Centum Investment Company Plc · NSEKE:CTUM
Centum Investment — H1 2015 Earnings Presentation
35 slides from Centum Investment's earnings presentation, November 2014
Slide 1: Investor briefing
Investor briefing Half year ended 30 September 2014
Slide 2: Agenda
Agenda 1• Strategic Objectives and Progress • James Mworia, Group CEO 2• Financial Performance • Risper Mukoto, Director Finance & Operations 3• Outlook 4• Q&A 2
Slide 3: Agenda
Agenda 1• Strategic Objectives and Progress • Our Business • Performance Update • Centum 3.0 Strategy Update 2• Financial Performance 3• Outlook 4• Q&A 3
Slide 4: Our Mission
Our Mission To create real tangible wealth by providing the channel through which investors access and build extraordinary enterprises in Africa
Slide 5: We are a channel providing investors with access to a portfolio
We are a channel providing investors with access to a portfolio of otherwise inaccessible, quality, diversified investments
Slide 6: Our Business
Our Business We invest across the following sectors Centum Investment Company Ltd Portfolio Value - KES 34.9Bn Total AUMs – 175.7Bn (incl TPFs) Financial Asset Others FMCG Real Estate Energy Services Management Kshs 5.94Bn Kshs 11.85Bn Kshs 0.37Bn Kshs 3.85Bn Kshs 6.77Bn Kshs 6.12Bn Genesis Kenya Ks
Slide 7: Agenda
Agenda 1• Strategic Objectives and Progress • Our Business • Performance Update • Centum 3.0 Strategy Update 2• Financial Performance 3• Outlook 4• Q&A 7
Slide 8: FY2015-19 – Centum 3.0 Strategy Themes
FY2015-19 – Centum 3.0 Strategy Themes 1 RETURN • Generate 35%+ annualized return over the strategic period • Develop, scale and grow investment capabilities in the 8 new 2 sectors, Agriculture, Education & Health, Energy, Financial FOCUS Services, FMCG and ICT and further grow our existing Real Est
Slide 9: Return
Return 22% average outperformance against the NSE over 5.5 years. HY2015 return higher than the full year performance of FY2010-2013. Total Return Centum NAV NSE 20 Centum Out Year Kshs M Return Return performance 2010 3,298 56% 43% 13% 2011 3,395 37% -4% 41% 2012 1,133 9% -13% 22% 2013 2,451 19% 44
Slide 10: Performance
Performance The market value added to shareholder wealth was 14Bn since as at 31 March 2014 Every Shilling invested in Centum shares in 2009 was worth Kshs 7.91 on 30 Sep 2014 44.6 45 Book Value Mkt Cap 40 35 30 24.3 25 20 13.2 15 13.0 27.3 9.8 22.9 8.6 10 5.6 16.1 12.6 13.7 5 9.2 5.9 0 2009 2010 20
Slide 11: Portfolio Value and Total AUM Growth
Portfolio Value and Total AUM Growth Total AUMs increased by Kshs 22.5bn over the 6 months period to Kshs 175.7bn Total AUMs Centum Portfolio Value 33.7 176 30 28.8 40 147 30 19.3 20 Kshs. Billion Kshs. Billion 22 14.7 14.5 20 16 14 10 9.0 9 10 0 0 2010 2011 2012 2013 2014 Sep-14 2010 2011 2012 2013
Slide 12: Cash flows and gearing
Cash flows and gearing Reduction in overall gearing due to higher return on invested capital relative to cost of debt Kes. M 2010 2011 2012 2013 2014 FY2015 Operating inflows 1,722 2,349 6,619 2,547 4,146 3,168 Operating outflows (199) (305) (309) (380) (463) (476) Cash from operations 1,523 2,044 6
Slide 13: Business Unit performance highlights
Business Unit performance highlights Kes. M PE AM RE HY2015 HY 2014 Activity Realization proceeds 12 1,867 0 1,879 901 Investments (88) (1,132) (695) (1,915) (1,656) Net investments 76 (735) 695 (36) (755) Return Gross Return 1,853 3,022 1,526 364 4,912 Total Return 1,195 2,826 1,487 90 4,403 Return
Slide 14: Brand - Key Awards
Brand - Key Awards Our passion for excellence 1. Financial Reporting Excellence (FiRe) Awards 2014 Centum won the following award at the 2014 FiRe award ceremony; i. Winner – Corporate Governance 2. Champions of Governance Awards Centum was feted with two awards at the ICPSK Champions of Governance
Slide 15: Agenda
Agenda 1• Strategic Objectives and Progress • Our Business • Performance Update • Centum 3.0 Strategy Update 2• Financial Performance 3• Outlook 4• Q&A 15
Slide 16: Our Centum 3.0 Strategy vs. Previous Strategy: Summary of Key Changes
Our Centum 3.0 Strategy vs. Previous Strategy: Summary of Key Changes We are a developer & promoter of investment grade opportunities CENTUM 2.0 CENTUM 3.0 Developed three business units, with PE Focus will be placed on 8 priority sectors Focus having no specific sector focus Active promoter and dev
Slide 17: Developer of Assets
Developer of Assets As developer and promoter, Centum realizes early-stage value by creating investment-grade opportunities for down-stream investors Project Development Growth Phase Mature Growth • Use of Centum’s equity capital • Value is created for Centum as • Centum may retain smaller equity to
Slide 18: Funding Opportunities
Funding Opportunities As developer and promoter, Centum will fund projects during development phase but will invite financial investors after de-risking projects Project Development Growth Phase Mature Growth Centum’s internally generated Equity investment by financial Debt funding to unlock funds t
