Centum Investment Company Plc · NSEKE:CTUM
Centum Investment — FY2021 Earnings Presentation
47 slides from Centum Investment's earnings presentation, Jul 27, 2021
Slide 1: Investor Briefing FY 2020/2021
Investor Briefing FY 2020/2021 27th July 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: 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: A summary of our capital cycle
About Centum Our Business | A summary of our capital cycle Disposal of mature assets in Private Equity and Real the growth portfolio allows us Estate are growth portfolios to monetize the value created Guiding principles whose returns will be primarily realized through Proceeds on disposal are capit
Slide 6: About Centum: Company Snapshot
About Centum Company Snapshot Portfolio Allocation – 31 March 2021 KES 11.5Bn Market Capitalisation(1) Real Estate 63.5% KES 41.8Bn Net Asset Value(2) Private Equity 20.5% 233% NAV growth between FY2011 – FY2021 High Yield Portfolio (3) 16% 3 Business Segments of Focus: Real Estate, Private Equity &
Slide 7: Business Review: FY2020/2021 Key Focus Areas
Business Review: FY2020/2021 Key Focus Areas Objective Status Balance sheet ▪ We targeted to retire Kes 16 billion of debt by March 2024. As at 31 March 2021, we strengthening: Deleverage had retired Kes 13 billion which is 81% achievement of the objective. and build up liquidity ▪ We target to set
Slide 8: Highlights and Performance Drivers
Business Review: FY2020/2021 Highlights and Performance Drivers High Yield Liquid Real Estate Private Equity Portfolio & cash 63.5% 63.5% 16% 18% 20.5% 18.5% of Total of Net Asset of Total of Net Asset Assets Value of Total of Net Asset Assets Value Assets Value Finalized the reorganization of Real
Slide 9: Company Total Return Statement
Centum 4.0 Strategy Progress Company Total Return Statement KShs. Millions FY2021 FY2020 %Δ ▪ The Company made an operating profit of Kes Investment income 1,517 3,695 (59%) 245 Mn and a net loss after tax of Kes 607 Mn largely on account of asset impairment provision Operating expenses (669) (895)
Slide 10: NAV Movement April 2020 – March 2021
Centum 4.0 Strategy Progress NAV Movement | April 2020 – March 2021 FY2021 NAV Evolution (KES Bn) ❑ 10% decline in total shareholder value (NAV) in FY2021. 50.0 48.0 1.52 0.67 ❑ 9% decline is attributed to portfolio value 0.60 erosion occasioned by dampened earnings 47.4 1.07 46.0 0.22 4.21 of under
Slide 11: Company NAV: Attribution to portfolio classes
Centum 4.0 Strategy Progress Company NAV | Attribution to portfolio classes Private Equity Centum RE TRDL High Yield Portfolio Total Kes M FY2021 FY2020 FY2021 FY2020 FY2021 FY2020 FY2021 FY2020 FY2021 FY2020 Total CICP Portfolio 9,764 11,006 22,610 29,846 7,607 7,034 7,534 8,965 47,515 56,850 Funde
Slide 12: Share Price, Market Performance & NAV
Centum 4.0 Strategy Progress Share Price, Market Performance & NAV Centum NAV & Share Price vs NSE 20 Index Centum’s share price has 90.0 6,000 declined over the past 6 years in tandem with the bearish 80.0 79.05 performance of the local 5,000 70.0 73.20 stock market. 71.29 63.5 67.30 60.0 62.85 4,0
Slide 13: Analysis of Centum's price to NAV gap
Centum 4.0 Strategy Progress Analysis of Centum’s price to NAV gap Asset contribution to Centum’s NAV per Share | March 2021 Simulated share price attribution to our portfolio value Multiple | Portfolio Assets NAV Per Share Valuation Methodology (Discount)/ 43.87 62.85 Total NAV per share Premium Ke
Slide 14: The past decade of growth was funded by borrowed capital
Centum 4.0 Strategy Progress The past decade of growth was funded by borrowed capital Shareholder value evolution over the past 10 Deleveraging our portfolio for resilience years (KES Mn) 80,000 50,000 70,000 45,000 3,860 60,000 40,000 KES 50,000 47.5 Bn 35,000 30,000 33,129 40,000 25,000 30,000 20,
Slide 15: Company Cash Flows
Centum 4.0 Strategy Progress Company Cash Flows The current focus is on monetizing mature assets to generate cash flows for the next round of investments and provide a sustainable return to our shareholders. KES million Mar ‘21 Mar ‘20 ▪ As an investment company, Centum realizes cash from its portfo
