Fondul Proprietatea. June 2016

Transcription

1 Fondul Proprietatea June 2016

2 Disclaimer This presentation is made solely to the intended recipient and should not be distributed to, or acted upon by, any other person. It is for general information only and reflects the personal views of the presenter. Nothing herein is intended to constitute advice on investment, legal or tax matters, any form of personal recommendation nor is it an offering, placement or an invitation to buy or sell shares in Fondul Proprietatea SA ( the Fund ) or in any other issuer of securities mentioned herein or to initiate any kind of transaction whatsoever. Neither the Fund nor its Fund Manager and its delegates accept any liability of any kind for any losses arising from making use of such information. Furthermore, this presentation is not intended, and should not be construed, as marketing of the Fund in the meaning of the Directive 2011/61/EU on alternative investment fund managers ( AIFMD ) in any member states of the European Economic Area. Any person considering an investment in the Fund or any other security mentioned herein should refer to the relevant issuer s prospectus and consult their own legal, accounting and tax advisors in order to make an independent determination of the suitability and consequences of an investment in the securities. The Fund's prospectus contains important information on the potential risks involved in such an investment which are not included in this presentation. Read the prospectus before investing in the Fund. The prospectus, the latest annual report and semi-annual report can be found on the Fund website The distribution of this presentation in certain jurisdictions may be restricted by law and persons who come into possession of it are required to inform themselves about and to observe such restrictions and limitations. Neither the Fund nor its Fund Manager or any of its delegates accepts any liability to any person in relation to the distribution or possession of the presentation in or from any jurisdiction. The shares issued by the Fund and those issued by the Company have not been and will not be registered under the US Securities Act of 1933, as amended, or with any securities authority of any state or territory within the jurisdiction of the United States of America. The Fund s shares may not be offered, sold or delivered in the United States of America or to American citizens or nationals. The information contained in this presentation is as of its date, unless otherwise indicated, and is not a complete analysis of every material fact regarding the market, and any industry sector, security, or portfolio. Statements of fact cited by the manager have been obtained from sources considered reliable but no representation, warranty or undertaking is made as to the completeness or accuracy of such information and no liability is accepted by the Fund, the Fund Manager or any of its delegates in relation therewith. Furthermore, no responsibility is accepted for updating any facts or assumptions in this document. Because market and economic conditions are subject to rapid change, opinions provided are valid only as of the date of the materials. Any forward-looking statements are based upon certain assumptions; actual events are difficult to predict and are beyond the control of the author, therefore actual events may differ from those assumed. References to particular securities are only for the limited purpose of illustrating general market or economic conditions, as such exist at the date of this presentation, and are not recommendations to buy or sell a security or an indication of the author s or any managed account s holdings. The Fund Manager s or its delegates opinions are intended solely to provide insight into how the Fund Manager analyses securities and are not a recommendation or individual investment advice for any particular security, strategy or investment product. No information hereof is to be considered, under any circumstances, as an information provided in accordance with Article 23 of the AIFMD as such was transposed by Article 22 of Law no. 74/2015 on managers of alternative investment funds. The price of shares and income from them can go down as well as up and you may lose some or all of your capital invested. The previous results of a fund or company do not account for future performances. Currency fluctuations will affect the value of foreign investments. All investments are subject to certain risks. Generally, investments offering the potential for higher returns are accompanied by a higher degree of risk. Stocks and other equities representing an ownership interest in a corporation have historically outperformed other asset classes over the long term but tend to fluctuate more dramatically over the shorter term. Small or relatively new companies can be particularly sensitive to changing economic conditions due to factors such as relatively small revenues, limited product lines, and small market share. Smaller company stocks have historically exhibited greater price volatility than larger company stocks, particularly over the short term. The significant growth potential offered by Emerging Markets remains accompanied by heightened risks when compared to developed markets, including risks related to market and currency volatility, adverse social and political developments, and the relatively small size and lesser liquidity of these markets. The Fund s headquarters are located at Buzesti Street, 7th Floor, Bucharest, 1st District, , Romania. Fund s Fiscal Identification Code is and Trade Registry registration number is J40/21901/2005. The subscribed share capital is RON 9,869,265, and paid up share capital is RON 9,541,834, Starting with 1 April 2016, in view of complying with the AIFMD, implemented in the Romanian legislation through Law no. 74/2015 on managers of alternative investment funds and Regulation no. 10/2015 on alternative investment fund management, Fondul Proprietatea SA, qualifying as an alternative investment fund, is managed by Franklin Templeton Investment Services S.À R.L. ( FTIS ), a société à responsabilité limitée qualifying as an alternative investment fund manager under Article 5 of the Luxembourg Law of 12 July 2013 on alternative investment fund managers, authorized by the Commission de Surveillance du Secture Financiere under no. A /21 November 2013, whose registered office is located at 8A rue Albert Borschette, L-1246 Luxembourg, registered with the Luxembourg Register of Commerce and Companies under number B , registered with the Romanian Financial Supervisory Authority ( FSA ) under number PJM07.1AFIASMDLUX0037/10 March This presentation herein is issued by Franklin Templeton Investment Management Limited ( FTIML ), registered with the FSA under no. PJM01SFIM/400005/14 September 2009, which is authorized and regulated in the UK by the Financial Conduct Authority, registered therein under the number , registered as a foreign equivalent of an investment adviser with the US Securities Exchange Commission, acting through its Romanian branch having its registered office at Premium Point, Buzesti Str., 7-8th floors, 1st. District, Bucharest, Romania. FTIML acts herein as a delegate of FTIS with respect to the portfolio management functions as well as administration services over the Fund. June

