Kuwait Projects Company Holding (K.S.C.P.) · KSE:KPROJ
Kuwait Projects Company Holding (K.S.C.P.) — Kuwait Projects Company Holding (KIPCO) — Investor Presentation (May 2007)
29 slides from Kuwait Projects Company Holding (K.S.C.P.)'s investor presentation, May 2007
Slide 1: Investor Presentation
Investor Presentation Building Value. Building Trust. May 2007 1
Slide 2: Disclaimer
Disclaimer The information contained in this presentation relates to Kuwait Projects Company Holding K.S.C. (Closed). This presentation contains forward-looking statements. These statements may be identified by such words as "may", "plans", "expects", "believes“, “projected” and similar expressions,
Slide 3: Agenda of Presentation
Agenda of Presentation 2006 : Sustained Value Creation 2007 Q1: Value Realisation 2007 : Value Enhancement 3
Slide 4: Year 2006: Sustained value creation
Year 2006: Sustained value creation Net Profit (KD million) Outperformed profit forecast for last 3 years 50.1 25.2 Return on Equity 21.6% in 2006 2004 2006 Investment grade rating S&P: BBB- (positive outlook) CI: BBB+ 4
Slide 5: Year 2006: Sustained value creation (cont'd)
Year 2006: Sustained value creation (cont’d) Amongst most liquid stocks Last 5 years on KSE Established EMTN First non-banking institution in the GCC programme Successful issuance under 5-year & 2-year floating rate notes EMTN Programme 5
Slide 6: Year 2006: Strong underlying asset quality
Year 2006: Strong underlying asset quality Improved asset quality S&P Moody CI - Baa3 BBB+ BBB+ - - BBB+ A2 A- 6
Slide 7: Year 2006: Showtime update
Year 2006: Showtime update A Year in Transition Enhanced Corporate Governance New Management Team Increased Operational Capability Greater balance in content position to deliver a differentiated offering 7
Slide 8: Year 2006: Effective liability management (Parent level)
Year 2006: Effective liability management (Parent level) Key Indicators Total Debt (KD million) 238 276 Average Debt Tenor (Yrs.) 2.3 3.3 Term Debt to Total Debt (%) 65% 94% Debt from outside the region (%) 30% 54% Spread vs. 3M US$ LIBOR (Bps) 107 53 8
Slide 9: Agenda of Presentation
Agenda of Presentation 2006 : Sustained Value Creation 2007 Q1: Value Realisation 2007 : Value Enhancement 9
Slide 10: 2007 Q1: Successful realisations
2007 Q1: Successful realisations… QTEL +Consortium Sale consideration : KD 1.1 billion Al Safwa UNITED INDUSTRIES COMPANY Group Sale consideration : KD 40 million UPAC KNAC +Consortium Sale consideration : KD 36 million 10
Slide 11: ...at attractive valuations...
…at attractive valuations… NMTC: Transaction Highlights Largest transaction in the GCC telecommunications space First regional consolidation in a strategic sector across the GCC Largest transaction ever on the Kuwait Stock Exchange Transaction price represents a 107% premium over the last 1-year tra
Slide 12: ...at attractive valuations (cont'd)...
…at attractive valuations (cont’d)… Implied AV/2006A EBITDA Proportionate Consolidation (x) 15.1x +41% 10.7x Offer Price Sector Median 1 NMTC’s implied valuation at KD2.1 billion (US$7.3 billion) 1 Median of MTC, MTN, Millicom, Orascom and Bharti 12
Slide 13: ...reflected in 2007 Q1 financial performance...
