Kuwait Projects Company Holding (K.S.C.P.) · KSE:KPROJ
Kuwait Projects Company Holding (K.S.C.P.) — KIPCO (Kuwait Projects Company Holding) — Investor Presentation (June 2016)
66 slides from Kuwait Projects Company Holding (K.S.C.P.)'s investor presentation, June 2016
Slide 1: Investor Presentation | June 2016
..KIPCO Still Continues to Grow.. Investor Presentation | June 2016 E 1
Slide 2: Disclaimer
Disclaimer This presentation is not an offer or invitation to subscribe to or purchase any securities. No warranty is given as to the accuracy or completeness of the information in this presentation. You must make your own independent investigation and appraisal of the business and financial conditi
Slide 3: Index: Executive Summary
Index Executive Summary Bloom berg Ticker: KPROJ KK Reuters Ticker: KPRO.KW 3
Slide 4: A diversified company with deep regional expertise and roots
A diversified company with deep regional expertise and roots We are Operating holding company with total assets of USD33.0bn# Geography Middle East and North Africa (MENA) Sectors Primarily financial services & media Track record 24 years of continuous profitability, 14 years of continuous dividends
Slide 5: Our presence by geographies & sectors
Our presence by geographies & sectors Major Sectors Geography Commercial Revenue Media Insurance Real Estate AMIB Industrial Others banking (2015) 1 Kuwait ● ● ● ● ● ● ● 46% KSA ● ● ● 8% UAE ● ● ● ● 7% Bahrain ● ● ● ● 4% Turkey ● 11% Jordan ● ● ● ● 8% Egypt ● ● ● ● 7% Algeria ● ● ● 3% Iraq ● ● ● 2%
Slide 6: Core Holdings
Core Holdings All core holdings are market leaders in their space #2 conventional bank #1 Digital satellite premium #1 Insurer in Kuwait3, Bahrain4 , in Kuwait1 Pay TV operator2 in MENA Jordan4 & Egypt5 region #1 Asset Manager in Kuwait with #3 listed real estate Leading industrial company In Kuwait
Slide 7: Best in Class: Performance vs. Key Indices
Best in Class: Performance vs. Key Indices 1 3 5 7 10 Total return* year year year year year Kuwait Stock (13%) (12)% (1%) (3%) NA Exchange MSCI Emerging Markets (12%) (12%) (18%) 77% 39% S&P 500 2% 40% 73% 199% 199% MSCI Frontier (12%) (8%) 3% 76% NA EM Index KIPCO (10%) 57% 121% 171% 275% KIPCO Ra
Slide 8: Attractive returns
Attractive returns Total Shareholders’ Return Growth 294 274 112 92 132 182 182 40 1996 Q1'16 2005 Q1'16 Share Price (US cents)^ Cumulative Dividend (US cents) Note: Data adjusted for stock dividend Book Value Per Share Growth (in US cents) 234 222 48 27 1996 Q1'2016 2005 Q1'2016 Note: Assuming no d
Slide 9: Continuous dividends
Continuous dividends KIPCO: USD1.5bn in cash dividend paid by KIPCO since 2002 10.1% 10.3% 8.7% 30 7.9% 8.2% 5.9% 6.6% 4.5% 16 5.2% 5.1% 4.3% 13 3.2% 3.6% 4.6% 8 8 8 8 6 7 7 7 5 7 3 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 2015 Cents Per share Dividend Yield 13 years of conti
Slide 10: Net asset value
Net asset value NAV Computation (USD per Share) 582 520 398 fils fils fils 0.06 0.06 0.25 0.19 (0.37) 0.12 0.11 0.50 0.58 0.69 0.63 1.24 1.72 0.32 1.32 0.64 Burgan OSN United Gulf United United Net other Net Debt NAV KIPCO Reported Bank Gulf Bank Insurance Real Industries Assets Share Book Company E
Slide 11: Index: Strategy
Index Strategy 11
