management capabilities. â« Ability to ... Strong management teams ..... Masters in settlement &. Specialised Engin
Trans-Century Grroup An Overview
INVESTING IN AFRICA
Contents
1. Executive Summary y 2. Power 3. Transport 4. Specialised Engineering 5. Consumer 6. Summary Financials 7. The Team
1
Executive Summary Trans-Century Limited (“TCL”) is a Kenya––headquartered infrastructure group with investments across East, Central & So outhern Africa
− Operating EBITDA of circa KES 1.4 1 4 Billlion − Gross investment portfolio in excess of o KES 9 billion Industry sectors include: Power Infrastruucture - Tanelec, Kewberg, EA Cables, Cableries Du Congo; Transport Infrastru ucture - Rift Valley Railways; and Specialised Engineering - Avery
Uniqueness of TCL: − Founded by entrepreneurial Kenyan business b
Entrepreneurial
people and investors
− Focus on power infrastructure, transpport infrastructure and specialized engineering
− Operating companies led by dynamic management with extensive experience & in-depth capabilities
Infrastructure focus
Ability to execute 2
Investment considerations Strong market fundamentals : undder-penetration and inefficiencies in Power and Transport/ Cargo and Sp pecialised Engineering
Strong market positioning: In 7 coountries; including Kenya, Uganda, Tanzania Rwanda Tanzania, Rwanda, DRC DRC, Zambia and d South Africa
Leveraging L i scale l ffor execution: ti Sh h h ld ffunds hareholder d off KES 6.9 6 9 billion billi Strong management teams Impressive financial performancee: Shareholders have enjoyed 43 (forty three) times money back on their investment since 2003
3
TCL’s focus going forward Trans-Century Ltd
Power
Transport
Specialised
Affiliated
Infrastructure
Infrastructure e
Engineering
Holdings
Consumer
Existing Aluminium Cables Investments:
Copper Cables
Kenya-Ugan nda railway
Transformers
Distribution & Service
Operations &
Switchgear
Maintenance
Engineering Growth:
Power Generation Transmission
Logistics
Turn-key projects EPC
Investments
Tea Banking Private equity
Historical timeline & pan-African growth
2009: TCL becomes public
2006: engagement of full full-time time management team
TCL’ss 2004: TCL initial buyout
POWER
TRANSPORT T
SPECIALISED ENGINEERING
CONSUMER
5
Contents
1. Executive Summary y 2. Power 3. Transport 4. Specialised Engineering 5. Consumer 6. Summary Financials 7. The Team
6
POWER 7
7
Under-penetration of electrrification is a common theme across the region r Installed capacity ( (MW) )
Installed capacity per capita (MW// 1000 people) 38.2
1,473
Electrification rate: % of population
6
16%
(Kenya) 10.7
340
5
9%
(Uganda) 919
2 6 21 21.6
4
14%
(Tanzania) 1,490
62.4
3
61%
((Ghana)) 40,498
831.8
2
70%
(South Africa) 964,754
(USA)
Source: KPLC, US EIA
3 172 9 1 3,172.9
100%
8
TCL’s participation in the po ower sector
Power generation Focus area Transmission lines
3 333
Substations (step down)
333
Substation (step up) Focus area
Distribution transformers Residential/ Comm’l Use
333
Distribution lines
333
333 9
Regional utilities plans Kenya
Tanzania
Connections
Connections
In millions 2.0 1.8 1.6 1.4 1.2 1.0 0.8 06 0.6 0.4 0.2 0.0
1.9 CAGR 19%
1.1
0.8
2006
2008
2012
In millions 1.8 16 1.6 1.4 1.2 1.0 0.8 0.6 0.4 0.2 0.0
CAGR 13%
Uganda
Rwanda
Connections
Connections
2012
In thousands 400.0
2014
350
350.0
CAGR 25%
300.0
Charged with growing connections , currently at 300,000 connections
1.2
0.7
2007
Umeme Ltd, a regulated distribution company with a 20yr concession
1.6
250.0 200.0 150.0 100.0
91
110
50 0 50.0 0.0 2006
Source: KPLC, Tanesco, Umeme, Ministry of Infrastructure (Rwanda)
2008
2012
10
Segmental reporting Power In millions
2010A
20 009A
% Variance
5,505
