Kuwait Projects Company Holding (K.S.C.P.) · KSE:KPROJ
Kuwait Projects Company Holding (K.S.C.P.) — Kuwait Projects Company Holding (KIPCO) — Investor Presentation (September 2013)
62 slides from Kuwait Projects Company Holding (K.S.C.P.)'s investor presentation, September 2013
Slide 1: Going for Growth Investor Presentation
Going for Investor Growth Presentation September, 2013 E 1
Slide 2: Disclaimer
Disclaimer This presentation is not an offer or invitation to subscribe to or purchase any securities. No warranty is given as to the accuracy or completeness of the information in this presentation. You must make your own independent investigation and appraisal of the business and financial conditi
Slide 3: Index: Executive Summary
Index Executive Summary Bloomberg Ticker: KPROJ KK Reuters Ticker: KPRO.KW 3
Slide 4: A diversified company with deep regional expertise and roots
A diversified company with deep regional expertise and roots Operating holding company with an AuM of US$31 bn Middle East and North Africa Primarily financial services and media 21 years of continuous profitability, 11 years of continuous dividends P/BV of 1.3x. Attractive NAV A transparent Listed
Slide 5: Our presence by geographies & sectors
Our presence by geographies & sectors Major Sectors Geography Asset Commercial management Revenues1 Media Insurance Real Estate Industrial Others banking & investment (2012) banking Kuwait ● ● ● ● ● ● ● 49% UAE ● ● ● ● 4% Bahrain ● ● ● ● 6% KSA ● ● ● 5% Jordan ● ● ● ● 13% Algeria ● ● 6% Tunisia ● ●
Slide 6: Track record of generating attractive returns
Track record of generating attractive returns Total Shareholders’ Return (Share Price Return and Dividend Yield) Growth Last 15 years Last 10 years 235 230 96 91 69 139 139 35 1997 2012 2002 2012 Adjusted Share Price (US cents) Cumulative Dividend (US cents) Note: Data adjusted for stock dividend Bo
Slide 7: Net asset value
Net asset value NAV Computation (US$ per Share) 682 550 410 fils fils fils 0.1 0.1 0.1 0.0 0.1 0.1 0.1 0.1 0.3 (0.6) 24% 0.8 0.7 0.5 1.6 1.9 1.4 0.9 Burgan OSN United Gulf United United Net other Net Debt NAV KIPCO BVPS Bank Gulf Bank Insurance Real Industries Assets Share (US$) Company Estate Compa
Slide 8: Index: Strategy
Index Strategy 8
Slide 9: Strategic roadmap: Building Businesses
Strategic roadmap Regional MENA Outlook Investing in Target engines of ROE: growth 20% Diversified Revenue streams Balanced Building Portfolio Businesses Strong managerial Team expertise Thought Approach leadership Being first in the region Investment in companies with sustainable and predictable ca
Slide 10: Controlling or majority stakes
Controlling or majority stakes Main Entities KIPCO Effective 60.3% 60.4% 96.7% 83.0%3 44.8% 65.8% Stakes1 Board Representation 6 of 9 2 of 75 6 of 6 6 of 6 4 of 104 4 of 7 Market Cap (US$ mn)2 3,135 Unlisted 469 111 381 459 S&P: S&P: A- Credit BBB+/A2 Moody’s: Unrated CI*: BBB CI*: BBB- AM Best: CI*
Slide 11: Active management
Active management Key businesses – progress indicators Businesses Parameters Then Now Active Management – KIPCO Support & Action 1995 H1’13 Net Transformed from a local player to regional player Interest 1.3% Hired new management in 2010/11 to execute on regional strategy Margin 2.7% Focused o
Slide 12: Index: Performance Update
Index Performance Update 12
Slide 13: H1 2013: Operating performance continues to be strong
H1 2013: Operating performance continues to be strong 117% 7% 2012 2012 40% 27% 4% 165% 25% 22% 25% growth in growth in NPA Aggregate growth in growth in EBITDA operating operating reduced to provision revenues subscriber margin income profits coverage base increased to Total expenses reduced by 13%
