Investor Presentation - Second Quarter August 2018 Cairo, Egypt

Transcription

1 Investor Presentation - Second Quarter August 2018 Cairo, Egypt

2 Table of Contents I. Macro Overview Economic Fundamentals Results in Perspective II. Consolidated Results Group Highlights Consolidated Income Statement Consolidated Balance Sheet III. Business Lines Performance Non-Banking Financial Services (NBFS) Leasing Microfinance Investment Bank Brokerage Asset Management IB Advisory

3 I. Macro Economic Update

4 H Economic Fundamentals GDP growth continues to expand as government-initiated structural reforms pay-off GDP growth (%) Q1 17 Q2 17 Q3 17 Q4 17 Q1 18 Q Bringing unemployment down to 10.6% in Q Unemployment Rate (%) Q Q Q Q Q GDP growth recorded 5.3% for the fiscal year FY17/18 The unemployment rate fell 140 bps y-o-y Fuel price hikes averaging c. 45% implemented in Q raised headline CPI to 14.4% in June from 11.4% in May Leading the CBE to delay monetary easing until Q or Q Headline CPI 17.1% 14.4% 14.4% 13.3% 13.1% 11.4% Jan-18 Feb-18 Mar-18 Apr-18 May-18 Jun-18 Policy Rates 19.25% 18.25% 17.25% 17.25% 17.25% 09/07/17 18/02/18 01/04/18 17/05/17 28/06/17 Fuel subsidy removal came as the government continued fiscal consolidation measures, minimizing the budget deficit, which narrowed to less than 10% of GDP in FY17/18 Following two consecutive rate cuts totalling 200 bps, the CBE kept rates on hold for the past 2 meetings Sources: CAPMAS, CBE 4

5 II. Consolidated Results

6 H Consolidated Results Group Highlights Total Revenues EGP 1.1bn 46% y-o-y H EGP 778.0mn Net Operating Profit EGP 301.8mn 111% y-o-y H EGP 140.2mn Operating Profit Margin 26.7% H % Cost-income 1 (%) 19.6% Net Profit Margin 14.3% Annualized Return on Av. Equity (ROAE) % H % H % H % Net Income By Business Line H H EGP 85.8 mn Leasing 33% +88% y-o-y Investment Bank and Holding 28% EGP mn Leasing 48% Investment Bank and Holding 67% Microfinance 24% 1. Cost-income is calculated as people s cost and other SG&A divided by total revenue 2. ROAE calculation is normalized for one-off IPO transaction related expenses and calculated using weighted average equity during the period. 6

7 H Consolidated Results Summary Consolidated Income Statement Results commentary Statement of Profit and Loss EGP mn H H y-o-y Consolidated Revenue 1, % Leasing % Microfinance NM Investment Bank and Holding % Operating Expenses % Financing Cost % Dep. of finance leased assets % People Cost & Other SG&A % Net Operating Profit % Net Operating Margin 26.7% 18.4% Net Profit After Tax & Minority Interest % Consolidated revenue grew 45.5% y-o-y given strong growth in revenues from the all group lines of business. NBFS made up 77.6% of consolidated revenue while the investment bank along with the holding company represented the remaining 22.4%. Total operating expenses grew 30.8% y-o-y given regular salary increases and an expansion in leasing and microfinancing operations. People s Cost & Other SG&A represented 19.6% of revenue, down from 22.1% in the comparable period last year. Financing costs y-o-y growth was significantly lower than Q as a result of deleveraging the balance sheet using IPO proceeds. Net operating profit grew 110.6% y-o-y on a widening operating profit margin. Net profit after tax and minority reached EGP mn in H1 2018, representing an annualized ROAE 1 of 27.3%. 1. ROAE calculation is normalized for one-off IPO transaction related expenses and calculated using weighted average equity during the period. 7