4 4,485
22.7%
368
731
-49.7%
KES
Revenues
EBIT
Strong growth in the business fundamentals, leeading to increased revenues: –Copper volumes up 9% –Aluminium l i i volumes l up 140% –Transformer volumes up 38% Impairment of working capital at subsidiary leevel impacted EBIT 11
Contents
1. Executive Summary y 2. Power 3. Transport 4. Specialised Engineering 5. Consumer 6. Summary Financials 7. The Team
12
TRANSPORT 13
13
As port volumes rose, railw way volumes continued their consistent decline d MTs millions 20
19
18 16 14
13
12 10 8 6
8 7 48 4.8
4
2.5
2.0
2
1.5
0 1980s
1990s Port Volume
Source: KPA, Kenya Railway Corporation and RVR estimates
2000
2010
RVR Volume
14
The RVR opportunity Techn nical parttner America Laatina Logistica (ALL) ( ) is a leader in Brazil B People p
Funding
Railway engineers g are in the region renowned
Strong shareholders Bank lenders
Existing assets
Market demand
2,800 2 800 km k off track k ~100 locomotives g ~4,000 wagons
20 million ll MT off cargo
15
Contents
1. Executive Summary y 2. Power 3. Transport 4. Specialised Engineering 5. Consumer 6. Summary Financials 7. The Team
16
Network of opportunity Strong regional presence with key relationships
POWER SOURCE PRODUCTS/ PERKINS
17
Segmental reporting Specialised Engineering In millions
2010A
20 009A
% variance
KES
Revenues
EBIT
411
226
82.0%
65
22
191.9%
Growth in the Specialised Engineering Division n driven by: –Growing industrial base – Focus by authorities on stringent observance of codes and standards (weights) – Continued demand for back-up poweer
18
Contents
1. Executive Summary y 2. Power 3. Transport 4. Specialised Engineering 5. Consumer 6. Summary Financials 7. The Team
19
Consumer Overview The prroducts Products include: – loose tea (Nguvu, Supreme, Premium) – tea bags (Premium and Luxury) – infusion products (Camomile, Green tea,, Hibiscus))
20
Segmental reporting Consumer In millions
2010A
2 2009A
% variance
KES
Revenues
915
714
28.1%
EBIT
114
33
249.2%
Tea volumes up 13% driven by: – Growing demand for tea in the reegion – Successful business repositioning
21
Contents
1. Executive Summary y 2. Power 3. Transport 4. Specialised Engineering 5. Consumer 6. Summary Financials 7. The Team
22
2010 Group Performance
Group reven nues 25% at Ksh 6.8 6 8 billion Group earnings befo b f re interest & taxes (EBIT) 22% 2 at Ksh 974 4 million Group net inccome 99% at Ksh 468 8 million 23
Summary Financial Stateme ents Income statement Ksh in thousands Turnover
GROUP 2010
GROUP 2009
6,794,650
5,414,887
1,415,828
1,105,627
Results from operating activities
974,271
796,069
Profit before income tax
630,585
526,625
Profit after income tax
468,262
234,497
Equity holders of the company Non-controlling interest
343,713 124,549
91,903 142,594
Profit for the year
468,262
234,497
Profit P fit before b f depreciation, d i ti impairment and finance cost
Profit after tax is attributable to:
24
Summary Financial Stateme ents Balance sheet COMPANY 2010 KShs'000
COMPANY 2009 KShs'000
GROUP 2010 KShs'000
GROUP 2009 KShs'000
9,040,291 392,374
7,878,499 556,398
7,141,777 4,094,701
5,039,372 3,693,959
Total Assets
9,432,665
8,434,897
11,236,478
8,733,331
EQUITY AND LIABILITIES Share capital Sh Share premium i Reserves Equity attributable to equity holders Non-controlling interest
133,519 106 684 106,684 6,692,676 6,932,879 -
131,462 106 684 106,684 5,581,918 5,820,064 -
133,519 106 684 106,684 3,711,277 3,951,480 1,341,974
131,462 106 684 106,684 2,397,928 2,636,074 881,771
6,932,879 2,166,657
5,820,064 1,952,622
5,293,454 3,371,518
3,517,845 3,168,545
333,129
662,211
2,571,506
2,046,941
9 432 665 9,432,665
8 434 897 8,434,897
11 236 478 11,236,478
