S.C. Fondul Proprietatea SA · BVB:FP
S.C. Fondul Proprietatea SA — Fondul Proprietatea — Shareholder Meeting (April 2016)
43 slides from S.C. Fondul Proprietatea SA's shareholder meeting presentation, Apr 26, 2016
Slide 1: Fondul Proprietatea Annual General Shareholders Meeting
26 April 2016 Fondul Proprietatea Annual General Shareholders Meeting This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 2: Disclaimer
Disclaimer This presentation is made solely to the intended recipient and should not be distributed to, or acted upon by, any other person. It is for general information only and reflects the personal views of the presenter. Nothing herein is intended to constitute advice on investment, legal or tax
Slide 3: Fund Information
Fund Information This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 4: The Fund – Key Facts
The Fund – Key Facts Fund Details as at 31 March 20161 RON USD2 NAV 11.44 bn 2.91 bn NAV/Share 1.1004 0.2797 Price/Share 0.7710 0.1959 Price/GDR 38.01 9.66 Market Capitalization as at 22 April 20163 7.88 bn 1.98 bn Discount per Share as at 22 April 2016 31.03% Discount/GDR as at 22 April 2016 31.45%
Slide 5: Fund Management Services under AIFMD
FONDUL PROPRIETATEA 4 Fund Management Services under AIFMD Franklin Templeton International Services S.À R.L. (“FTIS”) as Sole Director and Alternative Investment Fund Manager Permanent representatives of FTIS in Romania For activities that cannot be delegated under Romanian law Franklin Templeton I
Slide 6: The Investment Manager
FONDUL PROPRIETATEA 5 The Investment Manager GRZEGORZ KONIECZNY Legal Representative & Portfolio Manager ADRIAN CIGHI OANA TRUTA Legal Representative Legal Representative & Investment Analyst & Investment Analyst PORTFOLIO CLIENT MANAGEMENT & FUND CORPORATE REGULATORY INVESTOR PUBLIC LEGAL DEALER IN
Slide 7: Board of Nominees – Current Structure
FUND INFORMATION 6 Board of Nominees – Current Structure Position in Current Members Current Position Mandate Until BoN CEE Cloud Director and Country 30 September Sorin Mindrutescu Chairman Leader for Romania, Oracle 2016 Romania 30 September Mark H. Gitenstein Member Special Counsel, Mayer Brown 2
Slide 8: Shareholders Structure
FONDUL PROPRIETATEA 7 Shareholders Structure Evolution (% Held) 2% 2% 2% Largest Shareholders 2% 3% 100% 6% 10% 10% 9% 10% Elliott 9% 9% 13% 13% 21.06% 13% Associates1 14% 9% 11% 12% 12% City of London 75% 10% Investment Mgmt. 5.04% 43% 33% 34% 35% 54% 27% Total Number of 31% 8,061 50% 55% 53% 53% S
Slide 9: NAV, Share Price and GDR Performance
NAV, Share Price and GDR Performance Cumulative Performance (RON) Since Performance 2011 2012 2013 2014 2015 Q1 2016 Inception1 NAV (0.47)% 8.91% 13.29% 1.39% (0.60)% (4.84)% 17.78% Ordinary Share Price (30.32)% 38.30% 61.34% 14.53% (4.06)% (4.81)% 62.62% GDR N/A N/A N/A N/A N/A (7.95)% (11.75)% Ave
Slide 10: NAV Objective
NAV Objective • Objective – The Adjusted NAV per share as at 31 March 2016, to be higher than the NAV per share as at 30 June 2015 (RON 1.1851 per share) • Monthly Monitoring – 31 March 2016 – Adjusted NAV as at 31 March 2016 is lower than the NAV per share as at 30 June 2015 Adjusted NAV per share
Slide 11: Discount Objective
Discount Objective • Objective – The discount between closing price and last reported NAV per share to be equal to or lower than 15%, in at least 2/3 of the trading days in the period 1 July 2015 – 30 June 2016 • Monthly Monitoring – 31 March 2016 – In the period 1 July 2015 – 31 March 2016, discoun
Slide 12: Portfolio
Portfolio This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 13: Portfolio Structure – Listed vs. Unlisted
FONDUL PROPRIETATEA 12 Portfolio Structure – Listed vs. Unlisted Listed Companies Unlisted Companies (% of NAV as at 31 December 2015) (% of NAV as at 31 December 2015) 0.80% 0.33% 1.45% 1.41% 0.46% Hidroelectrica 1.46% OMV Petrom 1.47% ENEL companies Romgaz 1.75% Electrica companies 4.12% BRD GSG 2
Slide 14: IPO Calendar
IPO Calendar Offering Size FP Stake Investment Status of Offering Total Market FP Expected Company Value Value Consortium Required Size % Cap (USD mn) Timing (USD mn) (USD mn) Selected Decision Morgan Hidroelectrica 15.0 583.51 674.51 3,382.71 Stanley, Approved H2 2016 / 2017 Raiffeisen BRD Groupe S
Slide 15: Romgaz – Accelerated Bookbuild Offering (I)
14 Romgaz – Accelerated Bookbuild Offering (I) Transaction Details Type of Pricing / Pricing Offering Size Offering Structure Offering Settlement • RON 541 mn / $137 mn • RON 24.00 per • 22,542,960 shares • 20,286,910 shares and share / $6.09 ABO of 2,256,050 GDRs per GDR • 5.85% of share capital sh
