Centum Investment Company Plc · NSEKE:CTUM
Centum Investment — HY2022 Earnings Presentation
45 slides from Centum Investment's earnings presentation, Nov 30, 2021
Slide 1: Investor Briefing HY 2021/2022
Investor Briefing HY 2021/2022 30th November 2021
Slide 2: Agenda
Agenda Business Review Dr. James Mworia – Chief Executive Officer Financial Review Wambua Kimeu – Chief Finance Officer Outlook Dr. James Mworia – Chief Executive Officer Q&A 2
Slide 3: Business Review
Business Review Chief Executive Officer: Dr. James Mworia 3
Slide 4: About Centum: Our Business | The Value Wheel
About Centum Our Business | The Value Wheel We are investors. We find good opportunities make them Use capital great and exit to monetize value created to lock in base to attract superior returns for our stakeholders. other funds Diversify Deploy capital & Focus Shareholder • Identify compelling opp
Slide 5: About Centum: Company Snapshot
About Centum Company Snapshot Portfolio Allocation – 30 September 2021 KES 11.9Bn Market Capitalisation(1) KES 41.3Bn Net Asset Value(2) Growth Porfolio 81% 3.3x NAV growth between FY2011 – HY2022 Marketable Securities 19% Kes 62.1 NAV Per Share KES 47.3Bn Total 33% Cost-to-income ratio achieved in
Slide 6: Business Review: Key Focus Areas
Business Review: HY2021/2022 Key Focus Areas Objective Status ▪ We have maintained zero long-term debt at Company level in line with Centum 4.0 Balance sheet deleveraging objective. strengthening: Deleverage ▪ Kes 7.9 billion was held in marketable securities on 30 September 2021, up from and build
Slide 7: Company Total Return Statement
Business Review: HY2021/2022 Company Total Return Statement 6 months to 6 months to ▪ 38% growth in investment income driven by: KShs. Millions Sep 2021 Sep 2020 %Δ ✓ resumption of dividend payment by the Investment income 1,009 729 38% growth portfolio companies. Operating expenses (328) (298) 10%
Slide 8: NAV Movement
Business Review: HY2021/2022 NAV Movement HY2022 NAV evolution (Kes Bn) 43.0 ❑ Marginal - 0.7% change in net asset value. 0.33 42.5 ❑ Kes 1.0 billion investment income 0.26 1.01 fully covered the operating costs, 0.41 finance costs, dividend distribution. 42.0 41.8 0.30 ❑ Operating expenses and fina
Slide 9: Company NAV | Attribution to the company's portfolio
Business Review: HY2021/2022 Company NAV | Attribution to the company’s portfolio Growth Portfolio Marketable Securities Total Kes M Sep 2021 Mar 2021 Sep 2021 Mar 2021 Sep 2021 Mar 2021 Total CICP Portfolio 39,420 39,982 7,890 7,534 47,310 47,515 Funded by CICP Borrowings (4,040) (4,122) - - (4,040
Slide 10: Analysis of Centum's price to NAV gap
Business Review: HY2021/2022 Analysis of Centum’s price to NAV gap Simulated share price attribution to our portfolio value Asset contribution to Centum’s NAV per Share | 30 September 2021 Valuation Multiple | (Discount)/ Portfolio Assets Value Per Share Methodology Premium 9.42 62.1 <-- Total NAV p
Slide 11: Share Price, Market Performance & NAV
Business Review: HY2021/2022 Share Price, Market Performance & NAV Centum NAV & Share Price vs NSE 20 Index Initiatives to close the valuation gap 90.0 6,000 80.0 1 ▪ Cumulatively, we have realized Kes 24.3 billion 79.0 5,000 proceeds from the portfolio in Centum 4.0 70.0 73.2 comprising: 60.0 63.5
Slide 12: Portfolio Review
PORTFOLIO REVIEW 12
Slide 13: Portfolio Review Snapshot
Portfolio Review Snapshot Centum Investment Company Plc. (30 September 2021) Total Assets - KES 47.3 Bn | Total NAV – 41.3 Bn | NAV Per Share – Kes 62.1 A. GROWTH PORTFOLIO: 80.9% B. MARKETABLE SECURITIES: 19.1% Sector diversification CENTUM 1. Financial Services (3) EXOTICS LTD 2. Technology (2) 3.