Slide 12: Building Businesses
Strategic roadmap Regional MENA outlook Investing in Target engines of ROE: growth 15%+ Diversified revenue streams Balanced Building Portfolio Businesses Strong managerial Team expertise Thought Approach leadership Being first in the region Invest in companies with sustainable and predictable cashf
Slide 13: Controlling or majority stakes
Controlling or majority stakes Main Entities KIPCO Effective 64.7% 60.5% 96.3% 83.0% 3 45.6% 71.9% Stakes1 Board Representation 6 of 9 2 of 75 4 of 7 5 of 5 4 of 104 4 of 7 Market Cap (USDmn)2 2,209 Unlisted 844 63 397 317 S&P: S&P: Credit BBB+/A2 A- (GIRI); Moody’s: Unrated CI: BBB Unrated CI: BBB
Slide 14: Active management
Active management Key businesses – progress indicators Businesses Parameters Then* Now Active Management – KIPCO Support & Action 1995 Q1’16 Net 2.4% ▪ Transformed from a local player to regional player Interest 1.3% ▪ Hired new management in 2010/11 to execute regional strategy ▪ Focused on growth
Slide 15: Index: Performance Update
Index Performance Update 15
Slide 16: Burgan Bank
Burgan Bank Loan Growth Deposit Growth Asset Quality USDbn USDbn NPA C overage with collateral^ NPA C overage without collateral 175% 184% 184% 190% 123% 131% 120% 130% 14.5 14.4 15.5 15.9 3.9% 15.3 3.4% 3.6% 13.8 12.8 12.9 3.2% 13.2 13.0 2013 2014 2015 Q1'15# Q1'16 2013 2014 2015 Q1'15# Q1'16 2013
Slide 17: Burgan Bank: Regional operations
Burgan Bank: Regional operations* Loan Growth Deposit Growth Net Profit^ USDbn USDbn USDmn -16% 13% 5% -21% 11% 15% 2% 17 11 4 .4 4 .2 3 .3 4 .8 4 .9 5 3 3 1 3 2 .9 (0 ) 2 .4 AG B BoB TIB BBT Total 2 .1 (7 ) 1 .1 1 .2 1 .2 1 .2 1 .0 0 .9 0 .3 0 .3 0 .2 0 .2 0 .0 0 .0 (1 6 ) AG B BO B TIB BBT Total A
Slide 18: Burgan Bank: NPA & provisioning trend
Burgan Bank: NPA & provisioning trend NPA Trend NPA (USDmn) At end of Mar 2016, combined NPA Ratio (Percentage) coverage of non performing 1,034 787 1,193 881 623 642 699 682 246 assets (NPA) was 190% 199 166 185 164 116 117 102 NPA Ratio was 3.6% as on 31 1 1 .0 %1 1 .8 % 86 9 .5 % 1 0 .5 % 6 .
Slide 19: OSN: Overview
OSN : Overview MENA Pay TV Potential MENA Region1 Latin America UK India US Population (Mn) 335 596 65 1,260 319 Pay TV (Mn; Est.) 5 30 14 139 101 TV Households (Mn) 69 55 27 168 120 TV Households / Households (%) 96% NA 96% 61% 85% Pay TV/ TV Households (%) ~8% 55% 54% 82% 86% Low Pay TV penetratio
Slide 20: OSN: Overview…cont'd
OSN: Overview…cont’d Overview Pan Arab reach Largest premium Pay TV operator in MENA region (HQ in Dubai), created by the merger of Syria Showtime and Orbit in 2009 Tunisia Lebanon Iraq Iran Morocco Palestine Jordan Kuwait Licensed to operate in 24 countries in MENA with A lgeria Lybia Bahrain focus
Slide 21: Operating and financial performance
Operating and financial performance Subscribers Thousand 1,153 1,074 Diversified subscriber base (Mar 2016) 1,031 Subscribers: 1,031K Others 995 9% Qatar 5% KSA Egypt 27% 10% 2013 2014 2015 Q1'16 Bahrain Churn 3% Percentage Kuwait 9% UAE, 30% 37% 25% 20% 16% 2013 2014 2015 Q1'16 Quarterly Revenue ru
Slide 22: United Gulf Bank