Slide 14: Burgan Bank
Burgan Bank Loan Growth Deposit Growth Asset Quality US$ billion US$ billion NPA Coverage with collateral NPA Coverage without collateral 27% 10% 21% 17% 111% 108% 117% 165% 72% 49% 58% 110% 12.0 12.0 10.5% 9.1 14.4 7.3% 7.0% 8.0 13.8 7.6 11.1 9.1 9.9 4.2% 2010 2011 2012 H1'13 2010 2011 2012 H1'12 H
Slide 15: Burgan Bank: Regional operations
Burgan Bank: Regional operations Loan Growth Deposit Growth Net Profit US$ billion US$ billion US$ million 24% 2% 10% 33% 11% 25% 2.8 4.5 64 2.6 1.9 3.6 1.81.8 2.2 35 38 2.0 0.9 1.4 22 1.0 17 0.7 1.0 12 0.8 0.6 8 0.1 0.2 0.0 0.2 0.3 4 5 0 4 AGB JKB BOB TIB Total BBT^ AGB JKB BOB TIB Total BBT^ AGB J
Slide 16: Burgan Bank: NPA- cyclical & not structural
Burgan Bank: NPA- cyclical & not structural NPA Trend NPA (US$ million) As at end of H1’13, the NPA Ratio (Percentage) combined coverage of non 1,116 850 1,287 1,193 256 performing assets (NPA) is 208 722 173 193 171 165% 121 122 110 11.0% 11.8% 90 9.5% 10.5% 6.3% 6.0% 6.1% 4.1% 3.5% 1.7% 1.4% 7.3
Slide 17: OSN
OSN Subscribers Net Adds Thousand Thousand 48 818 702 734 782 672 36 33 33 30 Q2'12* Q3'12 Q4'12 Q1'13 Q2'13 Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 Churn Subscribers by country (June 2013) Others 10% 17% 17% 16% 17% 17% Qatar KSA 15% 25% Egypt 10% UAE Bahrain 28% 3% Kuwait Q2'12 Q3'12 Q4'12 Q1'13 Q2'13 9% Qu
Slide 18: OSN (Cont'd): MENA TV Overview
OSN (Cont’d) MENA TV Overview MENA Region1 Latin America UK India US 2 Population (Mn) 258 579 63 1,223 314 Pay TV (Mn; Est.) 4 37 14 133 102 TV Households (Mn) 2 53 NA 26 155 116 TV Households / Households (%) 85% NA 94% 61% 88% Pay TV/ TV Households (%) 9% 30% 53% 86% 88% Low Pay TV penetration in
Slide 19: OSN: Acquisition of Pehla
OSN: Acquisition of Pehla Continued consolidation of MENA Pay TV 2009 2011 2013 Merger OSN acquired exclusive Orbit & Showtime rights from ART for OSN acquired Pehla merged to form OSN select GE channels Pehla acquisition presents a huge opportunity Deeper and bigger base: Total South Asian househol
Slide 20: United Gulf Bank
United Gulf Bank Revenue Fees & commission Income US$ million US$ million 163 30 109 21 93 17 60 12 38 9 2010 2011 2012 H1'12 H1'13 2010 2011 2012 H1'12 H1'13 Net Profit & Provisions AUM & Capitalisation US$ million US$ billion 68 19.5% 18.2% 23.2% 24.9% 29 9.1 8.0 7.5 8.0 26 26 25 39 9 13 24 11 16
Slide 21: Gulf Insurance Group
Gulf Insurance Group Gross & Net Premium Written Net Investment Income US$ million US$ million 517 23 476 426 14 15 262 255 11 211 239 239 10 133 150 2010 2011 2012 H1'12 H1'13 2010 2011 2012 H1'12 H1'13 Net Premium Written Gross Premium Written Combined Ratio Net Profit US$ million 89% 89% 92% 93%
Slide 22: United Real Estate Company (URC)
United Real Estate Company (URC) Total Revenue Operating Profit US$ million US$ million 197 114 144 98 124 74 70 10 74 85 38 88 35 10 70 74 28 (0) 2010 2011 2012 H1'12 H1'13 2010 2011 2012 H1'12 H1'13 Net Profit Total Assets & Return on Equity US$ million US$ million 80 2.9% 5.1% 10.7% 6.1% 57 1,959
Slide 23: URC: Balance Sheet (Break-up) as of June 2013
URC: Balance Sheet (Break-up) as of June 30 2013 Total Assets Investment Properties Total Assets US$ 1,602 million 1 Total : US$ 496 million 3% 1% Investment properties 4% Marina World - Kuwait 2% 4% 10% 1 Land for development 5% Fairmount - Egypt Projects under Marina Plaza - Kuwait 31% constructio
Slide 24: KIPCO Consolidated: Financial performance
