Centum Investment Company Plc · NSEKE:CTUM
Centum Investment — Shareholder Meeting (September 2024)
58 slides from Centum Investment's shareholder meeting presentation, Sep 30, 2024
Slide 1: 57th Annual General Meeting
57 th ANNUAL GENERAL MEETING September 30th, 2024 www.centum.co.ke
Slide 2: Agenda
Agenda Chairperson’s Report Dr. Donald Kaberuka – Chairman, Board of Directors Dr. Laila Macharia - Vice Chairperson, Board of Directors Business Update Dr. James Mworia, Chief Executive Officer Financial Review Risper Alaro, Group Finance Director Business Outlook Dr. James Mworia, Chief Executive
Slide 3: Chairperson's Report
Chairperson’s Report Dr. Donald Kaberuka 3
Slide 4: The Board of Directors & Company Secretary
The Board of Directors & Company Secretary Dr. Donald Kaberuka Dr. Laila Macharia Dr. James Mworia Mr. Andrew Musangi Dr. Moses Ikiara Hon. William Byaruhanga Board Chairperson Board Vice Chairperson Chief Executive Officer Non-Executive Director Independent Non- Independent Non- Executive Director
Slide 5: Governance Update
Chairperson’s Report Governance Update 5
Slide 6: Our Governance Practices
Our A Governance ▪ Centum’s governance culture is deeply anchored in Governance Culture that our core values. upholds our Practices Company ▪ The Company monitors its governance practices to ensure adherence to the provisions of the CMA Values Code of Corporate Governance. ▪ The Centum Board is well
Slide 7: Strategy Update
Chairperson’s Report Strategy Update 7
Slide 8: Recap of Our Core Business Objectives
Strategy Update Recap of Our Core Business Objectives Centum generates and grows shareholders’ wealth by driving value creation within the portfolio companies. Our portfolio allocation is geared towards achieving two objectives: 01 Enhancing the recurring annuity income (Interest and dividend income
Slide 9: Centum 4.0 Scorecard
Strategy Overview Centum 4.0 Scorecard Performance Review Strategic Pillars Key Objectives (FY 2020 – FY 2024) (FY 2022 – FY 2024) Return & Dividend Pay-out Target Achieved Performance Returns & Return (% p.a) 20% -3.7% HITS Dividend Payout Net Asset Value (Kes Bn) 70.0 41.1 Dividend Pay-out (% of a
Slide 10: Centum 5.0 Outlook (FY2025 – FY2029)
Strategy Overview Centum 5.0 Outlook (FY2025 – FY2029) We have embarked on a new strategy period dubbed Centum 5.0 with the underlying theme being value optimization. Key Financial Pillars and Strategic Objectives Return and Dividend Pay-Out 1. Generate a minimum of 30% annualised return on equity.
Slide 11: Centum 5.0 Outlook (FY2025 – FY2029)
Strategy Overview Centum 5.0 Outlook (FY2025 – FY2029) We have embarked on a new strategy period dubbed Centum 5.0 with the underlying theme being value optimization. Key Non-Financial Pillars and Strategic Objectives Brand 1. Assess Centum’s brand equity value and define the Company’s 01 strategic
Slide 12: First and Final Dividend
Chairperson’s Report First and Final Dividend 12
Slide 13: FY2024 Proposed Dividend
FY2024 Proposed Dividend Kes 210Mn proposed dividend payout with respect to the Financial Year ended 31 March 2024 in line with policy: Dividend payout ▪ The Board proposes to pay a dividend of Kes 0.32 per share. 799 799 799 799 665 ▪ This totals Kes 210 million, Kes Mn 391 400 which is approximate
Slide 14: Sustainability Report
Chairperson’s Report Sustainability Report 14
Slide 15: ESG Governance and Reporting
ESG Governance and Reporting We report on our impact on the identified material topics, which have been defined by our stakeholders and the Company’s sustainability context. We have considered all requirements and guidelines from the Global Reporting Initiative standards in preparation for our susta
Slide 16: Our Approach To ESG Governance
Our Approach To ESG Governance As part of the value creation plan, we ensure portfolio companies implement high ESG standards to mitigate risk and increase investment value at exit. Pre-investment, ESG considerations and Post-investment, the portfolio due diligence findings are presented to companie
Slide 17: Our Impact in FY2024: Environment
Up to 90% of collected garbage recycled through service providers. 80% of water recycled from facilities within Two Rivers. Environment 1.2 MW of solar power installed in two of our investee companies. At least 5,000 Our Impact in trees in our nursery to sustain the demand for green landscapes in FY