United Gulf Bank Revenue Fee & Commission Income USDmn USDmn 169 38 145 32 64 17 35 33 8 8 2013 2014 2015 Q1'15 Q1'16 2013 2014 2015 Q1'15 Q1'16 Net Profit & Provisions AuM & Capitalisation USDmn USDmn 13.9% 11.6 59 10.9 10.7 41 9.7 17 8 6 5 4 19 3 5 11 1 3 2 3 2013 2014 2015 Q1'15 Q1'16 2013 2014 2
Slide 23: Gulf Insurance Group
Gulf Insurance Group Gross & Net Premium Written Net Investment Income USDmn USDmn 613 39 572 37 517 26 324 275 300 180 199 128 9 108 7 2013 2014 2015 Q1'15 Q1'16 2013 2014 2015 Q1'15 Q1'16 Net Premium Written Gross Premium Written Combined Ratio Net Profit & ROE USDmn 93% 95% 94% 90% 89% 13.5% 14.8
Slide 24: United Real Estate Company (URC)
United Real Estate Company (URC) Total Revenue 1 Operating Profit2 USDmn USDmn 76 216 70 194 63 171 49 55 16 16 2013 2014 2015 Q1'15 Q1'16 2013 2014 2015 Q1'15 Q1'16 Net Profit Total Assets & ROE USDmn USDmn 5.6% 4.0% 4.2% 3.8% 37 1,825 1,856 28 1,717 26 1,559 7 6 2013 2014 2015 Q1'15 Q1'16 2013 201
Slide 25: URC: Balance Sheet (Break-up) as of March 2016
URC: Balance Sheet (Break-up) as of 31 March 2016 Total Asset Investment Properties Total Assets USD1,856m n Total: USD374m n 3% 1% 2% Investm ent properties 9% Marina World - Kuwait 20% Land for development 13% 14% Projects under Salalah Mall - Oman construction* Fixed Assets (PPE) 47% Marina Plaza
Slide 26: KIPCO Consolidated: Financial performance
KIPCO Consolidated: Financial performance Revenue Net Income Consolidated Assets USDmn USDmn EPS (Cents) USDbn 9.2 10.9 11.2 2.1 2.5 175 33.0 2,047 1,970 152 * 31.6 1,694 132 30.7 28.5 545 45 464 40 2013 2014 2015 Q1'15 Q1'16 2013 2014 2015 Q1'15 Q1'16 2013 2014 2015 Q1'16 26 *Revenue excluding inco
Slide 27: KIPCO Parent debt profile
KIPCO Parent debt profile: As at 31 March 2016 Debt Type* Debt Maturity* Total Debt: USD2.1bn Total Debt: USD2.1bn Average debt International maturity is Bonds 3.5 years 6% 94% Term 23% 23% 6% 24% 47% Loan <1 Year 1-2 Years 2-4 Years >4 Years * As 31 of March 2016 Liquidity KIPCO has cash & bank bal
Slide 28: Index: Why KIPCO
Index Why KIPCO 28
Slide 29: KIPCO Best in Class: Last 10 Years
KIPCO Best in Class: Last 10 Years Operating Parameters Rank Global Kuwait CAGR Peers Revenue Growth 4 1 21% Operating Income Growth 1 2 20% Asset Growth 4 2 25% Data Source: Bloomberg Notes: Kuwait includes all KSE listed companies with a market cap of >USD500mn. Global Peers includes Investor AB,
Slide 30: KIPCO Best in Class: Last 10 Years
KIPCO Best in Class: Last 10 Years Return Parameters Rank Global Kuwait CAGR* Peers Dividend Yield 1 3 10% Return on Equity (ROE) 2 3 19% Total Shareholders Return (TSR) 2 3 281% * Except TSR Data Source: Bloomberg Notes: Kuwait includes all KSE listed companies with a market cap of >USD500mn. Globa
Slide 31: Why KIPCO? Pan MENA Player
Why KIPCO? Compelling Experienced strategy management team Pan MENA Player Supportive Outstanding track record Pan MENA primary shareholders Player Transparent Strong liquidity Well positioned to deliver 15%+ return in medium term 31
Slide 32: Thank you
Slide 33: Annexure 1: Portfolio Companies
Index Annexure 1: Portfolio Companies 33
Slide 34: Burgan Bank (BB): Overview
Burgan Bank (BB): Overview Overview Kuwait based commercial bank with regional presence in eight countries 2 nd largest conventional bank in Kuwait in terms of assets (Total Assets of USD24bn as of 31 March 2016) Offers a wide range of corporate, retail & treasury products through a network of 184 b