3 Romanian Macro

4 APPENDIX VI Romania Macroeconomic Data 4 Romania within the European Union Rank within the EU Size: 238,391 km 9 Population: 20,121,641 Urban: 54.0% Rural: 46.0% GDP: EUR bn 150 (2014) 17 7 Rank within New EU Member Countries 1 2 (following Poland) 2 (following Poland) 3 (following Poland & Czech Republic) GDP per capita 5 : EUR 8,263 (2014) Current S&P rating: BBB GDP Growth: e (%) e Nominal GDP (bn EUR) GDP growth CDS Quotations vs. No. of Notches to Reach AAA Status 3 Public Debt: 2015 (% of GDP) 4 CZ IR PL ES RO IT HU BG PG % 86.0% 76.2% 62.7% 53.1% 43.4% 41.4% % 29.2% e European Commission estimates, as at November and 2007 accession waves. 2. Source: Bloomberg, as at 28 March Source: Notches to AAA rating using S&P sovereign foreign currency ratings (LT) as at 28 March Source: Trading Economics. CDS Quotation, USD 5 years segment as 28 March Source: Bloomberg. 4. Source: Bloomberg, as at 25 February Source: World Bank. EURO Area EU Hungary Slovenia Slovakia Poland Czech Romania Bulgaria Republic 4

5 APPENDIX VI Romania Macro Indicators (I) 5 Household spending (%) % Loans dynamics (%) % % 90 Q1 13 Q3 13 Q1 14 Q3 14 Q1 15 Q3 15 Deposits dynamics (%) 2 20% 15% 10% Real private consumption Real retail sales Nominal sales of durable consumer goods -15% 1/13 4/13 7/13 10/13 1/14 4/14 7/14 10/14 1/15 4/15 7/15 10/15 Loans Corporate loans Retail loans Housing loans Non-housing retail loans Inflation vs. Key Interest Rate (%) 3 7% 4% 1.75% 5% 0% -5% 1/13 4/13 7/13 10/13 1/14 4/14 7/14 10/14 1/15 4/15 7/15 10/15 Deposits Corporate deposits Retail deposits 0% -4% -3.25% 1/13 4/13 7/13 10/13 1/14 4/14 7/14 10/14 1/15 4/15 7/15 10/15 1/16 4/16 Inflation Key Interest Rate 1. Source: Raiffeisen Bank. 2. Source: Wood & Co, as at 30 November Source: National Bank of Romania. Inflation as at 30 April Key interest rate as at 16 May

