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 (March 2015)
62 slides from Kuwait Projects Company Holding (K.S.C.P.)'s investor presentation, March 2015
Slide 1: Building Momentum
Building Momentum E Investor Presentation | March 2015 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 Bloomberg 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 an AuM of USD40.0bn# Geography Middle East and North Africa (MENA) Sectors Primarily financial services & media Track record 23 years of continuous profitability, 13 years of continuous dividends Valua
Slide 5: Our presence by geographies & sectors
Our presence by geographies & sectors Major Sectors Geography Commercial Revenue1 Media AMIB Insurance Real Estate Industrial Others banking (2014) Kuwait ● ● ● ● ● ● ● 40% UAE ● ● ● ● 7% Bahrain ● ● ● ● 4% KSA ● ● ● 7% Jordan ● ● ● ● 11% Algeria ● ● ● 5% Tunisia ● ● ● 1% Egypt ● ● ● ● 8% Lebanon ●
Slide 6: Core Holdings
Core Holdings KIPCO: 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
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 (10%) 25% 10% (33%) NA Exchange MSCI Emerging Markets (2%) 14% 11% (6%) 132% S&P 500 14% 74% 103% 63% 108% MSCI Frontier 7% 35% 43% (22%) NA EM Index KIPCO 22% 195% 129% 77% 760% KIPCO Rank vs.
Slide 8: Attractive returns
Attractive returns Total Shareholders’ Return Growth 337 325 98 86 239 239 41 50 1996 2014 2004 2014 Share Price (US cents)^ Cumulative Dividend (US cents) Note: Data adjusted for stock dividend Book Value Per Share Growth (in US cents) 233 221 39 28 1996 2014 2004 2014 Note: Assuming no dividend wa
Slide 9: Continuous dividends
Continuous dividends KIPCO: USD1.4bn in cash dividends paid by KIPCO since 2002 10.1% 31 8.7% 10.3% 7.9% 8.2% 5.9% 6.6% 4.5% 17 5.2% 5.1% 4.6% 14 3.6% 3.2% 9 9 9 6 7 7 7 5 7 3 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 2013 2014 P Cents Per share Dividend Yield 13 years of continuous div
Slide 10: Net asset value
Net asset value NAV Computation (USD per Share) 0.04 720 720 399 0.05 0.05 0.3 (0.2) fils fils fils 0.3 0.1 0.1 0.5 (0.7) 0.8 0.6 2.4 0.5 1.6 1.4 0.9 Burgan OSN United Gulf United United Net other Net Debt NAV KIPCO Reported Bank Gulf Bank Insurance Real Industries Assets Share Book Company Estate C
Slide 11: Index: Strategy
Index Strategy 11
Slide 12: Strategic roadmap: Building Businesses
Strategic roadmap Regional MENA Outlook Investing in Target engines of ROE: growth 20% Diversified Revenue streams Balanced Building Portfolio Businesses Strong managerial Team expertise Thought Approach leadership Being first in the region Investment in companies with sustainable and predictable ca
Slide 13: Controlling or majority stakes
Controlling or majority stakes Main Entities KIPCO Effective 62.7% 60.5% 96.9% 83.3%3 45.7% 69.5% Stakes1 Board Representation 6 of 9 2 of 75 6 of 6 6 of 6 4 of 104 4 of 7 Market Cap (USDmn)2 3,137 Unlisted 861 100 380 398 S&P: S&P: A- Credit BBB+/A2 Moody’s: Unrated CI*: BBB CI*: BBB- AM Best: CI*:
Slide 14: Active management
Active management Key businesses – progress indicators Businesses Parameters Then Now Active Management – KIPCO Support & Action 1995 2014 Net Transformed from a local player to regional player Hired new management in 2010/11 to execute regional Interest 1.3% strategy Margin 2.7% Focused on gr
Slide 15: Index: Performance Update
Index Performance Update 15
Slide 16: 2014: Operating performance continued to be strong
2014: Operating performance continued to be strong Growth % are over 2013 3.4% 175% 2013 2013 9% 3x 3.2% 183% 8% 24% 16% 23% Growth in Growth in NPA Aggregate Growth in Growth in Growth in EBITDA operating net profit provision subscriber revenue EBITDA margin income coverage base 2.6x 7.3x 11% 15% 1
Slide 17: Burgan Bank
Burgan Bank Loan Growth Deposit Growth Asset Quality USDbn USDbn NPA Coverage with collateral^ NPA Coverage without collateral 108% 144% 175% 183% 49% 76% 123% 131% 15.0 13.5 10.5% 11.5 15.8 16.1 13.3 7.7 5.6% 9.5 3.4% 3.2% 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 2013 2014 NPA to Gross Cre