KIPCO Consolidated: Financial performance Revenues Net Income Consolidated Assets US$ million US$ million US$ billion 1,576 26.8 1,451 25.6 160 1,249 20.8 20.1 1,077 107 111 879 63 60 2010 2011 2012 H1'12 H1'13 2010 2011 2012 H1'12 H1'13 2010 2011 2012 H1'13 24
Slide 25: KIPCO Parent debt profile: As at June 2013
KIPCO Parent debt profile: As at 30 June 2013 Debt Type Debt Maturity Total Debt: US$ 1.4 billion Total Debt: US$ 1.4 billion <2 year 0% MTN 70% 2-4 Years Term Loan 55% 10% >4 Years 45% Bonds 20% Average debt maturity is 4.6 years Liquidity KIPCO has cash & bank balance of US$547 mn with no debt mat
Slide 26: Index: Conclusion
Index Conclusion 26
Slide 27: Why KIPCO? Pan MENA Player
Why KIPCO? Compelling Experienced strategy management team Pan MENA Player Supportive Outstanding track record Pan MENA primary shareholder Player Transparent Strong liquidity Well positioned to deliver 20% return in medium term 27
Slide 28: Thank You
Thank You
Slide 29: Annexure: Portfolio Companies
Index Annexure 1 : Portfolio Companies 29
Slide 30: Burgan Bank (BB): Overview
Burgan Bank (BB): Overview Overview Kuwait based commercial bank with regional presence in nine countries 2nd largest conventional bank in Kuwait in terms of assets (total assets of US$22.4 bn as of June 30, 2013) Offers a wide range of corporate, retail & treasury products through a network of 217
Slide 31: OSN: Overview
OSN: Overview Overview Largest digital satellite premium Pay TV operator in MENA region Market leading technology includes integrated DVR & subscription VOD Showtime and Orbit merged w.e.f . Aug 1, 2009 to form Panther Media Group Limited (PMGL) Licensed to operate in 24 countries in MENA (Focused o
Slide 32: United Gulf Bank (UGB): Overview
United Gulf Bank (UGB): Overview Overview Asset management and investment banking (AMIB) business Offers asset management, investment banking, brokerage and advisory services Listed on the Bahrain Stock Exchanges with a market cap of US$469 mn as of September 03, 2013 Credit rating of BBB from Capit
Slide 33: Gulf Insurance Group (GIG): Overview
Gulf Insurance Group (GIG): Overview Overview Multi-line insurance provider with presence across 9 MENA countries through subsidiaries Provides marine, aviation, property, engineering, casualty, life & health insurance, & micro finance insurance Operates through a network of 50 branches across the r
Slide 34: United Real Estate Company (URC): Overview
United Real Estate Company (URC): Overview Overview Leading integrated real estate company with presence in Kuwait & MENA Sizeable portfolio of good quality properties; Large unencumbered asset base Stable rental income; growth to be supported by newly completed KIPCO Tower & upcoming Salalah Mall L
Slide 35: Major Real Estate Properties Developed & Operated by URC
Major Real Estate Properties Developed & Operated by URC 1979: Acquired 1994: Developed 1997: Developed 1999: Developed Fairmont Hotel, Al Khour Resort, Saleh Shehab, Al Shaheed Tower, Egypt Kuwait as BOT Kuwait as BOT Kuwait 1999: Developed 2001: Acquired 2003: Acquired 2003: Acquired Marina Hotel,
Slide 36: United Industries Company (UIC): Overview
United Industries Company (UIC): Overview Overview Established in 1979, UIC invests in the industrial sector in Kuwait and the region Major investments are SADAFCO & QPIC Listed on the Kuwait Stock Exchange in 1997, it has market cap of US$240 mn as of September 03, 2013 KIPCO Group holds 72.7% cons
Slide 37: United Industries Company: Financial performance