6 APPENDIX VI 6 Romania Macro Indicators (II) Confidence Indicator 1 Net Investments Index: % 6.7% % 0.1% 3.0% 1.7% /06 10/06 7/07 4/08 1/09 10/09 7/10 4/11 1/12 10/12 7/13 4/14 1/15 10/15-4.2% -10.0% -15.4% -7.4% -9.1% Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1' 14 Q2' 14 Q3' 14 Q4' 14 Q1' 15 Q2' 15 Q3' 15 Retail Sales Index: Industrial Sales Index: % 8.3% 8.2% 7.4% 7.0% 3.0% 4.9% 6.4% 13.5% 10.8% 8.9% 7.8% -0.8% -0.8% -2.3% Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1' 14 Q2' 14 Q3' 14 Q4' 14 Q1' 15 Q2' 15 Q3' % 5.4% 4.4% 4.7% 2.5% 3.1% 2.5% Q1 '13 Q2 '13 Q3 '13 Q4 '13 Q1' 14 Q2' 14 Q3' 14 Q4' 14 Q1' 15 Q2' 15 Q3' Source: Bloomberg. 2. Source: WOOD & Co. 3. Source: National Institute of Statistics. 6

7 APPENDIX VI Romania Solid Fundamentals (I) 7 Current Account Deficit: e (%GDP) 1 Budget Deficit: e (%GDP) 1-0.3% -0.2% -1.1% -1.7% e 2016e -1.5% -1.9% -2.5% -2.8% e 2016e³ Current Account: (%GDP) 2 Budget Deficit: % -0.2% 1.4% 0.9% 4.1% 3.4% -0.9% -2.4% 1.2% 0.6% 3.4% 5.3% 0.7% -5.8% -5.2% RO BG HU PL CZ RU TK CR % -1.5% -1.5% -2.4% -2.2% -2.0% -3.2% -3.0% -4.1% -5.8% ES PL IR IT CR HU BG RO CZ 1. Source: Bloomberg. as at 28 March Source: Bloomberg, as at 30 September Source: Bloomberg; e- estimate as at 4 September

8 APPENDIX VI Romania Solid Fundamentals (II) 8 Quarterly Unemployment: (%) 1 Exchange Rates: /13 6/13 9/13 12/13 3/14 6/14 9/14 12/14 3/15 6/15 9/15 12/ /13 5/13 10/13 3/14 8/14 1/15 6/15 11/15 HUF/EUR PLN/EUR CZK/EUR RON/EUR Average monthly gross wages (EUR) 2 1, Poland Hungary Czech Republic Slovakia Romania Bulgaria Croatia Serbia e 1. Source: Bloomberg. 2. Source: Raiffeisen Bank. 8

9 APPENDIX VI Romania Solid Fundamentals (III) 9 Net Annual EU Budget Flows DE FR UK NL IT BE SE AT DK FI LU IE CY MT SI EE LV ES LT HR BG SK PT CZ GR HU RO PL 0 Net annual EU budget flows (approx. in EUR bn budget - LHS) Net annual EU budget flows (approx. % of avg GDP - RHS) EU Funds Effective Absorption Rates % 40.1% 26.0% 0.0% 0.0% 9.6% 7.5% 3.7% 9.7% Source: European Commission, 8 March 2016 Commerzbank EM report. 2. Note: For the programme. Source: Ministry of European Funds. 9

10 APPENDIX VI Romania Solid Fundamentals (IV) 10 Quarterly GDP Growth: (yoy) 1 5.2% GDP per Capital as % of EU 28 in PPS 2 4.1% 3.8% 3.0% 2.7% 4.3% 3.4% 3.6% 3.8% % % 1.5% 40 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 13 Q3 13 Q1 14 Q3 14 Q1 15 GDP Breakdown: % 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 20 EZ17 FR SP SLV PT CZ HU CRO PL BG RO Q3 15 Agriculture Construction Wholesale and retail IT&C Banking and insurance Real estate activities Government spending Others Electricity, gas, and other raw materials 1. Source: Bloomberg. 2. Source: Eurostat, 8 March 2016 Commerzbank EM report. 3. Raiffeisen Bank. 10