Slide 18: Our Impact in FY2024: Social
90% of suppliers are local, to promote local enterprises and MSMEs. Social 52% of our staff compliment are women. KES 100M in scholarships, school development, and outreach programs. Our Impact in FY2024 18
Slide 19: Our Impact in FY2024: Governance
50 - 50 Board Diversity All portfolio companies have adopted the parent company’s Governance policies aimed at promoting Ethics and Integrity. Increased commitment to sustainability by joining the United Nations Global Our Impact in Compact Network. FY2024 19
Slide 20: Business Review
Business Review Dr. James Mworia Chief Executive Officer 20
Slide 21: Overview
C CENTUM Business Review Overview
Slide 22: Our Business Model
Our Business Model Our Competitive Advantage Deploy Create & Capital Grow Value IDENTIFY A high-quality portfolio Identify • Institutionalize Identifying and or creating comprising assets with compelling robust governance high quality investment potential for both significant opportunities structure
Slide 23: FY 2009 – FY 2024 Performance Snapshot
FY 2009 – FY 2024 Company Snapshot Performance Snapshot ▪ Centum has made dividend distributions Annualized to shareholders Centum Value creation and distribution (FY2009 - FY2024) amounting to Kes 5.1Bn Return and had grown the 18.0% Shareholder Value to Dividend payout Kes 41Bn by March 41.0 2024.
Slide 24: Key Portfolio Updates
Business Review Key Portfolio Updates 24
Slide 25: Key Portfolio Updates | March 2024
Key Portfolio Updates | 31 March 2024 Total Assets - KES 48.2 Bn | Total NAV – 41.1 Bn | NAV Per Share – KES 64.2 Cash Generating Growth Assets Assets Development Co. Land Co. Marketable Securities Portfolio 25
Slide 26: Portfolio Review - FY2024 Summary Carrying Value
Portfolio Review - FY2024 Summary Carrying Value 31 March 2024 Centum's Portfolio Summary – Equity Value Shareholder loans Total Carrying Value Nature of Business Sector Stake Valuation Method 31 March 2024 Kes Mn Kes Mn Kes Mn Development of Grade A offices within TRIFIC SEZ targeting Two Rivers La
Slide 27: Growth Portfolio Review – Two Rivers Land Company SEZ
Growth Portfolio Review – Two Rivers Land Company SEZ Business Model Centum’s stake: 80.5% A hub for export-oriented service enterprises ▪ TRIFIC offers Grade A office space (grey box, serviced or fitted) and business Carrying Value: Kes 10.6Bn support services to domicile export-oriented service en
Slide 28: Growth Portfolio Review – Centum Real Estate | Land sales
Growth Portfolio Review – Centum Real Estate | [A] Land sales Land Co Sales Traction: Cash Collections and Profit Potential Centum’s stake: 100% 4,221 acres sold; 88% average profit margin Carrying Value: Kes 23.4Bn Cost Total Value Profit Cash collected Receivables Land sales segment [Land+Infra] (
Slide 29: Growth Portfolio Review – Centum Real Estate | Residential Units
Growth Portfolio Review – Centum Real Estate | [B] Residential Units Development Co Sales Traction: Cash Collections and Profit Potential Centum’s stake: 100% 2,113 Units under development are 89% sold Total Cost to Net Cash Total Value Profit Cash collected Receivables Carrying Value: Kes 1.6Bn Res
Slide 30: Growth Portfolio Review – Akiira Geothermal
Growth Portfolio Review – Akiira Geothermal Centum’s stake: 75% The opportunity Carrying Value: Kes 1.0Bn ▪ Akiira Geothermal is strategically well placed to provide base load power to the grid and captive consumers. Market Opportunities 1. Growing demand for green ▪ To drive value creation and maxi
Slide 31: Growth Portfolio Review – Longhorn Publishers
Growth Portfolio Review – Longhorn Publishers Diversified Market Presence Centum’s stake: 60.2% Carrying Value: KES 377Mn Market Opportunities 1. Revision of existing titles and introduction of new titles in various markets where Longhorn has presence. Strategic Focus 2. Strategic partnerships to le
Slide 32: Growth Portfolio Review – Sidian Bank
Growth Portfolio Review – Sidian Bank ▪ The bank recorded Kes 2Bn growth in total assets in the year ended Centum’s stake: 40% December 2023, with 22% growth in net interest income for the period. Carrying Value: KES 1.9Bn ▪ Centum concluded a partial exit of Sidian Bank and remains with 40% stake.