Slide 14: A. Growth Portfolio
A. Growth Portfolio Managed by 14
Slide 15: Growth Portfolio Highlights | HY 2021/22
Growth Portfolio Highlights | HY 2021/22 1 Cash Yield • Kes 532m investment income generated from growth portfolio in the period, representing 18% growth. 2 • All portfolio companies have registered increased profitability year on year. Value Creation • Active engagement with management of portfolio
Slide 16: Growth Portfolio Highlights | Cash yield over the years
Growth Portfolio Highlights | Cash yield over the years Cash Initial Cost of Cash Distribution Net Cost of Carrying Value Multiple on % of company Investment Distribution Growth Portfolio Assets Sector investment since inception Investement (KES Mn) Net Cost owned Date Apr - Sep 2021 (KES Mn) (KES M
Slide 17: Centum Real Estate: Our investment thesis
Growth Portfolio: Centum Real Estate Our investment thesis | value creation and monetization 1 2 3 4 Execution and Land Acquisition Design Phase Monetization Phase controlling phase ✓ Competitive price point ✓ Zoning ✓ Infrastructure delivery ✓ Portfolio management ✓ Prime locations ✓ Design control
Slide 18: Centum Real Estate Limited Investment performance
Growth Portfolio: Centum Real Estate Limited Investment performance Financial Summary Centum RE Investment Value Highlights Stake: 100% Key Metrics Measure Initial investment by Total Assets Kes 40.9 Bn Centum Inv. Co. Plc (Kes 7.8 billion) Borrowings Kes 6.4 Bn (CICP) Debt/Assets 16% Cumulative Cas
Slide 19: Centum Real Estate: Development rights
Growth Portfolio Centum Real Estate: Development rights DEVELOPMENT RIGHTS: Analysis of As a Master-Developer of mixed used cities, the largest component of Centum Real Estate Limited's sales performance and valuations business value drivers is the monetization of development rights sellable on its
Slide 20: Centum Real Estate: Infill developments
Growth Portfolio Centum Real Estate: Infill developments Cash collections and receivbles on infill Six-month ❑ Kes 13.9Bn worth of units had been sold by Financial year ended 31 March: Sep 2021. developments period ended: ❑ 39% of the sales (Kes 5.5Bn) had been 2019 2020 2021 30-Sep-21 collected. Al
Slide 21: Two Rivers Development
Growth Portfolio Two Rivers Development Financial Summary TRDL Investment Value highlights Stake: 58% Financial Measure Measure Net Cost of CICP’s Total Assets Kes 21 Bn Investment in the (Kes 2.6 billion) Borrowings Kes 9.7 Bn asset Debt/Assets 46% Key Value Drivers Carrying Value as on 30 Sep 2021
Slide 22: Sidian Bank
Growth Portfolio Sidian Bank 41.7% 19x Liquidity Ratio vs 20% Year-on-year PAT growth regulatory minimum 20% 13% Loan book growth Customer deposits growth Interest Income and Non- Sidian’s Profit (Loss) After Tax KShs Million funded Income KShs million 369 ❖ The bank has maintained top line growth a
Slide 23: Longhorn Publishers
Growth Portfolio Longhorn Publishers 30% Debt reduction between June 2021 and Sep 2021 on the back of improved performance. 16% Strong Revenue growth recovery from Covid-19 103% PBT growth Impact 9 markets With most recent expansion into Cameroon Regional growth strategy and geographical diversifica
Slide 24: Isuzu East Africa
Growth Portfolio Isuzu East Africa Isuzu celebrated the production of their 100,000th vehicle in July 2021 and continues to cement their market leadership through capacity expansion and strategic partnerships Renewal of partnership between Isuzu E.A market share Eliud Kipchoge and Isuzu E.A. 45.6% 3
Slide 25: NAS Servair
Growth Portfolio NAS Servair Core business : Inflight catering ❑ Turnover grew marginally by 3.5%. New product : Home deliveries in partnership with Jumia ❑ 76% PBT improvement recorded owing to cost online shop control measures instituted by management. ❑ Centum revalued NAS from Kes 633m in March
Slide 26: Africa Crest Education (ACE)
Growth Portfolio Africa Crest Education (ACE) ACE Nairobi One is the holding company through which Centum has invested in SABIS International School Runda Enrolment of Students 350 Strategic Focus: 300 Ramp up student enrolment to >400 in the medium term 250 200 150 100 50 0 2017 2018 2019 2020 2021
Slide 27: Greenblade Growers
Growth Portfolio Greenblade Growers GP Margin 80% 73% 70% 62% 60% 50% 43% 40% 36% 36% 30% 18% 20% 10% ✓ Target is to grow to >USD 4 million EBITDA by FY2024. 0% Apr-21 May-21 Jun-21 Jul-21 Aug-21 Sep-21 ✓ 52% EBITDA growth achieved at HY2022 and a projected growth of 69% is estimated at full year. I
