Centum Investment Company Plc · NSEKE:CTUM
Centum Investment — Investor Presentation (January 2019)
48 slides from Centum Investment's investor presentation, January 2019
Slide 1: Investor Presentation January 2019
Investor Presentation January 2019
Slide 2: Table of Content
Table of Content Company Overview pg. 3 - 14 Our Portfolio pg. 15 - 37 Appendix pg. 39 - 47 2
Slide 3: Centum at a Glance
Centum at a Glance KES 23.9b Market Capitalisation(1) Real Estate 50% KES 49.0b Net Asset Value(2) Private Equity 35% Development 8% 18% CAGR on NAV FY14 – HY19 Marketable Securities 7% 23% Average Annualised Return FY14 – HY19 KES 67.0b Total Assets(2) 6 Active Sectors(3) 0.4% Cost Efficiency HY19
Slide 4: Our Strategic Pillars: Centum 3.0 Performance as at HY19
Our Strategic Pillars Centum 3.0 FY14 - FY19 Centum 3.0 was Centum’s 5-year strategy developed for the period FY 2014 – FY 2019 as a developer of investment-grade assets Return Scale Focus Brand Cost Generate 35% Grow total assets Develop and scale Develop sector Maintain costs annualised return to
Slide 5: Our Strategic Pillars: Transition to Centum 4.0
Our Strategic Pillars Transition to Centum 4.0: FY20 - FY24 Key objectives have been set that seek to reshape and rebalance the business to focus on sustaining attractive returns 01 Optimise Gross • Robust exit pipeline of mature assets across the Portfolio to optimize Gross Return Return • Portfoli
Slide 6: Financial Overview: Asset Growth FY14 – HY19
Financial Overview Asset Growth FY14 – HY19 Total Assets NAV Year KES billions KES/Share Year KES 73.6 per share HY19 73.2 FY18 HY19 KES 67.0 billion 67.3 FY17 FY18 66.1 FY17 61.6 59.5 FY16 Total assets and NAV per share have FY16 51.5 grown by a CAGR of 20.6% and 18.3% respectively since commenceme
Slide 7: Our Portfolio as at 30 September 2018
Our Portfolio As at 30 September 2018 Total Assets NAV NAV/ Share 01 Real Estate Land banks in strategic locations that have KES 33.4 billion KES 22.0 billion KES 33.06 | 44.92% been master-planned to new urban nodes 02 Private Equity Trading subsidiaries or investments KES 23.5 billion KES 20.9 bil
Slide 8: Our Track Record: Real Estate
Our Track Record Real Estate Two Rivers Development Limited Vipingo Development Limited Stake: 58.3% Stake: 100% • Project development activities following acquisition • Project development activities following acquisition of 102 acres in the Diplomatic Blue Zone of 10,254 acres of land in Kilifi Co
Slide 9: Our Track Record: Private Equity
Our Track Record Private Equity • Consolidates 3 of the country’s • Centum supported AON’s • Strengthened corporate six Coca Cola bottlers in 2013, business development efforts governance structures and through a 3-way share swap to through development of the board composition a holding company cont
Slide 10: Our Track Record: Marketable Securities
Our Track Record Marketable Securities Quoted Private Equity vs. NSE 20 Gross Return (%) Portfolio Diversification – HY19 70% 62% 60% 56% 50% 45% 45% 40% 45% 36% 31% 30% 20% 24% 10% 10% 0% 2% 0% 6% -4% Cash & Cash Equivalent 5% 2% -10% -5% Mutual Funds 14% -20% -13% -30% -24% -22% Fixed Income 36% 2
Slide 11: Our Performance: 5 Year Return Snapshot
Our Performance 5 Year Return Snapshot KES millions FY14 FY15 FY16 FY17 FY18 HY19 Return Drivers Dividend 1,789 1,318 2,671 1,765 2,040 266 FY14 Income • Partial sale of Tanzania Breweries Limited leading to payment of Interest Income 40 77 676 1,326 1,347 623 KES 1.1b and dividends by Centum Exotix
Slide 12: Our Performance: Company Liquidity as at HY19
Our Performance Company Liquidity as at HY19 Listed securities held on KES 58m Centum balance sheet Cash and equivalents held by Centum KES 1.03b 6.92% KES 4.6b Cash and Total cash and marketable marketable securities as securities percentage of Listed securities held through 100% owned company asse
Slide 13: Our Performance: Company Gearing
