Centum Investment Company Plc · NSEKE:CTUM
Centum Investment — Investor Presentation (May 2018)
46 slides from Centum Investment's investor presentation, May 2018
Slide 1: Centum Investment Company Plc Investor Presentation
CENTUM INVESTMENT COMPANY PLC INVESTOR PRESENTATION May 2018
Slide 2: Content
Content 1 Centum Overview 2 Portfolio Highlights 3 Financial Overview 4 Outlook 2
Slide 3: Centum At A Glance
Overview of Centum Centum At A Glance 27.6 62.5 46.4 KES Billion KES Billion KES Million Market Capitalisation (1) Total Assets (2) Net Asset Value (2) 6 19% 25% Active Sectors CAGR on NAV (RE, Power, FS, FMCG, Annualised Return FY14 – HY18 Agribusiness, Education) (3) FY14 – HY18 27% 0.5% 23.5% Net
Slide 4: Track Record
Overview of Centum Track Record COMPANY HOLDING VALUE CREATION PLAN 23% • Demonstrating ability to exit at attractive valuations in public equity markets • Acquired 23% of listed company in 2009 for USD 5M • Exited in 2010 for USD 14M in a highly illiquid counter delivering an IRR of 56% 14% • Demon
Slide 5: Centum 3.0 Strategic Objectives
Overview of Centum Centum 3.0 Strategic Objectives Centum 3.0 Strategic Objectives Achievements as at HY2018 • Generate 35% annualised return between • 25% annualised return achieved between FY RETURN FY 14 and FY 19 14 and HY 18 as compared to NSE average • Consistently outperform the market return
Slide 6: Content
Content 1 Centum Overview 2 Portfolio Highlights 3 Financial Overview 4 Outlook 6
Slide 7: Portfolio Snapshot
Portfolio Snapshot Total Assets as at 30th Sep 2017 Centum Investment Company Plc. Total Assets - KES 62.5Bn GROWTH DEVELOPMENT MARKETABLE REAL ESTATE SECURITIES & Financial CASH FMCG “Others” Agribusiness Power Education Healthcare Services Greenblade Healthcare Growers project CENTUM Limited devel
Slide 8: Top Portfolio Companies
Portfolio Snapshot Top 5 Portfolio Companies at 30th Sep 2017 NAV Per Share NAV Per Share Portfolio Company Centum’s Stake Sector Contribution (KES) Contribution (%) Two Rivers Development 58.3% Real Estate 16.7 23.7% Limited Almasi Beverages Limited 53.9% FMCG 10.4 14.9% Vipingo Development Limited
Slide 9: Portfolio Valuation Methodology
Portfolio Valuation Methodology Valuation Methodology Description Portfolio Breakdown by Valuation as at HY 2018 Net Asset Value • Value derived as an investee’s book value of equity multiplied by Centum’s shareholding KES 4.6Bn Fair Value: Multiples • Market multiples of KES comparable listed compa
Slide 10: Portfolio Highlights: Real Estate Portfolio
Portfolio Highlights 1 Real Estate Portfolio 2 • Growth Portfolio • FMCG • Financial Services • Others 3 Development Portfolio • Power • Agribusiness • Education • Healthcare 4 Marketable Securities Portfolio 10
Slide 11: Real Estate Sector Snapshot
Real Estate Portfolio Sector Snapshot ❖ In 2017, the performance of the real estate sector in Kenya softened as a result of political uncertainty due to the Occupancy Rates of Commercial Offices in extended electioneering period resulting in investors Nairobi, 2015 - 2017 adopting a wait and see att
Slide 12: Real Estate Assets
Real Estate Portfolio Real Estate Assets Two Rivers Development Limited Vipingo Development Limited Stake: 58.3% Stake: 100% A premium and mixed use world class master A master planned mixed use modern precinct planned urban precinct spread across 101 acres and anchored by an industrial park is set
Slide 13: High Level Real Estate Progress Overview