Slide 16: Romgaz – Accelerated Bookbuild Offering (II)
15 Romgaz – Accelerated Bookbuild Offering (II) Total Demand by Location Total Demand by Type Romania 6% Institutionals CEE 9% 12% 40% UK 15% US Retail 26% 91% Others Source: Goldman Sachs. This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not
Slide 17: OMV Petrom – Share Price Performance
APPENDIX I 16 OMV Petrom – Share Price Performance USD 100 80 60 40 20 6/14 7/14 8/14 9/14 11/14 12/14 1/15 3/15 4/15 5/15 7/15 8/15 9/15 11/15 12/15 1/16 3/16 4/16 OMV Petrom Brent Oil Emerging Markets Oil and Gas Index MOL OMV Source: Bloomberg, as at 22 April 2016. This material is intended solel
Slide 18: Hidroelectrica – Financial Performance
FONDUL PROPRIETATEA 17 Hidroelectrica – Financial Performance Net Income and Foregone Profits (RON mn) vs. Annual Pre-tax cumulated profit (RON mn) Production (TWh) and Number of Employees 19.9 19.6 14.7 12.1 14.8 18.4 16.1 1,198 5,230 5,237 5,218 5,115 4,172 3,711 3,448 1,100 875 902 237 192 819 1,
Slide 19: Negotiations with Electrica
FUND INFORMATION 18 Negotiations with Electrica • Electrica final offer: RON 684 million, representing an 18% discount to the Fund’s NAV of RON 841 million, as at 31 March 2016. BET- INDEX Electrica Offer FP NAV (excluding FP and (RON 684) (RON 841) Banks) EV / EBITDA 2.9x 3.6x 8.5x P/E 6.0x 7.5x 11
Slide 20: Corporate Actions
Corporate Actions This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 21: Distributions to Shareholders (I)
CORPORATE ACTIONS 20 Distributions to Shareholders (I) Annual Distributions to Shareholders (mn RON) 1,124.3 552.7 507.7 1,499.0 1,778.5 929.0 57.9 20.00% 18.25% 17.47% 1,500.0 15.00% 601.3 536.4 10.45% 1,000.0 10.00% 8.06% 7.46% 534.3 1,177.2 6.63% 500.0 1,124.3 5.00% 432.7 962.6 507.7 394.7 120.0
Slide 22: Distributions to Shareholders (II)
Distributions to Shareholders (II) Cash Distributions to Shareholders (RON) Gross Cash Net Cash Financial % Change Paid In Distribution Distribution Year Year on Year Per Share Per Share 2008-2009 Dividend 2010 0.08160 0.06854 - (aggregate) Dividend 2010 2011 0.03141 0.02638 - Dividend 2011 2012 0.0
Slide 23: 2016 Return of Capital
2016 Return of Capital • The 2016 Return of Capital of RON 0.05 per share was approved by the Fund’s shareholders on 21 January 2016 • The payment will be made to the Fund’s shareholders registered as such at the Registration Date (6 June 2016) , proportionally with their participation to the paid-
Slide 24: Dividend Income – Top 20 Portfolio Companies
Dividend Income – Top 20 Portfolio Companies FP NET DIVIDEND (RON mn) 2011 2012 2013 2014 2015 20169 Total Top 20 Holdings (RON mn) 429.2 534.2 582.2 650.8 557.1 154.2 Total Dividends from Listed Companies (RON mn) 304.0 450.1 373.9 538.6 251.5 48.5 Total Dividends from Unlisted Companies (RON mn) 2
Slide 25: Buy-Back Programs
Buy – Back Programs No. of shares to Average be repurchased / Cancellation of Program Period Status share price Broker % of the Fund’s issued shares (RON/share) share capital Oct 2014 – Cancelled on 14 Fourth Completed 991.0 mn/7.32% 1.05571 Raiffeisen Feb 2015 Aug 2015 Feb – Cancelled on 14 Fifth C
Slide 26: FP Share Price Returns Since Listing
APPENDIX IV 25 FP Share Price Returns Since Listing FP Share price return 1-Yr Deposit rate return BET Total return (RON) (RON) (RON) Returns on RON 1,000 1,804 1,284 1,505 Annual Investment1 % Return 80.4% 28.4% 50.5% 2,000 1,500 1,000 500 1/11 4/11 7/11 10/11 1/12 4/12 7/12 10/12 1/13 4/13 7/13 10
Slide 27: Research Analyst Target Prices
FUND INFORMATION 26 Research Analyst Target Prices Broker Report Report Date Report type Target Price / Share Ieba Trust Company Update March 2016 Update RON 0.9500 InterCapital Proxy for Romania March 2016 Initiation RON 0.9900 Securities Ltd. BRD - GSG All about corporate actions March 2016 Initia
Slide 28: Impact of Share Buy-backs and Return of Capital on the Discount Level and Alternative Investment Strategies
Impact of Share Buy-backs and Return of Capital on the Discount Level and Alternative Investment Strategies This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 29: Background
Background • According to FSA Endorsement no. 1 issued on 7 January 2016, the Fund Manager was requested to present to the Fund’s shareholders the following: – Effects of the share buy-backs and return of capital on the discount level – Alternative investment strategies This material is intended sol
