S.C. Fondul Proprietatea SA · BVB:FP
S.C. Fondul Proprietatea SA — Fondul Proprietatea — Shareholder Meeting (October 2017)
49 slides from S.C. Fondul Proprietatea SA's shareholder meeting presentation, Oct 26, 2017
Slide 1: Fondul Proprietatea – 26 October 2017 General Shareholders Meeting
Fondul Proprietatea – 26 October 2017 General Shareholders Meeting
Slide 2: Disclaimer
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 tax
Slide 3: Report on the Discount Objective
Report on the Discount Objective
Slide 4: Discount objective
Discount objective Objective Monthly Monitoring – 30 June 2017 The discount between closing price and last reported NAV per In the period 1 July 2016 – 30 June 2017, discount was higher share to be equal to or lower than 15%, in at least 2/3 of the than 15%, for both shares and GDRs. trading days in
Slide 5: Discount objective – Evolution during the Reporting Period
Discount objective – Evolution during the Reporting Period 0.9200 35% 0.8400 30% 0.7600 25% 0.6800 20% 0.6000 15% 7/16 7/16 8/16 9/16 10/16 11/16 12/16 1/17 2/17 3/17 4/17 5/17 6/17 Discount Adjusted Share Price Source: BVB, for the period 1 July 2016 – 30 June 2017. 4
Slide 6: Discount objective – Measures taken
Discount objective – Measures taken Distributed RON 2.21 billion to the Fund’s shareholders during 1 July 2016 – 30 June 2017 via: • Cash Distributions: • Buy-backs: • Total amount Two Cash distributions to Partial execution of the 6th buy-back program (1 July – 23 distributed1: shareholders totalin
Slide 7: Discount objective – Creating liquidity at the portfolio level
Discount objective – Creating liquidity at the portfolio level during the Reporting Period1 Amount RON Total Value of Disposals 801,883,058 Dividends Received (Collected) 503,786,280 Credit Facility (Committed)2 763,000,000 Total 2,068,669,338 Source: Fund’s periodical reports. 1. For the Reporting
Slide 8: Discount objective – Distributions to shareholders
Discount objective – Distributions to shareholders 1 July 2016 – 30 June 2017 Distributions to % of the Expenses related to % of the average market shareholders in the NAV distributions recorded capitalization during period 1 July 2016 – 30 Total as at in the period 1 July the period 1 July 2016 – J
Slide 9: Discount objective – Share buybacks
Discount objective – Share buybacks 1 July 2016 – 30 June 2017 No. of shares to Average be repurchased/% of the share price Cancellation Program Period Status Fund’s issued share capital (RON/share) Broker of shares Sep 2015 – Wood & Co., Sixth Finalized 891.8 mn/8.13% 0.8208 Finalized Sep 2016 Gold
Slide 10: Discount objective – Tender Offers
Discount objective – Tender Offers Number of FP pre- Premium to pre- Discount of Shares and Announcement Tender price announcement Allocation Tender Offer announcement offer price to Equivalent date (RON/share) share price ratio (%) share price (%) NAV (%)1 GDRs (RON/share) Third 575,000,000 5 July
Slide 11: Discount objective – Investor Relations activity
Discount objective – Investor Relations activity During the period, the Fund Manager continued to actively promote Fondul Proprietatea, through: • 338 Investor Meetings and • 4 Results Conference • 27 Investor • 3 Analyst and Investor Days Calls with analysts and Conferences and (Bucharest in Septem
Slide 12: Report on the NAV Objective
“INVESTMENTS Report on the NAV Objective <x lu a x a WW ia a jo) ao a = =) 2 Z Oo ae
Slide 13: NAV objective