Slide 35: United Gulf Bank (UGB): Overview
United Gulf Bank (UGB): Overview Overview Asset management and investment banking (AMIB) business Offers asset management, investment banking, brokerage and advisory services Listed on the Bahrain Stock Exchange with a market cap of USD844mn as of 26 May 2016 Credit rating of BBB from Capital Intell
Slide 36: Gulf Insurance Group (GIG): Overview
Gulf Insurance Group (GIG): Overview Overview Multi-line insurance provider with presence across 10 MENA countries through subsidiaries Provides marine, aviation, property, engineering, casualty, life & health insurance, & micro finance insurance Operates through a network of 50 branches across the
Slide 37: United Real Estate Company (URC): Overview
United Real Estate Company (URC): Overview Overview Leading integrated real estate company with presence in Kuwait & MENA Sizeable portfolio of good quality properties; Large unencumbered asset base Stable rental income; growth to be supported by newly completed KIPCO Tower and Salalah Mall Listed o
Slide 38: Major Real Estate Properties Developed & Operated by URC
Major Real Estate Properties Developed & Operated by URC Acquired Developed Developed Developed Saleh Shehab, Developed Marina Hotel, Fairmont Hotel, Al Khour Resort, Al Shaheed Tower, Kuwait as BOT Kuwait as BOT Egypt Kuwait as BOT Kuwait 1979 1994 1997 1999 1999 2001 2003 2003 2005 2012 2013 Acqui
Slide 39: United Industries Company (UIC): Overview
United Industries Company (UIC): Overview Overview Established in 1979, UIC invests in the industrial sector in Kuwait and the region Major investments are QPIC (31%) & ATC (29%) KIPCO Group holds 80.5% consolidated stake, while KIPCO directly holds 60.2% (as on 31 March 2016) Key highlights of Q1’1
Slide 40: United Industries Company: Financial performance
United Industries Company: Financial performance Income from Associates Total Revenue* USDmn USDmn 151 35 33 16 19 16 130 44 34 28 21 19 2013 2014 2015 Q1'15 Q1'16 2013* 2014 2015 Q1'15 Q1'16 * Profit from discontinued operation (SADAFCO) Net Profit^ Total Asset USDmn USDmn 93 748 760 646 561 31 15
Slide 41: Qurain Petrochemicals Industries Co. (QPIC): Overview
Qurain Petrochemicals Industries Co. (QPIC): Overview Overview Holding company focusing on investment opportunities in food, petrochemicals, oil, gas & energy related sectors Four petrochemical investments in Kuwait i.e. EQUATE, TKOC, KARO & TKSC Listed on the Kuwait Stock Exchange, with a market ca
Slide 42: Qurain Petrochemicals Industries Co: Financial performance
Qurain Petrochemicals Industries Co: Financial performance Share of Income from Associates Net Profit USDmn USDmn 35 31 104 91 82 73 20 9 2012/13 2013/14 2014/15^ 2015/16 2012/13 2013/14 2014/15* 2015/16 Total Asset Total Shareholder’s Equity USDmn USDmn 1,749 1,728 1,078 1,000 1,041 940 1,207 991 2
Slide 43: Jordan Kuwait Bank (JKB): Overview
Jordan Kuwait Bank (JKB): Overview Overview Jordan based commercial bank with Operations in Jordan, Palestine and Cyprus 4th largest conventional bank in Jordan in terms of asset (Total Asset of USD3.9bn as of 31 Mar 2016) Offers a wide range of corporate, retail & treasury products through a networ