Slide 16: Portfolio Review
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Slide 17: Portfolio Snapshot
Portfolio Snapshot Centum Investment Company Plc. Total Assets (31st March 2021) - KES 47.5 Bn REAL ESTATE : 63.5% PRIVATE EQUITY : 20.5% HIGH YIELD LIQUID PORTFOLIO : 16% CENTUM EXOTICS LTD Total 44.1% Assets: Kes 30.2 Bn Total Assets: Kes 9.8 Bn Total Assets: Kes 7.5 Bn NAV per share: Kes 39.9 NAV
Slide 18: Centum Real Estate Limited
Centum Real Estate Limited Managed by 18
Slide 19: Centum Real Estate
Centum Real Estate We are in the final stage of our real estate value creation process Centum RE Performance Highlights as at 31 March 2021 Stake: 100% Total Investment by Capital Repaid to Carrying Value at 31 Potential Distributable Centum (Kes Mn) Centum (Kes Mn) March 2021 (Kes Mn) Profits* (Kes
Slide 20: Centum Real Estate: Portfolio reorganized
Centum Real Estate Portfolio reorganized Our real estate assets are now consolidated under one vehicle called Centum Real Estate Limited in which we own 100%. However, we still hold 58% of Two Rivers Development Limited directly. Centum Investment Plc 100% 58% Centum Real Estate Two Rivers Developme
Slide 21: Two Rivers Development Limited
Two Rivers Development Limited The business model of Two Rivers Development Limited (TRDL)’s is sale of development rights to 3rd party developers as well development and sale of some of the available developable bulk Comment • Development rights are bundled with regulatory approvals, common area op
Slide 22: Private Equity
Private Equity Managed by ©) P, CENTUM
Slide 23: Private Equity Portfolio Highlights FY 2020/21
Private Equity Portfolio Highlights | FY 2020/21 1 • Businesses were affected by covid-19 and registered declined performance. However, half of the portfolio companies remained profitable. Profitability 2 • Despite reduced business activity, portfolio companies demonstrated resilience, preserving su
Slide 24: Private Equity: Sidian Bank
Private Equity Sidian Bank 35% 45% NFI contribution to total Liquidity Ratio revenues. Growth in digital channels income recorded. 11% NPL ratio down from 20% Interest Income and Non- Sidian’s Profit (Loss) After funded Income Tax KShs Million KShs million 113 102 596 28 19 Recovery in performance n
Slide 25: Private Equity: Longhorn Publishers
Private Equity Longhorn Publishers 9 markets Digital and geographical diversification continue to present growth opportunities Geographical operations 24.5% Market share in Kenya New Markets & Strategic Partnerships - The business continues to focus on sales growth through strategic partnerships Rev
Slide 26: Private Equity: Isuzu East Africa
Private Equity Isuzu East Africa Isuzu celebrated the production of their 100,000th vehicle this Africa remains a key market for the Isuzu brand month, a demonstration of the growth achieved Isuzu E.A market share 43.5% 38.6% 35.7% 28.1% 23.3% 2011 2018 2019 2020 2021 Kes 2 Bn capacity expansion and
Slide 27: Private Equity: NAS Servair
Private Equity NAS Servair Number of flights tracked daily by Flightradar24, 2020 v. 2019 ❑ Aviation industry bore the biggest brunt of Covid-19. ❑ NAS continues to diversify its transport catering as well corporate catering revenue lines. ❑ Airline activity expected to gradually pick up with wider
Slide 28: Private Equity: Greenblade Growers
Private Equity Greenblade Growers Cumulative Profit After Tax (Kes Millions) 20.0 ✓ 22% year-on-year revenue growth. 15.0 13.5 10.2 ✓ The business turned around 10.0 and broke even in FY2021 on the back of improved 5.0 3.0 production efficiencies. 0.0 Apr 2020 May 2020 Jun 2020 Jul 2020 Aug 2020 Sep
Slide 29: Private Equity: Akiira Geothermal
Private Equity Akiira Geothermal Key milestone in FY2021 ✓ Finalized agreement with strategic partners for joint development of the resource. 29
Slide 30: Marketable Securities
Marketable Securities Managed by 30
