Kuwait Projects Company Holding (K.S.C.P.) · KSE:KPROJ
Kuwait Projects Company Holding (K.S.C.P.) — Kuwait Projects Company Holding (KIPCO) — Debt Investor Presentation (May 2012)
37 slides from Kuwait Projects Company Holding (K.S.C.P.)'s debt investor presentation, May 2012
Slide 1: Building Order – KIPCO Debt Presentation May 2012
Year of Building Order D KIPCO Debt Presentation May 2012 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
Index Key Investment Highlights Our Business, Strategy and Team Performance Update & Key developments Debt Metrics Conclusion Annexure Bloomberg Ticker: KPROJ KK Reuters Ticker: KPRO.KW 3
Slide 4: Introduction: Key Investment Highlights
Introduction: Key Investment Highlights Proven Track IRR of 40% on fully realized investments and 21% on all investments (realized and Record unrealized) over the last 14 years1 Ruling Family Al Futtooh Investments (AFH) owned by members of Kuwaiti ruling family have a Shareholders controlling stake
Slide 5: Index
Index Key Investment Highlights Our Business, Strategy and Team Performance Update & Key developments Debt Metrics Conclusion Annexure 5
Slide 6: Our Business, Strategy and Team
Our Business, Strategy and Team KIPCO is a multi-sector operating holding company with a diversified portfolio spanning the GCC and wider MENA region OUR BUSINESS AUM of US$25 billion1 Present in 16 MENA countries Mainly financial services and media; profitable for the last 20 consecutive years OUR
Slide 7: Our Presence by Geography & Sectors
Our Presence by Geography & Sectors Major Sectors Geography Asset Commercial management Revenues1 Insurance Media Real Estate Industrial Others banking & investment (2011) banking Kuwait ● ● ● ● ● ● ● 49% UAE ● ● ● 6% Bahrain ● ● ● ● 6% KSA ● ● ● 5% Jordan ● ● ● ● ● 15% Algeria ● ● ● ● 7% Others ● ●
Slide 8: Strategic Roadmap
Strategic Roadmap Building Businesses Regional Thought Outlook leadership Investing Strong in engines managerial Being first Diversified MENA of growth revenue expertise in the streams region Team Target Approach ROE: 20% Balanced Portfolio 8
Slide 9: Controlling or Majority Stakes in Principal Companies
Controlling or Majority Stakes in Principal Companies Business Commercial Asset Management & Insurance Media Segments Banking Investment Banking (AMIB) Main Entities KIPCO Effective 59.8% 95.7% 82.1%3 44.7% 60.4% Stakes1 Board 6 of 9 6 of 6 6 of 6 4 of 104 2 of 75 Representation Market Cap 2,330 483
Slide 10: Supportive Shareholder With Ruling Family Links
Supportive Shareholder With Ruling Family Links Shareholding Profile (Mar 2012) Kuwaiti Ruling Family Support Retail Treasury KIPCO’s principal shareholder is Al Futtooh Holding Investors Shares Company K.S.C. (Closed) (“AFH”), a Kuwaiti 4.9% 2.2% HNIs company owned by members of the Kuwaiti ruling
Slide 11: Index
Index Key Investment Highlights Our Business, Strategy and Team Performance Update & Key developments Debt Metrics Conclusion Annexure 11
Slide 12: Recent Developments
Recent Developments All core operating companies operating performance improved in Q1 2012 Regionalization progress: − Commercial banking: Turkey (Eurobank Tekfen) − Insurance: Iraq (Dar Al Salam Insurance Company) and Egypt (Takaful Life Insurer ELTIC) New business lines: − OSN Play Launched;
Slide 13: Performance Update
Performance Update Strong asset quality, operating performance and capitalization of core companies Net profit grew by 26.3% from US$50 million in Q1’11 to US$63 million in Q1’12 Higher Net Interest Income was the main driver for the level of growth registered Strong CAR of 18.3% and comfortable l
Slide 14: Performance Update (cont’d)