8 H Consolidated Results Balance Sheet Summary Consolidated Balance Statement EGP mn H H PP&E Goodwill Finance Leased Assets, net 6, ,580.8 Securitization Difference, net Other Non-Current Assets (917.3) (467.9) Non-Current Assets 5, ,240.5 Cash and cash equivalents 1, Debit Clients 1, Clearing Accounts - Debit Other Current Assets Current Assets 2, ,627.6 Total Assets 8, ,868.1 Paid-in capital Retained earnings Share premium reserve Other Shareholders Equity (Parent Company) 2, Shareholders Equity (Non-Controlling Interest) Total Shareholders Equity 2, Long Term Loans and Facilities 4, ,137.6 Other Long Term Liabilities Non-Current Liabilities 4, ,175.4 Short Term Loans and Facilities 1, Credit Customers Other Short Term Liabilities Current Liabilities 2, ,854.9 Total Liabilities & Equity 8, ,868.1 Result commentary Total assets grew 50% y-o-y driven by 35% increase in finance leased assets, 106% increase in cash and cash equivalents as IPO proceeds entered the business. Goodwill reported in H grew y-o-y due to the Group s acquisition of Reefy in December Shareholder Equity to Parent grew 183% y-o-y given the successful completion of the initial public offering of 41.5% of CI Capital s shares. The IPO was followed by a c. 1 bn capital increase, of which EGP 861.5mn is classified under the share premium reserve. LT and ST loans and facilities increased 30% and 64% respectively y-o-y on significant expansion in microfinance and leasing activities in the period. 8

9 II. H Business Lines Performance

10 H Business Lines Performance Corplease, the Group s leasing arm continues to provide financial leasing solution to Egypt s largest corporates in 12 distinct economic sectors Leasing Revenue EGP mn Contribution to Net Profit NBFS - Leasing Holding & IB 28% Microfinance 24% Q Q H H Leasing 48% Total Outstanding Leased Portfolio Interest Income EGP mn Corplease s leased portfolio grew 28.3% y-o-y as economic recovery continues H H Interest income grew 25% y-o-y on a larger outstanding portfolio H H New bookings Key Growth Drivers Market share 1 Net interest margin (NIM) EGP1.67bn + 61% y-o-y 18.9% 5.5% 1. As of the latest publically available data published Financial Regulatory Authority (FRA) report for Q

11 H Business Lines Performance Founded in 2007, Reefy is Egypt s first licensed microfinance player. Reefy, the Group s microfinance arm, provides loans to low-income individuals through a network of over 1,200 employee spread across 44 branches nationwide Microfinance Revenue 1 - EGP mn Contribution to Net Profit NBFS - Microfinance Q Q H H Holding & IB 28% Microfinance 24% Leasing 48% Total Microfinance Loans Outstanding Interest Income EGP mn Reefy is well positioned within the microfinance space, allowing robust loan growth y-oy The expanding loan book resulted in significant growth in interest income H H H H Number of branches Key Growth Drivers Number of active borrowers Operating profit margin branches y-o-y 89k + 63% y-o-y 46.5% 1. Microfinance revenues were not consolidated prior to

12 H Business Lines Performance Established in 2005, CI Capital continues to offer top-tier investment banking services including brokerage, asset management, investment banking advisory and custody to clients worldwide Investment Bank Revenue EGP mn Holding and IB represented 28% of net profit Investment Bank - Financial Performance Q Q H H Revenue By Line of Business Holding & IB 28% Microfinance 24% Leasing 48% Investment Bank OPEX Financing Cost 24% Brokerage Asset Mgmt. IB Advisory Capital Markets and Treasury Total People Cost & Other SG&A 76% Key Performance Indicators Brokerage - Market Share 1 Research - Stocks Covered Asset Management - AUM s IB Advisory - Revenue 10.8% + 80 bps y-o-y stocks y-o-y EGP8.3bn + 14% stocks y-o-y EGP54.3mn + 137% y-o-y 1. Market Share is for transactions on the main market excl. deals. Source: EGX 12

13 H Business Lines Performance Investment Bank - Brokerage & Research Brokerage: CI Capital provides its clients with market-leading brokerage services through CIBC and Dynamic, giving CI Capital a aggregate H market share of 10.8%, 80 bps higher y-o-y. 1 In Q CI Capital s Brokerage arm signed a brokerage services agreement with ASEAN s Maybank Kim Eng through which it will provide the bank s clients with solutions covering execution and corporate access for the MENA markets. Market Share by Investor Nationaloty 2 CI Capital H1 Trading Value % 6.4% 4.6% 21.9% 12.4% 8.9% H H Foreign Local Arab 25.8 EGP bn 35.3 H H Value traded by CIBC grew 37% outpacing the market s 26% growth Research: Coverage Universe Awards CI Capital s research franchise continues to expand, bringing coverage to 102 stocks covering 6 MENA markets CI Capital s research team continues to provide key market insights through top-quality reports, earning the CI Capital the 3 rd spot in Extel s 2018 MENA Research Survey 45 '15 '16 '17 ' rd Place Extel s 2018 MENA Research Survey Total 1. Market Share is for transactions on the main market excl. deals. Source: EGX reports 2. Market share is for total transaction on the EGX. Source: EGX reports 3. EGX trading only 13