United Industries Company: Financial performance Income from Associates Total Revenue^ US$ million US$ million 228 29 199 26 18 14 10 34 29 32 2010 2011 2012 H1'12 H1'13 2010 2011 2012 H1'12 H1'13 Net Profit Total Asset US$ million US$ million 19 14 12 772 825 9 633 632 4 2010 2011 2012 H1'12 H1'13
Slide 38: Saudi Dairy & Foodstuff Company (SADAFCO): Overview
Saudi Dairy & Foodstuff Company (SADAFCO): Overview Overview Established in 1976 as a pioneering venture in dairy sector Leading dairy and foodstuff company having operations across the MENA region Highest market share in UHT milk, tomato paste, co-market leader in ice cream & growing presence in sn
Slide 39: Saudi Dairy & Foodstuff Company: Financial performance
Saudi Dairy & Foodstuff Company: Financial performance^ Total Revenue Net Profit US$ million US$ million 11% 11% 11% 8% 8% 413 356 44 40 302 34 109 114 8 9 2010/11 2011/12 2012/13 Q1'12/13 Q1'13/14 2010/11 2011/12 2012/13 Q1'12/13 Q1'13/14 Net profit Net profit margin Total Asset Total Shareholder’s
Slide 40: Qurain Petrochemicals Industries Co. (QPIC): Overview
Qurain Petrochemicals Industries Co. (QPIC): Overview Overview Holding company focusing on investment opportunities in petrochemicals, oil, gas & energy related sectors Four petrochemical investments in Kuwait i.e. EQUATE, TKOC, KARO & TKSC Listed on the Kuwait Stock Exchange, with a market cap of U
Slide 41: Qurain Petrochemicals Industries Co: Financial performance
Qurain Petrochemicals Industries Co: Financial performance Share of Income from Associates Net Profit US$ million US$ million 19 13 117 6 1 80 15 0 (32) (7) 2010 2011/12 2012/13 Q1'12/13 Q1'13/14 2010 2011/12 2012/13 Q1'12/13 Q1'13/14 Total Asset Total Shareholder’s Equity US$ million US$ million 1,
Slide 42: Annexure: Executive Management
Index Annexure 2 : Executive Management 42
Slide 43: KIPCO: Executive management
KIPCO: Executive management Joined KIPCO Board in 1990 Joined KIPCO in 1990; Board and committee Recipient of Arab Bankers Association of North member of American University of Kuwait, MIT America Achievement Award (2005) BSc from MIT and MBA from Harvard University Faisal Hamad Al Ayyar Sam
Slide 44: Annexure: Key Companies
Index Annexure 3 : Key Companies 44
Slide 45: KIPCO Group companies
KIPCO Group companies Burgan Bank is one of Kuwait’s leading commercial United Gulf Bank (UGB) is KIPCO’s investment banking banks. Burgan has 23 branches in Kuwait and one of operation based in Bahrain. Offering a range of the biggest ATM networks in the country. Burgan is one commercial and invest
Slide 46: KIPCO Group companies (cont'd)
KIPCO Group companies (cont’d) The United Industries Company (UIC) is KIPCO’s The Saudi Dairy and Foodstuff Company (SADAFCO) is industrial holding company. UIC has holdings in a one of the most profitable companies in the United variety of industrial sectors including stakes in Industries Company’s
Slide 47: Annexure: Per Share Return
Index Annexure 4 : Per Share Return 47
Slide 48: KIPCO: Per share return
KIPCO: Per share return EPS Book Value Cents per share Cents per share 14 169 165 161 12 9 9 147 2008 2009 2010 2012 2009 2010 2011 2012 DPS ROE Cents per share 8.0% 6.6% 6.7% 5.2% 5.1% 5.7% 4.6% 5.2% 9 7 7 7 2009^ 2010^ 2011^ 2012^ 2009 2010 2011 2012 DPS Dividend Yield 48 ^ An additional 5% stock
Slide 49: Annexure: Trends
Index Annexure 5 : Trends 49
Slide 50: KIPCO: Net asset value (NAV)
KIPCO: Net asset value (NAV) NAV/Share Position* 4 200% 150% 147% 136% 150% 126% 128% 128% 3 111% 101% 81% 100% 78% 79% 68% 72% 51% 46% 51% 13% 40% 40% 43% 2 36% 50% US$ 27% 23% 34% 3% 15% 13% 11% 6% (7%) (10%) (18%) 0% 1 (50)% - (100)% Q3-09 Q4-09 Q1-10 Q2-10 Q3-10 Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-