11 Corporate Governance and Financial Performance of SOEs

12 Corporate Governance Code and Listing of SOEs Corporate Governance Code was Approved by GEO 109/2011 on 30 November 2011 Company % FP Stake¹ % in Total NAV¹ NAV USD mn¹ Listing Status² Independent Board² Professional Management² Hidroelectrica X NA NA Romgaz CN Aeroporturi Bucuresti X X X Electrica Distributie Muntenia Nord X?? Electrica Distributie Transilvania Sud X?? Electrica Distributie Transilvania Nord X?? SN a Sarii Salrom X X X CN Administratia Porturilor Maritime X X Electrica Furnizare X?? Nuclearelectrica ?? Complexul Energetic Oltenia X?? Posta Romana X Conpet Legend: - Completed; X - Not completed;? - Suspected to be politically influenced 1. Based on the 31 March 2016 Detailed Statement of Investments. 2. As at 30 April Starting February 2014, the company is in insolvency procedure. 4. Holding sold entirely in April

13 Corporate Governance Code and Listing of SOEs Corporate Governance Code was Approved by GEO 109/2011 on 30 November 2011 Company % FP Stake¹ % in Total NAV¹ NAV USD mn¹ Listing Status² Independent Board² Professional Management² Romaero X X CN Administratia Canalelor Navigabile X? Oil Terminal X? A.I. Timisoara Traian Vuia X Plafar X X X AI M. Kogalniceanu Constanta X?? CN Administratia Porturilor Dunarii Maritime CN Administratia Porturilor Dunarii Fluviale X?? X?? Total ,351.7 Legend: - Completed; X - Not completed;? - Suspected to be politically influenced Total number of companies Independent Board Professional Management 6 5 X 4 4? Based on the 31 March 2016 Detailed Statement of Investments. 2. As at 30 April The administration plan was not approved. 13

14 State Controlled Companies Key Financials Company EBITDA (RON mn) Net Profit (RON mn) Hidroelectrica SA , , , (508.0) Romgaz SA 10 2, , , , , , , CN Aeroporturi Bucuresti SA Electrica Distributie Muntenia Nord SA Electrica Distributie Transilvania Sud SA Nuclearelectrica SA Electrica Distributie Transilvania Nord SA Societatea Nationala a Sarii Salrom SA CN Administratia Porturilor Maritime SA Electrica Furnizare SA Complexul Energetic Oltenia SA N/A (693.6) N/A Posta Romana SA (52.1) (29.4) 37.0 (33.0) 8 Conpet SA Romaero SA (32.3) (5.2) (25.0) N/A (46.7) (19.8) (45.0) N/A CN Administratia Canalelor Navigabile SA A.I. Timisoara Traian Vuia SA 13.8 (13.4) (21.6) Oil Terminal SA CN Administratia Porturilor Dunarii Fluviale SA (0.5) (2.5) A.I. M. Kogalniceanu Constanta SA (1.4) (3.8) Plafar SA 6 (0.9) N/A (1.0) CN Administratia Porturilor Dunarii Maritime SA TOTAL 4, , , , , , , ,172.4 WEIGHTED TOTAL , , , WEIGHTED TOTAL LISTED COMPANIES WEIGHTED TOTAL UNLISTED COMPANIES Note: EBITDA = Operational result + Depreciation. Source: Companies Financial statements, Judicial Administrator s reports. 1. From June 2012 to June 2013 the company was in insolvency procedure. Starting February 2014 the company is in insolvency procedure. 2. Source: Hidroelectrica calculations. 3. For the period 31 May 31 December EBITDA = Operational result + Depreciation + Expenses with the revaluation of fixed assets. 5. EBITDA = Operational result - Other income + Depreciation. 6. The company was in insolvency procedure until September Weighted for the Fund s stake in the companies. 8. Source: Companies 2016 Budgets and 2015 financial statements submitted for shareholders approval in the Annual GSMs. 9. Source: 2015 Annual financial statements approved by the companies shareholders. 10. Holding sold entirely in April

15 Fondul Proprietatea Premium Point Buzesti Street 78-80, 1st District Bucharest