Our Performance Company Gearing Borrowings by Nature of Debt HY19 Debt Maturity Profile (KES millions) 2% Overdraft Facility Revolving Credit 5,894 6,066 Facility 17% KES million 43% Bond II KES 14.77b 2,522 Total Debt 287 38% Term Loan FY19 FY20 FY21 FY22 Debt Service Coverage Long-Term Debt to Equ
Slide 14: Our Performance: Top Portfolio Companies as at September 2018
Our Performance Top 8 Portfolio Companies as at 30 September 2018 Carrying Value Net Asset Value Rank Portfolio Company Valuation Basis Contribution (%) Sector KES millions Vipingo Development 1 9,999 Net Asset Value 14.7% Real Estate Ltd.1 2 Almasi Beverages Ltd. 8,697 EBITDA multiple 14.7% FMCG Ce
Slide 15: Our Portfolio
Our Portfolio Pg. 15 01 Real Estate Pg. 25 02 Private Equity Pg. 32 03 Marketable Securities Pg. 35 04 Development Portfolio 15
Slide 16: Real Estate Portfolio: Infill Development Projects as at January 2019
Real Estate Portfolio Infill Development Projects as at January 2019 Infill Project Size Units under Development Realised Sales Key Dates 70% in market validation Construction Start 30% in construction Q4 2018 1,327 units >KES 1 billion Completion Q3 2020 258 units sold 17% in market validation Cons
Slide 17: Real Estate Portfolio Assets
Real Estate Portfolio Assets Sector Net Asset Value contribution KES 22,002 million | 44.9% | KES 33.06 per share Vipingo Development Limited Stake: 100% 10,254 acres mixed-use development anchored by an industrial zone dubbed the Vipingo Investment Park, the site is located in Kilifi County, Kenya.
Slide 18: Two Rivers Development: Outlook
Real Estate Portfolio Two Rivers Development Value Drivers Project Pipeline Riverbank Apartments • Two Rivers Mall was 77%(1) let (on gross lettable area) Retail ― Increased tenant uptake on both local and international brands • Two Rivers Office Towers, 14%(1) of the space is Office currently let w
Slide 19: Vipingo Development: Overview
Real Estate Portfolio Vipingo Development: Overview HY19: Vipingo had achieved; Value Uplift plot sales of KES 400m and To realize a target return of 30% realized sales of KES 1.05b from infill projects Sale of Unserviced Land Sale of circa 3,000 acres of unserviced land Strategic Pillars Sale of Se
Slide 20: Vipingo Development: Progress Update
Real Estate Portfolio Vipingo Development: Progress Update Sea Water Investment Park Awali Estate 1255 Palm Ridge Desalination Acquire Land Master Plan and Obtain Approvals (NEMA*, PPA2) Market Validation - KES 2 billion third- Discussions Discussions Discussions Fundraising party capital Underway U
Slide 21: Vipingo Development: Project Pipeline
Real Estate Portfolio Vipingo Development: Project Pipeline Residential Developments Commercial Developments Awali Estate Investment Park Sales Target: Sales Target: KES 2.6 billion KES 4.1 billion 152 units on 30 acres Spread over 180 acres 1255 Palm Ridge Infrastructure – Water & Power • Significa
Slide 22: Pearl Marina: Overview
Real Estate Portfolio Pearl Marina: Overview Value Uplift Unlock key infrastructure and social amenities within the development HY19: Pearl Marina had Targeted key social amenities include an realized sales of KES 754 international school, sports facilities, and million medical facilities Uganda Nat
Slide 23: Pearl Marina: Progress Update
Real Estate Portfolio Pearl Marina: Progress Update Riviera Mirabella Villas Bella Vista Town Houses Acquire Land Master Plan and Obtain Ongoing Ongoing Approvals (NEMA*) Market Validation Ongoing Fundraising Discussions underway Discussions underway Discussions underway Construction to commence Tar
Slide 24: Pearl Marina: Project Pipeline
Real Estate Portfolio Pearl Marina: Project Pipeline Mirabella Riviera Town Residences Houses Gross Built Area: Gross Built Area: 6,600m2 11,660m2 Sales Target: Sales Target: TBD USD 7.3 million Currently under 22 units on 4.7 acres 53 units on 4.7 acres market validation Bella Vista Apartments Gros
