S.C. Fondul Proprietatea SA · BVB:FP
S.C. Fondul Proprietatea SA — Fondul Proprietatea — Shareholder Meeting (January 2011)
52 slides from S.C. Fondul Proprietatea SA's shareholder meeting presentation, Jan 17, 2011
Slide 1: Fondul Proprietatea Shareholders' Meeting
Fondul Proprietatea Shareholders’ Meeting - January 17, 2011 Bucharest
Slide 2: Disclaimer
DISCLAIMER 1 Disclaimer This presentation is intended solely for information purposes only and may not be used for, or in connection with, and does not represent an offering or an invitation to buy or sell shares in Fondul Proprietatea (“the Fund”) or in any of the securities mentioned herein. The d
Slide 3: Table of Contents
TABLE OF CONTENTS 2 Table of Contents Emerging Markets Outlook Romania – Snapshot The Fund and the Fund Manager (Fund Manager and Sole Director) Fund Portfolio Investment Strategy FP Listing process FP and the Romanian Stock Market
Slide 4: Emerging Markets Outlook
Emerging Markets Outlook FONDUL a &. V/j, PROPRIETATEA FRANKLIN TEMPLETON INVESTMENTS
Slide 5: Emerging Markets: Statistics
EMERGING MARKETS OUTLOOK 4 Emerging Markets : Statistics World Population: 6.7 billion World GDP: US$62,033 billion Developed Markets Other 18% Emerging Markets Emerging 29% Europe 6% Emerging Markets: 31% Emerging Markets: 82% Other Emerging Markets Developed Emerging 76% Markets Europe 69% 2% Worl
Slide 6: Emerging vs Developed Markets: GDP Growth
EMERGING MARKETS OUTLOOK 5 Emerging vs Developed Markets: GDP Growth % 2011F 7% Emerging Markets 5.9% Developed Markets 6% 5% 4% 3% 2% 1.6% 1% 0% Emerging Markets Developed Markets Source: Economist Intelligence Unit; Dec 2010
Slide 7: Emerging vs Developed Markets: Foreign Reserves
EMERGING MARKETS OUTLOOK 6 Emerging vs Developed Markets: Foreign Reserves US$ bn 29-DEC-2000-31-DEC-2010 7,000 Total Reserves Minus Gold-Emerging Markets US$ Bn Total Reserves Minus Gold- Developed Markets US$ Bn 6,000 Emerging Markets 5,000 4,000 3,000 2,000 Developed Markets 1,000 0 '01 '02 '03 '
Slide 8: Emerging vs Developed Markets: Public Debt % of GDP
EMERGING MARKETS OUTLOOK 7 Emerging Markets Vs Developed Markets : Public Debt % of GDP Debt % of GDP 29-DEC-2000-31-DEC-2010 100 Developed Markets 90 80 70 60 50 40 Emerging Markets 30 20 '00 '01 '02 '03 '04 '05 '06 '07 '08 '09 '10 Source: Factset; Economist Intelligence Unit; April 2010 *- Develop
Slide 9: Total World EM Market Cap % of World
EMERGING MARKETS OUTLOOK 8 Total World EM Market Cap % of World % 1993 to 2009 35% As at End Dec 2009: Estimate of counting all EM stocks and not just the index stocks 30% % of total World stocks is about 32% 25% 20% 15% 10% Average exposure for pension funds 5% investing in emerging market equity i
Slide 10: 10-Year Performance: Emerging Markets vs World vs US
EMERGING MARKETS OUTLOOK 9 10-Year Performance : Emerging Markets Vs World Vs US 29-DEC-2000-31-DEC-2010 500 (INDEX) MSCI AC World - Price with Gross Dividends - Daily Official - USD (Index) (INDEX) MSCI EM (Emerging Markets) - Price with Gross Dividends - Daily Official - USD (Index) (INDEX) MSCI U
Slide 11: P/E 12 Months Forward: Emerging Markets
EMERGING MARKETS OUTLOOK 10 P/E - 12 Months Forward : Emerging Markets ‘xs All Time High, Low vs Current 30 28'xs 25 20 15 12'xs 10 7'xs 5 0 May 1988 (High) December 2010 Nov 2008 (Low) *- High & Low since 1987, Forward (Next twelve months) P/E Source: MSCI,I/B/E/S
Slide 12: MSCI Emerging Markets Index
EMERGING MARKETS OUTLOOK 11 MSCI Emerging Markets Index 01-JAN-1988-31-DEC-2010 MSCI EM (Emerging M arkets) - - Price with Gross Dividends - Daily Official - USD (Index) Asia Financial TMT Bubble Subprime Crisis Crisis : -56% Burst : -49% : -65 % 2,000 13 Months 17 Months 12 Mths 1,000 900 800 700 6
Slide 13: Romania - Snapshot
Romania - Snapshot FONDUL a &. V/j, PROPRIETATEA FRANKLIN TEMPLETON INVESTMENTS
Slide 14: Romania – Macroeconomic Data