Slide 18: Burgan Bank: Regional operations
Burgan Bank: Regional operations Loan Growth Deposit Growth Net Profit^ USDbn USDbn USDmn 15% 32% 18% 20% 53% 19% 6.2 7.8 159 5.3 6.5 145 3.0 63 64 65 2.3 48 1.8 1.8 2.3 2.5 2.2 1.01.1 1.5 1.2 23 21 0.03 1.3 1.2 0.3 1.5 0.2 0.2 0.03 0.3 10 9 (2) 1 AGB JKB BOB TIB BBT Total AGB JKB BOB TIB BBT Total
Slide 19: Burgan Bank: NPA cyclical & not structural
Burgan Bank: NPA cyclical & not structural NPA Trend NPA (USDmn) As on Dec’14, the combined NPA Ratio (Percentage) coverage of non performing 1,072 816 1,237 913 646 665 246 assets (NPA) is 183% 199 185 166 164 116 117 106 NPA Ratio is 3.2% as on 11.0% 11.8% 86 9.5% 10.5% 6.3% 6.0% 6.1% 4.1% 3.5
Slide 20: OSN: Overview
OSN : Overview MENA Pay TV Potential MENA Region1 Latin America UK India US 2 Population (Mn) 273 595 65 1,260 319 Pay TV (Mn; Est.) 4 37 14 133 102 2 TV Households (Mn) 53 NA 26 155 116 TV Households / Households (%) 85% NA 94% 61% 88% Pay TV/ TV Households (%) 9% 30% 53% 86% 88% Low Pay TV penetra
Slide 21: 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 Algeria Lybia Bahrain with focus
Slide 22: Operating and financial performance
Operating and financial performance Subscribers Net Adds Thousand Thousand 260 995 1,074 170 99 734 132 564 161 80 2011 2012 2013 2014 2011 2012 2013 2014 Churn Diversified subscriber base (Dec - 2014) Percentage Subscribers: 1,074K Others 22% 9% 20% Qatar KSA 17% 16% 16% 25% Egypt 8% Bahrain UAE 20
Slide 23: United Gulf Bank
United Gulf Bank Revenue Fees & Commission Income USDmn USDmn 169 38 109 93 21 64 17 17 2011 2012 2013 2014 2011 2012 2013 2014 Net Profit & Provisions AUM & Capitalisation USDmn USDbn 18.2% 23.2% 17.5% 15.2% 59 11.6 9.7 41 7.5 8.1 26 25 13 8 24 19 11 5 1 3 2011 2012 2013 2014 2011 2012 2013 2014 Pr
Slide 24: Gulf Insurance Group
Gulf Insurance Group Gross & Net Premium Written Net Investment Income USDmn USDmn 593 536 40 496 35 457 31 285 311 230 252 8 2011 2012 2013 2014 2011 2012 2013 2014 Net Premium Written Gross Premium Written Combined Ratio Net Profit USDmn 89% 92% 93% 94% 10.4% 13.3% 13.5% 14.8% 17% 17% 18% 41 21% 3
Slide 25: United Real Estate Company (URC)
United Real Estate Company (URC) Total Revenue1 Operating Profit2 USDmn USDmn 235 109 201 177 73 140 68 66 2011 2012 2013 2014 2011 2012 2013 2014 Net Profit Total Assets & Return on Equity USDmn USDmn 77 5.2% 11.2% 5.6% 4.0% 1,882 1,781 1,779 1,616 38 35 27 2011 2012 2013 2014 2011 2012 2013 2014 T
Slide 26: URC: Balance Sheet (Break-up) as of 31 December 2014
URC: Balance Sheet (Break-up) as of 31 December 2014 Total Assets Investment Properties Total Assets USD1,779mn Total: USD424mn Marina World - Kuwait Investment properties 2% 2% 9% Land for development 3% 1% Salalah Mall - Oman 24% 5% Projects under Marina Plaza - Kuwait 13% construction* 11% Fixed
Slide 27: KIPCO Consolidated: Financial performance
KIPCO Consolidated: Financial performance Revenue Net Income Consolidated Assets USDmn USDmn EPS (Cents) USDbn 8.2 8.0 9.5 11.3 31.9 2,042 29.5 157 1,756* 137 24.6 1,414 20.0 108 1,200 103 2011 2012 2013 2014 2011 2012 2013 2014 2011 2012 2013 2014 27 * Revenue excluding income from discontinue oper
Slide 28: KIPCO Parent debt profile: As at 31 December 2014
KIPCO Parent debt profile: As at 31 December 2014 Debt Type Debt Maturity Total Debt: USD1.9bn Total Debt: USD1.9bn Average debt maturity is International 3.4 years Bonds Local 78% Bonds 15% 41% 7% 52% 7% Term <2 Years 2-4 Years >4 Years Loan Liquidity KIPCO has cash & bank balance of USD913mn with
Slide 29: Index: Why KIPCO
Index Why KIPCO 29
Slide 30: 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 20% return in medium term 30
Slide 31: Thank you
Slide 32: Annexure 1: Portfolio Companies
Index Annexure 1: Portfolio Companies 32
Slide 33: Burgan Bank (BB): Overview
Burgan Bank (BB): Overview Overview Kuwait based commercial bank with regional presence in nine countries 2nd largest conventional bank in Kuwait in terms of assets (Total Assets of USD26.0bn as of 31 December 2014) Offers a wide range of corporate, retail & treasury products through a network of 23