Slide 30: Effects of the Share Buy-backs on the Discount (I)
FUND INFORMATION 29 Effects of the Share Buy-backs on the Discount (I) FP Share Price1 (RON) and Discount (%) Start of the 3rd buy- Start of the 5th buy- back program back program Start of the 6th buy- Start of the 1st buy- End of the 1st buy- Start of the 4 buy- th back program back program back pr
Slide 31: Effects of the Share Buy-backs on the Discount (II)
Effects of the Share Buy-backs on the Discount (II) Average Discount - 3 Average Discount Buy-Back Change in Period of the Buyback months before the during the Programs Discount start of the Program Program First 11 May 2011 – 30 September 2011 63.3% 67.8% +4.5% Second 27 May 2013 – 18 December 2012
Slide 32: Effects of the Return of Capital on the Discount (I)
FUND INFORMATION 31 Effects of the Return of Capital on the Discount (I) FP Share Price1 (RON) and Discount (%) Approval of the 1st Ex-date of the 1st Approval of the 2nd Ex-date of the 2nd Approval of the 3rd Return of Capital Return of Capital Return of Capital Return of Capital Return of Capital
Slide 33: Effects of the Return of Capital on the Discount (II)
Effects of the Return of Capital on the Discount (II) Return of Average Discount - 30 Average Discount – 30 Change in Ex-Date Capital days before the ex-date days after the ex-date Discount First 28 April 2014 40.2% 39.4% -0.8% Second 23 June 2015 31.4% 32.1% +0.7% Average 35.80% 35.75% -0.05% Sourc
Slide 34: Investment and Performance Objectives – IPS (I)
Investment and Performance Objectives – IPS (I) • Investment Objective: the Fund’s investment objective is the maximization of returns and per share capital appreciation via investments mainly in Romanian equities and equity-linked securities • Performance Objectives: – Discount Objective: The disco
Slide 35: Investment and Performance Objectives – IPS (II)
Investment and Performance Objectives – IPS (II) • General Principles for Achieving the Objectives: Discount management techniques to meet the Performance Objectives may include (but are not limited to) the following: – Recommendation of buy-back programs of the Fund’s shares and GDRs – Reduction of
Slide 36: Alternative Investment Strategy
Alternative Investment Strategy • Once the Performance Objectives are met and the discount is reduced below the 15% level, the Fund Manager will consider making new investments if the expected returns from those investments are higher than the returns generated by buying back the Fund’s shares • In
Slide 37: GSM Agenda
GSM Agenda This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 38: EGM Agenda
EGM Agenda • The approval of the amendments of the Constitutive Act of Fondul Proprietatea S.A., in accordance with the requirements set forth by the Endorsement no. 25/28 January 2016 issued by the Financial Supervisory Authority (“FSA”). • The approval of the decrease of the subscribed share capit
Slide 39: OGM Agenda
OGM Agenda • Board of Nominees’ presentation of its annual report. • Fund Manager’s presentation on, among others, the buy-backs’ effect on the discount level, as well as additional investment strategies proposed by the Fund Manager for the management of Fondul Proprietatea S.A., in accordance with
Slide 40: Appendix
Appendix This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
Slide 41: Statement of Financial Position
Statement of Financial Position 31 December 31 December 31 December RON million (audited) 2015 2014 2013 Cash and current accounts 0.6 6.9 5.6 Deposits with banks 197.8 109.4 232.1 Treasury bills 20.0 162.8 129.9 Government bonds 59.0 31.7 83.7 Equity investments 11,800.7 12,927.7 14,312.2 Deferred
Slide 42: Statement of Comprehensive Income
Statement of Comprehensive Income RON million (audited) 2015 2014 2013 Gross dividend income 569.3 687.4 652.4 Net gains / (losses) from equity investments at fair value (1,240.8) (604.2) 422.4 through profit or loss Impairment losses on equity investments available for (90.5) (344.1) (835.8) sale I
Slide 43: Fondul Proprietatea contact details
Fondul Proprietatea Premium Point Buzesti Street 78-80, 1st District, 7th Floor Bucharest 011017 www.fondulproprietatea.ro This material is intended solely for the recipient and should not be reproduced, copied or re-transmitted. Not for public use.
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