Slide 25: Our Portfolio
Our Portfolio Pg. 15 01 Real Estate Pg. 25 02 Private Equity Pg. 32 03 Marketable Securities Pg. 35 04 Development Portfolio 25
Slide 26: Private Equity: Performance over Centum 3.0
Private Equity Performance over Centum 3.0 Private Equity portfolio remains a significant driver of returns for the Group reflecting the success of our active portfolio management strategy Private Equity IRR 100% 82% Centum 3.0 80% Target IRR 60% 45% 40% 33% 33% 30% 27% 20% 0% Centum 2.0 FY15 FY16 F
Slide 27: Private Equity Portfolio: Fast Moving Consumer Goods
Private Equity Portfolio Fast Moving Consumer Goods Portfolio FMCG Sector Net Asset Value contribution KES 12,031 million | 24.6% | KES 18.08 per share Almasi Beverages Limited Stake: 53.9% Net Asset Value per share contribution: KES 10.84 per share | 14.7% The holding company owning three of Kenya’
Slide 28: Private Equity Portfolio: Robust Growth in Earnings – Bottlers
Private Equity Portfolio Robust Growth in Earnings – Bottlers Centum’s Share of Almasi Bottlers Limited (ABL) & Nairobi Bottlers’ Contribution to NAV, HY18 Bottlers Limited (NBL) EBITDA (KES mn), 2013 - 2017 3000 CAGR: 22% 2,122 24.4% 57.3% millions 2000 1,841 1,658 Bottlers NAV Bottlers NAV 1,368 C
Slide 29: Private Equity Portfolio: Financial Services Portfolio
Private Equity Portfolio Financial Services Portfolio Financial Services Sector NAV contribution KES 3,607 million | 7.2% | KES 5.30 per share Sidian Bank Limited Stake: 77.0% Net Asset Value per share contribution: KES 4.64 per share | 6.3% A leading tier III bank SME focused commercial bank in Ken
Slide 30: Sidian Bank: Accelerated Growth in Non-funded Income
Sidian Bank Accelerated Growth in Non-funded Income 2013 2017 KES 8,694 KES 11,409 Loan Book Loan Book KES 9,165 KES 12,761 Customer Deposits Customer Deposits KES 1,868 KES 3,447 Shareholder Funds Shareholder Funds • The bank is on track to position itself as a leading bank in trade finance solutio
Slide 31: Private Equity Portfolio: Others Portfolio
Private Equity Portfolio “Others” Portfolio Others Sector NAV contribution KES 3,532 million | 7.2% | KES 5.31 per share Isuzu East Africa Stake: 17.8% Net Asset Value per share contribution: KES 2.83 per share | 3.8% Involved in the assembly of trucks, pick-ups and bus chassis via a complete knock
Slide 32: Our Portfolio
Our Portfolio Pg. 15 01 Real Estate Pg. 25 02 Private Equity Pg. 32 03 Marketable Securities Pg. 35 04 Development Portfolio 32
Slide 33: Marketable Securities: Portfolio Return & Track Record
Marketable Securities Portfolio Return & Track Record Marketable Securities NAV contribution KES 4,613 million | 9.4% | KES 6.93 per share MSP vs MSCI – Long Term Track Record Contribution to Group Liquidity over Centum 3.0 Growth of 1,000 Investment from March 2009 [3.9x] 6,000 708 2,532 5,000 QPE
Slide 34: Marketable Securities: Portfolio Performance
Marketable Securities Portfolio Performance Portfolio Returns & Attribution – HY19 Portfolio Diversification by Asset Class (%) MSP vs. Primary & Secondary Benchmarks – HY19 0% 5% 14% -5% -10% -9% -15% 45% -14% -17% 36% -20% -25% -25% -30% Centum MSP NSE 20 Share Index MSCI Africa ex- MSCI Frontier
Slide 35: Our Portfolio
Our Portfolio Pg. 15 01 Real Estate Pg. 25 02 Private Equity Pg. 32 03 Marketable Securities Pg. 35 04 Development Portfolio 35
Slide 36: Development Portfolio: Overview
Development Portfolio Overview Development Portfolio Net Asset Value contribution KES 1,438 million | 2.9% | KES 2.16 per share Sector Split – Development Portfolio as at September 2018 Assets under development 6% KES 5,309 million The development portfolio’s focus Development Assets as at HY19 is t
Slide 37: Development Portfolio: Priorities in FY19