Performance Update (cont’d) Financial Discipline KIPCO diversified, extended and optimized its liability and liquidity profile − Completed US$ 287 million (KD80 million) KD bond issue and prepaid partial term Prudent Risk loan of US$115 million in January 2012 (details on next slide) Management − Re
Slide 15: Key Development: Liability & funding cost optimization
Key Development: Liability & funding cost optimization On 16th January 2012, KIPCO completed a 4 year KD denominated bond of KD80 million (US$ 287 million) Key terms: Maturity: 4 year bullet maturing 15th January 2016 Pricing: Tranche 1: Fixed rate @4.75% Tranche 2: Floating rate @ Kuwait central ba
Slide 16: Liability & funding cost optimization…cont’d
Liability & funding cost optimization…cont’d Use of proceeds: 1. Prepaid KD32 million (US$115 million) of outstanding KD72 million (US$258 million) of term loan 2. Remaining held as cash to be used for selective prepayments of debt Better terms on remaining KD40 million term loan: Removed Maturity:
Slide 17: Kuwait Development Plan
Kuwait Development Plan Purpose: Overview − Upgrade infrastructure − US$108 billion 4 year plan − Diversify non oil revenue − FY 2010/11 – Approved at US$18 billion comprising of 884 projects − Create employment − FY 2011/12 – Estimated at US$18.7 billion comprising of 1,240* projects − Develop priv
Slide 18: Kuwait Development Plan (cont’d)
Kuwait Development Plan (cont’d) Kuwait has spent $11.4 bn in the 2010-11 fiscal year on projects for its 4-year development plan The spending is almost 62 percent of the original allocation The government will implement 1,370 projects in the next fiscal year starting from April 2012; approval pendi
Slide 19: Burgan Bank Group
Burgan Bank Group Burgan Bank, the commercial banking arm of KIPCO group, today has become a regional player with market leadership in Jordan, Iraq, Tunisia and Algeria Business Highlights Key Subsidiaries CAR of 18.3% as on Mar 31,2012, amongst Market % Name Market Position Cap (US$ Country the h
Slide 20: United Gulf Bank
United Gulf Bank UGB, the Asset Management and Investment Banking arm of KIPCO Group, is focused on growing the financial services network across the MENA region Business Highlights Key Subsidiaries and Associates Bahrain-based financial services group listed on the Market Market Position Coun % Nam
Slide 21: Gulf Insurance Company
Gulf Insurance Company GIC, the insurance arm of KIPCO, is amongst the top 6 insurance players in the MENA Region Business Highlights Key Subsidiaries/Associates Kuwait-based insurance company listed on the KSE Market Market Coun % Name Cap Presence across the MENA region position -try Stake1 US$m2
Slide 22: OSN: MENA TV Overview (2010)
OSN: MENA1 TV Overview (2010) MENA Million Latin America UK India US Region1&2 331 551 62 1,191 310 Population3 63 NA 26 225 132 Households 54 120 25 135 116 TV Households 2 37 14 112 102 Pay TV TV Households /Total 85% NA 94% 60% 88% Households (%) Pay TV Households / TV 3% 30% 54% 83% 88% Househol
Slide 23: OSN
OSN The #1 pay-TV platform by revenue in the MENA region Business Highlights Geographical Presence (24 countries) Largest pay TV operator in MENA by revenues Syria Tunisia Cyprus Morocco Lebanon Iran Serving a population base of 410 million Palestine Iraq Kuwait Jordan Bahrain Algeria Libya Low Pay
Slide 24: Core Companies: OSN
Core Companies: OSN Subscribers Net Adds Thousand Thousand 601 50 40 39 526 564 37 30 455 495 30 23 10 -10 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 Q1'11 Q2'11 Q3'11 Q4'11 Q1'12 -30 Churn Subscribers by country (Mar’ 2012) 28% Others KSA 23% 21% 25% 20% 20% 17% Egypt 9% Bahrain 4% UAE 31% Q1'11 Q2'11 Q3'11 Q4'
