Centum Investment Company Plc · NSEKE:CTUM
Centum Investment — Shareholder Meeting (September 2022)
53 slides from Centum Investment's shareholder meeting presentation, Sep 16, 2022
Slide 1: 55th Annual General Meeting
55th Annual General Meeting 16th September 2022
Slide 2: Agenda
Agenda Dr. Donald Kaberuka – Chairman, Board of Directors Chairperson’s Report (Represented at this AGM by the Vice Chairperson - Dr. Laila Macharia) Business Update Dr. James Mworia – Chief Executive Officer Financial Review Risper Alaro – Group Finance Director Dr. Donald Kaberuka – Chairman, Boar
Slide 3: Chairperson’s Report
Chairperson’s Report Dr. Laila Macharia 3
Slide 4: Governance update
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Slide 5: 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 6: Board Changes
Board Changes Ms. Catherine Mturi-Wairi ▪ Ms. Catherine Mturi-Wairi was appointed to the board following the exit of Ms. Mary Ngige. ▪ Ms. Mturi-Wairi is a respected business leader who brings with her three decades of experience in finance and accounting. ▪ She has a track record of developing and
Slide 7: Our Governance Model
Our Governance Model ✓ The Board has adopted the guiding principles under the Code of Corporate Governance Practices for Issuers of Securities to The Public, 2015 (the Code). Governance ✓ Although the Code is on “Apply or Explain” model, we strive for utmost compliance as a strong foundation for val
Slide 8: Centum 4.0 Strategy update
Centum 4.0 Strategy update 8
Slide 9: Centum 4.0 Strategy
Centum 4.0 Strategy The Financial Year ended 31 March 2022 marked the end of three years into the Centum 4.0 Strategy period. Our key focus under the strategy remains: 1. Growth and preservation of shareholder wealth; and 2. Generating a sustainable stream of annuity cash income (dividend and intere
Slide 10: Centum 4.0 Strategy | Progress on financial objectives
Centum 4.0 Strategy | Progress on financial objectives Strategic Pillars (FY2022 – FY2024) Achievements to date | FY2020 – FY2022 Returns & Dividend Pay-out: ▪ Net Asset Value at 31 March 2022 was Kes 41.3 Bn against the • Generate 20% annualised return & grow NAV to Kes 70Bn by strategy target of K
Slide 11: Centum 4.0 | Progress on non-financial objectives
Centum 4.0 | Progress on non-financial objectives Strategic Pillars (FY2022 – FY2024) Achievements to date | FY2020 – FY2022 ▪ Our Growth portfolio comprised 85% of our total investment portfolio as Portfolio Focus: at 31 March 2022. • Allocate 75%-80% of assets to growth portfolio (PE & RE) ▪ Our s
Slide 12: Centum 4.0 Strategy | Dividend Policy
Centum 4.0 Strategy | Dividend Policy Our policy is to pay 30% of annuity cash income Dividend Policy Dividend pay-out drivers 31 March Management Focus Efforts to enhance future dividend distribution % Change Kes Mn 2020 2021 2022 FY23 and beyond… Y-o-Y Investment income 3,695 1,517 1,662 10% Exit
Slide 13: FY2022 First & Final Dividend
FY2022 First & Final Dividend ▪ In FY2022, the company generated cash annuity income (dividend and interest income) of Kes 1.3Bn from the portfolio. ▪ Our dividend policy is to pay out 30% of annuity income to shareholders. Proposed Dividend ▪ In line with the policy, the Board of Directors of the C
Slide 14: Sustainability Report
Sustainability Report 14
Slide 15: Environmental, Social and Governance (ESG) Pillars
Environmental, Social and Governance (ESG) Pillars UN Sustainable ESG Pillar Development Goals Why it matters to us 1) Education Ensures inclusive and equitable quality education and promotes ESG considerations remain lifelong learning opportunities for all at the centre of our investment decisions,
Slide 16: Our ESG efforts in a snapshot
Our ESG efforts in a snapshot Our investment objectives are anchored on sustainable development. We make conscious decisions to ensure responsible investing anchored on social, environmental and governance factors. ESG in a Snapshot Water and Solar Energy Education Gender Diversity Water & Wastewate
Slide 17: ESG | Highlights of Impact
ESG | Highlights of Impact How we contribute 1. Ksh. 180 million+ in school infrastructure and establishment of a Vocational Training Centre. 2. 300+ scholarships to bright but underprivileged students. 3. 6,866 young people accessing free online courses on our Ajiry e-learning platform School infra
Slide 18: ESG | Highlights of Impact
ESG | Highlights of Impact “At Centum, the diversity of our workforce is a source of a wide array of skills and expertise, creates broad networks and fosters an inclusive and open corporate culture.” How we contribute 1. We are committed to providing and promoting equal opportunities and ensure that