Slide 33: Cash-Generating Assets Review
Cash-Generating Assets Review ▪ Continues to diversify revenue streams to in-train services, office catering and formation of strategic partnerships for home deliveries. Centum’s Stake | 15% ▪ The business continues to enhance dividend distribution following the rebound of business to post-covid rec
Slide 34: Cash Generating Assets – Marketable Securities Portfolio
Cash Generating Assets – Marketable Securities Marketable Securities Portfolio Portfolio MSP Asset Allocation (Kes Mn) Cash & Mar 2023 Mar 2024 Cash & Equivalents Equivalents Carrying Value: Kes 2.8 Bn Government Bonds 11% 6% 20% (LCY) 14% Government Bonds 28% Government Bonds (LCY) (Eurobonds) Gove
Slide 35: Share Buyback Update
Business Review Share Buyback Update 35
Slide 36: Share Buyback Update
Share Buyback Update The primary objective of the Share buyback program was to provide liquidity to the counter, and this has largely been achieved. 45,000,000 10 ▪ Centum initiated the share buyback program on 40,000,000 9 the 6th of Feb 2023 at the offer price of Kes 9.03. 35,000,000 8 30,000,000
Slide 37: Proposed Second Share Buyback - Rationale
Proposed Second Share buyback - Rationale Continue ▪ Whereas there has been some reduction in the retail investors category of shareholders, the still remains over 26,000 accounts in this category. The buyback extension would ensure that there is providing sustained demand for this group to offload
Slide 38: Proposed Second Share Buyback Structure
Second Share buyback structure. Share Buyback Aspects Description Objective Provide immediate liquidity to shareholders looking to sell Nature of purchases On-market purchases Obligation No obligation on Centum to purchase Target No. of Shares The Company has regulatory approval to purchase a maximu
Slide 39: Approval Stages
Approval Stages Regulatory and board approvals have been received. 1. CMA Letter of No Objection – ✓ CMA reviewed the request for an extension of the share buyback and the related shareholders circular and issued a Letter of No Objection dated 27th August 2024. The regulator indicated that the Centu
Slide 40: Financial Review
Financial Review Risper Alaro Group Finance Director 40
Slide 41: FY2024 Company Performance
Financial Review FY2024 Company Performance 41
Slide 42: Total Return Statement
The primary objective of Centum as an investment company is Company Performance Highlights to grow and preserve shareholder value as measured by the Total Return Statement Net Asset Value (NAV) of the company. The Total Return Statement shows the shareholder value generated in a period. Centum Total
Slide 43: Company Cash Flows
Company Performance Highlights Kes 3.1 Bn cash generated from operations (annuity income and shareholder loan repayments) while Kes 3.5Bn was Company Cash Flows realized from disposal of marketable securities. In FY2024. Reconciliation of profit/(loss) to cash FY2020 FY2021 FY2022 FY2023 FY2024 Tota
Slide 44: Company Statement of Financial Position
Company Performance Highlights Company Statement of Financial Position Kes Mn Mar 2024 Mar 2023 %Δ Kes Mn Mar 2024 Mar 2023 %Δ Growth portfolio: Borrowings 1,951 2,248 (13%) - Investment in Subsidiaries 30,786 21,991 40% Other Liabilities 5,090 3,521 45% - Debt Investment in Subsidiaries 9,731 8,505
Slide 45: Company Debt Analysis