Real Estate Portfolio High Level Real Estate Progress Overview Two Rivers Pearl Marina Vipingo 101.31 acres, Nairobi 389 acres, Garuga 10,254 acres, Kilifi Acquire Land Master Plan and Obtain Approvals Attract Investors at Discussions Underway Discussions Underway Development Level Develop Trunk Pha
Slide 14: Focus Activities Across Portfolio
Real Estate Portfolio Focus Activities Across Portfolio Two Rivers Pearl Marina Vipingo Sale of Bulk • 43 acres of fully serviced land • Finalised master plan on 1,150 Rights/ available acres for an industrial park with a Serviced Land net developable area of 850 acres. Phase 1A has 280 acres and a
Slide 15: Real Estate Sector Contribution
Real Estate Portfolio Real Estate Sector Contribution Real Estate Sector Contribution, HY 2018 Sector NAV Contribution (KES Mn) 19,600 Sector NAV Contribution (%) 42% Sector NAV Per Share Contribution (KES) 29.5 Real Estate Portfolio % Stake NAV Per NAV Per Entity Total Entity Debt Companies Share S
Slide 16: Real Estate Valuation as at HY2018
Real Estate Portfolio Valuation as at HY2018 PORTFOLIO COMPANIES CENTUM’S SECTOR CARRYING CARRYING VALUATION STAKE VALUE VALUE METHOD (KES MN) (KES MN) 31 MAR 2017 30 SEP 2017 Vipingo Development 100.0% Real Estate 5,713 7,794 NAV Limited Two Rivers Development 58.3% Real Estate 11,053 8,795 NAV Lim
Slide 17: Portfolio Highlights: Growth Portfolio
Portfolio Highlights 1 Real Estate Portfolio 2 • Growth Portfolio • FMCG • Financial Services • Others 3 Development Portfolio • Power • Agribusiness • Education • Healthcare 4 Marketable Securities Portfolio 17
Slide 18: FMCG Sector Snapshot
Growth Portfolio FMCG Sector Snapshot ❖ Consumer spending growth expected to remain low over Total household spending, % y/y 2018 due to lingering negative impacts from extended 2016 – 2022F from 2017, namely high inflation and political unrest 10% 9% ❖ Spending on essential items will continue to d
Slide 19: Fast Moving Consumer Goods
Growth Portfolio Fast Moving Consumer Goods Nairobi Bottlers Limited FMCG Sector Contribution, HY 2018 Stake: 27.6% Sector NAV Contribution (KES Mn) 11,134 The largest of the Coca Cola franchise bottlers in Kenya and is engaged in the manufacturing, packaging, distributing Sector NAV Contribution (%
Slide 20: Financial Services Sector Snapshot
Growth Portfolio Financial Services Sector Snapshot Private Sector Credit Growth in Kenya ❖ Private sector credit growth dropped from its peak of October 2015 – February 2018 about 25% in mid-2014 to 2% in February 2018 25.00% ❖ The slowdown in credit growth is broad based, with 19.80% credit contra
Slide 21: Financial Services
Growth Portfolio Financial Services Sidian Bank Limited Zohari Leasing Limited Stake: 74.8% Stake: 100% A leading tier III bank SME focused Zohari Leasing is an SME focused tailored commercial bank in Kenya providing an leasing solutions company across various array of financial services to individu
Slide 22: Financial Services Sector Contribution
Growth Portfolio Financial Services Sector Contribution Financial Services Sector Contribution, FY 2017 Sector NAV Contribution (KES Mn) 6,230 Sector NAV Contribution (%) 13.4% Sector NAV Per Share Contribution (KES) 9.4 Financial Services Portfolio NAV Per Share NAV Per Share Carrying Value Attribu
Slide 23: Others
Growth Portfolio Others Longhorn Publishers Limited “Others” Contribution, HY 2018 Stake: 60.2% The second largest publisher in Kenya and is NAV Contribution (KES Mn) 4,483 also listed is listed on the Nairobi Securities Exchange. Longhorn Publishers is the first NAV Contribution (%) 9.7% publisher