Slide 44: Jordan Kuwait Bank
Jordan Kuwait Bank Loan Growth Deposit Growth USDbn USDbn 1.9 1.9 2.8 2.7 1.8 2.6 2.3 2.4 1.8 1.7 2013 2014 2015 Q1'15 Q1'16 2013 2014 2015 Q1'15 Q1'16 Operating Income & NIM Net Profit & Cost to Income USDmn USDmn 174 180 67 66 175 52 41.1% 4.0% 38.5% 3.7% 3.6% 3.6% 33.7% 35.5% 3.5% 30.0% 14 42 42
Slide 45: Annexure 2: Executive Management
Index Annexure 2: Executive Management 45
Slide 46: KIPCO: Executive management
KIPCO: Executive management Joined KIPCO Board in 1990 Joined KIPCO in 1990; Board and committee Recipient of Arab Bankers Association of North member of American University of Kuwait, MIT Faisal Hamad A l America Achievement Award (2005) Samer Subhi BSc from MIT and MBA from Harvard Univers
Slide 47: Annexure 3: Key Companies
Index Annexure 3: UGM Key Companies 47
Slide 48: KIPCO Group companies
KIPCO Group companies Burgan Bank is one of Kuwait’s leading commercial United Gulf Bank (UGB) is KIPCO’s investment banking banks. Burgan has 23 branches in Kuwait and one of operation based in Bahrain. Offering a range of the biggest ATM networks in the country. Burgan is one commercial and invest
Slide 49: KIPCO Group companies (cont'd)
KIPCO Group companies (cont’d) The United Industries Company (UIC ) is KIPCO’s The Saudi Dairy and Foodstuff C ompany (SADAFCO) is industrial holding company. UIC has holdings in a one of the most profitable companies in the United variety of industrial sectors including stakes in Industries Company
Slide 50: Annexure 4: Per Share Return
Index Annexure 4: Per Share Return 50
Slide 51: KIPCO: Per share return
KIPCO: Per share return EPS Book Value Cents per share Cents per share 11 11 134 9 118 116 108 2 2 2013 2014 2015 Q1'15 Q1'16 2013 2014 2015 Q1'16 DPS ROE Cents per share 11.4% 10.4% 10.1% 8.9% 3.6% 4.3% 7.1% 5.1% 3.2% 7 7 8 8 2012^ 2013^ 2014 2015 2013 2014 2015 Q1'15 Q1'16 DPS Dividend Yield ^ An
Slide 52: Annexure 5: Trends
Index Annexure 5: Trends 52
Slide 53: KIPCO: Net asset value (NAV)
KIPCO: Net asset value (NAV) NAV/Share Position* 3 40% 42% 50% 20% 8% 11% 12% (10%) 4% 6% 3% 2% (5%) (7%) 2 (11%) 0% (18%) (23%) USD (30%) (26%) (34%) (36%) (36%) (44%) (41%) (43%) (41%) (46%) 1 (50)% - (100)% Q1-13 Q2-13 Q3-13 Q4-13 Q1-14 Q2-14 Q3-14 Q4-14 Q1-15 Q2-15 Q3-15 Q4-15 Q1-16 NAV per Shar
Slide 54: Ownership
Ownership Shareholding Profile 1.9% Treasury Shares 44.7% Primary Shareholder (AFH) 6.9% HNIs & Retail Investors 6.9% Investment Funds 39.6% Investment companies & other Institutions They hold their ownership interest in KIPCO Major shareholders of KIPCO are members of through an investment vehicle
Slide 55: KIPCO Group: Market data
KIPCO Group: Market data P/B P/E Market Cap (USDmn)1 Entity 2015 Current2 2015 Current2 2015 Current2 1.8 1.6 16.6 14.1 2,831 2,489 1.2 1.1 10.9 9.3 2,613 2,209 2.1 2.1 49.1 49.1 867 844 1.6 1.5 9.9 9.2 465 397 0.6 0.5 13.6 12.6 374 317 Notes: 1.Market Cap for 2015 and the current number converted a
Slide 56: KIPCO: Average Daily Traded Value