Development Portfolio Priorities in FY19 Greenblade Growers Limited Completed: Completed: Completed: Completed: • PPA secured, EPC and O&M • PPA secured, Debt term • The objective is to establish • The objective is to establish a contracts, Debt term sheets sheets secured, NEMA a business that can a
Slide 38: Disclaimer
Disclaimer Certain statements in this presentation concerning our future growth prospects are forward-looking statements, which involve a number of risks and uncertainties that could cause actual results to differ materially from those presented in this report. The risks and uncertainties relating t
Slide 39: Appendix
Appendix
Slide 40: Appendix 1: Real Estate Sector Snapshot
Appendix 1: Real Estate Sector Snapshot Macro Commercial 7% sector expansion 1H18 83% occupancy rates 17% six-year CAGR growth of land prices 12% growth in absorption 24% average annual return over the last 5 years Retail Residential 60% - 75% occupancy rates for new retail Avg. sales price centres
Slide 41: Appendix 1: Real Estate Valuations as at September 2018
Appendix 1: Real Estate Valuations as at 30 September 2018 Carrying Value Carrying Value Valuation NAV Per Share NAV Per Share Portfolio Company HY19 (KES million) FY18 (KES million) Methodology HY19 (KES) HY19 (%) Vipingo Development Ltd. 9,999 7,646 Net Asset Value 10.80 14.7% Stake: 100% Two Rive
Slide 42: Appendix 2: Private Equity FMCG Sector Snapshot
Appendix 2: Private Equity Fast Moving Consumer Goods Sector Snapshot Total population in millions, 20-39 Years 2015 – 2030F KES 4.56 trillion 12.6 million 21.3 19.0 millions 16.8 14.8 Kenya’s forecasted total Current estimate of number household spending for of households in Kenya 2018 2015 2020f 2
Slide 43: Appendix 2: Private Equity Financial Services Sector Snapshot
Appendix 2: Private Equity Financial Services Sector Snapshot 4.4% 48.9% Private Sector Credit Growth in Kenya October 2015 – October 2018 19.80% Private sector credit growth Average bank liquidity ratio percent as at October 2018 as at October 2018 3.6% 12.3% 4.40% Interbank rate as at January NPL
Slide 44: Appendix 2: Private Equity Valuations as at September 2018
Appendix 2: Private Equity Valuations as at 30 September 2018 Carrying Value (KES million) Discounted Portfolio Company Stake Sector HY19 FY18 Valuation Method Multiple4 Almasi Beverages Limited 53.88% FMCG 8,697 8,697 FV3: Multiples - EV1/EBITDA 6.94x Nairobi Bottlers Limited 27.60% FMCG 5,078 5,07
Slide 45: Appendix 3: Marketable Securities Sector Snapshot
Appendix 3: Marketable Securities Sector Snapshot NSE-20 and NASI, 2012 – 2018 2018 equity turnover up 2% from USD 1.7b USD 1.65b in 2017 44% 45% 39% 35% 2018 foreign net outflows compared 29% 28% USD 0.3b to USD 0.1b in 2017 25% Highest in NSE history 19% 19% 17% 15% estimated company earnings grow
Slide 46: Appendix 3: Marketable Securities Valuations as at September 2018
Appendix 3: Marketable Securities Valuations as at 30 September 2018 Carrying Value Carrying Value Valuation Portfolio Company Stake HY19 (KES million) FY18 (KES million) Method Centum Exotics Limited 100% 3,587 3,589 Market Price Centum QPE 100% 58 396 Market Price Receivables 100% 450 331 Cost Cas
Slide 47: Appendix 4: Development Valuations as at September 2018
Appendix 4: Development Valuations as at 30 September 2018 Carrying Value Carrying Value Valuation Portfolio Company Stake HY19 (KES million) FY18 (KES million) Method Amu Power Ltd 51.00% 2,100 2,144 Cost Akiira Geothermal Limited 37.50% 1,510 1,491 Cost ACE Holdings Limited 16.40% 643 556 Cost Gre
Slide 48: investorelations@centum.co.ke
investorelations@centum.co.ke Centum Centum Investment InvestmentCompany CompanyPlc Ltd. Tel +254 20 2286000 99h Floor, Southern Tower, Two Rivers International House, Mobile +254 709 902 000 PO Box 10518-00100 5th Flr. Mama Ngina St. Email investorelations@centum.co.ke Nairobi, Kenya PO Box 10518-0
Centum Investment Company — Investor Presentation (January 2019) on 6ix