Slide 28: Akiira Geothermal
Growth Portfolio Akiira Geothermal Key milestones: ✓ Geoscientific studies completed with positive results. ✓ Exploration drilling is ongoing. ✓ We are pursuing a joint development agreement with a strategic partner experienced in geothermal. Steam being produced from Well 1 Date: 30 October 2021 28
Slide 29: Marketable Securities
Marketable Securities Managed by 29
Slide 30: Marketable Securities Portfolio Allocation and Performance Highlights
Marketable Securities Portfolio Allocation and Performance Highlights ❑ Kes 356 million net growth in portfolio value between April 2021 and Portfolio composition | 30 September 2021 September 2021. ❑ 90% of the portfolio was allocated to Cash and Fixed Income securities 7% 3% as of 30 September 202
Slide 31: CSR Engagement
CSR Engagement 31
Slide 32: Corporate Social Responsibility
Corporate Social Responsibility Supporting SDGs • 250+ scholarships awarded to date in Vipingo • Every year, the Vipingo Scholarship Programme supports 50 bright but needy students to transition to secondary schools. • The first batch of sponsored students completed form four in 2021 and are set to
Slide 33: Financial Performance
Financial Performance Chief Finance Officer: Wambua Kimeu 33
Slide 34: Company Income Statement
Company Income Statement 6 months to 6 months to ▪ 38% growth in investment income driven by: KShs. Millions Sep 2021 Sep 2020 %Δ ✓ resumption of dividend payment by the Investment income 1,009 729 38% portfolio companies. ✓ MSP Portfolio return of 15% up from 12%. Operating expenses (328) (298) 10%
Slide 35: Company Statement of Financial Position
Company Statement of Financial Position KShs. Millions Sep 2021 Mar 2021 %Δ KShs. millions Sep 2021 Mar 2021 %Δ Growth portfolio: Borrowings 4,040 4,122 (2%) - Investment in Subsidiaries 26,045 26,258 (1%) Other Liabilities 1,951 1,572 24% - Debt Investment in Subsidiaries 9,057 9,528 (5%) - Unquote
Slide 36: Company Cash Flow Statement
Company Cash Flow Statement 6 months to 6 months to ▪ Kes 776 million cash flows generated from KShs. Millions Sep 2021 Sep 2020 operations reflect cashflows from MSP Portfolio Cash flows from operating activities and Dividends received, shareholder loan Net cash generated from operating activities
Slide 37: Company Gearing & Liquidity
Company Gearing & Liquidity KES Million FY '17 FY '18 FY'19 FY'20 FY'21 HY'22 Short Term debt (982) (3,482) (108) (7,486) (4,122) (4,040) Long Term debt - (13,674) (11,360) (16,036) - - Total debt (14,656) (14,842) (16,144) (7,486) (4,122) (4,040) Cash and Cash Equivalents 2,447 1,078 253 2,912 867
Slide 38: Consolidated Financial Statements
Consolidated Financial Statements For purposes of compliance with the Company’s Act requirements
Slide 39: Consolidated Income Statement
Consolidated Income Statement KES. ‘000 Sep ‘21 Sep ’20 ▪ Profit from trading subsidiaries increased due to improved Trading business: Sales 1,237,652 136,274 performance of Longhorn. Direct and other operating costs (982,322) (453,067) Trading profit/(loss) 255,330 (316,793) ▪ Operating income from
Slide 40: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position KShs. millions Sep 2021 Mar 2021 Investment portfolio 22,667 20,173 ▪ The Consolidated Statement of Cash and cash equivalents 4,385 5,877 Financials Position represents an Other assets 86,234 83,381 aggregation of the assets and liabilities Total Assets 1
Slide 41: Outlook
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Slide 42: Outlook | FY 2021/22
Outlook | FY 2021/22 We have seen strong recovery in business activity across the portfolio in 1HY2022 and anticipate that a similar trend will be sustained into 2HY2022 Portfolio Aspect Key Focus Areas ▪ Continue working to close transactions that will validate Centum RE’s carrying value. ▪ Continu
Slide 43: Outlook | FY 2021/22
Outlook | FY 2021/22 Portfolio Aspect Key Focus Areas Marketable ▪ Maintain the average cash return yield on the portfolio above 15%. Securities Portfolio ▪ Preserve and grow the portfolio value to the strategic target level of 10% - 20% in order to generate a sizeable long term return to cover comp
Slide 44: Q&A
Q&A
Slide 45: Centum Investment Company Plc contact details
Centum Investment Company Plc 9th Floor South Tower, Two Rivers P.O. Box 10518 – 00100 Nairobi Kenya Tel: (+254) 20 228 6000 / (+254) 709 902000 Email: investorelations@centum.co.ke
Centum Investment Company — HY2022 Earnings Presentation on 6ix