Slide 24: Growth Portfolio Valuation as at HY2018
Growth Portfolio Valuation as at HY2018 PORTFOLIO CENTUM’S SECTOR CARRYING VALUE CARRYING VALUE VALUATION IMPLIED COMPANIES STAKE (KES MN) (KES MN) METHOD DISCOUNT4 31 MAR 2017 30 SEP 2017 MULTIPLE Almasi Beverages 53.9% FMCG 7,716 8,230 EV1/EBITDA 6.77x Limited Nairobi Bottlers Ltd 27.6% FMCG 4,388
Slide 25: Return Performance over Centum 3.0
Growth Portfolio Return Performance over Centum 3.0 Growth Portfolio IRR, Centum 2.0 and FY 2015 – HY 2018 80% 70% Growth Portfolio remains a significant driver of returns for the Group reflecting the success of our 60% active portfolio management strategy • FMCG (Almasi Beverages & Nairobi Bottlers
Slide 26: Portfolio Highlights: Development Portfolio
Portfolio Highlights 1 Real Estate Portfolio 2 • Growth Portfolio • FMCG • Financial Services • Others 3 Development Portfolio • Power • Agribusiness • Education • Healthcare 4 Marketable Securities Portfolio 26
Slide 27: Power Sector Update
Development Portfolio Power Sector Update ❖ Both Amu Power (1,050 MW coal power) and Akiira (140 MW geothermal power) projects are steadily progressing towards financial close with a numerous key project documentation already in place ❖ Notably, in August 2017, both Akiira and AMU Power were awarded
Slide 28: Agribusiness Sector Update
Development Portfolio Agribusiness Sector Update ❖ Greenblade Growers continues to export fresh herbs the European markets from its 120 acre farm in Ol Kalau, Nyandarua County ❖ As at HY2018, the Business had produced in excess of 51 tonnes of fresh produce ❖ Going forward, focus is on expansion of
Slide 29: Education & Healthcare Sector Updates
Development Portfolio Education & Healthcare Sector Updates Education ❖ Through our investment in ACE Holdings, we are seeking to establish a platform of high quality schools across the region ❖ The first school, to be operated by our internationally renowned partners, SABIS, is currently under cons
Slide 30: Development Portfolio Valuation as at HY2018
Development Portfolio Valuation as at HY2018 PORTFOLIO CENTUM’S SECTOR CARRYING VALUE CARRYING VALUE VALUATION COMPANIES STAKE (KES MN) (KES MN) METHOD 31 MAR 2017 30 SEP 2017 Amu Power Ltd 51.0% Energy 2,144 2,144 Cost Akiira Geothermal 37.5% Energy 1,347 1,371 Cost Limited King Beverage Limited 10
Slide 31: Portfolio Highlights: Marketable Securities
Portfolio Highlights 1 Real Estate Portfolio 2 • Growth Portfolio • FMCG • Financial Services • Others 3 Development Portfolio • Power • Agribusiness • Education • Healthcare 4 Marketable Securities Portfolio 31
Slide 32: Marketable Securities Snapshot
Marketable Securities Snapshot ❖ During the year 2017, the Kenyan equities market was on NSE Performance an upward trend, with NASI, NSE 25 and NSE 20 gaining by 2012 – 2017 28.4%, 21.3% and 16.5%, respectively. This performance was driven by gains in large-cap 44.10% 45% ❖ Following 2017’s bull-run
Slide 33: Marketable Securities as at HY2018
Marketable Securities As at HY2018 Marketable Securities portfolio comprises our investments in quoted securities and fixed income instruments QPE vs NSE 20 Gross Return (%) Portfolio Allocation by Asset 4% 70% 60% 62% 56% 50% 45% 45% 40% 30% 45% 31% 21% 20% 17% 10% 10% 0% 42% 54% 2% -4% 0% 6% -5% 2
Slide 34: Marketable Securities Valuation as at HY2018
Marketable Securities Valuation as at HY2018 PORTFOLIO CENTUM’S SECTOR CARRYING VALUE CARRYING VALUE VALUATION COMPANIES STAKE (KES MN) (KES MN) METHOD 31 MAR 2017 30 SEP 2017 Centum Exotics Marketable 100% 3,134 3,339 Market Price Limited Securities Marketable Centum QPE 100% 100 394 Market Price S