8 733 331 8,733,331
Ksh in thousands ASSETS Non current assets Current assets
Total Equity Non current liabilities Current liabilities Total equity and liabilities
25
TCL’s Strong Track Record TCL Group Revenues
Value creation¹
8 000 8,000
10
50x
9
43 x45x
Group revenues in billions
6.8 CAGR 25%
6,000
5.5 5,000
Shareho older funds in billio ons
8 7,000
40x 6.9
7
35x
6
30x
5
25x
4
20x
3
15x
2
10x
1
5x 0.1
0
4,000
2009A
2010A
0x
1x
2003
No o. of Investments:
0
2010
1
5
6
8
9
10
10
The group has seen remarkable growth in rev venues, driven by organic growth in portfolio company revenue as well as new acquisitions p spent p aimed at tripling p g TCL is investingg in the future with circa USSD 20 mm of capex capacity across core cables and transformer businesses b Note: ¹Times Money Back calculation assumes investment of TCL Hold Co’s 20 003 shareholder capital
26
Contents
1. Executive Summary y 2. Power 3. Transport 4. Specialised Engineering 5. Consumer 6. Summary Financials 7. The Team
27
Company Board of Directorrs B d off directors (8) Board
P t K Peter Kanyago
Founder East Africa Courier CPA (K), MBA, industrial management
– Directorship: Ecobank (chair) Fedex, Otis, KTDA
Njeru Kirira
Tax and fiscal policy administrator Served various capacities in G t T Govt. Treasury
– Directorship: Inoorero University
Z h i h Mbugua, Zephaniah M Mb Ch Chair i
30 3 years of eentrepreneurship ex experience (industrial ch i l ) chemicals)
– Directorship: EAC E (chair), P&A (EA), Abcon Group, Zeniki Z Investments
Robin K Kimotho
Business B advisory & Consultancy regionally C ( (Eastern & Southern A i ) Af Africa)
– Directorship: Polaris P International (K), Sigona Gollf Club
Carol Musyoka
Extensive experience in banking & corporate fi finance
N Ngugi i Kiuna Ki
Vast senior multinational management experience
– Directorship: UBA bank (Chair), Cooper Ke, Cannon Assn, X&R Tech
Joseph Karago
Large-scale architectural development Urban infrastructure d l development t
– Directorship: Kenya Children’s Home, Karago & Associates, Mcensal Ltd
Dr. Gachao Kiuna
Corporate finance & strategy gy consulting g (McKinsey)
– Directorship: Enablis (EA), Institute for Economic Affairs
28
Experienced Management team t Dr. Gachao Kiuna Yida Kemoli Group Head of Corporate finance & Strategy Capital markets investment banking (JPMorgan), Africa PE experience (Actis) MEng in Chemical Engineering
Allan Munyua Division Principal, Power & Specialised Engineering Business procurement, Financial management advisory Masters in settlement & infrastructure development, Bachelors of Architecture
Ng’ang’a Njiinu
Chi f Executive Chief E i Officer O Offi Corpporate finance & strattegy consulting (McK Kinsey) PhD Biotechnology, Biotechnology BSc Biocchemistry
Wambua Kimeu Group Head of Finance
Audit & Advisory (PwC) Certified Public Accountant (Kenya) Bcom finance
Mumo Muth hengi Division Managerr, Consumer and In nvestor Relations Invesstment banking (Deuttsche Bank) and priva ate equity experience MBA (Harvard Business Schoo ol), BBA finance
Kibiru Mutthaka
Geoffrey Njue Group Internal Auditor
Group audit experience at Nestle and Industrial Promotion Services CPA (Kenya) BSc in Civil Engineering
Janet Wanjiku
Division Manager, Business Analyst Management & Financial Specialised Engineering Accountant Audit (Kenya Women Bachelor of Science degree Financial analysis, planning & strategy Chartered Financial Analyst Analyst, MBA finance & investment management
in Fin nance from Towson Univeersity, ersity Maryland USA. USA level 3 candidate for the CFA designation d
Finance Trust) Certified Public Accountant (Kenya) Bcom finance 29
Contact Us
www.transceentury.co.ke y
30