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C & I LEASING PLC H1 2019 Investor & Analyst Presentation - - PowerPoint PPT Presentation
C & I LEASING PLC H1 2019 Investor & Analyst Presentation - - PowerPoint PPT Presentation
C & I LEASING PLC H1 2019 Investor & Analyst Presentation 15 August 2019 www.c-ileasing.com info@c-ileasing.com Disclaimer This presentation is based on C&I Leasing Plcs unaudited results for the period ending 30 June 2019.
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Disclaimer
This presentation is based on C&I Leasing Plc’s unaudited results for the period ending 30 June 2019. C&I Leasing Plc has obtained some information in this presentation from sources it believes to be reliable. Although C&I Leasing Plc has taken all reasonable care to ensure that the information herein is accurate and correct, C&I Leasing Plc makes no representation or warranty, express or implied, as to the accuracy, correctness or completeness of such information. Furthermore, C&I Leasing Plc makes no representation or warranty, express or implied, that its future operating, financial or other results will be consistent with results implied, directly or indirectly, by information contained herein or with C&I Leasing Plc’s past
- perating, financial or other results. Any information herein is as of the date of this presentation and may change without notice.
C&I Leasing Plc undertakes no obligation to update the information in this presentation. In addition, some of the information in this presentation may be condensed or incomplete, and this presentation may not contain all material information in respect of C&I Leasing. This presentation also contains “forward-looking statements” that relate to, among other things, C&I Leasing Plc’s plans, objectives, goals, strategies, future operations and performance. Such forward-looking statements may be characterised by words such as “estimates,” “aims,” “expects,” “projects,” “believes,” “intends,” “plans,” “may,” “will” and “should” and similar expressions but are not the exclusive means of identifying such statements. Such forward-looking statements involve known and unknown risks, uncertainties and other important factors that could cause C&I Leasing Plc’s operating, financial or other results to be materially different from the operating, financial or other results expressed or implied by such statements. Although C&I Leasing Plc believes the basis for such forward-looking statements to be fair and reasonable, C&I Leasing Plc makes no representation or warranty, express or implied, as to the fairness or reasonableness of such forward looking statements. Furthermore, C&I Leasing Plc makes no representation or warranty, express or implied, that the operating, financial or other results anticipated by such forward-looking statements will be achieved. Such forward-looking statements represent, in each case, only one
- f many possible scenarios and should not be viewed as the most likely or standard scenario. C&I Leasing undertakes no obligation
to update the forward-looking statements in this presentation.
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Outline
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H1 2019 Financial Snapshot Strategy & Outlook 1 2 3 4 5 4 9 15 18 Appendix 5 Group Financial Performance Review
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H1 2019 Financial Snapshot
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**EPS computation for H1 2019 is based on 404,252,500 ordinary share (H1 2018 : 1,617,010,000) as a result of the share reconstruction
H1 2019 Key Result Highlights
- Gross earnings of N16.3 billion, up 27.2% y-o-y (H1 2018: N12.8 billion) driven by the growth in lease rental
income.
- Net operating income of N4.6 billion, up 24.7% y-o-y (H1 2018: N3.7 billion) underscoring the growth in
gross earnings across the various business units.
- Profit after tax of N866.9 million, up 27.1% y-o-y (H1 2018: N682.2 million)
- Basic earnings per share ** of N2.14 in H1 2019 y-o-y (H1 2018: 42.2 kobo)
- Marine business achieved 92.0% vessel utilisation rate in H1 2019 (Q1 2019: 90.8%)
- Year to date growth in total assets of 8.7% to N57.2 billion as at H1 2019 as against N52.6 billion in FY 2018,
mainly on the back of the growth in finance lease receivables (acquisition of new finance lease assets) and
- ther assets.