Slide 31: Portfolio Allocation and Performance Highlights
Marketable Securities Portfolio Allocation and Performance Highlights Portfolio composition | 31 March 2021 ❑ 93% of the portfolio made up of Cash and Fixed Income securities as at March 2021. 6% 1% Equities ❑ The allocation is in line with Centum’s objectives of capital 21% Fixed Income: Government
Slide 32: CSR Engagement & Awards
CSR Engagement & Awards 32
Slide 33: Corporate Social Responsibility
Corporate Social Responsibility Supporting SDGs • 200 scholarships awarded to date in Vipingo • Shortlisting of candidates for the next academic year ongoing • Additionally, we have put up new classrooms for four schools: Makonde ,Timboni, Kadzinuni and Mukwajuni Primary schools. • We furnished Math
Slide 34: Awards: Winning is in our DNA
Awards Winning is in our DNA Fire Awards 2020 Winner Integrated Reporting Category 34
Slide 35: Financial Performance
Financial Performance Chief Finance Officer: Wambua Kimeu 35
Slide 36: Company Income Statement (Total Return Statement)
Company Income Statement (Total Return Statement) ▪ Company made an operating profit of Kes KShs. Millions March 2021 March 2020 %Δ 245 Mn; 75% lower than prior year. Investment income 1,517 3,695 (59%) ▪ Prior Year exceptions included Operating expenses (669) (895) (25%) ✓ Gain on disposal of bottl
Slide 37: Company Statement of Financial Position
Company Statement of Financial Position KShs. millions March 2021 March 2020 %Δ KShs. millions March 2021 March 2020 %Δ Investment portfolio: Borrowings 4,122 7,486 (45%) - Investment in Subsidiaries 26,258 30,236 (13%) Other Liabilities 1,572 1,926 (18%) - Debt Investment in Total Liabilities 5,693
Slide 38: Company Cash Flow Statement
Company Cash Flow Statement KES millions Mar-21 Mar-20 ▪ Centum received its first cash distribution Cash flows from operating activities from Centum Real Estate of Kes 4.5 billion Net cash generated from operating activities 4,541 19,077 in repayment of shareholder loans. Cash flows from investing
Slide 39: FY2021 First & Final Dividend
FY2021 First & Final Dividend The unprecedented covid-19 crisis impacted many of our portfolio companies who cut their dividend payments to conserve liquidity. It is against that background, and to cushion our shareholders, the Centum Board of Directors has recommended the payment of a first and fin
Slide 40: Consolidated Financial Statements
Consolidated Financial Statements For purposes of compliance with the Company’s Act requirements
Slide 41: Consolidated Income Statement
Consolidated Income Statement KES. ‘000 Mar ‘21 Mar ‘20 Prepared as a requirement by Companies Act Trading business: Sales 996 5,469 Direct and other operating costs (1,525) (5,444) ▪ Trading Profit declined due to Trading (loss) profit (529) 24 ✓ Disposal of Almasi in prior year Financial services:
Slide 42: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position Group Mar ‘20 KES million Mar ‘21 Restated Investment portfolio 20,173 18,202 ▪ Restatement of FY 2020 Statement of Financial Position Cash and cash equivalents 5,877 8,182 ✓ Centum Real Estate Limited restated their deferred Other assets 83,382 75,480 ta
Slide 43: Outlook
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Slide 44: Outlook | FY 2021/22
Outlook | FY 2021/22 As the local and regional economies recover from the pandemic, we anticipate improved performance across our portfolio as well as increased transaction activity in the financial year 2021/2022 Portfolio Aspect Outlook ▪ Continue to drive value creation by building a robust pipel
Slide 45: Outlook | FY 2021/22
Outlook | FY 2021/22 Portfolio Aspect Outlook ▪ Focus on capital preservation and provide liquidity to Centum. High Yield ▪ Generate market beating returns through active portfolio management. Portfolio ▪ Maintain the portfolio value within the strategic target of 10% - 20% in order to generate a si
Slide 46: Q&A
Q&A
Slide 47: 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 — FY2021 Earnings Presentation on 6ix