NAV objective Objective Monthly Monitoring – 30 June 2017 The Adjusted NAV per share as at 30 June 2017, to be higher than the NAV Adjusted NAV as at 30 June 2017 is higher than the NAV per share as at per share as at 30 June 2015 (RON 1.1851 per share) 30 June 2015 NAV Objective Amount RON Comments
Slide 14: Contributors to Change in the NAV (June 2015 – June 2017)
Contributors to Change in the NAV for the period 30 June 2015 – 30 June 2017 Top Performers % change in NAV Change in NAV per Company Status % in Total NAV1 performance share (RON) Hidroelectrica SA Unlisted 32.0% 12.23% 0.1450 CN Aeroporturi Bucuresti SA Unlisted 7.2% 3.95% 0.0468 CN Administratia
Slide 15: Contributors to Change in the NAV (June 2016 – June 2017)
Contributors to Change in the NAV for the period 30 June 2016 – 30 June 2017 Top Performers % change in NAV Change in NAV per Company Status % in Total NAV1 performance share (RON) Hidroelectrica SA Unlisted 32.0% 2.72% 0.0312 OMV Petrom SA Listed 19.1% 2.57% 0.0294 CN Aeroporturi Bucuresti SA Unlis
Slide 16: NAV objective – Major equity transactions
NAV objective – Major equity transactions Completed Major Equity Transactions Offering Transaction Value Investment Company Transaction Seller Comments Stake (RON mn) Consortium Selected Goldman Sachs, Wood Completed in OMV Petrom SPO FP 6.43% 760.8 & Co, BCR October 2016 Total 760.8 15
Slide 17: Report on the Obligations regarding the Discount Control Mechanism
Report on the Obligations regarding the Discount Control Mechanism
Slide 18: DCM provisions
DCM provisions According to Article 9 of the Management Agreement under AIFMD, as approved by the Fund’s Shareholders on 29 October 2015, which commenced on 1 April 2016: “Fund Manager performance objectives. Annual reporting: • 9.1. For the duration of this Management Agreement, the • 9.2. The Fund
Slide 19: Discount control during Q3 2016 – Q2 2017
Discount control during Q3 2016 – Q2 2017 (the IMA into force) Discount Board of Nominees There were: • If the discount stays above 15% for • The Board meetings took place on • 4 quarterly calculation periods (Q3 2016, more than half of the trading days the following dates: 7 Jun 2016, 3 Q4 2016, Q1
Slide 20: Ongoing DCM measures
Ongoing DCM measures • Cash Distributions: • Buy-backs: • Asset Disposals: • Credit facility: The Fund Manager proposed and shareholders approved the 8th buy- the sale of Electrica The RON 1 billion credit two cash distributions for 2017 totaling RON 0.10/share. back is ongoing subsidiaries stakes f
Slide 21: Fund Information
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Slide 22: The Fund – Key facts
The Fund – Key facts RON USD2 31 August 29 September Change 31 August 29 September Change Fund Details1 2017 2017 (%) 2017 2017 (%) NAV 10.57 bn 10.61 bn 0.38% 2.74 bn 2.72 bn (0.73)% NAV/Share 1.2013 1.2078 0.54% 0.3108 0.3099 (0.29)% Price/Share 0.8700 0.8450 (2.87)% 0.2251 0.2168 (3.69)% Price/GD
Slide 23: FP Market valuation
FP Market valuation NAV vs. Market Capitalization (USD bn)1 2.72 Discount to Unlisted Portfolio – 43.68% 1.90 Unlisted Net Cash and Receivables 1.89 0.21 Listed 0.61 NAV Market Capitalization2 29 September 2017 25 October 2017 1. Source: BVB, FP NAV as at 29 September 2017. 2. Based on the BVB share
Slide 24: FP Market performance
FP Market performance FP Share Price1 (RON) and Discount (%) 0.8500 66% 0.6500 49% 0.4500 32% 0.2500 15% 1/11 7/11 1/12 7/12 12/12 6/13 12/13 6/14 11/14 5/15 11/15 5/16 10/16 4/17 10/17 Discount Adjusted Share Price BVB LSE Discount2 30.04% 29.48% Average Daily Turnover (USD) 1.75 mn3 1.25 mn4 1. So
