Centum Investment Company Plc · NSEKE:CTUM
Centum Investment — HY 2016 Earnings Presentation
42 slides from Centum Investment's earnings presentation, Nov 30, 2015
Slide 1: Analysts Briefing
Analysts Briefing 30th November 2015
Slide 2: Content
Content 1• Performance Overview 2• Portfolio Overview 2
Slide 3: Our Vision
Our Vision “To be Africa’s foremost investment channel” Our Mission “To create real tangible Wed (hist a=amamEEEEest through which investors GCCCSSiqi@m=miaaES enterprises iii
Slide 4: Progress Against Centum 3.0 Strategy
Progress Against Centum 3.0 Strategy Strategic Objectives Performance in HY 2016 1 Generate 35%+ annualized return over Generated a return of 9% in HY 2016 and RETURN the strategic period and consistently outperformed the NSE 20 index by 20%. outperform the market. Develop, scale and grow investment
Slide 5: Company Net Asset Value (NAV)
Company Net Asset Value (NAV) Year-on-year increase in total portfolio income attributable mainly to dividend income, realised gains and unrealised value gains on the portfolio 37.0 1.1 0.3 0.2 0.3 0.2 34.0 1.0 0.3 34.8 1.1 31.0 31.9 28.0 Opening Dividends Interest Realised Unrealized Portfolio FX l
Slide 6: NAV Per Share
NAV Per Share Consistently outperformed the market both in local currency & USD terms. KES USD Total Centum Total Centum NSE 20 Centum MSCI FM Centum Year Return NAV Return Year Return NAV Return Return Out Perf. Africa Out Perf. KES Mn (KES) USD Mn (USD) 2010 3,298 56% 43% 13% 2010 43 39% 31% 9% 20
Slide 7: NAV Per Share & Share Price
NAV Per Share & Share Price Our focus is to preserve and grow the value of shareholder funds, through different market cycles. 70 63.00 Share price NAV 60 52.50 50 52.10 48.00 40 30 20 8.90 10 8.47 0 Mar 09 Mar 10 Mar 11 Mar 12 Mar 13 Mar 14 Jun 14 Apr 15 Sep 15 7
Slide 8: Scale
Scale Company Assets grew by KES 5.0 Bn. Total Assets Under Management stood at KES 195 Bn Total Assets Under Management Total Company Assets 60 198 195 50 46.1 50 41.2 147 40 40 28.8 30 KES Billion 30 KES Billion 21.4 22 20 15 15.7 20 16 14 9.8 9 10 5.9 10 0 0 2009 2010 2011 2012 2013 2014 2015 HY
Slide 9: Macro Environment
Macro Environment Volatility in interest rates and a depreciating currency have been key themes USD KES Key Interest Rate Indicators 110 30 Centum Bond issue 25 105 102.15 20 100 15 95 10 92.5 5 90 0 85 Interbank Rate (%) 91 Day T Bill Yield 9
Slide 10: Marketable Securities Portfolio Re-Allocation
Marketable Securities Portfolio Re-Allocation Proactive shift to cash and fixed income to take advantage of the high interest rate environment, while also positioning to re-enter the market at attractive prices. 31st Mar 2015 30th Sep 2015 10% 10% 10% 10% 7% Cash Cash Equities Equities 58% Mutual Fu
Slide 11: Marketable Securities Portfolio Performance
Marketable Securities Portfolio Performance MSP strategy continues to outperform the NSE 20 Index and has delivered an average outperformance of 21% over the last 6.5 years NSE 20 Centum NAV return Year MSP Return Return Outperformance 56% 53% 43% 44% 43% 2010 56% 43% 13% 35% 2011 10% -4% 14% 2012 0
Slide 12: Liabilities
Liabilities Centum secured competitively priced fixed rate debt & retired short term dollar denominated debt Sep 2015 Mar 2015 Bond I – Fixed Rate 13.50% and equity-linked notes 12.75% 4,252 4,252 Bond II – Fixed Rate 13.00% and equity-linked notes 12.50% 6,096 - USD 35 Million Bridge Financing Faci
Slide 13: Content
Content 1• Performance Overview - Financial Performance 2• Portfolio Overview 13
Slide 14: Company Statement of Comprehensive Income
Company Statement of Comprehensive Income 124% increase in PAT driven by growth in Income Kes. M HY2016 HY2015 Variance Dividend Income 1,142 1,030 11% Interest Income 296 136 118% Other Income 3 4 -25% Realized gains 999 54 1750% Total Income 2,440 1,223 100% Portfolio Costs (256) (247) 4% Finance
Slide 15: Company Statement of Financial Position