Slide 19: ESG | Highlights of Impact
ESG | Highlights of Impact How we contribute 1. 2+ million litres of wastewater recycled daily at Two Rivers 2. 3 million litres of sea water desalinated plant at Vipingo 3. Supplied 1+ million litres of treated water to Githogoro informal settlement 4. Kes 20+ million towards conservation in the Up
Slide 20: ESG | Highlights of Impact
ESG | Highlights of Impact How we contribute 1. 1.2 MW Solar plant at Two Rivers. 2. Reduced carbon emissions at Vipingo 3. Akiira Geothermal Plant. 20
Slide 21: Business Review
Business Review Dr. James Mworia – Chief Executive Officer 21
Slide 22: Business Review
Business Review
Slide 23: Our Business Model
Our Business Model Centum is an investment company that creates shareholder value by driving the process of creating underlying value in our investment portfolio. Our focus is to generate superior returns for our long-term shareholders by providing them with access to otherwise inaccessible investme
Slide 24: Our Business Model | Preserving value in an elevated risk environment
Our Business Model | Preserving value in an elevated risk environment 41.4 ▪ At the onset of Centum 4.0, we anticipated a difficult economic environment which turned out to be the case and this was further exacerbated by the global Covid -19 pandemic. ▪ Our focus in Centum 4.0 shifted to deleveragin
Slide 25: Portfolio Snapshot
Portfolio Snapshot Portfolio Assets Highlights Private Equity • Growth portfolio was 85% of total portfolio value at 31 March 2022. Managed by: • The total carrying value was Kes 38.7Bn which was 2.56x of the net cost Held for capital gains Growth Portfolio of our investment (Kes 15.1Bn). • Net cost
Slide 26: Portfolio Snapshot | Growth and cash distribution over time
Portfolio Snapshot | Growth and cash distribution over time Initial Cost of Cash Distribution Net Cost of Carrying Multiple on Investment Percentage Portfolio Assets Sector Stake investment since inception (KES Investment Value (KES Net Cost Date of Net Cost (KES Mn) Mn) (KES Mn) Mn) (MOC) (Year) (M
Slide 27: Portfolio Update | Sidian Bank Value Creation
Portfolio Update | Sidian Bank Value Creation Centum supported Sidian Bank’s Total Assets Customer Deposits management to create and grow 45,000 41,432 30,000 value driven by the following key 25,830 levers: 40,000 33,509 25,000 22,740 35,000 1. Brand: We transitioned from the 30,000 25,309 26,460 2
Slide 28: Portfolio Update | Sidian Bank Exit
Portfolio Update | Sidian Bank Exit Transaction Highlights Rationale for Exit Kes 4.3Bn | Expected exit proceeds 1. Relatively superior valuation: The exit price Kes 2.7Bn | Pre-exit Carrying Value in Centum’s books we secured valued the bank at 10.6x P/E and 1.1x P/BV, both of which above the avera
Slide 29: Performance Highlights
Performance Highlights
Slide 30: FY2022 Financial Performance Highlights
FY2022 Financial Performance Highlights Performance drivers • Annuity cash income growth driven by Increase in Kes 551 million strong MSP performance. operating profit 125% Operating profit • Operating cost reduction realized from organization restructuring. • Finance cost reduction realized from de
Slide 31: FY2022 Financial Performance Drivers
FY2022 Financial Performance Drivers ▪ During Centum 3.0 many of the companies were at infancy and therefore required a more hands-on approach to parenting which included provision of shared services from a centralized function which was structured under Centum Business Solutions Limited (CBS). Opti
Slide 32: Share Price to NAV Gap
Share Price to NAV Gap Centum NAV & Share Price vs NSE 20 Index 90.0 6,000 5,248 ▪ During the first 36 months of the 80.0 4,946 79.0 Centum 4.0 strategy period, the NSE- 5,000 20 Index declined by 13.4% 70.0 73.2 71.3 reflecting a sustained market bear 63.5 3,982 67.3 60.0 3,845 63.1 4,000 run. 62.1
Slide 33: Closing the Share Price to NAV Gap
Closing the Share Price to NAV Gap We focus on enhancing long term shareholder value Centum 4.0 Plan Management initiatives to enhance cash operating profit ▪ We have locked in an exit of Sidian Bank at Kes 4.3Bn which is Kes 1.6Bn above the carrying value as at 31 1 March 2022. Monetize mature ▪ On
Slide 34: Financial Reporting (FiRe) Award
Financial Reporting (FiRe) Award 1st Runners Up in Integrated Reporting Category “We continue to raise the bar in our integrated reporting as we aim to fully disclose financial and non- financial business information in a comprehensive, timely and accurate manner. Our objective is to go beyond the m
Slide 35: Financial Performance – FY2021/22
Financial Performance – FY2021/22 Risper Alaro – Group Finance Director 35