Slide 25: Portfolio
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Slide 26: Portfolio structure
Portfolio structure Listed vs Unlisted By Sector as at 29 September 2017 (% NAV)1 as at 29 September 2017 (% NAV)1 Electricity & Gas: Distribution & Supply…………26% Electricity: Unlisted……70% Generation…….34% Listed……….22% Oil & Gas………16% Net Cash & Net Cash & Receivables..8% Receivables……8% Infrastru
Slide 27: Largest holdings by NAV
Largest holdings by NAV NAV as at % in NAV Majority 29 September 2017 as at Portfolio Company Status Shareholder % Stake1 (USD mn) 29 September 2017 Hidroelectrica SA Unlisted Romanian State 19.9% 868.20 31.91 OMV Petrom SA Listed OMV 10.0%4 419.93 15.43 CN Aeroporturi Bucuresti SA Unlisted Romanian
Slide 28: Hidroelectrica – Update
Hidroelectrica – Update Dividends: Pre-tax Cumulated Profit (RON mn) In 2017, FP received from the company record high dividends for FY 2016 of RON 206.6 mn, 53.5% higher than the previous year. In September 2017, the Company’s shareholders approved a special dividend of RON 1,538 655 million to be
Slide 29: OMV Petrom – Accelerated Bookbuild Offering (I)
OMV Petrom – Accelerated Bookbuild Offering (I) Transaction Details Type of Offering Accelerated bookbuild offering Pricing RON 0.2750/share Discount to pre-announcement share price (5.82)% • 2.56% of the company’s share capital Offering Size • 1.454 billion shares • RON 399.85 million / USD 104.47
Slide 30: OMV Petrom – Accelerated Bookbuild Offering
OMV Petrom – Accelerated Bookbuild Offering Transaction Details Allocation by type Allocation by geography (Institutional investors only) Hungary..…………………...24.0% Romanian Pension Funds….14% UK……………….………….23.8% Romanian AM..……………….8% Romania……………………23.6% International Institutions….…31% Estonia……………
Slide 31: OMV Petrom – Share Price Performance
OMV Petrom – Share Price Performance OMV Petrom – Share Price Performance % in USD FP Announcement of the SPO and LSE listing 210 175 140 105 70 12/15 2/16 3/16 5/16 6/16 8/16 9/16 11/16 12/16 2/17 3/17 5/17 6/17 8/17 9/17 OMV Petrom Brent Oil Emerging Markets Oil and Gas Index MOL OMV Source: Bloom
Slide 32: Corporate Actions
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Slide 33: NAV, Share price and GDR performance
NAV, Share price and GDR performance Cumulative Performance Since Performance 2011 2012 2013 2014 2015 2016 Q2 2017 H1 2017 YTD1 Inception1 NAV (RON) (0.47)% 8.91% 13.29% 1.39% (0.60)% 7.33% 4.16% 9.24% 10.38% 46.64% Ordinary Share (30.32)% 38.30% 61.34% 14.53% (4.06)% 4.90% (1.17)% 16.68% 18.79% 11
Slide 34: Distributions to shareholders
Distributions to shareholders Cash Distributions to Shareholders (RON) Gross Cash Net Cash Financial % Change Year on Paid In Distribution Distribution Year Year Per Share Per Share1 2008-2009 Dividend 2010 0.08160 0.06854 - (aggregate) Dividend 2010 2011 0.03141 0.02638 - Dividend 2011 2012 0.03854
Slide 35: 26 October 2017 GSM agenda – Main points (I)
26 October 2017 GSM agenda – Main points (I) • The approval of the ninth buy-back programme for a maximum number computed so that all the outstanding treasury shares (acquired during this programme and/or previous ones) will not exceed 20% of the issued share capital at the relevant time, starting w
Slide 36: 26 October 2017 GSM agenda – Main points (II)
26 October 2017 GSM agenda – Main points (II) Ninth buy-back programme Continuation vote • for a maximum number computed so • For the purpose of reviewing the performance of the Fund Manager each year that all the outstanding treasury shares (including, but not limited to, whether the Performance Ob