KIPCO: Average Daily Traded Value Avg. Daily Traded Value (USD'000) 3,247 3,217 2,860 2,334 1,881 1,744 1,453 1,475 1,242 1,277 1,143 1,004 912 996 740 693 796 629 Oct-14 Nov-14 Dec-14 Jan-15 Feb-15 Mar-15 Apr-15 May-15 Jun-15 Jul-15 Aug-15 Sep-15 Oct-15 Nov-15 Dec-15 Jan-16 Feb-16 Mar-16 KIPCO stoc
Slide 57: Annexure 6: About the region
Index Annexure 6: About the region 57
Slide 58: MENA Region: Poised for strong economic growth
MENA Region: Poised for strong economic growth Real GDP Growth (2016-21E) Tunisia Lebanon Syria Iraq Israel Morocco Jordan 7.6% India Kuwait Algeria 6.0% China Bahrain Libya Egypt Qatar 3.5% MENA Saudi UAE 2.2% US Arabia Oman 2.2% UK 1.9% EU GCC Non GCC 1.4% Brazil Yemen 1.3% Russia 0.5% Japan MENA
Slide 59: GCC Region: Well positioned to deliver growth
GCC Region: Well positioned to deliver growth One of the highest per capita income, large sovereign ….All contribute to wealth funds, 30% of world’s proven oil reserves, fundamentals in the GCC…. along with robust and growing non-oil sector activity … Current Account Surplus Government debt as a % o
Slide 60: Kuwait: Protected against oil price decline
Kuwait: Protected against oil price decline Kuwaiti government’s Reserve Fund for Future Generations (RFFG) expected to stand at USD535bn at the end of 2015 25% of total revenue contributed to RFFG during periods of high oil prices and 10% during low oil prices Prudent Oil Oil output to remain above
Slide 61: Kuwait: Stable macro-economic environment
Kuwait: Stable macro-economic environment Average budget surplus of 25% 1 of GDP from 2001 to 2014 Healthy Average budget surplus expected to be 8% 1 from 2016 to 2019 Annual After excluding investment income from RFFG, on average Kuwait, will run single -digit fiscal deficits between Budget fiscal
Slide 62: Kuwait development plan overview
Kuwait development plan overview In February 2010, the Kuwaiti authorities announced a series of five-year plans stretching to 2035 aimed at diversifying the economy and expanding the role of the Purpose private sector while tackling much needed investments in health, education and infrastructure an
Slide 63: Kuwait Development Plan: Projects in action
Kuwait Development Plan: Projects in action Key Projects under the plan Jurassic Non Associated Oil & Gas Khairan City Oil & Gas Projects* Reserves Expansion: Phase 2 140mn m2 residential city, incl 10,000 Awarded: Kuwait oil Company awarded 45 houses, 22,000 apts, other facilities different work re
Slide 64: Annexure 7: Market opportunity
Index Annexure 7: Market opportunity 64
Slide 65: Burgan Bank: Banking Sector Opportunity
Burgan Bank: Banking Sector Opportunity Banking Penetration: Assets/GDP Banking Penetration: Loan/GDP 400 % 375% Burgan Presence 300 % Burgan Presence 339% 335% 261% 350 % 250 % 300 % 261% 260% 250 % 200 % 171% 196% 152% 200 % 157% 158%173% 150 % 120% 114% 123% 106% 99% 118% 79% 87% 150 % 92% 99% 10
Slide 66: Gulf Insurance Group: Market Opportunity
Gulf Insurance Group: Market Opportunity 291 Kuwait 1% 24 GIG Presence Egypt Low insurance density in MENA 1% region 974 UAE Double digit growth in insurance 2% market in all MENA countries 99 Jordan Increased acceptance of Sharia- 2% compliant takaful insurance to Lebanon 308 further boost th
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