Slide 19: Maturity of Centum Portfolio
Maturity of Centum Portfolio Snapshot of the maturity of Centum’s investment portfoli Project Development Growth Phase Mature Growth • Amu Power(Lamu Coal • Two Rivers Development • Legacy PE investments Project) • Krep Bank • Genesis Kenya • Akiira Geothermal • Nabo Capital Power Plant Enterprise •
Slide 20: Sector Update – Financial Services
Sector Update – Financial Services Acquisition of majority shareholding in Krep Bank Acquisition of majority stake in K-Rep Bank • We have completed the acquisition of 66% shareholding in K-Rep Bank. • The Bank is expected to deliver significant synergies within the Group. • We intend on reposition
Slide 21: Sector Update – FMCG
Sector Update – FMCG Improved performance of FMCG business and launch of Carlsberg in Kenya Improved financial performance of FMCG businesses • There has been a significant improvememt in the performance of our FMCG businesses especially Nairobi Bottlers, resulting in improved dividend income as wel
Slide 22: Sector Update – Real Estate: Two Rivers Update
Sector Update – Real Estate Two Rivers Update • Two Rivers is a 100 acres real-estate development in Nairobi’s Gigiri Diplomatic Green Zone. It is a large- scale mixed use development. The development is set to be one of the most attractive and prestigious destinations in Sub-Saharan Africa. • Two R
Slide 23: Carrefour signs up as Anchor Tenant at the Two Rivers Mall
Sector Update – Real Estate Carrefour signs up as Anchor Tenant at the Two Rivers Mall • Carrefour have officially signed on as the anchor tenant of the Two Rivers Mall. • Leasing 110,000 sq.ft, the Carrefour hypermarket shall be by far the largest in East Africa validating Two Rivers vision of bein
Slide 24: Sector Update – Asset Management
Sector Update – Asset Management Asset management businesses delivered Kshs 337Mn in income Rebranding of Centum Asset Managers to Nabo Capital • Centum Asset Managers rebranded to Nabo Capital in order to better position it to attract high net worth investors. • AUMs increased from Kshs 1.2 Bn to K
Slide 25: Sector Update – Power
Sector Update – Power Significant steps in the Power sector Amu Power (Lamu Coal Power plant) • Centum investment is the lead equity partner in the consortium that was awarded the tender to construct a 960Mw coal power plant in Lamu. • The project is expected to cost approximately USD 2 Billion and
Slide 26: Agenda
Agenda 1• Strategic Objectives and Progress • James Mworia, Group CEO 2• Financial Performance • Risper Mukoto, Director Finance & Operations 3• Outlook 4• Q&A 26
Slide 27: Consolidated statement of comprehensive income
Consolidated statement of comprehensive income 38% increase in PAT due to increased dividend, fund management income & realized gains Comments Kes. m HY2015 HY2014 Var • Dividends - Improved dividend income from Dividend income 489 364 34% unquoted investments. Interest income 83 94 (12%) • Fund man
Slide 28: Group Statement of Financial Position
Group Statement of Financial Position 42% growth in total assets as at 30 September 2014 Assets Liabilities & Shareholder Capital Kes M. Sep 2014 Mar 2014 Kes M. Sep 2014 Mar 2014 Investment property 11,655 10,960 Borrowings 6,228 5,492 Equipment & Intangibles 1,057 1,049 ELN Liability 9,537 843 Inv
Slide 29: Group Cash flow Statement
Group Cash flow Statement Kes. M HY2014 HY2014 Internally generated funds: Operating inflows 3,168 1,587 Operating outflows (476) (201) 2,691 1,386 Investing activities: Equity & Investment Property (2,838) (1,697) Equipment & intangibles (16) (8) (2,854) (1,705) Financing Activities: Interest paid
Slide 30: Company statement of comprehensive income
Company statement of comprehensive income 16% increase in PAT driven by increased dividend income Kes. m HY2015 HY2014 Var Comments Dividend income 1,030 873 18% • Dividends - Improved dividend income from Interest income 26 investment portfolio. 9 (65%) Other income 4 8 (50%) • Increase in portfoli
Slide 31: Company Statement of Financial Position
Company Statement of Financial Position 16% increase in total assets Kes. M Sep2015 Mar2014 Kes. M Sep2015 Mar2014 Investment in subsidiaries 9,320 7,192 Borrowings 6,228 5,492 Equipment & Intangibles 1 967 Payables and accruals 111 225 Investment in associates 7,714 6,594 Unclaimed dividends 29 29
Slide 32: Agenda
Agenda 1• Strategic Objectives and Progress 2 • Financial Performance 3• Outlook 4 • Q&A 32
Slide 33: Looking ahead…
Looking ahead… • Private Equity 1. Develop platform opportunities in real estate, health care, education, power and FMCG 2. A number of exits are in the pipeline 3. Engage co-investors to participate in the various opportunities once the opportunities are sufficiently de-risked. • Real Estate 1. Com
Slide 34: Agenda
Agenda 1• Strategic Objectives and Progress 2 • Financial Performance 3• Outlook 4 • Q&A 34
Slide 35: 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 35
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