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H1 2019 key performance indicators
Gross Earnings N16.3 billion Total Assets N57.2 billion Total Debt N35.1 billion Shareholder’s Funds N12.8 billion Leverage* 2.6x
27.2% 8.7% 5.1% 8.0% 10bps
H1 2018: N12.8 billion FY 2018 N52.6 billion FY 2018: N33.4 billion FY 2018: N11.8 billion FY 2018: 2.7x
Cost to Income Ratio 52.1% EBITDA margin 33.0%
410bps 220bps
H1 2018: 48.0% H1 2018: N3.7 billion
**Basic Earnings per Share N2.14
nm
H1 2018: 42.2kobo
Return on Equity 6.8%
20bps
H1 2018: 7.0%
Capital Adequacy Ratio 18.5%
220bps
FY 2018: 16.3%
Net Operating Income N4.6 billion
24.7%
H1 2018: 35.2%
nm – not meaningful **EPS computation for H1 2019 is on 1,617,010,000 ordinary share and H1 2019 is on 404,252,500 as a result of the share reconstruction *Net Interest-Bearing Liabilities /Equity
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C&I Leasing – Diversified and High-quality Client Base
56% 15% 9% 11% 3% 1% 1% 0% 4% OIL & GAS FIN SERVICES MANUFACT. TELECOM POWER
- CONSTR. /ENGR
HEALTH AGRO ALLIED OTHERS H1 2019 revenue split by sector
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A solid investment proposition focused on long-term growth
High quality borrower
Able to achieve lower weighted average cost
- f funds than the
market
Strong and stable management team
Allows the Group to continue to expand in a sustainable and profitable way
Strong competitive positioning across all segments
Long-term relationships with blue chip clients
Good security structure
Transparent structure of revenue flow from lease assets to meet specific repayment obligations of borrowings used to fund relevant assets provides platform for growth
Operating in sectors with sound market potential
Providing emerging growth opportunities
Predictable cash flows
Allowing for visibility of earnings and business planning
Significant infrastructure to grow the business
Highlighting strong barrier to entry
Expanding partnerships
Harnessing the strength in corporate Synergy
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Group Financial Performance Review
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Income statement snapshot
Income Statement Highlights H1 2019 (N mn) H1 2018 (N mn) % Δ Gross Earnings 16,256 12,776 27.2% Lease Rental Income 11,477 8,765 30.9% Outsourcing Income 3,958 3,230 22.6% Lease Rental Expense (5,496) (4,031) 36.4% Indirect Operating Expenses (1,796) (1,381) 30.0% Net Operating Income 4,617 3,703 24.7% Profit/loss before tax 909 723 25.6% Profit/loss after tax 867 682 27.1%
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Improving performance despite the challenging operating environment
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6 7 8 8 8 13 16
5 10 15 20 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 H1 18 H1 19 Gross Earnings (N, billions)
671 500 1,148 813 984 1,381 1,796
47% 27% 77% 49% 55% 48% 52%
0% 50% 100%
- 500
1,000 1,500 2,000 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 H1 18 H1 19 Indirect Operating Expenses Cost-to-Income Ratio
318 565 251 435 474 723 909
200 400 600 800 1,000 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 H1 18 H1 19 Profit Before Tax (N, millions) Indirect Operating Expenses* (N, millions)
- Gross earnings driven by the growth in lease rental income (70.6% of total
gross earnings), personnel outsourcing (24.3% of total gross earnings)
- Lease rental income growth was driven by marine and fleet management
+30.9%
- 25.8% y-o-y growth in PBT resulted in annualised ROE of 6.8% (H1 2018:
7.0%) and annualised ROA of 1.6% (H1 2018: 1.4%)
- Growth in Indirect operating expenses driven by depreciation charges
(+18.7%), personnel costs (+49.5%) as well as other administrative and general expenses (+26.6%)
27.2% 25.8% 30.0%
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Balance sheet snapshot
Balance Sheet Highlights 30 June 2019 (N mn) 31 December 2018 (N mn) % Δ Total Assets 57,183 52,612 8.7% Operating Lease Assets* 31,709 31,747 0.1% Shareholder’s Funds 12,229 11,827 8.0% Interest Bearing Liabilities 35,123 33,436 5.0% Net Interest Bearing Liabilities/EBITDA 6.3x 6.8x 50bps Net Interest Bearing Liabilities/Equity 2.6x 2.7x 10bps Net Interest Bearing Liabilities/Total Capitalisation 0.6x 0.6x nm Total Interest Bearing Liabilities/Total Capitalisation 0.6x 0.6x nm Net Interest Bearing Liabilities/Operating Profit 44.8x 38.8x 600bps
*Including additions from finance lease assets
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Balance sheet growth in line with business expansion
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Total Assets (N, billions) Shareholders’ Funds (N, billions)
51 58 53 55 57 53 57
46 48 50 52 54 56 58 60 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q4 18 H1 19
10 10 12 12 13 12 13
2 4 6 8 10 12 14 Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q4 18 H1 19
Total Liabilities (N, billions)
37 48 41 43 44 41 44
10 20 30 40 50 60
Q2 18 Q3 18 Q4 18 Q1 19 Q2 19 Q4 18 H1 19
- Total assets grew due to increase in finance lease receivables,
investment in Joint Venture and other assets.
- Growth in shareholders’ fund largely due to increase in retained
earnings and statutory reserves.
