG: Almasi and King Beverage Almasi Beverages Limited King Beverage • Significant investment, with shareholding • Wholly owned subsidiary of Centum Group increased to 50.95% in 2015 • Significant investment in strengthening the • Good volume growth in FY 2015 of 15.5% vs. rout
Slide 15: Power: Akiira and Amu Power
Portfolio Highlights Power: Akiira and Amu Power Amu Power Akiira, Coal, Lamu Geothermal, Olkaria • Project development is at an advanced stage • Exploratory drilling is progressing, with 2 • 25 yr power purchase agreement signed with wells drilled and drilling on a third KPLC commencing in June 201
Slide 16: Agribusiness: Green Blade Growers
Portfolio Highlights Green Blade Growers Limited Agribusiness: Green Blade Growers • Fully operational subsidiary established as initial investment in agribusiness sector • Acquired 120 acres of land in Ol Kalua, Nyarandua County • Business focused on growing herbs and vegetables for EU – Off-taker
Slide 17: Emerging Sectors: Education and Healthcare
Portfolio Highlights Emerging Sectors: Education and Healthcare • Consortium established with SABIS and High Level School Concept Investbridge Capital, with a vision of establishing 20 schools in SSA – SABIS is a school operator with 130 years experience and presence in 5 continents comprising > 70
Slide 18: Marketable Securities: Portfolio Reallocation
Portfolio Highlights Marketable Securities: Portfolio Reallocation Portfolio Allocation as at 31st March 2015 Portfolio Allocation as at 31st March 2016 10% 10% 17% 10% 7% 53% 70% 23% Cash Equities Mutual Funds Fixed Income Proactive shift to cash and fixed income in light of the high interest rate
Slide 19: Marketable Securities: Portfolio Performance
Portfolio Highlights Marketable Securities: Portfolio Performance Our marketable securities portfolio strategy continues to outperform the NSE 20 Index, and has delivered an average outperformance of 21% over the last 7 years MSP NSE 20 Centum Centum Marketable Securities Return and NSE Return, Year
Slide 20: Senior Management Appointments
Senior Management Appointments Brian Kiai Samuel Kariuki Kevin Kaburu Deputy Director, Group Finance Director Marketing Director Centum Capital Dr. Farai Shonhiwa Jennifer Kinyoe Gilles Devendevile Head of Health Care MD: Zohari Leasing GM- Two Rivers Lifestyle 20
Slide 21: Financial Review
Financial Review 21
Slide 22: Key Financial Performance Drivers
Key Financial Performance Drivers Key Financial Performance Drivers • Centum 3.0 implied shift from portfolio investor to being institutional Centum 3.0 Strategic developer of assets at scale Shift • Increased profitability of Group reflective of increased profitability of underlying assets • Gains
Slide 23: Consolidated Income Statement
Consolidated Income Statement 106% growth in consolidated top line from KES 11.8 bn to KES 24.2 bn 25% yoy growth in profitability from KES 7.9 bn to KES 9.9 bn KES million FY 2016 FY 2015 Variance Sale of Beverages 8,141 37 21903% Realised Gain on Sale of Investments 5,419 6,289 -14% Unrealised Gai
Slide 24: Group Statement of Financial Position
Group Statement of Financial Position Assets Liabilities and Shareholder Capital KES million FY 2016 FY 2015 KES million FY 2016 FY 2015 Investment Property 16,514 17,775 Customer Deposits 12,040 12,401 Associates and JVs 13,048 5,615 Borrowings 16,356 9,983 Unquoted Assets 5,977 6,678 ELN Liability
Slide 25: Company Statement of Comprehensive Income
Company Statement of Comprehensive Income Achieved a return of 23% as compared to NSE 20 Share Index return of -24% KES million FY 2016 FY 2015 Variance Dividend Income 2,671 1,318 103% • Strong Interest Income 676 77 778% performance on Other Income 7 (40) -118% total returns Realised Gain 989 5,32
Slide 26: Company Statement of Financial Position