Slide 36: Company Financial Statements
Company Financial Statements
Slide 37: Company Statement of Total Comprehensive Income
Company Statement of Total Comprehensive Income The total return statement represents the performance of Centum as an investment holding company. Income from the portfolio net of expenses and finance costs represents the operating performance of the company. The portfolio is held at fair value in th
Slide 38: Company Statement of Financial Position
Company Statement of Financial Position Kes Mn Mar 2022 Mar 2021 %Δ Kes Mn Mar 2022 Mar 2021 %Δ Growth portfolio: Borrowings 4,159 4,122 1% Investment in Subsidiaries 22,243 26,258 (15%) Other Liabilities 1,476 1,572 (6%) Debt Investment in Subsidiaries 9,275 9,528 (3%) Total Liabilities 5,635 5,693
Slide 39: Company Cash Flow Statement
Company Cash Flow Statement Kes Mn Mar 2022 Mar 2021 Net cash generated from operating activities 1,240 4,541 ▪ Closed the year with a positive cash position net Cash flows from investing activities of overdraft. Purchase of property and equipment (7) (0) Investments in subsidiaries (equity) (183) -
Slide 40: Consolidated Financial Statements
Consolidated Financial Statements For purposes of compliance with the Company’s Act requirements
Slide 41: Consolidated Statement of Total Comprehensive Income
Consolidated Statement of Total Comprehensive Income Summary (Kes Mn) Mar 2022 Mar 2021 %Δ Profit/(loss) from trading businesses 73,215 (529,034) 114% 110% improvement recorded in Profit from financial services 691,657 329,858 110% Group performance. Profit from real estate investments 127,049 875,3
Slide 42: Consolidated Statement of comprehensive income
Consolidated Statement of comprehensive income FY2022 FY2021 %Δ Kes. ‘000 73,215 (529,034) 114% Profit from trading business ▪ With exception of the TRDL sub-group, the consolidated profit before tax Profit from real estate operations 127,049 875,300 (85%) increased by 173% to close at Kes 343Mn Ope
Slide 43: Consolidated Statement of Financial Position
Consolidated Statement of Financial Position Kes Mn Mar 2022 Mar 2021 Investment portfolio 11,655 20,173 Loans and advances - 20,423 ▪ The Consolidated Statement of Financial Position Cash and cash equivalents 1,196 5,122 represents an aggregation of the assets and Assets held for sale 43,030 - liab
Slide 44: Group Borrowings | Debt levels and coverage
Group Borrowings | Debt levels and coverage Centum made a strategic decision to deleverage in the Centum 4.0 Strategy period. At portfolio level, borrowings is aligned to the respective company’s debt capacity. Ongoing initiatives to re-align the capital structure at TRDL Mitigation of the USD expos
Slide 45: Outlook
Outlook: Dr. James Mworia
Slide 46: Outlook | FY 2022/23
Outlook | FY 2022/23 We are optimistic that the key value drivers we embarked on in FY2022 will be closed during FY2023 and significant progress be made towards our strategic objectives Portfolio Aspect Key Focus Areas ▪ Implementation of value creation plans for each of our portfolio companies to r
Slide 47: Outlook | FY2022/23
Outlook | FY2022/23 Portfolio Aspect Key Focus Areas ▪ Keep the operating costs below 30% of annuity cash income per the Centum 4.0 strategic objectives. Cost Efficiency ▪ We expect to reduce our debt by at least 50% before the end of the 2023 financial year thereby reducing debt service costs ▪ Mai
Slide 48: Formal Business
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Slide 49: Ordinary Business
Ordinary Business 3 (i) To adopt the Consolidated Audited Financial Statements for the financial year ended 31 March 2022 together with the Directors’ and Auditors’ reports thereon To approve the Directors’ recommendation to declare a first and final dividend of Kes 0.587 per ordinary share for the
Slide 50: Ordinary Business
Ordinary Business d) Pursuant to section 769(1) of the Companies Act 2015, to ratify the appointment of the following directors as Audit Committee members: i. Ms. Catherine Mturi-Wairi [Chairperson]; ii. Dr. Laila Macharia; iii. Mrs. Catherine Igathe; iv. Dr. Moses Ikiara; and v. Mr. Christopher Huk
Slide 51: Special Business
Special Business As a special resolution: 4 THAT with effect from the conclusion of this meeting, the Memorandum and Articles of Association of the Company be and are hereby amended by incorporating the proposed changes and new articles set out in the Annex to this Notice to align the Company’s Memo
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Slide 53: Centum Investment Company Plc
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
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