- Growth in total liabilities driven by increased issuance of
commercial notes and other payables, as a result of acquiring more loans to support the expansion of the business.
8.7% 8.0% 8.8 %
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Well-diversified and stable funding base
14 20 16 17 17
5 10 15 20 25 Current Non-current
H1 2019 FY 2018 Interest Bearing Liabilities Maturity Profile (N, billions)* H1 2019 Interest Bearing Liabilities by Type (N, billions)
10 22 4 10 16 8 3 6 9 12 15 18 21 24 Banks Non-banking institutions Individuals
H1 19 FY 18 Interest Bearing Liabilities by debtor type (N, billions)
0.9 13.3 6.5 9.1 5.2
Balance due to banks Commercial Paper Redeemable Bonds Term Loans Finance Lease facilities
*Debt maturity profile consists of interest-bearing debt only
- A substantial portion of the Company's assets are funded by
- borrowings. These borrowings are widely diversified by type and
maturity and represent a stable source of funds
- As a Group we do not target a specific cash level but work towards
ensuring that we always have enough liquidity to meet our business needs
- We meet our short-term obligations through organic cashflows from
the business
- Increase in debt from non-banking institutions is as a result from the
N7bn bond and New issues on commercial paper
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Strategy & Outlook
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Strategy Update
OPERATIONS C O S T EFFICIENCY FINANCE
2019 2020 2022 2023
Improve cost optimisation plans complemented by new supply chain initiative Achieve operating expense growth rate below inflation rate
2021
Seek opportunities for growth to improve visibility to customers and potential business partners Digitise operations & commercialise the GETAJOBNG platform Develop human capital to strengthen the services provided by staff’s performance Expand profitable partnerships and joint ventures Expand Marine business to Ghana Commercialise Admin and Treasury to C & I Facility and Capital respectively Raise capital (debt/equity) of $50mn Maintain a minimum of 12.5% capital adequacy ratio Raise equity capital to support business expansion plans
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Contact
Andrew Otike-Odibi M.D/Chief Executive Officer T: +234 803 407 0554 E: andrew.otike-odibi@c-ileasing.com Alex Mbakogu E.D/Chief Financial Officer T: +234 903 777 5833 E: alex.mbakogu@c-ileasing.com
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Appendix
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*EPIC FZE is incorporated in the free trade zone of UAE for tax benefit purposes. All the vessels and operations are in Nigeria.
** this includes earnings and balances from Citrack.
Overview of the C&I Leasing Group structure
Fleet Mgt Gross earnings: N2.1bn PBT: N76.5mm ROE: 3.9% ROCE: 27.0% Fleet Mgt** Gross earnings: N2.3bn PBT: N213.2mm ROE:26.1% ROCE: 19.0% Personnel Outsourcing Gross earnings: N4.0bn PBT: N70.9mm ROE: 5.1% ROCE: 16.0% Marine Gross earnings: N6.0bn PBT: (N45.02mm) ROE: -2.1% ROCE: 9.0%
Subsidiaries Business Units Parent Company
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Ghana: Leasafric (71%) (114 staff) UAE: Epic FZE* (100%) (2 staff) Nigeria: C&I Leasing Plc (100%) (420 staff)
C&I Leasing Group Gross earnings: N16.3bn PBT: N909.2mm ROE: 6.8% ROCE: 12.1% Marine Gross earnings: N1.7bn PBT: N580.5mm ROE: 16.1% ROCE: 8.1%
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Key Shareholders / Board of Directors
Vice Chairman Chukwuemeka Ndu MD / CEO Andrew Otike-Odibi Chairman Chief Chukwumah. H. Okolo Petra Properties Emeka Ndu Leadway Assurance Company Ltd. Omotunde Alao- Olaifa Out Consortium Finance Limited Credit Alliance Financial Alex Mbakogu ABRAAJ Advisers Nigeria Limited Patrick Sule Ugboma
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Management
MD / Chief Executive Officer Andrew Otike-Odibi ED / Chief Financial Officer Alex Mbakogu ED Marine Wisdom Nwagwu Group Head HR & Corporate Commuinications Maureen Ogbonna GM Leasafric Ghana
- Kalu. O. Kalu
Head Treasury Babatunde Oguntunrin Head Finance Adesoji Aiyeola Head Human Resources Chigozirim Otefe-Edebi Head, C&I Outsource & Training Chiobi Ikechukwu Edwin Head Hertz/Fleet management Ayodele Johnson Babatunde Head Information technology David Ogunsola Head Internal control & Chief Compliance Officer Adetayo Abiodun Olugbenga