Slide 51: Ownership
Ownership Shareholding Profile: June 2013 Major shareholders of KIPCO are Primary Treasury Shareholde members of ruling family of Kuwait Shares 2.1% r (AFH*) Retail 63.4% They hold their ownership interest in Investors 6.3% KIPCO through an investment vehicle Al HNIs 2.6% Futtooh Holding Company
Slide 52: KIPCO Group: Market data
KIPCO Group: Market data Entity P/B P/E Market Cap (US$ mn)1 2012 Current2 2012 Current2 2012 Current2 KIPCO 0.9 1.3 17.3 24.6 1,832 2,712 Burgan Bank 1.7 1.8 14.7 16.6 2,877 3,135 UGB 0.9 1.0 NM 55.9 504 469 GIG 1.3 1.5 11.1 11.6 342 381 UIC 0.5 0.6 16.0 15.8 171 240 URC 0.7 0.7 6.9 14.1 501 459 No
Slide 53: Annexure 6: About the region
Index Annexure 6: About the region 53
Slide 54: MENA Region: Poised for Strong Economic Growth
MENA Region: Poised for Strong Economic Growth Syria Current Account Balance as a % of GDP (2012-17E) Tunisia Lebanon Iraq Morocco Israel 7.7% Jordan Kuwait Algeria Lybia Bahrain 3.3% Egypt 1.6% 1.4% Saudi Qatar 1.3% UAE Arabia MENA China Japan Russia EU Brazil US UK India Oman -3.0% -3.1% -3.8% -4.
Slide 55: GCC Region: Well Positioned to Deliver Growth
GCC Region: Well Positioned to Deliver Growth US$ billion ….One of the highest 355 per capita income, of world’s proven oil reserves along with robust and growing non-oil sector activity … 331 49,922 GDP / Capita, PPP (2012E) 46,716 (In US$) Accumulated 36,941 36,266 154 32,021 current 17,709 accoun
Slide 56: Kuwait: Oil Wealth to Fuel Non Oil Growth
Kuwait: Oil Wealth to Fuel Non Oil Growth Source: WEO Database, IMF, April 2013 56
Slide 57: Kuwait development plan update
Kuwait development plan update What has happened so far? Development Plan (In US$ Bn) KD31 bn (US$108 bn) 4 year plan starting FY 2010/11 FY2010/11 FY2011/12 FY2012/13 The government recently announced that US$5.4 bn will be allocated for development spending under the Kuwait Development Plan 2013-1
Slide 58: Kuwait development plan overview
Kuwait development plan overview Purpose: Overview − Upgrade infrastructure − US$108 bn 4 year plan − Diversify non oil revenue − FY 2010/11 – Approved US$18 bn comprising 884 projects − Create employment − FY 2011/12 – Approved US$18.7 bn comprising 1,240* projects − Develop private sector − FY
Slide 59: Annexure 7: Market opportunity
Index Annexure 7: Market opportunity 59
Slide 60: Burgan Bank: Banking Sector Opportunity
Burgan Bank: Banking Sector Opportunity Banking Penetration: Assets/GD Banking Penetration: Loan/GD 500% 475% 160% 450% 405% Burgan Presence 140% Burgan Presence 140% 126% 400% 350% 326% 120% 101% 100% 90% 300% 250% 250% 80% 71% 68% 69% 67% 177% 55% 200% 151%133% 60% 48% 122% 41% 41% 39% 150% 96% 96
Slide 61: OSN: Market Opportunity
OSN: Market Opportunity Movement in Pay TV Penetration Source: PWC Entertainment Outlook, Ofcom European Report, Screen Digest, Litsearch, Bain Analysis) Pay TV market in the MENA region has witnessed a penetration increase of 0.4% p.a. since its launch, compared to other developed markets (US~ 1.
Slide 62: Gulf Insurance Group: Market Opportunity
Gulf Insurance Group: Market Opportunity Insurance Density *(2012) Insurance Penetration** (2012) (In US$) 8% GIG Presence 3,996 GIG Presence 7% 7% 1,724 3% 2% 2% 656 1% 1% 337 450 302 1% 22 103 190 Kuwait Egypt Bahrain Jordan Lebanon Saudi Europe North World Kuwait Egypt Bahrain Jordan Lebanon Saud
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