DEG We finance opportunities in future markets DEG Deutsche Investitions- und Entwicklungsgesellschaft mbh DEG invests in Beloxxi August 2016
Who are we? DEG, a subsidiary of KfW Founded 1962 Employees 526 Headquarters Cologne KfW IPEX-Bank KfW Development Bank KfW DEG Shareholder New business KfW, Frankfurt EUR 1.1 billion International project and export finance Public Sector financial promotion Private Sector financing Portfolio EUR 8.0 billion Equity EUR 2.3 billion Balance sheet total EUR 5.8 billion KfW Ownership Rating Balance sheet: Ranking: German Government AAA/Aaa, 479 billion 3rd largest bank in Germany 2
With whom do we work? Tailored financing for different customer segments Private Equity Funds Financial sector DEG`s Customer segments Corporates Project Financing (Energy + Infrastructure) 3
What do we offer? DEG`s range of financial solutions Long-term loans Currency: Term: Amount: Interest rate: EUR, USD and some local currencies (ZAR, IDR, HKD, JPY) ~4-15 years, depending on cash-flow and project risk ~USD 10-30 million (up to USD 100-150 million can be mobilized from other financiers on best effort basis) fixed or variable, market-oriented depending on tenor, project & country risk Mezzanine finance Equity mezzanine: Debt mezzanine: Amount: Preference shares, fixed coupons with equity kickers (warrants, other performance-linked returns etc.) Subordinated debt, unsecured debt, partially performance linked returns USD 10-30 million Equity capital investments Currency: Term: Conditions: Amount: Local currency Long-term equity participation, usually with 5-7 year exit horizon Clear exit strategy; Significant minority stake with protection right; Active role e.g. board seat USD 7-20 million 4
Who is Beloxxi? Local biscuit manufacturer founded in 1994. Today is a market leader in cream crackers segment Family-run company that utilises state of the art production facility (German technology) Successfully competing in a large, high-growth market (~EUR 1bn) Credible business with track record of consistently improving revenue Strategy has historically been to focus in savoury biscuits where it has excelled above competition Facing rising, undeserved consumer demand growth opportunity 5
What was the appeal of Beloxxi to DEG? Profitable Sustainable and Viable business model Managerial and technical know-how Positive developmental impact Owner s equity capital Strong potential for growth and expansion Riskadequate return 6
What will DEG contribute with its investment? Debt Relief (refinance existing expensive loans) Growth Capital (to finance increased production capacity) Company Optimization (strengthen corporate governance, develop regional expansion strategy, prepare company for IPO) Value addition (implement Resource and Energy Efficiency measures and promote E&S standards) 7
DEG-Resource and Energy Effficiency Check Energy Energy efficiency check (technical optimization, operational improvements) Analyze potential for alternative sources of energy (e.g. biomass) Water Assess exposure to water risk Analyze water treatment and saving technologies (e.g. water recovery) Water management: irrigation, process water Waste/Recycling Recycling of by-products and waste Waste disposal system Land Reduce erosion and risk of flooding Analyze organic fertilizers and alternative plant protection Improve and maintain soil fertility Biomass Analyze economics and carbon footprint of alternative use of biomass e.g. as animal feed, energy, fertilizer Mineral & Fossil Resources Product development Reuse of industrial waste (synthetic fibres) 8
DEG-Resource and Energy Effficiency Analysis 9
Positive developmental impact on Country Creation of sustainable jobs: company currently employs about 2,000 people. 300 additional permanent jobs will created as a result of this investment Increased tax revenues for Government: The projected growth in earnings will lead to an increased tax revenue for the Goverment Structural transformation: the investment will transform the company from a familyowned business to a more institutionalised company that will be professionally run and expected to become an attractive asset to strategic investors Foreign direct investment: providing long-term risk capital at a time of significant pull-back in the midst of Nigeria s worst economic crises in decades 10
Thank you for your attention! 11