ROMANIA - SNAPSHOT 13 Romania – Macroeconomic Data Romania within the European Union Rank within Rank within new EU the EU member countries* • Size: 238,391 km2 9 2 (following Poland) • Population: 21,469,959 2 (following Poland) (2009) 7 – Urban: 54.9% – Rural: 45.1% • GDP: EUR bn 115.94 (2009) 17
Slide 15: Romania – Solid Fundamentals
ROMANIA - SNAPSHOT 14 Romania – Solid Fundamentals Public debt 2009 (% of GDP) Exchange rates 2008 - 2010 135 HUF/EUR 78.4% 74.0% 130 100% PLN/EUR 125 CZK/EUR 80% 120 50.9% % o f G DP 115 RON/EUR 35.4% 35.3% 35.3% 35.0% 60% 110 23.9% 105 14.7% 40% 100 20% 95 90 0% 85 80 Hungary EU Poland Slov akia C
Slide 16: Recovery Underway
ROMANIA - SNAPSHOT 15 Recovery Underway Industrial output 2008 - 2010 Monthly unemployment 2009- 2010 (%) 110 8.40% 8.40% 8.10% 8.10% 105 9% 7.80% 7.70% 7.50% 7.50% 7.50% 7.41% 7.35% 100 7.10% 6.90% 8% 6.60% 95 6.30% 6.00% 7% 5.80% 90 5.70% 5.60% 5.30% 85 4.90% 6% 80 75 5% 70 4% Mar- Jun- Sep- Dec-
Slide 17: The Fund and the Fund Manager
The Fund and the Fund Manager (Fund Manager and Sole Director)
Slide 18: The Fund – Key Facts and Shareholders Structure
THE FUND AND THE FUND MANAGER 17 The Fund – Key Facts and Shareholders Structure Shareholders structure (% held) - Evolution - FUND DETAILS AS OF 31 DECEMBER 2010 100% 0% 5% 13% 10% Base currency RON 19% 26% Fund Launch Date 28 December 2005 80% 31% Franklin Templeton Percentage held Appointment Dat
Slide 19: FTI's Asset Base Over Time
THE FUND AND THE FUND MANAGER 18 FTI’s Asset Base Over Time Franklin Templeton’s Global Assets Under Management 10-Year Periods Ended 9/30/10 $U.S. Billions $700 $600 Total: $645 Billion $500 International: $198 Billion CAGR: 10.9% $400 $300 U.S.: $447 Billion $200 $100 $0 9/00 9/02 9/04 9/06 9/08 9
Slide 20: FTI – Depth of Experience and Expertise
THE FUND AND THE FUND MANAGER 19 FTI – Depth of Experience and Expertise Franklin Templeton Investment Number of Franklin Templeton Professional Tenure1 Investment Professionals2 Franklin 10.0 14.8 523 444 Templeton 10.2 14.6 243 Mutual Series 91 9.6 16.5 1995 2000 2005 2010 Average Years with FTI A
Slide 21: Templeton Emerging Markets Group
THE FUND AND THE FUND MANAGER 20 Templeton Emerging Markets Group Vienna Warsaw Bucharest Moscow Bangkok Hong Kong Seoul – 48 Portfolio Managers and Analysts – 80 Professionals – 26 Nationalities Buenos Aires Rio de Janeiro Johannesburg Istanbul Dubai Mumbai Kuala Lumpur Singapore Ho Chi Minh Shangh
Slide 22: The Fund Manager – Bucharest Branch and Management Contract
THE FUND AND THE FUND MANAGER 21 The Fund Manager – Bucharest Branch and Summary of the Management Contract Franklin Templeton acting as the Sole Director John Lusk FTIML Director & Exec. Vice-President, and Fund Manager Portfolio Operations Fees (after listing) Dr Mark Mobius • Consideration x 0.47
Slide 23: Fund Portfolio
Fund Portfolio FONDUL a &. V/j, PROPRIETATEA FRANKLIN TEMPLETON INVESTMENTS
Slide 24: Portfolio Structure
FUND PORTFOLIO 23 Portfolio Structure • FP’s portfolio includes stakes in 83 companies (28 listed and 55 unlisted), both privately-held and State-owned, ranging from less than 2% up to 100% (as of the date of the Prospectus) • The portfolio weighs heavily on the power, oil and gas sectors (approx. 8
Slide 25: Portfolio Valuation
FUND PORTFOLIO 24 Portfolio Valuation Total value of - Aggregated value of liabilities and revenues NSC NAV = assets registered in advance “Total value of assets” is calculated by aggregating long term assets, current assets, derivative instruments and prepaid expenses. • NSC NAV computation: • Unti
Slide 26: OMV Petrom – Company Overview
FUND PORTFOLIO 25 OMV Petrom – Company Overview Quick Facts Shareholding Structure Sector: Integrated Oil & Gas OMV AG 51% Type: Listed Ministry of Economy 21% Weight in NSC NAV: 24.90% Fondul Proprietatea 20% FP stake: RON 3,816 mn (EUR 891 mn) Others 8% Oil consumption per capita in Romania vs. ot
Slide 27: Romgaz – Company Overview
FUND PORTFOLIO 26 Romgaz – Company Overview Quick Facts Shareholding Structure Sector: Oil & Gas Ministry of Economy 85% Type: Unlisted Fondul Proprietatea 15% Weight in NSC NAV: 8.13% FP stake: RON 1,246 mn (EUR 291 mn) Gas production – 2009 market share Gas production (bcm) 2009 Romgaz vs. Peer co