…reflected in 2007 Q1 financial performance… Net Profit (KD Millions) 2006 Q1 Growth 2007 Q1 6.6 407% 33.4 11.7 92% 22.5 2.5 937% 25.6 15.0 2,442% 381.5 13
Slide 14: ...and share price performance
…and share price performance Share price: April 2006 1,200 Share price: April 2007 980 820 400 720 590 435 520 390 255 (Fils per share) 14
Slide 15: Value Realisation: Successful track-record
Value Realisation: Successful track-record Period (1995-2007) 12 years No. of Transactions 19 Capital Invested1 (KD million) 619 Sale Proceeds2 (KD million) 1,846 IRR 27% Multiple of Cost 2.98x Notes: 1. Equity capital invested i.e. after netting off debt capital from total investment 2. Realised &
Slide 16: Agenda of Presentation
Agenda of Presentation 2006 : Sustained Value Creation 2007 Q1: Value Realisation 2007 : Value Enhancement 16
Slide 17: KIPCO Strategy: Cornerstones
KIPCO Strategy: Cornerstones Regional Investing in Outlook engines of growth Building Businesses Diversified Thought revenue leadership streams Team approach Strong managerial expertise 17
Slide 18: Strategy Validation: Our Growth Engines
Strategy Validation: Our Growth Engines Net Profit (KD million) 2004 CAGR 2006 12.6 52% 29.3 29.6 37% 55.7 5.8 20% 8.4 40.0 35% 73.2 18
Slide 19: KIPCO View: Key Themes
KIPCO View: Key Themes MENA Region: Positive Outlook … Trade surplus surging US$ 585 billion 2005-2007 more than China & Japan US$ 1.5 trillion worth of privatizations & projects announced Significant investments in real estate asset class and continuing to grow …Attractive Sectors Financial service
Slide 20: KIPCO View: Key Themes (cont'd)
KIPCO View: Key Themes (cont’d) …Emerging Trends Increased asset allocation by Global Majors… …Global Majors establishing regional offices Regional Consolidation to achieve Growth, Scale, Regional Footprint, Market Leadership …Key Considerations Investment discipline Operational excellence Access to
Slide 21: KIPCO: Strategy Execution
KIPCO: Strategy Execution Investment Philosophy Invest in Our Success Invest in ‘What We Know’ Invest with Financial Discipline Focus area - MENA region Invest in green field ventures to introduce new products & services in the region Invest through M&A transactions to regionalise, build scale & att
Slide 22: KIPCO Group Companies: Increase Trading Volumes
KIPCO Group Companies: Increase Trading Volumes Group Companies Stock Focus on investor communication – Regional & Global Target investors with long term commitment Increase liquidity through IPO’s of unlisted companies Achieve investor diversification through multiple listing on regional & global e
Slide 23: KIPCO: Strategic Focus 2007-08
KIPCO: Strategic Focus 2007-08 Increased Role of Financial Services Total Assets Increase ownership KD 1,359 million Existing Strengthen capital base Businesses KD 1,064 million Deeper & faster regionalisation KD 807 million Financial 2006 2005 2004 Services Invest or partner in regional products, I
Slide 24: NMTC Sale: Use of Proceeds
NMTC Sale: Use of Proceeds Over 48% invested within 90 days Increase in Ownership Sales Immediate cost Pay down debt Proceeds reduction Consolidator / seed capital position Strengthen capital New Opportunities base Regional/Global Diversification 24
Slide 25: Year 2007: Forecast
Year 2007: Forecast Net Profit (KD Millions) 2006 Growth 2007E 29.3 92% 56.3 55.7 17% 65.0 8.4 314% 34.8 50.1 914% 508.0* * KIPCO Dividend: 60 – 90 fils Subject to market price & expansion plan 25
Slide 26: NMTC Transaction: Impact on Operating Income (2007 Forecast)
NMTC Transaction: Impact on Operating Income (2007 Forecast) KD 17.1 Interest Income million on KD 455 million KD KD30.7 6.3 Investible Interest cost savings million on KD 210Surplus: million KD 24.6 KD 415 million million KD 7.3 Incremental income from million increased shareholdings Operating inco
Slide 27: KIPCO: Kuwait Market Position?
KIPCO: Kuwait Market Position? Top Kuwaiti companies by book value per share Share Price1 Book Value2 P/B # Company (Fils) (Fils) (x) 1 MTC 3,840 1,160 3.3 2 Agility3 1,980 896 2.2 3 NMTC 2,880 828 3.5 4 Kuwait Finance House 2,380 680 3.5 5 Gulf Bank 1,660 735 2.3 6 National Bank of Kuwait 2,120 581
Slide 28: KIPCO: Fair Value?
KIPCO: Fair Value ? Book Value March 31: 532 Fils Hidden Value Adjustments Mark to Unlisted Most liquid Investment Cash Brand market Companies stock track record Listed Carried at subsidiary & KD 415M On KSE Deal flow cost Associates 340 Fils* X Fils? X Fils? X Fils? X Fils? X Fils? Benefits Aids Gr
Slide 29: Thank you
Thank you
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