Slide 25: KIPCO Consolidated: Financial Performance
KIPCO Consolidated: Financial Performance Revenues Net Income Consolidated Assets US$ million US$ million US$ billion 1,433 1,465 21.9 20.3 20.8 1,261 162 19.1 132 108 390 336 29 31 2009 2010 2011 Q1'11 Q1'12 2009 2010 2011 Q1'11 Q1'12 2009 2010 2011 Q1'12 Note: Exchange rate of US$=0.27855KD 25
Slide 26: Index
Index Key Investment Highlights Our Business, Strategy and Team Performance Update & Key developments Debt Metrics Conclusion Annexure 26
Slide 27: KIPCO (Parent): Debt Metrics
KIPCO (Parent): Debt Metrics (US$ million) Financial KIPCO (Parent) Dec 31, 2010 Dec 31, 2011 Mar 31, 2012 Targets Cash & Cash Equivalents 1,014 423 642 Gross Debt 1,880 1,248 1,417 Net Debt 866 825 775 Shareholders’ Equity 1,996 2,072 2,118 Net Parent Debt / Shareholders’ Equity <2.5x 0.44x 0.40x 0
Slide 28: KIPCO (Parent): Cash Coverage
KIPCO (Parent): Cash Coverage Infinite 961 x Infinite 4.5x Current cash sufficient 642 642 641 641 to meet all debt obligations till 2015 - - 144 1 Mar'12 Dec'2012 Dec'2013 Dec'2014 No short term Cash ST Debt Short Term Debt Coverage debt in near and medium term Sufficient cash coverage with no sign
Slide 29: KIPCO Parent Debt Profile
KIPCO Parent Debt Profile Debt Type as at Q1’12 Debt Maturity as at Q1’12 Total Debt: US$ 1.4 billion Total Debt: US$ 1.4 billion 1-2 years 0% Term Loan 10% 2-4 years 30% Bonds 20% MTN 70% > 4 years 70% Enhanced Debt1 Maturity Profile Liquidity KIPCO has cash & bank balances of US$642 5.5 yrs millio
Slide 30: Index
Index Key Investment Highlights Our Business, Strategy and Team Performance Update & Key developments Debt Metrics Conclusion Annexure 30
Slide 31: Conclusion
Conclusion Proven strategy and experienced management team Little impact of recent turmoil in the region on our businesses Operating performance Prudent financial of our businesses management continues to improve Resulting in strong liquidity Increased visibility on with no refinancing risk operatin
Slide 32: Thank You
Thank You
Slide 33: Index
Index Key Investment Highlights Our Business, Strategy and Team Performance Update & Key developments Debt Metrics Conclusion Annexure 33
Slide 34: United Real Estate Company
United Real Estate Company UREC is a major real estate player in Kuwait, ranked fifth based on its revenues Business Highlights Country Key Projects Operations across the Middle East region through a Kuwait United Tower, Al Shaheed Tower, Marina World, mix of fully-owned properties, subsidiaries and
Slide 35: United Industries Company
United Industries Company UIC seeks to be a leading regional investment house with activities in the industrial sector Business Highlights Key Subsidiaries/Associates Established in 1979, UIC operates as a holding Name Sector Country % Stake1 company for the Group’s industrial investments Kuwait Nat
Slide 36: KIPCO: Huge Value Potential for Investors
KIPCO: Huge Value Potential for Investors No Repayment risk Has sufficient cash to service all debt obligations till 2015 (4.5x coverage) Proactive liability Minimal credit Strong secondary management risk and strong market Average debt investor performance of maturity of 5.5 years bonds confidence
Slide 37: Glossary
Glossary AUM: Assets under Management CAR: Capital Adequacy Ratio GPW: Gross Premiums Written IRR: The IRR provided in the Track record (Slide 4) is the leveraged gross IRR (it includes interest expense) and reflects the returns to KIPCO’s shareholders as of Dec 31, 2010. The information concerning
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