Company Performance Highlights Kes 14.2Bn of debt was repaid in Company Debt Analysis the Centum 4.0 period. Mar-2019 Mar-2020 Mar-2021 Mar-2022 Mar-2023 Mar-2024 Kes Mn Kes Mn Kes Mn Kes Mn Kes Mn Kes Mn Revolving credit facilities/ Term Loan 16,036 6,448 3,106 3,150 1,500 1,054 Overdraft Facility
Slide 46: Consolidated Financial Performance
Financial Review Consolidated Financial Performance 46
Slide 47: Statement of Comprehensive Income
Consolidated Financial Statements Statement of Comprehensive Income Kes 2.9Bn consolidated profit before tax driven by improved PERFORMANCE HIGHLIGHTS performance across 4 out of the 6 business segments. ▪ Consolidated P&L aggregates the performance of subsidiaries proportion of the performance of K
Slide 48: Statement of Financial Position
Consolidated Financial Statements Statement of Financial Position Kes Mn Mar 2024 Mar 2023 %Δ PERFORMANCE HIGHLIGHTS Investment portfolio 7,925 7,725 3% ▪ Consolidated Statement of Financial Loans and advances 271 101 169% position aggregates the assets and Cash and cash equivalents 1,431 543 164% l
Slide 49: Business Outlook
Business Outlook Dr. James Mworia Chief Executive Officer 49
Slide 50: FY 2025 Key Focus Areas
FY 2025 Key PORTFOLIO VALUE OPTIMIZATION Implementation of business model transformation Focus Areas initiatives to achieve growth in portfolio value e.g. TR Land Co. SEZ, Akiira, and other portfolio companies. At Centum, we remain committed to continue delivering sustainable value ASSET REALLOCATIO
Slide 51: Formal Business
Formal Business Mical Agina Company Secretary, Head of Legal & Tax 51
Slide 52: Ordinary Business
Ordinary Business 3 (i) To receive, consider and adopt the Audited Consolidated Financial Statements for the financial year ended 31 March 2024 together with the Directors’ and Auditors’ reports thereon. 3 (ii) To consider and, if thought fit, approve in accordance with Article 118 of the Company’s
Slide 53: Ordinary Business
Ordinary Business 3 (iv) a) To approve, in accordance with Article 88 0f the Companies Articles of Association, the re-election of Dr. Moses Ikiara, a Director retiring by rotation and being eligible, presents himself for re-election. b) To approve, in accordance with Article 88 0f the Companies Art
Slide 54: Special Business
Special Business Ordinary Resolutions To consider and if thought fit, to pass the following resolutions, as recommended by the Directors: 4 (i) For the purpose of regulation 14.6 of the Thirteenth Schedule of the Capital Markets (Public Offers, Listing and Disclosure) Regulations, 2023, to consider
Slide 55: Special Business
Special Business Ordinary Resolutions (cont’d) 4 (ii) a) THAT the Company be and hereby is authorized to make market purchases of up to 65,559,241 paid up and issued ordinary shares of the Company, being 10% of the issued and paid up share capital (adjusted for treasury shares) of the Company (Ordin
Slide 56: Any Other Business
Any Other Business 5 To transact any other business that may legally be transacted at an Annual General Meeting and for which due notice has been given. 56
Slide 57: Q&A
Q&A 57
Slide 58: Annual General Meeting
57 th Annual General Meeting September 30th 2024 Centum Investment Company Plc 8th 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 www.centum.co.ke
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