Company Statement of Financial Position 15% increase in total assets, driven by performance of the underlying portfolio Assets Liabilities & Shareholder Capital Kes. M HY 2016 FY 2015 Kes. M HY 2016 FY 2015 Investment in Subsidiaries 28,159 22,269 Borrowings 10,348 7,569 Associates & JVs 6,612 8,826
Slide 16: Portfolio Valuation
Portfolio Valuation Our portfolio is held at conservative valuations Cash – KES 3 Bn Valuation of cash based Market Price – KES 0.2 Bn on actual cash held by Valuation of investments is the company 0.5% done on the basis of market 7.0% prices on the stock market. This valuation basis has been applie
Slide 17: Fair Value Movement Attribution
Fair Value Movement Attribution The fair value movement attributable to earnings was an upward movement of KES 1.6 Billion but after adjusting the multiples to the current multiples there was a drop of 1.4 Billion. Fair Value Attribution Fair Value Attribution 24 • So as to reflect the reality of th
Slide 18: Profitability of underlying portfolio companies
Profitability of underlying portfolio companies Our share of the Profit before tax of portfolio companies has grown at an average rate of 34% 3000 CAGR – 34% 2500 2000 1500 1000 500 0 2009/10 2010/11 2011/12 2012/13 2013/14 2014/15 HY2016 PBT Attributable to Centum 18
Slide 19: Total Return Contribution Per Sector
Total Return Contribution Per Sector Sector Return HY2016 FY2015 Financial Services 379 2,183 FMCG (1,154) 3,205 Energy (74) (25) Real Estate 3,431 (731) MSP (215) 1,149 Others 363 3,220 Total Return 2,730 9,002 19
Slide 20: Consolidated Statement of Comprehensive Income
Consolidated Statement of Comprehensive Income 55% increase in PAT driven by increase in Income Kes. M HY2016 HY2015 Variance Dividend Income 327 489 -33% Interest Income 1,350 83 1527% Fund Management Income 267 337 -21% Realized Gains 1,734 1,017 71% Fees & Commissions 669 - 100% Other Income 249
Slide 21: Group Statement of Financial Position
Group Statement of Financial Position 9% growth in Total Assets Assets Liabilities & Shareholder Capital Kes. M HY 2016 FY 2015 Kes. M HY 2016 FY 2015 Investment property 21,111 17,775 Customer deposits 10,600 12,401 Associates & JVs 3,618 3,745 Borrowings 17,653 9,983 Unquoted assets 9.659 8,548 Qu
Slide 22: Content
Content 1• Performance Overview 2• Portfolio Overview 22
Slide 23: We are developers of investment grade opportunities of scale
We are a developers of investment grade opportunities of scale with a focus on 8 key 23 sectors
Slide 24: Portfolio as at HY 2016
Portfolio as at HY 2016 We have created a track record of deal sourcing, value addition and value realization Centum Investment Company Ltd Portfolio - KES 46 Bn Financial Real Estate MSP FMCG Energy Others* Sectors Under Services KES. 8.0 Bn KES. 2.5 Bn KES. 14.2 Bn KES. 4.0 Bn Dvpt KES. 10.7Bn KES
Slide 25: Financial Services: K-Rep Bank
Financial Services K-Rep Bank Centum acquired a controlling stake of 65% in K-rep Bank for KES 2.3 Bn. Making it the first operational investment company to have a bank as a subsidiary HY 2016 Key performance metrics of the Key activities Bank Return on Assets (%) 3.0% • A rights issue was approved
Slide 26: Financial Services: AON
Financial Services AON Centum entered into an agreement to sell its stake in AON Insurance Brokers • Centum entered into an agreement to sell its stake in AON Insurance Brokers. Centum has received all approvals and is awaiting Competition Authority approval. • The sale of Centum’s stake in AON is i
Slide 27: FMCG: Almasi Beverages
FMCG Almasi Beverages Ltd The business is currently investing& implementing new capacity measures to enhance its output and efficiency Fact Sheet Almasi Territory • Centum acquired a controlling stake in the company in 2015 and has a stake of 50.95% • Almasi’s market share is 29% of the carbonated s
Slide 28: Others