Slide 28: Romgaz – Opportunities and Threats
FUND PORTFOLIO 27 Romgaz – Opportunities and Threats • Planned IPO via the sale of a 15% stake by the Government in 2011 • Increase of gas prices for retail and industrial consumers • Efficiency gains • Threat: decline in reserves Gas prices to end-consumer in Romania vs. other EU Gas consumption pe
Slide 29: Transgaz – Company Overview
FUND PORTFOLIO 28 Transgaz – Company Overview Quick Facts Shareholding Structure Sector: Gas Transmission Ministry of Economy 73.51% Type: Listed Fondul Proprietatea 14.99% Weight in NSC NAV: 3.22% Others 11.50% FP stake: RON 494 mn (EUR 115 mn) Nabucco Project • Regulated company – natural monopoly
Slide 30: Electricity Generation Overview
FUND PORTFOLIO 29 Electricity Generation Overview Electricity generation by producer Electricity prices for households (EUR/MWh) Installed Electricity 122.7 Primary % held % in total capacity production 117.5 117.3 106.8 150 101.3 Producer source by FP NSC NAV (MW) (GWh, 2009) 88.5 85.5 81.4 EUR/ MW
Slide 31: Hidroelectrica – Company Overview
FUND PORTFOLIO 30 Hidroelectrica – Company Overview Quick Facts Shareholding Structure Sector: Electricity Producer Ministry of Economy 80% Type: Unlisted Fondul Proprietatea 20% Weight in NSC NAV: 21.44% • Main asset of the company is Portile de Fier I power FP stake: RON 3,287 mn (EUR 767 mn) plan
Slide 32: Hidroelectrica – Potential
FUND PORTFOLIO 31 Hidroelectrica – Potential Average price/MWh and EBITDA margin – comparative analysis (2009) • IPO of the company 50 80% 45.2 • Suspension of the plans to create the “energy champions” 76% 40 60% • Efficiency gains bringing the company in line with foreign 31.2 32.2 30 peers 35% 47
Slide 33: Nuclearelectrica – Company Overview
FUND PORTFOLIO 32 Nuclearelectrica – Company Overview Quick Facts Shareholding Structure Sector: Electricity generation Ministry of Economy 90% Type: Unlisted Fondul Proprietatea 10% Weight in NSC NAV: 4.60% FP stake: RON 706 mn (EUR 165 mn) Market share: 21% Installed capacity: 1,414 MW EnergoNucle
Slide 34: Nuclearelectrica – Potential
FUND PORTFOLIO 33 Nuclearelectrica – Potential • IPO of the company • Suspension of the plans to create the “energy champions” • Pricing transparency • Planned capacity expansion EV per electricity production (2009 figures) - EUR/MWh EV per installed capacity (2009 figures) - thEUR/MW 2,000 500 473
Slide 35: Electricity Distribution Market Overview
FUND PORTFOLIO 34 Electricity Distribution Market Overview Main distribution companies – coverage and market Main distribution companies – FP Stakes and weights in share (2009) FP’s portfolio Stake held % NSC Distribution company name by FP NAV Enel Distributie Muntenia 12% 2.12% 10.26% 10.78% Enel
Slide 36: Investment Strategy
Investment Strategy FONDUL a &. V/j, PROPRIETATEA FRANKLIN TEMPLETON INVESTMENTS
Slide 37: Investment Strategy
INVESTMENT STRATEGY 36 Investment Strategy Investment Philosophy • Value Orientation • Patient Investment Outlook • “Bottom-Up” Approach Investment Objective • Long-term capital appreciation via investments mainly in Romanian equity or equity-linked securities Investment Approach and Techniques • De
Slide 38: Active Management
INVESTMENT STRATEGY 37 Active Management Enhancement of holding’s value • FP representatives on Boards of Directors in over 20 portfolio companies • Legal tools to protect & enhance value – e.g. energy champions, Romgaz donation • Proper corporate governance practices (30 days notice prior to GSMs,
Slide 39: A Romanian Fund – Main Investment Restrictions
INVESTMENT STRATEGY 38 A Romanian Fund – Main Investment Restrictions • Minimum 70% of assets in Romanian listed shares • Up to 12% of assets in foreign shares • Up to 20% of assets in unlisted shares (shares currently held by FP in unlisted companies are exempted from this rule of allocation accord