Slide 35: Content
Content 1 Centum Overview 2 Portfolio Highlights 3 Financial Overview 4 Outlook 35
Slide 36: Generating Market Beating Returns on Investment
Financial Overview Generating Market Beating Returns on Investment Year Centum NAV NSE 20 Return Centum Centum's Net Asset Value (KES Bn) Return (KES) Outperformance 50 46 2010 56% 43% 13% 44.8 2011 37% (4%) 41% 40 39.3 2012 9% (13%) 22% 31.9 30 2013 19% 44% (25%) 2014 42% 2% 40% 22.9 20 2015 39% 8%
Slide 37: Our Performance
Financial Overview Our Performance Total Assets, FY 2009 to HY 2018 NAV Per Share, FY 2009 to HY 2018 69.7 70 70 67.3 CAGR: 23.91% 61.6 62.5 CAGR: 23.5% 59.1 60 60 51.5 50 50 48.0 41.2 KES Per Share KES Bn 40 40 34.5 28.8 30 30 24.3 21.4 20 20 10 10 0 0 FY2013 FY2014 FY2015 FY2016 FY2017 HY2018 FY20
Slide 38: Historical Financials
Financial Overview 5 Year Historical Financials KES Mn FY2013 FY2014 FY2015 FY2016 FY2017 HY2018 Growth portfolio Gross income 89 279 1,961 12,190 13,479 6133 Direct and other operating costs - (134) (1,258) (10,887) (11,818) (5568) Gross profit 89 145 703 1,303 1,662 565 Dividend income 156 320 488
Slide 39: Historical Cash & Total Return Snapshot
Financial Overview 5 Year Historical Cash & Total Return Snapshot Total Return in KES mn FY2013 FY2014 FY2015 FY2016 FY2017 Return Drivers Annuity Income: Dividend Income 283 1,738 1,318 2,177 756 Interest Income 108 40 77 676 196 FY14 Directors Fees & - 9 9 8 6 ▪ Sale of TBL leading to payment of K
Slide 40: Gearing & Finance Costs
Financial Overview Gearing & Finance Costs Debt Levels, 2014 - 2017 Finance Costs Debt Levels, 2014-HY2018 in KES mn 2014 2015 2016 2017 16 30% 27% 14 2.5 0.3 25% 25% Interest expenses 394 647 1,372 1,546 12 23% 20% Percentage 10 KES Bn 17% 8 4.1 15% Forex movements 2 (82) 20 60 0.2 12% 12.6 6 3.7 1
Slide 41: Our cash generating capacity for debt service
Financial Overview Our cash generating capacity for debt service DSCR COVERAGE RATIO KES Mn FY 2010 FY 2011 FY 2012 FY 2013 FY 2014 FY 2015 FY 2016 FY 2017 HY 2018 Operating Inflows 1,722 2,349 6,619 2,547 4,146 8,114 7,904 5,259 4,139 Operating Outflows (199) (305) (309) 380) (463) (519) (1,033) (9
Slide 42: Our Gearing & Debt Capacity
Financial Overview Our Gearing & Debt Capacity We redeemed the Kes 4.2 Bn 5-year corporate bond in Sep 2017, effectively deleveraging our balance sheet Instrument March Repaid Addition Sep 2017 Time to 2017 maturity 2012 Bond 4331 (4331) - - N/A Bond covenant: 50% ceiling on net debt 2015 Bond 6,225
Slide 43: Content
Content 1 Centum Overview 2 Portfolio Highlights 3 Financial Overview 4 Outlook 43
Slide 44: Outlook
Outlook • Focus on delivery of strategic in-fill developments at Two Rivers (The Riverbank Apartments), Vipingo (Lifestyle Centre and Industrial Park) and Pearl Marina (apartments) Real Estate • Aggressive sales of construction ready sites as well as bulk land sales − Several large transactions in t
Slide 45: 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 46: investorelations@centum.co.ke
investorelations@centum.co.ke Centum Investment Company Plc 9 9h Floor, Southern Tower, Two Rivers Centum Investment Company Ltd. Tel +254 20 316303 PO Box 10518-00100 International House, Mobile +254 722 205339 Nairobi, Kenya Ngina St. 5th Flr. Mama Fax +254 20 223223 PO Box 10518-00100 Email info@
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