Others GMEA has grown its market share in new vehicle sales to 31% up from 26% in the nine months ended September 2015 • GMEA, which sells Isuzu and Chevrolet brands, grew its market share to 31% on the back of increased sales. • This has seen the company being ranked as the country’s largest dealer
Slide 29: Real Estate: Two Rivers
Real Estate: Two Rivers A new urban node that will be a development on 100 acres • Phase 1 of the development includes the retail and lifestyle centre& the infrastructure. • The mall is set for completion in December 2015 and with a target to open in March 2016. • 190 shops of the 220 this represent
Slide 30: Two Rivers Lifestyle Update: Vision
Two Rivers Lifestyle Update: Vision 30
Slide 31: Two Rivers Lifestyle Update
Two Rivers Lifestyle Update 31
Slide 32: Pearl Marina
Pearl Marina A mixed use development with 1.3 Km of lake frontage in Garuga, Uganda. • The development will be set out on 385 Acres. • Phase 1 of the Project is designed on 41 acres of the land and development of 97 units. • Currently 4 show houses, the infrastructure works, gatehouse, jetty& recrea
Slide 33: Vipingo
Vipingo Centum acquired 11,794 acres of land in Vipingo, Kilifi County. • The vision of the proposed Vipingo development is to develop a city will become a sought after destination to do business in East African and beyond. • The City will provide a mix of residential, manufacturing, logistics, spor
Slide 34: Energy: Amu Power
Energy Amu Power This will be the largest private sector funded infrastructure project in EA . The plant will be at the top of the economic merit dispatch order as the lower cost producing IPP. Image for illustration only 34
Slide 35: Update on Amu Power
Update on Amu Power Project development is at fairly advanced stage with drafts of key documents being completed. Key Item Status PPA Initiated by KPLC and approved by the Energy Regulatory Commission (“ERC”) for formal execution. ESIA Being updated with Lenders comments before they are sent to NEMA
Slide 36: Energy: Akiira Geothermal
Energy Akiira 1 Geothermal At 70 MW, the Geothermal project will be the first private sector funded greenfield geothermal development in Sub-Saharan Africa. 36
Slide 37: Akiira Geothermal - Update
Akiira 1 Geothermal - Update • Well 1 drilled to a distance 2,840M striking steam. Testing is on-going on the well. • The second well is currently being drilled. • CSR activities for the surrounding community also on going: Library books, provision of clean water and education sponsorship for the lo
Slide 38: CENTUM
CENTUM
Slide 39: Centum Investment Company Ltd. contact details
Centum Investment Company Ltd. Tel +254 20 316303 International House, Mobile +254 722 205339 5th Flr. Mama Ngina St. Fax +254 20 223223 PO Box 10518-00100 Email info@centum.co.ke Nairobi, Kenya www.centum.co.ke
Slide 40: Performance against Key Metrics
Performance against Key Metrics Positive NAV returns and Growth in Assets Kes. M FY2009 FY 2010 FY 2011 FY2012 FY 2013 FY 2014 FY2015 HY2016 Scale & Return Total Assets 5,930 9,840 15,004 15,721 21,407 28,811 41,328 46,194 Market Capitalization 5,637 8,579 13,009 9,800 13,242 24,289 42,300 34,600 NA
Slide 41: Consolidation and Non-Controlling Interests
Consolidation and Non-Controlling Interests Example of NCI involvement Non Controlling Interests (NCI) Consolidated financial statements In preparing consolidated financial statements: • Combine line by line items of income, expenses, assets and liabilities of a company and all its subsidiaries. • E
Slide 42: Bond Performance - ELN
Bond Performance - ELN ELN Performance-Sept 2015 Bond I (2012 ) Bond II (2015) Plain Vanilla notes (Kes Bn) 4.00 2.10 ELN value (Kes Bn) 1.25 3.90 Total Bond (Kes Bn) 4.25 6.00 ELN Coupon 12.75% 12.50% Initial Net Asset Value (Kes Bn)* 13.69 26.95 NAV growth target to realize max upside NAV at 31st
Centum Investment Company — HY 2016 Earnings Presentation on 6ix