Slide 34: 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 USD861mn as of 23 February 2015 Credit rating of BBB from Capital I
Slide 35: 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 36: 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 37: 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 38: 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 & ATC KIPCO Group holds 78.2% consolidated stake, while KIPCO directly holds 75.6% (as on 31 December 2014) Income from underlying entiti
Slide 39: United Industries Company: Financial performance
United Industries Company: Financial performance Income from Associates Total Revenue* USDmn USDmn 38 162 26 18 140 12 55 29 41 47 14 22 2011 2012 2013 2014 2011 2012* 2013* 2014 * Profit from discontinued operation (SADAFCO) Net Profit* Total Asset USDmn USDmn 100 770 695 630 603 33 12 4 2011 2012
Slide 40: Qurain Petrochemicals Industries Co. (QPIC): Overview
Qurain Petrochemicals Industries Co. (QPIC): Overview Overview Holding company focusing on investment opportunities in 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 cap of U
Slide 41: Qurain Petrochemicals Industries Co: Financial performance
Qurain Petrochemicals Industries Co: Financial performance Share of Income from Associates Net Profit USDmn USDmn 33 33 ^ 117 21 97 79 9^ 51 * 6 30 2011/12 2012/13 2013/14 9M'13/14 9M'14/15 2011/12 2012/13 2013/14 9M'13/14 9M'14/15 Total Asset Total Shareholder’s Equity USDmn USDmn 1,713 1,293 1,007
Slide 42: Annexure 2: Executive Management
Index Annexure 2: Executive Management 42
Slide 43: 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 Al America Achievement Award (2005) Samer Subhi BSc from MIT and MBA from Harvard Universi
Slide 44: Annexure 3: Key Companies
Index Annexure 3: UGM Key Companies 44
Slide 45: 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 46: KIPCO Group companies (cont'd)
KIPCO Group companies (cont’d) The United Industries Company (UIC) is KIPCO’s The Saudi Dairy and Foodstuff Company (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’s
Slide 47: Annexure 4: Per Share Return
Index Annexure 4: Per Share Return 47
Slide 48: KIPCO: Per share return
KIPCO: Per share return EPS Book Value Cents per share Cents per share 11 10 155 8 8 140 139 122 2011 2012 2013 2014 2011 2012 2013 2014 DPS ROE Cents per share 8.9% 6.6% 7.1% 5.1% 5.2% 5.8% 3.6% 3.2% 7 7 7 9 2011^ 2012^ 2013^ 2014 2011 2012 2013 2014 DPS Dividend Yield ^ An additional 5% stock divi
Slide 49: Annexure 5: Trends
Index Annexure 5: Trends 49
Slide 50: KIPCO Best in Class: Last 10 Years
KIPCO Best in Class: Last 10 Years Rank Global Asset Kuwait Peers CAGR Asset Growth 1 1 29% Return on Equity (ROE) 2 2 21% Total Shareholders Return (TSR) 1 1 760% Dividend Yield 1 3 7% Data Source: Bloomberg Notes: Kuwait includes all KSE listed companies with a market cap of >USD500mn. Global Peer
Slide 51: KIPCO: Net asset value (NAV)
KIPCO: Net asset value (NAV) NAV/Share Position* 4 200% 152% 150% 130% 131% 150% 128% 3 103% 80% 83% 100% 74% 51% 15% 46% 42% 44% 34% USD 2 36% 50% 27% 23% 22% 13% 9% 10% 4% (3%) (5%) (10%) (10%) 0% (18%) 1 (30%) (34%) (41%) (44%) (46%) (43%) (50)% - (100)% Q4-10 Q1-11 Q2-11 Q3-11 Q4-11 Q1-12 Q2-12
Slide 52: Ownership
Ownership Shareholding Profile 2.2% Treasury Shares 44.7% Primary Shareholder (AFH*) 7.3% HNIs & Retail Investors 7.6% Investment Funds 38.2% Investment companies & other Institutions They hold their ownership interest in KIPCO Major shareholders of KIPCO are members of through an investment vehicle
Slide 53: KIPCO Group: Market data
KIPCO Group: Market data P/B P/E Market Cap (USDmn)1 Entity 2014 Current2 2014 Current2 2014 Current2 2.0 2.1 23.6 23.2 3,490 3,590 1.7 1.7 36.7 18.1 3,170 3,137 NM NM NM NM 861 861 1.2 1.4 9.8 9.8 380 380 0.6 0.6 13.6 26.9 402 398 Notes: 1. Market Cap for 2014 and the current number converted at 0.