Slide 37: 26 October 2017 GSM agenda – Main points (III)
26 October 2017 GSM agenda – Main points (III) Appointment of financial auditor for 2017-2019 financial years Legislation: EU Legislation: National Legislation: • Regulation (EU) no 537/2014 of the European • Law 162/2017 from 6 July 2017 on statutory audit of annual financial statements and Parliam
Slide 38: 26 October 2017 GSM agenda – Main points (IV)
26 October 2017 GSM agenda – Main points (IV) 2018 Budget of Income, Expenses and Capital Expenditure • The 2018 Budget of Income, Expenses and Capital Expenditure of the Fund was prepared in accordance with the International Financial Reporting Standards as endorsed by European Union and based on c
Slide 39: Appendix I – Performance Report
Appendix I – Performance Report
Slide 40: Summary of the Regulatory Issues Affecting the Performance
Summary of the Regulatory Issues Affecting the Performance during the Reporting Period
Slide 41: Summary of regulatory changes and issues
Summary of regulatory changes and issues Regulatory issues affecting the Performance during the reporting period • Delays in implementation of • Delays in the IPO calendar • Delays in the gas price • Delay in the Corporate Governance of the SOEs liberalization for publication of the new Legislation
Slide 42: Summary of the Market Conditions Affecting the Performance
Summary of the Market Conditions Affecting the Performance during the Reporting Period
Slide 43: Summary of market conditions
Summary of market conditions Market Conditions Affecting the Performance during the Reporting Period • Market Sentiment in Emerging and Frontier • Volatility in developed • General Risks • Oil Prices • Electricity Prices Markets markets 42
Slide 44: Oil price volatility
Oil price volatility • 6.02% decrease for WTI Crude Oil • 4.82% decrease for Brent Oil 59 52 45 38 7/16 7/16 8/16 9/16 10/16 11/16 12/16 1/17 2/17 3/17 4/17 5/17 6/17 WTI Crude Oil Brent Oil Source: Bloomberg, for the period 1 July 206 – 30 June 2017. 43
Slide 45: Electricity prices
Electricity prices • 35.61% increase for OPCOM • 24.41% increase for HUPX • 9.06% increase for EPEX 85 70 55 40 25 7/16 7/16 8/16 9/16 10/16 11/16 12/16 1/17 2/17 3/17 4/17 5/17 Romania Hungary Germany (OPCOM) (HUPX) (EPEX) Source: Hidroelectrica, Bloomberg, as at 30 June 2017. Note: Base load price
Slide 46: Romania vs. MSCI Eastern Europe vs. Frontier Markets vs. World
Romania vs. MSCI Eastern Europe vs. Frontier Markets vs. World USD 135 120 105 90 7/16 7/16 8/16 9/16 10/16 11/16 12/16 1/17 2/17 3/17 4/17 5/17 6/17 BET Index (USD) MSCI World MSCI Emerging Eastern Europe MSCI Frontier Markets Index Source: Bloomberg, for the period 1 July 2016 – 30 June 2017. 45
Slide 47: Other Developments during the Reporting Period
Other Developments during the Reporting Period
Slide 48: Challenges
Challenges Delay of a potential transaction Hidroelectrica’s IPO Delay in the IPO of Salrom and other with OMV Petrom shares SOEs • The significant decrease in the oil • After the prolonged insolvency, the • Although the Fund Manager has been prices globally led to a delay in the company exited only
Slide 49: Fondul Proprietatea contact details
Fondul Proprietatea Premium Point Buzesti Street 78-80, 1st District Bucharest 011017 www.fondulproprietatea.ro
Fondul Proprietatea — Shareholder Meeting (October 2017) on 6ix