14 H Business Lines Performance Investment Bank - Asset Mgmt. & IB Advisory Asset Management (CIAM): In H1 2018, CIAM continued to grow its overall AUMs through a 52% rise in equity AUMs as the CBE maintains restrictions over money market funds CI Capital s Asset Management division continues to outperform peers in all asset classes Assets Under Management Jun-17 (EGP bn) Jun-18 MM & FI Funds & Portfolios Equity Funds & Portfolios CIAM s fund performance vs peers 22.1% 16.0% 10.2% 9.2% 8.6% 7.0% Balanced Equity FI & MM CIAM Peers Average Investment Banking Advisory: Recent Transactions CI Capital s Investment Banking arm executed 2 deals with an aggregate value of c. EGP 2.6 bn during Q The division has a strong pipeline of M&A and ECM transactions to be executed over the course of EGP 881mn Advisory on Sale of 100% Stake in Exclusive Sell-side Financial Advisor 2018 EGP 1,737mn Advisory on Initial Public Offering Global Co-ordinator and Bookrunner Performance measured on a YTD basis. Source: EIMA 14

15 Share Information About CI Capital CI Capital is a diversified financial services group and Egypt s leading provider of leasing, microfinance, and investment banking products and services. Through its headquarters in Cairo and presence in New York and Dubai, CI Capital offers a wide range of financial solutions to a diversified client base that includes global and regional institutions and family offices, large corporates, SMEs, and high net worth and individual investors. CI Capital leverages its full-fledged investment banking platform to provide market leading capital raising and M&A advisory, asset management, securities brokerage, custody and research. Through its subsidiary Corplease, CI Capital offers comprehensive leasing solutions, including finance and operating leases, and sale and leaseback, serving a wide range of corporate clients and SMEs. In addition, CI Capital offers microfinance lending through Egypt s first licensed MFI, Reefy. Share Information Ticker: CICH.CA; CICH EY Listed: 30th April 2018 Shares Outstanding: mn IR Contacts +20 (02) Investor.relations@cicapital.com CI Capital Holding, Mohie El Din AboulEzz St., Dokki, Egypt 15

16 Disclaimer This announcement contains certain forward-looking statements. A forward-looking statement is any statement that does not relate to historical facts and events, and can be identified by the use of words and phrases like according to estimates, anticipates, assumes, believes, could, estimates, expects, intends, is of the opinion, may, plans, potential, predicts, projects, should, to the knowledge of, will, would, annualized or, in each case their negatives or other similar expressions, which are intended to identify a statement as forward-looking. This applies, in particular, to statements containing information on future financial results, plans, or expectations regarding the Company s business and management, the Group s future growth or profitability and general economic and regulatory conditions and other matters affecting the Group. Forward-looking statements reflect the current views of management of future events and are based on management s assumptions and involve known and unknown risks, uncertainties and other factors that may cause the actual results, performance or achievements of the Group to be materially different from any future results, performance or achievements expressed or implied by these forward-looking statements. The occurrence or non-occurrence of an assumption could cause the actual financial condition and results of operations of the Group to differ materially from, or fail to meet expectations expressed or implied by, those forward-looking statements. The Company s business is subject to a number of risks and uncertainties that could also cause a forward-looking statement, estimate or prediction to become inaccurate. These risks include fluctuations in the prices of energy, raw materials or employee costs required by the operations of the Group, its ability to retain the services of certain key employees, its ability to compete successfully, changes in political, social, legal or economic conditions in Egypt, worldwide economic trends, global and regional trends in the industry, the impact of war and terrorist activity, inflation, interest rate and exchange rate fluctuations and the ability of management to identify accurately and in a timely manner future risks to the business of the Group and manage the risks mentioned above. Accordingly, investors should not rely on the forward-looking statements in this announcement. None of the Group, its management or CI Capital gives any assurance regarding the future accuracy of the opinions set forth in this announcement or as to the actual occurrence of any predicted developments. After the date of this announcement, none of the Group or its management assumes, and each of the Group and its management expressly disclaim, any obligation, except as required by law and the listing rules of the EGX, to update any forward-looking. 16

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