Slide 54: KIPCO: Average Daily Traded Value
KIPCO: Average Daily Traded Value Avg. Daily Traded Value (USD'000) 5,882 3,477 3,286 3,366 2,072 1,808 1,480 1,509 1,070 959 820 767 Jan-14 Feb-14 Mar-14 Apr-14 May-14 Jun-14 Jul-14 Aug-14 Sep-14 Oct-14 Nov-14 Dec-14 KIPCO stock has maintained an average daily traded value of USD2.2mn in the last 1
Slide 55: Annexure 6: About the region
Index Annexure 6: About the region 55
Slide 56: MENA Region: Poised for Strong Economic Growth
MENA Region: Poised for Strong Economic Growth Syria Current Account Balance as a % of GDP (2014E-19E) Tunisia Lebanon Iraq Morocco Israel 4.8% Jordan Kuwait 2.7% 2.4% Algeria Libya Bahrain 1.5% Egypt 1.2% Qatar Saudi UAE Arabia MENA Russia China EU Japan India US UK Brazil Oman -2.4% -2.7% -2.9% GC
Slide 57: GCC Region: Well Positioned to Deliver Growth
GCC Region: Well Positioned to Deliver Growth USDbn ….One of the highest 305 per capita income, of world’s proven oil reserves along with robust and growing non-oil sector activity … 343 GDP / Capita, PPP (2014E) (In USD) Accumulated 387 54,678 current 37,744 37,683 35,849 24,764 account 15,153 12,8
Slide 58: Kuwait: Oil Wealth to Fuel Non Oil Growth
Kuwait: Oil Wealth to Fuel Non Oil Growth Kuwait rating: AA (S&P); Aa2 (Moody’s) Strong Current Government GDP Growth Account Spending (%) Balance % of Nominal GDP (USDbn) % of Nominal GDP (USDbn) Real GDP (USDbn) 32.0% 37 52 2010 44.8% 2.7% 43.6% 67 60 2011 39.1% 147 168 2014E 2019E 2012 45.5% 79 3
Slide 59: Kuwait Development Plan Overview
Kuwait Development Plan Overview Purpose: 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 private sector while tackling much needed investments in health, education and infrastructure
Slide 60: Annexure 7: Market opportunity
Index Annexure 7: Market opportunity 60
Slide 61: Burgan Bank: Banking Sector Opportunity
Burgan Bank: Banking Sector Opportunity Banking Penetration: Assets/GDP Banking Penetration: Loan/GDP 700% Burgan Presence 250% 236% Burgan Presence 583% 600% 200% 176% 153% 500% 400% 363% 150% 310% 300% 247% 235% 95% 100% 80% 75% 66% 72% 151% 174% 65% 69% 63% 200% 127% 55% 360% 80% 110% 98% 113% 41
Slide 62: Gulf Insurance Group: Market Opportunity
Gulf Insurance Group: Market Opportunity 323 Kuwait 1% MENA region is characterized by 23 low insurance density and GIG Presence Egypt 1% significant under penetration 557 Rapid insurance market growth Bahrain 2% in MENA with all countries witnessing double digit growth 105 Jordan 2% over past f
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