Slide 40: FP Listing Process
FP Listing Process FONDUL Not Z. Yp PROPRIETATEA FRANKLIN TEMPLETON INVESTMENTS
Slide 41: Listing of Fondul Proprietatea
FP LISTING PROCESS 40 Listing of Fondul Proprietatea • Benefits of FP listing for shareholders vs. trading the shares at the Central Depositary: • Provides price transparency; • Offers significantly improved liquidity; • Ensures permanent trading counter-party; • Provides a much easier procedure for
Slide 42: Prospectus
FP LISTING PROCESS 41 Prospectus Relevance of the Prospectus • Provides investors with the necessary information in order to make an investment decision regarding the Fund’s shares; • Prepared in accordance with international standards; • Provide information far above legal requirements; • Presents
Slide 43: Largest Road Show ever Organized for a Romanian Issuer
FP LISTING PROCESS 42 Largest Road Show ever Organized for a Romanian Issuer Rationale: • Increase international awareness of the Fund; • Enhance investors demand (all types of potential investors); • Extensive international road-show aimed to elicit foreign institutional investors’ demand; • Create
Slide 44: Transparency after FP Listing
FP LISTING PROCESS 43 Transparency after FP Listing Reporting obligations according to current regulations (BSE Rulebook and NSC Regulations); • Regular financial reporting: quarterly, semi-annually, annually; • Reporting those events that could have a direct or indirect impact on the share price an
Slide 45: FP and the Romanian Stock Market
FP and the Romanian Stock Market
Slide 46: Short History of Romanian Capital Market
FP AND THE ROMANIAN STOCK MARKET 45 Short History of Romanian Capital Market • The Bucharest Stock Exchange (BSE) – opened on April 21, 1995; – trading started on November 20, 1995, with six companies and one trading session per week. • In December 2005, the BSE has absorbed RASDAQ. • Currently, the
Slide 47: Institutions and indices
FP AND THE ROMANIAN STOCK MARKET 46 Institutions and indices Capital market institutions Key indices The Bucharest Stock Exchange (“BSE”) • Bucharest Exchange Trading index (BET or • The market operator BET-10) reflects the trend of the most liquid 10 The National Securities Commission (“NSC”) stock
Slide 48: Latest Evolutions
FP AND THE ROMANIAN STOCK MARKET 47 Latest Evolutions BET Index Evolution 2000 - 2010 The dynamics of BVB indices in 2010 Value at 12,000 Performance December 31, 10,000 2010 2010 8,000 BET 5,268.61 12.32% RO N 6,000 4,000 BET-FI 21,980.58 -7.98% 2,000 BET-C 3,111.17 14.60% 0 BET-XT 470.61 1.87% Jan
Slide 49: FP in the Universe of Equities Listed on the BSE
FP AND THE ROMANIAN STOCK MARKET 48 FP in the Universe of Equities Listed on the BSE Top 10 listed companies (international sector excluded) BSE Capitalization Market capitalization and free-float (without International Category) 5 4.7 2010 (EUR bn) 5 4 3.6 16 4 13.9 14 3 EUR bn 12 10.3 3 2.1 2.0 10
Slide 50: Taxation and fees
FP AND THE ROMANIAN STOCK MARKET 49 49 Taxation and fees Taxation of dividend • Dividends paid to Romanian individuals and legal entities are taxed at 16%*. Taxation of capital gains • Capital gains to Romanian individuals and legal entities are subject to a tax of 16%*. • The capital gain on the sa
Slide 51: Steps in trading the FP shares
FP AND THE ROMANIAN STOCK MARKET 50 Steps in trading the FP shares • Appoint an authorized broker • Provide the broker with the required documents • Conclude a brokerage agreement • For buying shares - ensure enough funds are available in the client’s brokerage account • For selling shares: • Provid
Slide 52: For further information please contact
For further information please contact: Franklin Templeton Investment Management Limited Premium Point 80 Buzesti Street, 7th-8th Floor, 1st District Bucharest 011017 Romania 00 40 21 200 96 00 The Listing Consortium: Raiffeisen Capital & Investment 15 Charles de Gaulle Square, 1st District Buchares
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