Company Statement of Financial Position Assets Liabilities and Shareholder Capital KES million FY 2016 FY 2015 KES million FY 2016 FY 2015 Intangible Assets 1 1 Borrowings 10,474 7,569 Investment in Subsidiaries 25,411 14,331 Trade and Payables 571 587 Investment in Associates 5,655 7,179 Unclaimed
Slide 27: Portfolio Valuation
Portfolio Valuation Our portfolio is held at conservative valuations, and this has been apparent when a value realization event such as an exit occurs Cash: KES 3.9 billion Market Price: KES 156 million Quoted investments held on 0.3% 8% Fair Value: KES 11.2 billion Centum’s balance sheet 22% Unquot
Slide 28: Liquidity
Liquidity Cash and cash equivalents as at 31 March 2016 amounted to KES 3.9 billion compared to KES 3.2 billion as at March 2015 KES million Mar 2016 Mar 2015 Cash and Cash Equivalents on the Company’s Balance Sheet 3,916 3,230 Total Equity 39,314 31,939 Net Debt (Total Debt Less Cash) on Company’s
Slide 29: Cash Flow Statement
Cash Flow Statement KES million FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 Operating Inflows 1,722 2,349 6,619 2,547 4,146 8,114 7,904 Operating Outflows (199) (305) (309) (380) (463) (519) (1,033) Internally Generated Funds 1,523 2,044 6,310 2,167 3,683 7,595 6,871 Finance Costs 44 148
Slide 30: Liabilities
Liabilities Successfully listed a second corporate bond of Kes 6.0 billion at 12.75% during FY 2016 KES million Mar 2016 Mar 2015 Bond I – Fixed Rate 13.50% and equity-linked notes 12.75% 4,425 4,252 Bond II – Fixed Rate 13.00% and equity-linked notes 12.50% 6,050 - USD 35 Million Bridge Financing F
Slide 31: Bond Performance – Equity Linked Note
Bond Performance – Equity Linked Note ELN March 2016 Bond I (2012 ) Bond II (2015) Plain Vanilla Notes (KES billion) 4.00 2.10 ELN value (KES billion) 1.25 3.90 Total Bond (KES billion) 4.25 6.00 ELN Coupon 12.75% 12.50% Initial Net Asset Value (KES billion) 13.69 26.95 NAV at 31st March 2016 (Kes b
Slide 32: Return Overview
Return Overview Group CEO: James Mworia 32
Slide 33: Portfolio Value and NAV Per Share
Return Portfolio Value and NAV Per Share Portfolio Value, FY 2009 to FY 2016 NAV, FY 2009 to FY 2016 60 60 59.1 51.5 50 50 48.0 CAGR: 27% 41.2 CAGR: 31% 40 40 34.5 KES Billion 28.8 KES Billion 30 30 24.3 21.4 20.6 20 18.9 15.7 20 15.0 13.8 9.8 10 8.8 5.9 10 0 0 2009 2010 2011 2012 2013 2014 2015 201
Slide 34: Shareholder Value Created
Return Shareholder Value Created Portfolio Value, FY 2009 to FY 2016 42.3 NAV Mkt Cap • NAV has grown by KES 33 billion since 2009 30.1 24.3 13.2 39.3 • We recorded a 13.0 31.9 5.7x growth in 8.6 9.8 22.9 shareholder 5.6 12.6 13.7 16.1 wealth over the 5.9 9.2 past 7 years 2009 2010 2011 2012 2013 20
Slide 35: Dividend Policy
Return Dividend Policy Share Price, 11 Mar 2009 to 11 March 2016 80 60 46.00 40 KES 20 6.72 - 11-Mar-2009 11-Mar-2010 11-Mar-2011 11-Mar-2012 11-Mar-2013 11-Mar-2014 11-Mar-2015 11-Mar-2016 11-Mar-2016 • The company closed the year with a strong performance and a healthy liquidity position • Board c
Slide 36: Corporate Social Investment: Centum Foundation
Corporate Social Investment Centum Foundation • Foundation’s vision is to facilitate Foundation Investee Companies for FY 2016 Africa’s most creative and sustainable solutions • Centum Entrepreneurship Program invests up to USD 150k in companies Media Company Software Development and Information Edu
Slide 37: Corporate Social Investment: Maathari Primary
Corporate Social Investment Maathari Primary We have completed the construction of 36 classrooms, a library and ICT lab to cater for over 700 children at a cost of KES166 million 37
Slide 38: Questions?
Questions? 38
Slide 39: 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
Centum Investment Company — FY2016 Earnings Presentation on 6ix